17 Aggregationists at the Barricades: Assessing the Impact of the Principles of the Law of Aggregate Litigation

More than a decade after publication of the American Law Institute’s (ALI’s) Principles of the Law of Aggregate Litigation,¹ distance provides an opportunity to reflect on the Principles’ contributions to the legal community and the improvement of civil justice.

ALI Restatements address legal uncertainty through a restatement of basic legal concepts that tell judges and lawyers what the law is. Restatements are intended to clarify legal uncertainties, simplify unnecessary complexities, and promote changes that will better adapt the law to life. Although Restatements largely are based on statutes and judicial decisions, Restatements also consider situations that courts or legislatures may not yet have considered or addressed.²

Unlike Restatements, ALI Principles “are primarily addressed to legislatures, administrative agencies, or private actors. They can, however, be addressed to courts when an area is so new that there is little established law. Principles may suggest best practices for these institutions.”³

This chapter assesses the Principles of the Law of Aggregate Litigation in two respects. First, has the Principles induced legislative bodies to enact provisions, based on those Principles, to govern aggregate litigation? Second, has the Principles assisted judges in their management of aggregate litigation through the project’s best practices suggestions? To what extent have judges embraced or eschewed the Principles?

The Principles built upon a long-standing ALI concern with the burgeoning and rapidly changing judicial crisis relating to the resolution of complex litigation. Apart from questions whether the Principles fulfilled its stated purpose, the project also raised fundamental questions about the ALI’s role in moving the law in certain directions based on the agendas of non-neutral actors.

On one interpretation, the Principles represented a well-intended effort to provide judges with guidance “where there was little established law.” On another, perhaps more problematic view, the Principles represented the desires of actors who, frustrated by some judicial resistance to aggregate litigation, used ALI auspices to change the law in a desired direction.

These questions go to the heart of the ALI’s role in guiding attorneys, judges, and rulemaking bodies in furtherance of civil justice. At what point do the scholarly, impartial traditions of ALI undertakings shade into something more problematic and questionable? Whether the liberalization of aggregate procedure is a desirable goal is a normative question that the ALI Principles project assumed but did not address.

This chapter concludes that while the Principles project has left its mark, courts and legislative bodies still have not addressed or resolved many issues the Principles identified. Since publication in 2010, most judges seem comfortable with prevailing jurisprudence and not especially interested in rewriting procedural doctrine governing complex litigation. Although the Principles recommended substantial changes in judicial case management, the Reporters and Advisers intended a more robust embrace of liberalized aggregative procedures. The legal system has only partially moved in this direction. The Principles has not resulted in a root-and-branch revision of aggregate procedure. Rather, implementation of the Principles suggests that a more incremental approach to legal reform has prevailed, and the efforts of the avid aggregationists must await another day.

The fundamental questions concerning aggregate procedure that the ALI undertook in its Principles project may be viewed as even more compelling in 2023 than when the project began. The concerns then that led the ALI to authorize the Principles project in 2005 may be greater today, with the significant shift of aggregate litigation into multidistrict litigation (MDL) auspices during the last decade. More than half the federal docket is now comprised of MDL litigation. Academic commentators have noted, with some concern, the evolution of largely judge-made MDL practices that have no direct basis in the MDL statute or federal rules.

The history of complex litigation over the past fifty years reflects paradigm shifts from models of individual litigant autonomy to aggregate procedure. The ALI has played a significant role in identifying issues relating to aggregate litigation and recommending doctrinal and statutory proposals for reform. To appreciate the Principles, it is important to understand the historical context in which the ALI initiated the Principles project.

In undertaking the Principles project in 2004, the ALI was not writing on a clean slate. The ALI previously grappled with problems relating to the resolution of complex litigation in the late 1980s, culminating in the 1994 publication of the Complex Litigation: Statutory Recommendations and Analysis.⁴ In a sense, the 2010 Principles was a successor to the Complex Litigation project. The push for another ALI effort suggested that the earlier effort had not sufficiently addressed the issues that complex litigation raised, or that the complex litigation paradigm had shifted sufficiently since 1994 to merit new attention.

The modern era of aggregate litigation substantially began with the 1966 amendment of the class action Rule 23 of the Federal Rules of Civil Procedure.⁵ After the Rule 23 amendment, the first decade of class litigation centered on civil rights actions. A new paradigm of public law and institutional reform litigation seeking injunctive relief dominated the litigation landscape.⁶ Cases contesting school desegregation, challenging conditions of confinement in prisons and mental health facilities, and confronting other discriminatory conduct exemplified aggregate litigation in this era.⁷

This period of harnessing the class action to resolve social justice problems engendered judicial and political backlash,⁸ and by the late 1970s, the civil rights class litigation of the 1960s had somewhat receded. The late 1970s marked a shift to a new form of complex litigation: mass tort litigation.⁹ This first-generation of mass tort litigation included the well-known cases of Agent Orange, the Dalkon Shield, DES, and Bendectin.¹⁰ This paradigm shift, and the problems generated by mass tort litigation, garnered the attention of institutional reform organizations including the ALI.

Mass toxic substances, defective medical devices, and pharmaceutical cases shared novel litigation issues unlike the 1960s institutional reform cases. Foremost was the sheer volume of mass tort cases filed in federal and state courts. Problems of geographic dispersion, latent injury, indeterminate plaintiffs and defendants, and complex issues of causation and scientific proof characterized this litigation.¹¹ By the mid-1980s some federal and state judges, confronted with dockets congested with mass tort cases, were seized with a crisis mentality.

As judges struggled to manage the mass tort litigation on their dockets, many institutional reform organizations initiated research projects to study the phenomenon and propose recommendations to address the burgeoning problems mass tort cases presented.¹² These efforts typically resulted in modest recommendations marginally suited to assist judges grappling with their mass tort dockets. In addition, Congress declined to address mass tort problems with legislation.

