Mass Litigation Governance in the Post-Class Action Era: The Problems and Promise of Non-removable State Actions in Multi-district Litigation

Given a string of decisions restricting the use and availability of the class action device, the world of mass litigation may well be moving into a post-class action era. In this era, newer devices of aggregation—perhaps principally among them multi-district litigation (“MDL”)—increasingly will be called upon to meet the age-old mass litigation goal of achieving global peace of numerous claims arising out of a related, widespread harm. Indeed, coordination of pretrial proceedings in the MDL frequently facilitates the achievement of this peace, given the reality that cases, once consolidated in the MDL, often settle en masse. However, one clear obstacle to the achievement of aggregate peace in the MDL, one that also plagues the achievement of that peace in the class action world, is our federal system of substantive and procedural law. In the MDL context, the problem arises because litigation involving state-law claims and non-diverse parties, which are not removable from state court, cannot be transferred to the MDL court. Despite their prevalence, little scholarly attention has been devoted to non-removable state-court actions in MDL. The few responses to this issue have largely focused upon the efficiencies that could be gained through increased, and perhaps total, consolidation of all related cases or, short of consolidation, through heightened coordination of pre-trial proceedings between state and federal judges. This article questions whether these responses have led reform proposals in the wrong direction, and instead takes a different view. Rather than argue for increased consolidation, I offer for further consideration the possible ways in which the happenstantial existence of parallel tracks of related state and federal cases actually hold promise, if properly harnessed, as mechanisms for achieving the goals of aggregate litigation and for disciplining the contours of global settlements of mass disputes. In particular, I explore the possibility that the existence of parallel state and federal cases—frequently viewed as an obstacle to global resolution of claims unable to be consolidated in a single forum—may well fortuitously provide an opportunity to achieve the sorts of mass litigation resolution envisioned but unsuccessfully attempted in the class action context. In so doing, this article adds new thoughts and theories to the specific debate regarding parallel state and federal claims in MDL, as well as to the larger debate about mass litigation governance in a post-class action world

Economic incongruities in the European patent system

Bruno van Pottelsberghe argues that the consequences of the fragmentation of the European patent system are more dramatic than the mere prohibitive costs of maintaining a patent in force in many jurisdictions. The authors first show that heterogeneous national litigation costs, practices and outcome induce a high level of uncertainty. But also that a high degree of managerial complexity results from systemic incongruities due to easier parallel imports, possible time paradoxes and the de facto paradox of having EU-level competition policy and granting authority, ultimately facing national jurisdictional primacy on patent issues.

Notes Procedural Fencing in Retiree Benefits Disputes: Applications of the First-Filed Rule in Federal Courts

Basil Chapman retired from ACF Industries, a railroad-car maker, after thirty-eight years of service. In December 2003, he received an unexpected phone call at his West Virginia home from a union representative, who informed him that an ACF executive wanted to speak with him. When they spoke, the executive informed Mr. Chapman that ACF was planning on changing its retirees’ health coverage plan. The ACF plan would now have a lifetime maximum benefit cap on hospital and surgical expenses for each participant and would require retirees to make monthly contributions. According to court papers filed later, Mr. Chapman responded, “We have a contract. You can’t do that.” Then, he said that he would “file in federal court” against ACF. The next business day, ACF filed a declaratory judgment action in the United States District Court for the Eastern District of Missouri asking the court to rule that retiree benefits were not vested and that ACF accordingly could alter benefits unilaterally. On January 26, 2004, Mr. Chapman, other named plaintiffs, and their union sued ACF in the United States District Court for the Southern District of West Virginia

“Inextricably Intertwined” Explicable at Last?: Rooker-Feldman Analysis After the Supreme Court’s Exxon Mobil Decision

