The globalization of class actions: An overview

Annals of the American Academy of Political and Social Science

Volumn 622, Issue 1, 2009, Pages 7-29

  Hensler, Deborah R ^a  

^a STANFORD LAW SCHOOL   (United States)

Author keywords

Class actions; Group litigation; International civil procedure; Mass torts; Transnational litigation

Indexed keywords

EID: 61349127276     PISSN: 00027162     EISSN: 15523349     Source Type: Journal    
DOI: 10.1177/0002716208328327     Document Type: Article

References (43)

1. Campbells Cash & Carry Pty Ltd. v. Fostif Pty Ltd (2006) HCA 41, per Kirby J at paras 143-145.
2. Arthur Miller, Of Frankenstein Monsters and Shining Knights: Myth, Reality, and the "Class Action Problem.," 92 Harvard Law Review 664 (1979).
3. Deborah Hensler et al., CLASS ACTION DILEMMAS: PURSUING PUBLIC GOALS FOR PRIVATE GAIN (2000).
4. For a discussion of the causal dynamics of mass tort litigation in the United States, see Deborah Hensler & Mark Peterson, Understanding Mass Personal Injury Litigation: A Socio-Legal Analysis, 59 Brooklyn L. Rev. 961 (1993).
5. Mark Galanter, Why the "Haves" Come Out Ahead: Speculations on the Limits of Legal Change, 9 Law & Soc'y Rev. 95 (1974).
6. On rent seeking and legislative democracy, see Anthony Downs, An Economic Theory of Democracy (1957); Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (.1.97.1).
7. On the role of attributions of causation and fault in liability claiming and litigation rates in instances of personal injury, see Deborah Hensler et al., Costs and Compensation for Accidental Injury in the U.S. (1991).
8. On the dynamics of nonclass aggregate litigation in the United States, see Deborah Hensler, Has the Fat Lady Sung? The Future of Mass Toxic Tort Litigation, 26 Rev. Litiq. 883 (2007).
9. On the early English history of group litigation, see Stephen Yeazell, FROM MEDIEVAL GROUP LITIGATION TO THE MODERN CLASS ACTION (1987).
10. For a discussion of the obstacles to conducting such an analysis, see Hensler et al., supra note 3.
11. Most recently the Class Action Fairness Act of 2005 ostensibly proposed to shift multistate class actions to the federal courts; the Act was widely seen by its advocates and opponents as an effort to curb certification of damage class actions. See Stephen Burbank, The Class Action Fairness Act in Historical Perspective: A Preliminary View, U. Penn. L. Rev., forthcoming.
12. See, e.g., Credit Suisse Sec. (USA) LLC v. Billing, 127 S. Ct. 2383 (U.S. 2007) [holding that SEC regulation provides a shield against antitrust class actions by investors alleging securities law violations with regard to IPOs];
13. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S. Ct. 2499 (U.S. 2007) [imposing a heightened pleading standard for securities fraud class actions];
14. Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., 128 S. Ct. 761 (U.S. 2008) [protecting "secondary actors" from securities class actions by investors claiming "scheme liability"].
15. The last major international conference on group litigation was held in Geneva, Switzerland, in 2000, before many of the developments cited above had occurred. A handful of conferences have been held since, but the more academically oriented among them have focused on theory and normative issues, rather than generating empirical data, and the more practice-oriented have facilitated sharing of information but produced little in the way of reference documents.
16. The original reports, prepared as background for the 2007 Conference, are available online at www.globalclassactions.law.stanford.edu. Because of space constraints, those reports were abridged by the reporters for this volume. Some reporters also updated their reports to reflect events subsequent to December 2007.
17. See, e.g., Thorson v. Attorney General of Canada, [1975] 1 S.C.R. 138, Nova. Scotia Board of Censors v. McNeil, [1976] 2 S.C.R. 265, and Minister of Justice of Canada v. Borowski, [1981] 2 S.C.R. 575 [extending to private individuals standing to challenge on behalf of the public interest the constitutionality of statutes in specified circumstances] and Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607 [extending such individual standing in specified circumstances to nonconstitutional challenges].
18. There is considerable uncertainty around this number. Where the information provided by a reporter did not offer enough evidence to determine whether a class action procedure exists, I excluded the country from the list, although with more information I might have decided to include it. Other reports described highly specialized representative procedures that are available only in very limited circumstances. I did not include these countries on the list either.
19. Germany's model case proceeding is considered by some to be a form of class action. I consider it a hybrid and, in form if not in practice, more akin to a procedure for consolidating aggregate claims than a true representative action.
20. Virtually all of the legal jurisdictions reported on in this volume include some form of joinder procedure, allowing for a few like cases to be combined (joined) for purposes of litigation. In some recent instances, these traditional procedures have been used for mass litigation. We reserve the category of "group litigation" procedures for procedures designed especially to deal with aggregated mass litigation.
