One of the perennial questions at class certification (at least under Rule 23(b)(3)) is whether the class is superior to other forms of adjudication. Defendants will often raise individual lawsuits as a viable alternative, but, in cases involving heavily regulated industries, they may also invoke the possibility of allowing a regulatory agency to address the problem as well. Stanford professor David Freeman Engstrom has pursued that argument to its logical extreme in his epic (97-page) Yale Law Journal article Agencies as Gatekeepers. (PDF here.)
Professor Engstrom’s primary focus is on whether any of the various scholarly proposals to give regulatory agencies authority to oversee, supplant, or coordinate private litigation is a viable means of solving the various problems that arise from private enforcement of statutes (or "regulation by litigation"). This question is of paramount importance to class action defense lawyers.
And for those defense lawyers, the first part of Professor Engstrom’s article is the most immediately useful. There, he rehearses the various critiques of private legal enforcement that will sound familiar to defense lawyers, including "piggybacking" (filing a class action on top of an active government investigation) and collusive settlements. And his prognosis is not hopeful:
many of the most pressing coordination problems that afflict private enforcement—from piggybacking and adversarial asymmetries to repeat-play dynamics and collusive settlements—are either imperfectly remediable by way of ex ante legislative fixes or, worse, entirely immune from them. As with the calibration challenges that extend from the zealousness critique, there are hard limits on legislators’ ability to solve coordination problems from afar.
(Emphasis added.) Professor Engstrom’s diagnosis is more nuanced, and includes a number of possible superiority arguments that defendants don’t often use. (For example, allowing one-shot class actions to go forward may compromise the optimal public level of regulation.) Moreover, his later discussions of the best possible gatekeeping regimes also contain some important observations of the limits of large-scale aggregated litigation. While there aren’t a lot of off-the-shelf arguments here, this article is still well worth the time to read.