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Class Action Countermeasures Discussions of the Strategic Considerations Involved In Class Action Defense

Classic Scholarship – Taking Adequacy Seriously

Posted in Certification

Today’s piece of "classic" scholarship is by Linda Mullenix, Professor of Law at the University of Texas. Published in 2004, Taking Adequacy Seriously: The Inadequate Assessment of Adequacy in Litigation & Settlement Classes, 57 Vand. L. Rev. 1687 (2004), took an in-depth look at the routine under-enforcement of Rule 23(a)(4)’s adequacy requirement.

To put the case simply, courts pay lip service to the concept of adequate representation but fail to robustly engage in any meaningful inquiry to establish the existence of such adequate representation. For judges, the adequacy inquiry usually is the least-rigorously examined requirement for certification, either for litigation or for settlement classes. Instead, courts routinely wave their blessings over class counsel and proposed class representatives and presumptively make findings of adequacy on nonexistent or scant factual showings.

(Emphases added.)  Mullenix attributes much of this under-enforcement to the fact that many courts focus on whether counsel is adequate rather than the class representative herself.

Because most courts historically and reflexively believe that the most important thing is the presence of competent counsel (the Newberg view), there is a general feeling of apathy toward class representative issues. In short, courts seem perfectly willing to ignore even the most clueless class representatives.

And, as Mullenix points out, that reliance on the adequacy of counsel can be a problem, because the same courts often do not probe into the adequacy of counsel, except in a superficial, check-the-resume way.

In reality, most courts routinely, reflexively, and presumptively certify proposed class counsel as adequate without a sufficiently probing inquiry. In the modern literature, one has to look long and hard to find cases in which class counsel have been deemed inadequate to represent the class.

(Mullenix points out that class counsel often do not face rigorous inquiry into adequacy because both courts and defense lawyers hesitate to call the adequacy of lawyers on the other side into question. And in general, this unwillingness to throw mud at opposing counsel is a feature, not a bug, in our civil litigation system.) There are a few exceptions, like Judge Baer’s decision that "adequate counsel" in a securities case should come from diverse firms.  But even there, Judge Baer’s order focused on a box to check, rather than the conduct of the firms themselves.

Mullenix offers one primary reform: require cross-examination of the class representative at the certification hearing, so that the court can make an adequate record of its own impressions of the adequacy of the named plaintiff.

While there are a few exceptions to this trend of under-enforcement now, for the most part, it appears to have continued. Many courts simply do not look at the adequacy of the class representative (or, failing that, class counsel) quite as closely as they could. And this is unfortunate, because a more rigorous inquiry into adequacy inquiry would have at least three salutary effects:

(1) It would cut down on lawyer-driven cases where there was no real harm. If class counsel can’t find a named plaintiff who is sufficiently motivated to educate herself on what happened and actually communicate with her lawyers, that’s a very good sign that the case is about a technical issue unattached to any harm rather than an actual injury that requires compensation. (Betty Dukes would likely pass this test, as would Dora Surowitz.)

(2) It would reinforce the finality of class settlements. Currently, it is possible to challenge a class settlement after the fact by challenging the adequacy of representation. This means that class settlements in jurisdictions that do not pay attention to adequacy are–in the long run–worth less than in jurisdictions that do pay attention to adequacy. But since there is systematic under-enforcement, mostly what it means is that class action defendants cannot trust the finality of the deals they do make.

(3) It would cut down on the kinds of settlements that draw objections. If there is an active named plaintiff involved, it is less likely counsel will be able to get away with coupons, illusory "injunctive relief," or exorbitant attorneys’ fees. Of course, this may very well be one of the reasons that adequacy is not enforced that vigorously. When you get right down to it, most parties involved in class-action settlements–including courts–do not want to see a settlement derailed just because the lawyers have asked too much.

 

  • Brian Perryman

    Andrew, as usual, great post. The only quibble is that Professor Mullenix’s name has been spelled incorrectly.

    [Thanks, Brian. I've changed the spelling. - AJT]