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Welcome to the deep Dive. 
We have a highly specific, 

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fundamentally critical mission 
for this session. 

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We really do. 
Yeah, today you are mastering 

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the Controlling Guide, 
Structural Civil Procedure, 

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Chapter 5, Class Actions and 
Aggregate Litigation. 

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And honestly, if you are a law 
student or you know, if you are 

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studying for the bar exam. 
Or even a practitioner who just 

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needs an ironclad refresher. 
Right. 

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Exactly. 
If you need a refresher on one 

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of the most intellectually 
demanding areas of federal 

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practice practice, you are in 
exactly the right place today. 

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We aren't just skimming the 
surface here or reciting black 

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letter law. 
We are going to deconstruct the 

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actual architecture of these 
rules. 

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Brick by brick. 
Brick by Brick will take apart 

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every doctrine, every major 
Supreme Court intervention, and 

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really the underlying policy 
rationales that dictate how our 

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legal system manages to bind 
massive groups of people in a 

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single colossal lawsuit. 
Because the scale of what we're 

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talking about today is what 
makes this so fascinating and, 

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well, honestly a bit terrifying 
when you first encounter it. 

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Terrifying is the right word. 
Right. 

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Because we spend so much of 
Civil Procedure agonizing over 

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bilateral litigation, we spend 
weeks on one plaintiff, 1 

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defendant. 
A hits B with a car in an 

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intersection. 
Exactly. 

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Or A breaches a real estate 
contract with B. 

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The entire system is built 
around this bespoke, 

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individualized dispute 
resolution. 

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But the modern economy simply 
doesn't operate in clean, 

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bilateral lines anymore. 
Modern disputes bleed across 

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state lines, and they affect 
millions of people 

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simultaneously. 
We're talking about consumer 

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fraud orchestrated by 
multinational corporations or, 

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you know, securities 
misrepresentations that wipe out

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the retirement accounts of 
thousands of shareholders. 

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Environmental toxic exposures 
spanning entire river valleys. 

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Yeah, or systemic employment 
discrimination embedded in a 

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national corporate culture. 
The class action device forces 

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civil litigation to evolve from 
an artisanal individual dispute 

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process into this industrial 
scale mechanism for collective 

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adjudication. 
And that transition from the 

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artisanal to the industrial, 
that is the foundational 

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paradigm shift you need to 
internalize right now before we 

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even look at a single rule. 
You really have to wrap your 

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head around it. 
You do. 

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Because when we move from a 
bilateral lawsuit to aggregate 

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litigation, we're taking a 
massive conceptual and 

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philosophical leap. 
We have to stop thinking about 

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the class action as just another
a neat procedural trick to clear

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a judges docket. 
It is definitely not just a 

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glorified joinder. 
Rule. 

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Not at all. 
A class action is a structural 

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instrument of sovereign power. 
When a federal judge bangs the 

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gavel and certifies a nationwide
class action, that judge is 

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suddenly wielding the awesome 
power to bind thousands or even 

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millions of individual citizens 
to a final legal judgement. 

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And these are individuals who 
will never step foot inside a 

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courtroom. 
They will never meet the lawyer 

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supposedly representing them. 
They might not even know the 

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lawsuit exists until years later
when they get a random check for

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$12.00 in the mail. 
Or conversely, when they try to 

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sue a company and find out their
constitutional right to a day in

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court was permanently 
extinguished 3 years ago in a 

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courtroom 2000 miles away. 
See, when you phrase it like 

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that, it sounds like a massive 
constitutional violation just 

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waiting to happen. 
Which is exactly why this topic 

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is conceptually brutal for law 
students, and it's why bar 

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examiners absolutely love 
testing it. 

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They love it. 
It forces you to wrestle with 

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structural questions of 
constitutional magnitude. 

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Think about the bedrock rules of
due process that we treat as 

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sacred. 
That every person deserves their

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day in court. 
Right to be heard, to control 

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their own legal destiny. 
How then, do we constitutionally

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strip people of that autonomy 
and bind them in Accenture? 

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And how does personal 
jurisdiction work? 

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Yes, The whole minimum contacts 
framework we drill into our 

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heads. 
How does that function when you 

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have a million plaintiffs 
scattered across all 50 states, 

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but the corporate defendant only
has ties to Delaware and New 

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York? 
These aren't just administrative

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headaches for the court clerk. 
These are existential questions 

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about the limits of judicial 
power. 

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So true. 
So to navigate that 

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constitutional minefield without
losing our bearings, we are 

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going to use the Bar Examination
Synthesis Checklist. 

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This is extracted straight from 
Section X of our Chapter 5 

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guide. 
This checklist is your survival 

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guide. 
It really is. 

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It's the road map for our 
question today and absolutely 

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must be the structural skeleton 
of your essay when you were 

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sitting in that exam room. 
Sweating over a massive multi 

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page fact pattern involving A 
defective product and 10,000 

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angry consumers. 
Exactly. 

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We will build this analytical 
house logically. 

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First, we tackle the strict 
prerequisites of Rule 23A. 2nd, 

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we search for a home in one of 
the specific Rule 23B 

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categories. 3rd, we confront the
due process demands of notice 

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and the right to opt out. 4th we
untandle the jurisdictional 

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nightmare of nationwide classes.
5th we examine the judges sudden

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transformation into a fiduciary 
during settlement approvals. 

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And finally, we assess the 
terrifying finality of 

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preclusion and the broader 
policy warfare surrounding 

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aggregate litigation. 
Let's start building the 

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foundation. 
The architecture of aggregation,

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always without exception, begins
with Federal Rule of Civil 

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Procedure 23. 
A. 

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But before a student even writes
the words Rule 23 on an exam, I 

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always warn them to spot the 
implicit unwritten threshold 

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requirements first. 
Right the define ability. 

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Yeah, you can't certify a class 
of like people who feel bad 

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about the economy. 
You need a properly defined, 

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objectively ascertainable class.
And you need a class 

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representative who is actually a
member of that defined group 

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possessing a live active claim. 
The court needs to know who is 

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in the room, but once you 
establish that baseline reality,

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you immediately hit the four 
explicit mandatory prerequisites

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of Rule 23. 
A numerosity, commonality, 

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typicality, and adequacy of 
representation. 

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You will hear those endlessly. 
Let's pull apart numerosity 

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first, because it's often 
misunderstood as a simple math 

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problem. 
Rule 23A1 requires that the 

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class be so numerous that 
joinder of all members is 

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impracticable. 
Notice the operative word there 

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is not impossible. 
Right, it's impractical. 

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You do not need a million people
to form a class. 

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There is no strict magical 
mathematical cutoff etched into 

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the federal rules. 
However, federal courts have 

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developed a generally accepted 
shorthand. 

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A class of 40 or more members 
typically satisfies the 

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numerosity requirement. 
If you have a fact pattern where

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5 people were injured by a 
defective toaster, you do not 

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need the heavy machinery of a 
class action. 

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You just use standard Rule 20 
permissive jointer and write all

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five names in the top of the 
complaint. 

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But when you hit 40 or 50 or 
1000 people, expecting a lawyer 

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to track down, interview and 
individually join 1000 named 

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plaintiffs in a single document 
becomes an administrative 

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nightmare. 
I would actually push back 

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slightly on how a student might 
perceive that bright line 40 

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rule though. 
Oh, because bar examiners love 

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to play with Gray areas. 
Exactly what if you have 25 

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plaintiffs? 
Is that numerous enough? 

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This is where you have to look 
at the geographic dispersion of 

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the class to argue 
impracticability. 

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Right, if those 25 people all 
live in the same apartment 

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building and were overcharged by
the same landlord, joinder is 

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probably highly practicable. 
They can literally hold a 

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meeting in the lobby. 
But if those 25 people are 

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independent contractors 
scattered across 25 different 

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states, suddenly forcing them 
all to join a single traditional

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lawsuit in one district becomes 
incredibly difficult and 

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expensive. 
The geographic spread makes 

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joinder impracticable even with 
a lower headcount. 

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But generally speaking, yes, if 
the exam says 300 factory 

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workers, you check the 
numerosity box in one sentence 

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and keep moving. 
Do not bleed your time on 

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numerosity. 
Save your ink for the beast that

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is commonality. 
That is critical advice. 

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Rule 23A2 states there must be 
questions of law or fact common 

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to the class. 
And for decades, the legal 

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establishment viewed this as an 
incredibly low hurdle. 

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A single, vaguely common 
question was often deemed 

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sufficient to unlock the 
courthouse doors, but you have 

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to completely erase that 
historical, relaxed 

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understanding from your mind. 
You cannot rely on it. 

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Because the United States 
Supreme Court fundamentally and 

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permanently altered the 
landscape of aggregate 

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litigation in a landmark case 
called Walmart Stores, Inc V 

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Dukes. 
If there's one case you must 

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know intimately for this topic, 
it is Dukes. 

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Dukes wasn't just a shift in the
law, it was an absolute 

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earthquake. 
To understand why the Supreme 

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Court reacted the way it did, 
you have to understand the sheer

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staggering scale of what the 
plaintiffs were attempting to 

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do. 
They were trying to certify what

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would have been one of the 
largest class actions in the 

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history of the world. 
We are talking about 

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approximately 1.5 million 
current and former female 

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employees of Walmart, spanning 
thousands of stores across the 

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entire country. 
The plaintiffs core allegation 

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was that Walmart gave its local 
store managers excessive, 

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unchecked subjective discretion 
over pay raises and promotion 

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decisions. 
Right. 

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They argued that because the 
corporate culture was allegedly 

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infused with gender bias, 
delegating the subjective 

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discretion to local managers 
resulted in a nationwide pattern

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or practice of gender 
discrimination in violation of 

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Title 7. 
The plaintiffs pointed to this 

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corporate policy of delegated 
discretion as the common thread 

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uniting all 1.5 million women. 
And prior to Dukes, a lot of 

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lower federal courts would look 
at that and say, sure, there is 

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a common question here. 
Did Walmart's corporate policy 

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of delegating subjective 
discretion lead to a 

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discriminatory impact on female 
employees? 

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On its face, that looks like a 
question of fact that is common 

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to the entire class. 
But Justice Scalia, writing for 

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a fractured Supreme Court, 
looked at that massive class and

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dropped the hammer. 
This is the birth place of the 

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modern doctrine of heightened 
commonality. 

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Scalia famously wrote that it is
essentially meaningless to just 

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say the class raises common 
questions. 

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Any randomly assembled group of 
people can raise a common 

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question. 
You and I could sue a 

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multinational bank tomorrow and 
raise the common question of 

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whether the bank's headquarters 
is located in New York. 

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We share that question, but that
trivial shared fact doesn't mean

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we have the right to litigate as
a class. 

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The standard Scalia articulated 
is rigorous, and it is the 

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standard you must apply on your 
exam. 

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To satisfy commonality under 
23A2 today, the class must 

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demonstrate that they have 
suffered the same injury. 

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And let's be very clear about 
what that does not mean. 

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It does not simply mean they all
claim to have suffered 

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violations of the exact same 
federal statute. 

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A million people claiming a 
Title 7 violation isn't enough. 

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Scalia demanded that the claims 
must depend upon a common 

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contention of such a nature that
it is capable of class wide 

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resolution. 
What does that actually mean 

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when you are standing in front 
of a judge? 

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It means that the determination 
of the truth or falsity of that 

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core contention will resolve an 
issue that is central to the 

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validity of every single one of 
those claims in one stroke. 

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One stroke. 
That is the magic phrase. 

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You need to highlight that in 
your notes. 

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The Supreme Court in Dukes 
looked at the reality of how 

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Walmart operated. 
They noted that Walmart's local 

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managers were exercising 
independence objective 

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discretion at thousands of 
wildly different stores under 

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wildly different market 
conditions across 50 states. 

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There was no single unifying 
corporate mandate ordering 

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managers to discriminate. 
There was no single glue holding

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the alleged reasons for all 
those individual localized 

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employment decisions together. 
Think about the practical 

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nightmare of trying that case. 
Why was Employee A, working in a

237
00:11:41,160 --> 00:11:44,680
California store, denied A 
promotion to shift supervisor? 

238
00:11:45,000 --> 00:11:48,920
Maybe she was habitually late. 
Why was employee B working in a 

239
00:11:48,920 --> 00:11:51,560
Texas store paid $0.50 less an 
hour? 

240
00:11:52,000 --> 00:11:55,360
Maybe she lacked a specific 
forklift certification that her 

241
00:11:55,360 --> 00:11:58,360
male counterpart had. 
To figure out if unlawful 

242
00:11:58,360 --> 00:12:01,640
discrimination actually happened
in each instance, the trial 

243
00:12:01,640 --> 00:12:05,240
court would have to pry open and
examine the individual, highly 

244
00:12:05,240 --> 00:12:09,760
specific reasons behind millions
of separate, localized 

245
00:12:09,760 --> 00:12:13,560
managerial decisions. 
There was absolutely no single 

246
00:12:13,560 --> 00:12:16,640
overarching answer, no one 
stroke that would resolve the 

247
00:12:16,640 --> 00:12:19,520
central issue of liability for 
the woman in California and the 

248
00:12:19,520 --> 00:12:22,120
woman in Texas simultaneously. 
Because the answer to the 

249
00:12:22,120 --> 00:12:25,280
question varied from employee to
employee, the class completely 

250
00:12:25,280 --> 00:12:27,000
failed the commonality 
requirement. 

251
00:12:27,440 --> 00:12:29,800
The massive class was 
decertified and dismantled. 

252
00:12:29,800 --> 00:12:32,480
This brings us to a highly 
nuanced analytical point, and 

253
00:12:32,480 --> 00:12:35,040
it's a point that often 
separates the A Level exams from

254
00:12:35,040 --> 00:12:36,480
the rest. 
Oh, this is crucial. 

255
00:12:36,680 --> 00:12:39,600
In establishing this new 
heightened commonality standard,

256
00:12:39,640 --> 00:12:42,800
this strict demand that the 
common question be central to 

257
00:12:42,800 --> 00:12:46,400
the litigation and capable of 
generating a common answer that 

258
00:12:46,400 --> 00:12:51,040
drives the resolution of the 
Casey, legal scholars widely 

259
00:12:51,040 --> 00:12:54,360
agree that the Supreme Court 
essentially imported this strict

260
00:12:54,360 --> 00:12:57,560
predominance requirement of Rule
23B3. 

261
00:12:57,640 --> 00:13:00,280
And they smuggled it into the 
threshold commonality 

262
00:13:00,280 --> 00:13:03,920
requirement of Rule 23A2. 
They took a standard meant for 

263
00:13:03,920 --> 00:13:07,040
the second stage of the analysis
and front loaded it into the 

264
00:13:07,040 --> 00:13:09,120
gateway. 
This is the exact trap you need 

265
00:13:09,120 --> 00:13:11,920
to navigate carefully when you 
are writing your essay. 

266
00:13:11,960 --> 00:13:15,560
You absolutely must demonstrate 
that you understand what Justice

267
00:13:15,560 --> 00:13:18,880
Scalia did in Dukes. 
You must apply that strict one 

268
00:13:18,880 --> 00:13:21,720
stroke standard. 
But, and this is critical, you 

269
00:13:21,720 --> 00:13:24,480
must also maintain the 
structural integrity of Rule 23 

270
00:13:24,480 --> 00:13:28,080
in your own writing. 
Do not clumsily conflate 23A 

271
00:13:28,080 --> 00:13:31,440
commonality with 23B3 
predominance, even if the 

272
00:13:31,440 --> 00:13:33,920
Supreme Court practically 
blurred the lines into non 

273
00:13:33,920 --> 00:13:36,200
existence. 
Show the greater you understand 

274
00:13:36,200 --> 00:13:39,640
the distinct mechanics when you 
were doing your 23A2 paragraph. 

275
00:13:39,640 --> 00:13:42,560
Your guiding question is is 
there a central legal or factual

276
00:13:42,560 --> 00:13:44,840
question that generates a common
answer for everyone in this 

277
00:13:44,840 --> 00:13:46,880
class? 
Then close that paragraph. 

278
00:13:47,240 --> 00:13:50,600
Peter, when you move down to 
your 23B3 analysis, you ask a 

279
00:13:50,600 --> 00:13:54,200
different question. 
Right, you ask, do these common 

280
00:13:54,200 --> 00:13:57,000
questions we just identified 
fundamentally outweigh and 

281
00:13:57,000 --> 00:14:00,520
dominate the individual 
localized questions maintain 

282
00:14:00,520 --> 00:14:02,360
that strict structural 
discipline. 

283
00:14:02,520 --> 00:14:05,400
It proves you aren't just 
regurgitating a case summary, 

284
00:14:05,600 --> 00:14:08,520
you are applying a complex 
procedural framework. 

285
00:14:08,520 --> 00:14:11,720
Moving down our Rule 23 A 
checklist, we arrive at the 

286
00:14:11,720 --> 00:14:16,880
third requirement, typicality. 
Rule 2383 demands the claims or 

287
00:14:16,880 --> 00:14:19,800
defenses of the representative 
parties are typical of the 

288
00:14:19,800 --> 00:14:22,760
claims or defenses of the class.
This is about alignment. 

289
00:14:23,120 --> 00:14:26,040
The lead plaintiff, the person 
whose name is on the caption of 

290
00:14:26,040 --> 00:14:29,640
the lawsuit, must be a true 
avatar for the absent class 

291
00:14:29,640 --> 00:14:31,520
members. 
The best way to understand 

292
00:14:31,520 --> 00:14:33,520
typicality is to look at what 
destroys it. 

293
00:14:33,800 --> 00:14:36,600
The classic exam trap is the 
unique defense. 

