I. Joinder, Consolidation and Civ. Pro StuffParklane Hoisery v. Shore (Non-Mutual Offensive Issue Preclusion)

Second plaintiff may use the result of previous litigation as to an issue that Defendant lost on, if it is the same issue, that was litigated, and actually decided on matter necessary to judgment.

Guedry v. Marino (Permissive Joinder, Severalability)- Soft Application Deputies not rehired b/c spoke out against sherrif before his election and racial discrimination. Alleged activity effects each P, so

common legal ?s, even if some questions are not similar.DirectTV v. Adrian (Permissive Joinder, Severalability)- Strict Application

DirectTV suing people for stealing transmissions. Allegations of similar staturoty violations do not satisfy same TOO requirement.Iron Workers Local Union v. Phillip Morris (Compuslory Joinder)

Trust case brought saying Phillip Morris did some dodgy financial things. Courts don’t evaluate reqs for comp. joinder rigidly, look at practicality.

Malcom v. Nat’l Gypsum Co. (Consolidation) 600 consolidated asbestos cases in one District for discovery. Consolidation was inappropriate b/c it was too confusing and the cases

to disparate for the jury to keep track of. Concern of prejudicing defendant’s rights.

II. Class CertificationHansberry v. Lee (Certification Significance for Plaintiffs)

Land not allowed to have black people live on it. 1st suit decision upheld agreement. Court finds that this ruling d/n have preclusive effect, because the 1st suit not adequate rep and thus not binding on the parties.

In re Rhone-Poulenc Rorer, Inc. (Certification Significance for Defendants) Company’s blood products infected hemophiliacs w/ AIDS. Posner decertified class b/c of overwhelming pressure to settle on

defendant despite history of victories in single trials. o (Contrast with EISEN- disallowing preliminary look at merits) (But this has diminished)

General Telephone Co. v. Falcon (Commonality/Typicality) Mexican suing for promotion/hiring discrimination. No adequate rep where individual was hired but not promoted and is suing on

behalf of those unhired.Dukes v. Wal-Mart I (Commonality/Typicality)

Current and former female Wal-Mart employees sued for discretionary discrimination by local supervisors. Not certified b/c discretion leads to individual answers to claims, not common to whole class.

Phillips Petroleum Co. v. Shutts (23(b)(3) Opportunity to be Heard) Natural Gas Co. owed royalties to 28000 respondents for a higher price being charged. In determining class, court found plaintiffs, to

be included in a (b)(3) class, must received notice and opportunity to be heard and participate in the litigation. Allow to opt-out.Brown v. Ticor Title Ins. (23(b(1) and (2) and Monetary Damages)

Members of antitrust class action certified under b(1) and (2) who later attempted to bring dmages action based on the same facts were not bound b/c due process required that class members be allowed to assert clams for damages)

Amchem Products, Inc. v. Windsor (Adequate Representation) Asbestos settlement-only class certification failed because Claimants who have manifest injuries should not be represented or have

same counsel as those without manifest injuries. Also found as collusive, and that interclass conflicts create typicality problems. Lack of common questions among Ps to create “typical” claimant. Thus no adequate representation.

Stephenson v. Dow Chemical Co. (Choice of Temporal Perspective- Es Post, backward-looking) Vietnam vet developed cancer after settlement time limit had ended, disallowing him to recover. Applying an ex post analysis of

adequacy, the court found he was not bound by previous settlement, b/c he, not knowing of his potential injuries, was not adequately represented (No SCOTUS precedential effect)

Uhl v. Thoroughbred and Telecommunications (Choice of Temporal Perspective- Ex Ante, forward-looking) Class rep got certification for claim against company who was adding fiber optic cables to rail lines. The subclasses were of people

who’d have the cable on their side of the land and those who wouldn’t. They didn’t know who would be in which group when class was certified. Because rep d/n know which subclass she’d eventually be in, she was adequate rep for both.

Cole v. GMC (Choice of Law affecting Predominance) Airbags failed, nationwide class up for certification. All 50 state’s laws are implicated. The Plaintiffs presented only textual

similarities of different state laws. Variations among them defeated predominance, b/c individual questions of choice of law supersede factual similarities.

In re Bridgestone/Firestone (Choice of Law Vested Rights application) Nationwide class of tire consumers tried to frame issue as financial loss under contract theory to avoid COL problem. But, because

forum state applied vested interest, injury occurred at point of sale of tires, so all 50 states’ law implicated. Unmanageable, so decertified.

In re Air Transportation Antitrust Litigation (23(b)(3) Manageability) Price-fixing case found manageable despite difficulties with notice and large number of people. Notice concerns not prohibitive of

class actions, they just need to be reasonable efforts. Damage calculations that are time-consuming/tedious are not unmanageable if calculation is mechanical/repetitive.

Hilao v. Estate of Marcos (23(b)(3) Manageability) 10,000 foreign nationals sued for crimes committed at lead of Philippine dictator under 23(b)(3) and the Alien Tort Claims Act. Used

statistics to create representative sample to create prediction of actual damages (cites Matthews v. Eldridge saying use of statistics no violation of Due Process).

Klay v. Humana, Inc. (23(b)(3) Complete. Certification and Denial thereof) Doctors suing HMOs for systematically underpaying bills. Raises federal (RICO) and state (contract) claims. Because racketeering

can’t be proven on individual basis, it is ripe for certification (common questions law/fact). K claims had no common questions of fact (though law was common). Class action was superior to joinder, consolidation, transfer and ind. trials.

Brown v. Ticor Title Insurance (23(b)(2) Damages Not Allowed)

1

Consumers suing for injunction and damages against title insurance company using (b)(2). Brown tried to opt-out an was not allowed. This is violation of due process b/c where damages are in play, you must be afforded chance to opt-out.

Barnes v. American Tobacco Co. (23(b)(2) No medical monitoring under (b)(2)) Medical Monitoring sought under 23(b)(2). Medical Monitoring is not injunctive relief. Too individualized of defenses and facts of

each injury. Addiction highly personalized, as is need for MM, AOR defense, knowledge of plaintiff, etc.Allison v. Citgo Petroleum Corp. (23(b)(2) damages claim must be incidental)

Civil Rights action was unsuitable for (b)(2) certification because monetary damages predominated the objective of the litigationWal-Mart Stores, Inc. v. Dukes (23(b)(2) damages claims barred)

Even back pay is now considered individualized relief, and not incidental to the injunctive relief. Effectively bars all but automatic, statutory damages for (b)(2) actions.

Ortiz v. Fibreboard Corp. (23(b)(1)(B) Limited Fund Class Action) Asbestos Cases, trying to establish a limited fund settlement for future claimants. Proposed future claimants do not have relationship

with attorneys. Substantial probability that claims would exhaust assets, resulting in bankruptcy, to establish limited fund.In Re Simon II Litigation (23(b)(1)(B) Punitive Damages class rejected)

Certification of a punitive damages class against the Tobacco companies was decertified. Because punitive damages are necessarily tied to compensatory damages per BMW v. Gore, State Farm and other cases, and thus would not be calculable with a defined ascertained limit in class action setting. Postulated limited funds are not allowable.

Brown v. R.J. Reynolds Tobacco Co. (Issue Classes and Preclusion) Extensive Tobacco Litigation in multiple phases. Question of whether the phases should have issue preclusive effect. So long as they

are “actually adjudicated” in their respective issue classes, they will be afforded issue preclusive effect if they are facts actually decided by the jury.

In the Matter of Rhone-Poulenc Rorer (Issue Class, Reexamination) Certified for negligence/common issues with later trials for individual liability. BUT individual trials involve individualized defenses,

such as comparative negligence, which necessitate reexamination of negligence.In re Nassau County Strip Search Cases (Issue Class and Predominance Req.)

Nassau County strip searched everybody, regardless of crime. Liability was common issue. An issue class certification is allowable regardless of whether claim as a whole satisfies predominance test. Certification of an issue class may be feasible regardless of whether the whole class is certifiable under 23(b)(3)

Allen v. Int’l Truck and Engine Corp (Mandatory and Opt-Out Issue Classes) Former employees sued for racial discrimination damages and equitable relief. Class treatment of indivisible injunctive claims and

individal damages cases does not violate the 7th amendment. First trial as to injunctive relief, and issue preclusion for later trialsIn re IPO Securities Litigation (Eisen Rule diminishes, Merits of Suit determined at Class Certification)

Securities class actions alleging fraudulent IPO issuance policies by major underwriters. Court determines that factual issues relevant to Rule 23 must be resolved, even if they overlap with the merits.

III. Parallel Proceedings (CAFA, MDL and other methods of Coordination)In re Oil Spill (MDL Transfer Orders under CAFA)

BP oil spill affected shores in multiple states, and this is transfer order for multiple suits in federal district courts across the gulf. Dispute among plaintiffs and Defendants as to which court to centralize in. ED of La chosen b/c a geographic center of injury and experienced judge

In re Silicone Gel Breast Implants (MDL Transferring to avoid prejudice) Defendants and Plaintiffs could not agree on California/Ohio for forum to transfer to. Court sends to Alabama, an unrelated forum

with an experienced MDL judge to avoid prejudice to either party.DeLaventura v. Columbia Acorn Trust (MDL and Settlement)

Criticizes “settlement culture” fostered by MDL. Courts hold on to trial-ready cases to encourage settlement. Matsushita Electric Co. v. Epstein (Full Faith and Credit Act, Applying State’s Preclusion Effect)

State Court settled claims that could not be brought in state court. De Class action derivative suit against MEI for buying subsidiary for less than it was worth. Separate California action filed w/ federal claims. De class settled state and federal claims, allowed for opt-out. California non-opt outs fired collateral attack claiming lack of JUX for fed claims and inadequate rep. SCOTUS upholds settlement b/c De would have upheld it.

Smith v. Bayer (Preclusion of State by Federal Ct. decision) 1st Suit filed in WV state, then removed to Federal Court and put in Minnesota MDL. 2nd Suit, Smith, filed in WV and stayed there.

Fed. Ct. case was not certified, but this did not have preclusive effect on Smith’s certification b/c it involved the state certification law, not the Fed’s (even if textually similar)

In re Corrugated Container Antitrust Litigation (Protection of Judgment) MDL Class Action alleging antitrust. Plaintiff’s counsel files competing class action in SC State Court. State court was found to risk

impeding imminent settlement, thus injunction was proper in aid of JUX and necessary to protect imminent final judgmentIn re Eagle-Picher Industries (Necessary in aid of JUX/Risk of inconsistency)

Asbestos Limited Fund class action conditionally certified, moves to enjoin ongoing state proceeding. Found as necessary in aid of JUX b/c continued litigation threatens fund over which court has JUX. Also worried about inconsistent judgments. LIMITED FUND IS LIKE A RES- can issue injunction to protect individual class member’s interests.

Carlough v. Amchem Products (Necessary in Aid of JUX) Fed. Class Action settlement filed, then a state class action filed in WV, claiming future claimants in state are not bound, wants

separate class action. D. Ct. enjoins state action as necessary in aid of JUX b/c settlement is imminent and state action would be disruptive, create confusion for class members.

IV. Settlement Review and DesignReynolds v. Beneficial Nat’l Bank (Review of Class Action Settlements 23(e))

Settlement of consumer finance class action where high risk of collusion among plaintiff’s attorney’s and defendant. Judge is supposed to act as fiduciary for class at settlement and voluntary dismissal phase and here neglected that duty

2

Devlin v. Scardelletti (Who may seek appellate review of Class Settlement Approval per 23(e)) Benefits plan litigation. Petitioner requested to intervene in suit, but never moved to do so. He is nonetheless allowed to appeal b/c

the named class rep is not an adequate rep, naturally, if he wants to appeal. This treats the nonnamed class member a party to the litigation, effectively (contrary to Hansberrry and Shutts). If you object, you can appeal.

