I haven’t commented much about the Supreme Court’s class action docket so far, largely because this year I was more focused on–in my own small way–trying to influence what it would be. But now that my particular efforts are done, I thought I would focus on each of the cases before the Court this Term. I don’t feel comfortable talking much about Standard Fire Ins. Co. v. Knowles, which addresses plaintiffs’ use of stipulations that limit class recovery to less than CAFA’s $5 million amount-in-controversy threshold, since I was on a team that assisted Ted Frank of the CCAF in filing its amicus brief.
However, several law students alerted me to a pair of student notes touch on the issues in the case, and there’s no reason I can’t share those with you.
First up, Front-End Fiduciaries: Pre-Certification Duties and Class Conflict by Nick Landsman-Roos of Stanford Law School. Landsman-Roos provides a good overall discussion of fiduciary duty, with a focus on binding stipulations. His primary argument:
When an action potentially prejudices or does prejudice a substantive legal right of ab- sent class members, an attorney should have an opportunity to offer a good faith defense—that the course of conduct was undertaken in a good faith belief that it would maximize the class’s recovery. That defense, in turn, can be evaluated in terms of whether it is legitimate, genuine, or pre-textual.
Next, An Illusion of Sacrifice: The Incompatibility of Binding Stipulations in CAFA Cases by Ryan S. Killian of Pepperdine Law School. Killian takes a hard-line stance against binding stipulations:
For reasons theoretical, legal, and practical, the right answer is the most extreme. Judges should impose a per se rule against giving effect to any purported binding stipulations. The theoretical reasons for such a rule have their basis primarily in agency theory. The legal reasons flow naturally from considerations of due process and the obligatory rigorous inquiry into Rule 23(a)(4)’s adequacy requirement. The practical reasons stem from considerations of complex litigation and efficiency.
(Emphasis added. Internal footnote omitted.)
As good student notes should, these both provide all the background one needs to follow along on the Knowles argument.