litigating class actions between certification and...
TRANSCRIPT
Litigating Class Actions Between Certification and Trial Pursuing and Defending Pre-Trial Motions and Discovery Requests
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TUESDAY, January 31, 2012
Presenting a live 90-minute webinar with interactive Q&A
Fred B. Burnside, Partner, Davis Wright Tremaine, Seattle
Kellie C. Lerner, Partner, Labaton Sucharow LLP, New York
Daniel R. Karon, Partner, Goldman Scarlato Karon & Penny, Cleveland
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LOEB & LOEB Adds Value
Litigating Class Actions
Between Class Certification and
Trial Effectively Pursuing and Defending Pretrial Motions and Discovery Requests
Kellie C. Lerner Labaton Sucharow LLP
140 Broadway
New York, NY 10005
212.907.0700
Daniel R. Karon Goldman Scarlato & Karon, P.C.
55 Public Square
Cleveland, OH 44113
216.622.1851
©2012
Fred Burnside Davis Wright Tremaine LLP
1201 Third Avenue
Seattle, WA 98101
206.757.8016
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
6
Drafting the class-certification order
Considering the merits
– In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305 (3d Cir.
2008); cf. Behrend v. Comcast Corp., 655 F.3d 183 (3d Cir.
2011).
– In re New Motor Vehicles Canadian Exp. Antitrust Litig., 522
F.3d 6 (1st Cir. 2008).
– Oscar Private Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d
261 (5th Cir. 2007).
– In re IPO Sec. Litig., 471 F.3d 24 (2d Cir. 2006).
– Szabo v. Bridgeport Machines, Inc., 249 F.3d 672 (7th Cir.
2001); cf. Kohen v. Pac. Inv. Mgmt. Co., 571 F.3d 672 (7th Cir.
2009). G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
7
Drafting the class-certification order
Findings of fact and conclusions of law (Hydrogen Peroxide, 552 F.3d at 307):
Plaintiffs’ goals
– Remain faithful to class definition and/or court’s request for
proposed findings and conclusions
– Offer choices to court (if expressed in class brief) to provide
alternative to possible denial of one large class
– Avoid seeking overambitious class, remaining mindful of court’s
manageability concerns
– Avoid appealable language
– Prepare plain language notice plan that (1) sets forth the class
definition; (2) basic details of the litigation and (3) reaches the
class either through direct mail or by publication.
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
8
Drafting the class-certification order
Defendants’ Goals:
– Narrow or shape class definition and scope
– Determine subclasses
– Limit claims certified
– Clarify which claims apply to which plaintiffs
– Obtain rulings on evidentiary objections
– Preserve issues for appeal
– Objections to plaintiffs’ proposed findings/conclusions-address
overreaching by plaintiffs
– Propose alternative findings/conclusions to best
position case for going forward
– Properly craft to achieve reconsideration -- limit to
new areas/arguments raised on reply
– Limit or narrow any inflammatory language regarding liability in
class notice.
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
9
Reconsideration and review
Motions for reconsideration
– Disfavored by courts and rarely granted
– In absence of surreply, provides defendants opportunity to
address issues raised in plaintiffs’ reply brief
– (i.e., new liability theories, amended class definitions, evidentiary and
collateral issues)
– Plaintiffs therefore should not get overly creative in their
reply brief
– Standard:
– Some courts have indicated standard may be relaxed due to high
stakes of class litigation;
– Others will not consider undoing what they just did
– Defendants can use reconsideration motions to help position
issues for appeal.
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
10
Reconsideration and review
Rule 23(f) motions for appellate review
“Unfettered discretion” of appellate court
– Court considers:
– whether certification order creates death-knell situation that is independent of the underlying claims’ merits;
– whether certification order presents unsettled and fundamental issue of law relating to class actions -- important both to the specific litigation and in general -- that is likely to evade end-of-the-case review; or
– whether district court’s class certification decision is manifestly erroneous.
– Writ of mandamus – bold move; extraordinary circumstances
– According to a 2010 FJC article, 75% of 23(f) appellate rulings concerned cases where class certification was granted; More than 50% of these rulings reversed class certification orders while only 20% affirmed. See www.law.ku.edu/publications/lawreview/pdf/1_Willging_Final.pdf.
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
11
Reconsideration and review
Plaintiffs’ considerations regarding staying discovery
– Agreeing to defendants’ stay request saves plaintiffs’
counsel from spending time and money where appellate
court might reverse certification
– But pushing discovery may pressure defendants to settle
pre-appellate ruling or immediately after affirmance
– Also, state-court reverse auctions can present problem for plaintiffs.