Epstein v. MCA, Inc. (Epstein III) (Collateral Attacks on Class Settlements) Second action filed alleging lack of adequate representation and questioning its preclusive effect. Both are factors in determining

validity of collateral attack. Three different standards are stated.In re Prudential Ins. Company (Deterrence of Opt-Outs through Settlement Design)

Nationwide Class action, some plaintiff’s opted out 2 of their 4 claims to sue on later. However, settlement provision included injunction enjoining future claimants from bringing claims related to common nucleus of facts, thus practically destroying the opted out claims. If they’d opted out all 4, they would not be parties and would not have been precluded

In re Inter-Op Hip Prostheses (Deterrence of Opt-Outs through Settlement Design) MDL for faulty hip replacement mechanisms. Dickie Scruggs designs settlement including favored nation, liens on assets, walk out

provisions, etc. Some of the provisions are allowed, some aren’t. Settlement being so good its practically mandatory is representative of how fair it is. Opt-out benefits being weak don’t make it illusory.

Vioxx Settlement (Non-Class Settlement Walk Away Provision) Terms were already agreed as to settlment. 85% walk away provision. To encourage to sign on, agreement had 100% attorneys

recommend deal to claimants and threaten to withdraw if they did not take it. Forced.Burrow v. Arce (Fiduciary Duty of Plaintiff’s Attorney)

Chemical Plant explosion. Mass contingency fee arrangements, lack of communication and threats of no recovery for those opposing the counsel. An attorney who violates his fiduciary duty in the creation of an aggregate settlement will forfeit some or all of his fees, to be determined by the court.

The Tax Authority v. Jackson Hewitt (Prohibition against Ex Ante Agreements for Non-Unanimous Consent) Contract existed whereby all the members of the group had to abide by by the majority’s decision as to the aggregate settlement. K

was established beforehand. Found invalid. Attorney cannot get advance consent from clients to abide by majority’s decision about merits of aggregate settlement.

In re Zyprexa Litigation (Court may adjust attorney’s fees in Quasi-Class Actions) Zyprexa caused injuries and pre-trial proceedings were consolidated by MDL Panel. Discovery and negotiations were handled by

special discovery master and special settlement masters. Pretrial settlement covering 8000 plaintiffs. Judge says “This action is more like a class action than individual action, and I’d have power to award attorney’s fees in a class action, so I should have that same authority now.”

3

General Attack Plan1. How do you want to proceed w/ litigation?

a. Rule 20 Joinder Requirements to Join πsb. Both of the following requirements must be satisfied, based on the

allegations in the complaint, beforec. Rule 20 joinder will be allowed.

i. Federal Rule 20(a) allows for joinder of πs if:1. They assert any right to relief jointly, severally, or in the

alternative in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences, AND

a. The transaction or occurrence requirement is frequently satisfied if the πs are complaining about the same behavior of the same Δ in the same time frame.

b. Courts are looking for a logical relationship between the πs claims. (This is a fact-based inquiry.)

2. There is any question of law or fact common to all these persons.

a. Only one common legal or factual question must exist.b. There is no requirement that all legal or factual issues be

common or that common issues predominate over individual issues (except in the Rule 23(b)(3) type class action.i. If the transaction or occurrence requirement is

satisfied, it is almost always possible to identify at least one common or factual question

d. Supplemental Jur (p. 16)i. Joinder Analysis

1. Is there a joinder provision in the Federal Rules that allows assertion of this claim (or joinder of this party)?

2. If so, does this claim invoke an original basis for federal jurisdiction such as federal question or diversity of citizenship? If so, it may be asserted in the pending case.

3. If not, ask whether the claim can nonetheless be asserted in federal court because it invokes supplemental jurisdiction.

a. Federal Question Jurisdictioni. Well-pleaded part of π’s claim creates federal question

b. Diversity of Citizenship Jurisdictioni. Δ-corporation resides: (1) where incorporated and (2)

at its principle place of business

4

1. PPB means “nerve center”—where are the administrators/the brains behind the operation

ii. Δ-person resides wherever domiciled1. Domicile—physical location and intent to remain

c. Supplemental Jurisdiction Analysisi. Has π asserted an original claim that independently

satisfies a basis for federal subject matter jurisdiction? (if not, then supplemental jur. isn’t applicable)

ii. Does the add’l claim “form part of the same case or controversy” as the claim with original federal jurisdiction?

1. If so, §1367(a) grants the federal courts supplemental jurisdiction over the claim, but that is not the end of our inquiry because although §1367(a) giveth, §1367(b) may taketh away.

2. Does the original claim (the one that got the case into fed. Ct. in the first place) invoke diversity of citizenship jur. under §1332? (if not, skip to #4)

3. If so, §1367(b) may prohibit the exercise of supplemental jurisdiction. Note that §1367(b) does not apply to federal question cases under §1331.

1. §1367(b)’s prohibition of supplemental jurisdiction in diversity cases applies only to claims asserted by πs or parties subsequently joined on the π’s side of the litigation.

2. §1367(b) deals only with diversity actions; it will kick out a claim if the claim is a:

a. claim by πs against persons made parties under Rule 14 (third-party practice), 19 (joinder of persons needed for just adjudication), 20 (permissive joinder of parties), or 24 (intervention) of the federal rules

b. Claim by persons proposed to join as P's under Rule 19 (joinder of persons needed for justification of adjudication)

c. claim by persons seeking to intervene as πs under Rule 24 (intervention)

5

3. If there is still supplemental jurisdiction under §1367(a) (after applying §1367(b), if applicable), is there some reason for the court to decline to exercise supplemental jurisdiction under §1367(c)?

e. Compulsory Joinderi. Rule 19—3 Step Practical Assessment

1. Is the absentee necessary?a. Rule 19(a)(1)(A) — “Complete Relief Prong” — absentee

should be joined if, without him, “complete relief cannot be accorded among those already parties.” i. The concern here is protecting the π from a hollow or

partial judgment. (The focus is on the parties, not the non-parties whose joinder is at issue.)

b. Rule 19(a)(1)(B) — “Prejudice Prong” — absentee must have an interest in the subject of the suit that is legally protected and not merely a financial interest or interest of convenience. In addition, Rule 19(a)(1)(B) requires that failure to join the absentee will harm either the absentee (Rule 19(a)(1)(B)(i)) or the Δ (Rule 19(a)(1)(B)(ii)). i. The goal here is to avoid prejudice to somebody, but if

it is the Δ, they will likely argue multiple and inconsistent obligations (which refers to where the Δ has to do X from Court 1 and Y from Court 2 and those are inconsistent—it does not refer to simply being sued multiple times).

2. Is joinder of the absentee feasible? Includes 3 relevant factors:a. Absentee must be “subject to service of process,” which

means that he must be subject to personal jurisdiction.b. If the absentee objects to venue and joinder of the absentee

would render the venue of the action improper, the absentee shall be dismissed.

c. Joinder is feasible if “joinder [of the absentee] will not deprive the court of jurisdiction over the subject matter of the action.” i. Supplemental jurisdiction does not help here because it

is one of the claims barred by § 1367(b)(prohibition on a claim by a π against a person made a party by Rule 19)

6

3. If joinder is not feasible, should the court (1) proceed without the absentee or (2) dismiss the pending case? (19(b) factors)

a. If a person who is required to be joined if feasible cannot be joined, the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. The factors for the court to consider include:i. the extent to which a judgment rendered in the

person’s absence might prejudice that person or the existing parties;

ii. the extent to which any prejudice could be lessened or avoided by:

1. protective provisions in the judgment;2. shaping the relief; or3. other measures;

iii. whether a judgment rendered in the person’s absence would be adequate; and

iv. whether the π would have an adequate remedy if the action were dismissed for nonjoinder.

 2. What type of class should be certified?

a. Eisen said that you could not have a free floating inquiry into the meritsi. In re IPO held that courts must make a definitive assessment that

each of the rule 23 requirements must be met, the court must resolve the factual disputes even if they overlap w/ the merits, and the court must still make a definitive assessment even if there is conflicting evidence

1. The conflicting evidence may be expert testimonya. Daubert-- debate whether subject to Daubert at certification

or at trial, In re IPO says you have to resolve conflicting expert testimony

2. After Eisen and IPO, can look into the merits as far as necessary to definitely establish that the Rule 23 certification requirements were met

a. The probing into the merits must be for class certification purposes onlyi. However, it is hard to divide between certification

based discovery and merit based discoveryb. Basic Rule 23 req's

i. Numerosity

7

ii. Commonaltyiii. Typicalityiv. Adequate representation

c. Rule 23(b)(1)(A)-- Risks of incompatible standards of conducti. Consider what the P's might ask for as relief if they proceed

independentlyii. If P's are successful in individual suits, would the D be able to

comply w/ all the adjudications are would some preclude others (deferring money damages are not mutually exclusive)

d. Rule 23(b)(1)(B)-- Limited Fund (when all parties seek recovery from finite source of assets that will be exhausted before all expected claims are satisfied)

i. After Fibreboard, a D must be close to bankruptcy to establish a limited fund

1. The Fibreboard court majority suggests that there must be a substantial probability of bankruptcy

2. The Fibreboard court dissent suggests there must be a significant risk that the total assets are going to fall well below the value of the claims

i. Applicable if P's proceeding individually would risk adjudication w/ respect to individual members of a class, which would as a practical matter would:

1. Be dispositive of the interests of other members not parties to the adjudication, or

2. Substantially impair or impede their ability to protect their interests

ii. Must demonstrate (not merely assert) substantial probability that fund is inadequate to pay aggregate amount of all the claims

1. Figure out what the P's likely recovery will be a. Difficult to do if you haven’t had any prior cases to give

you a baseline to estimate damages (for example, an immature tort)i. To help determine the limits of a fund, a judge could:

1. Look at settlements regarding this type of claim that are not confidential

2. Have bellwether trialsb. Difficult if the claims are unliquidated, like personal injury

tort claims2. Figure out fund size available for satisfying claims

iii. Proposed distribution must be equitable among all class members

8

1. Can’t discriminate against some class membersiv. Consider how much net worth defendant will retain (how close to

BR?)1. In equity, a characteristic of a limited fund was “the whole of the

inadequate fund is devoted to all the overwhelming claims”v. Fund must be preexisting; the (b)(1)(b) can’t create the fund

1. Can’t carve it out of other available resources (Per Fibreboard )e. Rule 23(b)(1)(B)-- Limited Punishment Fund, talking solely about

punitive damage claimsi. After In re Simon II, no chance of a limited punishment fund class in

(b)(1)(B)f. Rule 23(b)(2)-- Injunctions

i. Requirements:1. Pattern or practice that is generally applicable to a class as a

wholea. Useful to consider if remedy will settle the issue for all PLs

or if there will need to be individual relief b. if whole group isn’t remedied, probably not “action

generally applicable to the class”( Divisible remedy or Non-Divisible)i. Divisible – entail distribution to one or more claimants

individually, without predetermining the application of the same remedy to any other claimant in practical effect

ii. Indivisible – distribution of the remedy to any claimant invariably affects the application of the same remedy to other claimants

1. D conduct need not be directed to or cause damage to every member of the class, provided the defendant’s action is based on grounds that have general application to the class

2. Constitutional challenge to a sexually segregated public school, the policy is generally applicable to the entire excluded class, though it may be repugnant to a small part of the class, and the vast majority of the class members may be opposed to any change in policy.

