Results matching “Dukes ”

On the Supreme Court cert docket: Glazer and Butler - PointOfLaw Forum

As I discussed in yesterday's Washington Examiner, at tomorrow's conference, the Supreme Court will decide whether to grant certiorari on a pair of companion cases -- Sears v. Butler and Whirlpool v. Glazer, which Ted has previously discussed (here, here, and here).

Both cases involve 21 varieties of energy- and water-efficient "front-load" washing machines manufactured by Whirlpool.

In 2001, Whirlpool released the first of this diverse group of washers that reduced water and energy use by more than two-thirds (cutting $120 from the average family's annual water and power bills).

Whirlpool's washers have been ranked among the best in their class by Consumer Reports and helped the company win multiple "sustainable excellence" awards from the federal Environmental Protection Agency.

Class-action attorneys have pounced on the fact that a small percentage of these washers, like all washing machines, can (if improperly maintained) emit "musty odors" from leftover laundry residues.

Such odors may be marginally more likely in these newer machines than in traditional, less water- and energy-efficient washers.

A decade of call center data from Whirlpool and Sears place the percentage of consumers facing such odors at two to three percent, and a more recent February 2010 examination by the Consumers Union estimates the problem rate at less than one percent.

I agree with Ted and others (e.g., ATRA's Tiger Joyce, Tim Bishop & Joshua Yount, the bulk of the business community filing amicus briefs asking for cert) that these cases have broad-ranging potential implications and that the Supreme Court should take them up to clarify the reach of Wal-Mart v. Dukes and Comcast v. Behrend:

The Supreme Court has taken significant interest of late in limiting the use of class-action remedies. In its 2011 decision in Walmart v. Dukes (involving a gender discrimination claim) and last year's decision in Comcast v. Behrend (involving an antitrust claim), the court has emphasized that for a class of plaintiffs to be approved, the facts have to show a common and specific cause of harm that "predominates."

The washing machine cases certainly fail the Supreme Court's predominance test for class-action litigation.

Let's hope that the Supreme Court decides to step in yet again, because the legal theory underlying these cases is worse than musty -- it stinks.

Update: The Supreme Court neither granted nor denied the cert petitions here -- we'll watch for it at the next conference.

Roach v. T.L. Cannon Corp. - PointOfLaw Forum

Just as courts sometimes improperly certify class actions, sometimes they improperly fail to certify them. In the N.D.N.Y. case of Roach v. T.L. Cannon Corp., plaintiffs who worked at Applebee's restaurants alleged a uniform policy of docking employees for rest breaks they had not taken. The district court denied certification, arguing that, after Comcast v. Behrend, one could not certify a class for damages where individual plaintiffs have individualized damages. In the absence of classwide proof of damages, the district court ruled, Comcast prevents certification. Public Citizen is appealing to the Second Circuit.

I haven't seen the briefing below, so I don't take a position on whether class certification is appropriate; there might be legitimate grounds to deny certification not discussed in the court opinion. But it's clear to me that the district court's reasoning is incorrect.

Imagine a class action by waitresses against Chotchkie's Restaurants, alleging sex discrimination because the restaurant has a policy that it will deduct $10/week from women's paychecks, but not from men's paychecks. It's quite clear that this is an appropriate class certification. Even though the damages will vary from plaintiff to plaintiff—Jennifer might have been subject to the illegality for 50 weeks, while Joanne may have quit shortly after the policy was implemented and have only $20 of damages—the common elements of the case predominate over the individualized elements. (I made a similar point in discussing Wal-Mart v. Dukes: the question isn't whether a class is large, the question is whether there are common issues, and the Dukes certification precluded a consideration of individualized defenses to the sex discrimination allegations.)

The problem identified by the Supreme Court in Comcast, as I discussed, was that the plaintiffs attempted to justify class certification with a economically irrational theory that the antitrust violations affected class members equally when, in fact, there would be different market effects in different sub-markets (depending on the effect of the Comcast accretion of market share on deterring overbuilder competition) such that the theory of liability was not subject to classwide proof; subclassing would have or a different theory of certification might have fixed that.

In Roach, though, the allegation is that there is a single policy to fail to comply with New York state law. Perhaps that allegation is true (in which case class certification is appropriate); perhaps it isn't, and the problem varies from store to store or manager to manager or even from day to day, and Applebee's isn't liable on a classwide basis. That is the question the district court should have been investigating, and should be the basis on whether class certification is granted.

