How is this a "tough year for class action attorneys?"

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Yesterday Law.com published an article entitled Tough Year for Class Action Attorneys Continues, authored by Lynne Marek.  What I want to know is, how does Lynne Marek know what kind of year I'm having?  The article is ostensibly about three Lexington, Kentucky attorneys, William J. Gallion, Shirley A. Cunningham Jr., and Melbourne Mills Jr., that are facing charges for allegedly stealing $46 million in settlement funds obtained for their clients in Fen-Phen diet drug litigation.

I say "ostensibly" because this column strikes me as a gratuitous shot at all attorneys that litigate class actions.  For example, the column digresses from the factual discussion about the Kentucky attorneys to offer this:

“With criminal prosecutions of class action attorneys who have made millions of dollars off their cases unfolding through indictments from New York to Mississippi to Kentucky, government officials are starting to call for more scrutiny of such litigation.

(Lynne Marek, Tough Year for Class Action Attorneys Continues (May 21, 2008) www.law.com.)  "From New York to Mississippi to Kentucky..."  From the sound of it, we have a pandemic of class action practitioners under indictment by prosecutors.  In reality, the only other examples of such prosecutions include Mississippi lawyer Richard "Dickie" Scruggs and Melvyn Weiss and William Lerach, securities class action lawyers at the New York firm formerly known as Milberg Weiss.

Nevermind the facts; this crisis gives the author a chance to work in a quote from American Tort Reform Association President Sherman Joyce: "Maybe these are isolated incidents, but we have no way of knowing that right now."  Actually, Sherman, you do know the answer.  Most lawyers in most states are conducting their business in lawful manner, without stealing any client funds or paying clients or bribing judges.  Some are rotten apples, and the various state bars catch a fair number of those, even if it takes a while.  The chickens eventually came home to roost for Mr. Lerach.

But Lynne Marek's article isn't about evenhanded journalism.  It's about pushing an angle, an agenda.  As a modest proposal, I suggest honesty for future columns.  Instead of a whole page full of life-stealing prose, just say, "I hate class action and class action lawyers and I hope the government regulates them out of existence."  Look at how much time I just saved everyone.  Now we'll all have about 5 minutes of our lives back when the next column comes out.

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A challenge to the conventional wisdom that "mass actions" are a superior method for plaintiffs litigating tort claims

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It is the conventional wisdom that multi-plaintiff litigation (mass actions) provides a superior vehicle for litigating tort claims.  University of Pavia Ph.D. student Margherita Saraceno offers an alternative analysis.  In her thesis, Group Litigation, Access to Justice and Deterrence, Saraceno utilizes economic analysis to propose that mass actions may reduce the overall deterrence effect of tort law.  The working paper is available through the Social Science Research Network website.  The abstract for the paper is as follows:

“Policy makers are currently evaluating group litigation as a device to guarantee effective access to justice and to improve deterrence in torts with multiple victims. This paper focuses on how group litigation affects: 1) access to justice, 2) the choice between settlement and litigation, 3) the settlement amount, and finally, 4) deterrence. The main finding is that group litigation does not always improve access to justice and deterrence. On the one hand, group litigation makes it easier for victims to sue, by creating scale economies and improving their confidence in the outcome of a trial. On the other hand, the group is costly for victims to organize and reduces the injurer‘s liability costs by facilitating settlement and creating scale economies at trial. The combined effect might be a reduction, rather than an increase, in the deterrent effect of tort law.

(Margherita Saraceno, Group Litigation, Access to Justice and Deterrence (2008) Amsterdam Center for Law & Economics Working Paper No. 2008-04 Available at SSRN: http://ssrn.com/abstract=1128058.)

As a economics major in my salad days, I find the premise underlying the research interesting, if a bit scanty on sufficiently broad econometric data to convince me that she's on to something.  After reading the article, its seems like it should have been obvious that a mass litigation does create different economic incentives for a defendant.  There are two key variables that jeopardize any overarching conclusion.  First, it is difficult to say that any particular mass action will incorporate more or less litigants than single plaintiff litigation over the same issue againt the same defendant.  If the mass action accumulates more plaintiffs (perhaps because the fear factor is lessened), then the mass tort may improve deterrence.  It is difficult to find viable data to construct an econometric model that would generate valid results.

