Two Recent Surveys Show Class Actions Are on the Rise, Why?

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Two recent surveys, one by BTI Consulting and one by Carlton Fields, show that class action litigation is actually on the rise. Many treat this as a surprising phenomenon the Supreme Court’s recent decisions in Comcast, Dukes, and Concepcion. Comcast and Dukes essentially made it more difficult to get a class certified, and Concepcion held that federal law, the Federal Arbitration Act, eviscerates state contract laws that had been used to undermine the enforcibility of arbitration clauses, especially in consumer products and services.

So should we not have seen a stark decrease in class action filings? Is the increase due to plaintiffs’ lawyers’ unflappable confidence that they will find a way to beat these new doctrines, or at least circumvent them?

The answer to the first is “not necessarily” and the answer to the second is “sort of.”

A closer examination of the data actually shows that the rise in class actions is actually in new areas supplanting old ones. Class actions used to be dominated by claims against banks, financial institutions, telephone/cell phone companies, insurance companies, employment and consumer product companies, and the claims typically were those emanating from the nature of the contractual arrangements and representations made therein.

Now, the overwhelming majority of class actions tend to be for things like false advertising and employment. Consumer-to-bank or to insurance company or mass-market company class actions are virtually non-existent now (new filings that is). The indirect consumer and manufacturer relationship is a difficult one to bridge with an arbitration clause. And employment class actions are frequently being brought, as a matter of fact, not as “class actions” but as “mass actions,” where employees band together and are actually parties to the suit raising various federal or state statutory claims.

The rise in class actions also bespeaks a trend harkened by the death of many previously dominant areas: medical malpractice, asbestos, drug, event-tort litigation have been squashed in the most populous states, and class actions, arguably on their way to extinction, are the current fad and have been for a while now.