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Editor’s Note: The following guest post was authored by Sara Collins, contributor to the consumer finance website, NerdWallet.  The views expressed in Sara’s article are her own.  Although those of us who tend to represent defendants in consumer class actions may not agree with all of Sara’s views on the benefits of class actions, we can certainly learn something from reading a consumer advocate’s views on the subject.  The article also provides an easy-to-follow primer on how class actions work.  Many thanks to Sara for her contribution. 

Class Actions – Do They Actually Help Consumers? 

By Sara Collins

Consumers in the United States are sometimes victims of bad business behavior. These behaviors cover a huge range of bad acts, particularly in the field of securities. Class actions allow consumers to band together and fight against bad business. As such, they have a number of benefits for consumers and are quite helpful in evening the corporation versus consumer playing field.

What are Consumer Class Actions?

A consumer class action is simply a lawsuit which takes place in a federal or state court. The case is brought by one or a small handful of individuals, acting as representatives for a larger group of consumers, known as the class. Typically the case is seeking damages on behalf of the named individuals in addition to the entire class.

Why is a Consumer Class Action Necessary?

Traditionally, class actions are used to combine small-dollar claims for a large number of people. One small claim is generally too small for a cost-effective suit. Consumer class actions offer a helpful alternative, justifying the litigation expenses and immensely improving the consumer’s odds of success, particularly when it comes to larger corporations.

How do Consumer Class Actions Work?

When a class action is first brought, the court initially decides whether it is a proper class action. This is a process known as class certification. The parties then work towards a trial, though settlement negotiations can take place at any point.  If the parties decide to settle the case, the court must approve the settlement and then order notice given to class action members.

Do Class Actions Work?

They definitely do. Billions of dollars are given back to the public every year which come from consumer class actions. In most cases, the money is given directly to the victims of the suit, rather than going into the hands of the government, lawyers or other non-consumers.

What Long-Term Effects do Consumer Class Actions Cause?

Class actions help to make bad business practices unprofitable. Class actions aggregate the power of isolated consumers, allowing class actions to compete against corporate behemoths. It levels the playing field, forcing businesses to operate in honest and trustworthy ways.  Markets in other countries where class actions are not allowed often suffer from corporate abuses like stock manipulation, insider trading and other problems.

Do Lawyers Benefit Excessively From Consumer Class Actions?

One argument used by businesses to protest the prevalence of consumer class actions is to claim that the lawyers benefit excessively from the cases. In fact, attorney fees in class action cases average just between 20 and 30 percent of the amount recovered. In stark comparison, personal injury lawyers typically reap 35 to 50 percent of their case winnings. Clearly businesses are using false arguments in an attempt to eliminate class actions and thus damages sought against them.

What is the Class Action Fairness Act of 2005?

The Class Action Fairness Act of 2005 (CAFA) was enacted by Congress in order to curb abuse of class action suits in state courts. Evidence showed that many class actions were being filed which benefited the counsel, rather than the consumers. Additionally, many cases were filed in courts which showed prejudice against business defendants, a problematic issue.

CAFA was enacted to extend federal jurisdiction to these state courts in order to diminish such abuses. CAFA has had a mild success and while most benefits are for businesses, some benefits are extended to consumers. Primarily, the legislation limits the monetary benefits for the attorneys. This ensures that money won in settlements goes to the members of the class, rather than the plaintiff counsel.

Consumer class actions are needed to ensure the financial safety of consumers, particularly in the realm of securities. Class actions allow consumers to band together, combining resources in order to sue a corporation as a singular entity. In turn, all consumers reap the benefits of the settlement, helping to prevent future bad behavior from the corporation in question. Class actions undoubtedly have a positive effect on the world of consumers and it is vital they stay legal for the foreseeable future.

Sara Collins is a writer for NerdWallet, a personal finance site dedicated to helping consumers learn about new ways to save money.

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This is part II of a multi-part post summarizing last week’s 5th Annual Conference on the Globalization of Class Actions and Mass Litigation.  For the introduction, see part I posted yesterday.

