Law Commons^™

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 …

Halliburton Ii: It All Depends On What Defendants Need To Show To Establish No Impact On Price, Merritt B. Fox

Faculty Scholarship

Rule 1Ob-5 private damages actions cannot proceed on a class basis unless the plaintiffs are entitled to the fraud-on-the-market presumption of reliance. In Halliburton II, the Supreme Court provides defendants with an opportunity, before class certification, to rebut the fraud-on-the-market presumption through evidece that the misstatement had no effect on the issuer's share price. It left unspecified, however, the standard by which the sufficiency of this evidence should be judged.

This Article explores the two most plausible approaches to setting this standard. One approach would be to impose the same statistical burden on defendants seeking to show there was …

The Role Of The Judge In Non-Class Settlement, Howard M. Erichson

Faculty Scholarship

This commentary argues that judges lack the authority, as a general matter, to approve or reject non-class settlements. While judges overseeing mass litigation can set the stage for settlement by instituting phased discovery, scheduling bellwether trials, and other methods, they should respect the line between facilitation of settlement and control over settlement terms. The paper was presented in response to Judge Alvin Hellerstein’s and his special masters' account of their handling of the September 11 clean-up litigation.

The Absence Of Legal Ethics In The Ali's Principles Of Aggregate Litigation: A Missed Opportunity - And More, Nancy J. Moore

Faculty Scholarship

There is little discussion of legal ethics in the American Law Institute’s recently adopted Principles of Aggregate Litigation, either in the black-letter rules or the comments. The primary exception is that the Principles devote several sections to the so-called aggregate settlement rule (Rule 1.8(g) of the ABA Model Rules of Professional Conduct), although the purpose of these sections appears to be a proposed modification of that rule to permit claimants to agree in advance to be bound by majority approval of a particular settlement. The purpose of this essay is not to discuss the controversial aggregate settlement proposal (which the …

Reforming The Securities Class Action: On Deterrence And Its Implementation, John C. Coffee Jr.

Faculty Scholarship

Securities class actions impose enormous penalties, but they achieve little compensation and only limited deterrence. This is because of a basic circularity underlying the securities class action: When damages are imposed on the corporation, they essentially fall on diversified shareholders, thereby producing mainly pocket-shifting wealth transfers among shareholders. The current equilibrium benefits corporate insiders, insurers, and plaintiffs' attorneys, but not investors. The appropriate answer to this problem is not to abandon securities litigation, but to shift the incidence of its penalties so that, in the secondary market context, they fall less on the corporation and more on those actors who …

Class Action Accountability: Reconciling Exit, Voice, And Loyalty In Representative Litigation, John C. Coffee Jr.

Faculty Scholarship

In two recent and highly technical decisions – Amchem Products v. Windsor and Ortiz v. Fibreboard Corp. – the Supreme Court has recognized that a serious potential for collusion exists in class actions and has outlined a concept of "class cohesion" as the rationale that legitimizes representative litigation. Although agreeing that a legitimacy principle is needed, Professor Coffee doubts that "class cohesion" can bear that weight, either as a normative theory of representation or as an economic solution for the agency cost and collective action problems that arise in representative litigation. He warns that an expansive interpretation of "class cohesion" …

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. …

Conflicts Consent And Allocation After Amchem Products – Or Why Attorneys Still Need Consent To Give Away Their Clients' Money, John C. Coffee Jr.

Faculty Scholarship

If it was the goal of Silver and Baker to write a provocative article, they have succeeded. They ask probing questions; they are appropriately scornful of superficial answers; and they seek to relate their view of legal ethics to what they perceive to be the prevailing standards in the legal marketplace. All this is good. They also usefully focus on an underappreciated dichotomy: the ethical rules governing aggregated settlements in consensual litigation versus the rules applicable in aggregated nonconsensual litigation (i.e., class actions). Essentially, they argue that the rules in both contexts should be the same or very similar, the …

Class Wars: The Dilemma Of The Mass Tort Class Action, John C. Coffee Jr.

Faculty Scholarship

Legal change – like organic evolution – can occur at varying paces. Long periods of gradual evolution are sometimes punctuated by brief moments of rapid, irregular change. Recent developments in class action practice bear witness to this phenomenon: during the 1990s, evolution has given way to mutation. At least with respect to mass torts, the development of the class action had been slow and halting. Well into the 1980s, federal courts uniformly resisted attempts to certify such mass tort class actions, largely out of concern that the interests of the individual litigant would be submerged within any large-scale proceeding. By …

Corruption Of The Class Action: The New Technology Of Collusion, John C. Coffee Jr.

Faculty Scholarship

Professor Coffee's article, an oral version of which was given at the Cornell Mass Torts conference, is appearing in the Columbia Law Review. However, because commentators in this volume have responded to it, he has authorized the following summary of his views.

The Regulation Of Entrepreneurial Litigation: Balancing Fairness And Efficiency In The Large Class Action, John C. Coffee Jr.

Faculty Scholarship

Just as war is too important to be left to generals, civil procedure – with apologies to Clemenceau – is too important to be left to proceduralists. Although it would be a serious overstatement to claim that all civil procedure scholars are confined by a tunnel vision focused only on the Federal Rules of Civil Procedure, they have as a group been reluctant to engage explicitly in incentive-based reasoning and seem particularly hesitant to reexamine what they must know to be a noble myth: namely, that the client can and should control all litigation decisions. Within an important and expanding …

Federal Tort Claims At The Agency Level: The Ftca Administrative Process, George A. Bermann

Faculty Scholarship

Tort actions against the federal government and its agencies are currently governed by the FTCA and various other statutes, agency rules and procedures. Claims against the government are increasing rapidly, and the agencies enjoy broad settlement authority, often at the expense of coordination among the appropriate statutes. This Article examines the various procedures allowed and those that are actually practiced by the agencies. The author points out that, though claims officers are supposed to be fair-minded, the process can take on an adversarial nature, often a prelude to litigation rather than settlement. He proposes that the current processes be made …