1

THE FEDERAL JUDICIAL CENTER

THURGOOD MARSHALL FEDERAL JUDICIARY BUILDING

ONE COLUMBUS CIRCLE, N.E.

WASHINGTON, DC 20002-8003

RESEARCH DIVISION TEL.: 202-502-4074

 FAX: 202-502-4199

E-MAIL: bniemic@fjc.gov

To: Advisory Committee on Civil Rules

From: Bob Niemic & Tom Willging

FJC Project Team: Shannon Wheatman, George Cort, Dean Miletich,

Nicholle Reisdorff1

Date: September 9, 2002

Subject: Effects of Amchem/Ortiz on the Filing of Federal Class Actions: Report to

the Advisory Committee on Civil Rules2

A. Summary

The Class Action Subcommittee of the Advisory Committee on Civil Rules asked

the Federal Judicial Center (FJC or Center) to examine the impact, if any, of the

Supreme Court decisions in Amchem3

 and Ortiz4 on the rate at which plaintiffs file

class actions in federal courts. The subcommittee’s question also implicates

whether, post-Amchem/Ortiz, defendants more frequently removed class actions

from state to federal court and whether class actions in federal courts ended in

settlements less often than before the Amchem and Ortiz decisions. Similarly, for

securities cases, we analyzed filing patterns before and after the 1995 and 1998

securities legislation.

This report describes trends in federal class action filings, removals, settlements, and dismissals during the period from January 1994 through June 2001

and identifies certain discernible changes after the two decisions.

 

1. We also thank David Rauma for performing the time-series analyses and authoring

subsections B and C of Appendix II; Tim Reagan for helpful comments on drafts and advice on statistical methods; Professor Edward H. Cooper, Professor Richard L. Marcus,

and Laural Hooper for their helpful comments on drafts of this report; and Vashty Gobinpersad and Estelita Huidobro for their help in data collection.

2. This Federal Judicial Center publication was undertaken in furtherance of the

Center’s statutory mission to conduct and stimulate research and development for the

improvement of judicial administration. The views expressed are those of the authors

and not necessarily those of the Federal Judicial Center.

3. See Amchem Prods. Inc. v. Windsor, 521 U.S. 591 (1997) [hereinafter Amchem].

4. See Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) [hereinafter Ortiz].
Report to the Advisory Committee on Civil Rules

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Data collected on federal class actions for this study show that

• filings of nonsecurities class actions increased over our study period (January 1994 through June 2001), including an increase

during the two years following the Ortiz decision;

• filings of personal injury class actions more than doubled from

1994 through June 2001, including an increase during the two

years or so following the Ortiz decision;

• removals of personal injury and property damage class actions

decreased briefly after the Amchem decision and increased during

2000–2001—removals of such case types quadrupled from 1994

through June 2001;

• removals of class actions other than personal injury and property

damage actions doubled from 1994 through 1996 and then remained at approximately the same level from 1996 through June

2001;

• class actions filed in or removed to federal court with jurisdiction

based on diversity of citizenship more than doubled from 1994

through June 2001; and

• the proportion of class actions that settled within 2.5 years of filing

changed only within a narrow range for class actions filed from

1994 through 1999 (the last year for which we could study dispositions).

We cannot say with any certainty that either decision caused the changes observed. The report, however, discusses the results of a time-series analysis that

tested whether there were any statistically significant relationships between the

two decisions and the filing/disposition patterns we found. We found that certain of the changes we observed were not likely to have occurred by chance. In

other words, they were statistically significant. Because many other factors might

have affected filings, we cannot say what caused the observed changes.

B. Background

The Class Action Subcommittee of this Committee asked the FJC to obtain various kinds of caseload data and other information with which to assess whether

Amchem and Ortiz had any discernible effects on the rate and type of class action

filings in federal district courts. The subcommittee’s primary purpose is to determine whether there has been any notable decrease in the filing of federal class

actions after the Supreme Court decisions in Amchem and Ortiz. The subcommittee also expressed an interest in whether settlements of such actions decreased or

dismissals increased post-Amchem/Ortiz.

In Amchem, the Supreme Court affirmed a Third Circuit decision that vacated

the order of the district court certifying a class of individuals with asbestos injury

claims against a number of defendants and approving a Fed. R. Civ. P. 23(b)(3)
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

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opt-out settlement. The district court had combined in one class action plaintiffs

with present asbestos injuries and future claimants (absent and unknown) who

might discover an asbestos injury in the future. According to the Court, the district court‘s ruling had allowed a settlement of a “sprawling” class action that

failed to adequately protect the rights of the injured, particularly those in whom

a disease had not yet manifested itself.

In Ortiz, the Court reversed a Fifth Circuit decision that had affirmed an asbestos settlement with similar features to those the Court criticized in Amchem.

The settlement in Ortiz, however, focused on a single manufacturer of products

containing asbestos and used a mandatory “limited fund” settlement class certified under Rule 23(b)(1)(B).5

 The Supreme Court found that neither of the two class action settlements

complied with Federal Rule of Civil Procedure 23 because each allowed classes

too large and varied to meet federal standards governing class actions. Various

commentators have predicted that, after Amchem/Ortiz and other developments,

plaintiffs will file fewer federal class actions than before. Reasons given include

that federal courts will

• pay more attention to the breadth of a class;

• be less willing to certify classes;

• require that plaintiffs more fully support that a case qualifies as a

class action;

• be less willing to approve settlement even if the class is suitably

narrow; and

• be more likely to exclude scientific evidence.

Certain commentators have forecasted that the effects of Amchem and Ortiz

will include much more frequent filing of class actions in state courts.6

 We did

not include in this report any analysis of state court class action filings because

we could not locate a suitable database of such filings. The attorney survey discussed in the next subsection, however, will ask a sample of lead class counsel to

comment on why they did or did not file in state court. The survey results will

not provide comprehensive information on state-court filing rates over time, but

questionnaire responses should shed some light on the subject of state filings.

C. Two-part Study

We are conducting this research in two parts by collecting and analyzing statistical data on class action filings and by preparing, administering, and analyzing

 

5. Ortiz, 527 U.S. at 821.

6. See, e.g., Linda S. Mullenix, Abandoning the Federal Class Action Ship: Is There

Smoother Sailing for Class Actions in Gulf Waters?, 74 Tul. L. Rev. 1709 (2000) (stating

“many class counsel have abandoned the federal courts in favor of what are perceived to

be more receptive state court forums”).
Report to the Advisory Committee on Civil Rules

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results from a survey of counsel in class actions. This memorandum deals only

with the statistical data on class action filings that we collected from existing databases and a discussion of whether one might attribute any changes in class action filings to litigants’ understanding of the interpretations of Rule 23 announced in Amchem/Ortiz.

A second memorandum, which we will mail to Committee members prior to

the October 2002 meeting, will present a proposed survey design and a revised

draft questionnaire for class action counsel. We designed the survey, at the subcommittee’s request, to explore factors affecting decisions about filing class actions in state or federal court. The subcommittee had asked us to analyze

whether or to what extent Amchem and Ortiz had generally affected the terms

under which federal courts could approve class-wide settlements. The subcommittee also requested that we analyze whether the two decisions might deter litigants from filing in, or removing cases to, federal court.

D. Hypotheses

For part one of the study, we reformulated the subcommittee’s questions into

statements that could be tested empirically (hypotheses) and we gathered and

analyzed data to test those hypotheses. We formulated four hypotheses, viz., that

after the decisions in Amchem and Ortiz:

• the volume of class action filings in federal court would decline;

• removals of class actions from state court would decline;

• class action settlement rates would decline; and

• dismissals of class actions, voluntary and otherwise, would increase.

Filings in this report include cases removed from state court to federal court.

See subsections F.3 and F.5–6 below for data showing original filings and removals broken out separately.

E. Database Description

This report shows data on national filing frequencies and trends in class actions

from January 1, 1994, through June 30, 2001, in 82 federal district courts. We

could not gather data for all 94 federal districts. For 12 districts,7

 Public Access to

Court Electronic Records (PACER) or other data sources did not provide us with

the data we needed at the time of our data gathering. All case counts in the report exclude prisoner and pro se class actions.

 

7. Alabama Middle, Alaska, Arkansas Western, Guam, Indiana Southern, Mariana

Islands, Nevada, New Mexico, North Carolina Eastern, Oklahoma Eastern, Virgin Islands, and Wisconsin Western.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

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We used the period from January 1, 1994, through June 30, 2001, because it

covers at least two years before the Third Circuit’s May 1996 Amchem decision

and about three years before the Supreme Court’s June 1997 Amchem decision. At

the other end, we decided to use the most recent data available, which at the

study’s inception brought us to about two years after the Supreme Court’s June

1999 Ortiz decision.

Unless otherwise indicated, the analyses in this report used our class action

database, which contains the following:

• consolidated lead class actions (1,648 lead class actions from intradistrict consolidations);

• multidistrict litigation (MDL) lead class actions (192 lead class actions from interdistrict (or MDL) consolidations); and

• cases filed as class actions that were not consolidated or transferred to MDL (13,197 “unique class actions,” as we call them).

