By Order dated December 27, 2007 a New York appeals court rejected an absent class member's bid to obtain the work product of lead counsel in the CA Inc. securities class action. The absent class member, billionaire Sam Wyly, a major CA shareholder, alleged that the $134 million settlement of the CA securities class action obtained by lead counsel was inadequate. Wyly sought to obtain the privileged work product of lead counsel in order to assess the legal analysis supporting the recommended $134 million settlement.
The Appellate Division refused to grant Wyly's requested relief, concluding that the cited legal authority of a prior decision, styled Sage Realty Corp. v. Proskauer Rose, which held that clients are entitled to all of their attorney's work product, did not apply to absent class members. The Appellate Division found that because "[Wyly] was free to hire his own counsel to appear in the class action if he wished to employ a traditional attorney-client relationship...or to opt out of the class action altogether if he was unsatisfied with his limited role," Wyly could not obtain the privileged work product of lead counsel.
Without access to the work product of lead counsel, often compiled over years of expensive litigation, absent class members face significant expenses if they choose to pursue their own individual actions. With this decision in mind, absent class members may elect to simply remain members of the class --rather than opting out and pursing individual actions. Of course, absent class members with significant resources, such as Mr. Wyly or a large institutional investor, likely view individual opt-out actions as attractive options given the growing body of data suggesting materially higher recoveries are obtained though opt-out cases than from simple membership in a class action litigation.