The Device: A history and a possible future for class actions - Part 2: Rulemaking, progress, and counterrevolution

This series explores the history and motivations behind the class action device in the United States. Part I traced the class action’s origins up to the first iteration of Rule 23 and discussed the Rule’s purpose and the challenges of early class action litigation. In Part II, we examine the creation of the modern Rule 23 in the 1960s and its early development from 1966 until the passage of the Class Action Fairness Act in 2005.

Introduction

In Part I of this series, our colleague Kartik Sameer Madiraju wrote about the early conception and implementation of class actions, underscoring that, at that stage, simplicity was a—if not the—primary goal of the class action mechanism. This Part covers the period from 1966, when the modern Rule 23 was adopted, to 2005; in that span, the history of class actions is defined by evolving (and competing) conceptions of the class action device and its intended purpose.

To one group, the device helped address societal shortcomings. For instance, the drafters of the modern Rule 23 recognized that class actions could be a potent vehicle for litigating increasingly prevalent civil rights and antidiscrimination cases. At the same time, the consumer movement was gaining steam amid falling confidence in both government and big business. Many thus considered Rule 23 as promulgated in 1966 to have a distinct regulatory purpose: the Rule—particularly when combined with a spate of substantive legislation authorizing “private attorney general” actions—supplemented regulatory agencies and individual litigation, neither of which effectively addressed the broad-ranging discriminatory practices or harm to consumers so widespread at the time.

But this understanding had its detractors, who saw Rule 23 as an efficiency-oriented procedural tool not meant to be used as a quasi-regulatory weapon. Despite fierce rhetorical battles between the two sides, this era of history was a heyday for class actions—which largely benefitted society. Over time, however, the Supreme Court began placing limitations on class actions. The trend toward limitations has accelerated with the advent of Rule 23(f), which makes securing interlocutory appellate review of class certification decisions easier (largely for class action defendants) and the Class Action Fairness Act, which makes satisfying subject-matter jurisdiction requirements in federal court easier (which primarily benefits class action defendants).

The history of class actions since the modern Rule 23 was adopted is one of exploration—of what class actions really are, who they are intended to benefit, and what they are aiming to do. Courts, Congress, and commentators have explored each of these points. The early history of modern Rule 23 favored an expansive view of the Rule that benefited plaintiffs and served as a powerful procedural device for vindicating substantive law. Since the late 1990s and early 2000s, however, that trend has reversed, begetting more constrictive interpretations of Rule 23 and the adoption of rules and legislation that weaken its capacity to serve a robust regulatory purpose.

I. Origins of the modern Rule 23

As discussed in Part I, the initiative to reform the 1938 version of Rule 23 was largely driven by pragmatic concerns. But to characterize simplicity and efficiency as the drafters’ only motivations omits a crucial part of the story. Even the strongest proponents of a narrow Rule concerned only with procedural efficiency must contend with the undeniable influence of the civil rights movement, particularly desegregation efforts, on the push to amend Rule 23.

Scholars have noted that “[t]he drafters of the modern class action rule worked before a backdrop of intransigence and fierce resistance to desegregation efforts, especially in the south.”[1] And they were not mere audience members—the Rule’s primary drafters were deeply and personally committed to advancing desegregation efforts and brought those commitments to the Advisory Committee.[2] “The drafters were unified around creating an effective procedural tool to address significant backlash to integration.”[3]

Apart from desegregation, “technical procedural concerns dominated committee deliberations.”[4] To the extent that the drafters were envisioning the modern Rule 23 as a purely technical procedural tool, though, that vision could never come to pass. This is so both because the idea of procedural law as a neutral framework separable from substantive concerns is a legal fiction[5] and because of the historical and political events unfolding “as the ink dried on the proposed rule.”[6]

No matter the drafters’ intent, though, the modern Rule was born into a legal and sociopolitical landscape that positioned it at the center of many of the same ideological battles that continue to rage today. The first iteration of today’s Rule 23 was enacted in 1966 during the rise of the civil rights and consumer movements.[7] At that time, big business and big government were both losing their trial in the court of public opinion and began to “fall from political grace.”[8] With institutions seen as problematic, the response was to place hope for redress in neither—“[u]nchecked by prostrate business interests, motivated by a public interest agenda, but wary of agency politicization and capture, Congress in the late 1960s frequently turned to private rights of action, often enforced through class actions, to implement the new regulatory schemes it crafted.”[9] A procedural device that was “a litigation backwater when [the drafters] began work”[10] quickly became “more and more almost the staple of federal litigation.”[11] Tensions between dueling conceptions immediately began to ratchet up and would take center stage over the coming decades.

