North Carolina Law Review

University of North Carolina School of Law

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Revolution v. Evolution in Class Action Reform

March 21, 2018

96 N.C. L. Rev. 903 (2018)

 

It is widely agreed that the federal-court class action became a somewhat revolutionary device after Rule 23 was amended in 1966. Since 1966, further substantial changes to the rule have been considered by the rulemakers, but more proposals have been discarded than adopted. Meanwhile, a major battle has emerged about whether class actions should primarily or solely be designed to achieve deterrence or limited to a compensatory function. That division has been central to many current debates, such as the issue of “no injury” class actions, whether courts could certify classes only after determining that they were “ascertainable” by an identified administratively feasible method, and whether the idea of cy pres could be used to justify class actions in which the defendant paid a large amount, but the class members themselves received little or nothing and the funds were instead used for good works of some relevant sort. 

 

Changes to Rule 23 in the last half century have not directly addressed these hot-button issues. But judicial decisions— including some by the Supreme Court—have tackled some of these issues, and Congress has adopted legislation to address some alleged class action abuses, such as “coupon settlements.” 

 

This Article explores the last half century of class action reform in terms of whether further “revolutionary” changes will occur in federal class action practice. It finds that although the rulemakers looked at some aggressive changes in the 1990s, those amendment ideas were eventually jettisoned, and the changes actually adopted have been evolutionary rather than revolutionary.

 

That trend continues with the most recent amendment package, which may go into effect on December 1, 2018; the rulemakers are not embracing dramatic changes to the rule. Meanwhile, the possible sources of “revolutionary” change lie elsewhere. Some worry that the Supreme Court will deliver shocks to class action practice by deciding cases, though in recent terms it has not proved to be as adventurous as some thought it might. Congress has pending before it legislation that seemingly would make a fairly “revolutionary” commitment to limiting class actions to the compensatory purpose, and disavowing the deterrence purpose endorsed by many. The fate of that proposed legislation is uncertain as of this writing.

 

Though action by Congress or decisions by the Supreme Court might produce “revolutionary” change for class actions, this Article suggests that technology may instead be the most important source of major change. In the wired world of the twenty-first century, the “headless” class action of the past may be replaced by the “wired” class action in which class members have regular contact with one another and class counsel. That could work a genuine revolution. 

 

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