Below you will find an excerpt from Steven Berk's recently published article in The Class Action Newsletter of the American Association for Justice. For the full article, please click here
Introduction
Why are class action lawyers are held in such low regard by the public, fellow attorneys and too many courts? How do we change the paradigm from the prevailing view that we are greedy and opportunistic, to one where we are seen as respected private attorney generals and resourceful consumer advocates?
My perspective is informed by over twenty years of litigation experience in government and private practice, the majority outside the class action bar.
My professional journey through the past two decades in law has taken me from Illinois, where I was an associate at the law firm formed by Abraham Lincoln’s son to the United States Attorney’s Office for the District of Columbia where I was a federal prosecutor to a stint at the Securities and Exchange Commission’s General Counsel’s Office, then to a Top 100 Firm, where I was elected to the partnership and finally to my own practice where I represent thousands, indeed millions, of individuals in class action litigation.
I’ve had the good fortune to represent an array of consumers seeking redress for a range of corporate misconduct: owners of outboard marine engines; purchasers of inkjet printers; millions of owners of camcorders who for too many after using their camera a half a dozen times
Most recently, I’ve been representing investors who have lost their life savings in a Ponzi scheme that operated under the noses of the nation’s largest, and for a long time, most respected banks.
I’ve won some and lost some of these cases. I’ve found lifelong friends as we together fight a formidable foe, with superior resources. I like to think that more often than not I’ve earned the respect of my colleagues, adversaries, the court, and most importantly, my clients.
But there is a disconnect between how I view my work and how most people view my work
Plaintiffs’ Class Action Lawyer. You might as well call it, “swine flu.”
Why all the disdain and distaste for a group that typically represents the poor against the rich, the little guy paying out hard earned dollars for the latest corporate scheme to increase quarterly earnings and guarantee bonuses?
Two reasons … First, greed.[1] The words Plaintiffs Class Action Lawyer and greed seem to be joined at the hip. Second, dishonesty. (a first cousin to greed). No matter how you explain it, the public is convinced the lawyers get all the money. The clients and class, regardless of its size (and actual benefit) gets nothing. How did we get to this place? Good people, all over the country, view us with deep disdain and suspicion?
Changing Popular Misperceptions
We can at least make it harder for them to ridicule us. We can collectively clean our own houses; set standards, and agree on where the line is. Without self- regulation, though we only have ourselves to blame. To be sure the answers are not easy and more often than not the correct decision is a shade of gray. Consider the following situation many of us may have faced in some degree.
You are approaching year five of a case that started with great promise and fanfare (and a spirited fight for leadership). You want to be paid – you need to be paid. But married to that need, is an adverse ruling by the Court limiting discovery, narrowing the size of your class, or precluding you from seeking damages. Class certification and a victory on the merits become unlikely to downright impossible. What do you do? Gulp. Five years of costs: travel, experts, and deposition transcripts (wow those transcripts can be expensive). So, we try to get out of the case, with something for the class and our dignity. Would we like it to be different? Of course. For the class, treble damages, eight figure cy pres awards, injunctive relief with teeth – no big sharp fangs. And, what the heck, a written apology and handshake from the CEO. And for the lawyers, a nice multiplier on our hourly rate to compensate us for all that time we sank into the matter.
Alas, “Only in the movies,” as they say. Instead, we are discussing with opposing counsel the “e-credit” (a new term for the much maligned coupon) the company is offering. The negotiation centers on the transferability of that credit (would anyone outside “the immediate family” actually want this near worthless electronic discount?). Counsel for defendants feigning a seriousness of purpose earnestly explains the concern over the potential creation of a “secondary market” in these credits. We sit patiently -- knowing the war has been lost and we’re merely discussing the terms of surrender -- wanting to scream: “You know and I know that only 5% of the class will take advantage of these e-credits – a secondary market. what planet are you on?”
So we soldier on and settle, knowing we will be challenged. Knowing that the settlement may not look great. But we did the best we could, certain that without our efforts, there would be no benefits whatsoever. We live to fight another day. But it’s these settlements that give us all a collective “bad name”. Inevitably the fee –based on five years of work -- will be compared to the relief: a $5 e-credit and some mysterious, amorphous thing called “injunctive relief”, which really never makes it above the fold. The headline is “Greedy Class Action Lawyers Receive Millions And Clients A Worthless Electronic Credit.”[2]
We can say in reply. “Don’t look at us – it was approved by the Court.” But we have to realize that such settlements must become the exception. Not the rule.