Second, it is difficult to determine whether a mass action will generate, on average, a higher or lower recovery for the relevant group than would have been recovered in individual suits.  Certainly, the defendant faces higher litigation costs if numerous litigants sue individually.  On the other hand, the extent of this effect may be de minimis, in light of the many procedural tools for consolidating or coordinating actions in a single court.  A defendant can often avoid costs imposes by multiple, concurrent litigation.

In any event, it is good food for thought.

[Via Mass Tort Litigation Blog]

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Legalwriting.net continues dialog about poor writing by attorneys

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Over at Wayne Schiess's legal writing blog, Legalwriting.net (which isn't exactly found at Legalwriting.net), Wayne continues the discussion about nominalizations and how they are slowly killing the English language.  The most recent post (which provides an opportunity for me to give myself a gratuitous pat on the back), Wayne highlights a prior comment left by yours truly on the thesis that fear is responsible for poor writing:

“I think much of the problem (to the extent it is one) with legal writing is that it is based upon fear.

Young lawyers fear being wrong. They fear error as though to err is fatal (maybe fatal to your career, but not life-threatening). To limit the chance that they are wrong, young lawyers turn to qualifiers and equivocations. An outgrowth of writing in this way is the difficulty with writing in a strong and direct manner. It is very hard to use powerful action verbs when every sentence contains multiple escape clauses. Lawyers seem to believe, especially in litigation, that they can always salvage the argument or position, so long as there is a way to change their position with mushy language.

How often do lawyers write junk like, "Having evaluated your contentions and considered the applicable authority, it is evident that your client's position is unsustainable," when they could just say, "Your client's interpretation is wrong"? Fear.

The really good writers in the legal field have embraced their fear and just state their position with the confidence that, win or lose, clarity and certainty are better than weakness.

I don't actually know how I cite to Wayne Schiess's blog where he quotes my comment left to a prior post on his blog.  I guess that will do.

If you haven't already noticed, there is a link to Wayne's blog in the blogroll contained in the right column.  Again, class actions and complex cases in general are bad enough without sinking under the weight of bad written advocacy.

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Are punitive damages available in class actions asserting statutory wage & hour violations? Savaglio v. Wal-Mart may have the answer.

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California Punitive Damages has an intriguing post about a pending appeal that could affect punitive damage claims in wage & hour class actions.  (Cutting, Pending Appeal Will Affect Punitive Damages Claims In Wage & Hour Class Actions (May 16, 2008) calpunitives.blogspot.com.)  In an appeal to the First Appellate District, Division Four, Wal-Mart is contesting, among other things, a $115 million punitive damages award by asserting the "new right-exclusive remedy" rule:

“Among the issues that Wal-Mart has raised on appeal is whether California's "new right-exclusive remedy" rule bars the punitive damages award in this wage and hour case. Under this rule, "where a statute creates a right that did not exist at common law and provides a comprehensive and detailed remedial scheme for its enforcement, the statutory remedy is exclusive." (Rojo v. Kliger (1990) 52 Cal.3d 65, 79.) According to Wal-Mart's opening appellate brief, no California appellate cases have upheld an award of punitive damages for any statutory wage and hour claims, and at least three federal district courts have applied the "new right-exclusive remedy" rule to dismiss claims seeking punitive damages predicated on alleged wage and hour violations.

(Ibid.)  So what is the "new right-exclusive remedy" rule you ask?  Tell me about Rojo you say?  You had but to ask.

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Updates to The Complex Litigator likely to slow during the week of May 19

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I have an undesirably congested schedule this week.  As a result, there will probably be fewer posts of great length this week, and the posts that do go up may not go up as regularly as usual.  Though it might be getting old for me to say this, thanks for visiting.

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Littler Mendelson, P.C., provides educational report on how to achieve total wage & hour compliance

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Littler Mendelson, P.C. released a wage & hour report entitled, "Total Wage and Hour Compliance: An Initiative to End the Wage and Hour Class Action War."  The abstract on the firm's website summarizes the focus of the report:

“Wage and hour class actions are rising sharply and the potential exposure is unprecedented. The number of wage and hour class actions filed in federal courts more than doubled from 2001 to 2006, and settlements are frequently in the multi-million dollar range. Absent a complete and comprehensive approach to tackling wage and hour compliance, the trend is unlikely to end. In this report, a Littler Task Force lays out seven key components to help employers reach and maintain a level of compliance that greatly reduces the likelihood and cost of litigation. By implementing these components, a systematic process can be developed to move the level of wage and hour compliance as close to "total" as is reasonably possibly, with a sensible allocation of corporate resources.

