Friday, May 8, 2015

Class Actions Ten Years after the Enactment of CAFA

On February 27, 2015, the Committee on the Judiciary, Subcommittee on the Constitution and Civil Justice, held a hearing on the state of class actions post-CAFA.  The witnesses'  lack of ideological diversity (with Professor Moore as a single exception) is extremely troubling.  The committee heard testimony from: Andrew Pincus (Partner, Mayer Brown, U.S. Chamber Institute for Legal Reform), John Parker Sweeney (President, DRI - the Voice of the Defense Bar), Jessica D. Miller (Partner, Skadden Arps), and Professor Patricia Moore (St. Thomas Univ. School of Law).  

A video of the testimony is available here, and Professor Moore has posted her written remarks on SSRN.

May 8, 2015 in Class Actions, Current Affairs | Permalink | Comments (0) | TrackBack (0)

An Interesting Look Back at the Ford Pinto Case

I want to point out an interesting article by Malcolm Gladwell in the New Yorker that looks back at the litigation surrounding the Ford Pinto case. Although the article talks about the criminal prosecution and some of the legal issues briefly, it focuses on the engineers in the case and their ex ante decisions to issue recalls. In my view, the ex ante decisions of engineers, and their inherent difficulty, do not get nearly enough attention in the media, even though the defendant's liability in mass tort cases always hinges on these decisions.  A good read overall.


May 8, 2015 in Products Liability | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 6, 2015

Class Ascertainability

Yale Law Journal is publishing a note by Geoffrey Shaw on the latest hot topic in class litigation, class ascertainability.  Here's the SSRN abstract:

In recent years, federal courts have been enforcing an “implicit” requirement for class certification, in addition to the explicit requirements established in Rule 23 of the Federal Rules of Civil Procedure. The ascertainability requirement insists that a proposed class be defined in “objective” terms and that an “administratively feasible” method exist for identifying individual class members and ascertaining their class membership. This requirement has generated considerable controversy and prevented the certification of many proposed classes. The requirement has taken a particular toll on consumer class actions, where potential class members are often unknown to the representative plaintiffs, often lack documentary proof of their injury, and often do not even know they have a legal claim at all.

This Note explores the ascertainability requirement’s conceptual foundations. The Note first evaluates the affirmative case for the requirement and finds it unpersuasive. At most, Rule 23 implicitly requires something much more modest: that classes enjoy what I call a minimally clear definition. The Note then argues that the ascertainability requirement frustrates the purposes of Rule 23 by pushing out of court the kind of cases Rule 23 was designed to bring into court. Finally, the Note proposes that courts abandon the ascertainability requirement and simply perform a rigorous analysis of Rule 23’s explicit requirements. This unremarkable approach to class certification better reflects what the Rule says and better advances what the Rule is for.

May 6, 2015 in Class Actions, Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Multidistrict Centralization: An Empirical Examination

Our friends at the FJC and Administrative Office of the U.S. Courts, Emery Lee, Catherine Borden, Margaret Williams, and Kevin Scott have posted their latest empirical analysis of multidistrict litigation on SSRN.  Here's the abstract: 

Following the judiciary's experience with aggregate litigation in the 1960s, Congress established a procedure for the transfer of related cases to a single district court for coordinated pretrial proceedings. Originally designed to achieve efficiencies associated with coordinated discovery, the multidistrict litigation (MDL) process evolved from a rather modest starting point to become a central part of aggregate litigation in the federal courts today. Despite its importance, however, there is little empirical research on the MDL process. This article seeks to fill this gap in the empirical literature by addressing a few central questions about the work of the Judicial Panel on Multidistrict Litigation (Panel). Using a unique database, we examine how that body decided motions to centralize multidistrict litigation. We find, most importantly, that the Panel became more likely to order centralization of proceedings over time, after controlling for other factors. That trend is not, however, apparent in the most recent years' data. We also find, all else equal, that the Panel is more likely to centralize a proceeding including class allegations, and more likely to centralize proceedings raising certain kinds of claims.

