Howard Erichson was quoted in a Bloomberg Law article about the effect a Ninth Circuit ruling overturning a consumer settlement may have on class-action settlements.
Nationwide class actions are already under the microscope as lower courts decide whether the Supreme Court’s recent Bristol-Myers Squibb Co. v. Superior Court limitations on where suits can be filed applies to class actions.
This suit could add to that squeeze on nationwide class actions, Howard Erichson, who studies complex litigation at Fordham University School of Law in New York, told Bloomberg Law.
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Judge Ikuta said variations in state law are a predominance inquiry at class certification, so they can’t be ignored in class settlements, Trask, of McGuire Woods in Los Angeles, said. “She’s technically right, but treading on 20 years of practice in the other direction.”
Most lawyers and judges have treated such variations as a manageability problem that isn’t an issue at settlement, Trask said.
But the problem differences in state law pose for predominance has been around for years, Erichson said.
“The state-law-variation problem is why smart plaintiffs’ lawyers try to show that choice-of-law rules can point to application of a single state’s law to the entire class, but as this case shows, such efforts do not always succeed,” he said.
It still should be possible to certify classes for settlement on state law claims, Erichson said.
“In some cases, there’s a sound basis for applying a single state’s law,” he said. “In other cases, even if the law of multiple states applies, the variations may be insignificant or easily grouped into manageable categories.”
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Under Bristol-Myers, there must be a link between the defendant’s conduct in a state and the plaintiff’s alleged injury for suit to be brought in the state. It’s not clear whether the decision applies to national class actions.
That means “a nationwide class action might will have to be filed in the defendant’s home court, which either gives the defendant a great advantage and/or dis-incentivizes attorneys and their clients from bringing those cases,” Coleman said. “The Ninth Circuit’s strict reading of Amchem in this case certainly adds to that hindrance.”
But Erichson stressed this case addresses a different issue.
“Unlike the BMS issue about personal jurisdiction over defendants for claims unrelated to the forum state, which is a new issue (and it remains to be seen how it will play out in class actions), the state-law-variation problem is an old one,” he said.