294
00:14:36,800 --> 00:14:39,200
Let's say you have a class 
action against an auto 

295
00:14:39,200 --> 00:14:42,160
manufacturer regarding a highly 
defective transmission that 

296
00:14:42,160 --> 00:14:44,200
explodes after 10,000 miles. 
The. 

297
00:14:44,200 --> 00:14:46,800
Proposed lead Plaintiff bought 
the car and the transmission 

298
00:14:46,800 --> 00:14:49,040
exploded. 
Sounds typical, right? 

299
00:14:49,240 --> 00:14:53,240
But what if the fact pattern 
casually mentions that this 

300
00:14:53,240 --> 00:14:57,240
specific lead plaintiff had 
illegally modified their car by 

301
00:14:57,240 --> 00:14:59,680
installing an aftermarket 
turbocharger, and they 

302
00:14:59,680 --> 00:15:02,160
frequently use the car in 
amateur drag races on the 

303
00:15:02,160 --> 00:15:04,240
weekends? 
That completely destroys their 

304
00:15:04,240 --> 00:15:05,200
typicality. 
Why? 

305
00:15:05,200 --> 00:15:07,680
Yeah, because the auto 
manufacturer's defense attorney 

306
00:15:07,680 --> 00:15:09,760
is going to 0 in on that 
modification. 

307
00:15:09,760 --> 00:15:13,040
They will argue, look, maybe our
transmissions are defective. 

308
00:15:13,280 --> 00:15:16,040
But your transmission didn't 
blow up because of our factory 

309
00:15:16,040 --> 00:15:18,360
defect. 
It blew up because you wrapped a

310
00:15:18,360 --> 00:15:20,040
rocket to the engine and raced 
it. 

311
00:15:20,520 --> 00:15:23,040
Now, instead of litigating the 
common issue of the factory 

312
00:15:23,040 --> 00:15:25,680
defect, the entire trial gets 
derailed. 

313
00:15:26,200 --> 00:15:29,120
The trial becomes a hyper 
focused battle over this one 

314
00:15:29,120 --> 00:15:31,840
guy's drag racing habits and 
aftermarket parts. 

315
00:15:32,160 --> 00:15:35,600
His unique factual circumstances
have created a unique defense 

316
00:15:35,600 --> 00:15:38,400
that will distract from and 
potentially prejudice the 

317
00:15:38,400 --> 00:15:41,640
broader claims of the thousands 
of grandmothers and commuters 

318
00:15:41,640 --> 00:15:44,200
who just drove the car normally 
to the grocery store. 

319
00:15:44,200 --> 00:15:47,560
Because his claim is vulnerable 
to a defense that the breast of 

320
00:15:47,560 --> 00:15:50,840
the class doesn't face, he is an
atypical and therefore 

321
00:15:50,840 --> 00:15:52,920
unacceptable class 
representative. 

322
00:15:53,160 --> 00:15:56,320
And that dynamic bleeds 
seamlessly into the final 

323
00:15:56,320 --> 00:16:00,080
prerequisite OF23A adequacy of 
representation. 

324
00:16:00,320 --> 00:16:04,600
Rule 23A4 strictly requires that
the representative parties will 

325
00:16:04,600 --> 00:16:07,880
fairly and adequately protect 
the interests of the class. 

326
00:16:07,920 --> 00:16:11,320
Students often gloss over this, 
but it actually has two distinct

327
00:16:11,320 --> 00:16:14,200
critical prongs. 
The first prong looks at the 

328
00:16:14,200 --> 00:16:17,840
named plaintiff themselves. 
We are looking for structural 

329
00:16:17,840 --> 00:16:20,320
conflicts of interest between 
the representative and the 

330
00:16:20,320 --> 00:16:23,720
absent class members. 
Imagine a massive employment 

331
00:16:23,720 --> 00:16:26,640
class action regarding toxic 
workplace conditions. 

332
00:16:27,280 --> 00:16:30,080
The proposed class includes both
current employees and former 

333
00:16:30,080 --> 00:16:33,160
employees who were fired. 
The former employees might only 

334
00:16:33,160 --> 00:16:35,880
care about extracting the 
maximum possible retroactive 

335
00:16:35,880 --> 00:16:38,040
monetary damages. 
They don't work there anymore, 

336
00:16:38,040 --> 00:16:40,240
they want to check. 
But the current employees won't 

337
00:16:40,240 --> 00:16:43,280
care far more about securing 
structural injunctive relief, 

338
00:16:43,640 --> 00:16:47,120
firing, abuse of managers, 
changing HR policies, improving 

339
00:16:47,120 --> 00:16:49,600
daily working conditions. 
Even if it means accepting a 

340
00:16:49,600 --> 00:16:51,480
slightly smaller financial 
payout. 

341
00:16:51,680 --> 00:16:53,720
Right. 
If you appoint A disgruntled 

342
00:16:53,720 --> 00:16:57,760
former employee as the sole LED 
plaintiff, they might eagerly 

343
00:16:57,760 --> 00:17:01,520
sell out the current employees 
desire for workplace reforms in 

344
00:17:01,520 --> 00:17:03,720
exchange for a massive cash 
settlement. 

345
00:17:03,720 --> 00:17:07,240
Their goals are inherently 
structurally conflicting. 

346
00:17:07,440 --> 00:17:10,640
That former employee cannot 
adequately represent the current

347
00:17:10,640 --> 00:17:13,119
employees. 
The second prong of the adequacy

348
00:17:13,119 --> 00:17:16,640
requirement shifts the spotlight
away from the plaintiff and 

349
00:17:16,640 --> 00:17:18,480
shines it directly on class 
counsel. 

350
00:17:18,560 --> 00:17:21,359
Are the lawyers competent? 
Do they have the specialized 

351
00:17:21,359 --> 00:17:23,760
experience and complex aggregate
litigation? 

352
00:17:23,960 --> 00:17:26,720
Do they have the massive 
financial war chest required to 

353
00:17:26,960 --> 00:17:29,680
mitigate against a Fortune 500 
company for a decade? 

354
00:17:30,080 --> 00:17:33,360
But beyond just resources, this 
prong forces us to confront the 

355
00:17:33,360 --> 00:17:37,040
foundational economic reality of
class actions, the structural 

356
00:17:37,040 --> 00:17:39,200
alignment of incentives. 
This is where we have to talk 

357
00:17:39,200 --> 00:17:41,720
about agency costs. 
The class action device 

358
00:17:41,720 --> 00:17:44,440
completely flips the traditional
ethical lawyer client 

359
00:17:44,440 --> 00:17:47,760
relationship on its head. 
In normal bilateral litigation, 

360
00:17:48,200 --> 00:17:52,880
the principal, the client, hires
the agent, the lawyer, the 

361
00:17:52,880 --> 00:17:56,120
client directs the goals of the 
litigation, the client monitors 

362
00:17:56,120 --> 00:17:58,680
the lawyer's progress, and the 
client makes the ultimate 

363
00:17:58,680 --> 00:18:00,440
decision to settle or go to 
trial. 

364
00:18:00,440 --> 00:18:03,960
The lawyer serves the client. 
But in a massive consumer class 

365
00:18:03,960 --> 00:18:07,160
action, the reality is entirely 
reversed. 

366
00:18:07,640 --> 00:18:11,160
The agent, the entrepreneurial 
class action lawyer, often 

367
00:18:11,160 --> 00:18:13,960
recruits the principal. 
The lawyer finds a minor 

368
00:18:13,960 --> 00:18:17,200
regulatory violation, drafts a 
complaint, and then goes out to 

369
00:18:17,200 --> 00:18:18,920
find a lead plaintiff to attach 
to it. 

370
00:18:19,600 --> 00:18:21,720
The lawyer is absolutely driving
the bus. 

371
00:18:21,960 --> 00:18:24,400
And think about the economic 
incentives of the absent class 

372
00:18:24,400 --> 00:18:26,240
members. 
If millions of people were 

373
00:18:26,240 --> 00:18:29,880
overcharged by $3 on their cell 
phone bill, their individual 

374
00:18:29,880 --> 00:18:32,600
financial stake in the outcome 
is basically 0. 

375
00:18:32,680 --> 00:18:35,520
No rational human being is going
to spend hundreds of hours 

376
00:18:35,520 --> 00:18:38,320
calling the class counsel, 
demanding status updates, 

377
00:18:38,520 --> 00:18:41,120
reading legal briefs and 
monitoring the litigation 

378
00:18:41,120 --> 00:18:44,120
strategy over a $3 claim. 
This creates a massive 

379
00:18:44,120 --> 00:18:47,240
monitoring void. 
The principles have 0 incentive 

380
00:18:47,240 --> 00:18:50,720
to monitor the agent. 
This vacuum creates terrifyingly

381
00:18:50,720 --> 00:18:53,960
high agency costs, opening the 
door to collusion and self 

382
00:18:53,960 --> 00:18:57,000
dealing by the lawyers, which we
will analyze in deep forensic 

383
00:18:57,000 --> 00:19:00,440
detail when we get to Rule 23 E 
settlement approvals later. 

384
00:19:00,600 --> 00:19:04,120
But as a student, you must spot 
the potential for these inherent

385
00:19:04,200 --> 00:19:07,560
systemic conflicts at the very 
beginning of your analysis under

386
00:19:07,560 --> 00:19:10,000
the adequacy of representation 
requirement. 

387
00:19:10,280 --> 00:19:12,560
So let's assume you have 
successfully navigated the 

388
00:19:12,560 --> 00:19:16,840
treacherous waters of Rule 23A. 
You have proven numerosity, 

389
00:19:17,040 --> 00:19:20,200
heightened commonality, 
typicality and adequacy. 

390
00:19:20,280 --> 00:19:22,760
Take a breath, but realize you 
were only halfway there. 

391
00:19:23,160 --> 00:19:26,160
Satisfying 23A merely gets you 
through the front door of the 

392
00:19:26,160 --> 00:19:29,200
courthouse. 
It is a necessary condition, but

393
00:19:29,200 --> 00:19:31,640
it's not a sufficient condition 
for class certification. 

394
00:19:31,920 --> 00:19:35,640
You have cleared the lobby. 
Now you must proceed to Step 2 

395
00:19:35,640 --> 00:19:38,240
of the checklist. 
You must find a specific room to

396
00:19:38,240 --> 00:19:41,120
house your lawsuit. 
You must fit the class into one 

397
00:19:41,120 --> 00:19:44,280
of the three highly specific, 
rigidly defined categories under

398
00:19:44,280 --> 00:19:46,720
Rule 23 B. 
If you cannot squeeze your facts

399
00:19:46,720 --> 00:19:49,160
into one of these three boxes, 
the class completely fails and 

400
00:19:49,160 --> 00:19:52,400
cannot be certified, regardless 
of how perfectly you satisfied 

401
00:19:52,400 --> 00:19:55,440
the 23 A prerequisites. 
The stakes in this section are 

402
00:19:55,440 --> 00:19:58,560
incredibly high because the 
category you choose dictates the

403
00:19:58,560 --> 00:20:00,440
constitutional rights of the 
class members. 

404
00:20:00,520 --> 00:20:04,040
We can divide these three boxes 
into two broad opposing camps. 

405
00:20:04,320 --> 00:20:08,480
Rule 23-B1 and Rule 23B2, 2 are 
the mandatory classes. 

406
00:20:09,000 --> 00:20:13,760
Rule 23B3 is the opt out class. 
That singular distinction 

407
00:20:13,760 --> 00:20:16,720
between a mandatory class you 
are trapped in and an opt out 

408
00:20:16,720 --> 00:20:20,000
class you can escape is arguably
the most important heavily 

409
00:20:20,000 --> 00:20:23,800
litigated due process concept in
all of aggregate litigation. 

410
00:20:23,800 --> 00:20:25,840
Let's examine the mandatory 
camps first. 

411
00:20:26,560 --> 00:20:30,040
Rule 23 B 1 is designed for 
extreme situations where 

412
00:20:30,040 --> 00:20:33,160
allowing individual separate 
lawsuits to proceed would cause 

413
00:20:33,160 --> 00:20:36,080
an absolute structural disaster.
Either a disaster for the 

414
00:20:36,080 --> 00:20:38,160
defendant or a disaster for the 
plaintiffs. 

415
00:20:38,400 --> 00:20:41,240
We break this down further into 
B1A and B1B. 

416
00:20:41,720 --> 00:20:44,600
Let's look at B1A, which is 
uniquely designed to protect the

417
00:20:44,600 --> 00:20:47,040
defendant. 
It allows a judge to certify a 

418
00:20:47,040 --> 00:20:50,240
mandatory class action if 
individual adjudications would 

419
00:20:50,240 --> 00:20:53,480
create a risk of inconsistent or
varying adjudications with 

420
00:20:53,480 --> 00:20:55,960
respect to individual class 
members that would establish 

421
00:20:55,960 --> 00:20:58,720
incompatible standards of 
conduct for the party opposing 

422
00:20:58,720 --> 00:21:01,440
the class. 
The phrasing here is tricky and 

423
00:21:01,440 --> 00:21:03,960
students constantly misinterpret
it on exams. 

424
00:21:04,440 --> 00:21:08,000
Pay attention to the words 
incompatible standards of 

425
00:21:08,000 --> 00:21:10,160
conduct. 
It does not simply mean that the

426
00:21:10,160 --> 00:21:13,520
defendant might win against 
plaintiff A in one court and 

427
00:21:13,520 --> 00:21:16,560
then lose against plaintiff B in
another court, resulting in 

428
00:21:16,560 --> 00:21:18,440
paying damages to 1 but not the 
other. 

429
00:21:18,560 --> 00:21:20,840
That happens every single day in
the legal system. 

430
00:21:21,000 --> 00:21:23,400
Paying money to some people but 
not others is not an 

431
00:21:23,400 --> 00:21:25,040
incompatible standard of 
conduct. 

432
00:21:25,240 --> 00:21:28,080
An incompatible standard means 
the defendant is put in a legal 

433
00:21:28,080 --> 00:21:30,080
straitjacket. 
It means the defendant 

434
00:21:30,120 --> 00:21:33,720
literally, physically or legally
cannot comply with both court 

435
00:21:33,720 --> 00:21:37,720
orders simultaneously, obeying 1
judge guarantees being held in 

436
00:21:37,720 --> 00:21:40,840
content by the other. 
To make this concrete, imagine a

437
00:21:40,840 --> 00:21:43,920
municipality that issues a 
complex series of municipal 

438
00:21:43,920 --> 00:21:46,640
bonds to fund a massive 
infrastructure project. 

439
00:21:47,240 --> 00:21:50,040
A controversy arises regarding 
the legality of the bond 

440
00:21:50,040 --> 00:21:52,800
issuance. 
Plaintiff A An angry taxpayer, 

441
00:21:53,000 --> 00:21:56,200
sues in federal court in New 
York demanding an injunction 

442
00:21:56,200 --> 00:21:58,960
declaring the entire bond issue 
void and illegal. 

443
00:21:59,000 --> 00:22:02,000
Plaintiff B, an institutional 
investor holding millions in 

444
00:22:02,000 --> 00:22:05,560
these bonds, sues in federal 
court in Delaware demanding A 

445
00:22:05,560 --> 00:22:08,560
declaratory judgment that the 
bonds are perfectly valid and 

446
00:22:08,560 --> 00:22:11,200
must be enforced. 
If both plaintiffs win their 

447
00:22:11,200 --> 00:22:14,200
individual lawsuits, the 
municipality is trapped. 

448
00:22:14,800 --> 00:22:17,600
It is under a federal court 
order to completely void the 

449
00:22:17,600 --> 00:22:21,720
bonds and simultaneously under a
federal court order to fully 

450
00:22:21,720 --> 00:22:24,080
enforce and pay out the exact 
same bonds. 

451
00:22:24,360 --> 00:22:26,800
That is the definition of an 
incompatible standard of 

452
00:22:26,800 --> 00:22:28,840
conduct. 
To prevent this paradoxical 

453
00:22:28,840 --> 00:22:33,120
nightmare, the rules allow a 
court to certify a mandatory B1A

454
00:22:33,120 --> 00:22:36,960
class, dragging all bondholders 
and taxpayers into a single 

455
00:22:36,960 --> 00:22:40,480
forum to ensure 1U binding 
judgement that protects the 

456
00:22:40,480 --> 00:22:43,560
defendant from impossible 
conflicting legal obligations. 

457
00:22:43,680 --> 00:22:46,680
Then we look at the flip side. 
Rule 23 B 1B. 

458
00:22:46,840 --> 00:22:49,080
This provision completely 
changes the focus. 

459
00:22:49,080 --> 00:22:52,080
Instead of protecting the 
defendant, B1B exists to protect

460
00:22:52,080 --> 00:22:54,720
the plaintiffs from each other. 
It permits A mandatory class 

461
00:22:54,720 --> 00:22:58,600
action if individual lawsuits 
would, as a practical matter, be

462
00:22:58,600 --> 00:23:01,640
dispositive of the interests of 
the other class members, not 

463
00:23:01,640 --> 00:23:04,520
parties to the individual 
adjudications, or would 

464
00:23:04,520 --> 00:23:07,800
substantially impair or impede 
their ability to protect their 

465
00:23:07,800 --> 00:23:09,840
interests. 
That is incredibly dense 

466
00:23:09,840 --> 00:23:13,480
statutory language, but what it 
translates to in the real world 

467
00:23:13,560 --> 00:23:16,440
and the classic universally 
tested scenario you will see on 

468
00:23:16,440 --> 00:23:19,280
exams, is the concept of the 
limited fund. 

469
00:23:19,560 --> 00:23:22,040
Let's paint a vivid picture of a
limited fund. 

470
00:23:22,520 --> 00:23:25,760
Imagine a catastrophic localized
environmental tort. 

