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Articles 1 - 30 of 39
Full-Text Articles in Law
The Economics Of Class Action Waivers, Albert H. Choi, Kathryn E. Spier
The Economics Of Class Action Waivers, Albert H. Choi, Kathryn E. Spier
Articles
Many firms require consumers, employees, and suppliers to sign class action waivers as a condition of doing business with the firm, and the U.S. Supreme Court has endorsed companies’ ability to block class actions through mandatory individual arbitration clauses. Are class action waivers serving the interests of society or are they facilitating socially harmful business practices? This paper synthesizes and extends the existing law and economics literature by analyzing the firms’ incentive to impose class action waivers. While in many settings the firms’ incentive to block class actions may be aligned with maximizing social welfare, in many other settings it …
Working Hard Or Making Work? Plaintiffs' Attorneys Fees In Securities Fraud Class Actions, Stephen J. Choi, Jessica Erickson, A. C. Pritchard
Working Hard Or Making Work? Plaintiffs' Attorneys Fees In Securities Fraud Class Actions, Stephen J. Choi, Jessica Erickson, A. C. Pritchard
Articles
In this article, we study attorney fees awarded in the largest securities class actions: “mega- settlements.” Consistent with prior work, we find larger fee awards but lower percentages in these cases. We also find that courts are more likely to reject or modify fee requests made in connection with the largest settlements. We conjecture that this scrutiny provides an incentive for law firms to bill more hours, not to advance the case, but to help justify large fee awards—“make work.” The results of our empirical tests are consistent with plaintiffs’ attorneys investing more time in litigation against larger companies, with …
Civil Procedure And Economic Inequality, Maureen Carroll
Civil Procedure And Economic Inequality, Maureen Carroll
Articles
How well do procedural doctrines attend to present-day economic inequality? This Essay examines that question through the lens of three doctrinal areas: the “irreparable harm” prong of the preliminary injunction standard, the requirement that discovery must be proportional to the needs of the case, and the due process rights of class members in actions for injunctive relief. It concludes that in each of those areas, courts and commentators could do more to take economic inequality into account.
Class Actions, Indivisibility, And Rule 23(B)(2), Maureen Carroll
Class Actions, Indivisibility, And Rule 23(B)(2), Maureen Carroll
Articles
The federal class-action rule contains a provision, Rule 23(b)(2), that authorizes class-wide injunctive or declaratory relief for class-wide wrongs. The procedural needs of civil rights litigation motivated the adoption of the provision in 1966, and in the intervening years, it has played an important role in managing efforts to bring about systemic change. At the same time, courts have sometimes struggled to articulate what plaintiffs must show in order to invoke Rule 23(b)(2). A few years ago, the Supreme Court weighed in, stating that the key to this type of class action is the “indivisible” nature of the remedy the …
Securities Law In The Sixties: The Supreme Court, The Second Circuit, And The Triumph Of Purpose Over Text, Adam C. Pritchard, Robert B. Thompson
Securities Law In The Sixties: The Supreme Court, The Second Circuit, And The Triumph Of Purpose Over Text, Adam C. Pritchard, Robert B. Thompson
Articles
This Article analyzes the Supreme Court’s leading securities cases from 1962 to 1972—SEC v. Capital Gains Research Bureau, Inc.; J.I. Case Co. v. Borak; Mills v. Electric Auto-Lite Co.; Superintendent of Insurance v. Bankers Life & Casualty Co.; and Affiliated Ute of Utah v. United States—relying not just on the published opinions, but also the Justices’ internal letters, memos, and conference notes. The Sixties Court did not simply apply the text as enacted by Congress, but instead invoked the securities laws’ purposes as a guide to interpretation. The Court became a partner of Congress in shaping the securities laws, rather …
Piling On? An Empirical Study Of Parallel Derivative Suits, Stephen J. Choi, Jessica Erickson, Adam C. Pritchard
Piling On? An Empirical Study Of Parallel Derivative Suits, Stephen J. Choi, Jessica Erickson, Adam C. Pritchard
Articles