In the face of legislative inaction and limited reform proposals, several federal judges seized the initiative to create management techniques to deal with mass tort litigation. For these aggregationist judges, the prospect of individual relitigation of essentially the same claims became untenable. Several reasons motivated these judges: the need to consolidate similar cases into one aggregate unit, the need to foreclose repetitive relitigation of essentially the same case, and the need to alleviate docket congestion and expedite delivery of relief.

Although a cohort of aggregationist judges emerged, many other federal judges resisted certifying mass tort class actions based on their understanding of class action jurisprudence.¹³ By the mid-1980s, aggregationist judges with considerable mass tort dockets became frustrated with judicial and legislative inertia in the face of the growing problems of these cases. Thus, a small coterie of federal district court judges handling substantial mass tort dockets became the first generation of aggregationist judges.

These included Judge Jack Weinstein of the Eastern District of New York, handling the Agent Orange litigation; Judge Robert Parker of the Eastern District of Texas, handling personal injury asbestos litigation; Judges Lowell A. Reed and James McGirr Kelly of the Eastern District of Pennsylvania, handling the school asbestos litigation; Judge Carl Rubin of the Southern District of Ohio, handling the Bendectin litigation; Judge Sam Pointer of the Southern District of Alabama, handling breast implant cases; Judge Mehrige of the Eastern District of Virginia, handling the Dalkon Shieldlitigation; and Judge John Grady of the Northern District of Illinois, handling the tainted blood products cases. In addition, in 1989 Judge William W. Schwarzer of the Northern District of California, another leading judicial aggregationist, became the director of the Federal Judicial Center, where he used his position to exercise considerable influence in promoting and advancing the aggregationist agenda.¹⁴

The aggregationist judges responded to the mass tort crisis with innovative approaches that centered on expansive use of the class action rule. In 1986 and 1987, the efforts of the aggregationist district court judges were vindicated when the Second, Third, and Fifth Circuits upheld class certification in the Agent Orange and asbestos mass tort cases.¹⁵ The procedural advances of 1986–1987 inspired a decade of judicial activism in the class action arena.

Judges experimented with novel multiphase class action trial plans,¹⁶ limited issue classes,¹⁷ statistical damage sampling,¹⁸ and settlement classes.¹⁹ The aggregationist judges also introduced novel roles for judicial surrogates such as magistrates and special masters, greatly expanding their roles.²⁰ Judges appointed special masters to devise multiphase trial plans,²¹ to assess the existence of a limited fund,²² to assist with the Agent Orange settlement,²³ to create data bases of claimants’ alleged injuries and damages,²⁴ to supervise all pretrial matters and motions,²⁵ and to conduct discovery and hearings.²⁶

By the mid-1980s, the academic community embraced the aggregationist movement. The evolving mass tort landscape inspired scholarship commenting on, approving of, and suggesting innovative techniques for use of the class action rule.²⁷ A synergetic relationship developed between the judiciary and the academy, with scholars offering support for innovative initiatives such as statistical damage sampling.²⁸ Some professors became committed aggregationists when they undertook roles as special masters, expert witnesses,²⁹ or counsel involved in litigation.³⁰ Critical reaction to the aggregationist movement largely was muted.³¹

Nonetheless, some federal judges began to question the efforts of their aggregationist colleagues. In 1995–1996, three significant appellate decisions restricted district judges’ ability to continue to certify mass tort cases.³² These decisions set the aggregationist judges in tension with more conventional views on the legitimacy of group litigation. By the mid-1990s, critics began to question whether Rule 23 permitted the aggregationist judges’ activism.³³ Some suggested that the judges’ initiatives tested the limits of judicial authority under the Rules Enabling Act.³⁴ The judicial activism inspired the Advisory Committee on Civil Rules to place a reconsideration of Rule 23 on its agenda,³⁵ although the Advisory Committee held this in abeyance pending the Supreme Court’s decisions in two asbestos settlement classes.³⁶

By the end of the decade, the Supreme Court substantially limited innovative uses of Rule 23 with repudiation of two comprehensive asbestos settlement classes in Amchem and Ortiz, chiefly based on issues relating to the lack of adequate representation.³⁷ In these decisions, the Court held that settlement classes were legitimate but needed to satisfy all the same class certification requirements as litigation classes, except that the proponents need not show that a settlement class was manageable because the action would not be tried. The Court admonished that settlement classes were subject to heightened scrutiny at the time of judicial approval. The Court further indicated that in class actions where claimants had differing interests, adequacy of representation required that the settlement proposal incorporate structural assurances of due process protections to all class members. Finally, Justice David Souter took especial pains in Ortiz to admonish federal courts judges against any further “adventurous” use of the class action rule.³⁸

Mass tort class litigation did not become moribund because of the Court’s settlement class rulings or the appellate decisions limiting certification of mass tort cases. Instead, class counsel made a strategic choice to abandon federal courts and retreat to more hospitable state courts, which ushered in a decade of burgeoning state class litigation. Plaintiffs’ counsel forum-shopped for favorable state venues, which resulted in the emergence of what defense counsel haled into plaintiff-friendly state courts called “judicial hell-holes.”³⁹

Corporate defendants subjected to disadvantageous state class litigation lobbied Congress to enact the Class Action Fairness Act of 2005 (CAFA).⁴⁰ CAFA provided defendants with a removal provision to federal court, where defendants could rely on more restrictive federal jurisprudence to defeat class certification.⁴¹ CAFA’s enactment substantially succeeded in shifting class litigation back to federal court, federalizing class litigation.

When CAFA diverted state class actions to federal court, plaintiffs’ attorneys encountered class action jurisprudence that was increasingly restrictive and exacting.⁴² It became increasingly difficult for plaintiffs to plead class actions,⁴³ obtain class certification,⁴⁴ or accomplish settlement classes after Amchem and Ortiz.⁴⁵

By 2005, then, class action attorneys embraced two driving concepts: a need for reform of Rule 23 and class action jurisprudence, along with an emerging appreciation for non-class techniques for resolving complex disputes. A new generation of reform aggregationists emerged that included the older aggregationists of the 1980s, a new cohort of federal judges, and a younger generation of academics eager to embrace innovative ideas for resolving massive, complex cases both within and without the class action rule.

