The Significance of Silence: Collective Action Problems and Class Action Settlements

Abstract:     
Any proposed settlement of a class action lawsuit must be approved by the trial judge, who must conclude that the settlement is fair, adequate, and reasonable. The article notes how in considering whether to approve class action settlements, courts consider the reaction of the class members to be the most important single factor. However, these same judges routinely characterize the silence of class members regarding a proposed settlement to represent enthusiastic endorsement of the settlement's terms. Judges read too much into this silence. My article explains why class member silence is a perfectly rational response even for class members who find the proposed settlement to be inadequate or unreasonable. The article demonstrates how courts approve inadequate settlements because judges misinterpret the class response. Finally, the article proposes possible solutions to the problem of silent class members.

Number of Pages in PDF File: 65

Accepted Paper Series