Academic journal article Stanford Law Review

Class Action "Cops": Public Servants or Private Entrepreneurs?

Academic journal article Stanford Law Review

Class Action "Cops": Public Servants or Private Entrepreneurs?

Article excerpt

INTRODUCTION

I. THERE IS GROWING PUBLIC DISTRUST OF THE CLASS ACTION DEVICE
II. IN RESPONSE TO GROWING CRITICISM, SOME PLAINTIFFS' ATTORNEYS
MISLEADINGLY SEEK TO PORTRAY THEMSELVES AS "PRIVATE ATTORNEYS
GENERAL"
  A. The Profit-Seeking Class Action Lawyer and the Concomitant Effects
  on Lawsuit Initiation, Selection, and Settlement
     1. Lawsuit initiation and selection
     2. Settlement
  B. State Attorneys General Are Subject to Constraints Unknown to
  Private Class Action Attorneys
  C. The Enforcement Analogy's Inconsistency with Private Attorney
  General Statutes
  D. Blurring Public/Private and Civil/Criminal Distinctions
  E. Delegation of Attorney General Functions to Private Lawyers
III. IF CLASS ACTION LAWYERS SEEK TO PORTRAY THEMSELVES AS PUBLIC
SERVANTS, THEY SHOULD BE SUBJECT TO THE SAME ETHICAL STANDARDS
AS PUBLIC SERVANTS
  A. Some Jurisdictions Have Enacted Legislation Addressing Ethical
  Issues That Arise When States Retain Private Lawyers to Represent
  Their Citizens
     1. Some states bar payment of contingency fees in public
     representations by private attorneys
     2. States are also addressing ethical concerns raised by attorney
     general retention of campaign contributors
  B. States Should Consider Applying the Same Types of Ethical Standards
  to Class Action Lawyers
     1. Contingency fees should be eliminated or drastically curtailed
     2. Class action attorneys should be prohibited from litigating
     class actions before judges to whom they have contributed

CONCLUSION

INTRODUCTION

Recent surveys indicate growing public distrust of the class action device. Initially intended as a means of resolving numerous commonly grounded controversies through a single lawsuit, class actions are now widely perceived as little more than a money generator for attorneys. This perception should not be surprising, given the emerging pattern of class action settlements (particularly in state courts) in which virtually all of the recovered money flows to the class attorneys, rather than the allegedly injured class members.

During the congressional debate over the recently enacted Class Action Fairness Act, (1) opponents of the legislation sought to recharacterize class actions as private law enforcement efforts and to paint the class attorneys who bring such actions as "private attorneys general"--extensions of federal and state regulators. This has become a common theme among plaintiffs' lawyers. As one commentator has put it, "Because the government has limited resources, private parties need to pick up the slack. Our entire system of government is based on private initiatives, and class actions are no different." (2) Or as another commentator sees it, "The government can only do so much in policing corporate wrongdoing--society needs private attorneys general to assist in protecting victims' rights." (3)

There are two fundamental problems with this revisionist rationale for class actions. In the first place, the concept raises fundamental questions about the validity of the class action device under the Rules Enabling Act. (4) After all, if the true purpose of the class concept were to facilitate private law enforcement, it would be a substantive right. The Rules Enabling Act, however, authorizes the federal judicial branch to create nothing more than purely procedural mechanisms.

That insight is more than a mere technicality. Class actions were designed to allow more efficient recovery of damages for allegedly injured parties. On the other hand, the purpose of law enforcement is to stop or deter wrongful behavior; the restoration of private losses is not a core element of that concept. Thus, recharacterizing class actions as law enforcement tools will serve to reinforce the current negative public perception that although class actions are purportedly brought to recover losses for purportedly injured parties, the real purpose is to take money away from alleged wrongdoers and put it in the hands of uninjured third parties (mostly the attorneys who bring the actions). …

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