The members of an electric cooperative filed a putative class action against their own cooperative, alleging that it had acted improperly by failing to pay tens of millions of dollars of patronage capital allocated to the members.
Retained by Gardere Wynne Sewell
The members of an electric cooperative filed a putative class action against their own cooperative, alleging that it had acted improperly by failing to pay tens of millions of dollars of patronage capital allocated to the members. Counsel for the cooperative retained Cornerstone Research and Professor Steven Shavell of the Harvard Law School to provide an economic analysis of the plaintiffs’ motion to certify a class of all members who had balances remaining in the capital accounts.
The court ruled in favor of our client by denying certification of this putative class.
Based on his analysis, Professor Shavell drew two main conclusions. He showed that the plaintiffs’ theory of liability necessarily implied that numerous members of the putative class would not have been harmed at all as a result of the disputed actions, but instead would have benefited. Further, he demonstrated that it would be impossible for the court to ascertain whether any particular member was harmed or benefited, without departing from the class action framework and conducting an individualized inquiry into that member’s particular circumstances.
Professor Shavell presented his findings during a week-long hearing in which experts from both sides testified. Following the conclusion of this hearing, the court ruled in favor of our client by denying certification of this putative class.