Saving Class Members from Counsel

Law & Society Review, 1992

Using case studies and interviews with lawyers and representatives in class actions, this article explores the contribution that class actions make to their ostensible beneficiaries. The article first distinguishes the major types of class actions in terms of the roles of lawyers and class representatives, ranging from very passive representatives to individuals intensively involved with the dispute that gave rise to the litigation. The article next seeks to evaluate the class actions. On the basis of the results of the class actions, the article finds that class actions cannot be proclaimed major contributors to social change. The focus on results, however, is somewhat misleading. The class action plays a much more significant role through its impact on the parties as litigants and as individuals involved with a dispute. To understand this dimension, which has applications beyond the class action, the article suggests that the dispute transformation perspective should be modified to go beyond the metaphor of a dispute that changes form as it goes through different processes. Disputants in the class action can be thought of as an audience that interprets itself-and is empowered or disempowered-in part by what it learns from watching a legal dramatization of the dispute.

SSRN Electronic Journal, 2016

After the upsurge of class actions in North America, since the amendment to Federal Rules of Civil Procedure (FRCP) of 1966, this initially idiosyncratic American sort of litigation has pervaded procedural systems of countries of Civil Law tradition in the following decades. Its reception has not been uniform nor easy nonetheless. It is still, moreover, a work in progress. The rise of class lawsuits is commonly acknowledged as a product of the opt-out rule adopted by the amended Rule 23 FRCP. It is also a consequence of the conclusive effect of settlement or judgment on hypothetical subsequent claims, throughout res judicata and collateral estoppel nonetheless. Civil Law jurisdictions, as France, Brazil and Argentina, in turn, include in their class action schemes variations, precisely on those matters, which gives an interesting leeway for study. Our findings suggest that there is some room for improvements in those recent Civil Law schemes of class actions. Some of their peculiar innovations may look questionable but scarcely significant in practice. However, that empirical irrelevance may derive only from pre-existing chronic malfunctions in procedural systems that include them. Paradoxically, a betterment on the latter failures would make the negative impact of the analyzed variants significant on social cost.

Columbia Law Review, 1986

Because this Article examines the plaintiff's attorney as an independent monitoring force, a brief review of the development of private enforcement is in order. The term "private attorney general" was coined byJudgeJerome Frank to refer to one who brought an action to "vindicate the public interest." Associated Indus., Inc. v. Ickes, 134 F.2d 694, 704, 705 (2d Cir.), vacated as moot, 320 U.S. 707 (1943). The professional plaintiff's attorney, however, appeared at least several decades earlier. The plaintiff's attorney was probably first able to function as a "bounty-hunter"-that is, as a profit-motivated entrepreneur who is relatively unconstrained by the interests of any specific client-in the context of derivative litigation. For a colorful account of Clarence Venner, the pioneer of the "strike suit" in the first decade of this century, seeJ. Livingston, The American Stockholder 55 (1958) (describing Venner as "a legal Robin Hood," but also noting that this "policeman.. . would sell his nightstick-at a price"). For a representative case, see Venner v. Great N. Ry., 209 U.S. 24 (1908). By the 1930s, the expression "strike suit" was already understood to mean a derivative action whose nuisance value gave it a settlement value independent of its merits. See Note, Extortionate Corporate Litigation: The Strike Suit, 34 Colum. L. Rev. 1308 (1934). The debate over the utility of derivative litigation continues today and shows no signs of abating. See American Law Institute, Principles of Corporate Governance: Analysis and Recommendations 3-14 (Discussion Draft No. 1 1985). The primary locus of "entrepreneurial" private enforcement, however, has shifted away from derivative litigation. During the 1950s and 1960s, skilled plaintiff's attorneys, such as Harold Kohn and David Berger, perfected the antitrust class action. See Bruck, Harold Kohn Against the World, Am. Law., Jan. 1982, at 28. Once again, critics were quick to describe this development as leading to "legalized blackmail." See Handler, The Shift from Substantive to Procedural Innovations in Antitrust Suits-The Twenty-Third Annual Antitrust Review, 71 Colum. L. Rev. 1, 9 (1971). During the 1970s, the recognition of implied causes of action, particularly under Rule lOb-5, resulted in a sudden increase in securities class actions. For a review of the state-of-the-art in this field, see Berton, Auditors' Nemesis: Class-Action Lawyer Beats the CPA Firms 669 COLUMBIA LAW REVIEW the private attorney general a reality in American law today, however, are not substantive but procedural-namely, those rules that establish the fee arrangements under which these plaintiff's attorneys are compensated. 2 Inevitably, these rules create an incentive structure that either encourages or chills private enforcement of law. Over the last decade, as criticism of private enforcement has mounted 3 and the caseload pressure on the federal judiciary has inten-At Their Own Game, Wall St. J., Dec. 4, 1985, at 1, col. I (describing Melvyn Weiss, probably the most successful plaintiff's attorney in the securities class action field). Most recently, there has been a similar explosion of activity in the "mass tort" field, particularly in toxic products class actions that raise complex issues of causation and scientific proof. Considerable publicity has attended litigation concerning Agent Orange, the Dalkon Shield, asbestos, Bendectin, Rely tampons, and, most recently, the Bhopal, India tragedy. For profiles of the "new breed" of plaintiff's attorneys who litigate these actions, see Wagner, The New Elite Plaintiffs' Bar, A.B.AJ., Feb. 1, 1986, at 44. A key characteristic of these attorneys appears to be their ability to make substantial cash investments in an action. For example, in the Agent Orange case, five plaintiff's attorneys each contributed a minimum of $250,000 to a common expense fund, and the plaintiff's management committee spent almost $2,000,000 in expenses over a ninemonth period in preparation for trial. Id. Investments and expenditures at such a level suggest the utility of an economic analysis. 2. Four such legal rules are critical to our current system of private enforcement and are largely unique to the American legal system. First and oldest is the "American rule," under which each side bears its own legal expenses. See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240 (1975). Economic analysis suggests that the effect of this rule is to increase the incentive to bring an action that has a relatively low prospect of success at trial.

SSRN Electronic Journal, 2000

Access to judicial relief in these contexts therefore requires explicit legislative authorization of fee-shifting from a losing defendant to the lawyer. Id. 23. See Martha Pacold, Attorneys' Fees in Class Actions Governed by Fee Shifting Statutes, 68 U. CHI. L. REV. 1007, 1017-20 (2001) (discussing attorneys' fees in fee shifting class actions). 24. Common fund class actions accounted for about 75% of all class actions reported in judicial opinions, in the general media, and in the business press in 1995-96. HENSLER ET AL., supra note 3, at 52-53.

Fordham Law Review, 2018