These case categories total 15,037, which is the total number of class actions in

our study database.

We did not include the following counts in our final database for the analyses

described in this report:

• 8,335 member class action cases from the 1,648 intradistrict consolidations listed above;

• 4,182 member class action cases from the 192 interdistrict or MDL

consolidations also listed above; and

• 1,850 “undetermined” cases, as described in Appendix I.

We identified class action filings through the LexisNexis CourtLink database

plus additional cases found on the FJC’s Integrated Data Base (IDB). The IDB includes statistical records for all civil cases filed in the federal courts. The methods

and limitations related to our data gathering are explained in Appendix I.

We derived data for the graphs and analyses in this report from all federal

district courts that participate in the PACER system. We also used FJC and private databases to systematically identify missing cases and exclude duplicate

cases. For example, for consolidated and MDL data, we removed from our study

case counts “member” cases that had been consolidated with a lead case, either

in a consolidation within a single district or a consolidation among districts by

the Judicial Panel on Multidistrict Litigation (JPML). In so doing, we eliminated

what would otherwise have been duplicative case counts. In other words, we aggregated member cases into their respective lead cases and counted only the lead

case.

As we collected data, we identified certain relevant characteristics of those

filings, which we describe in the next subsections.
Report to the Advisory Committee on Civil Rules

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F. Findings and Data Analysis

This subsection describes our findings on the frequency of class action filings

over time, before and after Amchem and Ortiz, and examines certain relevant

characteristics of those filings as follows:

• frequencies for all class action filings (subsection F.1);

• nature of suit (subsections F.2–4);

• origin of the case: original proceeding or removal from state court

(subsections F.5 and F.6);

• jurisdiction: federal question or diversity (subsection F.7); and

• disposition: settled, voluntarily dismissed, or other dismissal, but

excluding dismissals after trials (subsections F.8–10).

Each subsection below provides some background discussion and an overview of six-month-interval data in Charts 1–10, with references to monthly data

which we graphed in Appendix II as part of our time-series analysis. As we discuss the data, we note filing patterns before and after Amchem and Ortiz where

appropriate. We also assess, where appropriate, whether observed differences in

filing patterns can be attributed to the two decisions or whether the differences

are likely the result of chance or other extraneous factors. Likewise for securities

cases, we evaluate whether the 1995 and 1998 federal securities acts had any statistically significant relationship to observed changes in filing patterns. Even

where these tests (time-series analyses) could not detect statistical significance in

the observed changes, the changes shown in the charts may be of interest to the

Committee.

Numerous events may have had some effect on class action filing and disposition patterns. These events include, of course, the Supreme Court decisions in

Amchem and Ortiz and the 1995 and 1998 securities acts. We have made no attempt to account for any other factors—such as those related to the general economy, financial markets, or the frequency of detectable unlawful behavior—which

might have had competing or enhancing effects on the findings discussed below.

Nor have we made any attempt to evaluate how these many factors may have

interacted with each other and with the effects of the Amchem/Ortiz decisions.

1. Class actions, generally (excluding securities cases)

We first looked at frequencies for all class action filings generally, to give a global

view of any change after the two decisions. The case counts in this and most

other subsections exclude securities class actions. Text and charts will make specific mention when securities cases are included. We decided to analyze separately securities class actions because we assumed that legislative changes in

1995 and 1998 would overshadow any impact that Amchem and Ortiz might have.

See subsection F.4.

For the 82 districts in our study, Chart 1 graphs the six-month frequencies for

class action filings (excluding securities). We identify the timing of the decisions
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

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in the charts below by adding broken vertical lines in the six-month period immediately following each decision. We use these because the Supreme Court decided both Amchem (June 1997) and Ortiz (June 1999) at the end of a six-month,

January to June period. Graphs of monthly data are in Appendix II, with vertical

lines indicating the timing of each decision.

a. Overview of findings

There was a fairly steady increase in nonsecurities filings until approximately the

time of the Amchem decision. At this point, monthly filings began a steady decline of about 10% until approximately the time of the Ortiz decision. See Table 2

in Appendix II (monthly data). Filings then began to increase slowly and then

leveled off. The time-series analysis does not establish definitively that either

change in filings began exactly at the time of a court decision; these changes may

have begun before the decisions were issued. Nevertheless, the changes in

monthly filings are clear and the decline after Amchem may be more than coincidental to the Court’s decision.

b. Time-series analysis

As described in more detail in Appendix II, we conducted a time-series analysis

to test the statistical significance of any relationship between changes in filing

rates and Amchem or Ortiz. It is clear that something is happening around the

time of the two decisions, but the data do not allow the timing of these changes

to be determined with precision. Statistically significant changes were obtained

but only when each decision was moved back three months. This makes us less

confident that the observed changes were the result of the two decisions. These

findings could have resulted from other extraneous variables we did not measure. Nevertheless, the patterns over time clearly change from pre-Amchem to

post-Amchem and pre-Ortiz to post-Ortiz. The change after Ortiz, however, is an

increase in class action filings, not the decrease the Committee anticipated.

c. Further analysis

We compared filing patterns for all civil cases to class actions filing patterns.

Nonsecurities class action filings generally followed the trend curve for all nonsecurities civil case filings. Most likely, various other factors were at work to create the variations in overall civil case filing rates, and at least some of those factors probably also affected nonsecurities class action filings. See Appendix III for

more on this methodology.

We used Chart 1 and other graphs to examine the magnitude of any effect

overall civil filing patterns may have had on our class action data (excluding securities). We found that adjusting our class action data to remove the fluctuations

in overall civil case filing patterns did not have a great impact on our graph of

unadjusted class action filing patterns. In other words, it appears that the nonse-
Report to the Advisory Committee on Civil Rules

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curities class action filing fluctuations we observed in this study cannot be traced

to the fluctuations we observed for overall filing patterns for nonsecurities civil

cases. Further, the filing patterns for nonsecurities class action filings remain

similar to the overall filing patterns for all nonsecurities civil cases, even after

adjusting our class action data for overall civil filing patterns.

Chart 1: Class action filing frequencies

(excluding securities cases)

(six-month totals with connecting lines)

0

200

400

600

800

1000

1200

JANJUN94JULYDEC94JANJUN95JULYDEC95JANJUN96JULYDEC96JANJUN97JULYDEC97JANJUN98JULYDEC98JANJUN99JULYDEC99JANJUN00JULYDEC00JANJUN01

FILING

NUMBER

OF CASES

FILED

Amchem Ortiz

2. Nature of suit

a. Generally

We identified nature of suit for all class action filings in our database. We did

this to address whether the Supreme Court decisions, if they had an effect, affected certain types of cases more than others. Changes in sixth-month filing totals are shown in Chart 2.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

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Chart 2: Number of class action filings by nature of suit (six-month totals with connecting lines)

0

50

500450400350300250200150100

JANJUN94 JAN- JUN95 JAN- JUN96 JAN- JUN97 JAN- JUN98 JAN- JUN99 JAN- JUN00 JAN- JUN01

FILING

NUMBER

OF CASES

FILED

Civil RightsContractLaborOtherSecuritiesPersonalInjury/Prop.Damage

Amchem Ortiz
Report to the Advisory Committee on Civil Rules

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b. Overview of findings

The bottom line on Chart 2 shows the sum of personal injury and property damage filings. Because Amchem and Ortiz were personal injury cases, we describe

torts cases in detail in subsection F.3. Other nature-of-suit categories include:

• Civil rights. A post-Amchem declining trend appears to have reversed itself after Ortiz, only to fall off again toward the end of the

study period.

• Contracts. Filings increased somewhat after Amchem but, by the

end of the study period, they were about the same as they were at

the time of Amchem.

• Labor. Filings continued their upward trend with minor interruptions between Amchem and Ortiz. Given that these cases generally

relate to various federal statutes, the changes seen were likely not

related to Amchem or Ortiz.

• Other statutes. After having doubled from 1994 through the time of

Amchem, these cases slumped between Amchem and Ortiz. But

they then exceeded their prior high point, before falling off some

at the end of the study period. Given that these cases generally

relate to various federal statutes, the changes seen were likely not

related to Amchem or Ortiz.

• Securities. A pre-Amchem slump was followed by unprecedented

growth during the rest of our study period. See subsection F.4.

3. Personal injury & property damage

a. Generally

Because both Amchem and Ortiz were asbestos personal injury cases, personal

injury and property damage class actions (PI/PD) may have been more likely

affected by Amchem/Ortiz than other case types. Given this, we discuss them

separately from the others. Most of the PI/PD cases were personal injury cases.

The nature-of-suit category “personal injury” also includes product liability

cases.

