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Civil Justice Report
No. 3  September 2001


They’re Making a Federal Case Out of It . . . In State Court

Notes

  1. The authors wish to thank Theodore Lis, Georgetown University Law Center ’02, for his invaluable research assistance.
  2. In the 106th Congress, 2d Session, the House class action jurisdiction bill was denominated H.R. 1875; the House bill in the previous session was labeled H.R. 3789. The former bill passed the House on September 23, 1999. See 145 Cong. Rec. H8595 (1999). In the 106th Congress, 2d Session, the Senate bill was S. 353.
  3. See Mass Torts and Class Action Lawsuits: Hearing Before the Subcomm. on Courts and Intellectual Property of the House Comm. on the Judiciary, 105th Cong. (1998) (“1998 General House Hearing”); Class Action Jurisdiction Act of 1998: Hearing before the Subcomm. on Courts and Intellectual Property of the House Comm. on the Judiciary, 105th Cong. (1998) (“1998 House Bill Hearing”); The Interstate Class Action Jurisdiction Act of 1999: Hearing on H.R. 1875 and H.R. 2005 Before the House Comm. on the Judiciary, 106th Cong. (1999) (unpublished) (transcripts and prepared testimony available at www.house.gov/judiciary/full0721.htm.
  4. See 145 Cong. Rec. H8568-8595 (Sept. 23, 1999) (debates on H.R. 1875); 145 Cong. Rec. H8595 (1999) (House passage of H.R. 1875); Interstate Class Action Jurisdiction Act of 1999, H.R. Rep. No. 106-320 (1999) (“House Report”).
  5. See The Class Action Fairness Act of 1999: Hearing before the Subcomm. On Administrative Oversight and the Courts of the Senate Comm. on the Judiciary, S. Hrg. No. 106-465, 106th Cong. (1999) (“1999 Senate Hearing”); Class Action Lawsuits: Examining Victim Compensation and Attorneys’ Fees, S. Hrg. No. 105-504, 105th Cong., 2d Sess. (1997).
  6. The Class Action Fairness Act of 2000, S. Rep. No. 106-420, 106th Cong. (2000) (“Senate Report”).
  7. The new House bill is H.R. 2341.
  8. The Judiciary Act of 1789, ch. 20, 1 Stat. 73, 92 (1789).
  9. See Barrow S.S. Co. v. Kane, 170 U.S. 100, 111 (1898) ( “The object of the [diversity jurisdiction] provisions . . . conferring upon the [federal] courts … jurisdiction [over] controversies between citizens of different States of the Union . . . was to secure a tribunal presumed to be more impartial than a court of the state in which one litigant[ ] resides.”); Pease v. Peck, 59 U.S. (18 How.) 518, 520 (1856); Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat) 304, 307 (1816). See also The Federalist No. 80, at 537-38 (Alexander Hamilton) (Jacob E. Cooke ed. 1961) (“[I]n order to [ensure] the inviolable maintenance of that equality of privileges and immunities to which the citizens of the union will be entitled, the national judiciary ought to preside in all cases in which one state or its citizens are opposed to another state or its citizens. To secure the full effect of so fundamental a provision against all evasion and subterfuge, it is necessary that its construction should be committed to that tribunal which, having no local attachments, will be likely to be impartial between the different states and their citizens, and which, owing its official existence to the union, will never be likely to feel any bias inauspicious to the principles [up]on which it is founded.”).
  10. 10. 1999 Senate Hearing at 100 (prepared statement of Prof. E. Donald Elliott, Yale Law School). See also James William Moor & Donald T. Weckstein, Diversity Jurisdiction: Past, Present and Future, 43 Tex L. Rev. 1, 16 (1964). See also Bank of United States v. Deveaux, 9 U.S. (5 Cranch) 61, 87 (1809) (Marshall, C.J.) (“[Even if] tribunals of states will administer justice as impartially as those of the nation, to the parties of every description, . . . the Constitution itself . . . entertains apprehensions of the subject . . . , [such] that it has established national tribunals for the decision of controversies between . . . citizens of different states.”).
  11. John P. Frank, Historical Bases of the Federal Judicial System, 13 Law & Contemp. Probs. 3, 22-28 (1948); Henry J. Friendly, The Historic Bases of Diversity Jurisdiction, 41 Harv. L. Rev. 483 (1928).
  12. John J. Parker, The Federal Constitution and Recent Attacks Upon It, 18 A.B.A. J. 433, 437 (1932).
  13. See, e.g., Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806).
  14. See, e.g., Snyder v. Harris, 394 U.S. 332 (1969).
  15. See, e.g., Zahn v. International Paper Co., 414 U.S. 291 (1973).
  16. See n._ infra.
  17. Senate Report at 14.
  18. 14B Charles A. Wright, et al., Federal Practice and Procedure, § 3704, at 127 (3d ed. 1998) (emphasis added).
  19. See Davis v. Cannon Chevrolet-Olds, Inc., 182 F.3d 792, 797 (11th Cir. 1999) (emphasis added).
  20. Id.
  21. Id. at 798-99 (emphasis added).
  22. In re Prudential Ins. Co. America Sales Practice Litig., 148 F.3d 283, 305 (3d Cir. 1998) (emphasis added). Agreement with this view can also be found in Cohen v. Office Depot, Inc., 204 F.3d 1069, 1079 (11th Cir. 2000) (noting that there are “persuasive reasons” for viewing the class action in its totality for purposes of determining the existence of federal jurisdiction).
  23. The Interstate Class Action Jurisdiction Act of 1999: Hearing on H.R. 1875 and H.R. 2005 Before the House Comm. on the Judiciary, 106th Cong. (1999) (statement of Hon. Walter E. Dellinger), available at http://www.house.gov/judiciary/dell0721.htm.
  24. Gibbons v. Ogden, 22 U.S. (9 Wheat) 1, 194-195 (1824).
  25. Civil filings in state trial courts of general jurisdiction have increased 28 percent since 1984 (versus an increase of only 4 percent in the federal courts). See B. Ostrom & N. Kauder, Examining the Work of State Courts, State Justice Institute, 1997, at 15 (Court Statistics Project 1998). Most tellingly, in most jurisdictions, each state court judge is assigned an average of 1,000 to 2,000 new cases each year. Id. In contrast, each federal court judge was assigned an average of 500 cases last year. See L.H. Mecham, Judicial Business of the United States Courts: 2000 Report of the Director 20, 22 (2001) (Administrative Office of the U.S. Courts) (“Judicial Business”). The federal court trend is downward. Since 1997, there has been an eight percent decrease in the number of pending civil cases in our federal courts nationwide. Id. at 22.
  26. Senate Report at 16.
  27. Id.
  28. See 28 U.S.C. § 1407.
  29. See Memorandum to Advisory Comm. on Civil Rules from Judge Lee Rosenthal, Prof. Edward H. Cooper, Prof. Richard Marcus (dated Apr. 10, 2001) (“Advisory Comm. Memo”).