May 6, 2015 in Aggregate Litigation Procedures, Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Thursday, April 30, 2015

Class Actions at the ALI Annual Meeting

In conjunction with its annual meeting each year, the American Law Institute hosts a CLE the day before the meeting begins.  This year, there are two programs that may be of interest to readers on Sunday, May 17, 2015:

1) Changes for Federal Rule of Civil Procedure 23?  An Open Forum with the Rule 23 Subcommittee of the Advisory Committee on Civil Rules; and

2) Ethical Issues in Class Actions and Non-Class Aggregate Litigation.

The panels run from 1:30-3:00 p.m. and 4:00-6:00 p.m., respectively and are located in the Ritz-Carlton Hotel in Washington, D.C.  I understand that panel members on the second panel will include Bob Klnonoff, Elizabeth Cabraser, Judge Diane Wood, Judge Lee Rosenthal, Sam Issacharoff, John Beisner, and myself among others.  Hope to see you there!

April 30, 2015 in Aggregate Litigation Procedures, Class Actions, Current Affairs | Permalink | Comments (0) | TrackBack (0)

Constructing Issue Class Actions

There's been a lot of chatter over the past few years about the greater use of issue classes.  The Rule 23 Subcommittee in its recent report (p. 41) indicated that issue classes top its agenda for possible reform and there's been a greater willingness to rely on Rule 23(c)(4) among the circuit courts over the last few years.  Much of the scholarship on issue classes thus far, however, has focused on how to use issue classes in conjunction with Rule 23(b)(3)'s predominance requirement.  Professor Laura Hines (Kansas) has, for instance, written a series of articles on the topic and there have been several debates in symposium pages, such as DePaul's 2013 symposium.  

Whatever side of the debate one adheres to on the to-be-or-not-to-be question, the courts are embracing issue classes.  Thus, there remains much work to be done on discerning which issues should qualify for certification, how to think about Seventh Amendment Reexamination Clause questions, and how to compensate plaintiffs' attorneys who initiate issue classes.

I've recently written a paper on issue classes that takes some steps toward fleshing out these problems.  The paper is long since it's meant to be a one-stop shop for judges and attorneys on the subject, but here are the critical points worth underscoring:

First, one of the main difficulties of our system is that the focus in massive lawsuits has shifted to the ways in which the plaintiffs are dissimilarly situated, even when the defendant's conduct is uniform.  Take the GM ignition switch debacle or the Toyota acceleration cases, for example.  Corporate actions are nonindividuated; it doesn't make sense to litigate what GM or Toyota did in 40,000 different cases.  (Draft pp 5-8) But defendants have successfully shifted the procedural focus to how their behavior affected claimants, which tends to defeat class certification because common questions do not predominate over individual ones.  The issue class has the potential to recapture what is common to the plaintiffs: defendant's conduct--at least so long as that conduct is nonindividuated.  One can capture this notion by divvying up the legal elements in any claim or defense as "conduct components," which concern the defendant's conduct, or "eligibility components," which concern a plaintiff's eligibility for relief.  (Draft pp 15-29)

Second, by embracing the standard suggested by the ALI's Principles of the Law of Aggregate Litigation, courts can ease the supposed tension (to the extent any remains) between Rule 23(c)(4) and Rule 23(b)(3).  (Draft pp 31-32)  Courts should certify issue classes where resolving the issue would "materially advance the resolution of multiple civil claims by addressing the core of the dispute in a manner superior to other realistic procedural alternatives, so as to generate significant judicial efficiencies." (Principles, 2.02(a)(1), 2.02 cmt. a, 2.08, 2.08 cmt. a)  Predominance is embedded in the "materially advance" language and superiority is included as a condition that certifying the issue would be "superior to other realistic alternatives" such that it "generate[s] significant judicial efficiencies."  Moreover, the courts themselves seem to have reached a general consensus on this matter, with even the Fifth Circuit embracing issue classes in In re Deepwater Horizon, 739 F.3d 790, 804 (5th Cir. 2014).  (Draft p. 30)

