ClassActionBlawg.com offers a useful practice tip

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Paul Karlsgodt ClassActionBlawg author Paul Karlsgodt has a post based upon an insightful thesis:  "Trial plans can be an effective pre-certification tool for both plaintiffs and defendants in class action lawsuits."  (Karlsgodt, Practice Tip: Trial Plans Can Be an Effective Pre-Certification Tool (April 28, 2008) www.classactionblawg.com.)  The interesting aspect of the post is that it is essentially neutral, discussing instances where either plaintiffs or defendants would benefit from the requirement of an early, detailed trial plan:

For defense counsel, asking the court to require the plaintiff to provide a trial plan illustrating the expected course of proceedings if the class is certified can help the defendant to persuade the court of practical manageability problems. . . . On the other hand, voluntarily providing a specific trial plan can be also be an effective tool for plaintiffs in seeking class certification. Provide a trial plan illustrating a reasonable and efficient process for resolving both common issues and any individualized issues can give even a skeptical court a level of comfort in certifying a class in the face of more abstract manageability arguments being raised by the defendant.

(Ibid.)  The potential value of Karlsgodt's observation is that it might facilitate a process where the cream rises to the top and the junk sinks (with greater reliability that we seem to have now). In other words, if the class action has major structural flaws, the trial plan may illuminate them, but if the class action is indeed legitimate, then the trial plan may provide the confirmation of what the pleadings and sample evidence already strongly suggest. Perhaps a greater emphasis on the need for a thorough discussion of “superiority” of the class action device (required in California state class action) would promote movement in this direction without specifically imposing a pre-certification trial plan requirement, such as that required by Texas courts.

The complete post is worth a read.

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WHO'S WHO (AND WHERE) OF COMPLEX LITIGATION: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. targets West Coast

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Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., an AmLaw 100 firm with offices in the U.S. and U.K., continues to expand its West Coast office, located in Palo Alto.  A group of leading patent litigators, formerly of Buchanan Ingersoll & Rooney, have joined the Palo Alto office of Mintz Levin.  "Bryan J. Sinclair and Karineh Khachatourian have joined as Members. Jeffrey M. Ratinoff has joined as Of Counsel. The new group comes to Mintz Levin on the heels of Matthew C. Bernstein and John Giust who joined the firm’s San Diego office from Fish & Richardson last week."  (Mintz Levin, Mintz Levin Continues Its West Coast Expansion with the Addition of Patent Litigators in Palo Alto (April 28, 2008) www.mintz.com.)

Bob Taylor, Managing Member of Mintz Levin's Palo Alto office, said of the move, "Bryan, Karineh and Jeff have handled numerous complex intellectual property matters. Their collective experience adds significantly to this firm’s overall capabilities for handling significant patent matters and other types of complex litigation, both here and internationally."  While the practice area covered by these new additions should primarily concern patenti litigation (which is inherrently complex), it will be interesting to see whether Mintz Levin begins to compete effectively in the broader, congested field of complex litigation in California.

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The Complex Litigator mentioned at Overlawyered

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In a blog post roundup for April 29, 2008, Overlawyered noted an earlier post from The Complex Litigator, entitled "Coupon-only settlements are hard to sell."  (Olson, "April 29 roundup" (April 29, 2008) www.overlawyered.com.)  As I make mention of Overlawyered's link to this site, I find myself contemplating whether to include Overlawyered on my list of read-worthy blogs.  Do I succumb to self interest and avoid promoting a site that is essentially dedicated to cataloging the excesses and failures of the legal system?  Do I commend Overlawyered and work to effectuate positive change from within, by self-selecting laudable cases?

No doubt that the legal profession makes itself an easy target.  But for every one of Overlawyered's posts confirming the death of self-restraint and common sense, there is a story of justice dispensed wisely, after diligent effort by courageous attorneys and clients.  To Overlawyered's credit, that blog never suggests that all litigation is bad.  Rather, it offers, as its mission statement, the following:

Overlawyered.com explores an American legal system that too often turns litigation into a weapon against guilty and innocent alike, erodes individual responsibility, rewards sharp practice, enriches its participants at the public's expense, and resists even modest efforts at reform and accountability.

I suppose that I have answered my own question about the merits of including Overlawyered in the dialog here.  I am interested in using The Complex Litigator to explore all manner of subjects touching on class action and complex litigation.  Some topics, like technology issues, concern the implementation of efficiencies to make a litigator's life easier.  Others, such as the recent discussion about coupon settlements in class actions spans topics of class action settlment mechanics and ethics in the law.  The Complex Litigator is intended to become a community that, by its nature, includes diverse viewpoints and ideas.  All appropriately expressed thoughts are welcome.

