The Private Securities Litigation Reform Act has had an enormous impact on securities class action litigation, but it left the “fraud-on-the market” presumption untouched. The fundamental efficiency axiom on which the presumption rests has come increasingly into question, though, and its continued viability deserves further study and potential reform, says Colby A. Smith, co-leader of Debevoise & Plimpton LLP's securities and corporate governance litigation practice group.
Discovery needs to be reformed so that the default in most cases is that discovery in the first instance is limited to the key players — for example, the individuals that are identified in the initial disclosures as most relevant to the dispute. There simply is no reason to produce millions of pages of documents, when the dispute will ultimately involve a few hundred pages and a handful of witnesses, says David J. Lender of Weil Gotshal & Manges LLP.
Securities class actions unfold with considerable procedural clarity thanks to the Private Securities Litigation Reform Act. Similar procedural changes could be effected in consumer cases without harming any of the consumers who were initially wronged, says Jeffrey S. Jacobson, a leader in Debevoise & Plimpton LLP's class actions practice group.
Health care issues are on everyone’s radar and there will be a fair bit of confusion as the new rules and regulations come into effect. Where there is confusion and a lot of money, you will always see class actions, says Lisa L. Heller, a leader in Robins Kaplan Miller & Ciresi LLP's class action practice group.
In addition to class actions related to the financial downturn and global warming, insurers will likely continue to be targets for class action attacks in connection with their use of third-party vendors and software systems to assist in the adjustment of claims or development of pricing, says Marci A. Eisenstein, co-leader of Schiff Hardin LLP's class action litigation and reinsurance and insurance practice groups.
There is great diversity in the availability of an interlocutory appeal of the determination of class certification from state to state, and even after the adoption of Rule 23(f), standards differ by circuit. Lawyers and clients should be able to predict with greater certainty the outcome on this all-important determination in class action litigation, says Jeffrey J. Greenbaum, chairman of Sills Cummis & Gross PC's class action defense practice group.
We need to maintain the independence of our judiciary. Watching a judge struggle because he knows his decision might have an adverse consequence for his re-election to the bench is not a pretty sight. The really odd part is that the so-called little guy — the voter who is often the target of referenda seeking to convert to an elected system of judges — is the very litigant mostly likely to get hurt by such a system, says Daniel D. Crabtree, chairman of Stinson Morrison Hecker LLP's commercial litigation division.
The ramifications of the financial crisis will continue to spawn litigation in a variety of ways, as will continued legislation and regulation directed toward the insurance and financial services industries. Also, the recent liberalization of the False Claims Act could prove a potent source of future cases, says Brent R. Austin, leader of Wildman Harrold Allen and Dixon LLP's class action litigation practice.
The next wave of class actions should continue to flesh out the jurisdictional issues similar to the question in Palisades v. Shorts, namely whether a third-party defendant, or counterclaim defendant, may remove a class action, says Karen E. Kahle, leader of Steptoe & Johnson PLLC's class action and mass torts team.
Statutes like the Telephone Consumer Protection Act are antiquated and have not been amended to reflect changes in technology. Damages caps in such statutes are necessary to reflect the realities of how business is transacted in today's world, says Lewis S. Wiener, chairman of Sutherland Asbill & Brennan LLP's financial services litigation team.
Without exception, delays in dispute resolution result in additional costs for clients, and a waste of public funds and judicial resources. The model set by the Eastern District of Virginia, in which expedited proceedings produce efficient, fair and reasoned results, should be implemented on a national scale, says J. Douglas Baldridge, chairman of Venable LLP's commercial south litigation group.
In the federal courts over the past several years, there has been a clear and decided trend by courts to "rigorously analyze" the facts and circumstances of a case to determine whether class certification is warranted under Rule 23. Not all state courts have followed suit, however. Rigorous analysis would help avoid some of the marginal (or completely bogus) claims being filed in state courts, says Sandra D. Hauser, co-chairwoman of SNR Denton US LLP's national class action and major financial litigation practice.
State and federal courts in California have developed that state’s unconscionability law to a point that effectively invalidates any standardized consumer agreement that does not permit classwide dispute resolution. This has introduced unpredictability into the dispute resolution programs of companies nationwide, says Joseph M. McLaughlin, a leader in Simpson Thacher & Bartlett LLP's litigation department.
With less tort reform and more potential for large damage claims, commercial torts, including commercial class actions brought under state consumer protection laws, are likely to be a significant growth area, says Marc E. Williams, a leader in Nelson Mullins Riley & Scarborough LLP's class actions and mass torts practice group.
The discretionary appeal of class certification granted by Rule 23(f) is not good enough. Class certification is important enough and decisive enough to warrant immediate appeal as of right, says Michael R. Pennington, chairman of Bradley Arant Boult Cummings LLP's class action and complex litigation practice team.
