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Posts Tagged ‘forum shopping’

As I noted in my post a few weeks ago for the SCOTUSBlog class action symposium, one issue to which I’m paying particularly close attention these days, particularly in the wake of the Supreme Court’s recent decisions in Shady Grove, Concepcion, Bayer and Dukes, is whether the state court class certification standards begin to diverge from increasingly more exacting federal standards. 

A recent article in the Wisconsin Lawyer caught my eye as a case in point for the potential divergence of state and federal class action standards.  A Call to Reform Wisconsin’s Class-Action Statute, authored by Paul Benson, Joe Olson & Ben Kaplan of the Milwaukee firm Michael Best, discusses the brief and arcane language of Wisconsin’s class action statute (Section 803.08 of the Wisconsin Statutes), which reads, in its entirety:

When the question before the court is one of a common or general interest of many persons or when the parties are very numerous and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of the whole.

Benson, Olsen and Kaplan point out in their article that although the courts have generally looked to case law interpreting federal Rule 23 in deciding whether class certification is proper under the state rule, the broad statutory language leaves state trial courts with broad discretion in deciding what standards to apply in a particular case.  This, they argue, leaves the state rule open to uncertainty of application, inconsistent decisions, and forum shopping.   They propose that the state rule be reformed so that it more closely mirrors the federal rule.

It remains to be seen whether states like Wisconsin with ill-defined class action rules will become battleground for class action litigation, where plaintiffs can attempt to avoid the more rigorous standards now required in the federal courts. Even assuming that CAFA and other jurisdictional issues could be overcome, there could be a variety of practical reasons why plaintiffs’ lawyers would not want to pursue class action litigation in the Wisconsin courts.  However, Wisconsin’s broadly-worded class action rule provides at least a possible inducement to pursue litigation there.

In other words, for potential class action defendants (and in observance of National Talk Like a Pirate Day), Ye maye want to considarrrr steerrrin’ clear o’ Wisconsin, me maties!

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The AAJ hasn’t published a “generous dispensers of recompense” list to compete with the ATRA’s list of “judicial hellholes,” as I very seriously suggested yesterday.  But the AAJ did send an email response to Robert J. Ambrogi of Legal Blog Watch in response to his well-publicized post yesterday discussing the ATRA report.   Ambrogi has summarized the AAJ response in this follow-up entry.  Not surprisingly, they don’t think too much of the report, although I’d be surprised if they didn’t at least take a few notes.

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The Class Action Blogosphere Weekly Review is back on its regularly scheduled day this week.  As always, here are some blog entries that might be of interest to class action practitioners…

See Carlton Fields’ class action blog Classified for links to various news tidbits relating to class actions, including a summary of a bill recently passed in the United States House of Representatives that would amend the Fair and Accurate Transaction Act (FACTA) to, among other things, “ensure that it is not abused by frivolous class-action lawsuits against businesses.”

http://www.carltonfields.com/classactionblog/blog.aspx?entry=213

Class Action Defense Blog summarizes and provides a link to a transfer of venue decision by the U.S. District Court for the Southern District of New York noting that the deference to be given to a plaintiff’s choice of forum is “diminished” in a class action:

http://classactiondefense.jmbm.com/2008/05/venue_class_action_defense_cas.html

The Complex Litigator comments on a recent entry in California Punitive Damages regarding an appeal that may affect punitive damages claims in wage and hour class actions:

http://www.thecomplexlitigator.com/2008/05/are-punitive-da.html

http://calpunitives.blogspot.com/2008/05/pending-appeal-will-affect-punitive.html

Drug and Device Law Blog provides an in-depth analysis of and a link to the Second Circuit Court of Appeals’ recent decision in Pew v. Cardarelli, No. 06-5703-mv, slip op. (2d Cir. May 13, 2008), which addresses the procedures for appellate review of remand orders in cases removed under the Class Action Fairness Act…

http://druganddevicelaw.blogspot.com/2008/05/cafa-intrigue.html

… and see more on the same decision from the Consumer Law & Policy Blog

http://pubcit.typepad.com/clpblog/2008/05/new-cafa-decisi.html

The D&O Diary continues to be the leading source of information on litigation arising out of the subprime mortgage crisis:

http://www.dandodiary.com/2008/05/articles/subprime-litigation/yes-but-the-subprime-litigation-wave-rolls-on/

