Litigation

What’s So Different About Class Action Mediation?

The author presented the following paper at the 2020 Class Actions National Institute of the American Bar Association.

What makes mediating a class action different from mediating an individual case? In both settings, parties seeking to resolve their disputes agree to a non-binding process designed to get them to “yes.” In both settings, the parties engage a third-party neutral who will bring them together, then separate them, then bring them together again, employing a variety of techniques to reach an accord. And in both settings, the parties are usually represented by counsel who will advocate for them and advise them about the risks and probabilities they face.

So, again, what makes mediating a class action different from mediating an individual case? Plenty. Here are some of the key differences.

The Timing of the Mediation

Class action litigation shares many of the attributes of individual litigation. It begins with the filing of a complaint, is often

Are Incentive Payments the New Fly in the Ointment?

Practice area:

For years, class action settlements typically have included incentive payments to named plaintiffs. The payments usually represent a very small percentage of the overall settlement payout, and are designed to compensate named plaintiffs for their time and trouble in service to the class. By way of a simple hypothetical, a million dollar settlement might include an incentive payment of $5,000 to a named plaintiff, in addition to that person’s share of the payment to the class. Class counsel invariably request incentive payments as a component of the overall settlement, defendants generally agree to them, class members rarely object to them, and courts typically approve them. Because incentive awards tend to be such a small percentage of the settlement,  usually dwarfed by the fees and costs class counsel request, the settling parties and the court spend very little time on them. After all, the thinking goes, named plaintiffs did have to do some work in representing the class, so it is only fair that they get compensated.

Unless,

The Seventh Circuit Clears a Roadblock to Settlement

Practice area:

As I have discussed in earlier posts, there are multiple stakeholders to class action settlements, including named plaintiffs, absent class members, class counsel, defendants, and the courts. Conflicts can arise within some of these groups, and perhaps most often arise among the class members themselves. A settlement that looks good to one named plaintiff or their counsel, for example, might not look good to another member of the class or their counsel. The ability of dissenting class members to object to a proposed settlement is one safeguard that can assist a court in determining whether a class action settlement satisfies Rule 23(e)(2)’s “fair, reasonable, and adequate” standard.

When an objection is brought in good faith and has merit, it can result in a better deal for the class. Unfortunately, not all objections are made in good faith. Rather, some are made with the sole objective of enriching the objector and the objector’s counsel, with no accompanying benefit to the settlement class. And often parties and their

Keys to Class Action Settlements: Understanding the Interests at Stake

Fundamental to the ability to settle a class action is understanding the interests that are being represented by the parties and other stakeholders. Although any given case might present its own unique circumstances, in general the interests can be described as follows.

  1. Named Plaintiffs. The interests of the named plaintiffs are the most obvious and immediate, yet also can be viewed, and often are treated, as the least important. That’s because the named plaintiffs have chosen to serve as representatives of a larger group, and in so doing, have agreed to pursue the greater good rather than simply act in their own self-interest. That they have done so does not mean that they have relinquished their personal interests in the settlement; only that they have assumed a responsibility to look beyond them to support a settlement that is fair to everyone they seek to represent, which by sheer math dilutes their own stakes in the outcome. And because most named plaintiffs do not

Virtual Mediation (Part 2): The Challenge of Establishing Trust

Like most aspects of litigation, mediation is a very personal pursuit. So much depends on the credibility and communication skills of the participants. Equally important are the participants’ non-verbal cues, including tone of voice, facial expressions, and body language. And a key to success of many mediations is the ability of the mediator to develop a rapport and trust with all of the players. Just as online poker cannot truly replicate the in-person card game, so virtual mediation is not a perfect substitute for a mediation that takes place around an actual table.

Despite its deficiencies, virtual mediation has some advantages. If some participants are not located where the mediation is taking place, it can save them the time and cost of travel. It also may provide some greater flexibility in how the mediation is structured. And, of course, in times like these, there may simply be no alternative than to mediate online. But parties who do not have to go to the trouble and expense

Virtual Mediations in the Age of COVID-19

I have been giving a lot of thought to the pros and cons of virtual mediation, and have been planning to post something here about that. In the meantime, my partner, Tom Dunn, has posted a very helpful piece about virtual mediation on our construction law blog. I still plan to add my two cents, but I couldn’t do a better job of describing many of the key differences between in-person and virtual mediations than Tom has done here. And “virtually” all of his observations apply equally to mediations of class action cases. So I give you this excellent and informative piece. I hope you find it as helpful as I did. https://www.solidfoundationconstructionlaw.com/2020/04/09/virtual-meditations-are-zooming-forward-jump-on-board/

The Roles of the Players in Class Settlements. Part 3: The Judge

In previous posts, I have discussed the roles of two of the players in class settlements: defense counsel and class counsel. For the third and final installment in this series, I will discuss the role of the third and most important player: the judge.

No class settlement can happen unless approved by a judge. Because most of the people affected by a class settlement are absent class members who are not before the court and have no real relationship with any of the attorneys, the judge has a special responsibility to protect their interests. That responsibility arises because of the potential for a conflict of interest between the named plaintiff and the named plaintiff’s counsel, on the one hand, and the class members who will be bound by the settlement, on the other. The process for settlement approval is designed to protect those absent class members from the risk of collusion between and among the named parties, in other words, the

The Roles of the Players in Class Settlements. Part 2: Class Counsel

In Part 1 of this series, I explained the role of defense counsel in class action settlements. In this Part 2, I will explore the role of class counsel.

I embark on this journey with some trepidation, because as a defense counsel myself I have always been on the outside looking in to the plaintiff’s side of the class action settlement process. However, I have settled enough class actions that I believe I can speak with some authority on the issues, even if a few of the details might get a bit blurred in the process.

As a starting point, class counsel must tackle the same tasks I described in Part 1  — negotiating the key terms, drafting the agreement, and seeking court approval — but has the lead role with respect to the latter. Like defense counsel, class counsel need to seek the best deal they can extract from the other side and that, at a minimum, will

A Few Do’s and Don’ts of Class Mediations

Having experienced class action mediations both as advocate and as mediator, I have witnessed a variety of approaches to the mediation process, some helpful and some unhelpful. Here is a partial list of do’s and don’ts when representing parties to a class action mediation.

  • DO come to the mediation fully prepared, knowing the strengths and weaknesses of your case and understanding the litigation risks to both sides. The risk analysis will depend in part on the stage of litigation during which the mediation occurs. For example, has the court yet ruled on the motion for class certification? If so, what is the likelihood that the court’s decision will withstand an appeal (if it hasn’t already gone through a Rule 23(f) appeal)? If not, how do you handicap the likelihood of class certification? Has summary judgment been briefed, argued, or decided? If not decided yet, what are the probabilities of success for each side? If plaintiffs prevail, what models are available for measuring damages,

Google, Cookies, and Cy-Pres-Only Settlements

Practice area:

In a case strikingly similar to a case that had been before the Supreme Court last term and that involves the same defendant and the same well-traveled objector, a unanimous panel of the Third Circuit vacated and remanded a district court’s approval of a Rule 23(b)(2) class action settlement that included cy pres payments but no payments to class members.  Its decision addresses important questions arising from a controversial approach to class action settlements.

The reader may recall the case of Frank v. Gaos, in which the Supreme Court had granted certiorari to review a settlement that had a significant cy pres component but no money going to the class. We wrote about the case in our First Class Defense blog, and you can find that post here. The defendant in Frank v. Gaos was Google, and the case challenged Google’s use of “referral headers” in its search results that transmitted data about the user