Category: Civil Procedure


Lawyers and Clients: The Absurd Reality for Indigent Clients Facing Execution

A Thought Experiment

Suppose that Facebook got sued for a privacy tort for hosting nonconsensual pornography and that Facebook’s lawyer told company executives that she did not intend to mount Facebook’s preferred response—a motion to dismiss on the grounds of Section 230 immunity. Executives explained to the lawyer that Section 230 of the federal Communications Decency Act is a knock out punch. An Internet intermediary can’t be held responsible for privacy-invading content created by a user. The lawyer, however, refused to listen to reason.

When Facebook tried to switch attorneys, its first lawyer told the court that Facebook should be forced to remain represented by that lawyer even though Facebook wanted a new one. In making that argument to the court, Facebook’s first lawyer told the court that she was doing a good job for Facebook and that her refusal to mount Facebook’s preferred defense was because Facebook had no Section 230 immunity. Facebook’s lawyer would not only be undermining her own client’s case, but would also be incorrectly representing the underlying issue to the court.

Facebook’s lawyer would be in flagrant violation of fiduciary duties to its client. Of course, clients with money can fire lawyers. Those lawyers certainly should not be permitted to undermine a client’s case in the course of trying to retain the representation—especially by inaccurately representing key features of a case. That sounds so obviously right: a contrary suggestion would surely be absurd.

Absurd Reality for Indigent Clients Facing Execution

For a reason that is hard to fathom, this is precisely what is allowed to happen in criminal cases affecting indigent clients facing execution. Apparently – at least in the Fifth Circuit – the relationship between client principals and lawyer agents is different.

This week, in Roberson v. Stephens, the Supreme Court will consider whether the execution of Robert L. Roberson should proceed even though his lawyers seem to have prioritized their own reputational interests at the expense of their client. Over at Balkanization, my colleague Mark Graber has a careful explanation of how Mr. Roberson’s lawyers seem more preoccupied with their reputations than with resuscitating a Sixth Amendment claim that might save his life.

At issue in Roberson is a failure of legal agency involving the same death penalty lawyers that a palpably displeased Justice Sotomayor rebuked on the eve of their client Raphael Holiday’s November 18 execution. The lawyers refused to file a clemency petition and opposed Mr. Holiday’s attempts to find a lawyer who would follow his wishes and file it. Forced to go along with the Court’s refusal to stay the execution because the attorneys filed a last-minute clemency petition, Justice Sotomayor nevertheless issued a powerful statement criticizing the lawyers for their behavior and the lower courts for failing to police it. She explained that the law does not permit “condemned men and women to be abandoned by their counsel at the last moment . . . [y]et this is exactly what happened here.”

Here again, the same lawyers have seemingly refused to listen to their client, Mr. Roberson, because doing so might require one of them to expose himself to a finding that the forfeiture of the Sixth Amendment claim was his own fault.

As briefing submitted in support of Supreme Court review explains: “In both Roberson and Holiday, the Fifth Circuit permitted the same pattern of conduct: CJA counsel’s refusal to pursue relief on the client’s behalf, followed by counsel’s inaccurate representations to courts about the constraints on seeking such relief, concluding with legal opposition to the very client they were appointed to represent. At base, both Roberson and Holiday express the Fifth Circuit’s view that [the statutory right to counsel] affords courts discretion to saddle inmates facing execution with lawyers who are not functioning as agents of their clients.”

The assessment of the ethics experts in the case is unequivocal. Yale Professor Lawrence Fox is the former Chair of the ABA Standing Committee on Ethics and Professional Responsibility, and the former Chair of the ABA Litigation Section. Professor Fox concluded “to a reasonable degree of a professional certainty that both lawyers are operating under profound conflicts of interest that prevent them from continuing the representation[.]” Charles Herring, a renown Texas ethics expert, explained: “James Volberding and Seth Kretzer have conflicts of interest that should prevent them from representing Mr. Roberson on the [Sixth Amendment issue in the case].”

I may not be a death penalty lawyer, but I know enough to understand that we should not be allowing attorneys to obstruct relief preferred by their own clients—particularly in cases where the attorneys seem to be engaged in obstruction as a means of protecting their own interests. If we would not allow counsel for Facebook to cling onto her job contrary to the interest of its client, we certainly should not do so in a case where the stakes are not just about money but about life and death.



Proceduralists’ Shibboleths

Would Charles Clark really care about plausibility pleading?

Would Charles Clark really care about plausibility pleading?

