Class Action Study Ignores ?Hellholes': ATRA

NU Online News Service, Jan. 19, 1:56 p.m.EST?A tort reform group is blasting a new study that said,contrary to popular belief, settlement costs from class actionsuits had not risen much in the past seven years.[@@]

The report has "a fatal flaw" in the opinion of the AmericanTort Reform Association in Washington,D.C.</?????????????????????????p?????????????????????????????????&????????????????????????????????????>

"The study does not take into account the handful of egregiousstate court jurisdictions--we call them ?Judicial Hellholes,'" saidSherman Joyce, ATRA president, commenting on the study published inthe Journal of Empirical Legal Studies.

Written by Theodore Eisenberg, a law professor at CornellUniversity, and Geoffrey Miller, a New York University lawprofessor, the study found that both the average cost of settlingclass action lawsuits as well as the average fee paid to classaction attorneys who bring them haven't changed much between 1993and 2002.

The authors said their study had used the largest sample to dateof class action cases--ranging from civil rights violations tosecurities fraud.

"Contrary to popular belief, we find no robust evidence thateither recoveries for plaintiffs or fees for their attorneys as apercentage of the class recovery increased," the authors said intheir report. The study states that the average settlement over the1993-to-2002 period was some $100 million, adjusted to 2002dollars. "The means client recovery has not noticeably increasedover the last decade," the report said.

However, Mr. Joyce from ATRA dismissed the study's results,noting that the study doesn't examine the effects of problemjurisdictions around the country.

"Even the study's author admitted that due to the absence ofpublished court opinions in these jurisdictions, ?it is difficultto learn about state court settlements,'" he argued. "Any policyconclusions drawn from this study are therefore inconclusive."

Mr. Joyce observed that "judicial hellholes" arbitrate adisproportionately large number of class action lawsuits in thiscountry. "Plaintiffs' lawyers file cases in them because they knowthey can win big judgments or settlements that are often settledunder extortionate terms," he commented. "If defendants do notsettle, they may face judgments from the court that may lead tobankruptcy."

But Mr. Joyce said legislation for tackling problemjurisdictions might soon be enacted in Washington. The tort reformlegislation is expected back on the Senate floor in late January orearly February.