Archive for April, 2009

The Colorado Supreme Court issued one of its most significant class action decisions in recent years today in Farmers Ins. Exch. v. Benzing, No. 07SC483 (Colo., April 27, 2009), rejecting the so-called “fraud on the market” theory of reliance and loss causation in an insurance class action.  Justice Bender authored the decision on behalf of a unanimous court, with two justices not participating.  The key issues addressed in the opinion include:

1) the trial court had discretion to decertify a previously certified class, despite the court of appeals’ finding that the facts and arguments presented in connection with the  decertification motion could have been raised at the initial certification stage, as part of the court’s “continuing obligation to review whether proceeding as a class action is appropriate”, Benzing, slip op. at 19; and

2) the fraud-on-the-market theory of reliance and loss causation was not applicable in an insurance class action where there was no efficient market and where the information alleged to have been concealed was a matter of public record.  Benzing, slip op. at 23-31.

The Court declined to address an alternative theory, also borrowed from the securities context, that common reliance or injury could be established by presumption or inference in a case involving a material omission of fact, as articulated in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128, 153-54 (1972).  The court acknowledged a split of authority on whether the Affiliated Ute doctrine could be applied in consumer class actions, but declined to rule one way or another, stating that the issue been “insufficiently raised” before the trial court and court of appeals.  Benzing, slip op. at 32-33 & n.9.

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In the entertaining Free Refills and Why I Love America, Ann Arbor, Michigan blogger Wally has listed class actions as the number #11 best thing about living in the U.S., just behind the Super Big Gulp. Class action-philes might feel a bit slighted about not making the top 10, but at least we got a mention!  Wally’s colorful description of class actions as the perfect embodiment of all that is good about American litigiousness, laziness, and greed is definitely worth a few moments of your day.

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The U.S. Supreme Court heard oral argument Monday in a Horne v. Flores, a case that originated as a class action against the State of Arizona for insufficient funding of education for non-native-English speaking students.  For a report on the oral argument, see this AP article

The case is interesting from a variety of perspectives, but perhaps most interesting is that it pits different officials from the same state against each other.  The petitioners include the Superintendent of Public Instruction and the Speaker of the state’s House of Representatives.  Along with the original class representatives, the respondents include the State of Arizona and the Arizona State Board of Education.

The appeal arises from the denial of a Rule 60(b) motion for relief from a series of previous orders from a federal court following a finding that the state’s programs for educating students who do not speak English proficiently violated the Equal Educational Opportunity Act (EEOA). 

The appeal raises complex questions of federalism, standing, and separation of powers.  Petitioners argue, among other things, that the federal court’s continued supervision and attempts to require compliance with previous orders must be reconsidered in light of the existence of the No Child Left Behind Act (NCLB) and a recent state enactment that increased funding for English language programs.  The Speaker of the House and President of the Senate intervened “as presiding officers of their respective legislative bodies,” which had enacted the state English language funding law found by the federal district court to be inadequate to comply with its earlier judgments. For links to the briefs filed by the various parties, see the ABA’s website:


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PriceWaterhouseCoopers has published its 13th annual report on trends in private securities class actions.  The 2008 report offers a variety of statistics, trends, and insights into securities class action litigation from the past year. 

Some of the statistical highlights include an overall increase in filings but a decrease in the number and amount of settlements.  The report examines filings by circuit and examines trends in the nature of allegations being made, the types of corporations, industries, and corporate officers being targeted as defendants, and trends in institutional investors being named as lead plaintiff. 

Not surprisingly, the report offers specific analysis of the impact of the global economic crisis on the types of cases filed in 2008, and it includes special section on U.S. securities class actions against foreign companies and trends on the inclusion of foreign plaintiffs or class members in U.S. class actions. 

The report concludes with a section offering strategic advice for managing civil securities litigation following a criminal investigation into alleged corporate misconduct.

PWC’s website has a variety of other securities-related publications:


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No time for extended entry this evening, but here’s a link to a tidbit from Andrew Longstreth of the American Lawyer (via Law.com) discussing a possible trend in the federal courts ruling on motions to dismiss subprime-related securities class actions for failure by the plaintiffs to meet the scienter requirements under Tellabs.

