Source: https://classactionblawg.com/tag/parens-patriae/
Timestamp: 2019-04-18 23:15:03+00:00

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What the Heck’s Going on With Class Actions?
1) the Court granted cert in State of Mississippi v. AU Optronics Corp., to address the issue whether parens patriae actions filed by state attorneys general seeking restitution on behalf of state citizens are “mass” actions, permitting removal under the Class Action Fairness Act (CAFA). For more on the case, see Deborah Renner’s post on the BakerHostetler Class Action Lawsuit Defense Blog. If it were up to me, I’d go further and say that parens patriae cases are actually “class” actions under CAFA, but apparently the Court has its own idea about the scope of the issue.
2) The Court vacated Judge Richard Posner’s decision in Butler v. Sears Roebuck & Co. and remanded for reconsideration in light of its recent decision in Comcast Corp. v. Behrend. This follows the Court’s earlier decision to vacate the Sixth Circuit’s decision in In re Whirlpool Corp. Front-Loading Washer Products Liability Litigation for the same reason. Given the many questions left unanswered by the Comcast decision, it will be interesting to see what the Sixth and Seventh Circuits do with the moldy washer cases on remand.
From time to time we will troll the class action blogosphere for news and information about our favorite class action topics. Here are just a few of the recent headlines from around the web.
Complex litigation as a commodity investment?
Hedge funds have traditionally been willing to explore new territory in the non-traditional investment sphere. At least some appear to be finding potentially attractive opportunities in so-called Litigation Funding Companies. LFC’s are often run by former lawyers–some with an investment or hedge fund background. They identify potentially profitable lawsuits and agree to fund the litigation (to a point) in exchange for a percentage of the settlement. Three Geeks and a Law Blog has an interesting multi-part series on this new trend. Read it here.
Andrew Trask, class action attorney at McGuire Woods and co-author of the Class Action Playbook recently put together a list of takeaways explaining how class action defense attorneys can use Wal-mart v. Dukes. His post links to a power point presentation he recently gave at DePaul University. It’s a quick read and worth checking out.
Irregular transaction was not enough to show a Bank had actual knowledge of an alleged Ponzi scheme.
Race to the Bottom contributor Susan Beblavi unpacks the Eleventh Circuit’s semi-recent opinion in Lawrence v. Bank of America, D.C. Docket No. 8:09-cv-02162-VMC-TGW, 2012 LEXIS 777 (11th Cir. Jan. 11, 2012). In that case, putative class action plaintiffs alleged the Bank of America substantially assisted in a Ponzi scheme operated by one of its account holders. The Eleventh Circuit upheld the District court’s dismissal of the case reasoning that even though BOA authorized numerous large transactions by the account holder, the bank wasn’t required to investigate them under Florida law. Moreover, the court found the purported red flags were too weak to infer that it was plausible that the bank had actual knowledge of the alleged scheme. Read more at the link below.
Parens Patriae actions, class actions?
Skaddon’s Russell Jackson posts that the Louisiana Supreme Court has again reversed class certification due to problems of commonality and causation. Previously, the Louisiana high court adopted the U.S. Supreme Court’s common question analysis in Walmart v. Dukes to reverse class certification in Price v. Martin. In a recent per curiam opinion in Alexander v. Norfolk So. Corp., No. 11-C-2793, Slip op. (La. Mar. 9, 2012), the Louisiana Supreme Court cited Price for the proposition that class certification requires a rigorous analysis and significant proof of a common question. The case involved a chemical spill involving train cars. Hundreds complained of a bad smell and irritation to their eyes, throat and nose. This led to a class action that was certified by the trial court and affirmed by an appellate court. It turned out, each putative class member would need individual toxicology testing to determine whether they are among the minority of people who are susceptible to very low levels of the released chemical. The Louisiana Supreme Court ultimately reversed class certification based on the lack of predominance of common issues, and the need for individualized trials. Read more here.
Todd Dawson’s post on Baker Hostetler’s Employment Class Action Blog illustrates just how badly things can go when a key “smoking Howitzer” document slips through defense counsel’s ESI review and ends up in the plaintiffs’ hands. In an FLSA Collective Action, the employer produced two million documents. Prior to the production, the employer’s attorneys used various search terms to identify privileged documents. Inevitably, one got through – a bad one. Even worse, the court concluded that the employer had waived privilege. Thus, not only did the plaintiffs’ counsel get to see the document, they got to use it as well. To see how this disaster could have been avoided, read more here.
Washington State v. Chimei Innolux Corp., No. 11-16862 (9th Cir. Oct. 3, 2011) – joining the Fourth Circuit in holding that a parens patriae action brought by state attorneys general or other state officials for the benefit of the state’s citizens is not a “class action” for the purposes of removal under the Class Action Fairness Act (CAFA).
Klier v. Elf Atochem N. Am., Inc., No. 10-20305 (5th Cir., Sept 27, 2011) – holding in the absence of an express provision in the settlement agreement to the contrary that unclaimed funds should be distributed pro rata to class members who participated in the settlement as opposed to being given to charity as a cy pres distribution. Take note of the concurrence by Judge Edith H. Jones, which makes a strong argument that in the absence of any agreement to the contrary or express waiver of the right to recover unclaimed funds, the equities favor returning those funds to the defendant rather than paying them to the class or distributing them to charity.
Esurance Ins. Co. v. Keeling, No. 11-8018 (7th Cir., Sept. 26, 2011) – holding that when punitive damages are at issue, the correct standard is whether it would be “legally impossible” for the plaintiff to recover an amount of punitive damages that, when combined with the amount of compensatory damages sought, would exceed the $5 million amount in controversy threshold under CAFA, but concluding that it was not legally impossible under Illinois law, even though it was unlikely, that $4.4 million in punitive damages could be awarded in a case where the compensatory damages were slightly more than $600,000.
A great resource for more timely commentary and analysis on recent class action decision in the federal courts of appeals is Alison Frankel’s blog On the Case.

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