Common Themes and Unintended Consequences in Class Action Reform

The reform pendulum has been swinging in the direction of limiting the scope and flexibility of the class action procedural device. The Private Securities Litigation Reform Act (PSLRA), the Securities Litigation Uniform Standards Act (SLUSA), the Class Action Fairness Act (CAFA), Federal Rule of Civil Procedure 23 (Rule 23), various state statutes and rules, and a variety of state and U.S. Supreme Court decisions have included significant efforts to make class actions look more like traditional one-on-one litigation. These efforts have focused on five overlapping areas: public transparency, client control and attorney selection, attorney fees, suit selection, and an increased judicial role. At the same time, however, these reforms have generated unintended consequences that have the potential for creating new problems or undercutting the efficacy of the reforms themselves

Punitive Damages and Class Actions

The union of punitive damages and class actions can be aptly described with Samuel Johnson’s famous quotation regarding marriage: “The triumph of hope over experience.” By most conventional wisdom, there is little future for plaintiffs or defendants who desire to resolve punitive damages claims globally using the procedural vehicle of a class action. From a conceptual perspective, however, there are circumstances under which the union could function. This Article explores those possibilities, not in the spirit of normative support, but in the spirit of exploring theories that may have some prospective vitality. Notwithstanding the chilly reception that punitive damages class actions have received from appellate courts, there are several approaches at the micro and macro levels of analysis suggesting that “hope” is still persistent. By disaggregating the United States Supreme Court punitive damages jurisprudence, it is possible to identify a limited number of factual scenarios where a class action for punitive damages could be successful. These micro-level observations can constitute a road map for navigating the current seemingly insurmountable barriers that have severely limited the use of class actions in punitive damages claims. At the macro level, there are two observations that could lead to a revision of punitive damages class actions: the seemingly undaunted, pragmatic desire on the part of trial judges to resolve similar cases collectively, and the powerful support for an economic vision of punitive damages that leads inevitably to a global, rather than individual, procedural approach