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First Annual Class Action Case Law and Practices Review Conference Materials

Summaries of Panelists' Remarks on selected Subtopics

Panel 1 – Aftermath of 2018 Rule 23 Class-Action Settlement Amendments 

“In the fifteen years since Rule 23 was previously amended, a host of meaty issues deserving of Advisory Committee attention have arisen-- ascertainability; cy pres remedies (an issue the Supreme Court had agreed to hear last term); issues class actions; and pick-off strategies, among others. In light of the importance of these issues, it is fair to say that the amendments actually made as of December 2018 are pretty modest. But they are nevertheless important and helpful.

This article identifies, contextualizes, and analyzes six of the more important changes made in the amended Rule: (A) front-loading of the settlement process by requiring preliminary approval before notice is provided to the class; (B) clarification that preliminary approvals are not appealable; (C) procedural and substantive standards for assessing the fairness of class action settlements; (D) combined notice of preliminary approval and class certification; (E) electronic means of providing class action notice; and (F) modest changes to rein in professional objectors.”

“As part of a symposium addressing what the next 50 years might hold for class actions, mass torts, and MDLs, this Article examines a recent amendment to Rule 23 that offers a new solution to the persistent problem of strategic objections. Most significantly, Rule 23 now requires the district judge to approve any payments made to class members in exchange for withdrawing or forgoing challenges to a class action settlement. Although the new provision is still in its infancy, it has already been deployed to thwart improper objector behavior and to bring for-pay objection practice out of the shadows. The 2018 changes--along with other on-the-ground developments--are important steps toward improving the class action settlement process.

In 2018, the Supreme Court adopted a major amendment to Rule 23--the most significant revision in 15 years. This Article examines the provisions in the 2018 amendment that deal with objectors to class action settlements. The most notable change in this regard involves judicial approval of any payments made to class members in exchange for withdrawing or forgoing challenges to a class action settlement. Such payments have long been controversial, in the eyes of both courts and commentators. The 2018 amendment creates a new legal framework regarding such payments, but it also raises important questions regarding how the new requirements should be implemented going forward.

Part I of this Article lays the groundwork by summarizing the 2003 amendment to Rule 23, which was the rulemakers' first attempt to address objections to class action settlements. Part II discusses the concerns that led to the 2018 amendment and describes the new provisions.  Part III addresses some of the early efforts to implement the 2018 amendment and the amendment's effect on class action practice. Finally, Part IV considers the most challenging issue posed by the 2018 amendment: what sort of payments should a court approve in connection with an objector withdrawing its challenge to a class action settlement?”

“This Article argues that class actions should never be certified solely for purposes of settlement. Contrary to the widespread “settlement class action” practice that has emerged in recent decades, contrary to current case law permitting settlement class certification, and contrary to recent proposals that would extend and facilitate settlement class actions, this Article contends that settlement class actions are ill-advised as a matter of litigation policy and illegitimate as a matter of judicial authority. This is not to say that disputes should not be resolved on a classwide basis, or that class actions should not be resolved by negotiated resolutions. Rather, this Article contends that if a dispute is to be resolved on a classwide basis, then the resolution should occur after a court has found the matter suitable for classwide adjudication, regardless of settlement.”

Panel 2 – Aftermath of 2018 Rule 23 Class-Action Settlement Amendments 

“It is widely agreed that the federal-court class action became a somewhat revolutionary device after Rule 23 was amended in 1966. Since 1966, further substantial changes to the rule have been considered by the rulemakers, but more proposals have been discarded than adopted. Meanwhile, a major battle has emerged about whether class actions should primarily or solely be designed to achieve deterrence or limited to a compensatory function. That division has been central to many current debates, such as the issue of “no injury” class actions, whether courts could certify classes only after determining that they were “ascertainable” by an identified administratively feasible method, and whether the idea of cy pres could be used to justify class actions in which the defendant paid a large amount, but the class members themselves received little or nothing and the funds were instead used for good works of some relevant sort. 

Changes to Rule 23 in the last half century have not directly addressed these hot-button issues. But judicial decisions— including some by the Supreme Court—have tackled some of these issues, and Congress has adopted legislation to address some alleged class action abuses, such as “coupon settlements.”

This Article explores the last half century of class action reform in terms of whether further “revolutionary” changes will occur in federal class action practice. It finds that although the rulemakers looked at some aggressive changes in the 1990s, those amendment ideas were eventually jettisoned, and the changes actually adopted have been evolutionary rather than revolutionary. 

