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Archive for September, 2011

UPI contributor Michael Kirkland published a recent article entitled Is Class Action on Its Last Shaky Legs, in which he quotes several legal experts as predicting that the Supreme Court’s recent rulings in Wal-Mart Stores, Inc. v. Dukes and AT&T Mobility LLC v. Concepcion could spell the end of the class action lawsuit.  But, near the end of the article, Kirkland quotes Columbia law and business school student Allessandro Presti, who says that those predicting the death of class actions “may be jumping the gun.”  Presti has a good article about potential practical limitations to the reach of Concepcion at the Columbia Business Law Review online, which is entitled AT&T Mobility v. Concepcion: End of Class Action Litigation as We Know It?  Or Much Ado about Nothing?

As anyone who reads this blog regularly is already aware, I’m with Presti.  Class actions are like the killer in a 1980s horror flick.  Just when you think you’ve done them in for good, they come back for another sequel.  Anyone who thinks that the U.S. Supreme Court is out to abolish class actions should read the decisions in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co. and Erica P. John Fund v. Halliburton Corporation.  No doubt there are factions of the Court who could not be considered champions of the little guy, but to say that class actions are nearly extinct goes a bit too far.

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As I noted in my post a few weeks ago for the SCOTUSBlog class action symposium, one issue to which I’m paying particularly close attention these days, particularly in the wake of the Supreme Court’s recent decisions in Shady Grove, Concepcion, Bayer and Dukes, is whether the state court class certification standards begin to diverge from increasingly more exacting federal standards. 

A recent article in the Wisconsin Lawyer caught my eye as a case in point for the potential divergence of state and federal class action standards.  A Call to Reform Wisconsin’s Class-Action Statute, authored by Paul Benson, Joe Olson & Ben Kaplan of the Milwaukee firm Michael Best, discusses the brief and arcane language of Wisconsin’s class action statute (Section 803.08 of the Wisconsin Statutes), which reads, in its entirety:

When the question before the court is one of a common or general interest of many persons or when the parties are very numerous and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of the whole.

Benson, Olsen and Kaplan point out in their article that although the courts have generally looked to case law interpreting federal Rule 23 in deciding whether class certification is proper under the state rule, the broad statutory language leaves state trial courts with broad discretion in deciding what standards to apply in a particular case.  This, they argue, leaves the state rule open to uncertainty of application, inconsistent decisions, and forum shopping.   They propose that the state rule be reformed so that it more closely mirrors the federal rule.

It remains to be seen whether states like Wisconsin with ill-defined class action rules will become battleground for class action litigation, where plaintiffs can attempt to avoid the more rigorous standards now required in the federal courts. Even assuming that CAFA and other jurisdictional issues could be overcome, there could be a variety of practical reasons why plaintiffs’ lawyers would not want to pursue class action litigation in the Wisconsin courts.  However, Wisconsin’s broadly-worded class action rule provides at least a possible inducement to pursue litigation there.

In other words, for potential class action defendants (and in observance of National Talk Like a Pirate Day), Ye maye want to considarrrr steerrrin’ clear o’ Wisconsin, me maties!

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For those of you who hadn’t already seen it, here is a link to an article that Raj Chohan and I co-authored entitled Class Action Settlement Objectors: Minor Nuisance or Serious Threat to Approval? which was published in both the BNA Product Safety Reporter & Liability and Class Action Litigation Report several weeks ago.  I had asked for and received permission from the publisher some time ago to post a copy here, and then forgot to do so.

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I’m very excited to be speaking at an upcoming Strafford Publications CLE webinar entitled: Statistics in Class Action Litigation: Admissibility and the Impact of Wal-Mart v. Dukes.   The program is scheduled for Thursday, October 6, at  1:00pm-2:30pm EDT.  This is a beefed up version of a presentation that Justin Hopson and I did for the Colorado Bar Association class actions subsection earlier this year.  Brian Troyer of Thompson Hine in Cleveland will be joining us this time around.  Here’s a synopsis of the program, followed by a link to the registration page:

As class certification standards have become more rigorous, the use of statistical evidence in certification proceedings has become an integral part of class action litigation. Effectively using or challenging statistics can be the difference between winning and losing a class certification motion.

Since statistical evidence is introduced through expert witness testimony, Daubert challenges may be an effective strategy. This raises the issue of the scope of the court’s inquiry into the merits at the class certification stage.

The prominent role of statistical evidence in class certification is underscored in Wal-Mart v. Dukes. The Court weighed in on both the level of statistical proof to sustain certification as well as the appropriate standard for a Daubert analysis.

