Aggregation and its Discontents: Class Settlement Pressure, Class-Wide Arbitration, and Cafa

53 Pages Posted: 28 Jul 2006 Last revised: 25 Sep 2010

See all articles by Richard A. Nagareda

Richard A. Nagareda

Vanderbilt University Law School (Deceased)

Date Written: 2006

Abstract

The law of aggregate litigation has witnessed the emergence of three significant debates in recent years. Scholars of class actions have debated the normative significance of the settlement pressure exerted upon defendants by judicial decisions to certify litigation to proceed on a class-wide basis. The courts themselves have diverged over the validity of provisions in consumer and other contracts that not only subject disputes to mandatory arbitration but also purport to forbid claimants from conducting the arbitration proceeding on a class-wide basis. Congress, too, has entered the fray over aggregate procedure, enacting the controversial Class Action Fairness Act of 2005 (CAFA) to facilitate the removal to the federal courts of proposed class actions involving state-law claims.

This article unites the discourse about these three seemingly separate questions of aggregate procedure. All three raise common questions about the proper relationship between aggregation and underlying substantive law - in particular, about the institutional authority that a decision to afford or to withhold aggregate treatment may wield to effectuate reform in substantive rights. By regarding aggregation from the standpoint of institutional authority, the law may discern with greater precision when class settlement pressure is illegitimate and when it raises no normative concern. Likewise, an institutional perspective helps to pinpoint the questions that courts should ask when confronted with challenges to waivers of class-wide arbitration. The article closes by relating these topics to an emerging debate over the application of choice-of-law principles to proposed nationwide class actions in the federal courts pursuant to CAFA.

Keywords: Class Actions, CAFA, Settlement, Class Settlement Pressure, Class-Wide Arbitration, Choice of Law, Aggregation, Litigation

Suggested Citation

Nagareda, Richard Allen, Aggregation and its Discontents: Class Settlement Pressure, Class-Wide Arbitration, and Cafa (2006). Columbia Law Review, Vol. 106, p. 1872, 2006, Vanderbilt Law and Economics Research Paper No. 06-14, Available at SSRN: https://ssrn.com/abstract=920833

Richard Allen Nagareda (Contact Author)

Vanderbilt University Law School (Deceased)

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