No Exit: Mandatory Class Actions in the New Millenium and the Blurring of Categorical Imperatives

Abstract

With the recent approval of the proposed amendments to Federal Rule of Civil Procedure 23, the Advisory Committee on Civil Rules and the Judicial Conference of the United States have taken a major step towards substantially revising the class action rule. Although the rule amendments at first seem like a sweeping overhaul, in reality the revisions embody the codification of class action practice over the past thirty-six years. Rather than forging new principles, the class action amendments instead delineate rules and principles that federal appellate courts have articulated in the large body of class action jurisprudence in this period.

The Advisory Committee on Civil Rules has been able to accomplish this current revision of Rule 23 in no small measure by avoiding controversy. During the decade in which the Advisory Committee has floated various proposals to amend Rule 23 to deal with pressing issues of class action jurisprudence, the Advisory Committee has consistently retreated in the face of strenuous, vocal criticisms from the bench, bar, and the academy. The Advisory Committee has been able to achieve consensus on Rule 23 revisions only when the Committee proposed “least common denominator” or “least objectionable” revisions. In essence, any Rule 23 proposals that were innovative or that dealt with cutting edge class action issues were swiftly banished from the drafting table or consigned to rule-making limbo.

Consequently, we now have a Rule 23 revision that codifies long-established class action principles, that offends no one, and that does not deal with the truly pressing class action issues that have developed in the past thirty-six years. The 2003 amendments largely address the appointment of class counsel and the awarding of attorney fees. Included in the universe of class action problems most likely to give offense ― and therefore least likely to be addressed ― are problems relating to the mandatory Rule 23(b) (1) and (b)(2) classes.

The Advisory Committee, consistent with its political “give no offense” approach to rule revision, has evaded and avoided grappling with and resolving the major problems of mandatory classes. As things now stand, the so-called “Shutts problem” remains unresolved, the Supreme Court views mandatory classes through a lens refracted in the eighteenth and nineteenth centuries, and the strategic deployment of mandatory classes contributes to litigant unfairness. Moreover, the strategic possibilities offered by mandatory classes encourage gaming the system, with consequent cynical appreciation of the justice system, on a grand scale.

This Article argues that the concept and use of the mandatory class has changed considerably during the last fifty years, which fact is largely under-appreciated by the Supreme Court. Thus, the mandatory class in the twenty-first century bears only remote resemblance to the archetypal illustrations in the Advisory Committee's 1966 Note. Nonetheless, as the mandatory class has evolved, the federal appellate courts have not offered a coherent structure for explaining and dealing with the mandatory class, a failure that continues into the twenty-first century. Moreover, the courts' doctrinal incoherence has blurred the categorical distinctions among class categories that the Advisory Committee carefully promulgated in 1966. Therefore the entire class action rule has been rendered analytically incoherent. It has become increasingly difficult to distinguish among the 23(b)(1), (b)(2), and (b)(3) class categories in any meaningful way.

The very vocabulary of class action litigation has, over time, been debased and distorted to permit litigation results that are analytically incoherent. Thus, core concepts of homogeneity and heterogeneity of interests that once were integral to the 23(b)(1), (b)(2), and (b)(3) classes have been rendered malleable in all but label. Concepts of “predominance” are used loosely, and often interchangeably, among the mandatory and opt-out classes. The concept of the “hybrid” class ― once a distinct analytical category under the original 1938 rule ― now describes various types of proposed class actions, and has assumed many meanings, depending on the setting.Moreover, while many courts pay lip service to old rhetorical constructs, decisions often avoid the practical implications of those categories. Loose labeling, result-oriented accommodations, creative innovations, and doctrinal incoherence all have contributed to uncertainties relating to due process and fairness. These factors also have maximized opportunities for gaming the system; that is, to obtain strategic litigation advantage through manipulating the rule and class action jurisprudence in ways not contemplated by the rulemakers or the courts.

This Article concludes by suggesting the Supreme Court, the rulemaking bodies, or Congress need to bring analytical coherence to the mandatory classes in the new millennium. These bodies must pursue an analytically sound appreciation of mandatory classes that ensures due process protections to all class litigants, and that eliminates opportunities for the strategic deployment of the mandatory class. Moreover, we need an explanation of the mandatory class that makes sense in the overall scheme of the class action rule, including the Rule 23(b)(3) class.