COMPLEX CIVIL LITIGATION – OUTLINE
Spring 2011
Introductory Policy .................................................................................................................. 1
I.
II.
Basic Aggregation Methods ................................................................................................. 2
A.
Joinder, Interpleader, and Intervention ............................................................................ 2
B.
Transfer & Consolidation ................................................................................................. 5
C.
Stays, Dismissals & Antisuit Injunctions ( indirect methods of aggregation) ................. 7
D.
Preclusion (another indirect method of aggregation) ....................................................... 9
III.
Jurisdictional Issues with Aggregation .............................................................................. 11
IV.
Class Actions ..................................................................................................................... 13
A.
The Class Action Fairness Act (CAFA) ......................................................................... 13
B.
Class Actions Generally ................................................................................................. 14
C.
Rule 23(a) – Numerosity, Commonality, Typicality, Adequacy ................................... 16
D.
Rule 23(b) – Types of Class Actions ............................................................................. 17
E.
Settlement Class Actions & Limited Funds (Amchem & Ortiz) ................................... 22
F. The Scope of Preclusion and Collateral Attacks on Class Judgments and Settlements .... 24
V.
Choice of Law .................................................................................................................... 24
VI.
Pre-Trial Issues .................................................................................................................. 28
A.
Selecting Counsel and Judges ........................................................................................ 28
B.
Narrowing Issues ............................................................................................................ 31
C.
Discovering Information ................................................................................................ 36
VII.
Trial Issues ......................................................................................................................... 41
I.
INTRODUCTORY POLICY
 How you define complex litigation matters because judges often find more creative methods
for resolving them than under the classic adversarial model. This most notably affects
procedural methods, but also has a material (indeed, often dispositive) effect on the outcome
on the case.
 Fuller–Chayes Debate
 Fuller
 Argued that as a matter of principle, the adversarial system was the only legitimate
approach to adjudication.
 The basic foundation for this is the question, “What is unique about adjudication” as
opposed to contract, election, etc.?
 He finds the essence of adjudication to be the participation of parties through “proofs
and reasoned arguments”
 Polycentric litigation (i.e., complex litigation) does not lend itself to the use of the
adversarial system, and thus is not legitimate.
 Chayes
 Writes in response to Fuller. Doesn’t challenge him on principal, but rather is more
of a realist description of what judges are actually doing.
 Recognizes that judges are actively involved in these big “public-law” cases,
particularly in the remedial stage.
 This view sort of sets the groundwork for the modern case management movement.
 Much of what we’ve done this semester is sort of within the framework of this debate.
 Structural Complexity
 Message of the three articles on structural complexity: aggregation does influence the
outcome of cases.
 Plaintiffs more likely to win and get most money at 4 plaintiffs; more likely to win
but lower remedy at 10; least likely to win and smallest remedy at 1.
 Rosenberg: if we don’t aggregate, we’ll lose the necessary deterrent effect of multiparty litigation. Talking mainly about mass-tort actions.
 McGovern: When we aggregate, it makes a tremendous difference (in relation to
overall life of total cases on a given issue, e.g. asbestos). In the infancy of mass
litigation defendants will win, in the adolescence plaintiffs will win, in maturity we’re
most likely to get accurate outcomes. This is the lifecycle model.
 McGovern’s point is that you’re better not to aggregate until the point of maturity.
 Aggregation helps plaintiffs win, but reduces their individual recovery.
 Finally, Federal courts are better than State courts for aggregation because of the various
procedural methods available. See below.
 So is aggregation a good thing or a bad thing?
 An obvious exam question.
 The generalized competing factors are plaintiff autonomy and judicial economy.
 Some devices has its limits and drawbacks, but some have utility in certain situations.
 It’s a debate that should be informed by where the law stands today.
 You cannot aggregate every relevant case. The aggregation devices are not sufficient to
do so.
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II.
BASIC AGGREGATION METHODS
A.
Joinder, Interpleader, and Intervention
Voluntary Joinder – Rule 20
 The default rule.
 Plaintiffs may join together so long as the claims arise out of the same transaction or
occurrence (or series of transactions/occurrences)
 It must also have a common question of law or fact, but no case has ever been thrown
out on this ground alone. Usually when you have the first requirement, you also have
the second.
 Complicated by lawyer unwillingness to work together, geographic dispersion (and
related issues of personal and subject matter jurisdiction and venue), and temporal
dispersion
 Joined plaintiffs/defendants need not be joined on all issues/claims. Relief may be
tailored accordingly. FRCP 20(a)(3).
 Mosley v. General Motors Corp., 497 F.2d 1330 (8th Cir. 1974) {p. 60}
 Employment discrimination case on the basis of race. Pattern or practice.
 The purpose of Rule 20 is to achieve as much joinder as is efficient. To “promote trial
convenience and expedite the final determination of disputes, thereby preventing multiple
lawsuits.”
 All ‘logically-related” events entitling a person to institute a legal action against
another generally are regarded as comprising a transaction or occurrence.
 Thus, a broad reading of the “arising from the same transaction, occurrence” language.
 In re Prempro Products Liability Litigation, 591 F.3d 613 (8th Cir. 2010) {p.65}
 Joinder is a two-way sword. Sometimes it’s useful to achieve aggregation. Sometimes
it’s useful to frustrate aggregation.
 Fraudulent misjoinder exists where plaintiff asserts a bogus claim against a defendant
of the same citizenship for the sole purpose of defeating diversity. Federal judges
have always had the power to disregard such fraudulent claims and assert jurisdiction.
 Procedural misjoinder involves valid claims, but plaintiff aggregation in order to
defeat diversity. This doctrine is highly contested, and not all courts recognize. FRCP
21.
 One problem with this doctrine is that it abrogates the idea that “plaintiffs are the
masters of their own complaints.”
 Rule 20 has some value, but it’s limited, particularly with regard to temporal dispersion
Interpleader – Rule 22
 Originally an equity device used in property disputes by a defendant to settle competing
claims for a single piece of property.
 Traditional interpleader was where defendant also claimed an interest in the property;
whereas an action “in the nature of interpleader” was where defendant did not.
 Two types of interpleader:
 (1) Rule Interpleader (Rule 22)
 One of the least used joinder rules. Not very useful.
 Rule that derives from the traditional equity approach.
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
Defendant can actually commence the action in interpleader to bring in all suits
proactively.
 Requires potential for “double or multiple liability”
 There’s no “multiple liability” if defendant is independently held liable to every
plaintiff down the row. It requires liability for the same thing, involving some
unfairness.
 Still holds the essence of the common-law, property context.
 (2) Statutory Interpleader (28 U.S.C. § 1335)
 Controls interpleader or in the nature of interpleader
 Covers case where defendant has something of value of $500 or more, and 2 or more
plaintiffs of diverse citizenship, then the court has jurisdiction thereover.
 Does not require complete diversity of citizenship. Only requires minimal
diversity (i.e. one plaintiff to have different citizenship of one other plaintiff.)
 Also requires deposit of the res to the court
 Reach is only national.
 § 2361. Process and procedure of an interpleader case
 Nationwide service of process (i.e. personal jurisdiction)
 Antisuit injunctions preventing suit elsewhere.
 A good aggregation device, but still tied to the requirement of a property interest
(usually a limited fund or a limited insurance liability policy).
 State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523 (1967) {p.84}
 Only the owner of the res (e.g., the insurance company offering limited coverage) can be
the beneficiary of antisuit injunctions under statutory interpleader.
Mandatory Joinder – Rule 19
 Rule 19. Required Joinder of Parties
 19(a) – defines who must be joined, if feasible (“necessary” or “required” parties)
 We have to read subsection (a) in light of the consequences of finding a party is
“required”, that is, the case could be required to be dismissed
 19(a)(1)(A) – without this person in the case, the plaintiffs are not able to get the
relief they seek
 Least common type of claim; Protects the plaintiff
 19(a)(1)(B)(ii) – an existing party will be subject to double or multiple liability or
otherwise inconsistent obligations because of the interest.
 Protects the defendant.
 Sounds a lot like interpleader.
 One reason not to interplead, but instead use rule 19 is that it could result in
the case being dismissed. Doesn’t usually work out, however.
 Limited Scope: See Temple v. Synthes
 19(a)(1)(B)(i) – the absent party is not going to be able to protect their interests if
they’re not in the party
 Protects the nonparty third person
 Unlike intervention, stare decisis effect is not enough of an “interest”
 19(b) – addresses what to do when joinder is infeasible (lists factors, see below)
 Go on without required party, or
 Case dismissal (required party “indispensible”)
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 Temple v. Synthes Corp., 498 U.S. 5 (1990) {p.92}
 It has long been the rule that it is not necessary for all joint tortfeasors to be named as
defendants in a single lawsuit. A tortfeasor with the usual “joint-and-several” liability is
merely a permissive party to an action against another with like liability.
 Increased efficiency is not enough to merit required joinder.
 Republic of the Philippines v. Pimentel, 553 U.S. 851 (2008) {p.93}
 Same case as Hilao. Here Merril Lynch interpleaded Philippine government in an action
by Hilao class to recovery judgment of the same moneys sought by the govt in a Filipino
court. Limited fund. Case dismissed on Rule 19 grounds for sovereign immunity.
 When is joinder not feasible? (Rule 19(b))
 Where the court doesn’t have proper personal or subject-matter jurisdiction or venue.
 If not feasible, the court should consider equity and good conscious and:
 (1) Does the judgment entered in the absence of the required party damage the
interests of the required party or the present parties?
 (2) Can the burden be lessened through shaping of relief or other measures?
 (3) Would the judgment in the absence of the required party be adequate (to all
parties)?
 (4) Would the plaintiff be able to obtain adequate remedy if the case were dismissed?
 Rule 19 is not a very useful device for aggregation because they contain the serious risk of
case-dismissal. (“really bad” aggregation device)
 Only unique circumstances will render Rule 19 useful for aggregation purposes.
 Courts tend to construe 19(a) narrowly, because this reduces the likelihood of the case
getting dismissed.
 Rule 19 impinges on plaintiff autonomy, doesn’t necessarily foster efficient packaging or
litigation, and can leave some plaintiffs without remedy.
 Rule 19(d) renders Rule 19 inapplicable in cases subject to Rule 23, the class-action
aggregation mechanism. Therefore, at least so far, parties and courts have not really utilized
Rule 19 as a joinder mechanism in complex litigation.
Intervention – Rule 24
 Intervention of Right (Rule 24(a))
 The way you always want to go if you’re going to try to intervene.
 If successful, you become a party to the case, and thus, usually gain full rights as a party
in the case.
 Requirements:
 (1) timeliness;
 Doesn’t mean any particular timeframe. Depends on what you’re intervening on
and how far the case has progressed;
 (2) interest in the case;
 Doesn’t necessarily mean legal claim
 There is a line of SCOTUS cases that says that the interest does need to be a
“significant legally protectable interest”
 The other line of SCOTUS cases is looser, needing only some general interest
 (3) this case may impair or impede your ability to protect that interest if you don’t
intervene; and
 (4) the parties already before the court may not adequately represent your interest.
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Showing of inadequacy is minimal. As long as you can show that you would
present the arguments differently or that your interests are somehow different
from that of the parties, this is sufficient.
 In cases where the government is a case and you want to intervene on the side of
the government, a finding of inadequacy requires a greater showing.
Permissive Intervention (Rule 24(b))
 Court gets to decide if you can intervene, and then they can condition the scope of your
intervention.
 Really an option of last resort. Just a step above amicus status.
 You get permissive intervention when a federal statute says you can permissively
intervene (which isn’t much or many); or
 You can permissively intervene when you have a common question of law or fact as the
case at bar.
When the party on whose side the intervenor wishes to join is cooperative, the court is much
more likely to permit it under the rule. The opposite is also true.
Grutter v. Bolinger, 188 F.3d 394 (6th Cir. 1999) {p.105}
 Looser standard applied. Philosophy is that should be applied so long as intervention
allows efficiency and due process.
Coalition to Defend Affirmative Action v. Granholm, 501 F.3d 775 (6th Cir. 2007) {p.110}
 Stricter standard applied for finding of “interest”; an organization’s general ideological
interest in a lawsuit is not sufficient.
Notice that Rule 24(a)(2) language is similar to Rule 19
 Rule 24 is usually considered to have a lower required showing of interest in the case.
 The classical showing of practical impairment under Rule 24 is stare decisis effect
 The stare decisis effect of the lawsuit in consideration will prejudice a later case that
you may bring on your own. This is generally considered enough of a showing of
practical impairment
 This is not enough of a showing of impairment under Rule 19 required joinder
Problems with Intervention as an Aggregation Device:
 Fewer incentives to intervene on the defendant side.
 Doesn’t really work very well in a lot of damages or personal injury claims
 Difficult for temporally dispersed plaintiffs to utilize intervention as an aggregation
device.
 Intervention is voluntary. It doesn’t bring in people that don’t want to be there. And for
aggregation to really work, we have to get everyone.
B.
Transfer & Consolidation
 Consolidation is intradistrict transfer. On the state level, it doesn’t really work.
 Transfer is interdistrict.
Consolidation – Rule 42(a)
 Rule 42(a).
 “If actions before the court involve a common question of law or fact, the court may:
 (1) join for hearing or trial any or all matters at issue in the actions;
 (2) consolidate the actions; or
 (3) issue any other orders to avoid unnecessary cost or delay.”
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 Johnson v. Celotex Corp., 899 F.2d 1281 (2d Cir. 1990) {p.123}
 Second circuit reads into “common issue of law or fact” a consideration of efficiency.
