Strategies for Class Action Defense - BakerHostetler · • But a court can halt a lawsuit by entering judgment for the Plaintiff when the defendant unconditionally surrenders

Strategies for Class Action Defense

Four Key Developments

Wednesday, Sept. 9, 2015 12:00 – 1:15 p.m. EST

Introductions

Paul G. Karlsgodt Partner, Denver Leader of BakerHostetler’s national Class Action Defense practice

Patrick T. Lewis Partner, Cleveland

Mootness & Offers of Judgment Rand L. McClellan Partner, Columbus [email protected]

“Full” Rule 68 Offers

• Issue: Defendants are issuing “full” Rule 68 offers to named Plaintiffs in putative class actions and, if the Rule 68 offer is refused, then arguing that an offer of full (individual) relief mooted Plaintiff’s claim. o Offers must be “full” o Exception: Claims that are “so insubstantial

that it fails to present a fed. controversy” (e.g., previous Circuit or Supreme Court decisions preclude claim)

Hot Topic

• The legal underpinnings of this issue have existed for some time, so why now?

• Proliferation of class actions for violations of federal statutes o Strict liability o Statutory damages

• TCPA example o Approximately 112 TCPA class actions were

filed in 2010. By 2014, that number grew to 558. Pace is not abating.

Legal Tenet - Mootness

• Federal jurisdiction is limited by Article III of the Constitution to “cases” and “controversies,” which “restricts the authority of the federal courts to resolving the legal rights of litigants in actual controversies.” Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1528 (2013) (internal quotations and parallel citations omitted).

• A party must have a legally cognizable interest in a case to “ensure[] that the Federal Judiciary confines itself to its constitutionally limited role of adjudicating actual and concrete disputes . . . which have direct consequences on the parties involved.” Id.

• “[A]ctual controversy must be extant at all stages . . . , not merely at the time the complaint is filed.” Id.

Offers of Judgment (Rule 68)

• Rule 68(a): “At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms ….”

• Rule 68(b): “An unaccepted offer is considered withdrawn, but it does not preclude a later offer….”

• Note, a proposed revision to Rule 68 that would have precluded offers of judgment in class actions was proposed, but never adopted.

Two Camps

• Preserve or not “frustrate” class action or

collective action device via “pick off offers.” • Settlement

o Individual Plaintiff receives all requested relief

o Limit “abusive” class actions

Circuit Split

• By 2013, there was disagreement among circuit courts regarding whether an unaccepted Rule 68 offer that fully satisfies a plaintiff’s individual claim renders that claim moot. o Individual claim vs. class claim o Circuit split on both issues

Genesis Healthcare Corp. Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (U.S. 2013)

• FLSA collective action. • Defendant made Rule 68 offer for all individual

relief sought by Plaintiff, who ignored offer. No other individuals joined her suit. District court determined Plaintiff’s claim was moot and dismissed claim for lack of subject-matter jurisdiction.

• Third Circuit, citing “pick off” concerns, reversed, holding that the individual claim was moot, but the collective action was not.


• Question Presented: Does a case become moot, and beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff's claims?


• Genesis Healthcare Corp passed on question presented because it was later discovered that the Plaintiff conceded the issue below and did not raise it via a cross petition. o The Court assumed that the Rule 68 offer

mooted the individual claim.


• Held: After Plaintiff’s individual claim became moot, she had no interest in representing others, reversed Third Circuit, stating that the Plaintiff’s claim was “appropriately dismissed” for lack of subject-matter jurisdiction. o Justices: Thomas, Kennedy, Alito, Roberts,

Scalia


Noteworthy observations by the majority: • Acknowledged Circuit split. • Rule 23 class acquires legal status when certified. • Rejected “relation back” doctrine rationale cited by some

courts in avoiding mootness argument. – Inherently transitory reserved for challenged conduct that

was “effectively unreviewable” because no plaintiff possessed a personal stake in the suit long enough for litigation to run its course (e.g., temporary pretrial detentions). 133 S. Ct. at 1525. “[C]laim for damages cannot evade review ….” Id. at 1525.