  30. Id. at 13 (citing Deborah R. Hensler, et al., Class Action Dilemmas: Pursuing Public Goals for Private Gains (Executive Summary 1999) (“ICJ/RAND Study”) at 15)).
  31. Senate Report at 21.
  32. Advisory Comm. Memo at 14.
  33. See Statement of Hon. Walter E. Dellinger before the House Judiciary Committee, Hearing on H.R. 1875, the Class Action Jurisdiction Act of 1999 (July 21, 1999), available at http://www.house.gov/judiciary/dell0721.htm.
  34. See U.S. Const. art. IV, § 1; see also Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) (absent class members from other states are generally bound by a state court’s decision in a class action).
  35. See American Judicature Society (State Justice Institute), Certification of Questions of Law: Federalism in Practice 28, 34-35 (1995) (noting that over a several year period, federal appeals and trial courts had certified hundreds of state law questions to state appellate courts for resolution).
  36. See Senate Report at 16-17 (citing numerous examples).
  37. ICJ/RAND Study at 21-22.
  38. Federal Judicial Center, Empirical Study of Class Actions in Four Federal District Courts 68-69 (1996).
  39. Senate Report at 15-22.
  40. ICJ/RAND Study, Executive Summary, at 28.
  41. In individual lawsuits, venue laws limit the forums in which a plaintiff may sue a defendant. For example, under the federal venue statute, a plaintiff may bring a lawsuit that is based on federal diversity jurisdiction only in (a) “a judicial district where any defendant resides, if all defendants reside in the same State,” or (b) “a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred” (unless there is no such venue, at which point the action may be filed in any “judicial district in which any defendant is subject to personal jurisdiction”). 28 U.S.C. § 1391(a). In contrast, a nationwide class action often can be filed in almost any federal or state court nationwide. For example, plaintiffs’ attorneys who seek to bring a class action in a certain county challenging a nationally distributed product, typically select a named plaintiff who purchased the product in that county and then argue that “a substantial part of the events or omissions occurred” there. Or, plaintiffs who sue multiple defendants from different states often argue that there is no one place where “a substantial part of the events” occurred and that they are therefore free to sue in any judicial district where the defendants are subject to personal jurisdiction (which, in the case of a company that sells its products throughout the country, is usually anywhere).
  42. Another impetus for change is the current division among federal courts about the breadth and current vitality of the Zahn view that the amount in controversy can only be established in a class action if each unnamed class member seeks damages in excess of the statutory minimum. Two federal appeals courts have held that in enacting 28 U.S.C. § 1367, Congress has overridden Zahn and that federal courts can preside over a class action as long as one plaintiff meets the amount-in-controversy minimum. See In re Abbott Labs., 51 F.3d 524, 526-27 (5th Cir. 1995), aff’d sub nom., Free v. Abbott Labs., 120 S. Ct. 1578 (2000) (per curiam; affirmance on tied vote); Stromberg Metal Works, Inc. v. Press Mechanical, Inc., 77 F.3d 928, 930-34 (7th Cir. 1996). Other courts have found that section 1367 did not abrogate the holding in Zahn and continue to require that each potential class member independently meet the amount-in-controversy minimum. See, e.g., Trimble v. Asarco, Inc., 232 F.3d 946, 959-62 (8th Cir. 2000). Because the Abbott decision was affirmed by an equally divided Supreme Court, Abbott controls only in the Fifth Circuit, and the conflict among the Circuits on this point remains.
  43. For example, in confirming the “complete diversity” prerequisite for diversity jurisdiction in Strawbridge, the Supreme Court was construing the language of the 1789 Judiciary Act, not the limits of Article III diversity jurisdiction. The Supreme Court has regularly recognized that the decision to require complete diversity and to establish a minimum amount in controversy are political decision not mandated by the Constitution. See, e.g., Newman-Green, Inc. v. Alfonzo-Larrian, 490 U.S. 826, 829 (1989). Congress therefore has the prerogative to broaden the scope of diversity jurisdiction as it chooses, so long as any two adverse parties to a lawsuit are entities of different states. See State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 530-31 (1967). In short, “minimal diversity” is the only prerequisite for federal diversity jurisdiction required by the Constitution.
  44. See, e.g., Statement of Rep. Lloyd Doggett (D-Tex.), 145 Cong. Rec. H8565 (daily ed. Sept. 23, 1999).
  45. 1999 House Report at 9 (citing Working Papers of the Advisory Committee on Civil Rules on Proposed Amendments to Civil Rule 23, Vol. 1, at ix-x (May 1, 1997) (“Advisory Committee Working Papers”) (memorandum of Judge Paul V. Niemeyer to members of the Advisory Committee on Civil Rules).
  46. Deborah Hensler, et al., Preliminary Results of Rand Study Of Class Action Litigation (1997).
  47. Analysis: Class Action Litigation, Class Action Watch, Spring 1999, at 3 (Figure 2).
  48. Id. at 2 (Figure 1).
  49. March 1998 House Hearing at 140-53.
  50. ICJ/RAND Study at 7.
  51. See, e.g., L.H. Mecham, Judicial Business of the United States Courts: 2000 Report of the Director 402-08 (2001) (Administrative Office of the U.S. Courts) (“Judicial Business”).
  52. March 1998 House Hearing at 140-53.
  53. Obviously, the literature search was not a scientific indicator of where state court class actions are being filed. For whatever reason, commentators and journalists may be focusing on certain locations and ignoring others, skewing the media record toward certain jurisdictions. Nevertheless, the literature review suggests that the local courts of the following counties appear to have had the most class action filings in the 1998-2000 timeframe (listed in descending order of apparent number of class action filings):
    1. Los Angeles County, California
    2. Cook County, Illinois
    3. Madison County, Illinois
    4. Dade County, Florida
    5. Santa Clara County, California
    6. San Diego County, California; Orange County, California
    7. San Francisco County, California
    8. Travis County, Texas; Broward County, Florida; Camden County, New Jersey; Jefferson County, Texas
    9. Palm Beach County, Florida
     