By Richard A. Epstein

The recent Supreme Court decision in Comcast v. Behrend is not likely to attract much popular press. The case is worlds apart from the Court's highly publicized class-action decision in Wal-Mart v. Dukes, which addressed burning issues of workplace parity between men and women. In contrast, Behrend reads like a quintessential technical case reserved for class action gurus and antitrust professionals. But on closer look, it may well turn out to be much more.

The Factual Background In Behrend, the plaintiffs allege that the cable company Comcast is violating the Sherman Act through its "clustering" program. Under that program, the company swaps its facilities in areas where it has a low concentration of customers to other cable TV companies, in exchange for those companies' facilities in regions where Comcast has a higher customer concentration. One such area was the Philadelphia Metropolitan Region, where, as Justice Scalia reports in his five-member majority opinion:

In 2001, [Comcast] obtained Adelphia Communications' cable systems in the Philadelphia DMA, along with its 464,000 subscribers; in exchange, petitioners sold to Adelphia their systems in Palm Beach, Florida, and Los Angeles, California. As a result of nine clustering transactions, petitioners' share of subscribers in the region allegedly increased from 23.9 percent in 1998 to 69.5 percent in 2007.

These numbers suggest that Comcast had acquired a dominant position in the geographically discrete Philadelphia market, which under orthodox theory should allow it to raise prices above the competitive level, holding service quality constant. On the other side of the scale is the prospect that Comcast generated various kinds of operating efficiencies that could offset, either in whole or in part, the social welfare loss from higher market concentration.

Even this brief summary reveals that any individual plaintiff in the Philadelphia DMA could face a unique set of considerations to the extent that they subscribe to different systems in different geographical markets. Nothing about this overall pattern indicates that the Comcast clustering strategy should have the same antitrust effect across various submarkets. In some submarkets, the concentrations may not rise up to dangerous levels. In others they will be more severe. But the overall 46 percent increase makes it highly likely that some real negative effects occurred in at least some, and perhaps many, of these submarkets. The fact that swaps instead of direct purchases were used to achieve these concentration levels is irrelevant to the Sherman antitrust issues. The short statement of fact shows that something is afoot. The question is what to do about it.

The Majority Response It is here that the plot thickens because of how the evidence was presented. The plaintiff introduced four different theories as to how the higher concentration hurt consumers. To quote Justice Scalia again:

First, Comcast's clustering made it profitable for Comcast to withhold local sports programming from its competitors, resulting in decreased market penetration by direct broadcast satellite providers. Second, Comcast's activities reduced the level of competition from "overbuilders," companies that build competing cable networks in areas where an incumbent cable company already operates. Third, Comcast reduced the level of "benchmark" competition on which cable customers rely to compare prices. Fourth, clustering increased Comcast's bargaining power relative to content providers. Each of these forms of impact, respondents alleged, increased cable subscription rates throughout the Philadelphia DMA.

None of these so-called theories leap out from the others. From this morass, however, the District Court held that only the overbuilding theory made any sense. Once that was done, the plaintiff introduced an expert analysis by Dr. James McClave that presented a "regression model comparing actual cable prices in the Philadelphia DMA with hypothetical prices that would have prevailed but for petitioners' allegedly anticompetitive activities," and which yielded a tidy sum of about $876 million in damages for the entire class. Justice Scalia speaking for the five conservative justices held that this procedure did not meet the exacting standards for class certification that apply uniformly to all issues under Rules 23(a) & (b), in this instance on the predominance requirement, by showing that the proof of individual antitrust injury could be established by evidence that was common to all class members. To Justice Scalia, the great sin of the plaintiff's proof is that it attempted to show the McClave model bore on the question of class certification just because it was relevant to establishing the damages in the case if the merits had been reached on the overbuiding theory. In his view, the fatal mismatch at the certification stage took place because the regression analysis did not relate exclusively to the single overbuilding theory that the District Judge had allowed into evidence.

An Alternative View A stinging dissent by Justices Ginsburg and Breyer claimed that the writ of certiorari was improvidently granted because of a set of procedural wrangles on the question presented that have been ably analyzed elsewhere, and need not be discussed again here. But the larger question that they raise is whether class actions can ever be brought in this fashion if the type of regression prepared by McClave is insufficient to meet a class-certification threshold. What follows is how I would defend this approach.

