Vulnerability Theory & Class Actions

SUNY-Buffalo professor Christine Bartholomew has an article out with the intriguing title “Redefining Predator and Prey in Class Actions.”  Unfortunately, it does not use zoology or mathematical predator-prey equations to explain class litigation—the kind of loopy academic mashups that can be both fun to read and insightful.  Instead, she uses a new “vulnerability theory” to critique the “current impotency” of Rule 23.

So what is “vulnerability theory“?  It appears to be a critique of current policies, arguing that they tend to favor the interests of entrenched institutions over truly disadvantaged groups when determining what is a public good.  In terms class action lawyers on both sides would likely understand better, that would mean placing the interests of the absent class members first.

According to Professor Bartholomew’s vulnerability-based critique, traditional class action scholarship and recent class action caselaw has focused too much on pro-corporation rhetoric, resulting in a superficially neutral, but de facto pro-defense interpretation of the Rule.  Or, as she puts it:

[B]y prioritizing efficiency over public good, rhetoric has redefined the “victim” in class actions. Individual consumers, or putative class members, are no longer seen as the victims of corporate defendants’ malfeasance. Instead, building on dicta from one Seventh Circuit decision, defendants are advancing arguments that class action procedures harm corporate defendants by forcing them into extortionist settlements. Successful class action attorneys have been redefined as the predators with corporations their prey.

It’s probably an overstatement to argue that corporate defendants are perceived as “victims” in a given class action lawsuit.  And Professor Bartholomew is hardly the first academic to believe that class counsel are unfairly maligned, or that legal policy should do more to favor plaintiffs. Indeed, the general progress of her argument will seem very familiar to many consumers of class action scholarship.  She argues that

• Class actions have been rendered impotent by decisions that have advantaged corporations over consumers.  Specifically, courts began accepting two arguments from defendants: (1) certification had the potential to coerce settlements in meritless cases, and (2) class actions were designed to serve judicial efficiency.
• Absent class members are the “vulnerable” group in class action litigation; not corporate defendants, because: (1) they are at a financial disadvantage compared to corporations; (2) they are at an informational disadvantage; and (3) courts favor corporations over consumers.
• As a result, reforming Rule 23 should focus on enhancing deterrence of corporate misconduct, on increasing participation from class members, and on allowing easier cy pres distributions to charities.

Some of these arguments are hardly controversial.  I know of no one who would argue that absent class members are the most vulnerable group in class litigation.  Many of these arguments are well-trod ground.  And a few of the phrasings that Professor Bartholomew employs betray either her bias towards automatically believing the merits of any plaintiff’s claim (“the dominant judicial attitude towards class actions is knee-jerk skepticism”), or a misunderstanding of how class actions work (such as her characterization of cy pres relief: “Class actions have allowed consumers to fund public benefits …”) (Emphasis added.)

Nonetheless, this article is important for two reasons.  First, it provides a relatively new justification for some of the same results-oriented arguments defendants tend to hear from plaintiffs.  “Vulnerability theory” may be novel, but in a political system that seems increasingly polarized between haves and have-nots, or between the 1% and the 99%, knowing the nuances of arguments for skewing the rules in a particular direction is always good.  Second, and more importantly, it reinforces from both a rhetorical and theoretical standpoint one of the central truths defendants must learn when litigating class actions: the best arguments are framed in terms of what is best for absent class members.  Absent class members are the beneficiaries of Rule 23.  Caselaw has consistently held that named plaintiffs, class counsel, and even judges owe absent class members a fiduciary duty.  And, as I have argued before, the interests of absent class members and defendants in a fair procedure for certifying a class often coincide in surprising ways.