Law Commons^™

Event-Driven Suits And The Rethinking Of Securities Litigation, Merritt B. Fox, Joshua Mitts

Faculty Scholarship

Event-driven securities suits-ones that arise after an issuer has experienced some kind of disaster-have become increasingly prevalent in recent years. These suits are based on the fraud-on-the-market doctrine, a doctrine that ultimately gives rise to the bulk of the damages paid out in settlements and judgments pursuant to private litigation under the U.S. securities laws. The theory behind fraud-on-the-market cases is that when an issuer's share price has been inflated by a Rule-10b-5-violating misstatement, investors who purchased shares at the inflated price have suffered a compensable injury if they still hold the shares after the inflation is gone. Although these …

Participatory Litigation: A New Framework For Impact Lawyering, Jules Lobel

Articles

This Article argues that the manner in which class-action and impact lawyers have traditionally litigated leaves little room for class participation in lawsuits, and that a new, participatory framework can and should be adopted. Through the story of a successful class-action suit challenging California’s use of prolonged solitary confinement in its prisons, the Article demonstrates that plaintiff participation is both possible and important.

Academic literature has assumed that broad plaintiff participation in class-action and impact litigation is not achievable. Yet this Article describes how, in a key California case, attorneys actively involved the plaintiffs in all aspects of the litigation: …

Ethical Duties Of Class Counsel Also Representing Class Representatives, Nancy J. Moore

Faculty Scholarship

In their excellent article entitled May Class Counsel Also Represent Lead Plaintiffs?,¹ Professors Bruce Green and Andrew Kent explore a particular aspect of two broader questions I have also addressed: (1) who should regulate class action lawyers;² and (2) who will regulate class action lawyers?³ I, too, focused on lawyers' conflicts of interest; however, Professors Green and Kent focus even more specifically on conflicts arising from class counsel's simultaneous representation of both the class and individual clients who are serving or will serve as class representatives. Their concern is with three particular scenarios in which the class …

Brief Of Complex Litigation Law Professors As Amici Curiae In Support Of Respondent, Myriam E. Gilles

Amicus Briefs

The amici are law professors who teach and write in the field of federal civil procedure and complex litigation. Amici share an interest in presenting this Court with an impartial view on the function of the class action and its relationship to the law of Article III justiciability to inform the question presented in this case.

A Fiduciary Judge's Guide To Awarding Fees In Class Actions, Brian T. Fitzpatrick

Vanderbilt Law School Faculty Publications

It is often said that judges act as fiduciaries for the absent class members in class action litigation. If we take this seriously, how then should judges award fees to the lawyers who represent these class members? The answer is to award fees the same way rational class members would want if they could do it on their own. In this Essay, I draw on economic models and data from the market for legal representation of sophisticated clients to describe what these fee practices should look like. Although more data from sophisticated clients is no doubt needed, what we do …

Follow The Money? A Proposed Approach For Disclosure Of Litigation Finance Agreements, Maya Steinitz

Faculty Scholarship

Litigation finance is the new and fast-growing practice by which a non-party funds a plaintiff’s litigation either for-profit or for some other motivation. Some estimates placed the size of the litigation finance market at 50–100 billion dollars. Both proponents and opponents of this newly -emergent phenomenon are in agreement that the it is the most important development in civil justice of this era. Litigation finance is already transforming civil litigation at the level of the single case as well as, incrementally, at the level of the civil justice system as a whole. It is also beginning to transform the way …

The Myth Of Morrison: Securities Fraud Litigation Against Foreign Issuers, Robert Bartlett, Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon

All Faculty Scholarship

Using a sample of 388 securities fraud lawsuits filed between 2002 and 2017 against foreign issuers, we examine the effect of the Supreme Court's decision in Morrison v. National Australia Bank Ltd. We find that the description of Morrison as a steamroller, substantially ending litigation against foreign issuers, is a myth. Instead, we find that Morrison did not significantly change the type of litigation brought against foreign issuers, which, both before and after this case, focused on foreign issuers with a U.S. listing and substantial U.S. trading volume. Although dismissal rates rose post-Morrison, we find no evidence …

Guidelines And Best Practices For Large And Mass-Tort Mdls (Second Edition), Bolch Judicial Institute

Bolch Judicial Institute Publications

Mass-tort MDLs dominate the federal civil docket, yet they present enormous challenges to transferee judges assigned to manage them. There is little official guidance and no rules specific to the management of mass-tort MDLs, often requiring the transferee judge to develop procedures out of whole cloth.

