1,720,975 research outputs found
Financiers as Monitors in Aggregate Litigation
Get PDFThis Article identifies a market-based solution for monitoring large-scale litigation proceeding outside of Rule 23’s safeguards. Although class actions dominate the scholarly discussion of mass litigation, the ever increasing restrictions on certifying a class mean that plaintiffs’ lawyers routinely rely on aggregate, multidistrict litigation to seek redress for group-wide harms. Despite sharing key features with its class action counterpart—such as attenuated attorney-client relationships, attorneyclient conflicts of interest, and high agency costs—no monitor exists in aggregate litigation. Informal group litigation not only lacks Rule 23’s judicial protections against attorney overreaching and self-dealing, but plaintiff’s themselves cannot adequately supervise their attorneys’ behavior. Plaintiffs’ attorneys may represent thousands of geographically dispersed clients, which fosters collective-action problems and makes individual, case-specific information hard to obtain.
An answer to this monitoring problem comes from an unlikely and potentially controversial source: alternative litigation financing. Self-dealing and high agency costs arise in aggregate litigation principally because of the contingent-fee attorney’s dual roles as agent and investor. These roles can pull lawyers in divergent directions; because attorneys front massive litigation costs, they may be tempted to coerce clients into settling so that they can recoup and profit from their investment. Third-party litigation financing, which involves hedge funds, private investors, and venture capitalists investing in and profiting from large-scale litigation, can ameliorate this critical conflict of interest by allowing the financier to bear the financial risk. Shorn of financial self-interest, the lawyer is then free to act as a faithful agent. Although alternative litigation financing can be controversial, this Article seeks to marry profit-seeking capitalists and aggregate litigation in a way that benefits society as a whole and plaintiffs in particular
A New Way Forward: A Response to Judge Weinstein
Get PDFThis short essay responds to Judge Jack Weinstein\u27s essay, Preliminary Reflections on Administration of Complex Litigations, 2009 Cardozo De Novo 1. In so doing, it also provides a condensed version of my earlier article, Litigating Groups, which analyzes group dynamics within nonclass aggregation. By drawing on the literature of moral and political philosophy as well as social psychology, I contend that, in the face of hard cases, of instability and disunity, plaintiffs who have made promises and assurances to one another can invoke social norms of promise-keeping, social agglomeration, compatibility, and the desire for means-end coherence to achieve consensus, mitigate client-client conflicts, and re-tether their attorney to their needs. Thus, using groups to overcome the problems in nonclass aggregation not only makes sense from a group responsibility perspective, it may also harmonize with wealth maximization and individual autonomy goals
On Regulatory Discord and Procedure
Get PDFBusinesses are increasingly global. But domestic courts’ jurisdiction remains largely provincial; both public and private regulators have overlapping, mismatched authority. Regulatory discord is readily apparent in consumer protection cases. When the Dodd-Frank Wall Street Reform and Consumer Protection Act empowered state regulators while simultaneously creating an encompassing federal regulator—the Consumer Financial Protection Bureau—it further contributed to overlap between federal agencies, states, and private litigation.
Whether this regulatory magnetism is optimal in terms of fundamental goals like compensation and deterrence is a hotly debated normative and empirical question. Yet, one need not wade too far into the substantive debate to appreciate the descriptive point that multiple regulatory layers exist and— whether normatively desirable or not—impact the procedural goals of aggregation. Aggregation, whether through a certified class action or multidistrict litigation, should not only enable regulators to enforce substantive rights, but should likewise encourage efficient resource use (of both litigants’ resources and judicial resources), generate binding resolutions, and produce accurate results through trial and settlement. Once cases conclude, procedure can intervene again through issue preclusion and stymie parties from relitigating issues that have already been decided, thereby preventing inconsistent verdicts
Litigating Together: Social, Moral, and Legal Obligations
Get PDFIn a post-Class Action Fairness Act world, the modern mass-tort class action is disappearing. Indeed, multi-district litigation and private aggregation through contracts with plaintiffs’ law firms are the new mass-tort frontier. But something’s amiss with this “nonclass aggregation.” These new procedures involve a fundamentally different dynamic than class actions: plaintiffs have names, faces, and something deeply personal at stake. Their claims are independently economically viable, which gives them autonomy expectations about being able to control the course of their litigation. Yet, they participate in a familiar, collective effort to establish the defendant’s liability. They litigate from both a personal and a collective standpoint. Current scholarship overlooks this inter-personal dimension. It focuses instead on either touting the virtues of individual autonomy or streamlining mass litigation to maximize social welfare. Both approaches fail to solve the unique problems caused by these personal dimensions: temptations for plaintiffs to hold out and thus derail settlements demanding near unanimity, outliers who remain disengaged from the group but free-ride off of its efforts, and subgroups within the litigation whose members compete for resources and litigation dominance to the group’s detriment. Accordingly, this Article has two principal objectives: one diagnostic, one prescriptive. The diagnosis is this: current procedures for handling nonclass aggregation miss the mark. Process isn’t just an exercise in autonomy or a handy crutch for enforcing substantive laws. Procedures can serve as a means for bringing plaintiffs together, plugging their individual stories into a collective narrative, making sense of that narrative as a community, reasoning together about the right thing to do, and pursuing that end collectively. Thus, the prescription is litigating together
Introduction: Dukes v. Wal-Mart Stores, Inc.