My fellow panelists and I will provide class action counsel with a review of the Court’s treatment of statistical evidence and expert testimony in Wal-Mart v. Dukes, discuss admissibility and use of statistics in certification proceedings, and outline strategies for using statistics and cross-examining statistics witnesses.

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

  • How did the Supreme Court in Wal-Mart v. Dukes address the level of Daubert analysis at the class certification stage?
  • What types of statistics can be introduced and what are the proper ways to utilize statistics?
  • What strategies can counsel use to effectively cross-examine statistics witnesses?
  • What are the recent trends in the use of statistical evidence to support a class certification motion?

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, click here

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The avid reader of CAB (maybe there are more than one of you now, but I don’t want to be presumptuous) will notice that I often comment on developments in class and collective actions outside the United States.  If you really want to keep abreast of the exiting trends in representative and multi-party litigation around the World, you don’t want to miss the upcoming Fifth Annual Conference on the Globalization of Class Actions and Mass Litigation, to be held December 8 and 9, 2011, in the Hague, Netherlands.  This annual conference is co-sponsored by the world’s leading academic experts in global collective and class litigation and the slate of speakers features the world’s leading practitioners, policymakers, and academics on the subject.

I have already signed up to attend this year.  Registration is only 300 Euros, and air travel to the Netherlands is inexpensive in December, so there’s no reason you shouldn’t sign up too! 

Here is a short synopsis of the conference from the Tilburg University website, where you can get more information, including a copy of the agenda, and information on how to register:

Despite continuing controversy and strong opposition from some sectors, class action procedures and mass litigation continue to proliferate around the world. What challenges do class and mass actions present to judges, litigators, business enterprises, and civil society?

On December 8-9 2011 judges, practitioners and scholars will gather together at Raad van State in the Hague, Netherlands, to share information, experiences and recommendations on these issues. The conference is co-organized by Deborah Hensler (Stanford Law School), Christopher Hodges (Oxford Centre for Socio-Legal Studies and Erasmus University) and Ianika Tzankova (Tilburg University).

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On Friday afternoon, I received a comment to a December post entitled Are Class Actions About to Make a Run for the Border? that deserved a more conspicuous mention.   The comment came from Mexican attorney Jorge de Hoyos Walther, who had the following update on the status of legislation in Mexico introducing collective actions:

In April 2011 the Mexican Parliament approved a legislative package that regulates such actions, foreseeing the publication of the same in the Federal Official Gazette during the month of July. The amended laws are six: (1) Federal Code of Civil Proceedings; (2) Federal Civil Code; (3) Federal Law of Economic Competence; (4) Federal Law of Consumer’s Protection; (4) Organic Law of the Federal Judicial Power; (5) General Law of Ecological Equilibrium and Environmental Protection; and (6) Law of Protection to the User of Financial Services. On August 30th 2011, the Federal Official Gazette published this amendment to the federal law.

Legislation limits collective actions to matters related to the consumption of goods or services (public or private) and the environment.

jdehoyos@dha.com.mx

Jorge de Hoyos Walther

http://www.dha.com.mx

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My recent SCOTUSblog post  on the October 2010 Supreme Court Term class action decisions does not address an important decision from the Third Circuit Court of Appeals, which was issued last week.  In Litman v. Cellco Partnership, the Third Circuit held that New Jersey decision holding class arbitration waivers unconscionable was preempted by the Federal Arbitration Act.  To that extent, the court’s analysis is a relatively straightforward application of the federal preemption analysis in Concepcion.  But what is important about the Litman decision is that the court’s analysis makes no mention of whether the arbitration clause at issue contained the sorts of consumer-friendly procedural protections contained in the AT&T Mobility arbitration clause at issue in Concepcion.  Based on the quoted portions of the agreement discussed in Litman, it appears that it did not.  As a result even in cases outside the Third Circuit, Litman provides a defendant with strong authority for arguing that class arbitration waivers cannot be held unconscionable under state law principles regardless of the presence of any special consumer protections ensuring that arbitration provides a meaningful mechanism for redress.

However, potential defendants should still be cautious about going too far with arbitration provisions that mandate a waiver of all avenues for class relief if they don’t also contain some provision for incentivizing the pursuit of individual arbitration of a meritorious claim.  There are a variety of other arguments, including arguments based on the federal common law of arbitrability, that may still be persuasive to many courts when the particular arbitration agreement at issue appears to foreclose any possibility of litigation at all.  Moreover, the decision of only one of the federal circuits will not likely be enough to prevent attempts by plaintiffs’ lawyers to attack broadly-worded arbitration agreements in consumer contracts in the short-term.  So, although Litman is a good decision for defendants, prudent corporations will not treat it as an invitation to adopt draconian class arbitration waivers that have the effect of precluding nearly all consumer litigation.

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