 However, any gains in convenience must outweigh any reductions in fairness or
impartiality
 District courts have a lot of discretion in this area.
 Eight Factors are considered when determining whether to consolidate asbestos cases:
 (1) common worksite;
 (2) similar occupation;
 (3) similar time or exposure;
 (4) type of disease;
 (5) whether plaintiffs are living or deceased;
 (6) status of discovery in each case;
 (7) whether all plaintiffs were represented by the same counsel; and
 (8) type of cancer alleged.
§ 1404(a) Transfer
 Standard transfer of venue statute. Not particularly tailored to complex litigation.
 In re Joint Eastern and Southern Districts Asbestos Litigation, 769 F. Supp. 85 (E. &
S.D.N.Y. 1991) {p.134}
 Weinstein claims judges may have inherent powers beyond Rule 42 and §1404 to
consolidate and transfer cases. This is not relied upon, however, so dictum.
 It’s not clear that §1404 is a good device for aggregation
 In most circumstances, it’s not going to be so simple to get disparate cases together. The
challenge is getting each and every transferor judge to consent to transfer their cases.
 An additional problem is that §1404 only allows transfer to other districts where venue is
proper (i.e. where the case could have been brought in the first place). Therefore, it is
difficult to find one district to which all cases can be transferred.
 § 1404(a) only allows transfer within and between federal courts. State courts are not
allowed to take advantage of the statute
Multidistrict Transfers - § 1407
 MDL Panel
 Has the power to transfer cases to a single transferee forum.
 Panel can do this sua sponte or upon motion of a party. The latter is more common.
 §1407
 (a) Civil actions involving one or more common questions of fact can be transferred to
any federal district for consolidated pretrial proceedings
 Must show: (i) convenience of the parties, (ii) convenience of witnesses, (iii) in the
interest of justice, (iv) common question of fact.
 After pretrial proceedings, if not settled or dismissed on summary judgment, the cases
return to their transferor courts.
 Judges used to utilize §1404(a) to permanently transfer these cases to themselves,
so as to consolidate for trial as well. In Lexicon (1998), however, SCOTUS held
that such “self-transfer” was not permissible.
 The Panel will usually pick judges who have a lot of experience in these sort of cases.
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 Since MDL is only for pre-trial purposes, it is unclear how much you really gain per se. But
what you’re hoping for is a greater chance for settlement, or even global settlement.
 Once these cases get aggregated in a MDL proceeding, most of them do not end up being
transferred back for trial. While remand is, in theory, the proper procedure, in practice,
most cases get settled or disposed of through summary judgment.
 In re Asbestos Products Liability Litigation (No. VI), 771 F. Supp. 415 (J.P.M.L. 1991)
{p.144}
 26,000 cases consolidated through MDL proceedings. Famous example.
 In re Vioxx Products Liability Litigation, 360 F. Supp. 2d 1352 (J.P.M.L. 2005) {p.153}
 Centralization under Section 1407 is necessary in order to eliminate duplicative discovery,
avoid inconsistent pretrial rulings, and conserve the resources of the parties, their counsel
and the judiciary.”
 Choice of Law issues encountered in MDL transfers and remands are addressed infra.
 MDL Transfer as an Aggregation Device
 Limitations of MDL
 Temporal dispersion
 Advantages of MDL
 Temporal dispersion is less of a problem because of the “tag-along” procedure,
wherein new cases can be transferred in so long as the case is still ongoing.
 Solves geographical dispersion (within the federal system).
C.
Stays, Dismissals & Antisuit Injunctions ( indirect methods of aggregation)
Stays and Dismissals
 Stays involve getting a judge to agree to delay adjudication of a case at bar to await the
outcome of a related case in a different court.
 The intended effect is to push all litigation into the one court hearing cases.
 The difficulty is getting every judge to agree to stay their cases.
 The aggregation effect of a dismissal is to encourage parties to seek relief in another court.
 Again, there’s a problem of coordination of judges.
Antisuit Injunctions
 Unlike stays and dismissals, with an antisuit injunction there is no need to coordinate with
multiple judges; you only need one judge to agree with you and issue an injunction against
all other courts from hearing related cases.
 The theory is that there are duplicative suits going on in different forums, and you want
to use the antisuit injunction as a method of encouraging aggregation in one forum.
 Anti-Injunction Act
 Limits the power of U.S. courts to issue injunctions against state courts
 In Rem vs. In Personam Proceedings
 In Rem
 Standard Rule: the court that gets jurisdiction over a res can claim exclusive
jurisdiction over that res (and its associated case)
 In Personam
 Standard Rule: There isn’t a general power to issue injection
 Federal / State Interplay (Federalism and Supremacy Concerns)
 In Rem
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Same as usual. First court to possess the res can enter injunction against other. More
common with federal to state but has occurred with state to federal as well.
 In Personam
 SCOTUS has ruled twice in recent history (Donovan and Felter) that state courts
may not issue injunctions against federal courts where in personam.
 Federal injunctions against state courts are another matter, however.
 Anti-Injunction Act necessarily starts from the assumption that federal courts can
issue such injunctions, since the Act constrains this power. The general rule of
the Act is that federal courts cannot issue such injunctions against state courts,
except:
 (1) where congress expressly authorizes (e.g. interpleader);
 (2) when necessary in aid of a federal court’s jurisdiction; or
 (3) to protect or effectuate its judgments.
 But where do federal courts get the power to issue such injunctions against
state courts? The generally accepted answer is the All Writs Act, 28 U.S.C. §
1651.
 § 1651(a) “The Supreme Court and all courts established by Act of
Congress may issue all writs necessary or appropriate in aid of their
respective jurisdictions and agreeable to the usages and principles of law...”
 Baldwin discusses the scope of this power.
In re Baldwin-United Corp., 770 F.2d 328 (2d Cir. 1985) {p. 183}
 Court recognizes that the All Writs Act and the Anti-Injunction Act must be read in
tandem
 Federal courts may issue antisuit injunctions where the parties are “near settlement” (a
virtual res). Covers even those parties not (yet) involved in the settlement.
 The idea is to protect the court’s jurisdiction at least until the parties make a decision.
Antisuit injunctions don’t run against other courts, but rather they run against parties.
 One of the problems of such an injunction is giving notice to everyone, because
injunctions are not effective against an individual unless he has notice thereof.
An easier scenario compared to Baldwin is where the antisuit injunction runs against parties
who attempt to avoid federal judgment by filing parallel suits in state courts. What makes
Baldwin such a difficult question is that the injunction concerns nonparties.
Retirement Systems of Alabama v. J.P. Morgan Chase & Co., 386 F.3d 419 (2d Cir. 2004)
{p.188}
 District court uses antisuit injunction against Alabama court to prevent a parallel suit
which might derail possible settlement. 2d Circuit strikes down district court’s injunction.
 Shows the limits of Baldwin United. The power to issue antisuit injunction is confined to
situations where there is “actual or impending settlement.”
In re Bridgestone/Firestone, Inc., Tires Products Liability Litigation, 333 F.3d 763 (7th
Cir. 2003){p. 194}
 7th Circuit rules that an antisuit injunction is appropriate where, as here, the parties in a
federal case seek to contravene a federal ruling (here a denial of national class action
certification) by subsequently raising the same issue in state court.
 This issue is currently before SCOTUS; Tidmarsh doubts they will rule likewise. See
class notes for Tidmarsh’s rationale.
 See GM Pick-Up in personal jurisdiction section.
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 In In re Diet Drugs, 282 F.3d 220, 235 (3d Cir. 2002), the court held that , “[u]nder an
appropriate set of facts, a federal court entertaining complex litigation, especially when it
involves a substantial class of persons from multiple states, or represents a consolidation
of cases from multiple districts, may appropriately enjoin state court proceedings in order
to protect its jurisdiction.”
 Due to its limited permissible scope, antisuit injunctions are not an optimal aggregation
device either.
 For abstention, see brief mention at end of this section in class notes.
D.
Preclusion (another indirect method of aggregation)
Aggregation through Preclusion
 The idea is that we will preclude people from relitigating an issue once it’s been litigated the
first time.
 We don’t bring you into the first suit, but we bind you to the outcome. So it indirectly
can force people to join in the first lawsuit.
 Is this a useful device for aggregation?
 Benefits:
 You don’t have to join the lawsuit. Simplifies the lawsuit. One person litigates and
everyone else gets the judgment applied to them.
 Drawbacks:
 We know from the CCL life-cycle model that defendants tend to win earlier lawsuits.
 The first plaintiff might not adequately represent the other putative plaintiffs’
interests.
 An issue is precluded when (1) the judgment in a prior case was valid, final, and on the
merits; (2) the issue was actually litigated in the prior case; (3) the issue was determined in
the prior case; and (4) the determination was necessary to support the judgment in the prior
case.
 Settlement does not count as a valid final judgment on the merits.
 Claim preclusion has little application in the CCL context.
Offensive Collateral Estoppel
 A v. B litigate and A wins. Can C, D, and E all sue B and utilize the judgment against B in
their favor? This is offensive collateral estoppel.
 See class notes for defensive collateral estoppel; we spent little time on it.
 Limitations on Offensive Collateral Estoppel; where wouldn’t apply:
 (1) where the party could have joined the first case
 The law won’t reward those that choose to stand on the sidelines and only get
involved once they have a favorable judgment to rely on.
 (2) where inconsistent verdicts exist (defendants have won some and lost some)
 (3) when the incentives in the two cases are different
 I.e. where the first case involved a small potential liability and the second involves a
large potential liability. Particularly where later cases were unforeseeable
 See Hardy
 (4) where procedural opportunities are different.
 SCOTUS has so ruled, but this has very little application to complex litigation
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
One possible area of application would involve transnational litigation where
procedural differences make preclusion impossible
 (5) where there isn’t an identity of issues
 You can’t use preclusion unless the issue is identical in the two cases. Must be raised
in the same way in the same manner.
 Limitations 1-3 and 5 really make issue preclusion a less useful tool for aggregation
purposes.
 The problem in complex litigation is rarely that of the exact same parties attempting to
relitigate adjudicated issues/claims.
 Hardy v. Johns-Manville Sales Corp., 681 F.2d 334 (5th Cir. 1982) {p. 211}
 Where the first case did not provide sufficient incentives for the defendant to litigate it
fully (such as where subsequent lawsuits are unforeseeable), offensive collateral estoppel
will not attach.
 The 6th Circuit has gone so far as to say that collateral estoppel is not available in mass tort
cases.
 Even outside of the 6th Circuit, however, so many little doctrines have whittled away at
the application of offensive collateral estoppel to ultimately result in a virtual death by a
thousand cuts.
 Given that this is the case, and the mass tort litigation is one of the main situations for
complex litigation, offensive collateral estoppel is not very useful as an aggregation
device.
Preclusion of Non-Parties
 A v. B litigate and B wins. When C, D, and E sue B can B utilize the favorable rulings from
the first case to deflect the subsequent issue suits?
 This is preclusion of nonparties.
 One problem with allowing defendants to utilize preclusion in such a manner is that the CCL
life-cycle tells us that defendants tend to win early cases.
 But perhaps that gives all possible plaintiffs incentive to join/intervene in the early case.
 Martin v. Wilks, 490 U.S. 755 (1989) {p.222}
 Preclusion only applies against parties who were part of the first case (unless privity,
class actions, bankruptcy). Unclear whether based on due process or FRCP grounds.
 Court also states that joinder is preferred over preclusion.
 Shortly after SCOTUS so held, Congress enacted a statute reversing this decision in the
context of employment discrimination where (i) actual notice of the first proceeding, (ii)
reasonable opportunity to present objections to the judgment therein (i.e. intervention)
and (iii) so long as the nonparty’s interests are adequately represented
 Taylor v. Sturgell, 553 U.S. 880 (2008) {p. 232}
 A person who was not a party to a suit generally has not had a “full and fair opportunity
to litigate” the claims and issues settled in that suit.
 There is no such thing as “virtual representation”
 Six categorical exceptions exist to the general rule against preclusion of nonparties.
 (1) Where the non-party has agreed to be bound by the first case;
 (2) Where there is a pre-existing legal relationship (“privity) between the parties
 Qualifying relationships include, inter alia, preceding and succeeding owners of
property, bailee and bailor, and assignee and assignor.
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(3) Where “adequate representation”, including: properly conducted class actions and
suits brought by trustees, guardians, and other fiduciaries.
 (4) Where the non-party had assumed “effective control” of the prior litigation
 Requires effective choice as to the legal theories and proofs, opportunity to obtain
review.
 (5) A party bound by a judgment may not avoid its preclusive force by relitigating
through a proxy.
 (6) Where provided by statute (e.g., bankruptcy)
 Hardy v. Johns-Manville Sales Corp., 681 F.2d 334 (5th Cir. 1982) {p.241}
 Parties to the first case that settle before trial are effectively “non-parties” and are not
precluded by the ruling in that case, unless it can be proved they settled to avoid
preclusion.
III.
JURISDICTIONAL ISSUES WITH AGGREGATION
Personal Jurisdiction over Plaintiffs
 A court can exercise jurisdiction over a party where:
 (1) when a party consents to jurisdiction;
 (2) when the party is transitorily present within a state and is served with process while in
the state;
 (3) when a court has “general jurisdiction” over a party; or
 (4) when a court has “specific jurisdiction” over a party.
 The general rule is that a court has personal jurisdiction over plaintiffs who file suit.
