The question of who belongs in a class action deserves a lot of think about it time. A good class definition may save class plaintiffs lots of trouble in winning certification of the class — a do-or-die event in the life of the class action.
For more than 40 years, you could wait (and wait and wait) to decide whether or not to opt out of a class action in order to pursue your own individual case. You didn’t have to squawk until (1) you got formal notice of your right to remove yourself from the class and (b) you failed to timely respond by saying “I opt out. Leave me alone. I would rather do it myself! More money for me!!”
But the thing that gave you leisure — American Pipe tolling — went partially poof last week. The Supreme Court ruled 5-4 (with Gorsuch in the role of Scalia) that tolling may apply to a statute of “limitations” but doesn’t stop the tick-tock under a statute of “repose”. California Public Employees’ Retirement Sys. v. ANZ Securities, Inc., No. 16-373 (U.S. June 26, 2017).
Wake up, people! You may need to move fast.
The place of suit matters a lot in civil cases. Suing at home helps the plaintiff — by keeping her costs low, giving her comfort that local judges and juries will give her fair treatment, and throwing out-of-town defendants off balance. All of that bigly boosts the plaintiff’s chances of success.
But a trio of recent U.S. Supreme Court rulings promise to make plaintiffs’ home fields more like patches of weeds than acres of sweet verdance. Continue Reading
In the last quarter-century and more, no current member of the Supreme Court tried a lawsuit of any kind to a judge or jury. Almost none of the justices has ever tried a civil case to verdict. And before their honors became appellate judges, only one of their number served as a full-time trial judge.
Does the justices’ nearly total lack of trial-lawyer chops matter? Has the almost utter absence of actual trial experience in fact degraded the quality of civil justice? And will confirming the nomination of a former trial lawyer like Neil Gorsuch make a difference?
Class actions can save courts and parties a lot of time and money. But what if the class includes just a few members? How much time and money will the class action device save then?
The Third Circuit grappled with that “numerosity” question in In re Modafinil Antitrust Litig., 837 F.3d 238 (3d Cir. 2016).
The answer it gave — that a class with 20+/- mostly big members may not pass the test — could reshape how courts handle antitrust cases worth billions of dollars.
Many voters believed that the major U.S. political parties offered them two disappointing choices for President this year.
Although their reasons for disparaging their options varied from voter to voter, a rough consensus emerged about the candidates’ relative riskiness. While one had served in public office for decades, the other had never done any government work. At least in terms of familiarity with the job, the first seemed safe, the other risky.
But in the Electoral College, the “safe” one lost, and the “risky” one prevailed.
You’ll have many thoughts on how to answer that question. You can find plenty of opinions anywhere you look.
But as a trial lawyer, I have a particular interest in one possible, if partial, explanation:
Does a cognitive tendency in our brains push us towards risk (or perhaps away from it) when we face a set of alternatives that we perceive as negative? Continue Reading
In 2014, the ABA Journal called the Fifth Circuit the “nation’s most divisive, controversial and conservative appeals court”. Liberal blog Jezebel deemed it “exceedingly conservative”. Even The Wall Street Journal described the court this year as “conservative-leaning”.
But in a recent case over limits on voting rights, the court ruled for the left-leaning opponents of the restrictions. And last week, the court sitting en banc voted 11-5 to revive a $250+ million class action. Torres v. S.G.E. Management, L.L.C., No. 14-20128 (5th Cir. Sept. 30, 2016) (en banc).
Has the court’s center of gravity shifted?
Rhetoric and flattery
Bryan Garsten, Yale professer of Political Science, wrote a book in 2006 on rhetoric — Saving Persuasion: A Defense of Rhetoric and Judgment — and in it said this:
Aristotle argued that when citizens sat as jurors, they listened with an ear for gratification . . . and let their own feelings of pleasure or pain . . . distort their judgment. He accused jurors of wanting to be charmed by charismatic speakers.
Professor Garsten contrasted Artistotle’s disdain for rhetoric that aimed mainly to flatter the decision-makers — the ancient Greek deemed it the “judicial” kind — with his greater faith in “deliberative” rhetoric.
How did they differ? As Professor Garsten explained:
What seems to have led a deliberator to guard against succumbing to irrelevant appeals in this account was that he was considering matters that affected his own interests. Having his own good at stake exerted an influence on the direction of his thought, perhaps acting as an anchor pulling him back to the matter at hand, as a standard against which he could easily measure the worth of various arguments and feelings, and as a motivation to pay attention. Because he was an interested party, a deliberator applied his interest as a criterion in making his judgments, basing his judgments on his determination of what was good for him.
The presidential debate
On the eve of a high-stakes presidential debate, the dichotomy between judicial and deliberative rhetoric raises a question about what the debaters should aim for — flattery or substance?
Professor Garsten offered more than a hint over the weekend in an op-ed he wrote for The Wall Street Journal. The Journal titled it “The Sad State of American Debate”.