Who’s Paying? New Developments in Funding

Professor Christopher Hodges, Centre for Socio-Legal Studies, University of Oxford/Erasmus University (and a co-sponsor and co-founder of the conference) chaired this panel.  Professor Camille Cameron, University of Windsor/University of Melbourne presented the case study.  The other panelists were The Honorable Vaughn Walker, Chief Judge (ret.) U.S. District Court for the Northern District of California, Dr. Gerrit Meincke, Foris AG, Mr. Till Schreiber, Cartel Damage Claims, and Mr. Wieger Wielinga, Omni Bridgeway.

This session examined an intriguing issue in international class and mass litigation: the emergence of private litigation funders who finance litigation in exchange for a share of the recovery. This is a development that may be unfamiliar to many U.S. practitioners, who are used to a system where class actions are mainly funded by well-financed law firms who can recover a contingent fee in a successful case.  In other parts of the world, however, ethical prohibitions on contingent fees, loser pays fee-shifting rules, and the lack of an organized plaintiffs’ bar have led to the emergence of alternative methods of funding litigation.

Professor Cameron opened the session by introducing three themes relevant to the study of litigation funding: 1) access to justice; 2) the impact of private litigation funding on public regulation; and 3) ethics.  Litigation funders do provide access to justice for litigants who would otherwise not be able to afford to bring their claims.  In Australia, for example, most law firms do not have the resources necessary to fund class action litigation, so the existence of private litigation funders expands access to justice.  On the other hand, Cameron pointed out, the existence of litigation funding institutions has turned law firms away from funding cases that they used to take, and the pool of cases that litigation funders will take on is very small and includes most only securities cases, so cases that used to be brought are now falling through the cracks.  On the regulatory front, the question arises whether the cases that are being brought by private litigation funders would be better left to government regulators.  On the one hand, remedying or deterring wrongful conduct is traditionally a public rather than private function in many parts of the world.  On the other hand, increasing globalization is causing cases involving mass wrongs to become larger and more common, and government regulators are becoming increasingly underfunded and ill-equipped to keep up.  The ethical issues implicated by private litigation funding are somewhat apparent.  Because they have a financial stake in the outcome, there is a strong incentive for funders to take on an active role in the management and strategic decision making in a case.  This can, although it does not necessarily have to, lead to potential conflicts of interest and questions about improper influence over the professional judgment of counsel.  These concerns may be decreased in jurisdictions where the funder can receive outright assignments of claims than in jurisdictions where they merely assist other litigants with financing in exchange for a fee.

The case study for this presentation was an examination two private litigation funders that had funded securities class actions.  The two funders, IMF and ILF used different models.  IMF took a hands-on approach in which it was actively involved both with the selection of counsel and the day-to-day management of the litigation itself.  ILF’s approach was to choose its counsel carefully and let the attorneys handle the management of the lawsuit.  Several litigation funders were asked to compare and contrast their firms’ approach with these two models.

Garrit Meincke is a litigation funder with Foris AG, a small firm that has been involved in litigation funding in Germany for more than 13 years.  It is the oldest and leading litigation funding firm in Germany and has historically had very few competitors.  Recently, three new companies have formed and have generally copied Foris’s approach.  Foris has modified its fee structure over time.  Initially, it charged a 50% fee, but its average fee has been adjusted over time and is now between 20 to 30%.  The firm is very selective about the cases it will fund, funding only about 5% of the total cases it reviews.  Foris is more of a passive rather than an active funder.  It leaves it to the lawyers to run the case.  However, it remains involved in monitoring a case throughout all proceedings.  Litigation funding is not regulated in Germany.  Germans are distrustful of U.S.-style class action litigation and do not have a representative action procedure.  Claims can be bundled by assignment, but there is a risk that bundled claims will be unbundled because German judges are evaluated in part based on the number of cases, which creates a disincentive to allow claims to be joined together.  Litigation costs are relatively low in Germany, attorney’s fees are regulated by a structure of tariffs which increase based on the amount at stake, and private litigation insurance is prevalent.  Hodges commented that these factors make litigation funding a natural development there.

