14 December 2010

Class Actions

Securities fraud class action lawsuist receive a lot of attention. But, there actually aren't very many of them. One blog devoted to the subject identified 189 of new securities fraud class action lawsuits in 2009, predominantly, although not exclusively, in federal court.

There were an average of about 618 class action lawsuits filed each year from 2000-2005 in California's state courts, the nation's largest state and one that has traditionally been friendly to class action lawsuits. The Class Action Fairness Act of 2005 probably curtailed this number significantly.

Employment cases represented a yearly average of 29.3% of all class action cases. Business Tort cases represented a yearly average of 27.4% of filings during the same period. . . . The percentage of contract class action cases declined during the study period. . . . with a six-year average representation of 10.3% of all cases filed. . . . Likewise, antitrust cases . . . with a six-year average of 5.9%.

Other case types include construction defects (5.4%), insurance coverage, mass torts, civil RICO, fraud (3.4%), product liability (3.5%) and civil rights cases.

The employment cases involved overtime and meal/break disputes. The anti-trust cases arose largely out of two events, profiteering in the utility industry during the 2000 energy crisis in California and a pricing dispute related to GM automobiles in 2003. The business tort cases are basically false advertising cases.

About half of the cases were resolved during the study period. Of those, just under a third (32%) settled, just over a third (34%) were dismissed in motion practice, and just under a third (33%) were transferred to another state or federal court or merged with another case. Nine out of 1294 cases (less than 0.1%) went to trial on the merits (compared to 8.6% of all general jurisdiction civil cases in the study period). A small number were stayed, on appeal of the class action determination, or in some other procedural situation.

About a sixth of the cases, or more, would be barred from state court under the Class Action Fairness Act of 2005.

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