Using a sample of all companies named as defendants in securities class actions between July 1, 2005 and December 31, 2008, we study parallel suits relying on state corporate law arising out of the same allegations as the securities class actions. We test several ways that parallel suits may add value to a securities class action. Most parallel suits target cases involving obvious indicia of wrongdoing. Moreover, we find that although a modest percentage of parallel suits are filed first, over 80 percent are filed after a securities class action (termed “follow-on” parallel suits). We find that parallel suits and, …
Judge Kozinski Objects, Beth H. Wilensky
Judge Kozinski Objects, Beth H. Wilensky
Articles
Sitting judges don’t get to practice law. So although they often opine on the dos and don’ts of effective advocacy, we rarely get to see them put their advice into practice. But a few years ago, a class-action lawsuit provided the rare opportunity to witness a federal judge acting as an advocate before another federal judge—if not in the role of attorney, then certainly in as close to that role as we are likely to see. Given the chance to employ his own advice about effective advocacy, would the judge—Alex Kozinski—practice what he preaches? Would his years of experience on …
Carrot Or Stick? The Shift From Voluntary To Mandatory Disclosure Of Risk Factors, Karen K. Nelson, Adam C. Pritchard
Carrot Or Stick? The Shift From Voluntary To Mandatory Disclosure Of Risk Factors, Karen K. Nelson, Adam C. Pritchard
Articles
This study investigates risk factor disclosures, examining both the voluntary, incentive-based disclosure regime provided by the safe harbor provision of the Private Securities Litigation Reform Act as well as the SEC's subsequent mandate of these disclosures. Firms subject to greater litigation risk disclose more risk factors, update the language more from year to year, and use more readable language than firms with lower litigation risk. These differences in the quality of disclosure are pronounced in the voluntary disclosure regime, but converge following the SEC mandate as low-risk firms improved the quality of their risk factor disclosures. Consistent with these findings, …
Sec Investigations And Securities Class Actions: An Empirical Comparison, Stephen J. Choi, Adam C. Pritchard
Sec Investigations And Securities Class Actions: An Empirical Comparison, Stephen J. Choi, Adam C. Pritchard
Articles
Using actions with both an SEC investigation and a class action as our baseline, we compare the targeting of SEC-only investigations with class-action-only lawsuits. Looking at measures of information asymmetry, we find that investors in the market perceive greater information asymmetry following the public announcement of the underlying violation for class-action-only lawsuits compared with SEC-only investigations. Turning to sanctions, we find that the incidence of top officer resignation is greater for class-action-only lawsuits relative to SEC-only investigations. Our findings are consistent with the private enforcement targeting disclosure violations at least as precisely as (if not more so than) SEC enforcement.
Class Action Myopia, Maureen Carroll
Class Action Myopia, Maureen Carroll
Articles
Over the past two decades, courts and commentators have often treated the class action as though it were a monolith, limiting their analysis to the particular class form that joins together a large number of claims for monetary relief This Article argues that the myopic focus on the aggregated-damages class action has led to undertheorization of the other class-action subtypes, which serve far different purposes and have far different effects, and has allowed the ongoing backlash against the aggregated-damages class action to affect the other subtypes in an undifferentiated manner. The failure to confine this backlash to its intended target …
Halliburton Ii: A Loser's History, Adam C. Pritchard
Halliburton Ii: A Loser's History, Adam C. Pritchard
Articles
The Supreme Court was presented with an opportunity to bring fundamental reform to securities class actions last term in Halliburton Co. v. Erica P John Fund, Inc.. The Court ducked that opportunity, passing the buck to Congress to undo the mess that the Court had created a quarter century prior in Basic Inc. v. Levinson. Congress's history in dealing with securities class actions suggests that reform is unlikely to come from the legislature anytime soon. The Securities and Exchange Commission appears to be satisfied with the status quo as well. With these institutional actors resisting reform, corporations and …
The Equal Employment Opportunity Commission And Structural Reform Of The American Workplace, Margo Schlanger, Pauline T. Kim
The Equal Employment Opportunity Commission And Structural Reform Of The American Workplace, Margo Schlanger, Pauline T. Kim