Till Schreiber’s firm, Cartel Damage Claims, funds cartel litigation in Belgium.  It is an active litigation funder that buys assignments in cases rather than financing litigation for a fee.  Obtaining an outright assignment allows the firm to actively manage the litigation and outside counsel without creating conflicts of interest.  Buying cases and aggregating them for litigation also creates economies of scale that allows the firm to be profitable despite the risks of loss and having to pay an opponent’s litigation expenses in unsuccessful litigation.  Schreiber pointed out that aggregating cartel litigation in Belgium has a benefit for defendants as well as plaintiffs.  Because defendants who commit anti-competitive violations can be held jointly and severally liable for damages, aggregation of claims decreases the risk of inconsistent rulings and duplicate recoveries.  Schreiber also pointed out that firms are looking at the possibility of funding end-consumer claims, but the viability of funding mass consumer claims is dependent on the technology available in the judicial system, such as the ability to handle electronic access to files and signatures.

Weiger Weilinga’s firm, Omni Bridgeway, started in the litigation funding business as a recovery specialist in the mid-1980s.  It did not become involved in funding litigation on the merits until recently.  As a recovery agent, the firm handles the recovery of money judgments from defendants in high-risk jurisdictions, such as in war zones or countries with unfriendly or unstable governments.  The firm still handles mostly political risk claims, but has recently branched out into providing litigation funding for cartel cases.  It has not yet taken on any consumer cases.  Omni Bridgway is active in both hiring lawyers and in managing the litigation.  Case management is usually a cooperative effort between the firm, the client, and outside counsel, but Omni Bridgeway gets a full power of attorney from the client and therefore has ultimate decisionmaking authority.  The firm takes only cases with a minimum value and is selective about what it will fund.  The percentage fee ranges from case to case.  It is typically around 30% but has been as high as 60% in a case involving recovery from a North Korean defendant.

Retired U.S. District Court Judge Vaughn Walker talked about the primary method of class action litigation funding in the United States, namely contingent fees.  In particular, he discussed the problem of deciding between competing groups of lawyers vying to represent a class of plaintiffs in order to earn the contingent fees that can be recovered in the event of a settlement or favorable judgment.  During the first 25 years of the modern class action era in the United States, the decision was made using two approaches: 1) the first group to file a class action; or 2) nomination of lead counsel from a group of plaintiffs.  Fees themselves were historically determined by the lodestar method, which involved the court determining an appropriate hourly rate, multiplied by the reasonable number of hours expended by the firm on behalf of the class.  However, the lodestar method had drawn criticisms, including that 1) it encourages firms to churn hours that might not be reasonably necessary for the prosecution of the claim; 2) it created an incentive to generate sub-optimal recoveries because it gave the firm an incentive to wait until late in the case to engage in settlement discussions; and 3) there was no adversarial presentation of the fees requested, as fees were usually requested by agreement in the context of a settlement.  In 1985, the Third Circuit Court of Appeals created a task force on attorney’s fees, which recommended that a percentage fee be used rather than the lodestar method, and many courts adopted this approach in the years that followed.  However, percentage fee awards created other problems, including that the optimal recovery for the client or class occurs after the marginal cost of litigation meets the marginal recovery for the lawyer, which it the point at which the lawyer is incentivized to settle.  Judge Walker was one of several judges to adopt an innovative approach to selecting lead counsel in class actions that both resolved the dispute over who should be lead counsel and encouraged more favorable fee structures.  He asked competing class action firms to submit competing proposals on the fee that they would request in the event of a successful outcome.  Ultimately, this resulted in the winning firm agreeing to a fee that was half the customary rate.

Judge Walker offered a framework for identifying cases in which a reverse-auction selection process works in assigning lead counsel in U.S. class action litigation, which he observed also provides lessens to litigation funders in assessing cases to fund: 1) there has to be a clear identification of both the claims and the defendants (securities and certain employment cases are good candidates); 2) the relief has to be quantifiable in monetary terms; 3) the selection methodology should be simple.  One example of a simple methodology that U.S. courts have adopted is the “X factor” methodology, where counsel is asked to propose an amount X that it will agree to recover for the class at no cost, and the percentage recovery at which the firm will do all additional work.