– Appellate reversal of certification may relate back to time of denial. Id. at 1528, n.2.


• Seemed to discount pick-off issue: – Dismissed references in Deposit Guaranty

National Bank v. Roper regarding “pick-off” offers as dicta. Genesis Healthcare Corp., 133 S. Ct. at 1531-32 (citing Roper, 445 U.S. at 329-30).

– “[S]ettlement may . . . foreclos[e] unjoined claimants from having their rights vindicated in [the named plaintiff]’s suit, [but] such putative plaintiffs remain free to vindicate their rights in their own suits. They are no less able to have their claims settled or adjudicated following [the named plaintiff]’s suit than if her suit had never been filed at all.” Genesis Healthcare Corp., 133 S. Ct. at 1531.

Kagan’s Dissent • An unaccepted offer is “withdrawn” and thus is a “legal nullity.” A

court can still grant relief. • Rule 68 provides no mechanism to terminate a lawsuit without the

Plaintiff’s consent. • Court lacks “inherent authority” to enter an unwanted judgment on

an individual claim, in service of wiping out collective action. o Does not address majority’s discounting of Roper and its

statements that other claimants are free to assert their rights. • Pick-offs frustrate collective action goals. • But a court can halt a lawsuit by entering judgment for the Plaintiff

when the defendant unconditionally surrenders. o Dissent does not identify the source of this authority.

• Has been adopted by several Circuits, most recently the 7th Circuit. (Chapman v. First Index, Inc., Nos. 14-2773 & 14-2775, 2015 U.S. App. LEXIS 13767 (7th Cir. Aug. 6, 2015).


Did not resolve much… • Relation back can be used to keep class action

claims alive in the face of a full Rule 68 offer (E.g., 11th Circuit).

• Entire class action suit is moot when individual claim is mooted via an offer of full relief (E.g., .4th Circuit).

Justice Kagan’s dissent has been followed by other courts. (E.g., 7th Circuit)


Campbell-Ewald Co. v. Gomez (No. 14-857)

Question presented: • Whether a case becomes moot, and beyond the

judicial power of Article III, when the plaintiff receives an offer of complete relief on his claim.

• Whether the answer to the first question is any different when the plaintiff has asserted a class claim under Federal Rule of Civil Procedure 23, but receives an offer of complete relief before any class is certified.


Will the following impact Gomez outcome? • Timing: Will Court address issue of timing of

Rule 68 offer? o Offers issued prior to filing of class

certification motion. (Damasco v. Clearwire Corp., 662 F.3d 895 (7th Cir. 2011)) (overruled)

o Carroll v. United Compucred Collections, Inc., 399 F.3d 620 (6th Cir. 2005)


Will the following impact Gomez outcome? • Individual vs. class relief: Will Court split its

analysis between individual and class relief? • Role, if any, of Rule 68: Assuming causes of

action can be resolved by offer of “full relief,” will that offer depend on Rule 68 framework?

• Legislative history or inaction.


Will the following impact Gomez outcome? • Nature of Action: Will decision distinguish between

different types of claims? o Will Court target certain types of class actions?

(e.g., no injury, statutory damages claims?) o “Total victory” exception.

o “[A] court has discretion to halt a lawsuit by entering judgment for the plaintiff when the defendant unconditionally surrenders and only the plaintiff’s obstinacy or madness prevents her from accepting total victory.” Genesis Healthcare Corp., 133 S. Ct. at 1536.


Foreshadowing? • Seventh Circuit decision in Chapman v. First Index,

Inc., Nos. 14-2773 & 14-2775, 2015 U.S. App. LEXIS 13767 (7th Cir. Aug. 6, 2015) o Overruled prior precedent that an offer of full

compensation moots the litigation or otherwise ends the Article III case or controversy.

o But … “Why should a judge do legal research and write an opinion on what may be a complex issue when the plaintiff can have relief for the asking?”

