Creating a 21st Century Oligarchy: Judicial Abdication to Class Action Mediators
5 Penn St. Y.B. Arb. & Mediation 162 (2013)
32 Pages Posted: 25 Jul 2013
Date Written: July 24, 2013
It has become a matter of routine for federal and state judges to cite the involvement of a private mediator as evidence that bargaining in a class action case was conducted at arms-length and without collusion between the parties. In many cases, class action mediators offer up testimony about the nature of the bargaining, as well as subjective (and most often summary) opinions on the merits of the settlements they helped to broker. This article argues that this approach to mediator participation (and haphazard delivery and uncritical acceptance of mediator evidence) is an abdication of judicial fiduciary duty to ensure that proposed class action settlements are fair to absent class members. Repeating the mantra that participation of a private mediator in the negotiating process ensures that the proceedings are free of collusion or undue pressure does not make it so. Moreover, should we really ignore the conflict of interest concerns when a mediator testifies about the quality of the bargaining or the merits of a settlement in the context of seeking court approval of the same? Unfortunately, repetition, not reasoned analysis, has characterized court opinion-writing on this topic. In fact, courts offer no reasoning to explain their practices. The one consistent theme to be inferred from the class action mediation cases is that courts view class action mediators as members of a small, elite club of highly experienced neutrals. "Club membership" alone seems to be the foundation for the now routine presumptions made about the benefits of mediator-brokered class action settlements. One solution: Insist that class action mediators be appointed as special masters under Federal Rule of Civil Procedure 53 (or state equivalent) and formalize their reporting obligations to the court. Arguably, the formal appointment would extend to the mediator the same fiduciary obligation to protect the interests of absent class members that the court itself holds, a fiduciary duty that private mediators do not have.
Keywords: class action, mediation, civil procedure
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