Class Action Countermeasures : Class Action Lawyers & Attorneys : McGuireWoods Law Firm : Complex Litigation, Mass Torts

 During the latter half of 2011, I was privy to the following exchange between a well-known law professor and a well-known practitioner:

PROFESSOR: Yes, I wrote a piece which concluded that the class action is dead. You heard it here.
PRACTITIONER: And yet plaintiffs keep filing the things …

That exchange (which I promise actually happened), summarizes the primary trend in class-action scholarship in the last year: declaring the device "dead," either because classes are now too hard to certify because of Dukes, too hard to bring in the first place because of Concepcion, or too expensive because of curtailment of attorneys' fees. Leave aside the fact that these arguments are most likely wrong (because, well, plaintiffs keep filing the things); they're dull as well. So, while the federal court system made it difficult to choose only ten significant cases this year, the rush of early autopsies of the class action made it difficult to scrape up ten interesting articles. That said, here are the Ten Most Interesting Class Action Articles of 2011:

1. Collective Justice or Personal Gain (Akron L. Rev. 2011) - Professor Stephen Meili provides outstanding empirical work on how plaintiffs' lawyers keep class-action plaintiffs involved in their in cases. It provides (1) a fascinating peek behind the curtain, and (2) great fodder for further discussion of whether plaintiffs' counsel are fulfilling their fiduciary duty to the class.
2. Unreliable Securities for Retirement Income Security: Certifying the ERISA Stock-Drop Class (Vanderbilt L. Rev. 2011) - This student comment cogently describes an emerging trend in securities class actions--the ERISA stock-drop class action--and one of the key controversies within that trend. When people ask why we bother having student-run law reviews, a piece like this helps to make the argument in support.
3. Embedded Aggregation in Civil Litigation (Cornell L. Rev. 2011) - The late Professor Nagareda discusses how even seemingly individual litigation can contain issues that require courts to make decisions about aggregating claims -- and he uses those cases to show why the constraints of Rule 23 are more than just "hypertechnical bugaboos." Fascinating reading.
4. Majority of Class Action Publication Notices Fail to Satisfy Rule 23 Requirements (Rev. Litig. 2011) (See also.) - Another excellent empirical study which asks: does class-action notice do what we intend it to? Most practitioners suspect that notice does not in fact actually notify the vast majority of class members about their claims. This study confirms that suspicion with cold, hard facts.
5. Two views of Class Actions (Fordham L. Rev. 2011) - Professor Lahav's article is hardly flawless, but the first half gets at a question that deserves a lot more discussion: are class actions primarily a joinder device or some other kind of legally transcendent entity? These two strains of thought continue to compete with each other as courts debate the propriety of various kinds of class actions, and some of the pre-certification tactics employed by the parties.
6. "Abandoned Claims" in Class Actions: Implications for Preclusion and Adequacy of Counsel (George Wash. L. Rev. 2011) - Abandoning claims (or "claim-splitting") has long been a practice of class-action plaintiffs. For almost that long, it has worried courts, who don't like to leave absent class members in the lurch. Professor Sherman provides a thoughtful review of various preclusion cases, and suggests that the phenomenon may be more of a superiority than an adequacy problem.
7. Financiers as Monitors (WP 2011). After the now-traditional "death of the class action" introduction, Professor Burch provides an interesting justification of third-party litigation financing, arguing that third-party financiers may provide a necessary monitoring role for entrepreneurial plaintiffs' lawyers. Having heard a number of financiers talk about how they fund litigation, I'd say that Burch's argument rings true.
8. Class Action Professional Objectors: What To Do About Them? (WP 2011) - Professor Lopatka and Judge Smith have provided an interesting analysis of class-action objectors. While they're largely critical of objectors, they do recognize that some objections have merit. So the question they seek to answer is: how should judges separate the legitimate objections from the objectors-for-profit? Their answer (large appeal bonds) won't be popular with some non-profit objectors, but they do put forward an intellectually honest proposal for discussion.
9. Overlitigating Corporate Fraud (WP 2011) - Professor Erickson asks a nagging question: do securities fraud class actions really deter corporate misconduct that has fallen through the cracks? Or do they just draft along behind government investigations and other existing enforcement mechanisms? She approaches this from a doctrinal rather than an empirical standpoint, but it's still a valuable first step in testing the deterrence justification that so many class-action proponents put forward.
10. Short Sales, Class-Action Lawsuits, and Potential Information Leakages (WP 2011). Professors Blau and Tew have noticed two interesting phenomena. First, some plaintiffs' lawyers leak their securities class-action complaints to short-sellers, a conclusion the professors reach by looking at spikes in short-sale activity just before a class action gets filed. (The tactic makes sense: short sales of the stock will put pressure on the corporation's management to settle a case. It may also raise some adequacy concerns, since what class counsel has done is to drive down the price of the stock in order to benefit themselves.) They also notice that post-filing short sales tend to correlate with the more successful securities class actions.

