A Class Action Law Practitioner's Perspective on the Selection of Class Counsel, page 2

A PRACTITIONER'S PERSPECTIVE (continued)

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These may include a firm's prior experience in a relevant legal or factual area of the case, the work-up or discovery done by a particular firm on a case to date, a firm's relationship with defense counsel or the judge, a firm's working relationship or history with other firms, pre-existing case referral or fee sharing arrangements among the firms, promises by one firm to give a firm work in another case, the number of clients a firm represents, and a desire to be overly inclusive with respect to the management structure to lessen the possibility of exclusion from the management structure in other cases. Despite the fact that many of these considerations are political, and appear to have nothing to do with choosing the best counsel to represent the class in a given case, most often, the firm or firms that emerge as the de facto leaders only do so because of their experience and past success in prosecuting the types of claims at issue. Track records count.

Ultimately, the court must pass judgment on who will represent the class. If the designation is to be made earlier than at the class certification stage, courts have two choices: they can sign off on the process described above, and incorporate the self-selected leadership structure of plaintiffs' counsel in a case management order; or, they can be more proactive and establish an approval or selection process themselves. The Manual recommends the latter approach, which is frequently used in multidistrict litigation in the mass tort arena, see Manual, §§ 20.2, et seq., and this approach seems to be the direction in which the law is moving. For instance, the current draft amendments to Rule 23 advocate that counsel should be selected by application process within a "reasonable period after the commencement of the action." Proposed Amendments to Rule 23, Rule 23(h). In addition, the Private Securities Litigation Reform Act also has implemented a process for choosing counsel at the outset. See 15 U.S.C. § 78u-4(a)(3)(B). This proactive approach is also consistent with the court's fiduciary duty to the class, whether it is presently mandated in a particular substantive area, as with the PSCRP, whether it may be ultimately incorporated in Rule 23, or whether, as at present, it remains a case management option.

In serving as a fiduciary for the class, the court must, at a minimum, look at the qualifications of counsel. If the court abdicates this duty and does nothing to ensure that counsel for the class are, at the very least, qualified and adequate, there can be no assurance that the class' best interests are being served. Allowing plaintiffs' counsel to self-select their leaders pursuant to the factors described above will nearly always result in a leadership structure that features experienced and savvy counsel, but may not always ensure that the class' best interests are foremost in the process.

Counsel Selection: Quality or Price?

If a court is to actively engage in a selection process, the factors it must evaluate undoubtedly must include a qualitative component. In many instances, however, all of the firms before the court will be adequately, if not well, qualified to prosecute the case on behalf of the class. Courts, that have considered this issue, have devised some fairly standard criteria to enable them to evaluate the candidates. See, e.g., In re Wells Fargo Sec. Litig., 156 F.R.D. 223, 228-29 (N.D.Cal. 1994) (firm's experience in type of litigation before court, identity and experience of counsel who will be working on case, ability of one firm to complete the litigation); In re Cendant Corp. Litig., 182 F.R.D. 144, 151 (D.N.J. 1998) (history of involvement in similar litigation, including cases, dates, courts, resolution, stage of litigation when resolution reached); In re Lucent Technologies, Inc. Sec. Litig., 194 F.R.D. 137, 157 (D.N.J. 2000) (experience of firm and lawyers who will prosecute case, demonstration that firm has thoroughly evaluated case).

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