COMPLEX LITIGATION

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					                                               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 Tidmarsh’s definition: ―cases where one of actors in a case can’t 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 what’s 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
                            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


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   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 that’s 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 doesn’t help us quantify certain things
        o Bush
                  Gives us certain goals of system, but doesn’t 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 function—keeping frivolous claims out
                 (Although class actions are exception)
        o Notice Pleading
        o Strict evidentiary rules
        o Parties pay own costs
                 So, access to courts is confined to those who can pay.
        o Judges are passive umpires
                 (Although this is changes in complex settlements, i.e. Agent Orange, where Judge suggested settlement)
        o 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.

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        o     Civil Juries
        o     Appellate Review
        o     Group Litigation is possible
        o     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 isn’t 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, they’re 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

                                         ADVERSARIAL PROCEDURE                                INQUISITORIAL PROCEDURE
     Pleading                     Makes no difference                                  Makes no difference
     Fact-Gathering               Private counsel                                      Inquisitorial magistrate
     Pre-Trial Control            Private counsel, but some judicial control           Inquisitorial magistrate
                                  from pretrial orders
     Evidence Rules               Strict (to protect jury from certain evidence        Little evidence rules (because magistrate hears
                                  we don’t want them to hear                           everything)
     Attorneys Fees               American Rule – Each side pays its own               Losing party pays the fees (powerful incentive to
                                  attorneys fees                                       settle)
     Judicial Role                Passive (although that’s more true in some           Active (in conducting cases; not creating new
                                  cases than others; some cases judges have            law)
                                  more active roles.
     Trials                       Climactic (try cases twice – during discovery        Series of sequential hearings (logical and orderly
                                  and trial)                                           investigation of facts)
     Juries                       Civil jury is part of the federal and many state     Ni civil jury
                                  constitutions
     Judiciary                    Appointed (it’s not necessary to be very             Career judiciary (decide while in school to be
                                  familiar with trials to become a judge; just         judge or private attorney)
                                  have to know the right people)
     Appellate Review             De novo review on law; deferential review on         1st Round – review of law and facts
                                  facts (only overturn if no rational jury could       2nd Round – law only; can introduce new
                                  have found that way and clearly erroneous            evidence on appeal
                                  standard if it is a bench trial)
     Group Litigation             Class actions and large consolidations are           No group litigation; only individual litigants can
                                  possible                                             sue.


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   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), can’t change parts of our system
                  Can’t have sequential set of hearings, because that’s 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 $.
                       P’s 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 isn’t 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:
               Don’t 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, can’t 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.
               It’s possible for judges to hire experts, but not usual for it to occur.
        o German System:
               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:

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                     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 gov’t bureaucrats (although not entirely, because counsel for both sides is at the elbow
                      of the magistrate.
                     Easier for gov’t to control/corrupt than our more independent and objective judiciary.
                     Fuller’s 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 third-party
            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)

o   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
            party’s claim, and that doesn’t 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 P’s anchor claim that it would be manifestly inefficient or unfair not to adjudicate
            them together. –These must be brought at the same time.
                  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 party’s 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 won’t deprive court of SMJ shall be joined as a
                     party if:
                          In person’s absence complete relief can’t 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 person’s ability to protect that interest
                                  o Leave any persons already party to the action subject to multiple or inconsistent obligations
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                     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 don’t have to) join together.
                 Plaintiffs MAY join multiple defendants (but don’t 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              D                          P                   D
             P2                                                            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.
        o    FR 24(b) – Permissive Intervention
                 Anyone can intervene when:
                          Statute gives conditional right to intervene, OR
                          Applicant’s 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.

   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.
        o Permits courts wide discretion to consolidate cases. (Johnson v. Celotex)
                         (Mosely decisions doesn’t 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.

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                                    2.  Fair and impartial trial
                                             a. Specific risks of prejudice and possible confusion if consolidation allowed.
        o    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 Don’t 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 that’s 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.
               Can’t 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.
                 Can’t be coerced into case she doesn’t 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 P’s 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 didn’t 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.
                 Held,
                           Joinder is proper here—because 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).


