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November 22, 2004

Fighting a class action? Cite Justice Gonzales

Attorney Robert C. Heim of Dechert LLP has a paper (PDF) giving advice to businesses on how to respond to class action lawsuits. He observes that since the certification of a class often turns a case into the "bet your company" kind and thus creates overwhelming pressure to settle, many if not most defendants find it crucial to defeat the original motion for class certification. They may, for example, convince the judge that it is unfair to lump all potential claimants into one class or impractical to run a resulting trial. One opinion that may be cited advantageously as precedent was written by the current U.S. Attorney General-designate:

Bernal is a leading state court decision on trial plans and class certification. In an opinion by then-Justice (now White House counsel) Alberto R. Gonzales, the Texas Supreme Court held that “it is improper to certify a class without knowing how the claims can and will likely be tried.” Bernal involved hundreds of personal injury claims arising from a refinery explosion. The claims turned on “thorny causation and damage issues with highly individualistic variables.” The plaintiffs’ trial plan called for proof of causation and damages on a class-wide basis, with “the help of models, formulas, extrapolation, and damage brochures.” The court rejected this idea, holding, first, that defendants have a fundamental right to case-by-case discovery and individual trial of personal injury claims, and, second, that if “individual issues” cannot be resolved “in a manageable, time-efficient, yet fair manner, then certification is not appropriate.”

Posted by Walter Olson at 12:17 AM | TrackBack (0)

Class Actions



Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.