 Exceptions: Involuntary Joinder & Non-Party Preclusion
 Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985){p. 276}
 A forum State may exercise jurisdiction over the claim of an absent class-action plaintiff,
even though that plaintiff may not possess the minimum contacts with the forum which
would support personal jurisdiction over a defendant
 Absent plaintiffs must receive adequate notice. Substantive due process is sufficient
where absent plaintiffs are given the opportunity to “opt out” of the class action.
 Opt-in is not required.
 Absent plaintiffs must be adequately represented
 In FN 3, the court cabined its decision to suits predominately for damages, expressly
excluding its applicability to suits for equitable relief, such as injunction.
 So it still remains up in the air whether the due process clause requires PJ (and thus
notice and opt-out) over plaintiffs in suits for predominantly injunctive relief (e.g.,
23(b)(1)(A) , 23(b)(2) class actions, or non-limited-fund 23(b)(1)(B)).
 This may make 23(b)(1)(B) limited fund cases unconstitutional unless minimum
contacts.
 There is also a question whether Shutts only applies to state court class actions.
 Tidmarsh thinks that minimum contact with the federal court system is sufficient
in federal.
 Shutts – Plaintiff jurisdiction
 Do we still not know whether personal jurisdiction is required over plaintiffs in
mandatory class actions, where no opt-out is allowed?
 We don’t know this
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Does it matter, since injunction will affect everyone anyway? Can we really balance
the relief of a valid plaintiff against another’s desire that no relief be granted?
 This is one of the arguments.
 Do we still not know whether Shutts’ ruling (and the damages/injunction distinction)
apply only to state courts?
 Shutts is a state-court class action, so there is a question of whether and how the case
applies in federal court, particularly in the mandatory class action context.
 Because the plaintiff has minimum contact with the federal court system, it probably
isn’t an issue in Federal.
Personal Jurisdiction over Defendants
 Residence or Minimum Contacts (International Shoe) – “specific jurisdiction”
Why a separate standard for plaintiffs?
 The burdens are not the same. Adequate representation and notice/opt-out opportunity
provide sufficient due process.
In re General Motors Corp. Pick-Up Truck Fuel Tank Products Liability Litigation, 134
F.3d 133 (3d Cir. 1998) {p. 283}
 3d Circuit ruled that it could not issue an antisuit injunction over plaintiffs who decided
to file for nationwide 23(b)(3) class action in state court after denied in federal court
because it lacked personal jurisdiction. (Different class counsel; different representatives)
 Affirms Shutts’ ruling that federal courts cannot exercise PJ over plaintiffs where no
consent, residence, personal contacts, or proper class action (with adequate representation
and opportunity to opt out).
GM Pick-Up Fuel Tank
 Compared to Bridgestone/Firestone?
 Is it that the class counsel/representatives are different?
 Tidmarsh doesn’t think that this is pertinent, particularly because the class was
never certified (finding of adequacy)
 Other differences: Nationwide service of process in Bridgestone. Not sure enough
though.
 Answer: They just take a different perspective on the issue.
Subject-Matter Jurisdiction
 FQJ – Federal question has to arise on the face of a well-pleaded complaint. It is typically
not good enough that a federal issue arises in the answer or amended pleadings.
 It’s oftentimes up to the plaintiff to structure his complaint so as to avoid or seek out
federal jurisdiction.
 DJ – Must be complete diversity (§1332) and there must be $75,000 in controversy by each
plaintiff.
 Also allows plaintiff to fairly easily, in many cases, avoid federal jurisdiction. Either
bring a claim for less than $75k or join a non-diverse defendant.
 Removal (§1441)
 A case is removable as long as the federal court has original jurisdiction.
 § 1332 – diversity
 § 1331 – federal question
 § 1369 – mass disaster (single accident) (requires only minimal diversity)
 All defendants must consent to removal.
12
 If no federal question jurisdiction, but diversity:
 The cases is not removable if brought in the home state of a defendant
 The case is not removable after one year from the date of filing.
 Syngenta Crop Protection, Inc. v. Henson, 537 U.S. 28 (2002) {p. 297}
 The All Writs Act does not give a federal court the power to sua sponte remove a suit
from state court (duplicative or no; in that case the proper solution is antisuit injunction).
 Section 1441 requires that a federal court have original jurisdiction over an action in
order for it to be removed from a state court. The All Writs Act, alone or in combination
with the existence of ancillary jurisdiction in a federal court is not a substitute for that
requirement
 The ALI and ABA both tried to get around the state-court/SMJ obstacle to aggregation.
Their proposed rules ultimately failed, however, on constitutional and impracticality grounds.
 Proposed something similar to an MDL Panel with removal and consolidation powers.
IV.
CLASS ACTIONS
A.
The Class Action Fairness Act (CAFA)
 Applies only to class actions. And only to diversity cases.
 The jurisdictional trigger is merely filing of a class-action complaint
 The CAFA was an expansion of federal jurisdiction over class actions.
 The usual assumption is that § 1332(a) still applies, but most cases fall under the usuallymore generous rule § 1332(d)
 Basic Rule: district courts have original jurisdiction over class actions for which there is
diversity between any member of the class and any defendant and the amount in controversy
is $5 million in aggregate. However, only applies to classes of 100 or more.
 See § 1332(d)
 Limitations
 100 or more class members
 If the primary defendants are primarily state officials (of United States state), does not
apply.
 Doesn’t apply to many securities actions, derivative actions, etc.
 Remember that this only applies to state law claims. Federal claims, would fall under
federal-question jurisdiction.
 Jurisdictional Abstention Doctrines
 Discretionary Abstention – Federal courts may choose not to hear a state action. (§
1332(d)(3))
 If more than 1/3, but less than 2/3, are from the same state; the primary
defendants are from the state; then a group of factors will be considered whether
or not to permit remand. See § 1332(d)(3)
 More closely resembles home state than local controversy.
 Mandatory Abstentions:
 Home State Exception (§ 1332(d)(4)(B))
 If “two-thirds or more of the members of all proposed plaintiff classes in the
aggregate, and the primary defendants, are citizens of the State in which the
action was originally filed” the action must remain in state court.
 But what is the total class size? (Preston) Who is a “primary defendant”?
13
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 Hannaford Bros.
 Local Controversy Exception (§ 1332(d)(4)(A))
 If more than two thirds of the class members are from the home state, a
“defendant against who significant relief is sought and whose alleged conduct
forms a significant basis for the claims” is a citizen of the state, the principal
injuries or any related defendant conduct occurred in the state, and no other
claims for the same or similar claims by same or other persons were filed
within 3 years prior to the current case.
Removal of Class Actions (§1453)
 The most important changes are:
 All defendants no longer need to assent in the removal
 The one-year limitation is no longer valid
 Can be removed even where the class was filed in a defendant’s home forum
 Parties can appeal a grant/denial of remand within 10 days and the court of appeals
has 60 days to rule thereon.
In re Hannaford Bros. Co. Customer Data Security Breach Litigation, 564 F.3d 75 (1st
Cir. 2009) {p.318}
 Home State Exception & CAFA Removal case. All plaintiffs and defendant were FL.
 The burden of proving an exception to federal jurisdiction under CAFA lies with the
proponent.
 The court is skeptical, in dicta, of the argument that defendant’s (POB in FL, incorp in
DE) incorporation state satisfied minimal jurisdiction.
 If the plaintiff fraudulently claims for the first time on removal that its claim is less than
$5million or similar arguments, the court will look through.
Preston v. Tenet Healthsystem Memorial Medical Center, Inc., 485 F.3d 804 (5th Cir.
2007) {p. 321}
 Sampling techniques may be used by the proponent to prove class size for application of
the exceptions to CAFA.
 In determining total class size, the district court must balance the need for discovery
while not unduly delaying the resolution of this preliminary question.
 CAFA eliminates the standard requirements of unanimous consent among the defendants
and the one-year removal deadline. § 1453(b).
CAFA § 1332(d)(11)
 If you have a “mass action,” i.e., an action with 100 or more joined persons, CAFA still
applies, even though not technically a class action.
 This provision is designed to try to combat the use of joinder to avoid CAFA application
to class actions.
B.
Class Actions Generally
 Class actions are contrary to the whole adversarial structure that we are used to because it
takes away individual control and gives that control to the class representative(s).
 What they really are is a preclusion device, because the outcome of the class action
precludes the later claims of any member of the class.
 Hansberry v. Lee
 It’s constitutional to bind class members (not representatives), so long as the class
representative(s) adequately represent the interests of the class members.
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
So the class action is an exception to the general rule that you can’t bind nonparties to
a judgment.
 Rule 23. Class Actions
 Under Rule 23, you have to meet all the requirements of (a) and you have to meet the
requirement of (g). Separate from that, you have to meet at least one of the requirements
of (b).
 (a) Requirements
 (1) Numerosity
 (2) Commonality
 Common question of law and fact (a common thread in the aggregation devices)
 (3) Typicality
 (4) Adequacy
 These are the four stated requirements, but there are two additional requirements
(“hidden elements”)
 (5) there must be a definable class
 Important for preclusion and notice purposes (for (b)(3)).
 (6) the representative must be a member of the class
 (g) Creates a rule for class counsel.
 Basically you have to demonstrate the financial and intellectual capacity and
experience to handle this case.
 (b) Types of Class Actions
 Basically, what (a) does is it describes why we would be willing to sacrifice the
individual prosecution of the claims. Gives us efficiency and adequacy. But what (b)
gives us are the actual reasons; i.e., the circumstances in which it makes sense to have
a class action.
 (1)(A) The traditional class action, descendant of old equity. Purpose is to stop
repetitive litigation that would prejudice somebody (a lot like interpleader).
 The specific requirement is the risk of “inconsistent or varying adjudications with
respect to individual class members that would establish incompatible standards
of conduct for the party opposing the class.”
 (1)(B) separate actions create a risk that as a practical matter that there will be a
substantial impairment of the interest of individual parties. (a lot like intervention or
required joinder)
 Rule 19 actually has an exception for class actions. So in effect (b)(1)(B) is the
required joinder provision for class actions.
 (2) injunctive class action which applies to all class members. Not derived from old
equity.
 (3) most controversial class action. Not derived from old equity.
 You can get a class action as long as there are common questions that
predominate and as long as the class action is superior to other methods of
adjudicating the case. Plus there are factors to consider in making this
determination (most of which go to the superiority element)
 The major difference between (b)(3) and the others is that (b)(3) is the only one which class
members can “opt out” of. This is due, in part, because (b)(3) actions involve damages,
whereas the others are for injunctive relief (though controversy exists with (b)(2)).
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C.
Rule 23(a) – Numerosity, Commonality, Typicality, Adequacy
Class Definitiveness and Numerosity
 Rice v. City of Philadelphia, 66 F.R.D. 17 (E.D. Pa 1974) {p. 344}
 Involves a class of present and future claimants
 Holds that a lower showing of definitiveness of the scope of the class is necessary in the
scope of a (b)(2) class versus a (b)(3) class.
 Since (b)(3) classes require notice and opportunity to opt out, whereas (b)(2) class
does not.
 The difference in remedy may be important as well. Injunctions can be more broadsweeping in their effect.
 Practical reasons for keeping a class more specifically defined
 Avoidance of federal jurisdiction (both by keeping it below the 100 person threshold and
defeating diversity jurisdiction)
 To keep notice costs low, since the plaintiff class will be responsible for paying for the
transmission of notice to all putative class members.
 Numerosity
 “One or more members of a class may sue or be sued as representative parties on behalf
of all members only if: (1) the class is so numerous that joinder of all members is
impracticable”
 If you look in the dictionary, impracticable = impossible. But, in application here, its
really interpreted more as “impractical”. Robidoux
 Usually, if you have over 100 you’re good. If you’re over 50 you’re probably okay;
if you’re under 20 you’re probably not okay.
 Robidoux v. Celani, 987 F.2d 931 (2d Cir. 1993) {p. 349}
 “Determination of practicability depends on all the circumstances surrounding a case, not
on mere numbers. Relevant considerations include judicial economy arising from the
avoidance of a multiplicity of actions, geographic dispersion of class members, financial
resources of class members, the ability of claimants to institute individual suits, and
requests for prospective injunctive relief which would involve future class members.”
Commonality, Typicality and Adequacy
 Commonality, Typicality & Adequacy
 Kind of blend together
 Trying to do two things: (i) maximize judicial efficiency and (ii) satisfy the
constitutional requirement of adequate representation (this is not just the job of (a)(4) but
one that is shared in by all three; thus, (a)(2)–(4) satisfy the constitutional requirements).
 Hansberry identified that constitutionality would be frustrated where contrary
interests exist within the class.
 Commonality (23(a)(2)) is the lowest threshold. It merely asks the question of whether
there is a common issue of law or fact.
 Typicality (23(a)(3)) is the next step. The claim of the class representative must be one
that is typical of the claims of the rest of the class members.
 Idea is that in pursuing his own interests, the class representative will be pursuing the
interests of the class.
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 Adequacy (23(a)(4)) trims closest to the ground. Deals with particularity. Idea is that on
the particular facts of the case, the class representative will adequately represent the
interests of the class.
 Examples of inadequacy include: mental incapacity, conflict of interest, etc.
23(g)
 It’s really quite rare that class counsel is the deal-breaker for class certification.
 There’s a disincentive for either side to raise this issue. The defense doesn’t
particularly want a better lawyer on the other side, and the plaintiff doesn’t want to
say that he’s inadequate counsel.
