United States: The Guardianship Model Of The Class Action

Last Updated: November 3 2014
Article by Andrew J. Trask

Northwestern Law professor Martin Redish should be very familiar to readers of this blog. I've covered his work before, from his constitutional challenges to the class action through his critique of thecy pres remedy to his surprising turn to what looked like a "trust model" of the class action last year. Professor Redish's work is—unlike many modern class action scholars—not easily classified. I've said before, and I'll likely say again (I'm certainly saying it now): you ignore Professor Redish at your peril.

So, when I saw he had a new article coming out in the Emory Law Journal, "Rethinking the Theory of the Class Action: The Risks and Rewards of Capitalistic Socialism in the Litigation Process," I sat down with great anticipation to read it.

The thesis of the article is, while hardly surprising, certain to be controversial. Professor Redish reaffirms his recent argument that the class action should be treated as a form of trust or guardianship (what he calls the "Guardianship Model").

As background, he points out that there have traditionally been three competing models of the class action:

 To this point, it would be accurate to assert that practitioners, scholars, and jurists have either proposed or implicitly assumed one of three underlying theories of the modern class action:

(1) the Aggregation model;

(2) the Entity model; or

(3) the Private Attorney General model.

The latter two models—at least in the ways in which scholars have employed them—must be categorically rejected. While the Private Attorney General Model implements legitimate purposes served by the modern class action, it is grossly incomplete and therefore leads to a skewed perspective on the class action, which effectively alters the underlying substantive law being enforced in democratically and constitutionally impermissible ways. The Entity Model, on the other hand, has absolutely nothing to recommend it. On the contrary, the model represents an alchemy-like transformation of the nature of underlying substantive rights in a manner that violates core notions of American democratic theory.

(Emphases added, internal footnotes omitted.) This is not to say, however, that Professor Redish approves of the Aggregation Model, either. Professor Redish believes that the Aggregation Model does not account for the unique nature of the attorney-client relationship in a class action, where the attorney is the driving force behind the litigation, and may experience serious conflicts of interest with various class members.

His solution is to propose a series of modifications to Rule 23, based on what he cals the "Guardianship Model" of the class action. As he explains that model:

in order to prevent the harms caused by the departures from the traditional attorney–client relationship the class attorneys must be deemed to function as guardians of the interests of the absent class members. By imposing on class attorneys the fiduciary obligations which guardians have to their wards, our procedural system should be able to obtain the benefits of the modern class action while simultaneously avoiding at least most of the pathologies to which the current practice gives rise. I should emphasize that the analogy to a legal guardian is by no means perfect. In some ways, class attorneys function as traditional attorneys, qualitatively different from the traditional guardian model. Thus the Guardianship Model of the modern class action represents a synthesis of traditional procedural aggregation and a form of guardianship, reminiscent of the fiduciary manner in which guardians legally function under long established principles of equity.

(Emphases added, internal footnotes omitted.)  To formalize this new way of looking at the class action, Professor Redish proposes four reforms:

  • inserting a "significant likelihood of meaningful relief for the bulk of the absent class members" requirement into Rule 23(a), the section of Rule 23 that applies to all class actions;
  • changing attorney compensation so that it relates only to the amount actual class members receive;
  • abolishing cy pres relief; and
  • treating the class attorney as the real party in interest for the purposes of preclusion.

These are all interesting ideas. And while I'm usually the first to point out when something is not likely to actually be adopted, I'm aware that the Rule 23 subcommittee is currently entertaining proposals on at least one of these reforms. So these are also worth taking seriously.

I have two other brief reactions to this article.

First, I'm surprised that Professor Redish doesn't mention the work of University of Miami law professor Sergio Campos, who has also written extensively on looking at class actions as trusts instead of aggregation devices.  Indeed, despite their conflicting views on the usefulness of the class action in general, they converge remarkably on the proposed reform.  That alone is extremely interesting.

Second, I think that Professor Redish may be overcomplicating the issue somewhat. Granted, his proposals are colored in part by his belief that Rule 23 as it currently stands likely violates the Rules Enabling Act. However, reining in the "pathologies" with which he is most concerned could also be accomplished by strengthening enforcement of Rule 23(a)'s adequacy requirement and Rule 23(g)'s adequacy of counsel requirement. While the text of both of these requirements counsels courts to keep a close eye on named plaintiffs and class attorneys as fiduciaries of the proposed class, the reality is that many courts provide only a cursory examination of adequacy.

Regardless of whether I personally agree with all of Professor Redish's conclusions, this is easily one of the most important class-action articles of the year, and Professor Redish's proposals are worth a serious look. Scholars sympathetic to class action plaintiffs frequently propose new ways of looking at the class action, which can often be interpreted as ways of getting around the restrictions imposed by Rule 23.  This is the first defense-side argument for a new way of looking at class aggregation, and that alone makes it worthy of study.  But, just as important, Professor Redish's proposals can have important practical effects.  Courts should study them to see how they might better fulfill their own fiduciary duties. And defense lawyers should study them because—like much of Professor Redish's work—these provide the seeds for some excellent oppositions to class certification.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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