The Q&A portion of the presentation generated a list of interesting observations from both the panelists and members of the audience.  (Unfortunately, my notes do not allow me to give proper acknowledgement for the specific source for each of these comments.)

  • In Australia, litigation funding has had the practical effect of turning an opt-out regime into an opt-in regime, as litigation funders are reluctant to represent the interests of litigants who do not share in the cost and risk of an unsuccessful lawsuit.  One issue currently being tested in Australia is whether a litigation funder can collect a percentage of all funds recovered on behalf of a class, including those claimants who have not contracted with the funder.  The answer to this question could impact whether class actions are brought as opt-in cases or opt-out cases in the future.
  • The lack of contingency fees in Europe is an important factor in litigation funding, as is the loser-pays cost-shifting rule.
  • There is a common mythology in Europe that litigation funding will lead to U.S.-style class action litigation, which is commonly perceived as synonymous with “ambulance chasing.”  Perhaps Europeans can learn a lot from U.S. litigation rather than being afraid of it.
  • The European civil law system can be criticized for encouraging “book building” activity, because litigation funders and consumer associations are required to sign up claimants in order to create economies of scale that make pursuing mass claims worthwhile.
  • Expect a ruling early next year from the Amsterdam Court of Appeal in a case involving objections to a collective settlement on the grounds that U.S. lawyers would be paid out of the settlement fund, something that would not be allowed for Dutch lawyers under Dutch law.

Finally, an observation of my own.  After listening to this panel presentation, it struck how much corporate, rather than consumer, interests have driven reforms and innovations in procedures allowing access to mass litigation in Europe.  Many of the parties seeking funding from third parties, and many of the parties pushing for access to collective action procedures, are institutional investors who are looking for an inexpensive vehicle for recovering funds on behalf of their clients.  This is a theme that came up in a later presentation titled Who Has Jurisdiction in a Global Market?  Stay tuned for a summary of that presentation…

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In another I must be living under a rock moment, for the first time this evening I came across Octagon Publishing’s Class Action Attorney Fee Digest Blawg.  The Blawg, which supplements Octagon’s subscription service, Class Action Attorney Fee Digest, focuses exclusively on orders, decisions, and trends in attorneys’  fee awards in class actions.  The publication’s key contributor is Harvard Law Professor William B. Rubenstein, who does expert witness work on class action fee issues.  If you’re about to submit a fee petition or are working on a class action settlement, you’d be wise to check out this great class action resource.

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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:

http://childwelfare.net/activities/kennya/kenny_a_case_overview_20060718.html

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Here are some blog entries from the week that was that might be of interest to class action practitioners:

Class Action Decisions

The UCL Practitioner quotes a recent California Court of Appeal decision reversing a trial court’s order denying class certification on the ground that the court had not allowed pre-certification discovery of the identity of possible replacement class representatives under Pioneer Electronics v. Superior Court, 40 Cal. 4th 360 (2007) (link to opinion provided by Class Action Defense Blog):

http://www.uclpractitioner.com/2008/09/new-class-certi.html

CAFA Law Blog provides a synopsis of a Louisiana federal court decision addressing the time for removal under CAFA and the non-applicability under CAFA of the “first-served” rule, which provided that all defendants had to join in a removal petition within 30 days from the date that the first defendant was served with process:

http://www.cafalawblog.com/-case-summaries-eastern-district-of-louisiana-says-no-go-noto-refusing-to-remand-cafa-case-back-to-state-court-on-timeliness-issue.html

Class Action Defense Blog summarizes a California opinion upholding the dismissal of a claim for attorneys fees under a fee sharing agreement that was not disclosed prior to another court’s ruling on a fee award in an underlying class action settlement:

http://classactiondefense.jmbm.com/2008/09/attorney_fees_class_action_def_1.html

Delaware Corporate and Commercial Litigation Blog discusses a Delaware Chancery Court decision allowing objectors limited discovery in evaluating the fairness of a class action settlement:

http://www.delawarelitigation.com/2008/09/articles/chancery-court-updates/limited-discovery-allowed-for-objectors-to-class-action-settlement/

