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The Pain Of "Just Saying No": The Law Is Not Always On Your SideKyle A. Shamberg

Last week, a potential client came to me with what she felt was a clear-cut mortgage fraud class action against one of the biggest banks in the world. After spending some time considering what she had told me and researching the point myself, I tended to agree that something was awry: there seemed to be indicators out there pointing to the fact that yes, this was happening and yes, it was happening to a lot of people. I determined that winning such a case would provide a tremendous societal benefit and would be significantly valuable to both my firm and to me personally. Immediately thereafter, I told her my firm could not take the case.

The reason was not that I doubted the case was addressing a worthwhile problem, or that she had not pinpointed chicanery that should be stopped. Instead, the reason was that it simply did not seem feasible to get a class certified and, without a certified class, there would be little if anything we would be able to do to put a halt to that particular practice. The utility of individual lawsuits, typically concerning small amounts of money against well-funded defendants, is often minimal. And, in the public sector, the resources of federal and state regulatory agencies are finite.

Though I would certainly not describe myself as an “old hand” at class action litigation (I have been in the practice area for a little over three years now), I would have to use both fingers and toes to count the number of times I have had to tell a client or potential client, who I earnestly believed had been wronged, that legal action was unlikely to succeed.

This is the conundrum that class action lawyers (and all lawyers, really) find themselves in from time to time. A non-lawyer can look at a situation and say “wow, I cannot believe this is happening, this is obviously wrong and needs to be stopped.” And that person is probably right. Unfortunately, in certain instances it is the job of the lawyer to say “Yes, but…” And the “yes, but...” can be both incredibly frustrating for the client and disheartening for the lawyer.

For class lawyers, the “yes, but…” is typically attributable to the fact that it is not only the defendant’s conduct, however immoral, unethical, or illegal it may be, that is at issue, but whether that conduct has impacted the individuals that would make up the class in a common, uniform way, and can be proven through common evidence. If individual issues – questions that must be answered on a case-by-case basis for each member of the hundred or thousand or million person class – predominate over those common questions, the case will not proceed as a class action. Instead, each class member must fend for him or herself and, as noted above, this is simply not an economically viable course in the majority of cases.

Of course, it is patently sensible that there must be a common thread running through any class action, and this concept has been deeply imbedded in the federal rules of civil procedure for 80 years. But, depending on the case and its complexity, this can mean there will be a lot of hoops to jump through. How many different people are involved? How many different states’ laws? How similar or dissimilar are those state laws? What are the damages, and are they different for different members of the class? Where is the defendant subject to jurisdiction, and how does the law in that jurisdiction treat the conduct at issue? Was the defendant’s conduct directed at the class members in the same way during the same period of time? The list goes on.

Now, this is not to say every class action should be certified, or even filed in the first place. It would be disingenuous of me to suggest that there are not class actions out there that serve little if any benefit to either the class members or the larger society. Indeed, it is generally these sorts of cases that paint the entire practice area, in certain eyes, in a negative light. There must be constraints to prevent these sorts of abuse of process, and anyone who would argue otherwise is not taking a serious position.

But what about those cases offering a real solution to real wrongs, ones that would make a tangible difference in the lives of people who have truly been injured? How do we make sure those cases succeed? Well, if you have read this post expecting a solution, bad news. It is a fact of life that we live in an imperfect world with a constantly evolving set of laws and an infinite number of varying factual scenarios to apply to those laws. In the end, it boils down to a simple and hard truth: now and again, in the face of bad behavior and obvious wrongs, lawyers have to take a page out of the book of Nancy Reagan and “Just Say No.” Oftentimes, it is not an easy thing to do.