Empirical Study Confirms That No-Injury Class Actions only Benefit Lawyers

We recently read an interesting new empirical study that confirms what we’ve long suspected −  that so-called “no-injury” class actions, those that allege that a product was “worth less” than it should have been due to some inchoate, unmanifested defect, are a litigation boondoggle, benefiting nobody but the lawyers who bring them.

The study is Joanna M. Shepherd, “An Empirical Survey of No-Injury Class Actions,” available through the Social Science Research Network, here.  Ms. Shepherd, a professor at the Emory University School of Law, started with all class action settlements between 2005 and 2015 that could be located on Lexis or Westlaw – 2158 cases.  She applied four criteria for identifying “no-injury” classes:

(1) the plaintiffs suffered no actual or imminent concrete harm giving rise to an injury in fact;

(2) the only harm alleged was a technical statutory violation (primarily of the Fair Debt Collection Practices Act, the Telephone Consumer Protection Act, the Fair Credit Reporting Act, and the Electronic Funds Transfer Act);

(3) if any out-of-pocket economic  loss was negligible or infinitesimal; or

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