2. P's are asking for injunctive or declaratory reliefa. “Injunctive or declaratory relief” has been interpreted to

mean “equitable relief”

9

i. Equitable relief includes some remedies that may deal with money, such as:

1. Back-pay for employment discrimination – characterized as equitable restitution rather than legal damages; Disgorgement; Constructive trust; Restitution; Equitable accounting

ii. Damages under (b)(2):1. (Brown v Ticor) held that due process is violated when you

include monetary remedies that predominate over non-monetary damages in a (b)(2) class (must have chance to opt out)

2. (Allison v Citgo) held that monetary damages in (b)(2) class may only be allowed when the damages are incidental to the indivisible remedies

a. The court used an incidental test and said that these other damages shouldn’t require additional hearings and shouldn’t introduce new and substantial legal or factual issues nor entail complex individualized determinations

b. Two requirements:i. Money damages must flow automatically from the

injunctionii. The damages are easily calculable

3. Dukes v. Walmart:a. Damages under a 23(b)(2) action are all but barred. b. While there is still technically an idea that damages that “do

not predominate”, and “incidental to the action” will be allowed, it is an extremely limited standardc. Even backpay is no longer allowedd. Certain automatic statutory awards may be permitted,

but nothing else.4. Courts could always certify the injunctive portion as a (b)(2)

class action and the monetary portion as a (b)(3) class actiong. Rule 23(b)(3) requirements

i. Predominance1. P will argue predominance over the entire case (5th Cir.-

Castano)a. The cause of action as a whole must satisfy the

predominance requirement of (b)(3)b. Argue that legal standard requires only that common

questions predominate, doesn’t require absence of individual issues,

10

c. the P will then argue that critical questions are common to all class members

d. Will argue that D cannot defeat certification by arguing the court to pre-judge the merits (see Rhone Poulonc)-

2. D will argue predominance requirement in each issues classa. Courts may separate out limited issues under (c)(5) and

then conduct the limited inquiries (2d Cir. Nassau Strip Search cases)

b. Emphasize the differences in individual class members claims and argue that those differences, in light of the differences in the underlying claim, would require a "mini-trial" for each class member

c. They will look for individualized defenses that can be applied be applied affirmatively against the P's that will require specific facts

ii. Superiority1. Interest in separately controlling the actions (negative value suit,

low damages make individual litigation cost prohibitive, w/o the class suit, individual adjudication probably wouldn’t proceed)

a. P will argue class members don’t have an interest in controlling their individual litigationi. b/c the claims themselves are too low value

b. D will argue the claims are high enough that there is value to bring them on their own

2. The extent and nature of any litigation concerning the controversy already begun by or against class members

a. P argumentsi. If presence of pending litigation, then this makes class

action superior, b/c cases can be heard together (promotes judicial economy); or

ii. If absence of pending litigation, class action is superior b/c it shows individuals don’t have enough at stake to bring their own claims

b. D arguesi. The presence of pending litigation shows that a class

action is not superior b/c P's have sufficient incentive to suit w/o the need for a class action, and courts should not take away those P's autonomy w/o a need to do so; or

11

ii. If absence of pending litigation, then this shows a class action is not superior, b/c there is no prior track record of trials from which the court can draw information

3. Desirability of concentrating the litigation of the claims in a particular forum

a. P argues (see Klay):i. Substantial economies of time, effort, and expense for

litigants in the courtii. When the amounts in controversy would make it

unlikely that P's would pursue individual claims (see negative value suit above)

iii. The forum has already handled prelim matters and put in significant effort

b. D argues inverse, difficulty of getting the evidence to one spot, etc

4. Likely difficulties in managing a class actiona. P argues you can have subclasses to make it more

manageableb. D argues that having to apply the laws of all 50 states

would make the class action unmanageablea. Choice of law-- state law that applies will determine

whether the common issues predominatei. If the issue involves state law claims, the choice of law

may affect whether common issues predominate (if all federal claims there would be no choice of law issues)

ii. 3 steps for choice of law:1. Identify a conflict2. Identify the applicable choice of law principles3. Apply the principles

iii. P: 1. to avoid choice of law problems, get outside the

category of state law problems in the 1st place, specifically plead what might at first glance seem like state tort or contract claims as violations of some federal law (RICO)

2. Apply the contention that even though 50 different bodies apply to members of a class spread across the country, those bodies of law are in functional terms the same (see Cole v GM, which failed)

12

3. Apply the contention that the applicable choice of law principles point to the application of a single body of state law, typically the law of the D's principle place of business to the entire nationwide class (see In re Matter of Bridgestone/Firestone)

4. Could use subclassing to avoid such problems, see outline p. 35 for more arguments

3. CAFAa. D's would prefer to remove the case, and CAFA acts as a useful tool b/c it

makes it easier to get cases into federal courtb. Requirements:

i. Minimal diversity, at least 1 P different from 1 Dii. $5 Million at controversy, "either viewpoint" rule-- value as

determined from either the P or Dc. Check for exceptions

4. MDL Panela. Applies to cases in federal court, purpose is to avoid duplicative litigation

and inconsistent verdicts, panel decides whether to coordinate and where to transfer, the transfer is technically only for pre-trial purposes

b. standard for an MDL transfer is that the cases involve one or more common questions of fact and are pending in different districtsi. If pending in same district, use Rule 42 to consolidate the claims

c. Transfer can be done either by a party through a motion or by the judge, sua sponte

d. Lexecon forbids the transferee court from hearing cases for trial; however, there are different ways around this (see p. 59)

e. Van Dusen, though technically decided under 1404 transfer says when you transfer under 1404 transfer, the law of the original forum follows you (same for 1407 transfer)

f. However, w/ a 1406 (venue is improper) the law of the original forum does not attach

g. An argument made to the transferee court may be to reconsider something the judge did in the original transferor courti. Law of the case-- generally courts wont overturn their previous

orders on the same issue, to get them to do so you would have to argue changed circumstances

h. Strategy:i. P: the MDL may force weaker and stronger claims to be lumped

together, and if you are a P w/ a strong claim, you will not like this

13

ii. D: lot easier to coordinate when everything has been consolidated through the MDL process

1. Though there may be some advantages to unconsolidated litigation (reverse auctions may allow you to play P's off of each other)

2. NOTE: Defendant can’t remove to Federal Court under CAFA and then use MDL to transfer for pre-trial and force settlement (unless majority of P’s request transfer)

5. Dueling Class Actions-- Anti-Injunction Act, Rooker-Feldman, Full Faith and Credit Act

a. States Recognizing Other State’s Judgments i. Would the laws of the state in which the judgment originated

preclude the new action? (Full Faith and Credit Clause)ii. Result in new state is what it would be in the originating state?

b. Federal Court Recognizing Other State’s Judgments i. Would the laws of the state in which the judgment originated

preclude the new action? (Full Faith and Credit Act)1. If so, as an exception of the Full Faith and Credit Act, 28 U.S.C.

S 1738, should the federal court refuse to give preclusive effect to the state court judgment?

ii. Is there any express indication in the statute with the exclusive federal jurisdiction that discusses its relationship with S 1738 or the preclusive effect of related state court proceedings? (rare)

1. If not, do the concerns underlying a particular grant of exclusive jurisdiction justify a finding of an implied partial repeal of S 1738?

a. Congressional intent should be the primary considerationb. Doesn’t matter if judgment from the state is waiver of

claims that could not be brought in state court so long as it passes the above analysis

c. Anti-Injunction Act Exceptions:d. §2283: fed court may not grant an injunction to stay proceedings in

state court unlessi. as expressly authorized by congress

ii. where in necessary aid of the fed. Courts JUXiii. to protect or effectuate fed judgments (relitigation exception)

1. use All Writs Act (28 USC 1651) to provide the positive authority for fed courts to issue injunctions of state court proceedings

14

2. NOTE: Smith v. Bayer. Strict interpretation of the litigation exception. If state is applying it’s own law, Fed Ct. d/n preclude it to protect judgment (not same issue)

6. Settlements-- Rule 23(e)-- voluntary dismissal and settlement of class actionsa. Court must approve a settlement binding on a class only after conducting

a hearing and finding the settlement is "fair reasonable and adequate" (see p. 66 for evaluating the fairness of a settlement)i. Rule 23(e)(1)(B)-- must direct notice in a reasonable manner to all

class members that would be bound by a settlementb. CAFA's effect on settlements (see p. 67): coupon settlements, settlements

resulting in a loss to class members, geographic location, and notice to governmental officials

c. Class action objectors: Rule 23(e)(5) permits objections to be withdrawn only w/ the court's approval; 23(e)(3) requires parties seeking a settlement to identify any agreement made in connection w/ the proposed settlementi. Devlin v Scardeletti held that the right to appeal is not restricted to

the named parties. Non-named class members are parties to the proceeding in the sense of being bound in the settlement. As a result, so long as they objected to the settlement in a timely fashion at the district court level, they are allowed to challenge the settlement on appeal w/o being required to intervene in the case.

1. Devlin was decided under a (b)(2) class action, it is undecided whether a party has to intervene in a (b)(3) class, seems that in (b)(3) the party must intervene or opt out

d. Collateral Attacks-- 23(e)(4)(A) any class member may lodge objections to a proposed settlementi. Most likely to be filed in state court b/c it is harder for the D in a

state court to enjoin the federal courtii. In a collateral attack, the P is arguing an exception to Full Faith and

Credit b/c no due process was providediii. P's get around claim and issue preclusion by:

1. Looking to the requirements of preclusion-- P may say they werent the named party in the previous lawsuit (not the same party), were not in privity with the named P's, and were not adequately represented

2. Do a full frontal collateral attack based on due process (adequacy of representation)

iv. Two moving parts to the debate over collateral attacks (p.71)e. Deterrence of Opt outs through Class Settlement Design

15

i. Opt outs are not a good thing for P attorneys or D attorneys (see p. 72)

f. Methods:i. Settlement provisions which enjoin the use of the common

nucleus of facts in the settlement (In re Prudential)ii. All assets of the defendant secured by a lien held in trust in

favor of settling partiesiii. Objectors cannot be paid until lein expirediv. Favored Nation- any better settlements acquired later would

automatically up the provisions of the settling class (discourages cherry picking)

v. Walk away provisions: if we don’t get some percentage participation, no settlement

vi. Prevention of opt outs from getting funds before the settling class

vii.f. Aggregate Settlements

g. 2 or more clients’ claims are resolved by same lawyeri. Model Rule 1.8: to do so, need IC of each client. Disclosure to

them requires:1. Total amount of aggregate settlement2. Existence and nature of all claims and defenses involved3. Details of every other clients participation in settlement,

their contribution and receipt4. Total fees paid to lawyer and whether they will be paid

from settlement fund or ortherwise5. Method by which costs are to be apportioned

h. Quasi-Class Actions (p. 77)i. Basically an Aggregate settlement which occurs through MDLj. The nature of a quasi-class action is virtually undefinable and it is a

sort of shotgun from the hip approach by the judge to wholistically look at litigation and determine whether it is so like class action that their role becomes a fiduciary and supervisory one.

i. Vioxx, Zyprexa Productsii. Judge has power to reduce fees- acts as fiduciary like a certified

class action judge would

16

FULL Complex Litigation Outline

I. Intro and Advanced JoinderPreclusion:

Full Faith and Credit generally requires every State to give to a judgment at lest the preclusive effect that the judgment would be accorded in the State that rendered it.

o Even if it is patently incorrecto Except for judgments rendered w/o PJ or SMJ.o Remedy is to appeal, not sue in another court.

