A few weeks ago, the Duke Law Center for Judicial Studies held a conference on class action settlements in San Diego, to discuss best practices in the wake of the likely Rule 23 amendments. Like all of its conferences, this one was held under the Chatham House Rule, which dictate that you can repeat the substance of anything said but not the identity of the speakers.  The candor these rules foster is extraordinary, and lead to valuable discussions.  So, with that in mind, here are the five most important things attendees took away from the conference.

  1. Plaintiff-oriented amendments
Continue Reading

Cy pres is an occasionally useful tool.  But limiting or eliminating it would clarify the underlying principles of the class action.   

In the last five years, the use of cy pres relief in settlements has become particularly controversial.  Various appellate courts have expressed suspicion about the use of cy pres in questionable settlements.  Even Justice Roberts has signaled that, given the right vehicle, he would like the Supreme Court to review the fairness of cy pres distributions.  Much of the controversy stems from two issues: (1) the potential for abuse of cy pres relief to inflate the value of bad … Continue Reading

Year-end lists are funny things.  They take a sort-of arbitrary starting and stopping point, and then they cram a bunch of prejudices into a (usually) arbitrary number of items.  And then people take them kind of seriously.  But they can be handy ways of catching trends one did not see before.  And in a year that has seen the beginning of a new debate over the shape of Rule 23, looking at the trends in caselaw can be important.  This year’s cases include some pro-plaintiff and some pro-defendant, and some hard to quantify.  But most of them are notable … Continue Reading

A brief one this week, involving a settlement that did not reach final approval. Dremak v. Iovate Health Sci. Group, Inc., No. 09md2087, 2013 U.S. Dist. LEXIS 165225 (S.D. Cal. Nov. 19, 2013) involved an attempted settlement of personal injury class and labeling class actions involving products with hydroxycut [http://en.wikipedia.org/wiki/Hydroxycut]. The proposed settlement involved $10 million in cash and $10 million in hydroxycut products. Any remaining cash after distribution would be distributed as "Additional Product."

The court was not impressed by the structure of the settlement.  As it stated:

The biggest problem with the proposed cy pres distribution in

Continue Reading

At this point, I’m well aware that I tend to sound like an old crank when reviewing class action scholarship; much of it repeats the same old stuff, predicts the imminent demise of the class action in its current form, and looks at the same Supreme Court cases instead of digging into where the real action happens. And that is why I am happy to report that this year, there were quite a few articles that did take different approaches to various problems in class actions. Yes, we still had some of the same Supreme Court rehashes, but even some … Continue Reading

 We’re in the middle of the holiday season, and that means that folks are making (or, for those who celebrate Hannukkah, checking off) their wish lists. This October, the Chamber of Commerce’s Institute for Legal Reform compiled one of their own in their report A Roadmap for Reform: Lessons from Eight Years of the Class Action Reform Act. Why pay attention to this report? As class action defense counsel, don’t we already know what we’d like?

Sure. But the report was prepared by John Beisner, a long-recognized thought leader in class action defense. [Disclosure: I worked Continue Reading

 Settlement opinions are often not that interesting. The vast majority of them are by-the-numbers approvals of proposed settlements that offer little insight about how Rule 23 works. This is especially true of preliminary approval opinions. But every once in a while, a court refuses even the preliminary approval of a settlement.  When that happens, class action lawyers can usually learn a few things about how not to settle a case.

Better v. YRC Worldwide Inc., No. 11-2072-KHV, 2013 U.S. Dist. LEXIS 163569 (D. Kan. Nov. 18, 2013), is such a case. It was a proposed settlement of a … Continue Reading

 Not right away, but it’s thrown down the gauntlet. In denying certiorari in Marek v Lane, Chief Justice Roberts took the time to issue an accompanying opinion. Marek v. Lane, No. 13-136, 2013 U.S. LEXIS 7772 (Nov. 4, 2013). In it, the Chief Justice takes the time to rehearse the facts behind the controverisal Facebook Beacon settlement. (In a nutshell: Facebook allegedly instituted an opt-out program that broadcast various commercial preferences of its members. The settlement cost Facebook $9 million; 25% went to the lawyers, roughly 75% went to create a new privacy-oriented foundation whose three-member board would … Continue Reading

 Judge Posner is often considered to be a pro-defense jurist, particularly in the area of class actions. Lately, he’s been proving himself to be more independent-minded than that. First, he allowed certification of a washing machine class, justifying certification despite some outcome-determinative individualized issues because predominance is a matter of "efficiency," and should not be reduced to "bean-counting."

And last week, he authored an opinion that reversed decertification of an Electronic Funds Transfer Act (EFTA) class action.

In Hughes v. Kore of Indiana Ent., Inc., No. 13-8018, 2013 U.S. App. LEXIS 18873 (7th Cir. Sep. 10, 2013)Continue Reading

Cy pres relief remains controversial among courts , but it’s like catnip to legal academics. Now, Notre Dame professor Jay Tidmarsh has published his take on it: Cy Pres and the Optimal Class Action. Like many other academics, Professor Tidmarsh is attracted by the argument that cy pres relief can deter corporate misconduct by increasing the amount a defendant must pay to escape liability through settlement. But Professor Tidmarsh’s argument relies on his conception that class actions should provide "optimal" solutions to the problems in aggregated litigation

Professor Tidmarsh admits that the "compensatory" justification for cy pres relief Continue Reading