LIVEBLOGGING CAALA: Notes on class actions and procedure in complex cases

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Jerome Ringler, of Ringler Kearney Alvarez LLP, is speaking this year on the topics of class actions and complex cases.

Concerning class actions, Mr. Ringler notes the following basic concepts:

  • Choose a good class representative that doesn't bring along a lot of baggage [bankruptcies, criminal convictions, etc.].  I note that this is much easier said than done.  Individuals willing to step forward and litigate a cause on behalf of a group often have, at minimum, interesting personality quirks that supply the fortitude to endure a class action.
  • Decide where to file.  Again, easier said than done.  CAFA often dictates that a case may end up in federal court, whether you want to be there or not.
  • Compared to individual party litigation, discovery may be limited to certification issues.  Mr. Ringler notes, and I have also found, that there is often entanglement between merits issues and, in particular, commonality and typicality analysis.
  • Mr. Ringler notes that Pioneer and Belaire-West supply the procedure for obtaining class member contact information.  He notes that the process requires filing a motion and agreeing on a third-party administrator that will send out notices permitting the putative class members to opt-out of disclosure of their contact data.  I think that this summary of the current state of the law is, at minimum, incomplete, and, arguably, inaccurate.  Puerto and the recent Writers' Guild decision Alch (discussed here), both suggest in different ways that the class representative may have a right to obtain contact information and other class member data, irrespective of whether any  putative class member objects.
  • Watch out for client representation issues.  What if you represent a putative class member at a deposition?  Do you continue to represent that person until certification?  You probably do, but be careful with this hot potato.  Don't hand over communications - you may be waiving a privilege that you ought to make the Court determine.

This seminar lecture appears targeted at attorneys with limited experience in the area of class actions.  If you are interested in learning about class action procedure, you will probably do better reading portions of treatises, major decisional authority, and then co-counseling class actions with more experienced class action litigators.  I'm going to wrap this post up as my battery is dying.

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LIVEBLOGGING CAALA: Ethics issues of significance in complex litigation

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A fair portion of the CLE material at CAALA is of primary significance in single party personal injury cases.  However, as with yesterday's e-discovery talk by Judge Lee Edmon, some issues are relevant in complex litigation practices.  This morning I am sitting in the Legal Ethics session.

Robert Tessier just addressed a number of basic ethical conduct issues applicable to all attorneys.  One such issue is the obligation of counsel discharged by the client to turn over the case file to the client and/or successor counsel.  Importantly, there are two kickers to this obligation: the obligation to turn over the original file (CA Eth. Op. 1994-134 1994 WL 200778) and the obligation to turn over electronic data, including case e-mails, pleadings, discovery documents, and deposition transcripts and exhibits (CA Eth. Op. 2007-1 74 2007 WL 2461 9 14).

On the first prong of this obligation, the attorney's duty to the client precludes causing any prejudice to the client by holding onto a file after discharge:

“When a matter is pending before a tribunal, the attorney may retain possession and control of the file only to the extent necessary to represent the client competently and fulfill any outstanding obligations to the court arising out of that representation. The attorney may not, however, hold the file in order to obtain payment or other consideration from the client in exchange for the delivery of the file to the client.

(Tessier, Ethics for the Small Office (August 29, 2008).)  For the complex litigation and/or class action practice, this means that it is essential that you keep the file organized (this should be happening in any event) and strewn across a file room and various attorneys' and assistants' desks.

On the second prong of this obligation, the attorney's duty to turn over the file includes a duty to turn over electronic information:

“An attorney is ethically obligated, upon termination of employment, promptly to release to a client, at the client's request: (1) an electronic version of e-mail correspondence, because such items come within a category subject to release; (2) an electronic version of the pleadings, because such items too come within a category subject to release; (3) an electronic version of discovery requests and responses, because such items are subject to release as reasonably necessary to the client's representation; (4) an electronic deposition and exhibit database, because such an item itself contains items that come within categories subject to release; and (5) an electronic version oftransactional documents, because such items are subject to release as reasonably necessary to the client's representation. The attorney's ethical obligation to release any electronic items, however, does not require the attorney to create such items if they do not exist or to change the application (e.g., from Word (.doc) to Wordperfect (.wpd)) if they do exist.

