It's 5:30 p.m. and I'm preparing to live-blog Class Actions in Alameda County: Advanced Seminar, which is taking place tonight in Oakland. Many thanks to the Alameda County Bar Association, Judges Freedman and Sabraw, and Messrs. Obbard and Stemmler for allowing me to bring this to my readers. Press the "refresh" button periodically for updates to this post throughout the evening. I'm told that the program will begin at approximately 6:00 p.m.
The materials are two inches thick and full of rulings on various class-action-related issues in actual cases filed in Alameda County.
Dinner is still being served as of 6:20 so I believe the program will not begin for a few more minutes.
The moderator is introducing the panelists. We have the entire Alameda County complex litigation bench speaking tonight (Depts. 20 and 22): Judges Sabraw and Freedman and their research attorneys.
Judge Freedman:
Department 20 handles odd-numbered cases; dept. 22 even-numbered cases. Tonight's program is structured as an "advanced" seminar on class actions, more focused than last year's general class action program. We will assume a certain level of experience with class actions but will apply the doctrine of "no attorney left behind." They will entertain questions.
We're going to follow the life cycle of a class action from cradle to grave. Will attempt to reiterate two important themes: (1) getting a class certified is important, but not the end-all-be-all of every case; (2) the fiduciary responsibility that both counsel in class action cases have to the class members and the court has to the class members. That sets class action litigation apart both for counsel and the court from other types of litigation except certain cases involving minors and good faith settlement determinations.
Alameda County Superior Court's website has been revamped and updated. Now, each direct calendar court and the complex litigation courts have their own pages listing all cases assigned to them. All orders in the written materials are available on the court's website.
How many people have tried a class action to verdict? [Only a few hands go up.] This is one of the challenges with class action litigation; very few go to trial. We don't have, individually or collectively, the kind of experience we have in civil litigation generally.
Largest volume of cases is wage and hour cases. They are the "flavor du jour" and he expects that to continue for some time.
Many of you have a choice to bring an action in state court or federal court. I won't ask you how you decide. The state court judges have an interest in the impact of the "mis-named Class Action Fairness Act of 2005" particularly the question of its impact on the caseload in complex litigation departments in California state courts. CAFA is relatively recent; there seems to be an increase in the number of class actions filed in district courts. That data may be anomalous because the no. of cases in both state and federal courts was down in 2006. Statistics are included in the written material. Impact on state courts seems to be minimal at this juncture. Doesn't seem to be a reduction in number of cases filed in state courts, even though there may also be an increase in the volume of federal actions.
A comparatively small proportion of class actions are removed, but when they are removed, few are remanded. This is different from general civil litigation, where many removed cases are promptly remanded.
Statutory framework that guides class actions in California state courts. A short discussion because there are almost no statutes or rules governing class actions in California. It's an area of law that's evolving very rapidly but primarily through appellate authority, both state and federal. If there's no authority in California on a class-action issue, you turn to federal authority.
[Judge Freedman just mentioned my blog and said he logs on every day! Thank you, Judge Freedman!]
Mr. Obbard on organization of class counsel:
Two "buckets": (1) single class action brought by multiple counsel; (2) multiple class actions brought across the state by multiple counsel. In case (2), there can be petitions to coordinate and/or to transfer venue. Usually you find yourselves all in the same courtroom. The question then arises of who's in charge and how we're going to run this case. The Deskbook on Complex Litigation talks about the importance of having a lead counsel, who makes strategic decisions, and a liaison counsel, which is important for defense attorneys and courts who need to know whom to contact about the case. Liaison counsel becomes the main point of contact for the court and defense counsel.
When plaintiffs' counsel can't decide among themselves, a motion must be filed for appointment of lead counsel. Each counsel must explain why you're better qualified, why your strategy is better, etc. Problematic because defense counsel is listening. This cannot be in camera. (Therefore it's a good idea to work it out for yourself!)