I get the impression, even from some of these articles, that academics think class actions aren't so much dead as dull; they're just kind of bored with the device as it stands. These professors tend to think that class actions are cool because of their ability to effect large-scale social change or raise big constitutional issues. Now that the Supreme Court has issued a record five opinions on class-action practice in a single year, I can see where it might be hard for them to identify the next area of constitutional import. Since, as Daniel Girard observed this year, we may have witnessed the end of the "Golden Age of the private attorney general" (a debatable but interesting observation), it's much harder to write articles that recommend new areas in which to file class actions.

Except: plaintiffs do keep filing the things. And, in doing so, they've raised a number of really interesting issues of legal strategy and civil procedure that the professors either haven't noticed, or don't think are worth their time. So here's a list of the ten most interesting articles that didn't get written this year.

1. The changing role of adequacy in class-action practice. Where does one strike the balance between a class representative who can provide discovery and oversight, and the ability to actually bring a class action without investing thousands in finding the "perfect" representative? How much does class counsel's role in the litigation matter? The Seventh Circuit in particular made three key rulings about adequacy this year: CE Design, Creative Montessori, and In re Aqua Dots. What do these cases suggest about the inquiries into adequacy of counsel and adequacy of representation?
2. The changing role of superiority. Should the analysis include the effects on non-parties to class actions? The Sixth Circuit has held that the superiority inquiry can look at the effect of a class action on a state's elderly population. How does the logic of that holding apply in the notoriously circular securities class actions? 
3. The evolving debate over the propriety of the motion to strike class allegations. Currently, the uneven development of motion-to-strike jurisprudence has resulted in vastly different practices across jurisdictions. What does this say about how Rule 1 and Rule 23 can intersect? How will motions to strike affect the kinds of class actions that plaintiffs bring? Do different holdings about the motion to strike result in different certification debates?
4. The emerging circuit split over the treatment of experts at class certification. There's one good article out there already, but it predates the rush of opinions that occurred this year. How do those affect the debate? Does Scalia's dicta in Dukes have any effect?
5. The class action and fiduciary duty. Various courts have recognized that named plaintiffs, counsel, and even judges have fiduciary duties to absent class members. But what are the precise contours of those duties? How (and how often) do courts actually enforce them?
6. The various new challenges to the "feasibility of joinder" aspect of numerosity. This has been a fascinating, though small, development over the last eighteen months, one that warrants more attention.
7. Public relations and class actions. Despite the increasing amount of raw data out there, no one has really done a comprehensive study of the role of public relations strategies in class-action practice, or an empirical study on their effectiveness. Do class actions with media pushes result in settlement or larger awards?
8. Follow-on class actions. Do class actions that follow recalls or investigations get certified as readily as "original" class actions?
9. Copycat class actions. What are the incentives for bringing them? How often do they actually work for the copycats? How do "original" plaintiffs and defendants fight them?
10. Settlement timing. At what point in litigation are class settlements most likely to occur? Most practitioners' intuition is that settlement occurs most frequently after certification. But is that actually the case? If not, what does that mean for class-action strategy?

I'll concede that these topics aren't as sexy as pronouncing on the latest Supreme Court opinions. But they're real trends and controversies, they touch on interesting aspects of representative litigation, and exploring them would be of real use to both practitioners and policymakers.

Regardless of whether those ten topics turn into articles, I have no doubt that the various battles still being fought over class certification on a daily basis will yield further scholarship. And, as soon as some aspect of class-action litigation turns sexy again, I'm pretty sure these same professors who pronounced the device "dead" will talk about its surprising comeback.

When that happens, remember: class actions were never dead. After all, plaintiffs kept filing the things.

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 This was a busy year for class-action jurisprudence. Clearly, most of the Supreme Court cases had some effect on class action practice. But the district and appellate courts also rendered a host of rulings this year that significantly affect class-action practice. Despite what a number of academics and plaintiffs' lawyers have claimed, the class action is not dead.  That said, it's probably true, to quote plaintiff's lawyer Daniel Girard, that while the "death of the class action" is overstated, the "Golden Age of the private attorney-general" is over. There were so many interesting opinions in the past year, with so many implications, that it was hard to identify just ten. Consequently, I've cheated a little. The final two entries actually comprise four cases which, taken as pairs, indicate a couple of new trends to watch out for.