General Telephone Co. v. Falcon, 457 U.S. 147 (1982) {p.353}
 Falcon is by far the most significant case as to (a)(2) and (a)(3). But it’s unclear whether
they’re holding based on (a)(2) or (a)(3).
 Here, the plaintiff brings a promotion discrimination case, attempting to represent other
promotion plaintiffs but also hiring discrimination. He fails because he’s trying to
represent these specific claims rather than just “pattern or practice discrimination”.
 Recognizes that the requirements of 23(a) tend to merge. Key considerations for
commonality and typicality are judicial economy and fair and adequate representation of
absent class members.
 Adequacy, by contrast also includes competency and conflict-of-interest concerns.
 The court must conduct a “rigorous analysis” of the class action reqruiements.
In re HealthSouth Corp. Securities Litigation, 213 F.R.D. 447 (N.D. Ala. 2003) {p.361}
 “Fraud on the market” securities cases are easy to get the 23(a) requirements. This case
is an exception, because some class members knew some of the relevant information and
actually benefit from the conduct that harmed the others. This is a clear typicality/
adequacy problem.
 There will always be a certain amount of variance within the class, and that’s okay. But
here there is too much.
In re American Medical Systems, Inc., 75 F.3d 1069 (6th Cir. 1996) {p. 367}
 Penile implants case. Involved different models, curvatures, etc.
 You want to see a lot of overlap between the representative’s claim and those of the rest
of the class, and you want to see that the representative isn’t some sort of wacko.
 When considering adequacy, in addition to considering conflicts of interest between the
representative and the other class members, you also look at the competency and
capability of the representative. Here the representative had some mental issues.
 To this end, defendants have the right to depose the representative prior to trial.
There are essentially three types of class actions: commercial litigation, mass tort, and
employment.
 Commercial litigation, you’re not likely to have much problems with the 23(a)
requirements.
 Mass tort class actions however, you seem more problems with the 23(a) (particularly
(a)(4)) and (b)(3) requirements.
 The (a) challenges are likely due to the individualized nature of the injuries.
 Employment falls between.
D.
Rule 23(b) – Types of Class Actions
 Why do plaintiffs want the mandatory certifications rather than (b)(3)?
17
 They can’t be opted out of, which results in two consequences:
 As the plaintiff’s lawyer, you have more leverage (though data seems to suggest that
this gain is minimal since very few class plaintiffs actually opt out when given the
opportunity)
 The bigger issue is that it’s very expensive to give notice to all the class members
under (b)(3).
 SCOTUS has decreed that if you know who the class members are, you have to
give first-class notice. Thus electronic (free) notice has not yet supplanted paper
notice.
Rule 23(b)(1) Classes
 Rule 23(b)(1)(A)
 “Prosecuting separate actions by ... individual class members would create a risk of ...
inconsistent or varying adjudications with respect to individual class members that would
establish incompatible standards of conduct for the party opposing the class.”
 This case arises when individual plaintiffs would seek conflicting injunctions against
defendant if allowed to pursue individual actions.
 But if this is the case, how do class actions which qualify under this section pass the
(a)(3)/(4) typicality/adequacy requirement?
 This question has never been addressed, but there is a clear threat of internal conflict.
 Rule 23(b)(1)(B)
 “Prosecuting separate actions by ... individual class members would create a risk of ...
adjudications with respect to individual class members that ... would be dispositive of the
interests of the other members not parties to the individual adjudication or would
substantially impair or impede their ability to protect their interests.”
 We’re afraid that the interests of those we leave out, as a practical matter, will be
disposed of if we leave them out or if individual actions are maintained.
 A common example is that of a limited fund.
 In re Dennis Greenman Securities Litigation, 289 F.2d 1539 (11th Cir. 1987) {p. 380}
 If seeking monetary damages, you can’t use (b)(1)(A); only injunctive relief is available
under (b)(1)(A).
 There’s nothing incompatible with telling the defendant to pay money to one plaintiff
and to not pay another.
 Under (b)(1)(B), defendant argues that stare decisis effect would effectively limit the
ability of later plaintiffs to gain a favorable judgment
 This is the argument that works with intervention; however, it is not a valid reason to
allow class certification. This is a point of settled law.
 A settlement you’ve devised is not a limited fund for (b)(1)(B).
 In re Merck & Co., Inc. Securities, Derivative and “ERISA” Litigation, 2009 WL 331426
(D.N.J. Feb. 10, 2009) {p.384}
 Recognizes that there are situations where damages claims can be pursued in the scope of
a (b)(1) class action.
 In re Telectronics Pacing Systems, Inc., Accufix Atrial “J” Leads Products Liability
Litigation, 172 F.R.D. 271 (S.D. Ohio 1997) {p. 388}
 The mass tort area is one type of case where the plaintiffs are more likely to want to opt
out, because there are significant monetary interests on an individual level.
18
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 Mass tort claims are generally not going to fly under (b)(1), with the exception of perhaps
the limited fund situation under (b)(1)(B).
 Plaintiffs have tried to get things like medical monitoring injunctions, but courts have
been reluctant to certify.
Day v. NLO (S.D. Ohio 1992) and St. Jude Medical (8th Cir. 2005) {pp.413–17}
 Highlights the debate on medical monitoring cases being certified as class actions. The
modern trend is toward not recognizing medical monitoring as a valid basis for class
action certification.
In this vein, the ALI has proposed a rule that medical monitoring can be certified where more
purely injunctive. An example would be requiring the defendant to set up a clinic for the
specific purpose of monitoring the health of the plaintiffs.
 On the other hand, requiring the defendant to reimburse plaintiffs for visits to their own
doctors is more like monetary relief.
There is also controversy concerning whether or not state law recognizes the medical
monitoring theory.
In re Simon II Litigation, 407 F.3d 125 (2d Cir. 2005) {p.396}
 The Second Circuit rejects the limited-punishment theory.
 You don’t know what the ascertainable amount is since punitive damages are tied to
compensatory damages, and thus (under Ortiz) we shouldn’t use the (b)(1)(B) limited
fund standard.
Really, after Simon, there hasn’t been another good, plausible theory advanced to try to get
class certification for mass tort actions.
Separate Classes
 Completely separate classes
 Sub-Classes under one Umbrella Class
 Permissible under 23(c)(5)
 The problem with this approach is that the representative has to be able to adequately
represent all the subclasses. One common solution is to form a group of
representatives with plaintiffs from each subclass.
Rule 23(b)(2) Classes
 Rule 23(b)(2) is sometimes called the “civil rights class action” or the “injunctive class action”
 There is little difference between a (b)(1)(A) and a (b)(2) class action.
 The biggest reason for the passage of the latter was, indeed, for the purpose of validating
civil-rights class action.
 It is possible to sneak a little bit of monetary damages into (b)(2) class actions.
 While the statute text is silent, the Advisory Committee notes and early courts seem to
suggest that money damages can fall within (b)(2) if not the predominant remedy sought.
 Allison (5th Cir.) said that monetary damages were not allowed under (b)(2) under
virtually any circumstances.
 Monetary damages only allowed where “incidental”, that is, applicable to the class as
a whole and must be able to be easily determined or calculable.
 Functionally what Allison does is makes it impossible to bring monetary claims under
(b)(2).
 Robinson v. Metro-North Commuter Railroad Co., 267 F.3d 147 (2d Cir. 2001) {p.401}
19
 Represents the 2d Circuit’s take on the question taken up in Allison. The circuits are split
on this question still, and thus SCOTUS is currently considering Dukes v. Wal-Mart.
 Rejects the bright-line approach of Allison. Instead applies an ad hoc approach for
determining when monetary relief is appropriate under (b)(2).
 Courts should satisfy themselves that: “(1) even in the absence of a possible monetary
recovery, reasonable plaintiffs would bring the suit to obtain the injunctive or
declaratory relief sought; and (2) the injunctive or declaratory relief sought would be
both reasonably necessary and appropriate were the plaintiffs to succeed on the
merits.”
 Basically, the injunctive relief has to predominate.
 Although Robinson groups front and back pay with injunctive and equitable relief, those
courts following Allison still consider this relief monetary (and not even “incidental”) and
thus disallows it for (b)(2) actions.
Opt-Out Rights for Mandatory Class Actions
 The standard view is that unless you’re in a (b)(3) class, you have no opt-out right.
 There is also the question of whether mandatory participation violates constitutional due
process rights.
 This question was addressed in Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985).
 The defendant argued on due process grounds that an “opt-in” election is
constitutionally required, rather than an opt-out election.
 In dicta the Court said, “Our holding today is limited to those class actions wholly or
predominately for money judgments. We intimate no view concerning other types of
class actions, such as those seeking equitable relief.”
 SCOTUS has granted cert on this issue 4 times and has each time declined to address the
issue directly. One thing the Court has noted in dicta that where you’re talking about
monetary damages, there may be some issue of questionable constitutionality.
 Shutts raises the issue that (b)(1) and (b)(2) are unconstitutional for due process reasons.
Rule 23(b)(3)
 The (b)(3) class action has always been seen as the monetary class action.
 Two elements under Rule 23(b)(3) you have to show:
 (1) that there are common issues of law or fact that predominate over individual issues of
the members of the class; and
 Not a requirement in (b)(1) and (b)(2) actions, though the idea of “coherence” has
some similarity.
 (2) that class action is superior to any other method of resolving the dispute.
 There are also four factors to consider when evaluating predominance and superiority,
though they really are all concerned with superiority:
 (A) the class members’ interests in individually controlling the prosecution or defense of
separate actions;
 (B) the extent and nature of any litigation concerning the controversy already begun by or
against class members;
 (C) the desirability or undesirability of concentrating the litigation of the claims in the
particular forum; and
 (D) the likely difficulties in managing a class action.
20
 This is by far the most important of the four.
 Most cases today seem to focus more on the “predominance” and “superiority” elements than
the four factors.
 You can more or less divide (b)(3) class actions into “commercial” and “mass tort”
categories. This is because mass tort actions really have unique issues.
 Negative-Value Suit
 Also known as Small-Value Suit
 Class actions are most useful and most necessary in cases that aren’t worth bringing on
their own.
 Thus the idea of a negative value suit is that even if you win, you pay more in
attorney and court fees than you can recover.
 These cases used to be (and sometimes still are) seen in a very negative light, since they
create litigation where there would otherwise be none. Also because class counsel reaps
large fees
 Today, however, courts are almost uniformly of the view that these sorts of cases are
what class actions are for.
 Smilow v. Southwestern Bell Mobile Systems, Inc., 323 F.3d 32 (1st Cir. 2003) {p.426}
 Example of the negative-value suit. The class representative Smilow was only wrongly
charged for one incoming phone call. A classic consumer fraud case.
 “The individuation of damages in consumer class actions is rarely determinative under
Rule 23(b)(3). Where common questions predominate regarding liability, then courts
generally find the predominance requirement to be satisfied even if individual damages
issues remain.”
 The best way to make this a non-issue is to produce testimony that the damages
awards will not be so difficult to administer. (i.e., manageability)
 Statistical sampling?
 Klay v. Humana, Inc., 382 F.3d 1241 (11th Cir. 2004) {p. 432}
 Nationwide class action of almost all doctors against almost all HMOs.
 You take the case as a whole and ask whether the common issues predominate; the
question is one of weight rather than quantity.
 “Put simply, if the addition of more plaintiffs to a class requires the presentation of
significant amounts of new evidence, that strongly suggests that individual issues are
important.”
 “In a multi-state class action, variations in state law may swamp any common issues and
defeat predominance. Class certification is impossible where the fifty states truly
establish a large number of different legal standards governing a particular claim. On the
other hand, if a claim is based on a principle of law that is uniform among the states, class
certification is a realistic possibility.”
 If only a couple different state laws  subclass
Commercial (b)(3) Class Actions
 Kirkpatrick v. J.C. Bradford & Co., 827 F.2d 718 (11th Cir. 1987) {p. 448}
 There’s always sort of a view that you shouldn’t certify these big securities class actions
because of conflicts of interests.
 Private Securities Litigation Reform Act
 Changes the ordinary class action rules
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Creates a presumption about who the class representative is. Presumptively, the
class representative is the plaintiff with the largest claim at stake.
 23(a) factors and superiority & predominance are the same.
 In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305 (3d Cir. 2008) {p. 455}
 As a general proposition, anti-trust cases have traditionally been even easier than
securities claims to certify.
 Yes, there are some individualized damages issues, but these can generally be
resolved.
 What’s important about this case is: It resolves a lingering question about whether and to
what extent the trial court can delve into the merits of the case in making the certification
decision.
 The trial judge cannot just except a threshold showing of the requirements of the Rule
23. You have to make determinations of fact and law necessary to satisfy the
“rigorous analysis” requirement of Falcon. Thus, the court must consider the merits
of the claim, where necessary for this purpose.
Mass Tort (b)(3) Class Actions
 There are particular difficulties that Mass tort actions encounter
 Almost all tort actions are going to be based on state law. So there will usually be
multiple state laws that apply in any particular mass tort class actions.
 Unlike a lot of commercial suits, a lot of mass tort cases involve enough money to justify
individual suits. (i.e. commonly not negative-value suits)
 Jenkins v. Raymark Indus., Inc., 782 F.2d 468 (5th Cir. 1986) {p. 467}
 Asbestos mass-tort class action. Court suggests broader application of class actions.
 Individual issues tend to predominate mass tort actions, but in cases like asbestos, the
courts didn’t feel like they had any other alternative.
 It’s possible that subclasses or bifurcation could help solve.
