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| 2002 News and Press Releases |
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HEADLINE ARCHIVED:
Third Circuit Calls For Circumscription Of Class Action Auctions Task Force On The Selection Of Class Counsel Concludes That Auctioning The Lead Counsel Role Is Proper Only In Limited Circumstances
By: Gregory P. Joseph
New Jersey Law Journal. August 5, 2002
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Excerpt: The author is principal of Gregory P. Joseph Law Offices in New York City. Auctions, bidding, quarreling, dissension. Sounds like an evening at Sotheby's. In fact, it captures much of the last year's developments in class actions. The Third U.S. Circuit Court of Appeals Task Force Report on the Selection of Class Counsel took a negative view of judicial auctioning of the lead
Counsel role. And, in addition to important securities class-action decisions dealing with auctions, lead plaintiff and lead counsel designations, amendments to Federal Rule of Civil Procedure 23 that will apply to all class actions are pending. At the beginning of 2001, Chief Judge Edward R. Becker appointed the Third Circuit Task Force on the Selection of Class Counsel to explore the
Relatively novel judicial technique of auctioning the lead counsel position in class actions (primarily in securities cases but also in an occasional antitrust action). In theory, the auction concept seems appealing -- a means of introducing the sunlight of market forces into the dimly lit area of lead counsel selections. A number of academics tout it, and some highly distinguished federal judges have used the auction mechanism with evident success. To date, lead-counsel
Auctions have been conducted in 14 cases.
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