Class Action Countermeasures : Class Action Lawyers & Attorneys : McGuireWoods Law Firm : Complex Litigation, Mass Torts

In years past, when I was a budding class-action nerd at O'Melveny & Myers, I used to look forward to the ABA's annual convention on class actions. While I couldn't go myself (not cost-justified for baby lawyers), John Beisner would always come back and circulate Professor John Coffee's Five-Year Reviews of class action law. I learned a lot about Rule 23 that way--not just the doctrine, but the way that the lawyers were actually using the Rule. Those five-year reviews were an essential guidebook for me as I made my way in an area of law that often seemed like a foreign country.

Fast-forward a few years, and, for various reasons, I haven't felt the same urgency about keeping up with Professor Coffee's reviews. And that was why I was delighted to read fellow blogger Paul Karlsgodt's post linking to the latest one.  I immediately downloaded the new survey (The New Class Action Landscape: Trends & Developments in Class Certification & Related Topics), transferred it to my trust iPad, and sat back to get a guided tour through a country I visit quite often, but from a skilled tour guide.

This year, Professor Coffee was joined by Professor Alexandra Lahav. Unfortunately, the result was far less than ideal. In fact, reading this survey was like joining a tour where the guides spent a great deal of time vaguely lost and telling me what used to be in various locations, while occasionally missing the really great sights they were standing in front of.

Specifically, there were several disturbing issues with this survey of the "New" Class Action Landscape:

• Lots of things in it are hardly "new". Professors Coffee and Lahav spend significant time, for example, in their adequacy discussion focusing on Berger v. Compaq Computer Corp. (82-84), and Judge Posner's opinion in Culver v. City of Milwaukee (97-98).  Neither of these are poor opinions, but both are more more than ten years old: there are law firm partners who have practiced their entire career with these precedents. And Judge Posner alone has produced a host of significant cases about the adequacy requirement since then that the survey simply doesn't mention. Placed next to these old chestnuts, some of the survey's omissions are mystifying: why cite the ten-year-old Culver as a "recent" example of the Seventh Circuit's opinion of incentive payments (97), but ignore the actually recent Espenscheid?
• It gets basic pieces of Rule 23 wrong. For example, the survey contends that an important part of the Rule 23(a)(4) inquiry involves the question of adequacy of counsel. (79) True enough, up until 2003, when Rule 23(g) was introduced as a specific replacement for Rule 23(a)(4)'s inquiry into class counsel. For the first few years after the 2003 amendments, it was understandable that people might confuse this inquiry; Rule 23(g) has now existed for a decade.  There is simply no excuse for getting this wrong.
• It ignores many significant recent cases and trends in class-action litigation. There's no mention of the Supreme Court's decision about loss causation in Halliburton. (A particularly strange omission since the review argues that the 2011-12 Term was heavily pro-defense (176).) There is no mention of Klier v. Elf Atochem (and no discussion of the growing controversy over cy pres relief.) There is no mention of the Ninth Circuit's influential Bluetooth opinion. There is no discussion of Rule 23(c)(1)(B), and its renewed focus on trial plans. Pilgrim v. Universal Healthcard rates a mention in a string cite on predominance (112) ; there is no discussion of how it is the first appellate court opinion to smile on the motion to strike. In other words, while at times our tour guides are focusing on ten-year-old trends that are really just background now, at other times they completely miss those cases that most practitioners have been focusing on. I'm on record as believing that understanding terrain is vitally important; in this case, the errors and omissions have sorely diminished my trust in my guides.

Contrary to what some might think at this point, I really don't like saying that the academics in my area of law are out of touch. I don't want them to be. I want class-action scholars to be much smarter than me, much better-informed, and much faster to spot trends in case law that they can see from their armchairs that I might miss in the trenches. And there are some interesting and informative discussions in here, in particular on burdens of proof (30-33), numerosity (65-68), and typicality (71-75). (Even here, however, the discussion is less a discussion of recent trends, and more just an overview.)

What makes this so frustrating is that Professors Coffee and Lahav are both accomplished class action scholars, who usually do outstanding work. Like I said before, I used to look forward to Professor Coffee's five-year reviews with great anticipation, because I knew I would learn something new. I didn't have to worry about filtering out wrong information, or wading through well-established precedent. Both of these scholars are capable of better than this, and that's exactly what I wish they had made available.

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In Wal-Mart Stores, Inc. v. Dukes, Justice Scalia registered his disapproval of using statistics to litigate liability in a class action, writing

The Court of Appeals believed that it was possible to replace such proceedings with Trial by Formula. A sample set of the class members would be selected, as to whom liability for sex discrimination and the backpay owing as a result would be determined in depositions supervised by a master. The percentage of claims determined to be valid would then be applied to the entire remaining class, and the number of (presumptively) valid claims thus derived would be multiplied by the average backpay award in the sample set to arrive at the entire class recovery -- without further individualized proceedings. We disapprove that novel project.