 Castano v. American Tobacco, 84 F.3d 734 (5th Cir. 1996) {p. 471}
 180 degree shift from Jenkins. Smoker class action, perhaps largest ever attempted.
 Variations in state law claims can defeat 23(a)
 In evaluating predominance, the court should look past the pleadings at the merits of the
case.
 The court here was (incorrectly) preoccupied with the pressure for settlement created by
mass-tort class actions and with the fact that the case had not yet matured (i.e., wait for
more individual cases so the parties have a chance to figure it all out).
 Also is concerned about Seventh Amendment issues inherent in bifurcation between
negligence and contributory negligence issues. An argument Tidmarsh doesn’t buy.
 It is very hard to get class certification on mass torts after Castano and its ilk.
E.
Settlement Class Actions & Limited Funds (Amchem & Ortiz)
 The motivation from the defendant’s perspective for agreeing to a settlement class action is
to effectuate a global settlement.
 Because of the different nature of settlement class actions, the standard policy arguments
regarding class actions have different weight.
 The concern that class actions excessively deter defendants’ behavior disappears;
defendants have agreed to the settlement’s terms.
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 Likewise, the court’s manageability concerns are downplayed; the case will never be
litigated.
 On the other hand, concerns for adequacy of representation and collusion dramatically
rise; the defendants might have shopped for lawyers who gave them the best deal, and
who sold out the class in return for a hefty fee and little work.
You can’t achieve a global settlement class under (b)(3) because, for one, plaintiffs have a
right to opt out. Shutts
Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) {p. 493}
 Asbestos global settlement class action involving present and future plaintiffs.
 Ranges developed depending on disease; no accounting for inflation; limited opt-out
 Predominance case
 Conflict of interest b/w present and future; conflict b/w injured and consortium
(who got nothing)
 There is a presumption against using a 23(b)(3) class action for mass torts.
 Settlement class actions must comply with all the criteria of any other class action, except
that of “manageability” since the case won’t actually be tried.
 23(e)’s mandate that a settlement by “fair” is not a substitute for the 23(a) , (g)
criteria.
 Where there are or should be subclasses, the distinct interests of each subclass must be
represented in reaching a settlement and in order to gain certification.
 You can’t have a sprawling class action.
 Due process – how do you give notice to everyone?
Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) {p. 506}
 Asbestos mass tort settlement class action, also involving present and future claimants.
 Here there is provision for inflation
 The theory for settlement is a limited fund under (b)(1)(B) based upon agreement of
the parties (which obviously doesn’t fly; it has to be everything they got).
 SCOTUS Holds
 The parties cannot construct a limited fund by agreement.
 Otherwise, there are Rules Enabling Act concerns of affecting substantive rights
 Requirements for a limited fund:
 (1) The fund must be inadequate to satisfy all the claims against it
 (2) The entire fund must be devoted to satisfying these claims
 (3) There must be equitable dispersion of the funds (often pro rata)
 This issue gets murky when you have present and future claimants.
 One good way to address this equity consideration is by sub-classing.
 The settlement cannot provide the basis for commonality, typicality, adequacy.
 A fairness hearing is no substitute for the elements of a class action
 If the limited fund is stretched beyond its permissible bounds there are rules enabling
act concerns. There’s a process called bankruptcy that this circumvents
 There are also due process concerns under Shutts with a mandatory class action for
damages since no notice/opt-out.
Note: There is very little reason for a defendant to enter into a limited fund settlement: if they
really had to pay in the full value of the defendant's assets, defendants will not have a reason
to settle for that number (why not just litigate them)
Both Amchem and Ortiz limit the scope of Rule 23
23
 Rules Enabling Act
 Due Process
F.
The Scope of Preclusion and Collateral Attacks on Class Judgments and
Settlements
 The whole point of the class action is that the judgment binds the members of the class.
 If the members of the class are free to go out and bring new lawsuits, you lose most of the
benefits of the class action as an aggregation device.
 The trade-off between plaintiff autonomy is only acceptable if there is adequate
representation. Hansberry v. Lee.
 Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867 (1984) {p. 526}
 Court holds in a class action, preclusion only occurs with respect to claims that were
actually litigated, as opposed to those claims that are transactionally related to those
actually litigated. Also applies to findings of fact on which the decision was based.
 Cooper is not the problem of inadequate representation. See Stephenson.
Collateral Attacks
 Hansberry v. Lee
 Constitutionalized adequate representation.
 Today, judges will always make a finding of adequacy of representation.
 Plaintiff will have to challenge the adequacy of the representation on the issue, then on
the claim. If both are proved, then no preclusion will attach.
 Stephenson v. Dow Chemical Co., 273 F.3d 249 (2d Cir. 2001) {p.536}
 Agent Orange post-settlement case. Plaintiffs fell outside of the settlement timeframe.
 Can you allow for a collateral attack?
 Shutts –class members do not need to appear in court to contest adequacy. They can
assume that they are adequately represented.
 2d Circuit (plurality) holds that collateral attack is permissible.
 The problem with this decision is that it really detracts from the finality of the
class action.
 The modern trend is away from collateral attack, and even the 2d cir has done so.
 This enhances the finality of class actions, but potentially sacrifices equity.
V.
CHOICE OF LAW
 The whole point of conflict-of-law is deciding which state’s law to apply to a claim where
more than one state’s law could apply.
 Lex Loci
 The place of the injury/transaction is the place whose law is applied.
 The problem is that such hard and fast rules tend to result in inequities in individual cases.
 Also may not even result in the law of one state, since parts of a given transaction may
occur in multiple states.
 The most common approach in modern jurisprudence is “most significant relationship” to the
particular transaction/occurrence.
 Like LL may not even result in the law of one state.
 Interest analysis – a procedure of eliminating states through comparison of interests in the
transaction/occurrence.
 Has proven rather unpopular
 Lex fori
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 Law is that of the forum where complaint was filed.
Today, each state has its own choice-of-law rules
So far, no states have developed choice-of-law approaches to address the problems of massinjury litigation.
Constitutional Concerns.
 Shutts
Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) {p.637}
 Holds that the Due Process and Full Faith and Credit clauses of the Constitution limit the
application of choice of law.
 A state’s law can only be selected only if significant contacts (or aggregation of contacts)
exist between the state and the transaction.
 At least for substantive issues.
 Also rules out lex fori as a blanket rule.
The typical choice-of-law rule for procedural law is that courts can apply their own
procedural law, even if they do not have sufficient contacts to support the use of their own
substantive law.
State Law Claims
 Erie – state substantive law applies; there’s no federal general common law.
 Klaxon – a federal court has to apply the choice of law principle of the relevant state.
 In the context of § 1404 transfers, the choice-of-law rule that applies is that of the
transferor court.
 § 1407 Multidistrict Transfer
 SCOTUS has never addressed it, but the assumption (based on lower court decisions)
is that, as with 1404, the choice-of-law applied is that of the transferor court.
 The MDL Panel does not consider choice-of-law issues
 Vioxx
In re Vioxx Products Liability Litigation, 239 F.R.D. 450 (E.D. La. 2006) {p.645}
 “Federal courts sitting in diversity must apply the choice-of-law rules of the forum state.
 In MDL cases, the forum state is typically the state in which the action was initially
filed before being transferred to the MDL court.”
Federal Law Claims
 Different circuits often take different rules with regard to federal law. Also, states apply
federal law as well. These situations are where the issues arise.
 Korean Air Lines
 MTBE
In re Korean Air Lines Disaster of September 1, 1983, 829 F.2d 1171 (D.C. Cir. 1987)
 Where federal law claim is transferred, the choice-of-law rules of the transferee court
applies.
 § 1407 transfers are for the just and efficient conduct of the litigation. Application of
multiple laws frustrates this purpose.
 Problem with this is what happens when the case is remanded:
 Since this is an MDL case, after Lexicon, the cases will be transferred back to their
transferor courts after pretrial proceedings. So what happens at that point?
 What Ginsburg says is that once law becomes the “law of the case” when the case
gets remanded, the law applied to it by the MDL transferee court is that which the
transferor court must apply once it gets the case back.
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 The Korean Airlines Approach is pretty entrenched at this point. The interesting thing is that
it’s so different than what we do for state law.
 In re Methyl Tertiary Butyl Ether (MTBE) Products Liability Litigation, 241 F.R.D. 435
(S.D.N.Y. 2007) {p.661}
 Case holds that when adjudicating class certification under Rule 23, the law of the
transferor court should be applied since SCOTUS in Amchem mandated that classes
should be certified as if going to trial.
 The argument is that §1407 talks about the just and efficient resolution of litigation. In
this case, this is a procedural rule. This case will have to go back to the transferor court
eventually, under Lexicon. Rule 23 determinations must be made as if going to trial, so it
makes more sense to apply the law of the court where the case will be tried.
 Tidmarsh says he actually likes this because it’s logical; but where do you draw the
line? Thus he thinks it goes too far.
 This flips the general rule that the court in which a case is sitting gets to apply its own
procedural rules.
Judicial Manipulation
 It rarely happens that the law of one state will apply under varying choice-of-law approaches.
 However, since many states apply a balancing test for choice-of-law decisions, these
decisions are easily manipulable.
 Ysbrand v. Daimler Chrysler Corp., 81 P.3d 618 (Okla. 2003) {p.668}
 Nationwide class action claiming defective airbags in Chrysler minivans. State
miraculously manages to apply the law of one state to the entire action.
 Applies the law of the defendant corporation’s principle place of business.
 Example of manipulation
 The rule that the law of the corporate HQ applies has garnered some support.
 It has been more common to apply it in tort actions than others.
 Chicago Air Crash Disaster Case
 Litigation commenced in 6 different federal courts. State law claims, so transferor courts’
choice-of-law rules applied.
 Issue is whether there should be punitive damages applied.
 Goes through the choice-of-law rules of each jurisdiction, but ultimately determined that
punitive damages were not applicable in any.
 Court below had allowed punitive damages for the plane manufacturer, but 7th
Circuit reapplied the analysis and came out with no punitive damages for anyone.
 Example of how manipulable choice-of-law rules can be to achieve a desired result.
 Regarded as the leading case for unabashed manipulation of COL rules for uniform
 Academic commentary is unanimously against the result.
 Problems with the Manipulative approach to Choice-of-Law Rules
 Not every judge is going to do it.
 Shutts – there are Constitutional limits on the states’ choice of law. There must be
significant contacts between the state whose law is applied and the individual class
members.
Solutions to the Choice-of-Law Problem
 Federal Common Law
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 The idea is that if the court can find that the case/claim is one that falls within federal
common law, it can displace whatever state law basis there was for the claim and apply
its own law, with jurisdiction under § 1331.
 Thus federal common law has dual advantages: It creates jurisdiction in federal court,
in which aggregation is easier; and it displaces fifty (or more) potentially different
laws with one law, thus reducing the incentive to disperse litigation and making
aggregated more manageable during the pretrial and trial phases.
 The reality is that while this may be a good theory, SCOTUS has held it fails in practice.
 Separation of Powers and Federalism are the greatest concerns
 There are some pockets of foreign common law that still are permissible, but these do not
have any general application to complex litigation.
 See list of six areas in reading notes. (if desired; none apply to CCL).
 See Kohr, for example of how federal common law could be applied. Was ruled upon
during a time of relative-acceptance of federal common law. Today it probably wouldn’t
hold.
 See Agent Orange (2d Cir. 1980). A more realistic enactment of the idea of federal
common law.
In re “Agent Orange” Product Liability Litigation, 635 F.2d 987 (2d Cir. 1980) {p.680}
 Just shows the tremendous difficulty of applying federal common law.
 The federal interests in this case are just extraordinary; but still, the court declines to
apply federal common law.
National Consensus Law
 See Agent Orange (E.D.N.Y. 1984)
 NCL seems to be a one-case solution. Judge Weinstein himself has refused in all other
cases to adopt a national-consensus law. Also, the 2d Circuit has expressed some serious
reservations about the technique.
In Re “Agent Orange” Product Liability Litigation, 580 F. Supp. 690 (E.D.N.Y. 1984) {p.
688}
 The federal interests in this case just overwhelm the individual states’ interests in
controlling the case.
 Weinstein finds that every state in the nation would choose a single law to govern this
dispute, recognizing that their own interests are less than the federal interests.
 Thus he applies a national-consensus law.
 A national-consensus law would be one uniform law that all states agree upon as the
proper law that should apply. Would be the manifestation of a compromise among the
states.
 Applies von Merhen approach, that states should come to a compromise.
Law of the Most-Restrictive Jurisdiction
 In Re School Asbestos Litigation, 977 F.2d 764 (3d Cir. 1992) {p.697}
 Plaintiffs consent to the application of the law of the jurisdiction most restrictive on
their claims. The problem is that if they lose, there are serious dangers of collateral
attack by plaintiffs that haven’t been adequately represented.
Choose One Law that Applies and Let Class Plaintiffs Opt-In
 Bendectin litigation.
27
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MDL transfer situation where plaintiffs were essentially given the choice to stay in
the transferee court and participate in the class action or transfer back to their
respective transferor courts.
 After the Bendectin plaintiffs lost, this has been an unpopular approach.
 Adopt a Federal Choice-of-Law Rule
 ABA and ALI proposals meant as a statutory overturning of the Klaxon decision (which
mandated federal courts to use forum states’ choice-of-law rules).
 Overturning Klaxon should be legislatively possible, since that case was not
obviously a constitutional decision.
 Just choosing a single choice-of-law rule doesn’t necessarily lead to one substantive law
for application.