Get PDFThis short introduction to Dukes v. Wal-Mart Stores, Inc. aims to explain the case and to set the table for what promises to be thought-provoking roundtable discussion hosted by Vanderbilt Law Review En Banc. Accordingly, what follows is a concise overview of the legal background and current debate over the two procedural issues that the Ninth Circuit explored in detail – how to evaluate Rule 23(a)(2)’s commonality when common questions heavily implicate the case’s merits, and when a Rule 23(b)(2) class can include relief apart from injunctive or declaratory relief without endangering due process
Litigating Groups
Get PDFLarge-scale litigation, such as the Vioxx, Zyprexa, and asbestos cases, breeds conflict. Conflicts arise between attorneys and their clients (agency problems), plaintiffs and other plaintiffs (group problems), and plaintiffs\u27 attorneys and other plaintiffs\u27 attorneys (competition problems). Although these cases cannot be certified as class actions, they still proceed en masse to achieve economies of scale and present a credible threat to defendants. Assuming that coordinating and consolidating large-scale litigation is systemically desirable, this Article explores a new approach to removing the group and agency problems that increase aggregate litigation\u27s costs and undermine its normative goals such as fairness, compensation, and deterrence. Unlike traditional scholarship that emphasizes individual autonomy or welfare maximization, this Article borrows from the literature of moral and political philosophy as well as social psychology to analyze group dynamics within nonclass aggregation. It requires us to view plaintiffs within large-scale litigation as a community of sorts and to recognize that sometimes litigants incur obligations simply by virtue of being a group member, whether chosen or not and whether welfare maximizing or not. Moreover, empirical studies demonstrate that once people consider themselves part of a group, they exhibit other - regarding preferences - trust, reciprocity, and altruism - toward other members. Cohesive group members are more likely to cooperate with one another and care about the collective outcome, and less likely to exit the group when doing so benefits the individual rather than the group In the face of hard cases, of instability and disunity, plaintiffs who have made promises and assurances to one another can invoke social norms of promise-keeping, social agglomeration, compatibility, and the desire for means-end coherence to achieve consensus, mitigate client-client conflicts, and restore the tether between clients and their attorney. Thus, using groups to overcome the problems in nonclass aggregation not only makes sense from a group responsibility perspective, it may also harmonize with wealth maximization and individual autonomy goals
CAFA\u27s Impact on Litigation as a Public Good
Get PDFClass actions regulate when government fails. Perhaps this use as an ex post remedy when ex ante regulation founders explains the fervor and rhetoric surrounding Rule 23\u27s political life. In truth, the class action does more than aggregate; it augments government policing and generates external societal benefits. These societal benefits - externalities - are the spillover effects from facilitating small claims litigation. In federalizing class actions through the Class Action Fairness Act (CAFA), Congress, in some ways, impeded class action practice, thereby negating its positive externalities and inhibiting backdoor regulation. This Article critically considers those effects on the common good. It also develops an implicit but overlooked theme within the CAFA debate - the notion that litigation itself is a public good
Group Consensus, Individual Consent
Get PDFDespite a rise in the number of personal-injury and product-liability cases consolidated through multi-district litigation, a decline in class-certification motions, and several newsworthy nonclass settlements such as the 700 million Zyprexa settlements, little ink has been spilled on nonclass aggregation’s unique issues. Sections 3.17 and 3.18 of the American Law Institute’s Principles of the Law of Aggregate Litigation are a noteworthy exception. This Article uses those principles as a lens for exploring thematic questions about the value of pluralism, group cohesion, governance, procedural justice, and legitimacy in nonclass aggregation.
Sections 3.17 and 3.18 make some scholars nervous because they substitute individual consent to a settlement for individual consent to a process. But the process itself plays a vital function; when process is coercive or consent is tainted those flaws undermine systemic legitimacy and can affect subsequent compliance with the outcome. To be sure, process should enable the enforcement of substantive laws. Yet, we can\u27t achieve justice solely through maximizing welfare or ensuring that plaintiffs have free choice. Rather, process can enable plaintiffs to reason together about the right thing to do and give rise to moral obligations that help balance the uneasy union between the collective and the individual
Revisiting the Government as Plaintiff
No full textThis is a symposium essay dedicated to the late Richard Nagareda and written in response to Adam S. Zimmerman\u27s piece, The Corrective Justice State.