II. The class action wars: Progress and counterrevolution

One of the conceptions saw Rule 23 as a badly needed supplement for “[c]aptured or resource-strapped public agencies [that] cannot adequately enforce the substantive law.”[12] The other viewed Rule 23 as a mere “joinder rule” that might plausibly help individuals with similar claims obtain relief, but supporters of this view claimed that class actions “are not in the main regulatory tools to be wielded for the achievement of administrative objectives.”[13]

Despite room for overlap between the two conceptions—a joinder rule could also serve a salutary, pro-regulatory purpose within its bounds—supporters of each side attacked each other with bitter accusations and recriminations in what have been called the “class action wars.”[14] The attacks began in the late 1960s, peaked in the 1970s, and continued for the rest of the 20th century.[15] Virtually every argument leveled in support of or against expansive use of class actions, even today, stems from these “wars.”[16]

Yet, from 1966 until at least the mid-1990s, neither conception decisively prevailed; the era was, overall, a prolonged period of success for class actions.[17] “[F]or much of this period, courts were generally receptive to class actions, even for sprawling mass tort cases such as asbestos suits.”[18] This success was due in part to the regulatory conception’s successes and occasional garnering of judicial support throughout the era, even if courts sometimes imposed limits on the class action device. Perhaps most famously, even then–Chief Justice Warren Burger recognized that class actions were “an evolutionary response to the existence of injuries unremedied by the regulatory action of government.”[19]

Indeed, this period was a “heyday for civil rights class actions.”[20] “Modern Rule 23’s civil rights provision, coupled with the historic Civil Rights Act of 1964, empowered ordinary people to achieve extraordinary outcomes through the court system.”[21] Civil rights litigation necessarily provided a strong basis for a regulatory conception of class actions. After all, civil rights class actions prosecuted under Rule 23(b)(2) seek injunctions that will most effectively help large groups of individuals who are or were victims of similar discriminatory conduct.[22] Even cases that weakened civil rights class actions nonetheless recognized that “suits alleging racial or ethnic discrimination are often by their very nature class suits, involving classwide wrongs.”[23]

Beyond the intuitive use of civil rights class actions as a vehicle to obtain broad-reaching injunctive relief, the main regulatory bodies that could pursue litigation at the time—the Equal Employment Opportunity Commission and the Department of Justice—were generally regarded as ineffective in the late 1960s and early 1970s.[24] The class action device was fundamental to the success of civil rights litigation and “helped to eliminate explicitly stated policies of discrimination,” even if “broad patterns” of discrimination persisted (though taking on “subtler forms” more appropriate to individual litigation).[25] The alternative—leveraging stare decisis in seriatim litigation—was far less effective: Class actions not only “did what stare decisis failed to do”; they “did what stare decisis could do, but with far less expenditure of judicial resources and lawsuits.”[26]

A robust conception of class actions finds equally strong footing where individual damages are small, “yet the aggregate harm to society is quite considerable.”[27] Under the regulatory conception, a central virtue of class actions is that they not only provide a procedural vehicle for joinder (or for bringing “private attorney general” actions in the abstract) but also “motivate [plaintiffs] to bring cases that for economic reasons might not be brought otherwise.”[28] “The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights.”[29] As Judge Posner explained, when potential individual damages are small, “[t]he realistic alternative to a class action is not 17 million individual suits, but zero individual suits.”[30] “A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.”[31]

Antitrust is another area where class actions performed a salutary function. Private antitrust enforcement, of which class actions are a critical part, has been “substantially underappreciated. Congress’s venerable ‘private attorneys general’ idea has produced tremendous benefits for the United States economy—for consumers and for businesses of all sizes.”[32] “Private [antitrust] actions have proven to be effective measures to secure compensation for antitrust victims that would otherwise not be forthcoming.”[33] Indeed, they are “virtually the only way that victims of anticompetitive behavior can obtain redress.”[34]

