Aggregate Litigation Research Articles

The Short Unhappy Life of the Negotiation Class

The Short Unhappy Life of the Negotiation Class

COVID-19 Aggregate Litigation: The Search for the Upstream Wrongdoer

COVID-19 Aggregate Litigation: The Search for the Upstream Wrongdoer

Aggregationists at the Barricades: Assessing the Impact of The Principles of the Law of Aggregate Litigation

Aggregationists at the Barricades: Assessing the Impact of The Principles of the Law of Aggregate Litigation

Built for Business: The Commercial Need for Aggregate Litigation

Built for Business: The Commercial Need for Aggregate Litigation

What is an appropriate measure of litigation? Quantification, qualification and differentiation of dispute resolution

This article reviews the claims about rates of litigation in the United States, as either “too much” or “too little” (e.g. “The Vanishing Trial”). While we need to understand aggregate litigation rates to assess access to justice, it may be more important to understand litigation rates in the context of differentiated case types. Litigation, in some cases, produces too “brittle” (binary) or costly outcomes, which is what led to the American “A” (alternative/appropriate) Dispute Resolution movement. This movement (now moving across the globe) may provide “process pluralism” with greater flexibility in outcome and cost variations, (now often called “a”ccesible dispute resolution”). However, litigation is still important in a variety of justice-seeking contexts (e.g. for new rights creation, old rights enforcement, and precedent elaboration). This article suggests that the question of how much litigation is appropriate in any legal culture is dependent on a variety of factors that goes beyond simple aggregate counting. The article concludes with a critique of recent American legal practices in restricting litigation through mandatory arbitration, non-disclosure agreements, class action limitations, privatized mass claim settlements, and restrictive jurisdictional interpretations in judicial decision making and legislation.

Mass Tort Anticommons and the Bankruptcy Superposition

Mass torts create a unique scale of harm and liabilities. Corporate tortfeasors are desperate to settle claims but condition settlement upon resolution of substantially all claims at a known price – commonly referred to as a global settlement. Without this, corporate tortfeasors are willing to continue with protracted and fragmented litigation across jurisdictions. Global settlements can be elusive in these cases. Mass torts are oftentimes characterized by non-homogenous victim groups that include both current victims and unknown, future victims – individuals whose harm has not yet manifested and may not do so for years. Despite this incongruence, the claims of these future victims must be aggregated as part of any global settlement. This is the tragedy of the mass tort anticommons: without unanimity, victim groups are unable to access settlement resources in a timely or meaningful way, but actual coordination across the group can be impossible. Current resolution structures have proven ill-equipped to efficiently and equitably address the novel challenges posed by mass torts. Many cases cannot satisfy Rule 23’s requirements for class action certification. Multidistrict litigation is the most frequently invoked resolution structure, but the MDL process is distorted. The process was initially designed for one district court to streamline pretrial procedures before remanding cases for adjudication. Instead, MDL courts have turned into captive settlement negotiations. In response, a new strategy for resolving modern mass torts has emerged. Corporate tortfeasors – including Purdue Pharma, Boy Scouts of America, and USA Gymnastics – have started filing for bankruptcy. These mass restructurings automatically halt the affected MDL cases and transfer proceedings to a bankruptcy court – a process I describe as bankruptcy preemption. Unfortunately, bankruptcy preemption replaces one deficient structure with another. Mass restructuring debtors are exploiting statutory gaps in the Bankruptcy Code in order to bind victims through an unpredictable, ad hoc structure. The new bargain creates myriad risks, including insolvent settlement trusts and disparate treatment across victim classes. This Article is the first to attempt a reconceptualization of how modern mass torts should be resolved and delivers an unprecedented normative construct focused on addressing anticommons dynamics through statutory amendments to the Bankruptcy Code. These changes, coupled with an evolved perspective on fundamental structural anomalies, are designed to improve predictability, efficiency, and victim recoveries. More broadly, this Article attempts to animate scholarly debate of this new, non-class aggregate litigation strategy that will reshape the field.

Constitutional Rights in the Machine Learning State

A new class of “machine learning” tools is able to make better predictions and inferences from data than was previously feasible. For the state, machine learning is a powerful and supple device to reveal citizens’ beliefs, actions, and expected behaviors. Its deployment to allocate investigative resources, material benefits, and coercive penalties to particular individuals, though, can implicate due process, privacy, and equality interests. Substantive doctrinal frameworks and enforcement regimes for those entitlements, however, arose in the context of human action. Neither is apt for a machine learning context. This Article offers a start to the larger project of developing a more general account of substantive rules and enforcement mechanisms to promote due process, privacy, and equality norms in the machine learning state. After cataloging notable state and municipal adoptions of machine learning tools, it considers how existing constitutional norms can be re-calibrated (in the case of due process and equality) or retooled (in the case of privacy). It further reexamines the enforcement regime for constitutional interests. Today, constitutional rights are (largely) enforced through discrete, individual legal actions. Machine learning’s normative implications arise from systemic design choices. The retail enforcement mechanisms that currently dominate the constitutional remedies context are therefore particularly inapt. Instead, a careful mix of ex ante regulation and ex post aggregate litigation, which are necessary complements, is more desirable.

