Class Action Rise Paints Complex Picture

Class Action Rise Paints Complex Picture - 1/13/2009

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Class Action Rise Paints Complex Picture
Jacqueline Bell

Securities Law 360. January 13, 2009
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EXCERPT: Class action filings in federal courts are on the rise, and experts largely chalk up the growth to changes in federal law and the perception of current federal enforcement efforts under the Bush administration, according to the 2009 Law360 Litigation Almanac. Our analysis of cases filed in federal courts from 2004 through 2008 shows that class action filings have been growing steadily, with notable growth particularly in antitrust and employment litigation. In 2007, the total number of class action filings in federal court was 7,119, compared with 5,222 cases filed in 2004, a 36 percent increase. In 2008, class actions broadly are already on pace to surpass the 2007 peak, with 7,661 cases filed through mid-November, compared with 6,176 over the same time period the year before, an 8 percent increase. Much of that increase can likely be attributed to the Class Action Fairness Act of 2005, which provides litigants with increased access to the federal court system and makes it much easier to remove class actions to federal court. Another important influence may well be the broad perception that there has been reduced government regulatory enforcement efforts under the Bush administration, said J. David Prince, a law professor at William Mitchell College of Law. “Litigation in effect is an indirect form of regulating behavior. I think there is a correlation,” Prince said. “I expect those two things are influencing the increase in the number of class actions in federal courts.” But while class actions broadly are on the rise, a closer examination of the types of class actions filed paints a much more complex picture and reveals that while antitrust class actions and employment class actions are experiencing record growth, other areas of class action litigation are relatively stable, or even in decline.

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