Chart 3a below displays sixth-month filing frequencies for PI/PD class actions. The top line in Chart 3a contains the combined total of personal injury and

property damage cases. The lower line (personal injury only) shows that a large

majority of these tort cases involved personal injury. Property damage class action filings in all 82 districts combined were generally fewer than three per

month.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

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Chart 3a: Personal injury & property damage

class action filing frequencies

(six-month totals with connecting lines)

0

10

20

30

40

50

60

70

80

90

JANJUN94JULYDEC94JANJUN95JULYDEC95JANJUN96JULYDEC96JANJUN97JULYDEC97JANJUN98JULYDEC98JANJUN99JULYDEC99JANJUN00JULYDEC00JANJUN01

FILING

NUMBER

OF CASES

FILED

PERSONAL INJURY PERSONAL INJURY + PROPERTY DAMAGE

Amchem Ortiz

b. Overview of findings

Our time-series analysis indicates a statistically significant, but short-lived,

change in filings after the Amchem decision. This decline in filings lasted through

just after the Ortiz decision. While the graph shows a steady increase in filings

after Ortiz, this could be interpreted as a return to the pre-Amchem trend line.

c. Time-series analysis

The time-series model proved to be somewhat unstable, possibly a result of the

small number of cases. The effect associated with the Amchem decision was shortlived and ended at approximately the time of the Ortiz decision. The filing increase after Ortiz, which was not found to be statistically significant, runs counter

to the effect we hypothesized. As we found in subsection F.1, the timing of the

observed effects could not be precisely linked to the two decisions, therefore we

cannot determine if the decisions are associated with the changes in filing rates

or if some other extraneous variables are the cause.
Report to the Advisory Committee on Civil Rules

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d. Further analysis

The time-series analysis for PI/PD shows a long-term filing curve similar to that

for nonsecurities class action filings. PI/PD class action filings, however, decreased by about 30% after Amchem until around the time of Ortiz. This is compared to a decline of approximately 10% for nonsecurities class actions and a decline of approximately 19% for nonsecurities civil cases during that same time

period.

PI/PD class action filings also roughly followed the directions of the trend

curve for all nonsecurities civil case filings, but with a greater percentage decline

post-Amchem and a far greater percentage increase post-Ortiz. We cannot say,

however, whether the more pronounced changes we observed for PI/PD class

actions were caused by Amchem, by overall filing trends, or by something else.

See Appendix III.

e. Removals, personal injury & property damage cases

For the purposes of this study, we examined the basis for federal jurisdiction in

terms of whether a case had been filed originally in federal court or removed

from state court to federal court. We reasoned that any changes we might find in

removals could indicate, for example, a change in the preference of defendants to

litigate class actions in federal court. Such changes also might indicate, indirectly,

any changes in plaintiffs’ preferences for filing class actions in state courts.

Recall that removals of state court cases to federal court are counted as case

filings in our database and in the previous charts. In Charts 3b and 5, we show

removals as a separate category.

i. Overview of findings

Removals of PI/PD cases have been erratic over time. The decrease in removals seen in the years between Amchem and Ortiz was temporary, followed by

post-Ortiz increases through the end of our study period. Over the entire study

period, the overall direction of removal frequencies has been upward. Removals

increased more than fourfold over the study period. However, the six-month removal frequency counts are relatively small.

ii. Further analysis

After a mostly upward removal pattern during the first three years in Chart

3b, removals decreased by nearly half over the first year or so after Amchem, leveled off just before and after Ortiz, and then increased during the last year of the

study period.

For a graph of these frequencies in the context of all class action removals, see

subsection F.5 below.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

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Chart 3b: Class action removal and original frequencies,

 personal injury & property damages cases

(six-month totals with connecting lines)

0

5

10

15

20

25

30

35

40

45

JANJUN94JULYDEC94JANJUN95JULYDEC95JANJUN96JULYDEC96JANJUN97JULYDEC97JANJUN98JULYDEC98JANJUN99JULYDEC99JANJUN00JULYDEC00JANJUN01

FILING

NUMBER

OF CASES

FILED

REMOVED ORIGINAL

Amchem Ortiz

f. Original proceedings, personal injury & property damage

To round out our discussion of removals for personal injury and property damage cases, we discuss original proceedings here separately. See Chart 3b above.

Original proceedings decreased in the two years after Amchem. However, an

increase in original proceedings occurred immediately following Ortiz and continued through the end of the study period.

For a graph of original proceedings for all class action filings, see subsection

F.6 below.

4. Securities

Before presenting more data for all nature-of-suit categories, we examine securities class actions separately. We did not expect to see an impact from Amchem/Ortiz on these filings, but we were interested in observing any impacts after the effective dates of the

• Private Securities Reform Act of 1995 (1995 Act)8

 (which generally

made it more difficult for plaintiffs to prove a securities violation);

and

 

8. Private Securities Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737

(codified in scattered sections of the U.S.C.) (affecting pleading standards and substitut-
Report to the Advisory Committee on Civil Rules

14

• Securities Litigation Uniform Standards Act of 1998 (1998 Act)

(which channeled securities-related cases into federal courts).9

Chart 4 graphs securities case filing frequencies in six-month totals. We highlight the effective dates of the 1995 Act (December 22, 1995) and the 1998 Act

(November 3, 1998) by adding broken vertical lines in the six-month period subsequent to each effective date. We did this because the effective dates each fell

near the end of their respective six-month periods. See Table 1 in Appendix II for

monthly data.

Chart 4: Securities class action filing frequencies

(six-month totals with connecting lines)

0

50

100

150

200

250

300

350

400

450

500

JANJUN94JULYDEC94JANJUN95JULYDEC95JANJUN96JULYDEC96JANJUN97JULYDEC97JANJUN98JULYDEC98JANJUN99JULYDEC99JANJUN00JULYDEC00JANJUN01

FILING

NUMBER

OF CASES

FILED

1995 Act Amchem Ortiz 1998 Act

a. Overview of findings

The time-series analysis showed that a marked decrease in the number of securities filings occurred in January 1995, the month after the 1995 legislation became

effective. This statistically significant decrease was followed by an at first slow

rise in monthly filings from that low-point until the filings were far above pre1995 levels by the effective date of the 1998 legislation. Six months later, securities filings began to increase at a faster rate. However, this latter increase began

 

ing proportionate liability for joint and several liability).

9. Securities Litigation Uniform Standards Act of 1998, Pub. L. No. 105-353, 112 Stat.

3227 (codified in scattered sections of the U.S.C.) (requiring most private class actions

alleging fraud in the sale of nationally traded securities to be based on federal law and

brought in federal court).
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

15

before the 1998 legislation became effective and, according to the time study

analysis, cannot be associated definitively with the legislation. Neither Amchem

nor Ortiz appear to have affected securities filing rates.

b. Time-series results

The statistically significant, abrupt decrease after the effective date of the 1995

Act cannot be fully seen in Chart 4 for two reasons. First, Chart 4 displays sixmonth, not monthly, intervals. The underlying monthly data used in the timeseries analysis, however, clearly indicate a statistically significant decrease in securities filings in January 1996 after the 1995 Act became law. See Table 1 in Appendix II.

Second, in Chart 4, we inserted the dotted, vertical line in the six-month period after the Act’s December 22, 1995, effective date. Chart 4 may make it appear

to some that the decrease in filings occurred in the July–December 1995 period,

whereas the abrupt decrease actually occurred in January 1996.

Among all the time-series analyses completed for this report, this decrease is

the only change whose onset coincided precisely with the date of the hypothesized intervention, that is the effective date of the 1995 Act.

Changes following the 1998 legislation were not consistent, especially when

observed by month. The time-series analysis found nothing statistically significant about the post-1998 Act changes.

c. Further analysis

An objective of the 1998 Act was to channel securities class actions into federal

courts. From January 2000 to June 2001, filings increased at a relatively high rate

to the highest point of the study period. We have, however, no way to determine

what part of this increase is related to the 1998 Act and what part is related to

increasing volatility, losses, or a burst of filings during this period that were related to initial public offerings (IPOs) in the equity markets.

5. Removals of class actions from state courts (nonsecurities & securities)

Subsection F.3 above discusses removal of personal injury and property damage

cases. Here, we show removals for all class actions. Chart 5 graphs the frequencies of removed class actions in six-month totals. As explained in more detail in

the text below, Chart 5 displays separate lines for

• securities and nonsecurities, i.e., total removals for all class actions

(top line);

• personal injury and property damage removals (bottom line); and

• nonsecurities (middle line).
Report to the Advisory Committee on Civil Rules

16

a. Overview of findings

Removals of class actions doubled from January 1994 through June 1996. After

that, removal activity generally held at about the same level for the remainder of

the study period.

b. Total removals for all class actions (securities & nonsecurities)

A fairly rapid rate of increase for total removals (top line in Chart 5) nearly leveled off about a year before Amchem. But total removals (primarily nonsecurities

removals) dropped by over 35% during the five or so months before the Supreme

Court decided Ortiz. Then removal frequencies increased again after Ortiz a nd

within a year removals were back up to around pre-Ortiz levels.

c. PI/PD removals

The bottom line on Chart 5 shows PI/PD removals, which we showed on a different scale in Chart 3b above. These removals were small in number, though not

as small as securities removals. The PI/PD removal frequencies ended the study

period with a six-month total about four times the comparable total in January–June 1994. Chart 3b shows a downturn in removals after Amchem and an

upturn that began shortly after Ortiz. See Chart 3b and accompanying text for a

more detailed analysis of these same data.

d. Securities removals

Securities cases are generally filed in federal court as original proceedings. After

the 1995 and 1998 Acts, however, some cases appear to have been removed from

state to federal court.

