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class actions

Nor, the complaint adds triumphantly, is Chobani yogurt even “made by Greek nationals.” It’s made in New York! Also, it’s too sweet and not very natural. [ABA Journal]

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“It may sound silly, but lost resale value is what cost Toyota a whopping $1.3 billion in claims when those suits were settled in late 2012.” And if lawyers can extract $1.3 billion in a case where there was nothing wrong with the cars, imagine how much they might extract in a case where there was. [Jalopnik]

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The city of Providence R.I. has consented to serve as their client [Kansas City Star, Reuters, Center for Financial Stability, earlier on Michael Lewis book]

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The rules for class actions seeking injunctive relief against unlawful conduct are looser in key respects than those for actions in which monetary relief is the object, in part because the consequences for absent class members are less serious. But what happens when shrewd counsel institute an action that is injunctive on its face, but actually crafted to tee up an entitlement to class damages? The Montana Supreme Court approved such a maneuver in a case now called Allstate Insurance Co. v. Jacobsen; now Cato has filed a brief seeking certiorari review of that decision, which raises important issues of class action fairness and practicality leading on from such recent high court decisions as Wal-Mart v. Dukes and Comcast v. Behrend. Read a summary here and the full brief here. More: Legal NewsLine (on Washington Legal Foundation brief).

“…by allowing them to proceed with class-action lawsuits alleging that millions of front-loading washing machines they bought suffered from mold or musty odors.” Thus Reuters’ Lawrence Hurley and Jonathan Stempel. Can you spot the two buried assumptions here? One is that moving forward with a class action on behalf of the many millions who bought washers, rather than a narrower class action of those who actually reported problems with their washers, constitutes a “victory” for consumers. That is to presuppose one of the points in dispute, since the defendants argued that consumers as a group would be ill-served that way. (Nor did the Supreme Court resolve the question either way, since it turned away the cases without explanation.) The second buried assumption is that the “consumers” themselves, most of whom have never shown any interest in participating, were the ones who were going to be proceeding. In reality, of course, the ones moving forward, and the ones who won a victory yesterday, were lawyers.

Although organized business worked hard to win Supreme Court review for the cases, and was duly disappointed by yesterday’s denial, the impact on the Supreme Court’s rapidly evolving class action jurisprudence is uncertain at best and perhaps negligible. So many other class actions raise likely issues of typicality, representativeness, or unity of interest among represented classes that the Court is sure to have the chance to visit the area before long, if it wishes, in other cases bubbling up from the lower courts; of the variety of fact patterns these new cases will present, some may be more compelling for the defense side.

More on the mandatory-conservation element of the washing machine saga here.

The Supreme Court’s ruling last month in a case on the limits of jurisdiction, Bauman v. DaimlerChrysler, was on its face a rejection of recently-fashionable notions of “universal jurisdiction” under which disputes labeled as serious human rights matters could be brought to courts more or less anywhere for adjudication. But according to Richard Samp, by clarifying the prerequisites for general jurisdiction, the case could if taken seriously revolutionize (for the better!) some other kinds of litigation for which forum-shopping has been the norm — in particular class action litigation, which is often filed in plaintiff-friendly jurisdictions where the defendants would not be considered “at home” under the standard laid out by Justice Ginsburg. [Washington Legal Foundation]

February 3 roundup

by Walter Olson on February 3, 2014

  • “Class counsel in Facebook ‘Sponsored Stories’ case seeks to impose $32,000 appeal bond on class-action objectors” [Public Citizen, Center for Class Action Fairness]
  • The best piece on bar fight litigation I’ve ever read [Burt Likko, Ordinary Gentlemen]
  • Casino mogul Adelson campaigns to suppress online gaming; is your state attorney general among those who’ve signed on? [PPA, The Hill]
  • Foreign Corrupt Practices Act (FCPA): “Anyone who values the rule of law should be alarmed by the ADM enforcement action.” [Mike Koehler]
  • New FMCSA rules on length of workweek make life difficult for long-haul truckers [Betsy Morris, WSJ via Lee Habeeb and Mike Leven, National Review and more]
  • “It takes a remarkable amount of nerve to cobble together publicly available facts, claim you’ve uncovered a fraud on the government, and file a lawsuit from which you could earn substantial financial benefits.” [Richard Samp, WLF] Whistleblower-law lobby tries to get its business model established in West Virginia [W.V. Record]
  • Pittsburgh readers, hope to see you tomorrow at Duquesne [law school Federalist Society]

January 17 roundup

by Walter Olson on January 17, 2014

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The Supreme Court will decide momentarily whether to review two more “musty washing machine” class actions. “The legal rules at play in the washing machine cases will have impact on a much broader array of businesses, which is why industry and technology groups have flooded the Supreme Court with briefs expressing their concern.” In particular, if the courts develop a liberal standard for “predominance,” it will often be feasible for lawyers to assemble class actions that include consumers who are not bothered by an alleged defect, as well as those that are. [James Copland, Washington Examiner] Earlier here and here.