471
00:23:26,320 --> 00:23:29,760
A small independent chemical 
plant in a rural valley suffers 

472
00:23:29,760 --> 00:23:33,440
a massive explosion, blanketing 
the surrounding town in toxic 

473
00:23:33,440 --> 00:23:35,720
gas. 
The property damage, the medical

474
00:23:35,720 --> 00:23:38,600
bills and the long term health 
monitoring costs across the 

475
00:23:38,600 --> 00:23:41,320
community clearly exceed $1 
billion. 

476
00:23:41,440 --> 00:23:44,480
However, this independent 
corporate defendant is thinly 

477
00:23:44,480 --> 00:23:47,400
capitalized. 
Between its total liquid assets 

478
00:23:47,400 --> 00:23:50,360
and its liability insurance 
policies, the company only has a

479
00:23:50,360 --> 00:23:52,520
maximum of $50,000,000 to its 
name. 

480
00:23:52,840 --> 00:23:55,480
If we follow the traditional 
rules of Civil Procedure and 

481
00:23:55,480 --> 00:23:58,560
allow individual bilateral 
lawsuits, what happens? 

482
00:23:58,840 --> 00:24:02,480
Plaintiff A, represented by a 
hyper aggressive trial lawyer, 

483
00:24:02,800 --> 00:24:06,640
sprints to the courthouse, gets 
an expedited trial date, wins a 

484
00:24:06,680 --> 00:24:10,400
$50 million jury verdict, and 
immediately seizes every single 

485
00:24:10,400 --> 00:24:12,920
penny the company has, plunging 
it into bankruptcy. 

486
00:24:13,200 --> 00:24:16,600
The race to the courthouse, it's
a literal 0 sum game. 

487
00:24:16,880 --> 00:24:20,360
Plaintiff B, Plaintiff C and the
thousands of other victims who 

488
00:24:20,360 --> 00:24:23,360
filed their lawsuits a few weeks
later get absolutely nothing. 

489
00:24:23,400 --> 00:24:26,320
Their legal rights are rendered 
entirely worthless because the 

490
00:24:26,320 --> 00:24:29,200
fund is completely depleted. 
Their ability to protect their 

491
00:24:29,200 --> 00:24:32,720
interests has been to quote the 
rule substantially impaired. 

492
00:24:32,920 --> 00:24:35,560
To prevent this chaotic, 
inequitable cannibalization 

493
00:24:35,560 --> 00:24:39,320
among victims, Rule 23-B1B 
allows the federal court to step

494
00:24:39,320 --> 00:24:42,520
in, halt all individual 
litigation, and gather every 

495
00:24:42,520 --> 00:24:45,280
single victim into a single 
mandatory class. 

496
00:24:45,280 --> 00:24:48,000
The court effectively seizes 
control of the $15 million 

497
00:24:48,000 --> 00:24:51,440
limited fund and distributes it 
fairly and equitably, often 

498
00:24:51,440 --> 00:24:54,560
proportionally, based on the 
severity of injuries among all 

499
00:24:54,560 --> 00:24:56,920
the victims, ensuring everyone 
gets at least something. 

500
00:24:57,080 --> 00:24:59,400
The policy logic mix. 
But here's where the 

501
00:24:59,400 --> 00:25:03,560
constitutional trap snapshot as 
we establish B1 classes are 

502
00:25:03,560 --> 00:25:06,880
mandatory. 
The text of Rule 23 does not 

503
00:25:06,880 --> 00:25:10,280
require the judge to give absent
class members the right to opt 

504
00:25:10,280 --> 00:25:13,400
out of a B1 class, and if you 
think about it structurally, it 

505
00:25:13,400 --> 00:25:15,840
can't. 
The very purpose of the rule is 

506
00:25:15,840 --> 00:25:18,200
completely defeated if people 
can leave. 

507
00:25:18,560 --> 00:25:21,240
Right. 
If plaintiff A is allowed to opt

508
00:25:21,240 --> 00:25:24,200
out of the B1B limited fund 
class so they can go resume 

509
00:25:24,200 --> 00:25:27,200
their race to the courthouse and
try to grab the whole 50 million

510
00:25:27,200 --> 00:25:30,080
for themselves, the protective 
structure collapses. 

511
00:25:30,080 --> 00:25:32,920
The fund is destroyed. 
Therefore, you are trapped in 

512
00:25:32,920 --> 00:25:34,880
the class. 
But I want you to pause and 

513
00:25:34,880 --> 00:25:39,600
deeply consider the profound, 
unsettling due process tension 

514
00:25:39,600 --> 00:25:42,320
we are accepting here. 
We are taking an American 

515
00:25:42,320 --> 00:25:45,600
citizen who was terribly injured
through no fault of their own. 

516
00:25:45,840 --> 00:25:49,240
We are stripping them of their 
fundamental individual autonomy.

517
00:25:49,440 --> 00:25:52,480
We are legally barring them from
hiring the lawyer of their 

518
00:25:52,480 --> 00:25:55,360
choice, pursuing their own 
strategy, and having their own 

519
00:25:55,360 --> 00:25:57,880
day in court. 
Instead, we are forcing them to 

520
00:25:57,920 --> 00:26:01,800
accept a fractional compromise 
payout engineered by a class 

521
00:26:01,800 --> 00:26:04,560
lawyer they have never met and a
judge they didn't elect. 

522
00:26:04,800 --> 00:26:07,840
When purely monetary relief is 
at stake, taking away the right 

523
00:26:07,840 --> 00:26:10,360
to opt out raises severe alarm 
bell. 

524
00:26:10,360 --> 00:26:13,360
Constitutional questions. 
The Supreme Court is acutely 

525
00:26:13,360 --> 00:26:17,040
aware of this, and historically 
they have been highly suspicious

526
00:26:17,040 --> 00:26:20,080
of lawyers trying to shove 
massive damages claims into this

527
00:26:20,080 --> 00:26:22,600
box. 
They strictly restrict limited 

528
00:26:22,600 --> 00:26:25,320
fund classes to narrow 
historically recognized 

529
00:26:25,320 --> 00:26:28,720
boundaries, specifically to 
prevent clever corporate defense

530
00:26:28,720 --> 00:26:32,840
lawyers and collusive plaintiffs
counsel from forcing massive 

531
00:26:32,880 --> 00:26:38,080
disparate mass tort cases into a
mandatory B1B box just to coerce

532
00:26:38,080 --> 00:26:40,640
a cheap global settlement that 
binds everyone forever without 

533
00:26:40,640 --> 00:26:42,800
an estate hedge. 
If you are reading an exam fact 

534
00:26:42,800 --> 00:26:46,280
pattern, you see a massive case 
primarily about money damages 

535
00:26:46,280 --> 00:26:48,840
trying to squeeze into AB1 
mandatory class. 

536
00:26:49,160 --> 00:26:51,440
You must raise a massive red 
flag in your essay about due 

537
00:26:51,440 --> 00:26:54,160
process and the fundamental 
necessity of the opt out, right?

538
00:26:54,320 --> 00:26:56,960
That inherent tension regarding 
remedies leads us directly into 

539
00:26:56,960 --> 00:26:59,880
the second mandatory category, 
Rule 23B2. 

540
00:27:00,080 --> 00:27:03,640
This category is specifically 
designed for cases where the 

541
00:27:03,640 --> 00:27:08,080
party opposing the class has 
acted or refused to act on 

542
00:27:08,080 --> 00:27:11,440
grounds that apply generally to 
the class making final 

543
00:27:11,440 --> 00:27:14,880
injunctive relief or 
corresponding declaratory relief

544
00:27:14,880 --> 00:27:16,520
appropriate for the class as a 
whole. 

545
00:27:16,680 --> 00:27:19,640
This is not about money. 
This is about changing behavior.

546
00:27:19,920 --> 00:27:23,640
This is the historic, powerful 
vehicle for institutional reform

547
00:27:23,640 --> 00:27:26,440
and civil rights litigation. 
Think of the foundational 

548
00:27:26,440 --> 00:27:29,120
desegregation cases of the mid 
20th century. 

549
00:27:29,600 --> 00:27:32,320
If you are challenging the 
school board's systemic policy 

550
00:27:32,320 --> 00:27:35,360
of racial segregation, you 
aren't trying to calculate the 

551
00:27:35,360 --> 00:27:39,000
individualized retroactive 
monetary damages for each 

552
00:27:39,000 --> 00:27:41,400
student's psychological harm 
over 10 years. 

553
00:27:41,520 --> 00:27:44,960
You are asking the federal court
to wield its equitable power to 

554
00:27:44,960 --> 00:27:48,120
order the defendant to change a 
systemic institutional policy 

555
00:27:48,120 --> 00:27:51,320
that affects everyone equally. 
You want an injunction ordering 

556
00:27:51,320 --> 00:27:53,520
the schools to integrate. 
Because the remedy, the 

557
00:27:53,520 --> 00:27:56,240
injunction naturally and 
inherently applies to the entire

558
00:27:56,240 --> 00:27:59,680
group without differentiation, 
B2 classes are logically 

559
00:27:59,680 --> 00:28:02,560
mandatory. 
The concept of an opt out makes 

560
00:28:02,560 --> 00:28:04,840
zero sense here. 
A student cannot raise their 

561
00:28:04,840 --> 00:28:08,080
hand and say I exercise my due 
process right to opt out of this

562
00:28:08,080 --> 00:28:09,960
lawsuit. 
Please keep my specific 

563
00:28:09,960 --> 00:28:13,600
classroom racially segregated. 
The injunction just is what it 

564
00:28:13,600 --> 00:28:15,240
is. 
It alters the institutional 

565
00:28:15,240 --> 00:28:17,320
reality for everyone 
simultaneously. 

566
00:28:17,400 --> 00:28:21,520
Which finally brings us to the 
absolute behemoth of modern 

567
00:28:21,560 --> 00:28:26,200
aggregate litigation, the Rule 
23B3 damages class. 

568
00:28:26,200 --> 00:28:28,800
If you are reading about a 
multibillion dollar settlement 

569
00:28:28,800 --> 00:28:31,720
in the Wall Street Journal, it 
is almost certainly AB three 

570
00:28:31,720 --> 00:28:33,440
class. 
This encompasses massive 

571
00:28:33,440 --> 00:28:36,640
consumer fraud, nationwide 
securities violations, 

572
00:28:36,720 --> 00:28:40,280
antitrust, price fixing, cartels
and massive data breaches. 

573
00:28:40,400 --> 00:28:43,600
Because these actions are 
primarily overwhelmingly about 

574
00:28:43,600 --> 00:28:46,520
securing retrospective money 
damages for individual economic 

575
00:28:46,520 --> 00:28:49,480
harms, the framers of the 
Federal Rules and the courts 

576
00:28:49,480 --> 00:28:52,480
recognize that plaintiffs have a
significantly stronger due 

577
00:28:52,480 --> 00:28:55,440
process interest in controlling 
their own legal destiny. 

578
00:28:55,640 --> 00:28:57,640
Therefore the B3 class is the 
opt out class. 

579
00:28:57,640 --> 00:29:00,120
You have the right to leave. 
But gaining the privilege of 

580
00:29:00,120 --> 00:29:02,520
that opt out class is incredibly
difficult. 

581
00:29:02,800 --> 00:29:06,760
To get AB3 class certified, the 
plaintiffs lawyers have to clear

582
00:29:06,760 --> 00:29:11,200
2 massive, highly litigated, 
incredibly expensive hurdles, 

583
00:29:11,440 --> 00:29:15,120
predominance and superiority. 
Let's tackle predominance first,

584
00:29:15,120 --> 00:29:16,840
because it's where most class 
actions go. 

585
00:29:16,840 --> 00:29:20,640
To die, the court must find that
the questions of law or fact 

586
00:29:20,640 --> 00:29:23,680
common to class members 
fundamentally predominate over 

587
00:29:23,680 --> 00:29:26,680
any questions affecting only 
individual members. 

588
00:29:26,720 --> 00:29:31,240
Recall our discussion of 23 a 
commonality, the threshold 23 a 

589
00:29:31,280 --> 00:29:35,520
test just asks if a central 
common question exists that can 

590
00:29:35,520 --> 00:29:39,520
be answered in one stroke. 
Rule 23B3 asks a much harder 

591
00:29:39,520 --> 00:29:42,000
question. 
Do those common questions 

592
00:29:42,000 --> 00:29:44,920
mathematically and practically 
dominate the entire litigation 

593
00:29:44,920 --> 00:29:47,360
process? 
Here is your exact analytical 

594
00:29:47,360 --> 00:29:50,040
strategy for a predominance 
question on the bar exam. 

595
00:29:50,360 --> 00:29:52,960
You need to mentally project 
yourself into the future and map

596
00:29:52,960 --> 00:29:55,880
out how the trial will actually 
physically unfold in the 

597
00:29:55,880 --> 00:29:57,680
courtroom. 
If the judge certifies this 

598
00:29:57,680 --> 00:30:00,360
class, are we going to be able 
to hold one streamlined trial on

599
00:30:00,360 --> 00:30:02,600
the defendant's overarching 
liability and then 

600
00:30:02,600 --> 00:30:04,320
mathematically distribute 
damages? 

601
00:30:04,480 --> 00:30:08,400
Or once we answer the common 
question, are we suddenly going 

602
00:30:08,400 --> 00:30:13,160
to need 10,000 highly specific 
individualized mini trials just 

603
00:30:13,160 --> 00:30:16,080
to figure out if each specific 
class member was actually 

604
00:30:16,080 --> 00:30:18,240
injured and what their specific 
damages are? 

605
00:30:18,600 --> 00:30:21,440
Let's look at the classic 
example that almost always fails

606
00:30:21,440 --> 00:30:24,040
predominance the pharmaceutical 
mass tort. 

607
00:30:24,720 --> 00:30:28,440
Imagine a drug company hides the
severe cardiovascular side 

608
00:30:28,440 --> 00:30:32,680
effects of a new painkiller. 
A massive nationwide class 

609
00:30:32,680 --> 00:30:35,160
action is filed. 
The common question is obvious. 

610
00:30:35,160 --> 00:30:37,760
Did the pharmaceutical company 
fraudulently conceal the 

611
00:30:37,760 --> 00:30:40,000
clinical trial data regarding 
heart attacks? 

612
00:30:40,040 --> 00:30:43,680
Yes, that is a massive common 
question, but answering that 

613
00:30:43,680 --> 00:30:46,040
question doesn't establish 
liability to any specific 

614
00:30:46,040 --> 00:30:48,480
person. 
To win a tort claim, you need 

615
00:30:48,480 --> 00:30:50,480
causation. 
Did the hidden side effect 

616
00:30:50,480 --> 00:30:53,520
actually cause plaintiff a 
specific heart attack or was it 

617
00:30:53,520 --> 00:30:56,240
caused by their 30 year smoking 
habit in family history? 

618
00:30:56,240 --> 00:30:59,240
Did it cause plaintiff BS stroke
or was it their severe obesity? 

619
00:30:59,440 --> 00:31:03,240
Proving medical causation is 
intensely, inescapably 

620
00:31:03,240 --> 00:31:05,800
individualized. 
If proving causation and 

621
00:31:05,800 --> 00:31:08,920
calculating the resulting pain 
and suffering damages requires 

622
00:31:08,920 --> 00:31:12,520
the judge to hold 10,000 
separate customized mini trials 

623
00:31:12,520 --> 00:31:15,840
dissecting the medical history 
of 10,000 different people, then

624
00:31:15,840 --> 00:31:18,840
the individual issues completely
overwhelm the common issues. 

625
00:31:18,920 --> 00:31:20,800
The trial collapses under its 
own weight. 

626
00:31:20,880 --> 00:31:23,720
Predominance fails. 
Certification is denied. 

627
00:31:23,800 --> 00:31:27,080
Conversely, contrast that 
nightmare with a modern consumer

628
00:31:27,080 --> 00:31:29,440
contract case. 
Imagine a massive 

629
00:31:29,440 --> 00:31:32,720
telecommunications company 
implements a uniform automated 

630
00:31:32,720 --> 00:31:35,800
billing algorithm that illegally
overcharges 1,000,000 

631
00:31:35,800 --> 00:31:39,440
subscribers by exactly $5 a 
month for a phantom service fee.

632
00:31:39,440 --> 00:31:41,080
The liability question is 
standard. 

633
00:31:41,240 --> 00:31:43,560
Was the uniform contract 
language deceptive? 

634
00:31:43,720 --> 00:31:45,840
That question is common to every
single subscriber. 

635
00:31:45,840 --> 00:31:48,960
More importantly, the damages 
question is entirely mechanical 

636
00:31:48,960 --> 00:31:51,800
and identical. 
Every single person lost exactly

637
00:31:51,800 --> 00:31:54,680
$5 a month. 
There are no individualized 

638
00:31:54,680 --> 00:31:57,760
medical histories to review. 
There is no subjective pain and 

639
00:31:57,760 --> 00:31:59,480
suffering to calculate. 
You just look at the 

640
00:31:59,480 --> 00:32:02,920
spreadsheet. 
The common issues vastly 

641
00:32:02,920 --> 00:32:06,560
overwhelmingly predominate over 
any microscopic individual 

642
00:32:06,560 --> 00:32:09,560
variations. 
That is a structurally perfect 

643
00:32:09,880 --> 00:32:12,800
B3 class. 
And that identical scenario 

644
00:32:13,240 --> 00:32:16,800
perfectly satisfies the second 
companion hurdle of B3 

645
00:32:16,800 --> 00:32:19,640
superiority. 
The judge must affirmatively 

646
00:32:19,640 --> 00:32:23,000
find that a class action is 
superior to all other available 

647
00:32:23,000 --> 00:32:25,760
methods for fairly and 
efficiently adjudicating the 

648
00:32:25,760 --> 00:32:27,320
controversy. 
Look back at our 

649
00:32:27,320 --> 00:32:30,400
telecommunications example. 
Not a single person on earth is 

650
00:32:30,400 --> 00:32:33,960
going to hire a lawyer, pay a 
$400.00 filing fee, and spend a 

651
00:32:33,960 --> 00:32:37,360
year in discovery to sue a 
massive corporation to recover a

652
00:32:37,360 --> 00:32:40,960
$5 overcharge. 
It is economically irrational if

653
00:32:40,960 --> 00:32:43,880
bilateral litigation is the only
option the corporation gets to 

654
00:32:43,880 --> 00:32:46,840
keep $5 million of stolen money 
with absolute impunity. 

