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Archive for the ‘Practice Tips’ Category

I recently authored a practice tip for the ABA Consumer Litigation Committee website entitled Consumer Class Action Defense: A Checklist for the First 10 Days, highlighting some key things that class action defense counsel should do or consider within the first 10 days after a class action is filed.  Audra Petrolle of The Rose Law Group in Phoenix authored a complementary practice tip for plaintiffs’ attorneys.  Click the links below to see both practice tips.

http://www.americanbar.org/publications/litigation-committees/consumer/practice/2016/consumer-class-action-defense-a-checklist-for-the-first-10-days.html

http://www.americanbar.org/publications/litigation-committees/consumer/practice/2016/consumer-class-action-prosecution-a-checklist-for-the-first-10-days.html

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Anyone still checking this site will have noticed a complete lack of new content lately, which is mostly the result of pure laziness on my part but partially due to the demands of several other writing projects I’ve been working on.  I’m pleased to announce that one of these articles it out, and the folks at Practical Law the Journal have graciously given permission for me to post a reprint here.  Click the following link to view the article, entitled Key Issues in Data Breach Litigation, which is featured in the October 2014 issue.  Please be sure to visit the Practical Law website to learn how to subscribe to more great content on timely legal topics.

Also, speaking of data privacy litigation, I’ll be part of a panel presenting on the topic at the ABA Institute on Class Actions next week in Chicago.  It’s not too late to register.

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Earlier today, the Supreme Court granted cert in Dart Cherokee Basin Operating Company, LLC v. Owens, No. 13-719, in which it will take up the contours of the standard for providing factual support in a notice of removal under the Class Action Fairness Act of 2005 (CAFA).  Specifically, the issue presented is as follows:

Whether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal, or is alleging the required “short and plain statement of the grounds for removal” enough?

This is the third CAFA removal case that the Court has accepted in as many years.  During the October 2012 term, the Court decided Standard Fire Ins. Co. v Knowles, 133 S. Ct. 1345 (2013), in which it held that a class representative may not avoid CAFA jurisdiction by stipulating to a recovery of damages of less than $5,000,000 on behalf of members of the proposed class.  Earlier in the current term, the Court decided Mississippi ex rel. Jim Hood v. AU Optronics Corp., Case No. 12-1036 (U.S. Jan. 14, 2014), holding that a parens patriae action brought by a state attorney general on behalf of Mississippi residents was not a “mass action” subject to CAFA.

 

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The U.S. Supreme Court issued its first class-action-related decision of the 2013-14 term today, or more precisely, its first non-mass-action-related decision of the term.  In Mississippi ex rel. Jim Hood v. AU Optronics Corp., Case No. 12-1036 (U.S. Jan. 14, 2014), the Court held that a parens patriae action brought by the Mississippi attorney general on behalf of Missouri citizens was not a “mass action” subject to the Class Action Fairness Act of 2005.  My partner Casie Collignon has a more detailed write-up on the decision at the BakerHostetler blog Class Action Lawsuit Defense.

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If you’re prosecuting or defending a class action or are interested in class action developments (and I’m not sure why on Earth you would be reading this otherwise) you’ll want to know about a great new ABA publication on the Class Action Fairness Act of 2005 (CAFA).  The Class Action Fairness Act, Law and Strategy, is a book of collected works written by experts on both sides of the bar and deftly edited by former ABA CADS Committee Chair Gregory C. Cook.  Those familiar with CADS (the Class Actions and Derivative Suits Committee of the ABA Section of Litigation) will recognize the names of many of the knowledgeable contributors.

