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Posts Tagged ‘Class Action Trends’

I’m pleased to announce that the BakerHostetler Class Action Defense Team has just released its 2012 Year-end Review of Class Actions, a joint project with the firm’s Employment Class Actions, Antitrust, and Data Privacy practice teams.  See below for a synopsis of the project.  Click the link above to access a copy of the report itself:

We are pleased to share with you the BakerHostetler 2012 Year-end Review of Class Actions, which offers a summary of some of the key developments in class action litigation during the past year. Class action litigation continues to persist in all areas of civil litigation despite the Supreme Court’s 2011 decisions in AT&T Mobility v. Concepcion and in Wal-Mart Stores, Inc. v. Dukes, which were seen by many commentators as marking the beginning of the end of class actions as we know them. But while the Supreme Court’s 2011 decisions have had a significant impact on class action litigation, they have not brought about its demise and are not likely to do so anytime soon. In the last two years, we’ve seen landmark decisions and the addition of important judicial gloss to those decisions. 2013 will be no different as the Supreme Court is set to weigh in on a series of key cases this spring.

We hope you find this Review a useful tool as you move forward into the new year. This comprehensive analysis of last year’s developments in class action procedure and jurisdiction, as well as developments by subject matter will hopefully provide context and insight as you look ahead to 2013′s expected trends in class action law, including the proliferation of privacy class action litigation and class action litigation relating to the LIBOR rate-fixing scandal.

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For those readers who may be dissatisfied with my somewhat uneven coverage of all things class action lately, here’s a reminder about a great source for the latest in class action news and trends: the ABA’s Class Actions and Derivative Suits (CADS) Committee Group Page on LinkedIn.  CADS membership is free to all ABA Section of Litigation members.  Participation in the LinkedIn group is a benefit to all CADS members.  For more information on how to join CADS, click here.  For the LinkedIn Group, click here

Some highlights of the content available on the LinkedIn page:

  • A summary of the recent oral argument before the United States Supreme Court in Standard Fire Insurance Co. v. Knowles
  • Coverage of a recent 7th Circuit decision discussing whether misconduct by putative class counsel requires denial of class certification.
  • Links to articles authored by members in other publications or blogs.
  • Announcements about upcoming CADS events.

And much more…

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Those of you who have been following my summaries of the 16th Annual Class Action Institute will be pleased to know that the paper of the past year’s class action developments prepared for the conference by Professors Alexandra D. Lahav and John C. Coffee, Jr. is available for free download at SSRN.  Click here for a link to the paper, entitled The New Class Action Landscape: Trends and Developments in Class Certification and Related Topics.  I highly recommend the paper for anyone who is looking for a comprehensive summary of all of the past year’s class action developments.  

For a summary of Professor Coffee’s and Professor Lahav’s oral presentations at the conference, see this October 31 CAB post.  Stay tuned for my summaries of the final two sessions at the conference…

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In a recent post entitled Concepcion a Year Later, Are Consumer Class Actions Dead Yet?, I invited readers to offer their perspectives on trends in the enforceability of class arbitration waivers now that a year after the Concepcion decision.  In response, Jessie Kokrda Kamens at the Bloomberg BNA Class Action Litigation Report send me a copy of her recent article, Post-Concepcion, Plaintiffs Chalk Up Few Victories, Look to Government for Relief.  Kamens offers the perspectives of several leading class action practitioners on how the law on class arbitration waivers has developed in the lower courts since Concepcion, as well as their predictions on how the law will develop into the future.  Among the observations made in the article:

  • Although class arbitration waivers were upheld in 76 cases, plaintiffs were successful in invalidating arbitration clauses in several key cases, mostly on various federal law grounds.
  • Use of “consumer-friendly” provisions, such as the one at issue in Concepcion that provided for monetary incentives for individuals to pursue arbitration, makes it much more likely that an arbitration clause will be upheld.
  • Observers are eagerly awaiting several federal and state regulatory and legislative developments that may impact the enforceability of class arbitration waivers, including the results of a study being conducted by the federal Bureau of Consumer Financial Protection (CFPB) pursuant to Dodd-Frank about the impact of arbitration clauses on consumer financial products, several bills being considered by Congress, and a bill being considered in the California legislature that would render void contracts that contain class action waivers.