Claim Preclusion (Res Judicata) Issue Preclusion (Collateral Estoppel)

Prevents litigation of a claim or defense that was or could have been litigated in prior action

Prevents relitigation of issues that were litigated, even if in the context of a totally different claim

Elements Final judgment On the merits Binds parties and those in

privity In subsequent litigation arising

out of same transaction or occurrence

On all claims or defenses that were or could have been litigated

Elements Same issue That was litigated and Actually and decided and Necessarily decided Cannot be relitigated by same

parties

Claim Preclusion: Requirements:

o Final Judgmento On the meritso Binds parties to action AND those in privity with the partieso Claims must arise out of same Transaciton or Occurrenceo Must be claims that were or could have been litigated

Case 1 and Case 2 must be brought by SAME CLAIMANT (or those in privity with claimant) against the SAME DEFENDANT (or those in privity with defendant)

17

Case 1 must have ended in valid, final judgment on the meritso Validity: court in case 1 had SMJ and PJ over parties. If so, judgment

is valido Finality: ends litigation and trial court does nothing but execute

judgment Just b/c case is on appeal d/n mean it is not final; it may have

preclusive effecto On the merits:

Based on substance of plaintiff’s claim and/or defendant’s defenses, not on procedural ground

Dismissal for lack of SMJ or PJ, improper venue, failure to join a party under Rule 19 are not judgments on merits

12(b)(6) failure to state a claim IS on the merits Rule 41(b) involuntary dismissal IS on the merits (but

Semtek says maybe not take literally)o Semtek says 41(b) means P can’t refile same claim

in the same fed. D. ct that entered judgment of dismissal

Both Case 1 and 2 must be on the same Claim: o Two cases involve same operative facts, transaction or occurrence,

basica factual situation, single core of operative facts, defendant wrongdoing, etc. Transactional test.

o Restatement: “Claim encompasses all rights to relief with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose”.

Issue Preclusion: Requirements:

o Same issueso Litigated and o Actually decided on matter was necessary to judgment

Case 1 must have ended in valid final judgment on merits (Like CP) Same issue presented in Case 2 must have been litigated and determined in

Case 1o Default judgments don’t count, Summary Judgments do.o “Same Issue”:

Substantial overlap between evidence/argument to be advanced in both Case 1 and 2?

Same rule of law being used?

18

Pretrial prep and discovery likely embraced matter sought to be brought in Case 2?

Issue must have been essential to Judgment in Case 1o If the finding on this issue had come out the other way, would the

judgment be different? Alternative theories, both sufficient, neither is precluded (R2d)

As matter of due process, issue preclusion can only be asserted against one who was party to Case 1 or in privity with a party to Case 1.

o Unlike claim preclusion, both parties need not be same.o One the party that issue preclusion is being asserted against must have

been a party to the case And had full and fair opportunity to litigate in case 1

Court in case 2 must assess mutuality, “who can assert issue preclusion”o If invited to join, knew about the suit and could have intervened as

matter of right, plaintiff may not be able to use issue preclusiono Or if it’s not fair to use IP against defendant, like the first case was for

small amount and not really worth litigating, or procedural disadvantages

o Or inconsistent prior judgments When IP works and when it doesn’t:

o Nonmutual Offensive IP WORKS: Case 1: P1 v. D1 (loses) Case 2: P2 v. D1

(can use preclusion to prevent relitigation of issue D1 lost on in Case 1 subject to certain conditions)

o Nonmutual Defensive IP DOES NOT WORK: Case 1: P1 v. D1 (wins) Case 2: P2 v. D1

(cannot use preclusion to prevent relitigation of issue D1 won in Case 1 against new plaintiff)

Supplemental JUX: Comes into play after P files claim that satisfies basis of federal SMJ

(diversity or Federal Question JUX).o Additional Claim forms part of the same case or controversy as the

claim with original Fed. JUX. Additional claim arise out of same transaction/occurrence?

o §1367(a) grants federal courts supp. JUX over the claim BUT:

19

§1367(b): applies ONLY to those claims brought in federal court solely b/c of Diversity

1367(c): Court may decline to exercise supp. Jux.o Novel question of law, state claim predominates,

etc.Permissive Joinder:

FRCP Rule 20:o Plaintiffs may join in one action if:

They assert right to relief jointly, severaly, or in alternative w/ respect to same TOO, AND

Any question of law/fact common to all plaintiffso Defendants may join in one action if:

Any right to relief is asserted against them jointly, severally, or in alternative w/ respect to same TOO, AND

Any question of law/fact common to all defendants Joinder is not allowed when different transactions/occurrences are involed or

when the matters do not share any legal or factual issues ALI Note on Permissive Joinder:

o Joinder generally sought only in relatively small scale suits b/c each new party must be joined separately and is expected to appear personally in the action.

Large #s of parties usually use class action or something elseo Each party must satisfy JUX and Venue Requirementso B/C permissive joinder is left to parties’ initiatives, presence of all

person necessary to a unitary adjudication cannot be ensured b/c some might be left out on purpose

Compulsory Joinder: FRCP Rule 19:

o Required party to be joined if feasible Must not deprive court of SMJ and is subject to service of

process In person’s absence, court can’t accord complete relief OR Person has interest that if not present,

Will impair/impede person’s ability to protect interest Leave another party subject to sub. risk of double/multi

or inconsistent obligationso Where not feasible, court has much latitude to work around absence

Rule 19: Compulsory Joinder:o Proper Parties Necessary Parties Indispensable Parties.

20

o People who can be in the litigation People who should be in the litigation (desirable) People who MUST be in the party, can’t continue without them

Consolidation FRCP Rule 42(a)

o When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the action

Join for hearing or trial any or all matters at issue in the actions Consolidate the actions Issue any other orders to avoid unnecessary cost or delay

Trial court has broad discretion to determine if consolidation is appropriate

Favors Judicial Economy BUT: Convenience and Economy must not infringe on

right of fair and impartial trials. Consider:

o Specific risks of prejudice and possible confusiono Burden on parties, witnesseso Available judicial resourceso Length of time required to conclude multiple suits

as against a single oneo Relative expenses compared to single trials

o Consolidation may be appropriate even where joinder is not. Where actions are not based on the same transaction or occurrence, but DO involve a common question of law or fact, consolidation may still be appropriate.

§1407: Multi-District Litigation (MDL)- more on that laterII. Class CertificationRule 23

(a) Prerequisites: One or more members of a class may sue or be sued as representative parties on behalf of all members only if

1. Class is so numerous that joinder of all members is impracticable (numerosity)

2. There questions of law/fact common to the class (commonality)3. Claims/defenses of representative parties are typical of the class

(typicality)4. Representative parties will fairly and adequately protect class interests

(adequacy)

21

Significance of Class Certification Defining the class is of critical importance because it identifies the persons

(1) entitled to relief, (2) bound by a final judgment, and (3) entitled under Rule 23(c)(2) to the “best notice practicable” in a Rule 23(b)(3) action.

o Although the identity of individual class members need not be ascertained before class certification, the membership of the class must be ascertainable.

A class may be defined to include individuals who may not become part of the class until later. Such “future claimants” are primarily a feature of those mass tort actions involving latent injury.

The court should also consider whether the class definition captures all members necessary for efficient and fair resolution of common questions of fact and law in a single proceeding.

If the definition fails to include a substantial number of persons with claims similar to those of the class members, the definition of the class may be questionable.

Significance for Plaintiffo Determines whether they are bound to judgment or not.

One is not bound by a judgment in personam in a litigation in which he is not designated as a party or to which he has not been made a party by service of process

BUT: Judgment of “class” or “representative” suit, to which some members of the class are parties, may bind members of the class or those represented who were not made parties to it (Hansberry v. Lee).

Members of a class not present as parties may be bound by judgment anyway where they are adequately represented by present parties

If not adequately represented, or not part of the class, holding them bound to judgment violates DPC.

o Class Rep must have some commonality of interest and some protectin from conflicts of interest.

Interests should be common, though need not be strictly identical.

Due Process Notice and an opportunity to be heard are basic elements of adequate representation.

Significance for Defendants

22

o Finality and Efficiency is sought. Though generally defendant would prefer to combat individual cases.

Concern of a “blackmail settlement” that is- the possibility of liability will be so great if class-action certification is granted that the party will almost certainly settle before any decision could be reviewed (In re Rhone-Poulenc)

A class action is not the superior manner of proceeding where the liability defendant stands to incur is grossly disproportionate to any actual harm caused to the aggrieved individual.

BUT: Eisen Rule: “We find nothing in either the language or

history of Rule 23 that gives authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action”.

o In re IPO Litigation and other cases have ate away at the Eisen Rule, though it hasn’t been officially overturned by the Supreme Court yet.

o Dukes says Eisen Rule was in dicta. Effectively overturns it (but doesn’t say as much)

While we save the heavy inquiry of merit for later (at summary judgment), there is an initial look.

Dukes Impact:o Not just a pleading standardo P must show in fact that these standards are met

(numerosity, commonality, etc.)o Defendant may prefer class actions, and settlements, involving lots of

plaintiffs in order to enact other provisions (like limited fund, bankruptcy, etc.)

D seeks finality to litigation; wants to move on.o Rule 23(f) now allows for interlocutory review of certifications.

Appropriate when: Class certification decision as a practical matter

terminates the litigation Class certification raises a novel issue of law When the district court’s certification is manifestly

erroneous

23

Class Certification Order 23(c)(1)o (A) Time to Issue: At an early practicable time after person sues or is

sued as a class rep, the court must determine by order whether to certifiy action as a class action

o (B) Defining the Class; Appointing Class Counsel: An order that certifies a class action must defie the class and the class claims, issues, defenses, and must appoint counsel under Rule 23(g)

o (C) Altering or Amending the Order: An order that grants or denies class cert may be altered or amended before final judgment

General Requirements of Class Certification (Rule 23(a) pre-reqs) Relationship of Rule 23(a)(2)-(4) Requirements

o All three requirements tend to merge with one another and ask: “whether the named plaintiff’s claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence”.

o a(2) relates class members to one another, a(3) relates class representaive to those not there

if these aren’t met, then a(4) likely isn’t going to be true eitherNumerosity- Rule 23(a)(1):

o Seriously contested only very rarely; almost always satisfiedo “Joinder must be impracticable”

where would-be absent members of class can be readily joined through Rule 19/20, no particular need for class action.

Rule 19-20 practical needs: identified by name and served w/ legal process to participate in the action

o Impracticable d/n mean impossible If it is extremely difficult or inconvenient, that is enough

o No bright-line test for numerosity Practical judgment in light of particular facts Estimates as to size of proposed class are acceptable But can’t just be mere speculation

Commonality- Rule 23(a)(2) Commonality/Typicality tend to merge.

o And these tend to merge with adequate representation as well (a(4)).o All ask:

Whether named plaintiff’s claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.

To paraphrase: Is the class a cohesive unit?

24

A(2) is written such that it demands minimal commonality.o A single factual or legal question across the class will suffice to

satisfy a(2). Claims must depend on common contention that is capable of classwide

resolutiono Determining its truth or falsity will resolve an issue that is central to

the validity of each one of the claims in one strokeo “What matters is not the raising of common questions, but rather the

capacity of a classwide proceeding to generate COMMON ANSWERS apt to drive the resolution of the litigation.”

Note: Mere fact that a complaint alleges racial/ethnic discrimination d/n ensure that the party who brought the suit will be adequate rep of class and suit may not be appropriate for class action.

EEOC can bring enforcement action against employers thought to have discriminated, however, w/o having to satisfy standards of Rule 23. Public Administrative Agency is granted more flexibility than private litigants.

o Dukes (Changing the game): Merges a(2) requirement of minimal commonality into the b(3)

type of predominance question. Question has to be one that leads to classwide resolution

The common question must lead to an answer that, if substantiated, would be common to all members of the class

Specific Common Resolutions Question of whether policy would lead to common action

by the defendants. Dukes case had supervisors w/ discretion, so it would be individualized proof.

o Dukes Plaintiffs claim that their local managers’ discretion over pay and promotions is exercised disproportionately in favor of men, leading to an unlawful disparate impact on female employees

Merely showing that Wal–Mart’s policy of discretion has produced an overall sex-based disparity does not suffice.

Dukes Language:o Their claims must depend upon a common contention—for example,

the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of class-wide resolution—which means that determination of

25

its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.

o Dukes I Dissent: Evidence demonstared that claims would necessitates

examination of particular policies and practices alleged to affect, adversely and globably, women employeed at Wal-Mart.

