January 30, 2013 Articles

Oil and Gas Class Actions in Texas

Forum selection and other tactics for defeating class certification.

By Thomas G. Ciarlone Jr. – January 30, 2013

It is axiomatic that the denial of class certification virtually always spells the swift end to a class action. On this score, after recognizing “the pivotal status of class certification in large-scale litigation,” one federal appeals court has emphasized that “denying . . . class certification is often the defining moment in class actions . . . for it may sound the death knell of the litigation on the part of plaintiffs. . . .” In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305, 310 (3d Cir. 2008) (citation and internal quotes omitted). By the same token, a successful bid for class certification can open up defendants to exposure on such a grand scale that they will settle even dubious claims rather than assume the burden of a costly defense, the unpredictability of a runaway jury, and the attendant risk of a crippling damages award. The official advisory committee notes to the 1998 amendments to the Federal Rules of Civil Procedure explicitly recognize this dynamic, bluntly conceding that class certification “may force a defendant to settle rather than incur the costs of defending a class action and run the risk of potentially ruinous liability.” 1998 Advisory Committee Notes to Fed. R. Civ. P. 23(f) (quoted in CE Design Ltd. v. King Architectural Metals, Inc., 637 F.3d 721, 723 (7th Cir. 2011)).

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