As the loyal reader will have guessed already, other commitments have limited the time I’ve been able to spend creating new content for ClassActionBlawg.com lately. As a result, I’ve decided to take a hiatus through the end of August. I’ll probably be posting announcements from time to time, but will be taking a break from any in-depth commentary until September.
Enjoy the Summer, and I’ll be back again in the Fall with more riveting class action-related content…
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Those of us who have been following the Supreme Court’s decisions on class actions and arbitration over the past few years may have been a bit surprised when the Court recently upheld an arbitrator’s decision to compel class arbitration in Oxford Health Plans LLC v. Sutter. Oxford Health bucked a trend of decidedly defendant-friendly decisions on issues relating to the interplay between class actions and arbitration. Today, the Court moved back into more familiar territory in deciding American Express Co. v. Italian Colors Restaurant (“Amex III“).
The holding in Amex III, as summarized in the syllabus, is that “[t]he FAA does not permit courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery.” Thus, just is it had held that state law of unconscionability could not be used to invalidate a class arbitration waiver in AT&T Mobility LLC v. Concepcion, the Court’s holding today limits the use of federal law to invalidate arbitration provisions that preclude class actions.
Will Amex III finally be the case to end class actions as we know them? Concepcion hasn’t, so I doubt Amex III will either.
Posted in Class Action Decisions, Supreme Court Decisions | Tagged amex, amex III, arbitration waiver, AT&T Mobility, class action, class arbitration, concepcion, effective vindication, FAA, federal law of arbitrability, italian colors, oxford health, scalia, sutter | Leave a Comment »
I’m very excited to be speaking at a Strafford Publications CLE webinar tomorrow entitled: Statistics in Class Action Litigation: Admissibility, Expert Witnesses and Impact of Comcast v. Behrend. The program is scheduled for June 18, 2013 at 1:00pm-2:30pm EDT. This is the third iteration of this presentation, which has been updated to offer insights in light of the Supreme Court’s Comcast decision earlier this term. Brian Troyer of Thompson Hine in Cleveland and Justin Hopson and Rick Preston from Hitachi Consulting in Denver will be co-presenting. Below is a synopsis of the program. Click here for more information and to register:
Class certification standards have become more rigorous, and the skillful use of statistical evidence is an important part of class actions. Effectively employing or challenging statistics can make a difference in winning or losing a class certification motion.
Statistical evidence is introduced through expert witness testimony, and 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 2011 Wal-Mart v. Dukes Supreme Court ruling underscored the prominent role of statistical evidence in assessing the merits at the certification stage. The Court’s recent Comcast v. Behrend ruling reinforces Dukes regarding merits assessments at class certification, thus impacting the continued role of statistical evidence.
Listen as our experienced panel examines statistical evidence in certification proceedings, the impact of Comcast v. Behrend and related case law, and best practices for using statistics and cross-examining witnesses.
- Role of statistical evidence in support of class certification
- Expert testimony and Daubert analysis at class certification stage
- Impact of Comcast v. Berhrend and Wal-Mart v. Dukes
- Science of statistics and cross-examining the statistics witness
The panel will review these and other key questions:
- What is the impact of Comcast and Dukes upon the use of statistical analysis at class certification?
- What strategies can counsel use to effectively cross-examine statistics witnesses?
- What types of statistics can be introduced and what are the proper ways to utilize statistics?
Following the speaker presentations, you’ll have an opportunity to get answers to your specific questions during the interactive Q&A.
Posted in CLE Programs | Tagged class actions, class certification, daubert, descriptive statistics, dukes, expert testimony, expert witness, inferential statistics, regression analysis, shreck, statistical evidence, statistician, statistics, wal-mart | Leave a Comment »
The Supreme Court issued its decision today in the first of two arbitration-related class action cases on the 2012-13 docket. Today’s decision bucks what had been a trend in the Court’s decisions in recent years strongly favoring individual arbitration and limiting the situations in which class arbitration (private arbitration in which the plaintiffs proceed in a representative capacity on behalf of a class) can occur.