Third, courts must figure out a way to compensate (and thus incentivize) plaintiffs' attorneys.  This is perhaps the trickiest part because of both the lack precedent and doctrinal hurdles such as Lexecon.  Lexecon presents a special challenge in multidistrict litigation cases where issue classes might prove most useful.  Nevertheless, one need not invent a theory out of whole cloth.  Charging liens and the common-benefit doctrine provide sound analogies for fashioning a coherent path forward.  (Draft pp 42-50)

Finally, there are some hurdles to making issue classes stick, such as preclusion doctrines, adequate representation, and the Seventh Amendment Reexamination Clause.  Thus, the paper concludes by suggesting solutions to these problems and arguing that preclusion can provide a way to coordinate dispersed public and private regulators.

As always, comments are welcome (eburch at

April 30, 2015 in Aggregate Litigation Procedures, Class Actions, Current Affairs, Lawyers, Mass Tort Scholarship, Procedure, Products Liability, Tobacco, Vioxx | Permalink | Comments (0) | TrackBack (0)

Thursday, April 9, 2015

11th Circuit holds Engle progeny cases preempted

You can find the surprising opinion here.   The crux of the opinion is the last paragraph:

Cigarette smoking presents one of the most intractable public health
problems our nation has ever faced. It was not so long ago that anyone would walk
a mile for a Camel: cigarette smoke once filled movie theaters, college classrooms,
and even indoor basketball courts. For fifty years, the States and the federal
government have worked to raise awareness about the dangers of smoking and to
limit smoking’s adverse consequences to the greatest extent possible, all without
prohibiting the sale of cigarettes to adult consumers. To that end, the State of
Florida may ordinarily enforce duties on cigarette manufacturers in a bid to protect
the health, safety, and welfare of its citizens. But it may not enforce a duty, as it
has through the Engle jury findings, premised on the theory that all cigarettes are
inherently defective and that every cigarette sale is an inherently negligent act. So
our holding is narrow indeed: it is only these specific, sweeping bases for state tort liability that we conclude frustrate the full purposes and objectives of Congress.
As a result, Graham’s Engle-progeny strict-liability and negligence claims are
preempted, and we must reverse the District Court’s denial of judgment as a matter
of law. For these reasons, the judgment of the District Court is REVERSED.

Case: 13-14590 Date Filed: 04/08/2015 Page: 50 of 50

April 9, 2015 in Aggregate Litigation Procedures, Class Actions, Tobacco | Permalink | Comments (0) | TrackBack (0)

Thursday, March 19, 2015

2014 Increased Revenue at Litigation Financier Burford Capital

Morris Ratner on Class Counsel as Litigation Funders

Professor Morris Ratner (UC Hastings) has posted to SSRN his article, Class Counsel as Litigation Funders, which is forthcoming in the Georgetown Journal of Legal Ethics.


March 19, 2015 in Class Actions, Ethics, Lawyers, Mass Tort Scholarship | Permalink | Comments (0) | TrackBack (0)

Skadden Class Action Chronicle

Skadden has posted its spring 2015 Class Action Chronicle.


March 19, 2015 in Class Actions, Procedure | Permalink | Comments (0) | TrackBack (0)

Friday, February 6, 2015

Special Report on Issue Classes

Perry Cooper, of the BNA Class Action Litigation Report, published a special report yesterday titled "Issue Classes Swell in Consumer Suits: Are Potential Rewards Worth the Risk?"  A subscription is required to read the full article, but it does a nice job of portraying different points of view on the topic - John Beisner and Jessica Miller (Sadden Arps) for the defense, Gary Mason (Whitfield Bryson & Mason) for the plaintiffs, and some of my own views as an academic.