The District Court was not concerned that three of the plaintiff's theories for antitrust damage were struck because the regression in question picked up all the losses by comparing the price movements in areas where Comcast had a large concentration with those where it did not. In my mind, the regression asked just the right question for estimating these damages. Unfortunately, the decision of the District Court raised an unnecessary damages kerfuffle by treating the four different lines of proof as though they were separate and distinct, such that the plaintiffs had to win on one or all of them. I regard that as a mistake. Properly understood, this case should have been able to go forward on an antitrust theory even if the District Judge had concluded that none of the four mechanisms identified by the plaintiff drove up the price of services to monopoly level.

The ultimate question in these cases is whether the price increase was attributable to the added concentration, and for that question the regressions have to be admitted because they apply to the class as a whole. The information on the four possible sources of the increase should not be looked at in the alternative; if examined at all, the theories should be treated at most as cumulative descriptive evidence that is weaker in kind than the quantitative evidence in the regression itself. It is therefore a plus that the regression is not tied to the overbuilding theory. If this analysis is correct, it is mistaken to insist that the harms suffered by the plaintiff class do not derive from the distinctive overbuilding theory put forward by the plaintiff. Instead, the numbers tell the key story, as each of the four theories mentioned could offer a partial explanation as to the subsidiary question of how the antitrust injury came to pass.

At this point, the relevant choices should be stark, given the limitations of regression analysis. No matter what regression is used, it is still the case that all the individual members of a given class will suffer somewhat different injuries that could never be picked up or measured if each person were to bring his own separate lawsuit. But in this instance, the class action offers a better vehicle for analysis because it attempts to measure aggregate social harm. That calculation in turn sets the stage for determining optimal deterrence against a defendant, by taking the total amount of antitrust injury that their actions caused and dividing it among the plaintiffs in a form that is certain not to reflect the exact injuries that each member of the class sustained. Yet at the same time, these errors do not systematically favor any identifiable class members and thus tend to cancel out. Allowing averaging across the plaintiffs, therefore, does improve the position of every member of the class, for each does far better off with a pro rata recovery than with nothing at all.

Why Class Actions Anyhow? These observations only go to show that the class action in the context of many smallish harms has a hidden advantage over individual law suits when precise estimates of individual harms are not possible. It still leaves open the prior question as to whether the proper antitrust response is through any kind of damage action. The transactions between Comcast and its trading partners were all matter of public record, and it could have been possible to vet the transaction for its positive and negative effects by some kind of pre-clearance procedure that sought to address any net consumer welfare losses that derived from the swaps. But if that is not done, then it seems odd to kill the private right of action by forcing the plaintiff to take what surely seems an unnecessary step in these cases, namely pleading the particular type of evidence that they use to establish the injury in question. So at this juncture, it is hard to predict what will be made of Behrend. Will it be treated as a misadventure in pleading or a major revolution in the proof of damages in consumer class actions? Only time will tell.

Whirlpool v. Glazer - PointOfLaw Forum

The Sixth Circuit, in a decision that pays only lip service to Wal-Mart v. Dukes while ignoring its requirements for finding commonality, affirmed the certification of a single Ohio class in a consumer-fraud class action against Whirlpool over 21 different models of front-loading washers over a nine-year class period. Like every other environmentally-friendly energy-and-water-saving front-loading washer, Whirlpool washers, if not properly maintained, have a small percentage chance (and a slightly larger chance than for the old technology of top-loading washers) of generating unpleasant odors from laundry residue: does that create compensable injury for purchasers who never suffered this problem? Of course, as in many class actions, the attorneys are less interested in consumer redress for nonexistent harms, so much as imposing litigation expense that would prompt a settlement payment to the attorneys. In a Washington Times op-ed, Tiger Joyce complains "Beyond the urgent question of class certification, the 6th Circuit's opinion being appealed also establishes a radical new theory of product liability. In essence, it says that even if just one buyer of a manufactured product might one day become dissatisfied with the product, even if proper product maintenance would have prevented that dissatisfaction, and even if the product is otherwise widely and enthusiastically embraced in the marketplace, everyone who ever bought the product has, by definition, been overcharged and can be joined in a class action against the manufacturer." The theory is analogous to a fraud-on-the-market theory in securities law transposed to consumer law. Of course, one buys securities to make money, while one buys washing machines to wash clothes. If your clothes are washed satisfactorily, have you really been injured any more than by the fact that you mistakenly failed to buy your washer at Sears instead of Best Buy and inadvertently paid too much?