  54. As detailed below, the researchers also looked at cases filed during the early months of calendar year 2001, to the extent possible.
  55. Researchers in Palm Beach County did not collect cases for 2001. Madison County cases were collected through March 7, 2001. Jefferson County cases were collected through January 2001.
  56. U.S. Census Bureau, Jefferson County, Texas QuickFacts, at http://www.fedstats.gov/qf/states/48/48245.html.
  57. U.S. Census Bureau, Palm Beach County, Florida QuickFacts, at http://www.fedstats.gov/qf/states/12/12099.html.
  58. U.S. Census Bureau, Madison County, Texas QuickFacts, at http://www.fedstats.gov/qf/states/17/17119.html.
  59. See Judicial Business at 405.
  60. Schoenleber v. Prudential Prop. & Cas. Ins. Company, No. 01-L-99 (filed Jan. 18, 2001); Lancey v. Country Mut. Ins. Co., No. 01-L-113 (filed Jan. 29, 2001); Richardson v. Progressive Premier Ins. Co. of Illinois, No. 01-L-149 (filed Feb. 6, 2001); Edwards v. Mid-Century Ins. Co., No. 01-L-151 (filed Feb. 6, 2001); Knackstedt v. St. Paul Fire and Marine Ins. Co., No. 01-L-153 (filed Feb. 6, 2001); Bordoni v. CGU Ins. Group, No. 01-L-157 (filed Feb. 6, 2001); Huff v. Hartford Ins. Co. of Illinois, No. 01-L-158 (filed Feb. 6, 2001); Billups v. GEICO Gen. Ins. Co., No. 01-L-159 (filed Feb. 6, 2001); Moore v. Shelter Ins. Co., No. 01-L-160 (filed Feb. 6, 2001).
  61. Hobbs v. State Farm Mut. Ins. Co., No. 99-L-1068 (filed Nov. 2, 1999); Kelly v. Progressive Premier Ins. Co., No. 00-L-277 (filed Apr. 3, 2000).
  62. Schachter v. Mut. Benefits Corp., No. 98-4490 AI (filed July 28, 1998); Thum v. Accelerated Benefits Corp., No. 98-9389 AN (filed Oct. 21, 1998); Schwartz v. Dedicated Res., Inc., No. 98-9393 AD (filed Oct. 21, 1998); Chancellor v. Future First Fin’l Group, Inc., No. 99-4429 AE (filed May 6, 1999); Brackman v. Dedicated Res., Inc., No. 99-9361 (filed Sept. 30, 1999).
  63. See The Lakin Law Firm, Class Actions, at http://www.weblinecommunications.com/practice/class-action/index.htm.
  64. Berman DeValerio Pease Tabacco Burt & Pucillo: About Class Action Lawsuits: FAQ,
    at http://www.bermanesq.com/content/classaction-faq.asp (cases filed by Burt & Pucillo prior to merger).
  65. Senate Report at 19 (“Yet another common abuse [of the class action device in state courts] is the filing of ‘copy cat’ class actions (i.e., duplicative class actions asserting similar claims on behalf of essentially the same people).”). As noted in the Senate Report, “sometimes these duplicative actions are filed by lawyers who hope to wrest the potentially lucrative lead role away from the original lawyers, [and] in other instances, the ‘copy cat’ class actions are blatant forum shopping—the original class lawyers file similar class actions before different courts in an effort to find a receptive judge who will rapidly certify a class.” Id. When these cases are filed in state courts, there is no way to coordinate or consolidate the cases; the cases must be litigated in an “uncoordinated, redundant fashion.” Id. “The result is enormous waste—multiple judges of different courts must spend considerable time adjudicating precisely the same claims asserted on behalf of precisely the same people.” Id. at 19-20. “As a result, State courts and class counsel may ‘compete’ to control the cases, often harming all the parties involved.” Id. See also House Report at 9.
  66. No. 00-7879 AE (filed Aug. 15, 2000).
  67. No. 00-L-480 (filed May 26, 2000). The defendants sought to remove this case on the basis that the plaintiffs’ claims are preempted by ERISA. The court remanded, finding that the complete preemption doctrine does not apply to this case.
  68. See Flanagan v. Bridgestone/Firestone, Inc., No. IP00-C-5106-B/S (S.D. Ind.).
  69. William H. Rehnquist, 1993 Year-End Report on the Federal Judiciary, 17 Am. J. Trial Advoc. 571, 572 (1994).
  70. See State and County Quick Facts, at
    http://quickfacts.census.gov/qfd/states/17/17119.html.
  71. See Profiles of General Demographic Characteristics 2000, at http://factfinder.census.gov.
  72. Telephone Call With Ed Taft, First Stop Business Information Center, August 14, 2001.
  73. Ill. Const., Art. 6, § 10 (2001).
