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Posts Tagged ‘entrepreneurial litigation’

In response yesterday’s entry discussing Daniel Fisher’s article on the potential impacts of Concepcion, I got one of the best comments that I’ve ever received on this site.  It comes from Portland complex injury and consumer class action attorney David Sugerman, who blogs at www.davidsugerman.com.  Of course, I disagree with just about every word of it, but with imagery like a bunch of corporate fat cats “fixing to celebrate the opening of the all-you-can-eat trough of greed,” I could not help but re-post it here:

I’m amused. As I said to defense counsel at a large multi-national firm, I guessed that midway through the second glass of champagne, the defense bar realized it had a real problem. He is apparently looking for a new job or to transition into other areas of practice.

Your one concrete example–retail sales–is, as you know, a less viable class because of problems of ascertainment, notice, locating the class, providing notice and obtaining and distributing relief. And not all retail sales cases survive. You likely recall the Gateway case some years ago with the forced mandatory arbitration clause in the paperwork in the box that was deemed accepted upon registration?

I love the concerted talking points in the defense bar that these cases are not done. Those of us who represent consumers know better.

We also know the torrent about to be unleashed when consumers can no longer take concerted action to stop nickel and diming on high-volume, small amount claims. AT&T, Comcast, banks, utilities, credit card companies are fixing to celebrate the opening of the all-you-can-eat trough of greed.

The argument that Congressional or Executive action *might* change things proves too much. Absent such action, consumer class cases are pretty much done. The argument also illustrates the crass overreaching in SCOTUS’ opinion, with views on federalism and statutory construction that are as breathtaking as the Citizens United case.

This is really not a problem for me because I handle a wide range of consumer and plaintiff problems. But my colleagues in high-priced defense firms who defend consumer class actions for a living are likely to have problems.

So no, if I were a high end defense attorney, I wouldn’t take much comfort in Forbes view or the talking points. It’s going to get bleak out there.

Lest you doubt my dire predictions, let’s set a wager for 12 months from the decision on how many consumer class actions have been filed, how many layoffs in the defense industry, or some other agreed-upon metric that we can revisit next year.

Ok, David, friendly banter on.

First, I must say that I don’t know a single defense lawyer who owns a private jet, but I know several plaintiffs’ lawyers who do, so all this talk about “high-priced” defense firms rings a little hollow to me.

Second, defense lawyers will have jobs for as long as there are plaintiffs’ lawyers around to file lawsuits, and somehow I don’t see the plaintiffs’ bar throwing in the towel this easily.  What you may see is simply a shift in the kinds of class actions that get filed in the future, or the industries that are targeted.  I say “targeted” because in my experience trends in consumer class actions are more often driven by the creativity of the entrepreneurial trial bar than by any epidemic of corporate greed.  Don’t get me wrong, I’m not saying there aren’t well-publicized scandals involving an epidemic of corporate greed (See Enron), but they tend to generate securities or ERISA class actions, not consumer class actions.

Finally, I’ll wager you, although not for money.  Only for pride.  (I’m not made of money after all, I’m just a defense lawyer).  I’ll bet that not only don’t we see a decrease, but we’ll actually see an increase in consumer class actions over the next year.  Sort of like the rash of class actions filed just before CAFA took effect.  I’m not sure at this moment how we’ll measure this, but I’d imagine that there’s a consulting firm out there (no doubt worried about the effect Concepcion is going to have on its own bottom line) planning just the kind of research we need.

So, if you’re a consulting firm looking for a project, we’ve got a job for you (pro bono, of course)…

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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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Canadian attorney Howard Levitt has an interesting article published today on FinancialPost.com about trends in Canadian employment class action law.  The article offers some practical preventative tips for employers, but also makes a few keen observations about the dynamics surrounding a recent increase in employment class actions in Canada, including this gem: 

It’s a new phenomenon: Roving groups of lawyers searching for corporate conduct deleteriously affecting large groups of employees quickly move to find one employee willing to start a class action on behalf of all.

Many of these lawyers have little or no expertise in employment law.

Levitt’s description conjures images of Canada as the wild frontier of employment class action law.  Certainly, there are many examples of young lawyers who have hit it big in class action lawsuits in the U.S.   But the inexperienced class action lawyers roaming the country in search of class actions like 49ers speculating for gold have long since settled down to cultivate the fertile class action ground south of the border. 

The roving bands have settled into established firms and consortiums of trial lawyers with the expertise, resources, and influence to edge out even the most enterprising of young lawyers.  This often occurs behind the scenes through a process called “private ordering,” politely described in the Federal Judicial Center’s class action Pocket Guide for judges as when counsel competing for the role of lead counsel in a case agree amongst themselves to divide up responsibilities and fees.  Sometimes, however, the struggle becomes more public, as it did when several different groups of firms competed for the role of lead counsel in this recent case.  “Auctioning,” or competitive bidding for the role of class counsel, has also been used in some cases.

So, if you’re a young enterprising class action lawyer in the U.S., you may have to pay your dues a bit before you earn your first private jet.  And for those would-be prospectors thinking about heading north to stake your claims, in addition to a quality gold pan and a sturdy mule, you’ll need to submit an application to the National Committee on Accreditation.

For some online articles discussing the phenomenon of “entrepreneurial litigation” try these links:

http://www.austlii.edu.au/au/journals/MULR/2006/14.html#Heading131

http://www.rand.org/pubs/monograph_reports/MR969/MR969.ch10.pdf

http://www.law.harvard.edu/programs/olin_center/corporate_governance/papers/04.Halfteck.class-action.pdf

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