Cashing In
Some observers take a cynical view of what’s driving the class action opt-out trend—plaintiffs lawyers. Recent Supreme Court decisions in Tellabs…
December 18, 2012 at 04:09 AM
1 minute read
Some observers take a cynical view of what's driving the class action opt-out trend—plaintiffs lawyers. Recent Supreme Court decisions in Tellabs Inc. v. Makor Issues & Rights Ltd. and Dura Pharmaceuticals Inc. v. Broudo raised the standards for pleading and proving the defendant's state of mind in securities fraud cases, curtailing many class action lawsuits and making them harder to win.
“The record on the success of opt-outs is much murkier than you'd glean from the claims of lawyers representing them,” says Kevin LaCroix, an attorney and executive vice president of D&O insurance intermediary RT ProExec. “It's lawyer-driven. Plaintiffs lawyers are scrambling for new sources of business due to increasingly hostile Supreme Court case law and statutes that have led to fewer class action suits. It's a different way for lawyers to make money.”
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