In a unanimous ruling, the Court in Oxford Health Plans LLC v. Sutter upheld an arbitrator’s decision to interpret an arbitration agreement as allowing for class arbitration, despite express reference to class arbitration in the parties’ written agreement. Writing for the Court, Justice Kagan reasoned that applicable standard of review prevents the courts from second-guessing whether the arbitrator’s interpretation of the party’s contract was the correct one and only permits review of whether the decision was based on an interpretation of the parties’ agreement. Because the arbitrator’s decision was clearly based on an analysis of contractual intent, the arbitrator’s decision could not be overturned. The fact that the arbitrator had interpreted the parties’ agreement as providing for class arbitration and the deferential standard applicable to the arbitrator’s decision distinguished Oxford Health Plans from Stolt-Nielsen S.A. v. AnimalFeeds International Corp., in which the Court had held that class arbitration cannot be compelled absent express agreement by the parties.
Important to the Court’s decision was the fact that the defendant had conceded that the arbitrator should decide the question of whether the parties had agreed to class arbitration. It was this concession that let Justice Alito to agree with the Court’s decision. However, in a concurring opinion joined by Justice Thomas, Justice Alito expressed doubt that any ruling in the class arbitration proceeding would have any preclusive effect as to absent class members, an observation that raises a serious question about whether the Oxford Health decision will be of any practical impact in other cases. He noted:
Class arbitrations that are vulnerable to collateral attack allow absent class members to unfairly claim the “benefit from a favorable judgment without subjecting themselves to the binding effect of an unfavorable one,” American Pipe & Constr. Co. v. Utah, 414 U. S. 538, 546– 547 (1974). In the absence of concessions like Oxford’s, this possibility should give courts pause before concluding that the availability of class arbitration is a question the arbitrator should decide.
Defendants will likely see the concurrence as a roadmap for asking the question to be addressed by a court in the first instance, as opposed to simply conceding that the arbitrator should decide the issue whether class arbitration is allowed.
There are two clear takeaways from the Oxford Health decision: 1) in drafting an arbitration provision, make sure to address the issue of whether arbitration on a class-wide basis will be allowed. Under Stolt-Nielsen, agreements that bar class arbitration will be enforced; 2) think carefully before conceding that an arbitrator, rather than a court, should make decisions about how an arbitration agreement should be interpreted.
Posted in Class Action Decisions, Supreme Court Decisions | Tagged alito, american pipe, arbitrability, arbitration, class action, class arbitration, class arbitration waiver, FAA, kagan, oxford health, scotus, stolt-nielsen, stolt-nielson, Supreme Court, sutter | 1 Comment »
My sincere apologies to the loyal ClassActionBlawg reader for the scarcity of new content lately. I’m on the road this week, but thought I should at least drop a note about two interesting class-action-related developments in the U.S. Supreme Court over the past week:
1) the Court granted cert in State of Mississippi v. AU Optronics Corp., to address the issue whether parens patriae actions filed by state attorneys general seeking restitution on behalf of state citizens are “mass” actions, permitting removal under the Class Action Fairness Act (CAFA). For more on the case, see Deborah Renner’s post on the BakerHostetler Class Action Lawsuit Defense Blog. If it were up to me, I’d go further and say that parens patriae cases are actually “class” actions under CAFA, but apparently the Court has its own idea about the scope of the issue.
2) The Court vacated Judge Richard Posner’s decision in Butler v. Sears Roebuck & Co. and remanded for reconsideration in light of its recent decision in Comcast Corp. v. Behrend. This follows the Court’s earlier decision to vacate the Sixth Circuit’s decision in In re Whirlpool Corp. Front-Loading Washer Products Liability Litigation for the same reason. Given the many questions left unanswered by the Comcast decision, it will be interesting to see what the Sixth and Seventh Circuits do with the moldy washer cases on remand.
