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Archive for June, 2011

Colorado litigators, I hope you will consider attending our next Class Action Subsection Luncheon scheduled for next Thursday, June 30, 2011 at noon.  The topic is “Statistics in the Courtroom.”  I will be presenting the law, and my co-presenter, Justin Hopson of Hitachi Consulting, will  be presenting the science.  Among other things, we will analyze the Supreme Court’s treatment of statistical evidence in the recent Wal-Mart Stores, Inc. v. Dukes decision.  I hope you can make it.  A program description follows.

CBA – Class Action Sub-Section LUNCHEON

CBA Offices, 1900 Grant Street, 9th Floor,

Executive Conference Room Denver, CO 80203

Thursday, June 30, 2011

Topic: “Statistics in the Courtroom”

 

As the standards of proof for class certification have become more rigorous over the past few years, the use of statistical evidence in class certification proceedings has become a growing trend.  For the practitioner, this means that knowing when and how to use statistics can be the difference between winning and losing a class certification motion. 

 

In Part I of this Program, Paul Karlsgodt of Baker Hostetler will discuss the legal principles involved and case law dealing with the admissibility and use of statistics in the courtroom, especially in class certification proceedings.

 

In Part II, Justin Hopson of Hitachi Consulting will discuss the types of statistics that can be used in the courtroom, what statistics mean, how statistics can and cannot not be used, and tips for cross-examining statistics experts.

 

1 General CLE Credit Applied for.

Registration for the Luncheon begins at 11:30 a.m.
The Luncheon will begin at 12:00 PM.

To RSVP for the Luncheon:
Call 303.860.1115, X727 or SEND AN E-MAIL TO LUNCHES@COBAR.ORG, PLEASE INCLUDE YOUR NAME AND Class Action luncheon in your e-mail.

Please register by Wednesday, June 29, 2011, Noon.

If sending a check please make it out to Colorado Bar Association, Class Action Sub Section, 1900 Grant Street, Suite 900, Denver, CO 80203.  Please also call or e-mail in your reservation when sending a check.
**Cancellations can be made only by calling 303.860.1115, X727 or by e-mail to mailto:lunches@cobar.org.**
Cancellations after Wednesday, June 29, 2011, Noon, will be responsible for payment.

The cost of the luncheon is $15.00 for Litigation Section members, $25.00 for Non-Members. Vegetarian meals must be requested when making reservation. 

Call-in option will be $5, please RSVP to lunches@cobar.org, and indicate that you would like to call-in.  Instructions for the call-in will be sent out before the luncheon. 

 

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After the all the activity in the Supreme Court during the October 2010 term, why would anyone want to talk about a decision from the October 2009 term?  Isn’t that kind of like showing off your new Blackberry Curve the day after they unveil the iPhone 4?  I prefer to think about it this way–it’s like what they say about the NFL draft.  Sure, it’s fun to read all of Mel Kiper’s draft grades the next day, but you won’t really know how your team did until you have time to see the players perform on the field.

All these obscure metaphors are my way of introducing an upcoming live phone/web seminar in which I’ll be presenting entitled “Filing Class Actions in Federal Court After Shady Grove” scheduled for Thursday, July 14, 1:00pm-2:30pm EDT.  Here’s a synopsis of the program:

The Supreme Court’s Shady Grove ruling held that Rule 23 preempts state laws that otherwise bar statutory claims from being brought as class actions. Many believed an increase in class actions filed in federal court, particularly in the consumer protection and antitrust arenas would result.

One year later, the impact of Shady Grove on federal court filings remains unclear, mostly due to ambiguities in the Court’s decision and the differing plurality and concurring opinions regarding the standard for deciding which state-law restrictions do not apply in federal court actions.

The lower courts’ struggles to apply these different tests have resulted in divergent applications of Shady Grove. Nonetheless, plaintiffs and defendants can glean guidance from these rulings for arguing their positions regarding the applicability of a state-law restriction in federal court.

My fellow panelists and I developed this program to analyze the U.S. Supreme Court’s Shady Grove decision and discuss how lower courts have applied the ruling. We will offer guidance for practitioners to argue their positions on whether particular state-law prohibitions on class action claims should apply in federal diversity cases.

We will offer our perspectives and guidance on these and other critical questions:

  • Has the Shady Grove decision provided plaintiffs with additional opportunities for class action litigation?
  • How have lower courts applied Shady Groves‘ divergent tests for deciding which state laws restrictions will not apply in federal court actions?
  • Have there been any rulings since Shady Grove which dispensed with the state law restriction on class action claims?

After our presentations, we will engage in a live question and answer session with participants — so we can answer your questions about these important issues directly.

I hope you’ll join us.

For more information or to register >

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Many commentators correctly that the decision in Wal-Mart Stores, Inc. v. Dukes would be favorable to business interests.  However, unlike the Court’s earlier decision in AT&T Mobility v. Concepcion, the decision does not necessarily threaten to sound a death knell for class actions or even a particular category of class actions.  Instead, the decision merely clarifies the standards on which future class actions are to be evaluated in the federal courts, but it does so in a way that is likely to impact class actions in many areas of the law outside of the employment law context.  Here are some of the key issues on which the opinion will undoubtedly be cited in the future, and some thoughts on the potential impact of the decision on each issue.

1) Standard of review  – The majority’s decision clarifies a long-standing misconception about the ability of a federal court to consider questions relating to the merits of a case in the class certification phase.  For more than 30 years, plaintiffs’ counsel and many courts have cited the Court’s opinion in Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) as prohibiting any examination of the plaintiffs’ claims on the merits at the class certification phase.  Consistent with the majority trend in the lower federal courts, the Supreme Court’s decision in Wal-Mart Stores, Inc. confirms that a court should consider and resolve any issues of fact that are necessary to determine whether one or more elements of Rule 23 are satisfied, regardless of whether those issues may overlap or be identical to one or more issues to be decided in ruling on the merits of the plaintiff’s claims.