Rule 23(a)(2), setting a necessary but not a sufficient criterion for class-action certification, demands nothing further

Rule 23(a)(2) DISSENTING VIEWo Rule does not requires all questions of law or fact

raised in the litigation be commono Single question common to all members will

satisfy the requiremento “Question” must be “common to the class”, and

must be a dispute, either of fact or of law, the resolution of which will advance the determination of the class members’ claims.

Typicality- Rule 23(a)(3) A class representative must be part of the class and represent the same

interest and suffer the same injury as the class membersAdequate Representation- Rule 23(a)(4)

Representative Parties will fairly and adequately protect the interests of the class

o In may cases, merges with the typicality requiremento Interclass conflicts can create typicality problems- the representative

parties may want different things out of the litigation than parties not represented

EX: Amchem: Future plaintiffs were sold out in favor of currently injured individuals. Found as inadequate representation.

o Combine 23(e) fairness analysis with 23(a)(4) adequacy when settlement is proposed

What courts look for in determining adequacy:

o Some degree of competence (Black v. Rhone-Poulenc)o Honesty and Good Character (Kaplan v. Pomerantz)o Absence of conflicts of interest (Robin v. Doctors Officenters Corp.)o Ability and Willingness to finance the lawsuit, though this is less

important today with contingency fees, etc. (Weber v. Goodman)

26

Intra-Class Conflicts (Goes along with the above prerequisites, mostly adequacy) Objectors- Rule 23(e)(5):

o Any class member may object to the proposal if it require court approval under this subdivision.

Or object to attorney’s fees (Rule 23(h) Settlement Class: Class certified for settlement only. Plaintiffs file complain

and motion for certification and propsed settlement simultaneouslyo Settlement terms requirements:

Common Issues Predominate Adequate Representation by named members

Divergent intra-class interests sufficiently represented Appropriate Subclassing Adequate Funding Bound known claimants with adequate notice

o Benefits of Settlement Class: Reduce Transaction Costs Defendant keeps reputation, plaintiff need not publicly disclose

harm to himself/herself Mass Torts:

No concern of manageability and conflicts of law issues that would otherwise impede certification

Common among securities and antitrust cases.o Difficulties:

Judges forced to act as inquisitors (unfamiliar role) Risk of collusion is high. Plaintiff’s attorney has incentive to

bind claimants to get fees Though manageability not an issue for settlement classes,

Court cannot ignore procedural protections of class through 23(a) and (b).

o NOTES: Many courts just to “check the box” analysis for settlement

class actions- very little in the way of factual findings. Redish & Constinick (Arguments AGAINST Settlement Class

Actions): Adversity is lacking, which is necessary in litigation, as

defined by Article IIIo Thus settlement classes are inherently

unconstitutional

27

These cases are essentially ADR, or contracts, and this isn’t the courts role/purpose and isn’t what it should be engaged in.

Subclassing Problems Class cohesiveness questions: “Which fissures within the class call for

subclassing?”o Amchem: Class divided between holders of present and future claims

requires division into homogeneous cublcasses With separate representation to eliminate conflict interests of

counsel Ortiz says you can’t have tons or ridiculous subclasses, but it’s

still very open ended.o Temporal Perspective:

Choice of Temporal Perspective:o Ex Post:

Determining whether the class was adequately represented after the fact (Stephenson v. Dow Chemical Co.)

The ex post perspective is backward looking. From the ex post point of view, we ask questions like: “Who acted badly and who acted well? Whose rights were violated?

o Deontological approaches to moral theory. Legal Formalism

o Ex Ante: Determining whether the class is adequate prospectively- don’t

know in which group the class rep is going to be in, so they’re okay for both (Uhl v. TTT Inc.)

The ex ante perspective is forward looking. From this pov we ask “What affect will this rule have on the future? Will decision of a case in this way produce good or bad consequences?

o Consequentialist, utilitarian or welfarist theory. Legal Realism.

23(b)(3) Opt- Out Classes Questions of law or fact PREDOMINATE over any questions affecting only

individual class members Class action is SUPERIOR to other available methods for fairly and

efficiently adjudicating the controversy

28

o Considerations in determining Predominance and Superiority (consider ALL):

1. Class members interests in individually controlling the suit in separate actions

Negative Value Suit. Low damages make individual litigation cost-prohibitive, w/o the class suit, individual adjudication probably wouldn’t proceed

2. Extent and nature of any litigation concerning the controversy already begun by or against class members

Generally: o If there is substantial ongoing litigation, it shows

folks think individual efforts are superioro Court should take account of which court is in best

position to adjudicate all the claimso If court can’t prevent multiple adjudications, it

may decide that cert. d/n accomplish efficiency and fairness

o If named Ps are in parallel litigation, court may have to assess the potential positive and negative aspects of the circumstances

3. Desirability of concentrating the litigation of the claims in the particular forum

Forum non conveniens analysis Economies of time, effort and expense of litigants and

court Negative value suit Forum has already handled preliminary matters and put

in significant effort4. Likely difficulties in managing a class action

(MANAGEABILITY) Management d/n have to be easy, it just has tobe better

than the other options. Prerequirements: A potential class member of a b(3) class must be provided with minimal

procedural due process protection:o Must receive notice of litigation

Notice must be the best practicable- “reasonably calculated, under all the circumstances, to apprise interested parties of the

29

pendency of the action and afford them an opportunity to present their objections.

Notice should describe action and plaintiff’s rights Opportunity to remove self from class by “opting out”

o Have opportunity to be heard and participate in the litigation (in person or through counsel)

Shutts: Where P has “claim for money damages or similar relief

at law” there must be:o Notice reasonably calculated to apprise him of the

pendency of the suito An opportunity to be ehard and participate in the

litigationo Opportunity to opt-out

o Notice Cases (what qualifies as sufficient): Peters v. National RR Passenger Co. (sufficient even though

omitted class member’s apartment number and used incorrect zip code)

VMS Ltd. P’Ship Sec. Litig. (sufficient when mailed to former address, even though contended they knew of new address)

Silber v. Mabon (sufficient although brokerage firm delayed maily notice until AFTER expiration of opt-out deadline).

RULE: Sufficiency of notice is a very low standard. In reality, nobody really has an incentive to make sure

plaintiffs get notice.o Judge wants clear docket, Plaintiff’s counsel gets

paid regardless and more members=more work, defendant has no duties to class members

o Watch for COLLUSIVE PRACTICES. Defense and Plaintiff’s counsel likely know each other- travel in small circles.

Personal JUX for 23(b)(3):o In rem, quasi in rem, im personam

23(c)(2) NOTICE to Class Members:o For 23(b)(1) and (2) classes:

Court MAY direct appropriate notice to the classo For 23(b)(3):

30

MUST direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort.

Must state nature of action, definition of class, etc. (see 23(c)(2)(B)(i-vii)

Klay v. Humana:o Nationwide RICO Class action against HMOs for under billing

practices. Raises RICO Federal claims and state contract claims. The proof of pattern is the substantive violation.

Racketeering activity can’t be proven on an individual basis.

Need an overarching policy or scheme. Mail fraud is gravamen it is different than Avis Rent-A-Car and

Motel 6 claims.o Court certifies federal RICO claims.

Nationwide conspiracy to restrain trade and underpay doctors is gravamen of case and involves common questions of fact and law; discrimination cases tangentially involved corporate policies, but not sufficient for predominance.

Reliance must be proven for each plaintiff, but can be proved with common evidence. Note: Civil RICO claims no longer require reliance.

Damages individualized, but can propose substantial method for calculating damages. Individualized damages only bar to predominance if there is no formula for determining individual damages.

o Rejects certification of state law contracts claims. No common questions of fact, even though state law is

essentially same with respect to the definition of breach. While conspiracy is sufficient to prove RICO claims, contract

claims require each doctor to prove a breach of contract which was done in different ways.

o Superiority: Must show class action is superior to joinder, consolidation, transfer and consolidation, & individual trials. Factors:

(a): class members’ interest in controlling prosecution or defense of separate actions:

Court finds no particular interest in controlling litigation.

31

(b)Extent nature of any litigation concerning the action has already begun.

Substantial ongoing litigation, may show people think individual efforts are superior. None in this case.

(c): Desirability in placing case in a single forum. Otherwise 600k independent cases: Many doctors will

not file cases. Class offers significant economies of time, scale, and

effort. District court already familiar with case; handled

preliminary matters. Immature tort doesn’t counsel against placing claims in a

single forum. (d) Difficulties in managing a class action.

Measuring whether class action is less manageable than alternative vehicles, not whether it will be difficult to manage.

If common issues predominate, individual cases rarely be more manageable than a single class.

Manageability (23(b)(3)(D): Strategic Devices for Alleviating Manageability Problems:

o Subclassing and trial of subclass issues separatelyo Bifurcating liability and damageso Devising an objective formula for determining individual damageso Using 23(d) to issue orders preventing undue repetition or

complication in the presentation of evidence or argumento Appointing special master for difficult evidentiary matterso Using litigation committees or surrogates to receive claims and proof

of eligibility for individual damageso Bellwether trials (trying certain issues first in anticipation of

furthering settlemento Limited class certification under 23(c)(4) (Issue Classes)o Power under 23(d) to require plaintiffs to bring in additional class reps

Where a court has already found that common issues predominate, it is hard to conclude that a class action will be less manageable than individual actions (Klay v. Humana)

In re Air Transport Antitrust Litigation:

32

o To be superior to other form, court must find the difficulties in manageability will not render the actin improper for cerification

Difficulties in management are of significance only if they make the class action a less fair and efficient method of adjudication than other available techniques

Here, it is the only fair way, since the claims are too small individually

o Notice concerns are not prohibitive of the action, since they just have to be reasonable efforts, not individual notice.

Where names and addresses are known, individual notice is required.

o Time-consuming and tedious is not unmanageable if the calculation is mechanical and repetitive.

Complex and difficult does not mean unmanageable Hilao v. Estate of Marcos:

o Special Master used statistics to determine representative sample of 137 claims would be an accurate portrayal of the whole class as to type of suit brought (torture, summary execution, disappearance of others) and the percentage that were valid.

Procedure found to be an accurate prediction, but increases likelihood of paying wrongful claim.

Risk of erroneous payment outweighed by plaintiff interest in receiving compensation. W/O using statistics, determining liability would be impossible.

State interest of getting this case over and done with. Matthew v. Eldridige (Marcos cites to say statistics use

okay)o Used for determining whether a procedure by

which a private party invokes state power to deprive another person of property satisfies due process:

Consideration of private interest; Risk of erroneous deprivation. Principal attention to interest of party

seeking procedure with due regard for an ancillary interest the government might have.

Common Questions (Issue Classes):

33

o It is possible to certify the class for only the common questions. Once the common questions have been answered in class format, individual trials can determine injury, causation, etc.

CHOICE OF LAW (biggest issue in manageability analysis) Under Erie Doctrine, federal courts in diversity actions must apply the

choice of law rules of the state in which the court sits.o Thus, in a nationwide class, there could be up to 51 sources of law

governing the claim (where the court’s COL rules require the court to apply the law of the place of injury, for instance).

This task has led to some courts finding that the different laws make individual issues predominate over common ones, and thus defeat a class b(3) certification.

o Court in multi-Jux 23(b)(3) class action cannot resolve choice of law determinations by summarily concluding that one state’s law should apply to all class members

o Cole v. GMC: If multiple states’ laws apply and those laws vary, the variations may impact whether common issues of law and fact predominate among the class members

COL Analysis proceeds in three basic steps:o Identificaton of a conflict

Does a conflict actually exist among the bodies of law with potential application to the dispute?

False Conflict: No real discrepencies among the sources of law

True Conflict: Real differences. Requires choice of law principles that govern resolution and requires choice of substantive law by court.

Due process violation arises at this stage (is there a conflict) occurs only when the court’s construction of another state’s law contradicts the law of the other state.

Just simply misconstruing the law is not enough to be a violation (Sun Oil case)

o Identification of the applicable choice-of-law principles True Conflict: Real differences. Requires choice of law

principles that govern resolution and requires choice of substantive law by court.