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                                    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 P’s 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 company’s 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 aren’t 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 you’re the company, it doesn’t 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 doesn’t 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 cas-
    by-case approach. (Mosley; Greyson v. K-Mart)

        o    Greyson v. K-Mart (N.D.GA 1994) (97)
                 Facts:
                          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.
                 Held,
                          Joinder not proper under these circumstances, because there was no common Q of law or fact and
                             doesn’t 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:
                          Asbestos case (mass tort) with 1000 Ps joined under Rule 20.
                          Ps oppose D’s motion to dismiss on grounds that FR21 precludes dismissal on account of misjoinder of
                            parties.
                 Held,
                          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 wasn’t 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:
                  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).
        o 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.
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       o Remedy is unified.
       o Aggregation of claims may place settlement pressure on D (because company’s 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.
       o Preserves more individual autonomy.
       o Any one case may be shorter in duration, even though the cases all together will take longer; so individual P may get
           resolution faster.

   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 don’t normally discuss: Individual autonomy; rights of Ps to control their lawsuit – where
         filed, etc.

   When there isn’t 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 court’s 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:
                         Airline crash; charge of negligence by some Ps against the airlines
                         Judge notified the other survivors of the suits
                  Held,
                         Notification of the other potential Ps was improper.
                  Note: 9th Cir’s notion at that time was that the judge should have no role in the packaging of a lawsuit. This has
                    changed.

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.
                o Permits courts wide discretion to consolidate cases. (Johnson v. Celotex)
                                   (Mosely decisions doesn’t guarantee that all claims will actually be tried together.)

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               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.

          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.

               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.
                        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


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                                                                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

                 o   FR 24(b) – Permissive Intervention
                         Anyone can intervene when:
                                  Statute gives conditional right to intervene, OR
                                  Applicant’s 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.
                 o   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 intervenor’s 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 won’t deprive court of SMJ shall be joined as a
                     party if:
                          In person’s absence complete relief can’t 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 person’s 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:
                         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.


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                              Lower court found that Dr. and hospital should be joined as FR 19(b) indispensable parties, without
                               which lawsuit should not proceed.
                     Held,
                              Joint tortfeasors don’t have to be joint defendants, and are NOT 19(b) indispensable parties.
                              Joint tortfeasors aren’t 19(a) parties, because in their absence, complete relief can still be obtained.
                                    o And rights of nonparties won’t 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:
                          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.
                  Held,
                          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.

   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.
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        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 party’s 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.
           Claim preclusion can’t bind class members when the class representative was inadequate.
           Claim preclusion can’t 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.


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                                                           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.

   o   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)

       o   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.‖

       o   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.

       o   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 didn’t
                                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.



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                                                         o   Disappointed stockholders brought class action, and wanted to use
                                                             prior jmt by SEC to estop D from contending that D didn’t 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 2 nd suit that
                                                                     weren’t 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
                                                                   D’s relatively weak incentive to litigate liability because
                                                                      didn’t foresee wave of catastrophic litigation coming.
                                                         o Court didn’t 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
                                                            didn’t.
                                                       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.

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                                                            o    Flies in the face of litigant autonomy.

      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.
      o    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.

      o    Our current preclusion rules don’t create incentives for aggregating factually related claims.
      o    There is little in the joinder rules that REQUIRE aggregation of factually related claims.
      o    Our system is NOT designed to give consistency of outcome, but of opportunity and procedure.
      o    Nonparties to an action cannot, consistent with DP, generally be precluded from re-litigating issues that were decided
           adversely to the party’s interest in a prior similar suit.

      o    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    A non-party cannot be precluded by a judgment in suit where they were not a party. (Martin v. Wilks)

                   Martin v. Wilks (US 1989) (240)
                        Facts:
                               o NAACP suing the city and personnel board on behalf of black firefighters, alleging race
                                    discrimination in hiring and promotion.
                               o Black FF won; city agrees to consent decree with targets for hiring and promotion of black
                                    FF.
                               o White FF seek to intervene, but denied by trial court.
                               o 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 doesn’t 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 non-
                                    party 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.

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                                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 don’t, 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 don’t 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)
                                            Ability of Ps to choose lawyer and method of conducting the case is lost.
                                  o Unfair forum? Choice of forums may vary
                                  o 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.