Standing David M. McMillan Associate, New York [email protected]

Two Major Decisions Coming Soon

• Spokeo, Inc. v. Robins, 2015 WL 4148655

(2015) • Tyson Foods, Inc. v. Bouaphakeo, 2015

WL 1285369 (2015)

Spokeo v. Robins • Putative class action stemming from violations of the Fair

Credit Reporting Act. • Spokeo.com is a “people search engine”: compiles publically-

available information on individuals and then displays that information in an easy-to-read format.

• Plaintiff alleged Spokeo willfully published inaccurate

information that hurt his ability to obtain credit, employment, and caused anxiety, stress and concern.

• Did not allege he suffered any particular or specific injury, but

the statute automatically entitled him to “not less than $100 and not more than $1,000”

Presenter

Presentation Notes

Spokeo’s search engine aggregates publicly available information regarding individuals from phone books, social networks, marketing surveys, real estate listings, business websites, and other sources into a database that is searchable via the Internet using an individual’s name, phone number, email, or physical address, and displays the results *4 of searches in an easy-to-read format

Spokeo v. Robins

Fair Credit Reporting Act • Regulates “credit reporting agencies” to ensure

publication only of accurate information. • Allows private citizens to sue for violations. • Provides that willful violations as to a consumer

entitles that consumer to “any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000”

Presenter

Presentation Notes

gs, publish false information about them as a result of careless procedures. Maurer, supra, at 126; 15 U.S.C. § 1681e(b). To protect consumers, Congress specified several procedures that credit reporting agencies must follow - such as providing the furnishers and users of consumer information with notices of their legal obligations and publicizing a telephone number through which consumers can access free reports. 15 U.S.C. § 1681e; id. § 1681j. In addition to these specific provisions, the FCRA requires credit reporting agencies to “follow reasonable procedures to assure maximum possible accuracy” of their information. 15 U.S.C. § 1681e(b).

Spokeo v. Robins

Article III standing (1) the plaintiff has suffered an injury in fact;

(2) there is a causal connection between the injury

and the conduct complained of; and (3) it is likely that the injury will be redressed by a

favorable decision. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992).

Presenter

Presentation Notes

Article III limits the federal “judicial Power” to the resolution of “Cases” or “Controversies.” U.S. CONST, art. Ill, § 2. “ Standing principles delineate “the ‘Cases’ and ‘Controversies’ that are of the justiciable sort referred to in Article III.” Lujan, 504 U.S. at 560. To demonstrate standing, a plaintiff bears the burden of showing that he (1) *** has suffered an “injury in fact” that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and *12 (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

A winding road at the District Court • Jan 2011 - District court grants Spokeo’s motion

to dismiss without prejudice, holding that plaintiff had no standing.

• May 2011 – District Courts finds that allegations of the Amended Complaint were sufficient to allege standing.

• Sep 2011 – District Court “strike[s] the standing discussion from its May 11, 2011 Order,” and “reinstates the January 27, 2011 Order, which found that Plaintiff fails to establish standing.”

Presenter

Presentation Notes

May 2011 decision: “Plaintiff has alleged an injury in fact—the ‘marketing of inaccurate consumer reporting information about Plaintiff’—that is fairly traceable to Defendant’s conduct—alleged FCRA violations-and that is likely to be redressed by a favorable decision from this Court.” Sep 2011 decision: “Mere violation of the Fair Credit Reporting Act does not confer Article III standing, moreover, where no injury in fact is properly pled. Otherwise, federal courts will be inundated by web surfers’ endless complaints.”

Injury-in-law vs. Injury-in-fact

• 9th Circuit - Reverses district court and holds that plaintiff had alleged standing.

• Violation of a statute for which Congress has created a private right of action counts as “injury” sufficient to confer Article III standing.

