Unused and Probably Unusable Class actions: why certification makes or breaks a case

Another great Class action article (HT: Howard again) (aside: HT is the abbreviation, commonly used by bloggers, to say Hat Tip, meaning a Tip of the Hat or casual salute to, another blogger or journalist for pointing out the relevant source.)

Wal-Mart's Bid to Void Suit Calls It Too Big (L.A. Times; free subscription may be required) mentions that the certification decision is the "crucial moment" for a class action, particularly for mass discrimination cases like Wal-Mart. UCLA Law Prof and labor law expert Katherine Stone is quoted:

"If the class is certified, the defendants will usually settle," she said. But if the plaintiffs' petition for a class action is rejected, it becomes too expensive for plaintiffs' lawyers to pursue their cases individually and they will "usually fold," Stone said.

Part I: In which I explain the significance of certification

Why is Stone's comment accurate? It's because the certification of a class gives plaintiff's lawyers a much bigger stick to wield against defendants. Insurance companies who want to continue fighting until certification is finally decided have a good point: a pre-certified class is only a potential threat. A certified class, on the other hand, has made it past a judicial hurdle - one required by statute. It has shown that it meets certain requirements (see Federal Rule of Civil Procedure 23, or your local equivalent), in the eyes of the judge:
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- the class has So Many People that joinder of their actions is impracticable (Numerosity is met)

- and they all have the Same Issues In Common, or at least most of their Issues Are In Common (Commonality is met; this is a hot-button one, since it's much harder to prove than most of the others, even if it happens to be true)

- this procedural tool is as good as (or better than; see your local jurisdiction) other available methods for achieving a good outcome. In Pennsylvania, the requirement is that a class action be "Superior to other available methods for the fair and efficient adjudication" of the lawsuit(s). This is a much harder test, in theory, than one requiring that it merely be No Worse than The Best Alternative. Equally adequate among good alternatives is one thing; better than any possible alternative is a really stringent requirement.)

- the class has a representative - a plaintiff willing to take on the necessary responsibility and time to see the case through
- who is similarly situated with the proposed class, meaning they have the same type of claims and the same sorts of defenses at issue (Typicality is met), and
- who is not in a position of conflict-of-interest with other class members, and is represented by capable class counsel (Adequacy of Representation is met).

The idea is: is it unfair (or unworkable) to do this other than as a class action? Would it be fair to hold absent class members (people covered by the class definition but not necessarily active in the litigation) to the outcome obtained by the class counsel and class representative? Is it ethical to have this representative in court on behalf of that proposed class? Is it fair to defendant to have this particular class certified, or does it force them to defend an unworkably large number of different claims?

Obviously, anytime class certification is contested there are going to be at least two views as to the right answer to at least one of those questions.

Sometimes a defendant won't deny the claim that the accused conduct is unitary and universal, meaning it's common to all of the proposed class members (say if the decision was to change a vacation or maternity or retirement policy that affected everyone in the described class) and so that they can't with a straight face argue that there's no commonality of claims, and that since approximately 50,000 employees were affected there's no way of arguing for an absence of numerosity without turning purple - the Purple Test, as one of my professors used to say.

But other times, a defendant can raise legitimate interests that may militate against applying the rule. I think that's what Wal-Mart was trying to do.

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Part II: A discursive and general discussion of abstractions

[This part starts in but diverges from the class action context, and discusses something more in the nature of Conflicts of Law and the nature of Interesting Questions. It could be its own post, but it comes out of the prior discussion and so I'll leave it here, in its own section.]

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Sometimes when two interests or rules are in conflict, there's an easy solution. A federal statute and a state statute cover a specific area where both legislatures have authority to regulate: Supremacy Clause says the federal statute wins. Easy.

But sometimes, application of competing rules and competing analyses does not produce a clean outcome.
Sometimes... sometimes we have the Interesting Situations, where the right solution to a conflict is not as obvious.

Leiter has mentioned this (halfway down the post), and it bears repeating: some cases are Easy, and some are Not, and the Easy ones are not especially interesting. If a rule requires that a class be "so numerous that joinder is a practical impossibility" or equivalent language, and the proposed class is over a million people, then it's an easy case. There's no valid argument on the other side. It's bizarre to say that a class action is "too numerous to be a workable class action" - that's not one of the requirements, that a class be _small_ enough. I think Wal-Mart is really arguing that if the class action proceeds it could kill the company, and they don't think that's fair. That's a different sort of claim about a different rule (perhaps about substantive fairness), perhaps of their own devising.

Hard cases are those where you have multiple answers that are arguably correct, or non-congruent values that appear to be in conflict. (In Leiter's post, above, he talks about questions to which reasonable people could come to different yet reasoned conclusions; I'm talking here about situations where it's unclear that there is any conclusion that is reasoned and unquestionably correct.)

This applies throughout the law: the interesting situations are those where it's not (or wasn't before) obvious which of multiple modes of analysis or endpoint solutions were the correct (or best available) ones.

It's not "interesting" in the analytical sense when an innocent man is wrongfully put to death. It's exciting in the sense of horrific, moronic, evil, and stupid — aside: although some will argue it may be "necessary," but I would look at these people with much suspicion; what are their values, exactly? Pro-death? Law And Order? It can't be Justice; I don't think that's the way Law And Order cuts; are they just conservative? Racist? Hateful? Are they a pragmatist and don't think it matters? Are they atheist? Why would they hold this morally indefensible view? Scalia, I'm particularly thinking about you this time....

But "interesting" in the sense that there's much to say about it, not so much. There are no competing values against the loss to the individual, the community, public respect for law and order, the country, the human race when the wrong person is put to death. It may not be a big loss- if that's your view, there's still not much to talk about- but there's no upside whatsoever. Even the vengeance felt by the friends or relatives of the victims isn't a positive; it's an undesirable joy, speaking as an armchair social utilitarian.

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As I always say, I'll have more about class actions in future posts.

[update: Thanks again to Patent Baristas for including this post in Blawg Review #19. I'm not entirely clear on what "Cooked" means, but it's apparently good. Yes, this is a linguistically inclined blawg, and I am glad that this post was interesting to someone.

I have some more thoughts on Wal-mart, and why its arguments may in fact have been meritorious (not that I necessarily want to see them win or lose, I'm just talking about rightness and wrongness). I'll get to them at some point. Short summary: if a class action is certified that necessarily involves a choice of law analysis between an excess of 50 jurisdictions; in which forum and jurisdiction are not necessarily correct; in which multiple (or even incompatible?) legal theories are being asserted; and against which no defense is possible, certification in a bet-the-company case does begin to look like a raw deal. However, unlike the classic cases (see In re Agent Orange Product Liability Litigation before Judge Weinstein) what's being asserted against Wal-mart is: >a factually diverse set of claims regarding a
uniformly applicable body of law. In an air crash or an agent orange exposure case, it's not just about proving you were injured; there's also the question, under what tort law (including law of privileges) does the case proceed? In a Title VII claim, especially with allegations of nationwide business practices (uniformly, from the top-down, allowing or failing to detect and halt sex-based discrimination), there's one law: Federal statutory law. But I'll have more to say later, as and if the case proceeds.]

Unused and Probably Unusable

-- a linguistically inclined blawg

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