Class Action News

Jurist reports on a class action lawsuit filed against the NSA, President Bush, Vice President Chaney, and other government officials for actions in connection with their warrantless surveillance program to gather consumer information from telecommunications companies:

http://jurist.law.pitt.edu/paperchase/2008/09/class-action-lawsuit-filed-over-us.php

Tribune Company issues a press release regarding an ERISA class action filed by various reporters, editors, and other employees of the LA Times, a case covered in various blog entries last week.  (See last week’s CABWR)…

http://www.tribune.com/pressroom/releases/2008/09172008.html

… and more on the case from Southern California Public Radio:

http://www.publicradio.org/columns/kpcc/kpccnewsinbrief/2008/09/la-times-employees-file-class.html

Point of Law reports on the settlement of long-standing litigation against the New York City’s homeless programs by consolidating all pending litigation into a single class action settlement:

http://www.pointoflaw.com/archives/2008/09/nyc-settles-maj.php

Class Action Commentary

A Seattle Supersonics fan provides an insider’s view of a heated battle over a subpoena issued by the defendant to a founder of the fan-organized lobbying group, Save our Sonics, in a putative class action for alleged deceptive marketing practices filed on behalf of Sonics ticketholders against the ownership group that recently moved the team to Oklahoma City, from Seattle Center Arena Reboot:

http://seattlecenterarenareboot.blogspot.com/2008/09/dispatches-from-tenth-circle-sonics-fan.html

The Complex Litigator offers commentary on developments in California case law regarding the preclusive effect of a denial of class certification:

http://www.thecomplexlitigator.com/2008/09/johnson-v-gla-1.html

Spam Notes comments on a recent class action settlement involving alleged text messaging spam and addresses the issue whether text messaging spam falls within the purview of the Telephone Consumer Protection Act of 1991 (TCPA):

http://spamnotes.com/2008/09/23/do-text-messgaes-fall-within-the-tcpa.aspx?ref=rss

Practice Tips

Drug and Device Law Blog offers a “Multidistrict Litigation Compendium,” which includes a clarification of the distinction between the MDL process and class certification:

http://druganddevicelaw.blogspot.com/2008/09/multidistrict-litigation-compendium.html

Class Action Trends 

Mass Tort Litigation Blog offers a link to an ABA Litigation News Section Report discussing a trend in courts ordering a full evidentiary Daubert hearing to assess the admissibility of expert testimony at the class certification stage of a class action:

http://lawprofessors.typepad.com/mass_tort_litigation/2008/09/daubert-hearing.html

The D&O Diary discusses the “dark new phase” of litigation spawned from the subprime economic crisis:

http://www.dandodiary.com/2008/09/articles/subprime-litigation/litigation-wave-inflection-point/

… and for loads of content on various other legal issues implicated by the financial crisis and proposed bailout, see http://www.theracetothebottom.org/.

Real Lawyers Have Blogs updates a previous story about a plaintiffs’ class action law firm that hired a PR firm to post a message on the social networking website Twitter seeking potential class representatives.  The update reports that the PR firm retracted the post following media and public reaction, but defended its use of Twitter to generate publicity about a potential class action as in the public interest…

http://kevin.lexblog.com/2008/09/articles/social-networking-1/pr-firm-retracts-twitter-post-looking-for-class-action-plaintiffs/

… and another brief commentary on the story from Overlawyered:

http://overlawyered.com/2008/09/using-twitter-to-scare-up-class-action-plaintiffs/

International Class Action Law

Securities Docket and Bankruptcy Information Centre discuss issues facing two British pension funds in pursuing securities class action claims against the now bankrupt Lehman Bros. investment bank:

http://www.securitiesdocket.com/2008/09/22/uk-pension-funds-in-lehman-bros-securities-class-action-weighing-options/

http://bankruptcy.org.uk/bankruptcy-news/pension-funds-review-status-of-lehman-class-action-ipecom/ (quoting article from IPE.com)