Private antitrust enforcement has been extraordinarily successful: a study of just forty then-recent private antitrust enforcement actions (which were predominantly class actions[35]) found that those cases had “provided a cumulative recovery in the range of at least $18.006 to $19.639 billion in allegedly illegally acquired wealth to United States consumers and businesses.”[36] That figure includes “more than $5.706 to $7.056 billion [that] came from foreign companies that violated United States antitrust laws,” meaning “that without the private enforcement of the antitrust laws this money would have remained with foreign lawbreakers instead of being returned to the United States consumers and businesses from which it was taken.”[37] A subsequent study found that private antitrust enforcement (again, largely through class actions) returned $33.8 to $35.8 billion in allegedly illegally acquired wealth to American consumers and businesses.[38]

And those figures from antitrust cases include only monetary benefits that can be easily measured. The studies above excluded cases that resulted primarily or exclusively in injunctive relief, reasoning that “while they may have yielded tremendous benefits to consumers or to the United States economy, these benefits are difficult to quantify.”[39] Furthermore, for more than half a century, antitrust class actions have been (and continue to be) an important vehicle for persuading courts to expand the types of relief antitrust plaintiffs might obtain. As one article summarized, “antitrust norms have been overwhelmingly created in the context of private enforcement.”[40]

Despite these successes, courts did impose limits on class actions during this era. In Snyder v. Harris, the Supreme Court held that class action plaintiffs could not aggregate damages to meet the “amount in controversy” requirement of 28 U.S.C. § 1332,[41] “depriving federal courts of subject matter jurisdiction over most state law class actions and thereby weakening Rule 23 as a weapon for the cause of consumer protection.”[42] In Eisen v. Carlisle & Jacquelin, the Court held that “Rule 23(c)(2) requires that individual notice be sent to all class members who can be identified with reasonable effort.”[43] “[T]he Court further required the plaintiff to ‘bear the cost of notice to the members of his class.”[44] Though “[t]he Court’s holding in this respect does not mean that a plaintiff must always bear the costs of providing notice,”[45] “the twin requirements impose[d] a crushing burden.”[46] In East Texas Motor Freight Systems Inc. v. Rodriguez, the Court held that a plaintiff cannot represent a class of which they are not a member.[47] In Phillips Petroleum Co. v. Shutts, the Court held that the Due Process Clause of the 14th Amendment requires that members of a Rule 23(b)(3) class receive notice and an opportunity to opt out.[48] It also rejected a broad attempt to apply the substantive law of the forum state to out-of-state class members.[49] And in 1997, the Supreme Court largely did away with so-called “mass tort class actions” in Amchem Corp. v. Windsor.[50]

The limits the Supreme Court imposed in this era were accepted to varying degrees. East Texas Motor Freight Systems, for instance, appears to be a common-sense proposition: a class representative ought to be a member of the class they represent. And, at least as to the core of Rule 23, Amchem can be seen as reaffirming the goal of being a regulatory supplement for certain kinds of claims. If class actions are an “evolutionary response” to the failure of the regulatory state (or traditional individual litigation) to protect groups from certain harms,[51] then perhaps the mass tort class action could be seen as “evolution [giving] way to mutation.”[52] After all, “the [Rule 23] Advisory Committee had dominantly in mind vindication of ‘the rights of groups of people who individually would be without effective strength to bring their opponents into court at all.’”[53] The mass tort class action—at least in the high-dollar asbestos context, where individual claims can amount to millions of dollars—could be seen as incompatible with such a conception. It might, however, fit within the older conception of simplifying litigation and managing increasingly sprawling dockets.[54] And Eisen—though debatable because the costs it imposed can directly inhibit recovery for small-dollar injuries that can be substantial in the aggregate—recognizes that the rights of individual class members remain important.[55]

Other decisions were more controversial. Shutts “has a disputed legacy” because, “while surely important,” litigators have reported that it had “no significant impact on the certification of multistate classes.”[56] Snyder and Zahn, which gutted consumer class actions at the time, could also be viewed as problematic because the Court’s heavy reliance on old decisions concerning ordinary joinder did not square with the then-novel tool for claim aggregation that Rule 23 represented.