That trend continues with the most recent amendment package, which may go into effect on December 1, 2018; the rulemakers are not embracing dramatic changes to the rule. Meanwhile, the possible sources of “revolutionary” change lie elsewhere. Some worry that the Supreme Court will deliver shocks to class action practice by deciding cases, though in recent terms it has not proved to be as adventurous as some thought it might. Congress has pending before it legislation that seemingly would make a fairly “revolutionary” commitment to limiting class actions to the compensatory purpose, and disavowing the deterrence purpose endorsed by many. The fate of that proposed legislation is uncertain as of this writing. 

Though action by Congress or decisions by the Supreme Court might produce “revolutionary” change for class actions, this Article suggests that technology may instead be the most important source of major change. In the wired world of the twenty-first century, the “headless” class action of the past may be replaced by the “wired” class action in which class members have regular contact with one another and class counsel. That could work a genuine revolution.”

“The federal class action has lost its way. It was created fifty years ago in a major revision to Rule 23 that envisioned the class action as a functional aggregation device aimed at promoting litigation efficiency and effective enforcement of substantive rights. Over the past twenty years, however, courts have added technical limitations that restrict the Rule’s functional efficacy. This Article examines two such limitations: a strict version of class ascertainability, and restrictions on cy pres relief. These limits are neither mandated by the text of Rule 23 nor supported by a reasonable interpretation of the Rule’s language and purpose. Proponents advance functional arguments, but those arguments fail to persuade. This raises an obvious question: why is support so strong when the proffered justifications are so weak? The answer to this question is important for what it reveals about the underlying normative stakes. The strongest arguments for class action limits sound in legitimacy, not functional efficacy. As a result, it is critical to engage the legitimacy arguments on their own terms. 

Many of the recent Rule 23 limitations have to do, in one way or another, with the kind of group that can qualify as a litigating “class.” In a series of decisions beginning in the late 1990s, the Supreme Court insisted that a group have internal unity, that it be internally “cohesive,” before it can be a Rule 23 class. As I have explained elsewhere, these decisions have resulted in the tightening of Rule 23’s commonality and predominance requirements. 

This Article examines two other limitations—strict ascertainability and limits on cy pres. Ascertainability imposes requirements on class definition. The traditional version of ascertainability is relatively easy to satisfy; it demands only that the boundaries of the class be reasonably clear. Over the past five years, however, some courts, led by the Third Circuit, have imposed a much stricter version. They insist not just that the class itself be defined clearly, but also that individuals be identifiable as members of the class in a reliable and administratively feasible way. This strict requirement has potentially severe consequences: it can scuttle small-claim class actions, especially consumer class actions involving low-priced items. 

The other limitation involves the cy pres doctrine. This doctrine, which has been around for decades, allows a court to distribute class recovery to a third-party charity when distribution to the class is infeasible or undesirable. The cy pres doctrine is particularly useful in class actions aggregating small claims. Because class members with only small amounts at stake seldom bother to claim their shares of a settlement fund, it is quite common for a large portion of the fund to be left over after an initial effort to distribute it to the class. Cy pres is a convenient way to dispose of these leftover funds: a court gives the money to a charity engaged in activities that indirectly benefit the class as a whole. 

Despite its advantages, cy pres has attracted considerable controversy over the past seven years. Critics argue that it exacerbates agency costs, invites judicial abuse, deprives class members of their property, and violates due process. Some of these critics would go so far as to abolish the practice altogether. Even supporters of cy pres worry about its unrestricted use, and many favor rather stringent limitations.

These developments figure prominently in proposed legislation now pending before Congress. Section 1718(a) of the so-called “Fairness in Class Action Litigation Act” requires a plaintiff to show, as a condition to obtaining class certification, that there is a “reliable and administratively feasible mechanism (a) for the court to determine whether putative class members fall within the class definition and (b) for distributing directly to a substantial majority of class members any monetary relief secured for the class.” This provision would appear to enact a strict version of ascertainability. Moreover, by insisting on substantial distributions to class members, it also restricts the use of cy pres.”

