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

Today’s case, In re Universal Serv. Fund Telephone Billing Practices Litig., 2013 U.S. Dist. LEXIS 80204 (D. Kan. Jun. 7, 2013), provides an unusual situation for a class action. First of all, it involves a verdict in a class action trial. Second, it is one of the first trial court opinions to pay attention to the ALI Principles of Aggregated Litigation

In this case, the plaintiffs challenged certain billing practices by AT&T, which are not important to this discussion. All you need to know is that the plaintiffs got a class certified, won at trial, and conceded that Continue Reading

This week’s article is a student comment: George Mason 3L Jennifer Johnston has published an interesting discussion of the problems that arise from cy pres distributions, Cy Pres Comme Possible to Anything is Possible: How Cy Pres Creates Improper Incentives in Class ActionSettlements, 9 J.L. Econ. & Pol’y 277 (2013). Her primary argument is that, since cy pres relief changes the incentives for key personnel in a class action settlement, it should only be used when there are assurances it will actually benefit absent class members.

Charitable cy pres distributions effectively add third parties to adversarial proceedings, in

Continue Reading

My apologies for missing last Thursday’s post: life with a newborn occasionally catches up with one. Nonetheless, finishing out our July Class Action Summer Camp, today we’ll focus on Rule 23(e) and class-action settlements. The vast majority of class actions settle, but because class-action settlements implicate so many different interests (the lawyers, the defendant, the absent class members, the court), they require an additional level of approval from the court. In addition, a number of different settlement structures have evolved that class-action lawyers must learn to pay attention to.

Ten Cases to Educate You

Continue Reading

Much has been written in the last few years about cy pres relief (relief that goes, not to class members, but to ) in class action settlements. While plaintiffs and defendants still find cy pres to be a valuable for increasing settlement amounts, the practice has come under increasing fire from some scholars and courts who view it more as a way of inflating settlement amounts to justify attorneys fees.

Last week, the First Circuit weighed in on the debate in Rohn v. TAP Pharmaceutical Products, Inc. Its take: while cy pres relief is a valid tool for Continue Reading

 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 … Continue Reading

 While it remains popular among settling lawyers and courts, the doctrine of cy pres in class actions (where defendants wind up paying charities with an ostensible link to the gravamen of a lawsuit) has been garnering criticism for some time. A few federal district courts (including the Southern District of New York and the District of New Hampshire) have questioned the application of cy pres in specific cases. Last year, Professor Martin Redish published an article questioning whether cy pres relief violates the Rules Enabling Act. After that, John Beisner and Jessica Miller of Skadden Arps published a working Continue Reading

 This month’s look at "classic" class action scholarship focuses on the article Nonpecuniary Class Action Settlements by Geoffrey Miller and Lori Singer. Like the name suggests, nonpecuniary settlements are settlements that don’t require cash payments to the absent class members. According to Miller and Singer, they include:

  • Coupon settlements.
  • Monitoring settlements, "where the defendant endows a fund whichis used to identify and compensate for future harm allegedly arising from the defendant’s product or conduct"
  • Securities settlements, "where the defendant distributes stocks, puts, or warrants instead of cash to membersof a class as consideration for a release of claims for alleged
Continue Reading

Skadden attorneys John Beisner, Jessica Miller, and Jordan M. Schwartz have drafted a white paper for the Institute for Legal Reform titled “Cy Pres: A Not So Charitable Contribution to Class Action Practice.”  Relying heavily on Martin Redish’s critique of cy pres recovery, they trace cy pres relief from its “pre-Christian” origins as a means of distributing estates to its most recent abuses. Their final recommendation is interesting, and fairly moderate:

in order to mitigate the legal and ethical concerns associated with cy pres awards, any application of the cy pres doctrine—even in the

Continue Reading

 When a defendant is faced with a class action complaint, sometimes the best strategy appears to be to settle quickly, before having to engage in costly litigation or burdensome discovery. But, as readers of this blog know, that strategy is not always as straightforward as it first seems.  In today’s case, we have another example, where what first appeared to be a quick-and-painless settlement wound up taking eight years and visiting the Seventh Circuit Court of Appeals three times.

In 2000, a group of class-action plaintiffs sued Fleet Mortgage claiming that it had sold their personal information to … Continue Reading