655
00:32:46,920 --> 00:32:49,720
In that context, a class action 
is not just the superior method,

656
00:32:49,760 --> 00:32:53,160
it is literally the only method 
capable of achieving justice, 

657
00:32:53,160 --> 00:32:56,040
providing compensation and 
deterring corporate wrongdoing. 

658
00:32:56,120 --> 00:32:59,240
That fulfills the core 
foundational access to justice 

659
00:32:59,240 --> 00:33:02,280
rationale that justifies the 
very existence of aggregate 

660
00:33:02,280 --> 00:33:04,920
litigation. 
So you've survived the gauntlet 

661
00:33:04,920 --> 00:33:07,720
of certification. 
You've placed your damages class

662
00:33:07,720 --> 00:33:12,080
perfectly into the 23B3 box. 
That brings to step three of our

663
00:33:12,080 --> 00:33:15,920
analytical checklist, due 
process notice and opt out 

664
00:33:15,920 --> 00:33:18,400
rights. 
This is the moment where the 

665
00:33:18,400 --> 00:33:21,040
cold procedural mechanics 
intersect violently with the 

666
00:33:21,040 --> 00:33:24,600
United States Constitution. 
We have established that in AB3 

667
00:33:24,600 --> 00:33:28,040
damages class, every single 
class member possesses A 

668
00:33:28,040 --> 00:33:32,000
fundamental right to opt out to 
escape the binding effect of the

669
00:33:32,000 --> 00:33:34,000
judgement. 
But that theoretical right is 

670
00:33:34,000 --> 00:33:37,160
completely, utterly meaningless 
if the class member doesn't even

671
00:33:37,160 --> 00:33:39,160
know the lawsuit exists. 
Exactly. 

672
00:33:39,240 --> 00:33:41,720
You cannot exercise a right you 
don't know you have. 

673
00:33:41,720 --> 00:33:44,840
It's a phantom right. 
So what is the strict 

674
00:33:44,840 --> 00:33:47,120
constitutional standard for 
providing notice? 

675
00:33:47,240 --> 00:33:49,840
How hard does the plaintiff's 
lawyer have to try to find these

676
00:33:49,840 --> 00:33:52,240
people? 
For that, we have to travel back

677
00:33:52,240 --> 00:33:56,720
to 1950 and look at a bedrock 
Supreme Court precedent, Mullane

678
00:33:56,720 --> 00:33:58,800
V Central Hanover Bank and Trust
Co. 

679
00:33:58,920 --> 00:34:02,000
This case didn't involve a 
modern class action, but it 

680
00:34:02,000 --> 00:34:04,760
established the due process 
floor for all aggregate 

681
00:34:04,760 --> 00:34:07,120
proceedings. 
The due process clause demands 

682
00:34:07,120 --> 00:34:10,120
that notice must be reasonably 
calculated under all the 

683
00:34:10,120 --> 00:34:13,480
circumstances to apprise 
interested parties of the 

684
00:34:13,480 --> 00:34:16,679
pendency of the action and 
afford them an opportunity to 

685
00:34:16,679 --> 00:34:19,960
present their objections. 
The specific facts of Mullane 

686
00:34:19,960 --> 00:34:22,440
beautifully illustrate what is 
not acceptable. 

687
00:34:23,040 --> 00:34:26,560
A massive New York Trust Company
pulled a bunch of small 

688
00:34:26,560 --> 00:34:30,520
individual trusts into a single 
common fund for easier 

689
00:34:30,520 --> 00:34:33,320
investment management. 
When it came time to legally 

690
00:34:33,320 --> 00:34:36,800
settle the accounts, a process 
that would permanently bind the 

691
00:34:36,800 --> 00:34:39,440
beneficiaries and cut off their 
right to sue the bank for 

692
00:34:39,440 --> 00:34:43,320
mismanagement, the bank followed
a bare bones state statute. 

693
00:34:43,719 --> 00:34:46,880
They simply published a small 
legalistic notice in the back 

694
00:34:46,880 --> 00:34:48,880
pages of a local New York 
newspaper. 

695
00:34:49,080 --> 00:34:51,840
The Supreme Court looked at this
and struck it down as 

696
00:34:52,040 --> 00:34:56,239
constitutionally abhorrent for 
those beneficiaries whose names 

697
00:34:56,239 --> 00:34:59,360
and home addresses we're sitting
right there in the bank's own 

698
00:34:59,360 --> 00:35:01,680
filing cabinets. 
The court recognized human 

699
00:35:01,680 --> 00:35:04,320
reality. 
Nobody reads the legal notices 

700
00:35:04,320 --> 00:35:06,880
in the back of the newspaper. 
If you actually know where 

701
00:35:06,880 --> 00:35:10,040
someone lives, a tiny print ad 
is not reasonably calculated to 

702
00:35:10,040 --> 00:35:12,280
reach them. 
If you have their address, due 

703
00:35:12,280 --> 00:35:15,800
process demands you put a letter
in an envelope, put a stamp on 

704
00:35:15,800 --> 00:35:18,600
it, and mail it to them. 
Federal Rule of Civil Procedure 

705
00:35:18,600 --> 00:35:21,800
23 takes that constitutional 
baseline from Elaine and 

706
00:35:21,800 --> 00:35:26,680
aggressively codifies it. 
Rule 23 CDB dictates that for 

707
00:35:26,680 --> 00:35:30,520
any class certified under B3, 
the court must direct to class 

708
00:35:30,520 --> 00:35:33,560
members the best notice that is 
practicable under the 

709
00:35:33,560 --> 00:35:36,600
circumstances, including 
individual notice to all members

710
00:35:36,600 --> 00:35:38,440
who can be identified through 
reasonable effort. 

711
00:35:38,520 --> 00:35:42,440
The fulcrum of that entire rule 
rests on the word practicable 

712
00:35:42,520 --> 00:35:44,080
and the phrase reasonable 
effort. 

713
00:35:44,440 --> 00:35:47,800
If you are suing a modern tech 
company or a major airline, and 

714
00:35:47,800 --> 00:35:50,680
the defendant possesses a 
pristine digitized database 

715
00:35:50,680 --> 00:35:53,840
containing the e-mail addresses 
of all 10 million class members,

716
00:35:54,160 --> 00:35:56,720
it is highly practical and 
incredibly cheap to send 10 

717
00:35:56,720 --> 00:35:59,920
million individualized emails. 
The court will absolutely demand

718
00:35:59,920 --> 00:36:02,560
it, but what happens when the 
class consists of transient 

719
00:36:02,560 --> 00:36:04,800
consumers? 
What if the class comprises 

720
00:36:04,800 --> 00:36:07,720
people who walked into a random 
grocery store and bought a 

721
00:36:07,720 --> 00:36:10,720
specific, defective brand of 
toothpaste using cash over a 

722
00:36:10,720 --> 00:36:13,560
five year period? 
The defendant has absolutely no 

723
00:36:13,560 --> 00:36:16,880
record of who those people are. 
Individual notice by mail or 

724
00:36:16,880 --> 00:36:20,920
e-mail is literally impossible. 
So what constitutes the best 

725
00:36:20,920 --> 00:36:24,240
notice practicable in a scenario
where you don't know who your 

726
00:36:24,240 --> 00:36:26,480
plaintiffs are? 
That is where we are forced to 

727
00:36:26,480 --> 00:36:29,040
rely on publication notice. 
And this is where the modern 

728
00:36:29,040 --> 00:36:31,760
application of the rule gets 
incredibly thorny and 

729
00:36:31,760 --> 00:36:35,840
technologically fascinating. 20 
years ago, publication notice 

730
00:36:35,840 --> 00:36:40,200
meant buying full page ads in 
USA TODAY or People magazine, or

731
00:36:40,200 --> 00:36:42,880
buying static banner ads on 
yahoo.com. 

732
00:36:43,080 --> 00:36:46,080
But our source materials dive 
deep into the highly contested 

733
00:36:46,080 --> 00:36:50,120
modern frontier of notice native
social media advertising. 

734
00:36:50,280 --> 00:36:53,280
These are the sponsored posts 
that seamlessly blend into your 

735
00:36:53,280 --> 00:36:56,840
TikTok, Instagram or Facebook 
feed, mimicking organic content.

736
00:36:57,080 --> 00:36:59,440
They don't look like legal 
warnings, They look like normal 

737
00:36:59,440 --> 00:37:02,160
videos or memes. 
How do federal judges decide if 

738
00:37:02,160 --> 00:37:04,640
these hyper modern, 
algorithmically driven forms of 

739
00:37:04,640 --> 00:37:08,480
publication notice satisfy the 
dusty due process standards of 

740
00:37:08,480 --> 00:37:10,800
1950? 
To solve this, modern courts 

741
00:37:10,800 --> 00:37:13,800
have implicitly adopted a 
rigorous economic balancing 

742
00:37:13,800 --> 00:37:16,760
test, heavily adapted from 
another famous administrative 

743
00:37:16,760 --> 00:37:19,040
law doctrine found in Matthew's 
Eldridge. 

744
00:37:19,080 --> 00:37:22,320
When a federal judge is staring 
at a proposed notice plan 

745
00:37:22,320 --> 00:37:27,080
drafted by a PR firm, they are 
engaged in a complex calculus of

746
00:37:27,080 --> 00:37:30,040
balancing costs and benefits. 
But we aren't just talking about

747
00:37:30,040 --> 00:37:33,000
the out of pocket financial cost
of buying the Facebook ads. 

748
00:37:33,480 --> 00:37:36,320
The Court is balancing the 
systemic benefits of reaching 

749
00:37:36,320 --> 00:37:40,520
more actual legitimate class 
members against the hidden 

750
00:37:40,520 --> 00:37:43,880
collateral costs of over 
inclusive viral notice. 

751
00:37:44,040 --> 00:37:46,320
I want you to look at this from 
the perspective of the corporate

752
00:37:46,320 --> 00:37:48,520
defendant firmware. 
If the plaintiff's lawyer 

753
00:37:48,520 --> 00:37:51,720
proposes a notice plan that 
involves blasting highly 

754
00:37:51,720 --> 00:37:55,160
aggressive clickbait native ads 
across every social media 

755
00:37:55,160 --> 00:37:57,720
platform. 
Ads with huge red letters 

756
00:37:57,720 --> 00:38:01,040
screaming Did mega court commit 
massive consumer fraud? 

757
00:38:01,400 --> 00:38:04,720
Click here to claim your $500. 
That campaign is going to go 

758
00:38:04,720 --> 00:38:05,960
viral. 
It will reach millions of 

759
00:38:05,960 --> 00:38:08,000
people. 
It maximizes the benefit of 

760
00:38:08,000 --> 00:38:11,160
notifying actual class members. 
But it also forcefully reaches 

761
00:38:11,160 --> 00:38:13,640
10s of millions of people who 
have never even interacted with 

762
00:38:13,640 --> 00:38:16,040
the company. 
It inflicts severe, immediate 

763
00:38:16,040 --> 00:38:18,960
and entirely unadjudicated 
reputational devastation on the 

764
00:38:18,960 --> 00:38:21,000
defendant before trial has even 
occurred. 

765
00:38:21,000 --> 00:38:23,840
The notice itself becomes a 
weapon of corporate damage. 

766
00:38:24,080 --> 00:38:26,400
Exactly. 
So the judge must engage in this

767
00:38:26,480 --> 00:38:30,160
delicate balancing equation. 
Does the marginal benefit of 

768
00:38:30,160 --> 00:38:34,040
reaching a few additional hard 
to find class members truly 

769
00:38:34,040 --> 00:38:37,200
outweigh the immense marginal 
cost of the reputational damage 

770
00:38:37,200 --> 00:38:40,080
caused by hyper aggressive over 
inclusive notice? 

771
00:38:40,520 --> 00:38:43,440
If the plaintiff can present 
data-driven evidence showing 

772
00:38:43,440 --> 00:38:47,240
that native social media ads 
are, say, 400% more effective at

773
00:38:47,240 --> 00:38:49,920
reaching the specific 
demographic of the class than a 

774
00:38:49,920 --> 00:38:53,560
traditional banner ad on a news 
website, and if the reputational

775
00:38:53,560 --> 00:38:56,440
harm is already factored in 
because the lawsuit has been 

776
00:38:56,440 --> 00:38:59,520
heavily covered by mainstream 
media, the judge is much more 

777
00:38:59,520 --> 00:39:02,760
likely to approve or even 
mandate the use of native social

778
00:39:02,760 --> 00:39:05,160
media ads. 
The courts are slowly dragging 

779
00:39:05,160 --> 00:39:07,720
the due process clause into the 
algorithmic age. 

780
00:39:08,320 --> 00:39:11,480
That balancing test is a 
brilliant piece of modern legal 

781
00:39:11,480 --> 00:39:14,560
theory, but let me hammer home a
massive exam strategy point 

782
00:39:14,560 --> 00:39:16,680
because I see students fail this
constantly. 

783
00:39:16,840 --> 00:39:19,840
Do not let the fascinating tech 
discussion about algorithms and 

784
00:39:19,840 --> 00:39:22,880
balancing tests distract you 
from the ruthless strict Rule of

785
00:39:22,880 --> 00:39:26,880
Milan and the text of Rule 23. 
The balancing test only applies 

786
00:39:26,880 --> 00:39:28,760
when individual notice is 
impossible. 

787
00:39:29,240 --> 00:39:32,640
If the exam fact pattern 
explicitly states or implies 

788
00:39:32,640 --> 00:39:34,880
that the plaintiff can identify 
the class members with 

789
00:39:34,880 --> 00:39:38,440
reasonable effort, for example 
by forcing the defendant to hand

790
00:39:38,440 --> 00:39:41,280
over the data from their 
customer loyalty card program, 

791
00:39:41,800 --> 00:39:45,640
then individual direct notice is
strictly, unconditionally 

792
00:39:45,640 --> 00:39:48,040
required. 
It does not matter if printing 

793
00:39:48,040 --> 00:39:51,360
and mailing 2 million physical 
letters costs the plaintiff's 

794
00:39:51,360 --> 00:39:53,920
lawyer $10 million out of 
pocket. 

795
00:39:54,800 --> 00:39:58,120
The Supreme Court made this 
brutally clear in a case called 

796
00:39:58,240 --> 00:40:01,480
Eisen V Carlisle and Jacqueline.
The plaintiff chose to bring 

797
00:40:01,480 --> 00:40:04,320
this massive lawsuit, so the 
plaintiff must bear the total 

798
00:40:04,320 --> 00:40:06,680
cost of notice. 
You cannot bend OR tailor the 

799
00:40:06,680 --> 00:40:09,680
constitutional due process 
requirements just to fit the 

800
00:40:09,680 --> 00:40:11,680
limited pocketbook of the 
plaintiff's lawyer. 

801
00:40:11,880 --> 00:40:14,640
If you can find their names, you
must notify them directly. 

802
00:40:14,840 --> 00:40:16,960
Period. 
There is no balancing test that 

803
00:40:16,960 --> 00:40:19,680
saves you from the postage bill.
Moving to step four of our 

804
00:40:19,680 --> 00:40:22,600
checklist, we wade into what is 
arguably the most unsettled, 

805
00:40:22,600 --> 00:40:25,400
hotly contested, and 
intellectually brutal area in 

806
00:40:25,400 --> 00:40:29,000
modern Civil Procedure personal 
jurisdiction in nationwide class

807
00:40:29,000 --> 00:40:31,440
actions. 
This corresponds to Chapter 5, 

808
00:40:31,680 --> 00:40:35,280
Section V of our guide. 
Let's tackle the defendant side 

809
00:40:35,280 --> 00:40:37,040
of the jurisdictional equation 
first. 

810
00:40:37,680 --> 00:40:41,400
We all remember the exhausting 
basics of specific personal 

811
00:40:41,400 --> 00:40:43,600
jurisdiction from our first year
of law school. 

812
00:40:44,080 --> 00:40:46,960
In order to constitutionally 
haul an out of state corporate 

813
00:40:46,960 --> 00:40:50,120
defendant into a specific 
state's court, the plaintiff's 

814
00:40:50,200 --> 00:40:54,360
specific claims must arise out 
of or strongly relate to the 

815
00:40:54,360 --> 00:40:57,320
defendants of deliberate 
contacts with that form state. 

816
00:40:57,720 --> 00:41:00,000
Right. 
To use a simple example, if a 

817
00:41:00,000 --> 00:41:02,760
lifelong resident of California 
is severely injured by a 

818
00:41:02,760 --> 00:41:05,280
defective medical device 
manufactured by a company 

819
00:41:05,280 --> 00:41:08,000
headquartered in New Jersey, but
the company deliberately 

820
00:41:08,000 --> 00:41:11,000
marketed and sold that device to
the plaintiff through a hospital

821
00:41:11,000 --> 00:41:14,280
in California, the plaintiff can
easily sue the New Jersey 

822
00:41:14,280 --> 00:41:16,280
company in a California federal 
court. 

823
00:41:16,600 --> 00:41:19,560
The specific claim of injury 
arises directly out of the 

824
00:41:19,560 --> 00:41:21,840
defendants commercial contacts 
with California. 

825
00:41:22,040 --> 00:41:24,360
That is straightforward specific
jurisdiction. 

