When a company learns it is the subject of a class-action lawsuit, insurance coverage may not be top of mind, but considering available coverage for the defense and resolution of the case should be a priority. A variety of insurance policies may provide coverage depending on the underlying allegations, even if some of the allegations or relief sought present coverage challenges. To ensure companies are taking full advantage of available coverage, and meeting any notice obligations under insurance policies, it is wise to dust off the applicable policies and consult with coverage counsel.
Mass Arbitration Procedures and Strategies Tested in Litigation
We previously wrote about the rising trend of mass arbitration and how companies and arbitration providers have responded to it thus far, including by adopting new rules and contract terms specifically geared towards coordinated proceedings. It may be tempting to impose strict controls on how mass arbitrations can proceed. But in considering their options, companies
Individualized Damages Issues Preclude Class Certification in Eleventh Circuit
On the heels of the Ninth Circuit’s recent decision in Bowerman—which held that questions concerning the “existence of damages” for each class member can prevent certification—the Eleventh Circuit became the latest in a growing number of courts to conclude that class certification should be denied when plaintiffs cannot prove that each individual class member actually suffered damages.
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“Critical Mistake” In Damages Model Sinks California Class Action
On July 29, Judge William Alsup of the Northern District of California issued a decertification order in a long-running class action dispute concerning Cricket Wireless’s 4G advertising, ruling that plaintiff’s counsel made “too critical a mistake” in fashioning their class-wide damages model. See Freitas v. Cricket Wireless, LLC, 2022 WL 3018061, at *6 (N.D. Cal. July 29, 2022).
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Eleventh Circuit Confirms Circuit Split Over Class Representative Incentive Awards
The en banc Eleventh Circuit recently denied a petition to rehear the case of Johnson v. NPAS Solutions, LLC (Johnson II). See 2022 WL 3083717 (11th Cir. Aug. 3, 2022). The initial opinion in Johnson relied on two Supreme Court decisions from the 1880s to hold that district courts can never, under
A Closer Look: Avoiding Personal Jurisdiction Under An Alter Ego Theory
Class action plaintiffs often attempt to drag an out-of-state parent company into a forum based solely on the contacts of a subsidiary under the so-called alter ego theory of personal jurisdiction (sometimes called a jurisdictional veil-piercing theory). This theory allows a court to impute a subsidiary’s contacts with a forum to its parent when the subsidiary is found to be an “alter ego” of the parent company.
Companies must understand how courts apply the alter ego jurisdictional theory and best practices to minimize the unique risks this theory presents.
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Practice Pointers: Know Your Plaintiff
One of the most common failings of plaintiffs’ counsel is inadequate due diligence on the individuals they put forward as putative class representatives. Defense counsel should not repeat that mistake.
It is not unusual for putative class representatives to have flawed personal claims or to be subject to important individual defenses. A named plaintiff may also present facts that make his claim demonstrably atypical of the class, or he may have baggage – such as a past criminal conviction for fraud – that make him facially inadequate as a class representative. Sometimes it turns out a named plaintiff isn’t even a member of the proposed class.
A Closer Look: Avoiding a “Mass”-ive Arbitration Problem
Arbitration agreements have become a fixture of American contracts, and companies have turned to them as a strategy for reducing class action exposure. In recent years, plaintiffs have responded by initiating “mass arbitrations” – individual arbitrations filed on behalf of hundreds or thousands of customers or employees, which may immediately threaten companies with millions of dollars in arbitration-initiating fees alone. Many companies, however, have been slow to react to the risks posed by mass arbitration. This post discusses some of those risks, the difficulties companies have encountered in trying to address this issue, and potential strategies for mitigating the threat posed by mass arbitration.
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Practice Pointers: Should a Putative Class Action Be Settled on an Individual Basis?
There are numerous ways that a class action may be won through an effective litigation strategy. But in some instances a corporate defendant will conclude that the most cost-effective approach is to pursue settlement rather than to take on the risks and costs of further litigation. Before going down that road, one of the first things that will need to be evaluated is whether to pursue a class-wide settlement, complete with court approval under Rule 23(e) or its state equivalent, or instead to try the simpler route of settling with the named plaintiff only.