(Cross-posted at Prawfs).

Recently a call for nominations came out on the civil procedure listserv: what’s the worst civil procedure case ever.  Nominations poured in–even as Pepperdine’sexcellent symposium on this worst topic was all-but-ignored. Sadly, recency bias trumped careful thought, and a plurality of respondents focused on Twiqbal.  In some ways this is an unsurprising result. Twiqbal hit a sweet spot for modern scholars.  The decisions together appear to be politically conservative (fitting modern progressives’ newfound suspicion of the Supreme Court); they cry out for empirical examination (fitting modern scholars’ newfound love of counting things); and they produce a test whose indeterminacy makes socratic dissection easy.

But here’s the thing: dozens of scholars have spent enormous effort on these problems, and have found essentially no observable effects on party and judge behavior, whether in  or out of Court. In that way,  Twiqbal is a black hole for scholarship — its sucks in quants and non-quants alike in, but nothing comes out.

Consider two recent papers — one by Jonah Gelbach, forthcoming in Stanford, and one by Roger Michalski and Abby Wood, under review.  As a part of a dazzling empirical & game-theoretic analysis, Gelbach points out that “a reasonable observer could conclude that the heated debates over the empirical evidence on Rule 12(b)(6) motion grant rates haven’t—couldn’t—shed any light at all on the actual effects of Twombly and Iqbal.”  (Emphasis added.) Michalski and Wood, studying state adoption of Twiqbal,  conclude that whether “at the federal or state level, attorneys and judges are either not as attuned to procedural changes as many commentators think they are, or plaintiffs were already pleading with factual specificity so as to negotiate earlier and more favorable settlements.” And yet, as they point out, “many academics, practitioners, and commentators simply refuse to believe that the switch from notice pleading to plausibility pleading would not have an empirical effect.”

What’s going on? Is this motivated cognition by progressive proceduralists, who can’t admit that the worst cases of their generation (or any!)  had no measurable effects? (That’s not to say that Twiqbal hasn’t had an effect in the world – just not one that is observable.)  Because their priors are so strong, later evidence is discounted.  As such, Twiqbal is quickly becoming a progressive proceduralist’s shibboleth: to belong to the academy community (and to be welcome at conferences), one has to agree that plausible pleading is implausible, evil, and otherwise wrongheaded.  Defending the decision is like defending Lochner. It can be done, but you really ought to teach at Mason.

Or is it something else? Maybe Twiqbal has attracted attention not because it actually represents a change in practice today (after all, no one was truly engaging in notice pleading) but rather because the cases represent a watershed in procedure – the beginning of a return to a pre-1938 code or fact pleading regime. Like Doleor Printz, it’s a signal of a revolution that’s coming. My colleague Craig Green has worked over the last several years to identify certain cases as iconic, particularly retrospectively — will Twiqbal be such an icon in another few generations?



UCLA Law Review Vol. 62, Issue 2

Volume 62, Issue 2 (February 2015)

Judging Opportunity Lost: Assessing the Viability of Race-Based Affirmative Action After Fisher v. University of Texas Mario L. Barnes, Erwin Chemerinsky & Angela Onwuachi-Willig 272
Enforcing Rights Nancy Leong & Aaron Belzer 306
Milliken, Meredith, and Metropolitan Segregation Myron Orfield 364



David’s Sling: How to Give Copyright Owners a Practical Way to Pursue Small Claims Jeffrey Bils 464
Nonserious Marijuana Offenses and Noncitizens: Uncounseled Pleas and Disproportionate Consequences Jordan Cunnings 510

Article Stub: Contracting into Federal Common Law


L.B. would hate this idea.

L.B. would hate this idea.

[I’m writing a series of posts I call article stubs – the germs of papers I’ll likely never write. Here was the first, finding offerors under 2-207. Dan Markel might – or more likely might not – approve. I used to talk about these pre-draft ideas with him, and he mercifully steered me off most of them before they saw the light of day. In his honor, here’s another bad idea. Feel free to tell me so.]

“There is no general federal common law.” We all know it, even though we sometimes, wrongly, qualify the statement “…in diversity cases.”  Though the decision’s constitutional roots are at best obscure, Erie teaches us that federal judges can’t create substantive rules of decision without constitutional or statutory sources. It’s an iconic case – and an ironic one, as it might be an example of the roving lawmaking that it abjures.

