Complex Litigation - Transgrud - Fall 2004

COMPLEX LITIGATION Dean Trangsrud Fall 2004 A.
Levin
INTRODUCTION Intro to Complex Litigation What is Complex Litigation? o First Manual on Complex Litigation (MCL) defined it as protracted or big cases requiring extraordinary treatment. o Third edition of MCL: need for judicial management of a case o ALI definition limited to: multi-forum, multi-party cases o Tidmarshs definition: cases where one of actors in a case cant perform the role usually assigned (lawyers, judges, juries, parties, etc.) Complex case is where that dysfunction can be corrected, but only when judge takes on a non-traditional role. As a result, procedures used in case differ from procedures in other cases. Examples of Complex Cases o Ortiz v. Fibreboard Corp. (Supp 50) o Bradley Milliken (1389) Manual on Complex Litigation o First published in 1979 o Set of guidelines / advisory text o Judges read and follow it. Our system of Transubstantive Rule One set of rules for all cases, regardless of substantive law.
Normative Limits to Procedural Choices
Complex Litigation tests outer boundaries of our adversarial system Normative Rules / Categorical imperatives / Essential Aspects
o Are there certain characteristics of justice that are essential to a system of justice? That transcend culture and national
boundaries? Equal treatment of similarly situated litigants This is because people will have NOTICE of the rules, and know whats expected. Neutral, rational decision-maker Notice Rules must be knowable and able to be followed. Decision based on relevant evidence Therefore, reasoned opinions are assuring Adherence to the rules o Other things that we may consider: Opportunity to be heard / Right of participation Speedy Justice delayed is justice denied. Finality / Repose With regard to the Facts: Cross Examination Equal access to discovery Decision-maker will attempt to determine the material truth Transparency / Trials should be open Align task with incentive
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Last Revised: 10/25/2012
People will do a better job at the task if they have an incentive This makes it easier for a judgment to be accepted by the losing party
Equal treatment of like cases is still fundamental. o BUT alike how? Similar transactions? (i.e. slip & fall) Similar legal theories/substantive law? (i.e. antitrust) Same for all claims arising out of one transaction? Same treatment of all parties? What is the relationship between substance and procedure? There are procedural values that sometimes conflict with substantive purposes. o Well-designed procedural system effectuates the substantive law / enforces it (Procedure is the handmaiden of justice) OR o There are independent procedural values that trump substantive rights (this one is more true than the first) Trans-substantive Procedure o This is the intention of the FRCP o FRCP 2 There shall be one form of action known as a civil action. This rule rejects historical procedure, where procedure was based on substantive law. The amount of procedure afforded toa litigant depends on how much is at stake in the lawsuit; the more thats at stake, then the more procedural DP is required. (Matthews v. Eldredge) o Matthews v. Eldredge Supreme Court says DP means different things in different contexts. Makes cost/benefit analysis Lays out test that is essentially economic, and ignores range of other procedural meanings that are sometimes understood to inhere in the notion of DP, including the notion of individual, adversarial participation at trial.
Normative Principles of Adversary Procedure Various theorists: o Posner Cost/benefit analysis But doesnt help us quantify certain things o Bush Gives us certain goals of system, but doesnt tell us what happens when those goals come into conflict o Positivists Skeptical of natural law Laws we should follow are those legally passed by those with authority to do so. (This is where most of us fall, according to T) Basic Characteristics of our adversary system: o Participation / Attorney Control Fuller emphasizes participation of the party as well as the lawyer Participation has value of aligning task with incentive, and also promotes acceptability of outcome. Hazard points out that participation respects autonomy NOTE - In mandatory class actions, members of the class are given no choice not to participate, and have no control over lawyers. As cases are aggregated and more Class Actions filed, individual plaintiffs lose autonomy and control. o Party Initiation Lawyers serve gatekeeping functionkeeping frivolous claims out (Although class actions are exception) o Notice Pleading o Strict evidentiary rules o Parties pay own costs
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o o
So, access to courts is confined to those who can pay. Judges are passive umpires
o o o o
(Although this is changes in complex settlements, i.e. Agent Orange, where Judge suggested settlement) Climactic trial Everyone has to show up and stay Contrasts with Europe, where there are sequential hearings, and things are handled in more business-like way. Civil Juries Appellate Review Group Litigation is possible Polycentric Some disputes are not resolvable through adjudication i.e. setting wages and prices or running a public school system
FRCP offers lots of discretion, which permits flexibility and adaptability. o Consequences of discretion: procedure may vary case to case based on the judge. o Procedure varies from judge to judge o These choices are largely unreviewable. Interlocutory orders (discovery, etc) are not reviewable until the end of the case, and even then, standard of review is abuse of discretion. District judges have enormous power (especially pre-trial) FRCP assumed judges would remain passive umpires, however that isnt true in all cases now. State courts now largely follow FRCP, with minor variations. Lots of discretion in the FRCP, which permits: o Flexibility o Adaptability Consequence of discretion: o Procedure may vary from case to case depending on the judge. o These choices are largely unreviewable. Interlocutory orders (re: discovery, etc) are not reviewable until the end of the case, and even then the standard of review is abuse of discretion. When cases settle, theyre not reviewable at all. o District judges have ENORMOUS power, especially pre-trial.
Adversarial v. Inquisitorial Civil Procedure Inquisitorial Procedure Dominant in Europe, Pacific, etc. (French, Swiss, etc) Differences Between Adversarial and Inquisitorial Procedure Pleading Fact-Gathering Pre-Trial Control Evidence Rules Attorneys Fees Judicial Role Trials Juries Judiciary ADVERSARIAL PROCEDURE Makes no difference Private counsel Private counsel, but some judicial control from pretrial orders Strict (to protect jury from certain evidence we dont want them to hear American Rule Each side pays its own attorneys fees Passive (although thats more true in some cases than others; some cases judges have more active roles. Climactic (try cases twice during discovery and trial) Civil jury is part of the federal and many state constitutions Appointed (its not necessary to be very familiar with trials to become a judge; just INQUISITORIAL PROCEDURE Makes no difference Inquisitorial magistrate Inquisitorial magistrate Little evidence rules (because magistrate hears everything) Losing party pays the fees (powerful incentive to settle) Active (in conducting cases; not creating new law) Series of sequential hearings (logical and orderly investigation of facts) Ni civil jury Career judiciary (decide while in school to be judge or private attorney)
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Appellate Review
Group Litigation
have to know the right people) De novo review on law; deferential review on facts (only overturn if no rational jury could have found that way and clearly erroneous standard if it is a bench trial) Class actions and large consolidations are possible
1st Round review of law and facts 2nd Round law only; can introduce new evidence on appeal No group litigation; only individual litigants can sue.
Our adversarial procedure is more expensive and cumbersome. o Everyone sues everyone o All lawyers investigate everything for years o Lots of experts o Lots of time o We try cases twice at discovery and trial o Values individual autonomy; ability to control own lawsuit o With the guaranteed right to a jury trial (7th amend), cant change parts of our system Cant have sequential set of hearings, because thats not possible with juries. Which system can produce the most satisfactory outcomes? FACT-FINDING o Our system: With partisan fact-finding, advocate will work hardest for his client; lawyers are motivated by $. Ps lawyer has incentive to spend lots of money finding facts, although P may restrain this. Lawyers must vigorously defend/represent client, and if fails to do something properly, can be liable for malpractice. Stringing out discovery means more $. Strange set of incentives in our system. Client supervision is rather limited. o German System: Magistrates have no financial incentives to draw out discovery. But magistrate isnt alone in the process; Langbein points out that lawyers are at magistrates elbows. COUNSELING WITNESSES o Our system: horse-shedding a W counseling/signaling a W Cross-exam is a protection against horse-shedding; but not very protective tool. T thinks this is the most problematic aspect of our system. o Eurpeans: Dont allow horse-shedding If it happens, credibility of W is seriously questioned. Europeans think our system is crazy that we allow lawyers to talk to Ws outside presence of judge. TRIAL PROCESS o Our system: Climactic trial Only one trial if you forget something, cant go back. o Europeans: Series of hearings/meetings just like business transactions are made. EXPERTS o Our system: Each side has expert, and experts give opposite opinions Jury, with no knowledge, decides which expert is right. Expert Ws like saxophones will play the tune of the person who hires them. Its possible for judges to hire experts, but not usual for it to occur. o German System:
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Judge hires expert. No lawyer can talk to the expert. Expert more likely to be credible.
GERMAN SYSTEM o Advantages: Cheaper Faster Less susceptible to W abuse Guards against dramatic disparities between lawyers o Disadvantages: Judges are not independent source of law or protectors of individual rights. Judges are career civil servants; our justices are justice-seeking demi-gods. (ha) Process is in the hands of govt bureaucrats (although not entirely, because counsel for both sides is at the elbow of the magistrate. Easier for govt to control/corrupt than our more independent and objective judiciary. Fullers concern about pre-judgment of the facts (although that concern is muted because lawyers are co-ppts). Quality of entire process rests on the quality of the judges (which can be extremely variable). OUR SYSTEM o Advantages Partisan advocates will vigorously represent clients. o Disadvantages No protection provided for those who choose council poorly. Rest fact-finding in the hands of largely unsupervised partisan advocates, out of presence of the courts. Experts and Ws not as credible because of the partisan nature of the procedure and horseshedding. Equal treatment of like cases is still fundamental.
JOINDER COMPLEXITY Cases can be aggregated in 2 ways: o Aggregation (joinder) o Consolidation (judge combines cases filed separately)
TRIAL JOINDER & LITIGANT AUTONOMY JOINDER UNDER FRCP: o Rule 18 Joinder of Claims
FR 18(a) A party asserting a claim against any other party (original claim, counterclaim, cross-claim, or thirdparty claim) may join as many claims as that party has against an opposing party. Any claims can be joined against the same party. No requirement that you join all claims as a matter of joinder rules, but claim preclusion (CL doctrine) requires that certain claims be joined. Legal definition of a claim same T/O (transaction or occurrence) If 2 claims arise out of the same T/O, rule 18 may not require both claims to be brought at the same time, but the doctrine of claim preclusion operates as a strong incentive to so do (like an unwritten rule of compulsory joinder)
Rule 13(a) Compulsory Counterclaims
FR 13(a) Any claim that D has involving same transaction or occurrence (T/O) that is subject matter of opposing partys claim, and that doesnt require 3rd parties must be included as a counterclaim during pleading. Exception Need not state claim if it is already pending in another action. Asks what claims are so related to the Ps anchor claim that it would be manifestly inefficient or unfair not to adjudicate them together. These must be brought at the same time.
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These claims are usually transactionally related.
Rule 13(b) Permissive Counterclaims o FR 13(b) a pleading may state as a counterclaim any claim not arising from same T/O that is subject matter of opposing partys claim. Rule 19(a) Joinder of Parties Needed for Just Adjudication o FR 19(a) Persons to be joined if feasible (NECESSARY PARTIES) A person who is subject to service of process and whose joinder wont deprive court of SMJ shall be joined as a party if: In persons absence complete relief cant be given to those already parties Person claims an interest in the subject of the action and disposition of the case without them would: o As a practical matter impede that persons ability to protect that interest o Leave any persons already party to the action subject to multiple or inconsistent obligations Court can order such a person to be made a party If joinder of that party would render venue improper, that party will be dismissed from action.
o FR 19(b) Determination by Court when Joinder not Feasible (INDISPENSABLE PARTIES) When person describes in FR 19(a) cannot be made a party, judge has discretion to determine if lawsuit should
continue without them. If action is dismissed, it is because absent person is regarded as indispensable.
Rule 20 Permissive Joinder of Parties o Parties can be joined when there is the same T/O and same common question of fact or law. (the second commonality requirement is superfluous). o Rule 20 joinder is permissive. Plaintiffs with related claims MAY (but dont have to) join together. Plaintiffs MAY join multiple defendants (but dont have to). No person can be made a P against her will. No person can be made a D against will of Ps. o Covered by Rule 20: P P2 D P D D2
Rule 21 Misjoinder / Nonjoinder o Misjoinder is not ground for dismissal. o Parties may be dropped or added by order of the court on motion of any party or its own initiative at any stage in the action on such terms as are just. o Any claim against a party can be severed and proceeded with separately. Rule 24 - Intervention Purpose of rule To entitle an absentee, purportedly represented by a party (trustee, beneficiary) to intervene if he could establish that representation was inadequate. o FR 24(a) Intervention of Right Anyone can intervene when: Statute gives unconditional right to intervene, OR Applicant claims an interest in property or transaction and wants to protect that interest, which is not adequately represented by existing parties. Application must be timely. FR 24(b) Permissive Intervention Anyone can intervene when: Statute gives conditional right to intervene, OR Applicants claim or defense have question of law or fact in common,
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o o
Courts exercise discretion, considering undue delay and/or prejudice to rights of original parties. When party relies on statute, executive order, regulation, etc, officer or agency is permitted to intervene.
Rule 42 Consolidation & Severance o Allows court to sever properly joined claims When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all of the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay. Permits courts wide discretion to consolidate cases. (Johnson v. Celotex)
(Mosely decisions doesnt guarantee that all claims will actually be tried together.) o Factors courts use in deciding whether to consolidate under FR 42: 1. Whether consolidation would promote judicial economy and convenience (Katz v. Realty
Equities Corp.) a. Risk of inconsistent adjudications of common factual and legal issues b. Burden on parties c. Length of time required to conclude multiple suits as against a single suit. d. Relative expense of consolidated suit and unconsolidated suit. 2. Fair and impartial trial a. Specific risks of prejudice and possible confusion if consolidation allowed. Decision whether to consolidate is very fact specific.
Traditional Joinder P is master of the complaint; have primary power to decide how case will be handled. o Name who you want o Bring suit where you want (venue privilege) o Dont have to sue everyone for every claim; you can pick o Free to choose legal and factual theories. Ds have limited opportunity to change the package of the case. P is master of the complaint, and is permitted to change mind about what claims to bring and Ds to sue, even if that causes greater expense to D. (Balty v. Berkely Farms) If P files in state court and Ds remove to federal court, P can change the complaint (changing claims and Ds) to return to state court. (Balty v. Berkely Farms) o Balty v. Berkely Farms Facts: Union member sued union, claiming violation of federal laws in state court. Ds removed to federal court. Ps dropped some Ds, added others, and relied purely on state law claims, so it could no longer be in federal court. Ps ordered by district court to pay legal fees for making the changes. Held, Ps had prerogative to do what it wanted, and thats OK even if it causes greater expense to others.
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LIMITATIONS on exercise of P autonomy: o 12(b)(6) If you assert a legal claim with no basis, it can be dismissed. Limits factual/legal theories o Rule 11 Limits what you can allege, legally and factually o Forum non-conveniens Can dismiss case if forum is very inconvenient o SMJ D can remove to federal court if it would have SMJ. Cant remove without SMJ Limits where P can sue o PJ Minimum contacts o Rule 21 Prohibits misjoinder Limits packaging of certain claims o Venue Transfers (1401, 1406, 1407) o Erie Doctrine Intended to avoid outcome determinative effects of bringing suit in either federal or state court Limits significance of where suit is brought
Litigant Autonomy according to William Rubenstein: (121) o Guarantee of litigant autonomy follows the day in court model o Benefits: Each individual can control the legal decisions that govern her life Can exercise control as sees fit. Cant be coerced into case she doesnt want to join. Valuable means of self-definition o Problems: Hard to determine its limits Outcome of initial actions, though not preclusive of future litigations, will be authoritative precedent governing them. day in court for one litigant could be denial of others their days in court; only a scrap left for future litigants. Rewards those who have access to attorneys and courts. Fails to provide satisfactory framework for addressing group disputes. FR 20 can be interpreted broadly to encompass claims arising from the same T/O. (Mosley v. General Motors although this case is at the extreme of FR 20). Court defers ENORMOUSLY to decisions of Ps lawyer about how to frame the case. (Mosley v. General Motors)
o Mosley v. General Motors (8th Cir 1974) (93)

Facts: 10 individuals suing GM and Union (UAW), claiming violations of civil rights laws, including Title 7 & 1981, alleging race and sex discrimination. Ps claim of discrim in promotion, hiring, termination, etc on part of GM and also claims of failure to pursue grievances against UAW. Ps didnt work together, injured in different ways by different conduct at different locations. Ps want to certify a class of black and female employees, divided into 2 groups based on the divisions within GM (Chevy workers & body workers) Joinder complexity in this case is due to the fact that the rights and remedies of all parties may not be protected if not litigated separately (risk of substantive unfairness) This is because there are significant differences between Ps: o Race & sex o Location o Conduct complained of If not joined, then no risk of substantive unfairness.
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Held, Joinder is proper herebecause if there is a company-wide conspiracy, as alleged, than that is the same T/O. (Despite differences among Ps and differences in conduct of GM and UAW). o Key was that all of the Ps alleged that the discrim arose from same set of discriminatory policies that had a common genesis and purpose. Bottom line: Court defers ENORMOUSLY to decisions of Ps lawyer about how to frame the case. Some issues here: Conflicts of Interest/not all interests represented: o The union would be as affected by changes to the companys structure as the company would, so it makes sense to include both parties in the case. o BUT white males and others in the company, who arent included in the suit as parties, may not have their interests represented (although union is mostly made up of white men, so may protect their interests as well). o I youre the company, it doesnt cost money to agree with an aggressive affirmative action plan, but it MAY cost if the court orders compensatory damages. Company wants to minimize the payout, but white men want to protect their own promotions. So at the remedy stage, white men are not included by any of the parties. There were a lot of factual differences between Ps claims, so this was prob not the best case for joinder. NOTE: Rule 42 allows court to sever properly joined claims, so this decision doesnt guarantee that all claims will actually be joined together.
In determining whether a particular factual situation constitutes a single T/O for purposes of Rule 20, courts usually pursue a casby-case approach. (Mosley; Greyson v. K-Mart)
o Greyson v. K-Mart (N.D.GA 1994) (97)

Facts: Held,
Ps from different states are suing K-Mart for age discrimination (Fed law) and IIED (state law). No request for a company-wide injunction, but allegation of company-wide policy of discrim. District court says there was misjoinder, and severs the claims.
Joinder not proper under these circumstances, because there was no common Q of law or fact and doesnt involve the same T/O. o Because each demotion decision was a discrete act by D; and therefore no common T/O or common Q. Because no company-wide injunction sought here, not the same issue of joinder complexity as in Mosley, where injunctive relief was sought. Case for joinder here not as strong.
FR 21 permits the court discretion to drop parties that are misjoined under FR 20. (Aaberg v. Acands)
o Aaberg v. Acands (D. Md. 1994) (101)

Facts:
Held,
Asbestos case (mass tort) with 1000 Ps joined under Rule 20. Ps oppose Ds motion to dismiss on grounds that FR21 precludes dismissal on account of misjoinder of parties.
That FR 21 permits the court on its own initiative to drop parties that are misjoined on such terms as are just. This case presents such a situation where dropping (without prejudice) all but the first named P is appropriate. Joinder would have created efficiencies, however it wasnt necessary because of potentially conflicting remedies as in Mosley. (unless insolvency would have been an issue).
Rule 20 decisions often come out differently in different cases, as exemplified between Mosley and Grayson. o The relief requested adds to the potential complexity and need for joinder:
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In Mosley, Ps sought injunction. Because of risk of conflicting injunctions, joinder was more necessary than in Grayson, where no risk of conflicting injunctions (because none sought). When insolvency or bankruptcy is a potential when lots of Ps bring separate suits, there is a stronger incentive for joinder.
Advantages of joinder: o Economy; efficiency i.e. common issues of law, W, evidence, etc. o Remedy is unified. o Aggregation of claims may place settlement pressure on D (because companys exposure is greater). Advantages of non-joinder: o Maybe more recovery for the individual serious claimant. Horowitz & Borden study suggests that it benefits the lesser-injured person to be joined with the more serious claimant. And it somewhat harms the more serious claimant to have the lesser-injured claims joined with theirs. Preserves more individual autonomy. Any one case may be shorter in duration, even though the cases all together will take longer; so individual P may get resolution faster.
o o
FACTORS that judges consider when deciding whether or not to join parties under Rule 20: o Efficiency gained / inefficiency gained o Outcome-determinativeness (Horowitz & Borden) o Unfairness o Unity of remedy Possibility of conflicting injunctions / insolvency / etc. o Preservation of SMJ. Diversity in federal courts requires CPLT diversity (none of Ps can be citizens of the same state as any of the Ds). o Similarities of the facts at issue It may make a difference whether it is a single-event lawsuit or a latent injury mass tort lawsuit. (i.e. tobacco, asbestos, etc) or something like school desegregation. o Another factor that courts dont normally discuss: Individual autonomy; rights of Ps to control their lawsuit where filed, etc. When there isnt CPLT diversity, court can drop non-diverse P(s) or D(s) under FR 21, which permits parties to be dropped upon motion or on the courts initiative. When a P in state court adds a non-diverse party against whom no real claim exists only to avoid federal SMJ, a federal court (after removal from state court) can drop the non-diverse party in order to preserve its SMJ. (p 105) o File notice of removal to federal court and it happens automatically. o Whether it stays in federal court is for the federal court to decide if there is SMJ o Removal is part of federal law. EFFECT of PROCEDURE on SUBSTANCE: o We have a commitment to equality of outcome, but we know that procedure effects outcome. o Horowitz & Borden suggestion that it benefits the lesser-injured person to be joined with the more serious claimant. And it somewhat harms the more serious claimant to have the lesser-injured claims joined with theirs. Judges may not always be able to proceed in the way that seems most efficient if it means taking a role in the packaging of a lawsuit (although this is changing). (Pan Am Worldwide Airways)
o Pan Am Worldwide Airways (9th Cir 1975) (107)

