Class Actions

2004-05-13T08:34:00.000-05:00

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

2004-05-11T10:21:00.000-05:00

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. WSJ.com - How to Collect On Your Losses From the Bust

2004-05-11T09:37:00.000-05:00

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.

2003-07-18T10:15:00.000-05:00

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.

2003-07-03T09:27:00.000-05:00

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.

2003-06-27T10:15:00.000-05:00

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).

2003-06-20T09:26:00.000-05:00

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.

2003-06-12T09:07:00.000-05:00

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.

2003-06-11T09:16:00.000-05:00

News that the Beatles were breaking up; news that Lewis & Martin were going their separate ways; neither item resonated through the entertainment industry any more than the news that class action colossus Milberg, Weiss will cleave in two will reverberate through the class and securities litigation community. Read all about it in the New York Times here.

2003-06-10T09:38:00.000-05:00

Off topic (but on medium?), but here is an article from the Guardian about blogging and the traditional media.

2003-05-29T11:59:00.000-05:00

The Wall Street Journal reports that Aetna has settled with a class of physicians in an action pending in a Florida federal court before the Honorable Federico Moreno. The insurer agreed to pay $100 million to the physicians and to simplify its billing practices.

2003-05-28T13:26:00.000-05:00

The tobacco industry has won another victory in their ongoing battle with plaintiffs' lawyers over certification of classes of smoking consumers. The Massachusetts Appeals Court issued an order today decertifying the class in the Aspinall case, where the plaintiffs alleged that Philip Morris USA improperly marketed Marlboro Lights cigarettes. Read the New York Times article here (registration required). The theories of recovery in the Massachusetts case are similar to those in the Price class action case, now on appeal in Illinois.

In the Massachusetts opinion, the appellate court ruled that "individualized factors in this case defy class certification in the manner that was done here."

The New York Times article quotes David Adelman, a Morgan Stanley analyst who covers the tobacco industry, who said that this case, along with the Engle decision in Florida, represented "a very significant reduction in the industry's legal risk."

2003-05-23T08:20:00.000-05:00

Yesterday the Judiciary Committee of the U.S. House of Representatives approved the "Class Action Fairness Act," H.R. 1115. The bill was amended to add a provision for retroactive treatment for all pending class actions in which a class certification order has not been issued.

H.R. 1115 would substantially expand removal jurisdiction for the federal courts; it would allow both defendants and absent class members to remove most class actions to federal court where the aggregate damages would exceed $2 million.

This pending legislation is noteworthy for many reasons. Two observations here: First, many of its sponsors are those who have joined the growing federalism crowd in recent years, and yet H.R. 1115 represents a substantial change in the relationship between the judicial branches of the states and the federal government and a move toward a more powerful central government which the federalists supposedly abhor. Second, the bill appears to express a lack of confidence that state courts are equipped to address complex class issues. The opinion of the Florida Third District Court of Appeal in Liggett Group, Inc., et al. v. Engle, et al. (see previous post) would seem to put the lie to the assumptions underlying H.R. 1115.

2003-05-22T10:34:00.000-05:00

One of the more significant holdings in the opinion of the Florida Third District Court of Appeal in Liggett Group, Inc., et al. v. Engle, et al. (the Florida class action against the tobacco industry) is that the states' settlement (and in particular, in Engle, that of the State of Florida) precludes private plaintiffs from punitive damages awards under the res judicata doctrine. The appellate court wrote that "plaintiffs, as private parties, do not have a 'right' to punitive damages; punitive damages are awarded solely as a matter of public rights or interests, in order the serve the public policy of punishment and deterrence. . . . [a]ccordingly, as a matter of law, Florida's settlement and release, and the res judicata effect of the resulting final judgment, preclude the plaintiffs' punitive-damage claims here." Slip op., pp. 63-64. Should other courts follow this reasoning, arguably no plaintiff with a health-related claim against the settling tobacco companies can be awarded punitive damages by a jury in any of the 46 states participating in the tobacco settlement.

2003-05-21T13:53:00.000-05:00

A Florida appellate court has handed the tobacco industry a huge victory in the class litigation on behalf of Florida smokers that resulted in a $145 billion judgment in the trial court. The appellate court reversed the trial court's certification of the class. Read the story in the Miami Herald here. A link to a lengthier treatment in the Wall Street Journal is here but may require a subscription. Findlaw has a pdf version of the opinion available here.

2003-05-20T12:39:00.000-05:00

Jeffrey Toobin has an article in The New Yorker discussing the appointment of judicial nominees by the Bush White House. Toobin's lengthy discussion is must reading for any student of the courts.