Chart 5’s small gap between the top line (nonsecurities and securities removals—i.e., all class action removals) and the line just below it (nonsecurities removals only) demonstrates that most of the removed class actions were not securities cases and that a relatively small number of securities cases were removed.

Removal frequencies for securities cases stayed within the range of 3–15 (mean of

7.1) cases per six-month period from right after Amchem until the end of the

study period. Prior to Amchem, removals were within the range of 1–3 (mean of

1.4) cases per six-month period. Notice, though, that the number of removed securities class actions began to increase to about 5–15 (mean of 9.4) cases per

month beginning with the six-month interval after the 1998 Act.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

17

Chart 5: Class action removal frequencies: nonsecurities, nonsecurities & securities, and PI/PD cases

(six-month totals with connecting lines)

0

50

250200150100

JANJUN94 JULY- DEC94 JAN- JUN95 JULY- DEC95 JAN- JUN96 JULY- DEC96 JAN- JUN97 JULY- DEC97 JAN- JUN98 JULY- DEC98 JAN- JUN99 JULY- DEC99 JAN- JUN00 JULY- DEC00 JAN- JUN01

FILING

NUMBER

OF CASES

FILED

Nonsecurities Nonsecurities & securities Personal injury & property damage

1995 Act Amchem 1998 Act Ortiz
Report to the Advisory Committee on Civil Rules

18

6. Original class action proceedings (nonsecurities & securities)

The cases discussed in this subsection are class actions originally filed in U.S.

district courts. Chart 6 graphs the frequencies of these original proceedings in

six-month totals, displaying PI/PD, securities and nonsecurities, and nonsecurities cases, as separate lines.

a. Overview of findings

Total class action original proceedings nearly doubled over the study period. In

particular, securities cases began a general increase in 1997 from the low levels

that immediately followed the 1995 Act.

b. Total original proceedings (securities & nonsecurities)

Looking at monthly data (not shown here), filings of original-proceedings class

actions appear to show greater volatility (month-to-month variation) postAmchem and even greater volatility post-Ortiz than in periods before these decisions.

Chart 6: Class action original proceedings frequencies:

 nonsecurities, nonsecurities & securities, & PI/PD cases

(six-month totals with connecting lines)

0

200

400

600

800

1000

1200

JANJUN94JULYDEC94JANJUN95JULYDEC95JANJUN96JULYDEC96JANJUN97JULYDEC97JANJUN98JULYDEC98JANJUN99JULYDEC99JANJUN00JULYDEC00JANJUN01

FILING

NUMBER

OF CASES

FILED

Nonsecurities Nonsecurities & securities Personal injury & property damage

1995 Act Amchem 1998 Act Ortiz
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

19

c. PI/PD original proceedings

Personal injury and property damage original cases were relatively small in

number. Trends cannot be seen on Chart 6. Chart 3b and accompanying text

above, however, provide a more detailed analysis of these same PI/PD original

proceeding data. Chart 3b shows a decrease in original proceedings after Amchem

and an increase beginning shortly after Ortiz.

d. Securities original proceedings

Not unlike Chart 5 for removals, Chart 6 shows that most of the original proceedings class actions were not securities cases. The reader can observe this by

looking at the relative size of the gap between the top line (nonsecurities and securities) and the line just below it (nonsecurities only). As seen in Chart 6, securities “original” class actions began to decrease just after the 1995 Act, as discussed more broadly in subsection F.4. The increases that followed became

greater during the second half of the study period.

7. Federal question and diversity jurisdiction (excluding securities)

a. Generally

Amchem and Ortiz were asbestos product liability class actions based on diversity

jurisdiction. Chart 7 below shows federal question and diversity frequencies for

all nonsecurities class action filings. Subsection F.4 above discusses securities

filings, which are usually based on federal question jurisdiction.

b. Overview of findings

The filings of nonsecurities class actions based on federal question jurisdiction

saw an overall rate of increase during the study period, with higher increases in

1997 and 2000. The 1997 increase came pre-Amchem. The number of filings

moved downward after Amchem, only to increase again after Ortiz in the second

half of 1999 and 2000. The filings based on diversity jurisdiction approximately

doubled over the 90-month study period.
Report to the Advisory Committee on Civil Rules

20

Chart 7: Class action filing frequencies federal question

and diversity jurisdiction (nonsecurities cases)

(six-month totals with connecting lines)

0

100

200

300

400

500

600

700

800

900

JANJUN94JULYDEC94JANJUN95JULYDEC95JANJUN96JULYDEC96JANJUN97JULYDEC97JANJUN98JULYDEC98JANJUN99JULYDEC99JANJUN00JULYDEC00JANJUN01

FILING

NUMBER

OF CASES

FILED

FEDERAL QUESTION DIVERSITY

Amchem Ortiz

8. Settled cases (excluding securities cases)

a. Methodology for disposition data

To see whether Amchem had any effect on the approval of class settlements, voluntary dismissals, and other nontrial dismissals, we gathered data on dispositions that occurred within 2.5 years of case filing. We could not gather disposition data for cases filed toward the end of our study period, because most class

actions are not concluded until years after filing.10 To adjust for this feature of

our data, we compiled disposition data from our study database, but only for

cases that had been open for at most 2.5 years after their respective filing dates.

In Charts 8, 9, and 10, we used nonsecurities filing data from the start of the

study period through June 1999 (two years prior to the end of the study period).

We did not collect disposition data for cases filed after July 1, 1999, to ensure that

we had 2.5 years of such data—given that we only had disposition data available

for periods through December 31, 2001.

To account for variations over time in filing frequencies, we graphed the

proportion of settled cases to total filings for each six-month interval shown in

Chart 8. More precisely, for each six-month period, the numerator for the pro-

 

10. See Thomas E. Willging, Laural L. Hooper & Robert J. Niemic, An Empirical

Study of Class Actions in Four Federal District Courts: Final Report to the Advisory

Committee on Civil Rules 28, 61–62 (Federal Judicial Center 1996).
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

21

portion was the number of cases filed in that period that settled within 2.5 years

of the filing date. The denominator for the proportion was the total of class action

filings in that six-month period. Subsections 9 and 10 discuss frequencies for

cases voluntarily dismissed and other nontrial dismissals. The only effects we

could analyze were from the Amchem decision; the Ortiz decision was issued at

the very end of the time period we used for Charts 8–10.

b. Overview of findings on settlements

Based on monthly data, the proportion of filed cases that settled within 2.5 years

of filing varied greatly over time, but within a fairly small range. The proportion

levels just before and after Amchem remained somewhat steady. Exceptions were

the dip and subsequent resurgence in the last two six-month periods shown on

Chart 8. The frequency of settled cases ranged from 596–911 (mean of 766) cases

per six-month interval.

Chart 8: Class action filings that settled within 2.5 years of filing

as a proportion of class actions filed (nonsecurities cases)

(six-month totals with connecting lines)

0.2

0.22

0.24

0.26

0.28

0.3

0.32

JANJUN94JULYDEC94JANJUN95JULYDEC95JANJUN96JULYDEC96JANJUN97JULYDEC97JANJUN98JULYDEC98JANJUN99

FILING

PROPORTION

OF CASES

FILED

Amchem Ortiz

c. Time-series analysis

The time-series analysis showed no clear, statistically significant post-Amchem

changes in the proportion of nonsecurities class actions that settled within 2.5

years of filing. We found the same result for PI/PD cases settled within 2.5 years.

The same can be said about the analysis for such cases that were voluntarily dismissed within 2.5 years of filing. See Appendix II, subsection C.4.
Report to the Advisory Committee on Civil Rules

22

9. Voluntarily dismissed (excluding securities cases)

We also compiled data on cases voluntarily dismissed. We recognized that voluntary dismissal of class actions does not signify a settlement of class claims,

which must be approved by the court. We also recognized that there are different

interpretations concerning whether individual dismissals require court approval

under the current version of Rule 23. See Chart 9. See subsection F.8 for a description of the methodology we used for Chart 9.

a. Overview of findings

The proportion of filed cases that were voluntarily dismissed within 2.5 years of

filing changed erratically over time, but within a fairly small range. The overall

trend has been an increasing one. The frequency of voluntarily dismissed cases

ranged from 50–102 (mean of 78) cases per six-month interval.

b. Time-series analysis

See subsection 8.C above for a description of the time-series analysis.