Legal Pad LA discusses a class action for life insurance benefits filed on behalf of a putative class of descendants of victims of the Armenian genocide of World War I against a foreign insurer in federal court in California:

http://www.lalegalpad.com/2008/09/descendants-of.html

ElectEcon takes issue with a Canadian usury law that formed the basis of a Ontario court’s decision holding a Canadian Satellite TV company’s late fees illegal in a class action decision impacting millions of customers: 

http://www.eclectecon.net/2008/09/consumer-protec.html

Remember the Midwest comments on an article in Australian newspaper The Age discussing a possible trend in securities class actions arising out of a company’s failure to disclose facts concerning its carbon emissions.  (for a ClassActionBlawg entry discussing the same article, click here):

http://rememberthemidwest.blogspot.com/2008/09/class-action-climate.html

Multinational Corporations links to a Business Day South Africa article reporting on developments in a case filed under the Alien Tort Claims Act against several multinational corporations for their alleged complicity in the former apartheid policy of the South African government:

http://www.multinationalcorporations.info/blog/9675/apartheid-class-action-group-in-us-court-again%C2%A0-business-day-south-africa/

Class Action Politics

Primary Monitor Blog provides a list of issues on which Presidential candidates Barack Obama and John McCain agree, including their support of the Class Action Fairness Act (CAFA):

http://199.125.75.56/primaryblog/voting_records_where_mccain_obama_have_agreed

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Here are some blog entries from the week that was that might be of interest to class action practitioners:

Class Action Decisions

For a “brief” commentary on a case addressing the removability under the Class Action Fairness Act (CAFA) of a class action counterclaim by a plaintiff/counterclaim defendant, see this guest commentary from Dallas attorney Jonathan Bridges on CAFA Law Blog:

http://www.cafalawblog.com/-case-summaries-guest-commentary-fourth-circuit-to-decide-whether-to-let-att-pull-up-its-shorts-class-action-to-federal-court.html

Class Action Defense Blog summarizes a Fifth Circuit Court of Appeals decision holding that a state’s parens patriae action brought on behalf of its citizens was removable under CAFA:

http://classactiondefense.jmbm.com/2008/09/cafa_class_action_defense_case_19.html

Mass Tort Defense summarizes a Kentucky federal court decision denying class certification in a toxic tort lawsuit in part based on plaintiffs’ ability to articulate an appropriate class definition:

http://www.masstortdefense.com/2008/09/articles/federal-court-rejects-toxic-tort-class-action/

Consumer Law & Policy Blog summarizes a September 8, 2008 decision of the Eighth Circuit Court of Appeals applying Missouri law in upholding a class arbitration ban in a consumer class action involving prepaid gift cards:

http://pubcit.typepad.com/clpblog/2008/09/eighth-circuit.html 

Class Action Commentary

Training Marketer discusses potential impacts from a class action settlement involving claims under the Americans with Disabilities Act (ADA) seeking access to a retail store’s website for persons with disabilities…

http://trainingtime.wordpress.com/2008/09/15/target-settles-class-action-ada-lawsuit-is-your-site-compliant/

… more on providing online access to visually impaired users from That Credit Union Blog

http://thatcreditunionblog.wordpress.com/2008/09/16/providing-online-accommodations-for-the-visually-impaired/

… and The Industry Standard:

http://www.thestandard.com/news/2008/09/15/target-pact-wont-lead-web-access-standards

The Defense Base Act Blog discusses possible impacts that the Defense Base Act could have on pending class action litigation involving claims that a company’s acts of not training its employees properly for work in Iraq has led to injuries to other employees:

http://defensebaseactblog.com/2008/09/12/will-the-defense-base-act-foil-the-recent-class-action-law-suit-against-kbr/

Class Action Scandals

Health Care Renewal comments on the University of Minnesota’s recruitment of a health insurance company executive who resigned in the wake of a stock option backdating scandal:

http://hcrenewal.blogspot.com/2008/09/university-of-minnesota-courts-mcguire.html