Articles
In one of its most-watched recent cases, the United States Supreme Court struck down a class action alleging that Wal-Mart stores discriminated against female employees in pay and promotion decisions. The plaintiffs alleged that Wal-Mart’s corporate culture and highly discretionary decision-making practices led to sex discrimination on a company-wide basis, and they sought injunctive relief as well as backpay for individual employees. Reversing the Court of Appeals for the Ninth Circuit, the Supreme Court held in Wal-Mart v. Dukes that the proposed class failed to meet the requirements for class action certification under Rule 23 of the Federal Rules of …
Plata V. Brown And Realignment: Jails, Prisons, Courts, And Politics, Margo Schlanger
Plata V. Brown And Realignment: Jails, Prisons, Courts, And Politics, Margo Schlanger
Articles
The year 2011 marked an important milestone in American institutional reform litigation. That year, a bare majority of the U.S. Supreme Court, in an opinion in Brown v. Plata by Justice Anthony Kennedy, affirmed a district court order requiring California to remedy its longstanding constitutional deficits in prison medical and mental health care by reducing prison crowding. Not since 1978 had the Court ratified a lower court's crowding-related order in a jail or prison case, and the order before the Court in 2011 was fairly aggressive; theoretically, it could have (although this was never a real prospect) induced the release …
Tying And Consumer Harm, Daniel A. Crane
Tying And Consumer Harm, Daniel A. Crane
Articles
Brantley raises important issues of law, economics, and policy about tying arrangements. Under current legal principles, Brantley was on solid ground in distinguishing between anticompetitive ties and those that might harm consumer interests without impairing competition. As a matter of economics, the court was also right to reject the claim that the cable programmers forced consumers to pay for programs the customers didn’t want. The hardest question is a policy one - whether antitrust law should ever condemn the exploitation of market power in ways that extract surplus from consumers but do not create or enlarge market power. I shall …
Securities Law In The Roberts Court: Agenda Or Indifference?, Adam C. Pritchard
Securities Law In The Roberts Court: Agenda Or Indifference?, Adam C. Pritchard
Articles
To outsiders, securities law is not all that interesting. The body of the law consists of an interconnecting web of statutes and regulations that fit together in ways that are decidedly counter-intuitive. Securities law rivals tax law in its reputation for complexity and dreariness. Worse yet, the subject regulated-capital markets-can be mystifying to those uninitiated in modem finance. Moreover, those markets rapidly evolve, continually increasing their complexity. If you do not understand how the financial markets work, it is hard to understand how securities law affects those markets.
The Price Of Pay To Play In Securities Class Actions, Adam C. Pritchard, Stephen J. Choi, Drew T. Johnson-Skinner
The Price Of Pay To Play In Securities Class Actions, Adam C. Pritchard, Stephen J. Choi, Drew T. Johnson-Skinner
Articles
We study the effect of campaign contributions to lead plaintiffs—“pay to play”—on the level of attorney fees in securities class actions. We find that state pension funds generally pay lower attorney fees when they serve as lead plaintiffs in securities class actions than do individual investors serving in that capacity, and larger funds negotiate for lower fees. This differential disappears, however, when we control for campaign contributions made to offcials with infuence over state pension funds. This effect is most pronounced when we focus on state pension funds that receive the largest campaign contributions and that associate repeatedly as lead …
Securities Class Actions Move North: A Doctrinal And Empirical Analysis Of Securities Class Actions In Canada, Adam C. Pritchard, Janis P. Sarra
Securities Class Actions Move North: A Doctrinal And Empirical Analysis Of Securities Class Actions In Canada, Adam C. Pritchard, Janis P. Sarra
Articles
The article explores securities class actions involving Canadian issuers since the provinces added secondary market class action provisions to their securities legislation. It examines the development of civil liability provisions, and class proceedings legislation and their effect on one another. Through analyses of the substance and framework of the statutory provisions, the article presents an empirical and comparative examination of cases involving Canadian issuers in both Canada and the United States. In addition, it explores how both the availability and pricing of director and officer insurance have been affected by the potential for secondary market class action liability. The article …