Of course, this particular question of Ohio law and public policy isn't before the Supreme Court, which generally doesn't intervene in error-correction of federal interpretations of state law, though there is an attempt to resuscitate the First American Federal question of class standing that the Supreme Court chose not to resolve last year in the cert brief itself. This case does not seem like the best of vehicles to make that stand.

But the commonality issue certainly seems cert-worthy, and even GVR-worthy. In terms of the certification, it's hard to see a common issue, given the different designs and different states of manufacturer and consumer knowledge over that time, and the Sixth Circuit opinion doesn't even try to distinguish Dukes. How is Whirlpool supposed to defend itself in a trial over such a wide-ranging class? Note that, while this is "just" a class action over Ohio consumers and Whirlpool washers, the same sort of case is being brought against every washer manufacturer.

I don't quite understand Joyce's reasoning in claiming "the future of all manufacturing in the United States hangs in the balance"—foreign manufacturers selling here will get sued just the same as American manufacturers will. It is, however, a litigation tax on consumers who face higher prices to compensate for the expense of lawsuits like this, and thus a wealth transfer from middle-class consumers to wealthy lawyers.

More: cert petition; Chamber amicus; PLAC amicus; PLF amicus; Wajert; PLF; Karlsgodt. The matter (No. 12-322) was to come up for conference Friday, but the Court has requested a response from the respondents, which is a better-than-average, though not dispositive, sign.

The state Supreme Court has agreed to hear an appeal on whether a $187.6 million class action award against retail titan Wal-Mart over allegations that its Pennsylvania employees were not properly compensated for off-the-clock work and missed rest breaks violated Pennsylvania law.

The court granted allocatur on "whether, in a purported class action tried to verdict, it violates Pennsylvania law (including the Pennsylvania Rules of Civil Procedure) to subject Wal-Mart to a 'trial by formula' that relieves plaintiffs of their burden to produce classwide 'common' evidence on key elements of their claims."

Plaintiffs, however, dispute that there was a trial by formula in the first place. It's one or the other. Unfortunately, the Legal Intelligencer doesn't tell us which side is lying. One reading the Superior Court description of the evidence might come to the conclusion that it is the plaintiffs, but perhaps the quotation of witnesses using statistical evidence to calculate damages was one of the errors of the Superior Court opinion. The Pennsylvania Supreme Court punted on this question last year in Samuel-Bassett v. Kia Motors. Of course, extrapolating from data to decide individualized issues was criticized in the Dukes case last year, and creates due process concerns, so plaintiffs' attorneys' bluster that this will necessarily be decided on state-law grounds with no hope of appeal to the U.S. Supreme Court suggests whistling past the graveyard. But, again, the Legal Intelligencer doesn't call them on this.

Though Wal-Mart had a policy of disciplining managers who violated the company's internal rest-break rules, the jury was asked to find (and did find) that Wal-Mart's policy of seeking to reduce labor expenses—i.e., the same policy that every business has—acted to trump this and incentivized managers to shortchange employees. Thus, this rationalized a finding of "bad faith" that entitled the plaintiffs to $62 million in liquidated damages. It's hard to see how this does not transform the "good faith" defense into simple de facto strict liability, if such a flimsy theory can provide a bad-faith finding, but the Pennsylvania Supreme Court is not considering this issue.

Earlier on POL: March 2007; October 2007. More: Wajert. And as Kantke notes, the court upheld a finding that the Wal-Mart employee handbook created contractual obligations that led to liability, despite the handbook explicitly disclaiming that it was a contract.

"Equal Opportunity Employment Restoration Act" - PointOfLaw Forum

S. 3317, introduced by Al Franken, is intended to undo Wal-Mart v. Dukes, but is largely an incoherent mess that strips both plaintiffs and defendants of important constitutional protections through a "group action" process replacing Rule 23; it is of dubious constitutionality. As Andrew Trask points out in a similar critique,

it appears that the primary benefit of this bill is rhetorical: it allows Democratic legislators to claim that they are standing up for civil rights, while not really standing a chance of amending Rule 23 in any significant way. Instead, they can claim that they tried to address the primary talking points of Dukes critics, and were stymied.

So Senator Franken's proposal is a competent political tactic, but would make for a lousy solution to civil rights problems.