 This is why the ABA and ALI rules emphasize an attempt to adopt a uniform
substantive rule; but attempting to do so and actually doing so are different matters.
VI.
PRE-TRIAL ISSUES
 Certainly in complex cases, the notion that judges are going to need more power to manage
the case is somewhat unremarkable.
 It is more or less accepted that judges will be more active in the management of the case
from the beginning, starting as early as discovery.
 Managerial judges are a move away from the pure adversarial model.
 There are risks that as the judge becomes a more active participant, he becomes invested
and may become predisposed to one side or the other.
 The modern notion of case management originated in the context of complex litigation.
 The reason is that these cases are so massive that if parties were left to their own devices,
there would never be any resolution to these cases.
 As judges become more involved in cases, they inevitably change the outcomes of cases.
There is an argument that these changes lean in favor of the judge’s own predisposition, but this
may or may not be the case
A.
Selecting Counsel and Judges
 One of the judge’s greatest case management power is the power to select class counsel.
 Thus, they virtually all deal with plaintiff counsel.
 It is not an insignificant power to reduce the amount of lawyers that you have to deal with as
a judge. This makes the process similar to a “normal” case from the judge’s perspective.
 This also raises the question of judges influencing results through counsel structure.
 Manual for Complex Litigation, Fourth
 Judges should create counsel structures for plaintiffs.
 Judges do not usually do this for defendants, who generally each have their own
counsel.
 Provides a menu of options:
 Lead Counsel: represents everyone
 Strongest possibility
 Huge change to the traditional form of litigation, wherein each plaintiff has the
right to choose his own counsel.
 The attorney doesn’t know me or my particular case.
 Trial Counsel
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Let each lawyer manage its way through the pretrial process, but then limit their
involvement in the trial phase.
 This is a rare result.
 Usually what is done is that this option is used in conjunction with others.
 Committees of Counsel
 Appoints a group of lawyers to act as lead counsel (usually). Lawyers within the
committee are given their own responsibilities.
 What the judge is trying to do in creating such a committee is to pick lawyers that
maximize plaintiff class representation without having to deal with each attorney
of all the individual plaintiffs.
 Usually, there are a relatively small number of players anyway, so it’s often
not so hard to select the committee counsel.
 Sometimes some people are put on the committee as “investors.” These
‘investors’ front the money for the litigation and get their cut on the back end.
 This is a hush hush but practical reality. The fact is that oftentimes there is a
standout financier among the plaintiff counsels
 Liaison Counsel
 Judge just picks one lawyer responsible for communications between the court
and the other counsel.
 Most common use is with defendants.
 Less common today with the invention of electronic communication.
 Each of these options are permissible, and judges can use one or many of them in a
given case. (or potentially none of them).
Vincent v. Hughes Air West, Inc., 557 F.2d 759 (9th Cir. 1977) {p. 721}
 Acknowledges the authority of the judge to make these assignments of counsel.
 The argument ultimately comes down to one of “inherent power”
 The court has “inherent power” to manage the case in order to move it forward,
including appointing general counsel.
 This was the key holding of MacAlister v. Guterma (2d Cir. 1958) too.
 Everyone now acknowledges that this inherent power exists. It’s an accepted proposition.
 However, the Supreme Court has never blessed this idea nor defined its origin/scope.
Part of the problem in Vincent was that the court just allowed the lawyers to decide among
themselves who would represent the plaintiff class. This approach can lead to back-dealing,
collusion, foul play, etc.
Chayes vs. Fuller
 Fuller – when you get to complex cases, what inevitably happens is that you cannot solve
them within the adversarial system.
 What were really doing is ‘shoe-horning’ or narrowing down an adversarial dispute
into something that kind of looks like an adversarial dispute but in fact isn’t.
Auctioning
 Involves potential attorneys bidding for class counsel. Idea is to get the best deal for the
class.
 But why is the court doing this? It almost seems like the judge is acting as the
fiduciary of the class counsel, which is obviously impermissible.
 The motivation is largely avoiding “agency cost,” that is, the threat that attorneys’ own
private interests will be elevated over the interests of the clients.
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 By choosing a particular fee arrangement, the judge was necessarily making judgments
about the future outcome of the case. Thus, the judge unavoidably invests the court in a
given outcome. Obviously there are huge problems with this.
 In re Cendant Corp. Litigation, 264 F.3d 201 (3d Cir. 2001) {p.724}
 Auction method was ruled improper here (on the facts), pretty much ending the practice.
Ethical Responsibilities of the Lawyer
 In both Agent Orange and Georgine, the court fails to find an ethical violation. However, in
both cases, the court recognizes that the rules are different in large, aggregated cases.
 There are inherent conflicts that are part of complex litigation.
 In re “Agent Orange” Product Liability Litigation, 800 F.2d 14 (2d Cir. 1986){p. 734}
 It’s impossible to avoid conflicts of interest when representing a class action. This is
because there are usually conflicts within the class itself.
 “We conclude that the traditional rules that have been developed in the course of
attorneys’ representation of the interests of clients outside of the class action context
should not be mechanically applied to the problems that arise in the settlement of
class action litigation.”
 The 2d Circuit comes up with a balancing test to deal with the issue of lawyer ethics in
representation in a class action. The test includes:
 The amount of actual harm :
 the amount and nature of the information that has been proffered to the attorney,
its availability elsewhere, its importance to the question at issue, as well as actual
prejudice that may flow from that information.
 The availability of substitute counsel:
 taking into account such factors as the nature and value of the claim they are
presenting, the ease with which they could obtain new counsel, the factual and
legal complexity of the litigation, and the time that would be needed for new
counsel to familiarize himself with all that has gone before.
 Georgine v. Amchem Products, Inc., 157 F.R.D. 246 (E.D. Pa. 1994), rev’d on other
grounds, 83 F.3d 610 (3d Cir. 1996), aff’d sub nom. Amchem Prods., Inc. v. Windsor, 521
U.S. 591 (1997) {p.739}
 The claim was that the attorneys’ interests were not aligned with those of the entire class.
They did not adequately represent the interests of the future claimants.
 The claims, specifically, were: (1) conflict of interest, (2) agreement not to bring
further lawsuits, and (3) collusion.
 Model Rule 1.7 provides: “A lawyer shall not represent a client if the representation of
that client may be materially limited by the lawyer’s responsibilities to another client or
to a third person, or by the lawyer’s own interests, unless: (1) the lawyer reasonably
believes the representation will not be adversely affected; and (2) the client consents after
consultation. When multiple clients in a single matter is undertaken, the consultation
shall include explanation of the implications of the common representation and the
advantages and risks involved.”
 Just because there is a difference in the amount of money does not necessarily mean
that the representation may be materially limited.
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 Model Rule 5.6(b) provides: “A lawyer shall not participate in offering or making: ... (b)
an agreement in which a restriction on the lawyer’s right to practice [i.e., not to file later
suit against defendants] as part of the settlement of a controversy between private parties.”
 Collusion is defined as follows:
 “An agreement between two or more persons to defraud a person of his rights by the
forms of law, or to obtain an object forbidden by law. It implies the existence of
fraud of some kind, the employment of fraudulent means, or of lawful means for the
accomplishment of an unlawful purpose. The secret combination, conspiracy or
concert of action between two or more persons for fraudulent or deceitful purpose.”
 Hard to prove.
 The Model Rules provide very little guidance to any of these questions
 What Weinstein (and others) argues is that you have to reconceive what constitutes your
client. The argument is that your client is the group of class members, as a whole, rather
than each individual member of that class.
B.
Narrowing Issues
 One of the most convenient way for a judge to push a complex case through the system is to
narrow the issues.
 The current orientation of our system makes this a job for the discovery stage, but to be
most efficient, this must be done even before that.
 The central feature of case management is the conference between the judge and the lawyers.
See FRCP 16(a).
 Typically there are a number of pretrial conferences during the course of a complex case.
 The first few conferences are usually devoted to organizing party and counsel
structures, establishing a schedule for such tasks as amending the pleadings and
joining parties, and setting in place the case-management plan for narrowing the
issues and conducting discovery.
Pre-Discovery Issues (Pleadings)
 Twombly
 Complex (antitrust) case
 Discussion in the majority about the costs of complex litigation, so in the front end courts
have to be sure that there is a claim.
 Underlying the majority view is that there isn’t much the court can do before the case
gets to summary judgment.
 Iqbal
 Not a complex case
 Giving judges power to dismiss cases at the front end can lead to the dismissal of valid
cases.
 Judges are likely to make mistakes, which are likely to be ratcheted in one way.
 Iqbal kills the possible reading of Twombly that there should be special pleading rules for
complex cases.
 It is quite common for courts to appoint a lead counsel, and then require that counsel to file a
consolidated complaint.
 This complaint covers everybody in the litigation. This is more a ministerial document
rather than a substantive document.
 It brings all the issues together in a single document.
31
 Consolidating complaints can change defendants’ rights. Small defendants that were
only being sued by a few parties are now being sued by everybody.
 Past Pleading but before Summary Judgment
 The actual authority in the FRCP is really limited. There is almost no authority in the
Federal Rules to limit issues in the pretrial phase.
 A lot of issue narrowing is done through case management authority that judges have
(Rule 16 – case management rule).
 A lot of things in Rule 16 arose as a matter of common law-like development among
courts in complex cases.
 Most of the actual the powers the judge has are found in Rule 16(c)(2):
 The court may consider and take appropriate action (Formulate issues, etc.)
 The Manual for Complex Litigation
 Sets out powers that are contained in the generalized grant of authority in 16(c). This
is a lot of powers that judges have a capacity to do.
Deadlines
 Power to Establish Deadlines
 Required by 16(b)
 The relationship between establishing deadlines and narrowing issues is not direct.
 If a judge narrows the length of time, it is going to force the parties to get to the heart of
the case.
 The problem is that this is not the way the parties are going to respond.
 The usual proposition to get deadlines to work:
 Early
 Must be long enough for parties to address central issues but not long enough to
develop all issues
 Firm
 The judge cannot cave on enforcement.
 The deadline that matters most is the trial deadline. This has the most significant
motivating force.
 Where is the line between getting a case to conclusion and inhibiting a trial on the merits
guaranteed under Due Process?
 The side that has more information tends to be advantaged by short deadlines (usually
defendants).
 This also skews litigation in favor of the richer party, who can employ more lawyers
to get around the time limitation.
 Empirical work has suggestion that across the board early deadlines do not have any
effect.
 Early firm trial dates do help process cases cheaply and quickly.
 Is this what we care about, or do we care about justice?
 In re Fine Paper Antitrust Litigation, 685 F.2d 810 (3d Cir. 1982) {p. 809}
 The judge has the power to limit discovery
 A judge’s limitation of discovery will not be overturned absent “a demonstration that the
court’s action made it impossible to obtain crucial evidence, and implicit in such a
showing is proof that more diligent discovery was impossible.”
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Bifurcation of Pretrial Issues
 The whole idea is that you only do certain pretrial issues at a time. The goal is that you find
an issue that is easy to discover and dispositive of the case, and you put that first.
 Of course, case disposition does not always result.
 In fact, there almost seems to be an inverse relationship between the ease of discovery of
an issue and its potential to dispose of the case.
 Vocabulary
 Technically, “bifurcation” involves splitting a case into two pieces, “trifurcation”
involves splitting into three pieces, and “polyfurcation” for more.
 Most courts and materials generically refer to all as “bifurcation.”
 Where is the authority for the judge to engage in bifurcation?
 The analysis begins with Rule 42(b), which allows cases to be broken up “to avoid
prejudice” or to further efficiency/economy. This rule, however, only talks about
separation for trial, but not for pretrial.
 It’s always been understood/assumed that this power to separate for trial also includes
the power to bifurcate pretrial discovery.
 In any case, trial and pretrial separation tends to go hand-in-hand. (though not
necessarily)
 Rule 16 – one of the case management powers that the judge has is to split up cases
pursuant to rule 42(b).
 Again, no explicit statement is made regarding pretrial bifurcation.
 Kos Pharmaceuticals, Inc. v. Barr Laboratories, Inc., 218 F.R.D. 387 (S.D.N.Y. 2003) {p.
815}
 Shows the arguments why sometimes bifurcation does not work out well for efficiency
and fairness.
 Sometimes the discovery overlaps, and one of the side-effects of bifurcation in this
circumstance (assuming not disposed of on the first issue) is that the same witnesses
may need to be deposed or give testimony at trial on multiple occasions.
 Costs, delays, prejudicial effect, etc.
 Good discussion of the benefits and drawbacks of bifurcation. (see reading notes)
 Ocean Atlantic Woodland Corp. v. DRH Cambridge Homes, Inc., 2004 WL 609326 (N.D.
Ill. Mar. 23, 2004) {p.821}
 Attempt to bifurcate between liability and damages (a common approach).
 The court focuses, in part, on the likely possible outcome that the case would be resolved
and disposed of (either by judicial decree or by settlement).
 Generally it is defendants who argue for bifurcation of liability from damages.
There’s pretty good data out there that when you bifurcate damages from liability,
defendants win more often. The reason is that you keep the jury away from the nittygritty of the damages. Liability is more theoretical, whereas damages is very real.
 In a class action, a possible strategy to achieve class certification is to bifurcate the common
issues from the individual issues. The intent is to get settlement on the latter issues (or on all
of them), but it’s not always going to work that way and bifurcation post-certification is
probably not the best thing for the plaintiff lawyer or class.
 Bifurcation, like many of the other devices we’ve studied is not outcome-neutral.
Bifurcation, in fact, is likely the most outcome-determinative device there is.
