I am frequently asked whether a company sued in a putative class action in Massachusetts state court would be better off in federal court. Despite the common perception that class action defendants in any state are always better off in federal court, there has never been a simple answer to this question in Massachusetts, and it is even more difficult today than it was a few years ago. One reason for the difficulty is that the quality of judges at both levels in Massachusetts is very high. Unlike many jurisdictions, our state court judges are appointed, not elected, and the appointment process is rigorous, so that only highly qualified candidates get seated on the Superior Court, where class actions are litigated. Of course, our federal judges also are highly qualified, so there is no meaningful disparity in the quality of judging between the two court systems.
Qualifications, of course, are just the beginning of the inquiry. By and large, our federal judges have lighter case loads and more experience with class actions than their state court counterparts, which weighs in favor of removal. However, Massachusetts also has a Business Litigation Session. Only four judges sit, on a rotating basis, in the BLS’s two sessions, so that every case can receive relatively close, individual case management. Not every case may be brought in the BLS, though, and our other Superior Court sessions, where there are enormous caseloads, staffing shortages and judges who ride circuit are not as well equipped for complex litigation. But if you have a case that is brought in or can be transferred to the BLS, or if you are in another session and able to have a judge specially assigned to your case so that one judge presides over it through conclusion, your experience can be as good as it would be in federal court.
For several years, I have thought that the class certification law in federal court has been more favorable to defendants than the state court rules. Certainly, Supreme Court precedents interpreting Rule 23 have resisted the “certification-at-all-costs” approach that seems prevalent in some jurisdictions. But Supreme Court decisions are only as good as the lower court cases that apply them, and lower federal courts often seem willing to give decisions like Wal-Mart Stores, Inc. v. Dukes or Comcast Corp. v. Behrend more restrictive interpretations than the Supreme Court may have intended. United States District Judges in Massachusetts do not apply a uniform approach to class certification, and much can depend on who draws your case. Also, the First Circuit’s recent decision in In re Nexium Antitrust Litigation, which we discuss in several earlier posts, while in many ways breaking no new ground and likely limited to its peculiar facts, nevertheless may give some defendants pause about removal to any federal district court within the First Circuit’s boundaries.
Meantime, in Massachusetts state court, the pendulum appears to have swung from what this author has considered a plaintiff-friendly approach to class certification to a more balanced view. This has particularly been true in consumer cases brought under the state’s Consumer Protection Act (chapter 93A). Not only does the statute have its own class certification provision, which sets a lower bar for certification than Massachusetts Rule of Civil Procedure 23, but the SJC has historically applied an expansive interpretation of the Act’s “injury” requirement. Last year the Massachusetts SJC expressly overruled its own expansive definition of injury, and applied a more traditional approach, consistent with much federal practice, in assessing whether individualized issues of injury and causation predominate over common issues. And, importantly, Massachusetts has adopted its own version of Daubert that closely resembles the federal rule, and has adopted the Twombly/Iqbal standard for Rule 12(b)(6) motions. In fact, the Massachusetts Rules of Civil Procedure, while not identical to the federal rules, are modeled after them, and our state courts often follow federal court civil procedure decisions. In many respects then, at least for some cases that are brought in or can be transferred to the Business Litigation Session, I am hard pressed today to find many, if any, advantages to removal.
And there is one final consideration that is unique to Massachusetts practice. Massachusetts Rule 23 does not permit opt outs. Every class member is therefore unavoidably bound by any judgment or settlement reached in a state court class action. The SJC has held, quite appropriately, that the reach of our state court class actions in most cases is limited to Massachusetts, because binding out-of-state class members with no minimum contacts with Massachusetts to a Massachusetts judgment that they cannot escape would deprive them of due process. So, a company sued in Massachusetts state court can in most cases be assured that any class would be limited in its geographic scope.
What all of this says is that the decision to remove, in many cases, should not be automatic. Corporate counsel and their outside advisors should make sure they understand the advantages and disadvantages of litigating in the state and federal courts in their jurisdictions before rushing to judgment.