                  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 judge’s power to amend parties’ chosen structure.

                  Virtual Representation
                        This is the idea that a nonparty’s 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:
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                                     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
                                                              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.

        o    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:
                         Car passengers injured in OK sue in OK.
                         Ds are retailer (NY), Regional distributor (NY), importer, and foreign manufacturer
                 Held,
                         The importer and the foreign manufacturer can be sued in OK, but retailer and regional distributor
                           can’t, 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 didn’t 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.

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                                    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 didn’t have power to change minimum contacts test, but that’s what he did.
                     Trangsrud thinks this reasoning is unpersuasive/fuzzy/dubious.

   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 don’t 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 opt-
                                       out rights and didn’t opt out.
                                  o If you are a non-rep class mem, have notice, and don’t opt out, then that is consent to KS PJ.
                           In a voluntary class action, non-resident Ps with actual notice who don’t 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, it’s 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 gov’t.

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.
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        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, req’mt 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 –
                  (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.
        o (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.
        o (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.
        o (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.
        o (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 it’s a good idea to aggregare claims based on same
             facts in federal court.

        o    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 isn’t available (§ 1369(b))
   Limitations of this rule –
        o It won’t 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.

   Removal statute allows cases to be removed when original action could have been filed in federal court.
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        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?
                           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 isn’t clear whether § 1367 was in fact overruled; 5 th 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.
                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.
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                                   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 didn’t reject this idea, either).
       o AND, Merrell Dow can be distinguished, because it didn’t 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.‖

   § 1367(b) – But in diversity cases, supplemental jurisdiction doesn’t 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 don’t need to meet amount in controversy requirements; only minimal diversity and common
             nucleus of operative fact.

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        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 doesn’t 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 PLAINTIFF’S 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        Not Diversity
               (a)(1)                (b)(1)               Judicial district where and D resides if all D reside in the same state
               (a)(2)                (b)(2)               Judicial district where ―substantial part of the events giving rise to the claim
                                                          occurred.‖
                 (a)(3)              (b)(3)               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, that’s the only time these provisions
                                                          would apply.)

        o    § 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.
   It’s 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) – P’s venue privilege
                          One justification for P’s 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 P’s choice of forum should rarely be disturbed‖, only when there exists either
                                    ―oppressiveness or vexation to a D . . . out of all proportion to P’s convenience, or
                                    ―considerations affecting the court’s 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
                                                           o Local interest in having localized controversies decided at home
                                                           o Desirability of having trial in a forum show law will apply or
                                                                which avoids unnecessary choice of law problems
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                                                              o    Unfairness of burdening citizens of a disinterested state with jury
                                                                   duty.

        o    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
        o    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.
                          Can’t 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.
                o Permits courts wide discretion to consolidate cases. (Johnson v. Celotex)
                                  o Consolidation permitted if there is a single question of fact or law.
                                             So, asbestos claims in theory can be consolidated based on P of whether asbestos can
                                                injure lungs.
                                   Mosely decision doesn’t guarantee that all claims will actually be tried together.

                 o    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
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                                                 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              D                         P                   D
           P2                                                           D2

       o   CONSOLIDATION: Covered by Rule 42:

           P1                     D1
           P2                     D2

           o    Here, the cases remain separate, although they are generally handled and managed as if the same.
           o    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,
                                 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,
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                                  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).

   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 D’s 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.

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            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 - Can’t 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
                      Can’t 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
        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.
        o 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.‖
        o 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

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                                   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 P’s 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
       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.
       o Pretrial phase is often longer and more cumbersome and expensive.
       o Panel has lots of discretion, and decisions are largely unreviewable.
       o 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.
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                         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.
        o   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.
        o   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.
                 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.


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   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 don’t opt out, you’re in.
       o 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.
       o FR 23(d) – Court has authority to make certain orders about conduct of actions.
       o FR 23(e) – Action can’t be dismissed without the approval of the court.

   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
                  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)
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                     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. Can’t 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 won’t 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. Can’t 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.)

                     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 can’t 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 won’t work (FR 23(a)(1)).