Facts: Held, Airline crash; charge of negligence by some Ps against the airlines Judge notified the other survivors of the suits Notification of the other potential Ps was improper.
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CONSOLIDATION
Note: 9th Cirs notion at that time was that the judge should have no role in the packaging of a lawsuit. This has changed.
FR 42 - Consolidation o Allows court to sever properly joined claims When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all of the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay. Permits courts wide discretion to consolidate cases. (Johnson v. Celotex)
(Mosely decisions doesnt guarantee that all claims will actually be tried together.) o Factors courts use in deciding whether to consolidate under FR 42: 1. Whether consolidation would promote judicial economy and convenience (Katz v. Realty
Equities Corp.) a. Risk of inconsistent adjudications of common factual and legal issues b. Burden on parties c. Length of time required to conclude multiple suits as against a single suit. d. Relative expense of consolidated suit and unconsolidated suit. Fair and impartial trial Specific risks of prejudice and possible confusion if consolidation allowed.
2.
a.
Decision whether to consolidate is very fact specific. A judge can order a single complaint to be filed in consolidated actions. (Katz v. Realty Equities Corp of NY). o Katz v. Realty Equities Corp of NY Judge ordered single complaint to be filed in consolidated actions. Appeals court found no abuse of discretion in consolidation for pretrial purposes of 12 securities actions that arose out of a series of actions allegedly designed to defraud the public. Not all facts of cases must be the same in order to be consolidated. (Johnson v. Celotex) o Johnson v. Celotex Facts: Cases of 2 asbestos workers who worked at same jobsite, both had asbestosis, and represented by the same lawyer. Exposure happened at different times, different occupations, one alive and one dead. Held, Consolidation for trial was allowed, despite the factual differences between the 2 Ps.
When commonalities between claims are too attenuated, consolidation will not be allowed. (In re: Repetitive Stress Injury Litigation) o In re: Repetitive Stress Injury Litigation Court granted writs of mandamus against pretrial consolidation of 44 cases against Ds that made or distributed products that allegedly caused array of repetitive stress injuries. Commonality of the facts found to be very general.
Case law on consolidation is mixed, as evidenced by Katz v. Realty Equities Corp of NY and Johnson v. Celotex contrasted with In re: Repetitive Stress Injury Litigation. INTERVENTION
FR 24 Intervention Purpose of rule To entitle an absentee, purportedly represented by a party (trustee, beneficiary) to intervene if he could establish that representation was inadequate.
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FR 24(a) Intervention of Right
Anyone can intervene when: Statute gives unconditional right to intervene, OR Applicant claims an interest in property or transaction and wants to protect that interest, which is not adequately represented by existing parties. Application must be timely. Once this is granted, intervenor has all the same rights as original party. Courts usually look at FR 24(a) in terms of 4 elements: 1. Timeliness i. Length of delay before seeking to intervene ii. Reason for delay iii. Prejudice to various ppts created by the intervention or nonintervention. 2. Protectable Interest 3. Impairment of the interest 4. Lack of adequate representation i. Fulfilled when intervenor shows that representation of his interest may be inadequate. (Trbovich v. United Mine Workers, S. Ct.) ii. Burden of making that showing is minimal. (Trbovich v. United Mine Workers, S. Ct.) o Most elements read in flexible way, to achieve as much joinder as possible that is compatible with efficiency and DP. o Timeliness and adequacy of representation elements are not high hurdles
FR 24(b) Permissive Intervention Anyone can intervene when: Statute gives conditional right to intervene, OR Applicants claim or defense have question of law or fact in common, o Courts exercise discretion, considering undue delay and/or prejudice to rights of original parties. o When party relies on statute, executive order, regulation, etc, officer or agency is permitted to intervene. Judge has discretion; can: Deny application to intervene if it appears undesirable Can limit participation to something less than the full rights accorded to other parties. FR 24(c) Procedure Intervention by motion
FR 24 shares common phrasing with FR 19. Federal courts are generally liberal in allowing intervention of parties. o However, when intervenors motion is opposed by existing party of comes late in lawsuit, this becomes more difficult. o Intervenor could prolong case by introducing more issues or disturbing existing issues and progress. Intervener, in order to intervene, must have a right of such direct and immediate character that intervener will either gain or lose by direct legal operation of judgment.
Mandatory Joinder (Rule 19 Indispensable Parties Rule) FR 19 defines the boundary of permissible joinder (when a party must be joined, or else the case must be dismissed). Rule 19(a) Joinder of Parties Needed for Just Adjudication o FR 19(a) Persons to be joined if feasible (NECESSARY PARTIES) A person who is subject to service of process and whose joinder wont deprive court of SMJ shall be joined as a party if: In persons absence complete relief cant be given to those already parties
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Person claims an interest in the subject of the action and disposition of the case without them would: o As a practical matter impede that persons ability to protect that interest o Leave any persons already party to the action subject to multiple or inconsistent obligations Court can order such a person to be made a party If joinder of that party would render venue improper, that party will be dismissed from action.
o FR 19(b) Determination by Court when Joinder not Feasible (INDISPENSABLE PARTIES) When person describes in FR 19(a) cannot be made a party, judge has discretion to determine if lawsuit should
continue without them. If action is dismissed, it is because absent person is regarded as indispensable.
Rule 19 should focus on practical effects of joinder and nonjoinder, and not be inflexible. Joint tortfeasors are not indispensable parties without which a lawsuit should be dismissed. (Temple v. Synthes)
o Temple v. Synthes (US 1990) (116)

Facts: Held, P had surgical procedure, but screws ended up floating in his spine. P sued manufacturers of plate in federal court, and Dr. and hospital in state court. Lower court found that Dr. and hospital should be joined as FR 19(b) indispensable parties, without which lawsuit should not proceed.
Joint tortfeasors dont have to be joint defendants, and are NOT 19(b) indispensable parties. Joint tortfeasors arent 19(a) parties, because in their absence, complete relief can still be obtained. o And rights of nonparties wont be affected by the case. This leads to inefficient outcome, but seems to be correct application of the rule (according to Trangsrud).
2 inquiries under Rule 19: (1) Can complete relief be accorded among existing parties? & (2) Any risk of prejudice to those absent persons or existing parties? (Eldredge)
o Eldredge v. Carpenters 46 Northern CA Counties JATC (9th Cir 1982) (117)

Facts:

Held,
JTAC alleges violations of Title 7 for sex discrim because of the system they use to select applicants to apprenticeship training program. (unrestricted hunting license system) District court held that the 4500 employees and 60 union locals were indispensable parties under 19(b), but joinder of all of them was impossible.
The 4500 employees and 60 union locals were NOT indispensable parties. Although it might be desirable to join all parties in order to eradicate sex discrim in the industry, relief could be accorded without them. There is no prejudice to the absent employers if not joined. (Trangsrud thinks that this is a badly decided case.)
Rule 19 concept of mandatory joinder forces us to confront the value of litigant autonomy and the rights of litigants (usually potential plaintiffs) to control their own day in court. The only player with an incentive to seek Rule 18 joinder of additional plaintiffs in order to avoid joinder complexity or inefficiency is the judge. Defendants may want to join additional defendants when: o Additional defendants could not be brought into the suit (because of jurisdictional factors) and D thinks there is good chance of convincing the court that they are indispensable. o D thought the presence of an additional D would reduce or eliminate his own responsible P Tactical advantages of Rule 19(b) dismissal often drives the use of the rule, rather than the desire to achieve appropriate 19(a) joinder. In practice, Rule 19 is narrowly construed and infrequently used.
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Focus of a Rule 19 inquiry is on the harm to the existing or absent parties, and NOT to harm of inefficiency on the judicial system. (Provident Tradesmens Bank) 4 interests served by the indispensable parties rule (Provident Tradesmens Bank): 1. P has interest in having a forum. 2. D may properly wish to avoid multiple litigation or inconsistent relief 3. Interest of the outsider whom it would be desirable to join. 4. Interest of the courts and the public in complete, consistent, and efficient settlement of controversies.
o Provident Tradesmens Bank (US 1968)

Facts: Owner of car involved in fatal crash. Some of victims of crash failed to sue the owner, whose presence would destroy federal jurisdiction. Held, Owner was not indispensable. Focus was on harm to the absent party, not the systemic harm of duplicative litigation. Dicta in this case seen as highwater mark for more broad interpretation.
PRECLUSION
Claim Preclusion (res judicata) o Claims are precluded when they were, or should have been asserted previously. Issue Preclusion (collateral estoppel) o Issues are precluded only when they were litigated and actually decided. o Party cannot contest certain factual issues that were actually decided and necessary to the outcome of the first case. It is a principle of general application in Anglo-American jurisprudence that one is not bound by a judgment in personam in an litigation in which he is not designated as a party or to which he has not been made a party by service of process. (Hansberry) CLAIM PRECLUSION FEDERAL COURT judgment (where jurisdiction based on federal question) is preclusive when: o (1) Claim was or should have been asserted in first action Most courts give claim a broad transactional definition. Legal theories related in time, space, or motivation are regarded as part of same transaction, and therefore part of same claim. Phrase should have been brought is generally understood to mean might have filed. o (2) Same Parties Parties to the 2nd action are same as parties to the 1st (or in privity) Exceptions to this requirement: o Non-party controlled partys prosecution or defense o Nonparty who contractually agreed to be bound by the outcome of the litigation o Nonparty has legal relationship with party (i.e. vicarious liability, survivorship, assignor and assignee in K claims) o Party acts as fiduciary to represent interest of others; beneficiary is bound. i.e. class members are bound by judgment involving class rep. o (3) There was a final judgment in the first action Limits effectiveness of preclusion as limit on future litigation because most cases settle. o (4) Judgment in first action was on the merits (including default judgments) Does NOT include cases dismissed for lack of PJ or SMJ, SOL, or settlements. Courts cannot give claim-preclusive effect to class action judgments seeking to bind absent class members where the original court had no PJ, at least without giving them an opt-out right. (Shutts)
STATE COURT judgment is preclusive: o According to the law of the RENDERING forum.
There is a split in the circuits as to what law to apply when the judgment is based on a diversity action in federal court.
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Claim preclusion cant bind class members when the class representative was inadequate. Claim preclusion cant bind class members regarding issues beyond the scope of the representation. (Cooper v. Federal Reserve Bank) Exception to claim preclusion rules: Where Ps have some class-wide and some individual claims that would normally be subject to claim preclusion, but the individual claims would make the class action unmanageable, then the class action judgment does NOT have preclusive effect. (Cooper v. Federal Reserve Bank) o Cooper v. Federal Reserve Bank Facts: Alleged victims of employment discrim brought class action on behalf of similarly situated employees. District court found pattern and practice of discrimination in certain pay grades and not others. Some class mem also brought claims of intentional discrimination. Other class mem brought separate suit alleging intentional discrim. D argued that prior class action was precluded based on standard claim preclusion. Held: The class mem subsequent suits for intentional discrim were not barred by claim preclusion. Created exception to the general claim preclusion rules for class actions. Reasoning: concern that a preclusion requirement would result in inundation of the class action with the related individual claims of class members, and it would be completely unmanageable. Result: Class action proceeds on issues that can be tried as a class, and then lets individual Ps proceed on their individual claims separately. o This allows certification of class-wide claims without requiring Ps to forfeit their individual claims. (Trangsrud think that this is sensible.)
As nonparty preclusive effects of a case expand, impairment of nonparty interests expand.
ISSUE PRECLUSION o Applies when:
(1) Issue of fact or law is the same in 2nd action as in 1st. No identity of issues when the legal standard in cases is different. No identity of issues if there are differences in burdens of proof between the 2 cases. (2) Issue of fact or law was actually and necessarily decided in the first action. If there is some ambiguity as to what the jury actually decided then no issue preclusion on any of the theories. (3) Same Parties - the target of preclusion was a party to the first action. Requirement of mutuality abandoned. Replaced with defensive collateral estoppel (see below) (4) The issue was essential to the final judgment in the first action (5) Judgment on the merits (default judgment does not give rise to issue preclusion) (6) Target had a full and fair opportunity to litigate the issue (Parklane Hoisery)
Issue must be ACTUALLY decided. Sometimes this is an issue when jury decided the first case Hypo: Case goes to jury with three separate theories: strict liability, negligence, and warranty theories. Jury comes back with a general verdict that D is liable. None of the three issues (SL, negligence, warranty) are precluded by issue preclusion, because no way to know which one was actually decided.
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Defensive Collateral Estoppel A nonparty to the first case can defend himself with the actually determined facts necessary to the first judgment. Allows a new defendant to use findings from a prior judgment as a shield against the unrelenting P. Only occasionally useful in complex lit. Offensive Collateral Estoppel Much more controversial; allowed sparingly Can encourage the wait and see approach of certain Ps. Hypo to illustrate: S brings negligence claim against Albertsons. Issue of negligence is actually determined and necessary to the judgment. G can now use this as a sword against Albertsons; not having to re-prove negligence if that is a common issue.
Permitting offensive collateral estoppel is based on judicial discretion in federal question cases brought in federal court. (Parklane Hoisery) 4 circumstances in which use of offensive collateral estoppel should be disfavored: (Parklane Hoisery) o (1) When P seeking to preclude D had opportunity to join prior case but didnt o (2) When D did not have same incentive in the first case to contest the issue o (3) When there have been prior inconsistent judgments, some favoring D. o (4) When D did not have procedural opportunities or safeguards available in the first case that were available in the 3nd case.
Parklane Hoisery (US) Facts: o D found liable for securities violations in enforcement action by the SEC. o Disappointed stockholders brought class action, and wanted to use prior jmt by SEC to estop D from contending that D didnt violate securities laws. Held, o Offensive collateral estoppel allowed, because : Stockholders could not join the prior SEC enforcement action. D had every incentive in the SEC action to vigorously contest the issue of securities violation. No prior inconsistent judgments existed. No procedural opportunities open in the 2nd suit that werent available in the 1st.
Issue preclusion is only proper against a prior party if: it involves the same issue, and it was clearly decided, there is no inconsistent verdict record, and there was a sufficient incentive to aggressively litigate the first time around. (Hardy) Hardy v. Johns-Mansville Sales Corp. (5th Cir 1982) Facts: o Asbestos D lost judgment for $68K. o At time of 1st jmt, D facing no other asbestos litigation. o At time of Hardy, facing thousands of cases for millions each. Held, o Offensive collateral estoppel NOT allowed, because: Prior inconsistent verdicts Ds relatively weak incentive to litigate liability because didnt foresee wave of catastrophic litigation coming.
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Court didnt discuss whether Ps trying to use offensive collateral estoppel could have joined initial suit, although that could be independent reason to deny it.
There might be a way to make use of issue preclusion in mass tort cases, even if there is a record of inconsistent verdicts. (Lynch-Merrell-National Labs)
Lynch-Merrell-National Labs (1st Cir 1987) (225) Facts: o Bendectin taken by pregnant moms; allege product caused birth defects. o MDL panel transferred cases to Judge Reuben in OH. o Had trial to determine if bendectin is a teratogen (causes birth defects) o Non-OH Ps had right to go back to other states for trial; some didnt. o Jury found for D; bendectin not a teratogen. o Record of inconsistent verdicts. o Lynch, a P that decided to go back to original state for trial, and D wants to use prior judgment to dismiss claim. Held: o Defensive issue preclusion IS allowed, and therefore P loses. This is despite the fact that there is a record of inconsistent verdicts. Shows us that there is a way to make use of issue preclusion in mass tort cases, although it would cut against some of our other values. o Where there are massive aggregations, it can produce different pretrial and trial procedures, which can be P or D friendly. o D usually opposed to aggregation; raises stakes and creates enormous pressure to settle. This case is among a small handful of cases that has bound a party to a judgment or factual findings rendered in a case where the person was not a party. o Promotes efficiency, finality, and consistency. o Flies in the face of litigant autonomy.
o o
Defensive and offensive collateral estoppel are limited in that: Both can only be applied against a person that was a party to the prior litigation by a nonparty to that litigation. If we allowed non-party preclusion, then it would create uncertainty. Non-parties would have to decide if their interests were sufficiently congruent to join in the prior suit; would create a temptation for non-parties to sue. Our current preclusion rules dont create incentives for aggregating factually related claims. There is little in the joinder rules that REQUIRE aggregation of factually related claims. Our system is NOT designed to give consistency of outcome, but of opportunity and procedure. Nonparties to an action cannot, consistent with DP, generally be precluded from re-litigating issues that were decided adversely to the partys interest in a prior similar suit. Nonmutual offensive issue preclusion: Asymmetry of risk i.e. multiple claimant anomaly If you have lots of Ps, then each one can try again, but D cannot if loses in first suit.
o o o o o
o A non-party cannot be precluded by a judgment in suit where they were not a party. (Martin v. Wilks) A. Levin
Martin v. Wilks (US 1989) (240) Facts:
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o o o o
NAACP suing the city and personnel board on behalf of black firefighters, alleging race discrimination in hiring and promotion. Black FF won; city agrees to consent decree with targets for hiring and promotion of black FF. White FF seek to intervene, but denied by trial court. Later white FF bring suit against city, claiming that consent decree in first suit violates Title 7
Held (Rehnquist), o White FF are not bound by the earlier consent decree; rejects principle of limited collateral attack. So they can attack the consent decree o A non-party cannot be precluded by a judgment in a suit where they were not a party. o This principle comes from the notion of DP (5th am) o Rehnquist also cite joinder rules 19 and 24; not clear as to whether opinion rests on FRCP or constitution; could be significant difference. 19(a) analysis: Were white FF party that should be joined in first suit? CPLT remedy in their absence? Yes Present party injured by their absence? No Non-party prejudiced? Yes, arguably. So this is the argument that they should have been joined under 19(b) in first suit. o But were white FF interests adequately represented by the city? Arguably yes, because city doesnt want to admit discrim against blacks. Also, many city officials are white. BUT, city would be more willing to remedy through consent decree/AA program as opposed to damages. Whereas white FF would be more affected by consent decree. Dissent (Stevens) o Legal rights of white FF were not the subject of the first suit. o Although their interests are possibly affected, that is not an adequate reason to join them. Trangsrud thinks that this system created by the S.Ct. is crazy! (Not the way to run a RR.) o This means that we try Title 7 discrim cases twice. o NAACP should be allowed to intervene in 2nd suit to defend the consent jmt. Congress was unhappy with this case, and overruled it by statute. o 1991 statute, which applies only to civil rights cases of the type in this case says: Whenever consent decree issued, and non-party has actual notice and opportunity to intervene, the nonparty IS bound. (apparently whether they intervene or not). o Nonparties who choose not to intervene are still bound, so this statute seen as victory for civil rights. o Statute keeps suit from being tried twice.
o Possible solution to complex joinder issues:

Give notice to interested parties and allow them to intervene; if they dont, they are bound/precluded from litigating the issue. (This is ALI 1994 proposal) Make joinder mandatory for interested non-parties. Give judge authority to give notice to interested non-parties and allow them to intervene. And if they dont intervene, then they are bound. Similar to Congress 1991 statute overruling Martin v. Wilkes. If we did this, then non-parties would be bound to common issues, but they would be free to independently litigate non-common issues, i.e. damages There are tremendous efficiencies created by this system, and consistency of outcome. (As opposed to Martin v. Wilkes) Major advantages of this proposal: o Consistency o Efficiency o Speed Expenses of this proposal: o Litigant autonomy (foundational value of our system)
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Ability of Ps to choose lawyer and method of conducting the case is lost. Unfair forum? Choice of forums may vary Affects settlement leverage Enormous variations among risk tolerance of Ps. Class lawyers can force class members to accept settlements, but to settle aggregated cases each P must sign onto settlement individually. o Produces conflicting incentives to settle Much more at stake for Ds Not as much $ will be spent litigating 1 case as to 150 (arguably) o Outcome determinations in immature litigation. The focus here is on the process, not the outcome. Pitfalls of the proposal: o May conflict with rule 19(a)(2)(i) seem to fit within parties that should be joined if feasible; so may need to dismiss case if they cannot be joined. o May not be constitutional under Martin v. Wilkes, because court was not clear whether the decision was grounded in FRCP or constitutional DP. o o
Give judges sua sponte power to invoke the joinder rules in order to achieve optimal joinder. Similar to sua sponte powers over pretrial and trial procedures. The rules of joinder already provide great flexibility for judges in joinder matters. Some support in the rules for this suggestion o Rule 21 states that parties may be dropped or added by order of the court . . . of its own initiative on such terms as are just. o Rule 7 joinder of real parties in interest o Rule 19 judicial initiative Argument against it: o If judges can simply override the joinder decisions of the parties, the fundamental value of litigant autonomy will collapse. o Concerns of fairness forcing nonparties to obtain legal representation and consent in a case in a distant forum would not be fair o SMJ, PJ, and venue are still hurdles that may prevent optimal joinder. o May overstep bounds of judicial discretion, as in Pan Am. In that case, Appeals Court said that the judges effort to notify all passengers families of a suit arising out of airplane crash was an abuse of discretion. Suggests there is a limit to judges power to amend parties chosen structure. Virtual Representation This is the idea that a nonpartys claims or factual issues can be precluded by a prior jmt in which the nonparty was virtually represented by someone with identical interests. This concept underlies class actions. Example of this approach: o Tyus v. Schoemehl Facts: Alderman challenge redistricting plan and lose. When first suit pending, 2nd suit commenced with state legislators as new Ps and some of the same Ps. Ps who were parties to the prior case were claim precluded in second case. Held, Claim preclusion also ran to the state legislators, on the theory of virtual representation. o Legislators had precisely the same interests as the alderman, so they were virtually represented in the first suit. Preclusion appropriate as long as the balance of equities in the particular case favored its use. Factors used to determine if there was a substantial relationship between parties in first case and parties in 2nd were: o Identity of interests
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o Similar incentive to litigate (adequacy of representation) o Public law nature of the issue subject to preclusion Supreme Court has never accepted this theory.
IMMATURE v. MATURE cases Immature cases principle issues only decided a few times in the courts Mature cases may be tried much differently based on experience in the earlier cases i.e. Tobacco first argued assumption of the risk as a defense. That worked at first, but then Ps learned how to side-step it. Raises different adequacy issues than litigation that is fully developed.
STRUCTURAL LIMITATIONS ON JOINDER Personal / Territorial Jurisdiction over Plaintiffs and Defendants
PJ restricts power of state and federal courts to aggregate claims. Our existing minimum contacts requirement for PJ limits the power of federal and state courts to aggregate, as seen in Worldwide Volkswagon. In order to have PJ over a D, there must be minimum contacts with that state. (Worldwide Volkswagon)
o Worldwide Volkswagon
Facts: Held, Car passengers injured in OK sue in OK. Ds are retailer (NY), Regional distributor (NY), importer, and foreign manufacturer The importer and the foreign manufacturer can be sued in OK, but retailer and regional distributor cant, because there were no minimum contacts. Result: Must have >1 suit in order to sue the other Ds. o P could have sued all 4 in NY, but since sued in OK, case was fragmented.
If a P brings suit in a state, it is consenting to PJ in that state for that claim and any compulsory counterclaims. o This is important in class actions. In complex cases, judges may seek a way to broaden or make exceptions to min contacts test to get PJ in order to achieve optimal joinder. (In re DES case)
o In re DES case (2d Cir 1993) (278)

Facts: DES prescribed to pregnant women. Active chemical component of DES is the same all over the country. Ps didnt know whose product caused the injury; in that case, NY law allows you to sue all of the industry, and each mfg is responsible for percentage of the loss equal to their percentage of the market. o NY used national market test, not NY market test. So if only 60% Ds subject to PJ in NY, P can only recover part of the loss. Some Ds were subject to PJ in NY, but others were not (i.e. Boringer) Held (Weinstein), NY had personal jurisdiction over Boringer anyway, because they should expect to be part of the same national marker as all other companies selling the same product. Judge Weinstein wants Ps to be able to get full recovery, so he says that CA Ds really do have minimum contacts, because by manufacturing a drug like the others, you become responsible for everyone. Strains language to show that Boringer caused tortuous injury in NY. In effect, judge says that the realities of a complex case warrant an exception to the minimum contacts rule. o Judge really didnt have power to change minimum contacts test, but thats what he did. Trangsrud thinks this reasoning is unpersuasive/fuzzy/dubious.
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PJ rules for class action Ds are no different than those in most other forms of aggregated lititgation. PJ rules do apply to Ps as well as Ds. (Shutts) In voluntary class action, non-resident Ps with actual notice who dont opt out are subject to PJ by consent. (Shutts)
o Phillips Petroleum v. Shutts (US 1985) (294)

Major S.Ct. decision about choice of law Facts: 33K P class members owned gas leased in TX, OK, LA, KS. P suing for additional interest owed on late royalty payments. P sued in KS, because had most generous rates for interest on late royalty payments. KS court certified a national class, even though most class mem had no min contacts with KS. S.Ct. reverses and remands Issues for the court: Can KS state courts have PJ over P class? Is it constitutional for KS to apply KS law to claims of non-KS Ps against non-KS Ds? Held, PJ rules apply to plaintiffs as well as Ds. (VERY IMPORTANT!) o KS can obtain PJ over absent class members as long as the class members had notice and optout rights and didnt opt out. o If you are a non-rep class mem, have notice, and dont opt out, then that is consent to KS PJ. In a voluntary class action, non-resident Ps with actual notice who dont opt out consented to KS PJ. This case does NOT answer: Whether the same rule applies to mandatory class actions (with no opportunity to opt out). S. Ct. granted cert in 2 cases where this argument was raised, but dismissed cert as improvidently granted. Trangsrud thinks that court will rule that mandatory nationwide class actions for damages are unconstitutional if no opportunity to opt out. For equitable claims, its more murky. There is a strong argument for treating state courts and federal courts differently. Trangsrud thinks we should distinguish between power of federal and state courts with regards to PJ over Ps. o Limited power of state courts over non-resident Ps, because historically only have authority over residents with min contacts. o Fed courts, exercising PJ over Ds are held to the same rule, but this could be changed to make it a test of min contacts with the federal govt.
Diversity Jurisdiction in Complex Cases
1332 Diversity of Citizenship; Amount In Controversy; Costs o (a) District courts have original jurisdiction over civil actions where the matter in controversy exceeds $75K and is between: (1) citizens of different states; (2) citizens of state and citizens/subjects of foreign state; (3) citizens of different states and in which citizens or subjects of foreign states are additional parties; and (4) foreign state as P and citizens of a state(s) o For the purpose of this section, an alien admitted to the US for permanent residence is a citizen of the state where domiciled. o In determining amount of controversy, federal courts apply the legal certainty test Unless it can be determined to a legal certainty that amt in controversy is NOT greater tan $75K, reqmt is satisfied.
1369 Multiparty, Multiforum Jurisdiction (direct quote; not paraphrase) o (a) In general The district courts shall have original jurisdiction of any civil action involving minimal diversity between adverse parties that arises from a single incident, where at least 75 natural persons have died in the accident at a discrete location if
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(1) a defendant resides in a state and a substantial part of the accident took place in another State or other location, regardless of whether the defendant is also a resident of the State where a substantial part of the accident took place; (2) any two defendants reside in different States, regardless of whether such defendants are also residents of the same State or States; or (3) Substantial parts of the accident took place in different states. (b) Limitation of jurisdiction of district courts The district court shall abstain from hearing any civil action described in subsection (a) in which (1) the substantial majority of all plaintiffs are citizens of a single State of which the primary defendants are also citizens; and (2) the claims asserted will be governed primarily by the laws of that state. (c) Special rules and definitions for the purpose of this section (1) Minimal diversity exists between adverse parties if any party is a citizen of a State and any adverse party is a citizen of another state, a citizen or subject of a foreign state, or a foreign state; (2) a corporation is deemed to be a citizen of an State, and a citizen or subject of any foreign state, in shich it is incorporated or has its PPB, and id deemed to be a resident of any State in which it is incorporated or licensed to do business or is doing business; (3) the term injury means (A) physical harm to a natural person; and (B) physical damage to or destruction of tangible property, but only if physical harm described in subparagraph (A) exists; (4) the term accident means a sudden accident, or a natural event culminating in an accident, that results in deaeth incurred at a discrete location by at least 75 natural persons; and (5) the term State includes the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States. (d) Intervening parties In any action in a district court which is or could have been brought, in whole or n part, under this section, any person with a claim arising from the accident described in subsection (a) shall be permitted to intervene as a party plaintiff in an action, even if that person could not have brought an action in a district court as an original matter. (e) Notification of judicial panel on multidistrict litigation A district court in which an action under this section is pending shall promptly notify the judicial panel on multidistrict litigation of the pendency of the action.
1369 o Passed in 2002. o Loosely based on law review article by Prof Rowe, who assumes that its a good idea to aggregare claims based on same facts in federal court. Requirements under this rule Minimum diversity Must be a single accident (at discrete location) At least 75 deaths discrete location Not all parties are citizens of the same state (multi-state component) If almost everyone involved is from one state, this isnt available ( 1369(b)) Limitations of this rule o It wont solve the problem in product liability cases like Phen Phen, asbestos, etc. o It will apply only to mass accidents: Aviation disasters Terrorism (maybe) Construction disasters. o Claims based on state law are not always based on the same state law, so it could still be complicated. o Removal statute allows cases to be removed when original action could have been filed in federal court. o But under 1369, removal could be hard because if P chooses state forum, then removal may be impossible because of no CPLT jurisdiction. o So some cases can be litigated in federal court and state court at the same time. How to fix this?
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Need flexibility in: o Joinder o SMJ o PJ o Venue However, to build in flexibility would open federal court up to all sorts of litigation. This could be solved by building in discretion (as 1369 does in part). o Maybe have a panel of judges to decide these on case by case basis. ALI has suggested Complex Litigation Panel: o Power to order cases to be transferred to federal district judge (from state court) o VERY powerful discretion, and extreme step. o Takes autonomy from litigants to decide where to sue.
Obstacles to Aggregating state law claims in federal court: o Strawbridge Rule Must have CPLT diversity between all Ps and all Ds to be in federal court. (This is because the case was NOT narrowly construed.) o Amount in controversy - $75K
This amount must be met for every P individually. (Zahn) Amount excludes almost all consumer litigation from federal court. This may also be an obstacle to class actions in federal court, because not all P class mem may meet the $75K requirement.
Class members cannot aggregate their claims to reach the amount in controversy requirement. (Snyder v. Harris) In a diversity case, each individual class member must meet amount in controversy requirements. (Zahn) o This significantly affects the ability of Ps to get to federal court when bringing their class action claims under state law.
o Zahn (232)
Facts: Some property owners had claims more than $75K, and others did not. Held, Each individual class member must meet amount in controversy requirements. This rule makes no sense when these cases can be very big. Prevents some class actions from reaching federal court.
Did 1367 overrule Zahn? o Legislative history of 1367 is perfectly clear that Zahn would NOT be disturbed by the statute. o Circuits are split on this; most say Zahn not overruled. o 5th Cir. said it did overrule Zahn. (Abbott Labs) It isnt clear whether 1367 was in fact overruled; 5th Cir. said it did overrule Zahn. (Abbott Labs) Abbott Labs (5th Cir. 1995) (349) Facts: o [add something here(?)] Held, o 1367 did overrule Zahn; and Rule 23 is not an exception in 1367. How could we change the problems presented here and permit aggregation of state claims in federal court? o Change the diversity rules Congress has broad power to do this i.e. overrule Strawbridge rule and change it to minimum diversity. This would open up federal courts to state law claims. Problem may be that it would flood the system with tons of claims. To remedy that potential problem include a provision about number of parties say you only need min diversity if there are a certain min number of parties.
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This is the approach Congress took in passing 1335 (Statutory Interpleader), where all that is required to get into federal court is minimal diversity and $500 amt in controversy. Interpleader that is not diverse cannot destroy diversity of an action already in federal court. o Tashire
Facts: Crash suit involving passengers (and survivors, bus driver, truck owner, truck driver; State Farm=insurance co of truck driver (interpleader in this case), sues everyone; policy lmts here wld make 1st passenger potentially collect all; SF gives entire policy to ct so ct can equitably divide I: Ct raises diversity issue sua sponte H: Ct construes 1335 to require minimal diversity (diversity btwn two or more claimants w/o regard to any other rival claimants); any two adverse ptys may not be co-citizens; Const. establishes minimal j/d; cgrs has extended
or restricted this over time o Pass a specific jurisdictional rule. Allow all class actions of a certain type in federal court. o Make certain areas of law federal claims (under the commerce clause). i.e. make asbestos claims federal. Problem with this is that tort law has historically been left to the states, so it would be very controversial. o Judicial action to create exceptions to the current rules; change current interpretations. (as S. Ct. suggested in Merrell Dow) Federal Q jurisdiction: o BROAD under Article III, which holds that arising under jurisdiction exists as long as a federal question forms an ingredient of the original cause. (Osborn v. Bank of the US) o Narrower under 1331, which requires the federal Q to appear on the face of a well-pleaded complaint. Merrell Dow S. Ct. acknowledged the scope of 1331 should be flexibly interpreted. o Mass tort case o Courts should consider a welter of issues regarding the interrelation of federal and state authority and the proper management of the federal judicial system. o BUT, opinion did not mention the issue of optimal aggregation or suggest that optimal aggregation should enter into the equation to calculate 1331 jurisdiction (although it didnt reject this idea, either). o AND, Merrell Dow can be distinguished, because it didnt involve a case where non-aggregation threatened to create n inequitable distribution of a remedy among similarly situated tort victims.
Supplemental Jurisdiction 1367 Supplemental Jurisdiction o (a) In federal Q cases, court have supplemental jurisdiction over all other claims that are so related to the anchor claim that they form part of the same case/controversy under Art III of the constitution. Such supplemental jurisdiction shall include claims that involve joinder or intervention of additional parties. o (b) In diversity cases, courts shall not have supplemental jurisdiction over claims by Ps made against parties under Rule 14 (3rd Party), 19 (necessary and indispensable), 20 (Joinder of parties), or 24 (Intervention). This leaves out Rules 20 and 23. o (c) The district judge has discretion to decline to exercise supplemental jurisdiction over a claim if: (1) claim raises a novel or complex issue of state law (2) the supplemental claim substantially predominates over the claim or claims over which the court has original jurisdiction. (3) district court has dismissed all claims over which it had original jurisdiction (4) in exceptional circumstances where there are other compelling reasons for declining jurisdiction 1367(a) Federal jurisdiction extends to state law claims not otherwise within federal jurisdiction as long as the state law claims form part of the same constitutional case as claims with federal Q jurisdiction. o This has been interpreted as the Gibbs common nucleus of operative fact.
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1367(b) But in diversity cases, supplemental jurisdiction doesnt extend to ppl made parties under certain rules (but excluding Rule 23). o This section limits power of 1367(a); tries to preserve the CPLT diversity and amt in controversy requirements in 1332 on claims based entirely on state law. o Suggests that state law class actions are still subject to holding in Zahn. o EXCEPT, Rule 23 is absent from the list of rules included, which would be interpreted to mean that class actions can fall under 1367(a), and dont need to meet amount in controversy requirements; only minimal diversity and common nucleus of operative fact. o EXCEPT again, the legislative history indicates that 1367 not intended to change the jurisdictional requirements of 1332. o Courts have split on this issue. The only reason that a federal claim would stay in state court is if a D doesnt remove it to federal court. In federal Q cases, ( 1367(a)), supplemental jurisdiction is as broad as possible under the constitution. o (Gibbs Anything arising from the same nucleus of operative fact) This is different when claims are in state court based on state law; there are more obstacles to getting claims aggregated in federal court. [How much do we have to know about abstentions(?) CL 55-58]
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ALTERING THE PLAINTIFFS FORUM & PACKAGING Factors leading to strategic choice of where to file best combo of: o Substantive law o Procedural law o Convenience o Practical considerations Docket speed Judicial attitude Jury sympathy
Venue Rules & Consolidation 1391 Venue Generally Diversity Only (a)(1) (a)(2) (a)(3)
Not Diversity (b)(1) (b)(2) (b)(3)
Judicial district where and D resides if all D reside in the same state Judicial district where substantial part of the events giving rise to the claim occurred. If neither of the first 2 criteria apply, then venue is proper in any district in which any D is subject to PJ at the time the action commenced. (If the events took place outside the US, thats the only time these provisions would apply.)
1391(c) Defines corporate residence as wherever a corporation is subject to PJ So there are very BROAD venue options for corporate Ds.
Venue Statutory restriction on location of lawsuits; not based on DP. Its appropriate to allow venue in a place where a substantial part of the events giving rise to a claim occurred. o The Ws are found there, documents there, etc. Venue statute interacts with aggregation in complex cases. o In mass accidents, it is easy venue approp where the accident took place. o Harder in cases like asbestos. All Ds may not reside in same state (so not (a)(1) or (b)(1)) Claims of different Ps may have substantial events in different states (so no (b)(1) or (b)(2)) 1404 Venue Change (Proper Proper) o Allows federal district judge to TFER case from one proper venue to another proper venue upon showing of convenience. o Should be used infrequently D bears heavy burden when urging transfer. P choice of forum given a lot of deference. 1404(a) Ps venue privilege One justification for Ps venue privilege is to reduce fighting/litigation over non-substantive issues like location of suit. Standard for when court can dismiss case on grounds of forum non conveniens: o A Ps choice of forum should rarely be disturbed, only when there exists either oppressiveness or vexation to a D . . . out of all proportion to Ps convenience, or considerations affecting the courts own administrative and legal problems. (Gulf Oil Corp. v. Gilbert) Factors to decide whether to dismiss under forum non conveniens: Private factors: o Ease of obtaining evidence in the 2 forums o Availability and costs of W in the 2 forums o Other practical problems that make trial of a case easy, expeditious, and inexpensive Public factors: o Court congestion
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o o o o
Local interest in having localized controversies decided at home Desirability of having trial in a forum show law will apply or which avoids unnecessary choice of law problems Unfairness of burdening citizens of a disinterested state with jury duty.
Why so much litigation under 1404? Why do parties want to change? Diff judges Who your trial judge is makes a HUGE difference. May never get to the jury, but will get to the judge. Diff local rules Diff jury pool Diff docket timing Geographic bias of parties themselves Possibly different circuits may affect law if split in the circuits; different local precedents Interesting study: In cases not transferred, Ps won 58% of time. In cases transferred, Ps won 29% of time.
1406 Venue Change (Improper Proper) o Allows federal district judge to TFER case from an improper venue to a proper venue. 1407 Multidistrict Litigation o Allows MDL panel (created in 1978) to transfer case from a proper venue to ANY venue for pretrial purposes. This is used in cases like Title 7, asbestos, etc. Powers of federal judge to repackage a lawsuit (formal and informal) o Rule 17(a) Permits realignment of parties based on real interest Allows court to realign parties if they were originally mischaracterized. o Informal power of federal / state coordination i.e. MGM hotel fire most cases filed in federal court, but some in state court. Cant bring them into same courthouse Federal judge calls state judge, and informally coordinate management of claims. o i.e. orders in each proceeding are the same, same timing, etc. This avoids unnecessary discovery, motions, etc. This could increase the chance of global settlement. When a federal case is transferred, transferee judge must use transferor choice of law rules (Van Dusen rule). o This rule allows P to choose the law applied, as master of the complaint. A case can be transferred only to a district in which venue would have been proper when case was first filed. (Hoffman v. Blaski) (US 1960) (489) Literal reading of 1404(a). Transfer cannot be made to a district that lacks PJ over a D. (Foster-Milburn Co. v. Knight)
CONSOLIDATION
FR 42 - Consolidation o Allows court to sever properly joined claims When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all of the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay. Permits courts wide discretion to consolidate cases. (Johnson v. Celotex) o Consolidation permitted if there is a single question of fact or law.
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So, asbestos claims in theory can be consolidated based on P of whether asbestos can injure lungs. Mosely decision doesnt guarantee that all claims will actually be tried together.
Factors courts use in deciding whether to consolidate under FR 42:
Whether consolidation would promote judicial economy and convenience (Katz v. Realty Equities Corp.) Risk of inconsistent adjudications of common factual and legal issues Burden on parties Length of time required to conclude multiple suits as against a single suit. Relative expense of consolidated suit and unconsolidated suit. Fair and impartial trial Specific risks of prejudice and possible confusion if consolidation allowed. Other considerations specific to consolidation of asbestos (or other PL cases) (Johnson v. Celotex; Malcom v. National Gypsum): Common worksite Similar occupation Similar time of exposure Type of disease Whether P is living or deceased Status of discovery in each case Whether all Ps were represented by same counsel Type of cancer alleged
Difference between joinder and consolidation: o JOINDER: Covered by Rule 20: P P2 o D P D D2
CONSOLIDATION: Covered by Rule 42: P1 P2 o o D1 D2 Here, the cases remain separate, although they are generally handled and managed as if the same. The difference is important with regard to when certain decisions can be appealed.
Unintended cost of consolidation Interests of some parties may be affected by expanded case. Decision whether to consolidate is very fact specific. Under Rule 42, consolidation is an efficient way to handle factually related claims. Enormous power here. Largely unreviewable (for the most part) by appellate courts. When reviewed, it is deferential. Most often used vehicle for aggregating factually related claims. A judge can order a single complaint to be filed in consolidated actions. (Katz v. Realty Equities Corp of NY). o Katz v. Realty Equities Corp of NY (2d Cir 1993) (476) Facts: o MDL transfers cases to same judge, who ordered single complaint to be filed in consolidated actions. o Not all Ps sues all Ds, so judge said that in amended complaint, all Ps should sue all Ds, and orders every D to cross claim against every other D, and assumes that all answers were denials. Held,
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o Appeals court found no abuse of discretion in consolidation for pretrial purposes of 12