Chart 9: Class action filings voluntarily dismissed within 2.5 years of

filing as a proportion of class actions filed (nonsecurities cases)

(six-month totals with connecting lines)

0.06

0.07

0.08

0.09

0.1

0.11

0.12

0.13

JANJUN94JULYDEC94JANJUN95JULYDEC95JANJUN96JULYDEC96JANJUN97JULYDEC97JANJUN98JULYDEC98JANJUN99

FILING

PROPORTION

OF CASES

FILED

Amchem Ortiz
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

23

10. Other dismissed (excluding securities cases)

a. Generally

Finally, the category “other dismissed” includes dismissals other than settled,

voluntarily dismissed, dismissed for want of prosecution, and dismissed for lack

of jurisdiction. This category does not include dismissals after trial. See Chart 10.

See subsection 8 above for a description of the methodology we used for Chart

10.

b. Overview of findings

The proportion of filed cases with other dismissals within 2.5 years of filing appears to have declined slightly over the data-collection time period. The sixmonth levels after Amchem were generally lower than those before Amchem. The

frequency of other-dismissed cases ranged from 50–277 (mean of 144) per sixmonth interval.

Chart 10: Class action filings other dismissed within 2.5 years of filing

as a proportion of class actions filed (nonsecurities cases)

(six-month totals with connecting lines)

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

0.2

JANJUN94JULYDEC94JANJUN95JULYDEC95JANJUN96JULYDEC96JANJUN97JULYDEC97JANJUN98JULYDEC98JANJUN99

FILING

PROPORTION

OF CASES

FILED

Amchem Ortiz

G. Conclusions

Statistical data from the entire 1994–2001 study period indicate that most of the

relevant indicators of class action activity that are of interest to the Advisory

Committee have increased. That is true of all filings and personal injury filings

(including removals). Separate examinations of trends in removals and in diversity filings indicate that both have increased. Within the limits of the study, we
Report to the Advisory Committee on Civil Rules

24

found no evidence that the proportion of class actions that settle within 2.5 years

has changed notably over the years.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

25

Appendix I

Methods for Report on the Effects of Amchem/Ortiz on the

Filing of Federal Class Actions

A. Introduction

We first determined the population of class action filings for the period January

1, 1994, through June 30, 2001. The database covers at least two years before the

Third Circuit’s May 1996 Amchem decision and about three years before the Supreme Court’s June 1997 Amchem decision. At the other end, we decided to use

the most recent data available, which at study inception brought us to about two

years after the Supreme Court’s June 1999 Ortiz decision. Because the Supreme

Court’s decisions in Amchem and Ortiz both occurred in mid-year (June), we decided to look at six-month intervals to discern filing patterns both before and after Amchem/Ortiz.

For this research, we broadly defined class action filings to be cases where a

class allegation was either considered or made at some point in the life of the

case but not necessarily certified by the court. To give equal weight to all cases,

we identified which cases had been consolidated, either within a district or

across districts by consolidation orders or by orders of the Judicial Panel on

Multidistrict Litigation (JPML). We then aggregated these “member” cases to the

lead case for that consolidation.

We could not gather data for all 94 federal districts. For 12 districts,11 PACER

or other data sources did not provide us with the data we needed at the time of

our data gathering. Our study results include data for the other 82 districts.

B. Population of Class Action Filings

We searched for class action identifiers using the online services of LexisNexis

CourtLink. This service maintains a database of docket sheets for nearly all the

federal district courts. CourtLink’s service allows full text searching capabilities

of the electronic docket files maintained in its “CaseStream Historical” database.

We supplemented this approach with data from the Federal Judicial Center’s Integrated Data Base (IDB), an historical database of all federal cases drawn from

the Administrative Office’s federal case statistics, but with corrections and re-

 

11. Alabama Middle, Alaska, Arkansas Western, Guam, Indiana Southern, Mariana

Islands, Nevada, New Mexico, North Carolina Eastern, Northern Oklahoma Eastern,

Virgin Islands, and Wisconsin Western.
Report to the Advisory Committee on Civil Rules

26

finements. We also obtained data from the JPML to cross-check our listing of

multidistrict litigation (MDL) cases.

1. Search of the CourtLink database

CourtLink has its own method of identifying and flagging class action cases in its

database. The company performs electronic searches of the litigants’ name field

for the terms “similarly situated” and “representative of the class” and also

searches electronically the first five docket entries of each docket sheet for the

term “class action complaint.” If either of these conditions is met, the case is

flagged as a class action.

In past FJC projects involving class actions, we discovered that CourtLink’s

flagging scheme overlooks many class action filings. After performing a review

of the language on the docket entries of a sample of class action cases, we formulated an expanded version of CourtLink’s method of identifying these cases.

We searched the CourtLink database for the following terms anywhere within the

entire docket sheet:

• “similarly situated”

• “representative of the class”

• “class action complaint”

• “class counsel”

• “class representative”

• “class allegation”

• “class certification”

• “class certify” and

• “class settlement.”

The search engine also allowed us to use “word-stemming” to find words that

have a common root, such as class representative, class representatives, and class

representation. Using this expanded search, we created a database of possible

class action filings that we called “Unadjusted CourtLink Cases.”

2. CourtLink database limitations

a. Description of “updating problem”

One inherent problem with CourtLink’s searching service is that not all of the

docket sheets on its system are up-to-date. We will first discuss here the limitations and extent of the so-called “updating problem.” We will then describe how

we addressed that problem.

In CourtLink’s current business model, all new cases filed in the federal district courts are downloaded each night and added to its database. Those cases

remain as they were first retrieved until one of two things happens: (1) a customer asks CourtLink to obtain an updated docket sheet from the court or (2) a

customer identifies a case for “tracking” (i.e., regular, automated updates of the
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

27

case’s CourtLink docket sheet from court records). Both of these options require

the customer to pay an additional fee for this service. Customers can “view” a

docket sheet in the CourtLink database at no additional charge, but the case information is only as current as the last time CourtLink updated it. When a customer makes an inquiry about a case, CourtLink tells the customer when CourtLink last downloaded the case so the customer can determine if the last update is

current enough for the customer’s purposes.

CourtLink initially “seeded” its database several years ago when it downloaded all docket sheets from the PACER system of all the courts that had them

available on PACER during the period from November 1997 to February 1998.

Because of the huge cost, CourtLink does not employ a regular or programmatic

system for “updating” its docket sheets. The problem that results from this is

that, for all cases that are not the subject of recent or frequent customer requests

for “updating” or “tracking,” the docket sheet information can be outdated. As a

result, it is not possible for CourtLink to identify cases for us where the court

added any of our search terms to the court’s docket entries on a date after CourtLink’s last update of that case. For the FJC to perform these searches on the

PACER databases in all districts would far exceed our available resources. Likewise, it would be cost-prohibitive for the Center to pay CourtLink for an update

of its entire docket sheet database.

b. Extent of updating problem

The special search CourtLink performed for us, as described above in section 1 of

this Appendix, yielded 31,25212 class action cases. We used another resource to

determine if we were missing any class action cases in our population because of

the CourtLink updating problem. We used the FJC’s Integrated Data Base (IDB)

to search for cases that were identified on the Civil Action Cover Sheet as class

actions at the time of filing or later upon termination. This exercise yielded 3,334

additional cases that our expanded CourtLink search had not identified as class

actions.

We reviewed a random sample of 93 docket sheets of the 3,334 additional

cases from the IDB to find out the extent of the updating problem.13 We compared the most recent docket sheet obtained through PACER with the docket

sheet maintained by CourtLink. We found that the expanded CourtLink search

had missed 19% of these docket sheets because one of our search terms appeared

in a docket sheet entry that occurred after the most recent update of the CourtLink’s docket sheet. We also discovered a small percentage of our sample (2%)

 

12. The original number was 31,303 cases; however, we excluded 51 Court of Federal

Claims cases from study because we wanted to examine only class action activity within

Article III courts.

13. We determined that given our population of 3,334 IDB cases we would need to

sample 93 cases in order to have a 95% confidence level with a +/- 10 confidence interval.
Report to the Advisory Committee on Civil Rules

28

had the term “similarly situated” in the header of the docket sheet but CourtLink’s header field was truncated and, thus, the search term was not present in

the truncated version. We also found that 8% of the sample of IDB cases had

original filing dates outside our study period. These latter cases were most likely

reopened cases (see section 5 of this Appendix for a discussion of reopened

cases).

In the 93-case sample of IDB cases, 71% had docket sheets with none of our

search terms anywhere in the docket sheet. These are cases that the IDB flagged

as class actions based on the “check-off” box on the Civil Action Cover Sheet but

that had no other references to class action activity in the text of the docket

sheets. We presumed that they were class actions and included them in the database as “undetermined” cases (see section 5 of this Appendix for our count of

“undetermined” cases). We did not, however, include these cases in the final

database and analyses for this report.