1. Wal-Mart Stores Inc. v. Dukes (S. Ct.) - Whether you think it killed the class action or not, Wal-Mart Stores, Inc. v. Dukes (called "Wal-Mart" by some, "Dukes" by others) was the runaway most important case of the year for class-action practitioners. It clarified an ongoing debate about whether Rule 23(b)(2) could be used for money damages (it can't), it finally provided a standard for Rule 23(a)(2) (a common question must have a common answer), and it finally put to bed a common misreading of Eisen that had justified ignoring inconvenient facts when certifying class actions. Those all make it the most significant decision of the year, even before you get to the press hype.
2. AT&T Mobility v. Concepcion (S. Ct.) - Concepcion is the other case that has been accused of killing the class action (sometimes on its own, sometimes in conjunction with Dukes.) It hasn't managed that feat, but it has sent what one plaintiffs' attorney called "a seismic change" through class-action practice. While we're still feeling the aftershocks it's clear that it is now more difficult to bring "creative" consumer claims that are governed by clear purchase contracts; and certain individualized employment disputes are also finding their way into arbitration rather than class actions. And that's before we get into the Supreme Court's discussion of exactly what due process requires from aggregated litigation.
3. Pilgrim v. Universal Health Card, LLC (6th Cir.) - This case, the first appellate opinion to address the motion to strike class allegations at the pleading stage, has made the tactic truly viable. For years, class-action defendants have faced down multi-state classes that they knew from prior experience could not get certified. And yet, because courts were reluctant to rule on the viability of these class actions before discovery, defendants faced long and expensive discovery just to get to a legal issue that required no additional facts. Pilgrim marks the first time that an appellate court has recognized that determining whether variations in state law predominate over other issues does not require discovery, it just requires an analysis of the laws in question.
4. Klier v. Elf Atochem Inc. (5th Cir.) - Thought that cy pres relief was a no-brainer in your class action settlement? Think again. Joined later in the year by the Ninth Circuit's opinion in Nachsin v. AOL, LLC, Klier finally bridles the runaway use of cy pres relief to dress up less valuable class actions. The fact that it also provided a stark critique of the always-problematic medical-monitoring class action was just a bonus.
5. Smith v. Bayer Corp (S. Ct.) - Significant" does not have to mean "pro-defendant." In Smith, the Supreme Court held (abrogating the Seventh Circuit's Thorogood opinion last year) that a defeat at class certification does not preclude another class member from bringing the same class action somewhere else. It based this decision on the eminently logical reason that, until a case has been certified as a class action, it is just an individual plaintiff's case. (That same logic underlies the Seventh Circuit's recent re-affirmation that one can moot a class action before certification.)
6. Erica John Fund v. Halliburton (S. Ct.) - Similarly, securities defendants were perfectly happy with the Fifth Circuit's requirement that a plaintiff demonstrate loss causation when certifying a securities class under a "fraud on the market" theory, even if that requirement could not be found in the text of Rule 23. The Supreme Court, in a short, well-reasoned, and unanimous opinion, definitively closed off that particular line of argument.
7. In re Bluetooth Headsets Products Liability Litigation (9th Cir.) - The Ninth Circuit's rejection of a problematic class-action settlement (the class got nothing, the attorneys got $850,000) imposed a common-sense "proportionality" requirement on class counsel fees, recognized that segregation of the fee request from the rest of the settlement does not eliminate perverse incentives for class counsel, and required a cross-check for lodestar-based fees.
8. Judge Alsup's Class Settlement Checklist - Judge Alsup has handled a number of class actions in his few years on the bench. And this was the year that he developed a standing order that lays out what he expects from any classwide settlement, before negotiations may even have begun. It's an outstanding idea, and it provides excellent guidance to plaintiffs and defendants about what they can and can't accomplish in a settlement in his court. While I may not agree with all of his analysis, I can't fault his attempt to create certainty in the negotiation process.
9. In re Aqua Dots Products Liability Litigation (7th Cir.) & Pipefitters Local 636 Insurance Fund v. Blue Cross Blue Shield of Michigan (6th Cir.) - The Sixth and Seventh Circuits both faced the question of how to handle class actions that, while they might benefit the plaintiff and the plaintiffs' lawyers, would do no one else any good. Judge Easterbrook of the Seventh Circuit pointed out that while it is logical to say that a class action duplicating a voluntary recall is not a good idea, it doesn't exactly fall under the text of superiority. So instead, he held that a plaintiff who brings a redundant class action is inadequate. The Sixth Circuit, faced with a class action that might benefit the class but would in the process hurt other citizens of Michigan, simply held it not superior to other methods of resolving the controversy (including individual lawsuits).
10. CE Design v. King Architectural Metals (7th Cir.) & Creative Montessori Learning Centers v. Ashford Gear LLC (7th Cir.) - In a pair of opinions this year, Judge Posner seemed single-handedly determined to restore integrity to the class action. In CE Design, he held that a named plaintiff who has credibility problems cannot serve as an adequate class representative. In Creative Montessori, he held that class counsel who have engaged in deceptive methods to prosecute their class action are not adequate class counsel. The message behind these two cases seems clear: everyone in a class action is expected to be on the up-and-up, not just the defendants.