III. Federalization and decline

When describing the current class action landscape, many point to seminal decisions like Wal-Mart Stores, Inc. v. Dukes[57] and Epic Systems Corp. v. Lewis[58] that have raised procedural and evidentiary burdens for class action plaintiffs while lowering the bar for defendants to combat the class mechanism. These cases and others like them, however, speak more to consequence than cause. That is, they are more representations of the current era than turning points unto themselves. The groundwork for that era was laid first in 1998 with the enactment of Rule 23(f), which allowed defendants to seek immediate appellate review of class certification decisions, and then in 2005 with the Class Action Fairness Act (CAFA), which shifted most class actions into federal court.

In a post-Rule 23(f) and CAFA world, more class actions than ever land in front of federal appellate judges, especially—and crucially—at the class certification stage. And the climate in today’s federal appellate courtrooms is increasingly hostile to class action plaintiffs. “Federal courts have not simply heard and decided more cases as a result of Rule 23(f) and CAFA; they have adopted troublesome new standards applicable to plaintiffs seeking classwide relief.”[59]

a. Rule 23(f)

“Class actions in the 1980s and 1990s (and even into the 2000s) resulted in numerous multi-million dollar and billion dollar settlements.”[60] This generated “significant unfavorable press”—class actions rarely went to trial, and the resulting settlements were criticized as enriching class counsel and taking advantage of both class members (who often received minimal benefits) and defendants (who complained that they “often felt compelled to settle large class actions rather than risk a potentially bankrupting judgment”).[61] And outside of the “extraordinary writ of mandamus,” which “[m]ost appellate courts were unwilling to invoke,” there was no “immediate appellate remedy for most defendants facing a grant of class certification.”[62] Enter Rule 23(f).

Rule 23(f) was “crafted in . . . neutral language”: it allows “either plaintiff (upon denial of certification) or defendant (upon the grant of certification)” to petition the appellate court for interlocutory review.[63] Though the petitioner need not seek leave from the district court, the appellate court has “unfettered discretion whether to permit the appeal, akin to the discretion exercised by the Supreme Court in acting on a petition for certiorari.”[64]

Rule 23(f) was controversial from the start. “Although there was much support for the addition, there was strong opposition as well, especially from plaintiffs’ attorneys, who worried that such a rule lacked clear guidelines and would result in increased costs and unnecessary delay.”[65] While the drafters of the amendment ultimately “concluded that both plaintiffs and defendants needed interlocutory review” of class certification decisions[66] and tried to balance competing concerns, in practice Rule 23(f) has ultimately benefitted defendants more than plaintiffs.[67] A 2013 survey of appellate court review under Rule 23(f) found that courts were significantly friendlier to defendants seeking reversal of a class certification decision than to plaintiffs appealing the denial of class certification:

Out of the 209 Rule 23(f) appeals accepted, 144 (or about 69 percent) were appeals by defendants after the grant of class certification, whereas only 65 (31 percent) were appeals by plaintiffs after the denial of class certification. Of the 144 appeals by defendants, defendants were successful in 101 cases (a 70 percent reversal rate). Of the 65 appeals by plaintiffs, plaintiffs prevailed in only 26 cases (or 30 percent of the time). Thus, even when plaintiffs convinced the appellate court to grant review, they lost in the majority of cases.[68]

Rule 23(f)’s “one serious limitation”—that it applies only in federal court[69]—catalyzed the next major development in class action jurisprudence: the Class Action Fairness Act, or “CAFA.”

b. CAFA

In short, “CAFA open[ed] the federal courts to class actions that could not be brought there under the default regime”[70] by relaxing the “stringent requirements for diversity jurisdiction” in class action cases—“complete diversity between plaintiffs and defendants and (absent supplemental jurisdiction) an amount-in-controversy of $75,000 per claimant”—and thus strengthening defendants’ ability to remove cases to federal court.[71]

Almost immediately after Rule 23(f) was enacted, business interests and defense lawyers seeking to take advantage of the new rule began ramping up efforts to steer class actions into federal court.[72] Early iterations of the bill that eventually became CAFA—then called “The Consumer Class Action Bill of Rights”—set their sights on perceived “prominent abuses in class action practice such as unreadable notices to class members and settlements that resulted in large fees to attorneys with little benefit to class members.”[73] These concerns, though valid in some instances, were often sensationalized and exaggerated to serve business interests’ desired narrative: class actions as “the big Bad of modern day civil procedure—in need of banishment, or, at a minimum, significant restraint.”[74] In any case, though, they were largely addressed by 2005: the combined force of “court decisions, judicial oversight, and 2003 amendments to the federal rules . . . requiring, inter alia, that notices be written in plain language and impos[ing] stricter rules for appointing class attorneys, awarding attorney’s fees, and approving settlements”[75] significantly curbed truly exploitative class action practices.

