Welcome to the deep Dive. We have a highly specific,
fundamentally critical mission for this session.
We really do. Yeah, today you are mastering
the Controlling Guide, Structural Civil Procedure,
Chapter 5, Class Actions and Aggregate Litigation.
And honestly, if you are a law student or you know, if you are
studying for the bar exam. Or even a practitioner who just
needs an ironclad refresher. Right.
Exactly. If you need a refresher on one
of the most intellectually demanding areas of federal
practice practice, you are in exactly the right place today.
We aren't just skimming the surface here or reciting black
letter law. We are going to deconstruct the
actual architecture of these rules.
Brick by brick. Brick by Brick will take apart
every doctrine, every major Supreme Court intervention, and
really the underlying policy rationales that dictate how our
legal system manages to bind massive groups of people in a
single colossal lawsuit. Because the scale of what we're
talking about today is what makes this so fascinating and,
well, honestly a bit terrifying when you first encounter it.
Terrifying is the right word. Right.
Because we spend so much of Civil Procedure agonizing over
bilateral litigation, we spend weeks on one plaintiff, 1
defendant. A hits B with a car in an
intersection. Exactly.
Or A breaches a real estate contract with B.
The entire system is built around this bespoke,
individualized dispute resolution.
But the modern economy simply doesn't operate in clean,
bilateral lines anymore. Modern disputes bleed across
state lines, and they affect millions of people
simultaneously. We're talking about consumer
fraud orchestrated by multinational corporations or,
you know, securities misrepresentations that wipe out
the retirement accounts of thousands of shareholders.
Environmental toxic exposures spanning entire river valleys.
Yeah, or systemic employment discrimination embedded in a
national corporate culture. The class action device forces
civil litigation to evolve from an artisanal individual dispute
process into this industrial scale mechanism for collective
adjudication. And that transition from the
artisanal to the industrial, that is the foundational
paradigm shift you need to internalize right now before we
even look at a single rule. You really have to wrap your
head around it. You do.
Because when we move from a bilateral lawsuit to aggregate
litigation, we're taking a massive conceptual and
philosophical leap. We have to stop thinking about
the class action as just another a neat procedural trick to clear
a judges docket. It is definitely not just a
glorified joinder. Rule.
Not at all. A class action is a structural
instrument of sovereign power. When a federal judge bangs the
gavel and certifies a nationwide class action, that judge is
suddenly wielding the awesome power to bind thousands or even
millions of individual citizens to a final legal judgement.
And these are individuals who will never step foot inside a
courtroom. They will never meet the lawyer
supposedly representing them. They might not even know the
lawsuit exists until years later when they get a random check for
$12.00 in the mail. Or conversely, when they try to
sue a company and find out their constitutional right to a day in
court was permanently extinguished 3 years ago in a
courtroom 2000 miles away. See, when you phrase it like
that, it sounds like a massive constitutional violation just
waiting to happen. Which is exactly why this topic
is conceptually brutal for law students, and it's why bar
examiners absolutely love testing it.
They love it. It forces you to wrestle with
structural questions of constitutional magnitude.
Think about the bedrock rules of due process that we treat as
sacred. That every person deserves their
day in court. Right to be heard, to control
their own legal destiny. How then, do we constitutionally
strip people of that autonomy and bind them in Accenture?
And how does personal jurisdiction work?
Yes, The whole minimum contacts framework we drill into our
heads. How does that function when you
have a million plaintiffs scattered across all 50 states,
but the corporate defendant only has ties to Delaware and New
York? These aren't just administrative
headaches for the court clerk. These are existential questions
about the limits of judicial power.
So true. So to navigate that
constitutional minefield without losing our bearings, we are
going to use the Bar Examination Synthesis Checklist.
This is extracted straight from Section X of our Chapter 5
guide. This checklist is your survival
guide. It really is.
It's the road map for our question today and absolutely
must be the structural skeleton of your essay when you were
sitting in that exam room. Sweating over a massive multi
page fact pattern involving A defective product and 10,000
angry consumers. Exactly.
We will build this analytical house logically.
First, we tackle the strict prerequisites of Rule 23A. 2nd,
we search for a home in one of the specific Rule 23B
categories. 3rd, we confront the due process demands of notice
and the right to opt out. 4th we untandle the jurisdictional
nightmare of nationwide classes. 5th we examine the judges sudden
transformation into a fiduciary during settlement approvals.
And finally, we assess the terrifying finality of
preclusion and the broader policy warfare surrounding
aggregate litigation. Let's start building the
foundation. The architecture of aggregation,
always without exception, begins with Federal Rule of Civil
Procedure 23. A.
But before a student even writes the words Rule 23 on an exam, I
always warn them to spot the implicit unwritten threshold
requirements first. Right the define ability.
Yeah, you can't certify a class of like people who feel bad
about the economy. You need a properly defined,
objectively ascertainable class. And you need a class
representative who is actually a member of that defined group
possessing a live active claim. The court needs to know who is
in the room, but once you establish that baseline reality,
you immediately hit the four explicit mandatory prerequisites
of Rule 23. A numerosity, commonality,
typicality, and adequacy of representation.
You will hear those endlessly. Let's pull apart numerosity
first, because it's often misunderstood as a simple math
problem. Rule 23A1 requires that the
class be so numerous that joinder of all members is
impracticable. Notice the operative word there
is not impossible. Right, it's impractical.
You do not need a million people to form a class.
There is no strict magical mathematical cutoff etched into
the federal rules. However, federal courts have
developed a generally accepted shorthand.
A class of 40 or more members typically satisfies the
numerosity requirement. If you have a fact pattern where
5 people were injured by a defective toaster, you do not
need the heavy machinery of a class action.
You just use standard Rule 20 permissive jointer and write all
five names in the top of the complaint.
But when you hit 40 or 50 or 1000 people, expecting a lawyer
to track down, interview and individually join 1000 named
plaintiffs in a single document becomes an administrative
nightmare. I would actually push back
slightly on how a student might perceive that bright line 40
rule though. Oh, because bar examiners love
to play with Gray areas. Exactly what if you have 25
plaintiffs? Is that numerous enough?
This is where you have to look at the geographic dispersion of
the class to argue impracticability.
Right, if those 25 people all live in the same apartment
building and were overcharged by the same landlord, joinder is
probably highly practicable. They can literally hold a
meeting in the lobby. But if those 25 people are
independent contractors scattered across 25 different
states, suddenly forcing them all to join a single traditional
lawsuit in one district becomes incredibly difficult and
expensive. The geographic spread makes
joinder impracticable even with a lower headcount.
But generally speaking, yes, if the exam says 300 factory
workers, you check the numerosity box in one sentence
and keep moving. Do not bleed your time on
numerosity. Save your ink for the beast that
is commonality. That is critical advice.
Rule 23A2 states there must be questions of law or fact common
to the class. And for decades, the legal
establishment viewed this as an incredibly low hurdle.
A single, vaguely common question was often deemed
sufficient to unlock the courthouse doors, but you have
to completely erase that historical, relaxed
understanding from your mind. You cannot rely on it.
Because the United States Supreme Court fundamentally and
permanently altered the landscape of aggregate
litigation in a landmark case called Walmart Stores, Inc V
Dukes. If there's one case you must
know intimately for this topic, it is Dukes.
Dukes wasn't just a shift in the law, it was an absolute
earthquake. To understand why the Supreme
Court reacted the way it did, you have to understand the sheer
staggering scale of what the plaintiffs were attempting to
do. They were trying to certify what
would have been one of the largest class actions in the
history of the world. We are talking about
approximately 1.5 million current and former female
employees of Walmart, spanning thousands of stores across the
entire country. The plaintiffs core allegation
was that Walmart gave its local store managers excessive,
unchecked subjective discretion over pay raises and promotion
decisions. Right.
They argued that because the corporate culture was allegedly
infused with gender bias, delegating the subjective
discretion to local managers resulted in a nationwide pattern
or practice of gender discrimination in violation of
Title 7. The plaintiffs pointed to this
corporate policy of delegated discretion as the common thread
uniting all 1.5 million women. And prior to Dukes, a lot of
lower federal courts would look at that and say, sure, there is
a common question here. Did Walmart's corporate policy
of delegating subjective discretion lead to a
discriminatory impact on female employees?