Beginning in 2013, the Bolch Judicial Institute (then the Center for Judicial Studies) sought to address this issue through a series of annual bench-bar conferences. From these conferences came the Guidelines and Best Practices for Large and Mass-Tort MDLs document — now in its Second Edition — which is designed to help judges and …

Taking A Second Look At Mdl Product Liability Settlements: Somebody Needs To Do It, Christopher B. Mueller

Publications

This Article examines the forces that lead to the settlement of product liability cases gathered under the MDL statute for pretrial. The MDL procedure is ill-suited to this use, and does not envision the gathering of the underlying cases as a means of finally resolving them. Motivational factors affecting judges and lawyers have produced these settlements, and the conditions out of which they arise do not give confidence that they are fair or adequate. This Article concedes that MDL settlements are likely here to stay, and argues that we need a mechanism to check such settlements for fairness and adequacy. …

Saving The Public Interest Class Action By Unpacking Theory And Doctrinal Functionality, Suzette M. Malveaux

Publications

No abstract provided.

The End Of Class Actions?, Brian T. Fitzpatrick

Vanderbilt Law School Faculty Publications

In this Article, I give a status report on the life expectancy of class action litigation following the Supreme Court's decisions in Concepcion and American Express. These decisions permitted corporations to opt out of class action liability through the use of arbitration clauses, and many commentators, myself included, predicted that they would eventually lead us down a road where class actions against businesses would be all but eliminated. Enough time has now passed to make an assessment of whether these predictions are coming to fruition. I find that, although there is not yet solid evidence that businesses have flocked to …

Future Claimants And The Quest For Global Peace, Rhonda Wasserman

Articles

n the mass tort context, the defendant typically seeks to resolve all of the claims against it in one fell swoop. But the defendant’s interest in global peace is often unattainable in cases involving future claimants – those individuals who have already been exposed to a toxic material or defective product, but whose injuries have not yet manifested sufficiently to support a claim or motivate them to pursue it. The class action vehicle cannot be used because it is impossible to provide reasonable notice and adequate representation to future claimants. Likewise, non-class aggregate settlements cannot be deployed because future claimants …

Segmented Settlements Are Not The Answer: A Response To Professor Squire’S Article, How Collective Settlements Camouflage The Costs Of Shareholder Lawsuits, Christopher C. French

Journal Articles

In his recent article, Professor Richard Squire offers a provocative theory in which he claims the underlying claimants in shareholder litigation against corporate policyholders are overcompensated due to what he describes as “cramdown” settlements, under which insurers are forced to settle due to the “duty to contribute” that arises under multi-layered directors and officers (“D&O”) insurance programs. He also offers a novel idea regarding how this problem could be fixed by what he refers to as “segmented” settlements in which each insurer and the policyholder would be allowed to settle separately and consider only its own interests in doing so. …

The Trouble With Basic: Price Distortion After Halliburton, Jill E. Fisch

All Faculty Scholarship

Many commentators credit the Supreme Court’s decision in Basic, Inc. v. Levinson, which allowed courts to presume reliance rather than requiring individualized proof, with spawning a vast industry of private securities fraud litigation. Today, the validity of Basic’s holding has come under attack as scholars have raised questions about the extent to which the capital markets are efficient. In truth, both these views are overstated. Basic’s adoption of the Fraud on the Market presumption reflected a retreat from prevailing lower court recognition that the application of a reliance requirement was inappropriate in the context of impersonal public …

Regulatory Litigation In The European Union: Does The U.S. Class Action Have A New Analogue?, S. I. Strong

Faculty Publications

This article is the first to consider the European resolution from a regulatory perspective, using a combination of new governance theory and equivalence functionalism to determine whether the European Union has adopted or is in the process of adopting a form of regulatory litigation. In so doing, the article considers a number of issues, including the basic definition of regulatory litigation, how class and collective relief can act as a regulatory mechanism and the special problems that arise when regulatory litigation is used in the transnational context. The article also includes a normative element, providing a number of suggestions on …

Regulatory Litigation In The European Union: Does The U.S. Class Action Have A New Analogue?, S. I. Strong

Faculty Articles

The United States has long embraced the concept of regulatory litigation, whereby individual litigants, often termed “private attorneys general,” are allowed to enforce certain public laws as a matter of institutional design. Although several types of regulatory litigation exist, the U.S. class action is often considered the paradigmatic model for this type of private regulation.