The bill does effectively create a substantive right to quotas by essentially prohibiting any other defense to an employment discrimination claim in front of the wrong judge.

Cobell v. Salazar (D.C. Cir. 2012) - PointOfLaw Forum

I'm disappointed by Tuesday's decision in Cobell v. Salazar, the first time I ever lost a federal appeal I've argued. (Of course, as always, the Center for Class Action Fairness is not affiliated with the Manhattan Institute.) [Briefing; Coverage: DC Circuit Review; BLT; ICTMN; AP; Reuters; Cronkite; McClatchy; Oklahoman; wildly inaccurate KFBB.]

Sherry on Dukes and Concepcion - PointOfLaw Forum

A new paper by Suzanna Sherry (h/t M.G.), argues that overreaching and greed by plaintiffs' lawyers resulted in adverse precedent:

Class action plaintiffs lost two major five-to-four cases last Term, with potentially significant consequences for future class litigation: AT&T Mobility v. Concepcion and Wal-Mart v. Dukes. The tragedy is that the impact of each of these cases might have been avoided had the plaintiffs' lawyers, the lower courts, and the dissenting Justices not overreached. In this Article, I argue that those on the losing side insisted on broad and untenable positions and thereby set themselves up for an equally broad defeat; they got greedy and suffered the inevitable consequences. Unfortunately, the consequences will redound to the detriment of many other potential litigants. And these two cases are not isolated tragedies; they provide a window into a larger problem of Rule 23. When plaintiffs' lawyers chart a course for future litigants, they may be tempted to frame issues broadly for the "big win" - with disastrous consequences. I suggest that it is up to the courts, and especially to those judges most sympathetic to the interests of class-action plaintiffs, to avoid the costs of lawyers' overreaching. That is exactly what the dissenting Justices (and the judges below) failed to do in these cases.

I'll repeat my earlier statements that the panic over Concepcion is wholly unwarranted: consumers will be far better off ex ante if vendors adopt consumer-friendly arbitration clauses like AT&T Mobility's, and many vendors will prefer the class action system to such generous arbitration clauses, so the death of the class action is a long ways away.

Around the web, April 11 - PointOfLaw Forum

  • Epstein on DOJ lawsuit against Apple. [Epstein @ Ricochet]
  • Replaying the Duke Lacrosse case at the New York Times with Patrick Witt's reputation; and why isn't there more of a scandal with Yale's abuse of an already abusive process? [KC Johnson @ MTC]
  • The federal prosecutorial overuse of ยง1001 charges, turning minor civil regulatory violations into federal felonies. [WSJ]
  • PLF speaks out against the ridiculous Toyota sudden acceleration class action litigation in the Ninth Circuit. [PLF]
  • Lawsuit against Iowa government alleges subconscious discrimination based on disparate impact, using theory rejected in Wal-Mart v. Dukes. [Overlawyered; Sailer]

  • Ohio Supreme Court urged to review abusive certification of class action in Cullen v. State Farm, where, speaking of Wal-Mart v. Dukes, lower courts disregarded individualized defenses. [WLF; ATRA; WLF brief]
  • Why the Supreme Court should curb the Alien Tort Statute. [Bellinger @ WaPo; Overlawyered; related @ Volokh]
  • New Hampshire "early offer" statute proposed. [TortsProf; SeaCoast Online]
  • Nearly half of the Warren Court justices were infrequent questioners (and Ruth Bader Ginsburg has fallen asleep during oral argument), but that Clarence Thomas is uniquely quiet among the historically unusually hot bench of the current Supreme Court is somehow evidence that he's a bad justice. [Drumm via Alkon]
  • Remember Obama Girl? She's shilling for a Kentucky Social Security disability lawyer now. [YouTube (h/t R.U.)]