Sometimes no petition for coordination or venue change is filed. This may happen because the party prefers it. However, if you get certification in your case, and a notice goes out, the people in the other cases will figure it out. You will eventually be pulled together whether you want to be or not. It's best to get that organization done early as opposed to finding out about cases later (e.g., when the notice of settlement is served, leading to objections, etc.).
Judge Bonnie Sabraw on motions to compel arbitration:
Two kinds: (1) arbitration agreement that permits arbitration of class actions. Sometimes the parties don't dispute that the case thus goes to arbitration. Question in those cases is whether the arbitrator may decide class cert or if the judge must decide it. She found no case law on whether it's proper for the arbitrator to certify. Better course of action is for the court to certify the class, thereby obtaining jurisdiction over the class, and then order the case to arbitration.
Second kind: (2) arbitration agreement that prohibits class actions.
Plaintiffs often oppose motions to compel arbitration based on the argument that the arbitration clause is unconscionable under Discover Bank. "We do not hold that all class action waivers are necessarily unconscionable, but in a consumer contract ... [of certain types] [etc. she reads a lengthy quotation]" they are unconscionable.
The Gentry case this year extended Discover Bank to beyond the consumer context. Cohen v. DirecTV, 2006, makes point that it doesn't have to be just claims involving very small amounts of money to be found to be unconscionable and fall under Discover Bank.
New case dated Oct. 17, Murphy v. Check N Go, exempt/non-exempt case; court found contract to be unconscionable. Contract had a provision that specifically stated that arbitrable claims include the assertion that the claim is inarbitrable. Court went ahead and ruled on whether it was unconscionable.
Final point. If you have a case and there's a motion to compel arbitration, and the arbitration clause is determined to be unconscionable, and it goes up on appeal and back, and you have other plaintiffs with the same provision, it's not res judicata as to these other plaintiffs' cases, because they're decided on a case-by-case basis.
Mr. Stemmler on demurrers in class actions:
Demurrers to the class allegations; defense attempt to determine at the pleading stage that the case will not go forward as a class action. Happens very rarely. Usu. limited to mass torts or personal injury cases. However, no shortage of defendants who are willing to give it a shot even when it's clear that it's the kind of case that could be litigated as a class action. In those cases this is never resolved at the pleading stage.
One case involving habitability; claims of all individual plaintiffs were so clearly and obviously distinct, on the face of the pleadings, it was clear that individual issues were going to predominate. Each tenant would have to prove the conditions of their individual unit. Gave plaintiffs several opportunities to amend, but the allegations were eventually thrown out at the pleading stage.
This rarely happens. Certainly not his experience in employment and consumer cases. There can also be challenges that don't necessarily result in elimination of the class allegations, but rather result in a refining of the class definition. For example, if plaintiffs alleged a definition of a class that you can tell would not be ascertainable, then it is appropriate to challenge that at the demurrer stage. However, leave to amend will be granted and usually they succeed in fixing the problems. Ends up with a more refined definition of the class and the case goes on.
Judge Freedman:
A practical thought and suggestion here. After you've met and conferred with counsel and decided you want to amend the complaint rather than going through an unproductive demurrer process, and you submit the stipulation and proposed order, PLEASE PUT THE STIPULATION IN A SEPARATE DOCUMENT FROM THE PROPOSED ORDER! PLEASE WRITE THIS DOWN! IT APPLIES TO EVERY CASE.
Mr. Obbard:
The order should say something more than "the court approves the stipulation." It should be a free-standing, complete document so you can tell what the order is by looking at just the order.
Judge Sabraw on class vs. merits discovery:
While in theory the division between the two types of discovery is a good idea, in practice the two types can often be blended, especially when the complaint is based on an allegation of pattern or practice, as distinct from policy. This is because plaintiff must conduct discovery on whether what he experienced is part of a pattern or practice. So you're more likely to find that the discovery is going to be allowed. If she's persuaded that the discovery is appropriate for class cert., it's probably going to be allowed. I tell you this so that when you're faced with this issue and you meet and confer, you can keep this in mind.