The American Advantage in Civil Procedure? An Autopsy of the Deutsche Telekom Litigation

This article examines the influence of civil procedure on the legal framework that supports securities markets in the U.S. and in Germany, two very different legal systems. It does so by way of comparing parallel shareholder actions against Deutsche Telekom for securities disclosure violations arising out of the same facts and allegations – the first set of actions filed in federal district court in Manhattan, the second filed in district court in Frankfurt, Germany.Deutsche Telekom was accused in both actions of misrepresenting the value of its real-estate holdings in its financial disclosures and for failing to disclose negotiations for the acquisition of the U.S. Company VoiceStream in its July 2000 offering prospectus.But the cases proceeded very differently and produced dramatically different outcomes. Within five years, and after full discovery, the U.S. class action plaintiffs negotiated a $120 million settlement with the Deutsche Telekom defendants. Meanwhile, the parallel claims by German shareholders, the first of which were filed in 2001, were ultimately dismissed by the German courts in 2012. Until now the German shareholders have received nothing, even after the German Bundestag had adopted a new and unprecedented aggregate litigation mechanism in late 2004 (dubbed “the Deutsche Telekom law”) to afford thousands of complaining German shareholders a reasonable mechanism for pursuing a just and speedier resolution of their claims against the DT defendants.The article also engages claims about the importance of litigation discovery for corporate and securities laws advanced by Michael Halberstam and Erica Gorga in Litigation Discovery and Corporate Governance: The Missing Story About “The Genius of American Corporate Law” 63 Emory Law Review 1383 (2014).

The Issue Class Revolution

In 2013, four Supreme Court Justices dissented from the decision in Comcast v. Behrend establishing heightened requirements for the certification of damages class actions. In a seemingly off-handed footnote, these dissenters observed that district courts could avoid the individualized inquiries that increasingly doom damages classes, by certifying a class under Rule 23 (c)(4) on “liability” issues only, and “leaving individual damages calculations to subsequent proceedings.” The dissenters were on to something big. In fact, the issue class and follow-on damages model has broad potential to restore the efficacy of aggregate litigation across a number of substantive areas, after decades of judicial hostility. This article offers a bold and original vision for the issue class procedure, promising scale efficiency while sidestepping the doctrinal land mines that dot the class action landscape. It is a vision rooted in sober pragmatism and an account of the economic incentives confronting entrepreneurial law firms as they consider investing in aggregate litigation under Rule 23(c)(4).

De Facto Class Actions

A persistent criticism of class actions is that they have unresolvable governance problems. The worry is that in a class action the attorneys will be able to take advantage of the class members, conducting the litigation in a way that lines their own pockets at the class’ expense. The relevant question should rather be how class actions fare compared to potential alternatives. As a common feature of collective action, governance problems are ubiquitous. However, we can determine how worrisome the governance problems with class actions are through comparison with similar types of actions. Cases brought by states and corporations can also be forms of aggregate litigation, and courts have consistently expanded the opportunities for these kinds of litigation while restricting class actions. From this comparative perspective class action governance appears to be especially fraught. Class actions lack the democratic processes of both corporate and state governance: unlike shareholders or citizens class members cannot vote to replace their attorney or otherwise steer the litigation. Their options are limited. But, despite both the intuitive appeal and doctrinal importance of democratic procedures like voting, democratic procedures actually do little to improve litigation governance. Class action governance functions better than it seems to at first because of the importance of the attorney’s legal expertise. Therefore, the governance problems in class actions are not substantially more dire than those confronting other types of aggregate litigation, especially if some modest procedural changes are implemented. Put in the proper context, then, the governance problems in class actions have been overstated.