The Screening Effect Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Karen K. Nelson
The Screening Effect Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Karen K. Nelson
Articles
Prior research shows that the Private Securities Litigation Reform Act (PSLRA) increased the significance of merit-related factors in determining the incidence and outcomes of securities fraud class actions (Johnson et al. 2007). We examine two possible explanations for this finding: the PSLRA may have reduced the incidence of nonmeritorious litigation, or it may have changed the definition of merit, effectively precluding claims that would have survived and produced a settlement pre-PSLRA. We find no evidence that pre-PSLRA claims that settled for nuisance value would be less likely to be filed under the PSLRA regime. There is evidence, however, that pre-PSLRA …
Jail Strip-Search Cases: Patterns And Participants, Margo Schlanger
Jail Strip-Search Cases: Patterns And Participants, Margo Schlanger
Articles
Among Marc Galanter’s many important insights is that understanding litigation requires understanding its participants. In his most-cited work, Why the “Haves” Come Out Ahead, Galanter pioneered a somersault in the typical approach to legal institutions and legal change: Most analyses of the legal system start at the rules end and work down through institutional facilities to see what effect the rules have on the parties. I would like to reverse that procedure and look through the other end of the telescope. Let’s think about the different kinds of parties and the effect these differences might have on the way the …
Requiem For Section 1983, Paul D. Reingold
Requiem For Section 1983, Paul D. Reingold
Articles
Section 1983 no longer serves as a remedial statute for the people most in need of its protection. Those who have suffered a violation of their civil rights at the hands of state authorities, but who cannot afford a lawyer because they have only modest damages or seek only equitable remedies, are foreclosed from relief because lawyers shun their cases. Today civil rights plaintiffs are treated the same as ordinary tort plaintiffs by the private bar: without high damages, civil rights plaintiffs are denied access to the courts because no one will represent them. Congress understood that civil rights laws …
Stoneridge Investment Partners V. Scientific-Atlanta: The Political Economy Of Securities Class Action Reform, Adam C. Pritchard
Stoneridge Investment Partners V. Scientific-Atlanta: The Political Economy Of Securities Class Action Reform, Adam C. Pritchard
Articles
I begin in Part II by explaining the wrong turn that the Court took in Basic. The Basic Court misunderstood the function of the reliance element and its relation to the question of damages. As a result, the securities class action regime established in Basic threatens draconian sanctions with limited deterrent benefit. Part III then summarizes the cases leading up to Stoneridge and analyzes the Court's reasoning in that case. In Stoneridge, like the decisions interpreting the reliance requirement of Rule 10b-5 that came before it, the Court emphasized policy implications. Sometimes policy implications are invoked to broaden the reach …
Nsf Fees, James J. White
Nsf Fees, James J. White
Articles
Overdraft fees now make up more than half of banks' earnings on consumer checking accounts. In the past century, overdrafts have gone from the banker's scourge to the banker's profit center as bankers have learned that there is much to be made on these short term loans at breathtaking interest rates. I note that the federal agencies have been complicit in the growth of this form of lending. I propose that the banks and the agencies recognize the reality and attempt to mitigate these rates by encouraging the development of a competitive market.
Rewriting Shutts For Fun, Not To Profit, Edward H. Cooper
Rewriting Shutts For Fun, Not To Profit, Edward H. Cooper
Articles
It has not been easy to reconcile contemporary class-action practice with traditional adversary procedure. For that matter, it is not easy to craft a unitary "class-action" procedure that serves well the many different purposes pursued by the many different species of class actions. The practice has flourished, but few would dare say it has really matured. Many problems remain.