Mr. Stemmler on pre-certification communications with class members:
First issue: disclosure by defendant of names and contact info of putative class members. Invariably defendants refuse to do this at first, citing their employees' privacy (in employment cases). What do you do to protect those rights and still give the plaintiff full access to class members, who are often witnesses as well? Pioneer Electronics; Bel-Aire West Landscape case. These cases laid to rest the question of what process should be followed. What these cases suggest strongly is that trial courts have the discretion to order the disclosure of names and contact info for class members if you use a system/process whereby each of those class members is notified this is happening before the disclosure is made and given the opportunity to withhold that info. Dichotomy between opt-in and opt-out procedure. Even post-Pioneer, people argue that it should be an "opt in"; safe to say that argument's not going to be successful in this court.
Other issue that comes up especially in employment cases is who can talk to the class members and what can they say? Communications with class members is protected speech under the Parris case, so a court order allowing that is unneeded. Questions also arise when class members are current employees of the defendant.
Other area we run into is where defendants overstep, or are alleged to have overstepped, the line, and where does that line get drawn re what the defendants can say to the class members (especially their employees) about the claims. There can't be a rule that defendants can't talk to their employees. The most important point becomes: If the purpose of the communication is to try to get releases from the class members (esp. employees) before the case has really gotten started, here employers make their key mistake, which is trying to do it on the sly and keep it all secret. This is never a good litigation tactic. It will always come back to bite you in some form, and even if you get all the class members to sign releases, those releases are almost certain to be unenforceable if you didn’t do two things: (1) give them full information about the litigation; and (2) be able to demonstrate that you did nothing coercive. That second one can be hard because coercion can be shown simply by the situation you're in. You call a meeting of all employees and say oh by the way on your way out, sign these. The court will almost certainly either strike the release completely, or order some sort of corrective communication (e.g., employer ordered to write a letter to go out to the employees in which they offer the employees the option to be released from the release and give them all the info that they hadn't given them in the first place). The idea that you can "game" the situation on the defense side and kill the class action before it gets stated is a misguided concept. Even though there are no hard and fast rules requiring you to notify, e.g., plaintiffs' counsel, before you get releases, it's fair to say that if you HAD notified plaintiffs' counsel and had them participate, the chances of getting enforceable releases will be greatly enhanced. Examples in the materials of orders that you might face if you overstep the line (e.g., a TRO ordering that any communication between employer and class members needed to be tape-recorded so the court could review it). That's a really unusual situation; happened because plaintiffs came to the court saying they're about to have this meeting, stop it, then defendants came to court and gave conflicting info about what they were going to do. Court couldn't tell what their intention was, resulting in the TRO. Bottom line, you have to be straightforward with your employees about the litigation if you want to get effective releases, and you have to be straightforward with the court in particular.
Judge Freedman: Don't attend the meeting yourself because you'll become a witness and your client will need new counsel.
Mr. Obbard: Example - a class was certified, and defendant sought permission to send out its own mailing with settlement offers, along with the class notice. Class members are told bird in the hand or two in the bush. But it was done in a straightforward manner; no air of suspicion. All of these are very fact-specific and case-specific. Fact that certain orders were issued in the past is no guarantee that same ones will be issued in future cases. Also, the opt-out procedure of Pioneer only works if the information you're seeking relates only to identifying information (not, e.g., employment records).
Mr. Obbard on merits determinations before class determinations:
Fireside Bank's main message is if defendants want to, they should be able to defer merits rulings until after certification. It's not fair for a defendant to have a pre-certification merits determination followed by a notice to the class saying you've already won. That's the main import of Fireside Bank.