But the “counterrevolution against private enforcement”[76] did not slow. Instead, it merely took on a new form. Proponents of CAFA shifted focus away from practice abuses and toward a purported epidemic of forum shopping.[77] Certainly, plaintiffs’ lawyers favored certain friendly state courts—especially as federal courts became more conservative and increasingly skeptical of class actions.[78] But for many proponents of CAFA, their “actual agenda, in vastly expanding the jurisdiction of federal courts to hear state law claims brought as class actions, was to ensure that the cases were not certified and went away.”[79]

The passage of CAFA marked a significant victory for big business and defense lawyers in the class action wars. By loosening rules on diversity and removal in class action cases, CAFA ensured that most major class actions could either be brought in or later removed to federal court.[80] “The move from state to federal court meant that class certification decisions would be governed not by autonomous and potentially liberal state class action doctrine, but by an ever-more-conservative federal class action jurisprudence.”[81]

To many, CAFA marked the beginning of a “death spiral” for class actions.[82] But the class action is not a lost cause—even in an increasingly hostile environment, it endures and, as will be discussed in part III, evolves.

*Zelly Rosa is an Associate and Renner Walker is a Partner in New York.

Footnotes

[1] Suzette M. Malveaux, The Modern Class Action Rule: Its Civil Rights Roots and Relevance Today, 326 Kan. L. Rev. 325, 333 (2017).
[2] See id. at 341–42 (“Interestingly, some of the rule’s architects themselves were personally involved in the civil rights issue of the time—desegregation. . . . Primary drafters had skin in the game. Not surprisingly, their commitment to civil rights was consistent with their work on the Advisory Committee.”).
[3] Id. at 342; see also David Marcus, The History of the Modern Class Action, Part I: Strum Und Drang, 90 Wash. U. L. Rev. 587, 605 n.6 (2013) [hereinafter Marcus, Strum Und Drang] (“If there was a single, undoubted goal of the committee, the energizing force which motivated the whole rule, it was the firm determination to create a class action system which could deal with civil rights and, explicitly, segregation.” (quoting John P. Frank, Response to 1996 Circulation of Proposed Rule 23 on Class Actions, in 2 Working Papers of the Advisory Committee on Civil Rules on Proposed Amendments to Civil Rule 23, at 262, 266, http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/ WorkingPapers-Vol2.pdf)).
[4] Marcus, Strum Und Drang, supra note 3, at 608.
[5] Many scholars have discussed this idea in greater depth than the scope of this article allows. See, e.g., Jay Tidmarsh, Procedure, Substance, and Erie, 64 Vand. L. Rev. 877, 895 (“[A]cting on, and changing, the substance of legal claims is an integral part of procedure’s nature, not simply one of its unavoidable and unfortunate side effects. . . . [S]ubstantive law [i]s inextricably linked to, and only partially comprehensible apart from, the process that acts on it.”); Phyllis Tropper Baumann, Judith Olans Brown & Stephen N. Subrin, Substance in the Shadow of Procedure: The Integration of Substantive and Procedural Law in Title VII Cases, 33 B.C. L. Rev. 211, 216 (“[N]o one denies the gross distinction between substantive and procedural law. . . . But procedural separateness makes little sense in the real world. Procedure is the language substance frequently must speak. Substance tends to be a museum piece—admired, but not used—unless it is delivered by the procedure.” (emphasis added)); Stephen B. Burbank, The Class Action Fairness Act of 2005 in Historical Context: A Preliminary View, 156 U. Pa. L. Rev. 1439, 1440–41 (2008) (cautioning that when analyzing “law’s significance,” especially a law “labeled ‘procedure,’” one “must resist the temptation to accept a doctrinal question at face value (that is, to regard doctrine as an end in itself), to view such a question apart from the litigation dynamics that it engenders, and otherwise to ignore issues of power that may be at stake in its resolution”).