Where state court- look at state law as source of choice of law standard (but remember CAFA will likely put the case in Fed anyway)

34

Because of Erie, Fed look at state in which it sit’s state law as well.

o Application of those principles. THREE MAIN TESTS STATES USE TO DETERMINE

WHICH STATE’S LAW GOVERNS Vested Rights Test (1st Restatement):

o Determine when and where a particular right vested, because the law in place where the right vested would control the content of the right

o Torts: place of injury.o Contracts/Property: place of making the contract

Criticized for sometimes applying a state’s law that did not have a real interest in the litigation

Significant Relationship Test (2nd Restatement )o Courts should apply law of the state with the most

significant contacts with the case Factors:

Place where injury occurred Placed where conduct occurred Domicile, residence, incorporation of

parties Place where relationship of parties is

centered (if any) Policies of the selected forum and the

justified expectations of the parties Interest Analysis Test:

o Applies the state’s law that has the most interest in see its law applied. Generally the law of the forum state, unless some other state’s policies would be impeded by not applying that state’s substantive law

Bifurcation:o The court might have an overall determination of facts applicable to

everyone and then then, if successful, the court might divide the group into subclasses based on different substantive applicable laws.

EX: Class action for tort claim successful, but plaintiffs want punitive damages. Punitive damages are different standars among all the applicable state laws. Court could divide into

35

subclasses after general actionability and wrong-doing is established.

Medical Monitoring: Courts have split on what to do with these claims and have certified them

under a number of rules based on different theories:o 23(b)(1)(A): Separate adjudications would impair plaintiff’s ability to

pursue single uniform medical monitoring programo 23(b)(a)(B): might be dispositive of the interests of the other members

not parties to the adjudication, or substantially impair/impede their ability to protect that interest

o 23(b)(2): medical monitoring really constitutes injunctive reliefo ALL ABOVE DISFAVORED!

23(b)(3): Funds distributed for individualized medical monitoring are essentially damages and thus should be handled under (b)(3).

THIS IS THE SUPERIOR METHOD23(b)(1)-(2) Mandatory Classes

Used for indivisible remedieso Divisible Remedies: those that entail distribution to one or more

claimants individually, w/o predetermining the application of the same remedy to any other claimant in practical effect

o INDIVISIBLE REMEDIES: Those where the distribution of the remedy to any claimant

invariably affects the application of the same remedy to other claimants

(b)(1)(A) Prejudice Class Action: Mandatory Class when prosecution of separate actions by or against individual class members would create a risk of inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class

o Similar to Rule 19’s prejudice standardo EX: individual suits would subject defendant to incompatible

standards of conduct NOT appropriate where primary objective is monetary damages

o Test: Court asks “if the putative class members sue individually,

might it subject the defendant to incompatible standards of conduct?

36

(b)(1)(B) Separate actions would create a risk of adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members

o claims may be dispositive of other interest, may impede ability to protect those other interests or if there is a limited fund.

Adjudication as to one or more members of the class will necessarily or probably have an adverse practical effect on the interests of other members who should therefore be represented in the lawsuit

EX: Limited Fund Caseso Other members of the class, their claims practically concluded, have

no representation in the lawsuit EX: action charging breach of trust by a beneficiary similarly

affecting the members of a large class of security holders or other beneficiaries.

23(b)(2) for Equitable Relief Onlyo Prerequisites of 23(a) are satisfied ANDo Party opposing the class, usually the defendant, has acted or refused to

act on grounds generally applicable to the class thereby making appropriate final injunctive relief with respect to the class as a whole

Generally for equitable relief, monetary damages essentially barred.

Injunctive, Declaratory Relief, Restitution No predominance or superiority requirements, but the

class claims must be cohesive (and remember Dukes has raised the pleading standard of commonality as a pre-req)

o The members of a (b)(2) class are generally bound together through preexisting or continuing legal relatoinsihps or by some significant common trait such as race or gener (Barnes fn. 18)

o Money damages are not allowed as a significant objective in a 23(b)(2) class

Ostensibly allowed damages under (b)(2): Flow automatically from the injunction Easily calculated

(b)(2) certification is proper if primary objective is to obtain injunctive relief

Money damages dominant when their presences suggest that procedural safeguards

37

As punitive damages and compensatory damages require individualized hearings on independent factual issues, they are inappropriate for a (b)(2)

Punitive damages are now tied to compensatory damages- therefore cannot be done as a class if compensatory damages are individualized.

They may make individualized claims more economically viable anyway, so as to mitigate the need for a class action

o HYBRID: Certify the injunctive relief under 23(b)(2) and then do the

money damages under 23(b)(3) Allison v. Citgo rejected this possibility, but it may be

considered by other courts. 23(b)(1)(B) Limited Fund Classes

o Class may be certified if claims may be dispositive of other interests, and may impede ability to protect those interests or if there is a limited fund

o Ortiz Standard for Limited Fund:1. Parties must demonstrate, not merely assert, that available

funds are insufficient to cover the numerous claims Substantial probability that if damages are awarded, early

claims will exhaust assets, resulting in bankruptcy, thus not allowing later claimants to recover

There must be a substantial probability that the claimants, if fully satisfied, would completely exhaust the assets of the company

o How to figure out if they will likely exhaust the funds:

Look at settlements regarding type of claim if not confidential

Have bellwether trials Determine, through independent analysis,

net worth of company (and insurance funds, etc.)

2. Proposed distribution must be equitable Cannot discriminate against some class members

o For classes that consists of those with existing injuries and those whose injuries have not

38

developed yet, ensuring equitable distribution of the proceeds would be a serious problem.

3. Defendant must be significantly impaired by the limited fundo Ortiz fund failed b/c:

No determined size of fund No analysis that fund was actually comprised No independent evaluation of potential insurance funds

Excluded inventory plaintiffs, and plaintiffs with ongoing litigation in favor of future plaintiffs

Intra class conflicts without adequate rep No due process protections

o Created “limited fund” out of thin air- not actually a limited fund as Fibreboard was to remain viable company

o There has to be a pre-existing fund, you can’t use 23(b)(1)(B) for a made up trust fund or something- to artificially limit the fund.

Punitive Limited Funds:o Not allowed Under Simon II Litigationo A limited punishment fund was proposed under the idea that the early

plaintiffs would get the largest punitive damage awards, and then the courts would decide they’d been punished enough, and later plaintiffs would receive less

Thus, a proposed fund would allow each plaintiff to get a piece, and punish the defendant just the one time

o REJECTED THEORY! Fund in this scenario is unascertainable and undefined. The fund here is postulated, and for that reason is not

susceptible to proof, definition or even estimation by any precise figure

And punitive damages are necessarily linked to compensatory damages- which aren’t measured here.

Issue Classes Reexamination Clause

o 7th Amendment: No fact tried by jury shall be otherwise reexamined in Court

Note: If a general verdict is reached, it may be difficult to determine what issues where actually decided- there could be different ways juries reached it.

39

Today, special jury verdict forms are structured in terms of specific questions keyed to the applicable legal elements:

Example: Do you find it more likely than not that the defendant failed to take reasonable care under the circumstances?

23(c)(4) When appropriate, an action may be brought or maintained as a class action with respect to particular issues

o Different kinds of class actions described in (b) may be certified only as to particular issues within a larger array of issues in a given litigation

Examples for issue litigation: Liability and remedies separated Different elements of liability separated (some focus on

defendant conduct, for instance) Divisible relief and indivisible relief separated (damages

apart from injunctive relief) Problems with Issues Classes

Constitutional Limits stemming from Reexamination Clause (7th Amendment)

Pragmatic IssuesNOTE: Relook at Nassau! May have a bad reading on what is allowable and what isn’t!

Predominance and Issue Classes (Subclassification using (c)(5):o (2d Circuit) An issue class certification is allowable regardless of

whether claim as a whole satisfies predominance test. (Nassau County)

Requiring such would defeat the purpose of an issue class. Courts may separate out limited issues under (c)(4) and then

conduct the Rule 23(a) and (b) inquiries.o (4th Circuit) Salovaara: consider 23(a) and (b) in light of ability to

certify issues classes because to do otherwise would require court considering manageability to ignore the ability to make the class more manageable through (c)(5); could only use (c)(5) to make manageable classes that were already deemed manageable

o (5th Circuit) Castano: cause of action as a whole must satisfy the predominance requirement of (b)(3); (c)(5) is a housekeeping rule that allows courts to then sever common issues for trial

40

o (9th Circuit) Gunnels and Valentino: courts may isolate common issues under 23(c)(5) and proceed with class treatment of those particular issues even if the predominance requirement isn’t met

o (11th Circuit- Georgia) Use (c)(5) before conducting predominance inquiry under (b)(3).

Separation of Mandatory and Opt-Out Classeso Indivisible and divisible relief may be separated without violating the

7th Amendment’s reexamination clause (International Truck) Jury will hear first case on defendant’s conduct and make

decision as to injunctive/indivisible relief Issue preclusion may be used for later trials as to the conduct

determined by the trier of fact in that original tiralo May determine the (b)(2) class action issue, then allow members to

opt out of (b)(3) damages class or prevent issue preclusion from denying them their right to jury trial

International Truck situation: Different isssues of discriminatory policy (indivisible

relief sought) and instances of discrimination (divisible relief, damages sought)

o (b)(2) goes first 23(b)(5) Subclasses: When appropriate, a class may be divided into

subclasses that are each treated as a class under Rule 23.Eisen Rule and Parameters of Judicial Inquiry for all Class Actions

From Manual on Complex Litigation:o Discovery into certification issues pertains to requirements of Rule 23

and tests whether claims/defenses are susceptible to class-wide proofo Discovery into merits pertains to strengths/weakness of

claims/defenses and tests whether they are likely to succeed Not always a bright line between the two Insistence on separation is arbitrary and thwarts assessment that

current class certification practice emphasizes Eisen Rule: “We find nothing in either the language or history of Rule 23

that gives authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action”.

o In re IPO Litigation and other cases have ate away at the Eisen Rule, though it hasn’t been officially overturned by the Supreme Court yet.

o Dukes says Eisen Rule was in dicta. Effectively overturns it (but doesn’t say as much)

41

While we save the heavy inquiry of merit for later (at summary judgment), there is an initial look.

o Dukes Impact: Not just a pleading standard P must show in fact that these standards are met

(numerosity, commonality, etc.) In re IPO Securities Litigation (2d Cir. 2006):

o Securities class actions alleging fraudulent IPO issuance policies by major underwriters.

o Court must resolve factual issues relevant to Rule 23 requirements even if they overlap with merits.

Some showing insufficient. Have to have a definitive assessment. o Expert testimony must be evaluated to ensure reliability and whether it supports

Rule 23 requirements.o Securities class actions have protections against frivolous claims. Only 4 have

ever been found frivolous.III. The Class Action Fairness Act (CAFA)

Goal:o Get more class actions involving state law claims

Expands federal court JUX over state-law class actions.o §1332(d): Plaintiff may initially file in Federal Court OR Any

Defendant may remove (per §1446) to federal court even if the other defendants don’t join in removal:

minimum diversity required: any member of a plaintiff class is a citizen of a state

different from any defendant any member of a plaintiff class is an alien and any

defendant a citizen of a state any plaintiff class member is a citizen of a state and a

defendant is an alien Amount in Controversy:

In aggregate, class seeks $5 Million + EXCEPTIONS:

Local Controversy:o 2/3 of class claimants and primary defendants are

citizens of state in which action was originally filed

Not sure what “primary” means Home State:

o Greater than 1/3, but less than 2/3 of the class claimants and primary defendants are citizens of

42

forum state, court MAY decline JUX, but look at totality of circumstances

No helpful standard as to how the factors weigh on this evaluation

o Notes on CAFA’s procedure: CAFA removed one year time limit (in general, you cannot

remove a case if it becomes removable after 1 year) CAFA allows defendant to remove even if sued in their home

state Consent of all defendants to remove is not required CAFA D/N affect Choice of Law Questions

Still apply the standard of the state in which court sitso Mass Actions

Defendant may remove Mass Actions to federal court (not just class actions)

Civil actions in which 100+ claimants are joined Each plaintiff must meet the $75K+ AIC requirement

o D/N Include Cases where: Claims arise in filing state and injuries were

suffered in that state or contiguous state Defendant joined the claims Claims are asserted on behalf of public

pursuant to state statute Claims have been consolidated solely for

pretrial proceedingo If defendant removes Mass Action, no MDL

treatment unless majority of plaintiff’s request it Once everything is in same forum, can move to

consolidate cases Transfer per 1404, 1406 and consolidate under Rule 42

We still have overlapping class actions after CAFA.o There are exceptions to CAFA, there may not be complete diversity,

etc.o Defendant may also want to stay in state court.