Issue classes have been on my mind for awhile now as well as the minds of many others--the Rule 23 Subcommittee has indicated that the topic tops their list for potential rule changes.  As such, I've been working on an article titled "Constructing Issue Classes."  I'm still tweaking it, so it's not available for public consumption yet, but for those interested in the topic, here's the gist of it:

Issue classes under Rule 23(c)(4) have the potential to adjudicate collectively what actually unites plaintiffs: defendant's uniform conduct.  One can separate the elements of any cause of action into "conduct elements" that relate to the defendant's conduct--what the defendant knew, when the defendant knew it, etc.--or "eligibility elements" that relate to the plaintiff's eligibility for relief--specific causation, damages, etc.  When defendant's conduct toward the plaintiffs is uniform, as it was for example in the smelly washing machine cases, then adjudicating elements relating to that conduct collectively can even out resource imbalances between plaintiffs' attorneys and defendants and reduce the possibility of inconsistent verdicts.

As you may imagine, a lot rides on that one trial.  Issue classes work by generating two-way preclusion in follow-on cases.  In the Ohio "smelly washer" trial against Whirlpool, the defense verdict meant that defendants could preclude class members from relitigating those same issues in subsequent cases.  (Granted, the class was limited to Ohio purchasers, but did include some 100,000 consumers.)  The high stakes suggest that anytime courts certify an issue for class treatment they should be prepared to allow an interlocutory appeal on the merits (not just the certification question as Rule 23(f) permits).  It also means that courts shouldn't certify trivial issues for class treatment.  As the ALI in its Principles of the Law of Aggregate Litigation suggest, the issue class should "materially advance the resolution of the claims," which would be the case with regard to most conduct-related questions.

February 6, 2015 in Aggregate Litigation Procedures, Class Actions, Current Affairs, Mass Tort Scholarship, Procedure | Permalink | Comments (0) | TrackBack (0)

Monday, February 2, 2015

John Beisner, Jessica Miller and Nina Rose on the Glazer Consumer Class Action Trial

Sunday, December 14, 2014

Debra Lyn Bassett on Class Action Silence

My colleague Professor Debra Lyn Bassett (Southwestern) has posted to SSRN her article, Class Action Silence, 94 Boston U. L. Rev. 1781 (forthcoming 2014).  Here is the abstract:

A number of law review articles have noted the issues inherent in treating class members' failure to opt out as consent to the court's personal jurisdiction or as agreement to a proposed class settlement. Missing from the existing analyses, however, is the "big picture" -- the reality that class action silence is layered, resulting in silence that is repeatedly and inappropriately compounded. At each and every step in class action litigation, absent class members are not just expected, but effectively encouraged, to remain silent. Moreover, at every step, courts interpret class members' silence as consent. The ultimate result is a "piling on" of consents: the expected and encouraged silence is deemed to constitute consent to the filing of the class suit and consent to personal jurisdiction and consent to be bound to any resulting class judgment and consent to the proposed class settlement and approval of the proposed settlement's terms and conditions. Yet this compounded effect occurs under highly ambiguous circumstances, where arguably the most sensible interpretation of class members' silence is not consent, but confusion. The multiple and contradictory meanings of silence render it unreasonable to equate the failure to opt out with consent. The fallacy of repeatedly ascribing consent to highly ambiguous silence should be recognized as a due process danger that potentially can deprive class members of property rights and their day in court.

December 14, 2014 in Aggregate Litigation Procedures, Class Actions, Mass Tort Scholarship, Procedure | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 10, 2014

Frankel on Issacharoff

Alison Frankel of Reuters highlights Sam Issacharoff's high quality, innovative Supreme Court briefs in the a recent blog post.   They are indeed masterful.  

