Complex Litigation Outline PDF

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Complex Litigation Outline Table of Contents I.

Foundations...................................................................................4 A.

In General..............................................................................................4

Timeline of Major Developments.................................................................................... 4 Crafting the Federal rules............................................................................................... 4 Preclusion and Due Process............................................................................................ 4

B. Defining and Situating Complex Litigation..........................................7 Joinder and Intervention................................................................................................. 7 National Injunctions........................................................................................................ 7

II.

Class Actions: Certification Requirements.................................7

A.

Subject Matter Jurisdiction...................................................................7

In General....................................................................................................................... 7

B. Certification Requirements...................................................................9 In General....................................................................................................................... 9 Precertification Discovery............................................................................................... 9

C.

23(b)(1): Inconsistent Judgments and Limited Fund Class Actions....9

D. 23(b)(2): Injunctive and Declaratory Relief.......................................10 Monetary Relief in (b)(2) Class Actions......................................................................... 10

E.

Cohesiveness and Indivisibility...........................................................11

Wal-Mart v. Dukes (Sup Ct 2011).................................................................................. 11 Chicago Teachers Union v. Board of Education of the City of Chicago (7th Cir 2015)...12 MD v. Perry (5th Cir 2012)............................................................................................. 12

F.

Class Definition and Ascertainability..................................................12 Class Definition: In General.......................................................................................... 12 Ascertainability: In General.......................................................................................... 13 City Select v. BMW Bank (3rd Cir 2017)....................................................................... 13 Briseno v. ConAgra (9th Cir 2017)................................................................................ 13

G.

Commonality........................................................................................14

In General..................................................................................................................... 14 General Telephone of the Southwest v. Falcon (Sup Ct 1982)......................................14 Walmart v. Dukes (Sup Ct 2011)................................................................................... 15 McReynolds v. Merrill Lynch (7th Cir 2012)................................................................... 16 Miller v. Countrywide (6th Cir 2013).............................................................................. 16 DL v. DC (Court of Appeals for the DC Circuit 2013)....................................................17

H.

Typicality and Adequacy...................................................................17

Typicality: Overview...................................................................................................... 17 Adequacy: Overview...................................................................................................... 17 Amchem Products v. Windsor (Sup Ct 1997).................................................................17 Litigation vs Settlement Classes................................................................................... 18 Ortiz v. Fibreboard (Sup Ct 1999)................................................................................. 18 In Re Payment Card Interchange Fee & Merch. Disc. Antitrust Litigation (2nd Cir 2016) ...................................................................................................................................... 19

I.

Notice and Opt-Out.............................................................................19

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In General..................................................................................................................... 20 Eisen v. Carlisle & Jacquelin (Sup Ct 1974)..................................................................21 Phillips Petroleum v. Shutts (Sup Ct 1995)...................................................................21

J.

Predominance and Superiority...........................................................22 Predominance: In General............................................................................................. 22 Superiority: In General................................................................................................. 22 Tyson Foods, Inc. v. Bouaphakeo (Sup Ct 2016)...........................................................22 Menocal v. GEO Group (10th Cir 2018).......................................................................... 23 Halliburton v. Erica P. John Fund (Sup Ct 2014)...........................................................23

III.

Class Actions: Effects of Certification......................................24

A.

Fees: Common Fund Awards...............................................................24

In General..................................................................................................................... 24 Silverman v. Motorola Solutions, Inc. (7th Cir. 2013).....................................................25

B. Incentives to Settle.............................................................................25 In General – Newberg................................................................................................... 25 Silver, “We’re Scared to Death”.................................................................................... 25

C.

Tolling and Justiciability.....................................................................26

In General..................................................................................................................... 26 Campbell-Ewald v. Gomez (Sup Ct 2016)...................................................................... 27 DL v. DC (DC Cir. 2017)................................................................................................ 27 Tolling........................................................................................................................... 28 California Public Employees Retirement System v. ANZ Securities (Sup Ct 2017)......28

IV.

Class Settlements.....................................................................28

A.

