Class Action Dilemmas: Pursuing Public Goals for Private Gain

By Deborah R. Hensler; Nicholas M. Pace et al. | Go to book overview

on how to evaluate the merits of specific litigation or on the appropriateness of using litigation to achieve social goals, it is unlikely that we will soon reach consensus on the proper answer to the "great big question" about class actions.


NOTES
1
John P. Frank, Whither Rule 23: Memorandum to the Honorable Patrick E. Higginbotham ( Apr. 28, 1995) (on file with the Advisory Committee).
2
See, e.g., Andrew Leigh, "Being a Plaintiff Sometimes Amounts to a Profession", Investor's Business Daily, Nov. 1, 1991, at 8; and Karen Donovan, "Bloodsucking Scumbag", Wired 4.11: Electrosphere ( Nov. 1996), available on the internet at http: / /www.wired.com/wired/4. 11.
3
Lawrence Schonbrun, "The Class Action Con Game", Regulation, Fall 1997, at 50-51.
4
Although the Federal Trade Commission ( FTC) appears to have opened a preliminary investigation into the polybutylene pipes consumer complaints, we did not find any evidence that the FTC's activities played a role in that litigation. Similarly, consumer groups and regulators were reportedly investigating consumer complaints about aggressive and misleading bank sales practices, but we did not find any evidence that such activity stimulated the Great Western brokerage products class action.
5
Parties argued for non-opt-out classes in these cases on the grounds that plaintiffs were suing for injunctive relief as well as damages, and that Rule 23 (b) (2) provisions therefore applied.
6
In a line of cases beginning with Erie R.R. v. Tompkins, 304 U.S. 64 ( 1938), the U.S. Supreme Court has held that in diversity cases (and with regard to state claims in cases also involving federal claims) the substantive law of the relevant state prevails, arguably removing incentives to file in federal rather than state court. Within the federal court system one set of procedural rules, the Federal Rules of Civil Procedure, supposedly governs all civil cases without regard to the jurisdiction in which they are filed. In practice, federal district courts operate under somewhat different interpretations of the federal rules. Each state court has its own procedural rules, but many are identical or similar to the federal rules.
7
See supra Chapter Three.
8
As a formal matter, parties and their lawyers cannot select the judge who will hear their cases. But lawyers can in some instances enhance the likelihood of finding themselves before a particular judge by strategically selecting a jurisdiction and venue.
9
Sometimes, parties ask judges to enjoin potential class members from filing new suits against the defendants during the pendency of a class action. See, e.g., supra Chapter Seven, at 196-97.
10
A proposed revision to Rule 23 (b) (3) that would have asked that judges, when deciding whether to certify a class, weigh the "probable relief' against the likely costs, was quickly clubbed the "it just ain't worth it" rule. See supra Chapter Two.
11
See, e.g., Administrative Office of the U.S. Courts, 1 Working Papers of the Advisory Committee on the Civil Rules on Proposed Amendments to Rule 23 254-61, 272-75 ( 1996) (hereinafter Working Papers of the Advisory Committee) (Minutes of Nov. 9-10, 1995, and Apr. 18-19, 1996, discussing proposed factor (F)).
12
As discussed in Chapter Nine, the public record for the credit life insurance class action contains no estimates of the alleged aggregate loss to the class or the individual loss to class members. We estimated the alleged average overcharge per class member using public announcements of the class size and the total value of premiums purchased.
13
Individuals actually secured representation in two of these suits, the Great Western brokerage products class action and the Heilig-Meyers credit life insurance class action. But, in the first instance, the attorney entered the litigation on behalf of a relative; in the second, the attorney entered the litigation to develop the legal grounds for future class action litigation. (See Chapters Six and Nine, supra.) Individuals willing to pay $100 or more per hour in attorney fees could secure legal representation. But most people seeking financial reimbursement in cases such as these would retain lawyers on a contingency-fee basis. Because of the small sums involved, attorneys probably would not agree to represent individuals in these circumstances on a contingency-fee basis. In instances involving small sums, individuals can seek recompense through small claims

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