ARTICLE
NINE PERCENT OF FOUR BILLION DOLLARS: NO INJURY CASES MUST BE CURTAILED A new empirical study conducted by Professor Joanna M. Shepherd of Emory University School of Law reveals that no-injury class action cases resolved in the last decade resulted in approximately $4 billion worth of settlements and judgments, yet provided a mere 9 percent—or less—of that amount to class members. The Shepherd study analyzes 432 class action cases that were resolved between 2005 and 2015. It provides compelling evidence of the need to amend Rule 23 to address the fundamentally flawed phenomenon of no-injury cases as described in LCJ’s earlier Comments to the Committee. A procedure that collects $4 billion dollars but delivers only 9 percent of that sum to the ostensibly aggrieved parties is indefensible. In addition, the average of 37.9 percent of total proceeds going to class counsel demonstrates that no-injury cases are extraordinarily inefficient from a transaction cost perspective. These data describe a rulemaking problem because Rule 23 is the mechanism that allows them to proceed. Rule 23 causes the no-injury problem by permitting the subversion of a longstanding principle of the American legal system that courts decide only actual cases or controversies. As the Seventh Circuit Court of Appeals stated more than a decade ago in reversing a problematic certification of a “no injury” class, “No injury, no tort, is an ingredient of every state’s law.” To view the study and the LCJ comment calling for Rule 23 reforms to address this problem, please click below: Shepherd Study
NINE PERCENT OF FOUR BILLION DOLLARS: NO INJURY CASES MUST BE CURTAILED A new empirical study conducted by Professor Joanna M. Shepherd of Emory University School of Law reveals that no-injury class action cases resolved in the last decade resulted in approximately $4 billion worth of settlements and judgments, yet provided a mere 9 percent—or less—of that amount to class members.
The Shepherd study analyzes 432 class action cases that were resolved between 2005 and 2015. It provides compelling evidence of the need to amend Rule 23 to address the fundamentally flawed phenomenon of no-injury cases as described in LCJ’s earlier Comments to the Committee.
A procedure that collects $4 billion dollars but delivers only 9 percent of that sum to the ostensibly aggrieved parties is indefensible. In addition, the average of 37.9 percent of total proceeds going to class counsel demonstrates that no-injury cases are extraordinarily inefficient from a transaction cost perspective. These data describe a rulemaking problem because Rule 23 is the mechanism that allows them to proceed. Rule 23 causes the no-injury problem by permitting the subversion of a longstanding principle of the American legal system that courts decide only actual cases or controversies. As the Seventh Circuit Court of Appeals stated more than a decade ago in reversing a problematic certification of a “no injury” class, “No injury, no tort, is an ingredient of every state’s law.”
To view the study and the LCJ comment calling for Rule 23 reforms to address this problem, please click below:
Shepherd Study