Litigation Governance: Taking Accountability Seriously

Both Europe and the United States are rethinking their approach to aggregate litigation. In the United States, class actions have long been organized around an entrepreneurial model that uses economic incentives to align the interest of the class attorney with those of the class. But increasingly, potential class members are preferring exit to voice, suggesting that the advantages of the U.S. model may have been overstated. In contrast, Europe has long resisted the U.S.’s entrepreneurial model, and the contemporary debate in Europe centers on whether certain elements of the U.S. model - namely, opt-out class actions, contingent fees, and the “American rule” on fee shifting - must be adopted in order to assure access to justice. Because legal transplants rarely take, this Essay offers an alternative “non-entrepreneurial model” for aggregate litigation that is consistent with European traditions. Relying less on economic incentives, it seeks to design a representative plaintiff for the class action who would function as a true “gatekeeper,” pledging its reputational capital to assure class members of its loyal performance. Effectively, this model marries aspects of U.S. “public interest” litigation with existing European class action practice. Examining the differences between U.S. and European practice, this Essay argues none of these differences are dispositively prohibitive and that functional substitutes, including an opt-in class action and third party funding, could be engineered so as to yield roughly comparable results. Although the two systems might perform similarly in terms of compensation, the ultimate question, it argues, is the degree to which a jurisdiction wishes to authorize and arm a private attorney general to pursue deterrence for profit.

The Fall and Rise of the Antitrust Class Action

Antitrust class actions have narrowed significantly in the United States in recent years but still remain robust compared to aggregate litigation in the rest of the world. While the Supreme Court continues to narrow the doorway to class actions, the rest of the world is increasingly interested in creating new mechanisms for aggregate litigation to better support effective private damage litigation in competition cases, and in particular the large number of small claims cases that led to the class action boom in the United States in the first place. The challenge for the rest of the world will be to fashion new remedies consistent with the history, culture, substantive law, and procedural rules of their legal traditions rather than either adopt or reject the system that has evolved in the United States. This article provides an overview of the increasingly stringent requirements for antitrust class actions in the United States and provides a representative survey of the nascent movement toward collective actions abroad where competition cases have been at the forefront of the debate. Part I discusses the standards for class certification under Rule 23 and recent Supreme Court cases tightening those standards. Part II analyzes a separate line of Supreme Court cases which effectively eliminates class actions altogether when parties have entered into a contract requiring arbitration rather than litigation and further requires individual rather than collective arbitration proceedings.Part III continues with a survey of recent developments in the opposite direction outside the United States. This section examines ongoing changes in the EU, UK, other EU Member States, Mexico, and Canada to empower consumers and business with small claims in competition cases by creating collection action mechanisms of different types. This section also briefly discusses the decision of the EU to simply prohibit the type of forced arbitration clauses that the U.S. Supreme actively encourages. Part IV analyzes the critical aspect of whether foreign class actions will thrive or whither on the vine – the need for an opt-out mechanism rather than the opt-in mechanism favored in most jurisdictions outside the U.S. Finally, I conclude by pointing out the irony of the rest of the world struggling to figure out how best to empower plaintiffs to bring appropriate class action type proceedings while the U.S. Supreme Court remains principally concerned with how to restrain or eliminate the very same type of action.

Multidistrict Centralization: An Empirical Examination

Following the judiciary's experience with aggregate litigation in the 1960s, Congress established a procedure for the transfer of related cases to a single district court for coordinated pretrial proceedings. Originally designed to achieve efficiencies associated with coordinated discovery, the multidistrict litigation (MDL) process evolved from a rather modest starting point to become a central part of aggregate litigation in the federal courts today. Despite its importance, however, there is little empirical research on the MDL process. This article seeks to fill this gap in the empirical literature by addressing a few central questions about the work of the Judicial Panel on Multidistrict Litigation (Panel). Using a unique database, we examine how that body decided motions to centralize multidistrict litigation. We find, most importantly, that the Panel became more likely to order centralization of proceedings over time, after controlling for other factors. That trend is not, however, apparent in the most recent years' data. We also find, all else equal, that the Panel is more likely to centralize a proceeding including class allegations, and more likely to centralize proceedings raising certain kinds of claims.

Class-Based Adjudication of Title VII Claims in the Age of the Roberts Court

This article considers two barriers to class-based adjudication of Title VII claims erected by the Roberts Court: (1) the Court's interpretation of Rule 23, primarily in Wal-Mart v. Dukes; and (2) the Court's interpretation of the Federal Arbitration Act (FAA) in a series of decisions, both employment-related and not. The article contends that it is the latter group of decisions that are the more significant for Title VII private aggregate litigation as well as for other types of private litigation. The Wal-Mart Court predictably did not expand an employer's obligations to avert discrimination by its agents, and its predictable interpretations of Rule 23 reinforced existing conditions on Title VII class actions. But Wal-Mart neither retracted meaningful Title VII law nor reinterpreted Rule 23 in a manner that should, or indeed has, prevented private Title VII class litigation in appropriate cases. The Court's interpretations of the FAA, by contrast, enable most employers outside the transportation industry to avoid any form of class adjudications, whether in arbitration or litigation. Reform thus should concentrate on restricting employers' legal authority to impose pre-dispute agreements to arbitrate on employees.