securities actions that arose out of a series of actions allegedly designed to defraud the public.
It is typical for appeals courts to be VERY deferential to Rule 42 consolidation decisions. (Johnson v. Celotex) Not all facts of cases must be the same in order to be consolidated. (Johnson v. Celotex) o Johnson v. Celotex (2d Cir 1990) (473) Facts: Cases of 2 asbestos workers who worked at same jobsite, both had asbestosis, and represented by the same lawyer. Exposure happened at different times, different occupations, one alive and one dead. Held, Consolidation for trial was allowed, despite the factual differences between the 2 Ps. This is typical of many Rule 42 cases, where appeals courts are very deferential to trial courts. Considerations: Common worksite Similar occupation Similar time of exposure Type of disease Whether P is living or deceased Status of discovery in each case Whether all Ps were represented by same counsel Type of cancer alleged
o Although, sometimes appeals courts are not so deferential. (Malcolm)

Malcolm v. National Gypsum (2d Cir 1993) (476) Facts: o Asbestos case o 48 Ps v. 28 Ds v. 200 3rd party Ds o Almost everyone settles, except for 2 Ps Held, o Court says risk of jury confusion and prejudice between the 2 Ps, and therefore no consolidation. o Benefits of efficiency can never be weighed against concerns of fairness BUT court still looks at and balances efficiency and fairness, so which is it? And how do we measure these things? o Used same considerations from Celotex above. This opinion itself is confused; sometimes suggests a balancing test of efficiency and fairness, and other times not.
When commonalities between claims are too attenuated, consolidation will not be allowed. (In re: Repetitive Stress Injury Litigation)
o In re: Repetitive Stress Injury Litigation (2d Cir 1993) (482)

Facts: o Consolidation order for 44 cases against multiple Ds for trial and pretrial. Held, o Consolidation was improper; Court granted writs of mandamus against pretrial consolidation of 44 cases against Ds that made or distributed products that allegedly caused array of repetitive stress injuries. o Commonality of the facts found to be very general. Injuries occurred at different places, jobs, training, devices, mfgs, etc. Different medical histories of all Ps. After this decision, MDL panel reiterated that consolidation not approp here for trial because too many evidentiary differences. (But OK for pretrial).
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Decision to consolidate is fact-specific, and often focuses on factors like judicial economy. (In re Joint E & S Asbestos Litigation) o In re Joint E & S Dist. Asbestos Litigation (487) Facts: Asbestos claims consolidated between 2 district courts. 2 judges think transferring is OK because of consolidation. This has little to do with discussion about venue privilege, and more to do with judicial economy. Held, Transfer is proper in this case, because of: o Burden of asbestos cases in the courts o Ps need for prompt recovery o Ds need to reduce transaction costs o It will avoid needless duplication in proof and decrease wasteful expenditures of time, energy, and money. Note When private parties try to disturb venue privilege, they face an uphill fight. When judges do it, much less burden.
Case law on consolidation is mixed, as evidenced by Katz v. Realty Equities Corp of NY and Johnson v. Celotex contrasted with In re: Repetitive Stress Injury Litigation. A judge may have broad power to consolidate, but can only do that for claims pending in his judicial district. Issues regarding consolidation: o What is the justification for giving 2 different sets of process for isolated tort claims and tort claim involving lots of other people? Judges are under pressure to go through docket quickly, so they have an incentive to consolidate. o Added expense of consolidation imposes unfair costs. Full consolidation means that all lawyers have to participate in all aspects of discovery. o Limit to consolidation - Cant consolidate pending claims with unfiled claims. Applies in cases like asbestos where some injuries not yet realized or when SOL has not run. CLAIM DISPERSION o Temporal dispersion Extending across time No immediate injury Used over many years i.e. asbestos, Ortiz, MGM Cant consolidate pending claims with unfiled claims. No procedural device to deal with this. o Geographic dispersion Claims filed in different states Some claims in fed ct, some in state ct There is no way to move cases from state to state or state to federal court, or federal court to state court. Possibilities for moving cases: o State State : NO o State Fed: NO o Fed State: NO o Foreign State/Fed: NO o Fed Fed: YES Forum non-conveniens has some impact, but ltd.
Venue Transfers and the MDL Panel 1407 Multidistrict Litigation
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o o
Allows MDL panel (created in 1978) to transfer case from a proper venue to ANY venue for pretrial purposes. This is used in cases like Title 7, asbestos, etc. Standard under which transfers should occur: Transfers . . . will be for the convenience of the parties and witnesses and will promote the just and efficient conduct of such actions. Panel can act either sua sponte or on motion of a party.
o 3 Prerequisites for transfer under 1407(a):

At least one common question of fact Commonality requirement not much of a hurdle. Suggestions that common facts must predominate over individual ones. Conveniences of the parties and witnesses Convenience-related factors: o Elimination of duplicative litigation o Reduction of repetitive discovery costs o Conservation of parties resources Promotion of just and efficient conduct of the action Factors: o Number of cases involved o Reduction of costs o Ability to coordinate overlapping class actions o Elimination of conflicting pretrial rulings o Readiness of some or all cases for trial o Availability and efficacy of other mechanisms for coordinate handling of cases o Voluntary cooperation o Unanimous consent or opposition to transfer
Details about MDL panel and procedures: o After pretrial, cases are sent back to original venue for trial. o Between 800-1000 cases transfered per year. o 7 judges on MDL panel; appointed by CJ of S.Ct. Judges rotate on and off the panel. Judges usually have experience with complex cases, to tend to be pro-aggregation. o No set courthouse. o Panel decides: Whether to transfer Transferee venue Who transferee judge will be Usually, someone with experience in complex litigation. o Not much explanation for panel orders issued. o Panel never decides case, but has enormous power There is no appeal of an order by the MDL panel; decisions effectively unreviewable. o Only appeal available is mandamus to the circuit in which the panel sat when it issued the order. o BUT, appeal has never been granted. Transferee judge has enormous power over: o Discovery o Pretrial orders o Settlement discussions PROBLEMS raised by MDL transfers: o Violates Ps ability to control the litigation o Interferes with foundational value of litigant autonomy o Panel considers only the overall costs/benefits of aggregation; not the potential for excessive costs it will impose on specific individuals o Causes shifts in the dynamic of litigation. o Pretrial judges have lots of power to affect the outcome of the litigation; most cases settle before trial. i.e. power to appoint a lawyer to represent the interests of the transferred plaintiffs
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o o o o
MDL pretrial process often takes longer to complete than the pretrial phase in any single individual litigation, even though total handling time for all cases goes down. Pretrial phase is often longer and more cumbersome and expensive. Panel has lots of discretion, and decisions are largely unreviewable. Can be attacked as an inadequate response to need for aggregation.
MDL panel examines several criteria when deciding to transfer, including efficiency served by the transfer, affect on parties, and ratio of common to non-common Qs. (East of the Rockies Concrete Pipe Antitrust Cases)
o In re East of the Rockies Concrete Pipe Antitrust Cases (495) Indicates criteria for transfer under 1407:
Court must look at whether the objectives of the statute are sufficiently served just and fair and convenience of parties. Criteria to decide 1407 transfer: Whether Ds are forced to litigate in place where they could not be served in the first place. Convenience/inconvenience. Loss of forum preference. Type of efficiency (if any) achieved by transfer o Whether transfer will prevent substantial duplicative work Number of related claims Ration of common Qs to non-common Qs) Number of cases involved Hardship to those involved. Geographic dispersion of cases to be transferred. Whether advantages of transfer can be achieved by cooperation among counsel instead of transfer Most important factors are the convenience and common Qs.
If uncommon Qs predominate, MDL panel may NOT transfer, as it did in the early days of asbestos litigation. That may change as time goes on, number of cases increase, cases mature, and need to facilitate settlement increases.
o In re Asbestos and Asbestos Insulation Material PL Litigation (1977) (498)

Panel chose not to transfer 103 pending asbestos actions. Common Q state of the science with regard to the effect of asbestos and what the manufacturer knew about products/warnings/etc. Court found that most of the issues were NOT common, i.e.: Nature of exposure Nature of product Contact with product Training and safety Medical history Length of exposure Etc. So, panel did not transfer. 1991 MDL panel addresses the issue again. At that time, >26K cases pending in 87 federal district courts MDL panel decides to transfer them to Philly where they are now). Uncommon Qs still outweigh common Qs, so what changed to warrant the change in position? # of cases More parties now favor transfer More mature (know more about relevant evidence) Need to facilitate settlement is great. Judge Weiner put pressure on parties to settle. Very few cases tried; most not yet transferred back. New cases have been filed in state court, because otherwise would disappear into the abyss of asbestos litigation. His role mainly to deal with discovery; most D discovery is done; still need discovery of Ps.
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Asbestos process in Philly has not been a big success, except that now, federal asbestos cases have been cleared from dockets in other federal courts.
Once the MDL panel transfers cases, any cases filed in federal court after the order will automatically be transferred as well as tagalong actions. MDL panel transfers have worked well in cases other than asbestos, such as plane crashes, securities fraud, and price fixing. Factors MDL panel considers when deciding WHERE to transfer: o Judge with expertise in specific kind of case or complex cases generally o What parties want/party preference o Docket issues o Geographically central location (accessibility) o Where evidence is located This is especially true in disaster cases o Number of cases already field in a particular venue. Ps strategize based on this factor. When transferee court for MDL purposes deciding a summary judgment motion, may still need to apply the substantive law of many states. (?) It is very important where cases are transferred to, because the judge makes a huge impact on a case. These choices are largely unreviewable.
Limits on MDL Venue Transfers
Cases are only transferred by the MDL panel for PRETRIAL purposes. Prior to 1998, transferee judges who had cases transferred to them under 1407 would not transfer cases back to original courts for trial; rather, they would self-transfer under 1404. After 1998, Supreme Court stopped the practice. (Lexecon v. Milberg Weiss) Transferee judges after 1407 transfer do NOT have the power to self-transfer under 1404; cases must go back to the original courts for trial. (Lexecon v. Milberg Weiss) o To allow otherwise would be an even more substantial incursion on plaintiff rights of litigant autonomy, and cause greater concern for outcome-determinative effects of transfer. COSTS of aggregation: o Eliminates P rights to bring and control litigation in forum of choice. o Invests tremendous power in a single judge o More expensive and litigation-prolonging for some litigants o Affects outcome of litigation
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CLASS ACTIONS Class action is a creation of equity, designed to overcome the problem of a multitude of lawsuits filed by or against a large number of people with similar interest. Judgment obtained by the representative binds all members of the class. (Some debate as to whether class members can get out from under the judgment by appealing based on adequacy of representation). Class actions are rare in the world and new to the US. o Group litigation allowed in old British equity courts, but only in very limited circumstances.
FR 23 Class Actions o FR 23(a) Pre-reqs to a class action One ore more members of class can sue or be sued on behalf of all ONLY if: Class is so numerous that joinder of all parties is not practical. There are questions of law or fact common to the class. Claims or defenses of representative parties are typical claims or defenses of class. Representative parties will fairly and adequately protect the interest of the class. o FR 23(b) Action can be maintained if: FR 23(b)(1) (PREJUDICE CLASS ACTION not very common) Prosecution of separate actions would create risk of: (a) Incompatible standards (Prejudice to D)- Inconsistent judgments to each individual member of the class, which would establish incompatible standards of conduct, OR (b) Limited Fund (Prejudice to P) Judgment for individuals in class would be dispositive of interests of other members not a party, or impede their ability to protect their interests. OR FR 23(b)(2) (EQUITABLE) Party opposing class has refused to act on grounds generally applicable to the class. Predominant remedy is injunction, declaratory judgment Many are anti-discrimination cases. FR 23(b)(3) (DAMAGE CLASS ACTION) Questions of law or fact common to class predominate questions affecting individual members, and class action is most fair way to proceed. Factors to consider are: o (A) Interest of members of class controlling separate actions o (B) Extent and nature of litigation already started o (C) Desirability of concentrating claims in forum o (D) Difficulty in maintaining class action In mass tort claims, only tie among members is that they were all injured on some way by D. Each class member needs notice and right to opt out. o If you dont opt out, youre in. FR 23(c) Court should give notice to members of class about suit. Judgment shall include and describe all members of the class. Class can be divided into subclasses. FR 23(d) Court has authority to make certain orders about conduct of actions. FR 23(e) Action cant be dismissed without the approval of the court.
o o o
23 (b)(2) Class Actions Equitable Usually reserved for classes seeking injunction or declaratory relief Not used when relief sought is only or predominantly $ damages. Can be used when monetary relief is incidental and equitable relief is predominant. (Hard to determine this sometimes). Important vehicle for anti-discrimination suits 23 (b)(3) Class Actions Damages Most important and controversial
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Requirements: Common questions of class must predominate over uncommon questions Superior to all other alternatives No limitations on remedy most common remedy is damages Gateway to all sorts of claims (mass torts, shareholders can sue corp., anti-trust price fixing) Debate as to whether this should be used to litigate mass tort claims. Requires notice to all parties who can be identified by reasonable efforts. (Eisin v. Carlisle)
D preferences as to (b)(2) and (b)(3): Ds have a distinct personal interest in seeing entire P class bound by res judicata, so not subject to new lawsuits later, so sometimes they like (b)(2) claims more, since no one can opt out. Although, sometimes (b)(3) is better, because it requires P to give notice. Notice is very expensive, and may dissuade Ps from proceeding, or too many people will opt out, which will cause court not to certify. 7 Requirements before class action can be certified (P has burden of establishing all 7): 1. There is a defineable class. Cant be too narrow or too broad. (IMPLIED REQ.) 2. Class representative must be member of class. (IMPLIED REQ.) 3. Numerosity Members of class must be so numerous that joinder wont work (FR 23(a)(1)). 4. Commonality Action raises common questions of fact or law common to the class (FR 23(a)(2)). 5. Typicality Claims of representative party are typical to those of the class (FR 23(a)(3)). 6. Adequate Class Representation - Representative will fairly and adequately protect the interests of the class (FR 23(a)(4)). 7. Case must fall within 1 of 4 categories in FR 23(b). (1) There is a defineable class. Cant be too narrow or too broad. (IMPLIED REQ.) Precise definition of class is important, because: It affects remedy involved and who should get it In some cases where notice/opt-out given, must know who is in class to give notice. Claim preclusion must know who will be bound by judgment. Helps determine plan for discovery, trial management and proof Helps determine if any conflicts between class rep and class. How specific class must be depends on nature of remedies. If seeking damages, you need to know who gets $, or who is bound by judgment. Less precision needed in defining class when remedy sought is injunction. The level of specificity in defining the class depends on the recovery that the class is seeking. (Rice v. Philadelphia) Rice v. Philadelphia (E.D. Pa. 1974) (556) o Facts: Civil rights action challenging long time between detention and arraignment. Class people still waiting for arraignment (present arrestees), past arrestees, and future arrestees. Past remedy = $ Present $ and injunction Future Injunction D claims the class is not adequately defined. o Held, The broad definition of a class if OK for injunctive relief, but not for damages. Level of specificity in defining the class depends on the recovery that the class is seeking.
(2) Class representative must be member of class. (IMPLIED REQ.)
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Courts attach great significance to selecting a class rep who will adequately represent interest of proposed class. Court itself has duty to protect interest of absent class members, but practical considerations limit its capacity to do this (heavy caseloads, limited information) Class opponents cant be relied upon to protect absentees interests. Trade association not normally allowed to be a class rep. (3) Numerosity Members of class must be so numerous that joinder wont work (FR 23(a)(1)). Tells us that there is a fundamental preference for traditional party joinder. Reflects a substantial preference for individual litigation and party autonomy. No numeric test, but rule of thumb: >50 members usually qualifies <20 members usually doesnt qualify In between other factors considered. Joinder need not be impossible in order to certify a class; just impractical. (Roubidoux v. Celani) Roubidoux v. Celani (2d Cir. 1993) (560) Facts: Suit by recipients of state welfare suing state for delays in determining eligibility for benefits. Class current benefit applicants and future applicants. Lower court rejects class, but 2nd Cir. Reverses. Held, Joinder need not be impossible in order to certify a class; just impractical. Here, traditional joinder is problematic because: a. Dispersion of Ps b. Modest amount of $ c. Changing class membership
(4) Commonality Action raises common questions of fact or law common to the class (FR 23(a)(2)). o o o The case must present common Q of law or fact. This can be satisfied even if common Qs do NOT predominate. Threshhold of commonality is not high / minimalist approach. Although, commonality requirement CAN be death knell for class action. J.B. ex rel Hart v. Valdez o Facts: Developmentally disabled children in state custody were allegedly denied the protections and services they were due under fed statute and DP. o Held, there was no common factual link between Ps. In re American Medical Systems o Facts: 4 Ps whose penile implants failed sued manufacturer, who made 10 different implants. o Held, Ps product liability claims lacked sufficient commonality with one another. This requirement is rather superfluous, because if it is not met, then wont satisfy the rest of the requirements anyway.
(5) Typicality Claims of representative party are typical to those of the class (FR 23(a)(3)). This requirement blends in with commonality requirement. Examines the way in which the class representatives will litigate the common claims evidence thy will seek, arguments they will make, etc. o Looks at nature of proof offered by class rep, and compares to proof that would need to be offered by others. If P doesnt represent the same interest and suffer the same injury as all class members, he isnt proper class rep. o General Telephone Co of Southwest v. Falcon Facts:
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Held,
P was Mexican American who alleged his was discriminated in failure to promote. P purported to represent all Mexian Americans who were victims in discrimination in hiring and promotion. If P doesnt represent the same interest and suffer the same injury as all class members, he isnt proper class rep (and P didnt in this case). Court focuses on fact that evidence of intentional discrim needed to prove Ps case of individual discrim in promotion was significantly different than the statistical evidence used by P to prove the classs claim of discrim in hiring and promotion. Ps claim of intentional discrim was not typical of pattern and practice claims of others who were not promoted, and not at all like those who had been discriminated against in hiring.
(6) Adequate Class Representation - Representative will fairly and adequately protect the interests of the class (FR
23(a)(4)). 2 parts of this inquiry: Class representative adequacy and Class lawyer competency What determines adequacy of class rep (FR 23(a)(4))? (1) Class rep has no physical or mental impairments that will render him inadequate to manage the case (2) Whether the class rep has appropriate resources and incentives to litigate the case. Courts look deeply into issue of financial incentives In one substantive area, Congress, in passing the Private Securities Litigation Reform Act of 1995, requires that shareholder with largest financial stake in outcome should be presumptive class rep. Applies only to certain securities fraud actions. Original P must give notice to other possible Ps and tell them they can apply to be class rep. Court selects lead P from applicants. Strong presumption that shareholder with largest financial stake in outcome should be presumptive class rep. Lead P selects class counsel (this decision is not appealable). Critical aspect here is classs attorney. Class counsel must be: o Legally competent (not the best) o Financially and logistically capable of sustaining a large case Must be able to front litigation millions of up front costs such as fees, expenses, and overhead. Sufficient partners, associates, and paralegals to staff the case. Access to technology to manage vast numbers of documents Resources for communicating with everyone. o Honest and ethical o Free of conflicts of interest or collusive behavior. (3) Personal characteristics Conscientiousness Knowledge of underlying litigation (although perfect knowledge if not required). (4) Conflicts of interest between class reps and the class as a whole. (5) Conflicts within the class itself. Amchem Products v. Windsor Facts: o Settlement class action sought to resolve claims of asbestos claimants who had not yet filed suits. o Differences among claimants: Some already suffering an injury.
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o o Held, o
Some not suffering injury but will in near future. Some would suffer it in the distant future. Some would not suffer injury at all. Settlement terms scheduled a payment within a specific range for each type of asbestos injury. All currently injured and future-injured Ps would receive settlement within that range. Settlement structure created irreconcilable conflicts among class members. Those claimants with current injuries had interest in getting large immediate awards. Those with future injuries had interest in preserving bulk of settlement funds until later. Present claimants werent concerned with inflation and future claimants were. This holding was DESPITE the significant consonant interests of the class members, including: Interest in inexpensive and expeditious alternative to nightmare of asbestos litigation. Interest in preserving settling Ds from bankruptcies that would jeopardize recovery by any of them.
(7) Case must fall within 1 of 4 categories in FR 23(b).

