Where Did All the Federal Class Actions Go?
Ironically, the turn of a New Year typically brings a renewed interest in the past, as articles summarizing historical data and prognosticating on future events flood all channels of the media. One recent study, however, assembled by NERA Economic Consulting, caught my eye and is worth a read.
Just released, "Recent Trends in Shareholder Class Action Litigation: Filings Plummet, Settlements Soar," is an interesting perspective on a phenomenon that may have gone unnoticed by many. Findings in the report suggest there may be no one definitive cause for the decline in federal class action filings in recent years but rather attribute it to a multitude of independent factors whose effect can neither be qualified nor quantified. Enactment of SOXA and the PSLRA no doubt quickly come to mind, but they too may be oversimplified explanations, as the study notes a divergence in number of class action filings across the federal circuits.
Equally intriguing, however, is the fact that mega-settlement amounts continue to rise - and there are more large settlements than ever before. So what is happening? Did a paradigm shift occur overnight whereby "settlement" became the preferred method of doing business? With public attention focused more and more on corporate giants slain over the past few years, additional research on this topic will likely be forthcoming.
Stay tuned . . .
