Bring your checkbook

Today resumes the series on take-aways from the epic case of Comcast Corp. v. Behrend — an antitrust class action that began more than a dozen years ago, produced dozens of opinions, and survived a loss in the U.S. Supreme Court before ending in a $50 million settlement, the benefits of which class members started receiving last month.

Today’s lesson underscores a harsh reality — and one that critics of class actions tend to forget: Class actions cost class counsel not only their time but also their money, potentially large quantities of it.

The Comcast example

In the Comcast case, for instance, class counsel fronted more than $8.5 million in expenses (plus  a multiple of that in time).

As you can see in the chart below, the biggest chunk ($6.7 million) went to pay for the help of our (superb) expert witnesses. Other big-ticket items consisted of class notices and claims administration, travel, research, and photocopying.

How do you spend so much money on expert witnesses?

Simple. As the U.S. Supreme Court and the courts of appeals produced rulings that made achieving and holding a class certification order increasingly difficult, we had to litigate class certification in Comcast over and over again — at least five times. The upshot was that experts on both sides generated more than 30 reports.* Experts in economics and econometrics also testified at length during a four-day evidentiary hearing.

What to expect

We did not think we would have to carry such a heavy burden when the case started in December 2003. Until then, class certification proceedings had not required such huge outlays of funds.

But when you agree to serve as class counsel, you don’t have the option of walking away from a case if it proves more costly than you anticipated. For one thing, you have to answer to the district court, which acts as a fiduciary to the class and oversees the work of class counsel.

You must also take into account the reputational effects that appearing to walk away from a class case could bring. Judges and other plaintiffs’ firms may look skeptically at your next bid to serve as co-lead counsel in a class case. Worse, defendants might start thinking of you as a push-over.

Staying in the vanguard

If you do have both the means and the will to finance the vigorous prosecution of a big and long-running class action case, you can stand in the front ranks of firms that vie for leadership positions in class cases.

You’ll take some losses along the way. Although class counsel will recoup expenses in Comcast, we will not recover from the $50 million settlement more than a small fraction of the value of our time.

We did our job. No regrets.