Matsushita and Beyond: The Role of State Courts in Class Actions Involving Exclusive Federal Claims,

Supreme Court Review, (1997).

Posted: 15 Jan 1997

See all articles by Marcel Kahan

Marcel Kahan

New York University School of Law; European Corporate Governance Institute

Linda Silberman

New York University School of Law

Abstract

In Matsushita Electric Industrial Co. v. Epstein, the Supreme Court held that a class action settlement approved by a state court is entitled to "full faith and credit," notwithstanding the fact that the settlement provides for a release of claims subject to the exclusive jurisdiction of federal courts. We analyze two questions raised by the opinion: when should state courts approve a settlement that provides for such a release; and when should such a settlement be subject to collateral attack in federal court. We argue that state class action settlements encompassing exclusive federal claims entail process deficiencies that go beyond those present in ordinary class action settlements: the bargaining power of the state class attorney with respect to the federal claims is impaired; the defendant's ability to engage in "plaintiff shopping" is increased; and the court may have less information to assess the fairness of a proposed settlement. State courts should therefore adopt a number of special precautions before approving such settlements. If state courts adopt such precautions, a decision to approve a settlement should not be subject to collateral attack. Collateral attack, however, should be permitted if the state court settlement structures do not provide for reasonable measures to guard against these process deficiencies and protect the federal interests at stake.

JEL Classification: K41

Suggested Citation

Kahan, Marcel and Silberman, Linda, Matsushita and Beyond: The Role of State Courts in Class Actions Involving Exclusive Federal Claims,. Supreme Court Review, (1997).. Available at SSRN: https://ssrn.com/abstract=10278

Marcel Kahan (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States
212-998-6268 (Phone)
212-995-4341 (Fax)

European Corporate Governance Institute ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Linda Silberman

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States
212-998-6204 (Phone)
212-995-4341 (Fax)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
1,021
PlumX Metrics