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Consumer Class Actions: 1.7.9 Competing Lawsuits

For many reasons, it is a good idea to attempt to learn whether or not other lawyers have already begun either individual or class actions involving the same or similar practices.

The NACA guidelines discourage the filing of competing class actions.179 The problem is explained as such:

Consumer Class Actions: 1.8.1 Importance of Investigating Potential Defendants Before Filing an Action

To determine whether a class action is an effective approach to obtaining relief for the class, it is essential to evaluate the nature and size of all businesses attached to the potential defendants and whether the defendants are likely to have sufficient assets to pay a judgment. If a defendant is operating a legitimate business with real assets, a class action may more likely enable counsel to obtain a collectable settlement or judgment.

Consumer Class Actions: 1.8.2 Techniques to Investigate Potential Defendants

When suing public corporations, annual reports to shareholders and various filings required by the U.S. Securities and Exchange Commission may provide helpful information about the company. The principal filing is the annual report on Form 10K. In addition, a new issue of securities is usually registered using SEC Form S-1. Form S-1 must be filed for such things as securitizations of B- to D-grade car paper and home mortgages.

Consumer Class Actions: 1.9.1 What Makes a Client a Good Class Representative?

Before deciding to represent any plaintiff in a class action, counsel should carefully interview, evaluate, and educate the individual seeking to be a class plaintiff.194 One requirement for class certification is that the named plaintiff will “adequately” protect the interest of the class.195 The role of a class representative is in the nature of a fiduciary for the class.

Consumer Class Actions: 1.9.2 Client’s Individual Settlement Efforts Do Not Prevent Client’s Later Service As a Class Representative

Class representatives and their attorneys may have attempted to settle their individual claims before bringing an action as a class. There could be several reasons for this: the idea of a class action was only recognized after the settlement attempt, the client wanted to try to settle the dispute before litigation, or state law may require that a demand be made prior to filing a case.

Consumer Class Actions: 1.9.3.1 Generally

Until recently, most courts had held that an individual who merely had their statutory rights violated had suffered an injury in fact sufficient to provide Article III standing to sue in federal court, regardless of whether the individual sought actual damages. In the 2021 case TransUnion L.L.C. v. Ramirez, the Supreme Court set forth the following principle: “No concrete harm, no standing.”202 The Supreme Court’s ruling has brought into question what exactly is a concrete harm.

Consumer Class Actions: 1.9.3.3 Named Plaintiff’s Standing to Seek Equitable Relief

In order to pursue injunctive relief, plaintiffs must allege an injury that is “actual and imminent, not conjectural or hypothetical.”212 To have standing at the time the lawsuit is filed, the plaintiff must allege either continuing, present adverse effects due to the defendant’s past illegal conduct or a sufficient likelihood that they will again be wronged in a similar way.213

Consumer Class Actions: 3.1 Introduction

Class action lawsuits often involve transactions and claims arising from conduct that has occurred in a number of states and often over a period of months or years. As a result, the plaintiff’s attorney may have a choice of forums where sufficient constitutional contacts have occurred to permit filing of a case.1

Consumer Class Actions: 3.3 Venue Based on Locus of “Substantial Events”

In a class action, it may sometimes be difficult to determine the second alternative basis for venue—that is, where “a substantial part of the events or omissions” giving rise to the claims occurred. Venue must be proper for each joined cause of action, but the concept of a cause of action is broadly construed, and courts generally recognize a theory of “pendent venue,” analogous to pendent jurisdiction, for claims arising out of a common nucleus of operative facts.23

Consumer Class Actions: 3.4 Venue Based on Personal Jurisdiction over Defendants

28 U.S.C. § 1391(b)(3) provides that “if there is no district in which an action may otherwise be brought as provided in this section,” a civil action may be brought in “any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action.” This may or may not provide much in the way of additional forum availability in the aftermath of the Supreme Court’s recent decisions, which carefully construe the bases on which courts may exercise either of the two recognized types of personal jurisdiction—general and specific—over a defendant.

