Rethinking the Theory of the Class Action: The Risks and Rewards of Capitalistic Socialism in the Litigation Process

ABSTRACTDespite all of the controversial scholarship that has been published in recent years concerning the modern class action, it is both puzzling and disappointing how little of it has sought to grasp the deep structural precepts underlying the device. All too often, the scholarly debate, not to mention the political debate, has broken down along ideological lines: the political left has reflexively favored the device and the political right has reflexively opposed it. Virtually all of even the serious scholarly work done on the subject has, for the most part, been superficial, failing to pursue, much less to grasp, the practice's underlying foundational purposes. The goal of this Article is to seek to understand those foundational purposes. The Article argues that the DNA of the modern class action fundamentally differs from that of the traditional one-on-one litigation process. The relationship between class attorney and class member, for example, is significantly different from the normal relationship between attorney and client. Recognition of these foundational differences should force us to recognize that the attorney-client relationship in the class action context is more like a guardian-ward relationship than a traditional relationship between client and attorney.This insight does not necessarily mean that the class action is inherently improper. Indeed, in some ways recognition of the guardian model of the modern class action underscores the procedure's value. But it also underscores the need to recognize the inherently capitalistic nature of that guardian relationship. Where profit incentives for the attorney are in accord with the interests of the class members, the practice should work well. However, all too often, modern class action procedure is plagued by externalities and perverse economic incentives, allowing class attorneys to profit even when class members will benefit virtually not at all. The goal of class action doctrine and rulemaking, then, should be to remove those economic perversions to insure that the capitalistic nature of the process functions effectively.INTRODUCTIONWith all the controversy that has pervaded legal scholarship on the subject of class actions over the years, it is perhaps surprising that relatively little of it has attempted to place the modern class action (i.e., post-1966 amendment to Rule 23 of the Federal Rules of Civil Procedure) within the broader theoretical framework of our nation's system of litigation. To be sure, those who are critical of the way in which the class action mle has been interpreted and applied generally assume-albeit implicitly-a particular foundational rationale and conceptual framework, while those who support expanded use of the class action implicitly assume a very different theoretical rationale for the device. But only rarely (and never effectively) has any scholar sought to undertake a detailed and coherent critique of the underlying theory of the modern class action, or to attempt to place it within the broader theoretical framework of the litigation process.This issue is not one solely of intellectual or academic concern, as interesting as it is on those levels. A proper understanding of the foundational theoretical rationale of the modern class action should logically have a significant impact on the shaping of the structure of the class action device as well as many of its ancillary doctrinal appendages. The goal of this Article is to provide an explanation and critique of the alternative approaches to this inquiry and to advocate an entirely new theoretical rationale as the proper conceptual foundation of the modern class action. It is my belief that when the modern class action is properly understood, its only even arguably legitimate rationale is as an entirely new procedural animal, one conceptually distinct from all the procedural devices to have proceeded it. I label this underlying theory the "Guardianship Model" because it recognizes that, as a practical matter, plaintiff class attorneys are functioning more as capitalistically driven guardians of the absent class members than as one side of a traditional attorney-client relationship. …