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Another Route to Court

By Megan Kinneyn | Apr. 2, 2007

Law Office Management

Apr. 2, 2007

Another Route to Court

It's become more difficult to get class actions certified, thanks to a variety of court rulings as well as recently passed laws. Plaintiffs lawyers, however, are adapting. By Steve Seidenberg

By Steve Seidenberg
      Edited by Martin Lasden
Big business may be thwarting large class actions, but plaintiffs lawyers are adapting.
      Class actions aren't what they used to be. Thanks to a variety of federal and state court rulings, as well as recent federal and state laws, it has become much harder to get a class certified.
      This change, however, hasn't been all bad for plaintiffs lawyers. They have adapted, using a variety of new and successful strategies to bring cases to trial.
      For instance, instead of filing a large national or multistate product liability class action, a plaintiffs attorney may file a number of mass-tort suits in state court. Each of these suits would include no more than 99 plaintiffs, most or all from the state of filing (so the suits can't be removed to federal court). Plaintiffs counsel can then coordinate the various lawsuits in one state court, allowing coordinated discovery and pretrial motions. The result is a large number of plaintiffs suing on essentially the same cause of action, without having to get a class certified. "This gets plaintiffs some of the negotiating leverage they would get in a class action," says Richard A. Nagareda, a professor at Vanderbilt University Law School in Nashville and the author of a new book on mass-tort suits.
      To be sure, for established class action firms there is a downside to pursuing multiple small suits instead of one big class action: It is more costly and time-consuming. But the change is likely to work to the advantage of many smaller law firms. "One attorney can't get a class action that squeezes everyone else out, so there's more opportunity for attorneys at smaller firms to get involved in these mass-tort suits," says Mark Burton, an attorney at Hersh & Hersh in San Francisco who has much experience in class action and mass-tort suits.
      Plaintiffs attorneys also are changing the type of class action claims they file. In recent years judges have become quite hesitant to certify classes in product liability suits, finding that the issues of individual plaintiffs predominate over the common issues of the class. So, many class actions that once would have been based on product liability claims are now brought as consumer-fraud actions.
      Such claims allow plaintiffs attorneys to sidestep many of the difficulties in prosecuting class actions. "You don't have to prove the harm suffered by each person in the class. All you have to do is show that the company made statements?in marketing pieces or advertisements?that weren't true," says Peter A. Antonucci, an attorney in the New York office of Sills Cummis Epstein & Gross who has often represented defendants in class actions.
      And though the damages awarded for consumer-fraud claims tend to be much lower than for product liability claims, plaintiffs attorneys can still do quite well. "You won't get the huge damages for injury or wrongful death, but you don't have to prove as much," says Antonucci. Moreover, he notes, even if the individual class members wind up with only a tiny recovery, their attorneys could still wind up with a big check.
      Consumer-protection laws vary from state to state, so suits based on these laws have traditionally been restricted to plaintiffs from the state in question. However, a state court in New Jersey recently ruled that the state's consumer-protection laws can be applied to protect plaintiffs throughout the country, allowing for nationwide class actions based on New Jersey law.
      So how are defense counsel responding? One strategy is to try convincing the court that these consumer-fraud actions are just product liability actions in disguise, says Antonucci. And even if they lose that gambit, defendants these days seem less likely to settle?if only because, as they've seen, settlements often don't bring an end to litigation.
      Thus, despite recent court rulings and statutory changes, mass litigation isn't going away anytime soon. Says Howard Erichson, who teaches mass-tort litigation at New Jersey's Seton Hall University School of Law, "As long as there is mass production of goods and mass provision of services, there will be mass instances of harm that give rise to mass litigation."

Megan Kinneyn

Daily Journal Staff Writer

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