Does this turn the three-part test for Article III standing into a single question—i.e.,

whether the plaintiff is entitled to statutory damages?

Presenter

Presentation Notes

9th Circuit Feb 2014 Reverses district court and holds that plaintiff had alleged standing. Explains that (1) Congress’s creation of a private cause of action to enforce a statutory provision implies that Congress intended the enforceable provision to create a statutory right; and (2) the violation of a statutory right is usually a sufficient injury in fact to confer standing. “When, as here, the statutory cause of action does not require proof of actual damages, a plaintiff can suffer a violation of the statutory right without suffering actual damages.” First, he alleges that Spokeo violated his statutory rights, not just the statutory rights of other people, so he is ²among the injured.² Second, the interests protected by the statutory rights at issue are sufficiently concrete and particularized that Congress can elevate them. Ninth circuit’s analysis “has the practical effect of turning the three-part test *7 for Article III standing into a single-factor inquiry that was satisfied by the availability of a statutory remedy. “ Issue: There was a violation as to you, but you didn’t actually suffer any harm because of it. But if the statute says you get money, is this enough to satisfy Article III?

Issue before Supreme Court

Whether a mere statutory violation, without more, satisfies the constitutional requirement of an injury-in-fact.

Implications for Class Actions Landscape 1. Will make predominance analysis under Rule

23 either more, or less, strict. 2. Creates standing for de minimus statutory

violations (i.e., clerical errors). 3. Exerts enormous settlement pressure even

though plaintiffs haven’t actually been injured. 4. Affects class actions not only in FCRA but

Truth in Lending, Fair Debt Collection Act, Telephone Consumer Protection Act, and any other act that confers a private cause of action and statutory damages.

Presenter

Presentation Notes

1. If court says injury-in-law is sufficient, more likely to find predominance of common issues. On the other hand, if actual injury is required, then more likely that individualized damages issues will predominate. Class certification is easier when injury-in-law can establish standing, because otherwise-disparate claims of causation and damages are transformed into class-wide common issues. See Pet. 15 - 16; Ramirez v. Trans Union LLC, 2014 WL 3734525, at *9-11, *14 (N.D. Cal. July 24, 2014) (certifying class because decision below rendered irrelevant “individualized question” whether class members were “actually injured”). Indeed, almost any FCRA class action could be recast in terms of an abstract, purely statutory harm. See Pet. 14-15. FCRA: Dozens of class actions are filed each year. 3. Spokeo amici: “ ‘aggregated statutory damages claims can result in absurd liability exposure in the hundreds of millions - or even billions - of dollars on behalf of a class whose actual damages are often nonexistent.’ ”

Tyson v. Bouaphakeo

• Hourly workers at a pork-processing facility sued for overtime compensation for time spent on “donning/doffing” protective gear.

• Case brought as a putative class action premised on Iowa

state law and as a collective action under the Fair Labor Standards Act.

• District Court certified a Rule 23(b)(3) class and an FLSA collective action:

– Tyson’s “gang-time” system was the “tie that binds” the class,

despite individual differences in time spent donning/doffing, rinsing, walking, and types of equipment worn.

Tyson v. Bouaphakeo: Proof by Statistical Extrapolation • Plaintiffs presented a time study by Dr. Kenneth Mericle that

purported to show the “average” amount of time Tyson employees spent on donning/doffing-related activities.

• Videographers stationed in various parts of the plant

recording time spent donning and doffing. • Computed an “all-in” average of 18 minutes on the

Processing floor and 21.25 minutes on the Slaughter floor.

• Dr. Liesl Fox: used Dr. Mericle’s “averages” to compute an aggregate damages award for each class, based on Tyson pay records.

Flashback: Wal-mart v. Dukes

• Class action by female Wal-Mart employees alleging sexual discrimination under Title VII seeking injunctive relief and backpay.