December 10, 2014 in Lawyers, Procedure | Permalink | Comments (0) | TrackBack (0)

Monday, December 8, 2014

BP Petition for Cert on Oil Claims Class Action Settlement Denied

You can find the order denying cert here

December 8, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 18, 2014

The NFL Concussion Settlement: Class Action Exploitation

By Howard Erichson

Tomorrow in Philadelphia, lawyers for the NFL and lawyers for former football players will try to persuade Judge Anita Brody to approve their settlement of claims that the League concealed chronic risks of concussions and failed to protect players. The judge, the players, and the public should view the settlement with suspicion.

We have grown so accustomed to "settlement class actions" that we have lost sight of what is strange and troubling about them. Class actions serve an essential function in our legal system by empowering claimants in mass disputes, and I reject the knee-jerk criticisms of class actions that I  hear too often. But when the class action tool is exploited by defendants to buy peace on the cheap, and when class members are harmed by the alignment of interests between defendants and class counsel, I feel the need to speak up.

Who reached this agreement with the NFL? Not the thousands of former football players. The deal was struck by lawyers who purported to represent the players but who had not actually gotten the go-ahead to litigate for the class. To litigate a class action, lawyers must get the class certified. But in this case, the lawyers negotiated their settlement before the court certified the class.

It makes sense that the NFL would want to do it this way. By negotiating before class certification, the NFL knew that the plaintiffs’ lawyers lacked the leverage that comes with being able to say, “See you at trial.” And it makes sense that the players’ lawyers would go along. They stand to make $112 million plus up to five percent of each award going forward. If these lawyers failed to reach agreement with the NFL, they risked being cut out if the League struck a deal with someone else.

In a “settlement class action” like the NFL deal, lawyers ask the court to certify the class for settlement only, as opposed to a standard class action that can be litigated or settled. This ought to be the first question people ask when they hear about a class action settlement: Was the class certified for litigation? If not, then class members are especially vulnerable to exploitation.

It is not an obscure problem. As I explain in The Problem of Settlement Class Actions, settlement class actions have become more common than standard class actions. And while good settlements exist, we see mischief too often. Three weeks ago, the Seventh Circuit heard arguments in Pearson v. NBTY, a settlement class action about false labeling for glucosamine supplements. Among numerous other problems, the lawyers’ fees were more than double the amount actually paid to the class. The district court's opinion approving the settlement is disturbing, and Ted Frank's argument for the objectors is powerful. And in Lane v. Facebook, a settlement class action involving claims that Facebook illegally shared information about members’ Internet activity, Facebook paid over $2 million to the plaintiffs’ lawyers, $6.5 million to a foundation that Facebook would partly control, and zero to the class members. Facebook discontinued the challenged program but could reinstate it under a different name. Facebook wiped away its liability while the class members got nothing of value. Chief Justice Roberts was horrified.

Compared to these settlements, the NFL deal looks pretty good. For some players, it offers immediate compensation, and for others it offers long-term insurance. Judge Brody initially rejected the settlement but then gave it preliminary approval after the NFL removed a cap on the fund. But the dynamic of settlement class actions should make us ask questions. The settlement rewards certain diagnoses (Alzheimer’s, Parkinson’s, ALS) over others (CTE). It pays for cognitive impairment but not mood disorders. The objectors make a strong argument that these items are crucial. The settlement imposes a registration requirement and other hurdles that objectors say are intended only to reduce claims. I can see why the deal has drawn so much fire and why Public Citizen sought to intervene.

The truth is, it is always hard to judge whether a class settlement is fair. A settlement, after all, is a compromise. There is no magic formula by which a football fan or a federal judge can evaluate whether the settlement is good enough. What we can ask, however, is whether the settlement resulted from a fair process, a negotiation on a level playing field. The answer is no.

The concern in every settlement class action is that lawyers may have struck the deal not because it was the best the class members could have gotten, but because it was the best the lawyers could get for themselves. If the settlement proves inadequate, then the lawyers get rich, the League gets off easy, and the football players – damaged forever – are left without the money they need to take care of themselves and their families for the rest of their lives.

