Here are some of my “takeaways” from the ABA’s 2013 National Institute on Class Actions, held recently in Boston:

  • Potential New Trends:  Prof. Jack Coffee (who taught me years ago at Columbia Law School) predicted that we might see increasing use of RICO by plaintiffs to get around Comcast v. Behrend, because RICO does not require a showing of reliance.  He cited the Second Circuit’s recent decision in In re US Foodservice Pricing Litigation on this point.   I don’t see this as having a significant impact on insurers because plaintiffs would have a very difficult time satisfying the substantive requirements of RICO on the types of issues that are typically raised in insurance class actions.  Prof. Coffee also predicted that after Comcast we will continue to see more attempts to certify “issue classes” limited to the issue of liability under Rule 23(c)(4).  If the Supreme Court grants certiorari in the moldy washing machine cases against Whirlpool and Sears, the Court’s decision might address issue classes.
  • Pending Supreme Court Case:  Prof. Alexandra Lahav of UConn Law School discussed the one class action case in which the Supreme Court has granted certiorari this term, which is Mississippi ex. rel. Hood v. AU Optronics Corp., No. 12-1036 (blog post).  The case involves whether a state attorney general action, purporting to be a parens patriae action, can be removed as a “mass action” under  the Class Action Fairness Act.  Prof. Lahav predicted that the case is likely to turn on the nature of the specific Mississippi law at issue in that case, and the “public interest” exception to CAFA.
  • Hot New Issues:  Prof. Lahav identified several new issues she predicted could become hot issues in class action practice.  First, how are burdens of proof allocated with respect to commonality?  The plaintiff bears the initial burden of proof, but the Ninth Circuit’s decision in Meyer v. Portfolio Recovery Associates, LLC, 707 F.3d 1036, 1041-42 (9th Cir. 2012) potentially can be read to suggest that the defendant may have some burden to prove its objections to commonality.  Second, does the entire action need to meet the requirements of Rule 23(b) where an issues class is certified under Rule 23(c)(4)?  Third, when must class certification be decided?  Prof. Lahav cited the Second Circuit’s recent decision in Authors Guild, Inc. v. Google, Inc., 721 F.3 132 (2d Cir. 2013), in which the Second Circuit directed the district court to decide whether Google had a fair use defense to copyright claims involving Google’s “Google Books” project before reaching the issue of class certification.  This decision effectively required the district court to decide a merits issue before certification.  Defendants may be able to take advantage of this approach in certain cases.
  • Class Action Settlements:  Prof. Coffee predicted that cy pres settlements will be in trouble if the Supreme Court grants certiorari in the Facebook case (Merrick v. Lane), on which the Court has been holding a petition for certiorari for several weeks.  The Facebook case involves a settlement in which the parties agreed to create a new foundation to which a cy pres award was made, with Facebook to select one of the members of the board of directors of the foundation.  During another panel focusing on cy pres settlements, a question was raised regarding whether such settlements create Rules Enabling Act concerns in light of the absence of any express authority for the federal courts to award such relief.  Ted Frank of the Center for Class Action Fairness, who was on that panel, indicated that he thinks cy pres should be viewed as a last resort, and that escheat to the state(s) would be preferable because it has a statutory basis and avoids potential conflicts of interest.  Judge Zouhary of the Northern District of Ohio recommended that the parties provide the court with all the ammunition they have to support a proposed settlement, and that each side have a representative testify live at the fairness hearing about why the settlement is fair.  He also noted that judges should not be asked to select the cy pres recipient; that should be done by the parties.  The panel also discussed whether a court should appoint a lawyer to be an independent advocate for the absent class members in a proposed settlement.  Judge Zouhary suggested that was the role of the judge and that an independent advocate might unduly complicate the proceedings.  Leading plaintiffs’ lawyer Elizabeth Cabraser recommended that plaintiffs’ attorneys think about cy pres at the beginning of the suit rather than the end, as suggested by Judge Posner in a recent decision (see my blog post on that decision).  She also pointed out that, in some cases, absent class members have been polled to determine what they would prefer, which may be advisable in some cases.