Under Cloak of Settlement

Posted: 17 Jan 1997  

Susan P. Koniak

Boston University School of Law

George M. Cohen

University of Virginia School of Law

Abstract

Lawyer abuse in class action settlements is a widely recognized problem. One approach to lawyer abuse in class actions has received insufficient attention: suing the lawyers. Lawyers involved in class actions may engage in conduct that constitutes a civil or criminal wrong under state or federal law. The difference between these lawyers and other lawyers is that judges approve class action settlements after making findings on the adequacy of class counsel, the lack of collusion between class counsel and defendants, and the fairness of the settlement terms, including lawyers' fees. We argue that this judicial approval does not, and should not, immunize lawyer misconduct from the reach of state tort law, consumer protection law, criminal law, or state or federal antitrust law. Class action lawyers seem to assume that judicial approval cloaks their settlements in protection from these actions. We argue that this assumption is erroneous. First, collateral estoppel does not apply to bar suits aimed at lawyer misconduct because there is no full and fair opportunity to litigate these issues in the fairness hearing. Second, the doctrines that exempt state action, federal regulatory activity, and petitioning the government from the antitrust laws do not apply to the conduct of class action lawyers in negotiating a settlement or to the terms of the settlement approved by the court. We provide case examples to demonstrate the types of actions that could be brought against class action lawyers.

Suggested Citation

Koniak, Susan P. and Cohen, George M., Under Cloak of Settlement. Virginia Law Review, Vol. 82, No. 2, 1996. Available at SSRN: https://ssrn.com/abstract=10282

Susan P. Koniak (Contact Author)

Boston University School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-3136 (Phone)
617-353-3077 (Fax)

George M. Cohen

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States
(804) 924-3814 (Phone)
(804) 982-2079 (Fax)

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