Rethinking the Theory of the Class Action: The Risks and Rewards of Capitalistic Socialism in the Litigation Process

27 Pages Posted: 21 Oct 2014

Date Written: October 16, 2014

Abstract

Despite all of the controversial scholarship that has been published in recent years concerning the modern class action, it is both puzzling and disappointing how little of it has sought to grasp the deep structural precepts underlying the device. All too often, the scholarly debate, not to mention the political debate, has broken down along ideological lines: the political left has reflexively favored the device and the political right has reflexively opposed it. However, virtually all of even the serious scholarly work done on the subject has, for the most part, been superficial, failing to pursue, much less to grasp, the practice’s underlying foundational purposes. The purpose of this Article is to seek to understand those foundational purposes. The Article argues that the DNA of the modern class action fundamentally differs from that of the traditional one-on-one litigation process. The relationship between class attorney and class member, for example, is significantly different from the normal relationship between attorney and client. Recognition of these foundational differences should force us to recognize that the attorney-client relationship in the class action context is more like a guardian-ward relationship than a traditional relationship between client and attorney.

This insight does not necessarily mean that the class action is inherently improper. Indeed, in some ways recognition of the guardian model of the modern class action underscores the procedure’s value. But it also underscores the need to recognize the inherently capitalistic nature of that guardian relationship. Where profit incentives for the attorney are in accord with the interests of the class members, the practice should work well. However, all too often, modern class action procedure is plagued by externalities and perverse economic incentives, allowing class attorneys to profit even when class members will benefit virtually not at all. The goal of class action doctrine and rulemaking, then, should be to remove those economic perversions to insure that the capitalistic nature of the process functions effectively.

Keywords: Due Process, Cy Pres, Class Actions, Capitalism, Socialism, Attorney-Client, Civil Procedure

JEL Classification: K10, K30

Suggested Citation

Redish, Martin H., Rethinking the Theory of the Class Action: The Risks and Rewards of Capitalistic Socialism in the Litigation Process (October 16, 2014). Emory Law Journal, Forthcoming; Northwestern Law & Econ Research Paper No. 14-20; Northwestern Public Law Research Paper No. 14-52. Available at SSRN: https://ssrn.com/abstract=2511595 or http://dx.doi.org/10.2139/ssrn.2511595

Martin H. Redish (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 E. Chicago Ave
Chicago, IL 60611
United States

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