Approval Process.................................................................................28

In General..................................................................................................................... 28 23(e) Fairness............................................................................................................... 29 Proposed Amendments to Rule 23................................................................................ 29 Incentive Payments....................................................................................................... 30 In re Online DVD Rental Antitrust Litigation (9th Cir 2015)..........................................30

B. Cy Pres.................................................................................................30 In General..................................................................................................................... 30

C.

Role of Objectors.................................................................................31

In General..................................................................................................................... 31 Proposed Rule Change.................................................................................................. 31 Simpson v. Trump University (9th Cir. 2018).................................................................31 Rodriguez v. Disner (9th Cir 2012)................................................................................. 32

D. Appeals................................................................................................32 Appeal of Class Certification Decisions: In General......................................................32 Microsoft v. Baker (Sup Ct 2017).................................................................................. 33 M.D. ex rel. Stukenberg v. Perry (5th Cir 2013).............................................................33 Settlement Appeals: In General.................................................................................... 33 Wells Fargo v. Van de Voorde (8th Cir 2017).................................................................. 34 Deepwater Horizon (5th Cir 2015)................................................................................. 34

V.

MDLs............................................................................................35 A.

In General............................................................................................35

B. 28 U.S.C. §1407: The MDL Statute......................................................35

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C.

History of the Development of MDLs..................................................36

D. Logistics of Transfer and Appeal........................................................36 Selecting the Transferee Forum.................................................................................... 36

The process................................................................................................36 The Transferee Court’s Authority: Transfer and Trial..................................................36 Lexecon v. Milberg Weiss (Sup Ct 1998) (3/27)............................................................37 In re Wilson (3rd Cir 2006)............................................................................................. 37

E.

Appointment of Counsel......................................................................38

F.

Common Benefit Fees..........................................................................39 In General..................................................................................................................... 39 Legal Authority............................................................................................................. 40 Common Benefit Fees and State Courts (Burch, Monopolies in Multidistrict Litigation) ...................................................................................................................................... 40 Fee Caps........................................................................................................................ 41 Closure Provisions in MDL Settlements........................................................................ 41 In re Vioxx Products Liability Litigation (I) (5th Cir Jul 2010)........................................42 In re Vioxx Products Liability Litigation (II) (5th Cir Dec 2010)....................................42 In re World Trade Center Disaster Site Litigation (2nd Cir 2014)..................................42

G. Bellwether Trials.................................................................................42 In General..................................................................................................................... 42 In re FEMA Trailer Formaldehyde Products Liability Litigation (5th Cir 2010).............43

H.

VI.

Compared to Single-Case Consolidation.........................................44

Jurisdiction...............................................................................44 In General..................................................................................................................... 44 Bristol-Myers Squibb Company v. Superior Court of California (Sup Ct 2017).............44

VII. Aggregation Outside of Court...................................................45 A.

Agency Aggregation: In General.........................................................45

B. Class Arbitration.................................................................................45 In General..................................................................................................................... 45 Stolt-Nielsen v. Animalfeeds International (Sup Ct 2010).............................................45 AT&T v. Concepcion (Sup Ct 2011)............................................................................... 46 American Express v. Italian Colors (Sup Ct 2013)........................................................ 46 Fitzpatrick: The End of Class Actions........................................................................... 47

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I. Foundations A. In General Timeline of Major Developments  Rules Enabling Act (1934): Enables the creation of FRCP and says that the rules can’t create or enlarge any substantive right.  Federal Rules of Civil Procedure: First promulgated in 1938  1966: Revised rule 23, creates it as we know it today. o Added 23(b)(3) for aggregated damages, designed to “take care of the little guy.”  1968: MDL Statute passed.  1995: Private Securities Litigation Reform Act – eventually (?) fixes litigation for securities class actions. Makes the largest shareholder suing the default name plaintiff.  2005: Class Action Fairness Act (CAFA) makes it easier to remove class actions to federal court. Crafting the Federal rules  Federal rules are promulgated by the Civil Rules Advisory Committee. o Composed of 15 members appointed by the Chief Justice of the Supreme Court. Committee includes judges, academics, and practitioners. Today, judges predominate. o Proposals then get published with a process involving public comment.  They then are subject to approval by the standing committee (made up of judges), the Supreme Court, and Congress. Preclusion and Due Process  Claim Preclusion o Same claim  Even if the actual issue is different, can still be the same claim. Construed very broadly under Federal law (states can be narrower). o Same parties  Same party, or deemed to be (trustee, guardian, absent class member in class action). o Final Judgment o On the merits  Issue Preclusion o Same issue of law or fact  Narrower than “same claim.” 4