Thanks to Bloomberg BNA (www.bna.com) for granting permission to post a copy of the article on this site.  For those of you who are not subscribers, I highly recommend the Bloomberg BNA Class Action Litigation Report.  It is one of the most comprehensive and reliable sources of class action cases and trends available.

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This is the sixth and final installment of a multi-part post summarizing last week’s 5th Annual Conference on the Globalization of Class Actions and Mass Litigation.  Click these links to see the summaries for Session 1, Session 2, Session 3, Session 4, and Session 5.

Paths to (Mass) Justice

To wrap up the conference, Dr. Sam Muller, Director, Hague Institute for the Internationalization of Law, led an all-star panel of academics, lawyers, and industry executives in a discussion about where we are heading over the next five years in global class, collective, and mass litigation.  The panel included program co-organizer Professor Deborah Hensler, international plaintiffs’ lawyer extraordinaire Michael Hausfeld (who more than ably filled in for Professor Hodges), Mr. Robert W. Hammesfahr, Managing Director Claims & Liabilities, Swiss Reinsurance Company Ltd., Mr. Richard Murray, The Geneva Association, Special Advisor on Liability and Legal Affairs and Liability Dynamics Consulting LLC, Mr. Daniel Girard, Partner Girard Gibbs LLP, and Mr. Martijn van Maanen, Partner BarentsKrans.

This is the only presentation not framed by a particular case study.  However, the panel did focus on a common question, what are we likely to be discussing at the 10th annual conference on the globalization of class actions?

Dr. Muller began the discussion with some general themes and questions that both summed up the conference generally and framed the last panel’s discussion.  They included:

  • Whether the internationalization of class action law will continue;
  • Whether we will see an increasing divide between public and private mechanisms for the enforcement of collective interests;
  • What will be the impact of social media and changes in mass communication?
  • Is globalization and the development of systems of collective redress driving changes to the legal profession or the legal profession driving changes to mechanisms for collective redress?

Pointing to the example of the development of competition law in the EU, Hausfeld remarked that changes in policy are happening on their own but that they are not happening quickly.  He argued that it is up to the legal profession to change policy through practice; in other words, through litigation brought by counsel and through court decisions.  Hausfeld also made a key observation based on a recurring theme throughout the conference: the engine of change in the development of private enforcement mechanisms is, at least in the near future, likely to come from large corporations and institutional investors, rather than from consumers or popular political pressure.

Hensler predicted that the future will be more of the same.  The development of collective enforcement mechanisms will not go away because the scale of commerce drives the scale of mass harms, and globalization is increasing the scale of commerce.  Moreover, citizens are more likely than ever to want redress for injuries.  In modern societies, people are no longer willing to blame God for their misfortunes.  Hensler predicted that the transformation into a truly international system of collective redress will take 25 years, not 5 years.

 Hammesfahr was optimistic about change.  He noted that “where there’s a vacuum, the law will fill it,” and that therefore, the growing need for systems of collective redress will require reforms in even those countries that are most politically resistant to change.  There has to be a remedy for harms, and the younger generation will not accept delays in avenues to redress in the same way as previous generations.  However, he also predicted that Europe will find its own solutions for the problem of mass harm without copying the U.S. model of class actions. 

Murray observed that what was discussed in the 2011 conference as being a practical reality was foreseen during the first global class actions conference in 2007, but was still being debated.  For example, 5 years ago in Europe, people were saying that “we don’t do that here,” but now, Europe has begun to recognize the need for private enforcement mechanisms for collective harms.  Murray made a variety of other observations and predictions, including

  • There has been a significant growth in the scale and economic consequences in things that require aggregation.
  • There has been a change in the nature of litigation globally.  It used to be unique, to be avoided.  In the past few years, we have become compensation driven rather than fault driven. 
  • In the future, litigation will be investment driven rather than party driven, and there will be a transformation of litigation funding to litigation ownership.  Litigation will become an investment of choice.
  • There will be more climate change and catastrophe-related litigation in the coming years.  There will be a convergence of liability and reparations processes, a socialization of the humanitarian loss compensation system.  This will be driven by huge need for redress, combined with someone to blame for mass harm.