(Tessier, Ethics for the Small Office (August 29, 2008).)  Electronic discovery is the new frontier of discovery practice in complex litigation.  This follows naturally from the fact that we are squarely in the digital era.  It also means that much of what we generate in litigation exists, in part or in whole, as digital information.  Collecting that digital information an providing it to the client is no small task, particularly where e-mail is concerned.  Most documents are saved in some reasonably organized manner on file servers.  E-mail, on the other hand, often resides in individual attorneys' inboxes.  To satisfy ethical obligations, complex litigation practices should implement some method of capturing e-mail of significance (especially e-mail to outside/opposing counsel).  Adobe Acrobat allows users to save e-mails as pdfs.  In addition, e-mails can simply be dragged and dropped into file folders.  Other software provides similar solutions.  The important issue is that you think about a process for saving case e-mails outside of your e-mail software.

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LIVEBLOGGING CAALA: Hon. Lee Edmon discusses likely e-discovery laws

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The Complex Litigator is here at CAALA, bringing you information selected from the best (my opinion) that the conferences have to offer.  First up is e-discovery developments presented by the Hon. Lee Edmon.

  • The scope of e-discovery in California will soon be comparable to the scope allowed by the Federal Rules.  Judge Edmon suggests that practitioners start looking at federal cases for guidance.
  • The demanding party will be able to demand the format of a production, including in native format, pdf, tiff, etc.  (CCP section 2031.030(a)(2).)
  • Protective Orders shift the burden onto the objecting party to show that information is from a source that is not reasonably accessible because of undue burden or expense.  The parties must meet and confer.  Judge Edmon believes that these "meet and confers" will be very important:  learn how and where documents are stored so that you know the cost of compelling the production.  You may have to do discovery specifically for the purpose of deciding whether data is inaccessible, the cost of retrieving it, and options.
  • Even if a party establishes that Electronically Stored Information (ESI) is unavailable due to the burden, the Court can still order the production if the requesting party establishes good cause for production.
  • Courts can limit ESI discovery if information is available from alternative sources.
  • The new law will allow a safe harbor for ESI inadvertently destroyed through the normal operation of an electronic system.
  • Send a preservation letter regarding ESI to the opposing party at the earliest opportunity to do so.
  • Responses:  If no format is specified in a demand, the producing party can specify the form, including form in which it is kept and a form that is reasonably usable.  Federal cases have held that placing production in a form that is not text-searchable is insufficient.  If a party objects that requested information is not reasonably accessible, the party must specify details as to why.
  • Data translation costs provision, CCP section 2031.280(e), allows responding party to translate, at requesting party's expense, productions into a reasonably usable format.
  • In the case of inadvertent production of privileged material, a new procedure will require prompt notification to the requesting party of the inadvertent production.  If the requesting party claims waiver, the requesting party will have to move within 30 days to retain the material and adjudicate the claim of waiver.
  • Many of these new procedures will also apply to subpoenas for ESI.  To protect third parties, courts and requesting parties must try to
  • CRC Rule 3.724 will now require the initial conference of counsel to address topics regarding conferring about ESI issues (form of production, clawback provisions, protection issues, and allocation of costs).
  • Judge Edmon believes that the new ESI provisions are going to be very complicated for Courts to apply.
  • If these measures are implemented, we will probably see them on January 1, 2008 (law was delayed by California budget crisis issues).

I will try to update this post later to elaborate on some of the points raised by Judge Edmon.  Please excuse any typos as I post from a conference ballroom.

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Commerce websites need to make themselves accessible to visually imparied visitors in a hurry

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The question of whether the Americans with Disabilities Act applies to websites has been simmering for several years.  (Sherry Karabin, Companies, Courts Debate Whether ADA Applies to Web Sites (September 6, 2007) www.law.com.)  The answer is coming into focus.  On Wednesday, after several years of litigation, Target Corp. agreed to a settlement with the National Federation of the Blind that calls for Target Corp. to pay out $6 million in damages and make its website fully accessible to blind customers.  (Evan Hill, Settlement Over Target's Web Site Marks a Win for ADA Plaintiffs (August 28, 2008) www.law.com.)  Judge Marilyn Hall Patel likely moved the parties closer to settlement after ruling that the ADA and California's Unruh Civil Rights Act both apply to businesses' websites.