On its face, that looks like a question of fact that is common
to the entire class. But Justice Scalia, writing for
a fractured Supreme Court, looked at that massive class and
dropped the hammer. This is the birth place of the
modern doctrine of heightened commonality.
Scalia famously wrote that it is essentially meaningless to just
say the class raises common questions.
Any randomly assembled group of people can raise a common
question. You and I could sue a
multinational bank tomorrow and raise the common question of
whether the bank's headquarters is located in New York.
We share that question, but that trivial shared fact doesn't mean
we have the right to litigate as a class.
The standard Scalia articulated is rigorous, and it is the
standard you must apply on your exam.
To satisfy commonality under 23A2 today, the class must
demonstrate that they have suffered the same injury.
And let's be very clear about what that does not mean.
It does not simply mean they all claim to have suffered
violations of the exact same federal statute.
A million people claiming a Title 7 violation isn't enough.
Scalia demanded that the claims must depend upon a common
contention of such a nature that it is capable of class wide
resolution. What does that actually mean
when you are standing in front of a judge?
It means that the determination of the truth or falsity of that
core contention will resolve an issue that is central to the
validity of every single one of those claims in one stroke.
One stroke. That is the magic phrase.
You need to highlight that in your notes.
The Supreme Court in Dukes looked at the reality of how
Walmart operated. They noted that Walmart's local
managers were exercising independence objective
discretion at thousands of wildly different stores under
wildly different market conditions across 50 states.
There was no single unifying corporate mandate ordering
managers to discriminate. There was no single glue holding
the alleged reasons for all those individual localized
employment decisions together. Think about the practical
nightmare of trying that case. Why was Employee A, working in a
California store, denied A promotion to shift supervisor?
Maybe she was habitually late. Why was employee B working in a
Texas store paid $0.50 less an hour?
Maybe she lacked a specific forklift certification that her
male counterpart had. To figure out if unlawful
discrimination actually happened in each instance, the trial
court would have to pry open and examine the individual, highly
specific reasons behind millions of separate, localized
managerial decisions. There was absolutely no single
overarching answer, no one stroke that would resolve the
central issue of liability for the woman in California and the
woman in Texas simultaneously. Because the answer to the
question varied from employee to employee, the class completely
failed the commonality requirement.
The massive class was decertified and dismantled.
This brings us to a highly nuanced analytical point, and
it's a point that often separates the A Level exams from
the rest. Oh, this is crucial.
In establishing this new heightened commonality standard,
this strict demand that the common question be central to
the litigation and capable of generating a common answer that
drives the resolution of the Casey, legal scholars widely
agree that the Supreme Court essentially imported this strict
predominance requirement of Rule 23B3.
And they smuggled it into the threshold commonality
requirement of Rule 23A2. They took a standard meant for
the second stage of the analysis and front loaded it into the
gateway. This is the exact trap you need
to navigate carefully when you are writing your essay.
You absolutely must demonstrate that you understand what Justice
Scalia did in Dukes. You must apply that strict one
stroke standard. But, and this is critical, you
must also maintain the structural integrity of Rule 23
in your own writing. Do not clumsily conflate 23A
commonality with 23B3 predominance, even if the
Supreme Court practically blurred the lines into non
existence. Show the greater you understand
the distinct mechanics when you were doing your 23A2 paragraph.
Your guiding question is is there a central legal or factual
question that generates a common answer for everyone in this
class? Then close that paragraph.
Peter, when you move down to your 23B3 analysis, you ask a
different question. Right, you ask, do these common
questions we just identified fundamentally outweigh and
dominate the individual localized questions maintain
that strict structural discipline.
It proves you aren't just regurgitating a case summary,
you are applying a complex procedural framework.
Moving down our Rule 23 A checklist, we arrive at the
third requirement, typicality. Rule 2383 demands the claims or
defenses of the representative parties are typical of the
claims or defenses of the class. This is about alignment.
The lead plaintiff, the person whose name is on the caption of
the lawsuit, must be a true avatar for the absent class
members. The best way to understand
typicality is to look at what destroys it.
The classic exam trap is the unique defense.
Let's say you have a class action against an auto
manufacturer regarding a highly defective transmission that
explodes after 10,000 miles. The.
Proposed lead Plaintiff bought the car and the transmission
exploded. Sounds typical, right?
But what if the fact pattern casually mentions that this
specific lead plaintiff had illegally modified their car by
installing an aftermarket turbocharger, and they
frequently use the car in amateur drag races on the
weekends? That completely destroys their
typicality. Why?
Yeah, because the auto manufacturer's defense attorney
is going to 0 in on that modification.
They will argue, look, maybe our transmissions are defective.
But your transmission didn't blow up because of our factory
defect. It blew up because you wrapped a
rocket to the engine and raced it.
Now, instead of litigating the common issue of the factory
defect, the entire trial gets derailed.
The trial becomes a hyper focused battle over this one
guy's drag racing habits and aftermarket parts.
His unique factual circumstances have created a unique defense
that will distract from and potentially prejudice the
broader claims of the thousands of grandmothers and commuters
who just drove the car normally to the grocery store.
Because his claim is vulnerable to a defense that the breast of
the class doesn't face, he is an atypical and therefore
unacceptable class representative.
And that dynamic bleeds seamlessly into the final
prerequisite OF23A adequacy of representation.
Rule 23A4 strictly requires that the representative parties will
fairly and adequately protect the interests of the class.
Students often gloss over this, but it actually has two distinct
critical prongs. The first prong looks at the
named plaintiff themselves. We are looking for structural
conflicts of interest between the representative and the
absent class members. Imagine a massive employment
class action regarding toxic workplace conditions.
The proposed class includes both current employees and former
employees who were fired. The former employees might only
care about extracting the maximum possible retroactive
monetary damages. They don't work there anymore,
they want to check. But the current employees won't
care far more about securing structural injunctive relief,
firing, abuse of managers, changing HR policies, improving
daily working conditions. Even if it means accepting a
slightly smaller financial payout.
Right. If you appoint A disgruntled
former employee as the sole LED plaintiff, they might eagerly
sell out the current employees desire for workplace reforms in
exchange for a massive cash settlement.
Their goals are inherently structurally conflicting.
That former employee cannot adequately represent the current
employees. The second prong of the adequacy
requirement shifts the spotlight away from the plaintiff and
shines it directly on class counsel.
Are the lawyers competent? Do they have the specialized
experience and complex aggregate litigation?
Do they have the massive financial war chest required to
mitigate against a Fortune 500 company for a decade?
But beyond just resources, this prong forces us to confront the
foundational economic reality of class actions, the structural
alignment of incentives. This is where we have to talk
about agency costs. The class action device
completely flips the traditional ethical lawyer client
relationship on its head. In normal bilateral litigation,
the principal, the client, hires the agent, the lawyer, the
client directs the goals of the litigation, the client monitors
the lawyer's progress, and the client makes the ultimate
decision to settle or go to trial.
The lawyer serves the client. But in a massive consumer class
action, the reality is entirely reversed.
The agent, the entrepreneurial class action lawyer, often
recruits the principal. The lawyer finds a minor
regulatory violation, drafts a complaint, and then goes out to
find a lead plaintiff to attach to it.
The lawyer is absolutely driving the bus.
And think about the economic incentives of the absent class
members. If millions of people were
overcharged by $3 on their cell phone bill, their individual
financial stake in the outcome is basically 0.
No rational human being is going to spend hundreds of hours
calling the class counsel, demanding status updates,
reading legal briefs and monitoring the litigation
strategy over a $3 claim. This creates a massive
monitoring void. The principles have 0 incentive
to monitor the agent. This vacuum creates terrifyingly
high agency costs, opening the door to collusion and self
dealing by the lawyers, which we will analyze in deep forensic
detail when we get to Rule 23 E settlement approvals later.
But as a student, you must spot the potential for these inherent
systemic conflicts at the very beginning of your analysis under
the adequacy of representation requirement.