33
Pretrial Disclosures
 What these are really called is Lone Pine Orders, after the case where they were first
developed
 The idea behind them (they are particularly used in environmental disputes and mass torts) is
once the initial complaint is put forward, then the defendant requests particularized proof of
injury.
 There is no specific provision authorizing Loan Pine Orders.
 Acuna v. Brown & Root, Inc., 200 F.3d 335 (5th Cir. 2000) {p. 824}
 District court issues Loan Pine Order saying that for each plaintiff in the case, there
would be required an expert affidavit affirming injury and causation from exposure to the
defendant’s activities.
 The idea is that if you can’t produce this kind of specific information, then your case will
be thrown out. The minimum threshold is one of at least prima facie legitimacy.
 In this case, the doctor’s opinion was overly generalized and thus the court dismissed it.
 The Court of Appeals affirmed, holding that it is in the district court judge’s
discretion to issue these orders in its case management rule. Cites Rules 16 and 11.
 The Court of Appeals also held that the issuance of a Lone Pine Order is a matter of
discretion.
 In re Digitek Product Liability Litigation, 264 F.R.D. 249 (S.D. W. Va. 2010) {p.827}
 A multidistrict proceeding for a mass tort claim (but not a class action).
 The court here finds the use of a Lone Pine Order inappropriate, particularly here.
 Recognizes that there is no specific authority for the device. Decides it is better
practice to follow those devices that are expressly authorized by statute (E.g., FRCP).
 Recognizes that such an order is an extraordinary procedure, since it is often outcome
determinative.
 Requires a balancing of equity and efficiency.
Pretrial Stipulations
 The idea is that as the pretrial goes on, you try to force the parties to stipulate to as many
facts as possible
 United States v. AT&T
 Probably the biggest 2-party case in American history. Possibly the most important.
 Judge realizes the massive amounts of information involved in this case. So what he did
was to facilitate several rounds of stipulations.
 Requires the parties to make contentions, and provide factual support therefor, and
present these to the other party for stipulation or rejection. After several rounds of
this, he put them in a room and required them to agree on as much as possible.
 The process didn’t work so well. There were just thousands of contentions on each
side. It took two special masters and over a year of negotiation between the parties to
come to some sort of solution.
Expert Panels
 The reality is that in a lot of complex cases, there will be expert testimony.
 The particular question in complex cases is the admissibility of the experts’ opinions to
sweep away issues
 Hall v. Baxter Healthcare Corp, 947 F. Supp. 1387 (D. Or. 1996) {p. 844}
34
 Contested issue whether breast implants leaking silicone caused cancer.
 Judge appoints a panel of experts to advise him whether the expert testimony should be
admissible under Daubert.
 Authority cited is that of inherent authority to appoint experts to help sort out the issue of
admissibility.
 In the related MDL proceeding, the court used FRE 706
 Here the expert panel was appointed to offer their own opinions in the case (in
addition to the opinions offered by the parties’ experts)
 This approach doesn’t hold the same promise of narrowing the issues the way the
Hall approach does, but the consensus of a neutral panel of experts will typically
control the ruling on the issue.
Summary Judgment
 SJ, as written and construed, has some limitations as a narrowing device.
 Celotex – a motion for SJ can only be granted after the party opposing the motion has had
an opportunity for “adequate time for discovery”
 So from this perspective, SJ is not so useful as an issue-narrowing device during the
pretrial state. On the other hand, it can be a useful device for narrowing trial issues.
 You have to be entitled to get judgment, as a matter of law. It’s not simply that you want
to take an issue out of the case.
 So, as an issue-narrowing device, SJ is not very adequate; on the other hand, as a claimnarrowing device, it’s much more appropriate.
 See reading notes for new Rule 56. Tidmarsh acted like we wouldn’t need to know.
 Big Question:
 Is the standard interpreted any differently in complex cases; are you more likely to get SJ?
 The original view on this issue was that espoused in Poller. What SCOTUS said
there was that summary procedures should be used sparingly in complex litigation.
So there was always a presumption against the use of SJ in complex cases.
 Matsushita says otherwise.
 Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)
 SCOTUS gets rid of the Poller standard that SJ in a complex case is more difficult.
 The debate ever since Matsushita is whether the court’s decision thus make it more likely
that a motion for SJ will be granted for complex cases.
 Most courts, however, now generally decide the question about the same—at least in
theory.
 Portsmouth Square, Inc. v. Shareholders Protective Committee, 770 F.2d 866 (9th Cir.
1985){p.859}
 Even where the court raises a sua sponte summary judgment proceeding, it is on the exact
same terms as an ordinary SJ. Parties must be given opportunity to brief, etc.
 Under the new Rule 56(f), a judge is now explicitly able to grant SJ sua sponte. Before
that, the power was sort of implied and not entirely certain.
 Requires notice and a reasonable time to respond. The terms of summary judgment
are identical to when motioned by a party.
Takeaway
35
 The end of the story with issue-narrowing devices is that we don’t have any great ones. The
ones we have are kind of blunt and indirect.
 But it’s uncertain whether we really want them. The current system stresses discovery,
and is a move away from the old writ system (which itself was an issue-narrowing
regime).
 The fear (realized under the writ system) regarding issue-narrowing devices is that valid
claims/issues will be thrown out, ultimately to the detriment of one or both of the parties
C.
Discovering Information
 Two questions: (i) how do we handle the discovery process and (ii) how do we resolve
disputes that arise thereunder?
The Discovery Plan
 Rule 26(f).
 First step (particularly in complex cases) is a pretrial conference. From this, a discovery
order will be issued.
 Prior to the pretrial conference, however, the parties should meet and construct a
“discovery plan”
 Will specify things such as: how to handle disclosures, when discovery should be
completed, whether the discovery should be completed in phases, etc.
 How to handle electronically stored information.
 How to handle privileged and confidential documents.
 Discovery Plan
 Requests for admissions
 Depositions
 Documents
 It’s a rare complex case that does not involve tons of documents.
 How do you harness the documents?
 How do you get control of them all?
 Disclosure
 Preservation Orders
 Preservation Orders
 Meant to preserve documents relevant to the litigation and counter corporate documentdestruction policies.
 Document preservation orders are necessary, but they can be extremely costly to the
parties involved.
 The result is also not party-neutral. Invariably there is one party that is burdened more
heavily than the other by these orders.
 United States v. Philip Morris USA, Inc., 327 F. Supp. 2d 21 (D.D.C. 2004) {p.871}
Umbrella Protection Orders
 Umbrella Protection Order
 Parties can designate documents up front as confidential when provided to the other party,
thus pushing off questions of privilege and other confidentiality concerns until the
specific documents are going to be used in the litigation.
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
As long as parties designate something as confidential, its use is limited pursuant to
the terms of the agreement.
 A lot of times, these umbrella protective orders are negotiated by the parties.
 However, it’s still unlikely that any attorney-client or work-product documents will be
offered up. Thus, umbrella protection orders are not well-suited for these concerns.
 It does work well, however for doctor-patient privilege or trade-secrets.
 In re Southeastern Milk Antitrust Litigation, 666 F. Supp. 2d 908 (E.D. Tenn. 2009)
{p.883}
 This case had a two-tier umbrella: documents could be marked as “confidential” or
“highly-confidential”, with increased protections attaching to the latter.
 One problem with this device is that there is potential to just stamp everything as
“confidential”
 Also, judges have the power to modify, even allowing for public disclosure, so you still
have to be careful about what you hand over.
Using Discovery from Prior Litigations
 This is another, though less frequent device for streamlining litigation. The seminal case for
this device was United States v. AT&T.
 Government in that case decided to just go to parties that had sued AT&T before to get
the relevant documents to prosecute its case. The purpose was to save work and costs.
 AT&T threw a big stink over this. The main argument was that it gave those
documents to the other parties in confidence and that the case was not entirely
identical, etc.
 Government’s case really was for basically the same purpose as the other parties
 District judge decided to allow the Government to do so.
 So, if you have prior litigation, there is this possibility of getting documents from a prior
similar litigation. Likewise, you have to be aware of this, as the defendant, that the
documents you give up in one case could be used against you in a later case.
 In the real world, you might end up having to compensate the original discoverer for a
portion of their discovery expenses, since you’re benefitting from their work.
 However, in AT&T, and potentially in other cases, the parties from whom the documents
were obtained were more than happy to share their discovery.
 The most common place you see this tool employed is with regard to grand jury proceedings.
The defense will try to get the discovery from the government used by the grand jury.
 You usually don’t see much of this with litigation between two private parties. Typically the
government is on one side or the other.
Discovery of Electronically-Stored Information (ESI)
 Obtaining of ESI is extremely expensive, even with advances in technology over the last 20
years.
 Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003) {p.901}
 The famous case pre-2006 amendments to the FRCP.
 Pre-Rule 26(b)(2)(B), but is highly influential to our understanding of that rule.
 Demonstrates the challenges with ESI and how expensive it can be.
 There are also problems with “legacy information” (e.g., floppy disks, tapes, etc.)
37





 One of the problems with discovery is that we expect the party who produces the
information has to pay for it.
 So one threat in these sorts of litigation are that parties can abuse the power of
discovery, in order to impose significant costs on the other party.
 This is the problem of “asymmetrical information”, since this possibility is most
dangerous where one party has much more information than the other that is
relevant to the case.
 Holding in this case was basically that the information that is readily searchable was
discoverable, but that information that was not should be sampled to determine its
relevancy.
 Because of the possibility of these asymmetrical problems of costs in ESI cases, there
may be situations where cost-shifting is appropriate to the discovering party.
 Group of factors to be considered in the cost-shifting analysis:
 (1) The extent to which the request is specifically tailored to discover relevant
information;
 (2) The availability of such information from other sources;
 (3) The total cost of production, compared to the amount in controversy;
 (4) The total cost of production, compared to the resources available to each party;
 (5) The relative ability of each party to control costs and its incentive to do so;
 (6) The importance of the issues at stake in the litigation; and
 (7) The relative benefits to the parties of obtaining the information
 Out of all this came 26(b)(2)(B)
FRCP Rule 26(b)(2)(B) deals with ESI.
 It’s not obvious that this rule has really done very much.
 One reason for this may be that it was too little too late. The rule came out after
many of these issues had sort of been resolved.
Basic Rule FRCP 26(b)(2)(B):
 Flips the presumption. Now, there is a presumption that a party need not provide ESI
discovery where it believes that the information is not “readily accessible,” due to undue
burden or cost.
 But on a motion to compel the discovery, the party that wants to restrict discovery has to
show that the information is not ‘readily accessible,’ due to undue burden or cost.
 If such a determination is made, a court may still order discovery, if the discovering party
shows “good cause”.
 What constitutes good cause? Committee Notes list 7 factors that more or less track
Zubulake. (includes the three factors identified in 26(b)(2)(C)).
 The Court may additionally shift the cost burden, provided the Zubulake factors are met.
 This rule has not been favorably received by practitioners, nor is it apparent that it has
had any result.
FRCP 26(b)(2)(C) – proportionality rule
 Discovery can be limited where:
 3) when the burden or the expense of the discovery outweighs the burden of its
undertaking.
FRCP 37
 Limits sanctions for destruction of documents when automatic and unintentional.
FRCP 34
38
 Procedure for requesting discovery of ESI
 William A. Gross Construction Associates, Inc. v. American Manufacturers Mutual
Insurance Co., 256 F.R.D. 134 (S.D.N.Y. 2009) {p. 910}
 The keyword-searching case
 You can’t just do keyword searches
 Aguilar v. Immigration and Customs Enforcement Division, 255 F.R.D. 350 (S.D.N.Y.
2008) {p.913}
 Metadata case.
 The discovery issues that each type of metadata presents are unique.
 Takeaway: if you want metadata, it must be asked for at the beginning for best results.
 John B. v. Goetz, 531 F.3d 448 (6th Cir. 2008) {p.920}
 State of Tennessee was “behaving badly” and destroying data. In response, plaintiffs
want to take images of the hard drives. District court grants.
 Court of Appeals orders a writ of mandamus.
 Partly because of federalism concerns, privacy, etc.
 Apparently it is extremely expensive to do these forensic imagings of computer hard
drives.
Limiting the Quantity of Discovery
 Federal Rules limit interrogatories and depositions, but of course, these are subject to
modification by the judge. In fact, in complex cases, it’s impossible not to.
 Smith v. Lowe’s Home Centers, Inc., 236 F.R.D. 354 (S.D. Ohio 2006) {p. 927}
 Collective wage action which operates a little differently than classic class actions.
They’re “opt-in” actions. This is a procedure specifically proscribed by the FLSA.
 Lowes wants to do discovery on 1500 employees.
 The usual rule in a class action is that defendant cannot engage in discovery of individual
class members (with the exception of the named class representatives).
 The reason is that otherwise, defendants could make the process so lengthy and
expensive that it would make it prohibitive for plaintiffs.
 Court flirts with the idea of statistical sampling.
Staged Discovery
 “Staged Discovery” is an umbrella term which encompasses:
 Targeted Discovery
 Klien – Targeted discovery is a type of phased discovery; segmented by legal issue.
 Phased Discovery
 Wave Discovery
 See Reading Notes p. 137
 Klein v. King, 132 F.R.D. 525 (N.D. Cal. 1990) {p.935}
 “Targeted Discovery”
 Like bifurcation, but not as formal.
 With regard to the other issues in the case, he has a set of other procedures. It should be
kept in mind that the judge here was really pushing for settlement.
