Behind the Curtain: Class Actions and the NBA Lockout
I have written before about class actions, the most popularly familiar form of aggregate dispute resolution. See here; see also here. They are one of the most interesting areas of legal procedure because they are relatively new and, as a result, still developing in meaningful ways. Class actions are a creation of Federal Rule of Civil Procedure 23 (and subsequent state analogues), enacted in 1966, nearly thirty years after the enactment of the general, modern Federal Rules of Civil Procedure, and three interacting planes of activity guide their development. There is a constitutional level: the Constitution’s due process guarantees constrain the dispute-resolution process. There is a rule-based level: the class action, so different from traditional, one-on-one litigation, is a creation of Rule 23. (I also would put other legislation, like CAFA, on this level.) And there is a “business” level: the motivations of the litigants, which often are or act like businesses, sets up, drives, and shapes (through developing litigation strategies) the judicial interpretations of the Constitution, Rule 23, and other legislation, and even triggering new legislation. There are any number of reasons why this area might be called “complex litigation,” and the ever-shifting, interactive push of these three levels of activity certainly creates complexity.
Class actions have been in the news lately, first with the lawsuits filed against law schools by former students, and, more recently, the antitrust complaint professional basketball players filed against the NBA. David Boies, the high-profile litigator who previously represented the NFL against the class of football players that sued it this summer and Jamie McCort in her divorce from Los Angeles Dodgers owner Frank McCort, is serving as class counsel in the players’ class action against the NBA.
In an interesting publicity move, Boise and Billy Hunter, leader of the now-disbanded players’ union, held a small press conference with twelve members of the media last Tuesday to discuss the players’ case against the NBA. Boies apparently walked through the complaint with those present and offered his commentary and legal strategy explanations. While he certainly was posturing with the public (no doubt Hunter’s aim in calling the meeting), Boies’ remarks hit on a number of class action legal issues. Jonathan Abrams, on Grantland‘s Triangle blog, has helpfully presented Boies’ comments in context with relevant portions of the complaint itself. It’s a bit lengthy, so rather than reprint it here, I encourage you to read it in full: “NBA Lockout Talking Points From The Players’ Attorney.”
One of the first things Boies mentioned was the issue of forum selection. To have the authority to hear a case, a court must have jurisdiction. Often, however, there will be more than one court that could properly exercise jurisdiction over a case, and that secondary distinction is termed one of venue. Plaintiffs often have a choice of venue, or forum, and the decision operates on multiple levels. There is strategy involved: even though the case is in federal court, the federal court may be required to apply certain aspects of state law, so geographic location becomes important. Similarly, if the trial is to be before a jury, plaintiffs may find they prefer juries in certain states over those in others. Plaintiffs also may be angling toward certain judges if they are known to be expert (or not expert) in a certain variety of procedural or substantive law. The cosmetics also matter: where outside perception is relevant, where a plaintiff sues can affect appearances in the mind of the public. Any number of other factors may influence the decision of where to sue, and Boies’ statement on forum selection hit on a few of them:
There were a number of people who wanted to be in California. Billy [Hunter] has a great fondness for Oakland. He lives out there. One of the key representatives, Mr. Powe, is a resident out there in Richmond, California, which is in the Oakland division of the Northern District of California. I also think that we think that district has a practice in moving cases along very quickly. They’ve got a lot of expertise in antitrust cases and we think it will be a good forum for us to proceed with this lawsuit.
A major issue in class action litigation is defining the represented class. Because class actions almost always settle once the court certifies the class, the certification stage is the real battle. The defendant’s aim, therefore, is to show that the group of plaintiffs lacks the cohesion required for certification under Rule 23 by emphasizing the differences in the situations of the would-be class members. Conversely, the plaintiffs will try to emphasize commonality and similarity across the proposed class. When there are undeniable differences, plaintiffs have other techniques, including the creation of subclasses. In the NBA suit, the complaint names the plaintiffs as “Carmelo Anthony, Chauncey Billups, Kevin Durant, Kawhi Leonard, Leon Powe and all those similarly situated,” and Boies explained:
I think it was people who believed they wanted to participate as plaintiffs and there were people whose lawyers believed would fairly represent the interests of the class. For example, although it’s not actually a legal requirement necessarily, in general when you’ve got a class action, you want to have a mix of people. For example, one of the subclasses in the complaint are players under contract because players under contract have particular claims that are based on the fact that the owners got together and all agreed that they would breach those contracts. So they have a certain set of claims. You then have NBA players who are not under contract and they have many of the same claims, but some different ones. And then you have the so-called rookie subclass of people coming into the league.
The remainder of the remarks from Boies and Hunter and excerpts from the complaint deal with the substantive law and factual history of the dispute. It’s a neat way to catch up on what’s been happening with the NBA labor dispute and get a sense of where it may go from here, at least as far as the litigation is concerned. Even if you don’t like watching the NBA, I recommend the NBA lockout– it’s much more interesting and entertaining.