2003-05-20T10:43:00.000-05:00

I have found a new (to me) blawg (blog for/by lawyers, law blog, etc.) written by Robert Ambrogi. Mr. Ambrogi's blog is filled with good, current information regarding legal sources on the 'net. It's called LawSites, and I will add a link to it in the links section of Class Actions.

2003-05-19T08:56:00.000-05:00

The New York Times reports today on a lawsuit challenging a contract between a plaintiff in a personal injury case and a lender which agreed to finance her lawsuit. Since plaintiffs' lawyers in personal injury, medical malpractice, and, yes, consumer class actions usually agree to advance the costs of litigation, some smaller plaintiffs' firms as well as the plaintiffs themselves utilize the services of such lenders. The lawsuit apparently seeks to void the contract under the doctrine that a contract which contemplates an illegal act (here, interest rates at least as high as 280 per cent per annum, according to the article) is void ab initio.

2003-05-18T16:57:00.000-05:00

Bag and Baggage, an eclectic legal blog by discerning appellate lawyer Denise Howell, now provides a link to our Class Actions blog. Ms. Howell's entertaining and informative site may be found here, or see our list of links.

2003-05-17T10:47:00.000-05:00

Tobacco farmers have settled their antitrust class action with Phillip Morris and others. Read all about it in the New York Times (registration, unfortunately, required; but it's free).

2003-05-17T10:27:00.000-05:00

An article from the New York Times (registration required) discusses a recent ruling from Judge Shira Scheindlin of the United States District Court for the Southern District of New York requiring UBS Warburg not only to search for emails at the instance of a plaintiff in a sexual discrimination and retaliatory discharge case but to pay for the search. Although this ruling is not a pure Rule 23 matter, it obviously will impact complex litigation and class actions.

2003-05-16T09:17:00.000-05:00

The Alabama Supreme Court has reversed a trial court's order certifying a class of purchasers of credit life insurance. The per curiam opinion can be found here.

2003-05-16T09:03:00.000-05:00

Wyeth reported that 90,000 persons opted out of the settlement before the deadline in the In re Diet Drugs class action.

2003-04-25T08:29:00.000-05:00

An op-ed piece in today's New York Times blasts the "Class Action Fairness Act" for its unfairness to consumers.

2003-04-22T13:07:00.000-05:00

A legal aid organization is challenging restrictions on filing class action lawsuits. More here.

2003-04-02T09:45:00.000-06:00

The National Association of Manufacturers is urging its members to support S. 274, the Class Action Fairness Act. The bill, up for vote soon before the Senate Judiciary Committee, would expand the jurisdiction of federal courts in class litigation.

2003-04-02T09:34:00.000-06:00

Forbes reported on March 31 that a California appeals court has affirmed a lower court's denial of class certification status to a lawsuit pending against Pfizer on behalf of persons allegedly injured by Pfizer's Rezulin.

2003-04-02T09:28:00.000-06:00

The Cato Institute has published a policy analysis on the Private Securities Litigation Reform Act concluding that the Act has had its intended effect and should not be repealed.

2003-03-31T14:21:00.000-06:00

The first significant amendment to Rule 23 of the Federal Rules of Civil Procedure since 1966 was approved by the Judicial Conference on September 24, 2002, and submitted to the United States Supreme Court in December 2002. If the Supreme Court and the United States Congress approve the amendment, the rule change will become effective on December 31, 2003. Further information on the proposed amendment can be found on the "uscourts.gov" website here .

2003-03-31T12:31:00.000-06:00

Sorry I haven't blogged lately. Playing catch-up.....
Here is a link to a story in the National Law Journal regarding Green Tree Financial Corp. v. Bazzle. The United States Supreme Court granted cert on January 22 in Green Tree's appeal of an order of the South Carolina Supreme Court upholding a $27 million award in arbitration and holding that classwide arbitration may be ordered where the arbitration agreement does not address classwide arbitration.

2003-03-20T15:47:00.000-06:00

The San Francisco Chronicle reported today that El Paso Corp. has reached a settlement valued at $1.7 billion in litigation in California with plaintiffs which alleged El Paso manipulated the natural gas market there.

2003-03-20T14:43:00.000-06:00

The New York Times is reporting that Healthsouth CEO Richard Scrushy and William T. Owens, another high-ranking corporate officer, have been placed on administrative leave pending an SEC investigation.

2003-03-20T11:14:00.000-06:00

On March 18, 2003, a class action complaint on behalf of members of the military and other employees of the United States government who were inoculated or will be inoculated against anthrax was refiled in the United States District Court for the District of Columbia.

