99 Iowa L. Rev. 1659 (2014)

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Abstract

One of the most serious pathologies of the modern class action is the danger of serial attempts to certify a class action. Because the bar of res judicata traditionally applies solely to the parties who had their day in court, it is easy for class action attorneys to seek certification for a never-ending parade of identical class actions, simply by changing the named plaintiffs, who, for purposes of certification, are completely fungible. As a result, the potential for redundancy, inefficiency and harassment of potential class defendants is all but unstoppable, effectively forcing defendants to settle class actions which may well fail on the merits.

In Smith v. Bayer, the Supreme Court did little or nothing to ameliorate the problem. Instead, it simply assumed that the enactment of the Class Action Fairness Act ("CAFA") will obviate the problem by authorizing removal to federal court of class actions brought in state court. But the Court grossly overstated the impact of CAFA on this serious problem.

In this Article, we propose a solution to the problem of serial certification attempts by reconsidering the underlying DNA of the modern class action. In so doing, we explain the important differences between the nature of the attorney-client relationship in traditional litigation on the one hand and in the modern class action, on the other. These factors lead us to re-characterize the modern class action as a form of “guardianship” litigation model. In effect, the class attorneys operate as the litigant, acting on behalf of the interests of the absent class members. The modern class action, then, represents a form of what can be labeled “capitalistic socialism”—class attorneys work to redistribute wealth to those whom they represent, out of what are often purely capitalistic motivations.

Once one accepts the guardianship model as the proper description of the modern class action, it logically follows that the class attorneys, as well as the named plaintiffs, should be treated as real parties in interest for purposes of res judicata. Admittedly, such an alteration represents a radical shift in res judicata theory, but it does so in order to bring modern res judicata doctrine in line with the innovative nature of the modern class action. As a result of our proposal, class attorneys will not be able to engage in harassment simply by changing fungible named plaintiffs. Instead, class attorneys, like any real party in interest, will have only one opportunity to seek class certification; a denial of certification will constitute direct estoppel barring the class attorneys from ever seeking re-certification under an identical standard.