The Class Action—American Style

The Class Action—American Style

Description

For almost fifteen years segments of the American bench and bar have been waging a holy war over the class action. In its benign form, the conflict manifests itself as a philosophical, social, and economic debate over the merits and demerits of the class action. In its more virulent form, the controversy occasionally infects the litigation process with courtroom acrimony and invective. Some aspects of the clash have spilled over into the political arena, particularly in the consumer, discrimination, and environmental fields and attention by the mass media has brought the class action to the attention of much of the American public. Unfortunately, much of the controversy has been highly emotional, often focusing on particular events in individual cases that have been transmogrified over the years into cosmic anecdotes. The sad truth is that there has been too much advocacy and too little pure reflection, making it difficult to separate fact from fantasy. The accepted dogma is that the 1966 revision of the class action rule for the United States District Courts, Federal Rule of Civil Procedure 23, has had a dramatic effect on federal civil litigation and, because of the pervasive influence of federal practice, has had an indirect effect on state adjudication as well. Indeed, some claim that the new provision has done more to change the face of American practice than any other procedural development of the twentieth century, including the promulgation of the Federal Rules in 1938. Opinions regarding the effect of Rule 23 range over an amazing gamut. Class action adherents would have us believe it is a panacea for a myriad of social ills, and that it deters unlawful conduct and compensates those injured by it. Catch phrases such as “therapeutic” or “prophylactic” and “[taking] care of the smaller guy” are frequently trumpeted. Its opponents have rallied around characterizations of the procedure as a form of “legalized blackmail” or a “Frankenstein Monster.” They also have charged widespread abuse of the rule by lawyers and litigants on both sides of the “v.,” including unprofessional practices relating to attorneys' fees, so-called “sweetheart” settlement deals, dilatory motion practice, harassing discovery, and misrepresentations to judges. Finally, some have questioned the wisdom of imposing the burdens of class actions on an already over-taxed federal judiciary. They assert that many of these cases are unmanageable and inordinately protracted by opposing counsel, creating a certain millstone or dinosaur character that diverts federal judges from matters more worthy of their energies. Yet despite the attention that has been riveted on the Federal Rule, there is precious little 'empiric evidence as to how it actually has been functioning, in terms of either its alleged benefits or supposed blasphemies. Even if the negative effects of class actions were assumed, they would have to be balanced against the societal benefits derived from deterring socially proscribed conduct and providing small claim rectification—considerations that thus far have escaped measurement and perhaps always will. The available information suggests that much of the debate has been based on erroneous assumptions. It indicates that class actions are achieving some of their intended purposes and may well be providing systemwide economies in several contexts, even though small-claim, large-class damage cases have proven extremely resistant to expeditious processing. Although there have been instances of undesirable and unprofessional conduct, abuse does not appear to have been widespread. Stories about a few questionable occurrences—cosmic anecdotes, if you will—have been repeated so often at professional meetings that they have created the impression that evils are commonplace in class action practice. The empirical evidence also implies that in settled class actions, particularly in the securities and treble damage antitrust contexts, the great bulk of the money received from the defendants actually is distributed to class members, in contrast to the widely held notion that the fund is either devoured by greedy attorneys or consumed by administrative expenses. Admittedly, the dimensions of certain class actions are beyond anything previously seen in American courts in terms of size, complexity, and longevity. Some of these cases obligate judges to undertake supervisory tasks requiring enormous expenditures of time and effort, converting their role from that of passive referee of a battle fought and controlled by opposing counsel to that of active participant, not only managing the progress of the case through the procedural maze, but in effect, looking after the interests of class members in deciding whether or not to approve settlement negotiated by the lawyers. Some of the very recent experience in the United States suggests that imaginative judicial management by judges willing to control, shape, and expedite these cases can go far toward achieving the objectives of the class action.

Source Publication

The Cambridge Lectures 1983

Source Editors/Authors

Elizabeth G. Baldwin

Publication Date

1983

The Class Action—American Style

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