But what if you generally liked that set of precedents that followed Swift and preceded Erie?  What if you, as Justice Swayne once did, proudly hold that “We shall never immolate truth, justice, and the law, because a state tribunal has erected the altar and decreed the sacrifice.” What if you just wanted to empower federal judges hearing your contracts case to resort to their own intuitions – guided, no doubt, by the informed views of other federal courts.  Could you contract into a general federal common law framework? Under traditional conflicts principles, the answer is likely “no.”  See Restatement 187 cmt. f (“The forum will not, for example, apply a foreign law which has been chosen by the parties in the spirit of adventure or to provide mental exercise for the judge. Situations of this sort do not arise in practice.” ) But traditional conflicts principles needlessly discourage innovation and now motivate parties to choose  arbitration (where they can benefit ex ante by giving ex post discretion to decisionmakers.) Courts should accept a wider range of choice of law clauses, and should start by permitting parties to opt out of Erie.




Marin Levy’s Judging Justice on Appeal in YLJ

Professor Marin Levy has a superb review of Injustice on Appeal: The United States Court of Appeals in Crisis written by my colleague William Reynolds and William Richman. Professor Levy is spot on when she says that “[o]ver the past thirty years, no one has contributed more” to the study of the federal judiciary and its crisis of its crushing workload “than two court scholars together—William M. Richman and William L. Reynolds.” As she notes: “Through a series of critical articles,Richman and Reynolds were able to pinpoint the precise effects of the caseload crisis, both on litigants and the system as a whole. Furthermore, they were able to show the interplay of these various effects, providing a holistic account of the problem in a way that no one else had done.” In her view, their “recent book, Injustice on Appeal: The United States Courts of Appeals in Crisis, stands as a culmination of their earlier work, bringing together vital analysis of the caseload crisis, the ways in which appellate review has suffered as a result of that crisis, and potential solutions. More broadly, Injustice on Appeal stands as one of the most comprehensive and thoughtful accounts of the largest problem facing the federal judiciary today.”Injustice on Appeal

In her review published in the Yale Law Journal, Prof. Levy concludes:

The story of Injustice on Appeal is one of ever-shrinking resources—the courts of appeals have had to perform the same set of critical functions with fewer and fewer means per appeal to do so. Yet there is another story here as well about the resources of the academy. Legal scholars in general spend a great deal of time devoted to theory and doctrine. And yet, we spend relatively few resources on studying the institutions that make up our legal system, particularly on the twin positive and normative questions about how they actually function and how they should function. Richman and Reynolds’s work serves as a call to arms for the academy to take up these critical inquiries.

Ultimately, Richman and Reynolds have provided a great deal for court scholars following in their wake. They have carefully and thoughtfully delineated the largest problem facing the federal judiciary in the past several decades—one that affects tens of thousands of litigants each year. With the quality of overall judicial review in doubt, it is for the academics to carefully study—using both qualitative and quantitative tools—the use of court practices. From judicial voting rules to visiting judges, from mediation to staff organization, there are numerous areas ripe for academic review about how to improve judicial review. In Injustice on Appeal, Richman and Reynolds have laid the groundwork; it is up to the next generation of court scholars to find the way.

Professor Levy has made her own formidable contributions to the discussion that Profs. Reynolds and Richman have been engaging in for a better part of 30 years. Her work includes “Judging the Flood of Litigation,” 80 U. Chi. L. Rev (2013), “Judicial Attention as a Scarce Resource: A Preliminary Defense of How Judges Allocate Time Across Cases in the Federal Courts of Appeals,” 82 Geo. Wash. L. Rev. 401 (2013), “The Mechanics of Federal Appeals: Uniformity and Case Management in the Circuit Courts,” 61 Duke L. J. 315 (2011), and “The Costs of Judging Judges by the Numbers,” 28 Yale L. & Pol’y Rev. 313 (2010) with Kate Stith & Judge José A. Cabranes. Those interested in figuring out how to solve the problems facing the judiciary will do well to follow her work.


What do a Writ of Mandamus, 12(b)(6), the Death Penalty, and a Batson Challenge Have in Common?