A lawyer representing a fan has sued the National Football League for allegedly breaking New Jersey state law by making just 1 percent of Super Bowl tickets available to the general public at face value. A section of the state’s Consumer Fraud Act reads, “It shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets’ release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating for the event.” (But does “person [with] access” refer to the original event organizers, or only to middlemen who acquire tickets for resale?) The lawsuit “says it’s on behalf of all ticket buyers who have paid more than face amount for their tickets, along with anybody who couldn’t afford to buy tickets in an exorbitant secondary market, but who still wanted them.” [NJ.com] More: the NFL made me do it! [Abnormal Use]

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From the U.S. Chamber’s Institute for Legal Reform: “Authored by John Beisner of Skadden Arps, this paper introduces for discussion potential class action reforms to build on the highly-successful Class Action Fairness Act of 2005. Among the reforms suggested are measures to address cy pres class action settlements and to preserve the efficiency of federal MDL proceedings. The paper also considers other changes designed to address certain judicial misinterpretations of CAFA’s jurisdictional provisions, and identifies several additional areas of concern that may warrant reform as they develop.” [report; coverage, Washington Examiner, Daniel Fisher, Andrew Trask]

Class action roundup

by Walter Olson on December 6, 2013

  • Whichever way high court rules in Hood v. AU Optronics, new Fifth Circuit decision will fuel parens patriae actions by AGs in state courts [Alison Frankel, earlier]
  • Justice Alito blasts federal district judge Harold Baer for insisting on race quotas for class action lawyers [Michael Greve/Liberty Law, Tom Goldstein/SCOTUSBlog]
  • “Unfortunately, even if SCOTUS does away with fraud on the market, plaintiff lawyers will still bring omission cases” [Bainbridge, earlier]
  • Ted Frank’s adventures, as documented at Point of Law [Pampers Dry Max (earlier), L'Oreal salon hair products, Korean Air, Wyeth]
  • Does it cost too much to provide class action defendants with due process? [Andrew Trask] Related on Mark Moller’s work [same] Should class actions be understood as creating trusts? [same]
  • Avery v. State Farm billion-dollar aftermarket-parts class action seeks RICO resuscitation, in Monty Python echo [Chamber-backed Madison County Record]
  • If you didn’t know distinguished proceduralist Arthur Miller as a Milbergian, you might detect it from his writing [Trask]

That was quick

by Walter Olson on December 5, 2013

Class action lawyers hop on 23andMe with a lawsuit piggybacking on the FDA’s enforcement action [Nita Farahany; Ron Bailey, Reason]. Earlier here.

Related: “regulators remain serenely unconcerned about their hubris, convinced they know better than the rest of us what is good for us.” [Nita Ghei, Washington Times, and thanks for link]

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Fortune reporter Erika Fry profiles the lawyer-allied Louisiana Municipal Police Employees’ Retirement System, pronounced “Lampers,” which has been called a “serial plaintiff,” a “frequent filer,” and in one legal brief “the most prolific filer of shareholder litigation in U.S. history.”

Reporter Paul M. Barrett:

Growing judicial skepticism toward such suits and toward the lucrative settlements they generate has caused plaintiffs’ attorneys to shy away from accepting lengthy, complicated cases. That’s tilting the legal playing field decisively in favor of Big Business—and as the Supreme Court reconvened on Oct. 7 for its 2013-14 term, trial lawyers are bracing for more setbacks.

Not everyone is shedding tears. Walter Olson, a legal expert at the libertarian Cato Institute in Washington, attributes the decline of mass lawsuits to a predictable—and welcome—backlash against “a wild carnival” of frivolous damage claims and outrageous conduct by plaintiffs’ lawyers.

Ted Frank has some further reactions.

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I moderated a panel at Cato’s annual Constitution Day September 17 with Mark Moller of DePaul speaking on the Supreme Court’s class action jurisprudence last term, and David Olson of Boston College and Gregory Dolin of University of Baltimore speaking on the life-science patent cases. I also warned viewers (this part is at the beginning) to use only the Twitter hashtags #CatoCD2013 or #CatoCD13 to comment, because the hashtag #CatoCD without numbers is already in use as #CatOCD to post pictures of cats with Obsessive-Compulsive Disorder. If the embedded version doesn’t work, you can watch here.

Many — most? — Des Moines taxpayers probably don’t care all that deeply whether the city extracts taxes via one broad-based method or another. But due to class-action procedure and the barriers it erects to opting out, they all get to be plaintiffs in the resulting suit, and the lawyers (self-) appointed to bring the case are expecting to pocket 37 percent, or $15 million, of the $40 million changing hands, a sum that could amount to $1,400 an hour. [Ryan Koopmans (On Brief blog), Des Moines Register, earlier]

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