                     Tells us that there is a fundamental preference for traditional party joinder.
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                  Reflects a substantial preference for individual litigation and party autonomy.
                  No numeric test, but rule of thumb:
                    >50 members usually qualifies
                    <20 members usually doesn’t 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    The case must present common Q of law or fact.
              o    This can be satisfied even if common Qs do NOT predominate.
              o    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 won’t 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 doesn’t represent the same interest and suffer the same injury as all class members, he isn’t proper class rep.
                        o General Telephone Co of Southwest v. Falcon
                                  Facts:
                                            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.
                                  Held,
                                            If P doesn’t represent the same interest and suffer the same injury as all class
                                               members, he isn’t proper class rep (and P didn’t in this case).
                                            Court focuses on fact that evidence of intentional discrim needed to prove P’s case of
                                               individual discrim in promotion was significantly different than the statistical
                                               evidence used by P to prove the class’s claim of discrim in hiring and promotion.
                                            P’s 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.


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      (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 class’s 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.
                                                                    Some not suffering injury but will in near future.
                                                                    Some would suffer it in the distant future.
                                                                    Some would not suffer injury at all.
                                                         o Settlement terms scheduled a payment within a specific range for
                                                              each type of asbestos injury.
                                                         o All currently injured and future-injured Ps would receive
                                                              settlement within that range.
                                                Held,
                                                         o 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 weren’t concerned with inflation and
                                                                       future claimants were.
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                                                                o    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.

            Judge’s 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 don’t approve adequacy of Ps or approve terms of settlement.
        o    Lawyers dominate the decision-making process in class actions.
        o    P’s 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.

   Class action seeking injunctive relief under 23(b)((2) is used most often.

   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?

o   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.

    o   Some conflicts of interest among class are unacceptable. (Hansberry, Amchem)
           o Hansberry v. Lee
                     Seminal class action case (but before Rule 23)
                     Facts:

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                                 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 can’t be bound by earlier judgment because it violated DP of 14 th 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 didn’t
                                          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 doesn’t 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 D’s exposure.
                               o Balances the settlement pressure on Ds with the benefits of class action.

      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(?)]

      o    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.

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                                   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.

        o   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, can’t certify the class, because the claims are
                              governed by the laws of many states and can’t 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 D’s 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.
                 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 didn’t 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 post-
                                         94 Ps had been inadequately represented.
                                     o Court distinguished Epstein.


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   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.

                    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).
                                      o Note – not obvious that this case was decided correctly.

           Risk of inconsistent judgments is not a reason to certify a settlement class. (Greenman)
                o 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.

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                                    (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 D’s 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.
                                                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:
                                            P’s likely recovery
                                                    How many Ps
                                                    $ size of claim
                                                    Chance of winning
                                            D’s available assets
                                                    D’s 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.
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                                                     2 of Fibreboard’s insurance carriers were responsible to indemnify Fibreboard in
                                                      unlimited amounts for all of Fibreboard’s 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 didn’t take into account.
                                                     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 gov’t 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 P’s 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 wasn’t 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 D’s 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 P’s 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 that’s 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 jury’s 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.

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      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, can’t enjoing state court or litigants from
              proceeding.
          o Although there are exceptions to this Act:
                       If there is another statute that creates exception
                       If it’s necessary to protect jmt of federal court
                       If it’s necessary in aid of federal court’s 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.
                                     o Federal judge chose to certify mandatory class action in federal court, effect of which
                                          would be to stay the state proceedings.
                                     o 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)
                                     o This is to avoid situation when federal judge would tell the state court judges to stop it.
                         Held,
                                  o 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.
                                  o 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, gov’t 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.