 (1) let the parties engage in limited, but intensive, discovery just on the core issues of
the case. Sets a limit for 3 months for document review, and 6 months for
interrogatories and depositions. Try to settle.
39
 (2) Solve any lingering issues from phase 1 that could lead to settlement.
 (3) Full discovery, if settlement fails after the first two phases.
 The flaw in the approach here arises if the case doesn’t settle. That would lead to
extensive repetitive discovery.
 In addition to the “targeted discovery” the judge here implements a sequenced or “wave”
discovery within the phases. Documents  Interrogatories  Depositions.
 Also suspended dispositive motions
 Defendants suggest, and the court rejects the defendant’s proposed time-period discovery
sequences. The reason the judge rejects this is because he wants to get to the core of the
case first.
 In re Freight Fuel Surcharge Antitrust Litigation, 258 F.R.D. 167 (D.D.C. 2009) {p.939}
 Phased discovery is like bifurcation; this case even refers to it as such
 Phased discovery is inappropriate where there would be a substantial overlap of issues
between different phases.
Non-Traditional Discovery
 One thing you can do is to conduct informational interviews instead of interrogatories and
interviews.
 The idea is to determine several questions, which you engage a neutral 3rd-party to ask
the witness.
 Tidmarsh doesn’t think this works well with important people who know a lot about the
substantive issues of the case. But they do work well for those that do not know as much
about the case, like a class plaintiff in a mass tort case.
 Usually facilitated by a court order, which specifies the questions to be asked.
Interviewees given 2 opportunities to show, otherwise the case can be dismissed under
Rule 37 for failure to comply with court-order.
 This last point is the real power of these, because they can be case dispositive.
Something like 10% of plaintiffs subjected to these don’t show up.
Sampling
 In re Simon II Litigation, 211 F.R.D. 86 (E.D.N.Y. 2002), vacated and remanded, 407
F.3d 125 (2d Cir. 2005) {p.971}
 Limited Punishment case. Weinstein decides to use statistical sampling to determine
compensatory damages from which to extrapolate to the class and assess punitive
damages.
 FRCP Rule 1, Rule 16, Rule 26(b)(2), Rule 30, Rule 33 are all cited by Weinstein to
support his power to structure the discovery process as such.
 He then cites the Manual and the Federal Rules of Evidence
 Arguments against Sampling:
 Violation of due process
 Weinstein’s response is to use the Matthews v. Eldridge approach for determining
procedural due process violations. Takes it out of Connecticut v. Doehr (p.976)
 The idea is the Hand Formula applied to procedure.
40


VII.
 There is a baseline procedure (the standard American adversarial model). As
we move away from that we have to balance: (i) the cost to the person that
would get that process with (ii) the cost to implement that process.
 Weinstein modifies this to be a balance between the cost to the defendant
and the cost to the legal system and plaintiff.
 The argument goes that there is no harm to the defendant if we adopt
the system, but huge harms to the plaintiffs and the legal system as a
whole.
Right to Jury Trial
 Jury trial right does not guarantee one-on-one adjudication of individual damage
claims.
 The 7th amendment was never intended to freeze a particular form of trial. It’s
flexible.
 Ex parte Peterson
Erie Doctrine
 Argument: this is not something that is allowed under state law and thus is
impermissible.
 Weinstein says there’s no indication that the state court would not adopt such an
approach.
TRIAL ISSUES
 Even though few cases actually reach trial, each case must be approached as if it is going to
trial.
 Plus, in a class action or other complex cases, the judge may require you to provide some
sort of trial plan.
 There are questions about how do you present information effectively, what are the roles of
the players at trial (judge, parties, counsel, jury), to what extent can you change a jury
structure in a complex case, etc.
 For the most part we assume that there is no exception to the Seventh Amendment for
complex cases.
 This was a big debate in the 1970-90s, but has only resulted in 6 cases, only 1 of the 3
cases granting the right to exclude juries in complex cases is still (maybe) good law.
Special Masters
 Rule 53 of the FRCP allows appointment of masters.
 They’re used a lot in complex litigation. Often they’re used for pretrial purposes.
 There is also the possibility of using masters for trial purposes as well. However, the
ability to get a master for trial purpose is tightly restricted.
 The Supreme Court has held that, as a routine matter, a master cannot be selected to
run the trial. The key concern is that judge’s cannot abdicate the judicial function.
 53(a)(1)(b) now doesn’t even allow the use of a special master in a jury-tried case.
 Therefore, the reality is that if these complex cases are likely going to be a jury trial, it wil
have to be presided over by an Art. III judge, and thus, we have to figure out a way to try
these massive cases in a way that makes the trial run more smoothly.
 One possible solution is to cut down these trials (i.e. limit the issues).
41
Bifurcation
 Benefits of Bifurcation:
 The idea is that if you can tackle subsets of information at a time, it’s more manageable.
 Also, if you split liability-damages, the defendant might settle upon finding of liability.
 Downsides
 Bifurcation benefits defendants (sterilization)
 Bendectin
 There is one big constitutional hurdle to the separation of issues at trial, that is, the
Seventh Amendment’s “reexamination clause,” which prevents the judge or any
subsequent jury from reexamining issues that have already been determined by a
factfinder.
 Thus you have to be very careful how you bifurcate a case.
 It’s also problematic as a matter of policy, as well. It’s not the American way; that’s the
French/Continental way.
 In re Bendectin Litigation, 857 F.2d 290 (6th Cir. 1988) {p. 1034}
 The reason bifurcation benefits defendants is that by separating liability from damages,
there is a risk that doing so will lead to a “sterilization of the issues”; the liability issue is
more theoretical if you don’t see the blood and guts.
 The sixth circuit affirms that trifurcation of issues is within the discretion of the trial
court, despite plaintiff claims of sterilization of the issues.
 Zeisel & Callahan Study
 Study inadvertently shows the strong correlation between bifurcation (between liability
and damages) and increased likelihood of defendant-favoring judgments.
 Thus, plaintiffs lawyers want to avoid. On the other hand, however, bifurcation also
gives advantages to plaintiffs, particularly in the class certification context. So there
is a balancing act that plaintiffs lawyers must make.
 In re Chevron U.S.A., Inc., 109 F.3d 1016 (5th Cir. 1997) {p.1048}
 Sampling case with 15 chosen by plaintiffs and 15 chosen by defendants to be used as
bellwethers.
 The idea is that these 30 cases will be tried all the way through and put to the jury.
 Then, the judge intended to use these bellwether cases as bases for settlement of the
other claims.
 Judge Parker, who wrote the district court decision in Cimino, writes this opinion. One
theory is that his point as to a “representative sample” (later labeled dictum in Cimino) is
merely laying the foundation for the 5th Cir. (on which he now presided) to affirm
Cimino.
 Dissent (Jones, J.)
 Separates himself from the suggestion that a bellwether method could be used to
extrapolate to non-bellwether plaintiffs where a statistical sample is representative.
No extrapolation is valid.
 Also recognizes Parker’s adjudication of Cimino.
 There’s still a life for bellwether trials. It need not be used to extrapolate to non-bellwether
plaintiffs (in fact after Cimino it probably can’t)
 The bellwether technique is really about how to try enough cases to get a good picture of
the claims of the class in order to encourage settlement.
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 Thus it is still one of the most useful tools for plaintiffs’ attorneys, even aside from the
extrapolation effect.
 Other Devices
 Reverse Bifurcation
 Damages tried before liability. Worked in asbestos litigation, where the liability
issues were more or less settled due to frequent litigation, but not so much anywhere
else.
 Wave Trials
 Blueprint Trials
 Really, the bellwether approach is the key approach.
 These are sort of like wave trials, except that you won’t be engaging in subsequent
“waves”
Trial by Statistics
 The basic idea is selecting a representative sample of the plaintiff class. You then adjudicate
their claims to determine the liability and damages issues with regard to this representative
sample. Then to extrapolate this to the remainder of the plaintiff class.
 We see in Hilao and Cimino, however, that it can get slightly more complicated with
subclasses.
 So far, courts have given actual awards to the members of the sample plaintiffs, whereas
the rest of the plaintiff class gets the average amount.
 Really, trial by statistics is one of the most efficient ways for us to try these complex,
aggregated cases.
 If you’re results oriented and do not like aggregation, you’re not going to like trial by
statistics. Probably.
 In re Simon II Litigation, 211 F.R.D. 86 (E.D.N.Y. 2002), vacated and remanded, 407
F.3d 125 (2d Cir. 2005) {p.971}
 See supra pretrial sampling
 In re Chevron U.S.A., Inc., 109 F.3d 1016 (5th Cir. 1997) {p.1048}
 See supra bifurcating trial issues; bellwether trial.
 Hilao v. Estate of Marcos, 103 F.3d 767 (9th Cir. 1996) {p.1058}
 Human rights violation case brought on behalf of tortured, executed, and “disappeared”
plaintiffs. Same case as Pimentel (Rule 19)
 Expert used to pick a random statistical sampling of the plaintiff class. These findings
were found to have a 95% statistical certainty.
 Special master used for findings. Testified at trial. Jury basically listened.
 The 137 plaintiffs that were in the sample received individualized damages, but with
regard to everyone else in the class, they got the average.
 This case went up on appeal by the Estate of Marcos on due process challenges.
 None of the plaintiffs in this case are objecting to this method, despite the fact that
very few of them actually received damages commensurate with their claims.
Remember, though, that the alternative was a protracted proceeding.
 9th Circuit affirms. The court seems the decide this on the fact that there is no erroneous
deprivation to the defendant, the plaintiffs are not complaining (about due process), and
there are serious efficiency gains.
 Basically the same argument made by Judge Weinstein in Simon II .
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




 The test for determining whether a procedure by which a private party invokes state
power to deprive another person of property satisfies due process is:
 First, consideration of the private interest that will be affected by the procedure;
 Second, an examination of the risk of erroneous deprivation through the procedures
under attack and the probable value of additional or alternative safeguards; and
 Third, principal attention to the interest of the party seeking the procedure, with
nonetheless due regard for any ancillary interest the government may have in
providing the procedure or forgoing the added burden of providing greater protections.
Cimino v. Raymark Indust. Inc., 151 F.3d 297 (5th Cir. 1998) {p. 1066}
 Judge Parker wrote the decision below (and was also the 5th Cir. judge in Chevron).
 Unlike Hilao, no special masters were used. Three district judges and two
magistrates (consented to by the parties thereunder) conducted jury trials on the
sample.
 What Judge Parker tried to do is impute causation determinations from the sample
group to the rest of the class, on a defendant-by-defendant percentage approach.
 The court then used a method similar to Hilao to determine damages, tied to the type
of injury, as determined by a sample group, and extrapolated it to the rest of the class.
 There was actually a higher level of statistical certainty here (99%) than in Hilao
(95%), as testified to by a statistical expert.
 Defendant on appeal contests:
 The use of global causation in the individual cases; and
 The extrapolation method.
 5th Circuit holds:
 Under Texas law, defendants have a right to individualized determinations of
causation. This is largely an Erie concern. This addresses the global causation claim.
 Extrapolation
 Court is concerned with the 7th Amendment implications of jury ruling on the
same issue twice.
 Court is concerned with the Rules Enabling Act implications (modification of
substantive rights).
 Biggest issue is the due process concern. Rejects the Hilao holding that you can
use statistical sampling to impute defendant liability to plaintiffs whose individual
circumstances have not been proved.
 The test, then, is whether the individual
 The court here relies heavily on the dissenting opinion in Hilao.
Cimino rather decisively closed the door on the extrapolation approach, at least for state-law
claims involving juries.
Hilao and Cimino are ships passing in the night.
 Hilao addressed only the question of due process; Cimino addressed only the questions
of the Seventh Amendment and Erie.
 Because Hilao involved federal law, the estate could not make an Erie challenge, and it
abandoned on appeal the Seventh Amendment challenge that it made in the district court.
In re Simon II Litigation, 211 F.R.D. 86 (E.D.N.Y. 2002), vacated and remanded, 407
F.3d 125 (2d Cir. 2005) {p. 971}
McLaughlin v. American Tobacco Co., 522 F.3d 215 (2d Cir. 2008) {p.1076}
 Related case to Simon. RICO claim – requires individualized proof of damages/reliance.
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 The district court below had allowed plaintiffs to prove collective damages on a class
wide basis then break it up proportionally. This court reversed this decision as well.
 When fluid recovery is used to permit the mass aggregation of claims, the right of
defendants to challenge the allegations of individual plaintiffs is lost, resulting in a due
process violation.
 Actual injury cannot be presumed, and defendants have the right to raise individual
defenses against each class member.
 In sum, because we find that numerous issues in this case are not susceptible to
generalized proof but would require a more individualized inquiry, we conclude that the
predominance requirement of Rule 23 has not been satisfied.
 Rules Enabling Act concerns about affecting a substantive right
 In re Pharmaceutical Industry Average Wholesale Price Litigation, 582 F.3d 156 (1st Cir.
2009) {p.1080}
 Class action by insurers against AstraZeneca claiming fraudulent overpricing and
misrepresentation that led to the pharma company basically bribing physicians to
prescribe their medicines.
 Seems that the court here used the cases of the class representatives, deemed adequate
representatives under Rule 23, to determine total damages for the whole class, then divide
them proportionally.
 Rules Enabling Act concerns here
 So maybe there’s still room for application of trial by statistics.
 Tidmarsh does not think that this is a distinction based on the fact that RICO claims (in
Simon and McLaughlin) require individualized findings of causation, reliance and
damages.
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