The answer is Herbert Smulls, who Missouri executed late last night. The last few days of Smulls’ life were filled with a procedural mess involving an en banc Eighth Circuit judgment and a stay of execution by the Supreme Court of the United States. On January 24, by a vote of 7-3, the Eighth Circuit  issued a writ of mandamus on behalf of the Missouri Director of the Department of Corrections directed at the district court judge who the Eighth Circuit found had abused its discretion. The district court had ordered discovery so that Smulls could find out the doctor, pharmacist, and laboratory that were prescribing and supplying the drugs to be used in his execution (and thus, determine if the death penalty drug would cause excessive pain and suffering in violation of the 8th Amendment). The en banc Eighth Circuit granted the extraordinary remedy of a writ of mandamus ordering the the district court to vacate its discovery order. The majority of the Eighth Circuit held that  the district court had abused its discretion by denying Missouri’s 12(b)(6) motion to dismiss on the underlying 8th Amendment claim. Notably, the Eighth Circuit reached its conclusion without mentioning 12(b)(6) at all and it isn’t until the dissent by Judge Bye that the underlying civil claim appellate posture is revealed.

Then, on Monday, the Supreme Court issued a stay barring the execution of Smulls. Doug Berman heard, from a knowledgeable source, that the stay was issued not regarding the 8th Amendment claim, but based upon a Batson challenge (which wasn’t even before the en banc 8th Circuit as far as I can tell). If true, the stay was truly remarkable because Batson challenges (based upon racial exclusion of jurors by the prosecutor) are almost never granted, of little interest to the modern Supreme Court, and usually litigated far earlier in the appellate process. However, yesterday, the Supreme Court lifted its stay and it is unlikely that we will ever find out the details underlying the last minute Batson challenge (if there was one).

My first reaction from a procedural perspective is that there has to be a better way. It is a very strange world were 12(b)(6), mandamus, and the criminal death penalty appear in a single case. Yet, a quick Lexis search revealed 47 other opinions issued with those three legal issues. Notably, all of the recent cases involved litigation over drug cocktails for the death penalty. Significantly, none involved Batson and the Supreme Court was seemingly absent from those cases. In some part, this can be traced back to the Antiterrorism and Effective Death Penalty Act of 1996 which barred second or successive habeas petitions. As a result, defense counsel must exploit other procedures for relief once the collateral habeas appellate process has been exhausted. This case illustrates the bizarre legal gymnastics that result. I joked with my colleague that you could teach most of a federal courts class with just this case.

Reading the Eighth Circuit majority, concurring, and dissent opinions shows that the judges are essentially in the dark on how these disputes should be handled. The majority infers its abuse of discretion finding from dicta in Baze v. Rees. The dissent rightfully, in my opinion, points out that Baze has as much to do with abuse of discretion for denying 12(b)(6) motions to dismiss as does a hot dog. And yet, I can’t completely fault the majority because they have been left with so little guidance from Congress and the Supreme Court that any opinion they issue would have to invent “new” law. The Federal Rules of Civil Procedure and traditional standards of review are simply not well-designed to address death penalty appeals (particularly those on the eve of execution). Whatever one thinks of the value of the Antiterrorism and Effective Death Penalty Act, someone has to clean up this mess or death penalty litigation will likely become even more procedurally absurd.


First Day of Civil Procedure

Today’s the first day of  Civil Procedure I at Temple. I like teaching the course: the material is complicated enough to make class time worthwhile; student expectations are very low and exceeding them is  a cinch; some deep problems of institutional design arise which offer rich material for good discussion.  Plus, it’s now on the Multistate Bar!  That said, I’ve some concerns about the course — you might call them existential, or (if you are disposed to be less charitable) “unduly repetitive.”

First, almost every civil procedure course taught to 1Ls in this country focuses on federal procedure.  I’ve argued before (using the image heading this post) that this is an odd choice. Why do the FRCP dominate over state rules? The best argument is that they prepare student for multi-jurisdictional practice. The second best argument is that many state procedural regimes ape federal law – a story of the latent triumph of the Swift regime that I might write about someday soon. But, honestly, I’ve a sneaking suspicion that most law professors teach federal procedure because they simply don’t know the current  state procedural practice at the school where they teach.  Note: practice, not rules — that is, it’s difficult to keep up with changes in the on-the-ground practice of procedural change in state court when you have another full-time job and aren’t regularly jousting in court. For example, in Philadelphia, there’s a Discovery Court.  That Court has some rules.  But those rules’ application varies so widely between judges, and changes yearly as judges rotate, that teaching the rules themselves would be insanity.  By contrast, the federal system is relatively uniform, transparent and stable.  A full-time law professor can teach the federal rules & federal cases and provide students a fair approximation of the lay of the land.  Thus, for all of the plausible reasons in the world, we teach procedural rules which are often irrelevant to the work of most graduates.