Although attorneys continued to pursue traditional class litigation, in the post-CAFA era the resolution of complex litigation shifted to innovative use of the federal multidistrict litigation statute.⁴⁶ Congress enacted the MDL statute in 1968 to assist federal judges dealing with that era’s electronic products antitrust litigation.⁴⁷ MDL procedure had, nonetheless, remained a statutory backwater for much of its history. Throughout the 1980s and 1990s the Judicial Panel on Multidistrict Litigation substantially declined to create mass tort MDLs.⁴⁸ This resistance abated in 1991 when the panel finally relented and authorized an asbestos MDL.⁴⁹

By 2005, plaintiffs’ attorneys and defense counsel began to align in interest in supporting a new paradigm for resolving complex litigation. Counsel on both sides of the docket realized that they profitably could use the underutilized MDL statute as a mutually advantageous umbrella to resolve large scale litigation for class and non-class claims resolution. This paradigm gave primacy to settlement negotiation, skipping the problematic processes of class certification at the front end.

Plaintiffs’ attorneys and defense counsel had good reasons to endorse a shift to the MDL umbrella for resolving complex litigation. For plaintiffs, accomplishing a class or non-class settlement under MDL auspices meant that plaintiffs might no longer be subjected at the outset of litigation to the heightened, restrictive class certification jurisprudence courts developed in the 1990s. Plaintiffs would not have to hazard expensive class certification proceedings that might result in denial, effectively ending their litigation. By postponing or circumventing class certification until the back end of litigation, plaintiffs could proceed with negotiations, settlement, and their attorney fees.

The use of the MDL umbrella similarly allowed defendants to bypass Rule 23 at the outset of litigation, sparing the considerable expense of class certification proceedings that might place the defendant in a disadvantageous negotiation posture if the court certified a class at the front end of litigation. Defense attorneys appreciated the shift to MDL auspices because it gave them freer rein in negotiating settlements where class agreements would be subject to judicial scrutiny only on the back end, with the concurrence of class counsel with whom they were then aligned in interest. If negotiated on a non-class basis, such agreements and fee arrangements would not be subject to the judicial scrutiny Rule 23(e) required, at all.

The modern era of expansive use of MDL auspices began with the Vioxx pharmaceutical litigation, which the Judicial Panel on Multidistrict Litigation approved as an MDL in 2005.⁵⁰ The Vioxx litigation provided a prototype of the twenty-first century MDL aggregate dispute resolution paradigm.⁵¹ After creation of the Vioxx MDL, the attorneys crafted a complex settlement agreement that derived its legitimacy based on contract principles rather than Rule 23 class action due process requirements.⁵² Notwithstanding an outpouring of critical commentary,⁵³ the Vioxx agreement provided a blueprint for subsequent large scale non-class aggregate settlements, including the Zyprexa MDL litigation.⁵⁴

The Vioxx and Zyprexa settlements also inspired the concept of the quasi-class action, intended to ameliorate problems engendered by the lack of judicial oversight of fee arrangements in MDL settlements.⁵⁵ Judge Jack Weinstein articulated the concept of the quasi-class action in the context of MDL litigation, where settlements are not subject to Rule 23 judicial approval. Judge Weinstein contended that settlements accomplished under an MDL umbrella had the attributes of a Rule 23 class action, hence these settlements constituted quasi-class actions that conferred authority on the supervising judge to oversee and modify attorney fees.

The ALI’s return to problem of complex litigation in 2004 may be understood as its effort to rethink the problem in the context of the paradigm shift evident at the beginning of the twenty-first century. Several consequences flowed from the federalization of class litigation post-CAFA and the Vioxx and Zyprexa MDL litigation. MDL proceedings began to proliferate after 2005.⁵⁶ If the 1980s and 1990s represented the high point of class litigation and experimentation, then MDL proceedings became the dominant paradigm for complex litigation procedure. The Judicial Panel on Multidistrict Litigation now rapidly authorized MDL designation whenever some product defect, pharmaceutical adverse event, antitrust, securities, or small claims consumer harm resulted in large-scale litigation.

By 2004 when the Principles project got underway, the new generation of aggregationists had a goal to reform class and non-class resolution of complex litigation. The twenty-first century aggregationists focused on Rule 23 amendment and judicial revision of Rule 23 jurisprudence. For twenty-first century aggregationists, Rule 23 and its prevailing restrictive class action jurisprudence were the problems.⁵⁷ In their view, the Supreme Court and unsympathetic judges stood in the way of attorneys desiring to resolve their complex cases.⁵⁸ More radically, these aggregationists endorsed the developing novel concept of non-class settlements. The aggregationists desired a more flexible, fluid, liberal approach to the resolution of aggregate litigation.

The ALI prides itself on speaking with a unique voice that encourages neutral expressions of Restatements and Principles.⁵⁹ The ALI Reporter’s handbook instructs writers to craft provisions that maintain a neutral perspective: “An ALI document represents the product of a collaborative drafting process and is intended ultimately to reflect the voice of The American Law Institute. It should be drafted objectively, in the third person, and not as if it were a personal essay. Its aim is to describe and analyze the law and its processes in a detached and neutral fashion.”⁶⁰