Girard was more pessimistic about significant developments in global collective redress, based in large part on events in the United States over the past several years.  

He divided aggregated litigation into 2 types of cases:

  1. “Train wrecks” – cases with a very high public profile, and a clear sense of public injustice.  This, he said, “is good work if you can get it.” 
  2. Private regulatory actions – i.e., mass lawsuits based on a private right of action that challenge conduct not widely recognized as being wrong.  This category would include many current class actions in the United States, such as those involving alleged deceptive trade practices and dangerous products.

While policymakers will almost certainly agree on the need for collective redress in the first category of cases, the second category is quite a bit more challenging, and there is a greater potential for abuse.  The resolution of cases in category 2 is quite a bit different than the deal brokering that goes on in category 1.

Girard pointed out how the recent trend in the United States has been to restrict class actions.  But, he went on, plaintiffs’ lawyers are nothing if not creative and persistent.  In the end, he predicted that we will see things swing back into an equilibrium, since “the law will tend toward justice.”  However, he admitted that we may have seen the end of the fully empowered private attorney general in the United States.

Girard concluded with a word of wisdom for policymakers in Europe.  As you are being urged toward a system like the American system, he said, keep in mind that lighter regulatory framework was intended to come with it a strong right of private enforcement.

Van Maanen was much more positive about change.  Using competition law as an example, he said that in the past, the it was economical for defendants to form cartels.  Now, however, corporations are taking on the role of ally with plaintiffs.  This will drive a push toward private enforcement in Europe.  He noted that there is some level of competition between European countries in the development of systems of collective redress.  For example, he observed that with its resistance to collective action legislation, the UK has fallen behind the Netherlands in recent years.  He concluded with the observation that a challenge for policymakers will be in developing a system that will make it more profitable for corporations to comply with the law.

In the Q&A session, the panelists were asked whether we are moving toward coordination or competition between jurisdictions, and if so, are we going to a race to the bottom or a race to the top?  In Hensler’s opinion, we are in a period of competition.  In the short term, there is an incentive to maintain a system of multiple forum choices.  Murray agreed, and commented that “we will do the right thing after we try everything else.” Girard returned to the theme that the United States is a microcosm of the world.  He pointed to example of the so-called reverse auction process discussed by Judge Vaughan Walker earlier in the conference and pointed out how competition helped to reduce attorney’s fee abuse.

Other topics addressed in the Q&A included the role of social justice.  Hensler commented that social media will have an effect on litigation, as it did during the recent Arab Spring movement.  Hammesfahr discussed the potential impact of social justice movements with respect to catastrophic events claims.  He observed that if the civil justice lawyers are going to have a role, they will have to look at transaction costs and efficiencies.

A final, and perhaps fitting, point (unfortunately, I did not note which panelist made it) had to do with the different way that European law is developing in comparison to the system of class actions in the United States.  In Europe, the prevailing view has been to consider anything but the “American horror story.”  In developing systems of collective redress, European systems haven’t built on the U.S. system, they’ve rejected it, but they are working toward a completely different system intended to solve some of the same problems.

In closing out this series of posts, I want to reiterate how impressed I was with both the content and organization of the conference.  The organizers say that they are uncertain whether this will continue to be an annual event going forward, but I hope that the demand will convince them otherwise.

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The award-winning U.S. Supreme Court blog SCOTUSblog is presenting a symposium on recent Supreme Court developments in the area of class actions that you won’t want to miss.  Click here for an introduction to the symposium and here to see a list of the various contributions as they are released. I’m extremely honored to be listed among the other fine contributors to the series.

