Monday, April 16, 2012
Klonoff on Class Actions
Dean Robert Klonoff (Lewis & Clark) has posted The Decline of Class Actions to SSRN. It provides a very useful overview to the recent developments in class actions - going far deeper than just Wal-Mart. If you're interested in class actions, this is a must read. Here is the abstract:
This Article argues that in recent years courts have cut back sharply on the ability to bring class action lawsuits, thereby undermining the compensation, deterrence, and efficiency functions of the class action device. Starting in the mid-1990s, courts began expressing concern about the pressure on defendants to settle after a decision certifying a class. The business community also raised concerns that many multi-state class actions were brought in pro-plaintiff, state-court venues. Federal Rule of Civil Procedure 23(f), adopted in 1998, enabled defendants to obtain interlocutory review of federal district court decisions certifying class actions, and the Class Action Fairness Act (CAFA), adopted in 2005, had the effect of shifting most major class actions to federal court. There is now a large body of federal appellate court case law, and as a result of that case law, several disturbing trends have emerged.
First, many courts now require that plaintiffs prove substantial portions of their cases on the merits at class certification. Second, several of the class certification requirements (class definition, numerosity, commonality, adequacy of representation, Rule 23(b)(2), and Rule 23(b)(3), are now considerably more difficult to establish. Third, a number of courts have rejected class settlements by rigidly applying the requirements for class certification, even though the settlement eliminates the need for a trial. Fourth, a number of courts have essentially nullified so-called issues classes under Rule 23(c)(4) by requiring courts to examine whether the case as a whole satisfies the predominance requirement of Rule 23(b)(3). Finally, the Supreme Court has upheld, against unconsionability challenges, binding arbitration clauses that prohibit resolution of disputes on a classwide basis.
Although some class actions remain viable, such as securities fraud, wage and hour, and antitrust class actions, the overall impact of these case law trends has been to curtail substantially the ability of plaintiffs to obtain class treatment. This Article thus concludes by urging courts, rule makers, and Congress to return to a more balanced approach to classwide adjudication.
Saturday, April 14, 2012
Comparative Case Valuation: Tobacco Edition
BNA Class Action Litigation Reporter has an article about Engle's progeny and how the Florida courts are dealing with the variation in jury verdicts in those cases. Here the link - behind a pay wall unfortunately.
In sum and substance, the Florida Supreme Court permitted an issue class action regarding the conduct of the tobacco companies to stand and ruled that the results have preclusive effect in subsequent cases. Now the Individual cases are being litigated. There are many plaintiffs verdicts. BNA describes that there have been 50 judgments and compensatory damages were awarded in 35 cases. Of those, in at least 10 the jury awarded more than $7 million. Not all have survived on appeal.
I am interested in this suit because I think issue class actions are the cutting edge of class litigation and because there is potential here to use statistical methods to come up with a solution that is better than spending many millions litigating every case to judgement and appealing it.
Here is the list of verdicts above $7 million:
$8 million compensatory and $71.2 million punitive damages (vacated on appeal) - Webb (No. 1D10-6557, 4/9/12)
$ 8 million compensatory - Tate (No. 2007–CA-021723 (17th Cir. Broward County))
$7.8 million compensatory - Campbell (No. 2008 CA 2147 (1st Cir. Escambia County)) (upheld on appeal).
$10 million compensatory - Cohen (No. 2007–11515 (17th Cir. Broward County)).
$7 million compensatory - Grey (No. 2007–CA-002773 (1st Cir. Escambia County)) (upheld on appeal)
$56.59 million compensatory - Naugle (No. 07–036736CA (17th Cir. Broward County)).
$15 million compensatory - Putney (No. 2007–CV-36668 (17th Cir. Broward County)).
$10.8 million compensatory - Townsend (No. 01–2008–CA-003978 (8th Cir. Alachua County)) (upheld on appeal) (40 million punitive damages award struck down).
