The Rule of Law Problem: Unconstitutional Class Actions and Options for Reform

Article excerpt

I. INTRODUCTION
II. THE RULE OF LAW PROBLEM
  A. Defining Rights
  B. Due Process and the Rule of Law
     1. Introduction to Due Process in the Class Action
        Context: Federalism and State Autonomy
        Interests
     2. The Rule of Law and Class Actions
     3. Class Actions and Rent-Seeking
III. CONSTITUTIONAL CLAIM AGGREGATION:
       PROPOSALS FOR REFORM
  A. Principles for Reform
     1. Decentralization
     2. Cooperative Federalism
     3. Judicial Review
  B. The Class Action Fairness Act Considered
     1. Summary of Provisions
        a. Expanding Federal Diversity
           Jurisdiction
        b. Expanding Federal Removal
           Jurisdiction
     2. Will the Class Action Fairness Act
        Succeed?
        a. Article III Problems with the Class Action
           Fairness Act
        b. The Act's Myopic Focus on Federal
           Competency
  C. Designing a Better Class Litigation System
     1. Enhance Transparency
     2. Create Textual Choice of Law
        Requirements
     3. Eliminate the Power of Named Plaintiffs to
        Monopolize the Market for Class Members
     4. Create Structural Incentives for Litigants and
        Courts to Raise Constitutional Challenges
        to Class Certification
     5. Encourage Decentralization and
        Cooperative Federalism
IV. CONCLUSION

I. INTRODUCTION

Imagine that relief depends on the will of a man, called the Judge, who possesses the power to force "wrongdoers" to compensate "victims." Busy and indecisive, the Judge hasn't formulated a coherent set of laws. Instead, when a citizen asserts a grievance, the Judge changes the rules based on principles he does not announce in advance. As a result, no one can predict when he will be hauled into court because there is, quite simply, no commonly accepted language for what is "wrong," who is a victim, and when coercive legal process is proper.

This article suggests that contemporary class action litigation mirrors this imaginary legal world. Utilizing an often neglected strain of due process analysis, the article explains how class actions frequently unsettle defendants' expectations about their rights and defends the proposition that class actions thereby violate due process. The article then applies this due process analysis to launch a new framework for class action reform, one that flows naturally from conceptualizing class action abuse as a constitutional problem.

It is well known that rights are often ignored or changed when litigants assert claims on behalf of a class. To see this problem concretely, consider the following hypothetical: Congress passes a law that outlaws the use of "profane" words, but excuses a defendant who utters profanity when physically injured. An onlooker sues you for damages under the statute after you stub your toe and assault him with choice words. At trial, you produce a witness--a tourist who videotaped the incident--but the judge disregards the evidence, deciding he will not enforce the "physical injury" defense on this occasion. Clearly, your rights have been altered. A potent defense (stubbing your toe) is not available to you, and your liability is assessed by a standard different than the law had allowed.

When courts aggregate many individual lawsuits through the class device, they are inevitably tempted to change defendants' rights in this fashion. Imagine, now, that one citizen files a class action against you under this anti-profanity statute, alleging you violated the rights of 10,000 persons in as many different individual encounters. It would be impossible for the court to ascertain whether the physical injury defense applied to each claim, since no single court could examine each of your interactions with 10,000 class members. So, inevitably, the plaintiff, to secure aggregation, will argue that your liability can be proven in a more lenient fashion. If the court accepts the plaintiff's invitation, the rules that govern your conduct are changed. …