In making this list, I had to leave off a number of significant developments in class action practice. Taco Bell tried a risky but successful PR strategy this year. The Second Circuit held that subclasses might require their own counsel. The federal appellate courts have split--even after Dukes--on how to treat expert testimony. 2011 was an interesting time for class actions. Perhaps uniquely so. It will be interesting to see how each of these developments shakes out in 2012.

[Note - edited after publication to fix a formatting error and an unfinished sentence.]

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BNA's Class Action Litigation Report has published an article by yours truly that adapts this post about arbitration post-Concepcion and tries to add a little more scholarly rigor.  

They've also graciously allowed me to make it available here, where you can find it suitable for downloading, printing, and stuffing in the stocking of your favorite class-action defense lawyer.  (It makes great kindling to go with the coal.)

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 This month, we have an abundance of "other strategists." At the beginning of the month, I attended the 5th Annual Conference on the Globalization of Class Actions at the Hague. The conference was extremely informative, even though it focused more on mass litigation than class actions specifically. Fellow blogger (and extremely nice guy in-person) Paul Karlsgodt has been putting up excellent, comprehensive notes from the various panels, so I'm not going to try to duplicate his efforts. Instead, I'm going to just leave you with one idea from each panel; usually the one that got me thinking the most.

"Mass Media & Mass Litigation" 

• Panel - Mr. Michael Seymour (Chair)
• Mr. Arnold Croiset van Uchelen
• Mr. Stephan Holzinger
• Mr. Ben Knüppe 
• Mr. Jan Maarten Slagter 
• Prof. Ianika Tzankova 

Primary insight: Media moves much faster than litigation, orders of magnitude faster. As a result, from the media's perspective, any account of litigation will be littered with huge, close-to-unfillable gaps. The plaintiffs' largest challenge is to fill enough of those gaps to keep the momentum of coverage going. The defendant's largest challenge is to make sure those gaps are not filled with speculation that hurts it. Since, with the rise of social media, "everyone is a journalist now," coverage is even less predictable than it used to be.

"Who’s Paying? New Developments in Funding"

• Prof. Christopher Hodges 
• The Honorable Vaughn Walker 
• Dr. Gerrit Meincke 
• Mr. Till Schreiber 
• Mr. Wieger Wielinga 
• Prof. Camille Cameron 

Primary insight: Third-party funding is becoming more common in Europe, and it can be profitable. But it's not necessarily what plaintiffs want. (They need the money, but they don't like ceding control of the litigation to the funders.) Two interesting phenomena are resulting from the rise of third-party funding in the countries that allow it. First, funders are engaging in "book-building," pulling together multiple similar claims by buying them from the original claimants. And book-building may be just another form of aggregation. (This isn't unheard of in the US; insurance companies have been trying "mass subrogation" litigation for some time.) Second, despite defendants' concerns that third-party funding just enables more runaway litigation, it appears that the funders may (and I stress may) provide a brake on entrepreneurial lawyers. (Professor Elizabeth Chamblee Burch has an interesting and well-timed paper out on this same subject.)

"Managing the Mass"

• Prof. Ianika Tzankova 
• The Honorable Lee Rosenthal 
• The Honorable Mr. Justice David Steel 
• The Honorable Ivan Verougstraete 
• Prof. Axel Halfmeier 

Primary insight: Judges know what needs to be done to manage large cases, but often lack the tools to do so. Technology is helping (ECF, for example, takes a lot of administrative work off judges), but it may not be helping enough. As a result, judges really stress cooperation from parties, and they are very cautious about having the parties run the litigation rather than themselves.  Despite conventional wisdom, many judges no longer see their role as encouraging settlement; the costs of litigation will do that on their own. Instead, they see their role as problem-solvers. (All of this, by the way, applies far less to European civil-law jurisdictions than it does to England and America.)