The academic Reporters chosen to draft the Principles as well as several of the project’s Advisers were committed to the goal of advancing and improving aggregative procedure.⁶¹ Many had with personal experience litigating complex litigation as consultants or counsel,⁶² or in their academic scholarship supporting and advocating on behalf of aggregationist innovations.⁶³ Moreover, the Reporters collaborated with one another in private sector litigation,⁶⁴ as well with attorneys conducting complex litigation who were members of the ALI Council or Advisers to the Principles.⁶⁵ Of the thirty-six Advisers, the overwhelming majority were judges involved in complex litigation who might fairly be described as aggregationists,⁶⁶ attorneys repeatedly involved in resolving complex litigation and seeking a more liberalized aggregation model,⁶⁷ or law professors who endorsed aggregationist views.⁶⁸ Notably absent were critics of evolving aggregationist procedure.⁶⁹

In the same fashion that the ALI prides itself on neutrality, the ALI also prides itself on its processes that encourage expression of competing views. The ALI’s draft and comment procedures enable plaintiff and defense counsel, judges, and scholars to express opposing perspectives which theoretically result in balanced statements of law or principles. A fair reading of the Principles, however, suggests that the ALI’s vetting procedures only partially tempered the views of its dominant aggregationists, but on many issues and through successive drafts, dissenting views were advocated and duly noted.

A contextual understanding of the relative posture of litigants involved in complex litigation assists in appreciating the Principles and the controversies it engendered. Litigants may pursue complex litigation through class or non-class procedure, which may unfold in different modalities that affect attorney decisions. The divergent strategic postures of adversarial parties illuminate motivations for several of the Principles’ proposals.

First, if litigants pursued an aggregate resolution of their dispute, they might accomplish this through a litigated class or a settlement class. If class counsel sought a litigation class, then defense counsel would vigorously contest certification of the proposed action. By 2004, plaintiffs’ attorneys chafed at and sought relief from restrictive Rule 23 class action jurisprudence that hampered their ability to obtain class certification. Plaintiffs’ lawyers and academic critics viewed Rule 23 constraints as an impediment to aggregate litigation. They sought relief from Rule 23 requirements for adequacy, predominance of common questions, superiority, limited issues classes, and choice of law. They desired relief from judicial rejection of mass tort class actions under Rule 23(b)(2) or (b)(3).

Defense counsel, on the contrary, had little interest in liberalizing Rule 23 or modifying prevailing jurisprudence which favored defense objections to class certification. If, however, a court certified a class action, defense interests then reverted to a settlement posture, in which defense interests aligned with plaintiffs’ in negotiating a settlement and obtaining judicial support for a negotiated agreement.

Second, if litigants pursued resolution through a settlement class, this frequently postponed the certification decision until after the parties reached agreement. At this point plaintiff and defense counsel were aligned in interest in obtaining judicial approval of their deal. By 2004, plaintiffs’ attorneys and defense attorneys were aligned in interest in supporting a more relaxed application of Rule 23 requirements needed to certify a class at the back end of the litigation.

Third, if litigants pursued resolution through a non-class settlement under an MDL umbrella, plaintiffs and defense counsel were aligned in interest in accomplishing a non-class settlement free from judicial management, oversight, and doctrinal constraints. By 2004, with the emergence of MDLs as a growing forum for resolution of complex litigation, plaintiff and defense counsel recognized their common interests in creating a model to accommodate these goals.

By 2004, the Reporters, judges, and attorneys involved in aggregate litigation were aligned in interest, centered on two broad concepts: (1) liberalizing class action procedure to enable more facile settlement negotiation and judicial approval, and (2) lessening judicial case management while increasing attorney control over complex settlements. Thus, where litigation adversaries in the ordinary course might counterbalance the most extreme tendencies in each other, to an unusual extent the Reporters’ and Advisers’ aggregationist goals instead encouraged collaboration in support of a certain model of aggregate procedure.

The Reporters’ desire to accomplish a wholesale root-and-branch revision of class and non-class aggregate litigation was manifested in Chief Reporter Samuel Issacharoff’s first memorandum to the Advisory group in August 2004, when he announced that the project would introduce “the discomfort of all the Reporters (Professors Nagareda and Silver, in addition to me) with the current inquiry into predominance and superiority found in the current Federal Rules of Civil Procedure.”⁷⁰ After several contentious early drafts, critics noted that there appeared to be only one guiding principle to the Principles, which was “to change the law in numerous ways to facilitate the creation of ever more class actions and other forms of mass litigation.”⁷¹ This included “consciously breaking with the prevailing terminology found in almost all class action jurisprudence, dispensing with predominance and superiority and the rest of the analytical framework used by courts.”⁷²

While the multilayered ALI vetting process tempered some of the Reporters’ initial aggregationist goals, the final Principles represented an impressive example of nimble crafting to nudge the law in a more favorable direction. While acknowledging disputes in current jurisprudence, the Reporters often showed a marked preference for rules supporting aggregation. Where existing law relied on formalism, the Reporters rejected recognized categories and instead articulated a more “functional” approach to achieve aggregation. The Principles most inventive contribution, however, was creation of new terminology to provide broad leeway to assist in aggregationist ends.

By 2004, the aggregationists had distilled their reform efforts to a universe of a dozen prime targets, which became the focus of the Principles project. These included: (1) endorsement of liberalized, expansive judicial consideration of adequacy requirements, (2) restriction or reversal of the Supreme Court holdings in Amchem and Ortiz, (3) restriction or reversal of the Second Circuit’s post-judgment collateral attack holdings in Stephenson v. Dow Chemical, (4) endorsement of restrictive intersystem preclusion of duplicative class litigation, (5) endorsement of liberalized, expansive judicial application of predominance requirements, including expansive views of choice-of-law issues, (6) endorsement of liberalized, expansive use of the limited issue class, (7) endorsement of a presumption of settlement fairness, (8) endorsement of unified criteria to assess settlement fairness, (9) endorsement of appropriate use of cy pres relief, (10) endorsement of contractual non-class settlement agreements, (11) endorsement of alternatives to the aggregate settlement rule, and (12) endorsement of limited judicial review for non-class aggregate settlements.

