Consumer class action lawsuits are expensive. Case after case confirms this fact. Recognizing this, 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 day-to-day operations. In light of that reality, the Paul Hastings Complex Litigation and Trial Practice employs a number of strategies 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, Paul Hastings will often seek to bifurcate discovery into two phases: (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 post-class 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 alert 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 the claims of improper class representative plaintiffs in their entirety.