  74. No. 98-L-98 (filed Feb. 4, 1998). Although the defendants attempted to remove this case, the case was remanded.
  75. No. 98-L-828 (filed Nov. 6, 1998).
  76. No. 99-L-529 (filed June 15, 1999).
  77. Plaintiff’s Complaint, ¶ 4, Wheeler v. Sears, Roebuck & Co., No. 99-L-529 (filed June 15, 1999) (“Wheeler Compl.”).
  78. Id. ¶ 6.
  79. Yellow Pages search using www.infospace.com.
  80. Wheeler Compl. ¶ 89.
  81. No. 00-L-830 (filed Aug. 28, 2000).
  82. About MCI WorldCom, at http://www.worldcom.com.
  83. Compl. ¶¶ 36, 46, Ott v. MCI Worldcom Communications, Inc., No. 00-L-830 (filed Aug. 28, 2000).
  84. No. 00-L-1112 (filed Nov. 6, 2000). The defendants sought to remove this case to federal court on the ground that the plaintiff’s claims were preempted by federal telecommunications laws and regulations. The court disagreed with the defendants, finding that the claims asserted in the case were not preempted by the Communications Act and that it therefore did not have jurisdiction over the state law claims asserted in the Complaint. See Order, Snyder v. Sprint Spectrum, No. 3:00cv971 (Feb. 6, 2001).
  85. Compl. ¶ 13. Snyder v. Sprint Spectrum L.P.
  86. Class Action Complaint, .¶ 8, Snyder v. Sprint Spectrum L.P. (filed November 6, 2000).
  87. Id. ¶ 18.
  88. Sprint Facts-at-a-glance, at http://www.sprintpcs.com/aboutsprintpcs/mediacenter/facts.html.
  89. Id.¶ 18.
  90. No. 00-L-525 (filed June 13, 2000).
  91. Besides Illinois and the District of Columbia, the states are: Alabama, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Washington, and Wisconsin. Plaintiff’s Compl. ¶ 4, Garvey v. Roto-Rooter Services Co., No. 00-L-525 (filed June 13, 2000).
  92. Id. ¶ 15.
  93. Telephone Interview with Roto-Rooter operator based in Addison, Illinois (Aug. 1, 2001).
  94. No. 99-L-1068 (filed Nov. 2, 1999).
  95. No. 99-L-995 (filed Oct. 13, 1999).
  96. 746 N.E.2d 1242 (Ill. Ct. App. 2001).
  97. Id. at 1242.
  98. Id.
  99. Id.
  100. Id.
  101. See Matthew J. Wald, Suit Against Auto Insurer Could Affect Nearly All Drivers, The New York Times, Sept. 27, 1998, § 1, at 29.
  102. Complaint,. ¶¶ 6-7, Paul v. Country Mut. Ins. Co., No. 99-L-995 (filed Oct. 12, 1999).
  103. The plaintiffs’ law firms on the complaint list addresses in a number of cities, including Little Rock, Arkansas; Lexington, Mississippi; San Francisco, California; Chicago, Illinois; Mobile, Alabama; and Knoxville, Tennessee.
  104. Complaint,. ¶ 42, Hobbs v. State Farm Mut. Auto. Ins., No. 99-L-1068 (filed Nov. 2, 1999).
  105. In a slight gesture that only addresses one of the problems with the Complaint, plaintiffs’ counsel seek to exclude from the class residents of Massachusetts and Hawaii, where state law mandates the use of non-OEM parts.
  106. Id. ¶ 27.
  107. Based on a comparison of the total direct premiums for twenty automobile insurance companies against those for all U.S. insurance companies in 1999. Lynna Goch, Car Wars,
    Best’s Review Magazine, Oct. 2000, available
    at
    http://www.bestreview.com/2000-10/cover_carwars.html.
  108. Estimated percentages are based on total automobile premiums across the nation. See Best’s Insurance Reports: Property-Casualty United States (2000 ed. 2000).
  109. Id. ¶ 43.
  110. Complaint, ¶ 1, Schoenleber v. Prudential Prop. & Cas. Ins. Co., No. 01-L-99 (filed Jan. 18, 2001).
  111. Id. ¶ 50.
  112. Id. ¶ 33.
  113. Plaintiff’s Motion for Class Certification, ¶ 2, Schoenleber v. Prudential Prop. & Cas. Ins. Co., No. 01-L-99 (filed Jan. 18, 2001).
  114. Id. ¶ 2.
  115. Telephone Interview with Prudential Service Operator (Aug. 7, 2001).
  116. About Geico, at http://www.geico.com/infocenter/about.htm.
  117. See, e.g., Complaint, ¶ 18, Edwards v. Mid-Century Ins. Co., No. 01-L-151 (filed Feb. 6, 2001).
  118. Id. ¶¶ 57-6.
  119. Complaint,. ¶¶ 48-49, Hernandez v. American Family Mut. Life Ins. Co., No. 00-L-629 (filed July 25, 2000)
  120. Id. ¶ 3.
  121. No. 00-L-629 (filed July 25, 2000). The defendant sought to remove the case to federal court, but the district court remanded it to state court, finding that plaintiffs’ claims did not meet the $75,000 amount-in-controversy minimum. See Order, Hernandez v. American Mutual Ins. Co., No. 00-CV-0681-DRH (Dec. 14, 2000).
  122. Id. ¶ 36.
  123. See Littleton v. Shelter Ins. Co., No. 99-L-864 (filed Sept. 7, 1999).
