Class Action Professional Objectors: What to Do About Them?

Abstract

Professional objectors are attorneys who on behalf of non-named class members file specious objections to class action settlements and implicitly threaten to file frivolous appeals of district court approvals merely to extract a payoff. Their behavior amounts to a kind of lawful extortion. By contrast, counsel may submit legitimate objections and appeal in good faith, conduct that helps police the settlement process. The policy challenge is to suppress extortionate behavior without deterring beneficial conduct. The solutions that have been tried or proposed are seriously flawed. We propose amendments to the Federal Rules of Appellate Procedure that would in effect require objectors to post appeal bonds in amounts greater than most circuit courts believe are now legally permissible.

Keywords: civil procedure, class action, settlement

JEL Classification: K00, K19, K41