What Counts As Fraud? An Empirical Study Of Motions To Dismiss Under The Private Securities Litigation Reform Act, Adam C. Pritchard, Hillary A. Sale
What Counts As Fraud? An Empirical Study Of Motions To Dismiss Under The Private Securities Litigation Reform Act, Adam C. Pritchard, Hillary A. Sale
Articles
This article presents the findings of a study of the resolution of motions to dismiss securities fraud lawsuits since the passage of the Private Securities Litigation Reform Act (PSLRA) in 1995. Our sample consists of decisions on motions to dismiss in securities class actions by district and appellate courts in the Second and Ninth Circuits for cases filed after the passage of the Reform Act to the end of 2002. These circuits are the leading circuits for the filing of securities class actions and are generally recognized as representing two ends of the securities class action spectrum. Post-PSLRA, the Second …
Do Institutions Matter? The Impact Of The Lead Plaintiff Provision Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Jill E. Fisch
Do Institutions Matter? The Impact Of The Lead Plaintiff Provision Of The Private Securities Litigation Reform Act, Adam C. Pritchard, Stephen J. Choi, Jill E. Fisch
Articles
When Congress enacted the Private Securities Litigation Reform Act in 1995 ("PSLRA"), the Act's "lead plaintiff' provision was the centerpiece of its efforts to increase investor control over securities fraud class actions. The lead plaintiff provision alters the balance of power between investors and class counsel by creating a presumption that the investor with the largest financial stake in the case will serve as lead plaintiff. The lead plaintiff then chooses class counsel and, at least in theory, negotiates the terms of counsel's compensation. Congress's stated purpose in enacting the lead plaintiff provision was to encourage institutional investors-pension funds, mutual …
Justice Lewis F. Powell, Jr. And The Counterrevolution In The Federal Securities Laws, Adam C. Pritchard
Justice Lewis F. Powell, Jr. And The Counterrevolution In The Federal Securities Laws, Adam C. Pritchard
Articles
The confirmation of Lewis F. Powell, Jr., to the Supreme Court coincided with a dramatic shift in the Court's approach to securities law. This Article documents Powell's influence in changing the Court's direction in securities law. Powell's influence was the product of his extensive experience with the securities laws as a corporate lawyer, which gave him much greater familiarity with that body of law than his fellow Justices had. That experience also made him skeptical of civil liability, particularly class and derivative actions. Powell's skepticism led him to interpret the securities law in a consistently narrow fashion to reduce liability …
Who Cares?, Adam C. Pritchard
Who Cares?, Adam C. Pritchard
Articles
Jim Cox and Randall Thomas have identified an interesting phenomenon in their contribution to this symposium: institutional investors seem to be systematically "leaving money on the table" in securities fraud class actions. For someone who approaches legal questions from an economic perspective, the initial response to this claim is disbelief. As the joke goes, economists do not bend over to pick up twenty-dollar bills on the street. The economist knows that the twenty dollars must be an illusion. In a world of rational actors, someone else already would have picked up that twenty-dollar bill, so the effort spent bending over …
Federal Class Action Reform In The United States: Past And Future And Where Next?, Edward H. Cooper
Federal Class Action Reform In The United States: Past And Future And Where Next?, Edward H. Cooper
Articles
Predicting the likely future developments in class action practice in the federal courts of the United States must begin in the past.
Class Action Advice In The Form Of Questions, Edward H. Cooper
Class Action Advice In The Form Of Questions, Edward H. Cooper
Articles
The opportunity to offer advice to those who are considering the adoption or modification of class or group action procedures for other legal systems is both welcome and distracting. It is welcome because it forces a change of perspective in the attempt to contemplate adaptation of United States practice to different cultures, political structures, substantive laws, and courts with dissimilar surrounding procedures. It is distracting because there are so many different levels of possible comparison that the choice of perspective must be tailored to the immediate occasion. It is tempting to take on the most important sets of questions-for example, …
Aggregation And Settlement Of Mass Torts, Edward H. Cooper
Aggregation And Settlement Of Mass Torts, Edward H. Cooper
Articles
The following essay is the pre-editing draft of the introduction to a paper delivered at a Mass Torts conference held at the University of Pennsylvania Law School in November 1999. Thc conference grew out of the work of the ad hoc Mass Torts Working Group that on February 15, 1999, delivered a Report to the Chief Justice of the United States and the judicial Conference of the United States. The Working Group, chaired by Third Circuit Judge Anthony J. Scirica, '65, included members drawn from several Judicial Conference committees, including the Advisory Committee on the Federal Rules of Civil Procedure, …