Law Commons^™

Lead Plaintiff Incentives In Aggregate Litigation, Charles R. Korsmo, Minor Myers

Vanderbilt Law Review

The lead plaintiff role holds out considerable promise in promoting the deterrence and compensation goals of aggregate litigation. The prevailing approach to compensating lead plaintiffs, however, provides no real incentive for a lead plaintiff to bring claims on behalf of a broader group. The policy challenge is to induce sophisticated parties to press claims not in their individual capacity but instead in a representative capacity, conferring a positive externality on all class members by identifying attractive claims, financing ongoing litigation, and managing the work of attorneys. We outline what an active and engaged lead plaintiff could add to the civil …

Ascertainability: Prose, Policy, And Process, Rhonda Wasserman

Articles

One of the most hotly contested issues in class action practice today is ascertainability – when and how the identities of individual class members must be ascertained. The courts of appeals are split on the issue, with courts in different circuits imposing dramatically different burdens on putative class representatives. Courts adopting a strict approach require the class representative to prove that there is an administratively feasible means of determining whether class members are part of the class. This burden may be insurmountable in consumer class actions because people tend not to save receipts for purchases of low-cost consumer goods, like …

Repeat Players In Multidistrict Litigation: The Social Network, Elizabeth Chamblee Burch, Margaret S. Williams

Scholarly Works

As class certification wanes, plaintiffs’ lawyers resolve hundreds of thousands of individual lawsuits through aggregate settlements in multidistrict litigation. But without class actions, formal rules are scarce and judges rarely scrutinize the private agreements that result. Meanwhile, the same principal-agent concerns that plagued class-action attorneys linger. These circumstances are ripe for exploitation: few rules, little oversight, multi-million dollar common-benefit fees, and a push for settlement can tempt a cadre of repeat players to fill in the gaps in ways that further their own self-interest.

Although multidistrict litigation now comprises 36 percent of the entire federal civil caseload, legal scholars have …

When Peace Is Not The Goal Of A Class Action Settlement, D. Theodore Rave

D. Theodore Rave

On the conventional account, a class action settlement is a vehicle through which the defendant buys peace from the class action lawyer. That single transaction will preclude future litigation by all class members. But peace, at least through preclusion, may not always be the goal. In a recent Fair Credit Reporting Action (FCRA) case, In re Trans Union Privacy Litigation, the parties agreed to a class action settlement that did not preclude individual claims. The 190 million class members surrendered only their rights to participate in a future class or aggregate action; they remained free to march right back into …

Auctioning Class Settlements, Jay Tidmarsh

Jay Tidmarsh

Although they promise better deterrence at a lower cost, class actions are infected with problems that can keep them from delivering on this promise. One of these problems is the issue of agency cost, in which the agents of the class (the class representative and class counsel) advance their own interests at the expense of the class. Controlling agency cost, which often manifests itself at the time of settlement, has been the impetus behind a number of class-action reform proposals.

This Essay develops an idea that, in conjunction with reforms in fee structure and opt-out rights, controls agency costs at …

Resurrecting Trial By Statistics, Jay Tidmarsh

Jay Tidmarsh

“Trial by statistics” was one means by which a court could resolve a large number of aggregated claims: a court could try a random sample of claim, and extrapolate the average result to the remainder. In Wal-Mart, Inc. v. Dukes, the Supreme Court seemingly ended the practice at the federal level, thus removing from judges a tool that made mass aggregation more feasible.

After examining the benefits and drawbacks of trial by statistics, this Article suggests an alternative that harnesses many of the positive features of the technique while avoiding its major difficulties. The technique is the “presumptive judgment”: …

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 …

Debate: The Future Of Mass Torts, Sergio J. Campos, Howard M. Erichson

Articles

No abstract provided.

Litigation Governance: Taking Accountability Seriously, John C. Coffee Jr.

Faculty Scholarship

Both Europe and the United States are rethinking their approach to aggregate litigation. In the United States, class actions have long been organized around an entrepreneurial model that uses economic incentives to align the interest of the class attorney with those of the class. But increasingly, potential class members are preferring exit to voice, suggesting that the advantages of the U.S. model may have been overstated. In contrast, Europe has long resisted the United States's entrepreneurial model, and the contemporary debate in Europe centers on whether certain elements of the U.S. model – namely, opt-out class actions, contingent fees, and …

Aggregate Litigation Across The Atlantic And The Future Of American Exceptionalism, Richard A. Nagareda

Vanderbilt Law Review

In long-running debates over civil justice reform, two points remain broadly shared: the legal regime for civil litigation in this country is exceptional by comparison to European systems as a positive matter, and the United States is much the worse for it in normative terms. The positive dimension of this account pinpoints several exceptional features of the U.S. civil justice system: class actions, primarily on an opt-out basis; contingency-fee financing of litigation; rejection of Euro-style "loser-pays" rules that link responsibility for the fees of both sides to the outcome of the litigation; extensive reliance on juries as fact finders; costly …

Small Claim Mass Fraud Actions: A Proposal For Aggregate Litigation Under Rico, Leah Bressack

Vanderbilt Law Review

Assume that, tomorrow, a large company advertises a "miracle pill" that it claims will cure all forms of cancer. The company uses a sophisticated national marketing campaign to convey a strong health assurance message, which it tailors to specific audiences: women with breast cancer, men with prostate cancer, older adults with intestinal cancer, and children with leukemia. In response to the national campaign, consumers across the country purchase the pill, which costs $10. Only then do consumers discover that the pill is worthless and that the company intentionally defrauded them.

The Racketeer Influenced and Corrupt Organizations ("RICO") statute provides a …

Evidence Of The Need For Aggregate Litigation, Theodore Eisenberg

Cornell Law Faculty Publications

In the experimental game designed by GÜTH et al. [2007], player 1 has promised to render a service to player 2. Player 1 either invests proper effort or shirks and performance may succeed or fail depending on random fluctuation. When player 1 fails to invest proper effort, and performance occurs or not through luck, player 2 must decide whether to punish player 1’s nonperformance. When the transaction fails, punishment may be sought through suing. When the transaction fails, player 2 may seek revenge or punishment though doing so incurs costs to player 2. The game’s design resembles civil enforcement rather …

Foreword Symposium: Multidistrict Litigation And Aggregation Alternatives: Foreword, Howard M. Erichson

Faculty Scholarship

On March 30, 2001, a somewhat surprising discussion took place among two judges, two plaintiffs' lawyers, a defense lawyer, and a legal scholar. The occasion was a Seton Hall Law Review symposium on federal multidistrict litigation ("MDL"). What made the discussion surprising was not what the participants said of their experiences with MDL, but rather the extent to which they discussed things other than MDL. Much of the discussion addressed state court litigation beyond the reach of MDL, and federal court aggregation techniques other than MDL. While the presenters left no doubt that MDL retains a central role in the …