Are Class Actions Unconstitutional? Does It Matter?
Martin Redish is back in the news. In the past week, he’s been written up in Forbes and the ABA Journal, as well as a series of associated blog posts by academics like Elizabeth Chamblee Burch. The Forbes profile – which kicked off the coverage – quotes him as saying that the rights held by class action litigants:
are individually held rights … What a lot of class action scholars and proponents have done--quite cleverly, I must say--is engage in a sort of alchemy to transform individual rights into collective rights.
The Forbes profile doesn’t focus on any particular work of Redish’s, although the discussion of cy pres relief recalls his forthcoming article on “Cy Pres Pathologies,” and Chamblee Burch uses it to highlight his latest book: Wholesale Justice: Constitutional Democracy and the Problem of the Class Action Lawsuit. But the Forbes headline (“Are Class Actions Unconstitutional?”), which has generated much of the buzz, presumably refers to Redish’s argument that the Rules Enabling Act (which gives authority to the Federal Rules of Civil Procedure) is unconstitutional because it violates Article III’s “case and controversy” requirement and the nondelegation doctrine. (For those playing along at home, Redish makes this argument at pp. 73-85.)
Redish predicts that his proposals will fall on “deaf ears.” He’s likely right – not because those proposals are unsound (or even invalid), but because very few lawyers would argue that the Rules Enabling Act (and with it, the entire structure of the federal rules) is unconstitutional. The typical class-action defendant – which is usually a corporation familiar with the benefits and drawbacks of litigation – is unlikely to want to bring the entire temple down on top of itself, no matter how much it might dislike the effects of Rule 23. And a settlement objector – most often a moonlighting plaintiff’s attorney – is even less likely to want to undermine the entire class-action structure. Nor is Congress likely to un-delegate responsibility for the Rules of Civil Procedure anytime soon.
Does this mean Redish’s work is useless? Hardly. There’s always value in going back and kicking the tires on people’s assumptions; no one wants a constitutional blowout at high speeds. But even more importantly, Redish at his best is gimlet-eyed about the disconnects between the legal fictions that accompany the class action and the realities of how class awards and class settlements get administered. While Redish’s approach to these disconnects is largely theoretical, it provides an excellent starting point for some more grounded legal attacks on meritless class actions.
Andrew Trask has participated in the defense of more than 100 class actions, involving all stages of the litigation process.
Thanks for the extended commentary on my work. However, I am not sure I know what "gimlet eyed" means (that I am seeing things after I drank a gimlet?). In any event, while I do make the Rules Enabling Act argument you mention, I don't think that is what the Forbes article was referring to. In my book and my forthcoming article on cy pres, I seek to fashion constitutional attacks on aspects of the modern class action that I think have far more relevance to modern doctrine. In particular, I refer to the faux class action and the settlement class action, as well as cy pres. Obviously, many people disagree with me. However, no one has told me, exactly, why my arguments are wrong. I would welcome any constructive criticism of my theories, as a means of engendering a legitimate debate about constitutional policy.
Professor Redish,
Thanks very much for commenting! My Concise Oxford tells me that a "gimlet eye" is an "eye with sharp or piercing glance," presumably the opposite of gimlet goggles.
Taking your forthcoming article on cy pres, I read your constitutional attack as having three parts: (1) cy pres relief in class actions violates both the separation of powers and the Article III “case or controversy” requirement; (2) because the underlying law does not authorize payment to third parties, cy pres relief violates the Rules Enabling Act’s prohibition on enlarging the substantive rights of a party; and (3) granting cy pres relief deprives the absent class members of due process because they forfeit a possible legal claim in return for a donation in their name to a charity.
Leaving aside the question whether a court can order cy pres relief as part of a post-verdict damages award (a clearer, but infinitely rarer case), I think the responses to your argument might go like this:
(1) violates the “case or controversy” requirement only if there is no live controversy between the parties. However, if a class has been certified, the court has made a determination that there is a live controversy between the plaintiff (on behalf of the absent class members) and the defendant. There’s a violation of separation of powers if the court takes on powers not granted to it by Article III. But the disposition of unclaimed settlement funds isn’t granted to any particular branch of government. (And, in Wilson, it was granted by consent decree directly to the court.) So it’s hard to see where the court is stepping on another branch’s prerogative.
(2) is a sound argument in a coercive damage award. Rule 23 can’t – and shouldn’t – enlarge the substantive right of either party. But, as you acknowledge, the parties are not limited to what the law authorizes for damages when settling a dispute. If Acme sues Ajax for breach of contract and is only entitled to damages, but in settlement talks gets altruistic and agrees to drop the case for an apology and a check to its favorite charity, I don’t think that counts as an enlargement of its substantive rights.
That makes (3) the real problem. The absent class members didn’t authorize the gift, so where does the court get off forfeiting their legal claims in exchange for a donation in their name to Northwestern Law School? I think the response there might be that there is due process – the Rule 23(e) final fairness hearing. At that hearing, a judge (who, for purposes of the settlement, is considered a fiduciary of the class) hears any objections from absent class members or interested parties, and makes a determination whether the proposed settlement is fair to the class members. One might argue that class notice is not necessarily enough to meet due process, but to do that, one argues with the Eisen and Oppenheimer Fund courts.
I’m definitely interested in hearing any other thoughts you may have on the matter, however.
Andrew Trask