A Securities Docket post today tipped me off to this Reuters article discussing the enactment of “Italy’s first law establishing class actions.”  The law will take effect January 2010 and will apply only to conduct occuring after the law’s effective date.  At first, I wasn’t sure whether this April 1, 2008, ClassActionBlawg article announcing Italy’s first class action law was just very prescient or an April fool’s joke, but according to the Reuters article, “The law is part of the so-called development package promoted by Development Minister Claudio Scajola, which has been before parliament for nearly a year.”

Economist David Gulley, Ph.D., of Navigant Consulting, has authored an informative white paper entitled Recent Trends in Rule 23 Class Certification Expert Analysis.  Dr. Gulley’s article explores the expanding role of experts and increased scrutiny over expert opinion testimony in class certification proceedings in light of recent federal appellate decisions placing renewed emphasis on the rigorous analysis standard.  See the Second Circuit’s opinion in In re IPO Securities Litigation and the Third Circuit’s opinion in In re Hydrogen Peroxide Antitrust Litigation.  The paper is a great resource for both class action attorneys and experts who are asked to testify in class certification proceedings.

The guys at the Drug and Device Law Blog have a post outlining “six things we’ve heard” about why no lawyers from the ten most profitable law firms have blogs.  Perhaps wisely, the’ve chosen to stay out of the fray by commenting further.  I do not share their good sense.  I’m completely unqualified to speak to what motivates lawyers at the 10 most profitable firms to do or not do anything, but I will say some things in defense of the benefits of blogging for big firm lawyers.

1. Lawyers at the most profitable firms are stupid:

“‘Profitable’ large law firms don’t see the need or the benefit of doing blogs. Clearly, if they are already doing well, why go to the trouble and work involved in blogging, when too many BigLaw lawyers still believe that the work will always be there. A mistake of course, but a perception nonetheless.”

I can offer no proof that this is a mistaken perception, but it does presuppose that the only reason to do anything is to make more money. 

2. Lawyers at the most profitable firms are too busy:

“The reason they are so profitable is that everyone is working their heads off – nobody has time to blog.”

I started work at 8:21 a.m. today and finished at 11:06 p.m., with 30 minutes off to drive home and pick up a Chipotle burrito on the way, so don’t talk to me about being too busy to blog.

3. Lawyers at those firms won’t stoop to blog:

“They are so profitable that they don’t think they need to stoop to marketing (which is what they think blogging is).”

Could be.  Blogging is the geekiest form of shameless self-promotion, unless you count Twitter.  But it’s also a great outlet for self-expression and a place to share ideas with smart lawyers who share your interests.

4. Lawyers at those firms don’t want to give away their product for free:

“Lawyers at the top ten PPP firms wouldn’t want anyone at the firm to blog because they might divulge the firm’s precious secrets.”

Of course, how to bill 1000 hours for a 150-page brief and the complete history of the juridical link doctrine are secrets worth protecting, but think about how much more money you could make if you made a nickel for every person who clicked on your blog to learn about your firm’s precious secrets.

5. Lawyers at those firms lack the necessary skill set:

“Those high-profit firms are so profitable because they are very good at making money, but the skill sets required for being good at making money may not be the same as the skill sets required to blog.”

ClassActionBlawg.com is proof positive that blogging does not require a skill set.

6. Lawyers at those firms correctly believe that blogging is unlikely to yield a decent return on investment because of the nature of the firms, the work they do, and their clients:

“When your firm name is already well known and your reputation that well established, you wouldn’t add any value by blogging.”

This one is right on.  That’s why you end up with so many law blogs written by nobodies who’ve never accomplished anything and who hope that by starting a blog, you’ll mistake them for someone famous.  Like this one from some guy named Spence who doesn’t even own a proper suit for court: http://gerryspence.wordpress.com/.  Or how about these two: http://www.becker-posner-blog.com/?  They sound more like Becker-POSER to me.

Jaclyn Jaeger of Compliance Week authored a comprehensive article published yesterday highlighting trends in credit crisis-related securities class action lawsuits.  The article summarizes a June 15, 2009, NERA Consulting report entitled “An Update on the Credit Crisis Litigation: A Turn Towards Structured Products and Asset Management Firms.”  Here is a link to the article, which in turn includes a link to a .pdf version of the NERA report. 

The report finds that credit-crisis-related lawsuits exploded in 2008, increasing 172% over 2007.  So far in 2009, filings appear to be continuing at a similar pace from 2009.  The report also notes an increase in cases that name officers and directors as defendants and an increase in the percentage of cases filed by non-shareholder plaintiffs.  Asset management firms and securities issuers and underwriters continue to be the target of the largest number of suits with only a small percentage of cases filed against mortgage lenders, home builders, insurers, and other defendants. 

The filing statistics only tell part of the story, however.  The report also provides preliminary statistics on the outcomes of cases, finding that almost two thirds of recent resolutions involved either an outright dismissal, partial dismissal, or voluntary dismissal.  15% resulted in settlements, while 21% survived motions to dismiss.

For anyone interested in tracking the litigation arising from the credit crisis, both the article and the NERA Consulting report are a worthwhile read.

