Class Action Accountability: Reconciling Exit, Voice, and Loyalty in Representative Litigation
In two recent and highly technical decisions – Amchem Products v. Windsor and Ortiz v. Fibreboard Corp. – the Supreme Court has recognized that a serious potential for collusion exists in class actions and has outlined a concept of "class cohesion" as the rationale that legitimizes representative litigation. Although agreeing that a legitimacy principle is needed, Professor Coffee doubts that "class cohesion" can bear that weight, either as a normative theory of representation or as an economic solution for the agency cost and collective action problems that arise in representative litigation. He warns that an expansive interpretation of "class cohesion" could produce a "Balkanization" of the class action that would impair its utility. The guiding normative principle in class action reform, he suggests, should be the protection and enhancement of client autonomy, not "class cohesion," because the class action for money damages is ultimately more an aggregation of individuals than a distinct entity.
Viewing class action accountability as at bottom a governance issue, Professor Coffee considers the relevance of corporate control mechanisms and market-based remedies that have worked in other contexts to limit agent opportunism. In particular, he concludes that a strategy of enhancing "exit" should outperform alternative efforts aimed at improving either client "voice" or agent "loyalty, " and suggests that "exit" could in some circumstances be a superior functional substitute for class cohesion.
Law | Torts
John C. Coffee Jr.,
Class Action Accountability: Reconciling Exit, Voice, and Loyalty in Representative Litigation,
Colum. L. Rev.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/30