No fooling with the rules in class actions
By Diane Karpman
|
Karpman |
After the Vioxx case, class action lawyers were called terrorists on Steve
Forbes’ Saturday morning television show. In today’s environment,
that is as inflammatory as labeling someone a liberal. When class actions are
vilified by the administration and have become targets of Congress, it is hard
to remember that class actions are the “poor man’s” key to
the courthouse.
Class actions desegregated schools, provided students with books and recently
forced hesitant school districts to provide advanced placement programs for
all neighborhoods. Think about it. Do you really believe that a group of prisoners
is an attractive client base? Representative actions are so controversial that
even the American Law Institute is hesitant to label their current project,
The Principles of Aggregate Litigation, as a “Restatement of the Law” of
class actions.
The traditional litigation paradigm is drastically changed in class actions
because everyone has enhanced duties. The court becomes a fiduciary for the
absent class members and is required to aggressively monitor the conduct of
counsel. To fulfill that role, courts expect that lawyers will exhibit greater
candor and competency. And, although litigators speak of “trial,” let’s
be real; the overwhelming majority of these cases settle.
The proverbial ethics conundrum regarding “who is the client” assumes
new shapes in class actions. Clearly, lead plaintiffs assume client status,
but what about others from whom you may receive confidential information? If
client identity is murky, then who consents to the inevitable conflicts that
are expected to occur? Lawyers, law firms, their friends and family cannot
be lead plaintiffs because that destroys the essential antagonism that must
exist for the just resolution of the case. Apple Computer Inc. v. Superior
Court (Cagney) (2005) 126 Cal. App. 4th 1253.
“Clienthood” is the primary trigger for most of our rules. It
determines the existence of confidentiality, loyalty and when impermissible
contact occurs. But just who is the client, post-certification but before expiration
of the opt-out period in employment cases? Many recognize that class actions
are entrepreneurial litigation and speculate that a true “client” is
unnecessary.
The rules regarding advertising and solicitation become mysterious because
class counsel has a duty to increase the class, and yet must be cautious not
to cross over the line, if one exists. A recent case recognized that lawyers
can troll the internet for class members. Barton v. U.S. Dist. Court for
Central Dist. of Cal. (9th Cir. 2005) No. 05071086, D.C. No. CV-01-07937-MRP.
The level of competency is amplified for lead counsel, since the rules state
the bare minimum level required. Much more is expected in “beauty contests” for
lead counsel. Incompetent performance can lead to claims of malpractice, which
can be so enormous that carriers are hesitant to insure class action lawyers.
One of the issues that worries carriers is the statute of limitations. Does
it exist? When your clients might be Holocaust victims or Japanese prisoners
of war, then time, in accordance with Einstein’s theory, really does
become relative.
• Legal ethics expert Diane Karpman can be reached at 310-887-3900
or at karpethics@aol.com.
|