The Principles set forth thirty-five sections. The introductory provisions broadly defined aggregate litigation and general principles. Subsequent sections addressed granular topics such as the handling of common issues, substantive law, and preclusion as constraints on aggregation, judicial case management, and class and non-class settlements. Much like Restatements, each section set forth black-letter principles citing judicial authority and illustrative examples. Each section concluded with Reporters’ Notes that assessed of the effect of proposed modifications on current law.⁷³

The Reporters’ Notes indicated whether the Principles might be implemented through legislative or rulemaking initiatives, judicial interpretations, or without change to existing law. Consistent with an intended reform of existing law, many of the Principles embodied a pro-aggregation approach that favored plaintiffs in class litigation practice, and plaintiffs and defense counsel in settlement settings. As will be seen, the Advisory Committee on Civil Rules adopted some of the Principles recommendations chiefly regarding class settlements, but very few courts embraced the Principles’ core proposals. In addition, some of the proposals most likely would have been adopted without encouragement from the project.

The Principles’ chief impact has been through Rule 23 amendments. In 2018, the Advisory Committee on Civil Rules adopted several recommendations regarding class action settlements and notice. Legislative bodies, however, have not adopted other proposed statutory or rulemaking recommendations.

An emerging issue in class action procedure centered on the extent to which claimants in a class action might be bound by the preclusive effect of any determination made on an aggregate basis. The Principles addressed this issue by providing claimants an opportunity to avoid preclusive effects by excluding themselves from an aggregate proceeding.⁷⁴ To accomplish this goal, the Principles noted that implementation of this due process protection would require an amendment to Rule 23(c)(2)(B) to add language requiring “appropriate notice.”⁷⁵

In 2018, the Advisory Committee on Civil Rules amended Rule 23(c)(2)(B) to add language requiring “appropriate notice.”⁷⁶

A contested area of class action jurisprudence concerned judicial approval of class settlements prior to class certification. The Principles proposed that judges be given limited oversight to scrutinize pre-certification settlements.⁷⁷ The Reporters noted that such a requirement of judicial approval of precertification settlements with class representatives would require a change in federal law.⁷⁸

In 2018, the Advisory Committee on Civil Rules amended Rule 23(e) to add language to indicate that the Rule 23(e) requirements extended to pre-certification classes proposed to be certified for settlement.⁷⁹ The rule was amended to require that parties must provide the court with information sufficient to enable the court to determine whether to give notice of the proposal to the class.⁸⁰

The Principles noted that federal courts applied a wide array of factors for evaluating a settlement, but rarely indicated the significance that judges should give to each factor. To bring order to judicial review of settlements the Principles in Section 3.05 recommended four factors to guide this evaluation.⁸¹ The Principles set out a black-letter rule that in reviewing a proposed settlement, a court should not apply any presumption that the settlement is fair and reasonable.⁸² The Reporters indicated that a rule change would be necessary to implement these recommendations.⁸³

In 2018, the Advisory Committee on Civil Rules amended Rule 23(e) to incorporate the four factors that the Principles recommended.⁸⁴ The Advisory Committee did not adopt the Principles’ settlement recommendations wholesale, however. The Advisory Committee did not adopt the principle that the failure to satisfy any of the criteria rendered a settlement unfair, the rule against the presumption of settlement fairness, or judicial authority to withhold approval until the parties amended a settlement in a manner the court specified.

A few courts have cited Section 3.05 for the settlement factors courts should consider when evaluating the fairness of a settlement.⁸⁵

Rule 23(f) provides litigants with an interlocutory appeal of orders certifying or denying class certification. Rule 23(f) did not address the availability of interlocutory appeals of orders rejecting settlements on fairness grounds. To remedy this situation, the Principles authorized a discretionary interlocutory appeal from orders definitively and finally rejecting a class action settlement.⁸⁶ The Reporters suggested that no new statute was necessary to implement this type of appellate review.⁸⁷ In 2018, the Advisory Committee on Civil Rules amended Rule 23(f) to clarify that approval of a settlement class before final judicial approval did not entitle litigants to an interlocutory appeal at that time; such appeal must await the court’s final decision to certify the class at the time of settlement approval.⁸⁸

The Principles endorsed a more relaxed embrace of certification of limited issue classes. To accomplish this, the Principles noted that legislation would be required to offer litigants an opportunity to pursue an interlocutory appeal when a court made a merits determination of a common or limited issue in a class action.⁸⁹ This appeal would be in addition to the existing interlocutory appeal provision in Rule 23(f). The Advisory Committee has not amended Rule 23 to add such a provision to Rule 23(f).

The Reporters’ Notes to Section 2.04 suggested that it might be helpful to achieve more liberalized certification of Rule 23(b)(1)(A) and (b)(2) classes by amending the text of Rule 23 to incorporate the vocabulary of divisible and indivisible remedies.⁹⁰ The Advisory Committee has not amended Rule 23 to adopt the language of divisible and indivisible remedies to characterize Rule 23(b)(1)(A) and (b)(2) class categories.

Section 2.10 of the Principles provided judicial authority to create opt-in mechanisms for voluntary claim aggregation by affirmative claimant assent.⁹¹ Existing class action jurisprudence authorized only opt-out class actions and does not approve of opt-in classes. The Reporters rejected the Second Circuit’s decision in Kern v. Siemens Corp.,⁹² in which the court repudiated certification of a Rule 23 opt-in class that included foreign claimants of a ski train accident in Kaprun, Austria.⁹³ The Reporters noted that Section 2.10 was based on the expectation that aggregation by consent would remain exceptional.⁹⁴ Section 2.10 reflects the Reporters’ preference for an expansive reach of aggregate litigation that would permit litigation embracing foreign claimants that would not otherwise be suitable for certification under existing Rule 23 jurisprudence.

The Reporters noted that if the Second Circuit was correct in repudiating an opt-in class under Rule 23, then a rule amendment might be necessary to effectuate authorization of an opt-in class.⁹⁵ The Advisory Committee on Civil Rules has not amended Rule 23 to provide for an opt-in right.

