Where's the Party: Do Class Action Plaintiffs Really Prefer State Courts?

Peter Cashman reviews the current state of play in Australia regarding the imposition of civil liability on multinationals for human rights abuses and environmental damage occurring overseas. He considers cases based on a direct tort law-based duty of care and the relevance in that regard of developments in English law and also environmental damage associated with the operations of Australian multinationals, in particular the historic OK Tedi litigation against BHP Billiton and the recent class action trial of the claim by Indonesian seaweed farmers arising from the Montara oil spill. Important aspects of the law on jurisdiction, forum non conveniens, and choice of law and the opt-out class action regime in federal and State courts are outlined. The rules relating to the running of cases by private law firms and third party litigation funders on the basis of contingency fee agreements are explained

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Unintended Consequences, Loopholes, and Gibberish

10.37419/lr.v7.i1.4 ◽

2019 ◽

Vol 7 (1) ◽

pp. 153-185

Author(s):

Brian Elzweig

Keyword(s):

Federal Court ◽

Unintended Consequences ◽

Federal Courts ◽

Class Action ◽

State Courts ◽

State Law ◽

Securities Litigation ◽

Class Actions ◽

National Importance ◽

Beaver County

This Article examines Congress’s decades-long attempt to ensure that securities class action lawsuits of national importance are litigated in federal courts. The intent is limiting strike suits. Congress attempted to curtail strike suits through the enactment of the Private Securities Litigation Reform Act (“PSLRA”). The PSLRA required heightened pleading requirements to ensure the validity of federal securities class actions. Instead of solving the dilemma, plaintiffs circumvented the PSLRA by bringing fraud cases as state law claims. To combat the circumvention of the PSLRA, Congress enacted the Securities Litigation Uniform Standards Act (“SLUSA”). SLUSA federally preempted state law claims based on alleged misrepresentations, untrue statements, or omissions of material facts, requiring them to be brought in federal court. However, SLUSA did not address the concurrent jurisdiction provision of the Securities Act of 1933. This created an anomaly whereby many federal claims under the 1933 Act were brought in state courts, while state fraud claims were required to be brought in federal court. Congress could have addressed this enigma when it enacted the Class Action Fairness Act (“CAFA”). Instead, CAFA, which reformed class actions generally, exempted most securities class actions from its rules. In 2018, the Supreme Court decided Cyan v. Beaver County and allowed 1933 Act claims covered by SLUSA to continue to be brought in state courts. The Court was silent on non-covered securities. This Article recommends how Congress can accomplish its goal of forcing important securities class actions into federal courts.

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Asbestos and the Future of Mass Torts

The Journal of Economic Perspectives ◽

10.1257/0895330041371187 ◽

2004 ◽

Vol 18 (2) ◽

pp. 183-204 ◽

Cited By ~ 25

Author(s):

Michelle J White

Keyword(s):

Financial Distress ◽

Asbestos Exposure ◽

Class Action ◽

State Courts ◽

Personal Injury ◽

Forum Shopping ◽

Large Numbers ◽

History Of ◽

Favorable State ◽

Mass Torts

Asbestos was once referred to as a ‘miracle mineral’ for its ability to withstand heat and it was used in thousands of products. But exposure to asbestos causes cancer and other diseases. As of the beginning of 2001, 600,000 individuals had filed lawsuits for asbestos-related diseases against more than 6,000 defendants. 85 firms have filed for bankruptcy due to asbestos liabilities and several insurers have failed or are in financial distress. More than $54 billion has been spent on the litigation -higher than any other mass tort. Estimates of the eventual cost of asbestos litigation range from $200 to $265 billion. The paper examines the history of asbestos regulation and asbestos liability and argues that it was liability rather than regulation that eventually caused producers to eliminate asbestos from most products by the late 1970s. But despite the disappearance of asbestos products from the marketplace, asbestos litigation continued to grow. Plaintiffs' lawyers used forum-shopping to select the most favorable state courts techniques for mass processing of claims, and substituted new defendants when old ones went bankrupt. Because representing asbestos victims was extremely profitable, lawyers had an incentive to seek out large numbers of additional plaintiffs, including many claimants who were not harmed by asbestos exposure. The paper contrasts asbestos litigation to other mass torts involving personal injury and concludes that asbestos was unique in a number of ways, so that future mass torts are unlikely to be as big. However new legal innovations developed for asbestos are likely to make future mass torts larger and more expensive. I explore two mechanisms - bankruptcies and class action settlements - that the legal system has developed to resolve mass torts and show that neither has worked for asbestos litigation. The first, bankruptcy by individual asbestos defendants, exacerbates the litigation by spreading it to non-bankrupt defendants. The second, a class action settlement, is impractical for asbestos litigation because of the large number of defendants. As a result, Congressional legislation is needed and the paper discusses the compensation fund approach that Congress is currently considering.

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