So let's assume you have successfully navigated the
treacherous waters of Rule 23A. You have proven numerosity,
heightened commonality, typicality and adequacy.
Take a breath, but realize you were only halfway there.
Satisfying 23A merely gets you through the front door of the
courthouse. It is a necessary condition, but
it's not a sufficient condition for class certification.
You have cleared the lobby. Now you must proceed to Step 2
of the checklist. You must find a specific room to
house your lawsuit. You must fit the class into one
of the three highly specific, rigidly defined categories under
Rule 23 B. If you cannot squeeze your facts
into one of these three boxes, the class completely fails and
cannot be certified, regardless of how perfectly you satisfied
the 23 A prerequisites. The stakes in this section are
incredibly high because the category you choose dictates the
constitutional rights of the class members.
We can divide these three boxes into two broad opposing camps.
Rule 23-B1 and Rule 23B2, 2 are the mandatory classes.
Rule 23B3 is the opt out class. That singular distinction
between a mandatory class you are trapped in and an opt out
class you can escape is arguably the most important heavily
litigated due process concept in all of aggregate litigation.
Let's examine the mandatory camps first.
Rule 23 B 1 is designed for extreme situations where
allowing individual separate lawsuits to proceed would cause
an absolute structural disaster. Either a disaster for the
defendant or a disaster for the plaintiffs.
We break this down further into B1A and B1B.
Let's look at B1A, which is uniquely designed to protect the
defendant. It allows a judge to certify a
mandatory class action if individual adjudications would
create a risk of inconsistent or varying adjudications with
respect to individual class members that would establish
incompatible standards of conduct for the party opposing
the class. The phrasing here is tricky and
students constantly misinterpret it on exams.
Pay attention to the words incompatible standards of
conduct. It does not simply mean that the
defendant might win against plaintiff A in one court and
then lose against plaintiff B in another court, resulting in
paying damages to 1 but not the other.
That happens every single day in the legal system.
Paying money to some people but not others is not an
incompatible standard of conduct.
An incompatible standard means the defendant is put in a legal
straitjacket. It means the defendant
literally, physically or legally cannot comply with both court
orders simultaneously, obeying 1 judge guarantees being held in
content by the other. To make this concrete, imagine a
municipality that issues a complex series of municipal
bonds to fund a massive infrastructure project.
A controversy arises regarding the legality of the bond
issuance. Plaintiff A An angry taxpayer,
sues in federal court in New York demanding an injunction
declaring the entire bond issue void and illegal.
Plaintiff B, an institutional investor holding millions in
these bonds, sues in federal court in Delaware demanding A
declaratory judgment that the bonds are perfectly valid and
must be enforced. If both plaintiffs win their
individual lawsuits, the municipality is trapped.
It is under a federal court order to completely void the
bonds and simultaneously under a federal court order to fully
enforce and pay out the exact same bonds.
That is the definition of an incompatible standard of
conduct. To prevent this paradoxical
nightmare, the rules allow a court to certify a mandatory B1A
class, dragging all bondholders and taxpayers into a single
forum to ensure 1U binding judgement that protects the
defendant from impossible conflicting legal obligations.
Then we look at the flip side. Rule 23 B 1B.
This provision completely changes the focus.
Instead of protecting the defendant, B1B exists to protect
the plaintiffs from each other. It permits A mandatory class
action if individual lawsuits would, as a practical matter, be
dispositive of the interests of the other class members, not
parties to the individual adjudications, or would
substantially impair or impede their ability to protect their
interests. That is incredibly dense
statutory language, but what it translates to in the real world
and the classic universally tested scenario you will see on
exams, is the concept of the limited fund.
Let's paint a vivid picture of a limited fund.
Imagine a catastrophic localized environmental tort.
A small independent chemical plant in a rural valley suffers
a massive explosion, blanketing the surrounding town in toxic
gas. The property damage, the medical
bills and the long term health monitoring costs across the
community clearly exceed $1 billion.
However, this independent corporate defendant is thinly
capitalized. Between its total liquid assets
and its liability insurance policies, the company only has a
maximum of $50,000,000 to its name.
If we follow the traditional rules of Civil Procedure and
allow individual bilateral lawsuits, what happens?
Plaintiff A, represented by a hyper aggressive trial lawyer,
sprints to the courthouse, gets an expedited trial date, wins a
$50 million jury verdict, and immediately seizes every single
penny the company has, plunging it into bankruptcy.
The race to the courthouse, it's a literal 0 sum game.
Plaintiff B, Plaintiff C and the thousands of other victims who
filed their lawsuits a few weeks later get absolutely nothing.
Their legal rights are rendered entirely worthless because the
fund is completely depleted. Their ability to protect their
interests has been to quote the rule substantially impaired.
To prevent this chaotic, inequitable cannibalization
among victims, Rule 23-B1B allows the federal court to step
in, halt all individual litigation, and gather every
single victim into a single mandatory class.
The court effectively seizes control of the $15 million
limited fund and distributes it fairly and equitably, often
proportionally, based on the severity of injuries among all
the victims, ensuring everyone gets at least something.
The policy logic mix. But here's where the
constitutional trap snapshot as we establish B1 classes are
mandatory. The text of Rule 23 does not
require the judge to give absent class members the right to opt
out of a B1 class, and if you think about it structurally, it
can't. The very purpose of the rule is
completely defeated if people can leave.
Right. If plaintiff A is allowed to opt
out of the B1B limited fund class so they can go resume
their race to the courthouse and try to grab the whole 50 million
for themselves, the protective structure collapses.
The fund is destroyed. Therefore, you are trapped in
the class. But I want you to pause and
deeply consider the profound, unsettling due process tension
we are accepting here. We are taking an American
citizen who was terribly injured through no fault of their own.
We are stripping them of their fundamental individual autonomy.
We are legally barring them from hiring the lawyer of their
choice, pursuing their own strategy, and having their own
day in court. Instead, we are forcing them to
accept a fractional compromise payout engineered by a class
lawyer they have never met and a judge they didn't elect.
When purely monetary relief is at stake, taking away the right
to opt out raises severe alarm bell.
Constitutional questions. The Supreme Court is acutely
aware of this, and historically they have been highly suspicious
of lawyers trying to shove massive damages claims into this
box. They strictly restrict limited
fund classes to narrow historically recognized
boundaries, specifically to prevent clever corporate defense
lawyers and collusive plaintiffs counsel from forcing massive
disparate mass tort cases into a mandatory B1B box just to coerce
a cheap global settlement that binds everyone forever without
an estate hedge. If you are reading an exam fact
pattern, you see a massive case primarily about money damages
trying to squeeze into AB1 mandatory class.
You must raise a massive red flag in your essay about due
process and the fundamental necessity of the opt out, right?
That inherent tension regarding remedies leads us directly into
the second mandatory category, Rule 23B2.
This category is specifically designed for cases where the
party opposing the class has acted or refused to act on
grounds that apply generally to the class making final
injunctive relief or corresponding declaratory relief
appropriate for the class as a whole.
This is not about money. This is about changing behavior.
This is the historic, powerful vehicle for institutional reform
and civil rights litigation. Think of the foundational
desegregation cases of the mid 20th century.
If you are challenging the school board's systemic policy
of racial segregation, you aren't trying to calculate the
individualized retroactive monetary damages for each
student's psychological harm over 10 years.
You are asking the federal court to wield its equitable power to
order the defendant to change a systemic institutional policy
that affects everyone equally. You want an injunction ordering
the schools to integrate. Because the remedy, the
injunction naturally and inherently applies to the entire
group without differentiation, B2 classes are logically
mandatory. The concept of an opt out makes
zero sense here. A student cannot raise their
hand and say I exercise my due process right to opt out of this
lawsuit. Please keep my specific
classroom racially segregated. The injunction just is what it
is. It alters the institutional
reality for everyone simultaneously.
Which finally brings us to the absolute behemoth of modern
aggregate litigation, the Rule 23B3 damages class.
If you are reading about a multibillion dollar settlement
in the Wall Street Journal, it is almost certainly AB three
class. This encompasses massive
consumer fraud, nationwide securities violations,
antitrust, price fixing, cartels and massive data breaches.