$20 million compensatory - Alexander (No. 07–46830–CA-10–4 (11th Cir. Miami-Dade Co.)) (on appeal)
$10 million compensatory and $20 million punitives - Smith (No. 09-719-CA (14 Cir. Jackson County) (on appeal)
Readers who know of others, or have a list of all the verdicts, please let us know. ADL
Wednesday, April 11, 2012
Sherry on Concepcion and Dukes
Suzanna Sherry (Vanderbilt) has posted a copy of her forthcoming article, "Hogs Get Slaughtered at the Supreme Court," on SSRN. Here's the abstract:
Class action plaintiffs lost two major five-to-four cases last Term, with potentially significant consequences for future class litigation: AT&T Mobility v. Concepcion and Wal-Mart v. Dukes. The tragedy is that the impact of each of these cases might have been avoided had the plaintiffs’ lawyers, the lower courts, and the dissenting Justices not overreached. In this Article, I argue that those on the losing side insisted on broad and untenable positions and thereby set themselves up for an equally broad defeat; they got greedy and suffered the inevitable consequences. Unfortunately, the consequences will redound to the detriment of many other potential litigants. And these two cases are not isolated tragedies; they provide a window into a larger problem of Rule 23. When plaintiffs’ lawyers chart a course for future litigants, they may be tempted to frame issues broadly for the “big win” – with disastrous consequences. I suggest that it is up to the courts, and especially to those judges most sympathetic to the interests of class-action plaintiffs, to avoid the costs of lawyers’ overreaching. That is exactly what the dissenting Justices (and the judges below) failed to do in these cases.
Cheng on Trial Sampling in Mass Torts
Edward Cheng (Vanderbilt) has posted his paper, "When 10 Trials are Better than 1000: An Evidentiary Perspective on Trial Sampling," on SSRN. It's also available through Penn's website. Here's the intro on Penn's website:
In many mass tort cases, individual trials are simply impractical. Take, for example, Wal-Mart Stores, Inc. v. Dukes, a class action employment discrimination suit that the Supreme Court reviewed last Term. With over 1.5 million women potentially involved in the litigation, the notion of holding individual trials is fanciful. Other recent examples of the phenomenon include the In re World Trade Center Disaster Site Litigation and the fraud litigation against light cigarette manufacturers, in which Judge Weinstein colorfully noted that any “individualized process . . . would have to continue beyond all lives in being.”
Faced with an unserviceable number of plaintiffs, courts have proposed sampling trials: rather than litigating every case, courts would litigate a small subset and award the remaining plaintiffs statistically determined amounts based on the results. But while sampling is standard statistical practice and often accepted as evidence in other legal contexts, appellate courts have balked— based on due process concerns—at the notion of court-mandated, binding trial sampling.
Despite this appellate reluctance, the controversy continues unabated. Trial courts have soldiered on by using nonbinding sampled trials (dubbed “bellwether trials”) to induce settlement, and a few brave appellate courts, including the Ninth Circuit in Dukes, have even hinted at an increased receptivity to sampling. Given that trial courts have few practical alternatives, one wonders if it is just a matter of time before their appellate brethren recognize the necessity of sampling.
And here's the SSRN abstract:
In many mass tort cases, separately trying all individual claims is impractical, and thus a number of trial courts and commentators have explored the use of statistical sampling as a way of efficiently processing claims. Most discussions on the topic, however, implicitly assume that sampling is a “second best” solution: individual trials are preferred for accuracy, and sampling only justified under extraordinary circumstances. This Essay explores whether this assumption is really true. While intuitively one might think that individual trials would be more accurate at estimating liability than extrapolating from a subset of cases, the Essay offers three ways in which the “second best” assumption can be wrong. Under the right conditions, sampling can actually produce more accurate outcomes than individualized adjudication. Specifically, sampling’s advantages in averaging (reducing variability), shrinkage (borrowing strength across cases), and information gathering (through nonrandom sampling), can result in some instances in which ten trials are better than a thousand.
Sunday, April 8, 2012
Bar on Punitive Damages Against Chrysler For Cars Sold Before 2009 Bankruptcy
The Wall Street Journal has a video describing the bar on punitive damages against Chrysler for new claims in connection with cars sold prior to Chrysler's 2009 bankruptcy. The video features Professor David Skeel (Pennsylvania).
Saturday, April 7, 2012
Class Action Blawg on the Case Against "Trial by Formula"
The Class Action Blawg has a post citing useful caselaw against the concept of trial by formula - that is, the use of statistical analysis to determine either apportionment of damages (less controversial) or liability (more controversial). Thanks to our own Sergio Campos for the tip.