(Emphases added, internal citation omitted.) Several months later, Connecticut Law Professor Alexndra Lahav wrote a spirited defense of the practice of "Trial by Formula," in the Texas Law Review, titled, aptly enough, "The Case for Trial by Formula."

I would love to say that Professor Lahav's argument is sound as far as it goes, but it goes a little too far. What do I mean by that?

For the most part, Professor Lahav argues that "Trial by Formula" (which she takes to mean statistical sampling in litigation) is an excellent way of ensuring equality of outcome in mass tort litigation. As she writes:

The problem with this understanding of injury valuation is that the tort system does not approximate the actual damages suffered by the plaintiff. The tort system is an institution that is supposed to monetize injuries, yet injuries are not readily monetizable. What the tort system does is assign a value to the damages suffered by the plaintiff. The amount of money damages the system assigns to injuries is contextual and cultural. This means that tort values are comparative; the value assigned to a given injury is dependent on values assigned to other injuries. The cultural contingency of tort damages is the reason that the amounts awarded in tort cases are sometimes controversial. This is also the reason that critics of the tort system are able to say that the system is unpredictable. The problem of valuing injury is not limited to the trial context. In settlement, even if one is able to accurately discount the amount of damages by the probability of the defendant being found liable, the damages assigned to a plaintiff (the amount that is to be discounted) will still be contested.

(Emphasis in original.) To ensure an accurate valuation of damages, Professor Lahav argues that courts should be more rigorous in their statistical methods, an argument that I (and most lawyers) would have no problem with.

To the extent that Professor Lahav argues that statistical sampling may help to smooth out the variations in damages awards, I think she has a strong case. And while I can certainly see where there are sound strategic arguments on the other side (who chooses the sample? for example), she has at least helped to frame an issue that both plaintiffs and defendants might agree on. (And, in many cases, they do. This is why matrix settlements have become popular in mass torts.)

The problem with her argument is that--at least implicitly--she does not confine herself to using statistical sampling to measure damages. Instead, she appears to also want to use it to determine liability. She tips her hand in two places. The first is in her discussion of several class actions that used statistical techniques, not just to determine the amount of damages, but also to determine the fact of injury for different plaintiffs:

In the late 1990’s, a few trial courts experimented with binding statistical adjudication procedures. In Hilao v. Marcos, a federal court used statistical methods to adjudicate a class action brought on behalf of persons who suffered human rights abuses under the regime of Ferdinand Marcos in the Philippines. A special master conducted on-site depositions in the Philippines, and based on these he recommended a recovery schedule to a jury, which then adopted his recommendations (for the most part). The Ninth Circuit upheld this procedure. Around the same time, a U.S. District Court judge in Texas tried 160 asbestos cases and was prepared to use these verdicts to extrapolate to the remainder of asbestos cases consolidated before him. The Fifth Circuit quashed his efforts, holding that the extrapolation of the results of the sample verdicts violated the defendant’s due process right and the Seventh Amendment. No trial court has followed in the footsteps of these innovators and the appellate courts continue to express hostility to mandatory statistical adjudication of this type.

(Emphasis added, footnotes omitted.) The second place is more explicit, when she discusses how one might use statistical sampling to root out fraudulent claims:

Trial by Formula has the potential to resolve many other problems that plague modern litigation. For example, commentators have repeatedly lamented patterns of baseless claiming in mass tort litigation. Sampling offers a way of addressing the phenomenon of fraudulent claims and creating incentives to curb them.

(Emphasis added, footnotes omitted.) In both of these cases, the problem that the courts (and the plaintiffs) have worried about is not the statistical determination of damages once liability has been established, it is the statistical determination of liability itself. This is the same issue that Justice Scalia had in the Dukes case. To repeat his specific issue (as opposed to the summation):

A sample set of the class members would be selected, as to whom liability for sex discrimination and the backpay owing as a result would be determined in depositions supervised by a master. The percentage of claims determined to be valid would then be applied to the entire remaining class ...

It isn't the use of statistical sampling to determine damages that defendants (or the Court) worries about. It's the use of sampling to determine liability that causes problems, because statistical sampling cannot tell which plaintiffs are actually entitled to relief and which are not. Professor Lahav argues that "Trial by Formula" works because we want equality of outcome--treating like cases alike. But no defendant--or anyone else concerned with due process--wants unlike cases treated alike, particularly when the difference between the cases is that in one the defendant is actually liable and in the other it is not. That's the bridge too far, and that is the one that Professor Lahav and others either don't notice--or won't admit--they are crossing.