"Giving Away Money: Calculating Damages & Allocating Compensation in Mass Cases"

• Prof. Francis McGovern 
• Dr. Norbert Wuehler
• Mr. Pieter van Regteren Altena 
• Mr. Kenneth Feinberg 
• Prof. Jasminka Kalajdzic 

Primary insight: Compensation panels face a real challenge in balancing logistics and legitimacy. (Or, as Feinberg put it, empathy and efficiency.) And, to some extent, they will fail. "Our job is to accomplish rough justice," says McGovern. Volume drives structure: the more claims you have, the more streamlining you need. The more compensation experts can listen to the harmed, the more legitimate the process will seem to each of them.

"Who Has Jurisdiction in a Global Market?"

• Prof. Deborah Hensler (Stanford Law School) 
• Mrs. Femke van 't Groenewout 
• Mr. Daan Lunsingh Scheurleer 
• Mr. Peter Cashman
• Prof. Manuel Gomez 

Primary insight: Non-American investors continue to prefer US courts. The primary challenge that non-Americans see is that jurisdiction is still subject to heavy gamesmanship, by plaintiffs' lawyers as well as by defendants. While most practitioners would like to see some clear inter-jurisdictional rules, they concede that won't be possible without more agreement among jurisdictions in the first place, and without less gamesmanship from the parties. (Also, many outside the United States are really sure what Morrison held.)

"Paths to Mass Justice"

• Dr. Sam Muller
• Prof. Deborah Hensler 
• Mr. Robert W. Hammesfahr 
• Mr. Richard Murray
• Mr. Michael Hausfeld
• Mr. Daniel Girard 
• Mr. Martijn van Maanen 

Primary insight: There really wasn't one. Rather than debating a single issue, this was more an opportunity for many of the panelists to engage in some amateur futurology. So, instead, here are a few visions of the future of mass litigation:

• Private enforcement of mass torts will continue, but may come from businesses as well as entrepreneurial lawyers. (Hausfeld)
• The scope of lawsuits will continue to grow, but innovations in the rules will lag behind adaptations in practice. (Hensler)
• The combination of millennial impatience (the next generation does not brook delays in compensation) and advanced information technology will lead to a form of "Facebook justice." (Hammesfahr)
• The combination of growing scope of lawsuits, growing social conscience about widespread harms (like global warming) and growing flexibility in procedural rules will lead to mass litigation being the investment vehicle of choice. (Murray)
• The "death of the class action" is overstated, but the "Golden Age of the private attorney-general" is over. (Girard)
• There appears to be less normative behavior in mass litigation, and more competition among jurisdictions (like England and the Netherlands). (Van Maanen.)

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Like many cell-phone users, Jerome Damasco received an an unsolicited text message on his phone. Unlike many cell-phone users, he decided to make a federal case of it. So he filed a class action in federal court, alleging that Clearwire (the advertiser) had violated the Telephone Consumer Protection Act.

Faced with the complaint, Clearwire offered Damasco the full damages he sought as an individual. (It also offered to make the same payment to ten other unnamed individuals, suggesting that this may have been a technical glitch rather than a knowing TCPA violation.) It warned Damasco that it considered this offer to moot his claims, and it moved to dismiss because Damasco no longer had standing. A trial court for the Northern District of Illinois granted the motion.

Damasco appealed to the Seventh Circuit, which, in the recent opinion Damasco v. Clearwire Corp., affirmed the trial court.

The question of mootness is hotly contested in class actions. The plaintiff wants to be able to assert a classwide claim as early as possible, with as little up-front expense as possible. (Locating a class representative who cares enough to prosecute the litigation can be a significant up-front expense.) The defendant wants to be able to get rid of a case if it is clear to it that it is dealing with a small customer-relations problem instead of a systemic problem.

Unlike the Third Circuit, which has consistently held that offers to make the named plaintiff whole do not moot class actions, the Seventh characterized the fight over mootness as one where some courts interpret the standing doctrine as it … well … stands, and others impose a "new rule" that would prevent mooting an individual plaintiff's claim.

Those circuits, citing the flexible nature of the mootness doctrine and concerns about buy-offs, have fashioned a new rule that, absent undue delay, a plaintiff may move to certify a class and avoid mootness even after being offered complete relief.

And the Seventh Circuit has now gone on record saying that it does not follow this exception:

We believe that the exception created by these circuits is unnecessary. To allow a case, not certified as a class action and with no motion for class certification even pending, to continue in federal court when the sole plaintiff no longer maintains a personal stake defies the limits on federal jurisdiction expressed in Article III. See Juvenile Male, 131 S. Ct. at 2864; Lewis v. Cont'l Bank Corp., 494 U.S. 472, 477-78 (1990); Holstein, 29 F.3d at 1147. That the complaint identifies the suit as a class action is not enough by itself to keep the case in federal court. Even when a "complaint clearly and in great detail describes the suit as a class action suit," if the plaintiff does not seek class certification, then "dismissal of the plaintiff's claim terminates the suit."