Defendants can, if they wish, specifically waive that, or implicitly waive it by filing a motion requiring merits determinations. Leads to questions about the scope of the waiver. This depends on the stage of the case. For example, if the defendant demurs, they may or may not have effected a waiver under Fireside. Issues like that may come up in your cases, but they're very case-specific.
Strategy decisions relating to this carry risk. If the defendants choose to raise substantive issues in a motion pre-cert, it may very well lead to a notice telling the class they've already won. However, it could also result in a "decapitation-type-strategy" whereby the named plaintiffs' claims are eliminated. Two types: summary judgment type motion directed at the named plaintiffs that raises common issues, such as interpretation of a uniform contract; if defendant wins on that, they have confidence that they'll win the case as a whole, because they've won the key issue in the case. Other type: summary adjudication motion directed to facts that are specific to the named plaintiff (e.g., specific misrepresentations made to the named plaintiffs). The fact that they win such a motion has no impact/bearing on the rest of the class members' claims. Hard to judge the impact on the case.
Judge Freedman: Want to point out that Fireside has Justice Werdegar's comment about "being pecked to death by ducks" as the policy behind the rule against one-way intervention. But, there's no direct discussion in the opinion about the due process rights of plaintiffs. This would come up in cases involving defendant classes, rather than plaintiff classes. Judge F. can remember only one case in his career in which the issue of a defendant class was even raised, but if it did, the Fireside Bank reasoning would apply to protect the plaintiff's due process rights.
Question: If defendant waives Fireside Bank rights by filing a motion, does that allow plaintiff to file a motion on that issue? Mr. Obbard: It's fact-specific, depends on the nature of the motion. Is it a demurrer/motion to strike vs. cross-motions for summary adjudication. Are they both pleadings motions or evidence motions; do they overlap in terms of issues; etc. If the defendant raises an issue relating to 10% of the case, that may or may not allow the plaintiff to bring a motion relating to the core issue in the case. The answer is, "it depends."
Mr. Obbard on locating a new named plaintiff:
Three aspects of this: (1) duty of the atty; (2) use of discovery; (3) ramifications of all that.
Re the duty of the lawyer (and perhaps the court), when you bring a class action you have a duty to all members of putative class. What happens to that duty if your original client's case is dismissed? I don't know. The Janik v. Rudy et al. case a few years ago suggests that maybe if you don't go out and search for a new named plaintiff someone may have a theoretical claim that you represented the absent claims prospectively, and I can't believe you abandoned us. You owe us some duty. This issue hasn't come up, but it's a theoretical question.
Let's assume you do have a duty, and you believe the defendant did something bad, and your original client's case was dismissed, how do you go about finding another plaintiff: Discovery; asking your original client to go and talk to people. If you do find one, you can usually substitute them in an amended complaint. Problems arise when plaintiff's counsel wants to use discovery to help identify a new plaintiff; uneasy crossover with discovery to find witnesses. Best Buy case says court CAN use discovery to help identify a new class representative. Also First American case says if the class rep was never part of the class he purported to represent, then you cannot use discovery to find another one. Somewhere in there, there might be a rule on this issue. It might be fact-specific relating to whether the plaintiff ever had standing. These things will play out over time.
What are all the ramifications of this? One obvious one is that if you do locate, or somebody finds you, and you have a new plaintiff, the question arises whether you found this person through discovery, or by following your duty under Janik and sending a postcard to the class members asking them to contact you. If you do that, you'll have maybe a new plaintiff, you'll have met your duty under Janik, and you'll get to class cert. Then, the defendant will say this isn't a real plaintiff; they're controlled by counsel; therefore they're not adequate under the Howard Gunty case. So this whole area is an area that's fraught with peril. It's an area we'll see more and more development of because in the post-Prop. 64 world, the identity of the named plaintiff and the nature of the named plaintiff's claims have become much more important.
Message to plaintiffs' counsel in the room: If you were deciding whether to take on an individual client, you'd want to make sure that client can survive summary judgment. If you're choosing a class rep, make sure that class rep can survive summary judgment.