21. In China, it appears that class counsel are "supervised" by public officials, implying some constraint. It is possible also that in a system like the United States, where federal judges have explicit authority to appoint class counsel, past actions may affect designations of counsel, albeit not representative parties. Since class counsel rather than class representatives control class litigation in the United States, attorneys seeking to engage in a class action practice may feel a need to comport themselves in ways that facilitate future appointments as class counsel.
22. Hensler et al., CLASS ACTION DILEMMAS, at 22-25.
23. Hensler, Has the Fat Lady Sung? supra note 8.
24. In Denmark, the opt-out provision can only be exercised by a public authority.
25. The U.S. federal class action rule also provides for mandatory non-opt-out class actions in F.R.C.P. 23(b)(2) actions for injunctive relief. The rationale for such a non-opt-out design is that the court can only order injunctive relief such as elimination of discriminatory employment practices for all class members or none. In practice, if provisions are made for individual remedies to class members (such as back pay), individual class members who wish to avail themselves of such remedies will need to come forward, in other words, opt in.
26. Norway's regime is generally opt in, but in certain circumstances a judge may order the use of an opt-out procedure.
27. Academic debate about due process in representative litigation focuses on plaintiff class members, but in the public policy arena defendants raise due process concerns as well. In the interests of efficiency, pretrial discovery (a key aspect of civil litigation in the United. States that is growing in importance elsewhere as well) is usually limited to the class representatives, meaning defendants do not have an opportunity to test the strength of the claims of the vast majority of class members. When class actions are used to litigate tort claims with varying evidence of causation and liability or contract claims where there is an issue of reliance, this may be a significant concern (and may be the basis for challenging application of a class procedure to such litigation). When class action lawsuits result in negotiated settlements rather than trial, plaintiff and defense counsel may not distinguish carefully among claims of varying factual and legal strength. As a result, plaintiff class members with strong claims may feel they were disadvantaged by a class settlement, while defendants may feel they were pressured into paying claims that would have had little value had they been pursued individually.
28. F.R.C.P. 23(a) (1) does not specify the actual number of class members required and the extant case law is somewhat ambiguous: classes with less than one hundred members have been certified by some judges and classes larger than that have been deemed not numerous enough by other judges.
29. See, e.g., Notice.com: The Notice Company information available at http://www.notice.com. Such firms frequently also administer class action settlement programs.
30. Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (U.S. 1974).
31. Hensler et al., supra note 3 at 448-54.
32. In the United States, since the passage of the Class Action Fairness Act of 2005, defendants in federal class actions must notify relevant state and federal officials of a proposed class action settlement.
33. For information on the paucity of data on class action outcomes in the United States, see Nicholas Pace & William Rubenstein, "Shedding Light on Outcomes in Class Actions," UCLA L. Rev. forthcoming.
34. See, e.g., Susan P. Koniak & George M. Cohen, Under Cloak of Settlement, 82 Va. L. Rev. 1051 (1996).
35. See Deborah Hensler, The Role of Multi-districting in Mass Tort Litigation: An Empirical Investigation, 31 Seton Hall L. Rev. 877 (2001).
36. A special problem is whether and how a class action settlement can include claimants whose losses have not yet materialized - for example, in a mass exposure case where some of those exposed will develop long latency diseases, or a mass product defect case where an implanted device is known to be prone to fail but not all those fitted with the device have yet experienced the failure. The treatment of such future claimants in mass tort class actions has evoked considerable controversy in the United States. See Deborah Hensler, Bringing Shutts into the Future: Rethinking Protection of Future Claimants in Mass Tort Class Actions, 74 UMKC L. Rev, 585 (2006).
37. Boeing v. Van Gemert, 444 U.S. 472 (1980).
38. See Judith Resnik, Dennis Curtis & Deborah Hensler, Individuals within the Aggregate: Relationships, Representations, and Fees, 71 NYU L. Rev. 296 (1996).
39. Where the number of defendants is large, as in asbestos litigation, judges will also appoint lead defense counsel for the same purpose.
40. See, e.g., In re Vioxx Litigation, MDL 1657, August 27, 2008, available at http://vioxx.laed.uscourts.gov/Orders/o&r082708.pdf.
41. Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. Law. No. 104-134 § 504(a) (7) 110 Stat 1321 (1996).
42. MULTIPLEX FUNDS MANAGEMENT LTD v. P DAWSON NOMINEES PTY LTD 2007 FCAFC 200, 244 A.L.R. 600 (2007).
43. CAMPBELLS CASH AND CARRY PTY LTD v. FOSTIF PTY LTD (No S5I4/2005), 2006 HCA 41, High Court of Australia, 229 A.L.R. 58 (2006).