  124. No. 99-L-920 (filed Sept. 15, 1999).
  125. Complaint, ¶ 2, Cunningham v. Mattel, Inc., No. 99-L-864 (filed Sept. 15, 1999).
  126. No. 00-L-331(filed Apr. 11, 2000).
  127. No. 00-L-872 (filed Sept. 6, 2000).
  128. Complaint, ¶ 43, Mizukonis v. Atl. Rich Field Co., No 00-L-872 (filed Sept. 6, 2000).
  129. Id. ¶ 18.
  130. See In re: Methyl Tertiary Butyl Ether Prods. Liab. Litig., No. M2188 (S.D.N.Y.).
  131. Id., Prayer for Relief.
  132. Id. ¶ 32.
  133. Id. ¶ 35.
  134. Id. ¶ 44.
  135. No. 99-L-48 (filed Jan. 20, 1999).
  136. Order Granting Prelim. Approval of Settlement ¶ 1, Unfried v. Charter Communications Inc., 99-L-48 (Sept. 28, 2000).
  137. Charter Communications Press Release: Charter Communications’ Annual Shareholder Meeting Focuses on Significant Achievements and Aggressive Goals, at http://www.onlinepressroom.net/chrtr/.
  138. Complaint, ¶ 10, Unfried v. Charter Communications, Inc., No 99-L-48 (Filed Feb. 11, 1999).
  139. Time span calculated between filing of first Complaint (filed January 20, 1999) and granting of final order of settlement (granted December 21, 2000).
  140. No. 99-L-120 (filed Feb. 11, 1999).
  141. Complaint, ¶¶ 1-3, Smith, Allen, Mendenhall, Emmons & Selby v. The Thomson Corp., No. 99-L-120 (filed Feb. 11, 1999).
  142. Motion for Class Certification ¶ 3, Smith, Allen, Mendenhall, Emmons & Selby v. The Thomson Corp., No. 99-L-120 (filed Oct. 8, 1999).
  143. Id. ¶ 4.
  144. Based on a search of Martindale-Hubbell Directory for Madison County, at http://www.martindale.com/locator/home.html.
  145. Order, Smith, Allen, Mendenhall, Emons & Selby v. The Thomson Corp., No. 99-L-120 (filed Dec. 1, 1999).
  146. No. 99-L-421 (filed Apr. 30, 1999).
  147. Nationwide Class Action Complaint, ¶ 11, Poor v. Sprint Corp., No. 99-L-421 (filed Apr. 30, 1999).
  148. Id. ¶¶ 22-23.
  149. FCC Releases Fiber Deployment Update, FCC News, (Sept. 9, 1999) at 14, available at http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/1999/nrcc906 5.txt.
  150. See Memorandum And Order, Poor v. Sprint Corp., No. 99-497-GPM (S.D. Ill. March 2, 2000).
  151. See Order Granting In Part And Denying In Part The Motion For Class Certification, Poor v. Sprint Corp., No. 3:00cv299 (S.D. Ill. April 6, 2001).
  152. See Order, Isaacs v. Sprint Corp., No. 01-8016 (7th Cir. Aug. 14, 2001).
  153. Id.
  154. See State and County Quick Facts at http://quickfacts.census.gov/qfd/states/48/48245.html.
  155. See Detailed Tables, Census 2000 Redistricting Data, at www.factfinder.census.gov.
  156. Tex. Const. Art. V § 7.
  157. Telephone Call with Beaumont Chamber of Commerce (Aug. 15, 2001).
  158. Nine of these cases were removed to the U.S. District Court for the Eastern District of Texas.
  159. No. A-162,152 (filed Apr. 27, 2000).
  160. Plaintiff’s Second Amended Original Class Petition, ¶ 21, Lapray v. Compaq Computer Corp., No. A-162, 152 (filed Apr. 27, 2000).
  161. Id. ¶¶ 5-6.
  162. Id. ¶ 8.
  163. Id. ¶ 18.
  164. Dell Computer No. 1 in U.S., Milwaukee Journal Sentinel, Oct. 26, 1999, Business Section, at 1.
  165. No. D-162,535 (filed Apr. 25, 2000).
  166. ABOUT US: The Company: BLOCKBUSTER Trivia, at http://www.blockbuster.com/bb/about/trivia/0,4429,,00.html.
  167. BLOCKBUSTER: LOCATE A STORE, at http://www.blockbuster.com/bb/store_locator/locate_store_enter/0,4301,,00. html.
  168. Households in Jefferson County reported, 2000 U.S. Census, at http://quickfacts.census.gov/qfd/states/48/48245.html.
  169. Plaintiff’s First Amended. Class Action Complaint, ¶ 4.2, Scott v. Blockbuster, Inc., No. D-162, 535 (filed on Apr. 25, 2000).
  170. See David Koenig, Blockbuster tried to settle class-action lawsuits over late fees, Associated Press, June 6, 2001.
  171. Wendy Wilson, Blockbuster to settle suits on late fees, Daily Variety, June 4, 2001, at 10.
  172. Cynthia Corzo, Blockbuster Settles Class-Action Lawsuit in a Smart Business Move, The Miami Herald, June 10, 2001.
  173. Monica Roman, A Blockbuster of a Legal Bill, Business Week, June 18, 2001, at 46.