Consumer Class Actions: 3.5 Venue with Multiple Defendants

Generally, a civil action may be brought in any judicial district where a defendant resides, provided that all defendants reside in the same state.43 If venue is based on the residence of one of the defendants, and other defendants do not “reside” in the same state,44 then venue may be improper as to those other defendants. If proper venue cannot be found for a particular defendant, 28 U.S.C.

Consumer Class Actions: 3.7 Change of Venue

The statutory scheme regulating venue is intended to provide protection to defendants who might otherwise find themselves subjected to lawsuits and trials in very inconvenient or unforeseeable locations.

Consumer Class Actions: 3.8 Waiver of Venue Defenses

Federal Rule of Civil Procedure 12(b)(3) provides in part:

(b) How to Present Defenses. Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:

* * *

(3) improper venue;

Consumer Class Actions: 5.1 Introduction

Complaints are often the first document that judges and law clerks review in order to familiarize themselves with the case. A well-written and persuasive complaint can set the framework for positive court consideration of the case.1 The complaint should educate the judge about the context of the particular violation that the class has alleged—and persuade the judge that the facts and law support class certification and the merits of the claims.

Consumer Class Actions: 5.8 Other Special Pleading Considerations

There are a variety of special pleading techniques that may be used in conjunction with class litigation. This section contains some of them.

1. Pleading Based on Information in the Possession of the Defendants

If there is information that is in the possession of only the defendant, such as a class list, then the appropriate allegations may be made based upon that information. This pleading may be important to verify that the defendant has the information, such as the proposed class list.

2. Pleading on Information and Belief

Consumer Class Actions: 7.1 Introduction

Once a defendant receives service of a class action complaint, it is likely to attempt a series of maneuvers to avoid or delay the prosecution of the action. Filing a claim on behalf of a class dramatically raises the stakes for the defendant, and the defendant’s natural response is to try to find a relatively inexpensive way to make the case go away. Absent an ability to avoid or derail a case, a defendant may simply seek to delay the case as much as possible.

Consumer Class Actions: 7.2 General Limits on Defendant’s Ability to Delay

A number of federal rules and their state counterparts limit a defendant’s ability to improperly delay a class action. Federal Rule of Civil Procedure 11 states that, whenever an attorney presents the court with a pleading, motion, or other paper, the attorney is certifying, based on a reasonable inquiry, that the paper is not being presented to unnecessarily delay or increase the cost of the litigation, to harass, or for any other improper purpose.

Consumer Class Actions: 7.3.1 Overview

Defendants often will respond to the filing of a class action by submitting an individual settlement offer or Federal Rule of Civil Procedure 68 offer of judgment to the named plaintiff in an effort to “pick off” the putative class representative before the plaintiff has the ability to move to certify the class—or at least before the court has ruled on a motion for certification. Obviously, such offers are made because it can be far less expensive for a defendant to pay off a single claimant than to litigate a class action.

Consumer Class Actions: 7.3.2.1 Deposit Guaranty National Bank v. Roper

In Deposit Guaranty National Bank v. Roper, the Supreme Court considered whether putative class representatives who have judgment entered in their favor, despite not accepting an offer of judgment, retain a live interest in appealing the denial of class certification.15 In Roper, the district court had denied class certification and later entered judgment for the named plaintiffs based on the defendant’s offer of the maximum amount that each named plaintiff could have recovered in the action.

Consumer Class Actions: 7.3.2.2 Genesis Healthcare Corp. v. Symczyk

After the Roper decision, thirty years passed before the Supreme Court revisited the implications of an offer of judgment in a representative action. In Genesis Healthcare Corp. v. Symczyk,21 the plaintiff brought a collective action under the Fair Labor Standards Act (FLSA). Before any other employees had joined the action, the defendant made an individual Rule 68 offer of judgment, which the plaintiff ignored. The district court found that the offer fully satisfied the plaintiff’s claim and dismissed the case as moot.

Consumer Class Actions: 7.3.2.3 Campbell-Ewald v. Gomez

The issue in Campbell-Ewald v. Gomez was the question reserved in Genesis Healthcare: “Is an unaccepted offer to satisfy the named plaintiff’s individual claim sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of persons similarly situated?”30 The Court held that it does not; an unaccepted Rule 68 offer of judgment creates no lasting right or obligation and therefore does not eliminate a justiciable case or controversy under Article III.