30 November 2010

Class Action Lawsuit Statistics For Colorado

How many Class Action lawsuits are filed each year in Colorado, and where are they filed?

I asked Paul Karlsgodt, a Colorado lawyer prominent in the Colorado Bar Association's Class Action circles who runs the blog ClassActionBlawg.com. He responded with an October 15, 2010 post detailing the best available data to date (this post has more detailed statistics).

How Many Class Action Lawsuits Are Filed In Colorado?

In the 46.5 month long period that he reviewed from January 1, 2007 to October 15, 2010:

The total number of lawsuits filed which were described as "class actions": 168

* Class Action Lawsuits In Federal District Court: 123

* Class Action Lawsuits in State District Court: 41

Class actions were filed at an annualized rate of 43 class actions in Colorado per year: an annualized rate of 32 class actions in federal court in Colorado per year, and an annualized rate of 11 class actions in state court in Colorado per year. Roughly speaking then, each month in Colorado, two or three federal class action lawsuits and one state class action lawsuit is filed. Combined, one class action lawsuit is filed in Colorado, most weeks, but not every week.

These Numbers Are Overstatements Of The Amount Of Judicial Burden They Impose

If Colorado resembles at all the experience of states known for large numbers of class action lawsuit filings, like California, and the experience of class action securities fraud lawsuits, the number of incidents giving rise to these lawsuits is probably quite a bit smaller than the number of lawsuits themselves. Generally speaking, when some big event or act that could give rise to a class action lawsuit arises it gives rise to multiple class action lawsuits, some virtually identical due to a race to the courthouse, and some with slightly different legal theories and purposed Plaintiff classes described in the complaints. As a result, an appreciable share of the litigation process in many class action litigations is devoted to the process of consolidating multiple lawsuits with the same subject matter.

Consolidation of cases, removal to federal court, bankruptcies by class action lawsuit defendants (effectively another form of removal to federal court for defendants who wouldn't otherwise qualify in many cases), swift dismissal of cases on motions to dismiss, early motions for summary judgment, and pre-arranged settlements of cases filed only after a settlement agreement has already been reached, mean that a significant share of the eleven or so class action lawsuits filed in state court in Colorado each year on average are probably swiftly removed from the court system with only modest judicial effort -- little more than an ordinary civil action.

Obviously, of course, class actions lawsuits that do make it beyond the preliminary stage of the civil litigation process in both federal and state courts do take considerable resources that are much greater than those in a run of the mill civil action.

Civil cases very rarely go to jury trials in the United States, with most being resolved by default judgment, in motion practice, in bench trials, or by settlement prior to trial. Class action lawsuits are typical in this regard. It is a fair guess that you can count on the fingers the number of class action lawsuits that have actually gone to a jury trial in the state of Colorado in the last four years.

Jury trials in class action lawsuits are as rare as penalty trials in death penalty cases outside the South. Each one is newsworthy and often receives attention as national or international news.

Class Actions As A Share of Colorado Court Dockets

For comparison's sake, there were 65,595 district court civil cases that were not appellate in nature (district courts hear appeals from inferior courts and quasi-judicial legislative bodies as well as state habeas corpus petitions) filed in Colorado's state district courts in 2009.

Many of these were summary proceedings (e.g. 34,832 foreclosure hearings, 3,514 petitions to seal criminal records, 1,825 state tax liens, 849 repossessions of personal property, 829 evictions, 564 foreign judgment registrations, 269 motions to enforce out of state subpoenas, 218 proceedings to confirm arbitration awards, 194 name change petitions, 176 motions to approve structured settlements and 58 petitions to form special districts).

But, 11,683 district court civil lawsuits filed in 2009 were lawsuits asserting tort or contract type claims of precisely the kind that often are the subject of class action lawsuits. So, class action lawsuits in state courts make up roughly 0.1% of the total docket of large dollar value tort and contract type claims in Colorado's state courts. The actual percentage is smaller, because some cases are successfully removed to federal court.

About 1.6% of traditional federal civil lawsuits in Colorado are class action lawsuits, a sixteen times larger share of the total than in state court. There were 2,877 federal civil cases filed in the U.S. District Court for the District of Colorado in 2008, the most recent year for which statistics are available. Almost a third of these cases are Social Security disability claims, SSI eligibility claims, student loan collection cases, and pro se prisoner's petitions (not that prisoner's petitions can never be class actions, indeed those class actions are highly relevant to the procedural tool), but the federal docket has a far largely share of individual civil lawsuits comparable in nature to class actions.

The Geography of Colorado Class Actions

In all about 73% of class actions were filed in the United States District Court for the District of Colorado (i.e. federal court). Thus, 27% of class actions filed in Colorado were filed in state court.

Karlsgodt has kindly broken the state district court class action data down by county. Over the 46.5 month time period the number of class action lawsuits filed in district courts in each county were: Denver 31, Boulder 6, Arapahoe 5, Douglas 1, Weld 1.