826
00:41:24,560 --> 00:41:27,400
But what happens when we scale 
that up into a nationwide class 

827
00:41:27,400 --> 00:41:29,480
action? 
Let's say that same California 

828
00:41:29,480 --> 00:41:32,360
plaintiff falls a class action 
in a California federal court 

829
00:41:32,360 --> 00:41:34,080
against that same New Jersey 
company. 

830
00:41:34,320 --> 00:41:38,360
But now the California plaintiff
seeks to represent every single 

831
00:41:38,360 --> 00:41:41,400
person in the entire United 
States who was implanted with 

832
00:41:41,400 --> 00:41:44,320
that defective device. 
Think about the constitutional 

833
00:41:44,320 --> 00:41:47,640
paradox here. 
Can a federal judge sitting in 

834
00:41:47,640 --> 00:41:51,400
California constitutionally 
exercise specific personal 

835
00:41:51,400 --> 00:41:55,040
jurisdiction over the claims of 
the absent class members who 

836
00:41:55,040 --> 00:41:56,520
live in New York, Texas and 
Florida? 

837
00:41:56,960 --> 00:42:00,080
Those absent plaintiffs bought 
the device in their home states.

838
00:42:00,320 --> 00:42:02,800
Their specific injuries occurred
in their home states. 

839
00:42:03,000 --> 00:42:06,720
Their claims have absolutely 0 
factual connection to anything 

840
00:42:06,720 --> 00:42:09,640
the defendant did in California.
You are hitting on the exact 

841
00:42:09,640 --> 00:42:12,160
paradox that is tearing the 
federal appellate courts apart 

842
00:42:12,160 --> 00:42:15,840
right now, all triggered by a 
recent highly disruptive Supreme

843
00:42:15,840 --> 00:42:18,840
Court ruling called 
Bristol-Myers Squibb Covey 

844
00:42:18,840 --> 00:42:20,880
Superior Court. 
Now, to be precise, 

845
00:42:20,880 --> 00:42:23,600
Bristol-Myers Squibb was 
actually a massive state court 

846
00:42:23,600 --> 00:42:26,880
mass tort action involving 
hundreds of joined plaintiffs, 

847
00:42:27,440 --> 00:42:30,320
not a formal Rule 23 federal 
class action. 

848
00:42:30,560 --> 00:42:34,160
In that mass tort context, the 
Supreme Court ruled definitively

849
00:42:34,360 --> 00:42:38,080
that a state court could not 
exercise specific jurisdiction 

850
00:42:38,240 --> 00:42:41,240
over the claims of non resident 
plaintiffs whose specific 

851
00:42:41,240 --> 00:42:43,960
injuries had no connection to 
the forum state. 

852
00:42:44,560 --> 00:42:47,320
You can't just pile out of state
claims onto an in state 

853
00:42:47,320 --> 00:42:49,320
plaintiff to manufacture 
jurisdiction. 

854
00:42:49,680 --> 00:42:52,640
Following that ruling, elite 
corporate defense firms launched

855
00:42:52,640 --> 00:42:56,000
a massive offensive. 
They are aggressively arguing 

856
00:42:56,000 --> 00:42:58,960
that the constitutional logic of
Bristol-Myers Squibb must 

857
00:42:59,040 --> 00:43:02,240
absolutely apply to Rule 23 
class actions in federal court 

858
00:43:02,240 --> 00:43:04,320
as well. 
They walk into the California 

859
00:43:04,320 --> 00:43:07,960
court and file a motion to 
dismiss the claims of every 

860
00:43:07,960 --> 00:43:11,160
single class member who doesn't 
live in California, arguing that

861
00:43:11,160 --> 00:43:14,480
the California judge lacks 
specific jurisdiction over those

862
00:43:14,560 --> 00:43:16,600
those out of state claims 
against the defendant. 

863
00:43:16,720 --> 00:43:19,240
And as our guide explicitly 
notes, this is a highly 

864
00:43:19,240 --> 00:43:21,960
litigated, wildly unsettled area
of law. 

865
00:43:21,960 --> 00:43:23,560
You have a massive circuit 
split. 

866
00:43:24,120 --> 00:43:26,520
Some federal appellate courts 
agree entirely with the 

867
00:43:26,520 --> 00:43:29,520
corporate defendants, holding 
that Bristol-Myers effectively 

868
00:43:29,520 --> 00:43:33,240
outlaws the certification of 
nationwide class actions in any 

869
00:43:33,240 --> 00:43:36,000
state other than the defendant's
home state, where they're 

870
00:43:36,000 --> 00:43:38,280
subject to general jurisdiction 
for anything. 

871
00:43:38,520 --> 00:43:40,880
But other circuits vehemently 
disagree. 

872
00:43:41,480 --> 00:43:45,120
They argue that a Rule 23 class 
action is structurally and 

873
00:43:45,120 --> 00:43:47,280
fundamentally different from a 
mass tort. 

874
00:43:47,840 --> 00:43:51,840
They argue that in a true class 
action, the named representative

875
00:43:51,840 --> 00:43:54,440
is the only plaintiff that 
matters for jurisdictional 

876
00:43:54,440 --> 00:43:56,680
purposes. 
The absent class members are 

877
00:43:56,680 --> 00:44:00,560
just represented parties, not 
active litigants, so their 

878
00:44:00,560 --> 00:44:03,240
individual jurisdictional status
is irrelevant. 

879
00:44:03,800 --> 00:44:07,120
When you encounter a nationwide 
class action on a bar exam and 

880
00:44:07,120 --> 00:44:10,080
the corporate defendant is not 
at home in the state where the 

881
00:44:10,080 --> 00:44:14,080
lawsuit is filed, you absolutely
must spot this Bristol-Myers 

882
00:44:14,080 --> 00:44:15,960
issue. 
You don't have to confidently 

883
00:44:15,960 --> 00:44:17,800
resolve it. 
The Supreme Court hasn't even 

884
00:44:17,800 --> 00:44:20,080
fully resolved it yet. 
But you must dedicate a 

885
00:44:20,080 --> 00:44:23,000
paragraph demonstrating to the 
greater that you understand the 

886
00:44:23,000 --> 00:44:27,160
immense tension between specific
jurisdiction and nationwide 

887
00:44:27,200 --> 00:44:29,640
aggregate claims. 
And while we are talking about 

888
00:44:29,640 --> 00:44:31,680
jurisdiction, we have to flip 
the coin and look at the 

889
00:44:31,680 --> 00:44:34,160
plaintiffs. 
This is a conceptual hurdle that

890
00:44:34,160 --> 00:44:36,680
constantly trips up students. 
Let's look at a different 

891
00:44:36,680 --> 00:44:38,800
scenario. 
Let's say a federal court in 

892
00:44:38,800 --> 00:44:42,480
Kansas properly certifies a 
nationwide class action 

893
00:44:42,480 --> 00:44:46,320
involving consumer fraud. 
By certifying that class, the 

894
00:44:46,320 --> 00:44:49,360
Kansas judge is preparing to 
issue a judgement that will 

895
00:44:49,360 --> 00:44:52,800
legally bind 10,000 absent 
plaintiffs scattered across the 

896
00:44:52,800 --> 00:44:54,680
country. 
Many of those plaintiffs live in

897
00:44:54,680 --> 00:44:57,280
New York or Oregon. 
They have never visited Kansas. 

898
00:44:57,280 --> 00:44:59,040
They've never done business in 
Kansas. 

899
00:44:59,280 --> 00:45:02,680
They have absolutely 0 minimum 
contacts with the state of 

900
00:45:02,680 --> 00:45:05,200
Kansas. 
The student instinctively asks 

901
00:45:05,800 --> 00:45:09,360
how on earth can a Kansas court 
constitutionally exercise 

902
00:45:09,360 --> 00:45:13,200
coercive power over them? 
Doesn't the Due Process Clause 

903
00:45:13,200 --> 00:45:16,520
require minimum contacts for 
everyone subject to a court's 

904
00:45:16,520 --> 00:45:19,560
binding judgement? 
That is a brilliant, entirely 

905
00:45:19,560 --> 00:45:21,960
logical question, and it was 
definitively answered by the 

906
00:45:21,960 --> 00:45:25,120
Supreme Court in a crucial case 
called Phillips Petroleum, Kofi 

907
00:45:25,120 --> 00:45:27,840
shuts. 
And the answer, surprisingly, is

908
00:45:27,840 --> 00:45:29,880
no. 
The court explained that the 

909
00:45:29,880 --> 00:45:32,600
entire heavy burden of minimum 
contacts, the whole 

910
00:45:32,600 --> 00:45:35,200
international shoe framework 
that causes us so much grief, 

911
00:45:35,800 --> 00:45:38,000
was specifically designed to 
protect defendants. 

912
00:45:38,200 --> 00:45:40,440
Why? 
Because defendants are being 

913
00:45:40,440 --> 00:45:42,880
dragged into a foreign court 
against their will. 

914
00:45:43,160 --> 00:45:46,360
They are forced to hire 
expensive local counsel, travel 

915
00:45:46,360 --> 00:45:50,160
across the country, endure 
invasive discovery and face the 

916
00:45:50,160 --> 00:45:52,600
threat of massive financial 
liability. 

917
00:45:52,600 --> 00:45:56,000
The burdens on a defendant are 
immense, so the constitutional 

918
00:45:56,000 --> 00:45:57,840
protections must be equally 
immense. 

919
00:45:58,200 --> 00:46:01,240
But the Supreme Court recognized
that absent plaintiffs in a 

920
00:46:01,240 --> 00:46:04,680
class action are in a 
fundamentally, structurally 

921
00:46:04,680 --> 00:46:07,840
different posture, they are not 
being hauled into court to 

922
00:46:07,840 --> 00:46:09,880
defend themselves. 
They aren't required to hire a 

923
00:46:09,880 --> 00:46:12,200
lawyer, they don't have to 
travel to Kansas, they don't 

924
00:46:12,200 --> 00:46:14,480
have to sit for depositions, and
they aren't facing any 

925
00:46:14,480 --> 00:46:16,800
affirmative liability. 
The court is adjudicating their 

926
00:46:16,800 --> 00:46:19,280
claims, yes, which extinguishes 
their rights. 

927
00:46:19,520 --> 00:46:22,240
But the court held that the 
absent plaintiffs are protected 

928
00:46:22,240 --> 00:46:25,800
by a different tailored suite of
procedural safeguards. 

929
00:46:26,000 --> 00:46:30,160
According to Shots, as long as 
the forum state provides 3 

930
00:46:30,160 --> 00:46:33,400
things adequate representation 
by the league plaintiff, 

931
00:46:34,080 --> 00:46:38,160
adequate notice of the lawsuit, 
and the absolute unencumbered 

932
00:46:38,160 --> 00:46:40,960
right to opt out, due process is
fully satisfied. 

933
00:46:41,200 --> 00:46:44,440
The absent plaintiff does not 
need personal minimum contacts 

934
00:46:44,440 --> 00:46:47,440
with Kansas because the 
combination of the opt out right

935
00:46:47,440 --> 00:46:51,040
and the fiduciary adequacy of 
the representation sufficiently 

936
00:46:51,040 --> 00:46:53,360
protects their fundamental 
constitutional rights. 

937
00:46:53,360 --> 00:46:56,640
That is a massive relief for 
plaintiffs lawyers trying to 

938
00:46:56,640 --> 00:47:00,200
certify nationwide classes. 
But Schutz also contains A 

939
00:47:00,200 --> 00:47:02,760
devastating trap regarding 
choice of law. 

940
00:47:03,000 --> 00:47:05,960
And it's a trap that often 
destroys the very class it just 

941
00:47:05,960 --> 00:47:08,120
saved. 
Just because the Kansas court 

942
00:47:08,120 --> 00:47:11,560
has the constitutional power to 
bind a plaintiff from New York, 

943
00:47:11,880 --> 00:47:15,000
that does not mean the Kansas 
judge can magically apply Kansas

944
00:47:15,000 --> 00:47:18,400
substantive consumer protection 
law to the New York plaintiff's 

945
00:47:18,400 --> 00:47:21,000
claim. 
The Supreme Court in Shutz ruled

946
00:47:21,000 --> 00:47:23,960
that a court cannot blindly 
apply its own state substantive 

947
00:47:23,960 --> 00:47:27,560
law to every single claim in a 
nationwide class action if the 

948
00:47:27,560 --> 00:47:30,600
laws of the various states 
materially conflict and if the 

949
00:47:30,600 --> 00:47:33,920
forum state lacks significant 
factual contacts to those 

950
00:47:33,920 --> 00:47:37,040
specific out of state claims. 
And this brings us full circle, 

951
00:47:37,040 --> 00:47:40,800
violently crashing back into the
predominance requirement OF23B3.

952
00:47:40,840 --> 00:47:42,360
Imagine the nightmare for the 
judge. 

953
00:47:42,560 --> 00:47:45,240
The judge in our Kansas 
nationwide class action 

954
00:47:45,240 --> 00:47:48,800
realizes, based on Shutz, that 
they cannot use Kansas law for 

955
00:47:48,800 --> 00:47:51,320
everyone. 
Instead, they must apply the 

956
00:47:51,320 --> 00:47:54,920
specific consumer protection 
statutes of all 50 states to the

957
00:47:54,920 --> 00:47:57,640
different class members based on
where they bought the product. 

958
00:47:58,160 --> 00:48:01,760
Suddenly the trial becomes an 
unmanageable, hyper complex 

959
00:48:01,760 --> 00:48:04,200
disaster. 
The jury instructions would be 

960
00:48:04,200 --> 00:48:07,080
1000 pages long. 
The legal standards for fraud 

961
00:48:07,080 --> 00:48:10,320
reliance and statutes of 
limitations vary wildly from 

962
00:48:10,320 --> 00:48:14,120
Texas to California to Florida. 
The common issues of fact are 

963
00:48:14,120 --> 00:48:18,080
instantaneously overwhelmed by 
massive, irreconcilable 

964
00:48:18,080 --> 00:48:19,960
individual variations. 
State law. 

965
00:48:20,400 --> 00:48:23,080
The class completely fails the 
predominance and manageability 

966
00:48:23,080 --> 00:48:26,000
tests and the judge is forced to
deny a certification. 

967
00:48:26,400 --> 00:48:28,640
So SHUTS solves the 
constitutional personal 

968
00:48:28,640 --> 00:48:31,040
jurisdiction problem for absent 
plaintiffs, but it's 

969
00:48:31,040 --> 00:48:33,560
simultaneously creates an 
insurmountable choice of law 

970
00:48:33,560 --> 00:48:37,000
problem that routinely kills 
nationwide class actions under 

971
00:48:37,000 --> 00:48:40,120
Rule 23B3. 
It is a procedural catch 22 of 

972
00:48:40,120 --> 00:48:42,240
the highest order. 
Now let's assume the class 

973
00:48:42,240 --> 00:48:45,480
somehow survived all of that. 
They were certified, notice went

974
00:48:45,480 --> 00:48:48,240
out, jurisdiction holds, and the
parties decide they don't want 

975
00:48:48,240 --> 00:48:49,280
to risk a trial. 
They want to. 

976
00:48:49,760 --> 00:48:53,040
This brings us to step five of 
our checklist settlement 

977
00:48:53,040 --> 00:48:55,120
approval and the judge as a 
fiduciary. 

978
00:48:55,520 --> 00:48:58,720
This entire phase is strictly 
governed by Rule 23 E. 

979
00:48:59,520 --> 00:49:02,680
In normal, run-of-the-mill 
bilateral litigation, if the 

980
00:49:02,680 --> 00:49:04,720
plaintiff and defendant 
negotiate a settlement, they 

981
00:49:04,720 --> 00:49:08,400
sign a private contract, file A1
page stipulation of dismissal 

982
00:49:08,400 --> 00:49:11,480
with the clerk, and walk away. 
The judge doesn't read the 

983
00:49:11,480 --> 00:49:13,960
settlement agreement. 
The judge doesn't care if it's a

984
00:49:13,960 --> 00:49:16,720
fair deal. 
It is a private contract between

985
00:49:16,720 --> 00:49:19,160
autonomous adults. 
But in a class action, the 

986
00:49:19,160 --> 00:49:22,200
parties are absolutely forbidden
from just settling and walking 

987
00:49:22,200 --> 00:49:25,560
away in the dark. 
Rule 23 E strictly mandates 

988
00:49:25,560 --> 00:49:28,520
formal, rigorous judicial 
approval of any settlement. 

989
00:49:28,720 --> 00:49:31,360
Voluntary dismissal or 
compromise that binds a 

990
00:49:31,360 --> 00:49:33,840
certified class. 
And we must ask why? 

991
00:49:33,920 --> 00:49:36,120
Why the sudden judicial 
paternalism? 

992
00:49:36,360 --> 00:49:39,280
It all goes back to the massive 
agency costs and structural 

993
00:49:39,280 --> 00:49:42,040
conflicts of interest we 
discussed under the adequacy of 

994
00:49:42,040 --> 00:49:44,800
representation requirement. 
In a settlement negotiation 

995
00:49:44,800 --> 00:49:47,720
behind closed doors, the 
corporate defendant has one 

996
00:49:47,720 --> 00:49:51,800
goal, pay the lowest total 
dollar amount possible to make 

997
00:49:51,800 --> 00:49:54,720
the liability disappear. 
The Entrepreneurial Class 

998
00:49:54,720 --> 00:49:58,400
Council has a different goal, 
secure the highest possible 

999
00:49:58,400 --> 00:50:01,680
guaranteed attorney fee. 
The absent class members who 

1000
00:50:01,680 --> 00:50:04,520
aren't in the room want the 
highest individual financial 

1001
00:50:04,520 --> 00:50:07,600
recovery possible. 
Those three goals are inherently

1002
00:50:07,600 --> 00:50:10,920
at war with each other and it 
creates the perfect breeding 

1003
00:50:10,920 --> 00:50:13,440
ground for the sweetheart 
settlement or the collusive 

1004
00:50:13,440 --> 00:50:15,400
deal. 
Imagine the defense lawyer 

1005
00:50:15,400 --> 00:50:18,440
sliding a term sheet across the 
table to the class council. 

