Saturday, April 6, 2013

Lessons from Chevron: Symposium Videos

For those who were unable to attend the "Lessons from Chevron" symposium at Stanford Law School in February, the conference website now has links to videotapes of the panels. Some of the panels focused directly on the Chevron-Ecuador environmental litigation itself, while others used that litigation as a springboard to consider such issues as litigation financing, transnational legal ethics, forum non conveniens, judgment enforcement, international discovery, and international arbitration. The participants included a mix of players in the litigation, journalists who have followed the litigation, and scholars interested in various aspects of transnational litigation: Deborah Hensler, Graham Erion, Theodore Boutros, Judith Kimerling, Burt Neuborne, Martin Redish, Maya Steinitz, Nora Freeman Engstrom, Morris Ratner, Catherine Rogers, Patrick Keefe, Jenny Martinez, Howard Erichson, Manuel Gomez, Christopher Whytock, Janet Martinez, Michael Goldhaber, Richard Marcus, and S.I. Strong.

HME

April 6, 2013 in Conferences, Environmental Torts, Foreign | Permalink | Comments (0) | TrackBack (0)

Friday, April 5, 2013

The Chevron-Ecuador Litigation and Forum Non Conveniens

I have posted a new paper on SSRN entitled The Chevron-Ecuador Dispute, Forum Non Conveniens, and the Problem of Ex Ante Inadequacy. Here is the abstract:

This essay, written for the 2013 Stanford Journal of Complex Litigation symposium on lessons from the Chevron-Ecuador environmental litigation, urges that we not take the wrong lesson concerning the doctrine of forum non conveniens. The paper highlights the irony of the forum battles in the litigation. The plaintiffs sued in the United States, the defendants won dismissal on grounds of forum non conveniens (arguing that the dispute should be adjudicated by the courts of Ecuador), the plaintiffs obtained a massive judgment in Ecuador, and the defendants challenged the judgment on grounds of fraud and corruption in the Ecuadorian proceedings. Despite the temptation to see the Chevron-Ecuador litigation as a cautionary tale about forum non conveniens, this essay argues that the “adequate alternative forum” standard for forum non conveniens should remain exceedingly low. Ex ante, deference to foreign legal systems should prevail, even as we permit ex post challenges to recognition of judgments on grounds of fraud and corruption.

The essay was prepared for the Stanford Lessons from Chevron symposium, which took place in February. On this blog, the long-running environmental dispute has come up a number of times, including a recent reference to Michael Goldhaber's work and earlier reports here, here and here

HME

April 5, 2013 in Conferences, Environmental Torts, Foreign, Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 2, 2013

Fallout from Behrend

BNA Law Week reports that the Supreme Court granted cert, vacated the judgments and remanded two class actions yesterday.  RBS Citizens NA v. Ross, U.S., No. 12-165, certiorari granted, judgment vacated, remanded 4/1/13; Whirlpool v. Glazer Corp., U.S., No. 12-322, certiorari granted, judgment vacated, remanded 4/1/13.

BNA describes Ross as a case in which a bank is accused of unlawfully denying overtime pay.  The allegations involved the enforcement of an unofficial policy and the Seventh Circuit affirmed the grant of class certification. 

The Whirlpool case comes out of the Sixth Circuit and a very similar issue class action was certified in the Seventh Circuit. This case involves allegations that Whirlpool sold faulty washing machines that got moldy.  I thought the Whirlpool case was a real poster child for the correct use of the issue class action, and I'm not sure on what grounds the Court thinks that Behrend is relevant.  It seems to me that it is not, Behrend was not an issue class action and the questions that concerned the majority there related to feasibility of damages determinations.  Given the allegations regarding overtime pay in Ross, I understand why that case might have made sense to remand, but Whirlpool is a very different kind of case.   There are no damages issues in Whirlpool because it is a liability issue class action. 

At a minimum, as after Wal-Mart, I predict we will see a spate of reconsideration motions, decertification motions and more litigation post-Behrend

ADL

ETA: And for commentary on Behrend, see Sergio's Campos' latest post on Scotusblog

 

April 2, 2013 in Class Actions | Permalink | Comments (0) | TrackBack (0)

Monday, April 1, 2013

The Problem of Settlement Class Actions

I have posted a new paper, The Problem of Settlement Class Actions, on SSRN. It makes the argument that we should abandon settlement-only class actions as a means of resolving mass disputes. The article focuses first on problems of leverage, including would-be class counsel's inability to take the class claims to trial and the monopsony or "reverse auction" problem. Because of the inherent asymmetry of settlement class action negotiations, would-be class counsel does not adequately represent the interests of the absent class members. The article incorporates these leverage concerns into an account of the illegitimacy of settlement-only class certification as a matter of judicial authority. The problems include not only due process concerns of inadequate representation, but also Rules Enabling Act concerns.

Settlement class actions have been an important form of dispute resolution in mass torts (as well as securities, antitrust, and other areas). Despite the Supreme Court's rejection of two asbestos settlement class actions in Amchem and Ortiz, and despite the problems encountered in the fen-phen nationwide settlement class action shortly thereafter, mass tort settlement class actions have never disappeared, and we need only look at the BP settlement class actions in the Gulf Oil Spill litigation for a well-known recent example.

Needless to say, the argument I am advancing faces an uphill battle. It cuts against entrenched interests of defendants, of plaintiffs' counsel, and of judges, all of whom prefer easier paths to comprehensive negotiated resolutions. The argument also cuts against the grain of most recent thinking on this topic. The ALI Principles of the Law of Aggregate Litigation, as well as a recent suggestion under consideration by the Advisory Committee on Civil Rules, would alter Rule 23 to facilitate settlement class actions even in cases that would be uncertifiable for purposes of litigation. Recent cases such as the Second Circuit's 2012 decision in In re AIG Securities Litigation and the Third Circuit's 2011 en banc decision in Sullivan v. DB Investments have taken new liberties with the Supreme Court's Amchem decision. The article explains what is problematic about the direction these cases have taken.

Here is the abstract:

This article argues that class actions should never be certified solely for purposes of settlement. Contrary to the widespread “settlement class action” practice that has emerged in recent decades, contrary to current case law permitting settlement class certification, and contrary to recent proposals that would extend and facilitate settlement class actions, this article contends that settlement class actions are ill-advised as a matter of litigation policy and illegitimate as a matter of judicial authority. This is not to say that disputes should not be resolved on a classwide basis, or that class actions should not be resolved by negotiated resolutions. Rather, this article contends that if a dispute is to be resolved on a classwide basis, then the resolution should occur after a court has found the matter suitable for classwide adjudication regardless of settlement. 

HME

April 1, 2013 in Class Actions, Mass Tort Scholarship, Settlement | Permalink | Comments (1) | TrackBack (0)

GW Class Action Symposium

For those who were unable to attend the excellent conference on class actions that was held last month at George Washington Law School, video recordings of the panels can now be found on the conference website.

HME

April 1, 2013 in Class Actions, Conferences, Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)