Abstract
Response to Bruce A. Green & Andrew Kent’s, May Class Counsel Also Represent Lead Plaintiffs?
Professors Bruce A. Green and Andrew Kent have drawn much-needed attention to ethical issues that can arise when class-action lawyers simultaneously represent named individual plaintiffs and putative or certified classes. They analyze three scenarios of potential conflict for which the scholarly literature has been surprisingly scant: (1) the holdout scenario, in which “the class may benefit from a settlement that the class representative opposes”; (2) the sellout scenario, in which the class representative “proposes to settle the individual claim on its own,” without a class-wide deal; and (3) the payout scenario, in which a named plaintiff “negotiat[es] an individual windfall payout” for herself “before a settlement is approved, sometimes as a condition of . . . supporting the settlement.”
Professors Green and Kent’s focus is to ensure that lawyers comply with ethical rules when the interests of their individual clients diverge from the interests of the class. And they suggest fixes: class-action attorneys should provide “greater disclosures of risks” to their individual clients, and courts should provide “greater judicial oversight” over these scenarios, including through a possible amendment to Rule 23 of the Federal Rules of Civil Procedure.
This Response agrees with Professors Green and Kent’s suggestions. This Response also suggests that we can address the root of the problem: the unfaithful class representative. Each of Professors Green and Kent’s scenarios stems from class representatives’ decisions made “in their own self-interest,” to the potential detriment of the class whose interests they are duty-bound to protect. So class representatives should be compelled, as a condition of serving in that role, to prioritize their duties to absent class members over personal interests whenever the two conflict. This Response suggests enhancing judicial scrutiny of a putative class representative’s adequacy and requiring courts to police that adequacy whenever appropriate throughout the litigation. Doing so would, in turn, ease the burden on class counsel, significantly reducing even the potential for the ethical dilemmas presented in Professors Green and Kent’s three scenarios.
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