Actually litigated and determined Valid and final judgment Issue is essential to the judgment Precluded party had adequate opportunity and incentive to litigate Note: for preclusion it’s not which case was filed first, but which case came to judgment first. If no class is certified, can’t have a preclusive effect on non-class members. That’s Smith v. Bayer. o Before that, there was a more expansive version of virtual representation. Courts really wanted to restrict endless attempts at certification – people could try again, and nobody was bound by denial of certification. In practice, judges will take a look and just rely on previous denial. NOTE: preclusion for certified class actions isn’t as broad as in individual litigation. In individual litigation, we ask about the “same transaction or occurrence.” In class litigation, we care about what was actually litigated and determined, or if settlement, what was actually in the scope of relief. o o o o

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Hansberry v. Lee (Sup Ct 1940)  Case #1: owners are suing the homebuyers in racially restricted area who were trying to move in. At issue was whether they had reached the 95% threshold for the racial covenant to be binding – wasn’t contested in that suit. Case #2: Now the owners are trying to enforce it against this P who wasn’t involved in case #1.  H: Default rule is no preclusion for non-parties. Violation of due process for the Illinois courts to make preclusive.  Takeaway: When evaluating the preclusive effect of a prior suit, we need to ask if the parties’ interests are aligned. Can’t have conflicts within a class if we’re going to make the result preclusive against absent class-members. Taylor v. Sturgell (Sup Ct 2008)  Case #1: airplane enthusiast makes FOIA request – fails. Case #2: same FOIA request for the same documents, different plaintiff in different federal court.  Court of Appeals said that P1 represented the interests of P2 through “virtual representation.”  H: Virtual representation is inadequate representation and can’t be the basis for preclusion. If one party is to represent another such that preclusion is to apply, then something needs to happen in this case to show party knows he’s representing someone else’s interests and/or special procedures for nonpresent parties. 5

o Ultimately remanded to see if P2 is suing as the agent of P1. Smith v. Bayer (Sup Ct 2011)  Both cases involving same drug. Both filed in WV state court, case 1 got removed to Fed Ct, case 2 couldn’t. Case 1 – class certification fails and USDC judge enjoins class certification in the state court case.  Ct: Federal courts can only enjoin state courts when there’s an exception to the general rule against these injunctions. o Here it would be the re-litigation exception. But for that to apply, need the same issue and same party. And P1’s case can only preclude P1. o Would’ve bound P2 if there were a properly certified class, but it failed.  Takeaway: When class certification fails, doesn’t have preclusive effect on any of the would-be class members. o Implies that a federal court’s decision denying certification will rarely enable an injunction against collateral litigation – we usually say that later case is distinct and can avoid the strict rules of preclusion. But the ct also says that they would expect federal courts to apply principles of comity to each other’s denials. Cooper v. Federal Reserve Bank (Sup Ct 1984)  Case #1: class action. Four employees intervene in EEOC suit against employer. Certified as a class action, found discrimination but only below certain “grade.” Case #2: separate individual actions, found that there were valid individual claims even though there was no proof of any classwide discrimination above that level. But said that their claims were estopped by the earlier finding of no disc above level 5 – issue preclusion.  Ct: No preclusion. There are differences between individual discrimination claims and a class action alleging general pattern or practice. That’s a gap – individual discrimination can’t possibly be enough to sustain a claim about general practices. No pattern is totally consistent with individuals experiencing.  Takeaway: Look at the substantive law to figure out of one claim can preclude another. In re Vioxx Product Liability Litigation (ED-LA 2012)  Case #1: Federal MDL. Case #2: MO state court certified class action. D wanted an injunction prohibiting pursuit of damages in ...