Justice for the Masses? Aggregate Litigation & Its Alternatives

Traditionally, disputes over injury compensation that were brought to court involved one or a few plaintiffs and defendants and were processed individually. The risk and expense of such litigation meant that most victims of legally cognizable injuries never came through the courthouse doors. The modern global economy, however, has vastly increased the potential for mass harms and losses, and modern mass media have created felicitous circumstances for mass claiming. Aggregated mass litigation blasts open the courthouse doors for individuals who might otherwise find them closed. Aggregation benefits some but disadvantages others. Class action rules attempt to mitigate these conflicts, but such procedures do not apply to aggregate non-class litigation. It is time for courts to adopt rules and practices that recognize the realities of such litigation.

Emerging Markets, Vanishing Accountability: How Populations in Poor Countries Can Use Aggregate Litigation to Vindicate Their Rights

The United States government, multilateral institutions such as the World Bank, and other actors collectively spend billions of dollars annually on international development assistance earmarked as “rule of law” aid. The professed aim of this aid is principally to lay a legal foundation for a free market economy, attracting large multinational corporations who, the theory goes, can generate economic growth. With new large-scale markets also come new large-scale problems, however, such as defective products, inhumane treatment of workers, environmental degradation and natural resource plunder that existing legal regimes are ill-equipped to handle. There is no “rule of law” aid for poor countries to provide en masse redress for the en masse harm that the aid indirectly causes. This Article argues that, to protect the welfare of their populations, poor countries should adopt viable methods for aggregate litigation. By enabling the aggregation of disputes for injured parties who are similarly situated, the legal systems in poor countries would provide a remedy for legally-recognized injuries, cause wrongdoers to absorb the costs of the harm that they inflict, deter future mischief, preserve scarce judicial resources and confer constitutive benefits on the litigants who are provided a public forum to tell their collective stories of injustice. In doing so, aggregate litigation would facilitate a much-needed locus of countervailing power to check the abuses and excesses of multinational corporations in poor countries.

Scheduling Shortfalls: Hours Parity as the New Pay Equity

At the dawning of the fifty-year anniversary of the Equal Pay Act of 1963, and as the same anniversary of Title VII of the Civil Rights Act of 1964 draws near, it is time to change the way we think about pay equity. Workplace fairness between women and men should no longer be framed merely by total disparities in pay, but also by disparities in hours given to women seeking as much work as their male counterparts. Doing so recognizes the realities of many female workers in today’s workplace and addresses the shortfalls thus far absent from the civil rights conversation about pay equity. Today’s workforce is filled with female contingent workers who are at the mercy of their supervisors as to the number of hours they work. The number of part-time workers has steadily increased over the last decade, with involuntary part-time workers (those forced to downgrade from full-time to part-time because of economic conditions or the employer’s needs) numbering 8.2 million and the total number of part-time workers exceeding 27 million. Two-thirds of part-time workers are women, and as the Congressional Joint Economic Committee has recognized, the gender pay gap is partly driven by the earning penalty for part-time work, which pays less per hour than the same or equivalent work done by full-timers. One under-examined factor in this pay inequity is the power of scheduling that employer supervisors have over their part-time work force. From the outside, supervisors seemingly make capricious decisions on whom to schedule, when, and for how many hours. When individual supervisors make these unilateral decisions without regard to employment standards or criteria, they appear to do so with little oversight and guidance, which can lead to discriminatory bias based on gender. This gender bias can be motivated (consciously or unconsciously) by societal stereotypes casting women as less than “ideal workers” with weak commitment to the workplace because of outside caregiving responsibilities. From a doctrinal standpoint, however, the current statutory regimes seem ill suited to address these disparities. The Fair Labor Standards Act (FLSA) of 1938 merely mandates minimum and overtime wages, the Equal Pay Act of 1963 does not cover hours equity, and Title VII of the Civil Rights Act of 1964’s anti-discrimination mandate rarely (if ever) reaches the issue of scheduling and is therefore sorely underdeveloped. Moreover, due to recent Supreme Court decisions dramatically restricting employment discrimination class actions, bringing aggregate litigation for low-wage workers will be an uphill battle, one attorneys are likely loathe to take on for relatively low damages. This Article makes the case for changing the way we think about pay equity. Because our workforce is filled with part-time workers, advocates for low-wage workers should focus not only on pay inequities and living wages, but also on hours equity. Hours equity would provide much-needed stability to scheduling that would allow female part-time workers to have a reliable schedule with guaranteed hours so that they make an expected amount of pay.