I just published a paper on this very topic called The Case for "Trial by Formula." In this defense of the use of statistics, I show the benefits for statistical analysis in mass tort cases for the promotion of equality between plaintiffs. "But what about defendants' due process rights?" the authors over at CAB, Justice Scalia and others might rightly ask. This is a very good question. Take Wal-Mart v. Dukes and the defense argument that the use of statistics to conduct Teamsters hearings would violate the defendants' right to assert individualized affirmative defenses. I wonder whether the defendant would actually be able to marshall the indivdualized proof against each individual plaintiffs' claims as they said they wanted to do. I'd like to see a court call the defendants' bluff in one of these cases and actually see if defendants have enough evidence to exercise their right to assert individualized defenses in at least a sampling of cases -- not to dispose of the whole litigation, but just to inject some realism into the proceedings. There's also a deeper issue - what is due process anyway? Is the touchstone tradition? If so, new developments in statistics and probability theory are useless to the doctrine; due process is really horse and buggy process which requires an individual hearing. Or is it about what process is due from either a participatory, accuracy or other metric? If so, there might indeed be something to talk about.
Sunday, March 4, 2012
More Information on the BP Settlement
As I've been sifting through news report on the BP class action settlement, I've noticed that it's hard to find information on the actual settlement terms. From what reporters are describing, it sounds like the parties are requesting that Judge Barbier certify two Rule 23(b)(3) classes. The most comprehensive information comes from the BP Press release. Here are a few of the most notable passages on the settlement's terms and conditions:
The proposed settlement is comprised of two separate agreements, one to resolve economic loss claims and another to resolve medical claims. Each proposed agreement provides that class members would be compensated for their claims on a claims-made basis, according to agreed compensation protocols in separate court-supervised claims processes. The proposed agreement to resolve economic loss claims includes the financial commitment for the Gulf seafood industry and a fund to support continued advertising that promotes Gulf Coast tourism.
The proposed agreement to resolve medical claims involves payments based on a matrix for certain currently manifested physical conditions, as well as a 21-year medical consultation program for qualifying class members. It also provides that class members claiming later-manifested physical conditions may pursue their claims through a mediation/litigation process. Consistent with its commitment to the Gulf, BP would also provide $105 million to improve the availability, scope and quality of healthcare in Gulf communities. This healthcare outreach program would be available to all individuals in those communities, regardless of whether they are class members. It would include expanding capacity to address community health needs, including primary care, mental health services and access to environmental health specialists, as well as enhanced training and education related to Gulf Coast health issues.Under the proposed settlement, class members would release and dismiss their claims against BP. The proposed settlement is not an admission of liability by BP.
The proposed settlement also provides that, to the extent permitted by law, BP will assign to the PSC certain of its claims, rights and recoveries against Transocean and Halliburton for damages not recoverable from BP.
The proposed settlement is subject to reaching definitive and fully-documented agreements within 45 days, and if those agreements are not reached, either party has the right to terminate the proposed settlement. Once there are definitive and fully-documented agreements, BP and the PSC would then seek the Court’s preliminary approval of the settlement. Under federal law, there is an established procedure for determining the fairness, reasonableness and adequacy of class action settlements. Pursuant to this procedure, and subject to the Court granting preliminary approval of both agreements, there would be extensive outreach to the public, including through advertisements and direct mail, to explain the settlement agreements, class members’ rights, including the right to “opt out” of the classes, and the processes for making claims. The Court would then conduct fairness hearings at which class members and various other parties would have an opportunity to be heard and present evidence. The Court would then decide whether or not to approve each proposed settlement agreement.The proposed economic loss settlement provides for a transition from the Gulf Coast Claims Facility (GCCF) administered by Kenneth Feinberg. "Ken Feinberg has overseen the GCCF since it began operating in August 2010, and we thank him and his team for their dedication and professionalism," said Mr. Dudley. "During Mr. Feinberg's tenure, BP has paid approximately $6.1 billion to resolve more than 220,000 claims from individuals and businesses through the GCCF."
A court-supervised transitional claims process for economic loss claims will be in operation while the infrastructure for the new settlement claims process is put in place. During this transitional period, the processing of claims that have been submitted to the GCCF will continue, and new claimants may submit their claims.
Payments in class action settlements typically are not made until after final approval of a settlement, but BP has agreed not to wait for final approval of the economic loss settlement before claims are paid. The economic loss claims process will continue under court supervision before final approval of the settlement, first under the transitional claims process, and then through the settlement claims process established by the proposed economic loss agreement.