Judge Sabraw on preemptive defense motions on class allegations ("motions to deny certification"):
A mid-case defense motion (not a demurrer or motion for judgment on the pleadings), based on evidence, where defense moves before class cert, arguing that the case should not be certified (i.e., motions to deny class certification). These motions are not specifically authorized by the Rules of Court. In the two cases she's faced, the collective thought was why do this? Why not wait until class certification when the burden falls on the plaintiff? In both cases, certification was on the horizon. What you're going to find if you bring these motions is that the court in the exercise of its discretion is likely to allow the case to proceed to class certification. It's kind of an unnecessary motion.
Judge Freedman on voluntary dismissal of entire actions, individual claims and parties:
Under Rule 3.770, you cannot dismiss a party, or class action claim, or entire action, without permission of the court. This relates to the issue of your fiduciary duties to the putative class. Policy reason behind it -- if an individual case, plaintiff, or claim is dismissed, the court wants to be assured it's not the result of an improper collusive arrangement among the parties that might be detrimental to the class. This rule applies both before and after class certification. It's not limited to cases where a class has already been certified. If a class has been certified, that might affect whether notice must be given. Generally speaking, there might be some completely innocuous, good cause reason to dismiss a named plaintiff; other named plaintiffs can carry on the action and they're not receiving any special consideration (e.g., I've been bribed to discontinue the case). File a declaration explaining this with an application for dismissal.
Also comes up in less obvious scenarios. Recent case, a demurrer was filed in a case involving class claims. The demurrer was unopposed, which led the court to wonder why not. In that kind of situation the parties would be well-advised to inform the court, submit a declaration saying why you're not opposing the demurrer. It's a good healthy practice for everyone to pay attention to this rule in a variety of scenarios.
Mr. Obbard on class certification elements:
Numerosity: There's no high end. The low end is somewhere around 10 or 20.
Ascertainability: Sometimes subject of a demurrer or motion to strike. If the class definition hasn't been worked out in the pleadings, it's important to do so in the class cert motion. The definition must be clear so we can determine who the judgment will be res judicata as to. E.g., people who worked more than 65% of their time on non-exempt work. That's really hard to figure out because it requires a factual inquiry. The judge should be able to go back and say you're in the class, or not in the class, with minimal effort. Also relates to the scope of the damages.
Also, goes to notice. If the beginning of your class period is defined by the statute of limitations, the ending period has to be a date certain not later than the date that the class notice goes out. The ending date can't be through trial. The experts need to know what the end period is for purposes of calculating damages, etc.
There are many different kinds of classes that are possible. CCP section 382 provides vague guidelines, then there's a lot of case law. Very different from federal rule 23(b)(2) and (b)(3) classes. California doesn't draw that bright a line. Federal law allows certification for a specific purpose only under FRCP 23(c)(4) (e.g., interp of a contract term). California doesn't allow for that type of slicing and dicing of your plaintiff class. Primary point is tell the court what you want the action to do.
Commonality: This invariably comes down to a fact-based questions. San Rafael Rock Quarry case. The quality of the commonality, not the quantity of the commonality. There may be some factors that are very important and some that are less so. One way to look at it would be to look at the CACI jury instructions. If there are five elements in the claim, you can go down and say each of them is common. Another approach is to talk about commonalities that aren't referenced to the claims, but that all the claims arise from the same facts and circumstances. Sometimes this is an appropriate way to do it, if you have overlapping claims based on the same factual transaction. So it will depend on how you approach it. Important distinction between "absolute commonality" and "partial commonality." This arose out of a case in which court faced issue of what do when you have 50 competing declarations on each side. How do you know where the commonality lies? What is the trial court to do? Court said plaintiffs have the burden, they haven't met the burden, so cert denied. Then later, the Home Depot case came down that included a thorough discussion that addresses this. If 51% of the class members have claims 51% of the time, does that mean that 100% of the people will get 100% of their damages at trial? Led to Theyer-Ogden (phonetic) decision that addressed the line of commonality -- absolute vs. partial commonality, which arises in pattern and practice cases. In some of these cases, it's hard to avoid merits determinations because you're trying to figure out whether anyone else has the same claims as the plaintiffs. It's a gradations of gray question.
