Class Action Update

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Quick update on this week’s class action docket, including two cases discussed earlier:

In Martin v. Blessing, the justices have requested the record below. (This is the case where the judge below certified a class and handed the case to counsel who promised to staff the case in accordance with a race and gender diversity “matrix.”) While waiting, the Court has held the case over.

Sadly, the Court denied cert in Marek v. Lane, a challenge to a collusive class action settlement that produced nothing but meaningless cy pres relief for the class. Chief Justice Roberts filed a four-page statement, recounting the travesty and acknowledging the growing importance and problematic nature of cy pres settlements—but nonetheless concurring with the denial of cert on the grounds that Marek wasn’t quite the right vehicle. Come the right case, the Chief concluded, “this Court may need to clarify the limits” of cy pres relief.

This doesn’t sound quite right: in my book, Marek was a perfectly fine vehicle. My strong hunch is that the Chief thought likewise; he just couldn’t find the votes but hopes to find them in the future. Hence, his “keep trying” signal. If that’s right, Hail to the Chief.

In related news, the Court heard arguments in Mississippi ex rel. Jim Hood v. AU Optronics Corporation (transcript here). Long story short, the question is whether (and which) actions brought by state AGs on behalf of numerous citizens do or don’t fall under the Class Action Fairness Act (CAFA), in which case they’d be removable to federal court. Here’s how this hangs together with cy pres:

Quite often, state AG actions of this sort are copycat actions: class action lawyers obtain some private settlement and then peddle the same case to a state AG. Several justice asked counsel whether there’s anything wrong with such double-dipping. (Not really, was the answer.) Where, the justices continued, does the money go? Not to consumers, was the answer: they can’t really be found (and in any event have already been compensated through the class action). It goes to the state treasury, counsel said.

What he didn’t say: in all too many cases, it goes to the treasury after the AG has raked off a good chunk for cy pres relief, which is a polite way of saying that he’s giving it to his friends in the law school or advocacy “community.” That problem isn’t with the compass of Marek (which deals with private settlements); but it, too, may need the Court’s attention in some future case.