(Abstract: Total Wage and Hour Compliance: An Initiative to End the Wage and Hour Class Action War (April 2008) www.littler.com.)

The report has received quite a bit of attention around the blogosphere in a variety of contexts.  Wage Law notes that "[s]ome of the best ideas for the plaintiff's bar have come from defense lawyers. . . . It isn't just a learning tool for employers. It also provides considerable food for thought if you are represent employees . . . ."  (Walsh & Walsh, New Littler Report on Wage and Hour Compliance (May 9, 2008) wagelaw.typepad.com.)  Cal Biz Lit cites from the Littler report in a detailed article about attorney fee-shifting statutes in California.  (Nye, Attorneys' Fee Awards in California III: More Attorney Fee Shifting Statutes (May 14, 2008) www.calbizlit.com.)   California Punitive Damages also quotes from the Little report, saying, "Indeed, a recent report issued by Littler Mendelson (which specializes in labor and employment law) indicates that at least 311 wage and hour related class actions were filed in California state courts alone in the nearly six-month period between October 1, 2007, and March 28, 2008."  (Curt Cutting, Pending Appeal Will Affect Punitive Damages Claims in Wage & Hour Class Actions (May 16, 2008) calpunitives.blogspot.com.)

I have faced off against one of the report's authors, Kevin Lilly, in a wage & hour class action.  He's a sharp attorney (and a gentleman), and I have no hesitation in suggesting that you take a look at the Littler report.  In any case, I have to commend a defense-oriented firm that essentially says, "If you want to avoid wage & hour class actions, your only choice is to comply with the law 100% of the time."  If everyone would offer sage advice like that (and if the recipients would follow it), I could get into some other line of work.

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WHO'S WHO (AND WHERE) OF COMPLEX LITIGATION: Julia Strickland

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Julia Strickland has been selected by the Daily Journal as one of the top 75 Women Litigators in California.  A partner at Stroock & Stroock & Lavan LLP, Ms. Strickland's practice focuses on the defense of class actions and other complex commercial actions.  Her notable accomplishments include a major ruling under the California Consumers Legal Remedies Act in Berry v. American Express. Berry held that credit card issuers may not be sued under the statute, and the decision has been interpreted broadly in other cases to hold that transactions for "money or credit" generally -- all lending activity -- are not regulated by the statute.

Of note is the fact that Ms. Strickland began her legal career at Stroock in 1977. In addition to being a member of the Firm's National Executive Committee, she has played a central role in development of the firm's Los Angeles office.

Reference:  May 15, 2008 Press Release

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Class of "technical writers" seeking overtime certified in suit against Sun Microsystems

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In a case that may draw renewed attention to wage & hour practices at high tech businesses, Santa Clara Superior Court Judge Jack Komar certified a class comprised of "technical writers" employed by Sun Microsystems since 2002.  Plaintiff Hoenemier is challenging the company's practice of treating Hoenemier and about 300 other writers as exempt from state labor laws governing overtime and breaks.  At issue in this case is the overtime exemption applicable to "computer professionals," found at Cal. Labor Code section 515.5.  "If the company loses, it could owe 'well over $20 million' in back pay, according to Hoenemier's attorney, Aaron Kaufmann of Walnut Creek."  (Brandon Bailey, Sun overtime lawsuit a class action (May 15, 2008) www.mercurynews.com.)

Sun contends in the suit that it is an industry-wide practice to classify technical writers as exempt under section 515.5.  If the Court ultimately determines that Sun is wrong in its classification, the whole industry will face a wave of wage & hour lawsuits, given that suits for back wages remain viable, irrespective of a corrective classification going forward.

Other coverage:

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Cal Biz Lit blog adds The Complex Litigator to its blogroll

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Given that I have appreciated the writing and analysis on Cal Biz Lit, I note with gratitude the fact that The Complex Litigator has passed muster as a blog that meets with Bruce Nye's approval.  You can also take a look at Bruce Nye's firm, Adams Nye Trapani Becht LLP at adamsnye.com.  Thank you, Bruce.

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ClassActionBlawg.com provides a weekly collection of class action blog posts

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Paul KarlsgodtClassActionBlawg.com has just posted a round-up of class action blawg articles from the last week or so.  This week's round-up includes one article by The Complex Litigator, so a special thanks for that.  ClassActionBlawg.com includes these useful round-ups once a week, but the most recent collection of posts is particularly thorough; it makes for a great launching point to look around the blawgosphere for topical posts on class actions.

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