(Emphasis added.)  The Seventh Circuit also considerd the traditional objection, that this would allow a defendant to "buy off" an individual named plaintiff. It found a simple solution to that problem.

A simple solution to the buy-off problem that Damasco identifies is available, and it does not require us to forge a new rule that runs afoul of Article III: Class-action plaintiffs can move to certify the class at the same time that they file their complaint. The pendency of that motion protects a putative class from attempts to buy off the named plaintiffs.Damasco argues that this solution would provoke plaintiffs to move for certification prematurely, before they have fully developed or discovered the facts necessary to obtain certification. But this objection is unpersuasive. If the parties have yet to fully develop the facts needed for certification, then they can also ask the district court to delay its ruling to provide time for additional discovery or investigation.

(Internal citations omitted.) Now, if I were a plaintiff, I might object here that what the Seventh Circuit has done is recommended that I violate Rule 11 by filing a motion for certification without a sufficient basis in law or fact. But I would be wrong to do so. After all, plaintiffs have to allege in their complaint that the case is appropriate for class treatment. If they have done that without a sufficient basis in law or fact, then they have already violated Rule 11.

The more interesting thing the Seventh Circuit has done here is to reframe the debate over standing in class actions. For the most part, legal doctrine treats an uncertified class as an individual case. But, in practice, courts do often assume that since a plaintiff has alleged a class action, there is something different about the case that justifies its continuation when an ordinary case might go off the rails. And there is no real justification in caselaw for doing so. Here, the Seventh Circuit has made that distinction more explicit: just saying a case is a class action does not make it so. A plaintiff must at the very least file a motion for certification to justify the special treatment courts afford a class action.

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There's a fascinating strategic story buried deep within Snigdha Prakash's book on the early Vioxx litigation, All the Justice Money Can Buy: Corporate Greed on Trial. It's revealed in two passages, one toward the beginning of the book, one toward the end.

At the beginning of the book (and the trial it covers), New Jersey Superior Court Judge Carol Higbee [] proposes bifurcating several upcoming Vioxx trials into two phases: a general causation phase, followed by a damages phase. As Prakash reports:

The plaintiffs embraced the proposal. Trying several cases together would give them multiple opportunities to beat Merck in a single trial. And they believed the the trial's bifurcated structure would play to their strengths because Merck's deceptive marketing practices and scientific misconduct would take center stage first. Merck would have to wait until the second half of the trial to call the jury's attention to what had proven to be the strongest part of its case--how each plaintiff's lifestyle and preexisting injuries may have contributed to the alleged injuries.

(Pages 29-30, emphasis in original.) Then, at the end of the trial, after the jury renders a verdict that precludes recovery for at least one of the plaintiffs, the plaintiffs reverse their position.

"Counsel have anything they want to say about the verdict before we move on?" [Judge Higbee] said when she was seated.

"Your Honor, Mark Lanier, on behalf of the Hermans[es]," Lanier said, standing up. "It is my request that you enter a judgment, notwithstanding the verdict on question number 1, to allow the Hermans case to continue into Phase II."

Lanier was asking the judge to set aside the ground rules that the two sides had fought over so bitterly before the trial. Under those rules, the jury was to determine if Merck was liable, in principle, for the injuries of all the plaintiffs in Phase I of the trial, and resolve each plaintiff's specific claim against Merck in separate mini-trials in Phase II. Higbee had proposed the bifurcated structure as a way to try several cases simultaneously. The plaintiffs' lawyers had agreed, believing that the arrangement would increase pressure on Merck to settle, while Merck had strenuously opposed it. Now, Lanier was arguing that the trial structure he earlier supported had prevented the judge from reaching "a valid verdict."

(Page 266, emphasis added.) How did the plaintiffs get from point A, where they were enthusiastic supporters of bifurcation, to point B, where they essentially argued it was grounds for reversal? (And did so unsuccessfully, as it turns out.) Was this a case of hubris? The fog of war? Malpractice?

Unfortunately, Prakash doesn't care about these questions. They don't fit the story she wants to tell, which is

why [Lanier] was beating Merck when others weren't.

