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Posts Tagged ‘International Class Action Law’

According to an article in the Korea JoongAng Daily, a Korean court has issued the first ever judgment in a collective action arising out of a data breach caused by alleged mismanagement of the data, as opposed to intentional conduct.  The Seoul Western District Court’s judgment in favor of 2,882 petitioners against SK Communications was for a total of approximately USD 534,200.   Although the amount may be insignificant by U.S. standards, the judgment reflects a key development in the development of both collective litigation and privacy law abroad.

Postscript: for more on the case, see this story published February 19.

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For those of you interested in the forthcoming book, World Class Actions, here’s a quick update.  The page proofs should be ready by the end of next week, and barring unexpected delay, we are still on pace for an early summer publication date.  For those that haven’t yet heard about the book, it is a guide to class and collective action litigation around the world.  Here’s a link to the Oxford University Press web page for the book where you will find a more detailed synopsis.  I’ll continue to post updates as the publication date approaches.

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Those of you who attended last month’s 5th Annual Conference on the Globalization of Class Actions (or followed my series of posts summarizing the conference) will know that the Netherlands has been on the forefront of global mass dispute resolution as a result of its statute allowing for collective settlements.  Today, the Amsterdam Court of Appeal issued a ruling dismissing two objections to a collective settlement and declaring it binding even though the defendants, and most of the plaintiffs, were domiciled outside of the Netherlands.  Here is a synopsis of the ruling from Daan Lunsingh Scheurleer and Ianika Tzankova of NautaDutilh N.V.

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Fellow class action blogger and defense lawyer Andrew Trask has posted some key insights from his notes of the 5th Annual Conference on the Globalization of Class Actions, on his excellent blog, ClassActionCountermeasures.  I had the pleasure of finally meeting Andrew in person at the conference, and he was every bit as engaging in person as he is online.

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This is the third in 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 and Session 2.

Session 3: Managing the Mass: Judicial Case Management

As the title suggests, this presentation focused on strategies for judges in managing class and mass actions in different jurisdictions.  Professor Axel Halfmeier, Frankfurt School of Finance and Management presented the case study.  Professor Ianika Tzankova moderated the panel, which consisted of three highly esteemed judges from three very different jurisdictions: The Honorable Lee Rosenthal, U.S. District Court, S.D. Texas, Sir David Steel, High Court of Justice, England & Wales (ret.), The Honorable Ivan Verougstraete, Former President of the Belgian Court of Cassation and Visiting Professor of Law Georgetown University.

Professor Halfmeier’s case study focused on ongoing mass litigation in Germany involving Deutsche Telekom arising out of alleged acts of securities fraud in the late 1990s and in 2000.    The thousands of individual shareholder claims brought by investors in Germany led to the enactment of a new law, roughly translated as the Capital Investors Model Proceedings Act, that provides for the creation of a test case that will be binding on all other similar claims.  Proceedings even under the new law have been slow, due in large part to bureaucratic court procedures in Germany, such as the requirement that the documents in each of the thousands of individual cases have to be hand marked by court clerks.  The last hearing in Telekom case was held in 2010, and the next hearing is not scheduled to occur until 2012. Meanwhile, securities class action litigation involving the same alleged acts had been brought on behalf of U.S. investors in the early 2000s and was resolved in a global settlement in 2005.

Sir David Steel did not pull any punches with his blunt criticism of the German system, commenting in summary that the “German courts need to join the modern world.”  He pointed out that the prospectus fraud claims in the Telekom case are not very complicated and that it should be possible for the courts to deal with them in a much shorter period of time.  He pointed to a number of simple procedural reforms that might have sped up the Telekom litigation, including reform of cumbersome clerical requirements, the imposition of a time bar for claims (he pointed out that the German proceedings had not even been commenced until 2005, roughly 5 years after the event), and rules relating to case assignments (by the time the case was ready for a ruling, the initial judge assigned to the case had reached retirement age), and discretion to impose reasonable pleading deadlines (the plaintiffs were allowed to introduce new claims as recently as 2010). He concluded by likening the Telekom case to the fictitious decades-long Jarndyce v. Jarndyce will contest in the Dickens novel Bleak House, which had spurred judicial reforms in the UK in the Nineteenth Century.  It should be noted (although not discussed specifically during his remarks) that Justice Steel himself has a proven track record of efficient management of mass litigation in a jurisdiction that does not permit class actions.  As an example, he presided over the Buncefield case, a mass tort action arising out of gas pipeline explosions in December 2005.  The case reached a judgment in March 2009, only three years and three months after the explosions giving rise to the claims. 

Judge Verougstraete offered a counterpoint to Justice Steel’s criticisms by pointing out the significant cultural differences between the common law system in the UK and the civil law jurisdictions in Continental Europe.  He went on to point out various constitutional, cultural, and practical barriers to significant judicial case management reforms in European civil law jurisdictions, including: 1) the individual’s right to his day in court is of paramount importance in European jurisdictions and cannot be discarded in the interest of judicial efficiency; 2) discovery reforms are not a solution in Europe because most European jurisdictions do not allow parties to engage in discovery anyway (he noted, however, that judges do have some level of control over the speed with which court-appointed experts and masters complete their investigations and findings); 3) while settlement and alternative dispute resolution procedures are theoretically possible, they haven’t worked yet in speeding the resolution of many mass actions.  Judge Verougstraete also pointed to two possible alternatives to collective litigation in civil law countries: 1) use of the criminal law complaint, which places the financial cost of redress on the State but also cedes control over the litigation; and 2) bundled litigation, although even in bundled litigation, the requirement to provide individual notice to litigants often minimizes the judicial efficiencies created by joining claims together, as was seen in the Telekom matter.  In closing, although he agreed with Justice Steel that civil law jurisdictions in Europe could benefit from legislative reforms streamlining judicial procedure in mass litigation, he warned that there was still the problem of legal tradition and culture, which cannot be changed overnight.