  174. No. E-159,403 (filed July 15, 1998). Defendants sought to remove this case to federal court, but the matter was remanded because one of the companies sued is based in Texas. The federal district court rejected defendants’ arguments that the Texas company was fraudulently joined. See Order Remanding Case To State Court, Rawls v. Mentor Corp., No. 1:98cv1818 (E.D. Tex. Nov. 13, 1998).
  175. Plaintiff’s Original Petition, § III, Rawls v. Mentor Corp., No. E-159, 403 (filed July 15, 1998).
  176. See Corporate Profile at http://investor.mentorcorp.com/profile.cfm.
  177. See About Us, at www.bestbuy.com/About/index.asp?b=0&m=435.
  178. No. B-163,429 (filed Aug. 4, 2000).
  179. Plaintiff’s Original Petition, ¶ 12(e)-(f), Brew v. Best Buy Co., Inc., No. B-163, 429 (filed Aug. 4, 2000).
  180. Id. ¶ 8.
  181. Id. ¶ 9.
  182. No. D-162,802 (filed Apr. 28, 2000).
  183. Strasen v. Allstate Insurance Co., No. 99-L-1040 (filed Oct. 26, 1999); Ellis v. Allstate Ins. Co., No. 00-L-493 (filed June 2, 2000).
  184. Plaintiff’s Original Petition, ¶ 20, Pego v. Allstate County Mut. Ins. Co., No. D-162,802 (filed Apr. 28, 2000).
  185. About Allstate, at http://www.allstate.com/About (stating that Allstate insures one in eight autos and homes in the United States).
  186. No. A-162,049 (Plaintiffs’ First Amended. Class Action Petition (filed Feb. 1, 2000)). This case was removed to federal court, but the federal district court remanded the case to state court after rejecting defendants’ arguments that the plaintiffs had fraudulently joined a Texas-based defendant to defeat removal. See Order Granting Plaintiffs’ Motion To Remand And Denying Defendants’ Motion To Sever, Shields v. Allstate County Mutual Insurance Co., No. 1:00-CV-147 (E.D. Tex.).
  187. Plaintiff’s First Amended Class Action Petition., ¶ 2, Shields v. Allstate County Mut. Ins. Co., No. A-162,049 (filed Feb. 1, 2000).
  188. Ellis v. Allstate Ins. Co., No. 00-L-493 (filed June 2, 2000); Richardson v. Progressive Premier Ins. Co. of Illinois, No. 01-L-149 (filed Feb. 6, 2001); Edwards v. Mid-Century Ins. Co., No. 01-L-151 (filed Feb. 6, 2001).
  189. Id. ¶ 21.
  190. See Defendants’ Motion To Transfer Venue And Motion To Sever, Shields v. Allstate County Mutual Insurance Co., No. A-162,049 (filed July 31, 2000). There was no order in the file indicating how the judge ruled on the motion. The case did not appear on the electronically available Dallas County court docket on Aug. 6, 2001.
  191. No. A-161,090 (Plaintiffs’ First Amended. Original Class Action Petition, filed June 25, 1999). This case was removed to federal court but was remanded because one of the companies sued is based in Texas and the federal district court rejected defendants’ arguments that the Texas company was fraudulently joined. See Order, Dunn v. Boise Cascade Corp., No. 1:99cv499 (E.D. Tex. Oct. 29, 1999).
  192. Plaintiff.’ First Amended Original Class Action Petition ¶ 7, Dunn v. Boise Cascade Corp., No. A-161,090 (filed June 25, 1999).
  193. Id. ¶ 4.
  194. Boise Cascade Corporation, Answers to Frequently Asked Questions, at http://www.bc.com/other/faqs.html#loc.
  195. Boise Cascade Corporation, SEC Form Q-10, filed Aug. 11, 2000.
  196. Jefferson County Election Results, available at http://co.jefferson.tx.us/cclerk/election/results_2000.htm.
  197. 2000 Official Presidential General Election Results, available at http://fecweb1.fec.gov/pubrec/2000presgeresults.htm.
  198. See Profile of General Demographic Characteristics: 2000, at http://factfinder.census.gov.
  199. See Information About Palm Beach County, at http://www.pbcgov.com/Budgetnew/final00/info_about_palm_beach_county.h tm.
  200. Fla. Const., Art. V § 10 (2000).
  201. No. 98-2244 AB (filed Mar. 11, 1998). The parties voluntarily dismissed the case in July 2000.
  202. Class Action Compl. ¶¶ 27-32, Foster v. Cabot Money Mgmt., Inc. No. 002244 (filed Mar. 11 1998).
  203. Id. ¶ 20.
  204. Id. ¶¶ 2, 21.
  205. No. 00-7021 AF (filed July 20, 2000).
  206. Am. Compl. ¶ 1, Greenfield v. Rexall Sundown, Inc., No. 00-7021 AF (filed July 20, 2000).
  207. Id. ¶¶ 1, 11.
  208. Complaint for Injunction and Other Equitable Relief, ¶ 8, Exhibit E, FTC v. Rexall Sundown, Inc., No. 00-7016-Civ-Feguson (filed July 19, 2000).
  209. After the Palm Beach County plaintiff was dropped, the case was renamed LaRaia v. Rexall Sundown, Inc., No. 00-7021AF (Consolidated Compl. (filed Mar 21, 2000)).
