Class actions

  • December 13, 2013

    by Caroline Fredrickson, ACS President

    Since its founding in 2001, ACS has enjoyed the great fortune of a consistently strong Board of Directors, with some of the nation’s leading academics, practitioners and activists serving. At our recently scheduled Board meeting we said goodbye to a few long-serving members and selected a new Board chair, David M. Brodsky.  

    David’s legal career is a highly distinguished one. He was formerly a partner of the global law firm Latham & Watkins LLP. Some of his duties included advising foreign and domestic companies with respect to investigations of suspected criminal conduct, complex securities litigation, including class actions and other regulatory investigations and enforcement actions.   

    He is now the sole principal of a mediation and arbitration firm in New York City. Before launching Brodsky ADR LLC to help effectively solve complex disputes, David spent decades building a nationally recognized reputation as one of this nation’s greatest trial lawyers.

    There’s more to the story. David has served as a federal prosecutor, a general counsel to an investment bank and on numerous pro bono boards. His energy and dedication to the legal profession and to making justice accessible is extraordinary. Indeed his very rich, varied legal career has won him honors from numerous national legal publications, being consistently named among the top 100 “Super Lawyers” in New York and listed in the 2012 Best Lawyers in America survey.

    David, in an eloquent ACSblog post, paid tribute to some of ACS’s long-serving Board members whose terms recently ended. But ACS members, supporters and friends should get to know David. He’s an inspiring figure and a tireless advocate of ACS’s work. We’re grateful he’s taken a leadership role on the Board.  

    [image via Brodsky ADR LLC]

  • November 25, 2013
     
    Every year, a few blockbuster Supreme Court oral arguments and decisions dominate the news. In 2013, voting rights, LGBT equality, and affirmative action in education took center stage. Many Americans, whether lawyers or not, understood that these decisions could affect their own lives.
     
    Almost under the radar, however, the Court has been chipping away at the very process that enables the American people to seek redress in court when they’ve been injured. In particular, the Court’s decisions enforcing arbitration clauses and class action waivers have closed the courthouse door to litigants harmed by corporate wrongdoing. Most recently, in American Express Corp v. Italian Colors last Term, the Court ruled that class action waivers are enforceable even when they render it functionally impossible for plaintiffs to vindicate their rights under federal law.
     
    Rich Freer, the Robert Howell Professor of Law at Emory Law School, explains the impact of these cases.
     

  • August 27, 2013
    Guest Post


    by Scott Michelman, attorney, Public Citizen Litigation Group Michelman wrote the plaintiffs’ successful petition to appeal in Roach v. T.L. Cannon, and will brief and argue the case before the Second Circuit.

    When big corporations have a legal problem, they usually have no shortage of legal help - from lawyers on their own payroll or from large law firms to whom they pay hundreds of dollars an hour.

    When ordinary wage-earners have a legal problem - such as being underpaid at work - obtaining relief can be a bigger challenge. Most people can't afford to hire a big law firm, and even if the amount of a legal dispute is significant to the individual, it may not be large enough to entice a for-profit lawyer to take the case.

    One of our system's most important tools for leveling the playing field and providing access to the courts is the class action. This device enables people who have been wronged in a similar way to join together to pursue relief in court. Even if the value of the case to each individual is small, the aggregation of the claims makes the case big enough for a lawyer to pursue it.

  • August 1, 2013
    Guest Post

    by Reuben Guttman, Director and Head of False Claims Group, Grant & Eisenhofer.

    Over the past several years, we have had the privilege of representing whistleblowers who have successfully pursued False Claims Act cases against some of the largest pharmaceutical manufacturers in the world. Cases against Pfizer, GlaxoSmithKline, Abbott Labs, Amgen, and most recently Wyeth which was acquired by Pfizer, resulted in the companies returning over $7 billion to government healthcare payors.   

    Viewed from the optics of the black letter law, these cases are about whether false or fraudulent statements cause the government to pay for drugs that doctors would not have otherwise prescribed. Yet, in human terms, these cases raise the question of whether corporate marketing goals are influencing medical decisions.           

  • July 22, 2013
    Guest Post

    by Suzette M. Malveaux, Associate Dean for Academic Affairs and Professor of Law, Columbus School of Law, Catholic University of America

    On June 20, 2013, as the general public, legal pundits and media anxiously awaited the Supreme Court to issue its blockbuster cases of the year on affirmative action, voting rights and marriage equality, American Express was handed down.  This case is about the enforceability of an arbitration agreement that forbids merchants from pursuing their federal antitrust claims against American Express as a class action.  Not the stuff most people are talking about at the dinner table . . . unless it’s mine.  That day, most media trumpeted that there were “no major decisions today,” and, with a few exceptions, made little or no mention of the case.  Others went so far as to claim that the public had been “cruelly trick[ed]” into learning about class action arbitration instead. In reference to American Express, Vanity Fair proclaimed that “[j]urisprudence diehards will argue that this morning’s . . . B-side ruling[] . . . [is] important too.  These nerds are not wrong . . .  .”  Vanity Fair is right, on both accounts.  While I usually prefer to go by “professor,” I embrace the magazine’s conclusion and urge others to do the same.

    To fully appreciate the magnitude of American Express, it is necessary to first understand what the case was about.  A group of merchants who accept American Express cards accused the company of using its monopoly power to force them to accept credit cards at an inflated rate.  The merchants brought a class action against Amex, alleging that this tying arrangement -- embodied in a form contract -- violated federal antitrust laws.  The parties had agreed in advance to resolve all disputes in arbitration.  This agreement also contained a clause forbidding class actions in arbitration.

    Thus, the issue before the lower courts was whether the class arbitration waiver was enforceable where the merchants had established that costs made it impossible for them to arbitrate their claims individually.  The evidence demonstrated that the cost of an expert analysis necessary to prove the merchants’ claims (“at least several hundred thousand dollars, and might exceed $1 million”) far surpassed each individual’s potential recovery (some by ten times).   And in the absence of any possibility of cost-sharing with Amex, this made the class action structure the only viable way to proceed.  Without a mechanism for aggregating the costs of litigation, it would be impossible for the merchants to challenge Amex’s alleged unlawful business practices.  Under these circumstances, the class arbitration waiver would function as an exculpatory clause, effectively giving Amex a pass for violations of federal antitrust laws.