PROCESS OF CONDUCTING A CLASS ACTION: Certification of Class Action claim: o Certification is MOST CRITICAL step in class action suit. o Supreme Court has ruled that courts may not make preliminary inquiry into merits of substantive claim when considering whether to certify a class action claim. o Court can certify action as proposed, deny it, or certify a modified class. o In certifying, court defines: Substantive issues it will consider Class representative Dictates leverage parties can bring to settlement negotiation Initiation of class actions: o Certifications usually issued in response to a motion by a party that will eventually be a member of the class o Permission of potential class members not needed to initiate certification, and consent of class is not prerequisite for certification approval. o In some cases, lawyers will solicit clients for a class action, or persuade individuals to follow a class action course. Judges Role in a Class action: o Determine if the class is adequately represented. o Select class counsel o Approve/reject settlement o Approve attorneys fees More active role than in ordinary lawsuits. In traditional suits, judges dont approve adequacy of Ps or approve terms of settlement. Lawyers dominate the decision-making process in class actions. Ps lawyers have to convince the judge that a settlement is fair. This is not so hard when both P and D are arguing that it is. It is hard for a judge to determine if it is actually fair lawyers know more about the facts than the judge does.
o o
Class action seeking injunctive relief under 23(b)((2) is used most often.
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PSLRA (Private Securities Litigation Reform Act of 1995) o Applies only to certain securities fraud actions. o Original P must give notice to other possible Ps and tell them they can apply to be class rep. o Court selects lead P from applicants. o Strong presumption that shareholder with largest financial stake in outcome should be presumptive class rep. o Lead P selects class counsel (this decision is not appealable) Why not use this approach with other types of class actions? CONFLICTS of INTEREST within CLASS: o Alternative to class action litigation is often no litigation at all. o Certification in small-stakes class actions, such as securities fraud or antitrust are more likely to be brought as class actions than mass dispersed torts. o Plaintiffs can form series of separate classes, subclasses, or issue-specific classes instead of just one class. o However, this could affect the financial incentives for attorneys bringing the case.
Some conflicts of interest among class are unacceptable. (Hansberry, Amchem) o Hansberry v. Lee Seminal class action case (but before Rule 23) Facts: Hansberrys (H) were black family that moved into house that was subject of racially restrictive covenant. Prior to them, another property owner in the area leased home to black family, and all other white families sued, on their own behalf and that of other property owners subject to the covenant. o State court found that the covenant was in effect. When H bought home, other prop owners went in to rescind sale because it violated the covenant. They claimed that H was bound by earlier judgment. Held, Held, H cant be bound by earlier judgment because it violated DP of 14th am. Court makes it clear that people can be bound in a class action if they are adequately represented, but not parties. o But, in this case, the requirements are not satisfied that would bind parties: Ps didnt distinguish Ds as a class, or seek injunctive relief against anyone except the named Ds. Interest of parties cannot be antagonistic; conflicting interest among parties to case, so it is impossible to consider them part of the same class. This case doesnt say how much divergence of interest can be tolerated.
o Considerations of the merits of the plaintiffs claims is expressly prohibited when deciding whether to certify a class.
(Copley Pharmaceutical overruling Rhone-Poulenc)
o Apprehension about a single jury simply is not a legal basis to deny class certification. Interest of parties cannot be
antagonistic. (Copley Pharmaceutical overruling Rhone-Poulenc)
Rhone-Poulenc (7th Cir 1995) (540) LATER OVERRULED Facts: o Wadley Ps (hemophiliacs) were infected by HIV tainted blood, suing blood suppliers. (NOT low-value suits) o Claim: Ds were negligent in not screening blood properly o District court ordered class certified only on the issue of whether blood suppliers were negligent. Held (Posner), o This type of class action was an abuse of discretion; will put Ds under enormous pressure to settle and magnitude of Ds exposure. o Balances the settlement pressure on Ds with the benefits of class action.
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o However, Rule 23 does not demand PERFECT congruence of interests among class members. (Agent Orange PL
Litigation)
Agent Orange PL Litigation (2d Cir 1986) Facts: o P class represented by consortium of law firms, who negotiated settlement. o Most class members supported settlement, but some did not. o Dist. Court approved settlement over their objections. o On appeal, 2 of law firms that worked as part of consortium sought to represent objectors. o Other firms moved for disqualification. Held, o Rules regarding representing clients with adverse interests must sometimes be modified in the class action context. o Second Cir proposed balancing test that factored in: Amount of confidential info lawyers obtained Prejudice that could result from possession of the info Cost and ease with which new counsel could be retained to represent objectors. o [So did they allow attorneys to represent them(?)]
Problems of conflicts of interest is apparent in securities litigation when determining the remedy for different class members. Blackie Court presented with the issue of COI within the class involving securities claim Court says that everyone who bought between day 1 and day 100 is entitled to recover. Some courts have begun to question whether conflicts within the class can be overcome and class should be certified. o But some courts may be inclined to recognize the COI problems of proof, but still certify in order to allow some remedy for those damaged. Courts sometimes massage the substantive law, overlook possible COI and problems of proof in order to allow class action to go forward to and enforce the substantive law. Kirkpatrick (5th Cir) is example of this. Court says that to extent Ps are asserting state law claims, cant certify the class, because the claims are governed by the laws of many states and cant be managed. BUT, as to the 1933 claims, case remanded to determine if the claims can be proven on a common basis.
o Even if proving Ds liability is common among all class members, there can still be COI as to theories of the case and
issues of individual proof that would prevent certification, as in securities fraud litigation. (Seagate) Seagate (628) Facts: o Stock purchasers sue manufacturer, alleging nondisclosure. Partially curative disclosures are made between April and Oct o 1st trial judge certified 4 sub classes. o 2nd judge holds evidentiary hearing regarding conflicts within the class, and found lots of conflicts because of when the curative disclosures were made and affects on recovery. Someone can be a victim of the fraud and a beneficiary of the fraud, so different evidence needed for different Ps. Hard for class attorney to determine which theory to rely on. Conflicts between those who bought and held and those who bought and sold. Held, o 2nd judge concluded that the COIs prevent class certification. o Calculating damages can be all but impossible. o 1995 PSLRA (Private Securities Litigation Reform Act) Created new procedure for selecting lead P and counsel.
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After notice, presumptive class rep is person with largest amount at stake (or largest shareholder) Result is that class reps are usually institutional investors with broad holdings, which will tend to maximize recovery of class as a whole. But, delicate ethical considerations here.
Challenging Adequacy of the Class Representation o Courts are split on the issue of whether and when a challenge to adequacy can be made.
Epstein v. MCA, Inc. (9th Cir) Facts: o Epstein was class mem in securities fraud case who did not opt out. o Settlement approved by district court, but Epstein argued that he had been inadequately represented and therefore should not be bound by judgment. Held, o 1st time Court of appeals held that the class was not adequately represented, and therefore the class members were not bound. o 2nd time Reversed on rehearing, holding that a class member cannot collaterally attach a judgment by claiming inadequacy of representation. Stephenson v. Dow Chemical (2d Cir 2001) Fact: o Arose out of the Agent Orange litigation settlement approved in 1984. o Settlement called for payments for certain injuries until 1994, when fund terminated. o Stephenson Ps alleged that their injuries from Agent Orange didnt manifest until after 1994. Held, o Adequacy of class counsel can be challenged in subsequent proceedings. o Relying on Amchem, said that pre-94 Ps and post-94 Ps had conflicts of interest, so post94 Ps had been inadequately represented. o Court distinguished Epstein.
4 TYPES OF CLASS ACTIONS: o 4 main types of class actions, but a class may meet more than one standard. o Most critical distinction is between the Mandatory ((b)(1)(A),(b)(1)(B), and (b)(2)) and Opt-out class actions ((b)(3))
o (1) Inconsistent Standards Class Action Rule 23(b)(1)(A)

Permits class action when independent suits would create a risk of inconsistent or varying adjudications that would establish inconsistent standards of conduct for D. Risk of separate suits by class members seeking injunctive relief fits within this provision. Risk of differing damage awards does NOT fit. Point of a (b)(1)(A) class action is to protect a D from the injustice of tying to comply with class members demands for inconsistent remedies. BUT the D would not be exposed to inconsistent standards of conduct unless members of the class have either different legal rights or interests that lead them to ask for different relief. So this begs the question of whether or not they satisfy commonality and typicality requirements. SO, the demands of fairness to D and simple efficiency require us to tolerate some tension within the class. Mandatory class action, so greater preclusive effect with less expense and delay. Example: Used in nuisance litigation. Rather uncommon. This has been used almost exclusively in cases seeking injunctive or declaratory relief. This standard can be stretched beyond typical injunctive/declaratory relief. For instance, medical monitoring has also been deemed by at least one court to fit under this standard.
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It IS proper to certify a (b)(1)(A) class when seeking an injunction for medical monitoring, because allowing Ps to proceed separately could expose D to conflicting monitoring responsibilities. (Telectronics)
o Teletronics Pacing Systems (S.D. Oh. 1997)

Facts: Mass tort action against mfg of defective pacemakers 400+ heart patients suing mfg, alleging negligence Cases transferred by MDL panel to OH, but other cases proceeding in state court Ps convinced the court that D could be forced to create a medical monitoring program (that could have been accomplished otherwise through damage award). Ps convinced court that individual suits would open door to creation of conflicting monitoring programs. Transferee court enters complicated orders: o Certifies 10 sub-class actions, including b(1)(A) and (b)(3) for injunctive relief, compensatory class under (b)(3), and denies punitive damages class. Held, It is proper to certify a class for medical monitoring injunction under (b)(1)(A) because there is a risk that if they proceed separately, D would be subject to different monitoring requirements in different places, may require FDA approval, and may be impractical. If Ps had asked for damages for medical monitoring, class would not have been certified, but since they framed it as a monetary injunction, it dell under (b)(1)(A). Note not obvious that this case was decided correctly.
Risk of inconsistent judgments is not a reason to certify a settlement class. (Greenman) Dennis Greenman Securities Litigation (11th Cir 1987) Facts: Complex securities cases; $ has disappeared Settlement reached, but some class members object to settlement Held, Settlement class inappropriate Inconsistent judgments are possible if P sue separately, but inconsistent judgments are NOT the same as incompatible standards. (b)(1)(A) looks to the future conduct of D, and risk of inconsistent future jmts against D. o Greenman class should not have been certified under b(1)(A), because no risk of incompatible standards for D. Also, should not have been certified under (b)(1)(B), because insignificant evidentiary showing about probable recovery of P group and assets of Ds to respond and pay. o Showing Ps likely recovery (how many Ps, $ size of claim, change of winning) and showing Ds available assets / fixes assets, future income stream, insurange coverage, etc., is hard.
o (2) Impaired Interest/ Limited Fund Class Action Rule 23(b)(1)(B)

Focus of (b)(1)(B) class is on the untoward consequences that individual suits by putative class mem would have on the rights of other putative class mem. Seeks to prevent risk of individual actions that would as a practical matter be dispositive of the interest of the other putative class members not parties to the adjudications or substantially impair or impede the putative class members ability to protect their interests. Examples: o Injunctive claims that seek the restructuring of an institution that might have the practical effect of impairing the interest of others who have a relationship with that institution. o Claims concerning management or distribution of trust funds or other forms of property in which numerous claimants have beneficial or joint ownership interests. o Context of a limited fund one that is insufficient to fully pay all of the claims against the fund.
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Happens when legitimate claims against a D exceed its assets.
(b)(1)(B) meant to protect all Ps when there is a true limited fund or impaired interest. Parallels exist between Rule 23(b)(1)(B) and Rule 24(a)(2), which permits person with potentially impaired interest to intervene in a case. Mandatory class action, so greater preclusive effect with less expense and delay. Courts are generally reluctant to certify under (b)(1)(B). o Once a company declares bankruptcy, all claims against it are stayed, and transferred to bankruptcy court under bankruptcy law. Theories for certifying under (b)(1)(B) o LIMITED GENEROSITY (as to punitives only) Seen in Agent Orange o STATUTORY cap As in nuclear disaster situation Or because of state laws limiting punitives to a single instance. Federal courts are precluded from entering injunctions as to ongoing state proceedings, so as a practical matter, little successful litigation under (b)(1)(B). It is difficult to show that a D will have insufficient funds to pay future judgment under (b)(1)(B). (Greenman) o Must show: Ps likely recovery How many Ps $ size of claim Chance of winning Ds available assets Ds available assets Fixed assets Future income stream Insurance cvg
Sometimes (but not always), classes will be certified because of a limited fund. (Ortiz v. Fibreboard) Ortiz v. Fibreboard (US 1999) o Facts: Asbestos mfg and 2 of its insurers struck deal designed to resolve all future claims. 2 of Fibreboards insurance carriers were responsible to indemnify Fibreboard in unlimited amounts for all of Fibreboards asbestos claims that wee based on asbestos exposure before 1959. Only Fibreboard was responsible for claims based on post-1959 exposure. Settlement reached for $1.535 B, with insurers contributing $1.525 B and Fibreboard paying $10 M (out of total assets of $235 M) Insurers would only settle if they got global peace. o Held, 23(b)(1)(B) could not be used as joinder vehicle for settlement in this case 23(b)(1)(B) limited fund must satisfy 3 criteria: (1) Max amount of the fund must be inadequate to satisfy the max amount of the aggregated claims. (2) Whole of the fund must be devoted to payment of the claims. (3) Claimant with common theories of recovery must be treated equitably among themselves. In Ortiz, problems were: fund from which compensation was to be provided was not set at its max; within the class, there were people with inconsistent interests that settlement didnt take into account.
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Raised the issue of the 7th Amendment and right to a jury: Mandatory action that settles monetary claims of class members implicates the 7th Amendment right to jury without consent. Not certain if this statement is part of holding or dicta. Either way, applies only to mandatory class action seeking monetary relief when the actions settle.
It is possible to certify a (b)(1)(B) class under a limited generosity theory, when there is concern that at some point trial courts will halt punitive damages and not all Ps will be able to get them. (Agent Orange). Agent Orange (2d Cir 1984) (593) o Facts: Weinstein decision Vietnam vets bring action against govt for damages caused by exposure to Agent Orange (herbicides) Agent O sprayed on forest canopy to kill it. Evidence very controversial and disputed as to whether Agent O actually caused the damages Weinstein certifies (b)(3) class action for compensatory damages and b(1)(B) class action for punitive class actions. o Held, Trangsrud says that b(1)(B) class action curious, because Ps case was not really certain, Ds had lots of $ and insurance, so not clear that Ps would get more $ than Ds could pay. Court said that the issue wasnt that Ds will run out of money, but that if Ps proceed separately and get lots of punitives, then at some point, trial courts might say that Ds paid enough, and call a halt to punitives. This is the LIMITED GENEROSITY THEORY. Limited funds can also be created by statute, such as in the case of a nuclear reactor failure. If the statute sets a limit on total provable claims, and there is a risk that Ps claims would exceed it, then (b)(1)(B) would be appropriate. Also, in some states the laws only allow first to judgment to get punitives, so thats a compelling reason for a (b)(1)(B) certification on a punitive damages claim.
Title 7 - A class can proceed under 23(b)(2) and also after 1991 amendments, if can satisfy requirements of (b)(3), then can proceed under this as well at the same time. o Can be 7th amendment problem o Beacon Theaters S. Ct. appeared to hold that when a P pursues both legal claims (jury triable) and equitable claims (bench tried), if they share overlapping factual issues, then 7th amendment requires that the factual claim goes to jury first, and then equitable claim goes 2nd to judge with jurys findings. So if there are 2 class actions going on at same time, then it might be required for the factual claims to be tried first for purpose of (b)(3) before the equitable class action. ANTI-INJUNCTION ACT o Applies only to ongoing state proceedings (not those that have not been filed) o You CAN enjoin parties from filing in state court, but once suit is filed, cant enjoing state court or litigants from proceeding. o Although there are exceptions to this Act: If there is another statute that creates exception If its necessary to protect jmt of federal court If its necessary in aid of federal courts jurisdiction. o May limit federal mandatory class actions under (b)(1) and (b)(2) Skywalk Facts: o Lawsuits pending in state and federal court in KS city.
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o o o Held, o o
Federal judge chose to certify mandatory class action in federal court, effect of which would be to stay the state proceedings. Q is whether the stay violates anti-injunction act, which prohibits federal court from enjoining ongoing state proceedings (if the case has already been filed) This is to avoid situation when federal judge would tell the state court judges to stop it.
23(b) is not exception to anti-injunction act or fit within any other exception, so it was improper to enter order for mandatory class action because it would have effect of staying the state court cases. It was improper to certify class action under (b)(1)(A) and (b)(2) because the effect was to enjoin ongoing state litigation. o Result of decision was that the state lawyers got to keep their cases.
o (3) EQUITABLE / Injunctive Class Action Rule 23(b)(2)

