Class Actions (Successful Partnering Between Inside and Outside Counsel)

Chapter 60A Class Actions by David G. Leitch, Gary L. Sasso, and D. Matthew Allen1 § 60A:1 Scope note § 60A:2 Objectives, concerns, preliminary considerations § 60A:3 —Objectives § 60A:4 —Concerns § 60A:5 —Preliminary considerations § 60A:6 — —Media relations § 60A:7 — —Insurance coverage § 60A:8 — —Financial reporting § 60A:9 — —Customer relations § 60A:10 — —Government relations § 60A:11 — —Business or technical expertise § 60A:12 — —Authority § 60A:13 — —Document preservation § 60A:14 — —Selection of outside counsel § 60A:15 — —Discovery and investigation issues § 60A:16 — —Venue and jurisdiction § 60A:17 — —Related proceedings § 60A:18 — —Early assessment § 60A:19 Eective partnering § 60A:20 —Planning is crucial § 60A:21 —Discussions should be conrmed in writing § 60A:22 —Introductions § 60A:23 Strategies in class action engagement 1The authors gratefully acknowledge the participation of the follow- ing attorneys in the preparation of this chapter. From Ford: John F. Mellen, Associate General Counsel — Litigation and Regulatory, Donald J. Lough, Assistant General Counsel — Product Litigation, and Michael J. O'Reilly, Counsel — Products Liability. From Carlton Fields: Chris S. Coutroulis, chair of the Business Litigation and Trade Regulation Practice Group, and Wendy Lumish, chair of the Appellate Practice Group. K 2010 Thomson Reuters/West, 2/2010 60A-1 Successful Partnering § 60A:24 —Elements of claims and defenses; classwide proof § 60A:25 — —Understand the nature of the claims § 60A:26 — —Focus on elements that defeat predominance § 60A:27 — —Complementary roles of inside and outside counsel § 60A:28 —Discovery § 60A:29 — —Special requirements § 60A:30 — —Bifurcation § 60A:31 — —Focus on the named plaintis § 60A:32 — —Deposing the named plainti § 60A:33 — —Third-party depositions § 60A:34 —Experts § 60A:35 —Case management considerations § 60A:36 —The class certication hearing § 60A:37 —Response to class certication § 60A:38 —Notice to the class § 60A:39 —Trial of class actions § 60A:40 Settlement strategies § 60A:41 —Individual settlement before certication § 60A:42 —Timing of initiating discussions § 60A:43 —Class wide settlements § 60A:44 —Settlement notice § 60A:45 —Open and frequent communication § 60A:46 —Non-monetary relief § 60A:47 —Class administration § 60A:48 —Dealing with objectors § 60A:49 Post-matter brieng § 60A:50 Principal legal issues, key cases, and statutory framework § 60A:51 —Various kinds of class actions § 60A:52 —“Rigorous analysis” § 60A:53 —Key cases § 60A:54 —Evolving standards of proof § 60A:55 —Rule 23(a) requirements for class certication § 60A:56 — —Numerosity § 60A:57 — —Commonality § 60A:58 — —Typicality § 60A:59 — —Adequacy § 60A:60 —Class denition § 60A:61 —Rule 23(b) requirements § 60A:62 — —Rule 23(b)(1)(A) § 60A:63 — —Rule 23(b)(1)(B) § 60A:64 — —Rule 23(b)(2) 60A-2 Class Actions § 60A:1 § 60A:65 — —Rule 23(b)(3) § 60A:66 Other Rule 23 subdivisions § 60A:67 —Rule 23(c) § 60A:68 —Rule 23(d) § 60A:69 —Rule 23(e) § 60A:70 —Rule 23(f) § 60A:71 —Rule 23(g) § 60A:72 —Rule 23(h) § 60A:73 Class Action Fairness Act § 60A:74 —Commencement § 60A:75 —Amount in controversy § 60A:76 —Exceptions to removal jurisdiction § 60A:77 —Appeal § 60A:78 —Settlements § 60A:79 The law of class action settlements § 60A:80 Class action arbitration § 60A:81 ALI Aggregate Litigation project § 60A:82 Practice checklists § 60A:83 Form: Class notice (certied class action) § 60A:84 Form: Class notice (settlement) § 60A:85 Form: Notice of removal KeyCiteL: Cases and other legal materials listed in KeyCite Scope can be researched through the KeyCite service on WestlawL. Use KeyCite to check citations for form, parallel references, prior and later history, and comprehensive citator information, including citations to other decisions and secondary materials. § 60A:1 Scope note In this Chapter, we discuss successful partnering between inside and outside counsel in litigating class actions. A class action is a lawsuit led by one or more plaintis seeking to represent a group or “class” of similarly situated persons.1 The purpose of a class action is to “enable parties, who have insucient means to pursue their individual claims, to pool [Section 60A:1] 1See, e.g., Montgomery Ward & Co. v. Langer, 168 F.2d 182, 187 (C.C.A. 8th Cir. 1948) (describing the class action's equitable origins and its subsequent memorialization under Federal Rule of Civil Procedure 23 as a procedural device that may apply to equitable or legal actions). K 2010 Thomson Reuters/West, 2/2010 60A-3 § 60A:1 Successful Partnering their resources and pursue their common complaints.”2 Al- though corporate clients may on occasion contemplate ling class actions oensively as plaintis, more typically, they are involved in class