The Continuing Need For Class Action Reform

Thursday, August 21, 2014 - 13:02

The Editor interviews Terri S. Reiskin, Practice Group Leader for the Products, Class Actions & Professional Liability Practice Group of Dykema.

Editor: Describe your role as group leader for the firm’s products, class actions, and professional liability practice.

Reiskin: I took over the role of practice group leader for our Products, Class Actions and Professional Liability group in January of this year. We have over 60 attorneys in the group, which makes it a management challenge. My primary responsibility is helping with professional development and marketing. Each lawyer has his or her own strengths and client base; my role is to try to help them think strategically about how to develop their practices. I also assist in making sure the work is being done by the right mix of people and that we have the bench strength to handle the litigation work we specialize in and want to do more of in the future. We are fortunate in that we have a very talented group of litigators, so more often it’s just figuring out where we want to be down the road, rather than filling a current need. However, we are always looking at lateral candidates to supplement our existing practice or to add new areas of expertise. I think that is essential to remaining competitive in the legal market right now.

Editor: Please discuss the management of a large (60-plus) group of litigators and the challenges of that job in today’s legal climate.

Reiskin: Dykema has offices around the country, so one challenge is just getting enough face time with the litigators in our group. I am based in DC, but I try to visit the other offices as often as I can. Even so, inevitably there is a trial going on or people are traveling, so I miss them when I am there. I’m a big believer in spending time one-on-one with my colleagues and clients.  Technology can be a crutch. Sure, you can send an e-mail from home at 10 p.m. just to cross something off your list, but relationships don’t develop that way. I think we all need to take time to make a phone call or, preferably, sit down together (over drinks or a meal, if possible) to really get to know and understand each other better. Since I came to Dykema only three years ago, I particularly need to do this to get to know the people in my group, as I don’t have the benefit of years of institutional knowledge and familiarity with all of their practices. It’s amazing how many different types of cases our lawyers have handled, and the more I know, the more I can help market our group better.

Editor: Describe recent class action trends, and give examples from your experience.

Reiskin: My practice focuses heavily on class action defense, particularly relating to consumer products. I’ve been handling class actions since the 1990s, and it’s been something of a roller coaster. Every time the law develops in a way that favors the defense, the plaintiffs’ bar adjusts and throws something new our way. One of the biggest battlegrounds has been over nationwide classes.  As courts rejected nationwide classes on grounds of lack of predominance of common issues over individual ones, as well as the impossibility of managing a trial involving the laws of dozens of jurisdictions, the plaintiffs had to adjust.

The Class Action Fairness Act (CAFA) also had the effect of moving most class actions from state courts into federal courts. More recently, it seems, the plaintiffs have decided to bring cases with dozens of named plaintiffs from states around the country, and to move to certify a lot of state sub-classes. I don’t think that solves the manageability problem (if anything, it may just make it worse), and it certainly makes discovery an expensive and time-consuming proposition. Frankly, I see plaintiffs’ lawyers struggling with this as well. I am handling a case now where the plaintiffs suggested we pick only a few jurisdictions and limit discovery and class certification motions to those jurisdictions to cut down on discovery. They don’t want to invest large sums of money in a case, as their model is to do only enough to get to a settlement. Increasingly, I find that my clients are not interested in settlements, and will fight hard to win these cases, whether at the summary judgment phase, at trial or even on appeal. I am encouraged to see more of that. It used to be that if you had a class certified, a settlement seemed inevitable.  Dykema has tried more class actions – and won them – than just about any firm I know, and our clients know we can do it, so they have less fear about the certification process. 

Editor: What is the effect of the Supreme Court’s decision in Comcast v. Behrend and other recent case law on class action defense, and particularly the defense of class actions involving consumer products?

Reiskin: Comcast has been interpreted differently by courts in different circuits, but where it has been interpreted more broadly, it has changed the dynamic as far as damages are concerned. The conventional wisdom in most jurisdictions, for a long time, has been that individual damages issues don’t preclude class certification. I think that reflected the notion that these cases are so big and involve so much exposure that the court would never have to get to the point of figuring out how to adjudicate the damages. Comcast changed all that and forces plaintiffs, at the certification stage, to show that they have a model that can be used to address damages issues in a way that correlates with the claims alleged and is manageable from a trial perspective. I think we will be seeing a lot more expert testimony on damages at the class certification stage, and more Daubert practice as well. Overall, I think these are positive developments from a defense standpoint. For too long, certification was viewed as just a procedural hump that courts didn’t need to take too seriously. That was unfortunate and led to a lot of abuse of the class action process.