Relief sought is predominantly equitable in character. Class is certified when party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole. Has been used to certify class actions in host of circumstances requiring injunctive relief, including civil rights, govt benefits, employment discrim. Nothing in the test of (b)(2) suggests that it can be used to handle related damages claims, BUT, the advisory notes imply that it can when damages do not predominate over injunctive relief. Courts generally address the predominant / incidental question by looking at whether the injunctive relief is substantial and important to make sure that the injunctive tail is not wagging the monetary dog. Back pay is seen as restitution, and NOT compensatory damages. Mandatory class action, so greater preclusive effect with less expense and delay. This was passed after the civil rights act of 64 in 66. In many respects, a great success. It is a routine part of civil rights litigation. (b)(2) classes are certified when D has engaged in conduct that gives rise to injunction or declaratory relief as to a class of people. Back pay awards in employment discrimination suits are seen as incidental, and permitted to go along with a b(2) certification (Wetzel).
Wetzel v. Liberty Mutual Insurance Co. (3d Cir 1975) o Facts: Ps were victims of workplace discrim, seeking injunctive relief and individual awards of equitable back pay. o Held, Back pay awards were merely incidental to the injunctive relief sought, and therefore the back pay claims were certified with the b(2) class. This eliminated the ability of class members to opt out of the class to pursue their own back pay claims.
There is a split on the issue of whether (b)(2) can be used [for civil rights claims] when damages are involved. Allison says no. Robinson says yes. Full compensatory claims in employment discrimination cases is NOT incidental, and will prevent certification of a b(2) class. (Allison) Damages must be easy to calculate using objective standards. (Allison) Damages are only incidental when they flow directly from the injunctive relief and are awarded to the group as a whole. (Allison)
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(b)(2) class action will not be certified unless the equitable relief predominates over the compensatory damages relief. (Allison)
Allison v. Citgo Petroleum Corp. (5th Cir 1998) o Facts: Claim of group of employees for employment discrim in workplace. Statute permitted full compensatory damages rather than just equitable back pay, including punitives. o Held, Court did not certify (b)(2) action here, because they apply the predomination rule. Damages are only incidental when they flow directly from the injunctive relief and are awarded to the group as a whole. Incidental test comes from the advisory notes, not the text of the rule itself. Notes say that you cant certify a (b)(2) class if damages predominate. Damages must be easy to calculate using objective standards. (such as statutorily mandated penalty for a violation of a consumer statute.) Here, damages are not incidental because they are not in the nature of a group remedy; the money goes to the individuals and not the group. In contrast, back pay can be determined based on a formula, not person by person. o Note This actually made it harder to get compensatory damages under Title 7, which was not the purpose of the 1991 amendments. o Class would NOT be precluded from proceeding individually for compensatory and punitives.
7th Cir (Jefferson v. Ingersoll Intl) has moved towards Allisons interpretation of (b)(2) claims, but more open to aggregate damage aspects of these cases using an ad hoc balancing approach focusing on: (1) Likelihood that injunctive claim would have been brought in the absence of a monetary claim. (2) Necessity of an injunction. Where claims require individualized proof as to different class members, then may not be appropriate for class certification under (b)(2). (Robinson Transit) BUT, as long as damage claims can be managed within a title 7 case, must certify under (b)(2). (Robinson)
Robinson v. Transit (2d Cir) (Supp) o Facts,
Held,
Ps bring (b)(2) class action, alleging: Individual disparate treatment Group disparate treatment (pattern and practice) Disparate impact
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Disparate impact claim can be certified as a class. Individual disparate impact claims not suitable for class action because require individualized proof. Can certify pattern and practice claim under (b)(2), but may require notice and opt out (when its conceded that damages are substantial and not incidental) Trangsrud thinks this is curious. Court seems to say that as long as the class is afforded procedural protections, we should allow it to proceed. Its hard to fit the pattern and practice claim under the language of the rule and Allison. 2nd Cir says that the important question is how cohesive is the class, and do all class members share the same interest. This case is very odd.
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o This decision is defensible if evidence for P and D is statistical, because it could be

o o managed on a group pases, but that generally wont be the case. This opinion is trying to give effect to the amendments and encourage deterrence. But it gives no guidance as to when notice and opt out should be given. Looks like court is trying to push the language of (b)(2) as far as possible for civil rights title 7 litigation. Therefore, we shouldnt give up on (b)(2) as a means of enforcing civil rights law, as long as damage claims can be fairly managed.
Medical monitoring claims are properly certified under (b)(2). (Cook v. Rockwell)
Cook v. Rockwell (606) o Facts: Property owners suing weapons facility for property damage, medical injury, punitive damages, and medical monitoring. P wanted (b)(2) class action for medical monitoring and b(3) for property damage claim. o Held, Because medical monitoring claim was in the form of an injunction, this is an equitable remedy under (b)(2). Although this could be elevating form over substance, because it essentially requires D to pay money. When class action validly sought under (b)(2) or (b)(3), (b)(2) is preferred, because it affords less procedural rights. (b)(3) requires notice and opt out. So court is expressing preference for giving class members LESS procedural rights.
There is issue of whether 7th amendment right to a jury prevents use of mandatory class action when damages are involved. Also, issue of whether DP of 5th amendment allows damage claims to be decided in mandatory class actions. Supreme court has not decided this issue. Shutts - FN in case says that court is not deciding if damage claims are proper in mandatory class actions.
o (4) Opt-Out Class Action Rule 23(b)(3)
Class members have a right to remove themselves from the class. Class members must receive the best practicable notice that they are members of the class and advises of their right to exclude themselves from class. NOTICE provision, according to Eisen v. Carlyle (US 1974) requires: (1) Individual notice through first class mail or an equivalent to every class mem who can be identified. (2) For those not identified, notice is approp through newspaper, TV, and radio as long as the substitute notice is reasonably calculated to reach class members. 2 specific elements of (b)(3):
(1) Questions of law or fact common to the class PREDOMINATE over questions affecting individual members; AND o Courts dont require that all questions of law and fact be common to satisfy predominance test. o No mathematical formula for predominance; rather, analysis is qualitative. o Some cases focus more on values of efficiency and individual control.
Jenkins v. Raymark Industries (5th Cir 1986) Facts:
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o P sought class treatment of class comprising 900 asbestos

o Held, claimants. Ps argued that predominance criterion was satisfied because the issue of the state of the art in the asbestos industry was common to all cases.
o 23(b)(3) class action was proper and predominance

o established, because state of the art was in fact a significant part of each class members case. Court also noted that single resolution was important, and would save time and expense of hundreds of trials using the same evidence.
Certification may not be proper if there are multiple state laws involved in the case.
Castano v. American Tobacco (5th Cir. 1996) Facts, o Attempt to certify a nationwide class of millions of injured cigarette smokers that became addicted. Held, o Certificaton not proper because of the multiple state laws that would be involved in the case. o Court noted that variations in state law may swamp any common issues and defeat predominance. o Class had manageability problems, such as: Different choice of law rules Different substantive law Erie guesses Notice to millions of class members Procedure of determining who is nicotine dependent. Not a negative value suit. In securities fraud cases, it is now common to use a fraud on the market theory that presumed that the public relied on public misrepresentations regarding a security. This made it easier for Ps to meet the predominance test.
(2) Class action is SUPERIOR to other available methods of fair and efficient adjudication of controversy. o Superiority factor seeks to ensure that there are no other mechanisms to handle case as efficiently as a class action. o This need to justify is unique to this kind of class action. o Factors considered by courts: Whether the small size of individual members relief makes consolidated handling essential; Whether Ps have adequate resources to sustain individual litigation Whether SOL for filing individual claims has run out after filing the class complaint Whether individual litigation is sufficiently mature to have a sense of whether class treatment might prevent many separate filings. Whether individual litigation would result in a judgment that would have preclusive effect in future cases How the class action might be tried Whether aggregation in a single distant forum represents a serious hardship to class members Whether multidistricting can accomplish the necessary coordinated handling Whether a single course of discovery and trial on common issues will expedite the ultimate resolution of the case or prolong it. Whether one law or multiple state laws govern the dispute
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Whether the class action presents complications that make it difficult for court to shepherd the case through pretrial and trial processes.
Certification may not be proper if there are multiple state laws involved in the case.
Castano v. American Tobacco (5th Cir. 1996) Facts, o Attempt to certify a nationwide class of millions of injured cigarette smokers that became addicted. Held, o Certificaton not proper because of the multiple state laws that would be involved in the case. o Court noted that variations in state law may swamp any common issues and defeat predominance. o Class had manageability problems, such as: Different choice of law rules Different substantive law Erie guesses Notice to millions of class members Procedure of determining who is nicotine dependent. Not a negative value suit. In securities fraud cases, it is now common to use a fraud on the market theory that presumed that the public relied on public misrepresentations regarding a security. This made it easier for Ps to meet the predominance test.
Additional factors to help decide whether to certify under b(3): (A) Interest of individual members of the class individually controlling their own cases o Looks at strength of autonomy interest o Looks at likelihood that a significant amount of class members will opt out o Looks at large or small value of each Ps recovery. (B) Extent and nature of any litigation already commenced in the matter o This factor can be twisted in either direction either for or against certification: If lots of ppl have already commenced actions, then shows: Strong interest in individual control and economic viability of separate litigation Potential for large number of opt outs. Heightened need for single resolution of common claims and issues. Lack of litigation shows: Inappropriateness of class treatment, OR Necessity of class treatment because individual actions are not viable. (C) Desirability of undesirability of concentrating the litigation o Looks at following considerations: Elimination of duplicative litigation Forums fairness and convenience for Ws and parties Law or laws that would apply (D) Difficulties likely to be encountered in the management of the class action (Manageability factor) o This factor is the 800 lb gorilla of the 4 factors. o Invites the court to consider how the class action will proceed at pretrial and trial. Driving forces behind this rule were efficiency and uniformity of result. Juxtaposed to this are concerns for individual autonomy and control. 23(b)(3) is most commonly used form of class action.
Giving Notice: o Notice requirements differ depending on what type of class action:
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FR 23(b)(3) Specific notice requirements Requires notice to all parties who can be identified by reasonable efforts. (Eisin v. Carlisle) Minimum contacts is not required of Ps to bring suit in a state, as long as they have option to opt out. o Phillips Petroleum v. Shutts (US) Held, it is not a violation of due process to Ps to proceed with class action where they have no minimum contacts, as long as they have option to opt out. This is fair because: o Minimum contacts applies to D, to protect them from burden of litigating in distant forum, where that forum can render judgment against them. o Ps in class action suit are very different no risk of judgment against them, and no burden for them to do anything, go anywhere, or spend any money. o As long as P can opt out, due process is satisfied, and KS properly asserted PJ over absent class member Ps. KS court did violate due process of D by applying only KS law to all claims. This is rare example of court policing choice of law rules. FR 23(b)(1), (2) Courts have tons of discretion about notice. **Supreme court never decided whether damages can be pursued under (b)(1) or (b)(2) without notice and opt-out.
Using Rule 23 for Mass Tort cases: o Negative value suit Small stakes cases Prime candidates for class treatment. o Large stakes cases that individuals have an incentive to prosecute the cases separately are problematic for aggregation. o Cases in which liability issues vary little from case to case are better candidates for (b)(3) treatment than those in which some elements of the claims or defenses hinge on individual circumstances. o For mass torts, drafters of 23(b)(3) states specifically that the opt-out class was ordinarily not appropriate.
o At one extreme for allowing class action in (b)(3) case was Jenkins, which said that the issue of the state of the art of
asbestos manufacture made class treatment superior and certified a class of 900 trials.
o On the more limiting side is Castano, which held that a nationwide nicotine-dependent smokers class action was NOT
superior. Class had manageability problems, such as: Different choice of law rules Different substantive law Erie guesses Notice to millions of class members Procedure of determining who is nicotine-dependent Not a negative value suit Smoking litigation was immature
o There is no categorical rule that mass torts cant be certified under (b)(3), although Amchem set a high bar. In Amchem, S.Ct. said, mass tort cases arising from a common cause or disaster may, depending upon the
circumstances, satisfy the predominance requirement. However, Amchem limits potential future for class action aggregation. Amchem put a brick wall at exactly the point in the road where traffic was most congested, and most in need of unclogging. Amchem especially made it hard to settle future claims.
The interest(s) that Rule 23 seeks to serve: (CL 147-149) o 23(b)(1) Remedial interest; remedial equity. o 23(b)(1)(A) and 23(b)(2) Trangsrud theorizes may serve different aspects of remedial equity
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(b)(1)(A) dissonance claims (b)(2) consonance claims 23(b)(3) Deterrence, especially for small stakes cases.
SMJ in Class actions: o Class action suit based on federal question doesnt raise any problems of SMJ. It is easy to get federal law class actions into federal court. o Diversity does: Must have CPLT diversity (Strawbridge Rule). Diversity of citizenship in class action suit is based on named parties only (Supreme court in Supreme Tribe of Ben-Hur v. Cauble) Not usually too hard to find a someone in class diverse from Ds. Trangsrud thinks this rule doesnt make sensewould make more sense to look at the citizenship of all members, like with partnerships. Still, $75,000 needed: Separate and distinct claims of different Ps in a class action CANNOT be aggregated. (Zahn; Snyder v. Harris) Snyder v. Harris - Rule that you cant aggregate $ claims in class actions. Many criticize Zahn as being unnecessarily hostile to class actions in this regard. This rule makes no sense. State Law class actions in state court: Removal is difficult; must have CPLT diversity, and all Ds must agree on removal Limited supplemental jurisdiction under 1367(b).
Venue in Class actions: o Only residences of class reps are important for purposes of venue. o Residences of absent class members is irrelevant. Courts must also set method of distribution of awards.
Courts evaluate settlement proposals, considering if it is fair, reasonable, and in the best interest of individuals affected by it. o Those proposing settlement have burden of proving standard is met. o Supreme Court said that settlement of class action prerequisites had to be demonstrated in course of settlement procedure. Class action changes roles of attorneys, somewhat. Difficult to determine loyalty to client. Sometimes, court issues orders to foster orderly interaction between attorneys and court. May establish management committee with lead counsel and liaison counsel. Attorneys Fees in Class Actions: o Courts now carefully assess attorney fee petitions to prevent excessive charges. o Attorney for the successful representative parties is typically awarded a fee. o Many courts have complicated method for determining fee Lodestar computation using hours, billing rate, etc. Then lodestar rate can be modified based on contingency (risk) factor, or quality of lawyers performance. Time-rate computation has inherent ambiguities that make it neither a stable measure nor an easily applied one. Criticized as over-compensating counsel. Common Fund Approach Attorneys get percentage of fund recovered for class. Flaws in lodestar method have prompted many courts to return to this approach. Because of huge cost of class action suits, it can be hard to find attorneys willing to spend time, $, and resources needed. Attorneys may reject meritorious claims because its took risky to justify cost required to justify investment on a contingency basis. Most claims that seek injunction do so under statute that requires losing party to pay attorneys fees, otherwise fees are paid by public interest groups or done on pro bono basis. Certain class action suits are controlled more by lawyer than client, because lawyer is the primary stakeholder because of the fees.
o o
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FR 23(b)(1)(a) can be compared to 19(a) (Joined parties), and 24(a) (Interpleader) very similar language. o Addresses common problem will others be affected by judgment? PROBLEMS WITH CLASS ACTIONS How they fall short of achieving optimal aggregation: o All of the usually aggregation-evading jurisdictional stratagems P wanting to avoid federal court will include a non-diverse class rep or include claimants with claims of $75K or less. o Ps can still file overlapping class actions in state and federal court, or different federal courts, and race each other to judgement. o Opt-out right in 23(b)(3) classes can lead to significant satellite litigation. o Strong potential to change litigation dynamics: Chances of P success may rise the more cases that are aggregated. Possibility of bankruptcy may force D to settle even non-meritorious claims. o No clear way to settle future claims and achieve global peace. o Problems with conflicts within classes may make settlement difficult. (i.e. Ortiz, Amchem); difficult to determine what is an acceptable amount of tension within the class. Cant have conflicts within the class; but there will always be SOME conflicts, especially at remedial phase. It is difficult to know how much conflict can be tolerated while still allowing class actions to happen. o Conflicts with traditional P venue privilege and autonomy. Class mem can be made an involuntary party in forum not of her chosing. Party has to give power to control suit to class rep o Potential collusion with opponent o Attorney interests dont always line up with that of the class. o Imperfect mandatory joinder device.
SETTLEMEMT CLASS ACTIONS
Regardless of possible certification problems, court may still certify a class action if the class members are almost identically situated, because they can determine damages by using a formula. (Baldwin-United)
In Re Baldwin-United Corp. (S.D.N.Y. 1984) Facts: Claim in nature of securities action Certified for settlement purposes only Not certified for trial; not sure whether can be certified for trial Certification problematic Premature s dont have hammer to threaten trial bargaining from position of weakness Little discovery Unaware of strengths and weaknesses of case Concern of collusion b/w s lawyers and s Factors mitigating in favor of certification Some discovery Collusion not at issue; MDL set up steering committee for s Doesnt raises issues of multiple attorneys representing different members Reverse auction Class members are almost identically situated Would probably still be upheld today Why not just look to terms of the settlement to determine reasonableness? All lawyers are in favor of settlement no adversarial situation Lawyers are in charge of information (discovered and undiscovered) How can Trial Judge make a decision on the fairness given the lack of information
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Plus TJs have incentive to clear their docket and support the settlement Amchem (SC) Cant just look at terms of settlement only b/c of Rule 23 settlements
In certifying a settlement class you cant ONLY look at the terms of the settlement, because Rule 23 has requirements before certifying a class. (Amchem) Judges often have difficulty determining whether settlement should be approved, for reasons cited above. Hoffman is one example of dangers of class action settlements. Hoffman Facts: Small amount of money being charged to consumers. But in some cases, class members actually LOST money by being in the class, because attny fees in come cases were more than damages awarded OUTRAGEOUS settlement, and no ability for federal review. Coupon settlements have been frowned upon in many cases. GM-Bronco Settlement (657) Facts: Broncos had defective design Lawyers negotiated settlement involving coupons on purchase of more GM products Held, Settlement rejected. Coupon settlements have been rejected. In deciding whether to certify a class action settlement, court cant only look at settlement terms; must also find that class satisfies requirements for litigation class. (Amchem) Amchem (3d Cir) Facts: Many people exposed to asbestos, and suing for injuries sustained. Terms of settlement Certain levels of injury get certain compensation, and caps on certain claims District court approved settlement Held, 3rd cir rejected settlement, because looking at settlement isnt enough; courts must also satisfy requirements of a litigation class. This caused shockwaves. Must also show that case was manageable for trial, also. Here, case clearly not triable. While applying requirements of rule 23, dont apply them the same way as in litigation class action. Must satisfy adequate representation requirement. (Not met here) Not met here conflict between future and present Ps. Because present claimants would want as much $ as possible now. PROBLEM OF FUTURE CLAIMANTS o Like present nonparties, future nonparties have not filed suit; difference is that they do not yet have a ripe claim. o Raises questions of: Geographical Dispersion Temporal Dispersion Article III Ripeness Standing How to have standing with no injury in fact? Mootness Constutionally adequate notice to unidentified future claimants DP problems (Amchem) 7th Amendment right to a jury Right to trial by jury for tort claims for damages in federal court. Adequacy of representation (Amchem, Ortiz) SMJ amount in controversy under 1367 How can you satisfy the $75K when there is no manifest injury?
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o o
Ignoring future Ps means inefficient re-litigation of issues, creation of potentially outcome-determinative differences between aggregated present claims and individually handled future claims. 3 approaches to problem of future claimants (none are perfect): Joinder Has the least potential of all 3. There is no way to litigate putative claims that have not yet ripened. Preclusion Preclusion binds future claimants to the outcome of the present litigation before the claims are necessarily ripe. BUT, this may be unconstitutional under Richards v. Jefferson County, which held that precluding a nonparty from asserting a present claim violates DP. Preclusion through Bankruptcy Discharge o Manville did this filed for bankruptcy to avoid burden of future claims. o A bankruptcy court can only discharge a claim, so the unripe future claims must fall under this definition for this to work. o Different courts have developed different tests for claims, some that would include future claims and some that would not. (See CL 194-195) o It is important in bankruptcy to estimate and value claims; this is hard enough to do with present claimants, and near impossible to do for future claimants. o In order to satisfy DP, some notice and opportunity to be heard must be accorded future claimants. This could be done through Legal Representative that participates in negotiations on behalf of the interests of future claimants. Generally creates a trust for future claimants. o Victims with present claims and future claims all look to trust for compensation and debtor is discharged. To extent not discharged, court issues channeling injunction that orders future claimants to seek compensation from the trust. o 1994 Congress passes provisions providing for discharge of all future asbestos claims that met the legal representative/trust mechanism of Manville. [Does this mean that any asbestos mfg that filed for bankruptcy can have trust set up for current claims, and wash its hands of the rest(?)] Settlement If some future victims can negotiate settlement for all, then maybe they can file class action to settle rather than litigate future claims. If court approved settlement as fair, adequate, and reasonable under 23(e), then all future claimants could have claim disposed without need for repetitive future litigation. Manageability of the suit would not be an important factor, because the class action would not be tried. Problems with this approach: o (b)(3) settlement class action cant buy global peace; future members can opt out. o Concern for inadequacy of representation. If no one hurt, no threat of litigation to give leverage. o When claims immature, settlement values may be hard to determine. o Even when claims are mature, its hard to evaluate a settlement in advance of actual injury. o D can engage in reverse auction and shop a low-ball settlement proposal among claimants and law firms. o Constitutionality of the approach: Effective notice to future claimants who may have no knowledge of exposure or potential injury Scope of PJ over absent future claimants Variation among class members state laws, injuries, P lifestyles, nature of wrongful behavior, etc. Violation of right to jury trial under 7th Am. Standing
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o Could violate the Rules Enabling Act Requires that no FRCP can abridge, enlarge, or modify any substantive right. o Amchem & Ortiz require that the structure of settlement class action account for variations in future claimants individual legal positions. Accounting for such variations can require multiple classes and class reps, and new groups may make settlement impossible. Both Amchem & Ortiz contained back-end opt-out rights, but those didnt save the settlements.
o Amchem - Suggests that you may have to notify someone with a damage claim sbefore you can include that person in a
settlement.
o Conflicts of interest may be found within a settlement class if not all Ps get the same recovery, or if one group gets non
at all, settlement is vulnerable to attack. (Stephenson)
Stephenson v. Dow Chemical (2d Cir 2001) Fact: o Arose out of the Agent Orange litigation settlement approved in 1984. o Settlement called for payments for certain injuries until 1994, when fund terminated. o Stephenson Ps alleged that their injuries from Agent Orange didnt manifest until after 1994. o Brought collateral attack on settlement. Held, o Adequacy of class counsel can be challenged in subsequent proceedings. o Relying on Amchem, said that pre-94 Ps and post-94 Ps had conflicts of interest, so post-94 Ps had been inadequately represented. o Court takes it as self evident that is Ps received nothing they must not have been adequately represented. NOTE but if that is true, then any class action where some class members dont receive anything could be vulnerable to attack. o Court distinguished Epstein.
In light of Stephenson, Amchem, and Ortiz, it seems unlikely that future claims can be settled. o Adequacy of representation is HUGE issue. Any attempt to come up with matrix of payment for different injuries would be susceptible to attack as arbitrary. One option to solve this problem might be to provide individualize hearings in neutral procedure of some kinds to determine individualized damages. Could cap damages based on statistical info about probable future claimants and damages. o Could provide for back-end opt out rights, but thats almost always heavily qualified and limited. o Another conflict is between present value and future value. o Open Q Whether someone with no manifest injury can even be adequately notified (Amchem)
Amchem & Ortiz doesnt answer. Ivy-Hartman suggests yes Stephenson suggests no
2003 FRCP amendments changes language to say that decisions about class certification should be made at an early practicable time. o This reflects recognition that decision to certify based solely on the pleadings is unrealistic. It IS proper to certify a (b)(1)(A) class when seeking an injunction for medical monitoring, because allowing Ps to proceed separately could expose D to conflicting monitoring responsibilities. (Telectronics) o Telectronics Facts:
Mass tort action against mfg of defective pacemakers 400+ heart patients suing mfg, alleging negligence
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Held,
Cases transferred by MDL panel to OH, but other cases proceeding in state court Transferee court enters complicated orders: o Certifies 10 sub-class actions, including b(1)(A) and (b)(3) for injunctive relief, compensatory class under (b)(3), and denies punitive damages class. It is proper to certify a class for medical monitoring injunction under (b)(1)(A) because there is a risk that if they proceed separately, D would be subject to different monitoring requirements I different places, may require FDA approval, and may be impractical. If Ps had asked for damages for medical monitoring, class would not have been certified, but since they framed it as a monetary injunction, it dell under (b)(1)(A).
IMPACT OF CHOICE OF LAW ON JOINDER & CONSOLIDATION Choice of Law in a Federal System Theories of Choice of Law: o Lex Loci Place of tort or K Favorable to aggregation in mass accident cases at single time/place Unfavorable to aggregation in mass product defect case (Vioxx, asbestos) o Most significant relationship Very vague, lots of discretion left to judge, so easily manipulated. o Interest Analysis o Comparative impairment Very vague, lots of discretion left to judge, so easily manipulated. o Lex Fori Employ law of forum o Better law (Leflar) Decide which law is better Depecage doctrine says that legal theories should be applied to each issue separately sounds crazy! Supreme Court rarely decides conflicts of law cases. Generally, not much of a restriction on states to choose their own law, this case was just too far afield; KS application of KS law to non-KS transactions was unconstitutional. o Shutts Facts: Roylaty holders in oil companies suing. Whole lawsuit comes down to appropriate interest rate on withheld payment Class action brought in Kansas, because KS gave highest interest rates. Kansas applies Kansas law to the case. Held, Should NOT have applied KS law to the case, because it violated FF&C and DP. o FF&C must give appropriate effect to laws and judgments of other states. o DP protects individual litigant rights There is not much of a restriction on states when deciding what laws they choose to apply not much prohibition against choosing to apply their own state laws. (Allstate v. Hague) o Allstate v. Hague Facts: 2 WI drivers collided in WI, and insured by WI insurance companies. Widow of one driver brought suit in Minn and Minn ct decided to apply min law. Held, This IS constitutional Muddled, plurality opinion. Federal courts sitting in diversity apply the SOL of the state in which they sit.
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A federal court sitting in diversity or a state court has broad discretion in interpreting state law of another state. (Sun Oil) States can apply their own statute of limitation even when using another states substantive law (although they dont have to). (Sun Oil) applies to federal courts sitting in diversity.
o Sun Oil (802)

