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Alexandra D. Lahav, Symmetry and Class Action Litigation, 60 UCLA L. Rev. 1494 (Aug. 2013)

Posted in Legal Publications and Articles

Alexandra D. Lahav, Symmetry and Class Action Litigation, 60 UCLA L. Rev. 1494 (Aug. 2013).

In her article, Alexandra D. Lahav, a Professor of Law at the University of Connecticut, discusses the resources that parties often have to devote to their lawsuit in terms of both human as well as financial capital, the effect of such resources on lawsuits, and the impact of such resources on class actions.

The question that Lahav aims to answer is to what extent should procedural law take into account the resources of participants in the legal system?  Lahav notes that the assumption in the United States is that the legal system does not require symmetry between litigants, and the courts take the litigants as they find them.  Lahav points three exceptions to this general rule: (1) the provision of an attorney by the state in certain limited circumstances; (2) fee shifting in the prevailing plaintiff’s favor; and (3) the class action lawsuit. 

Lahav focuses on the baseline assumption that the courts take litigants as they find them.  She outlines that current developments of the class action doctrine reinforces the asymmetry that exists between individual plaintiffs and organizational defendants outside litigation.  The trends favoring settlement classes over litigated classes are driven, at least in part, by a belief that litigation class actions pressure defendants into settling meritless cases to the detriment of defendants and society.

This Article first considers the power dynamics between parties in class actions.  Part I explains those dynamics and demonstrates how they create a disparity between class actions certified for settlement only and those certified for litigation. This section begins by describing the doctrinal background and then discusses recent decisions that point to a renaissance in settlement-only class actions. 

Lahav points that, until recently, the trend in class action doctrine moved in one direction—class actions were increasingly difficult to certify for both litigation and settlement purposes.  The biggest barriers to class actions were the courts’ concern for future claimants in the mass tort context, their openness to collateral attacks on settlements, and the increasingly narrow reading of the requirements of Rule 23, especially the commonality requirement for all class actions and the predominance requirement for money damages class actions.

Lahav noted that, in the last twelve months, the barriers to certifying settlement class actions have appeared to diminish. Courts have given certification requirements a more generous reading, and they have been more tolerant of differences among class members when presented with a settlement than when presented with a motion to certify a class for litigation.

Lahav notes that the recent renaissance in settlement classes allows defendants to obtain global peace when they agree to a settlement price, but they can resist collective resolution in all other cases so that litigation is extremely costly for plaintiffs to pursue.  For example, after the settlement announcement, more claimants than were expected may come out of the woodwork and dilute the settlement fund, or there may be fraudulent claims or other problems that increases the cost of settling or of administering the settlement.   For this reason, defendants are pushing for leniency in the certification of settlement class actions, even as they would like to limit litigation classes.  Lahav opines that the defendants may find themselves arguing for a lenient interpretation of predominance in settlement and a rigorous application in litigation, although in both cases the same provision of the rule is in play.

The recent decisions imposing very onerous standards for certifying litigated classes and looser standards for certifying settlement classes, according to Lahav, would alter the power dynamics in favor of defendants and undo the symmetry between parties that the class action procedure was intended to achieve.  Lahav notes that the defendants can use class certification as a way to obtain global peace when they agree to a settlement price, but they can resist collective resolution in all other cases so that litigation is extremely costly for plaintiffs to pursue.

Lahav points that the courts’ leniency toward class settlements leads to a paradox.  While judges are concerned that a litigated class will exert undue pressure on the defendant to settle, they readily approve of settlements of claims they believe lack merit.  One might respond that defendant has consented to the settlement, but arguably courts should also be concerned that the defendant’s purported consent is in fact a response to the duress imposed by the threat of a class action. Lahav suggests that the reason for courts’ exclusive concern over defendant’s duress in litigated classes is that litigated class actions upend the status quo ante whereas settlement classes reinforce it.  Ultimately, if judges continue to treat settlement and litigation classes differently, the courts will reflect the asymmetry between plaintiffs and defendants in the real world.

 In Part II, the article considers the problem created by the fact that the class action alters the status quo ante. Lahav asks whether it is possible to defend an egalitarian ideal of adjudication in a society with unequal resource distribution.  One possible justification for an egalitarian court system focuses on the special role of the courts in a social order structured around legal rights and obligations that are enforced through litigation.  The adjudicative process must treat individuals with equal respect and concern for them to be able to realize rights and enforce obligations. There is much more to be said on this subject.

In conclusion, Lahav remarks that the frustrating thing about litigation is that there is always someone equal and opposite you trying to undo everything you do.  The class action creates symmetry between litigants where outside the courtroom they are unequal.  In doing so, it sets in motion a process that lives up to the promise of the American litigation system, with all its flaws.  In her article, Lahav suggests that much of the ire against the class action stems from the fact that this procedural device alters the status quo ante by creating symmetry between litigants.  If the inconsistent treatment of the settlement and litigation classes persists, this symmetry would be undone and the power dynamic favoring organizations in the larger social order would be enforced within the courts.  Lahav hopes that her article would be the beginning of a conversation on the role of egalitarian principles in litigation.