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For the last six or seven years, a growing academic literature has put forward the argument that the primary justification for class actions is not to compensate absent class members, but to deter corporate wrongdoing. That justification has formed the basis of a number of arguments, from Professor Fitzpatrick's proposal that class action attorneys earn a 100% commission on their cases to Professor Lahav's that the law should go a little easier on the class-action lawyer. It also underlies many of the fears that tightening the class-action rules may lead to rampant corporate misconduct.

Few practitioners or scholars have really confronted the deterrence justification for class actions in depth. However, today's piece of Classic Scholarship, Class Action “Cops”: Public Servants or Private Entrepreneurs?, by John Beisner, Jessica Miller, and Matt Shors (57 STAN. L. REV. 1441), was an early and muscular entry into the debate. Beisner and company argue that, because of the incentives they face, class-action lawyers neither can nor should act as "private attorney generals," and that, in doing so, they distort the careful choices about how best to enforce the law that government must make.

First, they point out, there is no justification in the law for a "pure deterrence" class action. In fact, allowing class actions to operate as purely "private attorney general" vehicles would likely violate the Rules Enabling Act.

In the first place, the concept raises fundamental questions about the validity of the class action device under the Rules Enabling Act. After all, if the true purpose of the class concept were to facilitate private law enforcement, it would be a substantive right. The Rules Enabling Act, however, authorizes the federal judicial branch to create nothing more than purely procedural mechanisms.

Then, they show just why it is that we (rightly) don't trust the idea of private enforcement in other areas of the law.

In this regard, the private law enforcement characterization promoted by some class action attorneys is no different from permitting self-appointed “police officers” to roam the streets, set up speed traps, pull over drivers (whether or not they were speeding), and give them the option of either (1) spending a few nights in jail, or (2) resolving the problem by paying the police officer (for personal benefit) whatever he demands. No doubt, the self-appointed “cops” would argue that this would be an efficient system. After all, it would discourage speeding.
But justifiably, the public would have no trust in--or respect for--such a system of law enforcement, since prosecutorial decisions would be driven (or at least would have the appearance of being driven) by the overwhelming financial self-interest of the police officers themselves.

(In layman's terms, nobody rooted for Jackie Gleason in Smokey and the Bandit.)

Nonetheless, many continue to argue, if Smokey isn't doing his job properly, don't we need someone to backstop him? Isn't that a strong argument to bring in Dog the Bounty Hunter, to what the cops don't have the time or resources to do? [Warning: Link has autoplaying audio.]

As Beisner and company point out, the answer there is probably "no." First, Dog doesn't have the same incentives as real police. He's going to chase after the most telegenic fugitives, rather than the most dangerous. (Witness his current "Most Wanted," celebrity fugitive Randy Quaid.) And that will lead to over-deterrence in high-profile cases where the government is already working, and under-deterrence where the work is harder and the rewards less certain. The same thing happens in class actions, where many lawyers choose to just piggyback on government investigations or voluntary corporate action.

The reason class action lawyers prefer to follow--rather than to lead-- government investigations is simple: those lawyers prefer “no research” lawsuits that appear likely (from the investigation itself) to yield lucrative settlements with only a minimal investment of time and money. In contrast, government lawyers, who by definition are not driven by profits, tend to be willing to spend more time doing the factual and legal research needed to decide what kinds of cases should be brought, not simply to increase revenue, but to further the public good.

Moreover, there may be good reason the government might choose not to chase after Randy Quaid.

"The “gap-filler” argument also ignores that state officials often choose not to initiate legal action for reasons other than inadequate resources. For example, state attorneys general, as elected officials tasked with pursuing the public interest, have discretion to determine that, although a particular lawsuit might produce a recovery, the lawsuit should not be brought."

When might it choose not to bring a lawsuit? Say, when doing so might harm another vulnerable population within the state.  (And here, despite mightily trying to bring this analogy around to reality TV and celebrity fugitives, I admit defeat.)

Their solution: if you want private cops, then you have to treat them more like cops than private businessmen. Cops don't make 30% commissions on their drug busts, and with good reason. That kind of incentive would warp their instinct to protect the public rather than line their pockets. (Similarly, SEC lawyers don't get to keep 30% of their fines, and yet they can still draw heavy criticism for under- or over-enforcement.)  Everything about the class action rules as they stand and are enforced--the emphasis on procedure, the allowance of contingency fees, the use of common funds--rests on the assumption that the attorneys are securing compensation for civil wrongs, rather than supplementing actual law enforcement.

But the most interesting aspect of this debate to me, after having reread this article, is that it makes one thing very clear. The real issue here is not whether corporations should be allowed to effectively self-regulate. That argument is difficult at the best of times, and these are not the best of times. But if we don't trust corporations to effectively self-regulate, why would we trust plaintiff's lawyers--whose incentives match the corporations' rather than the government's--to do the exact same thing? The best answer I can come up with isn't very flattering to the plaintiffs' lawyers.