“When class actions resolve, it is common for some or even all funds paid to the class to remain undistributed. All U.S. circuits, 40 states, and the Class Action Fairness Act have permitted undistributed funds to be distributed as cy pres. Recently, a few commentators have voiced constitutional objections to cy pres, based upon standing pursuant to Article III, the Rules Enabling Act, and the First Amendment. However, these analyses generally ignore the congressional mandate found within Rule 23 and the power of the courts to supervise cy pres distribution. Finally, the following recommendations are made: such awards should not be used when settlement funds can be distributed to class members; these funds should not go back to a defendant or its surrogates in order to prevent undermining the class action deterrent function; and class representatives and counsel, representing the needs of the class, should select proposed recipients. Any residual settlement money should be distributed in a way that would indirectly benefit the class (including to non-profit access to justice organizations) under the following factors: (1) what the lawsuit is about; (2) the objectives of any statute that was violated; (3) the loss suffered by the class members; and (4) the geographic breadth of the class.”

“In April 2010, Deepwater Horizon, a BP-operated drilling rig, exploded killing eleven workers and poisoning the waters of the Gulf of Mexico with 210 million gallons of oil. Some 90,000 cleanup workers become involved in the response; many became sick after exposure to crude oil and Corexit, a chemical used to disperse the oil. A class action against BP ensued. A settlement was reached in 2013 and provided for a two-phased compensation mechanism, which class action experts praised for effectiveness and fairness.

Soon, however, it became clear that the settlement was neither effective nor fair. Many cleanup workers were denied the compensation that they were promised under the administrative-based phase one of the settlement. Instead, they were forced into the ongoing litigation-based phase two, where their individual claims must be brought to federal courts. Plaintiffs have become stuck with an unfair settlement and federal courts could be bogged down with a multitude of personal injury trials--an unwanted result of any class action settlement. This Comment argues that after granting a judicial approval of a class action settlement under Federal Rule of Civil Procedure 23(e)(2), courts should have a continuing duty as a fiduciary to the class to ensure fairness and effectiveness of the settlement.”

“This article proposes a simple and coherent approach to judicial review of class action settlements. Specifically, we propose that for questions going to the adequacy of a settlement, where no warning signals of fraud or collusion are found, the court should act relatively deferentially by employing a lenient standard of scrutiny and approving a settlement if it has a rational basis. An intermediate level of scrutiny should apply when the settlement presents facial issues that implicate the fairness of the settlement. Such facial issues include the allocation of settlement proceeds among subgroups in a class, the presence of coupon-type relief, “shotgun” settlements occurring very early in the litigation, and settlements in overlapping class actions. In settlements with one or more of these characteristics, if the initial inquiry raises concerns, the court should demand a well-reasoned explanation for the choices made. Finally, where the components of a settlement present a direct conflict between the interests of class counsel and those of the class issues, such as issues related to attorneys’ fees, courts should employ exacting scrutiny and require convincing evidence that the proposal is reasonable.”

Panel 3 – Class Certification  

"In its Recent Cases column, the Harvard Law Review analyzes Robins v. Spokeo, Inc. The Law Review writes: “When big technology companies engage in misconduct, the primary legal redress available to their consumers is class action litigation. But in order to file such lawsuits, consumers must have standing, a legal requirement that protects the constitutional separation of powers imperative. Rooted in the Article III limitation that courts adjudicate only actual “[c]ases” and “[c]ontroversies,” standing requires plaintiffs to show that they have suffered an “injury in fact” in order to access the courts. In order to meet that “irreducible constitutional minimum,” injuries must be “concrete and particularized,” and “actual or imminent.” “[C]onjectural or hypothetical” disputes should be left to the other branches. Recently, in Robins v. Spokeo, Inc., the Ninth Circuit held that a plaintiff who alleged he had been harmed by the defendant’s violation of the Fair Credit Reporting Act (FCRA) had suffered an injury sufficiently concrete to confer standing. In doing so, the Ninth Circuit affirmed standing’s separation of powers roots, honored congressional intent, and preserved class actions as a primary enforcement mechanism against technology companies.”

“As government budgets shrink each year, enforcement responsibilities in products liability, consumer protection, and employment discrimination fall increasingly to private attorneys. But defendants have successfully layered new objections about noncohesive classes and unascertainable members atop legislative and judicial reforms to cripple plaintiffs’ attorneys’ chief weapon — the class action. The result? Courts deny class certification and defendants escape enforcement by highlighting the differences among those affected by their misconduct. At the other end of the regulatory spectrum lies the opposite problem. Some defendants’ actions are so egregious that hordes of public and private regulators can’t help but get involved — think the GM ignition switch debacle or the BP Oil Spill, for example. Whether regulators are chasing splashy headlines, easy money, or public support, the result is a cacophony of litigation in dispersed fora that risks inefficient resource use and inconsistent verdicts regarding a defendant’s conduct.

