Results tagged “Class Actions”

Professor Georgene Vairo, an expert on class-action litigation who teaches and writes in the areas of mass torts, weighs in on Standard Fire Insurance Co. v. Knowles, argued before the Supreme Court on Jan. 7:

Key Issue: Can a plaintiff stipulate to damages below CAFA's federal jurisdictional threshold of $5 million where the aggregate claims of all class members exceed that amount?

Key Takeaway: The case comes down to a choice between allowing plaintiffs to openly manipulate CAFA's jurisdictional requirements, as well as scaling back the "master of the complaint" rule.

Prediction: I hope Justice Kagan writes the majority opinion. She reminded the defendant that there are two better options than requiring removal at this time. If the case is worth far more than $5 million, then the plaintiff is not an adequate representative of the class. If the plaintiff tries to play around once back in state court and get more than $5 million, then the defendant can remove again.

By Professor Michael Waterstone

This is another installment in the Summary Judgments summer series, "The Headline Club," in which Loyola Law School professors will discuss legal issues ripped from the front page.

On Monday, the Supreme Court decided Wal-Mart v. Dukes, reversing the Ninth Circuit's certification of a historically large class of women claiming sex discrimination against Wal-Mart. Employment discrimination lawyers have been eagerly awaiting the result in this case, realizing that either way, it would be determinative of the future of employment discrimination class actions (and maybe even class actions in other areas of law).

Other commentators whose views I respect have been quicker than me, and already weighed in on various parts of the Wal-Mart opinion - noting the Court's adverse reaction to the potential size and complexity of the class, the commonality analysis, and the Court's treatment of the social science evidence. Following up on an earlier post about this case, I write here to add my own voice to this chorus.

One issue in Dukes was whether this action - brought for injunctive relief, but also including claims for backpay - could be certified as a class action under 23(b)(2). This turned out to not be much of a fault line, as the Court unanimously held that claims for monetary relief may not be certified under Rule23(b)(2), holding that the claims for backpay were not incidental to the requested injunctive or declaratory relief. Fair enough: plaintiffs had tried to finesse this by not including claims for compensatory damages, which there was clear consensus was not enough. Future plaintiffs attempting reform litigation could choose to completely forego damage claims and focus on injunctive relief. Assuming some lawyer somewhere would take that case, but for the second part of the opinion - discussed below - this possibility would technically be open.

By Professor Georgene Vairo

This is another installment of Loyola's "11 on '11" series, in which Loyola Law School professors are weighing in on what they expect to be the biggest legal issues in their fields in 2011.

My colleagues, Michael Waterstone and David Horton have already weighed in on two of the big three class action cases before the Supreme Court this term. I will talk about the third.

Provocatively but aptly titled "Will arbitration kill the consumer class action?", David's article noted that in AT&T v. Concepcion, the Supreme Court will decide whether the Federal Arbitration Act (FAA) preempts state courts from striking down class arbitration waivers under the unconscionability doctrine. As he put it, "contract procedure" enthusiasts are on the edge of their seats anxiously awaiting the Court's ruling. The Court will have to balance its general trend in favor of favoring arbitration against it's the ideals of federalism which should enable state's to provide their citizens with greater protections than those afforded by federal law.

Michael talked about Wal-Mart v. Dukes, which is likely to have huge implications for both employment discrimination and class action law. Plaintiffs are a class of female Wal-Mart employees alleging sex discrimination. The Ninth Circuit whittled down a class of about 1.5 million employees to 500,000. Yet, the class still may be the largest-ever gender bias class action case. The Supreme Court's order granting certiorari looks at two important questions: 1) whether claims for monetary relief can be certified under Federal Rule of Civil Procedure 23(b)(2)--which by its terms is limited to injunctive or corresponding declaratory relief--and, if so, under, what circumstances?

By Associate Professor David Horton

This is another installment of Loyola's "11 on '11" series, in which Loyola Law School professors are weighing in on what they expect to be the biggest legal issues in their fields in 2011.

For "contract procedure" enthusiasts, few stories in 2011 will rival the U.S. Supreme Court's decision in AT&T v. Concepcion. The Court will decide whether the Federal Arbitration Act (FAA) preempts state courts from striking down class arbitration waivers under the unconscionability doctrine. It's no exaggeration to say that the fate of the consumer class action hangs in the balance.

The seeds of Concepcion go back to the late 1990s and early 2000s, when companies began to see mandatory arbitration clauses as a panacea for class action liability. During that period, most courts held that the FAA flatly precluded plaintiffs from aggregating claims. As a result, mandatory arbitration clauses not only funneled consumers outside of the court system, but forced them to pursue their lawsuits on an individual basis. But in 2003, a highly fractured plurality of the Court suggested in Green Tree v. Bazzle that the FAA didn't bar class arbitration. Thus, to continue to use arbitration as a bulwark against the class action, companies were forced to insert express class action waivers into their agreements.

In Discover Bank v. Superior Court, a landmark 2005 decision, the California Supreme Court held that these class arbitration waivers could be unconscionable when applied to numerous low-value claims. The state high court explained that, in those circumstances, class arbitration waivers amounted to "get out of jail free cards" for corporate liability. For instance, if a business defrauds a million consumers out of $10, no individual consumer will spend the time and money necessary to sue. That lawsuit will either be brought as a class action or not at all.