(Page 38.) Even more unfortunately--at least for Prakash--the trials in New Jersey that form the focus of her book don't progress how she predicted. Instead of watching a undefeated team take on a large and evil corporate defendant in a much-anticipated rematch, she witnesses a team score at best a partial victory that feels far more like a defeat. (Even the Humestons, plaintiffs who won at Phase I, would go on to lose at Phase II, at which point Judge Higbee would overturn the jury's verdict.)

Rather than embrace the nuances that drive complex litigation (there are rarely unsullied heroes or unambiguous villains, and even more rarely unequivocal victories), Prakash strives mightily to cram the facts in front of her into a straightforward story of good triumphing over evil, at least until the jury refuses to oblige her.

It's clear Prakash's model for All the Justice Money Can Buy is Jonathan Harr's A Civil Action. Like Harr, she embeds herself with the plaintiffs. And like Harr, she aspires to be a fly on the wall. But unlike Harr, she makes no attempt at journalistic depth. She does not try to get into the heads of the defense, the judge, or the jury. And the result is decidedly one-sided. While Harr was able to tell a story of how large-scale litigation warps the lives of everyone it touches, Prakash turns a series of trial transcripts into a high-school soap, where the cool kids try to take the Honors Society down a peg, and kind of succeed, but kind of don't. By the time she reaches the end of the trial, she is recounting a scene that could literally take place in a classroom, where a member of the trial team passes her a note mocking defense counsel and she laughs out loud, attracting the woman's attention.  (Page 244.)

That attitude is endemic to Prakash's book. Her verdict at the end is not that the plaintiffs made a mistake in structuring the trial as they did or presenting the evidence as they did, but that the jury made a mistake in not believing the story as the plaintiffs presented it. There are some interesting nuggets along the way--Mark Lanier is clearly a talented storyteller, and provides some worthwhile analysis on day-by-day trial presentation--but the fact that the plaintiffs appeared to make such a large blunder at either the beginning or the end of the case, and that blunder goes unexamined for the two hundred thirty pages in between, or the twenty pages afterward, mean that they're not quite worth the slog through the shallow cheerleading that takes up the remainder of the book.

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 Pickett v. Iowa Beef Processors was a lawsuit between cattle producers and a beef processing company. Cattle producers sold their cows in two ways: on the cash market (also known as the "spot market") and using forward contracts. The cash market was riskier, but also potentially more profitable. The forward contracts were safer, but also made less money for the producers. So some of the producers sued Iowa Beef Processors, alleging that their use of forward contracts was a deceptive business practice. (Specifically, they alleged a violation of the Packers & Stockyards Act, an antitrust statute which regulated the meat industry.)

The trial court (in the Middle District of Alabama) originally denied certification, because the plaintiffs had not met the typicality or adequacy requirements. The plaintiffs narrowed their class and sought reconsideration, offering expert testimony that an econometric model could determine most of the liability and damages issues. This time, the court certified the class. At that point, Iowa Beef Processors appealed.

The Eleventh Circuit began by noting that Rule 23(a)(4)'s adequacy requirement exists in part to guard against conflicts within the class.

Thus, a class cannot be certified when its members have opposing interests or when it consists of members who benefit from the same acts alleged to be harmful to other members of the class.

In this case, because the class action sought to prohibit forward contracts, it set up a conflict between those cattle producers who had used the device and those who had relied exclusively on the spot market.

Thus, the class includes those who claim harm from the very same acts from which other members of the class have benefitted. Moreover, in addition to damages, Plaintiffs seek an injunction that would prohibit IBP from using such purchasing arrangements in the future. Such an injunction would impose a significant restriction on the way these producers do business.

(Emphases added.)  So the Eleventh Circuit reversed the certification, because this conflict among the class would preclude any finding of adequacy.

In addition to being an excellent example of an intra-class conflict, Pickett also provides the first glimpse of a line of logic that shows up later in Pipefitters Local 636 Insurance Fund v Blue Cross Blue Shield of Michigan. It's always worth looking at the effects of a potential class action. Here, the proposed class action would have meant long-term harm to the producers. In Pipefitters, the class action would have harmed the elderly of Michigan. Class actions are cases large enough to effect massive and long-term changes. Sometimes those changes are for the best. Often, they have harmful effects on some members of the class, or on third parties.

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 My apologies for posting late this week; I'm suffering from a little jet lag. I spent yesterday in Virginia at the annual conference for the American College of Court Business Judges, where John Beisner and I were presenting a number of developments in class action litigation.  Today I'm England, and by tonight, I will be in the Hague for the 5th Annual Conference on the Globalization of Class Actions and Mass Litigation, where Paul Karlsgodt (of ClassActionBlawg) and I will be eagerly taking notes.  