A one-line sentence buried within Rule 23 offers a partial elixir for problems at both ends of the enforcement spectrum. That sentence, Rule 23(c)(4), allows courts to certify certain issues for class treatment. While issue certification is experiencing a renaissance in the courts, scholarship has stagnated. Commentators have fixated on the technical to-be-or-not-to-be question of how to read Rule 23(c)(4) within the rule’s predominance requirement. But they have offered strikingly little theory or guidance on how issue classes might revive private enforcement and coordinate fractured regulatory responses through issue preclusion.

This Article aims to fill that void with an alternative theory of class cohesion — a term that appears nowhere in Rule 23, but has emerged at the center of Supreme Court jurisprudence. This theory not only informs the class-certification calculus by identifying core questions ripe for issue-class adjudication, but also simplifies vexing questions over the sufficiency of aggregate proof and class members’ ascertainability. Shedding anachronistic, stereotypical notions that immutable characteristics like gender and race fuse members into a cohesive class can reveal what often unites groups for adjudication purposes: defendant’s uniform conduct. When a defendant’s actions are non-individuated (GM’s failure to take appropriate safety precautions, for example), litigating the components within a claim or defense that regulate defendant’s conduct on a classwide basis can revive private enforcement and stymie inconsistent outcomes through preclusion.”

“Judges have always been gatekeepers, but their gatekeeping tasks have changed a good deal over time. Gatekeeping is central to litigation aggregation, and it is thus not surprising to find that it is also central to the Principles of the Law of Aggregate Litigation. The central gatekeeping question, of course, is whether aggregation should occur and, if so, how broadly. Until recently federal judges have approached their gatekeeping tasks in deciding whether to certify with one hand tied behind their backs because they have regarded the Supreme Court’s 1974 Eisen decision as forbidding consideration of anything bearing on the merits of the case at that point. This limitation on certification scrutiny has been questioned almost from the time Eisen was decided, and it has recently been jettisoned, in part due to the 2003 amendments to Rule 23.

Part I begins by noting the longstanding role of judges in fashioning and approving aggregation of litigation, and then Part II examines the 1966 amendment to Rule 23 and the constricted attitude toward certification that resulted from the Eisen decision against that background. Part III then contrasts that constricted gatekeeping role in regard to class certification with the steadily broadening gatekeeping required of judges in a variety of areas in which they are asked to perform tasks much further from traditional adjudication—including the handling of important aspects of class action practice—and Part IV finds that the recent embrace of merits scrutiny in relation to class certification is something of a “back to basics” development. Finally, Part V reflects briefly on where this development may lead.”

“Few pretrial motions in our civil justice system elicit as much controversy as those for the certification of class actions. This Article offers the first account of the challenges courts face today in light of an important series of federal appellate decisions that direct the district courts to resolve competing expert submissions on the class certification question during the pretrial stage, even when the dispute overlaps with the merits of the litigation. 

Across broad swaths of class action litigation today, plaintiffs rely on aggregate proof—evidence, typically of an economic or statistical nature, that presupposes the cohesiveness of the aggregate unit for litigation and, from that perspective, seeks to reveal quantitatively a common wrong attributable to the defendant. Debates over the proper role of aggregate proof arise in what otherwise might seem disparate disputes over class certification across securities, antitrust, Racketeer Influenced and Corrupt Organizations Act (RICO), and employment discrimination litigation. Too often, however, courts have taken at face value the evidentiary form that aggregate proof assumes in motions for class certification. 

This Article urges a new conceptualization of the challenges in class certification facing courts today. The real question about aggregate proof in class certification is not one that speaks to the relationship between the court and the factfinder in the (usually hypothetical) event of a class-wide trial. Rather, the institutional relationship that really matters is the one between the court and the legislature as expositors of governing law. Properly understood, aggregate proof frequently offers not so much a contested view of the facts but, more fundamentally, a contested account of governing law—one eminently suited for judicial resolution and appellate correction de novo, without concern about possible intrusion into the role of the factfinder. 

This Article exposes how renewed attention to the judicial duty to “say what the law is” can lend coherence to the law of class certification, offering the first extended assessment of such controversial recent litigation as the civil RICO class action against the tobacco industry in connection with its marketing of light cigarettes and the employment discrimination class action—the largest certified class in history— against Wal-Mart concerning the pay and promotion of its hourly female employees. The Article concludes by relating the analysis of class certification to larger changes in the civil justice system that seek in various ways to address the reality of settlement, rather than trial, as the endgame of litigation.”