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              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)
              (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 can’t 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 Int’l) has moved towards Allison’s 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,
                                     Ps bring (b)(2) class action, alleging:
                                              Individual disparate treatment
                                              Group disparate treatment (pattern and practice)
                                              Disparate impact
                           o Held,
                                     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 it’s conceded that damages are substantial and not incidental)
                                              Trangsrud thinks this is curious.
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                                                              Court seems to say that as long as the class is afforded procedural
                                                               protections, we should allow it to proceed.
                                                          It’s hard to fit the pattern and practice claim under the language of the
                                                               rule and Allison.
                                    o    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.
                                    o    This decision is defensible if evidence for P and D is statistical, because it could be
                                         managed on a group pases, but that generally won’t be the case.
                                    o    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.
                                    o    Looks like court is trying to push the language of (b)(2) as far as possible for civil rights
                                         title 7 litigation.
                                                Therefore, we shouldn’t 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 don’t 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)
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                                         Facts:
                                              o    P sought class treatment of class comprising 900 asbestos
                                                   claimants.
                                               o   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.
                                         Held,
                                              o    23(b)(3) class action was proper and predominance
                                                   established, because ―state of the art‖ was in fact a
                                                   ―significant part‖ of each class member’s case.
                                               o   Court also noted that single resolution was important, and
                                                   would save time and expense of hundreds of trials using the
                                                   same evidence.

                   o    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
                              Whether the class action presents complications that make it difficult for court to
                                  shepherd the case through pretrial and trial processes.

                   o    Certification may not be proper if there are multiple state laws involved in the case.
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                                                   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 P’s 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
                                                Forum’s 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:
                    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:
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                                                                    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 can’t 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
                   (b)(1)(A) – ―dissonance‖ claims
                   (b)(2) – ―consonance‖ claims
        o 23(b)(3) – Deterrence, especially for small stakes cases.

   SMJ in Class actions:
           o Class action suit based on federal question doesn’t 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.

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                                   Trangsrud thinks this rule doesn’t make sense—would 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 can’t aggregate $ claims in class actions.
                                Many criticize Zahn as being unnecessarily hostile to class actions in this regard.
                                This rule makes no sense.
             o    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 lawyer’s 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.
        o 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 it’s took risky to justify cost required to justify investment on
                      a contingency basis.
        o 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.
        o Certain class action suits are controlled more by lawyer than client, because lawyer is the primary stakeholder because of
            the fees.

   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.

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             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.
                      Can’t 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 don’t 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
                    Πs don’t have hammer to threaten trial – bargaining from position of weakness
                    Little discovery
                        Unaware of strengths and weaknesses of case
                    Concern of collusion b/w Π’s lawyers and Δs
             Factors mitigating in favor of certification
                 Some discovery
                 Collusion not at issue;
                    MDL set up steering committee for Πs
                    Doesn’t 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
         Plus TJs have incentive to clear their docket and support the settlement
         Amchem (SC) – Can’t just look at ―terms of settlement only‖ b/c of Rule 23 settlements

   In certifying a settlement class you can’t 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
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            Held,
              Settlement rejected.
                  Coupon settlements have been rejected.

   In deciding whether to certify a class action settlement, court can’t 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 isn’t 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, don’t 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?

        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.

        o    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.

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                                                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 can’t 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, it’s 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
                 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 didn’t 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 didn’t 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 don’t
                                               receive anything could be vulnerable to attack.
                                  o Court distinguished Epstein.


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   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 that’s 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 doesn’t 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
                              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.
                     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 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.
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        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.
   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 state’s substantive law (although they don’t 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 state’s 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 state’s
                                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, can’t 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 don’t 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.

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                        Held,
                                 S. Ct. says that it must follow Klaxon, which would seem to lead to Cambodian law, but he says that’s
                                  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.
                                o Eris & Klaxon – Don’t want to encourage vertical forum shopping.

        o    Ferens v. John Deere (1990)
                  F/PP:
                          Π 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 PA’s 2 year SOL ran out.
                          Filed a contract/warranty suit in fed ct (diversity j/d), where the SOL hadn’t run yet. Also filed a
                             diversity tort suit in the SD Miss (negligence and products liability), assuming MS SOL law wld
                             govern.
                          Π moved for a 1404(a) transfer to PA. PA court refused to honor the MS SOL rule, holding that
                             because the Ferens’ were the Πs, Van Dusen did not apply, and dismissed the tort action since under
                             PA law, the SOL had run.
                  Held,
                          Van Dusen rule applies; choice of law rules of the transferor court transfer with case under 1404(a).
                             Doesn’t 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 Πs 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 didn’t apply on facts/DC Cir did apply
           o Held,
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                    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 cldn’t b transferred from NY to DC)
                               no horizontal stare decisis (fed cts aren’t required to follow each other’s decisions)
                               efficiency/consistency
                                    *Note: Law of the case=doctrine=when legal issue properly presented to trial ct and decided
                                        by trial ct, losing pty can’t 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 Δ 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.

