Coattail Class Actions: Reflections on Microsoft, Tobacco, and the Mixing of Public and Private Lawyering in Mass Litigation

Abstract:     
In both the Microsoft antitrust litigation and the tobacco products liability litigation, government lawsuits broke down the barriers of seemingly invulnerable defendants, and private lawyers pursuing class actions against the same defendants benefited from the government successes. This phenomenon-class actions that ride the coattails of government litigation-extends well beyond Microsoft and tobacco, and raises questions about the proper spheres of government and class action litigation. The article explores coattail class actions and related developments in Microsoft, tobacco, and other recent litigation involving widespread harm. There is nothing inherently problematic about such class actions, but certain features of recent government lawsuits and class actions should be examined in light of the divergent duties and incentives of government and class action lawyers. The article suggests that government lawyers should consider the public value of discovered information and the impact of settlement agreements that compromise private litigants' remedies or procedural mechanisms. It also argues that contingent fees are generally inappropriate for government retention of private litigators. Finally, the article shows that prior government litigation substantially increases the likelihood of successful prosecution of a class action, but in some cases it should reduce the likelihood or amount of punitive damages, as well as the amount of fees awarded to class counsel.

Number of Pages in PDF File: 48

Keywords: tobacco, Microsoft, class actions, government lawyers

JEL Classification: K40, K41, K42

Accepted Paper Series