Editor: Discuss Coker v. DaimlerChrysler Corp., 2004 WL 32676 (N.C. Super. Jan. 5, 2004, aff'd) dismissing a no-injury class action under NC unfair trade practices statute based on lack of standing, the economic loss rule and primary jurisdiction doctrine putative class action.

Reiskin: Coker was one of dozens of state court class actions brought against DaimlerChrysler alleging that vehicles were defective because they lacked a brake-shift interlock device. These were classic no-injury cases, but this was pre-CAFA, so the plaintiffs’ approach was to form a loose association of firms to bring multiple cases. We were national counsel for DaimlerChrysler on these cases, and it was a logistical challenge to retain local counsel and meet all the varying requirements of litigating in courts all over the country, including some places where you don’t typically see many class actions, like North Dakota and Nevada. I have been fortunate in my career to do a lot of national counsel work, and so I have a great network of defense lawyers around the country whom I can call on and really trust to do a great job. We were able to get a number of these cases dismissed early on, including Coker, and after we got summary judgment and defeated class certification in others, the plaintiffs basically just gave up. Coker stood out because the court applied the primary jurisdiction doctrine and forced the plaintiffs to file a petition with the National Highway Traffic Safety Administration. It also applied the economic loss doctrine to North Carolina’s consumer fraud statute. It’s been more than ten years since that decision, but I’ve briefed the effect of Coker as recently as earlier this year. This case seems to get under the plaintiffs’ skin; they are always arguing that it shouldn’t be given any deference, but it’s a well-reasoned decision.

Editor: Describe class action reforms being discussed by organizations like DRI and why they should be adopted.

Reiskin: Class actions tend to benefit disproportionally the plaintiffs’ lawyers who bring them, and often provide little benefit, if any, to the class members. They are very expensive to defend, and all consumers ultimately are disserved when products are more expensive or even unavailable due to the high costs of related litigation. DRI, the Product Liability Advisory Council (PLAC), Lawyers for Civil Justice and others are doing important work in pressing class action reforms and also through their amicus programs, which I think have a real impact on the beneficial development of the case law. I have written a number of amicus briefs for PLAC, and I enjoy having the opportunity to step outside the constraints on the parties to talk more expansively about the very real policy issues that the court’s ruling will inevitably influence. Although more class actions are now in federal court, changes to state class action procedures, like making interlocutory appeals more available and prohibiting out-of-state residents from filing class actions in state court unless there is some real connection to the jurisdiction, are examples of the sorts of reform that can be beneficial. On the federal level, these organizations can be helpful in fighting the notion that an “issue class” can be certified, which I think is an improper use of Fed.R.Civ.P. 23(c)(4) to get around the predominance requirement of Rule 23(b)(3). Rule 23 needs to be modified to make this clear, but, in the meantime, amicus activity on the issue should help persuade courts to get this right.  

Editor: How big a problem is e-discovery, and will the changes in the Federal Rules of Civil Procedure proposed last August by the Federal Rules Advisory Committee make a difference? 

Reiskin: I’m not an e-discovery expert, though I'm fortunate that Dykema has a team whose specialty is e-discovery to whom I can turn or refer clients when e-discovery issues arise. In my own practice, e-discovery is like a lion that has to be kept in its cage lest it eat everyone in sight. It can really swallow the litigation, particularly when the plaintiffs choose to make discovery, rather than substance, the issue. I think the changes proposed to Rule 37(e) will, if adopted, be a step in the right direction. The volume of electronic materials generated by most organizations is simply huge, and it is not practical to require it all to be preserved endlessly, nor is it of benefit to either side in litigation. Just weeding through it all to find what is truly relevant (typically a miniscule proportion) can be a staggeringly large job. The changes to Rule 26 to try to make discovery more proportional to the litigation would also make a difference. Cost-shifting would also be helpful to avoid the situation where plaintiffs can force defendants to bear extreme costs that are unjustified in the context of the particular litigation (if ever).   

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