How Appealing discusses a recent Sixth Circuit Court of Appeals decision upholding a large verdict in an antitrust class action:

http://howappealing.law.com/051508.html#033744

Federal Civil Practice Bulletin discusses a recent First Circuit Court of Appeals decision discussing the level of merits evaluation required (as opposed to allowed) at the class certification stage:

http://federalcivilpracticebulletin.blogspot.com/2008/05/first-circuit-discusses-degree-of.html

Elizabeth Cabraser submits entry as a guest blogger on ACSBlog regarding the use of class actions as a tool for change and social justice:

http://www.acsblog.org/guest-bloggers-class-actions-and-justice.html

Law and More comments on the Deutsche Telekom trial and the possibility that Germany may adopt an American-style class action model (see my earlier entry here)

http://lawandmore.typepad.com/law_and_more/2008/05/will-germany-wind-up-importing-american-style-class-action-lawsuits.html

Canadian blog FP Legal Post comments on recent competition class action decisions in the Canadian courts:

http://network.nationalpost.com/np/blogs/legalpost/archive/2008/05/20/divisional-court-upholds-competition-class-action-certification.aspx

Startup Company Lawyer provides some practice tips for directors and officers on ways to minimize potential class action exposure resulting from the sale of a company:

http://www.startupcompanylawyer.com/2008/05/15/what-are-directors-duties-and-what-can-they-do-to-protect-themselves-in-a-sale-of-company/

Too Old to Know Better discusses a website allowing users to submit grievances for review by a consortium of plaintiffs’ class action lawyers (see my commentary on related topics here and here):

http://too-old-to-know-better.blogspot.com/2008/05/class-action-connect.html

A franchise lawyer provides his views on the use of the class action device in franchisee’s rights’ cases on Blue Maumau:

http://www.bluemaumau.org/my_personal_bias_foragainst_using_class_action_lawsuits

Sabal Insurance Group‘s blog summarizes a seminar addressing trends in shareholder class actions in the insurance industry:

http://sabalinsurance.blogspot.com/2008/05/insurers-told-to-monitor-class-action.html

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The Institute for Legal Reform, an organization affiliated with the U.S. Chamber of Commerce, has issued its annual report ranking the lawsuit climates of each of the 50 States.  This report is an interesting resource for anyone who is interested in class action litigation and forum selection issues.  See the following link for the rankings and internal links to the full report:

http://www.instituteforlegalreform.com/states/lawsuitclimate2008/ 

The report is far from scientific and is based on the subjective responses of in-house lawyers in companies with annual gross revenues of at least $100 million.  However, as the executive summary concludes,

perception does become linked with reality. If the states can change the way litigators and others perceive their liability systems, we may find considerable movement in their rankings in the future. Once these perceptions change, the overall business environment may be deemed more hospitable as well.

One very interesting item in the report’s findings is that when respondents were asked to name the single most important issue facing state policymakers in reforming the legal system, speeding up the trial process was the factor most cited, beating out such factors as punitive damages and tort reform issues, eliminating unnecessary lawsuits, fairness and impartiality, and high litigation costs.  So, for anyone who believes that all corporate lawyers are interested more in delaying proceedings rather than letting the legal process run its course, the results of this survey provide some food for thought.

On a more predictable note, the report concluded that 41% of the respondents “view the fairness and reasonableness of state court liability systems in America as excellent or pretty good” while 55% viewed the systems as only fair or poor.”  In addition, 63% of respondents reported that “the litigation environment in a state is likely to impact important business decisions at their company, such as where to locate or do business, up from 57% in 2007.”  Executive Summary (Emphasis in original).

Another key point made by the report is that a state’s overall ranking may be influenced by the existence of one or two plaintiff-friendly magnet jurisdictions within the state.  Madison County, Illinois and Jefferson County, Texas, jurisdictions well-known to class action lawyers, are listed as examples.

Not surprisingly, corporate-friendly Delaware ranks as the best state in the survey, while West Virginia, home of the novel “reverse-bifurcation” procedure (see earlier entries here and here) in mass tort litigation, ranks last.

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