3. Addressing “updating problem” and verifying data

a. Adding cases from IDB

We developed ways to address CourtLink’s “updating problem.” As we recorded information on consolidations from the docket sheets of cases we found

through CourtLink and the IDB, we made note of any cases that were related to

the consolidation but that were not in our original population of class action

cases. When we finished making notes on these cases, we had a list of 1,597

“notes cases.” Again these were cases that were not found in the CourtLink or

IDB search. We downloaded the docket sheets for notes cases for six districts,14 a

total of 305 cases, and reviewed those docket sheets to see whether these cases

were also class actions that were not captured by our initial text search. We

found that 96% of the notes cases for these six districts were class action cases.

We also found that the information we had already obtained—from the docket

sheets that mentioned those notes cases—contained all of the information we

needed. Based on these findings, we felt comfortable adding all 1,597 notes cases

to our database, without reviewing the rest of the docket sheets for the notes

cases.

b. Verifying MDL cases

The Judicial Panel for Multidistrict Litigation (JPML) offered us assistance in

cross-checking our MDL cases.15 The clerk’s office for the JPML matched all of the

 

14. Alabama Northern, Alabama Southern, Arizona, Arkansas Eastern, California

Central, and California Eastern.

15. We would like to thank Michael Beck, clerk of the JPML, as well as Ariana

Estariel and Alfred Ghiorzi in the clerk’s office for their detailed assistance.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

29

cases we had in our database with all MDL cases in their database.16 The office

was able to match 1,950 cases in our database. From this matching we found that

262 cases we had originally thought were “unique” (single) class action cases

were actually MDL member cases. This miscategorization most likely occurred

because the MDL transfer came after the last update of docket sheets at CourtLink. With the information we received from the clerk’s office, we were also able

to verify that each of our MDL cases was only counted once—that is, counted

only for the final transferee district. This enabled us to eliminate our concerns

about double counting of MDLs that would have occurred if MDLs were counted

in both the transferor and transferee districts.

c. Verification from IDB

The IDB also contains information that helped us to verify the data in our database. We looked at the IDB origin and disposition codes for all cases. If a

“unique” class action case had an IDB origin code of “case transferred to this

district by MDL Panel Order,” we determined our database was not up-to-date

because of the CourtLink updating problem. We recoded such cases in our database as MDL member cases. Likewise, if a unique class action case had a disposition code of “MDL transfer,” the case was recoded as an MDL member case.17

Lastly, all cases that were coded as unique class actions and had a disposition

of “transfer to another district” were recoded as “undetermined” and not included in our database or analyses. By doing this, we excluded from our database cases that were transferred to another district and then given a new case

number in the transferee district. Such a transfer would have produced duplicates had we not recoded them.

4. Intradistrict consolidations and interdistrict MDL transfers

Once our population of class action case filings was determined, we attempted to

identify which of those cases were consolidated within a district (usually intradistrict consolidations) and which were transferred to the Judicial Panel on

Multidistrict Litigation (interdistrict consolidations). Recall that we wanted to

aggregate intradistrict and MDL consolidations to the lead case for that consoli-

 

16. The clerk’s office reported that it does not always receive case data for all MDL

member cases.

17. Even after these adjustments, we realize that there still may be “unique” class action cases left in our database that, rather than being unique, are really MDL member

cases. This might include cases where the only MDL identifier in the docket sheets is the

MDL number, such as 95-MD-1234. Our search for MDLs did not include the search term

“MD.” Such a search term would have produced too many cases that were not true

MDLs. Given the adjustments described above, we conclude that we have no practical

way to find any remaining MDL member cases that we might have improperly coded as

unique class actions.
Report to the Advisory Committee on Civil Rules

30

dation in order to count each lead case (and its associated member cases) as a

single filed class action. Once again we used the LexisNexis CourtLink searching

service to identify which of our cases had terms in its docket entries relating to

consolidations and multidistrict litigation. Upon reviewing a sample of the dockets to identify possible search terms, we finalized a search strategy that searched

for the terms:

• “consolidate”

• “member case”

• “lead case”

• “related case”

• “relating case”

• “relatedness”

• “42(a)”18

• “MDL”

• “M.D.L.”

• “Judicial Panel”

• “Multidistrict”

• “Multi-District”

• “Multi District”

• “JPML”

• “J.P.M.L.”

• “conditional transfer order” and

• “28 U.S.C. Section 1407.”

Again we allowed for “word-stemming”—case, cases, case(s), etc. Based on

our search results, we determined that our provisional population of 31,252 cases

contained approximately 18,275 “unique” class action filings that contained no

mention of consolidation or MDL transfer. The remaining cases we estimated

were comprised of approximately 3,656 MDL member cases and 9,321 intradistrict member consolidations, after doing these searches for all the 82 districts for

which we have data.

a. Reviewing the docket sheets

After identifying these cases, we proceeded to download the PACER docket

sheets for CourtLink-identified cases that we believed were MDL member cases

and intradistrict member consolidations based on the search terms listed above.

We reviewed each docket sheet for any mention of consolidation or MDL transfer. If a docket sheet contained a lead case or MDL number, that information was

recorded. If a docket sheet included information on a lead case or other consolidated member cases we verified that these cases were already in our database. If

the case was not in our database, we recorded the docket number to determine

 

18. Referring to Fed. R. Civ. P. 42(a).
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

31

later whether the case was a class action that should be included in our study

(these cases was referred to as “notes cases” in section 3 of this Appendix). We

coded information from each docket sheet so that lead cases, member cases, and

MDL lead cases could be counted and identified by district and identified

chronologically over our time period.

b. Filing dates

In this study, the filing date represents the date the case was originally filed in or

removed to federal district court. These dates are used to categorize case filings

into six-month intervals or monthly intervals over the study’s time period. The

filing date of the lead consolidated case and consolidated member case represents the date those cases were filed within our study period. However, for

MDL’s, because we could not always identify the “true” lead MDL case, we

chose the earliest filed MDL case to represent the MDL filing date.

5. Other excluded cases

We excluded approximately 3,400 reopened cases from our database. If a case

was originally filed outside our study time period then reopened within our time

period, we did not include the case in the study’s database. If a case was originally filed within our time period, then reopened during our time period, we included only the original filing in our database. We did this to avoid double

counting because the IDB contains a separate record for each reopening in addition to the record for the original proceeding.

We also excluded all prisoner cases. We decided it is highly unlikely that Amchem and Ortiz would have an effect on prisoner class actions because they are

generally actions for injunctive relief rather than actions for damages and because they rarely survive as class actions.

We also excluded pro se cases because, if a case is a true class action, counsel

must represent the class. A nonlawyer who is unassisted by counsel cannot represent a class without, by that representation, engaging in the unauthorized

practice of law. In total, we excluded approximately 3,900 prisoner and/or pro se

class actions.

We had to exclude six districts (Alaska, Guam, Northern Mariana Islands,

Nevada, Virgin Islands, and Wisconsin Western) from the study, because they

were not linked to PACER at the time of our search.

We also had to exclude six additional districts (Alabama Middle, Arkansas

Western, Indiana Southern, New Mexico, North Carolina Eastern, and Oklahoma

Eastern). The docket sheets for these six districts could only be retrieved via

CourtLink; they do not participate in WebPACER. CourtLink identified a total of

1,083 class actions in these districts. Because of the updating problem with

CourtLink, we decided to eliminate these districts from our study, thus reducing

to 82 the total number of districts in our study database.
Report to the Advisory Committee on Civil Rules

32

6. Final database

After excluding all these cases, our final database contains the following number

of class action cases:

• 13,197 “unique” class actions;

• 1,648 lead class actions among all intradistrict consolidations; and

• 192 lead class actions among all interdistrict (or MDL) consolidations.

We did not include the following counts in our final database for the analyses

described in this report:

• 8,335 member consolidations;

• 4,182 MDL member cases; and

• 1,850 “undetermined” cases.19

Unless otherwise noted, the analyses in this report used only the first three

groups of cases: “unique,” lead consolidations, and lead MDL cases.

 

19. The 1,850 “undetermined” cases are IDB cases that had no mention of any of the

search terms.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

33

Appendix II

Time-series Analysis Report on the Effects of Amchem/Ortiz

on the Filing of Federal Class Actions

A. Background

Social scientists commonly use interrupted time-series designs to assess possible

causes and effects of legal and policy changes.20 In this report, we examine the

effects that two Supreme Court decisions had on class action filing rates. Using

an interrupted time-series model with monthly data from January 1994 through

June 2001, we test the hypothesis that Amchem and Ortiz reduced the filings of

class actions in federal courts.

