- Class Action Dilemmas: Pursuing Public Goals for Private Gain by Deborah R. Hensler
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Class Action Dilemmas: Pursuing Public Goals for Private Gain by Deborah R. Hensler
After almost two decades of multilateral attacks, private class actions are on the decline in the United States. Supreme Court decisions in Amchem Products Inc. Windsor 3 and Ortiz v. Fibreboard Corp. Supreme Court and other federal appellate decisions have undermined their viability. Using private litigation to achieve public policy goals raises a fundamental question about the proper balance between public and private law in democratic societies.
This limitation aims to minimize if not eliminate the potential for conflicts of interest that arise in individually represented class actions prosecuted by private, fee-seeking class counsel.
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Most of these jurisdictions forbid private attorneys from charging fees related to the amount of damages obtained. She presents a careful analysis of the agency costs associated with public representative 11 litigation that in many instances turns the critique of private class actions on its head.
Agency costs in state attorney general litigation, she argues, are even greater than the agency costs associated with Rule 23 class actions, particularly in the majority of states where attorneys general are elected.
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The fact that state attorneys general work on salary, rather than charging contingency fees, exacerbates this risk. Past critiques of private class actions have rested on shaky grounds. Scholars often compare actual class actions to an idealized version of individual litigation. The ultimately successful critique of mass tort class actions that culminated in the Amchem and Ortiz decisions was based on the belief that these class actions deprived tort claimants of their right to individualized process and outcomes, a belief that ignores the realities of aggregated non-class mass tort litigation, which offers little of either.
First of all, an important feature of class actions constitutes that named plaintiffs can accept settlements that are binding on all class members, including the unnamed plaintiffs. This means the unnamed plaintiffs have very little to no control over the case. United States, U.
Wegener, F. Haisch eds. Class action lawsuits are also very costly and time-consuming, which contradicts the argument that class action lawsuits are the easiest way for plaintiffs to cash-in on their damages.
The South African Class Action Mechanism: Comparing the Opt-In Regime to the Opt-Out Regime
The lawyers on the other hand, who sued on behalf of the shareholders, made millions. This can justify legislation obliging lawyers to disclose any payment, fee or discount offered to a plaintiff to engage in litigation. Indeed, class actions can ruin plaintiffs: In , a life insurance company was sued for alleged overbilling of policy holders on their premiums.
However, the settlement cost the insurance company so much money it had to increase its premiums, which was in the long run more expensive for the plaintiffs5. In the aftermath of the war in Vietnam, a war veteran named Charles E.
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- Class Action Dilemmas: Pursuing Public Goals for Private Gain.
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Hartz sued on behalf of all American soldiers who were active in the war, for compensation of damages against wartime manufacturers of Agent Orange, a highly toxic dioxin which was allegedly insufficiently tested for human exposure. Court of Appeals for the Third Circuit, F. Rose, Tort Reform for a Civilized Society? Third World L. Cryovac, Inc. Beatrice Foods Co. Another risk of class actions is that individuals are being tricked by lawyers into believing they are victims, while they are really not, resulting in a net social loss. In the case Comer v.
Murphy Oil, a class action lawsuit was filed to force fossil fuel and chemical companies to pay for damages for global warming. The case was dismissed because of serious lack of evidence of fault, damage and causal link. Trial attorney Gerald Maples eventually confessed he only filed the class action lawsuit to make a statement and to get media coverage on the subject of climate change.
Meanwhile, he cashed in on named plaintiffs who signed in on the deal and the targeted companies already made significant litigation costs for defense attorneys9. This kind of populist scare-mongering is quite common for class action lawsuits In Pankhurst v.
WASA, a father of 2 children in de Washington DC area filed a class action lawsuit against the city supplier of tap water, for alleged elevated lead levels in the drinking water supply. The case got dismissed because it was not clear if the class had, has or would suffer an injury due to the elevated lead levels in the drinking water. But in the meantime, there had been a tremendous panic among American 7 W. Scott, J.
Stanley, J. Blair eds. Probably the most striking example of class action scare is the case of Smith v. Inco Limited12, in which the Inco nickel refinery in Ontario was sued for alleged nickel oxide poisoning of the surrounding properties and their owners. In the years leading up to the case, there has been orchestrated a big panic regarding the hazardous effects of nickel oxide diffusion into the air. In first instance, Inco was ordered to pay 36 million Canadian dollars in compensation to the landowners for loss of property.
Detrimental health effects were found not be proven.