Held, States can apply their own statute of limitation even when choosing another states substantive law. o Theory is that states should be free to determine how open their courts are to older claims. It is NOT unconstitutional for states to construe other states laws to be the same as the forum states law. (OK for states to misconstrue other states laws) Suggests that federal court sitting in diversity or a state court has broad discretion in interpreting state law of another state. o When KS is construing IL law, cant ignore IL law, but has broad liberty to decide what law IL would apply in the circumstances. This opinion is an invitation to manipulate the law, and weakens the Shutts opinion.
Generally, SOL are substantive, not procedural for Erie purposes. o But in Sun Oil, they are seen as procedural for COL purposes. How is this possible? State has systemic interest in deciding whether it will entertain an old claim. Issue in Erie is state/federal o Federal courts dont choose SOL for states (WRT state law claims) o So federal court sitting in diversity lacks authority to choose SOL for state law claims. o Want to avoid VERTICAL forum shopping (picking federal over state court) Supreme Court has almost completely washed its hands of policing state COL rules. o This could be big issue in our federal system.
Choice of Law in Diversity Cases
Federal court applies state COL rules of state in which it is sitting in diversity cases. (Klaxon) Federal court applies state COL rules of state in which it is sitting in diversity cases. (Day v. Zimmerman, reaffirming Klaxon) o Day v. Zimmerman (805) Facts: Veteran v. Howitzer mfg 5th Cir would not apply COL of TX, which would apply Cambodian substantive law. Held, S. Ct. says that it must follow Klaxon, which would seem to lead to Cambodian law, but he says thats not the necessary result. A federal court in a diversity case is not free to engraft onto those state rules exceptions or modifications which may commend themselves to the federal court, but which have not commended themselves to the states in which the federal court sits. Under 1404 transfer, transferee court must follow the choice of law rules of the transferor court, when either D or P is seeking to transfer. (applying Van Dusen Rule to Ps as well as Ds) (Ferens v. John Deere)
o Van Dusen (US 1990) (809)

Facts: Commercial airline crash. Held, After 1404(a) transfer, transferee court must follow COL rule of transferor court. When the case is transferred, there should be no change in the substantive law governing the claim. Reasons for decision: o This is because if substantive law changes when forum changes, it would encourage forum shopping. o If there was a change in law when D changed venue, it would complicate venue analysis.
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Eris & Klaxon Dont want to encourage vertical forum shopping.
o Ferens v. John Deere (1990)

F/PP:

Held,
lost his right hand when he caught it in a combine harvester manufactured by Deere. Accident occurred in PA, but guy delayed filing a tort suit and PAs 2 year SOL ran out. Filed a contract/warranty suit in fed ct (diversity j/d), where the SOL hadnt run yet. Also filed a diversity tort suit in the SD Miss (negligence and products liability), assuming MS SOL law wld govern. moved for a 1404(a) transfer to PA. PA court refused to honor the MS SOL rule, holding that because the Ferens were the s, Van Dusen did not apply, and dismissed the tort action since under PA law, the SOL had run. Van Dusen rule applies; choice of law rules of the transferor court transfer with case under 1404(a). Doesnt matter who moves for the transfer!
Problems with Ferens rule: o This creates an incentive for forum shopping for Ps. o Creates problem for lawyers who possibly have to have to investigate SOL and COL rules for all states. Easiest way to commit malpractice it to miss a SOL (per se malpractice) o Allows P to manipulate system. o Case also encourages s to break up their claims to get different COL rules. and undermines joinder o Erie might not have as much support for Van Dusen as may be suggested, although problem of vertical forum shopping still applies. Trangsrud thinks this is one of 5 worst decisions of all time. *Note: 1404(a) says nothing about choice of law rules but the rule was not supposed to provide benefits of forum shopping in applying for transfers it was only supposed to make it more convenient for people to actually get to the courthouse.*
After diversity case is transferred under 1407, transferor law is applied. After Federal Q case is transferred under 1407, transferee judge should apply transferee circuit law in deciding questions of law. (KAL)
Korean Air Lines (KAL) (DC Cir 1987) o Facts: Wrongful death claim based on airplane crash with no survivors Warsaw Convention/Montreal Agreement limit dollar amount recovery of plaintiffs 2d Cir hld Convention didnt apply on facts/DC Cir did apply o Held,
After case transferred under 1407, transferee judge should apply transferee circuit law in deciding questions of law. If case after Lexecon must return to transferor for trial, then it would seem unfair (to Ps) that case could be dismissed on SJ or other ruling in transferee court with law that would not be used in transferor court. Trangsrud thinks that P should have benefit of law of circuit in which case was filed. DC Circuit law (law of transferee circuit applies). Reasoning: Ct said that federal law supposed to be same no matter the circuit Erie irrelevant Erie principle 1: protecting state lawmaking power (this clearly irrelevant); Erie principle 2: avoiding vertical forum shopping (going to fed ct instead of state ct) (arguably this IS implicated, if went to state ct case cldnt b transferred from NY to DC) no horizontal stare decisis (fed cts arent required to follow each others decisions) efficiency/consistency
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*Note: Law of the case=doctrine=when legal issue properly presented to trial ct and decided by trial ct, losing pty cant raise issue later in case and argue for different result, unless major change of circumstance; in KAL idea is DC Cir decision is law of case and 2d Cir should follow it
Problems with this: Why should temporary lodging of case in one circuit for pretrial permit to reduce liability? IF case there forever then applying transferee law makes sense but in KAL cases going back to NY. This could give Ds an unfair advantage if the law if more favorable to them in the transferee circuit, or wait until they return to the transferor circuit. Also, vertical forum shopping is still an issue. Seems unfair to have a judge decide motions that could dispose of the actions when the law of that circuit was not the law that plaintiff chose. (Honor P autonomy) MDL panel may not consider the COL effect of the court to which they transfer the cases. Erie is interpreted as based on 2 things: Protecting state lawmaking power o Irrelevant here, because not applying state law to issue of whether treaty applies. Prevent vertical forum shopping o Arguably, this part of Erie is implicated, because if filed in state court, could not be transferred to different court. Federal law is not really the same across circuits.
Trangsrus agrees with law prof that argues:
In 1407 case, transferor law (or law where appeal will go when case is decided) should be applied in federal question cases. One other prof thinks that you should defer deciding substantive decisions in transferee circuit until its transferred back.
Klaxon, Van Dusen, Shutts o Pose problems of consolidating factually related claims in federal court o Even when claims are factually similar and based on state law, the different state laws may defeat efficiency concerns and make consolidation impossible. o Factually related claims brought/transferred to same venue and based on state law may be subject to different state laws, and therefore may be impossible/hard to try together. Good example Chicago Air Crash (7th Cir 1979) (833) Facts: o 118 Ps brought actions in 13 different states/nations o MDL panel transfers case to district court in Chicago. o D moves to strike punitive damages from Ps complaint. o Punitive damages vary from state to state. o Chicago istrict court had to determine which states law applied (arguably 6 states). o Court had to apply transferor COL rules. Held, o Applies IL law to all of the claims - place of injury rule. o Found claims governed by the same state law. o Because of the law of the case doctrine, the transferor judge should keep the decision as to punitives. o Case suggests that when a decision is made by MDL panel about where to send cases, should look at the COL of the forum and the substantive law. o Criticism
Place of injury rulecompletely random Where a plane crashes is entirely fortuitous, so lex loci rule seems completely arbitrary for air crashes. But court still looks to IL law to break tie between other interested states Trangsrud says this is almost whimsical.
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Procedural decision (to consolidate under MDL) had dramatic effect on substantive outcome Prevents ability to predict the outcome and what law will be applied. This is pretrial decisionwill trial cts apply own law? Will law of case apply? When arguing over location of MDL venue, lawyers should research what forum provides by way of choice of law, punitive damages or any other important case issue? LAW OF THE CASE doctrine o Equitable,Cl doctrine o Exists in every jurisdiction o When legal issue properly presented to and decided by the trial court, party cant raise the issue later in the same case and argue for a different result. i.e. if trial judge dies/promoted/etc, after making many decisions, cant reargue issues to new judge. Unless major change in circumstance that would warrant original judge to reconsider. COL can impair: o Prevent certification of claims in common Q class actions. o Ability of transferred case to be impaired by MDL panel. o How to fix this? (1) Have federal COL rules. Overrule Klaxon But problem must either do it for all cases in federal court, or just complex cases, and thats hard to justify. (2) Federalize the substantive law. i.e. Congress passes law that punitives are available, or not. This would be historic change. (3) Weinsteins idea of national consensus law in Agent Orange. All states should apply the same law. This was a desperate attempt to apply the same law to all cases; 2nd cir didnt decide the issue. (4) Claim governed by federal law. Boyle v. United Technologies Supreme Court applied federal CL o This case isnt much help to us where there Is no govt Ker involved. o But can argue that this problem has caused national federal health problem, so Congress should federalize the substantive law. Unless we make some sort of change, our system cant handle many state law claims based on laws of different states.
Proper -> Proper
SUMMARY of CHOICE of LAW in FEDERAL COURT DIVERSITY CLAIM FEDERAL Q CLAIM 1404 No matter who makes tsfer, transferee Apply transferee circuit law ct applies transferor COL rules to decide what substantive law governs (Trangsrud: Fed law not always uniform; s claim shld have right to choose favorable fed law thru proper venue just like can w/state; but privilege (Van Dusen; Ferens) not absoluteif another forum substantially more convenient, then case goes forward in that forum w/ that law and tough shit for the s)
Improper -> Proper Properpretrial and remand
1406 1407
Transferee COL Law (because transferor law never valid to begin with) Transferor Law applies while case is pending
Transferee law (dont reward s for bringing suit in wrong place) Transferee Circuit Law KAL
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(so as a practical matter, may have to apply many COL rules from all states, although may not be a huge problem for purpose of discovery) SJ motions court must determine what law applies for each, or defer that decision and transfer claims back to where they came from
(problem could be that MDL panel may not consider the effect of the circuit they pick)
Even if clams are factually similar, (i.e. aircraft disaster), it might not be efficient to consolidate if the law of many different states would be applied to difference claims. Class action is different from 1407 as far as COL goes. COL in class actions: o If nationwide class action is filed, the COL rules of forum where CA is filed will determine the law applied to each member. This could result in 1 law, or 50 state laws applied. If COL rule is lex loci, and injury occurred in 50 states, then apply 50 state substantive laws. If other rule, then maybe only one states substantive law applies. o COL rules are applied to each individual class member.
PRETRIAL COMPLEXITY Bipolar litigation o Pleadings o Motions o Discovery Really expensive Case tried twice once in discovery and once at trial o Pretrial hearings (Rule 16, 26(f)) Part of case management; judge actively involved in overseeing trial prep. Rule 16 Trial judge orders pretrial hearing early in the process Rule 26(f) Requires parties to confer about discovery matters In complex cases, lawyers cannot police themselves the same way. PLEADINGS o Trial judge can order parties to file certain pleadings o Judge can simplify the pleading process.
i.e. Katz judge ordered master complaint with separate answers; treated each D as filing cross claim and each D as denied the claims.
MOTIONS / DISCOVERY o Options for management of consolidations Lawyers: Appoint liaison counsel as coordinator o least intrusive o Only of modest use Committee of counsel o Responsibility shared by lawyers on committee Creates issue who does committee represent? Appoint lead counsel o This takes control away from other lawyers
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Scheduling Order Date/deadlines for all joinder No depositions until paper discovery ends Begin and end dates for paper discovery and depos No DJ motion filed until after certain date. o Schedules can help bipolar and complex cases. Can appoint judicial adjuncts to assist the court. Master Magistrate Read manual for complex litigation Federal Judicial center helps federal courts manage complex cases Not binding, but a guidebook about best practices Gives advice to federal judges Routing and persuasive to cite the manual. All these options have effect of changing roles of judges and lawyers in complex cases. Judge is active case manager, controlling case in a major way; acting more like inquisitorial judge.
Common funds can be used to compensate counsel in a counsel committee (Vincent v. Hughes) o Vincent v. Hughes (887) Issue Non-lead counsel seeking lead counsel committee 5% settlement fund went to lead counsel. Held, Arrangement not an abuse of discretion; justified because of common fund doctrine. This was not a class action (under rule 23, court can set fees). o Common Fund equitable notion Restitutionary notion of unjust enrichment If you labor for the benefit of another (and create a common fund), then should be compensate. So its equitable for lead counsel to receive benefit for the effort, even at the expense of other other attorney who signed the retainer agreement. This also used to compensate in class actions. How to select lead counsel? o In Vincent, J selected liaison counsel, who helped P counsel agree to selection of lead counsel o Now, manual on complex lit favors judge to choose lead counsel. How should judge choose? Experience Financial resources Commitment Professional assessment of abilities/background How can we keep J from deciding this? Auction-off lead counsel Auction whole case o Havent done this yet. Largest P chooses o We do this in securities litigation o Not yet been done in consolidated cases. Side effects of judge picking: o Judge in awkward position of picking P counsel o May induce lawyers to buddy up to judges o May affect lawyers in courtroom o Client loses ability to control Court not too worried about this. How should lead counsel be paid? o Quantum meruit / lodestar method Pay = hours * reasonable price *risk factor
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Common fund approach (preferred) Pay = reasonable % of recovery If quick-settling case, you want % recovery. But if it is a long case, want lodestar, although that may induce lawyers to drag case out longer. Trangsrud suggests taking the lower of either approach. o Sometimes, appeal court will change P attorney fee. (San Juan) o San Juan (890) Facts: Trial court gave 70% to lead and 30% to IRPA (individual representing Ps attorney) First circuit said 50/50 more equitable. Same type of oversight does not apply to Ds lawyers.
TRIAL COMPLEXITY
Complexity, Juries and the Seventh Amendment In re: Boise Cascade Securities Litigation I: Can s jury demands be stricken in securities litigation where cases are consolidated and evidence is overwhelming and confusing? H: Trial by judge ok. Ct begins by citing Ross v. Bernhard (1970) which recognized 3 factors when analyzing jury reqmt under 7th Amendmt: [1] pre [equity/law] merger custom with references to such questions; [2] the remedy sought; and [3], the practical abilities and limitations of juries. Ct focused on fairness. Here jury would b required to serve 4-6 months; judge more competent/experienced with the material; thus more efficient and effective to have trial by ct not by jury. 2. In re: Japanese Electronic Products Antitrust Litigation (3d Cir 1980) F: Complexities for jury in this case include prolong trial; financial issues related to the anti-dumping statute; concept of predatory intent under Sherman Act I: In an action for treble damages under the antitrust and antidumping laws, do the ptys have a rt to trial by jury w/o regard to the practical ability of a jury to decide the case properly? H: Ct analyzes conflict btwn 5th and 7th amdmt: jury is presumed to act rationally but cant act rationally if cant understand caseirrational jury cld deprive of damages or erroneously award damages (DP violation). If jury cant b relied upon to act rationally, then better to proceed w/trial b4 judge. Ct also analyzes case in light of Ross supra; length of case, its complexity lead ct to hold judge, not jury, best decisionmaker. However ct cautions b4 trial by jury rt stricken complexity of a suit must be so great that it renders the suit beyond of [sic] the ability of a jury to decide by rational means with a reasonable understanding of the evidence and applicable legal rules. Also other alternatives shld b sought before loss of jury. D: Jury parliament, gives moral legitimacy to cts decisions; necessary to trial. 3. Other solutions Develop pretrial strategies to reduce trial length (shorter empanelmentmore likely to find people to serve) Seek out jurors w/requisite experience/expertiseeven a few cld make a difference o But what about conflict of interest?? Can we stop lawyers from striking these people? Issue Splitting at Trial Two techniques for confronting 100s or 1000s of claims with different legal/factual issues: limit number of issues juries need to decide (issue splitting) trying particular case/sample of cases and then extrapolating results across range of cases In re: Bendectin Litigation (6th Cir 1988) PP: OH s and Non-OH s MDLed to Ohio for pre-trial proceedings; OH judge said would send non-OH s back to original venues unless wanted to stay in OH (s would b deemed to consent to OH law) Trial limited to whether Bendectin a teratogen; visibly deformed s and those under 10 not allowed in ctroom; TCt found for . Issue: Was trifurcation of claims/issues appropriate? Holding: Trifurcation of issues appropriate. Considerations: was issue separate; cld it b tried separately w/o prejudice or injustice?; and would sep. trial b conducive to judicial economy. Discusses Gasoline Products which held so long as issue one jury decides DISTINCT from issue another jury decides, then acceptable to give sep issues to sep juries --- bifurcation OK!
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Trangsrud, Mass Trials in Mass Tort Cases: A Dissent criticized trifurcation hard to imagine that you can separate specific and general causation w/o violating 7th (reexam cl.)?
Why wld s proceed this way? time? reduction in cost o perverse financial incentive for s lawyers to join claims (they make peanuts w/o collective pressure on s) Bifurcation decreases likelihood of s success, but increases efficiencySo, if we ought not to adopt procedures that are outcome determinative, why would we adopt this? Trial by Statistics o Statistical sample of bellwether cases Bellwether: this is the lead sheep in the flock the other sheeps follow; so, we try the lead case as you would normally try a full case, and then: Extrapolate across untried cases
o Allowing trial by statistics violates DP because no jury decision of individual causation. (Fibreboard) o In re Fibreboard Corp. (5th Cir) (1294)
o Facts:
Trial J divides the case into 3 phases: o Phase I: State of the art/punitive damages (Jenkins) o Phase II: Representative cases would be fully tried to decide % of exposure to each s product, % barred by statute of limitation, adequate warnings, and other affirmative defenses. o 41 total s o 15 s chosen by the o 15 s chosen by the s o 11 - sample o Phase III: Damages would be distributed among the remaining ~ 3,000 s based upon the results in Phase II. This procedure is improper. Rationale: o Due Process/Erie violation: o There is no jury decision of individual causation of damages. o Texas tort law requires proof on an individual basis of actual causation. There would be no individual trial on the extrapolated cases so this would violate Texas law. And, Texas law is binding on the court b/c of the Erie doctrine. o This is not a trial as to the extrapolated cases. o The G doesnt directly address whether this is unconstitutional under the 7th Amendment.
Held,
Circuits are split on whether trial by statistics can be applied.
Fibreboard and Cimino says no (5th Cir). Hilao says yes (9th Cir).
o Trial by statistics may violate the 7th amendment as well as DP of 5th amendment. (Cimino) o Cimino v. Raymark Industries (5th Cir) (1307)
o o
o
o
This is Judge Parker trying again. Facts: Phase I: Jenkins Phase II: Trial to determine the % of each of the asbestos products used in which worksites
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o
o
o 160 sample s that were randomly chosen get actual verdicts. Phase III: Judge extrapolates the $ o The remaining s, 2,138, get an average verdict depending on the disease category they are in. After this process, almost everyone settled. But, one appealed. The 5th Cir. held the case for 7 years after oral arguments.
Held, o The use of statistics to establish fact is widely accepted in the legal community, medical community, politics, and many other places. We make many decisions by relying on statistics and evidence. o Judge Parker wrote an opinion: o The s consented to the procedure. o The s cant argue that this violates their due process. The s are the ones that are really injured b/c some of them would have gotten more. o Avoiding years of trial delay and consumption of judicial resources ought to count for something. o 5th Cir. holding: (Supp 99) o Violates 7th Amendment b/c Texas law does not have a collective liability theory. o You must show that the s products caused the s injuries. o That was not done to any of the s (even the sample s). There was no proof required to show that a particular was exposed to a particular s product. This obviously then also didnt happen in the extrapolated cases. o The fact that the judge makes the extrapolation is particularly concerning. o Trud: Problem with the Cimino approach there were only 2 juries. Perhaps it would be good to have separate juries try the claims, and then aggregate the results. If we did that, there may be more support for it. But, until then, the support for trial by stats is very thin.
In Trial by statistics, we must be concerned with both 5th amendment and 7th amendment. Trial by statistics CAN be available in some cases. (Hilao) Hilao v. Estate of Ferdinand Marcos (pg 1299 9th Cir. 1996) o Facts: Philipinos brought action against estate for torture, execution, etc. Trial G used trial by statistics. There were certification of the class, trifurcation of the trial, and trial by statistics for the damages. Procedure used for trial by stats: o A master heard 137 cases and then reviewed the other 10,000 claims. He made recommendations to the jury. The jury took this, made modifications to it, and approved most of what he had proposed. o A stats expert said that this process was 99% reliable. o Holding: The procedure is affirmed. 10,000 claims were otherwise untriable. The damages exceeded the collectable amount b/c there wasnt enough in the estate to cover all the damages. Used Matthews v. Eldredge balancing text: o Test weighs private interests against erroneous deprivations through procedures under attack and probable value of alternative safeguards. o Dissent: o Even this is entitled to due process and face real proof of causation and damages and that wasnt done. o NOTE: One thing to note here is that this was a pretty outrageous dispute and we have little regard for Marcos who provided no due process to his citizens when he killed them. But, can we use this in more traditional complex cases like products liability?
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o o o o
It troubles our system that two people with very similar tort claims get very different judgments. The statistical method controls this by awarding an average verdict across the pool. We use statistics in settlement, so what is the problem with doing it here. Everyone gets something. This is a way of aggregating claims and finding an expedient way of adjudicating them. With our system of joinder we are setting ourselves up for having to deal with these in some way.
Is there something fundamentally wrong w/ trial by statistics? o Trial by stats has no way (like class actions) to ensure that the sample s are like the other cases. o This is a disadvantage to the s they are being set up for disaster. o But, s dont really want to try all the cases so this is $ saving for them. Still, it puts a lot on the line and really pushes them towards settlement that they wouldnt have done otherwise. o Its using a procedure to affect the substantive result of cases. However, without this, many cases will never be heard. Advantages of Trial by stats o Efficiency & cost & time o Make class action more manageable Disadvantages of Trial by stats o Might violate DP and 7th am depending on circuit o Loss of litigant autonomy o Might not be accurate in immature litigation o Lawyers take home more per hour, which could incentivise lawyers and influence strategy o Statistics can always be manipulated - reliability
BIFURCATION / TRIFURCATION Advantage of bifurcation o Efficiency & cost & time Disadvantages of Bifurcation o 7th amendment violation if juries decide the same issue. o Could skew the results of the litigation. o Witnesses not on stand for some of those issues; REMEDIAL COMPLEXITY Declaring Complex Injunctive Remedies o o Use of structural injunctions to reform public institutions is really controversial. For last 50 years, courts have reformed public institutions like school desegregation. Brown v. Board Courts had affirmative obligation to desegregate and remedy past harms of segregation. Sweeping injunctions more of a failure than a cusses Many schools remain highly segregated, and dramatic disparities in quality of public education. Federal courts also tackled humane conditions in prisons. Some success here, as with mental health hospitals. Prior to Brown, structural injunctions were largely unknown. Why have courts taken on these injunctive powers? Assumed that: Courts are competent Political branches failed to fix things, especially in cases of: o School desegregation o Prison conditions o Mental health institution conditions.
o o
o
o
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o Sometimes even courts dont know how to handle complex remedies; injunctive remedies may fail to achieve result.
(Bradley v. Milliken) Bradley v. Milliken Facts: o Detroit schools were still not segregates. o Problem is white flight; no practical way to move people within city to accomplish desegregation. o S. Ct. said that they couldnt move kids between suburbs and city. Held, o The Detroit only remedy is inadequate; further bussing will not help. o Remands case to district court to do something, but says it doesnt know what it should do. o Proceedings continue for next 13 years, but still no remedy; schools still segregated. o Fundamental problem is that court doesnt have control over all the factors here.
Trangsrud things Rodriguez was great missed opportunity; should have said that states should not be allowed to fund schools differently; disparities in funding is a big issue.
o There is a decrease in courts efforts to ameliorate past problems by injunction, as seen in MO v. Jenkins. MO v. Jenkins (5-4) (1392)
Increased funding and quality of city schools isnt adequate remedy. Held, no interdistrict remedy is adequate because: o Doesnt remedy past harms Adults that are now done with public school. o It is OK to fund improvement in city schools, but only to a certain point. Any further efforts to raise quality at expense is not sufficiently related to past harm to justify it. o Lots of dicta about separation of powers and federalism. Dissent Attempt to draw people back to city by increasing quality is OK. Structural injunctions continued after Jenkins, although less sweeping and with less enthusiasm.
Why have prison reforms been more effective? o Possible to get more objective criteria about what will remedy problem o Prison population and circumstances more controlled o Easier for courts to set standards These cases show: o In many cases, remedy that would fix Ps position is self-evident. o BUT, in others, like school desegregation and prison reform, we may know the liability standards, but defining how to create the remedy poses difficult/insuperable problems. This is embarrassment to judicial system to point out problems but not remedy. o Judge managing public institutions is intrinsically difficult; little law for judge to rely on when making orders and developing a remdy.
Declaring Complex Monetary Remedies o 2 situations: Title 7 decrees or other discrimination problems Fluid damage awards
Options for distributing back pay in Title 7 cases: o Pro rata all Ps get pro rata share Benefit imposes appropriate damage /loss on D Cost some Ps are undercompensated; others overcompensated o Full back pay to all Benefit no Ps are undercompensated Cost some Ps overcompensated; over-punishing D o Proper remedy would be to give back pay to only those who would have been promoted, but if class is big, hearings are impossible to determine who that would be.
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In discrimination cases, courts often take a pro rata approach to distributing back pay awards. (Dougherty) o Dougherty v. Barry (1401) Facts: Firefighters sue for reverse discrim District court said all 5 get back pay Circuit court said that there should be pro rata distribution among all 5 o Other option hold hearing to see who would have been promoted and give them full back pay while others will get nothing. Held, Back pay should be awarded on individualized basis where feasible, otherwise pro rata. In other cases, courts say that each P should get full back pay unless D can show that P would NOT have been promoted. (Western Electric) o Western Electric (1406) D should pay each P full back pay unless D can show that P would NOT have been promoted. HUGE damages and back pay! Unfairness/unmanageability of relief may be reason for not certifying class in first place. BUT then D bad actors would walk away scott free If it is a mandatory class action, and one person doesnt want to join, is it fair to make that person (who definitely would have been promoted) to join the class and only get compensation on pro rata basis? o If person stays in class, still undercompensated. o If you allow person out, can sue on individual basis. But causes problems for people still in the class. Argument used in Title 7 can influence remedy: o Disparate impact (stats) o Disparate treatment. Best option is proof of claim but its not practical, so must go to next best (cy pres). (WMATA) In deciding the next best remedy, courts have considerable discretion [see factors below]. (WMATA) o WMATA (1410) Facts: Ps win suit against bus company for overcharging. 2 trust funds created. Best option is proof of claim but its not practical, so must go to next best (cy pres) Categories of remedies available: o (1) Decrease Ds prices o (2) Escheat (specific and general) o (3) Consumer trust fund o (4) Claimant fund sharing Factors to consider when choosing o Amount of compensation due o Portion of class members sharing recovery o Extent to which non-class members will benefit o Cost of administration Held, Court goes with specific /earmarked escheat. So $ goes to WMATA, the wrongdoer in first place (ironic) Fluid recovery goes to people who were not the injured ones. o How do we justify this? Its inconsistent with the rightful position notion. Better than the alternative / more practical. We dont have enough resources / time / $ to do the best, so do the next best. Sounds a lot like reason we permit trial by statistics.
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Fluid remedy cant be too remote from the P class (6 Mexican Workers) o 6 Mexican Workers (1415) Another fluid recovery remedy example $ awarded to class of undocumented workers, and court cant find them. So, court says that award should go to who can be identified, and then rest to charitable foundation. Held, Circuit court says that this particular fdn is inappropriate, because benefits are too remote from P class. o So court wants a better option, but doesnt tell what that is. o Agent Orange J Weinstein gives 25% of funds to a foundation to benefit veterans Case generated lots of emotion/controversy at time. 2d cir says this is inappropriate (but doesnt seem obviously unfair to establish foundation
Implementing Complex Remedies
o There is a limit to what the district court can do; cannot directly order a tax be imposed, but can help administer a tax.
(Missouri v. Jenkins)
o Missouri v. Jenkins (pg. 1424)

