The following series of blog posts were excerpted from the class actions chapter of Successful Partnering Between Inside and Outside Counsel, a multi-volume treatise that is a joint project of West and the Association of Corporate Counsel. The segments reprinted here, with slight modifications to make them better suited to this format, were written by Carlton Fields shareholders Gary Sasso and Matt Allen, and David Leitch, general counsel of Ford Motor Company.
This continues our series of blog posts on effective partnering between inside and outside counsel to defend against class action lawsuits.
Inside and outside counsel should have different but complimentary roles in this effort to assess the strengths and weaknesses of claims, defenses, and class certification theories. Outside counsel ordinarily is best suited to research the applicable law and to provide guidance to inside counsel with respect to the types of factual information that will be most important to the case. Inside counsel will then be prepared to guide outside counsel through the company’s business records and practices.
For example, in a consumer fraud case, outside counsel should determine what law applies to the plaintiffs’ complaint (it might be different from that pleaded in the complaint and different from the law of the jurisdiction where the case was filed) and identify the elements of a consumer fraud claim under that state’s laws. If the applicable law requires that the plaintiff be a “consumer” who relied on an alleged misrepresentation and was damaged, then inside counsel can help locate witnesses and documents relevant to those issues. Inside counsel might be able to locate evidence showing that the plaintiff used the product in question for business purposes (and therefore is not a “consumer”) and that the defendant provided information or assistance to the plaintiff that would have negated any reliance or damage or that might at least render the plaintiff dissimilar from other class members. Outside counsel would then be in the best position to develop this evidence thoroughly and begin the process of presenting a defense.
Ordinary civil litigants prosecuting or defending individual claims may not have the occasion or even the motivation to develop some of these aspects of a case. But the motivation to develop these issues will be present in a class action because of their enormous importance to the resolution of class certification. For example, in a given case the class representatives themselves may be able to allege and prove they individually satisfied the requirements of the cause of action they assert, including reliance. And if the case were brought as an individual action, both sides might agree that reliance must be proven, and they might further agree the case must go to jury on the reliance issue. In defending against a “common issues” class action, however, the critical question is whether class counsel can prove the claims of all class members with the same evidence counsel will use to prove the claims of the class representa`tives. The stakes of proving every element of every claim and defense thus go up considerably in a class action, and defense counsel has the additional defense that all proof must be applicable to the entire class. Inside counsel can be instrumental in developing facts to show that the plaintiffs’ proof is not classwide in character.
An increasing number of courts insist that plaintiffs address the critical question by submitting—at the class certification stage—an exemplar trial plan showing how they anticipatepresenting evidence at trial. Having outside counsel that the plaintiffs be required to submit a trial plan can be a very effective tool for the defendant to show that liability and defenses cannot be determined on the basis of classwide proof.
Our next post will discuss special requirements of discovery in class action litigation.