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.