The book covers nearly every CAFA-related topic conceivable, from the history of CAFA to the provisions expanding federal diversity jurisdiction in class actions and the provisions regulating federal class action settlements.  It can be used as a reference guide for the basic requirements of CAFA, but it also provides practical strategy tips for both plaintiffs and defendants in dealing with common and not-so-common CAFA issues.  Here is a summary of the Table of Contents:

  • Chapter 1 – Introduction and Overview
  • Chapter 2 – CAFA in Congress: The Eight-Year Struggle
  • Chapter 3 – Hey CAFA, Is that a Class Action?
  • Chapter 4 – The Amount in Controversy under CAFA: Have You Got What It Takes for Federal Court?
  • Chapter 5 – CAFA’s Numerosity Requirement, or How to Count from 1 to 100
  • Chapter 6 – Basics of MInimal Diversity in CAFA
  • Chapter 7 – Welcome to the Jungle: CAFA Exceptions
  • Chapter 8 – How CAFA Expands Federal Jurisdiction to Include Certain Mass Actions
  • Chapter 9 – Advanced Procedural and Strategic Considerations on Removal under CAFA
  • Chapter 10 – CAFA-Related Appeals
  • Chapter 11 – CAFA Settlement Provisions

Be sure to click the link on the title of the book, above, for information about how to get your copy.  If you don’t have it, chances are that your opponent will!

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Yesterday, the ALPS 411 Blog published my guest post titled I got this email about a class action.  What should I do?  Among other things, the post addresses how one goes about deciding whether an emailed class action notice is real or spam (or worse). 

For readers not familiar with the company, ALPS is an attorney liability insurer and financial services provider headquartered in my home state of Montana.  Be sure to check out the ALPS 411 Blog for excellent content relating to a host of topics of interest to attorneys, including ethics, malpractice, risk management, and general practice tips.

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This is the last of six posts summarizing my notes of the six presentations at the ABA’s 16th Annual Class Actions Institute held in October in Chicago.  For more on this excellent conference, see my October 31, November 5, November 6November 18, and December 3 CAB posts.

This year’s Institute was capped off by a presentation and demonstration entitled: “Preparing Early and Often,” State-of-the-Art Strategies for Managing Class Action Experts.  Andrew J. McGuiness moderated the panel, which consisted of expert economists Dr. Janet S. Netz and Dr. James Langenfeld, attorneys Mary Jane Fait and Laurie A. Novion, and U.S. District Court Judge Gerald E. Rosen.  The panel’s insightful tips were highlighted by vignettes in the form of mock examinations of the two experts. 

Daubert analysis of proposed expert testimony is required at the class certification, a question on which the Supreme Court may shed some light when it rules on Comcast v. Behrend later this term.  At the moment, circuits that require a Daubert analysis include the Fourth, Seventh, Ninth, and Eleventh Circuits.  The Sixth and Eighth Circuits have both adopted a Daubert-lite standard, while the Fifth Circuit has taken a “Daubert Maybe ” or “Daubert I don’t know” approach to the question.

The vignettes illustrated some of the key potential lines of attack on a plaintiff’s or a defendant’s expert’s opinions presented in support of or in opposition to class certification.  They include (but are not limited to): 1) whether the expert relied on a reliable dataset; 2) whether there is a formulaic basis for calculating damages; 3) whether there are any inconsistencies between the defendant’s own transactional data and outside data, such as market research data; 4) whether any individual variation in the data can be explained in a systemic way; and 5) whether a regression analysis or other analytical model is a valid way of evaluating the data or its causal connection to the defendant’s alleged misconduct.

Both the vignettes and the panelists’ observations served to reinforce how important it is for the lawyer to present an expert’s testimony in a way so that the judge understands the evidence.

One key practice tip offered by the panel was to consider using a consulting expert before turning to a testifying expert.  This way, different models or modes of analysis can be tested without fear of tainting the conclusions of the testifying expert or unnecessarily exposing the testifying expert to impeachment or cross-examination. 

However, that does not mean that it is not necessary to make full disclosure to the testifying expert about the material facts and legal issues in the case.  A common frustration that experts have with lawyers is they oftentimes fail to provide a fair and clear picture of the facts or applicable law, leading the expert to an opinion that is at odds with the facts or irrelevant to the issues in the case.  At minimum, this can put the expert in an awkward position and undermine the attorney’s client’s chances for success.  At worst, it can both lead to an adverse decision and cause undeserved and lasting damage to the expert’s professional reputation.

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This is the second 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 this October 31, 2012 CAB Post.