Around the web, March 13 - PointOfLaw Forum

  • Who says Wal-Mart v. Dukes ends class actions—or even employment class actions? Certainly not Richard Posner. [McReynolds v. Merrill Lynch; Trask; Karlsgodt; Seyfarth Shaw; Baker Hostetler; WSJ Law Blog; earlier at POL]

  • Richard Epstein on safety nets: "These can cushion individuals from shock in the short run, but the balance is not sustainable in the long run. Too many people climb into the nets, leaving too few productive individuals to support them." [Hoover]
  • Charity auction for Friars Club doesn't deliver on the promised goods of Oscar tickets, so not only refunds purchasers their $27,000 purchase price, but offered them first-class roundtrip airfare and a luxury hotel stay. Not good enough, say plaintiffs, who hire BigLaw firm to sue for $250,000 in damages including "intentional infliction of emotional distress." [Am Law Daily]
  • Mazie Slater attempt to free ride on class action ex-partners litigated doesn't fly with New Jersey federal judge. [Lawyers USA]
  • EDNY magistrate shoots down defendant's request for plaintiff's log-in information for Facebook and other social network sites. Such an overbroad request and intrusion on privacy can deter plaintiffs from bringing legitimate actions, so this is a good ruling. But let's see judges recognize the problems caused by overbreadth in the other direction. [Turkewitz]
  • Coverage of Chevron/Ecuador $18 billion Lago Agrio judgment. Theodore Boutros notes that the ability of Ecaudorian President Rafael Correa to silence a critical newspaper with a criminal libel prosecution demonstrates the corrupt judiciary of Ecuador. [Boutros @ Forbes; Mastro video interview @ WSJ; California Lawyer]
  • For all the complaints about working conditions at Foxconn (which do seem very unpleasant), Chinese workers prefer it to other alternatives. [Atlantic]
  • The Landlord's Tale. [CJ]

Herzfeld & Rubin, Volkswagen, and Stockholm Syndrome - PointOfLaw Forum

I've noted before that one of the things that's surprised me most about my practice with the Center for Class Action Fairness (which, as always, is not affiliated with the Manhattan Institute) is how often law firms representing defendants will seek to lose the war to win exceedingly tiny battles at the long-term disadvantage of all of their corporate clients, including the one in the case.

Herzfeld & Rubin represents a number of Fortune 500 clients, including Volkswagen. For reasons that remain utterly inexplicable to me, they negotiated a settlement that arbitrarily excluded a million vehicles in the settlement class from receiving any pecuniary relief, while other class members were entitled to reimbursements of over $1000. My clients objected to the illegal intra-class disparities in the distribution, and, though VW should hypothetically be economically indifferent as to which class members receive which relief from a settlement fund they've already committed to pay, they've spent a lot of VW's money defending that distribution tooth and nail. We've argued that it made no sense to treat identically situated vehicles in a single settlement class differently: if a 1997 Audi and a 2009 Touareg are in the same class with the same claim and the same damages, there's no reason that the owner of the older Audi should get full reimbursement while the Touareg owner gets nothing. This isn't some odd right-wing ideological view of class actions; Public Citizen takes the same position about the same settlement. And if the argument is that it's okay to treat the uncertified "subclasses" differently because they're differently situated and have different individualized chances of success at trial, then there is obviously a Rule 23(a)(2) commonality problem that should preclude certification of the single settlement class.

This week, Herzfeld & Rubin has filed a brief defending the settlement by asking the Third Circuit to essentially eviscerate the Wal-Mart v. Dukes commonality requirements. Why would a defense law firm ask a court to take such a position ultimately so harmful to defendants' rights? Set aside an abusive personal attack that they made on me by name in an earlier appellate brief. Set aside that Sullivan v. DB Investments questionably narrowed Wal-Mart and other Supreme Court precedent: Herzfeld & Rubin is asking the court to make a questionable extension of Sullivan, a case that actually supports reversal. It would be one thing if this was just myopia of seeking a short-term result against long-term interests, but CCAF's argument against the settlement is largely irrelevant to VW's bottom line in this one case. It's a question of whether class members will get reimbursed or whether there will be leftover money in the settlement fund that will go to an unrelated charity some time in 2015; at worst to Volkswagen, a reversal will result in a wealth transfer from 1997 Audi owners to 2009 Touareg owners, and VW will, for interests of customer relations, make up the difference to Audi owners out of its own pocket. This is just seeking Pyrrhic victory for the sake of Pyrrhic victory: a notch in defense counsel's belt at the expense of their clients. And, of course, elimination of the commonality requirement is good for class-action defense firms, if not their clients.

Perhaps the fault is that of a general counsel who doesn't want to have to explain to his boss that a settlement needs to be renegotiated. But corporations are ill-served if their general counsels are not doing long-term strategic thinking. And they're worse served if their defense counsel is looking out for its own mercenary interests rather than the long-term interests of its clients.