Of the total 18% were filed in Denver District Court (76% of class actions filed anywhere in the state courts courts), 4% were filed in Boulder District Court (15% of class actions filed in the state courts), 3% were filed in Arapahoe County District Court (12% of class actions filed in the state courts), and the remaining 1% were filed in other metro Denver counties (about 5% of class actions filed in the state courts).

Since Colorado's federal distinct court and the Denver District Court are both in zip code 80202 (downtown Denver), that zip code accounts for 91% of class action lawsuits in Colorado, as well as all appeals in those actions (the 10th Circuit Court of Appeals, the Colorado Court of Appeals and the Colorado Supreme Court are all in zip code 80202) other than discretionary appeals to the U.S. Supreme Court.

The other 9% of class actions in the database filed in Colorado were all filed in the greater Denver-Boulder metropolitan area, an easy morning drive for a Denver or Boulder attorney involved in litigating one of these cases.


Class actions cases receive intense scrutiny in public policy circles, particularly as part of the tort reform debate. Their outcomes can often be on a greater scale than any individual lawsuit. These suits can make or break companies.

Of course, more often, the subject of class action lawsuits is banal. They are often brought because the harm to any one plaintiff is too small on its own to justify bringing a civil suit at all given the litigation costs involved, even if the likelihood of success on the merits is small. Most class members are almost completely unaware of the lawsuit until it settles, the attorneys for the class typically receive respectable fees, and the rewards to class members are often modest or produce no compensation at all, with a settlement paid to some putatively related good cause in an effort to prevent the defendant from being unjustly enriched, because the logistics of tracking down individual members of the class and providing them with a tiny money judgment aware are to unwieldy to be workable. Minor bureaucratic screw ups or deceptive advertising materials provided to large numbers of people are some of the typical scenarios.

The Scale of Regulatory Actions Relative To Class Actions

While people commonly perceive class actions as the American remedy of choice for wrongs done to large numbers of people, and suits by a state or federal regulatory agency or state attorney general as relatively less common, that isn't actually true, at least in Colorado.

The state attorney general litigates about many tens of times as many cases as their are class actions suits in state courts each year, involving harm to members of the general public, sometimes as civil actions and sometimes as white collar criminal cases, a large portion of which would have been class action lawsuits if filed by private individuals.

The Department of Regulatory Agencies in Colorado reaches settlement in hundreds of cases and handles thousands of cases, again, often in cases where the only practical private litigation alternative would have been a class action lawsuit or the threat of one.

All of this, of course, is in addition to action by federal regulatory agencies and the federal U.S. Attorney, who handles a significant share of all serious white collar crime cases. Collectively, the dollar amounts involved in these cases is very substantial, running to the hundreds of millions of dollars.

For example, year in and year out, the Colorado Department of Regulatory Agencies engages in never ending class action litigation-like enforcement actions against the state's insurance companies and public utilities, producing hundreds of millions of dollars of pro-consumer settlements and revisions each year.

All of this also ignores the modest, but real role played by local district attorneys and local government regulators in a consumer protection function, in addition to their primary role as prosecutors of "blue collar" crime.

Class Action Judges

State courts of inferior jurisdiction generally have no jurisdiction over class action cases at all.

Most of the 164 state court judges in courts of general jurisdiction in Colorado, particularly those who serve outside Denver, Boulder and Arapahoe County, will never handle a single class action lawsuit in their entire careers. Many of the state court judges who do handle a class action lawsuit will do so only once or twice in their careers. Even in Denver and Boulder, where the number of class action lawsuits filed per judge is highest and dockets are specialized so that only a subset of the total group of judges in the judicial district are handling civil cases at any one time, judges assigned to the civil docket for the year will typically handle only one class action lawsuit per year, a substantial subset of which can be disposed of quickly. In a few years, the judges handling civil cases will rotate, and those judges will not see any new civil cases, let alone class action cases, again for years. A Denver or Boulder District Court judge may handle a dozen class action lawsuits in a typical career (which tends to be shorter than the careers of federal judges due to the mandatory retirement age for state court judges and the reduced relevance of political balance in the judiciary under Colorado's merit system for appointing judges). In Arapahoe County, a typical District Court judge may handle half a dozen class action lawsuits in a typical career. In other large urban counties perhaps one in twenty state court general jurisdiction court trial judges will handle a class action lawsuit ever in an entire judicial career. In rural counties, it would be very exceptional for a state court general jurisdiction trial court judge to handle even one class action lawsuit in an entire career.

Federal district court judges, in contrast, handle class action lawsuits routinely. Colorado has five currently sitting U.S. District Court judges in active service, five senior judges, and eight magistrate judges, in addition to a number of bankruptcy judges. But, for the most part, the key decision points in a class action litigation need to be handled by a judge and not a magistrate, and senior judges carry lighter case loads than their active service peers on the bench. There are six class action lawsuits filed in federal court each year in Colorado, on average, per active U.S. District Court judge. If senior judges are assumed to have an average half time docket, that is still more than four class actions per year per active federal judge and two class actions per year per senior judge. The federal trial court bench does not specialize to the extent that Colorado's state court trial judges do, so that means active federal judges handle four class action lawsuits every year, year in and year out (on average) for their entire careers. A federal judge who has twenty years of active service and another ten as a senior judge (which would be fairly typical for a federal judicial career), will handle about a hundred class action lawsuits, even here in relatively provincial Colorado. Over the course of a career, there is a good chance that any given federal district court judge will actually preside over more than one jury trial in a class action lawsuit.