The Supreme Court\u27s March 2005 decision in \u27Exxon Mobil Corp. v. Saudi Basic Industries Corp.\u27 substantially limited the Rooker-Feldman doctrine, under which lower federal courts largely lack jurisdiction to engage in what amounts to de facto review of state-court decisions. Exxon Mobil\u27s holding is quite narrow--entry of a final state-court judgment does not destroy federal-court jurisdiction already acquired over parallel litigation. But the Court\u27s articulation of when Rooker-Feldman applies, and its approach in deciding the case, have significant implications for several aspects of Rooker-Feldman jurisprudence. Chief among our claims is that although the Court did not expressly repudiate or limit the applicability of the inextricably intertwined formulation from prior cases, which had been a primary test for many lower courts, that concept appears to have been relegated to some secondary role and no longer to be a general or threshold test. The Exxon Mobil Court properly did not elaborate on just what the concept\u27s role should be, but we offer a suggestion based on an earlier Ninth Circuit decision. We also discuss the apparent impact of Exxon Mobil on other aspects of Rooker-Feldman doctrine as the lower federal courts had developed it, including relation to preclusion doctrines, the significance of whether the federal plaintiff was plaintiff or defendant in state court, and the doctrine\u27s applicability a) to those not parties to prior state-court litigation, b) to interlocutory state-court rulings and decisions of lower state courts, and c) when federal-court plaintiffs did not raise their federal claims in state court. A February 2006 per curiam decision applying Exxon Mobil, Lance v. Dennis, reinforces the Court\u27s position on some of these issues

Liberty University\u27s Lawyering Skills Program: Integrating Legal Theory in a Practice-Oriented Curriculum

Law schools are not preparing lawyers for the practice of law. While modern legal education may teach analytical reasoning, skills training continues to suffer. The lawyering skills program developed by the Liberty University School of Law addresses the need to train lawyers in the practice of law. When seeking to build a top quality law school, Liberty University took seriously the challenge to address the void in legal education, particularly with respect to lawyering skills. The foundational principles of law are infused into the legal curriculum and lawyering skills program. The required substantive law courses are structured to have a relationship with lawyering skills so that they mutually reinforce each other

The International Trade Commission: Potential Bias, Hold-Up, and the Need for Reform

The International Trade Commission (ITC) is an alternate venue for holders of U.S. patents to pursue litigation against infringing products produced abroad and imported to the United States. Because the ITC may only grant injunctive relief, it has awarded injunctions in situations where there may have been better and more efficient remedies to the infringement available through litigation in federal district court. The increased likelihood of injunctive relief bolsters the position of patent holders against a wide range of producers in royalty negotiations and can harm the end consumers through a process known as patent hold-up. There are currently sweeping and aggressive proposed reforms to reduce this harm to consumers. This iBrief suggests that the optimal reforms would not change the overall structure or scope of the ITC or its jurisdiction. Rather it would harmonize the substantive law, available defenses for respondents, and requirements for injunctive relief between ITC proceedings and litigation in federal district court

SEC Enforcement Heuristics: An Empirical Inquiry

This Article examines the overlap between SEC securities enforcement actions and private securities fraud class actions. We begin with an overview of data concerning all SEC enforcement actions from 1997 to 2002. We find that the volume of SEC enforcement proceedings is relatively modest. We next examine the scope of the recently enacted Fair Fund provision that authorizes the SEC to designate civil penalties it recovers from defendants to benefit defrauded private investors. We conclude that this provision offers only limited potential relief for private investors. We complete this Part of the Article with an analysis of the serious resource limitations faced by the SEC. The second portion of the Article contains an empirical analysis of the determinants of SEC enforcement actions and the overlap of private fraud suits and SEC enforcement proceedings. Using bivariate analysis, we find that (1) private suits with parallel SEC actions settle for significantly more than private suits without such proceedings; (2) SEC enforcement actions target significantly smaller companies than private actions alone; (3) private cases with parallel SEC actions take substantially less time to settle than other private cases; and (4) private cases with parallel SEC actions have significantly longer class periods than other private actions. Finally, we create a model for estimating damages to compare settlement ratios in cases with parallel SEC actions to those in private actions. We find that one-fourth of all the private class action settlements occurring in suits that yield less than 10 percent of provable losses are settled for less than 2 percent of provable losses, but that there are no private actions with parallel SEC suits with such small settlements. In the final Part of the Article, we conduct a multivariate regression analysis of the determinants of when SEC enforcement actions are filed. We find that the most highly significant determinant of SEC actions is financial distress. Estimated losses do not appear to be a statistically significant factor in the SEC\u27s decision to file these suits