[6] See Marcus, Strum Und Drang, supra note 3, at 607.
[7] See id. at 607.
[8] Id. at 607–08.
[9] Id. at 608.
[10] Id.
[11] Id. (quoting Testimony of Arthur Miller, Public Hearing: Proposed Amendments to the Federal Rules of Civil Procedure Rule 23, at 6 (Jan. 17, 1997), in 3 Working Papers of the Advisory Committee on Civil Rules on Proposed Amendments to Civil Rule 23, at 6, http://www.uscourts.gov/uscourts/‌RulesAndPolicies/
rules/WorkingPapers-Vol3.pdf (internal quotation marks omitted)).
[12]Id. at 594.
[13] Id.
[14] See id. at 610. “[T]he standard set of rhetorical grenades for the class action wars” included accusations such as “spokesm[e]n for business interests insist[ing] that the closet Marxists on the plaintiffs’ side wanted ‘to literally dismember large numbers of business enterprises’” and prominent plaintiffs’ lawyers describing their adversaries as “lavishly paid defense buffoons.” Id. at 611–12 (citations and internal quotation marks omitted).
[15] Such debates over class actions continue today, although a spate of recent legislation and jurisprudence has rendered the 21st century a distinct era, as explained in the next section.
[16] Marcus, Strum Und Drang, supra note 3, at 610 (arguing that during “[t]he class action wars of the 1970s . . . combatants quickly exhausted virtually every claim for and against an invigorated Rule 23. Debates since have consisted largely of recycled doctrinal and rhetorical claims, suggesting either the stability of class action doctrine or the limits of the lawyer’s imagination (or both)”).
[17] Robert H. Klonoff, The Decline of Class Actions, 90 Wash. & Lee L. Rev. 729, 733 (2013).
[18] Id.
[19] Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326, 339 (1980).
[20] Malveaux, supra note 1, at 359 (2017).
[21] Id.
[22] Id. at 332 (explaining that Rule 23(b)(2) “permit[s] a class action to be maintained when a defendant has acted on grounds generally applicable to a group, justifying group-wide injunctive or declaratory relief” and that “[a]lthough [the] Rule . . . is not limited to civil rights cases, its driving force and evolution stem from a commitment to systemic desegregation and racial equality”).
[23] See E. Tex. Motor Freight Sys. Inc. v. Rodriguez, 431 U.S. 395, 405 (1977).
[24] See Marcus, Strum Und Drang, supra note 3, at 639 (“The pervasive gender and racial discrimination in the American workplace of the late 1960s overwhelmed the capacity of federal agencies to respond.”).
[25] David Marcus, The Modern Class Action, Part II: Litigation and Legitimacy, 1981–1994, 86 Fordham L. Rev. 1785, 1798–99 (2018) [hereinafter Marcus, Litigation and Legitimacy].
[26] Malveaux, supra note 1, at 361; see also Marcus, Strum Und Drang, supra note 3, at 639 & n.302 (explaining that “[f]or a number of reasons, individual lawsuits were an inadequate substitute” and citing reports reflecting on power imbalances that inhibited the efficacy of individual litigation).
[27] See Owen M. Fiss, The Political Theory of the Class Action, 53 Wash. & Lee L. Rev. 21, 22 (1996) (citation and internal quotation marks omitted). “Where it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages, aggrieved persons may be without any effective redress unless they may employ the class-action device.” Deposit Guar. Nat’l Bank. v. Roper, 445 U.S. 326, 339 (1980).
[28] Roper, 445 U.S. at 338. The Roper Court further noted: A significant benefit to claimants who choose to litigate their individual claims in a class-action context is the prospect of reducing their costs of litigation, particularly attorney’s fees, by allocating such costs among all members of the class who benefit from any recovery. Typically, the attorney’s fees of a named plaintiff proceeding without reliance on Rule 23 could exceed the value of the individual judgment in favor of any one plaintiff. Here the damages claimed by the two named plaintiffs totaled $1,006.00. Such plaintiffs would be unlikely to obtain legal redress at an acceptable cost, unless counsel were motivated by the fee-spreading incentive and proceeded on a contingent-fee basis. This, of course, is a central concept of Rule 23.
Id. at 338 n.9 (1980).
[29] Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)).
