Wednesday, December 26, 2007

What Happens to Class Actions Denied Certification?

In In re Bridgestone/Firestone Products Liability Litigation, 333 F.3d 763 (7th Cir. 2003) (Bridgestone/Firestone II), the 7th Circuit denied certification of a nationwide class action and held that this decision was binding -- that is, absent class members could not refile this national class action in another court to obtain certification.

What happened next?  You might predict nothing. But that is not the case.  Instead, the litigation was settled in state court in Beaumont Texas.  You can see a short description in this article that appeared in the Texas Lawyer, reprinted in  The unpublished opinion approving the settlement can be found on Westlaw: Shields on behalf of herself and all others similarly situated v. Bridgestone/Firestone, 2004 WL 546883 (Dist. Ct. Tx. 2004).

There are a lot of ways to read this chain of events.  Consider the following. The Class Action Fairness Act (CAFA) (which was passed after the events described above) was supposed to be responsive to concerns about certain state courts granting certification of class actions with minimal oversight.  It purported to solve this problem by giving jurisdiction to the federal courts of class actions over a certain size.  But when plaintiffs and defendants are both seeking certification, jurisdictional solutions like CAFA are unavailing because nobody is going to remove the case to federal court.  So does Bridgestone/Firestone II have more bite after CAFA?      

Addendum:  Since Beaumont is sometimes referred to as a "judicial hellhole", this article by Adam Liptak of the NY Times might be of interest (h/t TortsProf Blog).  Liptak analyzes a new report by the American Tort Reform Association claiming to "rank" judicial hellholes, albeit not empirically. 

“We have never claimed to be an empirical study,” said Darren McKinney, a spokesman for the association. “It’s not a batting average or a slugging percentage. It’s no more or less subjective than what appears in The New York Times."

If they actually did an empirical study, that would be worth reading.  The use of anecdotes in policy analysis is extremely misleading.  Not necessarily more misleading than the abuse of statistics can be, but perhaps less amenable to reasoned counter-argument and, to the extent that is true, more pernicious as a basis for policy making.  My favorite example of the moment of this problem is jury verdicts, which are so often reported as extraordinarily and perhaps offensively large.  But in fact studies consistently show that civil juries and judges agree approximately 80% of the time.  When they disagree, they split more or less evenly in favor of defendants and plaintiffs.  For more on this see Neil Vidmar and Valerie P. Hans' new book American Juries: The Verdict, a follow up to their excellent Judging the Jury, which presented the data in a very balanced and thoughtful way.


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