1006
00:50:18,960 --> 00:50:22,360
The defense says, look, we will 
agree not to fight your fee 

1007
00:50:22,360 --> 00:50:24,480
petition. 
We will happily pay your firm 

1008
00:50:24,480 --> 00:50:28,640
$15 million in legal fees. 
But in exchange, you must agree 

1009
00:50:28,640 --> 00:50:31,400
to a settlement structure where 
the actual class members, the 

1010
00:50:31,400 --> 00:50:34,720
people who are harmed, only 
receive a $2.00 digital coupon 

1011
00:50:34,720 --> 00:50:37,480
for their next purchase. 
If the judge isn't actively 

1012
00:50:37,480 --> 00:50:40,440
monitoring the room, the class 
council is economically 

1013
00:50:40,440 --> 00:50:42,400
incentivized to take that 
terrible deal. 

1014
00:50:43,080 --> 00:50:46,040
It makes them rich, it saves the
defendant of fortune, and the 

1015
00:50:46,040 --> 00:50:48,640
only people who lose are the 
millions of absent class members

1016
00:50:48,640 --> 00:50:51,440
who get worthless coupons. 
Because the class members cannot

1017
00:50:51,440 --> 00:50:54,440
monitor the lawyer, the judge 
must step out of their 

1018
00:50:54,440 --> 00:50:57,040
traditional passive neutral 
umpire rule. 

1019
00:50:57,920 --> 00:51:02,080
Under Rule 23 E, the judge 
undergoes A metamorphosis into 

1020
00:51:02,080 --> 00:51:05,640
an active fiduciary, A 
relentless guardian whose sole 

1021
00:51:05,640 --> 00:51:08,600
duty is to protect the absent 
class members from their own 

1022
00:51:08,600 --> 00:51:11,920
lawyers. 
The text of Rule 23 E states 

1023
00:51:11,920 --> 00:51:14,680
that the judge can only approve 
the settlement if they hold a 

1024
00:51:14,680 --> 00:51:17,360
hearing and issue written 
findings that the deal is 

1025
00:51:17,360 --> 00:51:20,360
fundamentally fair, reasonable, 
and adequate. 

1026
00:51:20,600 --> 00:51:22,920
And modern appellate 
jurisprudence demands that 

1027
00:51:22,920 --> 00:51:26,640
judges scrutinize far more than 
just the flashy top line dollar 

1028
00:51:26,640 --> 00:51:29,440
amount in the press release. 
They must forensically examine 

1029
00:51:29,440 --> 00:51:31,800
the hidden structure of the 
deal, the timing of when the 

1030
00:51:31,800 --> 00:51:34,400
settlement was reached, and most
importantly, the specific 

1031
00:51:34,400 --> 00:51:37,200
calculation of attorneys fees. 
Let's talk about evaluating 

1032
00:51:37,200 --> 00:51:39,560
those attorneys fees. 
Because fees are the undeniable 

1033
00:51:39,560 --> 00:51:42,520
engine that drives the entire 
machine of aggregate litigation,

1034
00:51:43,400 --> 00:51:46,520
courts generally rely on 2 
distinct methods, the low star 

1035
00:51:46,520 --> 00:51:48,120
method and the percentage 
method. 

1036
00:51:48,280 --> 00:51:50,840
The percentage method is 
conceptually straightforward, 

1037
00:51:51,080 --> 00:51:54,080
much like a standard personal 
injury contingency fee. 

1038
00:51:54,720 --> 00:51:58,240
The lawyers receive a judicially
approved cut of the total 

1039
00:51:58,240 --> 00:52:01,800
settlement fund they created, 
usually hovering around 25 to 

1040
00:52:01,800 --> 00:52:04,040
30%. 
This is designed to perfectly 

1041
00:52:04,040 --> 00:52:06,840
align the lawyers financial 
incentive with the class's 

1042
00:52:06,840 --> 00:52:09,200
interest. 
The bigger the pie they bake for

1043
00:52:09,200 --> 00:52:11,440
the class, the bigger the slice 
they get to keep. 

1044
00:52:11,760 --> 00:52:14,240
But what happens when the 
settlement doesn't create a 

1045
00:52:14,240 --> 00:52:17,880
massive pile of cash? 
What if the lawsuit is a civil 

1046
00:52:17,880 --> 00:52:22,120
rights case seeking injunctive 
relief, or a consumer case that 

1047
00:52:22,120 --> 00:52:25,160
forces a corporation to change 
its deceptive marketing 

1048
00:52:25,160 --> 00:52:27,680
practices? 
There is no fun to take a 

1049
00:52:27,680 --> 00:52:30,560
percentage from. 
In those cases, courts must use 

1050
00:52:30,560 --> 00:52:33,280
the lodestar method. 
You calculate the number of 

1051
00:52:33,280 --> 00:52:36,080
hours the lawyers reasonably 
worked on a case, and you 

1052
00:52:36,080 --> 00:52:39,000
multiply it by a reasonable 
hourly market rate for complex 

1053
00:52:39,000 --> 00:52:40,920
litigation in that geographic 
region. 

1054
00:52:41,120 --> 00:52:45,080
But as a fiduciary, the judge 
must spot the hidden dangers in 

1055
00:52:45,080 --> 00:52:47,880
the lodestar method. 
If a lawyer knows they are 

1056
00:52:47,880 --> 00:52:50,520
getting paid strictly by the 
hour, they are perversely 

1057
00:52:50,520 --> 00:52:53,960
incentivized to drag the case 
out, engaging in endless 

1058
00:52:53,960 --> 00:52:57,480
unnecessary discovery disputes 
and filing frivolous motions 

1059
00:52:57,480 --> 00:52:59,520
just to run up the billable 
hours. 

1060
00:52:59,800 --> 00:53:03,000
And the judge must also look at 
the inverse danger, the 

1061
00:53:03,000 --> 00:53:05,880
premature cash out. 
Let's say the lawyers are using 

1062
00:53:05,880 --> 00:53:09,240
the percentage method. 
They file the complaint, do a 

1063
00:53:09,240 --> 00:53:12,320
tiny bit of cheap initial 
discovery, and then immediately 

1064
00:53:12,320 --> 00:53:15,680
settle for a mediocre amount. 
They avoid the massive financial

1065
00:53:15,680 --> 00:53:18,400
risk and expense of hiring 
expert witnesses and going to 

1066
00:53:18,400 --> 00:53:21,560
trial, securing A guaranteed 
multimillion dollar fee for 

1067
00:53:21,560 --> 00:53:24,520
themselves while leaving the 
class under compensated. 

1068
00:53:24,640 --> 00:53:27,280
The fiduciary judge must 
critically evaluate the timing 

1069
00:53:27,280 --> 00:53:29,640
of the settlement. 
Was this deal reached after 

1070
00:53:29,640 --> 00:53:32,400
enough hard fought discovery was
completed to allow the parties 

1071
00:53:32,400 --> 00:53:35,760
to truly accurately assess the 
merits and risks of the case? 

1072
00:53:35,960 --> 00:53:39,600
Or was it a quick, collusive 
cash out designed to enrich the 

1073
00:53:39,600 --> 00:53:42,640
lawyers before their out of 
pocket costs skyrocketed? 

1074
00:53:42,800 --> 00:53:46,160
The judges fiduciary duty also 
requires them to ruthlessly 

1075
00:53:46,160 --> 00:53:49,320
evaluate the actual tangible 
remedies being provided to the 

1076
00:53:49,320 --> 00:53:51,880
class members. 
We mentioned coupon settlements 

1077
00:53:51,880 --> 00:53:54,000
earlier. 
The defendant agrees to give 

1078
00:53:54,000 --> 00:53:57,360
everyone in the Class A $20 
coupon for their next purchase 

1079
00:53:57,360 --> 00:53:59,600
of the defendant's product. 
Let's be honest about the 

1080
00:53:59,600 --> 00:54:03,800
reality here. 95% of consumers 
will throw that coupon in the 

1081
00:54:03,800 --> 00:54:08,680
trash or forget they have it. 
It provides 0 actual 

1082
00:54:08,680 --> 00:54:11,560
compensation. 
But the plaintiffs lawyers will 

1083
00:54:11,560 --> 00:54:14,400
try to value the settlement 
based on the theoretical face 

1084
00:54:14,400 --> 00:54:18,240
value of all millions of coupons
issued, claiming they created a 

1085
00:54:18,240 --> 00:54:22,720
$50 million settlement and 
demanding a $15 million cash fee

1086
00:54:22,760 --> 00:54:25,560
based on that illusion. 
Congress was so disgusted by 

1087
00:54:25,560 --> 00:54:28,960
this practice that they passed 
the Class Action Fairness Act, 

1088
00:54:28,960 --> 00:54:31,920
or Kampfa. 
Kampfa places severe mandatory 

1089
00:54:31,920 --> 00:54:34,760
restrictions on coupon 
settlements, generally requiring

1090
00:54:34,760 --> 00:54:37,280
that attorneys fees must be 
calculated based only on the 

1091
00:54:37,280 --> 00:54:39,880
value of the coupons that are 
actually redeemed by consumers, 

1092
00:54:40,320 --> 00:54:42,200
not the theoretical number 
printed. 

1093
00:54:42,400 --> 00:54:45,280
This forces the lawyers to 
negotiate a remedy that people 

1094
00:54:45,280 --> 00:54:48,040
actually want to use. 
Another highly scrutinized, 

1095
00:54:48,040 --> 00:54:51,240
deeply controversial remedy is 
the PSI Press award. 

1096
00:54:51,800 --> 00:54:54,960
PSI Press is an old trust law 
doctrine that literally 

1097
00:54:54,960 --> 00:54:58,720
translates to as near as 
possible in the class action 

1098
00:54:58,720 --> 00:55:00,880
context. 
It solves the leftover money 

1099
00:55:00,880 --> 00:55:03,560
problem. 
Let's say a defendant agrees to 

1100
00:55:03,560 --> 00:55:06,840
a settlement fund of $20 
million, but despite the best 

1101
00:55:06,840 --> 00:55:10,560
notice efforts, only 15,000,000 
is actually claimed by the class

1102
00:55:10,560 --> 00:55:12,560
members. 
You have 5 million sitting in a 

1103
00:55:12,560 --> 00:55:14,160
bank account. 
What do you do with it? 

1104
00:55:14,200 --> 00:55:16,280
You can't return it to the 
defendant because that 

1105
00:55:16,280 --> 00:55:19,560
completely undermines the goal 
of deterrence and allows them to

1106
00:55:19,560 --> 00:55:22,760
profit from their wrongdoing. 
You could try to redistribute it

1107
00:55:22,760 --> 00:55:25,320
to the class members who already
claimed money, but that might 

1108
00:55:25,320 --> 00:55:28,400
result in an unjust windfall, 
and the administrative cost of 

1109
00:55:28,400 --> 00:55:31,800
mailing millions of checks for 
an extra $0.40 might consume the

1110
00:55:31,800 --> 00:55:34,640
entire fund. 
So the settling parties agreed 

1111
00:55:34,640 --> 00:55:38,120
to take the leftover 5 million 
and donate it to a charity that 

1112
00:55:38,120 --> 00:55:40,720
is a Cypress Award. 
The problem, and the reason 

1113
00:55:40,720 --> 00:55:43,760
judges must be incredibly 
skeptical of this, is that 

1114
00:55:43,760 --> 00:55:47,320
donating millions of dollars to 
a law school, clinic or a random

1115
00:55:47,320 --> 00:55:51,080
consumer rights nonprofit does 
not directly compensate the 

1116
00:55:51,080 --> 00:55:53,840
actual human beings who are 
defrauded by the defendant. 

1117
00:55:54,120 --> 00:55:57,400
It is a massive financial 
windfall to an unrelated third 

1118
00:55:57,400 --> 00:55:59,560
party. 
Furthermore, it creates A 

1119
00:55:59,560 --> 00:56:02,520
perverse incentive for the 
lawyers and the defendant to 

1120
00:56:02,520 --> 00:56:05,480
intentionally design A claims 
process that is difficult for 

1121
00:56:05,480 --> 00:56:09,400
consumers to navigate, ensuring 
a large leftover side press fund

1122
00:56:09,400 --> 00:56:11,960
that they can then direct to 
their favorite charities or alma

1123
00:56:11,960 --> 00:56:14,360
mater's. 
Fiduciary judges are instructed 

1124
00:56:14,360 --> 00:56:17,520
to ensure that Cypress is only 
ever used as an absolute last 

1125
00:56:17,520 --> 00:56:20,720
resort when further distribution
is mathematically impossible. 

1126
00:56:21,280 --> 00:56:23,720
Furthermore, the judge must 
enforce A strict Nexus 

1127
00:56:23,720 --> 00:56:25,960
requirement. 
The chosen charity must have a 

1128
00:56:25,960 --> 00:56:28,760
direct, logical connection to 
the underlying harm of the 

1129
00:56:28,760 --> 00:56:31,080
lawsuit. 
If you are settling a massive 

1130
00:56:31,080 --> 00:56:34,240
data breach case involving 
stolen Social Security numbers, 

1131
00:56:34,400 --> 00:56:37,360
taking the leftover money and 
donating it to a charity that 

1132
00:56:37,360 --> 00:56:41,240
protects endangered sea turtles 
is wildly inappropriate and an 

1133
00:56:41,240 --> 00:56:44,000
abuse of the system. 
The judge must police this 

1134
00:56:44,000 --> 00:56:46,520
vigorously. 
The ultimate duty is to ensure 

1135
00:56:46,520 --> 00:56:50,080
the settlement is genuinely 
adequate for the class, not just

1136
00:56:50,080 --> 00:56:52,520
a convenient, profitable wrap up
for the lawyers. 

1137
00:56:53,280 --> 00:56:57,000
This brings us to the final 
culminating step of our bar exam

1138
00:56:57,000 --> 00:56:59,560
synthesis checklist. 
Step 6. 

1139
00:56:59,640 --> 00:57:02,840
Preclusion, policy, tensions and
legitimacy. 

1140
00:57:03,480 --> 00:57:06,240
This is where we zoom out from 
the procedural weeds and look at

1141
00:57:06,240 --> 00:57:08,760
the macro impact of the 
machinery we've just spent the 

1142
00:57:08,760 --> 00:57:11,680
last hour dissecting. 
If a class action is properly 

1143
00:57:11,680 --> 00:57:15,680
certified under Rule 23. 
If the constitutionally required

1144
00:57:15,680 --> 00:57:18,960
adequate notice is provided. 
If the representation remains 

1145
00:57:18,960 --> 00:57:22,240
adequate throughout the entire 
litigation and if a final 

1146
00:57:22,240 --> 00:57:25,040
judgement is entered by the 
court, whether that is a verdict

1147
00:57:25,040 --> 00:57:27,920
after a grueling trial or a 
court approved settlement, that 

1148
00:57:27,920 --> 00:57:30,800
final judgement is absolutely. 
It is binding on all absent 

1149
00:57:30,800 --> 00:57:32,760
class members who did not 
formally opt out. 

1150
00:57:33,080 --> 00:57:36,240
This is the awesome power of the
doctrine of res judicata or 

1151
00:57:36,240 --> 00:57:38,480
claim preclusion. 
We need to linger on what that 

1152
00:57:38,480 --> 00:57:40,760
actually means for a moment. 
It means that those millions of 

1153
00:57:40,760 --> 00:57:43,520
individuals who may never have 
even opened the e-mail notifying

1154
00:57:43,520 --> 00:57:46,640
them of the lawsuit can never, 
ever sue that defendant for 

1155
00:57:46,640 --> 00:57:49,320
those claims again. 
Their individual constitutional 

1156
00:57:49,320 --> 00:57:53,120
rights to seek redress have been
permanently extinguished, merged

1157
00:57:53,120 --> 00:57:55,640
into the collective class 
judgement and erased. 

1158
00:57:56,000 --> 00:57:58,480
The stakes are absolute and 
final. 

1159
00:57:58,880 --> 00:58:02,560
This terrifying finality is 
precisely why every single 

1160
00:58:02,560 --> 00:58:06,240
procedural safeguard we just 
discussed, from the strictness 

1161
00:58:06,240 --> 00:58:09,280
of heightened commonality to the
fiduciary intensity of 

1162
00:58:09,280 --> 00:58:12,720
settlement review, must be 
enforced so rigorously. 

1163
00:58:13,320 --> 00:58:16,200
Because when this immense system
functions correctly, when the 

1164
00:58:16,200 --> 00:58:19,640
guardrails hold, it represents 
the profound promise and 

1165
00:58:19,640 --> 00:58:21,560
necessity of modern Civil 
Procedure. 

1166
00:58:21,640 --> 00:58:23,680
Think about the powerful 
arguments in favor of 

1167
00:58:23,680 --> 00:58:26,480
maintaining the system. 
First, there is massive judicial

1168
00:58:26,480 --> 00:58:29,200
efficiency. 
Resolving 10,000 identical 

1169
00:58:29,200 --> 00:58:32,800
claims in one single courtroom 
saves untold millions of dollars

1170
00:58:32,800 --> 00:58:35,840
in judicial resources, prevents 
the courts from collapsing under

1171
00:58:35,840 --> 00:58:38,920
the weight of repetitive trials,
and ensures consistency. 

1172
00:58:39,160 --> 00:58:42,240
You don't get wildly 
contradictory verdicts across 

1173
00:58:42,240 --> 00:58:44,200
different states for the same 
conduct. 