Because these actions are primarily overwhelmingly about
securing retrospective money damages for individual economic
harms, the framers of the Federal Rules and the courts
recognize that plaintiffs have a significantly stronger due
process interest in controlling their own legal destiny.
Therefore the B3 class is the opt out class.
You have the right to leave. But gaining the privilege of
that opt out class is incredibly difficult.
To get AB3 class certified, the plaintiffs lawyers have to clear
2 massive, highly litigated, incredibly expensive hurdles,
predominance and superiority. Let's tackle predominance first,
because it's where most class actions go.
To die, the court must find that the questions of law or fact
common to class members fundamentally predominate over
any questions affecting only individual members.
Recall our discussion of 23 a commonality, the threshold 23 a
test just asks if a central common question exists that can
be answered in one stroke. Rule 23B3 asks a much harder
question. Do those common questions
mathematically and practically dominate the entire litigation
process? Here is your exact analytical
strategy for a predominance question on the bar exam.
You need to mentally project yourself into the future and map
out how the trial will actually physically unfold in the
courtroom. If the judge certifies this
class, are we going to be able to hold one streamlined trial on
the defendant's overarching liability and then
mathematically distribute damages?
Or once we answer the common question, are we suddenly going
to need 10,000 highly specific individualized mini trials just
to figure out if each specific class member was actually
injured and what their specific damages are?
Let's look at the classic example that almost always fails
predominance the pharmaceutical mass tort.
Imagine a drug company hides the severe cardiovascular side
effects of a new painkiller. A massive nationwide class
action is filed. The common question is obvious.
Did the pharmaceutical company fraudulently conceal the
clinical trial data regarding heart attacks?
Yes, that is a massive common question, but answering that
question doesn't establish liability to any specific
person. To win a tort claim, you need
causation. Did the hidden side effect
actually cause plaintiff a specific heart attack or was it
caused by their 30 year smoking habit in family history?
Did it cause plaintiff BS stroke or was it their severe obesity?
Proving medical causation is intensely, inescapably
individualized. If proving causation and
calculating the resulting pain and suffering damages requires
the judge to hold 10,000 separate customized mini trials
dissecting the medical history of 10,000 different people, then
the individual issues completely overwhelm the common issues.
The trial collapses under its own weight.
Predominance fails. Certification is denied.
Conversely, contrast that nightmare with a modern consumer
contract case. Imagine a massive
telecommunications company implements a uniform automated
billing algorithm that illegally overcharges 1,000,000
subscribers by exactly $5 a month for a phantom service fee.
The liability question is standard.
Was the uniform contract language deceptive?
That question is common to every single subscriber.
More importantly, the damages question is entirely mechanical
and identical. Every single person lost exactly
$5 a month. There are no individualized
medical histories to review. There is no subjective pain and
suffering to calculate. You just look at the
spreadsheet. The common issues vastly
overwhelmingly predominate over any microscopic individual
variations. That is a structurally perfect
B3 class. And that identical scenario
perfectly satisfies the second companion hurdle of B3
superiority. The judge must affirmatively
find that a class action is superior to all other available
methods for fairly and efficiently adjudicating the
controversy. Look back at our
telecommunications example. Not a single person on earth is
going to hire a lawyer, pay a $400.00 filing fee, and spend a
year in discovery to sue a massive corporation to recover a
$5 overcharge. It is economically irrational if
bilateral litigation is the only option the corporation gets to
keep $5 million of stolen money with absolute impunity.
In that context, a class action is not just the superior method,
it is literally the only method capable of achieving justice,
providing compensation and deterring corporate wrongdoing.
That fulfills the core foundational access to justice
rationale that justifies the very existence of aggregate
litigation. So you've survived the gauntlet
of certification. You've placed your damages class
perfectly into the 23B3 box. That brings to step three of our
analytical checklist, due process notice and opt out
rights. This is the moment where the
cold procedural mechanics intersect violently with the
United States Constitution. We have established that in AB3
damages class, every single class member possesses A
fundamental right to opt out to escape the binding effect of the
judgement. But that theoretical right is
completely, utterly meaningless if the class member doesn't even
know the lawsuit exists. Exactly.
You cannot exercise a right you don't know you have.
It's a phantom right. So what is the strict
constitutional standard for providing notice?
How hard does the plaintiff's lawyer have to try to find these
people? For that, we have to travel back
to 1950 and look at a bedrock Supreme Court precedent, Mullane
V Central Hanover Bank and Trust Co.
This case didn't involve a modern class action, but it
established the due process floor for all aggregate
proceedings. The due process clause demands
that notice must be reasonably calculated under all the
circumstances to apprise interested parties of the
pendency of the action and afford them an opportunity to
present their objections. The specific facts of Mullane
beautifully illustrate what is not acceptable.
A massive New York Trust Company pulled a bunch of small
individual trusts into a single common fund for easier
investment management. When it came time to legally
settle the accounts, a process that would permanently bind the
beneficiaries and cut off their right to sue the bank for
mismanagement, the bank followed a bare bones state statute.
They simply published a small legalistic notice in the back
pages of a local New York newspaper.
The Supreme Court looked at this and struck it down as
constitutionally abhorrent for those beneficiaries whose names
and home addresses we're sitting right there in the bank's own
filing cabinets. The court recognized human
reality. Nobody reads the legal notices
in the back of the newspaper. If you actually know where
someone lives, a tiny print ad is not reasonably calculated to
reach them. If you have their address, due
process demands you put a letter in an envelope, put a stamp on
it, and mail it to them. Federal Rule of Civil Procedure
23 takes that constitutional baseline from Elaine and
aggressively codifies it. Rule 23 CDB dictates that for
any class certified under B3, the court must direct to class
members the best notice that is practicable under the
circumstances, including individual notice to all members
who can be identified through reasonable effort.
The fulcrum of that entire rule rests on the word practicable
and the phrase reasonable effort.
If you are suing a modern tech company or a major airline, and
the defendant possesses a pristine digitized database
containing the e-mail addresses of all 10 million class members,
it is highly practical and incredibly cheap to send 10
million individualized emails. The court will absolutely demand
it, but what happens when the class consists of transient
consumers? What if the class comprises
people who walked into a random grocery store and bought a
specific, defective brand of toothpaste using cash over a
five year period? The defendant has absolutely no
record of who those people are. Individual notice by mail or
e-mail is literally impossible. So what constitutes the best
notice practicable in a scenario where you don't know who your
plaintiffs are? That is where we are forced to
rely on publication notice. And this is where the modern
application of the rule gets incredibly thorny and
technologically fascinating. 20 years ago, publication notice
meant buying full page ads in USA TODAY or People magazine, or
buying static banner ads on yahoo.com.
But our source materials dive deep into the highly contested
modern frontier of notice native social media advertising.
These are the sponsored posts that seamlessly blend into your
TikTok, Instagram or Facebook feed, mimicking organic content.
They don't look like legal warnings, They look like normal
videos or memes. How do federal judges decide if
these hyper modern, algorithmically driven forms of
publication notice satisfy the dusty due process standards of
1950? To solve this, modern courts
have implicitly adopted a rigorous economic balancing
test, heavily adapted from another famous administrative
law doctrine found in Matthew's Eldridge.
When a federal judge is staring at a proposed notice plan
drafted by a PR firm, they are engaged in a complex calculus of
balancing costs and benefits. But we aren't just talking about
the out of pocket financial cost of buying the Facebook ads.
The Court is balancing the systemic benefits of reaching
more actual legitimate class members against the hidden
collateral costs of over inclusive viral notice.
I want you to look at this from the perspective of the corporate
defendant firmware. If the plaintiff's lawyer
proposes a notice plan that involves blasting highly
aggressive clickbait native ads across every social media
platform. Ads with huge red letters
screaming Did mega court commit massive consumer fraud?
Click here to claim your $500. That campaign is going to go
viral. It will reach millions of
people. It maximizes the benefit of
notifying actual class members. But it also forcefully reaches
10s of millions of people who have never even interacted with
the company. It inflicts severe, immediate
and entirely unadjudicated reputational devastation on the
defendant before trial has even occurred.