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The second of Senator Margett's attacks on California's meal break law is also in freefall

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The likely demise of SB 1192 was covered previously by The Complex Litigator.  (See, "That would be 'Plaintiffs: 2, Defendants: 0'".)  Senator Margett's second challenge to the present formulation of California's meal break law, SB 1539, a bill that sought to dillute the statutory entitlement to meal breaks or sue for missed meal break wages, made it out of committee, was substantially amended on April 15th, and set for hearing today.  That hearing was withdrawn.  It looks like legislative efforts to revise how meal breaks are treated is back to square one.  With a democratically controlled legislature and a governor that, despite liberal tendencies, is generally in favor of any legislation that eases requirements for business, it appears unlikely that anything will be sorted out any time soon.

[Via Wage Law.]

UPDATE:  For an alternative view on the significance of the recent history of SB 1539, read the recent post at the California Labor & Employement Law Blog, entitled "California Legislature Indicates Intent To Clarify Meal Period Law."  California Labor & Employment Law Blog says, "While the meal period laws have not been changed, the Legislature’s declaration of intent is a good sign that lawmakers recognize the need for change and will continue to have further discussions to try to find consensus on a solution that contains adequate protections for employers and employees."  Only time will tell, but I don't share their "optimism." 

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An interesting defense of the class action device

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In earlier posts on this blog, I challenged some specific criticisms levied at the class action procedural device.  (See, "'Class' missing in Daily Journal column on class actions" and "Daily Journal Forum column challenges recent anti-class action campaign".)  The blog Disgusted Beyond Belief offers its own critique of several of the most common complaints about the class action device:

[O]ne has to wonder about those who call class actions with settlements frivolous. It is true that sometimes it is cheaper and easier to settle to make a complainant go away than it is to go to trial and win, but the aggregate costs of most class actions are so high that one would think it would always be much cheaper to go to trial if the suit is so weak as to be frivolous. In other words, it is not very likely that a class action suit where there has been a settlement was frivolous - just the opposite, in fact.

("Class Action Lawsuits" (April 21, 2008) disgustedbeyondbelief.blogspot.com.)

It is true that lawyers typically get anywhere between 30 and 40% of a suit that is done on contingency. But keep in mind that there is also the chance that they will lose and then get nothing. What it means is that the lawyer or law firm assumes the risk of the lawsuit.

(Ibid.)  The rest of the post is a good read, as Disgusted Beyond Belief is not ashamed to express outrage (in an entertaining manner).  I must admit that I did chuckle at the notion of a "right-wing stranglehold on the [mainstream medias]."  I guess many things in life are subjective.

[Via The UCL Practitioner]

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Recent opinions rejecting settlements in options backdating suits may have far-reaching consequences

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On April 7, 2008, Judge William Alsup, of the United States District Court of the Northern District of California, issued two opinions in two options backdating lawsuits involving Zoran Corporation and CNET Networks. These opinions, which rejected proposed settlements in two separate lawsuits, may have far-reaching consequences that could extend outside the realm of options backdating lawsuits (or securities litigation generally).

I first learned of this story on Ideoblog, which had an April 25, 2008 post chiding the "poor plaintiffs’ lawyers, [who] like so many others, fell for the notion that backdating was the scandal of the century." (Larry Ribstein, "Backdating's latest victims: plaintiffs' lawyers," (April 25, 2008) busmovie.typepad.com/ideoblog.)  Following the link trail, I found more information on the Wall Street Journal's Law Blog, Law.com, and extensive detail and commentary about the story from The D&O Diary, which has extensive coverage of options backdating lawsuits.  What I read should serve as a wake-up call to all class action/complex action practitioners, whether aligned with the plaintiffs' bar or the defense bar.

To briefly summarize the facts, the parties to the Zoran case entered settlement negotiations, resulting in a February 26, 2008 stipulation of settlement. "At the preliminary approval hearing, the plaintiffs’ damages expert, at the court’s request, presented a report calculating the plaintiffs’ maximum damages as $16 million (including prejudgment interest), which incorporated both the alleged damaged cause to company by the defendants’ option grants as well as by option grants to the rank-and-file employees." (Kevin LaCroix, "Uh-Oh! Serious Options Backdating Settlement Problems," (April 24, 2008) www.dandodiary.com.)  The proposed settlement included: the payment of up to $1.2 million of the plaintiffs’ attorneys’ fees and costs; the repricing or cancellation of certain officer defendants’ options (which repricing or cancelation was represented to the court to have a value of $1.65 million); the company’s adoption of certain corporate governance reforms; and, the grant of a broad claims release. (Ibid.)