Second, most Civ Pro courses allocate time based on available case law. Hence: more days on personal jurisdiction, and fewer on discovery.  Again, this decision makes some pedagogical sense. If the first year is about learning how to read cases, jurisdiction cases certainly provide illustrative examples of doctrinal evolution. That’s true especially since the hard questions of internet jurisdiction are likely to remain largely unsettled. But how about the time spent on Erie? Though that case is iconic, I doubt that Erie issues come up very often in real cases.  It’s sort of like the Contract course’s focus on consideration and promissory estoppel instead of interpretation.

At the same time, the real billable output of procedural questions is often document review & consequent deposition practice.  Though many professors teach some variant of deposition practice as a part of a procedure course, none that I’m aware of require students to engage in the “skill” of document review of a large set of irrelevant results.  This may be changing: some schools are teaching students how to use technological solutions to review requests, though typically such experiences are divorced from the basic procedure course and instead segregated into a law & tech class. But it’s hard to imagine that you could actually shape a first year course around discovery.

Third, very few casebooks, and thus very few courses, spend significant time on the intersection of contract and procedure outside of the forum selection context.  Maybe that’s because there’s no there there.  Or maybe it’s for ideological reasons.  Regardless, it’s obviously true that civil cases are being eaten up by arbitral proceedings, whose largely-secret and evolving procedures are very difficult to study in the first year.

What’s the upshot? The course is called procedure, but it’s far more typically taught as a legal process course driven by due process concerns & the Matthews test. That’s not a terrible thing, though it does present a bit of truth-in-advertising concern, no?  Perhaps Law Schools should rename Civil Procedure as “Some Musings on the Constitutional Roots of Procedural Problems.”


What Should We Be Working On? Empirical Civil Procedure Post CELS

Earlier this week, I argued that civil procedure empiricists are spending too much time on the Twiqbal problem.  That’s not the same as saying that Twiqbal is an unimportant set of cases.  It probably signals an important shift in federal pleading doctrine, and, arguably, some litigants we care about are being shut out of federal court. I mean to say merely this: the amount of attention paid to Twiqbal is exceeding its importance to litigants (over state and federal court).  Our focus is being driven largely by data availability and law professor incentives. We can do better.

I’m starting to make a genre of these “people should be writing about X not Y” posts.  Boy, that could get tiresome fast!  Luckily, no one actually has to listen to me except for the poor 1Ls.  In any event, it seemed useful to start a conversation about what topics are more worth writing about than Twiqbal. Use the comment thread below to generate a list and if there’s enough interest I’ll create a poll. To qualify, the topic has to be real-data-driven (i.e., not merely doctrinal analysis, not experimental, etc.); and there must be a way, in theory, to get the data.  For example,

  • Does law influence outcomes in small claims court?
  • How well do choice of law clauses work in state court?
  • When do attorneys matter?
  • What are the determinants of summary judgment grant rates in state courts?
  • Is there a way to get a handle on which cases are being “diverted” to arbitration or “carved-[back]-in“?



CELS VII: Data is Revealing Part 2


Shouldn't it be "data are revealing?"

Shouldn’t it be “data are revealing?”

[This is part 2 of my recap of the Penn edition of CELS, promised here. For Part 1, click here.  For previous installments in the CELS recap series, see CELS IIIIVV, and VIVII.]

Where were we?  I know: throwing stink-bombs at a civil procedure panel!

At the crack of dawn saturday I stumbled into the Contracts II panel. Up first was Ian Ayres, presenting Remedies for the No Read Problem in Consumer Contracting, co-authored with Alan Schwartz.  Florencia Marotta-Wurgler provided comments.  The gist of Ayres’ paper is that consumers are optimistic about only a few hidden terms in standard-form contracts. For most terms, they guess the content right. Ayres argued that should be concerned only when consumers believe that terms are better than they actually are.  The paper  proposes that firms make such terms more salient with a disclosure box, after requiring firms to learn about consumer’s knowledge on a regular basis. Basically: Schumer’s box, psychologically-calibrated, for everyone.  Florencia M-W commented that since standard-form contracts evolve rapidly, such a calibrated disclosure duty might be much more administratively complex than Ayres/Schwartz would’ve thought.  A commentator in the crowd pointed out that since the proposal relies on individuals’ perceptions of what terms are standard, in effect it creates a one-way ratchet. The more people learn about terms through the Ayres/Schwartz box, the weaker the need for disclosure. I liked this point, though it appears to assume that contract terms react fairly predictably to market forces. Is that true?  Here are some reasons to doubt it.