Precertification discovery constitutes the critical phase of any class action. Because many cases brought as class actions either settle (in the case of certification) or die (in the case of denial of certification), the critical stage of precertification discovery is rightly the subject of the parties' time, effort, and money. There are a myriad of issues that arise during this critical stage. The parties may disagree not only on what discovery should be done and how long it should last, but also on whether any should be done at all. The requested formal discovery may range from written interrogatories, requests for production of documents, and deposition testimony to a simple request for identifying information about putative class members. Alternatively, the parties may desire to engage in less formal means of discovery, such as interviews with the proposed class members.

The reasons for the requested discovery is, likewise, varied. Sometimes the defendant believes that formal precertification discovery of putative class members will provide hard evidence that one of the required Rule 23 factors is absent, thereby defeating class certification. A class representative may desire to depose the defendant's employees who were responsible for the alleged wrong to gain information about the common issue of liability. The class representative will wish to capture formal discovery to bolster her argument that she is an adequate class representative, that her claims are typical of the absent class, that all members of the class share common issues and theories, that those common issues predominate *1829 over any individual issues, and that the class action procedure is a superior method to adjudicate common issues.

In situations in which a class action defendant possesses identifying information about its customers or policyholders, a class action plaintiff may desire the names and addresses of putative class members to inform them of the existence and litigation of a class action that may affect their rights. Sometimes one or both parties requests permission to engage in other types of discovery of or about unnamed and unrepresentative class members. The defendant may seek limits on precertification discovery through court orders limiting the type and amount of discovery or through bifurcation, in which only “class certification” issues are the subject of discovery before the class certification decision.

This Article discusses precertification discovery issues. The Article begins with a discussion of the role class actions play in our society, the relevant Rule 23 factors, and the role of “putative” and “absent” class members in class action litigation. Next, this Article discusses the various protections granted to class members, the relationship between absent and putative class members and class counsel, and the scope of discovery before class certification hearings. Finally, it focuses on specific instances in which precertification discovery is sought and the standards by which such requests should be evaluated.”

“The Dukes “rigorous analysis” blurs the line between “certification” and “merits” discovery in class action litigation. Without adequate discovery, class counsel risk finding themselves without a sufficient record to survive appellate review of class certification orders. Class counsel must be aware of how commonality challenges based on the merits of the class allegations can defeat certification. Therefore, class counsel must anticipate merit-based challenges and develop a discovery strategy that will enable a sufficient demonstration to the appellate courts that common issues predominate in the case.

After surveying current case law, this article provides class counsel and the judiciary with recommendations regarding requirements for pre-certification discovery.”

Panel 4 – Technology Tools Facilitating Class-Action Case Management 

Courtroom View Network covers the first binding civil jury trial, Griffin vs. Albanese Enterprise, in which a jury determined damages over Zoom.

“Consistent with the gradual phase-based governmental plans for returning our communities to the new COVID-19 normal, trial lawyers have adapted in phases — from transitioning to remote work (Phase One), to learning how to use remote litigation technology (Phase Two), and now to Phase Three, in which we're actually using that technology.
We shift now to Phase Four, in which trial lawyers are not just using the technology but using it effectively and persuasively.”

“Since the 1990s, with the Supreme Court's ruling in Daubert v. Merrell Dow Pharmaceuticals Inc., 509 U.S. 579 (1993), and its progeny General Electric Co. v. Joiner, 522 U.S. 136 (1997) and Kumho Tire Co. v. Carmichael, 536 U.S. 137 (1999), it has been well established that courts serve as “gatekeepers” of expert witness testimony. While the factors outlined by the Supreme Court in Daubert help a court evaluate the admissibility of an expert's opinions at the Daubert stage, science often plays a crucial role in other phases of mass tort, product liability, and patent litigation. That's where “science days” come into play. A science day allows the litigating parties, through counsel or experts, to make educational presentations to a court about the scientific issues in the case, such as clinical use, efficacy, epidemiological concepts and data, and general and specific causation. Science days allow the defense team to focus a court on science up front, which may affect the whole case. A court that understands the science will be better equipped to deal with discovery issues, to address threshold causation issues sooner, or to weed out unmeritorious cases. Science days also provide an early chance to build credibility with a court, encourage skepticism about a plaintiff's case, and provide the lens through which you wish the court to focus.

