Here is the third and final installment of my insights from the recent ABA conference.  

Class Action Trials:  There was a very interesting panel discussion on class action trials with some lawyers and a judge who have tried class actions.  The panel included Andrew McGuiness, Judge Weinstein of the Eastern District of New York, James Donato, David Sanford, Ned Searby and Thomas Sobol. Here are my takeaways from this: 

  • From the defendant’s perspective, a big concern at trial is often addressing the potential preconception that jurors may have that because so many people are in the class, it must have some merit.  The defense panelists suggested starting with voir dire to educate people regarding what a class action is.  There are people who have received checks in the mail for tiny sums as a result of a class action and will recognize that some of these cases can have little value.  Judge Weinstein suggested that he probably would allow some attorney voir dire in a class action trial. 
  • Another big issue identified by the panelists is the extent to which the named plaintiffs will be part of the trial.  The plaintiffs’ trial strategy is typically to keep the focus entirely on the defendant’s conduct.  They often argue that because a class has been certified, the class should be treated like a corporate entity, and the named plaintiffs should not have relevant individual issues.  Although it is a challenge for them, they often call adverse defense witnesses as their lead witnesses at trial.  They need to call the named plaintiffs, but they often try to keep their testimony as short as possible.  The defense lawyers on the panel offered different viewpoints on how to handle the named plaintiffs.  One of them suggested that there is often little cross-examination that is appropriate, and the defense strategy should really focus on the details of the company’s practices and convincing the jury that the defendant acted appropriately.  Another defense panelist suggested that a long cross-examination of the named plaintiffs, to the extent possible, will be helpful to try to make a record for decertification or an appeal of the certification decision, and to demonstrate the lack of involvement that the named plaintiffs have in the class action process. 
  • Another key issue is whether any absent class members will testify and, if so, how they will be selected.  Often this arises in disputes over whether absent class members will be deposed because if they are not deposed it is unlikely the court will allow them to testify at trial.  Judge Weinstein suggested that in some cases interrogatories to absent class members may be more appropriate but he might allow both sides to select some absent class members to be deposed and to testify at trial. 
  • Another important question is whether the jury will decide the class issues or the individual issues first (a chicken and egg type of question).  If not all the named plaintiffs are allowed to testify, that tends to answer the question as the jury will not be able to decide all of the individual issues first.

The new Consumer Financial Protection Bureau (CFPB):  This new federal bureau was established by the Dodd-Frank Act and will have some regulatory oversight in areas that impact class actions.  The CFPB is currently operating without a director because the Senate has not acted on President Obama’s nomination of Richard Cordray due to a Republican filibuster.  David Gossett of the CFPB spoke at the ABA conference.  He said the bureau is interested in receiving notices of proposed class action settlements, although it is not expressly required by the Class Action Fairness Act.  The CFPB has the statutory authority to consider the propriety of and potentially ban mandatory arbitration clauses in certain types of consumer contracts, or impose conditions or limitations on them by regulation.  The bureau first has to conduct a study on arbitration, and it will not make any determination until after the study is completed.  It appears that formal action cannot be taken until a director of the bureau is confirmed.  If the CFPB issues regulations on arbitration clauses, an interesting question will arise as to whether those regulations will govern insurance contracts, given the McCarran-Ferguson Act’s preference for state regulation of insurance.