Zev Eigen then presented An Experimental Test of the Effectiveness of Terms & Conditions.  Ridiculously fun experiment — the subjects were recruited to do a presidential poll. The setup technically permitted them to take the poll multiple times, getting paid each time.  Some subjects were exhorted not to cheat in this way; others told that the experimenters trusted them not to cheat; others were given terms and conditions forbidding cheating. Subjects exhorted not to cheat and trusted not to cheat both took the opportunity to game the system significantly less often than those presented with terms and conditions. Assuming external validity, this raises a bit of a puzzle: why do firms attempt to control user behavior through T&Cs? Maybe T&Cs aren’t actually intended to control behavior at all! I wondered, but didn’t ask, if T&Cs that wrapped up with different formalities (a scan of your fingerprint; a blank box requiring you to actually try to sign with your mouse) would get to a different result.  Maybe T&Cs now signal “bad terms that I don’t care to read” instead of “contract-promise.”  That is, is it possible to turn online T&Cs back into real contracts?

Next, I went to Law and Psych to see “It All Happened So Slow!”: The Impact of Action Speed on Assessments of Intentionality by Zachary C. Burns and Eugene M. Caruso. Bottom line: prosecutors should use slow motion if they want to prove intent. Second bottom line: I need to find a way to do cultural cognition experiments that involving filming friends jousting on a bike. I then hopped on over to International Law, where Adam Chilton presented an experimental paper on the effect of international law rules on public opinion. He used a mTurk sample.  I was a concern troll, and said something like “Dan Kahan would be very sad were he here.” Adam had a good set of responses, which boiled down to “mTurk is a good value proposition!”  Which it is.

After lunch it was off to a blockbuster session on Legal Education. There was a small little paper on the value of law degrees. And then,  Ghazala Azmat and Rosa Ferrer presented  Gender Gaps in Performance: Evidence from Young Lawyers. They found that holding all else equal, young women lawyers tend to bill somewhat fewer hours than men, a difference attributable to being less likely to report being highly interested in becoming partners while spending more time on child care.  What was noteworthy was the way they were able to mine the After the JD dataset. What seemed somewhat more troubling was the use of hours billed as a measure of performance, since completely controlling for selection in assignments appeared to me to be impossible given the IVs available.  Next, Dan Ho and Mark Kelman presented Does Class Size Reduce the Gender Gap? A Natural Experiment in Law. Ho and Kelman found that switching to small classes significantly increases the GPA of female law students (eliminating the gap between men and women). This is a powerful finding – obviously,it would be worth it to see if it is replicable at other schools.

The papers I regret having missed include How to Lie with Rape Statistics by Corey Yung (cities are lying with rape statistics); Employment Conditions and Judge Performance: Evidence from State Supreme Courts by Elliott Ash and W. Bentley MacLeod (judges respond to job incentives);  and Judging the Goring Ox: Retribution Directed Towards Animals by Geoffrey Goodwin and Adam Benforado.  I also feel terrible having missed Bill James, who I hear was inspirational, in his own way.

Overall, it was a tightly organized conference – kudos to Dave Abrams, Ted Ruger, and Tess Wilkinson-Ryan.  There could’ve been more law & psych, but that seems to be an evergreen complaint. Basically, it was a great two days.  I just wish there were more Twiqbal papers.




Credit Card Merchant Fee Settlement — Injunctive Relief

Credit Card CroppedPrior installments in this series addressed the background leading up to the credit card merchant fee class action and the damages provisions in the b(3) opt out class action.  This post addresses the injunctive relief provisions that the settlement in In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation styles as a mandatory b(2) non-opt out class action.  An upcoming final installment in this series will address the release provisions in the settlement.

B(2) classes are appropriate where the nature of the injunctive relief is such that it will necessarily affect every class member.  After setting out the relief proposed in the settlement, I’ll provide some thoughts on whether b(2) is really an appropriate device for this case.  Perhaps class action experts out there could weigh in on this issue in the comments.

The injunctive relief set out by the settlement is notable for what is not provided.  Nothing in the settlement addresses the core concerns in the complaint about (1) the collective setting of a default interchange fee; (2) the rule prohibiting merchants from rejecting the cards of, surcharging the card transactions of, or otherwise discriminating against some card-issuing banks, but not others; or (3) the rules making it impossible for merchants to route transactions over the least expensive network.

Read More