Saturday, March 3, 2012
Settlement Reached in BP Litigation
John Schwartz at the New York Times reports that the litigation surrounding the BP Deepwater Horizon Oil Spill has settled for all of the litigants except the federal government. The Judge overseeing the litigation issued the order late Friday night and will review the settlement.
Here's the report from Bloomberg as well.
According to these reports, either the settlement will be paid by the $20 billion fund BP created to compensate victims or the fund will close and be replaced by a court overseen claims facility. In any event, the amount of the settlement is $7.8 billion that from these reports is not in addition to the $20 billion already set aside.
More to come. ADL
Wednesday, February 29, 2012
Precedent for BP Settlement?
An intrepid reporter asked me today what a good precedent would be for a settlement in the BP litigation - something on point, not a products liability mass tort settlement but an environmental toxic tort settlement of the magnitude that this would have to be. I couldn't think of anything except the Exxon case, which of course was litigated. Any other ideas?
Tuesday, February 28, 2012
BP Today, Tomorrow and Into the Future
You don't need the Mass Tort Litigation Blog to tell you that the imminent BP trial has been stayed pending settlement talks. In the meantime, here are some thoughts from the ever relevant George Conk. Special shout out for his poetic references: Diving Into the Wreck: BP and Kenneth Feinberg's Gulf.
I was just at a wonderful conference at the Charleston School of Law on Mass Torts and the Federal Courts where Feinberg spoke. One of the key questions at the conference is the extent to which claims facilities (BP, 9/11, etc.) are unique and unlikely to be repeated or the wave of the future. The interesting thing about BP is that it shows the interaction between claims facilities and litigation - its not one or the other. Speakers mentioned how companies trying to get ahead of a litigation may well look to the BP model. Others questioned whether BP was really special because the company was prepared to admit liability (although not gross negligence).
I was especially interested by the remarks of Sheila Birnbaum, currently running the 9/11 Fund for first responders and who mediated settlements for the 94 families who chose not to participate in the 9/11 Victim Compensation Fund. Even the families who wanted a public trial to find out what happened ultimately settled because of the uncertainty of trial. This raises important questions about the purpose of litigation for individuals: is it ultimately to get compensation? How important is it to get to the "truth"? How important is vindication? Punishment? When people settle (or waive their right to litigate prior to filing suit), what kind of consent do we want and does money ultimately satisfy? Lynn Baker, who was at the conference, referred me to the following article that addresses some of these questions: Gillian Hadfield, Framing the Choice Between Cash and the Courthouse: Experiences with the 9/11 Victims Compensation Fund. This continues to be relevant, especially if Funds become a model rather than a one-off.
Saturday, February 18, 2012
The Upcoming Trial in the Deep Horizon Litigation
NPR has a story with lots of interesting quotes. My favorite:
"There's only one place where a waitress or a shrimper can be on equal footing with a company the size of BP, and that's a courtroom," says Rhon Jones, with the Montgomery, Ala., law firm Beasley Allen. Jones is part of the plaintiffs' steering committee, a group of lawyers coordinating the case.
The story raises a series of important questions about the purpose of litigation and settlement. Is it best for society to funnel cases outside that system as in the BP and 9/11 cases? What is the use of a trial - to apportion liability? get to the truth? allocate damages? figure out difficult causation questions? Are different plaintiffs to be treated differently - for example the waitress and the shrimper above as opposed to the attorneys general of the affected states?
Edited to add: I just saw the blog post by George Conk about the potential ineligibility of many plaintiffs who did not file claims with the compensation fund. See here for more analysis.
Friday, February 17, 2012
Philly Court Issues New Mass Tort Protocol
Mark Behrens sent me a new mass tort protocol issued by the Philadelphia Court of Common Pleas. Here are some highlights:
- There shall be no reverse bifurcation of any mass tort case, including asbestos, unless agreed upon by all counsel involved.
- Consolidation of mass tort cases shall not occur absent an agreement of all parties, except in the asbestos program in accordance with the protocols set forth herein below.
- All punitive damage claims in mass tort claims shall be deferred.
- Pro hoc vice counsel shall be limited to no more than two (2) trials per year, but otherwise will not be limited on pre-trial appearances. The Court encourages non-Pennsylvania counsel to pass its Bar Examination and thereby become familiar with Pennsylvania law, rules and procedures.