They say in baseball, that if a hitter goes 2 for 10 over the course of his career, he’ll be destined to long bus rides over the dusty roads of the minor leagues -- improving to 3 for 10 translates into a long stay in the majors: team jets, five star hotels, big free agent contracts, and possible enshrinement in the Hall of Fame.
We’re never going to go 10 for 10 on our cases. There are too many unknowns. The facts unfold differently than we expected and hoped. The law is interpreted differently than we had predicted, and yes – the elephant in the room – many judges will never grant class certification, no matter the facts or law. But if we can improve the value of our collective portfolios just 10% (that translates to 100 points for an aspiring major leaguer), our reputation and standing among the public and the courts will be enhanced dramatically.
Five Suggestions for Change
1) Case Selection: Real Harm and Sharp Practices
Consider only taking on cases where there is real harm resulting from a sharp practice. First, as to harm: It should be something you can explain to your ten year old. Or if you’re talking to a college friend, they should understand in three sentences what you are seeking to accomplish. Harm doesn’t translate exactly to dollars. The value of money is relative. An alleged defective windshield wiper blade on a Mercedes might be $250, but it is hardly as harmful as a $25 surcharge by banks on any checks cashed by folks without a permanent address. Harm or injury must be evaluated in context. If you need an expert to determine the harm, or your ten year old says: “Huh?” or your college friend says: “Geez, that doesn’t seem like a big deal,” you’ve got a problem.
2) Put an End to Copycat Suits and Feeding Frenzy Litigation
Too often there is a feeding frenzy sparked by media coverage. The next big thing. “Let’s get retained and put something on file quickly.” Well, how do you file quickly? You copy someone else’s complaint. This practice needs to stop. Pure and simple. If your name is on a pleading that is identical or substantially similar to an earlier filed complaint, there should be a presumption it is a copycat suit.
3) Treat Your Class Representatives Like Clients
You have a client. Don’t ever forget it. You should be required to communicate with your client once per month, even if it’s just by email. Why? Consider the following: the night before your class certification hearing, the Judge contacts your class reps to discuss the issue of adequacy. What would you want your client to say? You’ve never spoken since the day she was sent the retainer? She couldn’t pick you out of a line up? Some attorney who she never met flew in for her deposition and she can’t recall his name? We must do better. We should all strive for the day when our clients routinely say: “Your Honor, my lawyer contacts me every month. What would you like to know about the case?”
This type of care and feeding is not only ethically required, but good business. And good for the standing of our bar.
4) Commit to Pro Bono Work[3]
Class Actions, as we know, can be positive forces for social change. We should all commit to cases where the beneficiaries are some disenfranchised group: the poor, those with special needs or the exploited.e disabled, or children. Let’s use our expertise and skills on their behalf. For bigger firms, it’s a way to train associates. For the rest of us, it’s good exposure. But for all of us, it’s an opportunity to do the right thing and take a small chip out of the moniker “greedy” that we have been branded with, and can’t shake.
For big pro bono projects, why not co-counsel with a defense firm? Make it a bi-partisan effort. Cross the aisle in support of the public good. We must be bold and creative to change the paradigm we find ourselves in.
5) Object to Bad Settlements
The conventional wisdom is: “Don’t object to even the worst settlement because you will put yourself at risk of objection and scrutiny on your good cases. It’s not worth the risk.” That kind of cowardly thinking must change. We are all risk takers. Objecting to bad settlements is a risk we must have the courage to accept. Sure, there are many marginal settlements that may be improved – but no need to second-guess those. Save your powder for the clear, egregious cases – those that give us all heartburn. Commit to objecting every three years. Objecting doesn’t have to be a regular part of your practice to be an effective deterrent.
[2] To see cases where class settlements have been rejected and/or attorney fees critiqued: Moulton v. United States Steel Corp., 581 F.3d 344; Staton v. Boeing Co., 327 F.3d 938; Jones v. Amalgamated Warbasse Houses, Inc., 721 F.2d 881; and In re Metropolitan Life Derivative Litig., 935 F. Supp. 286.
Steven N. Berk has over twenty years of litigation experience spanning both the private and public sectors. His practice ranges from representing Fortune 500 Companies, to consumers. Steven is based in Washington, D.C. and founded Berk Law in May 2009....
