(Reuters) – A confession: When I speculated last October that the hot-button issue of class action ascertainability – the process of figuring out just who is a member of a plaintiffs’ class – could arise at the U.S. Supreme Court in Tyson Foods v. Bouaphakeo, I was wrong. The Tyson case, as you will recall, was at its heart a dispute over the certification of a class of meat-processing plant workers who ended up winning a $6 million wage-and-hour judgment against Tyson. Tyson’s lawyers at Sidley & Austin wanted to inflate the case into an inquiry over the constitutionality of certifying classes that may contain uninjured class members. Tyson’s final Supreme Court brief insisted that at the very least, trial courts should require class action lawyers to offer a mechanism for culling plaintiffs who haven’t been injured, which is exactly what ascertainability literalists demand.
(Reuters) – In 2007, when the Australian class action firm Slater & Gordon conducted an initial public offering and began trading shares on the Australian Stock Exchange, it was supposed to be the beginning of a new era for international law firms. In the U.S., contingency fees and the American rule permit firms representing plaintiffs to take on risky representations and, when their cases succeed, to capitalize more of the same. But in countries where contingency fees aren’t allowed and losing parties are on the hook for their opponents’ fees, the risk analysis is different. By raising capital on a public exchange, Slater & Gordon was testing a new way to spread litigation risk.
Plaintiffs’ lawyers trying to bring big-money class actions before friendly state-court judges is such an old story that Congress passed a law to prevent it. The Class Action Fairness Act of 2005 allows defendants to remove to federal court just about every class action in which more than $5 million is at issue. And when some entrepreneurial litigators in Arkansas and Texas devised a way to get back to state court by stipulating to class damages of less than $5 million, the U.S. Supreme Court put a quick stop to their gamesmanship, in the unanimous 2013 decision in Standard Fire v. Knowles.
(Reuters) – Kenneth Feinberg, the most famous victims’ compensation expert in the United States, has many fans in the plaintiffs’ bar. He has earned their regard in designing and implementing settlement programs over the past 30 years, including funds for victims of the 9/11 attacks, the Boston Marathon bombing, and the General Motors ignition switch defect. This month, when U.S. District Judge Charles Breyer of San Francisco invited recommendations for a court-appointed settlement mediator in the gigantic consolidated clean diesel litigation against Volkswagen, Feinberg was suggested by at least a half-dozen plaintiffs’ firms that sang his praises.
(Reuters) – The beauty of a burgeoning litigation investment strategy known as appraisal arbitrage is that speculators can make money even if they lose in court. Appraisal actions, brought by shareholders who believe buyout prices are too low, ask courts to set a fair value for share prices. If the courts decide the fair value is more than the buyout price, the protesting shareholder is entitled to the higher price, plus interest.
David Brennan is one of about 4,000 current and former California employees of Robert Half International who reached a $19 million wage-and-hour class action settlement with the company in 2012. The state court judge overseeing the case awarded class counsel from the Law Offices of Kevin T. Barnes one-third of the class fund, or $6.3 million. Brennan, represented by class action ombudsman Lawrence Schonbrun, objected to the settlement, arguing that under 40-year-old California precedent, the fee award should have been based on plaintiffs’ lawyers’ hourly billings, not a percentage of the class recovery. When that argument failed to persuade the trial court and the intermediate appellate court, Brennan and Schonbrun took the case to the California Supreme Court, which agreed to hear his appeal.
(Reuters) – The Federal Reserve Bank of New York is not a fan of U.S. Court of Federal Claims Judge Thomas Wheeler, who ruled in June that the Treasury Department’s $87 billion bailout of AIG violated the Fifth Amendment rights of AIG shareholders.
(Reuters) – A couple of years ago, Chief Justice John Roberts appended an unusual statement to the U.S. Supreme Court’s decision not to review a privacy class action settlement in which all of the class recovery (except for legal fees) was delivered to a new online privacy education group Facebook was to help oversee. The chief justice said the Facebook settlement challenge was too tightly focused on the particulars of the case to warrant Supreme Court review but he basically invited future cert petitions raising the issue of when, if ever, class action settlements can deliver money to charities under the doctrine of cy pres, or “as near as possible.”
(Reuters) – U.S. District Judge David Godbey of Dallas didn’t do a lot of explaining in his order Wednesday denying the Texas Health and Human Services Commission a temporary restraining order to block the resettlement in Houston of nine Syrian refugees. The entire ruling is less than three pages long, and, as Reuters reported, concludes simply that Texas hasn’t met the requisite showing of irreparable harm.
The legal world was quite understandably transfixed Wednesday by U.S. Supreme Court arguments in Fisher v. University of Texas, the justices’ latest consideration of the role race may play in admissions decisions at public universities. In particular, Justice Antonin Scalia incited an Internet firestorm with a question about whether black and Hispanic students admitted under affirmative action policies might be better off at less competitive schools.