As Professor Zimmerman recognizes, the debate over governments acting as plaintiffs and “regulating by deal” has shifted from initial questions over whether litigation produces the best public policy and whether executive officials are acting within the scope of their authority to how government actors should pursue and allocate settlements. Yet, as this first wave of controversy suggests, the slate upon which executive officials currently write is neither clean nor uncontroversial. Instead, this new debate is playing out in an unsettled landscape where those first-order questions about legitimacy remain unresolved.
When layered atop the existing controversy over the intermingling of government functions, executive officials’ relatively new allocative role may put their actions even further at odds with their traditional regulatory and proprietary functions, particularly when the action yielding the compensation is a public substitute for a private right of action. What principles should guide officials in this new role: traditional tort law, social welfare, or political equality principles such as one person one vote? More specifically, should executive officials look to tort law precepts to govern the allocation and retain concepts such as economic loss and the collateral source rule, or employ a governmental aid aspect, which would suggest a principal of equality that would not vary based on one’s income but would consider collateral sources of compensation?
Zimmerman suggests that officials have attempted to justify both their regulatory and allocative decisions with ill-suited corrective justice principles that translate poorly from the private to the public sphere. Despite reservations about whether regulation through litigation results in the best policies or offers democratic checks, he seems more willing to accept executive officials’ increased litigation role in the wake of Congressional failings and the difficulty of certifying a private class action. He thus tailors his reform proposals to target the government’s allocative function, suggesting ways to improve legitimacy and transparency in distributing recoveries, whatever the guiding principle might be.
Still, certain concerns and questions linger. First, Zimmerman narrows his focus to the second generation question of allocation, even though he raises and dismisses first-generation concerns over whether executive officials are properly acting within the scope of their authority and whether the regulatory solutions they generate through litigation are legitimate and optimal. Shoring up back-end allocation procedures, however, does not alleviate first-generation legitimacy questions or regulatory concerns. Second, Zimmerman opts not to iron out overarching systemic problems like legislative stalemates or mounting difficulty in certifying class actions, preferring instead (or perhaps more realistically) to work within the circumstances that prompt executive action. Yet, truly legitimizing process and adhering to corrective justice principles would require resolving systemic concerns about who should litigate and who should regulate. Finally, given concerns that judges already “rubber stamp” class-action settlements and that parties tend to find innovative ways to gerrymander votes and stakeholder input in areas like bankruptcy, one might question the effectiveness of Zimmerman’s proposals for enhancing due process when allocating state recovery to affected citizens
Securities Class Actions as Pragmatic Ex Post Regulation
Get PDFSecurities class actions are on the chopping block-again. Traditional commentators continue to view class actions with suspicion; they see class suits as nonmeritorious byproducts of self-interest and the attorneys who bring them as rent-seekers. Their conventional approach has popularized securities class actions\u27 negative effects. High-profile commissions capitalizing on this rhetoric, such as the Committee on Capital Markets Regulation, have recently recommended eliminating or severely curtailing securities class actions. But this approach misses the point: in the ongoing push and pull of securities regulation, corporations are winning the battle.
Thus, understanding the full picture and texture of securities class actions necessitates a positive pragmatic account. This Article provides that account and thus fills a significant gap in the benefit side of academic cost-benefit literature. To do so, however, it self-consciously begins from a controversial assumption: namely, that securities class actions provide a public good. Integrating both public and private actors into ex post enforcement diminishes collective action dilemmas, agency inaction, and private resolution of public law matters through arbitration. Moreover, by supplementing ex post enforcement, securities class actions produce positive externalities, spillover effects that confer public advantages such as: innovation, cost-reduction through information sharing, deterrence, transparent judicial process, and both corporate and enforcement accountability. So, while I harbor no illusion that the securities class action always functions optimally and have a number of lingering doctrinal and jurisprudential concerns about its operation, I also recognize its comparative institutional capability to make transparent an increasingly opaque process, craft decisional rules and interpretations that guide future behavior, cultivate innovation, deter fraud, and hold corporations, exchanges, and the SEC publicly accountable. This piece thus envisions the ramifications of eliminating securities class actions by imagining a world with government-centric securities enforcement. That world, I contend, is one steeped in bureaucracy, one failing to produce behavior-guiding precedent, one filled with closed-door arbitrations, one neglecting nonprioritized misconduct, and one ignoring litigant preference for judicial process. In short, it is a world less preferable than our current system-flawed though it is
- …