Litigation Discovery and Corporate Governance: The Missing Story About the 'Genius of American Corporate Law'

Strikingly absent from the entire corporate governance and corporate litigation debate is a unique feature of American civil procedure that deserves special attention: the modern civil discovery regime. This Article attempts to fill this gap. We argue that modern discovery — first established by the Federal Rules of Civil Procedure in 1938 — has had a profound impact on the evolution of shareholder litigation, corporate governance, and the culture of corporate disclosure in the United States. This Article shows that (1) litigation discovery, and its threat, have driven and structured the process of corporate shareholder litigation; (2) the information generated by discovery has stimulated the development of case law defining shareholder rights and managerial duties; (3) the episodic legal demands for detailed corporate internal information (and the threat of discovery) have induced incremental improvements in corporate governance practices, including more exacting decision procedures, internal monitoring, recordkeeping, and disclosure; (4) highly developed, continuously evolving discovery practices have established templates for independent corporate internal investigations by boards and regulators; and (5) discovery has given regulators steady insight into changing corporate internal practices and patterns of wrongdoing to which regulators have responded with broad legal and regulatory changes. This Article concludes that litigation discovery serves, inter alia, as a form of ex post disclosure, which complements and enforces ex ante disclosure under the federal securities laws. These observations have important normative implications for legal transplants and the enforcement debate. Among other things, this Article cautions against legal transplants of U.S.-style securities disclosure, aggregate litigation mechanisms, and other enforcement mechanisms without considering appropriate tools for investigating corporate internal wrongdoing ex post, and points to problems in the empirical literature on U.S. shareholder litigation outcomes. It also questions current proposed reforms to the federal discovery rules.

The Supreme Court and the Class Action: Where We Are and Where We Might Be Going

In 2010 and 2011, the Supreme Court decided five class action cases. In 2012, it has agreed to hear four more. This piece summarizes what the Court has done and where it appears to be going concerning aggregate litigation. The goal of this piece is more practical than theoretical: to place all nine cases in context and draw preliminary conclusions about the impact these cases have had and will have -- not only on class action practice, but in other areas, including the Erie Doctrine, waivers of class arbitration, anti-suit injunctions, the binding effect of judgments on class members, enforcement of Rule 10b-5, and the apparent efforts of defendants to front-load litigation by demanding greater consideration of merits-based facts (and qualification of experts) at the class certification stage. The cases dealing with waivers of class arbitration implicate the role of the civil suit in law enforcement. If small (usually consumer) claims cannot be pursued on an aggregate basis, they may never be vindicated; individuals and lawyers will not find it economically feasible to do so. Yet the Court appears unwilling to recognize a public-policy exception to the primacy of contract. Thus, if the underlying contract waives aggregate litigation or arbitration, apparently this will not be trumped by the concern that the relevant law (often consumer protection laws) will not be enforced through civil litigation.

The Way Forward after Wal-Mart

The Supreme Court's decision denying certification of a class action in Wal-Mart Stores, Inc. v. Dukes elicited a strong dissent from Justice Ginsburg, and widespread criticism in liberal circles, but in several important respects, the decision was unanimous. All the Justices agreed that a class action could not be certified under Federal Rule of Civil Procedure 23(b)(2), the rule which governs class actions in which injunctive relief is appropriate respecting the class as a whole. The holding that divided the Justices concerned the failure of the plaintiffs’ case to meet the requirement of Rule 23(a)(2) that there were questions of law or fact common to the class. Yet even on this issue there were points of apparent agreement, and one of them was the need to inquire into the merits to determine whether the prerequisites to certification were satisfied. This article begins by situating this widely accepted observation in the context of perennial disputes over substance and procedure in class actions. It then turns to the question of where to put certification decisions in the structure of pretrial litigation: in pleading, discovery, or summary judgment. That inquiry, in turn, leads to the larger question of how to reform class action procedure. Looking to the merits provides a way to differentiate among class actions, both in fine-grained analysis of particular claims and in broad terms defined by different areas of law. The cases and commentary on class actions presume that class actions must be divided into conventional categories, such as mass torts, consumer class actions, civil rights claims, and securities class actions, but they provide little more than a pragmatic justification for this division. A look at the merits was tacitly accepted as the premise of most analyses of class actions before Wal-Mart. This article provides a theoretical justification for doing so -- at the level of legal doctrine, based on the relationship between the substance of a claim and the requirements of Rule 23, and at the level of optimal enforcement, by identifying cases in which the expense of aggregate litigation yields gains in the basic goals of compensation, deterrence, and efficient litigation.