Defendant could see whether there are multiple cases going on and decide where they’d rather be. They can effectively shop around for the best forum

Multidistrict Litigation Act (MDL) Created Judicial Panel on Multidistrict Litigation (MDL Panel)

43

o Coordinates related lawsuits within Federal Judicial Systemo Rule:

When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated and consolidated pretrial proceedings

o Requirements for Transfer: Civil Actions involve one or more common questions of fact Pending in different districts Convenience of parties and witnesses recognized Promotes just and efficient conduct in such actions

o May be initiated by: MDL panel upon its own initiative Motion filed with the panel by a party in any action in which

transfer may be appropriate (defendant or plaintiff) MDL §1407

o Panel Actions Decides when/where to transfer cases in federal district courts

Can act sua sponte (on its own) or by motion of party Cannot try cases (Lexecon)- Transfer is for pretrial purposes

only Discovery, certification, summary judgment, pre-trial

filings and preparation ALMOST ALWAYS SETTLED AND NOT SENT

BACK (DeLaventura)o Litigant who refuses to settle will not get sent back

to home courto May unfairly advantage defendant to force

settlement Can Consolidate multiple class actions under MDL

o Getting around Lexecon and inability to try the case: Intra/Inter circuit transfer per §292, 293 and get assigned to

original district Get complaint dismissed and refilled in transferee court Perform non-precedental bellwether trial (affects/encourages

settlement)o Laws applied

44

Van Dusen Doctrine: Transferee Court must apply the same state law, including Choice of Law standards, as would have been applied in transferor court.

Makes Choice of Law in transferor court very complicated BUT: Transferee court can apply its own view of federal law

NOTE: No class action removed to federal court under CAFA provisions shall thereafter be transferred to another district per MDL w/o request of a majority of plaintiffs

o D/N apply to those originally filed in Federal Court b/c of CAFAo Don’t want to double advantage defendants to remove, then transfer to

force settlement.IV. Coordination across Different Judicial Systems

FFCC: Judicial proceedings of any state shall have the same full faith and credit in every court within the US as they have by law or usage in the courts of such State form which they are taken.

o Directs all JU to treat a state court judgment with the same respect that it would receive in the courts of the rendering state.

FFCA: Federal Courts give state court judgments same effects in federal courts that judgments would be given in state courts

o Federal Court must give a state-court judgment approving a class action settlement which releases claim within the exclusive jurisdiction of the federal court the same effect that it would have in the courts of the state in which it was rendered (Matsushita)

Framework for deciding whether a state court judgment can preclude an exclusively federal claim:

Does the law of the state rendering the judgment indicate that the particular claim or issue would be barred from litigation in a court of that state?

If so, as an exception to the FFCC, should the federal court refuse to give preclusive effect to the state court judgment?

o Express indication in statute w/ exclusive federal JUX that discusses it relationship w/ FFCA or preclusive effect of related state court proceedings? (RARE)

o Do concerns underlying a particular grant of exclusive JUX justify a finding of an implied partial repeal of the FFCA?

45

Congressional Intent is primary consideration

Federal Court’s Preclusive Effect on State Proceedings:o §2283: fed court may not grant an injunction to stay proceedings in

state court unless as expressly authorized by congress where in necessary aid of the fed. Courts JUX to protect or effectuate fed judgments (relitigation exception)

use All Writs Act (28 USC 1651) to provide the positive authority for fed courts to issue injunctions of state court proceedings

o Smith v. Bayer (Issue Preclusion, Relitigation Exception): First, the issue presented in the state court was not identical to

the one decided in the federal tribunal. And second, the plaintiff in the state court did not have the

requisite connection to the federal suit to be bound by the District Court’s judgment.

Issue Preclusion:o Valid Final Judgment on the meritso Same issue in Case 2 as Case 1 (not just similar

facts, this is where Bayer fails)o Issue must be essential to judgmento IP can only be asserted against one who was party

to Case 1, or in privity (also lacking in Bayer) Types of Relationships that Bind NON-Parties:

o Successive Interests in Property (in priviy)o Nonparty controls litigation in Case 1 (somehow

manages conduct of litigation, has direct financial/proprietary interest in litigation)

o Nonparty represented by party in Case 1 Class action, fiduciary action, etc.

Anti-Suit Injunction Act and All-Writs Act §2283: Federal Court may not grant an injunction upon state court

proceedings UNLESSo (1) Expressly Authorized by Congresso (2) Where in necessary aid of the Federal Court’s JUX

State case removed to federal court and state court refuses to relinquish JUX

46

And where a fed court first acquires JUX ofver a case involving the dispositin of real property

If Fed. Ct. has JUX in Rem or quasi in rem, they can enjoin other courts from hearing cases from hearing the matter.

D/N apply to in personam JUX Need res in form of limited fund or be very close to final

judgment (imminent) (In re Eagle-Picher)o (3) To protect of effectuate a final judgment on the merits (relitigaiton

exception) Permits federal courts to enjoin state proceedings if necessary

to ensure preclusive effect of earlier fed. ct. decision (traditionally) Must have final judgment on the merits

Smith v. Bayer Corrugated Container Litigation

o IF any injunction fall under one of these exceptions, the All Writs Act (§1651) provides positive authority for federal courts to order an injunction of the state proceeding.

Rooker-Feldman Doctrine: Limits JUX of Fed. District Cts to review final

adjudications of state courtso Once state court enters judgment, D. Ct. lack SMJ

over those claimso Thus, there may be need for injunction

CASE LAW (Examples of exceptions and their application)o In re Corrugated Container Antitrust Litigation (5th Cir. 1981):

Federal MDL class action alleging antitrust conspiracy; plaintiffs’ counsel files competing class action in state courts. State court raises only state antitrust claims. District court enjoins state proceedings.

5th Cir. finds that injunction was proper under Necessary in aid of jurisdiction exception: South Carolina will challenge federal jurisdiction by impeding the progress of federal case.

Protection of Judgment: Cases have settled; injunction necessary to protect imminent final judgment.

No final judgment in South Carolina. Final judgment is imminent in the federal case.

GM Trucks only got to certification. Here S.C. may impede federal case, undercut likelihood of settlement.

o In re Joint East. & So. District Asbestos Litig. (In re Eagle-Picher Industries) (E.D.N.Y. 1990):

Asbestos limited fund class action conditionally certified; moves to enjoin ongoing state proceedings.

47

Judge Weinstein enjoins all ongoing state litigation under necessary in aid of jurisdiction exemption:

Necessary because continued litigation threatens fund, over which court has jurisdiction, making it difficult to negotiate equitable settlement in limited fund cases. Prevents depletion of fund.

o Also worried about inconsistent judgments. Interest in a class action is similar to a res; can issue injunction to

protect individual class members interests; cannot have simultaneous jurisdiction over same property.

o Assets held in a common fund, held to be distributed equitably among class.

Limited fund similar to interpleader, have to recover against fund or not at all.

o Fighting over limited fund of assets. Zero sum game. Settlement is immiment: Judge is cracking down on the parties.

o Carlough v. Amchem Products (3d Cir. 1993): Federal settlement class action filed. Objector files West Virginia class

action request declaration that federal class settlement is unenforceable and not entitled to full faith and credit in West Virginia for futures claimants. Also requests judicial declaration of opt for W.Va. futures claimants.

Attempts to be declared adequate representative of W.Va. class. District Court enjoins state case under Necessary Aid of Jurisdiction.

Settlement is imminent. This directly challenges propriety of the federal class, disruptive to

settlement proceedings Also problem that plaintiffs will be confused as to which class they

belong. Dueling Class Actions Synopsis:

o Are the different classes in state and federal court? If two states, states can’t enjoin other states State courts generally can’t enjoin federal courts

o If state court has entered final judgment, then fed. ct must afford that judgment full faith and credit and it lacks JUX to act as an “appellate” court (review the state court’s decision) b/c of rooker-feldman doctrine

True even if state ct. includes exclusively federal claims in settlement, so long as that state would preclude subsequent re-litigation under its own state laws (Epstein I)

Only potential route around this is possibly state court violated Due Process right and judgment should be afforded full faith and credit (Ginsberg, Epstein I)

48

o If the state ct. hasn’t entered a final judgment, then what is the status of the Federal ct. litigation?

Class Certification denied: Federal Cout shouldn’t interfere Smith v. Bayer, GM Pick-up Truck

Final Judgment Rendered: Injunction proper using “protect or effectuate” exception

Nearing class settlement/prospect “imminent”: Injunction proper using “necessary in aid of Fed. Ct. JUX” exception, particularly if state court threatens the Fed. Ct. deal

Corrugated Container, Carlough Nearly Certified Limited Fund: Injunction proper using “In res”

exception. The analogy of a res is extended to a limited fun b/c of their magnitudge and complexity and advanced stage of action

In re Eagle-PicherV. Settlements

FRCP 23(e): Settlement, Voluntary Dismissal, or Compromise.o The claims, issues, or defenses of a certified class may be settled,

voluntarily dismissed, or compromised only with the court's approval. The following procedures apply to a proposed settlement, voluntary dismissal, or compromise:

(1) The court must direct notice in a reasonable manner to all class members who would be bound by the proposal.

(2) If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and adequate.

(3) The parties seeking approval must file a statement identifying any agreement made in connection with the proposal.

(4) If the class action was previously certified under Rule 23(b)(3), the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so.

(5) Any class member may object to the proposal if it requires court approval under this subdivision (e); the objection may be withdrawn only with the court's approval.

CAFA’s Effect on Settlement Procedures:a. Coupon Settlements 28 U.S.C. § 1712: Regulates Fee Awards: If proposed

settlement in class action provides for recovery of coupons to class members,

49

portion of any attorney’s fee award to class counsel that is attributable to award of coupons shall be based on value of coupons that are redeemed.

i. Waiting for attorney’s fee for years provides disincentive for class action litigation.

b. Class action litigator acts like private attorney general. Trying to cover what regulation cannot.

c. Settlements Resulting in Loss to Class Members: The court may approve a proposed settlement under which any class member is obligated to pay sums to class counsel that would result in a net loss to the class member only if the court makes a written finding that nonmonetary benefits to the class member substantially outweigh the monetary loss.

i. See Bank of Boston: Got $8 for class members, but class members liable for attorney’s fees.

d. Distribution Based on Geographic Location: 28 U.S.C. § 1714: The court may not approve a proposed settlement that provides for the payment of greater sums to some class members than to others solely on the basis that the class members are located closer geographically to the court.

e. Notice to Government Officials: 28 U.S.C. § 1715(b): Not later than 10 days after a proposed settlement of a class action is filed in court, each defendant that is participating in the proposed settlement shall serve upon the appropriate State official of each state in which a class member resides and the appropriate Federal official, a notice of the proposed settlement.

i. Only happened in Wyndham.1. Notice Must include

a. Complaint, notice of scheduled hearings, class notice, terms of settlement and contemporaneous agreements made between class counsel and defense counsel, any notice of dismissal, names of the class members residing in state official’s state or reasonable estimate of number of them and proportion of claims, and any judicial opinion relating to these claims

f. Bull Rubenstein’s new mechanisms for review at the fairness hearing:i. Devil’s Advocate: Court appoints devil’s advocate to argue against

reasonableness of settlement, recreating adversarial environment.ii. Bonds: Parties settling must post bond w/ court; bond used to pay

objector’s fees.iii. Labels: public agency could require that class action settlements be

labeled with a simple chartiv. Trademarks: Could register a certification mark similar to Good

Housekeeping seal of approval. 1. There is a decline in adversarial litigation. Role of the judge is

supposed to be impartial decider. Judges becoming managers of litigation.

g. How can objectors win, if they don’t have access to discovery.i. Need to intervene if you want discovery on the issues. Dublin.

ii. Public Citizen: Left wing, nonprofit. Advocates on behalf of consumers.