• Employees “held a multitude of different jobs, at different

levels of Wal–Mart’s hierarchy, for variable lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of supervisors (male and female), subject to a variety of regional policies that all differed .... Some thrived while others did poorly. They have little in common but their sex and this lawsuit.”

• “The Court of Appeals believed that it was possible to replace

such proceedings with Trial by Formula. . . We disapprove that novel project.”

Presenter

Presentation Notes

Promotional policies were discretional with local managers; Plaintiffs alleged that discretion was disproportionately exercised in favor of men District Court grants certification, and a divided Court of Appeals affirmed en banc. Supreme Court reverses: commonality means there must be a common contention that is capable of classwide resolution—i.e., determination of its truth or falsity will “resolve an issue that is central to the validity of each one of the claims in one stroke.”

Tyson v. Bouaphakeo

• At trial, class members testified as to the amount of time spent donning/doffing—none of them matched Mericle’s “averages.”

• Fox’s testimony established that there were at least 212

class members who had zero uncompensated overtime. • Jury awarded lump sum damages in an amount roughly

equal to half of what Fox had calculated—by implication, this means that Mericle’s “averages” were overstated (and that there were even more uninjured class members).

• 8th Circuit affirmed by divided panel

Presenter

Presentation Notes

plaintiffs’ expert admitted that if “‘employee[s] worked less than [the time study] numbers … it is possible that Tyson’s K-code payments already have fully paid them for that time.’” Id. at 123a (omission in original). Accordingly, “under the evidence [plaintiffs] themselves adduced, well more than one-half of the certified class of 3,344 persons have no damages.” Id. at 125a.

Tyson v. Bouaphakeo: Issue before the Supreme Court

Whether Article III is satisfied where only the named plaintiff suffered actual injury (and some absent class members have not)

Presenter

Presentation Notes

Rule 23 “‘must be interpreted in keeping with Article III constraints’” on standing, Ortiz v. Fibreboard Corp., 527 U.S. 815, 831 (1999) (quoting Amchem, 521 U.S. at 613), the lower courts are divided about what that entails. Circuit courts disagree as to whether standing requires only the named plaintiff to have suffered injury, or whether all class members must have been injured. If all class members, then standing will be much hard to meet—and certification will be much more difficult because of the individual proof that must be presented. Some courts have held that the “‘possibility or indeed inevitability’” that some class members were not injured “‘does not preclude class certification.’” In re Nexium Antitrust Litig., 777 F.3d 9, 25 (1st Cir. 2015) Since, Comcast, courts seem to be raising this standard. Comcast held that class damages models must fit with plaintiff’s liability theory (antitrust impact); Comcast is often viewed by defense counsel as standing for the proposition that damages models in general must meet a higher level of scrutiny.

Tyson v. Bouaphakeo: Implications for class actions • If affirmed, will pave the wave for class actions

that include class members that suffered no injury in fact.

• If reversed, certification will become more difficult—defendants will have the ability to present individualized defenses to show that certain class members were not injured.

Presenter

Presentation Notes

Bad for business groups such as the U.S. Chamber of Commerce, the National Association of Manufacturers, the Business Roundtable and others that filed amicus briefs urging the Supreme Court to take the Tyson case.

Comcast’s Impact After Two Years Patrick T. Lewis Partner, Cleveland [email protected]

Comcast Corp v. Behrend, 569 U.S. ___, 133 S. Ct. 2426 (2013)

• 5-4 decision that reversed the certification of an antitrust class

• Quickly heralded by some in the defense bar as a sea change in class certification law

• Has it turned out that way?

What was Comcast about?

• Antitrust class action brought by putative class of cable subscribers.

• Alleged claim under Section 2 of the Sherman Act that the cable company drove up prices in the Philadelphia media market using anticompetitive “clustering strategy”

• To show predominance, plaintiffs had to: – Prove that individual injury resulting from the alleged

antitrust violation (“antitrust impact”) could be proven with evidence common to the class; and

– Show damages to the class were measurable on a class-wide basis using a “common methodology.”