The notice itself becomes a weapon of corporate damage.
Exactly. So the judge must engage in this
delicate balancing equation. Does the marginal benefit of
reaching a few additional hard to find class members truly
outweigh the immense marginal cost of the reputational damage
caused by hyper aggressive over inclusive notice?
If the plaintiff can present data-driven evidence showing
that native social media ads are, say, 400% more effective at
reaching the specific demographic of the class than a
traditional banner ad on a news website, and if the reputational
harm is already factored in because the lawsuit has been
heavily covered by mainstream media, the judge is much more
likely to approve or even mandate the use of native social
media ads. The courts are slowly dragging
the due process clause into the algorithmic age.
That balancing test is a brilliant piece of modern legal
theory, but let me hammer home a massive exam strategy point
because I see students fail this constantly.
Do not let the fascinating tech discussion about algorithms and
balancing tests distract you from the ruthless strict Rule of
Milan and the text of Rule 23. The balancing test only applies
when individual notice is impossible.
If the exam fact pattern explicitly states or implies
that the plaintiff can identify the class members with
reasonable effort, for example by forcing the defendant to hand
over the data from their customer loyalty card program,
then individual direct notice is strictly, unconditionally
required. It does not matter if printing
and mailing 2 million physical letters costs the plaintiff's
lawyer $10 million out of pocket.
The Supreme Court made this brutally clear in a case called
Eisen V Carlisle and Jacqueline. The plaintiff chose to bring
this massive lawsuit, so the plaintiff must bear the total
cost of notice. You cannot bend OR tailor the
constitutional due process requirements just to fit the
limited pocketbook of the plaintiff's lawyer.
If you can find their names, you must notify them directly.
Period. There is no balancing test that
saves you from the postage bill. Moving to step four of our
checklist, we wade into what is arguably the most unsettled,
hotly contested, and intellectually brutal area in
modern Civil Procedure personal jurisdiction in nationwide class
actions. This corresponds to Chapter 5,
Section V of our guide. Let's tackle the defendant side
of the jurisdictional equation first.
We all remember the exhausting basics of specific personal
jurisdiction from our first year of law school.
In order to constitutionally haul an out of state corporate
defendant into a specific state's court, the plaintiff's
specific claims must arise out of or strongly relate to the
defendants of deliberate contacts with that form state.
Right. To use a simple example, if a
lifelong resident of California is severely injured by a
defective medical device manufactured by a company
headquartered in New Jersey, but the company deliberately
marketed and sold that device to the plaintiff through a hospital
in California, the plaintiff can easily sue the New Jersey
company in a California federal court.
The specific claim of injury arises directly out of the
defendants commercial contacts with California.
That is straightforward specific jurisdiction.
But what happens when we scale that up into a nationwide class
action? Let's say that same California
plaintiff falls a class action in a California federal court
against that same New Jersey company.
But now the California plaintiff seeks to represent every single
person in the entire United States who was implanted with
that defective device. Think about the constitutional
paradox here. Can a federal judge sitting in
California constitutionally exercise specific personal
jurisdiction over the claims of the absent class members who
live in New York, Texas and Florida?
Those absent plaintiffs bought the device in their home states.
Their specific injuries occurred in their home states.
Their claims have absolutely 0 factual connection to anything
the defendant did in California. You are hitting on the exact
paradox that is tearing the federal appellate courts apart
right now, all triggered by a recent highly disruptive Supreme
Court ruling called Bristol-Myers Squibb Covey
Superior Court. Now, to be precise,
Bristol-Myers Squibb was actually a massive state court
mass tort action involving hundreds of joined plaintiffs,
not a formal Rule 23 federal class action.
In that mass tort context, the Supreme Court ruled definitively
that a state court could not exercise specific jurisdiction
over the claims of non resident plaintiffs whose specific
injuries had no connection to the forum state.
You can't just pile out of state claims onto an in state
plaintiff to manufacture jurisdiction.
Following that ruling, elite corporate defense firms launched
a massive offensive. They are aggressively arguing
that the constitutional logic of Bristol-Myers Squibb must
absolutely apply to Rule 23 class actions in federal court
as well. They walk into the California
court and file a motion to dismiss the claims of every
single class member who doesn't live in California, arguing that
the California judge lacks specific jurisdiction over those
those out of state claims against the defendant.
And as our guide explicitly notes, this is a highly
litigated, wildly unsettled area of law.
You have a massive circuit split.
Some federal appellate courts agree entirely with the
corporate defendants, holding that Bristol-Myers effectively
outlaws the certification of nationwide class actions in any
state other than the defendant's home state, where they're
subject to general jurisdiction for anything.
But other circuits vehemently disagree.
They argue that a Rule 23 class action is structurally and
fundamentally different from a mass tort.
They argue that in a true class action, the named representative
is the only plaintiff that matters for jurisdictional
purposes. The absent class members are
just represented parties, not active litigants, so their
individual jurisdictional status is irrelevant.
When you encounter a nationwide class action on a bar exam and
the corporate defendant is not at home in the state where the
lawsuit is filed, you absolutely must spot this Bristol-Myers
issue. You don't have to confidently
resolve it. The Supreme Court hasn't even
fully resolved it yet. But you must dedicate a
paragraph demonstrating to the greater that you understand the
immense tension between specific jurisdiction and nationwide
aggregate claims. And while we are talking about
jurisdiction, we have to flip the coin and look at the
plaintiffs. This is a conceptual hurdle that
constantly trips up students. Let's look at a different
scenario. Let's say a federal court in
Kansas properly certifies a nationwide class action
involving consumer fraud. By certifying that class, the
Kansas judge is preparing to issue a judgement that will
legally bind 10,000 absent plaintiffs scattered across the
country. Many of those plaintiffs live in
New York or Oregon. They have never visited Kansas.
They've never done business in Kansas.
They have absolutely 0 minimum contacts with the state of
Kansas. The student instinctively asks
how on earth can a Kansas court constitutionally exercise
coercive power over them? Doesn't the Due Process Clause
require minimum contacts for everyone subject to a court's
binding judgement? That is a brilliant, entirely
logical question, and it was definitively answered by the
Supreme Court in a crucial case called Phillips Petroleum, Kofi
shuts. And the answer, surprisingly, is
no. The court explained that the
entire heavy burden of minimum contacts, the whole
international shoe framework that causes us so much grief,
was specifically designed to protect defendants.
Why? Because defendants are being
dragged into a foreign court against their will.
They are forced to hire expensive local counsel, travel
across the country, endure invasive discovery and face the
threat of massive financial liability.
The burdens on a defendant are immense, so the constitutional
protections must be equally immense.
But the Supreme Court recognized that absent plaintiffs in a
class action are in a fundamentally, structurally
different posture, they are not being hauled into court to
defend themselves. They aren't required to hire a
lawyer, they don't have to travel to Kansas, they don't
have to sit for depositions, and they aren't facing any
affirmative liability. The court is adjudicating their
claims, yes, which extinguishes their rights.
But the court held that the absent plaintiffs are protected
by a different tailored suite of procedural safeguards.
According to Shots, as long as the forum state provides 3
things adequate representation by the league plaintiff,
adequate notice of the lawsuit, and the absolute unencumbered
right to opt out, due process is fully satisfied.
The absent plaintiff does not need personal minimum contacts
with Kansas because the combination of the opt out right
and the fiduciary adequacy of the representation sufficiently
protects their fundamental constitutional rights.
That is a massive relief for plaintiffs lawyers trying to
certify nationwide classes. But Schutz also contains A
devastating trap regarding choice of law.
And it's a trap that often destroys the very class it just
saved. Just because the Kansas court
has the constitutional power to bind a plaintiff from New York,
that does not mean the Kansas judge can magically apply Kansas
substantive consumer protection law to the New York plaintiff's
claim. The Supreme Court in Shutz ruled
that a court cannot blindly apply its own state substantive
law to every single claim in a nationwide class action if the
laws of the various states materially conflict and if the
forum state lacks significant factual contacts to those
specific out of state claims. And this brings us full circle,
violently crashing back into the predominance requirement OF23B3.