2) Evaluation of Expert Testimony - The majority decision makes clear that it is appropriate for a federal court to conduct a Daubert analysis to consider the reliability and helpfulness of expert witness opinions at the class certification phase.  It is no longer sufficient for a plaintiff to present expert testimony and then argue that the Court may find that testimony reliable at some later point in the proceedings.  Again, in keeping with te trend among the federal circuit courts, the Court’s analysis in Wal-mart Stores, Inc. makes clear that the reliability and relevance of expert testimony proposed as “common proof” should be evaluated before granting class certification.

3) Use of Statistical Evidence in Support of Class Certification - The majority’s decision leaves open the possibility that statistical evidence might be used in establishing the existence of common proof in certain cases, but it sets a high standard for when proffered statistical evidence can be considered as adequate proof of the existence of “common issue.”  Significantly, Part III of Justice Scalia’s opinion, which was joined by all 9 justices, disapproves of the “Trial by Formula” approach to class actions, in which a sample of claims is tried on the merits, and the results of that sample are then applied proportionally to the claims of the entire class.

4) Certification of Claims Seeking Monetary Relief Under FRCP 23(b)(2) - This is perhaps the most uncontroversial aspect of the opinion in that part of the unanimous holding of the Court.  The Court’s holding is also straightforward, at least conceptually: claims for monetary relief may not be certified under FRCP 23(b)(2) unless they are merely incidental to injunctive or declaratory relief being requested on behalf of the class as a whole.  However, the devil may be in the details, as future courts (especially outside the employment law context) will be left with the task of defining what monetary relief is “incidental” to injunctive or declaratory relief and what is not.

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As was widely expected, the Supreme Court has overturned class certification in what has been called the largest employment discrimination class action in history. The slip opinion in Wal-mart v. Dukes, No. 10-277, (S. Ct. June 20, 2011). is available at the Court’s website.

The justices were unanimous in finding that Rule 23(b)(2) did not allow the class action to go forward for the purpose of seeking monetary relief in the form of back pay. However, the Court split 5-4 on whether the case should have been allowed to go forward for the purpose of pursuing injunctive relief. Justice Scalia wrote for the majority and Justice Ginsburg authoring a partial dissent.

Much more on the decision later…

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Earlier today, the Supreme Court issued its third of four class action-related decisions for the October 2010 term.  In Smith v. Bayer Corp., No. 09-1205, the Court held that a federal court exceeded its authority when it issued an injunction preventing a state court from considering whether to certify a class on claims in which the federal court had previously denied class certification. 

Justice Kagan’s opinion involves a fairly straightforward academic analysis of the “re-litigation exception” to the federal Anti-injunction Act and principles of issue and claim preclusion: where a state court applies a different class certification standard than the standard applicable under FRCP 23, the issue decided in the federal action on class certification is not the same as the one to be decided in the state court proceeding.

However, the practical impact of the decision is that a plaintiffs’ lawyer who is unsuccessful in seeking class certification in federal court can try again in a state that applies a different class certification standard.  Of course, the successive class action is potentially subject to removal under the Class Action Fairness Act (CAFA), but if one of the exceptions to CAFA applies, such as the home state or local controversy exception, the Court’s decision paves the way for multiple bites at the class certification apple.

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The premise sounds ridiculous, but maybe there’s more to it after all.  This quote from moose collision class action lawyer Ches Crosbie sums it up:

Six months ago when we launched this class action, most people in the province thought that we were a bit crazy.

Count most observers from outside the province as sharing that sentiment.  In two previous less-than-scholarly posts, I mocked the idea of a class action seeking relief against the government of Newfoundland and Labrador on behalf of people injured in car collisions with moose.  See entries dated October 19, 2010, Danger! Moose Crossing, and January 12, 2011, Moose Collision Litigation: The Wave of the Future in Canadian Class Actions?  

I stand corrected.

According to Sue Bailey of The Canadian Press, the trial judge has decided to certify the moose collision case as a class action.  In fact, the case for certification was evidently so compelling that the main concern raised by the judge was whether the limitation to persons hospitalized as a result of moose collisions made the class too narrow.  The judge has reportedly asked the parties to consider whether the class definition should be expanded.

According to the article, the government did not resist the motion to certify the class, so perhaps it decided it would be better to take on the moose collision issue once and for all in a single case rather than having to face a flood of individual moose collision lawsuits.  Whatever the reason, it looks like the issue of whether the province was negligent in its introduction of moose and its management of the species after introduction is moving toward a decision on the merits.

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Just when we were starting to think that 2011 might mark the end of the great American class action…

Today, the Supreme Court issued a unanimous decision reversing a denial of class certification in the securities class action Erica P. John Fund, Inc. v. Halliburton Co., No. 09-1403, slip op (June 6, 2011).  In the opinion, authored by Chief Justice Roberts, the Court held that the Fifth Circuit Court of Appeals had erred by requiring a securities fraud plaintiff proceeding under a “fraud on the market” theory to prove loss causation as a prerequisite to class certification. 

The decision does not necessarily mean that class certification will be granted, however.  It just means that the denial of class certification cannot rest on the conclusion that the plaintiff failed to prove loss causation at that stage.  The case will be remanded to the Fifth Circuit, which may consider any other arguments against class certification to the extent that they have been preserved by the defendant.  See Slip Op. at 9.

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