- Unless otherwise agreed by defense counsel or upon showing of exigent circumstances, all discovery shall take place in Philadelphia.
- Except for those cases already scheduled for trial through February 29, 2012, asbestos cases thereafter shall be grouped in groups of a minimum of 8 and a maximum of 10 and counsel shall be required to propose cases for consolidation considering the following criteria:
- Same law. Cases that involve application of the law of different states will not be tried together;
- Same disease. The disease category for each case in a group must be identical. The disease categories of cases to be grouped for trial are mesotheliomas, lung cancers, other cancers and non-malignancy cases;
- Same plaintiff’s law firm. Primary trial counsel for all cases in each group will be from a single plaintiff firm. Cases where Philadelphia plaintiff firms serve as local counsel for out-of-state counsel will not be grouped with cases from the local firm;
- Fair Share Act cases will not be consolidated with non-Fair Share Act cases;
- Pleural mesothelioma is a disease that is distinct from mesotheliomas originating in other parts of the body, and will not be tried on a consolidated basis with non-pleural mesothelioma cases and not necessarily tried on a consolidated basis. Non-pleural mesothelioma cases will be further classified for trial, so that non-pleural mesothelioma cases allegedly caused by occupational exposure will not be tried on a consolidated basis with non-pleural mesothelioma cases allegedly caused by para-occupational (bystander) exposure;
- And such other factors as determined appropriate in weighing whether all parties to the litigation can receive a prompt and just trial. The Court’s present backlog of asbestos cases shall not be an overriding factor in the consolidation determination.
- Any grouping of cases less than 8-10 in number shall not receive a trial date until a group is formed of 8-10 cases. A maximum of 3 of these 8-10 cases may be tried, with the other 5-7 cases either resolving through settlement or returned to the Coordinating Judge for regrouping and relisting for trial.
- Mediation: Once grouped, assigned a trial date and after Motions for Summary Judgment have been decided by the Court, counsel are urged to seek mediation from a special panel of former judges named herein below. Either side may request mediation. The mediator selected by the parties shall advise the Court whether the plaintiff firm’s participation was in good faith or not. In the discretion of the Coordinating Judge, any plaintiff firm’s failure to proceed in good faith in mediation may constitute just cause to remove that group of cases from the trial list and any defendant’s failure to proceed in good faith may result in an increase of the maximum 3 cases consolidated for trial. Since no more than 3 cases may be consolidated and proceed to trial in any group of 8-10, the remaining 5-7 cases should be resolved and settled. Otherwise, those unresolved cases shall be relisted for trial. All parties will share the expense of mediation.
11. Immediately prior to trial of up to 3 consolidated asbestos cases, the assigned trial judge shall independently determine whether the cases will be tried in a consolidated manner based on the criteria herein above set forth and any other factors deemed relevant to the issue of consolidation and a fair trial.
12. Expediting of Cases. There shall be no expediting of cases based on exigent medical or financial reasons until the backlog of pending cases has been resolved, unless otherwise agreed by a majority of the defendants. When this Program achieves 80% of all asbestos cases resolved in 24-25 months, advanced listings based on exigent medical circumstances will be considered for plaintiffs with Pennsylvania exposure only.
Hermann on Aggressive Lawyering
A great post on Above the Law by Mark Hermann (formerly of Drug and Device Law Blog & Jones Day) today explains why a blowhard isn't necessarily the best lawyer.
Monday, February 6, 2012
Catherine Sharkey on the Vicissitudes of Tort
Professor Catherine Sharkey (NYU) has posted to SSRN her article, The Vicissitudes of Tort: A Response to Professors Rabin, Sebok & Zipursky. Here is the abstract:
This response essay probes three themes that tie together three articles submitted for a tort symposium on “The Limits of Predictability and the Value of Uncertainty.” First, I explore the use of unpredictability as a code word for an assault on tort doctrine in response to an out-of-control tort system. In his historical account of the evolution of tort, Professor Rabin focuses on the canonical “no duty” rules of the nineteenth century and the contemporary rules-based limitations on open-textured liability in the twentieth century. But largely missing from this account is the story of rules promoting tort liability, such as strict liability, vicarious liability, negligence per se, and the like. Second, I probe the link between unpredictability and insurance. I argue that Professor Sebok’s efforts to distinguish champerty from illegal gambling and to analogize it to a form of insurance will inevitably fall short of establishing social acceptance or embrace of the practice. Third, I highlight the role of the U.S. Supreme Court and its incursions into the state law domain of tort in the name of predictability. Professor Rabin is doubtful that the U.S. Supreme Court will achieve great strides in its endeavor to quell unpredictability in punitive damages. Professor Zipursky has considerable angst about the Court’s making inroads into privacy and emotional distress torts. Such incursions are in keeping with the Court’s longer-term project of procedural reform of the civil litigation system in the name of unpredictability, but are novel in their ambition to launch frontal attacks.