1. Use in policy analysis generally

An interrupted time-series research design allows an evaluation of the effect of a

Supreme Court decision (e.g., Amchem, Ortiz) on a dependent variable of interest

(e.g., class action filings). This type of quasi-experiment has been used widely in

research that evaluates the impact of legal policies and decisions because it allows statistical testing of the impact of the decision over time.21

2. Specification of the intervention model

Two issues concern the researcher when specifying an intervention in an interrupted time-series model.22 One issue focuses on when and how the intervention

occurred. Was the onset of the intervention immediate or gradual? The second

issue focuses on whether and how the intervention (e.g., the Amchem decision)

influenced, for example, class action filing rates. Was the influence temporary or

permanent?

Prior to our analysis we hypothesized that the impact of Amchem and Ortiz

on class action filing rates would be gradual and permanent. We assumed that

any effect of the two decisions would be gradual because change in the legal

system in general—and in lawyer and client decision making in particular—typically follows a gradual course. We expect that awareness of the impli-

 

20. Abraham R. Tennenbaum, Influence of the Garner Decision on Police Use of Deadly

Force, 85 J. Crim. L. & Criminology 241 (1994).

21. Malcolm D. Holmes et al., Plea Bargaining Policy and State District Court Caseloads:

An Interrupted Time Series Analysis, Law & Soc’y, 139, 143 (1992).

22. Barbara G. Tabachnick & Linda S. Fidell, Using Multivariate Statistics 837–900

(4th ed. 2000).
Report to the Advisory Committee on Civil Rules

34

cations of Supreme Court decisions like Amchem and Ortiz filters down to lawyers and clients over a period of months as opposed to having an immediate impact. We assumed that the Advisory Committee would be interested primarily in

testing for a permanent effect of the decisions because the Committee’s mission is

to write rules designed to remain in effect indefinitely, if not permanently.

B. Methodology for Data Analysis

Interrupted time-series models were estimated for the monthly series described

in this report. This class of models is frequently used to assess the over-time impact of changes in public policy and/or related events on some outcome.23 These

models take the form:24

y

B

B

I B

B t a

i

i

i

=+ + μ ∑ it t

ω

δ

( )

( )

( )

( )

Θ

Φ

• yt represents the time series of interest, such as the number of securities cases filed monthly (the subscript t denotes time periods).

It is composed of three parts: a mean or expected value for the series, one or more policy changes (again which social scientists call

interventions), and an error process.

• μ represents the mean of the time series y.

• it

i

i

I

B

B

( )

( )

δ

ω represents the impact of the ith intervention I on y.

• at

B

B

( )

( )

Φ

Θ represents an error component that includes a random

error at.

This model is similar to a standard regression model, which represents a dependent variable as the function of dependent variables and an error process. In

conceptual terms, an important difference between the time-series model and the

regression model is that the temporal ordering of the time series—the dependent

variable—creates the possibility of effects over time in both the impact of the interventions and the error process. The result of this difference is an iterative

process of identifying, estimating, evaluating, and, if necessary, re-estimating the

over-time processes using a variety of diagnostic tools unique to time-series

analysis.

 

23. See G.E.P. Box & G. Jenkins, Time Series Analysis: Forecasting and Control (1976);

G.E.P. Box & G.C. Tiao, Intervention Analysis with Applications to Economic and Environmental Problem, J. Am. Stat. Ass’n 70 (1975).

24. Interrupted time-series models are a subset of a larger class of models in which

other time series may be used to model the outcome series.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

35

Five time series were analyzed here:

• the number of securities class action cases filed monthly from

January 1994 to June 2001;

• the number of nonsecurities class action cases filed monthly from

January 1994 to June 2001;

• the number of tort class action cases25 filed monthly from January

1994 to 2001;

• the proportion of nonsecurities class action cases filed each month

that were settled or voluntarily dismissed within two and one-half

years of filing, for the period January 1994 to June 1999; and

• the proportion of tort class action cases filed each month that were

settled within 2.5 years of filing, for the period January 1994 to

June 1999.

Four interventions were tested. The effective dates of the 1995 and 1998 securities acts were tested for their impact on securities class action filings in federal

courts. The Supreme Court’s decisions in Amchem and Ortiz were tested for their

impact on nonsecurities and tort class action filings. However, because the series

did not extend far enough in time26 only the Amchem decision was tested for its

impact on the proportion of nonsecurities class action cases settled or voluntarily

dismissed. These four interventions are described in more detail in the body of

the study report.

Monthly data were used for the time series reported below. All series begin

in January 1994. The filings data end in June 2001; the settled and voluntarily

dismissed data end in June 1999. The four interventions are represented by

dummy or binary variables coded 0 before the month the legislation took effect

or the Supreme Court decision was issued and 1 afterward. One feature of these

models is that different effects of the interventions on the outcome series mean

can be modeled, including the following: abrupt, permanent changes to a new

level; gradual over-time changes to a new level; and abrupt changes in level followed by gradual decline in that change. All of these changes were found among

the five time series analyzed and are shown graphically below.

 

25. This category consists of property damage and personal injury cases. It is a subset

of nonsecurities cases.

26. These two series could only be calculated through June 1999, in order to calculate

the proportion of cases settled or voluntarily dismissed within 2.5 years after the last

month in the series.
Report to the Advisory Committee on Civil Rules

36

C. Results

A word of caution is necessary. With one exception, the onset of the interventions in these models could not be determined to be unique. In other words,

changes in the outcome time series were associated with the onset of the intervention, but could also have begun earlier than the intervention. Whether this is

due to the behavior of litigants or to the construction of reporting periods

(months) is not known. As a result, the estimated models use the “theoretical” starting points of the interventions, and little emphasis will be placed on the exact values of

the estimated changes. Instead the direction and nature of the estimated changes will be

emphasized and supported graphically. Finally, all of the reported models passed the

time-series diagnostic tests for stationarity and serial correlation.

1. Securities filings: effects of 1995 and 1998 legislation

Before we turn our analysis to the effects of Amchem and Ortiz, we discuss the

effects of the 1995 and 1998 securities legislation. (See also subsection F.4 in the

main body of this report.) Table 1 below contains the results for the analysis of

securities filings. Two interventions were tested: the 1995 legislation (I1t) and the

1998 legislation (I2t). Following Table 1 below in this Appendix is a graph of the

series and its estimated value based on the model.27 The graph contains two lines

going from left to right over time. The smoother line denotes the estimated values for the model; the jagged line denotes the actual monthly filings.

The two vertical lines indicate the beginning of the interventions. The first

line denotes the 1995 legislation; the second line denotes the 1998 legislation.

The estimated model shows that there was an abrupt shift downward in filings after the onset of the 1995 legislation, followed by a gradual return to a

higher level of filings. Overall, this change is represented by (1 ) 11

10

δ B

ω

− . The estimates for the shift parameter (ω10) and the change parameter (δ11) are statistically

significant. This over-time change is clearly seen in the graph following the table.

Among the analyses reported in the tables below in this Appendix II, this is the

only change whose onset clearly coincides with the intervention. No such abrupt

change followed the 1998 legislation.

 

27. The estimated values are actually forecasted values using the observed values of

the time series and the interventions.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

37

The shift parameter is small and not statistically significant; however, after

the 1995 Act, the change parameter is statistically significant and denotes a gradual increase over the time period from the 1995 Act to the 1998 Act. This effect is

represented by (1 ) 21

20

δ B

ω

− . The gradual change is also evident in the graph of the

observed and estimated series.

Table 1

Securities Class Action Filings

(1 ) (1 ) (1 ) (1 ) 2

21

20

1

11

10

B

a B I

B

I

B y t

t t t δ φ

ω

δ

ω

μ − − + − + − = +

Coefficient Estimate t-value

μ 28.84 7.53*

ω10 -27.99 -2.92*

δ11 0.92 17.03*

ω20 0.46 1.29

δ21 1.07 24.78*

φ 0.37 3.62*

*Statistically significant at the .05 level for a two-tailed test.
Report to the Advisory Committee on Civil Rules

38

2. Nonsecurities filings

Table 2 below contains the estimated results for nonsecurities filings, all of which

are statistically significant. As shown in the graph following Table 2, nonsecurities filings were increasing prior to the Supreme Court’s Amchem decision (I1t in

the table and the first vertical line in the graph). At approximately that time, nonsecurities filings began to steadily decrease, until the Ortiz decision (I2t in the table, and the second vertical line). At approximately the time of the Ortiz decision,

nonsecurities filings began to increase, but that increase gradually slowed over

time. At the end of the observed series, these filings appear to have reached a

plateau or even began to decline. These patterns are reflected in the model’s estimated values (smooth line).

The timing of the two interventions could not be determined with precision.