Session 2 addressed a topic of great relevance to all class action practitioners, regardless of the subject matter area of practice.  It was entitled “The Class Definition That Works . . . or Does It?” Strategies for Pleading and Attacking Class Definitions;  The Most Basic and Most Ignored Step in a Class-Action Lawsuits Success or Failure.  The panel of academics, judges and practitioners discussed recent developments in the state and federal courts regarding the requirements for a class definition.  They also discussed practical tips for plaintiffs in articulating a class definition that will withstand attack at the class certification stage, and practical tips for defendants in defeating class certification by attacking the plaintiff’s choice of class definition.  Program Chair Daniel R. Karon moderated the panel discussion, which consisted of The Honorable James G. Carr, Bart D. Cohen, Donald Frederico, Professor Dean Robert Klonoff, Sabrina H. Strong, and Ranae D. Steiner. 

Here are some highlights of the pointers made by the panel during the presentation:

  • Many courts have accepted several additional elements as implicit under Rule 23 and similar state rules of civil procedure, including that the class definition be sufficiently clear and narrow so that the class is ascertainable and not overly broad.  These requirements are implied in order to ensure 1) that the class can be identified from a practical perspective; 2) that the defendant has notice of the claims being made against it and by whom those claims are being made; and 3) that the court can manage the litigation.
  • These issues can also be expressed through the other, express Rule 23 elements.  For example, if a class is not ascertainable, then there is no basis to conclude that numerosity is present.  Similarly, an inability to distinguish class members who have a claim from those who do not should lead the court to conclude that common issues do not predominate.
  • Many trial judges would prefer to consider issues relating to the class definition in terms of the express Rule 23 elements rather than by accepting addition, implicit requirements.
  • Rather than declining to certify altogether, courts are often willing to work with plaintiffs’ counsel to try to come up with alternative class definitions that resolve problems associated with a class as originally proposed.
  • Because most judges are not dealing with these types of issues on a daily basis, the involvement of counsel on both sides is essential to the judge’s well-reasoned evaluation of the potential legal and practical problems with the proposed class definition and whether those problems can be remedied without violating the rights of the defendant or absent class members or overburdening the court.

The panel grouped issues relating to class definitions into various categories.  The panel discussed each of these categories in reference to an example case.  In many instances, the categories overlap, and the example cases often illustrated more than one of the categories.  I have listed below, for each category, the key problems, the example case(s) discussed by the panel, and my notes on insights offered by panelists:

Lack of objective criteria for class membership

Issue – Membership in the class depends on criteria that cannot be established without looking at each class member individually.

Example –  Solo v. Bausch & Lomb Inc., MDL No. 1785, 2009 WL 4287706 (D.S.C. Sept. 25, 2009):  In class action seeking compensation for the lost value of tainted contact lens solution that purchasers were encouraged to dump out as part of a product recall, class defined as consisting of all purchasers who “lack[ed] full reimbursement” for the value of the solution purchased.

Notes – fixes proposed by panel members included 1) Expand definition to remove individualized issues, e.g. “all who purchased”, but this could create overbreadth problems; 2) create subclasses based on date of purchase, and estimate likely amount of consumption for members in each subclass.

Vagueness

Issue – The class definition is too vague and indefinite to determine who is in the class.

Example – Heisler v. Maxtor Corp., No. 5:06-cv-06634, 2010 U.S. Dist. LEXIS 125745 (N.D. Cal. Nov. 17, 2010): Class defined as anyone who experienced a hard drive “failure.”  The problem was determining what constituted a “failure” and limiting that phrase to failures caused by the alleged product defect. 

Notes – The Maxtor case provides an example of a decision where the court preferred to characterize the issues in relation to the express Rule 23 requirements.  The case also illustrates a common problem in cases where causation may be an issue.  By trying to limit class membership to only those individuals who suffered harm, the plaintiffs created a vagueness problem.

Failsafe Class

Issue – Class definition includes only those individuals who will ultimately prove their claims on the merits, so that class membership is not determined until a decision on the merits occurs.  The main problem with failsafe class is that it puts the defendant in a lose-lose situation.  Either the class wins at trial, binding the defendant to a classwide judgment, or the defendant prevails but gets no preclusive effect against absent class members.