For years, the United States appeared to be the sole proponent of both regulatory litigation and large-scale litigation. However, in February 2012, the European Union dramatically reversed its existing policies toward mass claims resolution when the European Parliament adopted a resolution proposing to create a …

Secret Class Action Settlements, Rhonda Wasserman

Articles

This Article analyzes the phenomenon of secret class action settlements. To illustrate the practice, Part I undertakes a case study of a class action lawsuit that recently settled under seal. Part II seeks to ascertain the scope of the practice. Part II.A examines newspaper accounts describing class action settlements from around the country. Part II.B focuses on a single federal judicial district – the Western District of Pennsylvania – and seeks to ascertain the percentage of suits filed as class actions that were settled under seal. Having gained some understanding of the scope of the practice, the Article then seeks …

Aggregation, Community, And The Line Between, Elizabeth Chamblee Burch

Scholarly Works

As class-action theorists, we sometimes focus so heavily on the class certification threshold that we neglect to reassess the line itself. The current line asks whether procedurally aggregated individuals form a sufficiently cohesive group before the decision to sue. Given this symposium’s topic - the state of aggregate litigation and the boundaries of class actions in the decade after Amchem Products, Inc. v. Windsor and Ortiz v. Fibreboard Corp. - the time is ripe to challenge our assumptions about this line in non-class aggregation. Accordingly, this Article examines group cohesion and asks whether the current line is the only dividing …

Multinational Class Actions Under Federal Securities Law: Managing Jurisdictional Conflict, Hannah Buxbaum

Articles by Maurer Faculty

This article examines a form of securities class action that is growing increasingly popular in U.S. courts: the foreign cubed action, brought against a foreign issuer on behalf of a class that includes foreign investors who purchased securities on a foreign exchange. These cases are becoming an important part of the regulatory landscape (as evidenced by recent high-profile lawsuits involving issuers such as Vivendi, Bayer and Royal Ahold), and they create the potential for particularly severe conflict with other countries on the question of how best to regulate global economic activity. Yet they point out quite clearly that the traditional …

Designer Trials, Elizabeth G. Thornburg

Faculty Journal Articles and Book Chapters

This article considers the intersection of freedom of contract and the trials that have not vanished. Could contracting parties effectively agree in advance of a dispute that any litigation of the case will comply with certain rules? Would such an agreement be enforced even in a contract of adhesion? If so, parties with sufficient bargaining leverage could design away many of the characteristics of litigation that they find unappealing, without the need to resort to private processes. The result: a designer trial with the procedural deck stacked in favor of the party with the greatest pre-dispute bargaining power.

Such a …

Access To Justice And The Evolution Of Class Action Litigation In Australia, Camille Cameron, Bernard Murphy

Articles, Book Chapters, & Popular Press

The federal and Victorian class action regimes are intended to facilitate aggregation of multiple claims. Aggregation can improve efficiency by combining similar claims and can enhance access to justice by providing a mechanism to litigate small claims. This article considers whether these efficiency and access aims are being achieved. The authors argue that whilst some developments in class action jurisprudence have been consistent with these legislative aims, other have not. Several features of Australian class action jurisprudence and practice have hampered the healthy development of the legislative regimes, including adverse costs orders, unclear threshold requirements, evasive posturing and unresolved class …

How Like A Winter? The Plight Of Absent Class Members Denied Adequate Representation, Susan P. Koniak

Faculty Scholarship

Class actions assume absent class members. ² Notices in class actions tell class members that they need not show up in the courthouse, although they may if they choose.³ Class members are told that class counsel and the named class representatives will look out for them, although if they choose to hire their own lawyer, she may appear on their behalf.⁴ They are also routinely told that once the decision in the class action becomes final they will be bound by it, losing any and all right to protest the resolution of their claims by the class action …

The New Look Of Shareholder Litigation: Acquisition-Oriented Class Actions, Randall Thomas, Robert B. Thompson

