Constructing Issue Classes

Class actions are no longer functional. In 1966, the Advisory Committee on Civil Rules embarked on a guarded experiment by anticipating how class actions might help enforce substantive laws. But in the years since, both Congress and the courts have twisted and curtailed that experiment through increasingly strict certification standards. Now plaintiffs’ attorneys forgo a bevy of claims to buttress their certification argument, bootstrap state law claims into federal causes of action, or bill class-certification questions at such high levels of generality that judges are confronted with an all-or-nothing proposition: to certify, or not. But these strict standards and corresponding tactics have evolved from a misguided focus on class members’ cohesiveness vis-à-vis one another and a failure by parties and courts alike to frame and adjudicate collectively what actually unites plaintiffs—a defendant’s conduct.

This black-or-white thinking is not without consequence. Without certification, some litigation—like small-stakes consumer claims—will evaporate, which undermines enforcement goals. While economically viable claims will not wholly disappear, most injured people will not sue, which raises questions about realizing compensation and deterrence aims. And plaintiffs’ attorneys’ strategy of presenting only potentially certifiable causes of action can simultaneously risk disabling viable personal-injury claims and saddling subsequent proceedings with unpredictable preclusion. Plaintiffs who do sue individually are likely to be corralled into multidistrict litigation, where judges face similar agency problems but lack clear policing authority absent class certification.

Certifying fewer classes also seemingly correlates with increased public regulation through state attorneys’ parens patriae power. While faithful attorneys general can fill a much maligned regulatory void, as the New York Times recently reported, they can also be purchased with timely campaign contributions. Moreover, when state attorneys proceed exclusively in state court, parens patriae actions incite further concerns about inconsistent outcomes, precluding private claims, and inadequately representing constituents.

Issue classes, where courts certify only certain claims or elements within those claims, can shed conventional black-or-white thinking about certification, equip private regulators with a procedural means to stymie these concerns, and advance substantive values. But issue classes palliate these pitfalls only insofar as judges abandon their misguided search for internal class unity and recognize that the defendant’s conduct, when uniform, is what bonds plaintiffs—not race, gender, identical injuries, or consistent damages.

Reorienting traditional philosophies about class cohesion frees judges to think pragmatically about how to situate, sort, and adjudicate the components of claims and defenses by classifying them into their constituent parts. Most legal elements can be cataloged according to whether they address a defendant’s alleged conduct or a plaintiff’s eligibility for relief. When a defendant’s conduct is nonindividuated toward plaintiffs or when substantive law permits plaintiffs to satisfy their eligibility for relief with aggregate proof, those components are ripe for aggregate treatment. Adjudicating those issues collectively may substantially advance all the claims, increase efficiency by reducing replicated proof, and minimize inconsistent verdicts.

The promise of issue classes has not gone unnoticed. After a rocky debut in the 1990s with appellate decisions in Castano v. American Tobacco Co. and In re Rhone-Poulenc Rorer, Inc., issue classes are now experiencing a renaissance: They top the Rule 23 subcommittee’s agenda for potential rule changes and have been embraced by most circuit courts. To date, however, scholars have done little beyond debating whether issue classes should exist.

This Article changes the status quo with two principal contributions. First, after identifying how our existing procedural landscape fails to effectively redress nationwide misconduct, it constructs a unifying doctrinal theory as to when collectively resolving a single issue will be worthwhile. By reconsidering disjointed notions of class cohesion and recasting claims and defenses into defendant’s conduct or plaintiff’s eligibility components, it demystifies the certification calculus and sets the stage for courts to certify classes that resolve key issues like a defendant’s uniform conduct. This resists the all-or-nothing approach to certification and coordinates the judicial response to jurisdictionally disaggregated regulators. Second, it offers solutions to a medley of sticky legal and logistical quandaries such as how to compensate issue-class counsel when no common fund exists, ensure appropriate error-correction mechanisms through interlocutory appeals, coordinate fragmented public and private regulators, remand multidistrict litigation cases post-issue-classes, and confront Seventh Amendment Reexamination Clause concerns.

Part I begins by identifying and defining the central problem of today’s regulatory terrain: When a national corporation behaves egregiously, that single act or series of acts gets distorted through several legal prisms—jurisdictional restrictions, state law intricacies, and limited regulatory authority. Unless there is parity between the regulator’s authority, the governing law, the court’s jurisdiction, and the corporation’s nationwide conduct, the net effect is to thwart coordinated enforcement. Defendants successfully capitalize on these imbalances to avoid class certification, at least until they want the umbrella of closure that settlement classes provide. But this prompts settlement-oriented litigation. Plaintiffs’ attorneys sacrifice valuable claims to satisfy strict certification standards, have little bargaining leverage with defendants, and rarely test the claims’ merits. This risks undervaluing claims, undermining deterrence, and encouraging splintered enforcement, which escalates inadequate-representation concerns and prompts erratic preclusion decisions.

Class certification, adequate representation, and preclusion all boil down to whether a class is cohesive—a term that appears nowhere in Rule 23, but has emerged at the heart of Supreme Court jurisprudence. Part II irons out doctrinal difficulties with class cohesion and situates defendant’s conduct as what unifies plaintiffs. When misconduct toward plaintiffs is uniform, adjudicating conduct components collectively promotes consistency. But this also reveals a fundamental flaw when plaintiffs’ attorneys try to transform decentralized conduct toward different individuals into a group wrong by deploying “aggregate proof” through statistical or economic experts. Without a change in substantive law, the magic of mathematical models is just smoke and mirrors—models cannot make disparate conduct uniform.

Part III recognizes that, as usual, the devil is in the details. It thus breaks new ground by carefully parsing interrelated doctrinal, political, logistical, and constitutional concerns about issue classes. While issue classes can promote resource parity between parties and reduce inconsistent decisions as to the same conduct, certifying inconsequential issues can generate undue settlement pressure. Yet, certifying only components that resolve core questions and instituting appeals on the merits can alleviate this pressure. Conversely, without appropriate incentives, issue classes could lie stillborn in the hands of plaintiffs’ attorneys: Because issue classes do not produce a final judgment, there may be no common fund from which to collect fees. Adapting charging liens and the common-benefit doctrine, however, ensures compensation for class counsel if plaintiffs subsequently benefit from the issue class’s preclusive effect.

To be sure, issue classes can do only so much. Multiple regulators persist and procedural mechanisms cannot alter regulatory and jurisdictional overlap. But, because issue classes work by precluding re-litigation in follow-on proceedings, they can facilitate cross-pollination between (and consistency among) public and private enforcers in dispersed fora. Likewise, they offer a means for transferee judges to resolve common conduct questions in multidistrict litigation when plenary classes are nonviable.