litigation as defendants. Hence, in this Chapter, we focus on defending against class actions. We begin by discussing key objectives, concerns, and preliminary considerations inside and outside counsel must ad- dress in class action litigation. We next describe eective partnering and strategies peculiar to class action defense, focusing on defense against the certication of the litigation as a proper class action.3 We also review the legal framework governing class action litigation. Finally, we provide checklists for use by inside and outside counsel and forms for addressing procedural necessities in class action litigation. § 60A:2 Objectives, concerns, preliminary considerations We rst discuss the objectives in defending class litigation, some concerns arising from class cases, and some preliminary considerations for defending such claims. § 60A:3 Objectives, concerns, preliminary considerations—Objectives Plaintis' counsel often prefer class actions to individual claims because these cases oer the opportunity to aggregate dozens, hundreds, or even many thousands of otherwise inconsequential cases into class claims seeking millions or billions of dollars in damages—and attorneys' fees. By ag- gregating the claims of numerous class members, class counsel strive to make class litigation as threatening to corporate defendants as possible. Thus, a central question in defending against class actions is whether litigation may properly be maintained as a class action in the rst instance. Often members of the class do not even know they have 2In re Dennis Greenman Securities Litigation, 829 F.2d 1539, 1545 n.6, 9 Fed. R. Serv. 3d 415 (11th Cir. 1987). 3For additional discussion of class actions, see John F.X. Peloso, Peter Buscemi, and James D. Pagliaro, Chapter 16 “Class Actions,” in Haig, Business and Commercial Litigation in Federal Courts, §§ 16:1 et seq. (2d ed.). 60A-4 Class Actions § 60A:19 its strategy for managing—or resolving—the litigation.1 Inside and outside counsel together should conduct a clear- eyed assessment of the likelihood of defeating class claims due to legal insuciencies, defeating class certication, and prevailing at trial. This will require performing preliminary legal research of claims and potential defenses and evaluating the company's exposure (of course, with the assistance of personnel in the company's aected business unit). The informal investigation we have described will be crucial for these purposes.2 In certain instances, consultants may need to construct classwide damages models that plaintis' experts are likely to adduce at trial in order to evaluate the case. For example, in a securities case, consultants may need to estimate losses incurred by stockholders as a result of a drop in stock prices caused by disclosures of material information allegedly with- held by the company, which they may do by modeling stock trading behavior. An early case assessment can be particularly dicult in class actions because of their complexity and the high likelihood that the plaintis' theories will shift with time. Some twists and turns can be anticipated, and counsel's preliminary legal research of claims and potential defenses should consider such contingencies. Of course, getting an early handle on the company's exposure will be of great interest to the business managers whose budgets may be tapped in the event of a settlement or loss. Based on this preliminary assessment, inside counsel should be in a position to determine whether the company should approach plaintis' counsel early to resolve the claims of at least the class representatives on an individual basis or whether it must take the litigation to the mat—or something in between. § 60A:19 Eective partnering We now turn to discussing specic approaches to eective partnering between inside and outside counsel and strate- [Section 60A:18] 1See generally Chapter 12 “Evaluating Legal Risks and Costs with Decision Tree Analysis” (§§ 12:1 et seq.). 2See § 60A:15. K 2010 Thomson Reuters/West, 2/2010 60A-15 § 60A:19 Successful Partnering gies they might develop in defending class actions. Given that class action litigation can implicate core aspects of the defendant's product lines or business practices or policies, ef- fective partnering between inside counsel and outside counsel is indispensable to ensure that the conduct of the litigation itself does not impair the ability of the company to continue to do business with as little disruption as possible. Plaintis may be claiming millions or billions of dollars in damages, which may approach “bet the company” proportions. Accordingly, the company will have to weigh investing considerable internal and nancial resources to defend the litigation, and managers of the aected business units and the defendant's

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