The Principles eschewed decisions giving rise to a presumption that a settlement is fair, adequate, and reasonable if the court gives preliminary approval of a settlement prior to a final hearing.⁹⁶ Instead, the Principles endorsed use of preliminary approval to identify and address problems relating to notice or substantive defects in a proposed settlement.⁹⁷ The Reporters indicated this would require a change in existing law where courts require preliminary approval before notice to class members.⁹⁸ The Principles also required that judges make findings of fact and conclusions of law on the record in approving or rejecting a settlement.⁹⁹ The Reporters noted this proposal goes beyond current cases and would require a change to existing practice.¹⁰⁰ The Advisory Committee on Civil Rules did not amend Rule 23 to provide guidance for preliminary approval of settlements based on Principles’ recommendations.

The Principles provided judges leeway not to order individual notice in cases where likely recovery to class members was too small to justify the costs of providing notice.¹⁰¹ The Principles stated: “Individual notice should be presumptively viewed by a court as less important when the claims are likely too small to be pursued individually in the absence of a class action.”¹⁰² This provision rejected the Eisen requirement of individual notice, even in small-claims cases.¹⁰³ Instead, the Reporters suggested that under the Due Process Clause, it was more important to balance the benefit of notice against the cost of providing notice.¹⁰⁴ The Reporters indicated this would require a change in procedural rules where a jurisdiction’s rules mandated individual notice regardless of the size of individual class members’ claims.¹⁰⁵

The relaxation of notice requirements for small-claims class actions embodied a pro-aggregationist position, encouraging small claims litigation free from potential constraints of onerous notice costs for plaintiffs or defendants. The Advisory Committee on Civil Rules has not relaxed the notice requirement for small-claims class actions.

During the 1990s a major controversy centered on the standard for judicial approval of a Rule 23(b)(3) settlement class.¹⁰⁶ The Supreme Court resolved this controversy in its 1997 Amchem decision, holding that (b)(3) settlement classes needed to satisfy all the same criteria for certification as litigation classes, except for the manageability requirement.¹⁰⁷ Additionally, the Court held that intraclass conflicts of interest among class members defeated the Rule 23(a) requirement for adequacy. The Amchem and Ortiz holdings concerning the adequacy requirement provided the basis for the Second Circuit decision that permitted a collateral attack of the Agent Orange settlement in Stephenson v. Dow Chemical Co.¹⁰⁸

The aggregationists believed the courts had wrongly decided Amchem, Ortiz, and Stephenson. Repudiation of these decisions became a prime target for reform because the aggregationists believed these decisions hampered the liberal approval of settlement classes. To this end, the Principles set forth a provision that permitted approval of a Rule 23(b)(3) settlement classes based on three criteria: (1) an ascertainable class, (2) simple commonality, and (3) numerosity.¹⁰⁹ The Principles eliminated the predominance requirement.¹¹⁰ The Reporters noted that a move away from Amchem’s interpretation of Rule 23 would potentially require a rule change.¹¹¹

The Advisory Committee on Civil Rules in 2018 did not adopt the recommendations for a more liberalized standard for judicial approval of settlement classes. The Reporters’ Notes pointed out that the Advisory Committee had considered creation of relaxed standards for approval of a settlement class after Amchem but had rejected this approach.¹¹²

By 2004, courts disagreed on the legitimacy of cy pres relief where monetary distribution to class members was not viable on an individual basis. Among courts that permitted cy pres relief, jurisdictions disagreed concerning the circumstances in which cy pres was appropriate. Thus, some courts held that cy pres relief was permissible only when class members were too difficult to identify, funds were too small to distribute economically, or unclaimed funds existed.¹¹³ In Section 3.07 the Reporters approved cy pres relief and set forth criteria to assist courts in determining when cy pres relief was appropriate.¹¹⁴ The Reporters noted that in some jurisdictions a rule change might be necessary to establish the precise circumstances in which cy pres awards might be allowed.¹¹⁵ Much to the Reporters’ surprise, Section 3.07 became the most cited section of the Principles,¹¹⁶ with many courts ratifying the Principles’ approach to cy pres relief in certain circumstances.¹¹⁷ The Advisory Committee on Civil Rules in amending Rule 23 did not adopt a provision concerning cy pres relief.

The Principles provided class members a second opportunity to opt-out of a settlement where the settlement terms had not been revealed until after the initial period for opting out. This provision also mandated that a court make an on-the-record finding of its reasons if the court declined to allow a second opt-out.¹¹⁸ The Reporters indicated that this provision would require adoption of a new procedural rule creating a presumption in favor of a second opt-out and requiring on-the-record findings where a second opt-out was not provided to class members.¹¹⁹ Although Rule 23 has provided for a second-opt out since 2003,¹²⁰ the current rule creates no presumption in favor of a second opt-out nor does it require on-the-record findings if a judge declines to order a second opt-out.

In many instances the Reporters suggested that courts could implement the Principles through judicial interpretation without the need for legislative enactment. Since the first Preliminary Draft in August 2004¹²¹ through July 2021 courts have cited the Principles sixty times. This includes eight citations before the 2010 publication,¹²² thirty-eight federal appellate and district court citations after the 2010 publication,¹²³ eight unreported federal district opinions,¹²⁴ and six state court cases.¹²⁵ If the unreported and state decisions are removed from this survey, federal appellate and district courts have cited the Principles forty-six times.

