One of the perennial problems with class actions as a procedural device is whether and how to recognize the conflicts and divergences of interest among members of the class (for instance, in a consumer class action, class members who plan to buy the product again in the future may have very different interests from those who do not on the question of what counts as a useful remedy). Lawrence Solum on his Legal Theory Weblog has a very long and theoretical post on the topic (Oct. 30) one of whose lessons (if we are reading it correctly) is that many of the conflicts are too real and fundamental to be conjured away even by clever theoretical efforts to reinterpret class members’ interests at a higher level of abstraction.
Posts Tagged ‘class actions’
Update: Calif. business groups launch s. 17200 initiative
As predicted in this space (Sept. 29), a California business coalition which includes the state Chamber of Commerce, auto dealers and the Civil Justice Association of California has launched an initiative drive aimed at curbing lawsuits under s. 17200, the state’s bizarrely broad consumer-protection statute. (see Oct. 2, Aug. 27 and links from there). The coalition “expects to spend $1 million to $2 million to collect signatures to put the initiative on the November 2004 ballot. … Under the initiative, private attorneys or individuals would no longer be able to file a lawsuit without a specific victim or evidence of harm or financial loss. … The right to sue on half of the public would rest with the attorney general, county district attorneys and other local prosecutors.” (Gilbert Chan, “Ballot drive targets lawsuits”, Sacramento Bee, Oct. 23). More: Law.com coverage (Jeff Chorney, “Tort Reformers Want Voters to Remake Calif. Unfair Competition Law”, The Recorder, Oct. 27)
New vs. Old Democrats on class actions
The Class Action Fairness Act, a version of which has already passed the House with White House support, may be brought to the floor of the Senate tomorrow, but Democratic leaders are saying they have enough votes lined up for a filibuster to prevent its passage (Jesse J. Holland, “Supporters looking for more votes to help class action legislation past filibuster”, AP/San Francisco Chronicle, Oct. 20; Helen Dewar, “GOP Pushes Vote to Curb Class-Action Suits”, Washington Post, Oct. 21; Heather Fleming Phillips, “Group tries to rein in lawsuits”, San Jose Mercury News, Oct. 21). If so it’s a shame, the more so as some of the most persuasive argumentation for the CAFA has come from New Democrat circles, especially from Walter Dellinger, solicitor general during the Clinton Administration, now a professor at Duke Law and partner at O’Melveny & Myers (home of our co-blogger Ted Frank). (“The Class Action Fairness Act”, Progressive Policy Institute, Mar. 11). “The states whose courts have honorably decided not to play class action games are, contrary to fundamental federalism principles, being forced to transfer authority over their citizens’ claims and the interpretation of their own laws to other states whose courts seem to have an insatiable appetite for such lawsuits,” according to Dellinger. See New Democrats Online, “Breakthrough in the Courts?”, Feb. 19; “Compromise on Class Action Reform”, May 1.
Law.com: “The Future of Litigation”
American Lawyer/Corporate Counsel runs a multi-article feature on “The Future of Litigation (contents) with articles on asbestos, the Class Action Fairness Act, and other topics, some of them more to our taste than others. We shouldn’t omit mention of Alison Frankel’s overview piece (“Where We Are”, Law.com, Oct. 8) since it quotes a certain “litigation pundit who slays lawyer-excesses on his ‘Overlawyered’ Web site”.
Larry Schonbrun profile
Our primary editor, Walter Olson, is quoted in an East Bay Express profile of “The Spoiler”, Larry Schonbrun, a former Neighborhood Legal Assistance Foundation lawyer who now specializes in taking on class action settlements where the plaintiffs’ lawyers seek extravagant attorneys’ fees. (E.g., May 28). “To date, Schonbrun has convinced judges to reduce such fees by more than $100 million.” (Susan Goldsmith, “Class Action Warrior”, Oct. 8).