1174
00:58:44,840 --> 00:58:47,720
Second, and perhaps most 
importantly, is deterrence. 

1175
00:58:48,400 --> 00:58:52,280
If a massive multinational 
corporation successfully steals 

1176
00:58:52,280 --> 00:58:56,240
exactly $1.00 from 50 million 
people through a deceptive 

1177
00:58:56,240 --> 00:58:59,960
hidden fee, absolutely nobody is
going to sue them individually. 

1178
00:59:00,120 --> 00:59:03,640
It is economically impossible. 
Without the class action device,

1179
00:59:03,680 --> 00:59:06,560
the corporation operates with 
absolute impunity and gets to 

1180
00:59:06,560 --> 00:59:08,640
keep $50 million of stolen 
money. 

1181
00:59:09,040 --> 00:59:12,360
The class action is literally 
the only mechanism in our legal 

1182
00:59:12,360 --> 00:59:15,680
system capable of aggregating 
those tiny disparate injuries 

1183
00:59:15,680 --> 00:59:18,640
into a threat large enough to 
force that corporation to 

1184
00:59:18,640 --> 00:59:21,920
disgorge its I'll gotten gains 
and deter future malicious 

1185
00:59:21,920 --> 00:59:23,480
behavior. 
It forces corporate 

1186
00:59:23,480 --> 00:59:25,600
accountability where the free 
market and a bilateral 

1187
00:59:25,600 --> 00:59:29,240
litigation completely fail. 
It provides access to justice 

1188
00:59:29,400 --> 00:59:31,880
for the small claims plaintiff 
who is otherwise permanently 

1189
00:59:31,880 --> 00:59:35,200
locked out of the legal system. 
But we must be equally clear 

1190
00:59:35,200 --> 00:59:37,760
eyed in confronting the peril of
this system. 

1191
00:59:38,240 --> 00:59:41,640
The concerns raised by critics 
are very real and deeply 

1192
00:59:41,640 --> 00:59:44,200
structural. 
Corporate defendants and many 

1193
00:59:44,200 --> 00:59:48,040
legal scholars argue that modern
class actions often amount to 

1194
00:59:48,040 --> 00:59:50,400
legalized, court sanctioned 
extortion. 

1195
00:59:50,640 --> 00:59:52,360
They call them blackmail 
settlements. 

1196
00:59:52,800 --> 00:59:55,200
Put yourself in the shoes of a 
corporate board of directors. 

1197
00:59:55,520 --> 00:59:58,880
A federal judge just certified a
class of 50 million people 

1198
00:59:58,880 --> 01:00:01,480
against your company. 
The potential aggregated 

1199
01:00:01,480 --> 01:00:03,920
liability suddenly becomes 
annihilating. 

1200
01:00:04,320 --> 01:00:07,640
We were talking about bankruptcy
inducing company ending numbers.

1201
01:00:08,040 --> 01:00:10,320
Even if the board firmly 
believes the company did 

1202
01:00:10,320 --> 01:00:13,480
absolutely nothing wrong, and 
even if their elite defense 

1203
01:00:13,480 --> 01:00:16,480
lawyers tell them they have a 
95% chance of winning a jury 

1204
01:00:16,480 --> 01:00:19,320
trial on the merits, can a 
responsible board of directors 

1205
01:00:19,320 --> 01:00:22,400
really risk destroying A 
multibillion dollar company and 

1206
01:00:22,400 --> 01:00:26,480
firing thousands of employees on
that 5% chance that a single 

1207
01:00:26,480 --> 01:00:30,320
unpredictable jury gets angry? 
No, they are forced to settle. 

1208
01:00:31,040 --> 01:00:33,560
They pay hundreds of millions of
dollars to the plaintiff's 

1209
01:00:33,560 --> 01:00:36,920
lawyers, completely divorced 
from the actual merits of the 

1210
01:00:36,920 --> 01:00:40,200
underlying claims, simply to 
eliminate the catastrophic 

1211
01:00:40,200 --> 01:00:43,280
existential risk created by the 
mere act of certification. 

1212
01:00:43,760 --> 01:00:47,120
There is also the profound 
philosophical dilution of 

1213
01:00:47,120 --> 01:00:50,000
individual autonomy. 
We are taking the deeply 

1214
01:00:50,000 --> 01:00:53,600
personal constitutional right to
control your own destiny within 

1215
01:00:53,600 --> 01:00:56,120
the justice system and handing 
it over to a class 

1216
01:00:56,120 --> 01:00:59,480
representative you didn't choose
and a lawyer who is operating on

1217
01:00:59,480 --> 01:01:01,520
an industrial mass production 
scale. 

1218
01:01:01,800 --> 01:01:04,480
Furthermore, aggregate 
litigation causes a massive, 

1219
01:01:04,640 --> 01:01:07,520
arguably anti Democratic over 
centralization of power. 

1220
01:01:08,120 --> 01:01:11,160
A single unelected federal judge
sitting in a single District 

1221
01:01:11,160 --> 01:01:14,360
Court in Texas for California 
suddenly possesses the power to 

1222
01:01:14,360 --> 01:01:18,040
dictate the national operational
policy of a major corporation or

1223
01:01:18,040 --> 01:01:20,640
effectively legislate consumer 
protection standards for the 

1224
01:01:20,640 --> 01:01:23,360
entire country, vastly 
distorting the principles of 

1225
01:01:23,360 --> 01:01:27,280
federalism and local control. 
So what is the core synthesis? 

1226
01:01:27,280 --> 01:01:29,280
A student must walk away with 
It. 

1227
01:01:29,280 --> 01:01:32,880
Is this foundational paradox? 
In the realm of aggregate 

1228
01:01:32,880 --> 01:01:36,040
litigation, procedural law 
becomes inherently substantive 

1229
01:01:36,040 --> 01:01:38,280
in its effect. 
We are taught in law school that

1230
01:01:38,280 --> 01:01:41,760
Rule 23 is merely A procedural 
tool, a neutral housekeeping 

1231
01:01:41,760 --> 01:01:43,720
mechanism for managing complex 
joinder. 

1232
01:01:44,360 --> 01:01:47,960
But that is a polite fiction. 
The mere act of certifying a 

1233
01:01:47,960 --> 01:01:51,680
class alters the substantive 
economic leverage of the parties

1234
01:01:51,880 --> 01:01:55,280
so drastically and so violently 
that it practically determines 

1235
01:01:55,280 --> 01:01:57,080
the ultimate outcome of the 
litigation. 

1236
01:01:57,480 --> 01:02:00,800
The constitutional legitimacy of
wielding this immense sovereign 

1237
01:02:00,800 --> 01:02:03,680
power, of binding millions of 
citizens without their act of 

1238
01:02:03,680 --> 01:02:07,440
consent, depends entirely and 
exclusively on the rigorous, 

1239
01:02:07,480 --> 01:02:10,520
unflinching enforcement of the 
procedural safeguards we've 

1240
01:02:10,520 --> 01:02:13,240
explored today. 
You cannot cut corners on the 

1241
01:02:13,240 --> 01:02:15,320
one stroke requirement of 
commonality. 

1242
01:02:15,480 --> 01:02:18,000
You cannot hand wave away away 
the strict Malane notice 

1243
01:02:18,000 --> 01:02:20,600
requirements just because 
postage is expensive. 

1244
01:02:20,760 --> 01:02:23,800
The judge cannot abdicate their 
role and refuse to act as a 

1245
01:02:23,800 --> 01:02:25,520
ruthless fiduciary during 
settlement. 

1246
01:02:25,680 --> 01:02:29,360
The moment those procedural 
guardrails fail, the entire 

1247
01:02:29,360 --> 01:02:32,840
system devolves from a mechanism
of justice into a tool of 

1248
01:02:32,840 --> 01:02:35,520
coercion. 
As we transition into our outro,

1249
01:02:35,680 --> 01:02:38,240
grounded deeply in the 
concluding thoughts of Section 

1250
01:02:38,240 --> 01:02:42,080
12 of our guide, let's tie all 
this sweeping theory directly 

1251
01:02:42,080 --> 01:02:44,280
back to your exams and your 
future practice. 

1252
01:02:45,200 --> 01:02:48,320
We've spent an hour seeing how 
aggregation radically expands 

1253
01:02:48,320 --> 01:02:51,440
judicial authority to an 
unprecedented scale, but we have

1254
01:02:51,440 --> 01:02:54,320
also seen how it attempts to 
strictly structure CAGE and 

1255
01:02:54,320 --> 01:02:57,800
limit that authority through the
intricate mechanics of Rule 23 

1256
01:02:57,960 --> 01:03:00,840
and the Due process clause. 
It is the ultimate exercise of 

1257
01:03:00,840 --> 01:03:02,480
power through restraint. 
Exactly. 

1258
01:03:02,840 --> 01:03:05,920
So when you flip the page and 
face a massive aggregate 

1259
01:03:05,920 --> 01:03:09,280
litigation question on your 
exam, do not panic at the scale 

1260
01:03:09,280 --> 01:03:11,200
of it. 
Retreat to the structure. 

1261
01:03:11,440 --> 01:03:13,120
Respect the checklist we just 
built. 

1262
01:03:13,600 --> 01:03:15,600
Spot the structural issues 
systematically. 

1263
01:03:15,800 --> 01:03:19,080
Is the class genuinely cohesive 
enough to generate a single 

1264
01:03:19,080 --> 01:03:22,160
common answer, or does it 
require a million mini trials? 

1265
01:03:22,400 --> 01:03:25,160
Is the notice reasonably 
calculated or is it a cheap 

1266
01:03:25,160 --> 01:03:27,440
shortcut? 
Did the judge aggressively 

1267
01:03:27,440 --> 01:03:29,720
protect the absent members from 
a collusive sweetheart 

1268
01:03:29,720 --> 01:03:32,320
settlement, or did the lawyers 
get rich while the class got 

1269
01:03:32,320 --> 01:03:34,200
coupons? 
Remember the inherent, 

1270
01:03:34,280 --> 01:03:37,720
permanently unresolvable tension
between the desperate practical 

1271
01:03:37,720 --> 01:03:40,920
need for judicial efficiency and
the sacred constitutional 

1272
01:03:40,920 --> 01:03:43,000
mandate of individual due 
process. 

1273
01:03:43,920 --> 01:03:47,360
Your job on the exam is not to 
definitively solve that tension.

1274
01:03:47,760 --> 01:03:51,440
Your job is to demonstrate to 
the greater that you see both 

1275
01:03:51,440 --> 01:03:53,560
sides of the coin. 
Show them you understand the 

1276
01:03:53,560 --> 01:03:56,480
absolute necessity of the class 
action device to prevent 

1277
01:03:56,480 --> 01:03:59,360
corporate impunity, but show 
them you are equally aware of 

1278
01:03:59,360 --> 01:04:03,040
the devastating constitutional 
consequences if the procedural 

1279
01:04:03,040 --> 01:04:05,680
guardrails fail. 
We will leave you with a final 

1280
01:04:05,680 --> 01:04:08,720
provocative thought to Mull over
as you continue your studies. 

1281
01:04:09,520 --> 01:04:13,080
We built the entire massive 
architecture of Rule 23 in a 

1282
01:04:13,080 --> 01:04:16,360
20th century analog world. 
The rules operate on the 

1283
01:04:16,360 --> 01:04:18,840
foundational assumption that 
individuals have distinct 

1284
01:04:18,840 --> 01:04:21,360
autonomous legal rights that 
must be fiercely protected 

1285
01:04:21,360 --> 01:04:24,000
through physical notice and the 
physical right to opt out. 

1286
01:04:24,160 --> 01:04:27,680
But look at the modern landscape
we actually inhabit today in a 

1287
01:04:27,680 --> 01:04:31,000
digital age where our data, our 
daily movements, our microscopic

1288
01:04:31,000 --> 01:04:34,320
purchasing decisions and our 
very habits are constantly 

1289
01:04:34,320 --> 01:04:37,520
relentlessly aggregated, 
analyzed and monetized by black 

1290
01:04:37,520 --> 01:04:40,840
box algorithm as massive 
impersonal data sets. 

1291
01:04:41,280 --> 01:04:44,160
Does the traditional legal 
concept of individual autonomy 

1292
01:04:44,160 --> 01:04:45,960
and litigation even make sense 
anymore? 

1293
01:04:46,040 --> 01:04:49,120
When a massive tech monopoly 
violates our privacy on a global

1294
01:04:49,120 --> 01:04:52,680
scale, we are not harmed as 
unique, bespoke individuals. 

1295
01:04:53,000 --> 01:04:56,400
We are harmed simultaneously, 
collectively, as microscopic 

1296
01:04:56,400 --> 01:04:58,720
data points in a vast corporate 
matrix. 

1297
01:04:59,040 --> 01:05:03,120
So ask yourself, is the complex 
creaking machinery of Rule 23 

1298
01:05:03,120 --> 01:05:05,320
desperately struggling to 
protect an illusion of 

1299
01:05:05,320 --> 01:05:07,440
individuality that no longer 
exists? 

1300
01:05:07,440 --> 01:05:10,760
Or are we all inevitably, 
inextricably just unnamed, 

1301
01:05:10,760 --> 01:05:13,880
absent members of a future 
global class action, waiting 

1302
01:05:13,880 --> 01:05:15,400
silently in the dark to be 
certified? 

1303
01:05:15,520 --> 01:05:17,400
Thank you for joining us on this
deep dive. 

1304
01:05:17,640 --> 01:05:19,960
Keep the checklist close, 
respect the rules, and study 

1305
01:05:19,960 --> 01:05:22,000
hard. 
All right, let's dive into one 

1306
01:05:22,000 --> 01:05:24,440
of the most transformed, 
informative and frankly one of 

1307
01:05:24,440 --> 01:05:27,560
the most powerful tools in all 
of Civil Procedure, the class 

1308
01:05:27,560 --> 01:05:29,280
action. 
You know, we spend most of our 

1309
01:05:29,280 --> 01:05:32,120
time in the familiar world of 1 
plaintiff versus 1 defendant. 

1310
01:05:32,320 --> 01:05:34,920
But here we're entering a whole 
different universe of what we 

1311
01:05:34,920 --> 01:05:38,480
call aggregate litigation. 
This is where one single lawsuit

1312
01:05:38,480 --> 01:05:40,760
can decide the rights of 
thousands, even millions of 

1313
01:05:40,760 --> 01:05:42,160
people who aren't even in the 
room. 

1314
01:05:42,520 --> 01:05:45,120
It is an incredibly powerful and
as we'll see, a very 

1315
01:05:45,120 --> 01:05:48,880
constitutionally tricky device. 
And this right here, this is the

1316
01:05:48,880 --> 01:05:51,840
question for any exam, for any 
real understanding of this 

1317
01:05:51,840 --> 01:05:54,040
topic. 
This is where your analysis must

1318
01:05:54,040 --> 01:05:56,120
begin. 
How can a court, consistent with

1319
01:05:56,120 --> 01:05:58,760
the due process clause, issue a 
final judgement that binds 

1320
01:05:58,760 --> 01:06:01,440
people who never got their day 
in court, people who might not 

1321
01:06:01,440 --> 01:06:04,720
even know a lawsuit exists? 
Every single part of Federal 

1322
01:06:04,720 --> 01:06:07,480
Rule of Civil Procedure 23 that 
we are about to break down is an

1323
01:06:07,480 --> 01:06:09,720
attempt to answer this 
fundamental constitutional 

1324
01:06:09,720 --> 01:06:12,160
challenge. 
The fancy term for all this is 

1325
01:06:12,160 --> 01:06:15,000
aggregate litigation, and it's 
so important that you don't 

1326
01:06:15,000 --> 01:06:17,880
think of this as just a simple 
tool for efficiency, a way to 

1327
01:06:17,880 --> 01:06:19,440
clean up the docket. 
It's not. 

1328
01:06:19,600 --> 01:06:21,760
It's a profound use of 
government power. 

1329
01:06:21,960 --> 01:06:25,400
A court is literally reaching 
out, grabbing the legal claims 

1330
01:06:25,400 --> 01:06:28,160
of people who are absent and 
extinguishing them forever. 

1331
01:06:28,440 --> 01:06:30,960
That action raises huge 
questions about legitimacy, 

1332
01:06:31,040 --> 01:06:34,160
which is exactly why Rule 23 is 
so complex and so detailed. 

1333
01:06:34,840 --> 01:06:37,080
So here's our road map for this 
deep dive, and you should think 

1334
01:06:37,080 --> 01:06:39,200
of this as your analytical 
framework for an exam. 

1335
01:06:39,520 --> 01:06:42,160
First, we have to start with the
constitutional foundation, which

1336
01:06:42,160 --> 01:06:44,600
is due process. 
Then we'll get into the weeds of

1337
01:06:44,600 --> 01:06:47,600
Rule 23 itself, starting with 
the four mandatory requirements 

1338
01:06:47,600 --> 01:06:50,400
OF23A, and then the three 
different types of classes you 

1339
01:06:50,400 --> 01:06:53,400
can have under 23B. 
After that, we'll talk about the

1340
01:06:53,400 --> 01:06:56,240
reality of settlements and the 
judge's special role, touch on 

1341
01:06:56,240 --> 01:06:58,040
some big picture jurisdictional 
issues. 