Class Action Reform

Watchdog Blog endorses proposed legislation that would prohibit class arbitration waivers in credit card agreements:

http://citizen.typepad.com/watchdog_blog/2008/09/arbitration-wil.html

Class Action Settlements

Overlawyered updates earlier commentary on a $688 million attorneys fee awarded in an Enron class action settlement:

http://overlawyered.com/2008/09/coughlin-stoia-amlaw-daily-and-prof-john-coffee-contd/

The Consumerist reports on frustrations in trying to participate in a class action settlement after receiving notice:

http://consumerist.com/5048989/join-the-verizon-etf-class-action-if-they-would-only-let-you

Class Action (and Related) Scholarship

California Punitive Damages provides a synopsis and brief commentary on a recent scholarly work entitled “Punitive Damages and Class Actions” written by Professors Fransesco Parisi (Minnesota) and Marta Cenini (Milan)…

http://calpunitives.blogspot.com/2008/09/law-review-article-punitive-damages-and.html

… and more on the same article from Mass Tort Litigation Blog:

http://lawprofessors.typepad.com/mass_tort_litigation/2008/09/parisi-and-ceni.html

Point of Law reviews a paper entitled “The Use of Litigation Screenings in Mass Torts: A Formula for Fraud?” authored by Cardozo Law Professor Lester Brickman:

http://www.pointoflaw.com/archives/2008/09/brickman-of-1-m.php#more

Wage Law recommends the paper “Class Certification in the Age of Aggregate Proof” by Vanderbilt Professor Richard A. Nagreda:

http://wagelaw.typepad.com/wage_law/2008/09/class-certification-in-the-age-of-aggregate-proof.html

Class Action News

Fitz & JenLuke Ford.net, paidContent.org, and Portfolio.com discuss an ERISA class action filed by editors, writers, and other employees of a major newspaper recently acquired through the alleged misuse of an Employee Stock Ownership Plan (ESOP): 

http://www.fitzandjen.com/2008/09/jen-if-you-thin.html

http://lukeford.net/blog/?p=5006

http://www.paidcontent.org/entry/419-jack-nelson-among-current-ex-tribune-co-staffers-trying-class-action-su/

http://www.portfolio.com/views/blogs/mixed-media/2008/09/16/la-times-refugees-sue-for-control-of-paper

Class Action Trends

The D&O Diary discusses the latest in options backdating settlements:

http://www.dandodiary.com/2008/09/articles/options-backdating/options-backdating-settlement-news-apple-and-unitedhealth/

Real Lawyers Have Blogs discusses a well-known plaintiffs’ class action firm’s use of social networking website Twitter to find prospective class representatives:

http://kevin.lexblog.com/2008/09/articles/social-networking-1/law-firm-using-twitter-to-find-plainitiffs-for-class-action-law-suit/

Rhondak discusses the use of small claims court as a “poor man’s class action” to vindicate consumer’s rights:

http://rhondak.livejournal.com/1036526.html

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Here are some blog entries from the week that was that might be of interest to class action practitioners:

Class Action Decisions

Law and Insurance discusses a recent Texas Supreme Court decision holding that a duty to defend was triggered in the context of class actions in which the plaintiffs argued that an alleged product defect in cell phones allegedly could cause brain injury, even though the plaintiffs only sought to recover the cost of a headset as damages on behalf of class members and did not seek damages for actual bodily injuries…

http://lawandinsurance.typepad.com/law_and_insurance/2008/09/cost-of-cellpho.html

… and Point of Law discusses a Pennsylvania federal court decision dismissing a putative class action involving similar claims that cell phones cause brain damage on federal preemption grounds:

http://www.pointoflaw.com/archives/2008/09/angelos-strikes.php

CAFA Law Blog discusses a Rhode Island federal court decision rejecting the “legal certainty” standard for meeting the $5 million amount in controversy requirement under CAFA:

http://www.cafalawblog.com/-case-summaries-short-case-from-small-state-rhode-island-handles-cafa-amount-in-controversy-standard.html

