Update (November 8, 2013): Otto Von Bismarck is credited with this witty insight: “Laws are like sausages, it is better not to see them being made” (at least on some website of seriously dubious authority).
It’s a clever turn of phrase but, really, not all that brilliant. We all know that legislation is the product of coercion, rhetoric, deception, direct or indirect bribery, blackmail, game-playing, seduction, double-crossing, arm-twisting, brow-beating, kow-towing, etc., etc.
Come to think of it, isn’t this how almost everything is always done in any collective action? It is never easy to get very large numbers of people to all buy in to one “solution.” In fact, when one has a strong broad consensus, it is often a fairly thoughtless stampede of unanimity often regretted and/or criticized in hindsight (See, e.g., Patriot Act.)
So it is with class actions. They can look a little ugly sometimes.
The basic idea of class action litigation (like legislation) is not just a good idea. The class action procedure is a critical judicial tool whereby companies (primarily) cannot get away with deceiving huge numbers of people or stealing from people whose losses, otherwise, would be so small that they would never rationally seek to vindicate their rights. By the same token, class actions can prevent parasitic plaintiffs’ lawyers from sucking drips and drabs from companies’ profits with individual low-dollar lawsuits of little or no merit, which otherwise would cost companies more money to defend than to shoo away with a thousand dollars or so each. Class actions can sometimes enable companies to dispose of hundreds or thousands of weak or invalid legal claims in a single class action.
And class actions are very attractive, not necessarily for the plaintiff class members on an individual basis, but very often but for their lawyers (and defense counsel) some of whom can all get quite rich bringing, defending, and resolving these claims.
But the process is not always pretty. This seems evident in a recent decision rejecting preliminary approval of a class action settlement by Sr. Judge Richard H. Kyle, Sr. (D. Minn.). This was in a class action litigation brought against Cargill for its allegedly false and misleading claim that its sweetener, stevia, is “natural.”
I do not intend to cast aspersions on the players in this drama, many of whom, on both sides, I count as friends, cherished colleagues, and formidable adversaries. At the same time, there is at a minimum an appearance of something like a rushed back-room deal, an attempt to seal a deal very quickly and shut out other class action lawyers with suits in other venues. And Judge Kyle would have none of it.
One can easily imagine the groans and sighs among the class action lawyers on both sides (and Cargill, as well) as their fragile alliance failed to withstand the court’s scrutiny.
It is even worse for plaintiffs’ counsel. Judge Kyle has raised the significant risk that the entire case might be tossed out in favor of a previously filed class action lawsuit in Hawa’ii.
Original Post (June 25, 2012): (Under subject line: Behrend v. Comcast Antitrust Class Action: Why Plaintiffs’ Class Action Lawyers Get Paid the Big Bucks): The Twin Cities law firm of Heins Mills & Olson is a plaintiffs’ class action law firm that has seen some heady wins in its day (and suffered through the subsequent litigation over the fair distribution of the proceeds).
For every grand-slam for plaintiffs’ class action firms, there are costly strike-outs. And sometimes the plaintiffs’ class action losses can occur in the 25th extra inning, to continue with the baseball metaphor.
Today, the U.S. Supreme Court granted a petition for review of a Third Circuit opinion in an antitrust class action that HMO and others have been litigating against Comcast for almost ten years.
The question presented:
Whether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.
One predicts the outcome of U.S. Supreme Court decisions at one’s peril, of course. We cannot say for sure whether or not this lawsuit brought by HMO and its fellow plaintiffs’ counsel will survive this trip to the Supreme Court. On the other hand, given the Court’s current make-up and the fact that the Court granted review of the Third Circuit’s decision in their favor, this could be one of those costly cases that the plaintiffs’ firms’ “grand slams” must counter-balance in order to avoid plaintiffs’ firms’ financial destruction.
Regardless of the Supreme Court’s decision on the case they have just agreed to decide, some things are certain as of today: Comcast’s valuation of financial exposure has fallen and whatever the results of the pending question before the U.S. Supreme Court, the fact that the Court has taken the question probably means no recovery any time soon for plaintiffs and their lawyers in this lengthy and hard-fought class action antitrust case.
Update: Class action plaintiffs (or more specifically, their lawyers) lost.