The Advisory Committee has signaled that the merits inquiry is a “back burner” issue for the next Rule 23 amendments.  Perhaps they should nudge it towards the front. 

 The role of the merits inquiry at certification is of vital interest to litigators, but less so to policymakers.  The Rules 23 Subcommittee, in the report from its October meeting, pointed out that, as far as it was concerned, the role of the merits inquiry did not rate a place on the “front burner.”

It’s clear why it came up, however.  Plaintiffs (and their advocates in academia) do not like the current … Continue Reading

The answer is nowhere near as simple as you might think. Everyone knows that a court is supposed to conduct a “rigorous analysis,” but what that means in practice is not quite as clear.

For example, last year, the Supreme Court (in dicta) made a statement about Rule 23 that many, including myself, thought would reverberate throughout class action cases in the years to come. In American Express Co. v. Italian Colors Restaurant, it said that Rule 23 “imposes stringent requirements for certification that in practice exclude most claims.” A year later, only one courtContinue Reading

 For some time, academics have been decrying the demise of the class action, arguing that the Supreme Court’s precedent makes it harder than ever to certify a class under Rule 23. And yet, as one practitioner I know observed, plaintiffs keep filing the things. And quite a few courts keep certifying them.

Now, however, at least one federal district court appears to be listening to the academy.

The case, In re Kosmos Energy Ltd. Secs. Litig., No. 3:12-CV-373-B, 2014 U.S. Dist. LEXIS 36365 (N.D. Tex. Mar. 19, 2014), appears to be an unremarkable stock-drop case, the exact kind that … Continue Reading

The Supreme Court has handed down its first class-action related opinion of the 2012-13 Term, Amgen Inc. v. Connecticut Retirement Plans & Trust Funds. And while that opinion represents a loss for the defendants in the specific case, it’s not as big a problem for securities defendants in general.

Amgen involved an alleged securities fraud committed by Amgen Inc., a biotechnology company. As the Ninth Circuit’s opinion lays out the alleged misstatements:

First, Amgen supposedly downplayed the FDA’s safety concerns about its products in advance of an FDA meeting with a group of oncologists. Second, Amgen allegedly concealed details

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On Monday, the Supreme Court heard arguments in two different class actions, united by a common problem.

The first, Comcast Corp. v. Behrend, asked whether a trial court should hold plaintiffs to the Daubert standard for expert testimony at class certification, a question that has divided federal circuits for several years. Due in part to a difficult record below (Comcast had not actually registered a Daubert objection), the Justices argued back and forth about whether there was an issue to decide at all, and, if so, what it was. At one point, Justice Kagan remakes in frustration:


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 Last week, Senator Al Franken (D-Minn) proposed a bill that would partially reverse the Supreme Court’s opinion in Wal-Mart Stores, Inc. v. Dukes.

According to Senator Franken’s press release, the Equal Opportunity Employment Restoration Act (good title) would add a section 4201 to 28 U.S.C.:

Section 4201(a) creates a new judicial procedure – called “group actions” – that workers can use when bringing employment discrimination cases. The requirements for establishing a group action are the same as the pre-Dukes requirements for maintaining a class action under Rule 23 of the Federal Rules of Civil Procedure—namely,

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Robert Klonoff, Dean of the Lewis & Clark Law School, has produced a new article, The Decline of Class Actions (forthcoming from the Washington University Law Review), that provides a much-appreciated overview of recent developments in class action law from a plaintiff’s perspective. (Disclosure: Dean Klonoff provided a very nice blurb for the Class Action Playbook.) Regular readers of this blog know that I am actually a big fan of plaintiffs’ perspectives: I think understanding them is crucial to a conscientious and seals defense of class action litigation. And while there is much to like in … Continue Reading

Class definitions can be extremely difficult for plaintiffs. In addition to holding that merits-based class definitions cannot support certification, courts have begun to hold that some definitions are simply too broad. Overbroad definitions usually are symptomatic of other problems with the proposed class.

Want an example? Take the case of Kemblesville HHMO Center LLC v. Landhope Realty Co., 2011, U.S. Dist. LEXIS 83324 (E.D. Pa. Jul. 28, 2011). Kemblesville concerns the dispersion of methyl tertiary-butyl ether (MTBE), a gasoline additive that helps reduce harmful automobile emissions, but which can contaminate groundwater under the wrong circumstances.

In … Continue Reading

 In the 1990s, a group of attorneys sued a number of securities broker-dealers nationwide. They alleged that the broker-dealers had executed a number of securities orders at the "National Best Bid and Offer" (NBBO) price–which would provide a customer with the lowest available ask or the highest available bid for a security–an industry-wide practice at the time. Broker-dealers operate under a "duty of best execution," which requires them to "use reasonable efforts to maximize the economic benefit to the client in each transaction." The plaintiffs accused the broker-dealers of violating that duty by executing orders at … Continue Reading

 This week, we’re going to address one of the longest-standing debates in class-action litigation: How much may a court delve into the merits of a class action when deciding certification?

Plaintiffs often argue "not at all." Defendants often argue "as much as necessary." (Though not always; when defendants file motions to strike class allegations, they argue that the court need not look at the merits at all to decide a class is not appropriate.) Both arguments stem back to a single 1974 Supreme Court opinion: Eisen v. Carlisle & Jacquelin

Eisen was a class action filed by odd-lot … Continue Reading