[Disclosure: At the time the article was written, John, Jessica, and Matt were all colleagues of mine. To my knowledge, none of them have ever made Burt Reynolds or Dog the Bounty Hunter references.]

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Last week, my post on the Ten Most Interesting Articles in 2011 got linked by Professor Alexandra Lahav at the fine Mass Tort Litigation Blog. She recommended my list of ten interesting but unwritten articles to students looking for notes topics, although she cautioned that 

I don't agree with Mr. Trask's assessment of my own work, legal academia or what people ought to write about …

Which is a completely fair opinion, even though I'm not entirely sure what those assessments are myself. Leaving aside what I think of Professor Lahav's work (I've featured it three times on this blog, and included it in one "Ten Most Interesting" list--I think her work is thought-provoking and worthy of serious discussion), I recently bemoaned the fact that 2011 was not a great year for interesting class-action scholarship. (Specifically, I complained that too many articles either previewed the same Supreme Court cases, or predicted the death of the class action.) And, in doing so, I stepped into a old debate that has grown heated in the past few months: what is the point of law school (and law professors) anyway?

The sources of that heat make this a particularly important question right now. The cost of legal education keeps rising, and so does legal-sector unemployment. While it grows more expensive, it also appears that legal education is becoming less relevant to actual law practice. Most of us have to justify our existence sometime, and law professors are taking their turn in the hot seat. They're not all doing it gracefully. While some have been thoughtful, others have been defensive, or self-congratulatory.

So what are legal scholars good for? They have two primary roles: they teach students and they research. I'll leave the teaching alone because it's been (let's just say "too long") since I was in law school, and I don't currently interview new hires.

But legal scholarship? Here I have an opinion, one that's been informed by reading pretty much everything published on class actions in the last four years through LEXIS or SSRN. I frequently rely on legal scholarship about class actions, on this blog, in my other writing, and in my own legal work. I think scholarship is more useful than most lawyers realize, even if you do have to sift a lot of silt to get to the gold. Since this is a defense-oriented blog, I focus on scholarship that is useful for class-action defense lawyers, but those are hardly the only worthwhile articles.

But I also think that legal academia is suffering from an ethos problem, one that stems from too much legal scholarship making too little effort to be relevant or interesting to those actually in the law. And, since law review articles may cost as much as $100,000 of student tuition each, that's a shameful waste of resources.

I'm a firm believer in academic independence. It enables scholars to follow where the facts and law lead for a given problem. That's something professional advocates can't do in the same way. And I accept that academic independence means that legal academia will never be merely a free R&D department for private lawyers.

But there is no reason, given the money law students (and, by extension, taxpayers, law firms, and clients) spend to fund those articles should result in so many proposals that ignore current law, faux dissents to existing opinions, jeremiads, or rehashes of the same Supreme Court cases. It should be eminently possible for academics to write articles that are original, useful, and still interesting to read.

So, based on those assumptions (and because I have a book deadline at the end of the week), here are ten simple things legal academics could do to make their work more relevant, and more interesting:

1. More looking for the overlooked. Professor Miriam Gilles wrote an excellent article on class-action arbitration--in 2005. It was good because lawyers weren't paying much attention to arbitration at the time. In the past year, as the legal status of class-action arbitration got resolved, we saw a flurry of articles rehashing Professor Gilles, but nothing focusing on emerging trends in numerosity, motions to strike class allegations, or new uses for superiority. Why not? Why weren't there any professors watching these trends?
2. More focus on district court cases. Where do you find the overlooked? On the front lines. And those are the trial courts. Based on two years' work with LEXIS, I can confidently say that the federal court system produces between 50 and 100 opinions in class actions each week. That's a lot of raw data, and a lot of overlooked trends. Who's looking there? Hardly anyone. Instead, everyone focuses on the same few appellate cases.
3. More focus on how the common law actually works. Many law review articles focus on Congressional action, what the Supreme Court should do, or arguments that are just plain contrary to existing law. But it takes little effort to come up with our own wish lists and invoke the genies of a unified Congress or Supreme Court. In our common-law system, most of the real change occurs when lawyers convince a trial court to rule their way. (That then generates those cases for appeal that the Langdell method loves so much.) So why aren't more articles proposing new arguments for lawyers to make?
   