ExampleNudell v. Burlington N. & Santa Fe Ry. Co., 2002 WL 1543725 (D.N.D. 2002): The court denied certification after determining that class membership hinged on class members’ ability to prove all of the factual issues that would prove their claims on the merits, including that they owned land abutting a railroad easement, that they did not give consent to the placement of utility cables on the easement, and so on. 

Notes – The problem in Nudell may have been due to a failure to develop the record sufficiently to convince the court that class membership could be determined based on objective criteria.  This is an example of a case where problems with the class definition could be remedied.  The case ultimately settled on a classwide basis after the class was re-defined.

Overbreadth

Problem – Class includes members who did not suffer injury or who have no legal right to recover.

ExamplesSanders v. Apple Inc., 672 F. Supp. 2d 978 (N.D. Cal. 2009): In action for deceptive advertising, class definition included all persons who “own” a 20-inch iMac.  The court found this definition overly broad because it included individuals who didn’t purchase the product and those who weren’t deceived by the advertising.  Anderson v. United Fin. Sys. Corp., 281 F.R.D. 292 (N.D. Ohio 2012): Class was found to be overly broad because it included class members whose claims were time-barred and who had no private right of action.

Notes – In some cases, overbreadth can be cured simply by narrowing the class definition.  On others, however, overbreadth is a symptom of predominance issues that may be difficult to remedy.

Class Definitions in Class Action Settlements

The panel also discussed issues in class definition within the settlement context.  As is true with other threshold requirements, the courts are generally more lenient about class definitions in the settlement context than they are in the litigation context, in large part because manageability concerns are lessened when otherwise contested issues do not have to be resolved.  An example is the DeBeers diamond settlement, Sullivan v. D.B. Invs., Inc., 667 F.3d 273 (3d Cir. 2011), where the Third Circuit affirmed certification of a settlement class over objections claiming that some of the class members would not have had a private right of action due to variations in state law.  Whether the inclusion of class members whose claims are barred or significantly weaker than other class members should be a bar to certification of a settlement class probably depends on whether other class members will suffer as a result.  If it’s simply a matter of the defendant agreeing to waive defenses as to a portion of the class, then courts are more likely to overlook variations in the strengths and weaknesses of individual class members’ claims.

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The United States Supreme Court has granted certiorari to decide whether a plaintiff’s stipulation to seek less than $5 million in damages can deprive the federal courts of jurisdiction to hear the case under the Class Action Fairness Act of 2005 (“CAFA”). The specific question presented in Standard fire Insurance Company v. Knowles is as follows:

Last Term, this Court held that in a putative class action “the mere proposal of a class … could not bind persons who were not parties.” Smith v. Bayer Corp., 131 S. Ct. 2368, 2382 (2011). In light of that holding, the question presented is:

When a named plaintiff attempts to defeat a defendant’s right of removal under the Class Action Fairness Act of 2005 by filing with a class action complaint a “stipulation” that attempts to limit the damages he “seeks” for the absent putative class members to less than the $5 million threshold for federal jurisdiction, and the defendant establishes that the actual amount in controversy, absent the “stipulation,” exceeds $5 million, is the “stipulation” binding on absent class members so as to destroy federal jurisdiction?

For copies of the cert petition and other briefs, and the opinion below, see the SCOTUS Blog page for the case:

http://www.scotusblog.com/case-files/cases/the-standard-fire-insurance-co-v-knowles/

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The Class Action Playbook, Second Edition

I was nearly distraught when I recently misplaced my only copy of The Class Action Playbook by Brian Anderson and Andrew Trask (Oxford University Press 2010).  Not only was the book a handy guide to just about every issue one might face in a class action, but it is also an accessible introduction to class action practice that has saved me hours of having to explain difficult concepts to new associates (I suspect that one of these associates is hoarding my lost copy, but alas, I have no solid proof).  Thankfully, Anderson and Trask have released the Second Edition of the book, which now is available at the OUP website.   So, not only do I have my quintessential guide to defending class actions back, it’s up to date with the latest trends and authorities.  Just in time!

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