Litigation

SCOTUS to rule on due process in class actions?

By Ted Frank

There's been some press coverage of Justice Scalia's stay of a judgment in Philip Morris USA Inc. v. Scott, the Louisiana class action requiring the tobacco company to set up a $250M+ smoking cessation fund, but it's mostly focused on scorekeeping and the underlying allegations of the suit. But what's really significant about the stay is the interest the Supreme Court is taking on the tail-wagging-the-dog aspect of class actions, where the procedural Procrusteanism of creating a class ends up depriving defendants of their ability to mount a substantive defense that they would have to individual claims. Scalia's order weighs in on the tremendous due process problems—a hint on his thoughts in the pending Dukes v. Wal-Mart case. If the Supreme Court weighs in, it would have the potential to strike down billions of dollars worth of abusive consumer class actions, especially the "harm-less lawsuits" that Michael Greve and I have frequently criticized. Russell Jackson has excellent analysis, and Daniel Fisher's coverage at Forbes is, as usual, more savvy than that of most legal reporters.

Full post as published by Point of Law on September 28, 2010 (boomark / email).