4. More work with primary litigation documents. District court cases shouldn't even be a cutting edge. Lawyers breed documents like crazy, and in these days of ECF and PACER, it is entirely possible to get access to entire court dockets without leaving the comfort of your office. So why aren't law professors taking more advantage of these rich seams of raw data? Imagine a survey of the most common commonality arguments. Or the most common discovery requests, and whether they get actual responses.
5. More natural experiments. There are 13 federal judicial circuits, 89 federal district courts, and 50 state court systems. Each of these has different judges, and come up with subtly different lines of cases. Economists love stuff like this; it means they can test all kinds of crazy theories. Why haven't our law professors done that? Got two different rules on experts at class certification? You can test how that affects certification rates, or filings of class actions. Where are these articles?
6. More predictions and more followups. Scientists make predictions, and then follow up on them later. Legal scholars make predictions ("The class action will die soon!") but rarely follow up on them. And yet, the followup is the most informative part. It even adds some drama--everyone loved when Oprah would revisit her best stories.
7. More changing of minds. Unless a scholar knows everything when she starts out, she should encounter facts that will change her views at points. (It's certainly happened to me.) Yet we rarely see that in scholarship.  Depaul professor Mark Moller recently did so in an interesting article on due process arguments. Why isn't this more common in articles? From a rhetorical standpoint, it adds credibility to an argument. And from a human-interest standpoint, it adds some drama.
8. Less overt ideology. Academics are certainly free to root for whomever they want and vote for whomever they like. But the ideal of the academic is that she is free to go where the facts lead. The appearance of partiality can harm even disciplines that should be immune from political controversy. So why not leave the partisanship to the lawyers and think tanks and tackle questions without preconceptions? I guarantee scholarship that aims toward neutrality is more useful to judges, and there is no question articles would be more interesting if we couldn't predict the results just from the author's name.
9. More fact-checking. Plaintiffs make one claim. (Class actions as a whole deter corporate wrongdoing.) Defendants argue the opposite. (Class actions in practice overdeter by focusing on government investigations.) The factual debate has a real impact on which legal rule is a better idea. Who's right? Legal scholars are ideally placed to referee these debates, particularly if they're seen as open-minded and not overtly ideological. 
10. More identification of stakes. Legal debates happen for a reason, and it's rarely just that one side is good and the other is not. Instead, specific arguments often involve specific strategic and tactical choices in litigation. Identifying the practical stakes to various legal positions helps to put those debates in context--for students, for judges, and for practitioners new to an area.

These suggestions are simple, but not easy. Fact-checking takes work. Convincing student editors that district-court rulings have merit will be a slog. But they should lead to scholarship that's both interesting to read and actually relevant to how lawyers argue (and judges decide) cases.

I've had my fill of top ten lists, and I'm sure you have too. Next week, we're back to the usual "case and a thought" method. So come back then for the classic case In re General Motors Pick Up Truck Fuel Litigation, and a review of Judge Posner's How Judges Think.

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 During the latter half of 2011, I was privy to the following exchange between a well-known law professor and a well-known practitioner:

PROFESSOR: Yes, I wrote a piece which concluded that the class action is dead. You heard it here.
PRACTITIONER: And yet plaintiffs keep filing the things …

That exchange (which I promise actually happened), summarizes the primary trend in class-action scholarship in the last year: declaring the device "dead," either because classes are now too hard to certify because of Dukes, too hard to bring in the first place because of Concepcion, or too expensive because of curtailment of attorneys' fees. Leave aside the fact that these arguments are most likely wrong (because, well, plaintiffs keep filing the things); they're dull as well. So, while the federal court system made it difficult to choose only ten significant cases this year, the rush of early autopsies of the class action made it difficult to scrape up ten interesting articles. That said, here are the Ten Most Interesting Class Action Articles of 2011:

1. Collective Justice or Personal Gain (Akron L. Rev. 2011) - Professor Stephen Meili provides outstanding empirical work on how plaintiffs' lawyers keep class-action plaintiffs involved in their in cases. It provides (1) a fascinating peek behind the curtain, and (2) great fodder for further discussion of whether plaintiffs' counsel are fulfilling their fiduciary duty to the class.
2. Unreliable Securities for Retirement Income Security: Certifying the ERISA Stock-Drop Class (Vanderbilt L. Rev. 2011) - This student comment cogently describes an emerging trend in securities class actions--the ERISA stock-drop class action--and one of the key controversies within that trend. When people ask why we bother having student-run law reviews, a piece like this helps to make the argument in support.
3. Embedded Aggregation in Civil Litigation (Cornell L. Rev. 2011) - The late Professor Nagareda discusses how even seemingly individual litigation can contain issues that require courts to make decisions about aggregating claims -- and he uses those cases to show why the constraints of Rule 23 are more than just "hypertechnical bugaboos." Fascinating reading.
4. Majority of Class Action Publication Notices Fail to Satisfy Rule 23 Requirements (Rev. Litig. 2011) (See also.) - Another excellent empirical study which asks: does class-action notice do what we intend it to? Most practitioners suspect that notice does not in fact actually notify the vast majority of class members about their claims. This study confirms that suspicion with cold, hard facts.
5. Two views of Class Actions (Fordham L. Rev. 2011) - Professor Lahav's article is hardly flawless, but the first half gets at a question that deserves a lot more discussion: are class actions primarily a joinder device or some other kind of legally transcendent entity? These two strains of thought continue to compete with each other as courts debate the propriety of various kinds of class actions, and some of the pre-certification tactics employed by the parties.
6. "Abandoned Claims" in Class Actions: Implications for Preclusion and Adequacy of Counsel (George Wash. L. Rev. 2011) - Abandoning claims (or "claim-splitting") has long been a practice of class-action plaintiffs. For almost that long, it has worried courts, who don't like to leave absent class members in the lurch. Professor Sherman provides a thoughtful review of various preclusion cases, and suggests that the phenomenon may be more of a superiority than an adequacy problem.
7. Financiers as Monitors (WP 2011). After the now-traditional "death of the class action" introduction, Professor Burch provides an interesting justification of third-party litigation financing, arguing that third-party financiers may provide a necessary monitoring role for entrepreneurial plaintiffs' lawyers. Having heard a number of financiers talk about how they fund litigation, I'd say that Burch's argument rings true.
8. Class Action Professional Objectors: What To Do About Them? (WP 2011) - Professor Lopatka and Judge Smith have provided an interesting analysis of class-action objectors. While they're largely critical of objectors, they do recognize that some objections have merit. So the question they seek to answer is: how should judges separate the legitimate objections from the objectors-for-profit? Their answer (large appeal bonds) won't be popular with some non-profit objectors, but they do put forward an intellectually honest proposal for discussion.
9. Overlitigating Corporate Fraud (WP 2011) - Professor Erickson asks a nagging question: do securities fraud class actions really deter corporate misconduct that has fallen through the cracks? Or do they just draft along behind government investigations and other existing enforcement mechanisms? She approaches this from a doctrinal rather than an empirical standpoint, but it's still a valuable first step in testing the deterrence justification that so many class-action proponents put forward.
10. Short Sales, Class-Action Lawsuits, and Potential Information Leakages (WP 2011). Professors Blau and Tew have noticed two interesting phenomena. First, some plaintiffs' lawyers leak their securities class-action complaints to short-sellers, a conclusion the professors reach by looking at spikes in short-sale activity just before a class action gets filed. (The tactic makes sense: short sales of the stock will put pressure on the corporation's management to settle a case. It may also raise some adequacy concerns, since what class counsel has done is to drive down the price of the stock in order to benefit themselves.) They also notice that post-filing short sales tend to correlate with the more successful securities class actions.

I get the impression, even from some of these articles, that academics think class actions aren't so much dead as dull; they're just kind of bored with the device as it stands. These professors tend to think that class actions are cool because of their ability to effect large-scale social change or raise big constitutional issues. Now that the Supreme Court has issued a record five opinions on class-action practice in a single year, I can see where it might be hard for them to identify the next area of constitutional import. Since, as Daniel Girard observed this year, we may have witnessed the end of the "Golden Age of the private attorney general" (a debatable but interesting observation), it's much harder to write articles that recommend new areas in which to file class actions.

Except: plaintiffs do keep filing the things. And, in doing so, they've raised a number of really interesting issues of legal strategy and civil procedure that the professors either haven't noticed, or don't think are worth their time. So here's a list of the ten most interesting articles that didn't get written this year.

1. The changing role of adequacy in class-action practice. Where does one strike the balance between a class representative who can provide discovery and oversight, and the ability to actually bring a class action without investing thousands in finding the "perfect" representative? How much does class counsel's role in the litigation matter? The Seventh Circuit in particular made three key rulings about adequacy this year: CE Design, Creative Montessori, and In re Aqua Dots. What do these cases suggest about the inquiries into adequacy of counsel and adequacy of representation?
2. The changing role of superiority. Should the analysis include the effects on non-parties to class actions? The Sixth Circuit has held that the superiority inquiry can look at the effect of a class action on a state's elderly population. How does the logic of that holding apply in the notoriously circular securities class actions? 
3. The evolving debate over the propriety of the motion to strike class allegations. Currently, the uneven development of motion-to-strike jurisprudence has resulted in vastly different practices across jurisdictions. What does this say about how Rule 1 and Rule 23 can intersect? How will motions to strike affect the kinds of class actions that plaintiffs bring? Do different holdings about the motion to strike result in different certification debates?
4. The emerging circuit split over the treatment of experts at class certification. There's one good article out there already, but it predates the rush of opinions that occurred this year. How do those affect the debate? Does Scalia's dicta in Dukes have any effect?
5. The class action and fiduciary duty. Various courts have recognized that named plaintiffs, counsel, and even judges have fiduciary duties to absent class members. But what are the precise contours of those duties? How (and how often) do courts actually enforce them?
6. The various new challenges to the "feasibility of joinder" aspect of numerosity. This has been a fascinating, though small, development over the last eighteen months, one that warrants more attention.
7. Public relations and class actions. Despite the increasing amount of raw data out there, no one has really done a comprehensive study of the role of public relations strategies in class-action practice, or an empirical study on their effectiveness. Do class actions with media pushes result in settlement or larger awards?
8. Follow-on class actions. Do class actions that follow recalls or investigations get certified as readily as "original" class actions?
9. Copycat class actions. What are the incentives for bringing them? How often do they actually work for the copycats? How do "original" plaintiffs and defendants fight them?
10. Settlement timing. At what point in litigation are class settlements most likely to occur? Most practitioners' intuition is that settlement occurs most frequently after certification. But is that actually the case? If not, what does that mean for class-action strategy?