Vanderbilt Law School Faculty Publications

Shareholder litigation is the most frequently maligned legal check on managerial misconduct within corporations. Derivative lawsuits and federal securities class actions are portrayed as slackers in debates over how best to control the managerial agency costs created by the separation of ownership and control in the modern corporation. In each instance, early hopes these suits would effectively monitor managerial misconduct have been replaced with concerns about the size of the litigation agency costs of such representative litigation, which can arise when a self-selected plaintiff's attorney and her client that are appointed to pursue the claims of an entire class of …

Typology Of Aggregate Settlements, A , Howard M. Erichson

Faculty Scholarship

It is odd, considering how often lawyers engage in aggregate settlements, that no one seems able to explain what "aggregate settlement" means. It is one of the most important yet least defined terms in complex litigation. Lawyers and judges talk about aggregate settlements as though it were obvious what the term signifies and as though it describes a single thing. In fact, group settlements in multiparty litigation vary significantly. And they vary in ways that make it difficult to determine whether certain deals ought to be understood as collective settlements or simply as groups of individual settlements bundled together. This …

Solving The Nuisance-Value Settlement Problem: Manadatory Summary Judgment, David Rosenberg, Randy J. Kozel

Journal Articles

The nuisance-value settlement problem arises whenever a litigant can profitably initiate a meritless claim or defense and offer to settle it for less than it would cost the opposing litigant to have a court dismiss the claim or defense on a standard motion for merits review like summary judgment. The opposing litigant confronted with such a nuisance-value claim or defense rationally would agree to settle for any amount up to the cost of litigating to have it dismissed. These settlement payoffs skew litigation outcomes away from socially appropriate levels, undermining the deterrence and compensation objectives of civil liability. Yet current …

Secret Settlements And Practice Restrictions Aid Lawyer Cartels And Cause Other Harms, Susan P. Koniak, David Dana

Faculty Scholarship

In this article, the authors argue that the use of secrecy agreements and practice restrictions in settlement contracts should be prohibited not only by the ethics rules, but also by criminal and civil law. The authors begin by discrediting four arguments that are traditionally employed to support the use of secrecy agreements and practice restrictions. They then argue that the use of secrecy agreements and practice restrictions generate substantial costs, but do not secure any legitimate benefits that could not be attained by other, less costly means. The authors also explain how the problems caused by secrecy agreements and practice …

Coattail Class Actions: Reflections On Microsoft, Tobacco, And The Mixing Of Public And Private Lawyering In Mass Litigation , Howard M. Erichson

Faculty Scholarship

Ask anyone who follows legal news to name the two biggest litigation news stories in the United States at the start of the twenty-first century, and they will answer without blinking: Microsoft and tobacco. The Microsoft litigation, they will tell you, claims a place in the pantheon of antitrust landmarks that includes Standard Oil, Alcoa, and AT&T. The tobacco litigation is the most massive in a string of mass torts including asbestos, Dalkon Shield, and breast implants; it is arguably the most important public health matter ever litigated. Microsoft and tobacco each fit so well and so interestingly in their …

Mass Tort Litigation And Inquisitorial Justice, Howard M. Erichson

Faculty Scholarship

In the past decade, settlement class actions have become increasingly popular in mass tort litigation, having been used successfully in cases such as the Dalkon Shield litigation, the Bjork-Shiley heart valve litigation, and the orthopedic bone screw litigation. Although the Supreme Court's opinion in Amchem has engendered some confusion over the continued viability of mass tort settlement class actions, it appears that such settlements remain a dominant approach to resolving mass tort lawsuits. With increasing frequency, plaintiffs and defendants come to court holding hands, and courts must launch their own vigorous inquiries into the merits of the parties' proffered settlement. …

Legal Ethics And Class Actions: Problems, Tactics And Judicial Responses, Richard H. Underwood

Law Faculty Scholarly Articles

Perhaps no procedural innovation has generated more controversy than the class action. As Professor Arthur Miller has observed, debate over “class action problem[s]” has raged at several different levels. For example, opponents and proponents of class actions disagree on whether such actions produce socially desirable results in an economical fashion and whether an already overburdened judiciary can handle the additional supervisory demands of the class action. Recently, a somewhat more ideological dialogue has addressed the merit of publicly funded class actions. Such questions arise only indirectly in the context of class action litigation. However, a certain hostility toward class actions …

Environmental Class Actions Seeking Damages: The Need For Environmental Class Action Suits, Richard D. Lamm, Steven A.G. Davison

All Faculty Scholarship

No abstract provided.