16 January

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The Impact of Free Media on Class Actions

Class action lawsuits are certainly not new. Indeed, some scholars believe they date back to medieval times, when groups of villagers would choose three or four representatives to represent their collective interests in court. What is new, however, is the rampant popularity of class action lawsuits in the age of the internet and social media. Whereas notice to class members historically came by way of mailings or publication in relevant periodicals, today class membership is an advertised commodity. Consequently, class awards have the potential of becoming exponentially larger than they’ve ever been. By way of illustration, this article presents some of the top websites advertising quick cash through participation in class action suits. It also explores several case studies illustrating how media attention to class action lawsuits has changed the way class payouts are made. Additionally, the article touches on the desirability of various settlement structures that may help stem the tide of...

22 October

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When is the right time to settle a class action?

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Perhaps more than any other type of litigation, class actions often feature dynamic shifts that quickly alter the settlement landscape. For example, the court’s ruling on a motion to compel discovery may bring a new perspective on liability exposure. And a decision on class certification often upends both parties’ expectations. The risks and benefits of continuing to defend class actions are constantly changing. Accordingly, defense counsel would be wise to analyze settlement options at every phase of the case. Finding the most efficient litigation off-ramps is one of the greatest skills a lawyer can develop. And perhaps nowhere is that skill more critical than in class actions. In this article, first we present a case study of a good settlement opportunity that was lost only to be exploited by class counsel later in the case. Next, we explore some of the nuances that should inform the settlement analyses throughout litigation. Case Study In one...

29 August

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7 Reasons Companies Seek Class Action Certainty Through Risk Transfer

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Companies spend billions of dollars defending class action lawsuits each year. Compared to other forms of litigation, defending a class case is exceptionally challenging because the percentage of these cases considered “bet the company” continues to rise, while the overwhelming majority still results in settlement. Compounding the complexity of these matters is the universal understanding that the company’s and class counsel’s perspectives on settlement are wholly divergent. Knowing this, companies looking for certainty should consider risk transfer as a viable strategy in class action litigation.

14 June

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Why Waiting to Consider Settlement Could be a Mistake

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Class action lawsuits are complex, and many companies that find themselves involved in them are under the impression that they are in for a long, protracted battle. However, this doesn’t always have to be the case. While there is no one-size-fits-all approach to class actions, early settlement consideration can provide a number of benefits to the defending company. Thus, the decision to fight or to settle the lawsuit is not mutually exclusive, but rather can, and often should, be evaluated and pursued simultaneously early in the case. Defending litigation is expensive and the majority of cases end up with a cash settlement. So, the question is: Can an early settlement provide an efficient end to litigation? The simple answer is yes, for a number of reasons. When settlement is considered at the beginning of litigation, class counsel: Has not yet invested copious time and expense – factors which, when added up, can...

05 May

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Guest Post: Are Class Action Settlements Tax Deductible?

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Guest Post by Peter Robbins, CPA, Partner at Corbett & Robbins, LLP With the exponentially rising role that litigation plays in today’s business world, one might consider the costs associated with settling lawsuits to be “ordinary and necessary” business expenses, rendering them tax deductible under §162 of the Internal Revenue Code (IRC). However, as experienced tax professionals know, there are always exceptions and restrictions to the rules—factors that can leave the unwary with an unexpected and hefty financial burden to bear. To determine whether payments to the settlement class are tax deductible, settling parties must bear in mind the provisions of IRC §162(c)(2) and §162(f), which prohibit deductions for payments that are: 1. Deemed to be illegal under U.S. or state law 2. For a fine or similar penalty paid to a government for the violation of any law Therefore, the ability to receive tax deductions on class action settlements is entirely dependent on tracing...

14 April

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Settling Class Actions, from the Defending Company’s Perspective

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While class counsel has its own objectives when it comes to settling class action lawsuits, the defending company has fundamentally different analyses. First is whether it should settle the case at all, as there are often business reasons not to do so. For example, the company may not want the reputational hit, to invite regulatory scrutiny or to set a bad precedent by settling....

11 April

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Class Counsel’s Perspective on Class Action Settlements

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When it comes to class action lawsuits, it is a universal truth that the class counsel will always want to settle. In fact, the sooner, the better as, class counsel is paid upon resolution. And, quicker resolutions, allowing the payment of a class benefit and a pathway to fees, are optimal. So, while defense counsel and the companies they represent consider whether settlement is even appropriate given legal and business interests, class counsel is already focusing on the structure of the settlement....

class action litigation Tag

The Impact of Free Media on Class Actions

When is the right time to settle a class action?

7 Reasons Companies Seek Class Action Certainty Through Risk Transfer

Why Waiting to Consider Settlement Could be a Mistake

Guest Post: Are Class Action Settlements Tax Deductible?

Settling Class Actions, from the Defending Company’s Perspective

Class Counsel’s Perspective on Class Action Settlements