Fordham Lecture on Third-Party Litigation Funding by Lisa Rickard fo U.S. Chamber Institute for Legal Reform
Lisa Rickard, the President of the U.S. Chamber Institute for Legal Reform, will present the 2012 Noreen E. McNamara Memorial Lecture at Fordham Law School in New York. Her lecture is entitled, The Commercialization of Legal Practice: Legal and Ethical Perils of Third-Party Litigation Funding, and the lecture will take place at 6:00 p.m., February 28, 2012.
Sunday, February 5, 2012
Zimmerman and Sant'Ambrogio on the Agency Class Action
The number of claims languishing on administrative dockets has become a new “crisis” — producing significant backlogs, arbitrary outcomes and new barriers to justice. Coal miners, disabled employees, and wounded soldiers sit on endless waitlists to appeal the same kinds of administrative decisions that frequently result in reversal. Refugees seeking asylum from the same country play a dangerous game of “roulette” before arbitrary decisionmakers. Defrauded consumers and investors miss out on fair compensation, as agencies settle the same claims with wrongdoers without victim participation or meaningful judicial oversight.
Reformers have called for new resources, more administrative law judges and improved attorney fee arrangements. But surprisingly, commentators have largely ignored tools long used by courts to resolve common claims raised by large groups of people: class action and complex litigation procedures. Almost no administrative law process allows groups to aggregate and resolve common claims for relief. As a result, in a wide variety adjudicatory proceedings, administrative agencies routinely (1) waste resources on repetitive cases, (2) reach inconsistent decisions for the same kinds of claims, and (3) deny individuals access to the affordable representation that aggregate procedures otherwise promise. Moreover, procedural and substantive hurdles — including exhaustion of administrative remedies and judicial deference to agency expertise — often prevent federal courts from providing class-wide relief to parties in agency adjudications.
We argue that agencies themselves should adopt aggregation procedures, like those under Rule 23 of the Federal Rules of Civil Procedure, to adjudicate common claims raised by large groups of people. After surveying the current tools by which agencies could promote more efficiency, consistency and legal access — including rulemaking, stare decisis, attorneys fees and federal court class actions — we find agency class action rules more effectively resolve common disputes by: (1) efficiently creating ways to pool information about recurring problems and enjoin systemic harms; (2) achieving greater equality in outcomes than individual adjudication; and (3) securing legal and expert assistance at a critical stage in the process. In this way, The Agency Class Action represents a new kind of decision-making for administrative agencies — a blend of adjudication and rulemaking for large groups of people who similarly depend upon the administrative state for relief.
Campos on Proof of Classwide Injury
Federal courts have recently required proof of classwide injury to certify a class action for monetary remedies. Proof of classwide injury is defined as proof, which is common to the class, that the defendant's unlawful conduct injured every member of the class. This article argues that the requirement of proof of classwide injury arises from three fallacies about the class action. The first fallacy, the "all at once" fallacy, presumes that all issues in a class action must be determined in one fell swoop. I argue that the class action is not an "all at once" trial device but a trust device that entrusts the claims to class attorney so that he or she can make optimal investments on common issues. Thus, a class action can incorporate multiple trials, or even individualized trials. The second fallacy, the "extraordinary remedy" fallacy, analogizes the class action to extraordinary remedies like the preliminary injunction. Thus, proof of classwide injury is required because it allows a court to determine the plaintiffs' likelihood of success of the merits. However, in litigation involving numerous plaintiffs, the defendant can exploit economies of scale to invest in common issues that the plaintiffs cannot utilize in the absence of the class action. Thus, class certification is required before a merits determination, not after. The third fallacy, the "individualist" fallacy, presumes that individual trials as to each plaintiff's injury are required in the absence of proof of classwide injury to avoid compensating uninjured plaintiffs. I argue that individual trials will not necessarily result in more accuracy, and, more importantly, such accuracy is of secondary importance given the deterrence function of the litigation, which only requires an accurate determination of the defendant's aggregate liability. The article concludes that class certification only requires common questions concerning liability, not common answers as to individual injury. It also suggests factors other jurisdictions should consider in adopting, designing, and implementing similar collective procedures.