Judge Alsup would have none of it.  The Court began its discussion by declaring that the class action procedure can “lend itself to abuse,” noting that “one form of abuse is a collusive settlement.” Judge Alsup said that a collusive settlement “usually comes with a cash award to counsel, a broad release of claims, and a cosmetic non-cash recovery for the abused shareholders.”  Judge Alsup explained the obligation of reviewing courts to ensure that absent shareholders are treated fairly.  The obvious outcome was the Court's determinatio that the proposed settlement “falls short of deserving preliminary endorsement.”

Meanwhile, In the Court's CNET Networks opinion, issued on the same day, Judge Alsup refused even to evaluate the a proposed settlement. The case was stayed pending directed discovery related to whether the plaintiff had satisfied the demand requirement. The parties then presented a joint motion to lift the stay for the purpose of seeking a preliminary approval of a settlement. The Court commented that the actions of the parties were “disappointing” because the parties did not, as they had represented to the court, conduct any discovery or file an amended complaint.

The D&O Diary is concerned that Judge Alsup's decisions "could well have an in terrorem effect on other litigants in other" options backdating suits, despite the fact that the decisions lack any precedential value.  But I am interested in whether these decisions have even broader consequences.  Judge Alsup's concerns are as relevant to proposed settlements in consumer fraud or wage & hour class actions as they are in an options backdating derivative suit.  The Wall Street Journal's Law Blog notes, "It’s perhaps too soon to say what impact Alsup’s rulings might have on other pending settlements."  (Ashby Jones, "Recent Rulings Pose Potential Threat to Backdating Settlements," (April 24, 2008) http://blogs.wsj.com/law/.)  Of course it's too soon to know about the ultimate impact of these rulings, but it isn't too soon to contemplate that impact.  The decisions of Judge Alsup essentially require some testing of the merits of a claim before a settlement will receive even preliminary approval.  If this analysis gains any momentum in other courts, plaintiffs and defendants alike may find it very difficult to receive preliminary approval for early settlements, particularly where the plaintiff's attorneys receive all or most of any cash changing hands.

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Whiplash warning: Bell v. Superior Court (H.F. Cox, Inc.) is depublished

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We live in amazing times.  Not three minutes after I published my last post about Bell v. Superior Court (H.F. Cox, Inc.), 158 Cal.App.4th 147 (2007), Ms. Kralowec (The UCL Practitioner) was kind enough to alert me via e-mail to the fact that the Supreme Court has reversed itself on the depublication request in Bell:

The order filed on April 23, 2008 is hereby amended to read in its entirety: The petition for review is denied. The requests for an order directing depublication of the opinion are granted. The Reporter of Decisions is directed not to publish in the Official Appellate Reports the opinion in the above-entitled appeal filed November 21, 2007, which appears at 158 Cal.App.4th 147. (Cal. Const., art. VI, section 14; rule 8.1125(c)(1), Cal. Rules of Court.) George, C.J., was absent and did not participate. Kennard J., is of the opinion the petition should be granted.

(Kralowec, "Supreme Court depublishes class certification opinion: Bell v. Superior Court (H.F. Cox, Inc.)" The UCL Practioner, www.theuclpractitioner.com.)  The customary blog nomenclature is "Hat Tip to...." or "Nod to ...." as a thank you for being the source of useful information.  That just doesn't seem good enough in this case, so...Thanks!

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The value of precedent depends on perspective: Bell v. Superior Court (H.F. Cox, Inc.)

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Greatsealcal100 In a post from earlier today, The UCL Practitioner reported that "[o]n Wednesday, the Supreme Court denied review and depublication in Bell v. Superior Court (H.F. Cox, Inc.), no. S160423."  (Kralowec, "Supreme Court denies review and depublication in class certification case: Bell v. Superior Court (H.F. Cox, Inc.)," The UCL Practioner, www.theuclpractitioner.com.)   In an earlier post on that same blog, The UCL Practitioner, noting that the Bell decision contained "some interesting language on the 'superiority' element of class certification," quoted from the opinion:

The opinion contains some interesting language on the "superiority" element of class certification: The party seeking class certification has the burden to establish that class action will be a superior means of resolving the dispute. (Aguiar v. Cintas Corp. No. 2, supra, 144 Cal.App.4th at pp. 132-133.) Our Supreme Court recently addressed the issue of the superiority of a class action in a wage and hour case. In Gentry v. Superior Court (2007) 42 Cal.4th 443, the Supreme Court concluded that both factors on which the trial court relied in this case – the size of some claims suggesting individual enforcement and the possibility of administrative proceedings before the Labor Commissioner – were insufficient to deny class certification. The court noted that there are many other factors in favor of class resolution in such cases, including that current employees might not bring individual claims out of a fear of retaliation, that current employees might not know of their rights (especially where, as here, the employer has affirmatively told them they are not eligible for overtime), and the necessity of class actions to give teeth to wage and hour laws even when some employees may have claims large enough for individual enforcement. (Id. at p. 459-462.) The court specifically held that an administrative action before the Labor Commissioner was an inadequate substitute for a class action. (Id. at p. 465.) As such, the trial court’s conclusion that a class action is not superior cannot stand.

(Kralowec, "New class certification decision: Bell v. Superior Court (H.F. Cox, Inc.)," The UCL Practioner, www.theuclpractitioner.com, quoting Bell.) My reaction to Bell at the time was that it seemed substantially more useful to plaintiffs than defendants.  As an aside, this is almost always true when a Court of Appeal reversed any part of a denial of certification.  Reversing a certification denial order, in any part, is a big deal.  Certification decisions are reviewed for abuse of discretion, and trial courts get the benefit of the doubt on appeal.

Today, I argued (successfully) against a defendant that sought to decertify a class.  Relying heavily on Bell, the defendant attacked a garden-variety class definition used in overtime/off the clock cases as lacking ascertainability.  Bell included some language that made defendant's argument more than trivial to overcome.

The defendant's use of Bell, an apparently plaintiff-friendly case, was sobering.  I was reminded of the danger inherrent in evaluating new precedent through the bias of one's primary practice area, in my case, predominantly plaintiff-side class actions.  While it is usually the case that a defendant, seeking decertification, would shy away from any certification opinion where any portion of a denial of certification was reversed, there are no guarantees that you won't have to deal with "surprise" citations.  In Bell, as in most cases, there are bits and pieces that are as useful to defendants as to plaintiffs, depending upon what issues are in play.

My unsolicited advice to erstwhile class action practitioners is to set aside some time to read each and every new class action decision, front to back, at least once while it is still hot off the presses.  Your early read of new authority may be enough to help you avoid surprises down the line.

UPDATE:  Aside from also reporting on the depublication of Bell earlier today, Wage Law notes that while Bell "had seemed to favor the plaintiff (who was the petitioner seeking Supreme Court review) the Court of Appeal's endorsement of the denial of certification in the off-the-clock and meal period causes of action had been embraced by the employers' bar, who will lament the depublication of the case."  ("Supreme Court Depublishes Bell v Superior Court (HF Cox, Inc.)," Wage Law, www.wagelaw.typepad.com.)

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My identity is worth $2.00?

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I was just informed by the Consumer Law & Policy blog that my identity is worth a scant $2.00.  The apparent basis for this valuation is the fact that so much data is available for the taking online, that there is essentially no barrier to entry in the market to sell this stuff.  That is sufficiently troubling to be the end of the story, but it got me thinking.  If I bring a consumer identity theft class action against some big company that suffered one of those headline-generating breaches, will I see as an expert for the defendant one of the black market identity theft privateers, opining that the data is nearly worthless (but he'll bid $1.75 for each person in the data set)?  It just seems like the natural progression: "Sure, your private data was stolen, it's just worthless.  Here's your settlement for 99 cents."

[From Techdirt, via Consumer Law & Policy Blog]

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Complex litigation requires clear, cogent writing

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In my experience, class action and other complex cases depend more heavily upon written submissions to the court.  I spend more time writing joint status conference statements, supplemental briefs after hearings, oppositions to demurrers to eighth amended complaints, and so on, and so forth.  I don't necessarily mind the emphasis on writing - I like writing.  But I am ever more keenly aware that as the briefing and other written submissions rise in importance, the quality of the written message must also rise.  There isn't enough time in the day to make every brief the ideal brief.  We simply endeavor to make each brief better than what is required to accomplish the goal of the brief.

In my own efforts to improve my writing, I am always interested in sound advice and constructive criticism.  I recently found the blog of Wayne Schiess, a legal writing instructor at the University of Texas.  Surprisingly named Wayne Schiess's legal-writing blog, Mr. Schiess provides interesting advice about writing, advice with which I find myself often in agreement.  The blog doesn't link to each post on its primary page, so Mr. Schiess's blog is more suited to occasional browsing.

[Thanks to The California Blog of Appeal for suggesting the site.]

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