[30] Carnegie v. Household Int’l, Inc., 376 F.3d 656, 661 (7th Cir. 2004) (second emphasis added). As Judge Posner also explained, “[i]t would hardly be an improvement to have in lieu of [a] single class action 17 million suits each seeking damages of $15 to $30. . . . [A] class has to be unwieldy indeed before it can be pronounced an inferior alternative—no matter how massive the fraud or other wrongdoing that will go unpunished if class treatment is denied—to no litigation at all.” Id.
[31] Amchem, 521 U.S. at 617 (internal quotation marks omitted) (quoting Mace, 109 F.3d at 344).
[32] Robert H. Lande & Joshua P. Davis, Benefits from Private Antitrust Enforcement: An Analysis of Forty Cases, 42 U.S.F. L. Rev. 879, 904 (2008) [hereinafter Lande & Davis, Forty Cases].
[33] Clifford A. Jones, Exporting Antitrust Courtrooms to the World: Private Enforcement in a Global Market, 16 Loy. Consumer L. Rev. 409, 441 (2004).
[34] Lande & Davis, Forty Cases, supra note 32, at 904.
[35] See Joshua P. Davis & Robert H. Lande, Defying Conventional Wisdom: The Case for Private Antitrust Enforcement, 48 Ga. L. Rev. 1, 16 (2013) [hereinafter Davis & Lande, Defying Conventional Wisdom] (noting that this study relied on class actions because “class action settlements must receive court approval and are a matter of public record,” whereas “in non-class action cases parties often insist on confidentiality, impeding research”).
[36] Lande & Davis, Forty Cases, supra note 32, at 891 & n.45. The authors noted that, “[f]or simplicity,” they relied on both cases that resulted in settlements (hence the qualifier “allegedly”) and cases that were “proven in court.” Id.
[37]Id. at 891–92.
[38] Joshua P. Davis & Robert H. Lande, Toward an Empirical and Theoretical Assessment of Private Antitrust Enforcement, 36 Seattle U. L. Rev. 1269, 1272 (2013).
[39] See Lande & Davis, Forty Cases, supra note 32, at 890–91; see also Davis & Lande, Defying Conventional Wisdom, supra note 35, at 16 (“In assessing these benefits, we sought to avoid subjective assessments of value. As a result, we did not include cases that obtained an injunction as the only or primary form of relief. Nor, in analyzing quantitative recoveries, did we include equitable relief (or coupons, products, rebates, or discounts). Equitable relief may be extraordinarily valuable, but its benefits are difficult to measure.” (emphasis added)).
[40] Daniel A. Crane, Towards a Realistic Comparative Assessment of Private Antitrust Enforcement, in Reconciling Efficiency and Equity: A Global Challenge for Competition Policy 343 (2019).
[41] 394 U.S. 332, 338 (1969).
[42] Marcus, Strum Und Drang, supra note 3, at 610. In Zahn v. International Paper Co., the Court compounded this holding by rejecting jurisdiction even when one (or more) of the named plaintiffs could satisfy the amount in controversy requirement on their own. See 414 U.S. 291, 292, 300–02 (1973).
[43] 417 U.S. 156, 175–76 (1974).
[44] Alexander W. Aiken, Comment, Class Action Notice in the Digital Age, 165 U. Pa. L. Rev. 967, 976 (citing Eisen, 417 U.S. at 177).
[45] Id. at 976 n.53 (emphasis in original). “Courts have developed several doctrines that permit cost shifting.” Id.
[46] The Law: Taking Mass from Class, Time, June 10, 1974, https://time.com/archive/6845266/the-law-taking mass-from-class/.
[47] 431 U.S. 395, 405 (1977). The Court underscored that ruling in General Telephone Co. of the Southwest v. Falcon, 457 U.S. 147, 158 (1982).
[48] 472 U.S. 797, 811–12 (1985).
[49] Id. at 821–23.
[50] Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997).
[51] Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326, 339 (1980).
[52] See John C. Coffee, Jr., Class Wars: The Dilemma of the Mass Tort Class Action, 95 Colum. L. Rev. 1343, 1344 (1995). Though Coffee was writing before the Supreme Court’s Amchem decision, he had testified as an expert witness for settlement objectors in Georgine v. Amchem Prods., Inc., 157 F.R.D. 246 (E.D. Pa. 1994), which ultimately made its way to the Supreme Court in Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997).
[53] Amchem, 521 U.S. at 617 (quoting Kaplan, Prefatory Note 497).