50

At settlement:o Judge is supposed to act as fiduciary for class at settlement and

voluntary dismissal phase (Reynolds) See above for mechanisms of doing so

o Girsh factors for considering fairness or proposed settlement: Complexity, expense and likely duration of the litigation Reaction of the class to the settlement The stage of the proceedings and the amount of discovery

completed The risks of establishing liability. Risk of establishing damages. Risks of maintaining a class action through trial. Ability of defendant’s to withstand a greater judgment. Range of reasonableness in light of best possible recovery.

o In re Prudential Factors (in addition to Girsh!): Maturity of underlying substantive issues. Development of scientific knowledge Extent of discovery on the merits Other factors bearing on ability to assess outcome of a trial on

merits and individual damages Existence and probably outcome of claims by other classes and

subclasses Comparison between the results achieved by the settlement for

individual class or subclass members and the results achieved, or likely to be achieved

Whether class or subclass members are accorded the right to opt out o the settlement.

Whether any provisions for attorneys fees are reasonable; and Whether the procedure for processing individual claims under

the settlement is fair and reasonable.

Objectingo Rule 23(e)(5)- permits objections to be withdrawn only with court’s

approvalo Rule 23(e)(3)- requires parties seeking approval of settlement to

identify any agreement made in connection w/ proposed settlement Designed to foster transparency of special deals made with

those who try to hold up settlements Devlin curtails these powers

51

Objector d/n have to have approved intervention to appeal approval of the settlement (thus, Judge has less control over would-be predatory objectors)

o Devlin: Have to object to appeal the approval of the settlement, but

need not intervene BUT:

Some JUX have limited Devlin to mandatory class actions, only those without opt-out rights (Barnhill)

Some JUX still require formal intervention before you can object to a final judgment (Arkansas)

Collateral Attacks on Class Settlementso 23(e)(4)(A) Any class member may lodge objections to a proposed

settlemento A collateral attack is a separately filed action challenging the validity

of the previous judgment instead of going through the appellate process. Attacks validity of judgment of first court.

Alleges parties in second case are not part of the class, or that there was not adequate representation

Usually takes the form of a dissatisfied person suing on their own in another JUX or another class action

o Usually the class action in question will end in state court and the dissatisfied party goes to federal court

If it was in federal court, they can’t really do anything.

o WHAT IS ADEQUATE REPRESENTATION and HOW DOES IT EFFECT PRECLUSION?

Three respective opinions in Epstein illustrate three different approaches to preclusion question:

Judge O’Scanlon: Claim preclusion principles for collateral attacks. If there was full and fair opportunity to raise constitutional

adequate representation issues, we should give the judgment full faith and credit.

Judge Wiggins: Seeks to adapt issue preclusion principle for collateral attacks.

We should be looking at whether it was fully litigated and determined.

Was adequacy of representation fully and fairly determined. Judge Thomas (Dissenting): No preclusion for this particular collateral

attack, because there was no adequate representation.

52

The opportunity alone isn’t good enough, but if they were actually fully and fairly litigated, then that is enough to preclude the collateral attack.

Thomas thinks they weren’t adequately represented and the Delaware court didn’t make any specific findings as to adequate representation.

But claim preclusion applies to parties. Class members not afforded party status.

Also doesn’t make sense in terms of issue preclusion; Issue wasn’t fully and fairly litigated.

o THE BURCH PRECLUSION MATCH UP: Adequate representation in structural conflicts sense: Law should use

issue preclusion principles: Question whether rendering court, in fiduciary role, actually

determined structural conflict now being invoked by collateral attack is not disabling to class representation.

Adequate representation in fair class settlement sense: should use claim preclusion principles:

Question should be whether there was a full and fair opportunity for absent class members to object to the fairness of the deal in the rendering court.

Deterrence of Opt Outs Through Class Design Opt Outs are not a good thing for P’s Attorney’s or Defendants, and thus

provisions and schemes have been developed to prevent them from occurring (or negating the effectiveness of those that are):

o Methods: Settlement provisions which enjoin the use of the common

nucleus of facts in the settlement (In re Prudential) All assets of the defendant secured by a lien held in trust in

favor of settling parties Objectors cannot be paid until lein expired Favored Nation- any better settlements acquired later would

automatically up the provisions of the settling class (discourages cherry picking)

And tells plaintiffs attorneys if they do get an opt out, their claims are going to be litigated to all hell

Walk away provisions: if we don’t get some percentage participation, no settlement

Prevention of opt outs from getting funds before the settling class

o Other techniques to discourage opt-outs:

53

Right to withdraw clause: defendant may choose to withdraw from class settlement if it determine that an excessive number of class members have opted out.

Most favored nation clause: class settlement assures class members of additional benefits in the event that comparable opt out cases receive judgments or settlements higher in value than the benefits described in the class settlement agreements.

o Back-end opt out rights: You have the right to opt out and pursue claims if certain things arise, but you give up some claims to do so. Like punitive damages. Essentially you have to buy your way out of the class in order to pursue something on your own.

Back-end opt outs appear to cause so many complications their costs outweigh their benefits.

NON-Class Settlements Only applies to the people who have brought suit- class not yet certified

o As CAFA discourages nationwide classes, this type of suit more likelyo Removal of nationwide classes makes them largely unmanageable

Aggregate Settlement:o 2 or more clients’ claims are resolved by same lawyer

Model Rule 1.8: to do so, need IC of each client. Disclosure to them requires:

Total amount of aggregate settlement Existence and nature of all claims and defenses involved Details of every other clients participation in settlement,

their contribution and receipt Total fees paid to lawyer and whether they will be paid

from settlement fund or ortherwise Method by which costs are to be apportioned

o Clusters within NonClass Aggregation: Geographic clusters/Individuals entering into litigation together

represented by single attorney Individuals/clusters represented by different attorneys may

further cluster through cooperating attorneys OR court ordered transfer and consolidation

Problems w/ Nonclass Aggregation:o Disunity arises between three factions:

Attorneys and their clients (agency problems) Plaintiffs and other plaintiffs (group problems)

54

What to do with holdouts, dissenters, those who join the group but then want to leave

What to do with outliers, those who have never joined group or considered themselves group members

How to mitigate competition among subgroups Plaintiff’s attorneys and other plaintiff’s attorneys (competition

problems) Litigants Prefer:

o Adversarial system before impartial decision-maker w/ error-correcting mechanisms such as new trials and appeals

o Well-established court rules OR ability to participate in designing dispute resolution procedures

o Opportunity to take part and be heard in process In re Zyprexa Products Liability Litigation (E.D.N.Y. 2006) (Weinstein, J.):

o Court subverts private contracts of individually retained attorneys. Judge says “This action is more like a class action than

individual action, and I’d have power to award attorney’s fees in a class action, so I should have that same authority now.”

o Didn’t deviate about what they contracted for. Reduced plaintiffs fees.

o Worried about the claimants. Judge Weinstein used to represent clients in legal aid

Tax Authority, Inc. v. Jackson Hewett, Inc. (N.J. 2006):o All joined under Rule 20. All agreed to be represented by the same

attorney. Same series of transactions or occurrences.

o What sort of governance agreement do they set up? How do they decide when settlement is appropriate? Steering committee represents 154 of individual plaintiffs. No allegations of collusion.

o Get together, sign agreement, four different attorneys. Have to have a bare majority to settle.

o Does it seem like an unfair allocation scheme? Proceeds are easily calculable. Why doesn’t the court dispense with the aggregate settlement

rule?o RULE:

Ex ante agreements to follow particular decisional rules short of unanimous consent are impermissible under current law

55

Attorney may not obtain advance consent from his clients to abide by the majority’s decision about the merits of an aggregate settlement.

Arrangement which allows majority to control rights of minority is violative of the basic tenants of the A/C relationship

Vioxx Settlement:o Have agreed on the terms of the proposed settlement.o Calling it a settlement, changing the rhetoric. Not settlement until

85% walkaway provision satisfied. Have this walkaway provision: 85% of plaintiffs have to sign

on.o To encourage them to sign on: 100% of the attorneys recommend the

deal to their claimants.o If you’re attorney comes to you and is require to recommend it to you,

you will feel inclined to take it.o There was a group of attorneys who filed an emergency motion.o If we recommend it with 100% of clients, we can’t fulfill their ethical

recommendations.o Alternatives:

Had to withdraw from representing their client if they did not take it.

Pretty much required that everyone signed on.o Trying to enforce the settlement agreement. Creates odd incentive.o Defendant will enforce the super majority.o Third party beneficiary between plaintiffs attorneys and their clients.o When do plaintiffs attorneys get paid? After settlement, by the

defendant.Quasi-Class Actions

Basically an Aggregate settlement which occurs through MDL The nature of a quasi-class action is virtually undefinable and it is a sort of

shotgun from the hip approach by the judge to wholistically look at litigation and determine whether it is so like class action that their role becomes a fiduciary and supervisory one.

o Vioxx, Zyprexa Productso Judge has power to reduce fees- acts as fiduciary like a certified class

action judge wouldBellwether Trials

56

To determine a sort of standard for what a case is worth, what payment should be made, what the criteria for eligibility is, etc. it is common that the counsel has vast experience in that type of litigation.

o If they don’t, an individual case, or a couple of them, may lead to that sort of information being developed.

o These are called bellwether trials. Two Functions:

Exert some manner of preclusive effect vis-à-vis the much larger number of untried, individual cases.

Exert no formal preclusive effect, but just inform in rough manner the terms for the remaining cases

Figure out which laws are helpful/relevanto Kind of like statistical samplingo Which is kind of disfavored as trial by formula…

MDL is for pre-trial, so how does it go about handling bellwether trials? MDL Consolidation: if informative bellwether trials will advance resolution

of related civil claims, then which should be transferred?o By injecting juries and fact-finding into MDL, bellwether trials assist

by providing opportunity for coordinating counsel to: Organize the products of pretrial common discovery Evaluate the strengths and weaknesses of their arguemtns and

evidence Understand the risks and costs associated w/ litigation

Create “trial packages”. Knowledge gained can precipitate global settlement

Attorney’s Relationship to Plaintiffs

Three traditional ways for defining the relationship between class attorney and the class.

o Class is aggregate of individuals: But class attorney doesn’t have traditional lawyer client relationship.

o Class as an entity: Class attorney represents class as whole just as an attorney represents corporation.

o Problem: Class rep lacks legitimacy held by corporate officers and directors, except for lead plaintiffs in PSLRA, class rep lacks leverage that a board has over its lawyers, need court approval to fire attorney.

o Private Attorney General Model: Represents both class and public interest, someone must define what the public interest is, idea is that the lawyer will come up with this definition.

57

Client Disclaimer:o Once a class action plaintiff, you don’t get the same sort of

invidualized A/C relationship that you would if it were a single suit.o You get put in a pot with a number of other plaintiffs with varying

degrees of similarity to your claim.o But it could be good/more effective, even if you don’t get your

traditional “day in court”.

58