In the Cobell v. Salazar Indian trust class action settlement, class counsel made unrealistic promises to the class about when money from that settlement would be distributed. With over four separate appeals, including one from my client, Kimberly Craven, and post-fairness-hearing motions about whether the lead representative plaintiff, Elouise Cobell, was personally entitled to another $10.5 million from the settlement fund, the money has not yet been distributed, and class members are asking questions, including why there are appeals. Class counsel could simply make the briefing publicly available, or even summarize their arguments against the appeal. Instead, they announced falsely January 20 that the appealing objectors "each believes that you are not entitled to the relief (nor the payment of your trust funds) that has been provided in the settlement agreement," and then provided the addresses and phone numbers of the appellants and invited the hundreds of thousands of class members to contact the objectors. (The allegation is especially ironic, given that it is the class counsel who has defended the settlement approval and their $99 million fee (and $2.5 million in incentive payments to the class representatives) by arguing that class members are not entitled to anything, so anything they get makes the settlement fair, notwithstanding objectors' claims of intra-class conflicts and complaints that the settlement violates Wal-Mart v. Dukes in multiple ways.)

Fortunately for the cause of justice, the appellants are not so easily silenced by such unprecedented intimidation tactics. I'm quoted in two of the stories. [Indian Country Today; AP/WaPo; Lincoln Journal-Star]

Wherein George Soros wastes his money - PointOfLaw Forum

At Media Matters, David Lyle is critical of my post about Michael Greve's new paper. But he exhibits no evidence of having read Greve's paper: he just asserts that it's wrong, without addressing the Commerce Clause issues Greve raises, much less the century and a half of Supreme Court precedent Greve discusses in support of his contentions.

Lyle is also critical of me because I correctly noted that the Court is not pro-business by any reasonable qualitative standard by... asserting the same flawed quantitative statistics that I had previously refuted as meaningless. Does Lyle address that refutation? Nope! He just repeats the assertion and pretends I never said anything about it, incorrectly insinuating that I was unaware of the argument.

Lyle does point to AT&T v. Concepcion and the unanimous decision in Wal-Mart v. Dukes, though he has no criticism of these decisions other than the result that they came out the way the Chamber of Commerce wanted. Of course, these are examples of the Supreme Court correctly applying the law to reverse the anti-business Ninth Circuit; in both instances, the decisions are good for consumers and employees, if bad for the litigation lobby special interest that Media Matters is for some reason mindlessly parroting. The fact that Media Matters has only snark on their side, rather than substance, is revealing.

CEI amicus in Cobell v. Salazar Indian trust appeal - PointOfLaw Forum

The Competitive Enterprise Institute has filed an amicus brief opposing the $3.4 billion settlement in the Cobell v. Salazar Indian trust case. The lead brief author, Andrew Trask, has written on Wal-Mart v. Dukes, a critical precedent in this case, for the Cato Supreme Court Review, and is the co-author of The Class Action Playbook. [BLT]

Opening brief filed in Cobell v. Salazar - PointOfLaw Forum

The Center for Class Action Fairness LLC filed its opening brief today in the DC Circuit in Cobell v. Salazar, No. 11-5205. The case, relating to the $3.4 billion government settlement of Indian trust mismanagement claims, raises important issues regarding class members' rights in class action settlements; whether it is permissible to abrogate some class members' individual rights while giving other class members a windfall; whether one can impose a mandatory class upon a wholly monetary settlement by characterizing the monetary relief as "equitable"; the appropriateness of certifying a unitary class involving dozens of different types of claims; the extent to which Congress can abrogate the protections of Rule 23; and whether it is an impermissible conflict of interest for a class representative to request an incentive award of $13 million. It's an important case for delineating the scope of Wal-Mart v. Dukes.

Which raises an interesting issue. The plaintiffs' attorneys, Kilpatrick Townsend, hoping to defend a fee award between $99 and $111 million (some of which will be shared with other attorneys), are now placed in the position of arguing for a narrow construction of Wal-Mart v. Dukes—so narrow as that they will need the D.C. Circuit to essentially find that that precedent has no effect, because plaintiffs cannot possibly win an affirmance consistent with Wal-Mart. Kilpatrick's clients include Adidas, BellSouth, British Petroleum, Chrysler, Delta Air, Dupont, General Electric, Google, Office Depot, Pepsi, and Sony—all of whom would be adversely affected if Kilpatrick Townsend wins this case in the DC Circuit. I've previously complained that Fortune 500 companies are more concerned about political correctness in their law firms than whether those firms are taking litigation positions harmful to their own long-term interests, and this case provides another remarkable example of a BigLaw firm putting its own financial interests ahead of its clients. General counsels should pay much more attention to whom they're giving their business to: they should do more to insist that their outside defense firms are really defense firms that believe in their clients' rights, rather than mercenaries that happen to represent defendants in a particular case.