This is why it's important, at the class cert stage, to lay out how your claims will be presented at trial. Tell the judge there's a way to make sure the defendant's due process concerns can be accommodated; any potential conflicts between the class can be addressed. So you're saying yes, it's gray, but we can solve this. Better than to ignore the gray part and assume that you're white and they're black.
Typicality and adequacy: No clear California law re what is expected of a class representative. Case law suggests they have a fiduciary duty, but that the named plaintiff isn't really required to do that much, so long as they check in with their counsel and know what's going on, they don't have to participate in strategy. This is not entirely resolved in the case law.
Superiority: Discover Bank made clear that there are some issues where a class action is the superior way to address a problem, e.g., a defendant taking small amounts from a large number of people. But there are also other ways of dealing with a potential problem, e.g., a DA or other type of law enforcement proceeding. E.g., labor case involving unionized employees; the union may object saying we already have a collective dispute resolution process here, why don't you wait 6 months and we the union will negotiate this. That said, there are many cases in which class action proceedings really are superior.
Mr. Stemmler on subclassing:
Class actions is one of the few areas where the COURT has a fiduciary obligation to one of the parties. The court may observe that subclassing might be a way to accommodate potential problems with a case and a commonality finding. Because of the court's duties to the class, you will not always have the court come back and say to the plaintiff that you haven't adequately defined subclasses, so class cert denied. What will happen instead is in some instances the court will actually re-write subclass definitions sua sponte. They may conditionally grant certification and send the plaintiff back to the drawing table to do what's necessary to hammer out better subclass definitions (including discovery in some cases) and come back for a second try. In one case, the defendant had interfered with discovery on such a level that even though class was clearly certifiable, because they had done such a bad job of responding to discovery, the court put the burden on the defendant to come back with a separate motion on subclasses, if they could show that subclassing would be appropriate. Don't assume that if the plaintiff hasn't dotted all i's and crossed all t's, that means cert will be denied. It doesn't bec. the court has duties to the class itself.
Judge Freedman on devising the trial management plan:
Initially at least, it's the plaintiff's burden to propose a feasible trial management plan. However there are very few folks who have actually tried a class action and who can thus propose a plan that will be feasible. In many ways, class action trials are not distinct from ordinary litigation. Typically the plaintiff get to go first, although defendants sometimes argue that if they have the burden of proof on something, THEY should go first.
In a hypothetical case involving 500,000 plaintiffs, defendants argue that their due process rights are violated unless they can cross-examine all. Obviously, that's not going to happen. Somewhere between 1 and 500,000, there is a practical medium. The time to start thinking about this is at the very outset of the case. You have to think about the cost factor, the time factor, using representative or sampling techniques, which requires expert testimony to extrapolate that kind of information to the class, statisticians and "human factor" or psychological experts weighing in on the process. It's not an area that's very well fleshed out. The Bell v. Farmers case is the best example. It's an area that is subject to exploration. I suspect that as the modern age of class actions in California matures, we'll get some more appellate authority on what works and what doesn't. It's been my experience that class certification/complex departments are very popular in the writ business. I'm never unhappy when someone decides to seek a writ; sometimes encourage it under the Code of Civil Procedure as appropriate for interlocutory appellate review. Every case is different and there aren't that many bright lines to guide us.