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Thursday, February 2, 2012
Ronald Brand on Access-to-Justice Analysis on a Due Process Platform
Ronald Brand (Pittsburgh) has posted to SSRN his article, Access-to-Justice Analysis on a Due Process Platform. Here is the abstract:
In their article, Forum Non Conveniens and The Enforcement of Foreign Judgments, Christopher Whytock and Cassandra Burke Robertson provide a wonderful ride through the landscape of the law of both forum non convenience and judgments recognition and enforcement. They explain doctrinal development and current case law clearly and efficiently, in a manner that educates, but does not overburden, the reader. Based upon that explanation, they then provide an analysis of both areas of the law and offer suggestions for change. Those suggestions, they tell us, are necessary to close the “transnational access-to-justice gap” that results from apparent differences between rules applied in a forum non conveniens analysis and rules applied to the question of recognition of foreign judgments. While the analysis is good, it ignores core differences among legal systems, particularly the due process core of U.S. jurisdictional jurisprudence and the “access to justice” approach to jurisdiction, particularly of European civil law systems (from which most other civil law systems draw their origins). This distinction involves a fundamental difference, with U.S. doctrine focusing on the rights of the defendant and the civil law doctrine focusing on the rights of the plaintiff. So long as this difference exists, it will not be possible to wrap the process of declining jurisdiction and the process of recognition of foreign judgments in the same cloak of doctrine in order to provide common or connected analysis.
Rhonda Wasserman on Secret Class Action Settlements
Professor Rhonda Wasserman (Pittsburgh) has posted to SSRN her article, Secret Class Action Settlements. Here is the abstract:
This Article analyzes the phenomenon of secret class action settlements. To illustrate the practice, Part I undertakes a case study of a class action lawsuit that recently settled under seal. Part II seeks to ascertain the scope of the practice. Part II.A examines newspaper accounts describing class action settlements from around the country. Part II.B focuses on a single federal judicial district – the Western District of Pennsylvania – and seeks to ascertain the percentage of suits filed as class actions that were settled under seal. Having gained some understanding of the scope of the practice, the Article then seeks to assess it normatively. Part III analyzes the policy debate surrounding secret settlements of civil suits in general, fleshing out the competing policy objectives served by public access to, and confidentiality of, settlement agreements. Finally, Part IV examines the statutory, logistical and policy-based constraints that call into serious question the legality, efficacy and wisdom of secret class action settlements
Honda Loses Small Claims Court Suit Over Hybrid Fuel Economy, Raising Questions About Alternatives to Class Actions
As the L.A. Times reports, Honda has lost a case filed in small claims court in California by a Civic hybrid owner who claims her Honda misrepresented the gas mileage possible. The owner apparently opted out of a proposed class action settlement that might provide $100 and new-car rebate coupons to Civic owners, and pay class counsel $8.5 million in attorneys fees. Instead, she filed in small claims court and after 3 hours of testimony over two days, she was awarded $9,867.19 in damages. (In California small claims courts, parties must appear without separate counsel; plaintiff here was an attorney representing herself, though her bar membership is apparently inactive.) Honda, however, plans to appeal the small claims award to Los Angeles County District Court. (H/t to my Mass Tort Litigation student Michelle Rosenberg, who sent me the story.)
Might small claims court be a viable alternative to class action litigation? Class actions of course are most appropriate in so-called negative value claims, where the cost of bringing individual suit exceeds the recovery sought. Small claims court, with its radically diminished transaction costs (and no attorneys' fees), could be seen to shrink the realm of negative value claims. And smalls claims court avoids the potential conflict of interest arising from the temptation for class counsel to settle class claims for a less than optimal amount, in pursuit of a hefty, sure, and speedy class counsel fee. Small claims court still wouldn't be worth the trouble of people who think they were defrauded only a dollar or two, but it might be a viable alternative if hundreds of dollars per claimant were at stake.