Imagine the nightmare for the judge.
The judge in our Kansas nationwide class action
realizes, based on Shutz, that they cannot use Kansas law for
everyone. Instead, they must apply the
specific consumer protection statutes of all 50 states to the
different class members based on where they bought the product.
Suddenly the trial becomes an unmanageable, hyper complex
disaster. The jury instructions would be
1000 pages long. The legal standards for fraud
reliance and statutes of limitations vary wildly from
Texas to California to Florida. The common issues of fact are
instantaneously overwhelmed by massive, irreconcilable
individual variations. State law.
The class completely fails the predominance and manageability
tests and the judge is forced to deny a certification.
So SHUTS solves the constitutional personal
jurisdiction problem for absent plaintiffs, but it's
simultaneously creates an insurmountable choice of law
problem that routinely kills nationwide class actions under
Rule 23B3. It is a procedural catch 22 of
the highest order. Now let's assume the class
somehow survived all of that. They were certified, notice went
out, jurisdiction holds, and the parties decide they don't want
to risk a trial. They want to.
This brings us to step five of our checklist settlement
approval and the judge as a fiduciary.
This entire phase is strictly governed by Rule 23 E.
In normal, run-of-the-mill bilateral litigation, if the
plaintiff and defendant negotiate a settlement, they
sign a private contract, file A1 page stipulation of dismissal
with the clerk, and walk away. The judge doesn't read the
settlement agreement. The judge doesn't care if it's a
fair deal. It is a private contract between
autonomous adults. But in a class action, the
parties are absolutely forbidden from just settling and walking
away in the dark. Rule 23 E strictly mandates
formal, rigorous judicial approval of any settlement.
Voluntary dismissal or compromise that binds a
certified class. And we must ask why?
Why the sudden judicial paternalism?
It all goes back to the massive agency costs and structural
conflicts of interest we discussed under the adequacy of
representation requirement. In a settlement negotiation
behind closed doors, the corporate defendant has one
goal, pay the lowest total dollar amount possible to make
the liability disappear. The Entrepreneurial Class
Council has a different goal, secure the highest possible
guaranteed attorney fee. The absent class members who
aren't in the room want the highest individual financial
recovery possible. Those three goals are inherently
at war with each other and it creates the perfect breeding
ground for the sweetheart settlement or the collusive
deal. Imagine the defense lawyer
sliding a term sheet across the table to the class council.
The defense says, look, we will agree not to fight your fee
petition. We will happily pay your firm
$15 million in legal fees. But in exchange, you must agree
to a settlement structure where the actual class members, the
people who are harmed, only receive a $2.00 digital coupon
for their next purchase. If the judge isn't actively
monitoring the room, the class council is economically
incentivized to take that terrible deal.
It makes them rich, it saves the defendant of fortune, and the
only people who lose are the millions of absent class members
who get worthless coupons. Because the class members cannot
monitor the lawyer, the judge must step out of their
traditional passive neutral umpire rule.
Under Rule 23 E, the judge undergoes A metamorphosis into
an active fiduciary, A relentless guardian whose sole
duty is to protect the absent class members from their own
lawyers. The text of Rule 23 E states
that the judge can only approve the settlement if they hold a
hearing and issue written findings that the deal is
fundamentally fair, reasonable, and adequate.
And modern appellate jurisprudence demands that
judges scrutinize far more than just the flashy top line dollar
amount in the press release. They must forensically examine
the hidden structure of the deal, the timing of when the
settlement was reached, and most importantly, the specific
calculation of attorneys fees. Let's talk about evaluating
those attorneys fees. Because fees are the undeniable
engine that drives the entire machine of aggregate litigation,
courts generally rely on 2 distinct methods, the low star
method and the percentage method.
The percentage method is conceptually straightforward,
much like a standard personal injury contingency fee.
The lawyers receive a judicially approved cut of the total
settlement fund they created, usually hovering around 25 to
30%. This is designed to perfectly
align the lawyers financial incentive with the class's
interest. The bigger the pie they bake for
the class, the bigger the slice they get to keep.
But what happens when the settlement doesn't create a
massive pile of cash? What if the lawsuit is a civil
rights case seeking injunctive relief, or a consumer case that
forces a corporation to change its deceptive marketing
practices? There is no fun to take a
percentage from. In those cases, courts must use
the lodestar method. You calculate the number of
hours the lawyers reasonably worked on a case, and you
multiply it by a reasonable hourly market rate for complex
litigation in that geographic region.
But as a fiduciary, the judge must spot the hidden dangers in
the lodestar method. If a lawyer knows they are
getting paid strictly by the hour, they are perversely
incentivized to drag the case out, engaging in endless
unnecessary discovery disputes and filing frivolous motions
just to run up the billable hours.
And the judge must also look at the inverse danger, the
premature cash out. Let's say the lawyers are using
the percentage method. They file the complaint, do a
tiny bit of cheap initial discovery, and then immediately
settle for a mediocre amount. They avoid the massive financial
risk and expense of hiring expert witnesses and going to
trial, securing A guaranteed multimillion dollar fee for
themselves while leaving the class under compensated.
The fiduciary judge must critically evaluate the timing
of the settlement. Was this deal reached after
enough hard fought discovery was completed to allow the parties
to truly accurately assess the merits and risks of the case?
Or was it a quick, collusive cash out designed to enrich the
lawyers before their out of pocket costs skyrocketed?
The judges fiduciary duty also requires them to ruthlessly
evaluate the actual tangible remedies being provided to the
class members. We mentioned coupon settlements
earlier. The defendant agrees to give
everyone in the Class A $20 coupon for their next purchase
of the defendant's product. Let's be honest about the
reality here. 95% of consumers will throw that coupon in the
trash or forget they have it. It provides 0 actual
compensation. But the plaintiffs lawyers will
try to value the settlement based on the theoretical face
value of all millions of coupons issued, claiming they created a
$50 million settlement and demanding a $15 million cash fee
based on that illusion. Congress was so disgusted by
this practice that they passed the Class Action Fairness Act,
or Kampfa. Kampfa places severe mandatory
restrictions on coupon settlements, generally requiring
that attorneys fees must be calculated based only on the
value of the coupons that are actually redeemed by consumers,
not the theoretical number printed.
This forces the lawyers to negotiate a remedy that people
actually want to use. Another highly scrutinized,
deeply controversial remedy is the PSI Press award.
PSI Press is an old trust law doctrine that literally
translates to as near as possible in the class action
context. It solves the leftover money
problem. Let's say a defendant agrees to
a settlement fund of $20 million, but despite the best
notice efforts, only 15,000,000 is actually claimed by the class
members. You have 5 million sitting in a
bank account. What do you do with it?
You can't return it to the defendant because that
completely undermines the goal of deterrence and allows them to
profit from their wrongdoing. You could try to redistribute it
to the class members who already claimed money, but that might
result in an unjust windfall, and the administrative cost of
mailing millions of checks for an extra $0.40 might consume the
entire fund. So the settling parties agreed
to take the leftover 5 million and donate it to a charity that
is a Cypress Award. The problem, and the reason
judges must be incredibly skeptical of this, is that
donating millions of dollars to a law school, clinic or a random
consumer rights nonprofit does not directly compensate the
actual human beings who are defrauded by the defendant.
It is a massive financial windfall to an unrelated third
party. Furthermore, it creates A
perverse incentive for the lawyers and the defendant to
intentionally design A claims process that is difficult for
consumers to navigate, ensuring a large leftover side press fund
that they can then direct to their favorite charities or alma
mater's. Fiduciary judges are instructed
to ensure that Cypress is only ever used as an absolute last
resort when further distribution is mathematically impossible.
Furthermore, the judge must enforce A strict Nexus
requirement. The chosen charity must have a
direct, logical connection to the underlying harm of the
lawsuit. If you are settling a massive
data breach case involving stolen Social Security numbers,
taking the leftover money and donating it to a charity that
protects endangered sea turtles is wildly inappropriate and an
abuse of the system. The judge must police this
vigorously. The ultimate duty is to ensure
the settlement is genuinely adequate for the class, not just
a convenient, profitable wrap up for the lawyers.