Judicial pre-publication citation to Principles drafts provides insight into the sections that would gain judicial attention after final approval. This small cohort of cases cited with approval the Principles’ endorsement of a liberalized view of the predominance requirement,¹²⁶ the Principles’ articulation of factors to govern certification of a limited issue class,¹²⁷ and the Principles’ recommendation for a second opt-out provision where settlement terms changed after a first opt-out period.¹²⁸ In three cases courts agreed with the Principles’ approach to the use of cy pres remedies¹²⁹—the single principle that subsequently garnered the most judicial attention after final publication.¹³⁰ One court cited the Principles in a footnote for the proposition that a denial of class certification should give rise to a rebuttable presumption against the same aggregate treatment in other courts as a matter of comity.¹³¹

Perhaps the most interesting citation to the Principles occurred early in the drafting process. Judge Jack Weinstein, a Principles’ Adviser, used his supervision of the Zyprexa litigation in 2006 to express dissatisfaction with the Second Circuit’s Stephenson decision permitting collateral attack on a prior settlement.¹³² His citation to the Principles supports the thesis that limiting or overturning the Stephenson decision was a major target of the aggregationists’ agenda.

Litigants can pursue class litigation in federal and state court arising out of the same claims. A preclusion problem arises where a litigant might defeat class certification in federal court but be subject to class certification for the same claims in state court. The Reporters rejected the Seventh Circuit’s view that issue preclusion applies to a prior denial of class certification¹³³ and stated that the Seventh Circuit’s conclusion represented a minority view among federal circuits.¹³⁴

To avoid intersystem preclusion, the Reporters in Section 2.11 set forth a principle that a court’s denial of class certification should raise a rebuttable presumption against the same aggregate treatment in another court as a matter of comity (and not strict preclusion rules).¹³⁵ The Reporters indicated that this approach could be implemented by judicial interpretation without the need for a rule change.¹³⁶

By couching the rebuttable presumption based on comity rather than the strict issue preclusion rules, the Reporters skewed their preference for plaintiffs’ class litigation to proceed in subsequent forums free from the formal preclusive constraint of a prior denial of class certification elsewhere.

In 2011, the Supreme Court cited Section 2.11 in a footnote to its decision in Smith v. Bayer,¹³⁷ for the proposition that a denial of class certification in one jurisdiction could not bind proposed class members in another jurisdiction.¹³⁸ In 2015, the Ninth Circuit adopted Section 2.11, holding that where a district court faced an earlier denial of class certification in a different district court, the second court should adopt a rebuttable presumption of the correctness of the earlier decision based on comity principles.¹³⁹ A New Mexico district court cited Section 2.11 in a footnote for the proposition that res judicata does not apply to a denial of class certification.¹⁴⁰

To the Reporters’ surprise, the Principles’ proposal for cy pres relief in Section 3.07 generated the most judicial attention and partial endorsement.¹⁴¹ Seventeen of the forty-six cases citing the Principles engaged with the Section 3.07 provision for cy pres relief. Section 3.07 embodied a policy choice favoring cy pres relief but would presume further distributions to participating class members unless subsequent distribution to individual class members involved small amounts that would render distribution infeasible, or if “other specific reasons exist that would make such further distributions impossible or unfair.”¹⁴²

For a court to order and approve a cy pres remedy, the parties recommending cy pres relief carried the burden to demonstrate by convincing evidence that the parties had no prior “significant meaningful relationship” or affiliations with the intended cy pres recipients. Section 3.07 addressed the question of cy pres recipients and set forth a “reasonable approximation” standard.¹⁴³ Thus, recipients of cy pres funds should be those “whose interests reasonably approximate those being pursued by the class,” who “can be identified after thorough investigation and analysis.”¹⁴⁴ If there were no such recipients, then a court might approve a recipient who did not reasonably approximate class interests.¹⁴⁵

The First, Third, Seventh, and Eighth Circuits approved several Section 3.07 provisions for cy pres relief, although with some qualifications.¹⁴⁶ Not all federal judges have been enamored of the Reporters’ preferences for cy pres relief or the way it should be implemented. Thus, Third Circuit Judge Joseph F. Weis dissented from cy pres relief in preference for further distributions to class members. In contrast to the Section 3.07 provisions, Judge Weis indicated that he would redistribute any remaining funds to class members where possible or have funds escheat to the government.¹⁴⁷

Fifth Circuit Judge Patrick Higginbotham held that a district court abused its discretion in ordering unused funds to be distributed to charities instead of distributing them to a subclass of individuals who had suffered injuries.¹⁴⁸ He indicated that settlement fund proceeds generated by the value of class members’ claims belonged solely to class members.¹⁴⁹ And Fifth Circuit Judge Carolyn Dineen King rejected cy pres relief in the Katrina Canal Breach litigation, where notice to class members failed to apprise them of the possibility that they might not receive any direct benefit from the settlement.¹⁵⁰

Eighth Circuit Judge Diana E. Murphy dissented from her court’s rejection of a cy pres award where the majority determined the district court abused its discretion in selecting a charity that was not the “next best recipient” under Section 3.07 standards. Judge Murphy contended that the court had not yet adopted Section 3.07 and the litigants had not argued it in the district court.¹⁵¹ Acknowledging that the First, Third, and Fifth Circuits had endorsed Section 3.07, Judge Murphy concluded that the district court had not abused its discretion in choosing the cy pres recipient.¹⁵²

Ninth Circuit Judge M. Margaret McKeown noted that although the circuit had yet to adopt Section 3.07, it joined the Eighth Circuit in embracing a preference for direct distribution to class members of excess funds in lieu of cy pres relief.¹⁵³ In addressing the Section 3.07 “significant prior relationship” test for determining a cy pres recipient, the court noted that this suggestion was unsupported by any illustration, case law, or other authority.¹⁵⁴ Judge John Clifford Wallace, concurring and dissenting in part, recommended that the Ninth Circuit adopt Section 3.07 with the burden on class counsel through sworn testimony to show that prior affiliations played no role in the selection of a cy pres recipient.¹⁵⁵

Several district courts also have cited Section 3.07 provisions with approval.¹⁵⁶ However, some district courts have flagged potential problems with the ALI’s approach, especially where cy pres is the exclusive remedy and class members will receive no relief at all.¹⁵⁷ The court’s identification of the problem of a “cy pres only” class was prescient, and the Supreme Court has signaled its willingness to address this issue.¹⁵⁸

Courts determine class counsel fees based on one of three methodologies: (1) a percentage of the common benefit fund, (2) a lodestar approach, or (3) a combined methodology of a percentage with a lodestar cross-check. The common benefit approach awards the plaintiffs’ attorneys a percentage of the common benefit fund they have accomplished for the class in the settlement. The lodestar approach tasks the judge with reviewing the attorneys’ hourly billing rate and hours expended, to determine a fee lodestar. The lodestar is then adjusted upward by a multiplier. In jurisdictions applying a hybrid approach, the court first determines a common fund percentage fee, but cross-checks that percentage by analyzing the fees under a lodestar approach.