This article will help in-house counsel analyze potential science day planning issues to maximize strategic benefits and anticipate what an effective science day may look like. Additionally, this article will help in-house counsel know what to look for from outside counsel, or the questions that they may want to ask as they prepare for, consider, or propose a science day.”

“Legal cases increasingly involve complex scientific and technological information. For example, mass tort cases that involve exposures to chemical agents, pharmaceutical products, or medical devices require that the court understand scientific, medical, and statistical principles to evaluate the likelihood of injury associated with exposure. Similarly, in cases involving complex technology, decisions about patent infringement often turn on a judge’s or jury’s understanding of scientific or technological issues. Such issues also arise in criminal law, where judges must evaluate the scientific validity of tools and technologies—such as DNA comparison or brain imaging—to determine the admissibility of certain evidence. 

A variety of tools are available to assist judges in managing cases involving such sophisticated science and technology. One such tool is a “science day,” “education day,” or “technology tutorial.” Judges often utilize science days in cases involving pharmaceutical product liability claims, and they commonly request technology tutorials in patent cases to assist with claim construction. But similar strategies can be valuable whenever the merits of a case turn on scientific, medical, or technological information. We adopt the term science tutorial to encompass this judicial practice more generally. Science tutorials have developed as a means to ensure judges have the background needed to understand complex case subject matter. Science tutorials provide an opportunity for the parties, experts, or technical advisors to identify and educate the court about scientific issues central to a case or to a set of coordinated or consolidated cases. This guide provides an overview of practical considerations to help judges plan and conduct science tutorials effectively.”

“In this Note, the author discusses the true potential that digital media and technology hold for class actions beyond effectuating notice to members of a class. Ironically, just as challenges have mounted against the use of the class action device, digital technology has continued to advance in the background to a point where it may be used to break down barriers to class certification now facing would-be class plaintiffs.

However, much of the current discussion across law reviews and blogs as it relates to digital media and class actions pertains to the effect of digital media on notice. Not only are some proposed methods of digital notice flawed, the focus on notice overlooks the numerous other ways digital media and technology can support class actions. The author proposes that advances in digital media and technology may be used to solve recently erected barriers to class actions.

Specifically, mobile location and purchase data--as well as new digital media formats enabling immediate feedback from class members--may be used to supply the additional evidentiary proof now required of would-be class plaintiffs who must establish elements under Rule 23(a) and (b) beyond a mere pleading standard and before plaintiffs have had the benefit of full merits discovery. The potential cost savings from new methods of digital payment for claims administration will also be of particular relevance to small claims plaintiffs who must argue that the class device is superior despite resistance from defendants who may suggest that the cost to administer claims alone renders a class action inefficient, and thus, an inferior method of adjudicating claims.”

Panel 5 – Selected Class-Action Litigation Issues 

“In federal multidistrict litigation (MDL), district courts regularly appoint attorneys to manage the litigation of cases that are transferred to a single district court for coordinated pretrial proceedings. Orders appointing MDL leaders serve as a constitution or charter for a particular MDL, reallocating functions that otherwise would be performed by individually retained plaintiffs’ attorneys to court-appointed leaders. As such, they perform a crucial role in the “MDL model” of aggregate litigation and settlement. Yet in spite of their importance, knowledge of these orders is mostly folk wisdom. 

This Article presents preliminary findings from a study of leadership appointment orders in all MDLs pending in the federal courts in June 2019. The principal finding is that, while leadership appointment orders are a standard feature of contemporary MDL, they vary significantly in how they structure plaintiffs’ leadership, the functions they assign to court-appointed leaders, and how orders conceive of the relationships among court-appointed leaders, nonlead attorneys, and MDL plaintiffs. The Article’s findings about the “diverse uniformity” of MDL leadership appointments shed light on debates over the nature of contemporary MDL, the duties court-appointed leaders owe to nonclient plaintiffs, and the costs and benefits of MDL’s dependence on decentralized, ad hoc procedure-making.”

Reporter Amanda Bronstad describes her research finding that women are making up more of MDL leadership. She finds that while women are getting more MDL appointments, however, MDL leadership still lacks racial diversity, with only two people of color making the top MDL attorney list.

“Every year, fee awards enable millions of people to obtain access to justice and strengthen the deterrent effect of the law by motivating lawyers to handle class actions. But little research exists on why judges award the amounts they do or whether they size fee awards correctly. The process remains a black box. Through a detailed study of 431 securities class actions that settled in federal district courts from 2007 through 2012, this Article presents the first empirical study to peer inside that black box. In contrast to prior analyses, this study relies on the actual court filings in each case to create an original, comprehensive data set on all points at which federal judges are likely to consider issues relating to fees. These data enable us to paint a picture of the feesetting process that is unusually detailed and nuanced—and that falsifies many common beliefs. 