The diffuse nature of class action lawsuits in the state courts, and lack of judicial specialization in handling them (although there is some subject-matter specialization on a short term rotating basis in both the Denver and Boulder District Courts that handle most state court class action cases), and the undue influence that these suits give to the pools of juries in these counties who are unrepresentative of the state as a whole, also naturally gives rise to the question of whether some matters of particularly wide interest, should be handled by a single statewide court charged with handling the most potentially demanding and procedurally esoteric matters, or whether other justice system values make this inadvisable. A jack of all trades judiciary can protect that institution from the kind of regulatory capture that is the stock in trade of bureaucratic infighting and inside the beltway politics. But, this can come at the price of weak processes and insufficient procedural expertise.

Class Action Lawyers

I haven't reviewed the detailed data, but I suspect that it is safe to assume that the 168 class action lawsuits brought in the past four years in Colorado were brought by considerably fewer than 168 law firms, and probably fewer than 168 lawyers, in a state that has something on the order of 30,000 lawyers. The class action defense bar is probably a little bit more diffuse, but a few dozen specialists at large firms who represent mostly large and medium sized enterprises probably make up a large share of the total.

It is also a safe bet that the class action plaintiff's bar is not homogeneous. Employment discrimination and overtime class actions are often brought by an entirely different group of lawyers than those who bring class action lawsuits in cases involving large numbers of personal injuries from the same cause (e.g. train wrecks, airline crashes and defective products), who in turn probably have very little overlap with the group of attorneys who bring securities fraud cases.

Give the quite small number of lawyers who file class actions at all, the number of lawyers actively filing class action lawsuits of any given type of lawsuit in Colorado is small indeed. You can probably can't on your fingers the number of lawyers who have filed class action civil rights cases in the last four years, for example.

The class action defense bar is probably a little more homogeneous. They have a class of clients who collectively tend to get sued a lot, and get their cases from the ranks of the clients that they already have; clients who are served in other matters by other lawyers in the same firm. If a case puts the life of a firm at stake, the general counsel may go out and shop for a specialist in the field, but most of the time the firm that represents those large business clients tries to be a full service firm as much as possible.

In contrast, class action plaintiffs' lawyers look for incidents or clear wrongdoing, or clear harm through a wide variety of means, through a wide variety of means, including media accounts and complaints from individual prospective clients who suffer harm too modest to economically litigate on an individual basis, and then actively recruit or including by definition in a class clients on the receiving end of the wrongdoing or harm.

Caveats Regarding The Data

Karlsgodt's data come from the fee based Courthouse News Service database which includes a comprehensive list of federal class action lawsuits, as well as data from state trial courts of general jurisdiction (i.e. District Courts) from urban counties that include "a majority of the state population" in the time period from 2007 to 2010 (through October 15, a partial year).

The bias within large urban counties in favor of Denver and Boulder, which are the most liberal large urban counties in Colorado and had 91% of the state court class actions (despite making up only about about 11% of the Colorado's population), suggests that the exclusion of more rural Colorado probably didn't omit many cases. They omitted counties are not only low in population (making them less convenient for urban trial lawyers to utilize), they are also mostly much more conservative than Denver or Boulder, and hence not plaintiff friendly venues. Yet, class action plaintiffs often have a fair amount of flexibility in choosing a state court venue when a state court venue is available. My educated guess is that than no more than half a dozen class action lawsuits over the 46.5 month period (i.e. probably not more than one or two per year) that were outside the geographical scope of the database were omitted, and if those suits were repeatedly filed in a rural county known to be Plaintiff friendly, I am sure that class action attorney Paul Karlsgodt and other policy makers would have discussed this fact.

In addition to excluding class actions filed in more rural counties (which are probably disproportionately small in number relatively to the minority of the state's population that they include), the data come with a few other caveats.

They do not reflect removals of cases filed originally in state court. That analysis could be done using the CNS data because CNS tracks removals, but it would be fairly time consuming.

Moreover, the data also doesn’t provide any qualitative information about the cases included in the statistics. A pro se filing that uses the words “class action” in the civil cover sheet description would be treated the same as a real class action filed by a reputable firm.

Finally, many of the federal class action filings are employment cases, where federal question jurisdiction provides a jurisdictional basis independent of CAFA.

He also cautions that many class actions filed before the Class Action Fairness Act of 2005, which limited state jursidiction over class actions, are still pending in state courts.

Still, this is better direct data than is available from any other source and probably understates class action filings in Colorado only slightly.

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