Defense considerations regarding staying discovery
– Likelihood that defendants will succeed on appeal
– Whether defendants will suffer irreparable injury if injunction/stay does
not issue
– Whether others will suffer harm if injunction/stay is granted
– Whether injunction/stay will further public interest. G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
12
Discovery considerations
Create discovery/trial plan
– Isolate issues
– Focus on relevancy to issues outlined in certification order
– Set process
– Set schedule
Use of targeted, written discovery
– Interrogatories
– Document requests
– Requests for admission
Depositions
– Plaintiffs’ use of Rule 30(b)(6) depositions
– Key liability witnesses
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
13
Discovery considerations
Bifurcation
Even viable after Hydrogen Peroxide and IPO?
– If viable, defendants would have sought it pre-class certification;
but is doing so a wise strategy?
– What cost factors affect defendants’ decision to request
bifurcated discovery?
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
14
Discovery considerations
Experts
– Expert testimony required at class certification?
– The Supreme Court has not ruled definitively.
– “The District Court concluded that Daubert did not apply to expert testimony
at the certification stage of class-action proceedings . . . We doubt that is
so...” Wal-Mart Stores v. Dukes, 131 S. Ct. 2541, 2553-54 (2011).
– Split among circuits regarding standards- Fatally Flawed, Daubert-Lite or full
Daubert?
– American Honda Motor Co., Inc. v. Allen, 600 F.3d 813 (7th Cir. 2010).
– In re Zurn Pex Plumbing Products Liab. Litig., 644 F.3d 604 (8th Cir. 2011).
– Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571, 602-03 (9th Cir. 2010).
– Using same expert at trial
– Can expert deliver at trial on promises made at certification as testimony
concerns liability?
– Both sides “junk-science” considerations – did court require experts to meet
Daubert or Frye standards at class certification; or is this now a trial issue?
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
15
Post-certification motions:
Summary Judgment
Timing Considerations
– Rule against one-way intervention
– Trial court must decide class-action issues before addressing merits of
case
– Due-process principles - to ensure affected parties are bound before
ruling on merits
– Rule protects defendants from “being pecked to death by ducks.”
Premier Elec. Constr. v. National Elec. Contractors Ass’n., Inc.,
814 F.2d 358, 363 (7th Cir. 1987) (Easterbrook, J.)
– Putative class members should not benefit from favorable merits
decision without subjecting themselves to binding effect of unfavorable
one
– Rule also protects absent class members who have not had
opportunity to opt out from being bound by unfavorable merits
determinations
– Res judicata considerations
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
16
Post-certification motions:
Motion to compel plaintiff’s trial plan
Defendant’s goals
– Eliminate claims/theories of liability
– Drive settlement value down
– Identify or create sub-classes
– Likelihood of total victory
Plaintiffs’ perspective
– Smart plaintiffs’ counsel includes trial plan in class-certification
motion
– No need to make defendants compel that which plaintiffs should
have crafted before filing complaint
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
17
Post-certification motions:
Motion to decertify the class
Some courts reluctant to certify too many sub-classes
Eventual individualized questions of fact could result in
decertification
– Clark v. Pfizer, No. 1819, 2009 WL 356382 (Pa. Com. Pl. Feb. 9,
2009)
– Class lacked “competent, common proof of causation”
– Individualized causation questions predominated, “making class
resolution impracticable and possibly impossible.”
– Kelley v. Microsoft Corp., No. C07-475, 2009 WL 413509 (W.D.
Wash. Feb. 18, 2009).
– Expert unable to demonstrate proof of price inflation on class-wide
basis as represented at certification stage; although, more rigorous
class-certification analysis avoids this issue
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
18
Post-certification motions:
Motion to decertify the class
Simple, common-sense, well-chosen arguments
Do not limit to terminology of Rule 23
– How will claims be tried?
– Individualized inquiries vs. common evidence
– What facts must court hear to decide merits?
– Do the key facts vary from member to member?
– Carefully examine class definition
– Is action based on state law?
– Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 818 (1985)
– State must have “significant contact or significant aggregation of contacts” to
class claims
– Fairness dictated by expectation of parties
– Varying laws, different standards of proof, different elements of claim,
different statutes of limitations
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
19
Preparing for trial
Motions in limine
– Last chance to avoid questionable expert opinions
– Do not differ from individual litigation
Motion to bifurcate trial
– Seventh Amendment concerns
Jury instructions
– If multiple state-law classes, must have instructions relating to
each class
Bench Trial
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .
20
Questions?
Litigating Class Actions
Between Class Certification and Trial
Kellie C. Lerner Labaton Sucharow LLP
140 Broadway
New York, NY 10005
212.907.0700
Daniel R. Karon Goldman Scarlato & Karon, P.C.
55 Public Square
Cleveland, OH 44113
216.622.1851
Fred Burnside Davis Wright Tremaine LLP
1201 Third Avenue
Seattle, WA 98101
206.757.8016
G O L D M A N
S C A R L A T O
K A R O N &
PENNY , P . C .