There is, of course, something the judge can do about it. Reject this settlement, and on a proper motion, certify the class for litigation as well as settlement. Rest assured, there will be a better offer on the table. Although the judge would still face the difficult task of evaluating a class settlement and would still have to be on the lookout for abuse, at least she would know that the players weren’t disempowered from the start. 


November 18, 2014 in Class Actions, Settlement, Sports | Permalink | Comments (0) | TrackBack (0)

Friday, November 14, 2014

Plaintiff win in Pelvic Mesh Trial

Plaintiffs have won another multi-million dollar verdict in a pelvic mesh trial in Florida.  More cases are slated for trial.  So far, defendant has won two individual trials and lost one individual trial.  This latest loss was a consolidated trial of four plaintiffs.  Another consolidated trial is proceeding in West Virginia. 

This article from Reuters gives more detail.

November 14, 2014 | Permalink | Comments (0) | TrackBack (0)

Monday, November 3, 2014

Pelvic Mesh Litigation - Consolidated Sample Trials

A recent article by Jessica Dye (Thomson Reuters) describes the procedure adopted by Judge Goodwin (U.S.D. So. Dist. W. Va).  

While Goodwin originally scheduled a series of single-plaintiff bellwether, or test, trials for the federal litigation, he scrapped those plans earlier this year and instead consolidated claims from multiple women into a single trial. Doing so, he said, would help save courts' time and resources, and "may facilitate settlement" by giving Boston Scientific and plaintiffs a clearer picture of the strengths and weaknesses of their cases.

You can find the article here. I would love to know how Judge Goodwin is picking the plaintiffs and locations to go forward and what coordination is happening with state courts.  

November 3, 2014 in Aggregate Litigation Procedures, Products Liability | Permalink | Comments (0) | TrackBack (0)

Friday, October 31, 2014

Jury Verdict for Whirlpool in Moldy Washing Machine Case

The Ohio jury's verdict yesterday was in favor of the defendant, Whirlpool, in the moldy washing machine issue class action.  BNA has the report.  

In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig. (Glazer v. Whirlpool Corp.), N.D. Ohio, No. 08-65001, verdict10/30/14

October 31, 2014 in Class Actions, Procedure, Products Liability | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 14, 2014

BP's Cert Petition Appealing the Deepwater Horizon Settlement

The papers in the Deepwater Horizon Settlement cert petition are mostly in.   The case is BP Exploration & Production Inc. v. Lake Eugenie Land & Development, Inc. -- you can find the documents on SCOTUSBLOG.  

BP's basic argument is that the settlement approved by Judge Barbier in the mass tort class action against it was ultra vires because it contemplated giving money to people who were, according to BP, not injured.   The plaintiffs respond that BP is just trying to overturn a settlement it championed through the backdoor now that its unhappy with the deal.

One of the most interesting briefs filed in this dispute is from Kenneth Feinberg, who oversaw both the 9/11 Victims Compensation Fund and the Gulf Coast Claims Facility.  The latter was the entity that settled claims arising out of the Deepwater Horizon oil spill immediately after it happened.

Feinberg is a world class mediator and one of the most prominent figures in the mass tort world.   The class action settlement that BP is now disputing is the successor to the Gulf Coast Claims Facility, which he headed.   What the class action did that the Gulf Coast Claims Facility could not do is give BP global peace. In other words, all civil claims against BP arising out of the oil spill are precluded by that class action settlement.  

Feinberg's brief asks the Supreme Court to grant cert.  The argument is basically the following: claim facilities like the ones he ran apply a causation requirement that parallels that of the tort system. But, he argues, the settlement agreed to by BP does not include as strong a causation requirement, and this threatens the possibility of future compensation funds to solve mass torts. The brief explains: 

..the Fifth Circuit's decisions in this case affecting the causation standard, if permitted to stand, threaten to make these sorely needed alterantives to mass tort litigation unlikely to be replicated.  Future funds would either adopt the Fifth Circuit's new standard, thereby threatening to overwhelm the claims process with spurious claims, or continue to require causation, thereby channeling claimants toward litigation where the burden of proof is lower. (Feinberg petition at 6). 