Before John and I presented on Monday, we were treated to a panel discussing the ALI's recently-finalized Principles of the Law of Aggregated Litigation. Victor Schwartz (long hailed as the "intellectual guru of the wrongdoers of America") moderated, and Professors Troy McKenzie and Charles Silver, and the Hon. William Highberger, discussed the development of the Principles. Among the highlights:

• The ALI Principles have featured in several prominent class-action opinions in the past year, including Smith v. Bayer Corp. in the Supreme Court, and Gates v. Rohm & Haas Co. in the Third Circuit.
• While Wal-Mart Stores, Inc. v. Dukes did not explicitly cite the Principles, it relied heavily on the late Richard Nagareda's work on divisible and indivisible remedies and the nature of common questions, as did the Principles.
• The Principles have proven to be more stringent about cy pres relief than much of the case law, which may have influenced the Fifth and Ninth Circuits in their recent restrictions of when cy pres may be used.
• The evolution of the Principles through its draft forms reflect a desire to minimize gamesmanship, including the removal of a number of examples discussing medical monitoring (which often does not lend itself to class treatment), a de-emphasis of subclasses to prevent any gamesmanship in class proposals (by, say, proposing a massive class, but having a subclass as a fallback position), and the deletion of a discussion of using a company's principal place of manufacture in conflict-of-law analysis (because conflicts of law involves substantive--rather than procedural--questions).
• Certain of the Principles endorse changes in the law, rather than just restating it. Most notably, §§ 2.10 (which recommends allowing opt-ins where possible, or "aggregation by consent), and 3.17 (which would allow plaintiffs to give informed "advance consent" to settlement agreements, facilitating mass tort settlements).

Overall, the Principles are still new enough that most lawyers don't cite them very frequently when briefing mass or class actions. However, the judges in the audience seemed pretty enthusiastic about the analysis. Make of that what you will.

Given my travel and conference schedule this week, there'll be no post tomorrow.  But join me on Friday for the first set of highlights from the Globalization conference.  Safe travels to those who'll be there.  

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This month's piece of classic scholarship comes from the sociology of law. Thirty years ago, William L.F. Felstiner, Richard L. Abel, and Austin Sarat published a piece in the Law & Society Review titled "The Emergence and Transformation of Disputes: Naming, Blaming, Claiming …" 

The authors wanted to trace how experiences transform into legal disputes. And they identified three key steps along the way:

• Naming -- the party recognizes that she's been injured, or, as the authors put it, recognizes an experience as injurious;
• blaming -- she figures out that someone else is responsible for her injury; and
• claiming -- she communicates that conclusion to the faulty party. If the faulty party does nothing about her claim, then it evolves into a dispute.

As the authors point out, one of the interesting things about this process is that not all grievances evolve into lawsuits. They refer to this phenomenon as "grievance apathy."

We know that only a small fraction of injurious experiences ever mature into disputes. Furthermore, we know that most of the attrition occurs at the early stages: experiences are not perceived as injurious; perceptions do not ripen into grievances; grievances are voiced to intimates but not to the person deemed responsible.

In other words, grievance apathy makes the world go 'round. Not every "injurious experience" needs to wind up in a court of law.  And we would not want them all to.  In fact, the authors identified, even at the time, the problem that that lawyers often "'create' at least some of the needs they satisfy."

But they did not predict the extent to which, today, entrepreneurial class action attorneys have turned that social process on its head. In the course of looking for claims on which they can make money, they will identify entities with deep pockets (blaming), and then come up with a reason why they've done some injury (naming). They'll then look for someone who has suffered the pre-identified "injury." And, if that person's resolve wavers (that is, they begin to succumb to "grievance apathy"), they'll do their utmost to keep the plaintiff angry.

The problem is that manufactured conflicts rarely lead to good lawsuits. Those lawsuits tend to be a waste of time and money, for all concerned. They may very well focus on harms that are not really harms.  And they can lead to inordinately complicated "solutions," or duplication of previous solutions (with the added cost of judicial administration and attorneys fees), or cases that--if won--would harm innocent third parties.

Now, despite what some might argue, this does not mean that there is no such thing as a good class action. There are some instances where there will be clear-cut harms that are too small to bring as individual lawsuits, and where the defendant chooses not to offer a remedy. Those instances are why we have Rule 23. But, and this is a large but, Felstiner, et al.'s analysis does suggest that courts have good reason to be suspicious of manufactured lawsuits--in which a lawyer comes up with his case first and his plaintiff as an afterthought. Because, in those cases, there very well might be a reason that "grievance apathy" took hold.

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