2003-03-20T09:04:00.000-06:00

Yesterday the Securities and Exchange Commission filed a civil lawsuit in federal court in Birmingham, Alabama, against Healthsouth Corp., one of the country's largest healthcare providers, and Richard M. Scrushy, the company's CEO. A copy of the complaint filed by the SEC is available from Findlaw here. The SEC also announced that Healthsouth's former Chief Financial Officer, Weston Smith, would plead guilty to charges of securities and wire fraud. Here is a link to the USA Today story; the Birmingham News also has extensive coverage of this story.

A securities class action lawsuit on behalf of shareholders and shareholders' derivative actions are also pending against Healthsouth and various company officers and directors.

2003-03-20T08:54:00.000-06:00

Sprint reported yesterday that it had settled two lawsuits in which it agreed to pay $50 million and make changes in corporate governance, including how directors are chosen and when executives can sell stock.

2003-03-17T08:46:00.000-06:00

The Associated Press reported this morning that the American Association of Retired Persons has joined as a plaintiff in a class action age discrimination suit filed by more than 60 employees of Capital One Financial. The class certification issue is not yet before the Richmond, Virginia, court.

2003-03-15T09:44:00.000-06:00

Quattrone Grand Juries

The New York Times reports this morning that two grand juries are looking into Frank Quattrone's activities at CS First Boston.

2003-03-14T09:09:00.000-06:00

Cash for CD's

If you signed up via the internet, or otherwise, to participate in the settlement of the Music CD Antitrust Litigation, you will receive $12.60. 3.5 million consumers filed claims by the deadline. The settlement also includes a cy pres element -- 5.5 million CDs valued at $75.7 million will be distributed to public institutions and nonprofit organizations. Read the story in the Seattle Times.

2003-03-14T08:54:00.000-06:00

Another arbitration opinion........

On February 11, 2003, the United States Court of Appeals for the Ninth Circuit held, in Ting v. AT&T, that the arbitration clause in AT&T's contracts with consumers is unconscionable and unenforceable. Among other things, the Court based its ruling on the fact that the contract purports to proscribe class actions. You can read the opinion on the Ninth Circuit's website.

2003-03-13T15:00:00.000-06:00

Those who would call for the abolition of the class action procedure should be reminded of its utility. As the United States Supreme Court observed in Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 617 (1997) (read the opinion here),

"While the text of Rule 23(b)(3) does not exclude from certification cases in which individual damages run high, the Advisory Committee had dominantly in mind vindication of 'the rights of groups of people who individually would be without effective strength to bring their opponents into court at all.' Kaplan, Prefatory Note 497. As concisely recalled in a recent Seventh Circuit opinion:
"'The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone's (usually an attorney's) labor.'" Mace v. Van Ru Credit Corp., 109 F. 3d 338, 344 (1997)."

2003-03-13T14:02:00.000-06:00

For those of you who prefer to enter e-mail addresses manually, it's blogmail@diceandgregory.com.

2003-03-13T13:55:00.000-06:00

If you want to contact Steve or me, you may reach us here.

2003-03-13T13:25:00.000-06:00

On October 18, 2002, the Alabama Supreme Court held that an arbitration clause purporting to deny a consumer the right to pursue class relief is unenforceable. The opinion in Leonard v. Terminix, which you can read here, was recently upheld on motion for rehearing.

2003-03-13T08:57:00.000-06:00

Stanford University hosts a website dedicated to providing information on securities class actions. The Securities Class Action Clearinghouse, found here "provides detailed information relating to the prosecution, defense and settlement of federal class action securities fraud litigation."

2003-03-13T08:46:00.000-06:00

Steve Gregory and I are lawyers licensed in the State of Alabama, so please note the following disclaimer. No advertising is intended herein, but the Alabama Rules of Professional Conduct may require the following: No representation is made that the quality of legal services to be performed is greater than the quality of legal services provided by other lawyers.
This information is not intended as legal advice nor to create an attorney-client relationship.

2003-03-12T16:44:00.000-06:00

The link here shows Federal Rule of Civil Procedure 23, which covers class actions.

2003-03-12T13:47:00.000-06:00

Please note that, in order to pull up the link for the New York Times article I mentioned earlier, you'll need to register with the NY Times. It's free; once you've done so, the linked article will appear.

2003-03-12T10:37:00.000-06:00

The following link here leads to a New York Times article discussing the payment of fees in an asbestos-liability case and the broader issue of how fees are paid in class actions. In this case, a portion of the plaintiffs' lawyer's fees were paid directly by the parent company of the defendant.