Statistically significant changes were obtained when the beginning of each intervention was moved back several time periods, making it less likely that each intervention caused the observed change. Nevertheless, the over-time patterns

clearly change from pre-Amchem to post-Amchem/pre-Ortiz to post-Ortiz. It is

clear that something is happening, but the time-series data do not allow the timing of these changes to be determined exactly.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

39

Table 2

Nonsecurities Class Action Filings

(1 )

(1 )

(1 ) (1 )(1 ) 2

21

20

1

11

10

B

B a I

B B

I

B y t

t t t −

− + − − + − = +

θ

δ

ω

δ

ω

μ

Coefficient Estimate t-value

μ 1.76 5.42*

ω10 -6.20 -4.87*

δ11 -1.01 -34.63*

ω20 9.09 2.82*

δ21 0.87 15.98*

θ 0.91 18.27*

*Statistically significant at the .05 level for a two-tailed test.
Report to the Advisory Committee on Civil Rules

40

3. Torts filings

The results for the analysis of torts filings are reported in Table 3. The Supreme

Court’s decisions in Amchem (I 1t in the table and the first vertical line in the

graph) and Ortiz (I2t in the table and the second vertical line in the graph) are

again tested as interventions. The results for this analysis are slightly more difficult to interpret, because the natural log of filings rather than filings was analyzed. The torts filing series showed a great deal of variability over time, and the

degree of that variability changed. As a result of this variability, a stationary

model could not be estimated. Instead, a model was estimated for the natural log

of series [ln(yt)].28 The estimated values were exponentiated29 and plotted against

filings in the graph accompanying the table.

The over-time pattern for torts filings resembles that of nonsecurities filings.

There are differences however. Apart from the mean, the only statistically significant estimate for the effect of the interventions is the change parameter (δ11)

for the Amchem decision. This indicates there was not an immediate effect of the

Amchem decision, but a gradual decline in the number of filings after the decision. This was a change from the steadily increasing filings prior to the Amchem

decision.

Neither the shift (ω20) nor the change (δ21) parameter for the Ortiz decision is

statistically significant. While the graph shows a steady increase in filings after

the Ortiz decision, this may be interpreted as a return to the pattern before Amchem. In other words, the effect associated with the Amchem decision was shortlived and ended at approximately the time of the Ortiz decision.

Once again, the timing of these interventions could not be precisely determined, but the over-time patterns suggest that changes occurred that coincided

with at least the Amchem decision.

 

28. This is a standard and recommended solution when the variance of the timeseries changes over time. Logging the series compresses the variance and may allow a

model to be estimated.

29. The estimated values were also corrected for the standard error of forecast.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

41

Table 3

Torts Class Action Filings

(1 )

(1 )

(1 ) (1 ) ln( ) 2

21

20

1

11

10

B

B a I

B

I

B y t

t t t −

− + − + − = +

θ

δ

ω

δ

ω

μ

Coefficient Estimate t-value

μ 0.03 2.96*

ω10 -0.14 -1.89

δ11 0.90 12.16*

ω20 -0.09 -0.25

δ21 0.38 0.15

θ 0.85 14.43*

*Statistically significant at the .05 level for a two-tailed test.
Report to the Advisory Committee on Civil Rules

42

4. Nonsecurities cases settled or voluntarily dismissed

Table 4 reports results for the analysis of the proportion of nonsecurities cases

settled or voluntarily dismissed within 2.5 years of filing. The only intervention

tested for this series was the Amchem decision (It in the table and the vertical line

in the graph); the Ortiz decision was issued at the end of the period covered by

this series and could not be tested. The results are straightforward. There was a

small but statistically significant increase (denoted by ω0) in the mean proportion

of cases settled or voluntarily dismissed. However, the timing of this change

cannot be determined precisely; it could have begun several months earlier,

making it less likely that Amchem caused the change. Nevertheless, there was a

shift upward at about the time of the Amchem decision. Nearly identical results

were obtained for separate analyses of voluntarily dismissed and settled cases.

Table 4

Nonsecurities Cases Settled or

Voluntarily Dismissed

t t at y = μ +ω0I +

Coefficient Estimate t-value

μ 0.39 39.73*

ω0 0.04 2.69*

*Statistically significant at the .05 level for a two-tailed test.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

43

5. Torts cases settled

Table 5 contains the results for the analysis of the proportion of torts cases settled. As with prior analysis, only the Amchem decision (It in the table and the

vertical line in the graph) could be tested as an intervention. The results show no

statistically significant change at the time of that decision. There is one caveat for

this analysis. The series shows the same problem as the torts filing series—changes in the variability of the series over time. Because of the presence of

zeros in the time series, it could not be logged.30 Therefore, these results on settled torts cases must be considered with caution.

Table 5

Tort Cases Settled

t t B at y I (1 ) = μ +ω0 + −θ

Coefficient Estimate t-value

μ 0.25 11.62*

ω0 -0.04 -1.22

θ 0.27 2.25*

*Statistically significant at the .05 level for a two-tailed test.

 

30. As a test, zeros in the series were changed to very small positive values and the

series logged. The analysis of this logged series yielded the same results as reported in

Table 5—no significant change following the Amchem decision.
Report to the Advisory Committee on Civil Rules

44

D. Conclusions

Overall, the time study analysis indicates that the decline in class action filings in

the two-year period between Amchem and Ortiz may be more than coincidental

to the Court’s decision in Amchem. Said another way, the analysis found that Amchem was associated with reduced class action filing rates during that two-year

time period. After Ortiz, filing frequencies returned to their pre-Amchem pattern

of increases. We found no long-term effect of Amchem or Ortiz on filing rates or

settlements of class actions. We also found a statistically significant relationship

between the Private Securities Litigation Reform Act of 1995 and the filing of

federal securities class actions.

An interrupted time-series design is susceptible to history effects.31 Our results cannot rule out the possibility that the patterns we might attribute to the

impact of the Supreme Court decisions or the securities acts may have actually

resulted from the influence of other collinear or unmeasured influences. Events

other than the decisions could have influenced filing.

The interrupted time-series design is a good research method to determine

causal inferences, but the external validity of most interrupted time-series design

is problematic in many applications.32 For this study we have reduced the external validity concern and feel comfortable generalizing our findings to all federal

districts, based on data from 87% of all federal districts.

 

31. See supra note 21 at 155.

32. Id.
Effects of Amchem/Ortiz on the Filing of Federal Class Actions • Federal Judicial Center 2002

45

Appendix III

Trend and Proportion Analysis Report on the Effects of

Amchem/Ortiz on the Filing of Federal Class Actions

We wanted to remove from our class action data the effects of general trends in

the filing of federal civil actions during the study period. In other words, we

wanted to adjust our class action study data to account for filing patterns for federal civil case filings for each month of our study period.

A. Overview

We looked to see if the filing patterns we observed in filing rates for class actions

(Chart 1) were also present in the filing patterns for all civil cases generally.

When we did this comparison, we observed that nonsecurities class action filings

generally followed the trend curve for all nonsecurities civil case filings. This was

our finding still, even after we adjusted Chart 1 data to proportion data, effectively removing from Chart 1 data the increases and decreases in nonsecurities

civil case filing patterns during our study period. To accomplish this, we reviewed a scatter plot of the monthly proportion of nonsecurities class action filings to all federal nonsecurities civil case filings. We then looked at a computergenerated trend curve for these adjusted proportions. We observed that the adjusted curve is very similar to the unadjusted curve.

B. Calculations

We chose not to include these proportion charts in this report in the interests of

clarity and brevity. The method for computing these proportions is as follows.

We took the data for monthly filings and computed “Proportion of Cases Filed.”

We calculated “Proportion of Cases Filed” by dividing the number of class actions filed by the number of federal civil cases filed for each month of our study

period. The data used for the numerator is taken from the class action database

we created for this study and the data for the denominator is from civil case

counts on the FJC’s Integrated Data Base (IDB).

In calculating the proportion, the data in the numerator excludes securities,

prisoner, and pro se cases but includes consolidated class action member cases.

The data in the denominator excludes securities, prisoner, and pro se cases but

includes consolidated class action member cases and MDL member cases. We

had no way of identifying all class action MDL member cases to add them to the

numerator or to subtract them from the denominator. Based on the relatively

small number of such cases compared to the relatively large denominator, we
Report to the Advisory Committee on Civil Rules

46

assume that having those cases in the denominator does not have a significant

effect on the calculated proportions.

C. Analysis and Conclusion

Based on Chart 1 and other graphs, we determined that adjusting our class action

data to remove the filing patterns for civil case filings had no significant effect on

unadjusted trend curves for our study’s class action data. One of the reasons is

that nonsecurities civil case filings did not vary greatly, relatively speaking, over

our study period. In calculating these proportions, the number of class actions

(the numerator) was very small compared to the total number of civil case filings.

As a result, changes in the denominator would have to be quite large before they

would begin to significantly change the calculated proportion.

We concluded that, even after adjusting for nonsecurities civil case filing

patterns, class action filings generally followed the trend curve we observed for

all nonsecurities civil case filings. This leaves open the question of whether the

influences we observed at play for all civil case filings might have been at play

for class action filings as well.