United States District Court Judge Lee Rosenthal focused her remarks on what jurisdictions with developing complex litigation procedures can learn from the experience of the United States.  While the United States has a well-developed body of rules governing case management of complex litigation, U.S. Courts still have problems in managing complex litigation, and we “haven’t gotten there” in terms of perfecting efficient management of complex litigation.   Judge Rosenthal agreed that there is a divide between civil and common law jurisdictions but argued that there are a lot of things that a judge can do in either type of jurisdiction manage cases.  She provided examples of key areas where courts and policymakers need to focus in evaluating effective case management techniques: 1) early and effective court supervision; 2) cooperation by counsel; 3) development of a case management plan cooperatively between the court and counsel; 4) communication between counsel, the court, and both representative and absent parties; 5) effective management of electronic discovery issues (notably, Judge Rosenthal is one of the foremost thought leaders on e-discovery issues in the United States); 6) management of attorney’s fees awards (this is a topic addressed by Judge Vaughn Miller in Session 2); 7) effective trial planning; 8) if there is a settlement, an effective plan for assessing and administering the settlement.  She went on to point out that although many judges are much more comfortable in a passive role (decision maker) rather than active role (manager), effective case management requires a judge to carry out both of these roles at appropriate times.  In other words, a judge must be both a neutral decider and an effective case manager.  An effective case manager also has to be both flexible and pragmatic.  Despite having the tools for effective case management, Judge Rosenthal admitted that many judges in the United States are still viewed as being ineffective case managers.  In summarizing the experience of the U.S. judiciary, Judge Rosenthal opined that the United States has the tools in place for effective case management, but U.S. courts are still far from institutionalizing effective case management techniques.

As one member of the audience observed during the question and answer portion of the presentation, the three panelists represent the cream of the crop in their respective judicial systems, both as case managers and as jurists.  Judges from around the world have a lot to learn from their pearls of wisdom.

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For those of you interested in trends in class and collective actions in other parts of the world, check out the recent article by Manuel A. Gómez, Associate Professor at Florida International University College of Law, entitled Will the Birds Stay South? The Rise of Class Actions and Other Forms of Group Litigation Across Latin America (available for download at SSRN).  Professor Gómez’s article discusses the common features of collective action regulations across Latin America and surveys the unique features of the collective action procedures in several key Latin American countries.

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A recent CAB post entitled Mexico Joins the Class Action Club provided an update from Mexican attorney Jorge de Hoyos Walther on the passage of recent legislation in Mexico introducing class actions.  If that post piqued your interest, check out this new article authored by Catherine Dunn for Corporate Counsel magazine (available at Law.com) entitled Mexico’s New Class Action Law Opens a Litigation Frontier.  Dunn’s article highlights the key provisions of Mexico’s new class action law and compares and contrasts it both with U.S. class action procedure and the procedures available in other Latin American countries.

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The premise sounds ridiculous, but maybe there’s more to it after all.  This quote from moose collision class action lawyer Ches Crosbie sums it up:

Six months ago when we launched this class action, most people in the province thought that we were a bit crazy.

Count most observers from outside the province as sharing that sentiment.  In two previous less-than-scholarly posts, I mocked the idea of a class action seeking relief against the government of Newfoundland and Labrador on behalf of people injured in car collisions with moose.  See entries dated October 19, 2010, Danger! Moose Crossing, and January 12, 2011, Moose Collision Litigation: The Wave of the Future in Canadian Class Actions?  

I stand corrected.

According to Sue Bailey of The Canadian Press, the trial judge has decided to certify the moose collision case as a class action.  In fact, the case for certification was evidently so compelling that the main concern raised by the judge was whether the limitation to persons hospitalized as a result of moose collisions made the class too narrow.  The judge has reportedly asked the parties to consider whether the class definition should be expanded.

According to the article, the government did not resist the motion to certify the class, so perhaps it decided it would be better to take on the moose collision issue once and for all in a single case rather than having to face a flood of individual moose collision lawsuits.  Whatever the reason, it looks like the issue of whether the province was negligent in its introduction of moose and its management of the species after introduction is moving toward a decision on the merits.

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According to this December 9, 2010 Bloomberg article from Adriana Lopez Caraveo and Jens Erik Gould, the Mexican Senate has passed a bill that would introduce a form of class action litigation to Mexico.  According to the article:

The bill, which now moves to the lower house, would allow Mexicans to bring class action suits against companies that provide consumer goods and services, financial services or that cause environmental damage, according to the bill. Mexican law doesn’t currently allow for such lawsuits.

For more on the bill, see this December 10 article in The News from Víctor Mayén, which characterizes the bill as authorizing collective actions

regarding the consumption of private or public goods and services, environmental services and financial services that harm the consumer, due to monopolistic or other undue practices.

Neither article assesses the odds of the bill’s passage in the lower house, although the unanimous passage in the Senate would appear to suggest that the chances are good.

The legislation follows an amendment to article 17 of the Mexican constitution, passed in June, granting authority to the legislature to pass legislation regulating class or collective actions.  For more on the amendment, see this entry posted in June at the Stanford University global class actions clearinghouse.

Despite a (somewhat) diligent Internet search, I have not been able to locate an English translation of the Bill, so unfortunately I can’t report on any of the details of the legislation.  This August 2008 report from emii.com hinted that the legislation being considered in Mexico at the time was following a more “Latin American” pattern, as distinguished from US-style class action procedure.

If any readers have more information about this bill, we welcome your comments.

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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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