The pandemic has impacted people across the globe in a multitude of ways, and many are turning to litigation to air their grievances. Because the sheer number of people impacted is so large, class actions are especially well-suited to address numerous claims of similarly situated plaintiffs against one or more defendants in a single case. Recent class actions relating to COVID-19 include classes being certified in relation to anticompetitive behavior, closed college campuses, cancelled events, and more.
Areas seeing a class action surge
Despite extended court closures and changing procedural rules, class action filings have seen a steady rise and are expanding globally and across industries. The ongoing economic impact, disruptions of business operations, and physical toll of the crisis all but ensures that this early trend is just the tip of the iceberg.
Students relegated to online courses far from campus are suing for refunds or credits relating to their vacant dorm rooms, unused meal vouchers, and inability to take advantage of campus resources or student activities. Many are claiming that virtual university is no comparison to attending class IRL, and are demanding financial restitution. Schools from Ivy league to regional colleges are seeing suits — not even Harvard University was above the fray.
Health issues from shutdown delays health issues
Multiple cruise lines have been hit with class actions claiming the delay in shutting down operations amplified the spread in the U.S. The class action litigation is asserting the claim that the companies negligently promoted the spread of COVID-19 or hid relevant information about the risks of transmission or scale of health impact. Costa, Carnival, and Royal Caribbean are just a few of the implicated cruise lines.
It will come as no surprise to anyone who attempted to purchase cleaning products, toilet paper, or personal protective equipment (PPE) since the onset of the pandemic that price gouging has been a serious issue. Whether it was three N95 masks for $585, a lot of five Lysol spray cans for $227.50, or a 12-mega roll of Cottonelle toilet paper for $49.90, the scale of the gouging was extensive. Consumers in certain states have explicit protections against unfair increases in response to the pandemic — for example, California’s Unfair Competition Law prevents an increase of more than 10% within 30 days of a government declared emergency. To date, Amazon, Ebay, and several grocers are facing class actions relating to gouging prices on essential items.
False claims and fake cures
In the wake of the pandemic, everyone was looking for the best ways to remain safe and healthy and some unscrupulous organizations seeking to capitalize on this fear falsely claimed that their products cured or protected against COVID-19. There have been multiple class actions relating to the effectiveness of hand sanitizers (Target and GermX in particular have been implicated). Other companies and individuals went so far as to claim a vaccine or a cure for COVID-19. Televangelist Jim Bakker is facing a suit for claiming a magic “Silver Solution” kills COVID-19 and doctors in several states are likewise facing censure and lawsuits.
Travel and event cancellation
In light of the nationwide shutdown, flights and many high-profile events were cancelled, so some consumers are turning to litigation when the airlines or event organizers refuse to proffer refunds. To date, SXSW, Ticketmaster, and multiple airlines including American Airlines and United are all facing breach of contract and consumer protection class actions. Gyms, amusement parks, and resorts are also facing class actions relating to membership dues during extended closures, with Six Flags and 24 Hour Fitness representing some of the marquis organizations implicated to date.
Employers are facing several flavors of class action including wage and hour relating to overtime clocked by home-based workers, WARN Act (Worker Adjustment and Retraining Notification Act) violations for plant closures without sufficient notice, and claims relating to discriminatory termination. Some claims are also arising with regard to provision of adequate safety protocols and PPE — these will likely continue to surge as employees return to their offices. Uber, Hertz and even Hooters have all been implicated in various employment class action suits and this area will continue to surge.
Unique considerations and best practices
Class actions are a complex animal. Comprising many parties and their counsel, they often entail contentious class certification and messy related motion practice, not to mention massive reputation and financial stakes. When you combine this with the deluge of electronically stored information (ESI), razor-thin deadlines, and government intervention or non-party objectors it is easy to see why ediscovery in class actions is daunting.
There is no such thing as a simple class action. Every class action has hidden hazards that can surface without warning. Some of the most common ediscovery challenges in class actions include:
In class action there is often a vast, disparate group of individuals facing a large enterprise, with the preponderance of ESI and cost associated with discovery borne by the enterprise defendant. Finding an effective way to manage complex data types and volume and extract insight quickly is imperative in coming to a favorable outcome. Practitioners have tools like TAR and data prioritization powered by DISCO AI that can assist.