Other companies have decided to avoid litigation (probably to foster more goodwill with consumers).  Amazon.com and RadioShack both agreed to make changes to their sites without protracted litigation.  Following Target's settlement, I think it is likely that online retailers can expect a rapid surge in litigation of this type.  And frankly, the only reason why I am not 100% certain that this area of litigation will explode is that Internet-linked issues seem to deter some otherwise confident litigators because of an irrational fear of all things digital.

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Evidence surfaces that some class action lawyers don't actually file bad cases

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According to anecdotal accounts collected by a reporter for the Houston Chronicle, at least some class action attorneys practicing in the area of wage & hour law have reportedly turned away problematic clients or those with non-viable claims.  (L.M. Sixel, Employment lawyers know no-go cases when they see them (August 27, 2008) www.chron.com.)  I know that this may be viewed as a shocking (and unsubstantiated) development, but my experience is that this actually happens.  Perhaps I'm just filled with a bit too much sarcasm tonight, or maybe I was possessed of some peculiar wave of partisanship in advance of attending CAALA's annual convention.  In any case, I hope to do a bit of "live blogging" from CAALA if I can find some useful sessions, so check back on Friday in particular to see if anything interesting is going on here.

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Printers continue to lie about ink and toner levels

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A number of years ago, Epson was faced with costly litigation surrounding its practice of designing ink cartridges that reported an empty status long before the cartridge was out of ink.  Apparently this practice hasn't stopped; printers are stll "lying" about ink and toner levels.  (Christopher Null, Your printer is lying to you (August 24, 2008) tech.yahoo.com.)  Fortunately, there are things you can do to get at all of the ink or toner you bought (other than file another class action lawsuit).  (Farhad Manjoo, Take That, Stupid Printer (August 21, 2008) www.slate.com.)  One piece of advice is to "Google some combination of your printer's model number and the words toner, override, cheap, and perhaps lying bastards."  Now that's useful advice.

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Predictably, the UCL "safe harbor" can be supplied by regulations

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Greatsealcal100The Second Appellate District of the California Court of Appeal has been busy issuing decisions in the last few weeks that touch on matters relevant to class actions and complex litigation.  Any decision concerning the Unfair Competition Law ("UCL") certainly qualifies.  On August 18, 2008, the Court of Appeal, in Yabsley v. Cingular Wireless, LLC (Second Appellate District, Division Six) held that the "safe harbor" discussed in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (1999) could be supplied by a regulation, not just a statute.  This doesn't qualify as a grounbreaking holding.  The Cel-Tech analysis essentially says that when conduct is expressly declared lawful under a statutory scheme, it cannot constitute a violation of the UCL.  As the Yabsley Court noted, regulations, when properly promulgated, have the same force and effect as statutes.

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Certification decision Medrazo v. Honda of North Hollywood discusses commonality, ascertainability requisites and the prohibition on merits-based denials

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Greatsealcal100With all the class certification decisions over the years, one might think that there isn't much left to say on the topic that hasn't been said before.  While there is a kernel of truth to that sentiment, many of the governing principles of class action law aren't put into practice by trial courts in a consistent manner.  Reviewing courts occasionally take such opportunities to emphasize what should be well-settled principles.  In Medrazo v. Honda of North Hollywood, the Court of Appeal (Second Appellate District, Division Four) used just such an opportunity to reinforce the appropriate analyses that apply to the "commonality" and "ascertainability" requisites of class certification.  In addition, the Court of Appeal emphasized the prohibtion on merits-based denials by trial courts.

In Medrazo, the Plaintiff alleged that Honda of North Hollywood violated Vehicle Code sections 11712.5 and 24014 by failing to attach a suggested retail price and costs label to motorcycles.  The trial court denied a motion for class certification and an appeal followed.  Starting with the standard for evaluating motions for certification, the Court said:

““As the focus in a certification dispute is on what type of questions -- common or individual -- are likely to arise in the action, rather than on the merits of the case [citations], in determining whether there is substantial evidence to support a trial court’s certification order, we consider whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.” (Sav-On Drug, supra, 34 Cal.4th at p. 327.)

(Slip op., at pp. 7-8.)  After articulating the standard, the Court held that the trial court erred when it considered the merits of an affirmative defense as a basis for denying certification.