This argument seems to me to be just wrong.  The settlement imposed a looser causation requirement than tort law requires.  But that causation requirement was agreed to in order for claimants collect under the settlement; it is not the causation requirement of the substantive law. In the future, if a defendant perferred to create a settlement fund of the Feinberg-ian variety, they could do so and rest "easy" that the causation requirement of the substantive law remains as it always was. (Whether the requirement of specific causation is the best requirement from a normative point of view in mass tort litigation I leave to another day).  

There is no risk that this settlement will affect future litigation because it is a settlement - the defendant participated in crafting and agreed to the causation requirement applied in the claims facility created by the settlement.   One might say it is a form of private lawmaking only applicable to these parties.  If a future mass tort defendant doesn't like this type of loosened causation requirement, they don't have to agree to it.  In fact, they are free to say "we'll litigate every case" as Merck did for five years in the Vioxx mass tort and then in each and every case the standard causation requirement of the tort law in the relevant jurisdiction will apply. 

And what of the argument championed by BP that the settlement pays people who were not injured in fact?  Welcome to the world of settlements, Dorothy.  What happens in a settlement is this: each party has a sense of what the case is "worth" - that is, the likely result at trial.  They discount that amount by the risk of loss.  Then they substract from that discounted amount their transactions costs (the costs of litigation).  If the resulting number is close for both parties, they settle.  See Steven Shavell, Foundations of the Economic Analysis of Law, 401-407 (2004).  If they settle, they don't litigate. When they don't litigate, there is no trial.  

A settlement means that the plaintiff never has to prove causation, or any other element of her cause of action.  If the BP settlment violates Article III because plaintiffs didn't prove their legal entitlements, then every settlement violates Article III.  The reason is that in no settlement does plaintiff ever prove that they are entitled to compensation because the very purpose of the settlement is to avoid trial.  A plaitniff's entitlement at settlement is always uncertain.  If settlements in general are constitutional, then so is this one. 

A class action settlement is different than an ordinary settlement because it requires judicial approval.  But does that judicial approval require that plaintiff establish injury?  Here is the requirement for judicial approval of class action settlements:  "If the settlement would bind class members," then the court needs to determine at a fairness hearing that the settlement is "fair, reasonable and adequate."  Fed. R. Civ. P. 23(e)(2).  The reason that a fairness hearing is only required "if the settlement woudl bind class members" is that the purpose of the hearing and approval process is to protect absent class members who are to be bound, but are not before the court to state their objections.  This requirement is not meant to protect defendants, who are certainly well able to defend their interests and state their objections before the court.

And what was the benefit to BP? Why would BP enter into such a settlement?  They wanted global peace.  Only a class action settlement can provide that.  They were willing to pay a high price for global peace at the time.  Now things are different for BP, time has passed and it is in a better position than it was when it made this agreement, but that doesn't make the agreement unconstitutional or violative of the class action rule.  

I hope the Supreme Court does not grant certiorari because the Fifth Circuit correctly rejected these claims.  The ideas that underly the BP cert petition don't make sense in a litigation system that permits settlement.  And they don't make sense under modern jurisprudential understanding of what a right is.  People can sue when they think they have a right that has been violated.  If the lawsuit goes to trial, then plaintiff will have to meet their burden of proving that they in fact (1) have a right and (2) it was violated.  (Actually, they will likely have to show that they have a colorable case long before then).  At the beginning of the litigation these things are uncertain. Uncertainty is the space in which settlements happen.  






October 14, 2014 in Aggregate Litigation Procedures, Class Actions, Environmental Torts, Mass Disasters | Permalink | Comments (0) | TrackBack (0)