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Bifurcated Discovery in Class Actions: An Effective Strategy To Prevent the Continuation of the Unmeritorious Lawsuit - BNA - Class Action Litigation Report

August 26, 2011

Dennis S. Ellis, Sean D. Unger & Katherine F. Murray

Consumer class actions are expensive. Case after case confirms this fact. Recognizing this reality, many consumer class action lawsuits are filed without a proper class representative, solely so that discovery may be initiated to locate a plaintiff with a legitimate claim. As counsel for the named plaintiffs search for someone, anyone, to step into the lawsuit in the place of the original plaintiffs, the defendant faces substantial cost in discovery alone, and that cost takes many forms. It includes dollars spent, employee hours lost, possible reputational harm in the market place, and a general distraction from a businesss day-to-day operations. In light of that reality, there are a number of strategies a defendant might employ in an effort to reduce that cost.

One of those strategies is to pursue bifurcated discovery. Assuming a case survives a demurrer or a motion to dismiss, and after consultation with the client to ensure the strategy is appropriate for the particular case, seeking to bifurcate discovery into two phases often makes sense: (1) pre-class certification discovery, and (2) post-class certification discovery. In the pre-class certification phase, discovery would be limited to the issues relevant to the class-certification analysis, inclusive of the Plaintiffs standing to pursue the asserted claims. If a class is certified and makes it to the postclass certification phase, discovery will focus on the merits of the underlying claims. Where a court agrees to bifurcate discovery, the costs of pursuing merits discovery can be delayed or eliminated. This article discusses the reasoning behind and the practical implications of pursuing a bifurcated discovery plan in consumer class action cases, and how that strategy can adroitly be used to block improper class representatives from filing suit to find a proper representative and a better case.

Reproduced with permission from Class Action Litigation Report, 12 CLASS 803, 08/26/2011. Copyright © 2011 by The Bureau of National Affairs, Inc. http://www.bna.com

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