[54] See id. at 617–18 (1997) (“In the decades since the 1966 revision of Rule 23, class-action practice has become ever more ‘adventuresome’ as a means of coping with claims too numerous to secure their ‘just, speedy, and inexpensive determination’ one by one. The development reflects concerns about the efficient use of court resources and the conservation of funds to compensate claimants who do not line up early in a litigation queue.” (citing Fed. R. Civ. P. 1; Jack B. Weinstein, Individual Justice in Mass Tort Litigation: The Effect of Class Actions, Consolidations, and Other Multiparty Devices (1995); William W. Schwarzer, Settlement of Mass Tort Class Actions: Order out of Chaos, 80 Cornell L. Rev. 837 (1995))).
[55] See Marcus, Strum Und Drang, supra note 3, at 633–35.
[56] Marcus, Litigation and Legitimacy, supra note 25, at 1793 (citing, inter alia, Elizabeth J. Cabraser, The Manageable Nationwide Class: A Choice-of-Law Legacy of Phillips Petroleum Co. v. Shutts, 74 U.M.K.C. L. Rev. 543, 546 (2006))
[57] 564 U.S. 338 (2011).
[58] 138 S. Ct. 1612 (2018).
[59] Klonoff, supra note 17, at 745.
[60] Id. at 737.
[61] Id. at 737–38.
[62] Id. at 738.
[63] Id. at 740. The exact language of Rule 23(f) is as follows: A court of appeals may in its discretion permit an appeal from an order of a district court granting or denying class action certification if application is made to it within ten [now 14] days after the entry of the order. An appeal does not stay proceedings in the district court unless the district judge or the court of appeals so orders. Id. (quoting Fed. R. Civ. P. 23(f)).
[64] Id. (internal quotation marks omitted) (quoting Advisory Committee Note, Fed. R. Civ. P. 23(f)).
[65] Id. at 739.
[66] According to the Rule 23(f) advisory committee, For plaintiffs, securing review of a denial of class certification (absent an interlocutory appeal) meant taking an individual plaintiff’s case to trial and obtaining a final judgment, thereby incurring expensive discovery, often with only a slight hope of ultimately overturning the denial of certification on appeal. For defendants, securing a final judgment meant risking a potentially bankrupting verdict at trial, with no guarantee of ultimately prevailing on class certification. Id. (citing Advisory Committee Note, Fed. R. Civ. P. 23(f)).
[67] Id. at 741.
[68] Id. (emphasis added).
[69] Id. at 743.
[70] Burbank, supra note 5, at 1453.
[71] Klonoff, supra note 17, at 744–45. Specifically, CAFA’s marquee reforms were: (1) permitting removal with “minimal diversity,” i.e., any class member diverse from any defendant and an amount in controversy for the entire case of more than $5 million; (2) permitting removal without regard to the one-year deadline for removal prior to CAFA; (3) permitting removal by one defendant without the consent of the other defendants; and (4) permitting removal even when a defendant is a citizen of the state where the suit was brought. Id. at 745 (footnotes and internal citations omitted).
[72] See, e.g., Edward F. Sherman, The Class Action Fairness Act and the Federalization of Class Actions, 283 F.R.D. 321, 322 & n.6 (2007). For instance, almost concurrently with Rule 23(f)’s adoption, Congress passed the Securities Litigation Uniform Standards Act (SLUSA), which precluded the majority of securities class actions from being brought in state courts. See 5 U.S.C. §78bb(f)(1)(A).
[73] See Sherman, supra note 72, at 322.
[74] Christine P. Bartholomew, Redefining Prey and Predator in Class Actions, 80 Brook. L. Rev. 743, 743 (2015).
[75] Sherman, supra note 72, at 322 & n.8 (citing Fed. R. Civ. P. 23(d)–(h)).
[76] Stephen B. Burbank & Sean Farhang, Class Actions and the Counterrevolution Against Federal Litigation, 165 U. Pa. L. Rev. 1495, 1496 (2017).
[77] See Sherman, supra note 72, at 322.
[78] See, e.g., id.; Burbank, supra note 5, at 1504–05 (describing “the allure of the state class action litigation format as an instrument of interstate forum shopping”).
[79] Burbank & Farhang, supra note 76, at 1511.
[80] Klonoff, supra note 17, at 744–45.
[81] Burbank & Farhang, supra note 76, at 1511.
[82] Jay Tidmarsh, Living in CAFA’s World, 32 U. Tex. Rev. Litig. 691, 692 (2013).