Plaintiffs’ Damages Model

• Plaintiffs alleged four theories of antitrust impact from “clustering”: – Decreased satellite competition by allowing

cable company profitably withhold local sports programming

– Reduced competition from “overbuilders” (companies that build competing networks in the same area)

– Prevented customers from “benchmarking” competition

– Increased cable company’s bargaining power with content providers

Plaintiffs’ Damages Model

• Plaintiffs’ expert purported to calculate $875,576,662 in class-wide damages from the combined effect of all four antitrust impact theories.

• But the district court only certified the class using one theory—”overbuilding”

• So… Did Plaintiffs show damages could be calculated on a class-wide basis?

Comcast’s Holding

• Class should not have been certified • The Court held the model could not measure

damages on a class-wide basis because it was not measuring antitrust impact of just the overbuilding theory

• Lower courts held that requiring Plaintiffs to show a damages calculation was premature at class certification because it was a merits issue

• This, the Court held, was inconsistent with Dukes’ “rigorous analysis” test, which it applied to predominance under Rule 23(b)

Takeaways?

• Comcast expressly extended Wal-Mart Stores v. Dukes’ “rigorous analysis test” to the Rule 23(b) predominance inquiry

• Hot debate over Comcast’s impact on the class action landscape – Can a court certify a class with individual

damages concerns? • What about Daubert?

Rigorous Analysis

• Comcast now requires Dukes’ “rigorous analysis” to be performed on the class certification elements under Rule 23(b)(3), particularly predominance

• Solidifies trend toward requiring plaintiffs to demonstrate a case is susceptible to resolution by common proof

Comcast and Damages

• Comcast’s impact on 23(b)(3)’s predominance requirement unclear: – Must plaintiffs show a class-wide

measurement of damages in all cases? – Does case simply require proof that

damages caused by defendant’s conduct? • Dissent: idea that “individual damages

calculations do not preclude certification under Rule 23(b)(3) is well-nigh universal.”

Comcast and Damages

• Several Circuit Courts have concluded Comcast does not require a class-wide measurement of damages in all cases: – Roach v. T.L. Cannon Corp.,

778 F.3d 401 (2d Cir. 2015) – Neale v. Volvo Cars of N. Am., Inc.,

794 F.3d 353 (3d Cir. 2015) – In re Deepwater Horizon,

739 F.3d 790 (5th Cir. 2014) – Butler v. Sears, Roebuck & Co., Inc.

727 F.3d 796 (7th Cir. 2013) – Leyva v. Medline Indus., Inc.,

716 F.3d 510 (9th Cir. 2013)

Comcast and Damages

• These cases gave Comcast a narrow construction: – Neale rejected notion that Comcast created “a

broad-based rule” requiring damages to be susceptible to measurement across entire class

– Deepwater Horizon called it a “misreading” of Comcast to interpret it as “preclud[ing] certification under Rule 23(b)(3) in any case where class members’ damages were not susceptible to a formula for classwide measurement.”

Comcast and Damages

• The D.C. Circuit came out the other way in an antitrust class action: – “No damages model, no predominance, no

class certification.” In re Rail Freight Fuel Surcharge Antitrust Litig., 725 F.3d 244 (D.C. Cir. 2013)

Rule 23(c)(4)

• Rule 23(c)(4) provides: – “When appropriate, an action may be

brought or maintained as a class action with respect to particular issues.”

• After Comcast, more liability-only classes: – In re Whirlpool Corp. Front-Loading Washer

Prods. Liab. Litig., 722 F.3d 838 (6th Cir. 2013)

But what about Daubert?

• But the Court left unanswered the question on which it granted cert: – “Whether a district court may certify a class

action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis?”

• Issue here was whether a Daubert challenge could be mounted to plaintiffs’ experts at the class certification stage

But what about Daubert?