Next, Medrazo addressed the trial court's determination that common issues of fact or law did not predominate.  Explaining predominance, Medrazo reminded courts and litigants that predominance is not requirement that demands an absence of individualized issues:

““Predominance is a comparative concept, and ‘the necessity for class members to individually establish eligibility and damages does not mean individual fact questions predominate.’ [Citations.] Individual issues do not render class certification inappropriate so long as such issues may effectively be managed. [Citations.] [] Nor is it a bar to certification that individual class members may ultimately need to itemize their damages.” (Sav-On Drug, supra, 34 Cal.4th at p. 334.)

It is true that in this case, each Honda purchaser will be required to establish that there was no hanger tag attached to the motorcycle he or she purchased and/or that the dealer-added costs were not disclosed on the hanger tag [footnote omitted], and all purchasers will be required to establish the suggested retail price of their motorcycles and the amount of dealer-added costs included in their purchases (if it is determined that the class is entitled to a monetary recovery measured by those items). But those individual issues must be compared to the issues that are subject to classwide (or sub-classwide) treatment. Those issues include: (1) whether HNH violated section 11712.5 and section 24014 by selling motorcycles without hanger tags; (2) whether a purchaser who buys a motorcycle sold in violation of section 11712.5 and section 24014 is entitled to restitution, disgorgement, and/or damages, and if so, what is the proper measure of restitution, disgorgement, and/or damages; (3) whether the alleged injury to the purchaser is mitigated by the disclosure of dealer-added costs in a sales agreement; and (4) whether HNH is excused from the requirements of section 11712.5 and section 24014 if the manufacturer does not supply a hanger tag that complies with section 24014.

There is nothing in the record to suggest that the individual issues cannot be effectively managed. Indeed, the record suggests that the resolution of the individual issues will involve mostly undisputed evidence -- presumably, the class members will attest that there were no hanger tags on the motorcycles they purchased, and HNH has admitted it did not attach hanger tags on any Suzuki or Yamaha motorcycles, did not attach them to some of the Honda motorcycles, and has no evidence to show there were hanger tags on any specific motorcycles. That HNH may be hampered in its ability to challenge the class members’ evidence due to its failure to keep records of its casual approach to affixing hanger tags is not a valid reason to deny class certification on the ground that individual issues predominate. In short, the substance and scope of the individual issues pale in comparison to the substance and scope of the common issues.

(Slip op., at pp. 12-13.)  Significantly for plaintiffs, this analysis provides a very concrete roadmap for presenting certification motion for claims based on statutory violations.

Finally, Medrazo explains yet again the fact that ascertainability does not require the Plaintiff to identify the class members at the time certification is determined:

““A class is ascertainable if it identifies a group of unnamed plaintiffs by describing a set of common characteristics sufficient to allow a member of that group to identify himself or herself as having a right to recover based on the description.” (Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 828.) While often it is said that “[c]lass members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records” (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932; accord, Aguiar v. Cintas Corp. No. 2, supra, 144 Cal.App.4th at p. 135), that statement must be considered in light of the purpose of the ascertainability requirement.

“Ascertainability is required in order to give notice to putative class members as to whom the judgment in the action will be res judicata.” (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 914; accord, Aguiar v. Cintas Corp. No. 2, supra, 144 Cal.App.4th at p. 135.) The representative plaintiff need not identify the individual members of the class at the class certification stage in order for the class members to be bound by the judgment. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 706.) As long as the potential class members may be identified without unreasonable expense or time and given notice of the litigation, and the proposed class definition offers an objective means of identifying those persons who will be bound by the results of the litigation, the ascertainability requirement is met.

(Slip op., at pp. 13-14.)  This, too, is an important point.  It has been my observation that the ascertainability requirement is often twisted beyond recognition, until a trial court concludes that no class definition is workable.  As Bartold notes, what is important at the outset is that the definition be sufficiently specific that a class member viewing the definition knows whether he or she falls within the class definition.  Nobody else needs to know the answer to that question at the point of certification.  Thanks to Medrazo, the context added to the Rose decision may help resolve disingenuos challenges to ascertainability.

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Judge Bonnie Sabraw, assigned to hear complex cases in Alameda County, reportedly retires

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According to the well-connected authors of WageLaw, Judge Bonnie Sabraw has retired.  Judge Sabraw recently made news with her recent decision to award a class of consumers roughly $20 million as a result of Sprint's Early Termination Fees associated with cell phone contracts.

[Via WageLaw]

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