Discovery with unknown custodians
While class actions do have named representative plaintiffs, the putative class members are largely unknown and are often challenging to identify prior to class certification. This ambiguity creates challenges with meeting preservation obligations and avoiding spoliation sanctions early in a matter when potentially thousands of unknown individuals may be in scope. Given the potential cost associated with merits discovery, many practitioners opt to bifurcate discovery between precertification and the bulkier merits-based discovery if that is an approach the jurisdiction supports (which is not always the case). In the event class certification is not attained as a result of precertification factual disputes, this bifurcated approach avoids the substantial cost associated with merit discovery.
Because you are dealing with a broad class and expansive enterprise data over a potentially long period of time, it is imperative to have an accurate data source catalogue and tracking for preservation, collection, and reviewed data. Detailed and accurate records and source tracking mitigate future claims of spoliation and reduce the likelihood of sanctions. You can also use this comprehensive overview to prioritize and track preservation and collection to mitigate over-collection and the associated risks and costs. In addition to creating a data source catalogue for tracking purposes, consider engaging with a forensic ediscovery partner. They can help you collect the data you’ve identified in a defensible manner to further mitigate any arguments of spoliation or data manipulation.
The Central District of California, Northern District of Georgia, the Northern District of Texas, the Eastern District of Louisiana, and the District of Utah all have a strict 90-day deadline for filing the motion of class certification, with penalties that include striking the class completely. See Klune v. Ashley Furniture Industries Inc., (striking class allegations for failure to comply with 90-day deadline); Main v. Electronic Data Systems Corp., 168 F.R.D. 573, 577 (N.D. Tex. 1996) (same). In terms of discovery obligation, some jurisdictions allow merits-based ediscovery prior to certification, so the cost and undertaking of complex ediscovery relating to the class action is under amplified constraints. Some practitioners with a strong factual basis to dispute the class action claim may want to invert the discovery so that certification discovery is avoided in favor of merits-based.
Compressed timelines with increasing data volumes create a massive challenge for practitioners. Leveraging AI to accelerate time to key evidence across even large and disparate data sources informs practitioners as to the relevant risk and key information within their data set. If you are quickly armed with grounds to contest the class certification or merits of the case, without investing countless hours of billable time, the benefits to a client are substantial.
Class action settlements have always been large, but we are well into an era of mega-settlements, especially when the public at large is sympathetic and empathetic to the harmed individuals. In a situation like COVID-19, where so many are personally impacted, the likelihood of a mega-settlement and reputational damage is high. Leveraging the advanced analytic power of a tool like DISCO helps surface key evidence quickly and enable the case team to determine settlement posture early and facilitate a favorable outcome informed by the key facts of the case. Additionally, the likelihood of mega-settlements is often impacted by class certification, so having the right technology and expertise to determine class certification and uncover key evidence pre-settlement is a huge benefit.
Death by line item
Whether you’re an enterprise defending against a class action or a plaintiff team trying to win one, budgets often make or break cases. Ediscovery usually involves a painful monthly surprise (your invoice) that often feels like “death by a thousand line items” — for example, unexpected expanded data costs or professional services fees to add a new global highlight. Picking the right ediscovery partner can eliminate that monthly dread and enable creating accurate budgets for your discovery process. DISCO provides all-in-one pricing for hosting and processing with no charges for data expansion, document analytics, or AI.
All said, this enables teams to handle class actions to their best resolution, without letting the discovery bill dictate case strategy.
Too many cooks in too many kitchens
An enterprise facing class action in light of COVID-19 is likely to be facing similar charges in multiple jurisdictions with differing classes and counsel. Being able to adequately collaborate across multiple matters and to be able to reuse work products so that they are not starting at zero with each successive matter. Tools like DISCO Case Builder and AI model-sharing are just a few of the ways that DISCO helps practitioners accelerate time to insight across a portfolio of similar matters.
The economic impact and disruption of COVID-19 is creating a massive amount of hardship globally, and individuals and groups continue to turn to litigation to be made whole. As filing deadlines come closer, the economy begins to reopen and classes are identified, the volume of class actions will continue an exponential rate of increase. Be sure that you are armed with the best possible tools and expertise to manage the surge in filings and related discovery from the outset.
Also in this series: