This is the third of what will be six posts summarizing my notes of the six presentations at the ABA’s 16th Annual Class Actions Institute held last month in Chicago. For more on this excellent conference, see my October 31 and November 5 CAB posts.
Session 3 examined the conceptual issues and practical challenges that litigants and courts face in cases seeking certification under the different subparts of Rule 23(b), a question that took on increased importance following the Supreme Court’s Decision in Wal-Mart Stores, Inc. v. Dukes. The panel presentation was titled “Don’t Blame Mrs. O’Leary’s Cow!” Rule 23(b)(3) Classes Under Fire and Rule 23(b)(2)’s Emerging Importance. Jeffrey A. Leon moderated the panel, which consisted of Robert J. Axelrod, E.K. Cottrell, Professor Francis McGovern, and David S. Stellings.
Unfortunately, due to a computer crash, I lost some of my notes from this presentation, but I have summarized some of the highlights below:
- The courts are facing an ever-increasing tension between principle and pragmatism in deciding whether to certify class actions and under what procedure they should be certified.
- Despite significant hurdles to class certification that have been imposed by the Supreme Court and other federal courts in recent years, the plaintiffs’ bar has a creative “gene” that keeps them pushing the envelope and experimenting on new methods of seeking aggregate redress. This can be seen in many of the decisions in the lower courts over the past year, and is likely to continue into the future.
- In the near future, we are likely to see mixed results, as some courts become more restrictive in granting class certification, while others are more receptive to creative ways of certifying classes.
- Discovery and resolution of substantive issues and Daubert challenges are likely to come at an earlier stage in the process, regardless of the procedural vehicle under which certification is sought.
- There is likely to be much more of a mixture of the subsections of Rule 23 used to certify classes, including combinations of classes in the same trial.
- ERISA class actions are an area where the Rule 23(b)(2) class actions for monetary relief remain viable after Dukes. Pennsylvania Chiropractic Ass’n v. Blue Cross Blue Shield Ass’n, No. 09 C 5619 (N.D. Ill. Dec. 28, 2011) provides a textbook list of reasons why courts may continue to refuse to certify ERISA claims for monetary relief after Dukes under Rules 23(b)(1), (2) and (3).
- But the Supreme Court’s decision in Cigna Corp. v. Amara, No. 09-804 (S. Ct. May 16, 2011) may have breathed new life into the argument that monetary relief may be available to plan members as part of the equitable relief that courts can provide, especially when a trustee is involved. Among the equitable remedies that may be available in a particular case is the “surcharge remedy”, which allows plan members to recover money as an equitable remedy for a trustee’s breach of fiduciary duty. Amara may pave the way to arguments by plaintiffs that claims against a trustee for payment may be characterized as injunctions, for which certification under Rule 23(b)(2) may be appropriate notwithstanding the Supreme Court’s ruling in Dukes. However, in February, the Second Circuit rejected the argument that claims for disgorgement made on behalf of a putative class of trustees of thousands of ERISA plans, holding that the necessity to determine how to divide any disgorged amount among the plaintiffs meant that the monetary relief was not “incidental” to any equitable relief as required under Dukes. Nationwide Life Ins. Co. v. Haddock, 10-4237-cv, 2012 WL 360633 (2d Cir. Feb. 6, 2012).
Class Action Blogosphere Weekly Review
Posted in Class Action Decisions, Class Action News, Class Action Trends, International Class Action Law, Other class action blogs, Reports and Surveys, tagged CAFA, class action commentary, Class Action Decisions, Class Action Fairness Act, Class Action News, Class Action Trends, class certification decision, ERISA Class Action, International Class Action Law, securities class action, transnational class action on November 29, 2008 | Leave a Comment »
CABWR Challenge of the Week Recap
I’m very disappointed to have to report that last week’s “Lay Down the Gauntlet” Challenge of the Week did not generate a single vote or comment. This means that I must arbitrarily assign a label for class actions filed against institutional investors for failing to make a claim in another class action settlement. I have delegated the selection to my dog, Monty, whose vote was to be recorded based on whether he wagged his tail in response to my uttering each of the three candidates. For anyone who questions the fairness of this process, you should have thought about that when you decided not to vote. Plus, you should know that Monty got third place one year in the NCAA basketball tournament office pool. In truth, Monty wasn’t enthralled by any of the choices. But he did raise an eyebrow and sniff in response to one, while simply maintaining a blank stare in response to the other two. So, class actions seeking liability for failing to participate in other class action shall forever be called…
“Malkovich”
Congrats to Professor Peter J. Henning of White Collar Crime Prof Blog on his victory. I’m sure he’ll be thrilled by his victory if he ever discovers that he even entered (in an entry from 2005).
