Class Action Watch Winter 2002
January 1, 2002
We are pleased to present the Winter 2002 issue of Class Action Watch. This issue examines a number of recent developments and new trends in class action litigation. Our feature articles describe duplicative class actions - that is, two or more class actions filed on behalf of the same class (or overlapping classes) that present claims arising out of the same set of operative facts. A number of legal scholars believe this trend threatens to undermine the very goals of fairness and efficiency that class actions were intended to serve. To investigate this trend, Class Action Watch surveyed Fortune 500 companies that have demonstrated an interest in the litigation process to inquire whether they had been affected by duplicative class action filings. Our analysis examines these companies' experiences by reporting the incidence, magnitude, and source of duplicative class actions filed against them. A second survey focused on class actions that have come to the attention of the Judicial Panel on Multidistrict Litigation (the "MDL" Panel). Class Action Watch studied a variety of sources of information-MDL Panel docket entries respecting actions removed from state court and proposed for consolidation but later remanded, newspaper reports of state court filings, and reports of counsel involved in the MDL proceedings themselves-to determine the extent to which federal court class action defendants are encountering competitive state court class actions as well. The preliminary results of this survey are reported in this issue, with further analysis coming in future issues of Class Action Watch. The trend of duplicative class actions is also considered in this issue with regards to proposed amendments to Rule 23.
Two other trends will be discussed; one is the phenomena of "auction bidding" in which federal judges receive competing bids from plaintiffs council to handle a case. Although adopted a decade ago as a free market approach to awarding the potentially lucrative cases, competitive bidding is gaining popularity across the country. We also examine underwriting laddering, which is creating a flood of new class action litigation due to the decline of the technology sector. Investors are suing failed dot.com companies and their initial public offering (IPO) underwriting banks for misleading investors. The implications of this action are laid out in this issue. This issue also contains an article on pleading standards for scienter and an extensive list of developments in class action law.
We remain committed to providing such information concerning the changing nature of class action litigation and reporting recent developments in the field. We hope this material will prove helpful to litigators, judges, and those involved in legislative debates over the future of class actions. We also hope that this issue will prompt others to try to collect and disseminate additional data concerning the changing nature of class actions. We encourage any comments or suggestions you may have to improve the publication so that future issues can provide even more useful information.
Class Action Watch would like to extend its gratitude to several volunteers who contributed to this issue: Allyson Newton, Megan Farrell, Laura Kam, Andrew Morris, and Dave Salmons.