Saturday, December 09, 2006

Take our thesis -- please! (Class action notice)

We're busy guys. We can just barely manage the full-time practice of law, blogging, being decent husbands and fathers, and the rest, without writing sophisticated legal articles in our spare time. So here's an idea for a law review article that would make a real contribution to the legal profession. We'll never get around to writing this. So take our thesis (and write this article) -- please!

The article would answer the question that clients regularly ask when class action settlement notices are about to be mailed: What will the response rate be? Defense lawyers have different ways of evading this question. No one provides details, but all lawyers give the same basic answer: The response rate will be "low," "extraordinarily low," "nil," or "next to nothing." With luck, clients don't press further.

Surely there's an empirical answer to this question.

Litigants have now implemented thousands of class action settlements, and the response rate to each of those notice campaigns is a historical fact. The response rate surely varies based on identifiable factors that include, for example: (1) nature of the product (or security, or whatever) involved in the underlying litigation, (2) nature of the notice process, including the direct mail element, internet-based notice, size and scope of print media notice campaign, etc., (3) the value of the settlement to the class members (because people are presumably more likely to fill out the forms needed to claim a $1000 check than a $1.75 check), (4) the burden imposed by the claims process (such as the number and complexity of forms that must be completed, the need to have saved receipts or other proof of purchase, etc.), (5) size (and notoriety) of the litigation underlying the settlement, and (6) many other factors that the person who chooses to write this article will surely identify.

So here's the idea: Obtain all available data for known class action settlements that required class members to respond to notice campigns. Sort the data based on the types of criteria that we've identified above. And tell the world the response rates based on those criteria.

That data would be invaluable. It would allow litigants to calculate more precisely the value of the settlement to the class and the cost of the settlement to the defendant. It would also let courts decide whether a proposed settlement is fair and whether a proposed notice campaign is sufficient for its purpose.

Come on, academia! You guys have time to do this type of analysis, and you could produce an article that would cross the divide between pure academic abstraction and useful information that lawyers and judges could use regularly.

Take our thesis -- please!

1 comment:

Rick Werder said...

I wonder if the real reason why there are no good, comprehensive data on this is that, in the end, it's not all that material to the decision to settle and the typical answer is good enough for a non-academic.

I also wonder if the answer would vary depending on how the settlement provides for the disposition of any unspent funds.