Mr. Obbard on representative actions by organizations and unions:
An area that we might see more of. E.g., a homeowners' association brings an action on behalf of everybody in the complex. E.g., a union bringing an action on behalf of its members. The way those issues break down is there are some claims that are on behalf of the entity as an entity (e.g., the union being overcharged on its phone line), it could be a class rep or bring an action on behalf of itself. More common is where an organization tries to bring an action on behalf of its members. There is caselaw that supports its ability to bring such an action without having a class certified. This doesn't mean we're back in 2003 and you can be the Trevor Law Group and create an organization. But if you can establish that the organization is a viable representative of the group whom it purports to represent, to such a degree that what it does will have a res judicata effect, then those actions can proceed. Usually just for injunctive relief. If you seek recovery of money, those will have to be a formal class action.
Mr. Stemmler on class notice:
It comes at two different times. Post-settlement/preliminary approval or post-certification. In either case, notice must be understandable to laypersons. Particularly important (dept. 20 has a handout) to have accurate information about how to find out more about the case, including how to access the case file online at the court's website. Judge Freedman won't approve any notices without this.
Who should pay for the notice? It depends. No hard and fast rule under the Rules of Court. Court has discretion to require either party to pay. Practically, it revolves on equitable considerations more than anything. If it's a relatively small case, no discovery yet, plaintiff pays. If it's clear from discovery etc. that the defendant will bear some liability then the equities lean towards the defendant paying. Same in cases in which a huge class of plaintiffs claims very small amounts. If defendant obstructed plaintiffs' ability to get class member information, to the point that plaintiffs can't compile a mailing list, then the defendant will most likely get stuck with paying for published notice. So keep your client clean going into this.
Once notice has gone out and the opt-out period is over, the whole dynamic of who can talk to the class members changes, because from that point forward, they're considered to be clients of plaintiffs' counsel. So it's completely inappropriate for defense counsel to contact class members. It's also not a good idea in an employment case for an employer to talk to its employees who haven't opted out about the litigation (although ordinary work-related things are fine).
Judge Sabraw on motions to decertify the class:
Authorized by the Rules of Court. These are based on post-class-cert discovery or trial preparation that discloses an inability to manage a class trial. There are several recent cases on it. Sums up the importance of preparing your case not as though it's going through class cert and that's the end, but as though it's going to go to trial. When all is said and done and discovery is all done, am I going to be faced with a motion to decertify? Think about it in that context. This is like the advice that says look at the jury instructions before you draft the complaint so you know what you're going to have to prove.
If the court denies certification, it would be a very rare situation that the court would allow more discovery and permit a renewed motion for certification. The court might permit discovery if there's some important reason, but you should not expect to be allowed to file a second motion for cert. Get it right the first time.
You may have to narrow your class focus. Have that back-up plan already there. Put it in your opening brief. If that's really something that's going to be addressed, don't hold it back. Always include proposals for narrowing your class as a fallback argument.
If you have a small class case, you can join multiple individual plaintiffs so long as the claims arise from the same factual transaction. This is something to consider. You may not need a class action or need to go to the complex department. Multiple cases can be coordinated in Alameda County, through trial, with a direct calendar judge. The usual rule is the oldest case in time is the department where all the cases would end up.
Mr. Obbard on post-trial motions to decertify the class:
Given how few trials there are, post-trial motions to decertify are even rarer. Nothing more to say.
Mr. Obbard on fees and costs:
Two ways to get paid -- by your clients or the losing party. Impt to keep this in mind when you're seeking your fees. The case law might treat them indistinguishably, they are in fact two distinct ways of getting paid. If you're being paid by your clients, it can be a percentage of recovery or what the market will bear. They can expressly or impliedly agree to pay you whatever is reasonable. If you're being paid by the losing party, it's a different dynamic; you can't be paid much above your lodestar because it starts to become punitive because they got no benefit whatsoever as a result of your work except the res judicata effect (and they might not think this is a benefit).