This brings us to the final culminating step of our bar exam
synthesis checklist. Step 6.
Preclusion, policy, tensions and legitimacy.
This is where we zoom out from the procedural weeds and look at
the macro impact of the machinery we've just spent the
last hour dissecting. If a class action is properly
certified under Rule 23. If the constitutionally required
adequate notice is provided. If the representation remains
adequate throughout the entire litigation and if a final
judgement is entered by the court, whether that is a verdict
after a grueling trial or a court approved settlement, that
final judgement is absolutely. It is binding on all absent
class members who did not formally opt out.
This is the awesome power of the doctrine of res judicata or
claim preclusion. We need to linger on what that
actually means for a moment. It means that those millions of
individuals who may never have even opened the e-mail notifying
them of the lawsuit can never, ever sue that defendant for
those claims again. Their individual constitutional
rights to seek redress have been permanently extinguished, merged
into the collective class judgement and erased.
The stakes are absolute and final.
This terrifying finality is precisely why every single
procedural safeguard we just discussed, from the strictness
of heightened commonality to the fiduciary intensity of
settlement review, must be enforced so rigorously.
Because when this immense system functions correctly, when the
guardrails hold, it represents the profound promise and
necessity of modern Civil Procedure.
Think about the powerful arguments in favor of
maintaining the system. First, there is massive judicial
efficiency. Resolving 10,000 identical
claims in one single courtroom saves untold millions of dollars
in judicial resources, prevents the courts from collapsing under
the weight of repetitive trials, and ensures consistency.
You don't get wildly contradictory verdicts across
different states for the same conduct.
Second, and perhaps most importantly, is deterrence.
If a massive multinational corporation successfully steals
exactly $1.00 from 50 million people through a deceptive
hidden fee, absolutely nobody is going to sue them individually.
It is economically impossible. Without the class action device,
the corporation operates with absolute impunity and gets to
keep $50 million of stolen money.
The class action is literally the only mechanism in our legal
system capable of aggregating those tiny disparate injuries
into a threat large enough to force that corporation to
disgorge its I'll gotten gains and deter future malicious
behavior. It forces corporate
accountability where the free market and a bilateral
litigation completely fail. It provides access to justice
for the small claims plaintiff who is otherwise permanently
locked out of the legal system. But we must be equally clear
eyed in confronting the peril of this system.
The concerns raised by critics are very real and deeply
structural. Corporate defendants and many
legal scholars argue that modern class actions often amount to
legalized, court sanctioned extortion.
They call them blackmail settlements.
Put yourself in the shoes of a corporate board of directors.
A federal judge just certified a class of 50 million people
against your company. The potential aggregated
liability suddenly becomes annihilating.
We were talking about bankruptcy inducing company ending numbers.
Even if the board firmly believes the company did
absolutely nothing wrong, and even if their elite defense
lawyers tell them they have a 95% chance of winning a jury
trial on the merits, can a responsible board of directors
really risk destroying A multibillion dollar company and
firing thousands of employees on that 5% chance that a single
unpredictable jury gets angry? No, they are forced to settle.
They pay hundreds of millions of dollars to the plaintiff's
lawyers, completely divorced from the actual merits of the
underlying claims, simply to eliminate the catastrophic
existential risk created by the mere act of certification.
There is also the profound philosophical dilution of
individual autonomy. We are taking the deeply
personal constitutional right to control your own destiny within
the justice system and handing it over to a class
representative you didn't choose and a lawyer who is operating on
an industrial mass production scale.
Furthermore, aggregate litigation causes a massive,
arguably anti Democratic over centralization of power.
A single unelected federal judge sitting in a single District
Court in Texas for California suddenly possesses the power to
dictate the national operational policy of a major corporation or
effectively legislate consumer protection standards for the
entire country, vastly distorting the principles of
federalism and local control. So what is the core synthesis?
A student must walk away with It.
Is this foundational paradox? In the realm of aggregate
litigation, procedural law becomes inherently substantive
in its effect. We are taught in law school that
Rule 23 is merely A procedural tool, a neutral housekeeping
mechanism for managing complex joinder.
But that is a polite fiction. The mere act of certifying a
class alters the substantive economic leverage of the parties
so drastically and so violently that it practically determines
the ultimate outcome of the litigation.
The constitutional legitimacy of wielding this immense sovereign
power, of binding millions of citizens without their act of
consent, depends entirely and exclusively on the rigorous,
unflinching enforcement of the procedural safeguards we've
explored today. You cannot cut corners on the
one stroke requirement of commonality.
You cannot hand wave away away the strict Malane notice
requirements just because postage is expensive.
The judge cannot abdicate their role and refuse to act as a
ruthless fiduciary during settlement.
The moment those procedural guardrails fail, the entire
system devolves from a mechanism of justice into a tool of
coercion. As we transition into our outro,
grounded deeply in the concluding thoughts of Section
12 of our guide, let's tie all this sweeping theory directly
back to your exams and your future practice.
We've spent an hour seeing how aggregation radically expands
judicial authority to an unprecedented scale, but we have
also seen how it attempts to strictly structure CAGE and
limit that authority through the intricate mechanics of Rule 23
and the Due process clause. It is the ultimate exercise of
power through restraint. Exactly.
So when you flip the page and face a massive aggregate
litigation question on your exam, do not panic at the scale
of it. Retreat to the structure.
Respect the checklist we just built.
Spot the structural issues systematically.
Is the class genuinely cohesive enough to generate a single
common answer, or does it require a million mini trials?
Is the notice reasonably calculated or is it a cheap
shortcut? Did the judge aggressively
protect the absent members from a collusive sweetheart
settlement, or did the lawyers get rich while the class got
coupons? Remember the inherent,
permanently unresolvable tension between the desperate practical
need for judicial efficiency and the sacred constitutional
mandate of individual due process.
Your job on the exam is not to definitively solve that tension.
Your job is to demonstrate to the greater that you see both
sides of the coin. Show them you understand the
absolute necessity of the class action device to prevent
corporate impunity, but show them you are equally aware of
the devastating constitutional consequences if the procedural
guardrails fail. We will leave you with a final
provocative thought to Mull over as you continue your studies.
We built the entire massive architecture of Rule 23 in a
20th century analog world. The rules operate on the
foundational assumption that individuals have distinct
autonomous legal rights that must be fiercely protected
through physical notice and the physical right to opt out.
But look at the modern landscape we actually inhabit today in a
digital age where our data, our daily movements, our microscopic
purchasing decisions and our very habits are constantly
relentlessly aggregated, analyzed and monetized by black
box algorithm as massive impersonal data sets.
Does the traditional legal concept of individual autonomy
and litigation even make sense anymore?
When a massive tech monopoly violates our privacy on a global
scale, we are not harmed as unique, bespoke individuals.
We are harmed simultaneously, collectively, as microscopic
data points in a vast corporate matrix.
So ask yourself, is the complex creaking machinery of Rule 23
desperately struggling to protect an illusion of
individuality that no longer exists?
Or are we all inevitably, inextricably just unnamed,
absent members of a future global class action, waiting
silently in the dark to be certified?
Thank you for joining us on this deep dive.
Keep the checklist close, respect the rules, and study
hard. All right, let's dive into one
of the most transformed, informative and frankly one of
the most powerful tools in all of Civil Procedure, the class
action. You know, we spend most of our
time in the familiar world of 1 plaintiff versus 1 defendant.
But here we're entering a whole different universe of what we
call aggregate litigation. This is where one single lawsuit
can decide the rights of thousands, even millions of
people who aren't even in the room.
It is an incredibly powerful and as we'll see, a very
constitutionally tricky device. And this right here, this is the
question for any exam, for any real understanding of this
topic. This is where your analysis must
begin. How can a court, consistent with
the due process clause, issue a final judgement that binds
people who never got their day in court, people who might not
even know a lawsuit exists? Every single part of Federal
Rule of Civil Procedure 23 that we are about to break down is an
attempt to answer this fundamental constitutional
challenge. The fancy term for all this is
aggregate litigation, and it's so important that you don't
think of this as just a simple tool for efficiency, a way to
clean up the docket. It's not.