Alaska Employment Law discusses a 9th Circuit Court of Appeals decision upholding sanctions in an FLSA/state wage hybrid class action for the failure to provide Rule 26 damages disclosures for all plaintiffs who opted in to the suit:

http://www.akemplaw.com/wiki/2008/09/04/9th-cir-sanctions-in-hybrid-flsa-opt-in-class-action/

How Appealing and Securities Docket discuss and provide links to a Third Circuit Court of Appeals decision reversing a lower court’s dismissal of a securities fraud case involving statements about the commercial marketability of the drug Vioxx:

http://howappealing.law.com/090908.html#030206

http://www.securitiesdocket.com/2008/09/09/third-circuit-reverses-dismissal-by-lower-court-in-merck-securities-class-action/

Plan Adviser summarizes and provides a link to a recent Iowa federal district court decision denying class certification in an ERISA case filed against a retirement plan service provider on behalf of a would-be class of tens of thousands of 401K plans:

http://www.planadviser.com/article.php/2778

Class Action Defense Blog summarizes an Eleventh Circuit Court of Appeals Decision upholding decertification of a class based on the individualized nature of the damages claimed in a case alleging federal Truth in Leasing regulations:

http://classactiondefense.jmbm.com/2008/09/class_action_defense_casesowne.html

Class Action News

The Complex Litigator reports that a petition for review has been filed in the highly publicized wage and hour class action decision by the California Court of Appeal in Brinker Restaurant Corp. v. Superior Court:

http://www.thecomplexlitigator.com/2008/09/petition-for-re.html

The D&O Diary discusses a securities class action filing against mortgage giant Fannie Mae in the wake of the federal government’s takeover this past weekend:

http://www.dandodiary.com/2008/09/articles/subprime-litigation/first-the-government-takeover-then-the-lawsuit/

Classified provides a summary of recent class action news from the Southeastern U.S.:

http://www.carltonfields.com/classactionblog/blog.aspx?entry=236

THR Esq. reports on the upcoming trial date in a class action filed by former NFL players against the NFL Player’s Association:

http://reporter.blogs.com/thresq/2008/09/class-action-ag.html

PogoWasRight.org discusses reports on a trend in Korea on class action filings resulting from alleged acts of illegal downloading of customer information from publicly available broadband wireless connections:

http://www.pogowasright.org/article.php?story=20080908063543355

Class Action (and related) Commentary

The Race to the Bottom offers more installments of its response to securities class action reforms proposed by the U.S. Chamber of Commerce Institute for Litigation Reform:

http://www.theracetothebottom.org/home/the-chamber-of-commerce-and-excessive-litigation-be-careful-5.html

Drug and Device Law Blog provides a follow up to last week’s discussion of the Multidistrict Litigation (MDL) process:

http://druganddevicelaw.blogspot.com/2008/09/how-long-does-mdl-process-take.html

Class Action Settlements

Overlawyered and The AmLaw Daily report on the $688 million fee award approved for imprisoned lawyer William Lerach’s former firm in a class action settlement arising out of the Enron scandal:

http://overlawyered.com/2008/09/enron-class-action-lawyers-set-to-get-688-million/

http://amlawdaily.typepad.com/amlawdaily/2008/09/coughlin-stoia.html

Life of Brad asks lawyers for help in assessing whether any negative repercussions might come of his decision to do nothing and remain part of a class action settlement:

http://lifeofbrad.wordpress.com/2008/09/03/symantec-corporation-class-action-lawsuit-vs-a-lot-of-people/

Canadian Class Action Law

Morton’s Musings reports on a ruling by an Ontario court allowing a class action to proceed against the Canadian federal government for alleged negligence in allowing “Mad Cow” disease to spread into the Canadian market from England:

http://jmortonmusings.blogspot.com/2008/09/mad-cow-class-action-gets-judges.html

Dipper Chick discusses the use of class actions as a tool by minority party candidates in Canada for seeking ballot and media access in elections:

http://dipperchick.blogspot.com/2008/09/dion-doesnt-get-to-bring-his-personal.html

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