Just Go Away: Representation, Due Process, and Preclusion in Class Actions

A number of commentators have argued for an expansion of the preclusion doctrines in the class action context, thereby limiting the ability to challenge a class judgment through subsequent litigation. The preclusion doctrines apply when one's interests have already been represented and litigated, and thus, as a general matter, the preclusion doctrines do not apply to nonparties; the class action is one of several limited exceptions. In this Article, I conclude that the class action exception is notably and distinctively inconsistent with the underlying construct that gives cohesion to the preclusion doctrines and their exceptions-a construct with both theoretical and practical dimensions: the foundational prerequisite of direct representation in litigation. I. INTRODUCTION 1080 II. A BRIEF HISTORY OF THE USE OF PRECLUSION IN COLLECTIVE LITIGATION 1082 A. Early Development in the Age of Law and Equity ...... 1082 B. The 1938 Federal Rules 1084 C. Preclusion Issues in Class Actions Today 1087 1 . Adequate representation as a due process prerequisite 1089 2. Preclusion, finality, and adequate representation... 1092 III. FOUNDATIONAL CONCEPTS WITHIN THE PRECLUSION DOCTRINES 1096 A. A Brief Summary of the Preclusion Doctrines 1096 B. Representation in Litigation 1098 1. Traditional concepts of representation 1100 2. Nonparty preclusion exceptions 1102 3. The representation outlier: stare decisis 1104 4. The distinctive inconsistency of preclusion in class actions 1109 IV. CLASS ACTION PRECLUSION THEORY 1113 A. Due Process Issues in Class Actions 1114 B. Achieving Both Direct Representation and Adequate Due Process: The Opt-In Procedure 1118 V. CONCLUSION 1125 I. INTRODUCTION Mention res judicata to almost any lawyer or law student, and one of two responses is typical: either the listener will react with a stricken, deer-in-the-headlights expression, or with a stifled yawn. The oft-cited quote by Judge Clark that the preclusion doctrines are "universally respected, but actually not very well liked"1 continues to hold true more than sixty years later. However, despite the fear and loathing that the preclusion doctrines tend to evoke, preclusionrelated issues continue to arise and the doctrines carry potentially serious repercussions by virtue of their ability to bar subsequent litigation.2 Indeed, an ongoing, high-profile exchange over the application of the preclusion doctrines in the class action context has generated vociferous commentary on both sides of the issue, with some commentators arguing in favor of expanding the reach of the preclusion doctrines so as to bar subsequent litigation more broadly following a class judgment or settlement.3 The supporting arguments for this more expansive approach suggest that its proponents want such subsequent litigation to "just go away" and are even willing to compromise due process considerations to attain that goal. After a brief lull in the commentary, a recent Supreme Court decision seems poised to prompt a resurgence of interest in the issue of the application of the preclusion doctrines in class actions. The Court's 2008 decision in Taylor v. SturgelP disapproved the use of "virtual representation" as a theory of preclusion, and in so doing, offered some discussion and analysis of the preclusion doctrines that apply both directly and indirectly to the class action context. …