        o   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 P’s 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.
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                                   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 rule—completely 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.
                                    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 decision—will 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 can’t 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, can’t 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 that’s 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) Weinstein’s 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; 2 nd cir didn’t decide the issue.
                 (4) Claim governed by federal law.
                          Boyle v. United Technologies – Supreme Court applied federal CL
                                  o This case isn’t much help to us where there Is no gov’t K’er involved.
                                  o But can argue that this problem has caused national federal health problem, so Congress
                                      should federalize the substantive law.
        o   Unless we make some sort of change, our system can’t handle many state law claims based on laws of different states.


                                   SUMMARY of CHOICE of LAW in FEDERAL COURT
                                      DIVERSITY CLAIM                       FEDERAL Q CLAIM
Proper -> Proper                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; Πs
                                      claim                                 shld have right to choose favorable fed law thru
                                                                            proper venue just like can w/state; but privilege
                                      (Van Dusen; Ferens)                   not absolute—if another forum substantially
                                                                            more convenient, then case goes forward in that
                                                                            forum w/ that law and tough shit for the Πs)




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Improper -> Proper                1406     Transferee COL Law                            Transferee law (don’t reward Πs for bringing
                                           (because transferor law never valid to        suit in wrong place)
                                           begin with)
Proper—pretrial and remand        1407     Transferor Law applies while case is          Transferee Circuit Law KAL
                                           pending
                                                                                         (problem could be that MDL panel may not
                                           (so as a practical matter, may have to        consider the effect of the circuit they pick)
                                           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

   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 state’s 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?
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                             Appoint lead counsel
                                  o This takes control away from other lawyers
                  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.
        o   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 it’s 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 Haven’t 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
        o Common fund approach (preferred)

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                     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.

   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 P’s attorney)
                          First circuit said 50/50 more equitable.
                 Same type of oversight does not apply to D’s lawyers.

TRIAL COMPLEXITY


Complexity, Juries and the Seventh Amendment
        In re: Boise Cascade Securities Litigation
         I: Can Πs 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 can’t act rationally if can’t
          understand case—irrational jury cld deprive Π of damages or erroneously award damages (DP violation). If jury
          can’t 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 ct’s decisions; necessary to trial.
        3. Other solutions
                   Develop pretrial strategies to reduce trial length (shorter empanelment—more likely to find people to serve)
                   Seek out jurors w/requisite experience/expertise—even 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 Πs and Non-OH Πs MDLed to Ohio for pre-trial proceedings; OH judge said would send non-OH Πs
              back to original venues unless wanted to stay in OH (Πs would b deemed to consent to OH law)
              Trial limited to whether Bendectin a teratogen; visibly deformed Πs and those under 10 not allowed in ctroom; TCt
              found for Δ.
              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!

            Trangsrud, Mass Trials in Mass Tort Cases: A Dissent
                     criticized trifurcation
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                         hard to imagine that you can separate specific and general causation w/o violating 7 th (reexam cl.)?

             Why wld Πs proceed this way?
                     time?
                     reduction in cost
                             o perverse financial incentive for Πs lawyers to join claims (they make peanuts w/o collective pressure
                                  on Δs)
             Bifurcation decreases likelihood of Πs success, but increases efficiency…So, 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 Π’s
                                          o 15 Π’s chosen by the Π
                                          o 15 Π’s chosen by the ∆’s
                                          o 11 - sample
                                 o Phase III: Damages would be distributed among the remaining ~ 3,000 Π’s based upon the results
                                     in Phase II.
                          Held,
                                  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 doesn’t directly address whether this is unconstitutional under the 7th
                                                   Amendment.

    o       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 This is Judge Parker trying again.
                              o Facts:
                                        o Phase I: Jenkins
                                        o Phase II: Trial to determine the % of each of the asbestos products used in which worksites
                                                   o 160 sample Π’s that were randomly chosen get actual verdicts.
                                        o Phase III: Judge extrapolates the $
                                                   o The remaining Π’s, 2,138, get an average verdict depending on the disease category
                                                       they are in.
                                        o After this process, almost everyone settled. But, one ∆ appealed. The 5th Cir. held the case
                                              for 7 years after oral arguments.