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I got an email the other day about LSI’s 5th Annual Litigating Class Actions conference.  I’ve been to this seminar in the past and thought it was very well done.  I can’t make it this year, but for anyone interested I thought I’d pass along the details:

Litigating Class Actions – 5th Annual Conference
May 7 & 8, 2009
Seattle, WA (Renaissance Seattle Hotel)

Class actions dominate the litigation landscape and our Fifth Annual Conference on Litigating Class Actions will look at today’s “hot issues”, including consumer class actions from the plaintiff’s and defendant’s perspectives and significant court decisions and trends. Hear how you should assess matters for prefiling; litigating class actions between certifica tion and trial; the use of experts; considerations for labor and employment class actions; trial strategies and approaches; avoiding ethical traps; views from the bench on problematic issues; and more.

Sign up soon. Here is an opportunity for valuable discussion with your peers and our distinguished faculty. Download the complete program agenda or register by clicking here.

Program Chairs: Thomas L. Boeder, Esq. of Perkins Coie LLP and Timothy G. Fielden, Esq. of Microsoft Corporation

Intended Audience
Corporate and trial attorneys, corporate executives and governmental officials responsible for managing class actions litigation

Register here or call us at (800) 854-8009

Credits Available:

  • WA CLE 12.25 inc 1 ethics
  • CA MCLE 12.5 inc 1 ethics
  • Others available upon request; please call for details
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    The loyal reader will note that ClassActionBlawg covers class action trends in other parts of the world, including Canada.  But since I live about 1000 miles (or 1609.344 km) from Canada, and certainly have no license to practice law there, you have to take anything I say about trends in Canadian law with a huge grain of salt. 

    Not so with Ward Branch’s aptly named blog Class Actions in Canada.  If you want to get an insider’s view of class action news, legislation, decisions, and trends across the border, be sure check it out:


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    Hilary Hehman, Senior Research Analyst, Office of Court Research, Judicial Council of California, offered the following comment today, which deserves its own entry:

    The Judicial Council of California just released the first in a series of reports detailing the findings of a study of class action litigation in California state courts. The first interim report has a section that discusses the CAFA effect in California. It is empirical legal research, but may still be of interest to you.


    The first report is titled Findings of the Study of California Class Action Litigation, 2000-2006.  It provides statistics and analysis of trends in class action litigation in California.  The report provides a wealth of information that promises to be helpful to policymakers and practitioners alike.  Well done, Hilary, and please keep us posted on future reports.

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    According to SCOTUS Blog, the ABA Journal, and other sources (see the citations within Debra Cassens Weiss’s ABA Journal article), the U.S. Supreme Court has accepted certiorari in Perdue v. Kenny A., et al., Case No. 08-970.  The appeal involves an attorneys fee award to attorneys who successfully prosecuted a class action on behalf of thousands of foster children in Georgia’s two most populous counties, Fulton and DeKalb.  The lawsuit resulted in consent decrees that require significant reforms to the State’s and counties’ foster care systems.  Although the case involves an action brought by attorneys for a non-profit public interest organization and their cooperating counsel, the outcome of the Supreme Court case could have broad repercussions on the attorneys fees awardable in a variety of cases in federal court, including run-of-the-mill class actions.   The Court accepted review of the following question:

    Can a reasonable attorney’s fee award under a federal fee-shifting statute ever be enhanced based solely on qualify of performance and results obtained when these factors already are included in the lodestar calculation?

    For more information on the history of the case with links to key documents, see childwelfare.net:


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    A colleague tipped me off today to the Supreme Court of Canada’s April 2 decision in Canada Post Corp. v. Lépine, 2009 SCC 16.  In that case, Canada’s high court upheld a lower court decision limiting the reach of a settlement class action filed in Ontario, purportedly on behalf of all residents of Canada other than residents of British Columbia.  The Supreme Court of Canada’s decision was an appeal from the Court of Appeal for Quebec, arising from a competing, parallel class action filed on behalf of Quebec residents.  The Quebec court had refused to recognize the validity of the Ontario court’s judgment approving the settlement in that case.

    The high court’s ruling:

    • offers an analysis of the “Legal Framework for the Recognition of External Judgments,” including issues of comity in evaluating the binding effect of a judgment in one province on residents of another province,
    • discusses the concept of forum non conveniens in the context of national class actions, 
    • addresses issues of proper class notice in multi-jurisdictional settlements, and
    • comments on problems of national class action settlements in Canada in general, including the need for communication and cooperation between trial courts in different jurisdictions and the need for intervention by provincial legislatures in creating a more comprehensive framework for national class actions.

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