Without further ado (and a few days later than usual), here are some blog entries from the week that was that might be of interest to class action practitioners…
Class Action Decisions
Feminist Law Professors discusses a California state court’s decision to grant class certification in a sexual orientation discrimination case filed against an online dating site for refusing to match gay and lesbian patrons:
http://feministlawprofs.law.sc.edu/?p=4364
Class Action Defense Blog reviews a Third Circuit Court of Appeals opinion reversing, on predominance and superiority grounds, a class certification order in a case filed by automobile dealers against a manufacturer:
http://classactiondefense.jmbm.com/2008/11/class_action_defense_casesdanv_1.html
Classified provides a synopsis of a decision by a Florida federal court addressing proof necessary to establish jurisdiction under the $5 million amount in controversy requirement in a case removed under the Class Action Fairness Act (CAFA) when the plaintiffs’ class definition was imprecise:
http://www.carltonfields.com/classactionblog/blog.aspx?entry=243
Drug and Device Law comments on a Tennessee Supreme Court decision from earlier this year holding that claims under the state’s consumer protection law could not be brought as class actions:
http://druganddevicelaw.blogspot.com/2008/11/tennessee-rejects-consumer-fraud-class.html
Class Action Trends
Point of Law comments on a well-known personal injury firm switching its emphasis from asbestos cases to ERISA class actions involving fees charged in connection with 401K plans:
http://www.pointoflaw.com/archives/2008/11/asbestos-today.php
The WSJ Law Blog discusses a request for attorneys fees in a class action settlement for work done by temporary lawyers:
http://blogs.wsj.com/law/2008/11/24/in-xerox-class-action-fees-for-temp-lawyers-take-center-stage/
Class Action News
North Carolina Business Litigation Report offers the latest developments relating to a class action brought to enjoin a high profile bank merger:
http://www.ncbusinesslitigationreport.com/2008/11/articles/class-actions/north-carolinas-attorney-general-and-state-treasurer-duke-it-out/
Securities Docket discusses the resolution of a battle between several large institutional investors for appointment as “lead plaintiff” in a securities class action against a mortgage lender:
http://www.securitiesdocket.com/2008/11/26/political-shoving-match-in-north-carolina-rebuts-lead-plaintiff-presumption-in-freddie-mac-case/
The Tampa Bay Tribune reports on a putative class action filed in Florida on behalf of voters challenging Florida’s decision to move up its primaries despite objections from both major parties:
http://www2.tbo.com/content/2008/nov/26/class-action-status-sought-suit-over-florida-prima/news-politics/
The UCL Practitioner summarizes the issues accepted for review by the California Supreme Court in a case implicating whether payment of alleged overcharges can constitute injury sufficient to support an action under the Unfair Competition Law (UCL) when those overcharges are passed on to third parties:
http://www.uclpractitioner.com/2008/11/statement-of-issues-on-review-in-clayworth-v-pfizer-inc.html
AMLAC & Fraud links to a CNN article reporting on the indictment of six people charged in connection with an alleged conspiracy to make fraudulent claims in class action settlements (see ClassActionBlawg entry about the story here):
http://amlac1.blogspot.com/2008/11/federal-government-charges-6-in-40.html
Class Action Commentary
Sergie Lemberg of LemonJustice.com offers a guest commentary on The Complex Litigator addressing the loser pays rule common in jurisdictions outside the Europe and opining that the rule hurts consumers:
http://www.thecomplexlitigator.com/2008/11/guest-blogger-sergei-lemberg-from-lemonjusticecom-on-the-loser-pays-system-and-why-it-hurts-consumer.html
The Race to the Bottom comments on trends in “foreign cubed” securities fraud class actions. (See recent ClassActionBlawg commentary on the subject here):
http://www.theracetothebottom.org/home/no-bright-line-test-for-foreign-cubed-securities-fraud-actio.html
Class Action Reports
Tom Willging of the Federal Judicial Center (FJC) comments on Consumer Law & Protection Blog regarding the FJC’s recent report on trends in class action filings following the Class Action Fairness Act (CAFA):
http://pubcit.typepad.com/clpblog/2008/11/new-federal-judicial-center-study-on-the-class-action-fairness-action-one-of-the-authors-speaks.html
International Class Action Law
Shareholders Foundation discusses proposed European collective action procedures and how they might compare to the U.S. class action model:
http://shareholdersfoundation.com/?p=4647
Jurist reports on the Sixth Circuit’s decision affirming an order granting in part and denying in part a motion for summary judgment in a class action against the Vatican arising out of alleged clergy abuse by the Catholic Church:
http://jurist.law.pitt.edu/paperchase/2008/11/sixth-circuit-allows-class-action.php
With Vigour and Zeal offers notes on a variety of issues touching on international and transnational class and collective action litigation:
http://kranenburgesq.com/blog/2008/11/wrapping-it-up-26-november-2008/
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