Reflections on the Flying Buttresses of Class Action Settlement

Abstract

Since the advent of the modern class action rule in 1996, class actions have long settled. Yet for more than five decades, class action settlements remained a backwater of class action jurisprudence. This changed in the 1990s, when issues relating to settlement classes dominated the federal legal landscape. The Supreme Court effectively resolved the controversy over settlement classes in its landmark decisions in Amchem Prods. Inc. v. Winsor and Ortiz v. Fibreboard Prods. at the end of the twentieth century.

The Court’s imprimatur on settlement classes opened an era of expansive use of settlement classes, which was accompanied by proliferating problems relating to the substantive and procedural fairness of settlement agreements. These problems garnered the attention of the practicing bar, the federal judiciary, and the rulemakers. In 2003 and 2018, the Advisory Committee on Civil Rules enacted sweeping changes to Rule 23(e) governing judicial approval of class action settlements.

This article argues that the twenty-first century amendments to Rule 23(e) encouraged the creation of an entire cottage industry of external expert witness support to shore up the settling parties’ burden of proof at Rule 23(e) fairness hearings. Although parties employed various such expert sin the 1990s, the rule amendments accelerated the routine use of these experts in the twenty-first century, as well as judicial acceptance and embrace of this testimony.

The article canvasses six types of party-retained expert testimony in support of class certification and settlement approval: (1) the notice vendor, (2) the fee expert, (3) the class certification expert, (4) the settlement fairness expert, (5) the ethics expert, and (6) the neutral mediator. The article focuses on the peculiar development of recourse to mediators in support of final settlement approval.

The article evaluates the value added and benefits to the judicial system of the deployment of these external experts, contrasted with the problems endemic to their use. The article concludes with thoughts on addressing the challenges presented by external expert testimony with  recommendations for improvements to the status quo of routine judicial deference to party-retained external support.