Wednesday, July 20, 2016

Kaur v. Things Remembered, Inc. (9th Cir. - July 20, 2016)

Well now here's a strange one.

I was wondering when I read it why the Ninth Circuit published the order.  It's an incredibly short thing.  It basically just says (1) we hereby grant you permission to file a reply, and (2), sure, we've decided to hear your Rule 23(f) (denial of class certification) appeal.

That's not a decision on the merits.  That's a routine thing.  That's why this just a decision for the motions panel.  That's a funny thing to publish.  (Especially when, as here, the order is so incredibly short.)

Nonetheless, once I read the fifth sentence of the order, I understood why the Ninth Circuit published the thing.  And it's sort of cool.

The district court denied class certification.  Plaintiffs asked permission to appeal, and today's order granted permission.  But the district court denied apparently certification based at least in part on its feeling that class counsel might not be a "vigorous" advocate for the class, and the motions panel is keenly interested in whether that's a permissible basis upon which to deny certification.

So the panel drops a sentence that essentially says so, and instructs the parties:  "In addition to all other issues the parties may wish to raise in this appeal, the parties shall brief the issue of whether the district court should have considered less drastic alternatives before denying class certification based on concerns with the vigor of class counsel’s representation."  Then drops a citation to make crystal clear what the panel's talking about:  "See, e.g., Busby v. JRHBW Realty, Inc., 513 F.3d 1314, 1323-24 (11th Cir. 2008) (“In the event that class counsel does act improperly, the ordinary remedy is disciplinary action against the lawyer and remedial notice to class members, not denial of class certification.”) (internal citation omitted)."

But the motions panel doesn't stop there.  And that explains why the order's published -- and also why someone out there might potentially be interested in following up on it.

The motions panel then tells the world that it's sufficiently interested in the topic that it's happy to hear opinions on the subject.  Entering the following order:  "The court sua sponte grants any individual or entity leave under Federal Rule of Appellate Procedure 29(a) to file an amicus curiae brief addressing the above-stated issue in this appeal. The brief(s) shall comply with Federal Rule of Appellate Procedure 29(c) and (d); the due dates are governed by Rule 29(e)."

End of published order.

So there you have it.  If you're interested in the subject -- and it's an interesting one -- feel free to file a brief.  Judges Kozinski and Paez, at least, are happy to hear your views.

For what it's worth, I'm probably leaning the same way I think these judges are.  Though I might be a bit more conflicted than they are.  (Though I admit I'm reading tea leaves here, at least on their end.)

I get that if you've got a problem with the lawyer, maybe the right remedy is to lean on the lawyer rather than deny the class a remedy by denying certification.  Seems right.

At the same time, it's hard to lean on the lawyer.  At least effectively.  They can do a lot of things that you can't see.  Particularly if they lack "vigor".  And, sure, you can report them to the bar, as well as deny approval of any settlement that you don't like.

But, truthfully, this sort of supervision not only takes time and effort, but is, I think, not likely to be supremely effective.  You can only do so much.  And what a district court may well be worried about in a particular case is that the lawyer will be manifestly incompetent, but rather that he will simply be exceptionally subpar.  Which in turn will hurt the class.

It seems to me that the best remedy in such cases, to be honest, would not be to rely upon discipline or other supervisory remedies to solve the problem -- since I don't think they (typically) will -- but to instead adopt or incentivize a system that'll address the issue directly.  What a district judge may well want in such a setting is to have a different class counsel, and they're trying to get at that by denying class certification in the hopes, perhaps, that someone else will step forward.

Now, if there's already a parallel class action pending filed by another lawyer, maybe denying class certification in the present case -- and doing so expressly based on counsel concerns -- solves the problem.  That way the other class action can go forward, and everyone wins.  So, in that setting, I think denying certification would actually be legitimate.  Perfectly fine.  And I would not want to do what the Eleventh Circuit potentially says to do:  grant certification in the present case and just rely on discipline.  I don't think that'd either solve the problem or be the best of the available alternatives.

In most cases, however, there's probably not a parallel class action pending.  And while I'd understand it if a district court thought "Hey, I'll deny certification here for class counsel reasons, and hopefully a different class action lawyer will pick up on my order and file a new (identical) class action," that may be a pipe dream in a lot of cases, and there may be statute of limitations or other problems with such an approach as well.

So, in the typical case, I lean towards agreeing that the judge shouldn't just deny certification on the hope that there might be a better lawyer out there.

But, to me, that's not the end of it.

Instead, rather than rely on discipline and the like, if I held (as I think the Ninth Circuit will) that the alleged "lack of vigor" of class counsel shouldn't typically be a legitimate basis upon which to deny certification, I'd also expressly mention other perfectly permissible alternatives that district judges may well want to consider when confronting such a setting.  For example, I think that, while granting certification, the district court could permissibly -- and perhaps should -- "invite" intervenors or other class counsel to join the litigation.  Not by name, of course, but make it clear that there are concerns here, and that we're more than happy to look favorably upon someone else coming in and trying to take over the role as lead class counsel.  My guess is that, most of the time, that'll do the trick, and that there are more than enough "aggressive" class counsel out there who'd pick up on the suggestion and be willing to take on that role.  The district court need not conduct a "reverse auction" or any of the other fancy procedures that are sometimes suggested in competing class action counsel cases.  A mere word may be sufficient.  That, when combined with approval of class certification, should in all but the most extraordinary cases do the trick.

But, to be honest, if all the district court did was to approve the class, and/or no one came forward to "help out" the existing (potentially lazy) counsel, to tell you the truth, I'd have problems with that.  A lazy class counsel can do a lot of damage.  A lot.  Sure, the class may get some relief.  But the class may also lose, sometimes solely due to the attorney.  And, in other cases, the class may get pennies on each dollar to which they're legitimately entitled; again, solely because of the attorney.  And approving classes headed by lazy counsel also systemically encourages and incentivizes continued litigation of this type, and that's a bad thing as well.

So, in an appropriate case, I think that'd be a sufficient reason, if no one else stepped forward, to decertify the class even after having originally certified it.  Or, at a very minimum, to try to prevent such a problem in the first place by inviting intervenors and/or suggesting that existing class counsel obtain co-counsel.  Those things, unlike the largely-hypothetical threat of discipline, may actually solve the problem, while simultaneously permitting the class (and the judicial system) to obtain the relief that we want.

So, were I to write an amicus brief, that's probably what I'd say.

Though, having now said it, I'll probably dispense with actually filing a brief.

But if you disagree, or think there's a better approach, I strongly encourage you to take up the Ninth Circuit's opening today and file a brief of your own.  'Cause it's an important issue.

And the Ninth Circuit wants to hear your views.