I'll concede that these topics aren't as sexy as pronouncing on the latest Supreme Court opinions. But they're real trends and controversies, they touch on interesting aspects of representative litigation, and exploring them would be of real use to both practitioners and policymakers.

Regardless of whether those ten topics turn into articles, I have no doubt that the various battles still being fought over class certification on a daily basis will yield further scholarship. And, as soon as some aspect of class-action litigation turns sexy again, I'm pretty sure these same professors who pronounced the device "dead" will talk about its surprising comeback.

When that happens, remember: class actions were never dead. After all, plaintiffs kept filing the things.

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As I've discussed before, there are few areas of law as polarized as class actions. The plaintiff and defense bars in class-action law rarely agree on anything, from the proper scope of Rule 23 to what a class action is in the first place. And I'm not the only one to have noticed this divide. Connecticut law professor Alexandra Lahav recently published an essay in the Fordham Law Review on "Two Views of the Class Action."

Lahav's essay could improve from more focus.  She winds up talking about two different pairs of competing views--one of class actions, and one of class-action lawyers lawyers--that don't line up perfectly themselves.

The first set of competing views she discusses are often called the "entity" and the "joinder" views of class actions. The entity view (often espoused by plaintiffs in briefing) argues that a class is a single entity that exists independently of the class representative. This label is often helpful for courts trying to certify a class, or lawyers seeking greater control over their case. (If a class is an entity, then there is little need to listen to a rebellious class representative, or even objectors.) By contrast, defense lawyers often invoke the joinder analogy to remind the court that a mere joinder device cannot and should not change the substantive rights of the parties.

The second set of competing views involve how to look at class-action lawyers. One school of thought looks at these lawyers as entrepreneurs, businessmen who conjure cases and then find plaintiffs to staff them; the others as private attorneys general who serve the public good for a profit.

Lahav's account of these two sets of competing views gets confused in a few places. For example, she describes both the entity and the entrepreneur tropes as defendants' views of class actions, even though defendants traditionally do not argue (or believe) that litigation classes are cohesive entities. Instead, they often see--and point out to the court--a loose collection of people with different problems and different claims, not all of equal merit. Similarly, while plaintiffs may on occasion argue that a class action is just a joinder device, they are far more likely to describe a class as a coherent entity that exists independently of the class representative.

Moreover, rather than really explore how these conflicting views have informed class-action doctrine, Lahav then embarks on a completely different discussion. Relying heavily on references to poets Wallace Stevens and Percy Shelley, and novelist Nikolai Gogol, she asks whether plaintiffs' lawyers are rogues harnessed for a useful purpose, or a redemptive force that deserves more respect. (Personally, If we're going to make poetry out of something as prosaic as lawyering, I'd prefer Anna Barbauld's approach myself.)

The point that Lahav is leading up to (after invoking Gogol's novel Dead Souls) is that the law often treats class-action lawyers as greedy men whose greed is harnessed for the public good. In Lahav's view, this is a problem, not because class-action lawyers may in fact step over the line, but because seeking to limit their wrongdoing apparently causes the problem in the first place.  As she puts it:

The lawyer is sometimes a rogue, but the more our system accepts this as true and seeks to harness the rogue, the more our system creates roguish behavior.

There are two problems with this final argument. First, literary references or no, Lahav doesn't explain how treating class actions as susceptible to abuse winds up creating those abuses, and that failure to identify how the process works undermines her credibility. It also means her logic could apply to anyone, including defendant corporations. By Lahav's logic, treating corporations like criminals by regulating them just encourages them to commit illegal acts--a conclusion I doubt she would agree with. And that's the second problem with Lahav's article: it provides a one-way ratchet that gives plaintiffs' lawyers the benefit of the doubt, but no one else. Courts, she argues, should view the class-action lawyer as "capable of redemption," but not the defendant (who should be deterred from exploiting others).

As I've explained before, law (not to mention legal strategy) works best when it recognizes that everyone has a little rogue in them. Corporations are capable of good and bad things, and so are the self-appointed cops who police them. Assuming that one side can do no right and the other can do no wrong very rarely leads to accurate descriptions or good policy outcomes; while it may encourage the side that can do no right to clean up its act, it usually results in the side that can do no wrong testing exactly how far it can go.