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As 2010 winds down, it’s time to review the key developments in class action law.  It was an especially busy year for the federal courts, and in particular the U.S. Supreme Court, on issues impacting class action practice.  Here, in chronological order, are 10 key developments from the year that was:

  1. January 5 – In In re Baycol Products Litigation, the Eighth Circuit follows the Seventh Circuit’s lead in upholding the right of a federal court to enjoin a putative statewide class action from proceeding where a federal court had already denied class certification in a case involving substantially similar claims.  (See CAB entries dated January 7 and January 12).
  2. February 23 – In a decision that will impact many class actions removed under the Class Action Fairness Act, the Supreme Court adopts the “nerve center test” as the standard for determining corporate citizenship, in Hertz Corp. v. Friend.  (See CAB entry dated March 2)
  3. March 31 – The Supreme Court holds that states may not regulate the types of claims that may be filed as class actions in the federal courts, in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co.  (See CAB entry dated April 8)
  4. April 7 – In American Honda Motor Co. v. Allen, the Seventh Circuit holds that a trial court must rule on challenges to the admissibility of expert testimony relevant to class certification before deciding whether a class may be certified.  (See CAB entry dated May 4)
  5. April 26 – The Ninth Circuit issues its decision in Dukes v. Wal-mart Stores, Inc., adopting rigorous class certification standards similar to those previously adopted by the Second Circuit in In re IPO Securities Litigation, 471 F.3d 24 (2d Cir. 2006), but nonetheless certifying under FRCP 23(b)(2), what has been called the largest employment discrimination class action in history.
  6. April 27 – The Supreme Court seemingly puts an end, for all practical purposes, to the concept of class arbitration by holding that a defendant could not be compelled to defend an arbitration on a class basis where the arbitration clause did not expressly provide for class arbitration, in Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp.  (See CAB entry dated May 11).
  7. June 24 – In Morrison v. National Australia Bank, the Supreme Court deals a fatal blow to “foreign-cubed” class actions, holding that § 10(b) of the Securities and Exchange Act of 1934 does not allow for fraud claims involving transactions on foreign exchanges that occurred outside the United States. (See case summary at SCOTUS blog).
  8. July 19, October 20 - An Eleventh Circuit panel issues a controversial decision in Cappuccitti v. DirecTV, Inc., severely restricting CAFA removal jurisdiction to cases where the amount in controversy exceeds $75,000 with respect to at least one class member, but later reverses itself in an October 15 opinion.  (See Guest Post from Eric Jon Taylor and Jon Chally at CAFA Law Blog for more on the first decision and this October 20 CAB entry on the second decision).
  9. November 9 – Supreme Court hears oral argument in AT&T Mobility v. Concepcion, in which the Court considers whether the Federal Arbitration Act preempts state law holding a class arbitration waiver unconscionable.  (See CAB fsummary of oral argument dated November 17).
  10. December 6 – Supreme Court grants certiorari in Wal-Mart Stores, Inc. v. Dukes, to decide the issue of whether a claim for monetary relief can be certified under FRCP 23(b)(2).  (See CAB entry dated December 7).

Just considering the cases still awaiting ruling before the Supreme Court, 2011 promises to be another exciting year in the world of class actions.  Happy New Year to all!

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In October, Colorado attorney and Wash Park Prophet blogger Andrew Oh-Willeke asked whether there were any statistics on class action filing in the state and federal courts in Colorado.  I responded by providing the raw data on class action filings that I could find through the Court News Service (see October 15, 2010, CAB Post entitled Colorado Class Action Filing Trends).  Oh-Willeke has since authored a post in which he has added some insightful observations on the raw data, including an analysis of on the burden, or lack thereof, that class action lawsuits may be placing on court dockets and some more general comments on class action litigation in general.  Check out his follow-up analysis at the following link:

http://washparkprophet.blogspot.com/2010/11/class-action-lawsuit-statistics-for.html

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Debate about legal reforms outside the U.S. can often provide a revealing look at the strengths and weaknesses of the U.S. legal system.  For policymakers in other countries, U.S. consumer protection laws can be the gold standard for access to justice and, at the same time, the epitome of litigiousness run amok.

As an example, check out today’s column from Globe and Mail law reporter Jeff Gray discussing Bill C-36, a proposed reform being considered by the Canada Senate that would permit the government to order mandatory product recalls.  Gray has quotes from several Canadian class action lawyers, both from the plaintiff’s and defense side, making predictions on the potential effects of the bill and commenting on the development of Canada’s consumer protection laws as compared to the United States.

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NERA Economic Consulting has published its first study on trends in securities class actions in Australia.  The study covers a variety of topics, including numbers of filings, industries targeted, and settlement amounts.  However, what I found to be of particular interest is the study’s focus on the impact of private litigation funding.

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