Thursday, July 30, 2020

Klonoff on Class Action Objectors, MDLs

Bob Klonoff has posted drafts of two articles on SSRN: Class Action Objectors: The Good, the Bad, and the Ugly, which is forthcoming in the Fordham Law Review; and The Judicial Panel on Multidistrict Litigation: The Virtues of Unfettered Discretion, which is forthcoming in the University of Missouri-Kansas City Law Review.

Here are the abstracts:

Class Action Objectors: The Good, the Bad, and the Ugly:

When litigants reach a class action settlement, they usually present a unified front in seeking judicial approval of the settlement. Plaintiffs’ counsel, the class representatives, and the defendant are typically on the same page regarding the fairness of the settlement and the maximum amount of attorneys’ fees to be paid. Before a settlement is approved, class members (or putative class members when the case has not yet been certified) have the opportunity to object. In many class actions, especially highly publicized ones, myriad objections are filed, some by counsel representing one or more individual class members and others by individual class members pro se. But not all objectors and objections are of equal value. The Good, the Bad, and the Ugly is not just a classic Clint Eastwood/Sergio Leone movie from 1966; it is also an accurate categorization of the kinds of objectors that frequently appear during the class settlement approval process.

Good objectors offer thoughtful and potentially meritorious objections that engage the court and require substantive responses from the parties, possibly improving the settlement for the class. Bad objectors raise objections that are insubstantial, making arguments that have no chance of persuading either the district court or an appellate court to reject the settlement based on the applicable law and facts. Often filed pro se by class members who have no legal training or background, bad objections are a necessary byproduct of a system that actively encourages objections—including objections by non-lawyer class members. Finally, ugly objectors raise objections not to improve the settlement but to extort payments from class counsel in exchange for dismissing their objections. Such objectors do not even arguably serve a legitimate purpose.

In this article, I examine all three kinds of objectors and offer two principal approaches for addressing them. First, parties may use summary affirmance to seek a prompt resolution, without full briefing or oral argument, when the objector’s appeal is plainly meritless. Second, through expedited review a court can accelerate the briefing schedule (and possibly dispense with oral argument) to consider potentially meritorious objections when there is a critical need to distribute recovery to class members quickly.

The Judicial Panel on Multidistrict Litigation: The Virtues of Unfettered Discretion:

Under the federal multidistrict litigation (MDL) statute, when there are federal civil actions pending in more than one district—involving one or more common questions of fact—a special panel of seven federal judges may centralize the cases before a single federal judge for pretrial proceedings. This panel, which is selected by the Chief Justice of the United States, is known as the Judicial Panel on Multidistrict Litigation (JPML).

Although the stated purpose of the MDL statute is to achieve judicial efficiency in pretrial proceedings, the reality is that only about three percent of the cases end up being transferred back to the transferor courts for trial. The other 97 percent are resolved by the MDL judge, either through settlement or dismissal. Moreover, a substantial percentage of the federal civil docket consists of MDL cases. Thus, the JPML’s decisions regarding (1) whether to create an MDL, and (2) which federal judge should oversee the cases (assuming the cases are deemed suitable for an MDL), have profound consequences for our civil justice system.

Although attorneys and scholars have offered numerous reform proposals involving the MDL process, those proposals have all been focused on the functions and powers of the MDL judge, not the decisions of the JPML. This lack of focus on the JPML process is surprising, given the JPML’s crucial role. It is especially surprising because the statute provides few criteria to govern the JPML’s decisions, and it provides for only limited mandamus review of JPML orders. Indeed, only once in the statute’s 52-year history has an appellate court issued a writ of mandamus overturning an order of the JPML.

Section I of this article explains that the decision whether to create an MDL, and the selection of the MDL judge, are heavily fact-intensive, and are undertaken without clear guidelines or consistent reasoning. A factor that the JPML finds to be important in one case may be given little weight in another, and in many cases it is difficult to predict how the JPML will rule. Yet, this article concludes in Section II that any attempt to codify detailed criteria to govern the JPML’s decision-making would be extremely difficult, and ultimately self-defeating. As the article notes, the JPML is doing an excellent job, and there is no need to adopt more rigid criteria to govern its decisions or more liberal avenues for appellate review.

 

 

https://lawprofessors.typepad.com/civpro/2020/07/klonoff-on-class-action-objectors-mdls.html

Class Actions, MDLs, Recent Scholarship | Permalink

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