Posted in Class Action Decisions, Class Action News, Supreme Court Decisions | Tagged attorney general, attorneys general, behrend, CAFA, class action, comcast, diversity, federal jurisdiction, glazer, moldy, parens patriae, posner, predominance, remand, removal, Supreme Court, whirlpool | Leave a Comment »
The Class Actions, Mass Torts and Derivative Suits Subcommittee of the Colorado Bar Association, now ably chaired by my BakerHostetler partner, Casie Collignon, held its first CLE luncheon of the year this past Friday. The program, United States Supreme Court vs. Class Actions in 2013, featured excellent commentary about the Supreme Court’s 2013 class action decisions by The Honorable Marcia Krieger, Chief Judge, U.S. District Court for the District of Colorado, Seth Katz of Burg Simpson, and John Fitzpatrick of Wheeler Trigg O’Donnell. Here are just a few of the many insightful observations made by each of the speakers:
Judge Krieger opened by observing that none of the cases this term have been a surprise from the standpoint of what a trial court judge would have expected given existing law. Amgen was predictable because the question of materiality in a securities fraud case is unquestionably a common issue, so it is not surprising that it is a question for trial, not a prerequisite for class certification. Standard Fire can be viewed as a straightforward application of agency law: a plaintiff cannot bind a class of people that he or she doesn’t yet represent. Comcast exemplifies the importance of examining the plaintiffs’ theory of liability and the relationship to the theory of loss. Damages are not the same as loss. The theory by which the plaintiff establishes loss determines the measure of damages.
When asked to identify any trends that she has been seeing in class actions recently, Judge Krieger identified issue certification as a key trend. She has been seeing more situations where the factual issues may be individualized but there are common legal issues that can be resolved classwide. She noted that she has been inclined to grant partial certification limited to the common legal issue(s) in that situation.
From the plaintiffs’ perspective, Katz agreed that the outcome of Standard Fire was not surprising, and he went as far as to say that the outcome was correct, noting that plaintiffs’ attorneys shouldn’t be afraid of the federal courts. Although the holding of Amgen was favorable to plaintiffs, Katz noted an issue that should be of great concern to plaintiffs, and that is the commentary from the conservative wing of the court suggesting that they might be willing to revisit the fraud-on-the-market presumption adopted in Basic Inc. v. Levinson. Katz sees the potential of a 4-4 split on that issue, with Chief Justice Roberts being the deciding vote. He predicts market studies being commissioned by both sides over the coming years to demonstrate or disprove the continued efficiency of the markets.
Comcast, Katz noted, caused a collective sigh of relief in the plaintiffs’ bar because it does not go as far as many would have feared by requiring Daubert hearings at the class certification phase. He noted that one positive impact for plaintiffs arising from the “death of Eisen” (the rejection in decisions like Wal-Mart and Comcast of the idea that merits questions were off-limits at the class certification phase) is that it gives plaintiffs’ counsel an opportunity to obtain merits discovery much earlier in a case than was allowed previously. On the other hand, Katz expressed fear about the possibility that the Court is trying to raise the bar for plaintiffs with a subtle change in the language about what common proof is necessary on the issue of damages. Where earlier decisions required that damages be “susceptible to classwide proof,” the Comcast majority phrased the standard as requiring the plaintiff to ”prove classwide damages.” Katz predicts that defendants will argue that this means damages must be uniform, as opposed to simply being susceptible to formulaic calculation. He noted, however, that the few lower courts that have interpreted Comcast so far have rejected a broad application of the decision.
Fitzpatrick combined philosophical commentary about the evolution of class actions with some practical tips for defense lawyers. Standard Fire, he argued, is proof that judicial hellholes still exist. He pointed to Amgen as an example of the dangers of accepting conventional wisdom, pointing out that the outcome in that case might well have been different if the defendants had stipulated to the existence of an efficient market.
Comcast, Fitzpatrick said, provides an opportunity for defendants to prevail at the class certification stage by discrediting a plaintiffs’ expert. Focus not just on the opinions themselves, he suggested, but also on 1) the existence of bias; 2) the expert’s credentials, and 3) flaws in the methodology. Scour the country for transcripts about the plaintiffs’ experts. Look at misstatements and exaggerations in the expert’s CV. Make sure you find and read all of their prior statements in books, media, and transcripts. Just as important, Fitzpatrick reminded defense practitioners, is the make sure to prepare your own experts for class certification.
Posted in Class Action Trends, CLE Programs, Supreme Court Decisions, Uncategorized | Tagged amgen, antitrust, basic, behrend, CAFA, class action, class certification, classwide proof, colorado, comcast, daubert, efficient market, eisen, expert, federal judge, fitzpatrick, fraud on the market, hellhole, katz, knowles, kreiger, levinson, merits, securities fraud, standard fire, stipulation | Leave a Comment »