Following Iqbal, Twombly and the Ninth Circuit’s recent decision in Dukes v. Wal-Mart, courts across the country will be taking a closer look at class action filings in the consumer products, financial sector, and deceptive or unfair business practices areas. However, the added scrutiny has yet to slow the pace of new class action filings, says Neal R. Marder, head of Winston & Strawn LLP's litigation department.
As legislative interest in overturning the Supreme Court's decision in Stoneridge increases, potential private liability of secondary actors for securities fraud will require continued attention, says James B. Moorhead, leader of Steptoe & Johnson LLP's class action practice group.
Legitimate shareholder cases are being dismissed early on, before even reaching the discovery phase, based on an unjustified fear of meritless cases being brought. This is a real problem that has enabled and prolonged the existence of massive frauds like WorldCom, Enron and Madoff, says Brian J. Robbins, co-founder and managing partner of Robbins Umeda LLP.
International class actions under the Alien Tort Claims Act, class action prevention, and class actions regarding labels and advertisements for “green” and “organic” products should be areas of growth for defense lawyers in the near future, says Jeffrey L. Richardson, chairman of Mitchell Silberberg & Knupp's class action defense practice group.
By turning over sovereign prosecutorial-like power to contingency fee counsel in product-related litigation, a state effectively creates a new branch of government motivated by the prospect of private gain rather than the pursuit of justice or the public welfare. If not banned outright, this area needs "sunshine" reform, says Sean P. Wajert, co-chairman of Dechert LLP's mass torts and products liability practice group.
The pros of using predictive coding far outweigh the cons. Given the heavy pressure on law firms and in-house counsel to reduce discovery costs, as well as the Justice Department's recent stance on the subject, it appears predictive coding will continue to emerge from the obscure world of legal technology to the mainstream of legal practice, say Michael Moscato and Myles Bartley of Curtis Mallet-Prevost Colt & Mosle LLP.
In many circumstances in antitrust litigation, standing up as a class representative may be an effective way to protect the company’s interests while assuring that it and other victims of anti-competitive behavior receive the monetary recovery they deserve, say Kellie Lerner and Ryan Marth of Robins Kaplan Miller & Ciresi LLP.
In 2012, shareholders challenged 93 percent of all merger and acquisition transactions with a value greater than $100 million and 96 percent of M&A transactions with a value greater than $500 million. In other words, it almost is inevitable nowadays that litigation will follow a merger or going private announcement — with an average of about five lawsuits per transaction, say attorneys with Arnold & Porter LLP.
When U.S. District Judge Naomi Reice Buchwald dismissed a consolidated, multidistrict batch of antitrust and racketeering suits in Manhattan earlier this spring, she suggested plaintiffs seeking to recover from banking giants at the heart of the interest rate-fixing scandal might have better luck with securities fraud claims. But those plaintiffs will need to be lucky indeed. Two recent developments show that obstacles are inherent and, perhaps, insurmountable, say attorneys with Choate Hall & Stewart LLP.
Now that investigations have been initiated by U.S. Attorney’s Offices and the SEC into possible abuses by corporate executives of Rule 10b5-1 trading plans, the private securities bar inevitably will follow suit and file litigation. Nevertheless, these plans continue to be an effective defense against allegations of insider trading, say attorneys with Pillsbury Winthrop Shaw Pittman LLP.
Recently, two firms have filed class actions against three Catholic Church-affiliated health care facilities, claiming that their pension plans should be subject to the Employee Retirement Income Security Act. These cases could have a profound effect on all church plan sponsors, regardless of whether they have previously obtained favorable church plan rulings, say attorneys with Drinker Biddle & Reath LLP.
Many lawyers are asking whether placing electronically stored information in the cloud could inadvertently waive the attorney-client privilege and whether the government or a civil litigant could obtain ESI directly from a cloud service provider. In answering these questions, there are a number of aspects of the cloud worth considering, say Timothy Broas and Matthew Saxon of Winston & Strawn LLP.
The decision by the Allegheny County Court of Common Pleas in In re H.J. Heinz Co. Derivative and Class Action Litigation represents a faithful application of the American Law Institute’s Principles of Corporate Governance, which were formally adopted by the Pennsylvania Supreme Court in the landmark decision Cuker v. Mikalauskas, say attorneys with Dechert LLP.
Regulators, food distributors and lawyers are scrambling to determine the legal and reputational consequences of the still-growing horse meat scandal that recently hit Europe. Amid the recalls, finger-pointing and consumer outrage, one thing remains certain: You will have time to bet on many Derby winners before this scandal is fully resolved, say attorneys with Cozen O'Connor.
Not since Franklin Roosevelt took office in 1933 have we seen a Supreme Court so imbalanced that it would throw its own power away as it did in Twombly, Iqbal and Concepcion, or devalue its own authority through matters of little interest, simply for the benefit of large American corporations, says Fred Isquith of Wolf Haldenstein Adler Freeman & Herz LLP.