Among this Article’s major findings are that: (1) federal judges often deviate from the path Congress laid out in the Private Securities Litigation Reform Act of 1995 (PSLRA), which requires lead plaintiffs to set the terms of class counsel’s retention and federal judges to serve as backstops against abuses; (2) fees are generally lower in federal districts that see a high volume of securities class actions than in districts that handle lower volumes; (3) judges in high-volume districts are significantly more likely to cut fees than low-volume judges; (4) the “decrease– increase” rule, according to which fee percentages decline as settlements become larger, operates mainly in high-volume districts; and (5) judges appear to cut fees randomly, typically with very little explanation for why they did so. Finally, this Article finds that so-called “lodestar crosschecks,” which are supposed to help judges moderate fee awards, have unintended effects. All else equal, fee awards are significantly higher when fee requests include cross-checks than when lawyers use only the percentage method. A plausible explanation is that lawyers are anticipating judges’ reactions to fee requests and acting strategically. They include lodestar information when their requests may appear excessive and they omit it either when they expect judges to grant their requests or they think that the lodestar data will not help their cause. 

In sum, there is little evidence that courts’ current actions in securities class actions move class counsel’s fees closer to the “right price.” This Article therefore proposes a set of procedural reforms, which courts could easily adopt, to make fee-setting in securities class actions more transparent, more compatible with the PSLRA’s normative goals, and more predictable. The reforms would encourage lawyers to invest in class actions at more appropriate levels, with salutary effects for plaintiffs and the integrity of the financial markets.”

“Class actions have been a feature of the American litigation landscape for over seventy-five years. For most of this period, American-style class litigation was either unknown or resisted around the world. Notwithstanding this chilly reception abroad, American class litigation has always been a central feature of American procedural exceptionalism, nurtured on an idealized historical narrative of the class action device. Although this romantic narrative endures, the experience of the past twenty-five years illuminates a very different chronicle about class litigation. Thus, in the twenty-first century American class action litigation has evolved in ways that are significantly removed from its golden age. The transformation of class action litigation raises legitimate questions concerning the fairness and utility of this procedural mechanism, and whether class litigation actually accomplishes its stated goals and rationales. With the embrace of aggregative nonclass settlements as a primary—if not preferred—modality for large-scale dispute resolution, the time has come to question whether the American class action in its twenty first century incarnation has become a disutilitarian artifact of an earlier time. This Article explores the evolving dysfunction of the American class action and proposes a return to a more limited, cabined role for class litigation. In so doing, the Article eschews alternative nonclass aggregate settlement mechanisms that have come to dominate the litigation landscape. The Article ultimately asks readers to envision a world without the twenty-first century American damage class action, limiting class procedure to injunctive remedies. In lieu of the damage class action, the Article encourages more robust public regulatory enforcement for alleged violation of the laws.”

“This Article focuses on problems that arise in connection with the representation of plaintiffs by lawyers who charge contingent fees. These problems require clear thinking about the boundary that separates matters to which lawyers’ fiduciary responsibilities apply from other matters to which they do not. On the one hand, the fiduciary duty encourages lawyers to serve clients well by requiring lawyers to pursue clients’ interests exclusively. In matters to which the duty applies, lawyers must be “disinterested”—they must pursue clients’ interests exclusively and must keep themselves free of, or obtain clients’ informed consent to, conflicting interests and other pressures that might tempt them to act disloyally.

On the other hand, contingent fee contracts encourage lawyers to serve clients well by making successful representation profitable for attorneys. Because contingent-fee lawyers earn more when their clients recover larger sums, they have incentives to treat their clients well. For contingent fee arrangements to work, however, lawyers must collect fees and expense reimbursements from clients at the end of the day. This obviously makes lawyers better off at clients’ expense.