(CCAF is not affiliated with the Manhattan Institute.)

Around the web, August 15 - PointOfLaw Forum

  • You probably heard that the Eleventh Circuit overturned part of PPACA. The nifty aspect of that is that, because the PPACA challengers lost on the issue of severability, they can appeal directly to the Supreme Court, forcing a cross-appeal to the Supreme Court, and ensuring that the Obama administration can't delay Supreme Court consideration past the 2012 election. The deciding vote was Clinton appointee Frank Hull. [Kerr @ Volokh; Adler @ Volokh; SCOTUSblog; Florida v. HHS; related: Richard Epstein]
  • Trask on Scruggs biography The Fall of the House of Zeus
  • California litigation lobby targets arbitration agreements in AB 1062. [BLD; ACIC]
  • The late Richard Nagareda's influence on Wal-Mart v. Dukes. [Frankel]
  • Olson on age discrimination laws. [Reason]
  • Texas bank focuses on small business loans even as economy hurts from drying up of credit in that area; naturally, federal regulators complain. Bank decides to go Galt to escape regulation and focus on its business absent FDIC insurance. [WSJ]
  • Utah trial court rejects "negligent directions" claim against Google brought by woman who walked into traffic. [Volokh]
  • How riots start, and how they can be stopped. [Glaeser]
  • Who lost the middle class? [City Journal]

Wal-Mart v. Dukes not end of world - PointOfLaw Forum

For all the hyperbole of how Wal-Mart v. Dukes closed the door of the courthouse to employment plaintiffs, it just ain't so: it only affected one implausible theory of disparate-impact liability and the tendency of some courts to certify classes even when doing so was wildly inappropriate. Thus, Reuters discovers that many employment class actions are proceeding apace after the Wal-Mart decision.

Copland on Wal-Mart v. Dukes - PointOfLaw Forum

Yesterday, MI's own Jim Copland spoke with Jim Blasingame on the Small Business Advocate radio show about Wal-Mart v. Dukes: Part 1 and Part 2.

What pro-business court? It was generally viewed as a good sign for the Rule of Law when Justice Scalia stayed judgment in a Louisiana class action that ran roughshod over the due process clause in awarding $270 million for a smoking cessation program, and it was generally expected that, at a minimum, the Court would remand the case for reconsideration in light of Dukes, but, in a move that surprises me, the Court simply denied certiorari today, letting the verdict stand. [Bloomberg]

Around the web, June 27 - PointOfLaw Forum

  • Some of the better Wal-Mart v. Dukes commentary and analysis—and don't miss my podcast. [Trask; Beck; Karlsgodt; Olson @ Cato; Olson @ Phil. Inquirer; Bloomberg; NYT; WSJ; Examiner; Bader; Omaha World-Herald; Entrepreneur; WLF; earlier; elsewhere on POL]

  • Best Buy employment-discrimination class-action settlement: $200,000 for plaintiffs, $10 million for lawyers. [Minn. Bus. J.]
  • The perils of vague criminal statutes. [Silverglate @ Reason]

  • More on Congressional hearing on FCPA. [Richer/Kendrick]

  • Louisiana narrowly rejects automobile forfeiture sanctions for littering. [OL]
  • Taiwan court imposes heavy damages on web reviewer who complained about salty food at restaurant. [MR]

  • DC-area Supreme Court roundups: WLF; Heritage
  • Corpus Christi Judge Longoria ignores Texas state law to impose felony conviction on mother who spanked her child. [Corner]

  • Not satisfied with ruining our toilets and light-bulb choices, environmentalists place New York Times story presaging campaign to save energy at the cost of it taking two minutes for our cable televisions to turn on. This seems awfully counterproductive: just as people now flush the toilet more often, people are going to respond to the inconvenience by keeping their televisions on all day. [NYT]

  • Our nation Depends on the TSA: Northwest Florida Regional Airport security officials keep us safe from 95-year-old invalid woman with leukemia by requiring her to remove her adult diaper. [NWF Daily News; CNN]

2 3