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                       o    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 Π’s consented to the procedure.
                                      o The ∆’s can’t argue that this violates their due process. The Π’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 Π’s injuries.
                                      o That was not done to any of the Π’s (even the sample Π’s). There was no proof required
                                          to show that a particular Π was exposed to a particular ∆’s product. This obviously then
                                          also didn’t happen in the extrapolated cases.
                                      o The fact that the judge makes the extrapolation is particularly concerning.
                                      o T’rud: 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 5 th 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 wasn’t 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 wasn’t
                              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?
       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.
       o We use statistics in settlement, so what is the problem with doing it here.
       o Everyone gets something.
       o This is a way of aggregating claims and finding an expedient way of adjudicating them.
       o 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 Π’s are like the other cases.
       o This is a disadvantage to the ∆’s – they are being set up for disaster.


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        o   But, ∆’s don’t 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 wouldn’t have done otherwise.
        o   It’s using a procedure to affect the substantive result of cases. However, without this, many cases will never be heard.

    o   Advantages of Trial by stats
           o Efficiency & cost & time
           o Make class action more manageable

    o   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   Use of structural injunctions to reform public institutions is really controversial.
        o   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.
        o   Sweeping injunctions – more of a failure than a cusses
                  Many schools remain highly segregated, and dramatic disparities in quality of public education.
        o   Federal courts also tackled humane conditions in prisons.
                  Some success here, as with mental health hospitals.
        o   Prior to Brown, structural injunctions were largely unknown.

        o   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   Sometimes even courts don’t 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 couldn’t 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 doesn’t 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 doesn’t 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.

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        o   There is a decrease in court’s 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 isn’t adequate remedy.
                           Held, no interdistrict remedy is adequate because:
                                   o Doesn’t 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.
        o   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 P’s 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.

   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.

A. Levin                                      Page 64/68                    Last Revised: 10/15/2011
                     BUT – then D bad actors would walk away scott free

   If it is a mandatory class action, and one person doesn’t 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 it’s 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 it’s not practical, so must go to ―next best‖ (cy pres)
                            Categories of remedies available:
                                    o (1) Decrease D’s 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?
                   It’s inconsistent with the ―rightful position‖ notion.
                   Better than the alternative / more practical.
                   We don’t have enough resources / time / $ to do the best, so do the next best.
                            Sounds a lot like reason we permit trial by statistics.

   Fluid remedy can’t 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 can’t 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 doesn’t 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 doesn’t 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:
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                                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 can’t 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 there’s 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 didn’t vote for it?
                                      o Really, they don’t offer a way that the school district could otherwise recover the
                                           revenue.
                                      o They could order contempt – but it’s 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 TP’s weren’t 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 isn’t happening (T’rudism).

   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 Π’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 doesn’t say how much each Π 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.
                 o Holding:
                     It is an extremely complex scheme. Just an overview . . .
                              Personal injury Π’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 Π’s, final judgments are entered.

               o    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.
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                         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   If this is permissible in this setting, why isn’t it allowed in other settings?
    o   Why can’t this be used in a situation like Ortiz.
    o   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.
    o   T’rud thinks you should give class members a second opt-out right in this situation. The rule allows it, but doesn’t mandate
        it.
    o   The problem is that if you get too many opt-outs, the entire settlement unwinds.

EXTRA NOTES:
   o Rules Enabling Act –
         o Says that the rules shouldn’t 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 A’s claim is
                             common to B’s 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? Can’t reconcile
                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) – don’t 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
                  Based on equitable principle that if someone helps create benefit, should get part of that benefit.
        o Lodestar also sometimes used.




A. Levin                                      Page 67/68                    Last Revised: 10/15/2011
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 won’t 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 won’t be brought individually
                 Problems with conflicting state laws?
      o Limited fund (b)(1)(b)
                 Statute limits amt of P’s overall recovery, so won’t 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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