Class action litigation is a significant risk for consumer-facing companies. The following checklist outlines the first steps that a company should take to gather and preserve the information that may be necessary to defend against consumer class action claims. For each of these steps, it is imperative that in-house attorneys or outside counsel take the lead to ensure preservation of the attorney-client privilege and attorney work-product protections.
Executives should contact the company’s in-house lawyers or outside counsel as soon as possible after receiving notice of a class action complaint against the company, a credible litigation threat, or mounting consumer complaints.
Identify the policies, procedures, products, or practices that are being challenged and consider the following issues:
a. What are the legal claims alleged? Has the company faced similar allegations in the past? What was the outcome?
b. Identify factual and legal defenses to the claims.
c. How many putative class members exist?
d. What is the relevant time/class period?
e. What is the potential financial exposure?
Identify the key individuals within the company who may have firsthand knowledge regarding these issues. It may make sense for the company’s in-house lawyers or outside counsel to conduct initial interviews with these individuals to evaluate the merits of the claims alleged.
Assess where potentially relevant documents (including electronically stored information (ESI)), communications, and any other evidence may be located within the company. Identify all potentially relevant custodians of this information.
Issue a litigation hold to all conceivably relevant custodians for documents (including ESI), communications, and any other evidence.
Identify any potentially applicable contracts or agreements. In particular, be on the lookout for contracts or agreements that contain arbitration provisions that may apply.
Locate and review all company records pertaining to the named plaintiff(s). This information may be critical to knocking out the individual claims, terminating the case entirely, negotiating an individual settlement, and/or defeating class certification.
a. Active Litigation: For active litigation, review the case docket to identify all pertinent deadlines, including any removal and/or responsive pleading deadlines.
b. Litigation Threats: For litigation threats, review whether the opposing party included a deadline to respond, and strategize regarding next steps.
Obtain an understanding of the forum where the lawsuit has been filed.
a. What contacts does the company have in the jurisdiction where the plaintiff filed the complaint?
b. Has the company faced similar claims in this jurisdiction?
c. Has the company ever appeared before the judge assigned to the case?
d. Has the judge ever ruled on claims or issues similar to the ones presented in the new case?
Assess whether any individualized legal or factual questions must be answered to assess the merits of the named plaintiffs’ claims or the claims of potential class members for the purposes of developing arguments to defeat class certification.
Companies should address the issues highlighted above as soon as they become aware of a pending class action complaint or a credible litigation threat. The information obtained as a result of this process will provide a solid foundation for the company’s substantive defense strategy.