Class actions and the cost of cars
Steve Blow of the Dallas Morning News, like Alex Tabarrok before him (see Sept. 19), is far from pleased with the results of the class action on behalf of otherwise uninjured owners of recalled Firestone tires; he follows up with a second column which gives details of another class action, this time against Nissan over a printed error on car leases (“Firestone, lawsuits and cost of inflation”, Oct. 4; “Isn’t it time to raise the bar for lawyers?”, Oct. 7). And across town at the Fort Worth Star-Telegram, J.R. Labbe discusses the recent case (see Oct. 4) in which Philip Morris agreed to pay $2 million to a mother who by her own account left a child and a lit cigarette unattended in a car contrary to Texas law. “The public may never know why the company chose to settle this case, but you can be sure it will open the door for additional claimants looking to blame someone for their own irresponsible actions.” (“Somebody has to pay”, Oct. 5). (Corrected May 1, 2004 to remove erroneous implication that tire owners were receiving financial compensation in the class action).
“Investors gain little from shareholder suits”
Highly critical analysis of the shareholder-suit biz in the St. Louis Post-Dispatch: “Usually, what shareholders get back is some minuscule fraction of their loss, some symbolic payment,” said Stuart Greenbaum, dean of Washington University’s Olin School of Business. “They’re of great benefit to the legal profession, but I don’t know that they do a great deal to right corporate wrongs.” (Allyce Bess, St. Louis Post-Dispatch, Oct. 4) (via 10b-5 Daily).
Update: Madison County
Notorious Madison County (e.g., Mar. 24, Sep. 26, and too many other entries on this blog to list), across the river from St. Louis, continues to make news. The Illinois Supreme Court is reconsidering the state’s venue rules in the Madison County case of Gridley v. State Farm Insurance in the wake of the county’s reputation as a home for plaintiffs’ venue-shopping. In Gridley, the plaintiff is from Louisiana, all of the percipient witnesses in the case are in Louisiana, the defendant’s headquarters are in Bloomington in central Illinois, but the “plaintiffs say in documents that Madison County is the proper venue because two Madison County residents who have worked for State Farm will be called to testify about how the company handles salvage titles.” (Kevin McDermott, “Big companies aim to dent county’s popularity as venue for lawsuits”, St. Louis Post-Dispatch, Sep. 13). The Belleville News-Democrat explores the role of plaintiffs’ lawyers’ money in Madison County. (Mike Fitzgerald, “Where money talks”, Oct. 5; see also David Bailey, “Illinois county court a corporate ‘hellhole'”, Reuters, Oct. 5). The consequences are real for the laypeople of Madison County: doctors are closing shop as medical malpractice insurance rates triple. (Shawn Clubb, “Another doctor leaving Alton”, The Telegraph, Oct. 4). But the class actions continue: Mattel finds itself a defendant to plaintiffs complaining that the “limited edition” Barbie dolls weren’t sufficiently limited, though they acknowledge that Mattel disclosed that it would make up to 35,000 of them. Plaintiffs are trying to keep the case before Judge Kardis, who issued the original decision permitting venue in Gridley. (Beth Hundsdorffer, “Litigation Barbie”, Belleville News-Democrat, Oct. 5).
“Can’t get upgraded? Sue”
A California resident has brought an intended class-action lawsuit “against Korean Air, arguing the airline company charged him an extra $200 for his ticket when he asked the company to upgrade his economy-class ticket to a business-class one using his accumulated flying mileage.” (Byun Duk-kun, “Korean Air Faces Class Action for `Unfair Mileage Program'”, Korea Times, Oct. 3). Gary Leff at Webflyer comments (Oct. 4). More commentary on frequent-flier-program class actions: Chris McGinnis, “The frequent traveler: Angry fliers challenge Delta over miles-selling”, TravelSkills.com, Feb. 7; Greg Scandlen, “Lawyers Fly High By Suing Airline On Behalf Of Non-Complaining Passengers”, National Center for Policy Analysis “Idea House”, Aug. 10, 2000.
Overlawyered gets results
On Aug. 27 we said we hoped Arnold Schwarzenegger would tell us where he stood on s. 17200, the state’s abuse-ridden business practices act. Now his campaign has published its official agenda, and not only is “End the Litigation Lottery” Plank #3 in “Arnold’s Five Point Plan for Economic Recovery”, but reform of s. 17200 is the first specific to be listed, along with reform of employment litigation and specifically age discrimination law (California accords more liberal treatment to such claims than does federal law). “California’s runaway litigation system has become a trial lawyer’s paradise — encouraging frivolous lawsuits and outrageous settlements that are bleeding money from businesses while driving the cost of virtually everything higher for average consumers.” (Californians for Schwarzenegger, “Agenda”, undated).