  210. Consolidated Compl. ¶¶ 2-7, La Raia v. Rexall Sundown, Inc., No. 00-7021AF (filed Mar. 21, 2000).
  211. Id. ¶ 36.
  212. The researchers also discovered another class action pending against Rexall in Palm Beach County. This one was brought on behalf of all holders of Rexall common stock, and alleges that Rexall breached its fiduciary duty to shareholders by agreeing to unfavorable merger terms. The case is captioned Peccatiello v. Desantis, et al., No. CL 00-4284AO (filed May 1, 2000) and seeks to recover on behalf of a nationwide class.
  213. FTC v. Rexall Sundown, Inc., No. 00-7016-CIV-Ferguson (filed July 19, 2000).
  214. No. 00-2023 AO (filed Feb. 28, 2000). Defendants removed the case to the U.S. District Court for the Middle District of Florida on the ground that the plaintiffs’ claims were preempted by ERISA and that the case therefore raised a “federal question.” The district court remanded the case, however, finding that ERISA preemption did not apply because the named plaintiff would not have standing to sue the defendant under federal law. See Order Remanding Action To State Court, Beer v. United Health Group, Inc., No. 00-8550-CIV-GOLD (Sept. 21, 2000).
  215. Compl. ¶ 3, Beer v. United HealthCare, Inc., No. 00-2023AO (filed Feb. 28, 2000).
  216. Id. ¶ 20.
  217. Id. ¶ 9(a).
  218. Id.
  219. Id.
  220. Id. ¶¶ 10, 12.
  221. About UnitedHealthcare: Business description, at http://www.unitedhealthcare.com/about/index.html#description.
  222. Phil Galewitz, HMO Agrees to $65,000 Payment, The Palm Beach Post, Dec. 28, 2000, Business at 1D.
  223. Id. ¶ 8.
  224. Id. ¶ 16.
  225. Id. ¶¶ 35, 53.
  226. No. 98-009402 (filed Oct. 22, 1998).
  227. Kantor Compl. ¶ 10, Kantor v. Vivra Specialty Partners, Inc., No. 98-009402 (filed Oct. 22, 1998).
  228. Id. ¶ 9.
  229. Id. ¶ 6.
  230. Schachter v. Mut. Benefits Corp., No. 98-4490 AI (filed July 28, 1998); Thum v. Accelerated Benefits Corp., No. 98-9389 AN (filed Oct. 21, 1998); Schwartz v. Dedicated Res., Inc., No. 98-9393 AD (filed Oct. 21, 1998); Chancellor v. Future First Fin. Group, Inc., No. 99-4429 AE (filed May 6, 1999); Brackman v. Dedicated Res., Inc., No. 99-9361 (filed September 30, 1999).
  231. Complaint,. ¶ 11, Chancellor v. Future First Fin. Group, Inc., No. 99-4429AE (filed May 6, 1999).
  232. Complaint., ¶ 7, Schachter v. Mut. Benefits Corp., No. 98-4490 AI (filed July 28, 1998).
  233. Complaint, ¶¶ 11, 15, Chancellor, No. 99-4429 AE.
  234. Complaint, ¶ 17, Schachter, No. 98-4490 AI. Similarly, according to the Brackman Motion for Class Certification, “members of the [c]lass are geographically diverse, residing all over the nation.” Mot. For Class Certification at pg. 5, Brackman v. Dedicated Res. Inc., No. 99-9361 (filed Sept. 30, 1999).
  235. Mutual Benefits Corporate Profile, at http://mutualbenefitscorp.com/company.html.
  236. Complaint, ¶¶ 37-46, Schachter, No. 98-4490 AI.
  237. No. 98-4460 AO (filed May 18, 1998).
  238. See Wolfe & Irizarry v. Fla. Marlins Baseball Ltd., No. 98 004460 AO (Amended. Complaint. & Demand For Jury Trial, filed June 25, 1998).
  239. Amended. Complaint, ¶ 18, Wolfe & Irizarry v. Fla. Marlins Baseball Ltd., No. 98004460 AO (filed June 25, 1998).
  240. Id. ¶ 18.
  241. No. 98-5853 AJ (filed July 1, 1998).
  242. Because this case alleges a violation of federal law, First Union might have been able to remove it to federal court. It is unclear from the docket whether it attempted to do so, or if not, why. A federal docket search did not yield any references to this case.
  243. Amended Complaint, ¶ 6, Elliot v. First Union National Bank, No. 98-5853 AJ (filed July 1, 1998).
  244. Id. ¶¶ 5-6.
  245. Id. ¶ 7.
  246. Id. ¶ 2.
  247. Id.
  248. Id. ¶ 3.
  249. Id. ¶¶ 44-47.
  250. Id. ¶ 47.
  251. No. CL 00-4170AN (filed Apr. 27, 2000).
  252. The other case is Berman v. Travelers Group, Inc., No. CL-00-2334A0 (filed Mar. 7, 2000).
  253. Complaint, ¶ 1, Josephs v. Smith Barney, Inc., No. CL-00-4170AN (filed Apr. 27, 2000).
  254. See Defendants’ Motion To Stay Or Dismiss This Action, Josephs v. Smith Barney, Inc., No. CL-00-4170 AN (June 12, 2000).
  255. Complaint, ¶ 12, Josephs, No. CL-00-4170 AN.
  256. Id. ¶ 42.
  257. Id. ¶ 6.
  258. Id. ¶ 9.
  259. Id. ¶ 63.
  260. Senate Report at 20.

