This blog collects information about class actions and complex litigation and offers observations on current issues in complex litigation.

Thursday, May 13, 2004

The Wall Street Journal discovers that the position of lead plaintiff's counsel in class actions is "lucrative"! Read all about it here.

Tuesday, May 11, 2004

Did you lose money on WorldCom? According to the following Wall Street Journal article, you aren't likely to collect from today's Citigroup settlement. - How to Collect On Your Losses From the Bust
Objecting to class action settlements is, as every class action lawyer knows, a cottage industry. The Wall Street Journal recently ran this article regarding objections to the settlement between merchants and major credit card companies.

Friday, July 18, 2003

Plaintiffs denied class certification in federal court may no longer be able to take another shot at certification of a nationwide class in state court. Read an ABA Journal article here and read Judge Easterbrook's opinion here.

Thursday, July 03, 2003

Counsel winning coupon and other non-cash consideration for class members in Texas state courts will be rewarded in kind. The Texas state legislature recently passed a new bill which requires class counsel to receive non-cash compensation for non-cash settlements and also requires courts to use the lodestar formula for fee awards. Read about the bill in the ABA Journal here.

Friday, June 27, 2003

The United States Supreme Court has reversed and remanded Greentree Financial v. Bazzle. The opinion is available here on the Supreme Court's website. Read an ABA Journal comment on the opinion here.

The issue of classwide arbitration will be revisited. The more interesting and far more common scenario is the question of an arbitration agreement which purports to proscribe classwide arbitration. Some state courts have held such agreements unconscionable under state law. For example, in Leonard v. Terminix International Company, L.P., No. 1010555 (Ala. 10/18/2002), the Alabama Supreme Court found a "no class action" arbitration clause to be substantively unconscionable:

"If this approach [no class wide arbitration] prevails, the pervasive use of arbitration agreements in consumer contracts could have the effect of eliminating class actions as an option available to aggrieved consumers. If class actions are no longer an option, the vast majority of consumers claims involving relatively small sums of money will be left without a remedy."

In Ting v. AT&T, 2002.NCA.0000004 (N.D. Cal. January 15, 2002), the Ninth Circuit held:

"AT&T sought to shield itself from liability . . . by imposing Legal Remedies Provisions that eliminate class actions, sharply curtail damages in cases of misrepresentation, fraud, and other intentional torts, cloak the arbitration process with secrecy and place significant financial hurdles in the path of a potential litigant. It is not just that AT&T wants to litigate in the forum of its choice - arbitration; it is that AT&T wants to make it very difficult for anyone to effectively vindicate her rights, even in that forum. That is illegal and unconscionable and must be enjoined."

Some (see the ABA Journal article quoted above) have speculated that the Supreme Court might find such decisions, particularly those of state courts, violative of the Supremacy Clause. But these unconscionability decisions are based on language in Section 2 of the Federal Arbitration Act: "Written provisions in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon grounds as exist at law or in equity for the revocation of any contract." (emphasis added).

Friday, June 20, 2003

Earlier this week, a judge in a Delaware federal court certified the Kirk Kerkorian-led class action lawsuit against Daimler-Chrysler in which the plaintiff seeks to undo the merger of five years ago. The Detroit Free Press has an article accessible here.

Thursday, June 12, 2003

The New York Times has an article today describing in some detail the Class Action Fairness Act. The United States House of Representatives is expected to pass the bill imminently.
Without commenting on the merit, or lack thereof, of this legislation, it seems ironic to me that many if not most of the groups that support the massive expansion of federal diversity jurisdiction contained in the legislation call themselves, in other circumstances, "federalists." An example is the Cato Institute, a Washington think tank which characterizes itself as "libertarian" yet supports expanded federal power when that expansion favors the interests of large corporations. In Cato's Handbook for the 106th Congress, the Institute opines that "[f]ederal legislation to remove nationwide class actions from state courts would go a long way toward resolving the problem." The "problem," according to Cato, is that state courts, under current United States Supreme Court caselaw, have jurisdiction to certify nationwide classes.

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