• Courts more consistently permitting Daubert challenges to experts at class certification stage

• “[A] plaintiff cannot rely on challenged expert testimony, when critical to class certification, to demonstrate conformity with Rule 23 unless the plaintiff also demonstrates, and the trial court finds, that the expert testimony satisfies the standard set out in Daubert.” – In re Blood Reagants Antitrust Litig., 783 F.3d

183 (3d Cir. 2015)

Key Takeaways

• The jury is still out on Comcast’s impact on the Rule 23(b)(3) predominance analysis – Probably not a sea change – Does highlight importance of being able to

show class-wide injury • Defendants should consider greater use

of Daubert challenges to plaintiffs’ experts

Class Action Objectors Casie D. Collignon Partner, Denver [email protected]

Courts are taking Objectors seriously.

• Eubank v. Pella Corp., 753 F.3d 718 (7th Cir. 2014) • Redman v. RadioShack Corp., 768 F.3d 622 (7th Cir. 2014) • Pearson v. NBTY, Inc., No. 12-1245, (7th Cir. Nov. 19, 2014)

Judge Posner criticizes: • the valuation of a settlement for purposes of determining attorney's

fees (administration costs and cy pres awards are not part of the value to the settlement class)

• the calculation of attorney's fees (a ratio based on actual value to the class, not the maximum potential value, especially when “clear sailing” provisions are included in settlement agreements)

• and the notice to the class and the claims process (claims forms were too long and complicated and notice was too long, confusing, yet incomplete and misleading - simplification is what the court wants)

http://scholar.google.com/scholar_case?case=11253445229497131691&hl=en&as_sdt=6&as_vis=1&oi=scholarr



We Have To Face All Kinds of Objectors.

• Whackos • Individual class members • Professional or “Greenmail” objectors • Public Interest objectors

– Ted Frank - In Re: Capital One Telephone Consumer Protection Act Litigation (June 2015) Because the Center for Class Action Fairness was “poorly funded and thinly staffed,” and “because courts failed to provide adequate compensation for successful objectors” he entered into an agreements with professional objectors for cuts of their fees.

• Government objectors • Competing Plaintiff Lawyer objectors - leading to opt out litigation

– Allen et al. v. Schnuck Markets, 15-cv-00061 (S.D. Ill.) • Allies Who Have Become Enemies

– In re: Target Corp. Customer Data Security Breach Litigation, MDL. No. 14-25222 (D. Minn. 4/21/15)

• Objections from Judges

Social Media is the new frontier.

• Mirakay v. Dakota Growers Pasta Co.,

Inc., No. 13-cv-4229 (Oct. 20, 2014, D. N.J.) – In a food case, objector argued that the

parties should have posted notice on defendants social media pages.

– Settlement was approved over the objection.

Strategies for Avoiding and Defeating Objectors or Settlement Rejection

• Avoid appearance of collusion. – Allow some confirmatory discovery. – Make sure to keep a record of negotiations. – Consider hiring a mediator or using court-

sponsored dispute resolution service. – Put evidence or documentation in the

Settlement Agreement. – Avoiding “clear sailing” provisions.

• Avoid overreaching with your release.

Strategies for Avoiding and Defeating Objectors or Settlement Rejection

• Make the Plaintiff defend the attorney fee calculation during the mediation: – Do not let Plaintiff’s counsel include admin costs or

cy pres as part of the class recovery. – Have a principled basis for settlements with

outrageously high exposure and relatively low class recovery…and any necessary cy pre component.

• Carefully vet your notice and claims processes and know your anticipated claims rates.

• Know your objectors and their weaknesses.

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These materials have been prepared by Baker & Hostetler LLP for informational purposes only and are not legal advice. The information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel. You should consult a lawyer for individual advice regarding your own situation. ©2014 Baker & Hostetler LLP. All Rights Reserved.

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Strategies for Class Action Defense - BakerHostetler · • But a court can halt a lawsuit by entering judgment for the Plaintiff when the defendant unconditionally surrenders