Facts: We looked at the 1995 decision Supreme Court held that the remedies were outside the power of the court. When this opinion was written cert was granted, not to evaluate if the programs were proper (it was assumed it was appropriate), but to determine whether the G was correct in ordering that taxes be raised to further the desegregation programs.
Held:
District Court was incorrect in directly ordering the tax. But, they can order the school district to raise the revenue and enjoin any state law restrictions that would prevent this. There is a difference between ordering and administering the tax. The problem w/ the dissent is you cant use the contempt remedy effectively against any party (the parties are trying t comply) and there is really no other way to solve the constitutional violation. Thomas concurrence Raises issue of competence of courts to undertake these injunctions/authorities Suggests that theres something fundamentally wrong/unconstitutional for judges to take on these functions. They should be left to executive and legislature. Dissent: There is no judicial taxing power. The taxing power by history and the Constitution rests with the legislature so it is beyond the permissible authority of a federal court to order taxation. If the dissent prevailed, what else could the district court do? o The dissent gives no other options. o Perhaps they could order a vote on the tax, but what if people didnt vote for it? o Really, they dont offer a way that the school district could otherwise recover the revenue. o They could order contempt but its not clear that this would work here. o Stripping the federal courts of this authority would make it very difficult for them to implement the remedies needed here. However, the dissent is powerful. o The TPs werent represented in this litigation, yet they are the ones having the remedy imposed against them. o This goes against our belief that you should be in court, and represented, and have the chance to argue before you have a remedy decided against you. o And, on top of that, the federal court is not even imposing a federal tax. They are going into state law. o A remedial scheme should minimize the offense to the separation of powers and federalism as much as possible. Here, that isnt happening (Trudism).
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o Example of managerial, inquisitorial judging; judge inventing his own substantive criteria and not really applying the right
tort law. Master acting outside of the usual adversary process. (In re Combusion) o In re Combustion, Inc. (pg. 1435) o Facts:
10,000 s suing 450 s for damages received by living near a combustion waster site. The settlement was $20 million. This was approved by the G. But, the settlement doesnt say how much each is to be paid. So, a special master is appointed to do this. Master is creating the law, finding the facts, and distributing the remedy entirely outside of our usual adversary process. Holding: It is an extremely complex scheme. Just an overview . . . Personal injury s Those w/in 3 miles of the centers follow a point scheme. The points are based on how close they live, and the nature of their diseases. They get money per point. Those outside the matrix get $250. State of Louisiana has some medical liens that they get Medical monitoring fund established Property Damage claims there is another formula for this. After a scheme of objections by s, final judgments are entered.
The judge is, in a sense, inventing the substantive criteria to be used in this settlement. o Does this violate Erie b/c the federal judge is displacing state tort law w/ some scheme of dispersing the settlement? The has paid and they are out of the picture. Now, the judge is just handling the money this is really like Agent Orange where the judge had to decide who would benefit from the fund. This looks like a judge just proposing an equitable solution. The judge is determining the allocation and then also deciding whether or not it is fair. o o o o o If this is permissible in this setting, why isnt it allowed in other settings? Rule 23(e)(3) a class certified under (b)(3), the G may refuse a settlement if . . . class members had a chance to refuse settlement but did not do so. Trud thinks you should give class members a second opt-out right in this situation. The rule allows it, but doesnt mandate it. The problem is that if you get too many opt-outs, the entire settlement unwinds.
o Why cant this be used in a situation like Ortiz.
EXTRA NOTES: o Rules Enabling Act o Says that the rules shouldnt be enlarged or interpreted to change substantive rights. o Rules themselves may not do it, but courts do. Review Session Commonality of proof and aligning of interests o Used to determine whether a class action should be certified Commonality relates to 23(b)(3) claim Also relates to typicality and adequacy of rep requirement, because if the proof of Plaintiff As claim is common to Bs claim, it is more likely that claims are typical of one another, and that A would be adequate rep for B. Alignment of interest Primarily goes to 23(a)(4) adequacy of representation Boyle & Agent Orange o How to reconcile? Cant reconcile
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Boyle said that federal law should be the law Agent Orange state law should govern claim against company that made product that injured servicemen in Indochina. Facts here provide more compelling case for applying federal law, especially because there is absence of any state interest here.
(b)(1) & (b)(2) dont have to go to a jury because back in the old days, they were considered equitable claims. o Test of whether factual issues must be submitted to a jury, depends in federal court upon whether historically that claim or similar claim would be tried in law or equity back in England in 1791. o Back pay can be called an equitable remedy under Title 7. Attorney fee calculation o Common fund approach is more common o
Based on equitable principle that if someone helps create benefit, should get part of that benefit. Lodestar also sometimes used.
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PRACTICE EXAM TILA lending act in SDNY Can class action be certified as to count I o Adequate rep (23(a)(4)) Concerns/args: Class conflicts Different loans Some Ps might have diff circumstances / defenses / counter claims / oral agreements Standard form used for all makes this attractive for class action certification Might need some individualized hearings after trial about promissory forms. But probably wont defeat manageability o 23(b)(3) Do common Q predominate and class is superior to alternatives Common Q is whether the promissory note form violates TILA Claims are small, so probably wont be brought individually Problems with conflicting state laws? o Limited fund (b)(1)(b) Statute limits amt of Ps overall recovery, so wont give rise to mandatory class here. Could argue that if they proceed individually, early Ps could exhaust fund for others. o Define class claim for monetary damages, so identity of every class mem must be known. Count 2 o Based on NY state law, but NY has no statutory caps o No more conflict between class mem and rep because now no statutory cap o Must talk about SMJ under 1367(a) Strong case for supplemental jurisdiction. Judge has discretion to decline to exercise supp juris (1367(c)(1)), and might have reason to exercise it here. ALWAYS a good idea to cite language of statute POLICY o Say, purpose of rule is X, so see if applying rule to facts would advance policy. o spirit of federal joinder rules The better exams say: o Because o Since o Therefore Advance reasons for assertions we make.
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COMPLEX LITIGATION Dean Trangsrud Fall 2004 A.

Normative Limits to Procedural Choices

Last Revised: 10/25/2012

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Rule 13(a) Compulsory Counterclaims

Last Revised: 10/25/2012

These claims are usually transactionally related.

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o Mosley v. General Motors (8th Cir 1974) (93)

Last Revised: 10/25/2012

o Greyson v. K-Mart (N.D.GA 1994) (97)

o Aaberg v. Acands (D. Md. 1994) (101)

Last Revised: 10/25/2012

o Pan Am Worldwide Airways (9th Cir 1975) (107)

Last Revised: 10/25/2012

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FR 24(a) Intervention of Right

Last Revised: 10/25/2012

o Temple v. Synthes (US 1990) (116)

o Eldredge v. Carpenters 46 Northern CA Counties JATC (9th Cir 1982) (117)

Last Revised: 10/25/2012

o Provident Tradesmens Bank (US 1968)

Last Revised: 10/25/2012

As nonparty preclusive effects of a case expand, impairment of nonparty interests expand.

ISSUE PRECLUSION o Applies when:

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o Possible solution to complex joinder issues:

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o In re DES case (2d Cir 1993) (278)

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o Phillips Petroleum v. Shutts (US 1985) (294)

Diversity Jurisdiction in Complex Cases

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Not Diversity (b)(1) (b)(2) (b)(3)

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Factors courts use in deciding whether to consolidate under FR 42:

Difference between joinder and consolidation: o JOINDER: Covered by Rule 20: P P2 o D P D D2

Last Revised: 10/25/2012

o Appeals court found no abuse of discretion in consolidation for pretrial purposes of 12

o Although, sometimes appeals courts are not so deferential. (Malcolm)

o In re: Repetitive Stress Injury Litigation (2d Cir 1993) (482)

Last Revised: 10/25/2012

Venue Transfers and the MDL Panel 1407 Multidistrict Litigation

Last Revised: 10/25/2012

o 3 Prerequisites for transfer under 1407(a):

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o In re Asbestos and Asbestos Insulation Material PL Litigation (1977) (498)

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Limits on MDL Venue Transfers

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(2) Class representative must be member of class. (IMPLIED REQ.)

Last Revised: 10/25/2012