Class Action Reform

Problem

Today, some class actions are meritless cases in which thousands, or millions, of plaintiffs with unique injuries and grievances are granted class status, often without the knowledge of class members. In many of these cases, plaintiffs’ counsel negotiate settlements with the defendants early on that allow the defendants to avoid costly litigation, and rewards the plaintiffs’ counsel with millions in legal fees. Meanwhile, the class members, who play no role in the negotiation process, and who often have no idea that plaintiffs’ lawyers are advancing a lawsuit on their behalf, often receive pennies or nearly-worthless coupons.

ATRA's Position:

ATRA supports state legislation that allows only plaintiffs from the forum state who have suffered the same injury with similar claims against similar defendants to be certified as a class. ATRA also supports legislation that allows the interlocutory (immediate) appeal of class action certification orders.

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Opposition Opinion:

The personal injury bar’s argument against meaningful class action certification standards — that flexible standards make the process more efficient by incorporating all like claims, and more fair by ensuring representation for plaintiffs with claims that would not otherwise be profitable for attorneys — fails to address the hardship imposed by abuse of the device on class members, (who receive pennies, while their lawyers receive millions), defendants, (who are often forced to settle unmeritorious lawsuits), and consumers, (who ultimately bear the burden of class actions through increased costs).

The personal injury bar’s argument against the interlocutory appeal of class action certification orders — that such orders are appealable at the end of a case — fails to take into account the strong incentive that defendants have to settle an unmeritorious case once the class is certified in order to save unnecessary litigation costs.

Rules of Procedure: A.B. 773 (2018)

Wisconsin|2018

Provides that any party has a nondiscretionary right to interlocutory

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Provides that any party has a nondiscretionary right to interlocutory appeal of class certification. Specifies that, absent a showing by the moving party of substantial need and good cause (subject to an assessment of whether the burden of the proposed discovery outweighs its likely benefit), a party is not required to provide discovery of four categories of electronically stored information (ESI) as outlined in the legislation. Provides that, upon a motion of a party, a court shall limit the frequency or extent of discovery if it determines that one of the following applies: the discovery sought is cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive; the burden or expense of the proposed discovery outweighs its likely benefit or is not proportional to the claims or defenses at issue considering the needs of the case, the amount in controversy, the parties’ resources, the complexity and importance of the issues at stake in the action, and the importance of discovery in resolving the issues. Provides that a court, when ruling on a motion for a protective order, may order that discovery may be had only on specified terms and conditions, including the allocation of expenses. Adds new language to the general scope of discovery by specifically providing that parties may obtain discovery regarding any nonprivileged matter that is relevant to the party’s claim or defense and is proportional to the needs of the case, considering: importance of the issues at stake in the action; amount in controversy; parties’ relative access to relevant information; parties’ resources; importance of the discovery in resolving the issues; and whether the burden or expense of the proposed discovery outweighs its likely benefit. Provides for automatic stay of discovery upon the filing of a motion to dismiss. Provides for limitations on discovery methods unless otherwise stipulated by the court. Reduces the statute of limitations for a number of causes of action including fraud, action for injury to character or other rights, and limitation when no other limitation is provided. Changes the statute of repose for actions that result from deficiency or defect in an improvement to real property. Lowers the interest rate on untimely payment of insurance claims from 12 percent to 7 percent. Provides for mandatory disclosure of third party litigation financing. Makes certain changes as it relates to third party audits of unclaimed property.