I'm not saying Lahav's essay is useless. The first half contains an interesting (if somewhat muddled) description of several rhetorical tropes used in class-action practice. I just wish that the second half had stuck with analyzing the rhetoric instead of indulging in it.

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 Last year, I discussed Northwestern professor Martin Redish's argument that class actions are unconstitutional. Redish had predicted--and I largely agreed--that the argument would fall on deaf ears. It turns out we were both wrong. Leaving aside those defense lawyers who adopted his arguments about the Rules Enabling Act, Alexandra Lahav of the University of Connecticut has now reviewed his book Wholesale Justice.

Lahav praises the book, but largely disagrees with its conclusions. Specifically, she takes issue with Redish's argument that class actions violate separation of powers, and that they lack democratic accountability.

In arguing against Redish's separation-of-powers critique, Lahav observes that this separation is most often enforced through the use of "checks and balances"; and those, she says, are sufficient in their current form. As she points out, when abuses of class actions have grown especially prevalent, the legislature has stepped in to address the problem. In particular, it has done so when it enacted the PSLRA and CAFA. Lahav also claims that class actions are constitutional in a larger sense because they are--contrary to Redish's argument--subject to democratic accountability. As she puts it:

Not only are class actions salient on a national level, but individuals also have access to class actions, in the sense that many of us have been members of class actions. We have received notices in the mail and gathered that while we will only obtain a very small recovery, the lawyers managing these cases will get millions. Class members are entitled to call the lawyers in charge of the case and there is often a toll free number available for that purpose. Class members are also entitled to write to the court as well as to appear at a fairness hearing about the settlement.
The problem is that the class actions to which citizens have access— class actions of which they are actually a member—lack salience. This is either because class action notices are indeed mind numbing or because the amounts at stake are simply too small to bother over. Most people do not call that toll free number, protest the settlement in person or in writing, or even respond to the notice. Opt-out rates are low.

(Internal footnote omitted)

However, aside from a throwaway mention, Lahav's discussion of accountability leaves out perhaps the most important group to questions about class actions: class-action lawyers. Courts that regularly hear class actions have noted that, in most cases, the plaintiffs have little to no influence. Instead, they are "cats paws" for lawyers that even she points out stand to get millions for a case. (The cats-paw relationship has gone so far, in some cases experienced lawyers name plaintiffs without consulting them first.)

It's unfortunate that Lahav largely avoids this discussion, because it's where the real meat of the debate over the legitimacy of class actions lies. Those who worry about litigation-enforced "blackmail" are not worried about the plaintiffs looking to enforce their two-dollar claims. They're worried about more interested parties--the lawyers with the skewed incentives and the actual control over the lawsuit.

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 When the Supreme Court granted certioriari in Dukes v. Wal-Mart Inc., the Vanderbilt Law Review grabbed a number of law professors who study mass torts and asked them to contribute essays to its En Banc feature. One of these--Richard Nagareda's Common Answers for Class Certification--was one of the most interesting articles published in 2010. Several of the other contributions also posed some interesting questions, among them Alexandra Lahav's The Curse of Bigness: The Optimal Size of Class Actions. 

Lahav doesn't really address the question she asks in the title; she offers no verdict on the optimal size of a class action (unless the answer is "as big as you can make them"). For the most part, she focuses on how courts could use the promise of probabilistic evidence to justify certifying classes for litigation. But the introduction to her essay poses an interesting rhetorical issue: when arguing about class actions, does the size of the lawsuit matter?

There's no question that many press outlets, when covering Dukes, focused on the fact that it was the largest civil-rights lawsuit to be certified.  After all, the size of the lawsuit is something the average reader understands immediately. And there is no question that courts often call attention to the size of class actions, both when granting certification and when denying it.

As Lahav correctly points out, there is no doctrinal limit on how large a class action may grow. (Rule 23(a)(1)--the numerosity requirement--does establish on how small one may shrink.) Instead, most lawyers use size as a proxy for one of the other Rule 23 requirements. Plaintiffs use the size of the class to bolster their arguments that a class action is superior to other forms of resolving a given dispute. For example, as the the Fifth Circuit put it in Jenkins v. Raymark Industries, when a class is large enough, it may be

superior to the alternative of repeating, hundreds of times over, the litigation of the state of the art issues with, as that experienced judge says, ‘days of the same witnesses, exhibits and issues from trial to trial.’

Defendants, on the other hand, often use size as a shorthand for heterogeneity (as they did in Dukes). As Lahav puts it:

The statements about the size of this class action appeal to an intuition that the court’s ability to provide individualized justice is inversely proportional to the size of the class action.

And, to the extent that a larger class is more likely to encompass various different kinds of claimants, that rhetoric can be useful. Defendants also may point out that the larger a class is, the more likely that it may pressure defendants into settling claims that have no merit, just to avoid the possibility of ruinous liability.

So does the size of a class matter? It depends on why the party is invoking it.

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