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In my 2010 wrap up posted last week, I neglected to mention one of the three class action-related cases in which the United States Supreme Court granted cert in 2010.   Smith v. Bayer is an appeal of a case that did make my top 10 list, In re Baycol Products Litigation, 593 F.3d 716 (8th Cir. 2010).  The Court granted cert last September to address whether a federal court that has denied class certification has the power to enjoin the relitigation of the class certification issue by members of the would be class in a separate state court proceeding.  (See this link for the full text of the “questions presented”).  Oral argument is set for January 18, 2011. 

For an excellent preview of the “trifecta” of class action-related cases pending before the Supreme Court this term, see this December 20, 2010 article from Daniel Fisher at Forbes.com.

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As 2010 winds down, it’s time to review the key developments in class action law.  It was an especially busy year for the federal courts, and in particular the U.S. Supreme Court, on issues impacting class action practice.  Here, in chronological order, are 10 key developments from the year that was:

  1. January 5 – In In re Baycol Products Litigation, the Eighth Circuit follows the Seventh Circuit’s lead in upholding the right of a federal court to enjoin a putative statewide class action from proceeding where a federal court had already denied class certification in a case involving substantially similar claims.  (See CAB entries dated January 7 and January 12).
  2. February 23 – In a decision that will impact many class actions removed under the Class Action Fairness Act, the Supreme Court adopts the “nerve center test” as the standard for determining corporate citizenship, in Hertz Corp. v. Friend.  (See CAB entry dated March 2)
  3. March 31 – The Supreme Court holds that states may not regulate the types of claims that may be filed as class actions in the federal courts, in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co.  (See CAB entry dated April 8)
  4. April 7 – In American Honda Motor Co. v. Allen, the Seventh Circuit holds that a trial court must rule on challenges to the admissibility of expert testimony relevant to class certification before deciding whether a class may be certified.  (See CAB entry dated May 4)
  5. April 26 – The Ninth Circuit issues its decision in Dukes v. Wal-mart Stores, Inc., adopting rigorous class certification standards similar to those previously adopted by the Second Circuit in In re IPO Securities Litigation, 471 F.3d 24 (2d Cir. 2006), but nonetheless certifying under FRCP 23(b)(2), what has been called the largest employment discrimination class action in history.
  6. April 27 – The Supreme Court seemingly puts an end, for all practical purposes, to the concept of class arbitration by holding that a defendant could not be compelled to defend an arbitration on a class basis where the arbitration clause did not expressly provide for class arbitration, in Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp.  (See CAB entry dated May 11).
  7. June 24 – In Morrison v. National Australia Bank, the Supreme Court deals a fatal blow to “foreign-cubed” class actions, holding that § 10(b) of the Securities and Exchange Act of 1934 does not allow for fraud claims involving transactions on foreign exchanges that occurred outside the United States. (See case summary at SCOTUS blog).
  8. July 19, October 20 – An Eleventh Circuit panel issues a controversial decision in Cappuccitti v. DirecTV, Inc., severely restricting CAFA removal jurisdiction to cases where the amount in controversy exceeds $75,000 with respect to at least one class member, but later reverses itself in an October 15 opinion.  (See Guest Post from Eric Jon Taylor and Jon Chally at CAFA Law Blog for more on the first decision and this October 20 CAB entry on the second decision).
  9. November 9 – Supreme Court hears oral argument in AT&T Mobility v. Concepcion, in which the Court considers whether the Federal Arbitration Act preempts state law holding a class arbitration waiver unconscionable.  (See CAB fsummary of oral argument dated November 17).
  10. December 6 – Supreme Court grants certiorari in Wal-Mart Stores, Inc. v. Dukes, to decide the issue of whether a claim for monetary relief can be certified under FRCP 23(b)(2).  (See CAB entry dated December 7).

Just considering the cases still awaiting ruling before the Supreme Court, 2011 promises to be another exciting year in the world of class actions.  Happy New Year to all!

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Last week, I posted a short note about the Eighth Circuit’s decision in In re Baycol Products Litigation.  Here is a more in-depth synopsis, thanks to fellow Baker & Hostetler partner Joe Ezzi:

The Eighth Circuit Court of Appeals recently affirmed a district court order enjoining state court plaintiffs from pursuing a class action because the district court had already denied certification of an identical class in federal court.  In re Baycol Products Litig., ___ F.3d ___ (8th Cir. January 5, 2010).

A state court putative class action was filed by George McCollins in West Virginia in 2001.  Bayer removed the case and it became part of a multidistrict action consolidated before the district court in Minneapolis.  Class certification was denied in the McCollins MDL class action, with the district court making certain legal conclusions concerning economic loss requirements under West Virginia law related to predominance.  At the same time, a similar West Virginia state court class action was pending against Bayer, albeit with different putative class representatives.  Following the district court’s denial of class certification, Bayer moved the district court to enjoin the plaintiffs in the West Virginia state court action from pursuing a class action because, as absent putative class members of the McCollins lawsuit, they could not relitigate the previous federal court decision denying certification of a West Virginia economic loss class.  The district court granted Bayer’s request for an injunction under the All Writs Act. 

The Eighth Circuit, in affirming the district court order enjoining the West Virginia state court class action, found that the West Virginia state court plaintiffs sought “certification on the same legal basis of the same class already denied in this case.”  In re Baycol Products Litig., ___ F.3d ___ (8th Cir. January 5, 2010), slip op. at 6.  Thus, “in the context of MDL proceedings, certification in a state court of the same class under the same legal theories previously rejected by the federal district court presents an issue sufficiently identical to warrant preclusion under federal common law.”  Id. at 10.  Further, relying on the Seventh Circuit decision in In re Bridgestone/Firestone, 333 F.3d 763 (2003), the Eighth Circuit noted that the putative class representative in the federal action was in privity with the state court class representatives for purposes of collateral estoppel based on allegations of adequacy of representation and because both putative class representatives asserted the same claims.

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