The Supreme Court failed to take the opportunity to resolve the pressing problem of relitigation in class actions, but suggested some potential solutions.  On June 16, the Supreme Court issued its opinion in Smith v. Bayer Corp., addressing whether a federal court, after denying class certification, can enjoin a state court from adjudicating a putative class action on the very same issue.  Unfortunately, the result was not what corporate America had hoped for.  In a unanimous opinion authored by Justice Kagan, the Court held that, at least in the vast majority of circumstances, such an injunction is not available.  

The case involved the relitigation exception to the Anti-Injunction Act, under which a federal court can enjoin a state court from relitigating issues fully and finally decided by a federal court.  Applying this exception involves an issue preclusion (collateral estoppel) analysis, focusing on: (1) whether the issue presented to the state court is the same as the issue previously decided by the federal court; and (2) whether the plaintiff in the state case was a party to the federal case or a nonparty that can be bound (such as a nonparty that was in privity with a party to the federal case). 

The Court concluded that: (1) the issue of whether to certify a class in state court is not identical to the issue of whether to certify a class in federal court if the state has a different class action rule, or even if the text of the state rule is identical, but the state supreme court applies the rule differently; and (2) a putative class member in a case in which class certification is denied is not a “party” or the kind of nonparty that can be bound by a denial of certification.  The Court concluded that “[n]either a proposed class action nor a rejected class action may bind nonparties.”  (Slip op. at 15.)

This opinion has not gotten much attention in the media or blogs from what I can find.  There was a short AP piece published in the Washington Post and other places, but it doesn’t say much. 

I found most interesting the Court’s discussion of the problem that is presented, for corporate defendants and the legal system, by allowing plaintiffs’ lawyers to keep pursuing class certification on the same issue, even after certification has been denied multiple times:

Bayer’s strongest argument comes not from established principles of preclusion, but instead from policy concerns relating to use of the class action device.  Bayer warns that under our approach class counsel can repeatedly try to certify the same class “by the simple expedient of changing the named plaintiff in the caption of the complaint.”  Brief for Respondent 47-48.  And in this world of “serial relitigation of class certification,” Bayer contends, defendants “would be forced in effect to buy litigation peace by settling.”

The Court suggested several solutions to this problem:

  1. Stare decisis and comity among courts can mitigate the problem of repetitive class action litigation.  The problem I see here is that this does not help when you have a few “rogue” state courts that largely ignore what the federal courts and majority of state courts are doing on class certification.  These states become meccas for class action litigation, particularly against insurers.
  2. The Court concluded that CAFA might solve the problem because “Congress enabled defendants to remove to federal court any sizable class action involving minimal diversity of citizenship.”  (Slip op. at 17.)  This might work, as long as the federal courts do not allow gamesmanship by plaintiffs’ lawyers seeking to frame their cases so that numerous $4.9 million class actions can be brought in state courts in places favorable to class certification.
  3. The Court suggested, in footnote 12, that Congress could enact a statute, or the Federal Rules of Civil Procedure could be amended, so as to restrict relitigation of class certification.  I think those options are worth pursuing and insurance and other industry associations should consider supporting them.

A couple other potential solutions I see are: (1) an effort by the defendant, perhaps through a declaratory judgment claim against a putative class, to try to obtain one final, binding resolution by a federal court on the issue of class certification; and (2) the Supreme Court using the federal Due Process Clause to place some limitations on state court class certification rulings.  On the due process point, there is currently a petition for certiorari pending in Philip Morris USA Inc. v. Jackson, No. 10-735 (docket), involving due process issues in a state court class action. 

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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and most of the class actions I’ve defended have been brought against insurance companies. I’ve also handled some involving products liability, managed care, health care, utilities, financial services, higher education and environmental issues.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at work, you might find me running lines or watching a musical with my teenage daughter who hopes to be a Broadway star (or taking her to voice or dance lessons) or reading a good book.

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