Carlton Fields recently released its sixth annual Class Action Survey, which is based on detailed interviews with general counsel and senior legal officers at 373 companies operating in more than 25 industries. Those individuals shared their thoughts and best practices on class action exposure and management. Highlights from this year’s survey include data on the types of class actions companies faced in 2016 and the likely next wave of class action.
Class-Actions By Type
Companies faced different volumes of class actions in different practice areas than in past years. Overall, companies’ class action spending across industries increased for the second consecutive year, reversing a downward trend that occurred between 2011 and 2014. In 2016, labor and employment cases accounted for the largest category of class actions, representing 37.7 percent of all class actions, which was a notable increase from 2015, when the percentage was just 24.1. The increase was due, in significant part, to a surge in wage and hour claims, particularly in California. Intellectual property class actions also increased significantly, jumping from 0.1 percent in 2015 to 7.5 percent in 2016. Securities actions increased from 7.3 percent to 9.6 percent. Consumer fraud cases decreased significantly, from 24.6 percent in 2015 to 19 percent. The percentage of products liability cases remained roughly consistent at 10.1 percent, and antitrust cases decreased slightly from 7.6 percent in 2015 to 6.5 percent.
Next Wave of Class Actions
This year, companies had different predictions as to the next wave of class actions than in past years. Companies in various industries agreed wage and hour class actions will continue to increase. Nearly 26 percent of companies predicted that these cases will form the next wave of class actions. Coming in second, Telephone Consumer Protection Act (TCPA) cases were considered the most likely wave of class actions by 22.2 percent of companies. Further, while data privacy class actions were highly anticipated for several years, they remained a small percentage of class action matters expected to occupy the next wave. Just 11.1 percent of companies predicted they will form the next wave of class actions. This likely reflects not only the proactive steps many organizations have taken to prevent, prepare for, and address possible data breaches, but also the fact that plaintiffs have had difficulty establishing damages in these cases. Other actions predicted to form the next wave of class actions included those resulting from the Consumer Financial Protection Bureau’s proposed rules (13.7 percent), antitrust (11.1 percent), and non-discriminatory provisions of the Affordable Care Act (7.4 percent).