When settling, case called Robins says it's important to settle the claims of your clients first. Then and only then, talk about how you'll get paid. Otherwise, there's an inference or suggestion that you settled your fees to the detriment of the clients' claims. If you settle the clients' claims first, you may then have a pot of money from which your fees can be paid. The clients can pay you, which is the normal thing in litigation. Some retainer agreements say the lawyer gets paid the greater of x% or whatever the other side is ordered to pay. The point is these are two distinct sources of fees.
Judge Freedman on ADR and settlement of class actions:
There's a certain period of "ripeness," when a case is ready to be settled. When first filed, usually not, but sometimes you see "settlement suitcases" where the parties have already negotiated the settlement and they file the action with the settlement ready to go.
Litigants are sometimes reluctant to ask the judge who will try the case to handle settlement discussions. Judge Freedman is always glad to handle these negotiations in any case pending before Judge Sabraw and vice versa.
Judge Freedman typically orders: On or before date CMC statements are due, meet and confer re mediation and identifying neutrals. Counsel are usually able to agree. In those rare cases when they don't, the court will make every effort to assist the process. Sometimes important for the neutral to have a specific substantive expertise. Alameda County has an ADR committee/resource with non-judicial mediators.
Judge Sabraw on class settlement procedures:
Settlement agreement should be clearly drafted to define the scope of the relief. Very important. If there is I/R, set up a plan to monitor compliance. [Refers to handout listing issues that arise in this context; was devised with input from complex judges across the state.] Final approval hearings are ALWAYS "parties to appear," even if the court says it's inclined to grant everything that has been requested, the court must consider any objections, so these hearings are always "parties to appear."
In her courtroom, there will be post-settlement hearings after the final approval, for an accounting, and if there's injunctive relief, to monitor that. There will also likely be a 10% retention of the atty fees to make sure that all loose ends are tied.
Mr. Obbard on post-settlement procedures:
Because the court has a fiduciary duty, the court needs to have some assurance that the settlement proceeds have been appropriately distributed, and that any disputed claims are resolved, and what happens to any money left over in a cy pres fund. It is interesting how frequently it will come up that there are problems with distributing the money, and checks get returned, and counsel need to come back and get permission to extend deadlines and re-cut checks. Important that the court follow through and make sure the money goes to the people who are supposed to get it. If this can't be done, you end up with a cy pres distribution. What do you do when it isn't administratively feasible to get the money to the people who are supposed to get it? Court can approve a distribution to another entity, usually a charitable organization, that has something to do with the claims in the case, so that in some indirect way it will help the people who were members of the class. So, don't propose that it go to your alma mater. Think about your class when identifying appropriate institutions.
And that was the end of an excellent and very informative seminar!
Thanks for posting this online. I was VERY frightened, however, by the statement made on an important and frequently raised question of law that was reflected in Judge Bonnie Sabraw's comments on motions to compel arbitration. In particular, she said:
Question in those cases [that do not forbid class arbitration] is whether the arbitrator may decide class cert or if the judge must decide it. She found no case law on whether it's proper for the arbitrator to certify. Better course of action is for the court to certify the class, thereby obtaining jurisdiction over the class, and then order the case to arbitration.
The problem with her answer is that it is wrong - there is clear case law. If the FAA applies to the arbitration agreement, Green Tree and Garcia v. DirecTV answer the question expressly and state in very clear terms that the decision is solely for the arbitrator, not the court. If the FAA does not apply, and only California law applies, then the old Blue Cross case discussed by the Garcia v. DirecTV opinion still applies and permits the court to exercise its discretion, subject to the terms of the parties' agreement to arbitrate.
I hope a practitioner in live attendance pointed this out to Judge Sabraw and the rest of the audience.
Posted by: Sean McLoughlin | Friday, October 26, 2007 at 10:26 AM
Thanks, Sean. That point was not mentioned during the seminar. What I summarized above was all that was said about it.
Posted by: Kimberly A. Kralowec | Friday, October 26, 2007 at 11:06 AM