The Korea Times reported today that South Korea’s first ever class action has been given a preliminary approval to move forward, as a local court selected a private equity fund as representative plaintiff.  According to the article, the suit is the first filed under a South Korean securities class action law that was passed in 2005.  The use of the class action device in a shareholder lawsuit reflects that South Korea doesn’t just recognize class actions as a tool to combat public protest (see previous CAB entries dated August 29,  September 8, and November 3, 2008).

For more on today’s story, see this entry from Securities Docket.

CBC business columnist Michael Hlinka has this modest proposal for how to prevent class action abuse in Canada: make unsuccessful plaintiffs’ class action attorneys pay the defendant an amount equal to the amount of the contingent fees that they stood to earn if they had won.  It’s  not an idea that is likely to catch on among policymakers, but it’s sure to be popular among those who think that lawyers are the only ones who win in class actions.

This month’s edition of BNA, Inc.’s Class Action Litigation Reporter (available by subscription) tipped me off to three interesting class action-related cases pending before the United States Supreme Court:

1) Morrison v. National Australia Bank, No. 08-1191 (cert pending).  The Court invited the Solicitor General to submit a brief expressing the U.S. government’s views on a petition for certoriari to review the Second Circuit Court of Appeals’ well-publicized ”foreign-cubed” class action decision.  (For more on the lower court’s decision in Morrison, see this October 28, 2008 CAB entry).

2) Herz v. Corporation v. Friend, No. 08-1107 (cert granted).  This case involves an issue that is the subject to a split among the Circuit Courts of Appeals regarding the proper test for establishing a corporation’s principal place of business for diversity purposes under 28 U.S.C. 1332, as amended by the Class Action Fairness Act (CAFA). 

3) Merck & Co. v. Reynolds, No. 08-905 (cert granted).  This appeal involves the standard for triggering the statute of limitations in a securities fraud case and the question of whether, for purposes of “inquiry notice” sufficient to trigger the limitations period, an investor has a duty to investigate prior to receiving actual knowledge of both a misrepresentation and the defendant’s wrongful intent.

The cert petitions and briefs for these cases are available for download at the SCOTUSblog.

According to a story on NPR this morning, the Obama administration is pushing to turn over regulatory power currently within the jurisdiction of the Federal Reserve. One has to wonder whether the creation of a new consumer protection agency will have the effect of reducing class actions, either by preventing corporate misconduct or provoding an administrative process for redress. On the other hand, maybe increased govermental oversight will merely raise awareness of possible theories of relief for civil lawsuits. We shall see.

Senior U.S. District Court Judge Jack B. Weinstein (E.D.N.Y), has become well known for his often-cited and sometimes controversial opinions in mass tort and class action cases.  He recently authored a commentary in the Cardozo Law Review’s new online journal de novo on some of his key decisions in cases involving subjects ranging from Agent Orange, asbestos, and tobacco to breast implants, hand guns, and pharmaceuticals.  Judge Weinstein describes the article, entitled Preliminary Reflections on Administration of Complex Litigations, as a brief summary of

my view of the federal courts’ appropriate role in bringing mass litigation to resolution as quickly and with as few transactional costs as possible while allowing reasonable satisfaction to the litigants and the public weal.

Excerpts of the article are available on the publication’s website, where you can also download a pdf version of the entire article.  Judge Weinstein openly expresses dismay over what he sees as a “general hostility” in the federal courts against the certification of Rule 23 class actions in mass tort and securities case, and muses that the law and the courts have failed to provide the consuming and investing public with adequate remedies for mass harms.  As possible approaches for remedying these perceived failings, he suggests an ALI study into “relevant procedures” and challenges administrative agencies to do more to protect the public from illegal and tortious conduct.

For additional discussion on the article, see this post from Ben Hallman at the Am Law Litigation Daily.

According to this article by Anindita Dey of the Business Standard yesterday, an Indian securities regulator has announced plans to fund a program to reimburse litigation expenses actions brought on behalf of investors for alleged illegal securities practices.  The fund would be available to a group of registered investor associations who could apply for reimbursement for legal expenses from the fund, but only after those expenses have been incurred and only after a showing that at least 1,000 investors are affected by the alleged practices. 

The representative securities litigation described in the article is characterized as similar to class action litigation in the U.S., but it appears to differ in at least two important respects.  The first difference is the use of litigation fundingto support group litigation.  In the U.S., the funding of a lawsuit is usually accomplished by law firms who pursue the case and often advance costs in the hopes of recovering a portion of the judgment through a contingent fee or a fee award.  In other parts of the world, such as in Australia, private litigation funding firms provide funding for class actions in exchange for a portion of any recovery.  The funding scheme described in the article appears to differ slightly from that prevalent in Australia in that it is state-funded rather than private. 

The second difference is the method in which the representation is being achieved.  In the U.S., an individual investor or small group of investors typically seek appointment as class representatives to represent a larger class of investors.  By contrast, the type of litigation being described in the article contemplates that an association would bring the action on behalf of its members.  Associational representation is a procedural vehicle that has been used in the U.S., but is far less common in securities litigation than true class actions.