 


Center for Legal Policy.

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CJR 3 PDF (222 kb)

WHAT THE PRESS SAID:

Study finds Madison County has most class action suits per capita | Associated Press, 9-11-2001
Class-Action Suits Soar In Madison County, Study Says; Think Tank Argues For Moving Cases To Federal Court | St. Louis Post-Dispatch, 9-11-01

SUMMARY:
Increasingly, academics and policy makers are concerned that a handful of state courts, may be effectively making law for 49 other states in addition to their own, or applying their own state law to citizens of other states. This study reveals that the authority to certify national class actions is, in fact, providing local judges with the ability to dictate national policy over a vast array of issues and industries.

TABLE OF CONTENTS:

About the Authors

Authors’ Acknowledgements

I. THE IMPETUS FOR EXPANDING FEDERAL JURISDICTION OVER INTERSTATE CLASS ACTIONS.

II. THE EMPIRICAL CASE FOR EXPANDING FEDERAL JURISDICTION OVER INTERSTATE CLASS ACTIONS.

A. The Current Congressional Record.

B. The 2001 County Court Data Collection Effort.

III. THE COUNTY COURT RESEARCH PROJECT: PRIMARY FINDINGS.

A. The County Courts Experienced Class Action Filing Rates That Were Disproportionate To Their Populations.

B. Surprisingly Numerous Cases Involved Named Parties Who Reside Outside The County Court’s Vicinity.

C. The County Courts’ Class Action Dockets Are Monopolized By A Small Cadre Of Out-Of-County Plaintiffs’ Counsel.

D. Many Of The County Court Cases Were “Copy Cat” Class Actions, Duplicative Of Other Pending Litigation.

IV. THE COUNTY COURT SURVEY: THE INDIVIDUAL COURTS AND THEIR CLASS ACTION DOCKETS.

A. Madison County, Illinois: A Projected 3650% Increase In Class Action Filings Over Four Years.

B. Jefferson County, Texas: Class Action Filings Double Over 1998-2000 Period.

C. Palm Beach County, Florida: Class Action Filings Up By 34%.

CONCLUSION

Appendix of Statistical Tables

Table 1: Populations Of Counties Surveyed, With Comparisons To Other Counties With Large Class Action Dockets

Table 2: Retail Sales and Manufacturers Shipments by County, with Comparisons to State and National Values

Table 3: Per Capita Class Action Rate Of Counties Surveyed

Table 4: Repeat Appearances By Plaintiffs’ Counsel

Notes

 


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