* * *
In recent multidistrict litigations (MDLs) and other mass tort lawsuits, judges have cut lawyers’ fees, and lawyers have questioned or challenged the reductions. Clients have sizeable stakes in these battles, which, because they occur after settlements are negotiated, can put more money in their pockets without compromising the quality of the representation. By challenging judges’ power to cut fees and otherwise seeking to enforce their contractual payment rights, did the lawyers violate the duty to put their clients’ interests ahead of their own? In the Vioxx MDL, for example, the presiding judge ordered that the attorneys’ fees be capped, then ruled that the lawyers’ interests conflicted with their clients’ interests regarding attorneys’ fees and sua sponte appointed new counsel to represent the clients on fees. Was the order disqualifying the attorneys on the issue of fees justified, even though when it was entered not a single client had complained about the fees they had contracted to pay their attorneys?”

Panel 6 – Class-Action Challenges 

“The coronavirus (COVID-19) pandemic has caused upheaval in the global economy. This massive disruption has led to a wave of class action lawsuits relating, directly or indirectly, to COVID-19. This White Paper reviews the various categories of such class actions, the most commonly asserted theories of liability, and possible defenses to such actions, both as to the merits and against class certification.”

“This article is a comprehensive empirical study of class action settlements in federal court. Although there have been prior empirical studies of federal class action settlements, these studies have either been confined to securities cases or have been based on samples of cases that were not intended to be representative of the whole (such as those settlements approved in published opinions). By contrast, in this article, I attempt to study every federal class action settlement from the years 2006 and 2007. As far as I am aware, this study is the first attempt to collect a complete set of federal class action settlements for any given year. I find that district court judges approved 688 class action settlements over this two-year period, involving nearly $33 billion. Of this $33 billion, roughly $5 billion was awarded to class action lawyers, or about 15 percent of the total. Most judges chose to award fees by using the highly discretionary percentage-of-the-settlement method, and the fees awarded according to this method varied over a broad range, with a mean and median around 25 percent. Fee percentages were strongly and inversely associated with the size of the settlement. The age of the case at settlement was positively associated with fee percentages. There was some variation in fee percentages depending on the subject matter of the litigation and the geographic circuit in which the district court was located, with lower percentages in securities cases and in settlements from the Second and Ninth Circuits. There was no evidence that fee percentages were associated with whether the class action was certified as a settlement class or with the political affiliation of the judge who made the award.”

“Class action critics and proponents cling to the conventional wisdom that class actions empower claimants. Critics complain that class actions over-empower claimants and put defendants at a disadvantage, while proponents defend class actions as essential to consumer protection and rights enforcement. This Article explores how class action settlements sometimes do the opposite. Aggregation empowers claimants’ lawyers by consolidating power in the lawyers’ hands. Consolidation of power allows defendants to strike deals that benefit themselves and claimants’ lawyers while disadvantaging claimants. This Article considers the phenomenon of aggregation as disempowerment by looking at specific settlement features that benefit plaintiffs’ counsel and defendants without benefiting class members. Recognizing that protection of disempowered class members lies with judges who review settlement agreements, the Article identifies red flags to alert judges to problematic settlement terms and fee requests. By showing how certain settlement features reflect improper cooption of the power of aggregation, the Article offers a framework for understanding class action power dynamics and a path for reclaiming class actions as an empowerment mechanism.”

“The advent of third-party litigation financing—the funding of lawsuits by entities other than parties or their legal representatives—in the United States has stimulated legal scholarship, policy debate, and interest group advocacy. Some scholarship fails to distinguish among financers that use different business models and target different market segments, which can make it difficult to assess normative recommendations. Nonetheless, most scholars are cautious in drawing conclusions about the cost–benefit ratio of introducing third-party financing into the legal system. Likewise, the policy debate has been cautious, as leaders of the bar have adopted a “wait and see” attitude in response to calls for regulation. The advocacy has been strident, however, with corporate interest groups pressing hard for regulation —if not absolute prohibition—of third-party financing not only in the United States but in other jurisdictions as well. No group has been as strident or as active in opposition to third-party litigation financing as the U.S. Chamber of Commerce’s Institute for Legal Reform, and no area of legal practice has been more clearly targeted for prohibition of such financing than class action litigation. 
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This Article discusses the possible consequences of third-party litigation financing for class action litigation in the United States. Part II describes the market for third-party litigation financing in the United States and discusses the potential for litigation investment in U.S. class action litigation. Part III unpacks the criticisms of third-party litigation financing with particular reference to U.S. class actions and considers their empirical basis. Part IV describes the Australian federal class action procedure and the role of third-party litigation financing in the class action domain, presents statistical data on the frequency and types of class actions in Australia, and reflects on the lessons of the Australian experience for the United States. Part V concludes with a consideration of the likelihood that the sky would fall if third-party litigation financing were to become common in class action litigation in the United States.”