Professor Garsten started by noting that the “forum itself is flawed” as a means for debate of substantive issues. In the balance of the piece, he explained that the impending face-off between Hillary Clinton and Donald Trump will “float free from the pressures of our governing institutions” and will therefore fail to produce something that “is actually a part of self-government.”
What does that imply about the debate? It suggests that the true merits of concrete policy choices will get little play precisely because the debate involves more of a judicial setting than a deliberative one. If voters perceive that their votes have no direct effect on their “own good”, their choices will likely depend much more on the candidates’ ability to flatter, charm, gratify, make irrelevant appeals to, and evoke feelings of pleasure or pain in the audience.
What to look for
When you watch the debate tonight (or snippets of it later when analysts chew it over), consider whether and how much the candidates adopted a strategy of flattering voters. Did they assure the voting public of its greatness, whether inherently as true Americans or as a result of their willingness to strengthen the American experiment through diversity? Did they project respect of and express affection for some or all of their fellow citizens? Or did they parse the objective merits of particular policy choices?
In Napoleon Dynamite (2004), Napoleon’s friend Pedro ran a long-shot campaign for Class President against cheerleader Summer. After Napoleon wowed the class with a dance routine, Pedro ended his speech with this:
Vote for me, and all your wildest dreams will come true.
If Pedro’s pitch sounds familiar, Professor Garsten has reminded us, it’s hardly new.
A price-fixer cheats his buyers, but he may also do something worse — frighten them into doing nothing about it.
Last week, the Third Circuit made a ruling that will calm victims’ fears. Instead of bringing a claim they don’t want to prosecute, the court held, they may freely assign it to someone who does. And they may do so with or without payment for the assignment.
The case that produced the decision arose from an effort by Eaton Corporation, the dominant maker of heavy-duty truck transmissions, to squelch competition by an upstart, ZF Meritor. Tauro Brothers Trucking sued Eaton for treble damages under sections 1 and 2 of the Sherman Act. Tauro alleged that Eaton had killed ZF Meritor with contract terms that tied buyers exclusively to Eaton.
But four years into the case, Eaton moved to dismiss on the ground that Tauro lacked standing to sue. Because Tauro did not buy transmissions directly from Eaton, the motion argued, it failed to meet the Supreme Court’s limitation on antitrust standing in Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), to direct buyers.
Tauro replied that it had a valid assignment from R&R, a firm that sold Eaton transmissions to Tauro after buying them directly from Eaton.
The district court granted the motion, holding the assignment no good on the ground that Tauro gave R&R nothing for it. A valid assignment, the court held, required “consideration”.
The Third Circuit reversed.
It started by stressing that “federal common law” — not state law — governed the question of what makes an assignment of federal antitrust claims valid. Wallach v. Eaton Corp., No. 15-3320, slip op. at 15 n.11 and accompanying text.
The panel next adopted the American Law Institute’s Restatement (Second) of Contracts (1981) “as a starting point for fashioning rules of federal common law” regarding the validity of antitrust claim assignments. Id. at 20.
Because the Restatement does not require the owner of a right of action to receive something in return for assigning it, the court held, the lack of consideration for R&R’s express assignment to Tauro did not matter. Tauro had standing. Id. at 28-29.
The panel supported its ruling on the ground that it will aid enforcement of antitrust law. Their honors noted:
Part of creating incentives for private antitrust suits is making federal courts a welcome forum for such litigation, and erecting the barrier of consideration threatens to shut out otherwise meritorious suits from resolution. True, in some circumstances, consideration could spur such private suits because an assignee who pays valuable consideration for the right to sue might be more likely to actually bring suit in order to recoup its investment. But in situations like the one at issue in this case, if a direct purchaser is uninterested in pursuing its claims, whether because it deems them valueless or because it cannot afford the expense of litigation, an otherwise willing and interested assignee might be discouraged from pursuing the suit in the direct purchaser’s stead if it were required to provide consideration.
Id. at 26.
The court did not point out that “the expense of litigation” may include concern about the direct buyer’s ongoing relationship with her supplier, the Sherman Act violator. But I hear questions about the effect of bringing a case all the time. Will the powerful antitrust cartel take revenge?
An assignment can help take away worry. By transferring the claim to a third party, the direct purchaser puts distance between herself and the fight over the antitrust violation. She also avoids friction as well as expense and administrative burden of litigation, including party discovery.
As the court held in Wallach v. Eaton Corp., the claim owner may assign the antitrust claims without receiving consideration in return. But she also has the option of requiring some kind of payment. That may take the form of a lump-sum, but it may also consist of a right to a share of proceeds from litigation and settlement of the claims.
The Supreme Court has okayed assignments of federal claims to an entity that aggregates many claims and promises to pay proceeds, if any, to the assignors. Sprint Communications Co., L.P. v. APCC Services, Inc., 554 U.S. 269 (2008).
We left off last Monday in the middle of something — the Seventh Circuit’s latest proof of its leadership in the law of class actions.