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Manhattan Institute

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Class Action Magnet Courts: The Allure Intensifies


Class Action Magnet Courts: The Allure Intensifies

July 1, 2002
Legal ReformOther

Last year, we published an article analyzing data gathered by the Manhattan Institute concerning purported class actions filed in three county courts (one in Illinois, one in Texas, and one in Florida) with emerging reputations as “class action magnets.”[1]  Those data revealed several patterns in the class actions filed in those state courts between 1998 and early 2001—most notably, a dramatic growth in the frequency of such cases.

Earlier this year, the Manhattan Institute asked the researchers who collected the data for the first report[2]  to update the earlier research in one of the county courts—the Circuit Court of Madison County, Illinois—to test whether the patterns uncovered in the earlier research were continuing. To that end, the researchers retrieved for review the dockets of all the class actions that had been filed there in 2001 and early 2002. That follow-up research revealed that as a general matter, the pattern trends identified in our earlier article on this subject were sustained last year:

Class Actions Continue to Be Filed at a Rate Highly Disproportionate to Madison County’s Population. Madison County, a small rural county that covers 725 square miles in southwest Illinois, is home to just 259,000 people, less than 1 percent of the United States population. Nonetheless, it attracts more class actions each year than some of the nation’s most populous communities. As was reported in our first article, the number of class action filings in the county per year increased exponentially between 1998 and 2000—from two cases to 39.[3]  That is an increase of 1,850 percent. The follow-up study confirmed that the number of new class action filings increased further in the year 2001, with 43 class action lawsuits (another 10 percent increase) filed in the county. Moreover, early indications suggest that the size of Madison County’s class action docket will grow even more dramatically in 2002. Thirteen class actions were filed in the first two months of the year. If that pace continues for the remainder of the year, a total of 78 class actions will be added to the Madison County court docket over the course of 2002.

While the absolute number of class action filings may not seem that alarming, these rates are relatively dramatic when considered in the context of Madison County’s size and its relative lack of substantial commerce. Indeed, as reported in our earlier article, if class actions were filed nationwide at the same per-capita rate as they were filed in Madison County in 2000, there would be nearly 43,000 class actions filed in this country each year.[4]