It's a profound use of government power.
A court is literally reaching out, grabbing the legal claims
of people who are absent and extinguishing them forever.
That action raises huge questions about legitimacy,
which is exactly why Rule 23 is so complex and so detailed.
So here's our road map for this deep dive, and you should think
of this as your analytical framework for an exam.
First, we have to start with the constitutional foundation, which
is due process. Then we'll get into the weeds of
Rule 23 itself, starting with the four mandatory requirements
OF23A, and then the three different types of classes you
can have under 23B. After that, we'll talk about the
reality of settlements and the judge's special role, touch on
some big picture jurisdictional issues.
And finally, we'll wrap up with the policy debate, the promise
versus the peril of it all. OK, First things first, that
constitutional spine. Again, the question that haunts
this entire area of law is how can you bind people who aren't
there? The only acceptable answer is
that the procedure itself has to be so good, so fair, that it
acts as a constitutionally adequate substitute for their
actual day in court. So think of every single rule
we're about to discuss as a brick in that wall of due
process protection for the absent class members.
At its core, the right to your own day in court is fundamental
to our system. A class action looks like it
just steam rolls right over that.
So the entire legitimacy of the class action rests on a kind of
legal fiction. The idea is that the
representation by the named plaintiffs and their lawyers is
so good, so aligned with the interests of everyone else, that
it's as if they were all there themselves.
Rule 23 is the blueprint designed to make sure that legal
fiction is actually a reality. And that brings us to the front
door of the rule itself. Rule 23 A.
Now I want you to think of these AS4 non negotiable mandatory
gateways. A potential class action has to
satisfy every single one of these.
If it fails on even 1, the analysis is over.
No class certification, End of story.
So here they are, the BIG4 Numerosity, commonality,
typicality, and adequacy. Numerosity is just a practical
question. Are there so many people that
joining them all up 1 by 1 is just impracticable?
Commonality and typicality sort of work together.
They're about the glue that holds the class together.
There have to be common questions and the person
bringing the suit, the representative, has to have a
claim that's typical of everyone else's.
And finally, adequacy. This is the big one, the most
direct constitutional protection.
The judge has to be convinced that the representatives and
their lawyers are going to fight hard and competently for
everyone. Now, for a very long time, this
second requirement, commonality, was seen as a pretty low bar.
The thinking was, as long as there's at least one common
question, you're good to go. But that is absolutely not the
law anymore. That understanding was
completely upended. And today, commonality is one of
the toughest, most heavily fought battles in all of class
action law. And the reason everything
changed is this landmark Supreme Court case, Walmart versus
Dukes. Justice Scalia, writing for the
court, totally reframed the issue.
He said, And this is the key phrase, what matters is the
capacity of a class wide proceeding to generate common
answers. See the shift.
It's not about having common questions anymore.
It's about whether you can get a common answer that helps resolve
the case for everybody all at once.
So for your exam, this is the crucial take away.
The pre Dukes world was easy on commonality.
The post Dukes world has a much tougher heightened commonality
standard. Plaintiffs can't just point to a
shared question anymore. They have to convince the judge
that their claims turn on a central issue that can be
resolved for the entire class in one single stroke.
It's a much higher bar, and it forces a much deeper look into
the merits of the case right at the beginning.
OK, so let's imagine our proposed class has cleared all
four of those 23 A hurdles. Are we done?
Nope, not even close. The plaintiffs now have another
job. They have to show that their
class fits into one of the three specific categories laid out in
Rule 23 B. And each of these types is
designed for a different purpose and comes with its own set of
rules. This chart breaks them down
nicely. First, you have the B1 or
prejudice class. Think of a situation with a
limited pot of money. This ensures it's shared fairly.
Then you have the B2 injunctive class.
This is the classic civil rights model where the main goal isn't
money, but to stop a defendant from doing something.
Now what's crucial to see is that both B1 and B2 are
mandatory classes you're in and you can't get out.
The third type, the B3 damages class, is the most common.
This is for when money is the main goal, and because people's
individual money claims are on the line, the protections are
way higher. You get mandatory notice and
critically, the right to opt out and go it alone if you want.
Now for that common B3 damages class, there are two more huge
hurdles. The first is predominance.
My favorite way to think about this is commonality on steroids.
It is way more demanding than the 23, a commonality we just
talked about. It's not enough for common
questions to just exist. They have to predominate over
all the individual issues. The judge has to be convinced
that this case is really one big collective issue, not just a
bunch of individual lawsuits stitched together.
And the second requirement for A5O13 class is superiority.
Here, the judge basically leans back and asks a very practical
question. All things considered, is a
class action really the best way to handle this whole mess?
The rule even gives the judge a list of things to think about,
like how much control individuals might want over
their own cases, or how difficult the case would be to
manage. It has to be the superior
method, not just an OK one. All right, let's talk about the
real world for a second. The vast, vast majority of class
actions that get certified never see a trial.
They settle. And this settlement phase brings
a whole new set of dangers to the forefront and completely
changes the judge's role from being a neutral referee to being
an active guardian. So why the need for a guardian?
Well, it's because of something lawyers call agency problems.
In a normal case, the lawyers on opposite sides are fighting, but
in a settlement negotiation, they're suddenly on the same
team. Both the class council and the
defendants council want the judge to approve their deal.
This creates a huge risk that the class lawyers whose fees
depend on the deal might cut a sweetheart deal.
That's great for them, but not so great for the millions of
absent class members they're supposed to be representing.
To combat this risk, Rule 23 E puts a special hat on the judge.
The judge cannot just sign off on whatever the lawyers bring
them. The judge must act as a
fiduciary, a legal guardian for all those absent people citing
big cases like AMCAM. The court has to do its own deep
dive and decide if the settlement is truly fair,
reasonable, and adequate before it can approve it and make it
binding on everyone. OK, let's zoom out from the
specific rules for a moment and look at two big picture
structural issues. When you have a nationwide class
action, it immediately creates friction with two huge
constitutional ideas. First, the limits on a court's
personal jurisdiction, and 2nd, the balance of power between
state and federal courts, which we call federalism.
Now, this is a really critical point and it's perfect for an
exam question. You have to distinguish between
a mass action like an MDL, where you just bundle thousands of
individual cases, and a true class action.
In a mass action, the Supreme Court's decision in
Bristol-Myers Squibb is clear, the court needs specific
personal jurisdiction for every single plaintiff's claim.
But in a class action, the law is less clear.
The dominant views that BMS doesn't apply to the claims of
the absent class members because they aren't technically formal
parties. Their protection comes from
adequacy of representation, not personal jurisdiction.
But this is still a very hot and unresolved issue.
And what about that federalism tension?
Well Congress stepped in with a huge piece of legislation in
2005 called the Class Action Fairness Act, or KAFA.
KAFA basically blew up the old rules of federal jurisdiction
for class actions. It created a much easier path
with things like minimal diversity to get big multi state
class actions out of state courts and into federal courts.
But essentially Congress made a judgement call that these large
scale cases are really matters of national interest that belong
in the federal system. So after going through all the
mechanics and big structural issues, let's wrap this up by
returning to the central policy debate that drives this whole
area of law. The two sided nature of the
class action. You really can think of the
class action as a coin with two very different faces.
On one side, you have the promise.
This is a tool that can democratize justice.
It allows people whose claims are too small to bring on their
own, what we call negative value claims, to band together and
hold powerful actors accountable.
It's a huge deterrent. But then you flip the coin over
and you see the peril. This device concentrates a scary
amount of power in the hands of a few lawyers and a single
judge, and that creates massive risks of due process violations
and shady settlements if those rules aren't followed to the
letter. And this all leads us to the
final fundamental question that courts and lawmakers are always
wrestling with. Is the class action a tool that
democratizes justice, or is it a dangerous tool that centralizes
power? And the real, honest answer is
that it's both. The entire complex body of law
we've just discussed is nothing more than our legal systems
ongoing, never ending attempt to strike that delicate balance, to
harness the incredible promise of the class action while
keeping its very real perils in check.