1342
01:06:58,240 --> 01:07:00,960
And finally, we'll wrap up with 
the policy debate, the promise 

1343
01:07:00,960 --> 01:07:04,560
versus the peril of it all. 
OK, First things first, that 

1344
01:07:04,560 --> 01:07:08,000
constitutional spine. 
Again, the question that haunts 

1345
01:07:08,000 --> 01:07:11,720
this entire area of law is how 
can you bind people who aren't 

1346
01:07:11,720 --> 01:07:14,080
there? 
The only acceptable answer is 

1347
01:07:14,080 --> 01:07:18,480
that the procedure itself has to
be so good, so fair, that it 

1348
01:07:18,480 --> 01:07:21,480
acts as a constitutionally 
adequate substitute for their 

1349
01:07:21,480 --> 01:07:24,520
actual day in court. 
So think of every single rule 

1350
01:07:24,520 --> 01:07:27,360
we're about to discuss as a 
brick in that wall of due 

1351
01:07:27,360 --> 01:07:30,080
process protection for the 
absent class members. 

1352
01:07:30,600 --> 01:07:33,680
At its core, the right to your 
own day in court is fundamental 

1353
01:07:33,680 --> 01:07:36,000
to our system. 
A class action looks like it 

1354
01:07:36,000 --> 01:07:37,640
just steam rolls right over 
that. 

1355
01:07:38,000 --> 01:07:41,240
So the entire legitimacy of the 
class action rests on a kind of 

1356
01:07:41,240 --> 01:07:43,360
legal fiction. 
The idea is that the 

1357
01:07:43,360 --> 01:07:46,200
representation by the named 
plaintiffs and their lawyers is 

1358
01:07:46,200 --> 01:07:49,440
so good, so aligned with the 
interests of everyone else, that

1359
01:07:49,440 --> 01:07:51,400
it's as if they were all there 
themselves. 

1360
01:07:51,960 --> 01:07:54,600
Rule 23 is the blueprint 
designed to make sure that legal

1361
01:07:54,600 --> 01:07:58,400
fiction is actually a reality. 
And that brings us to the front 

1362
01:07:58,400 --> 01:08:01,160
door of the rule itself. 
Rule 23 A. 

1363
01:08:01,440 --> 01:08:04,880
Now I want you to think of these
AS4 non negotiable mandatory 

1364
01:08:04,880 --> 01:08:07,400
gateways. 
A potential class action has to 

1365
01:08:07,400 --> 01:08:09,320
satisfy every single one of 
these. 

1366
01:08:09,560 --> 01:08:12,120
If it fails on even 1, the 
analysis is over. 

1367
01:08:12,240 --> 01:08:14,440
No class certification, End of 
story. 

1368
01:08:15,160 --> 01:08:19,040
So here they are, the BIG4 
Numerosity, commonality, 

1369
01:08:19,200 --> 01:08:22,920
typicality, and adequacy. 
Numerosity is just a practical 

1370
01:08:22,920 --> 01:08:24,840
question. 
Are there so many people that 

1371
01:08:24,840 --> 01:08:27,520
joining them all up 1 by 1 is 
just impracticable? 

1372
01:08:28,000 --> 01:08:30,319
Commonality and typicality sort 
of work together. 

1373
01:08:30,520 --> 01:08:32,640
They're about the glue that 
holds the class together. 

1374
01:08:32,920 --> 01:08:35,080
There have to be common 
questions and the person 

1375
01:08:35,080 --> 01:08:37,240
bringing the suit, the 
representative, has to have a 

1376
01:08:37,240 --> 01:08:38,920
claim that's typical of everyone
else's. 

1377
01:08:39,359 --> 01:08:42,640
And finally, adequacy. 
This is the big one, the most 

1378
01:08:42,640 --> 01:08:44,319
direct constitutional 
protection. 

1379
01:08:44,720 --> 01:08:47,040
The judge has to be convinced 
that the representatives and 

1380
01:08:47,040 --> 01:08:49,399
their lawyers are going to fight
hard and competently for 

1381
01:08:49,399 --> 01:08:52,240
everyone. 
Now, for a very long time, this 

1382
01:08:52,240 --> 01:08:55,880
second requirement, commonality,
was seen as a pretty low bar. 

1383
01:08:56,160 --> 01:08:58,800
The thinking was, as long as 
there's at least one common 

1384
01:08:58,800 --> 01:09:02,160
question, you're good to go. 
But that is absolutely not the 

1385
01:09:02,160 --> 01:09:04,319
law anymore. 
That understanding was 

1386
01:09:04,319 --> 01:09:07,680
completely upended. 
And today, commonality is one of

1387
01:09:07,680 --> 01:09:10,960
the toughest, most heavily 
fought battles in all of class 

1388
01:09:10,960 --> 01:09:13,120
action law. 
And the reason everything 

1389
01:09:13,120 --> 01:09:16,960
changed is this landmark Supreme
Court case, Walmart versus 

1390
01:09:16,960 --> 01:09:19,120
Dukes. 
Justice Scalia, writing for the 

1391
01:09:19,120 --> 01:09:21,080
court, totally reframed the 
issue. 

1392
01:09:21,279 --> 01:09:24,160
He said, And this is the key 
phrase, what matters is the 

1393
01:09:24,160 --> 01:09:27,319
capacity of a class wide 
proceeding to generate common 

1394
01:09:27,439 --> 01:09:28,920
answers. 
See the shift. 

1395
01:09:29,240 --> 01:09:31,359
It's not about having common 
questions anymore. 

1396
01:09:31,560 --> 01:09:34,520
It's about whether you can get a
common answer that helps resolve

1397
01:09:34,520 --> 01:09:36,279
the case for everybody all at 
once. 

1398
01:09:36,880 --> 01:09:39,800
So for your exam, this is the 
crucial take away. 

1399
01:09:40,040 --> 01:09:42,920
The pre Dukes world was easy on 
commonality. 

1400
01:09:43,160 --> 01:09:46,439
The post Dukes world has a much 
tougher heightened commonality 

1401
01:09:46,439 --> 01:09:48,560
standard. 
Plaintiffs can't just point to a

1402
01:09:48,560 --> 01:09:51,399
shared question anymore. 
They have to convince the judge 

1403
01:09:51,399 --> 01:09:53,520
that their claims turn on a 
central issue that can be 

1404
01:09:53,520 --> 01:09:56,200
resolved for the entire class in
one single stroke. 

1405
01:09:56,520 --> 01:09:59,560
It's a much higher bar, and it 
forces a much deeper look into 

1406
01:09:59,560 --> 01:10:01,400
the merits of the case right at 
the beginning. 

1407
01:10:02,000 --> 01:10:04,920
OK, so let's imagine our 
proposed class has cleared all 

1408
01:10:04,920 --> 01:10:07,120
four of those 23 A hurdles. 
Are we done? 

1409
01:10:07,440 --> 01:10:10,440
Nope, not even close. 
The plaintiffs now have another 

1410
01:10:10,440 --> 01:10:12,360
job. 
They have to show that their 

1411
01:10:12,360 --> 01:10:15,880
class fits into one of the three
specific categories laid out in 

1412
01:10:15,880 --> 01:10:18,760
Rule 23 B. 
And each of these types is 

1413
01:10:18,760 --> 01:10:21,800
designed for a different purpose
and comes with its own set of 

1414
01:10:21,800 --> 01:10:23,960
rules. 
This chart breaks them down 

1415
01:10:23,960 --> 01:10:26,200
nicely. 
First, you have the B1 or 

1416
01:10:26,200 --> 01:10:28,560
prejudice class. 
Think of a situation with a 

1417
01:10:28,560 --> 01:10:31,360
limited pot of money. 
This ensures it's shared fairly.

1418
01:10:31,840 --> 01:10:34,160
Then you have the B2 injunctive 
class. 

1419
01:10:34,440 --> 01:10:37,480
This is the classic civil rights
model where the main goal isn't 

1420
01:10:37,480 --> 01:10:40,000
money, but to stop a defendant 
from doing something. 

1421
01:10:40,560 --> 01:10:43,640
Now what's crucial to see is 
that both B1 and B2 are 

1422
01:10:43,640 --> 01:10:46,640
mandatory classes you're in and 
you can't get out. 

1423
01:10:47,080 --> 01:10:50,040
The third type, the B3 damages 
class, is the most common. 

1424
01:10:50,360 --> 01:10:53,320
This is for when money is the 
main goal, and because people's 

1425
01:10:53,320 --> 01:10:55,800
individual money claims are on 
the line, the protections are 

1426
01:10:55,800 --> 01:10:58,400
way higher. 
You get mandatory notice and 

1427
01:10:58,400 --> 01:11:01,120
critically, the right to opt out
and go it alone if you want. 

1428
01:11:01,800 --> 01:11:05,440
Now for that common B3 damages 
class, there are two more huge 

1429
01:11:05,440 --> 01:11:08,120
hurdles. 
The first is predominance. 

1430
01:11:08,520 --> 01:11:12,040
My favorite way to think about 
this is commonality on steroids.

1431
01:11:12,320 --> 01:11:15,400
It is way more demanding than 
the 23, a commonality we just 

1432
01:11:15,400 --> 01:11:17,360
talked about. 
It's not enough for common 

1433
01:11:17,360 --> 01:11:20,280
questions to just exist. 
They have to predominate over 

1434
01:11:20,280 --> 01:11:23,120
all the individual issues. 
The judge has to be convinced 

1435
01:11:23,120 --> 01:11:26,120
that this case is really one big
collective issue, not just a 

1436
01:11:26,120 --> 01:11:28,280
bunch of individual lawsuits 
stitched together. 

1437
01:11:28,800 --> 01:11:32,440
And the second requirement for 
A5O13 class is superiority. 

1438
01:11:32,760 --> 01:11:36,480
Here, the judge basically leans 
back and asks a very practical 

1439
01:11:36,480 --> 01:11:39,040
question. 
All things considered, is a 

1440
01:11:39,040 --> 01:11:42,360
class action really the best way
to handle this whole mess? 

1441
01:11:42,760 --> 01:11:45,400
The rule even gives the judge a 
list of things to think about, 

1442
01:11:45,680 --> 01:11:47,920
like how much control 
individuals might want over 

1443
01:11:47,920 --> 01:11:50,440
their own cases, or how 
difficult the case would be to 

1444
01:11:50,440 --> 01:11:52,680
manage. 
It has to be the superior 

1445
01:11:52,680 --> 01:11:56,080
method, not just an OK one. 
All right, let's talk about the 

1446
01:11:56,080 --> 01:11:59,120
real world for a second. 
The vast, vast majority of class

1447
01:11:59,120 --> 01:12:01,480
actions that get certified never
see a trial. 

1448
01:12:01,600 --> 01:12:03,760
They settle. 
And this settlement phase brings

1449
01:12:03,760 --> 01:12:06,480
a whole new set of dangers to 
the forefront and completely 

1450
01:12:06,480 --> 01:12:09,640
changes the judge's role from 
being a neutral referee to being

1451
01:12:09,640 --> 01:12:12,880
an active guardian. 
So why the need for a guardian? 

1452
01:12:13,280 --> 01:12:16,520
Well, it's because of something 
lawyers call agency problems. 

1453
01:12:16,880 --> 01:12:20,360
In a normal case, the lawyers on
opposite sides are fighting, but

1454
01:12:20,360 --> 01:12:23,080
in a settlement negotiation, 
they're suddenly on the same 

1455
01:12:23,080 --> 01:12:25,480
team. 
Both the class council and the 

1456
01:12:25,480 --> 01:12:28,160
defendants council want the 
judge to approve their deal. 

1457
01:12:28,560 --> 01:12:31,440
This creates a huge risk that 
the class lawyers whose fees 

1458
01:12:31,440 --> 01:12:33,880
depend on the deal might cut a 
sweetheart deal. 

1459
01:12:33,880 --> 01:12:36,640
That's great for them, but not 
so great for the millions of 

1460
01:12:36,640 --> 01:12:38,920
absent class members they're 
supposed to be representing. 

1461
01:12:39,440 --> 01:12:43,560
To combat this risk, Rule 23 E 
puts a special hat on the judge.

1462
01:12:43,840 --> 01:12:46,440
The judge cannot just sign off 
on whatever the lawyers bring 

1463
01:12:46,440 --> 01:12:48,040
them. 
The judge must act as a 

1464
01:12:48,040 --> 01:12:52,280
fiduciary, a legal guardian for 
all those absent people citing 

1465
01:12:52,280 --> 01:12:55,400
big cases like AMCAM. 
The court has to do its own deep

1466
01:12:55,400 --> 01:12:57,960
dive and decide if the 
settlement is truly fair, 

1467
01:12:58,120 --> 01:13:00,840
reasonable, and adequate before 
it can approve it and make it 

1468
01:13:00,840 --> 01:13:04,360
binding on everyone. 
OK, let's zoom out from the 

1469
01:13:04,360 --> 01:13:07,400
specific rules for a moment and 
look at two big picture 

1470
01:13:07,400 --> 01:13:10,360
structural issues. 
When you have a nationwide class

1471
01:13:10,360 --> 01:13:13,080
action, it immediately creates 
friction with two huge 

1472
01:13:13,080 --> 01:13:16,120
constitutional ideas. 
First, the limits on a court's 

1473
01:13:16,120 --> 01:13:19,160
personal jurisdiction, and 2nd, 
the balance of power between 

1474
01:13:19,160 --> 01:13:21,640
state and federal courts, which 
we call federalism. 

1475
01:13:22,440 --> 01:13:25,320
Now, this is a really critical 
point and it's perfect for an 

1476
01:13:25,320 --> 01:13:27,520
exam question. 
You have to distinguish between 

1477
01:13:27,520 --> 01:13:30,400
a mass action like an MDL, where
you just bundle thousands of 

1478
01:13:30,400 --> 01:13:33,000
individual cases, and a true 
class action. 

1479
01:13:33,240 --> 01:13:35,440
In a mass action, the Supreme 
Court's decision in 

1480
01:13:35,440 --> 01:13:38,240
Bristol-Myers Squibb is clear, 
the court needs specific 

1481
01:13:38,240 --> 01:13:40,760
personal jurisdiction for every 
single plaintiff's claim. 

1482
01:13:41,080 --> 01:13:43,640
But in a class action, the law 
is less clear. 

1483
01:13:43,840 --> 01:13:46,480
The dominant views that BMS 
doesn't apply to the claims of 

1484
01:13:46,480 --> 01:13:49,160
the absent class members because
they aren't technically formal 

1485
01:13:49,160 --> 01:13:51,000
parties. 
Their protection comes from 

1486
01:13:51,000 --> 01:13:54,000
adequacy of representation, not 
personal jurisdiction. 

1487
01:13:54,280 --> 01:13:57,000
But this is still a very hot and
unresolved issue. 

1488
01:13:57,400 --> 01:13:59,120
And what about that federalism 
tension? 

1489
01:13:59,480 --> 01:14:02,320
Well Congress stepped in with a 
huge piece of legislation in 

1490
01:14:02,320 --> 01:14:06,200
2005 called the Class Action 
Fairness Act, or KAFA. 

1491
01:14:06,800 --> 01:14:09,640
KAFA basically blew up the old 
rules of federal jurisdiction 

1492
01:14:09,640 --> 01:14:12,480
for class actions. 
It created a much easier path 

1493
01:14:12,560 --> 01:14:15,480
with things like minimal 
diversity to get big multi state

1494
01:14:15,480 --> 01:14:18,120
class actions out of state 
courts and into federal courts. 

1495
01:14:18,560 --> 01:14:21,160
But essentially Congress made a 
judgement call that these large 

1496
01:14:21,160 --> 01:14:24,120
scale cases are really matters 
of national interest that belong

1497
01:14:24,120 --> 01:14:26,960
in the federal system. 
So after going through all the 

1498
01:14:26,960 --> 01:14:30,440
mechanics and big structural 
issues, let's wrap this up by 

1499
01:14:30,440 --> 01:14:33,240
returning to the central policy 
debate that drives this whole 

1500
01:14:33,240 --> 01:14:35,720
area of law. 
The two sided nature of the 

1501
01:14:35,720 --> 01:14:38,080
class action. 
You really can think of the 

1502
01:14:38,080 --> 01:14:41,240
class action as a coin with two 
very different faces. 

1503
01:14:41,640 --> 01:14:43,120
On one side, you have the 
promise. 

1504
01:14:43,280 --> 01:14:45,520
This is a tool that can 
democratize justice. 

1505
01:14:45,760 --> 01:14:48,240
It allows people whose claims 
are too small to bring on their 

1506
01:14:48,240 --> 01:14:51,560
own, what we call negative value
claims, to band together and 

1507
01:14:51,560 --> 01:14:53,160
hold powerful actors 
accountable. 

1508
01:14:53,440 --> 01:14:56,320
It's a huge deterrent. 
But then you flip the coin over 

1509
01:14:56,480 --> 01:14:59,640
and you see the peril. 
This device concentrates a scary

1510
01:14:59,640 --> 01:15:02,040
amount of power in the hands of 
a few lawyers and a single 

1511
01:15:02,040 --> 01:15:05,560
judge, and that creates massive 
risks of due process violations 

1512
01:15:05,560 --> 01:15:08,200
and shady settlements if those 
rules aren't followed to the 

1513
01:15:08,200 --> 01:15:10,440
letter. 
And this all leads us to the 

1514
01:15:10,440 --> 01:15:13,800
final fundamental question that 
courts and lawmakers are always 

1515
01:15:13,800 --> 01:15:16,400
wrestling with. 
Is the class action a tool that 

1516
01:15:16,400 --> 01:15:19,920
democratizes justice, or is it a
dangerous tool that centralizes 

1517
01:15:19,920 --> 01:15:22,160
power? 
And the real, honest answer is 

1518
01:15:22,160 --> 01:15:25,040
that it's both. 
The entire complex body of law 

1519
01:15:25,040 --> 01:15:27,640
we've just discussed is nothing 
more than our legal systems 

1520
01:15:27,640 --> 01:15:31,200
ongoing, never ending attempt to
strike that delicate balance, to

1521
01:15:31,200 --> 01:15:33,560
harness the incredible promise 
of the class action while 

1522
01:15:33,560 --> 01:15:35,400
keeping its very real perils in 
check.