In Section 3.13 the Principles rejected cases preferring the lodestar approach solely or that allowed a court to choose between the lodestar or percentage methods.¹⁵⁹ Instead, the Principles endorsed an attorney fee regime based on the percentage approach, but permitted judges to use a lodestar cross-check under certain circumstances.¹⁶⁰ The Principles also required that attorney fees be based on the actual value of the judgment or settlement to class claimants¹⁶¹ and rejected cases that awarded attorney fees based on the total fund without regard to the actual value of the judgment or settlement.¹⁶²

Only two district courts have referred to Section 3.13’s discussion of methodologies for determining attorney fees.¹⁶³

An impediment to certifying diversity class actions arises from the presence of multiple laws that would defeat the predominance requirement for class certification under Rule 23(b)(3). The Principles recognized five basic approaches to evaluating choice-of-law problems in relation to class certification, endorsed three, and rejected two.¹⁶⁴ The Reporters indicated that its proposals for assessing choice-of-law problems could be accomplished through judicial decision, with no need for a national choice-of-law statute.¹⁶⁵

The Principles approach in Section 2.05 provided more judicial latitude in certifying classes with applicable law issues.¹⁶⁶ Thus, the Principles eschewed traditional doctrinal analysis in favor of a more open-ended methodology. The traditional, doctrinal approach to the applicable law problem in relation to the predominance requirement asked the judge to assess whether the differences among state laws created so many individual issues so as to defeat the predominance of common questions. Typically, in most class actions where state law differed (for example, state tort law principles), the presence of these differences would defeat the predominance requirement as well as certification of a Rule 23(b)(3) damage class action.

The Principles Reporters found the traditional approach to the applicable law problem in relation to satisfaction of the predominance issue to be too constricting and too often used to defeat class certification. Instead, the Reporters suggested that in litigation involving multiple bodies of law, “[t]he real question for the court is not a formal one (whether multiple bodies of law apply to the claims for which aggregate treatment is sought) but, rather, a functional one (whether bodies of law are relevantly the same in functional content).”¹⁶⁷

In providing a framework for analysis of choice-of-law issues based not on formal law but rather on an opaque concept of functionality, the Principles endorsed an aggregationist solution that favored plaintiffs. Thus, Section 2.05 potentially relieved plaintiffs from the strict doctrinal approaches most federal courts used when confronted with applicable law issues and provided leeway for certifying such class litigation.

One district court, in a proposed multistate class action, cited Section 2.05 to support creation of subclasses to address variations in state law.¹⁶⁸

In many sections the Reporters suggested that courts might accomplish their recommendations with no change to existing law because prevailing jurisprudence already encompassed their proposals. In some instances, the Reporters shaded their views in favor of aggregationist outcomes. Consistent with the view that existing law already embraced some of the project’s recommendations, a few courts have cited the Principles for such unremarkable propositions as the need for adequate class representatives and their fiduciary duties.¹⁶⁹ Because courts already employ various judicial adjuncts, courts have not cited the Principles’ uncontroversial provision relating to the use of adjuncts.¹⁷⁰

By the early twenty-first century, federal courts disagreed concerning the proper certification of limited issues classes under Rule 23(c)(4)(a). The core issue concerned whether courts could certify limited issues classes that did not independently satisfy the Rule 23(b)(3) predominance requirement. For example, plaintiffs’ attorneys could propose a class limited to determination of the liability issue, leaving apart any consideration of damage issues (where individual damages of class claimants would defeat predominance). Because the attorneys so narrowly proposed a class certification limited to one or more issues in the litigation, this approach avoided the problem that other issues such as damages would defeat the predominance requirement. Some appellate courts, most notably the Fifth Circuit, rejected the view that limited issue classes could be certified without meeting the predominance requirement, arguing that proposed limited issue classes could not accomplish an end run around the Rule 23 predominance requirement.¹⁷¹

In Section 2.02, the Reporters canvassed competing jurisprudence and embraced the trend to permit certification without a predominance requirement. The Principles incorporated language from decisions that set forth multiple conditions to certify a limited issue class. The Principles permitted certification where it would “materially advance the resolution of multiple civil claims by addressing the core of the dispute in a manner superior to other realistic procedural alternatives, so as to generate significant judicial efficiencies.”¹⁷²

The Reporters’ Notes stated that the approach in Section 2.02 was “designed to lend precision to the inquiry presently undertaken by the courts within the vocabulary of existing procedural law.”¹⁷³ In so doing, the Principles eschewed the competing view that required proposed limited issues classes to satisfy the Rule 23(b)(3) predominance requirement. While Section 2.02 gave aggregationists a victory that allowed for a more liberalized certification of limited issues classes, the Reporters’ Notes also recognized that courts generally had not certified issues classes in products liability and personal injury classes.¹⁷⁴

A few courts have referred to Section 2.02 and its standards in certifying or refusing to certify limited issues classes,¹⁷⁵ but the Principles recasting of the criteria for approving limited issues classes has not, to date, gained widespread traction among federal courts.

By 2004, most federal courts resisted certifying certain proposed class actions under Rule 23(b)(1)(A), Rule 23(b)(1)(B), and (b)(2), commonly understood as mandatory, non-opt-out classes. Typically, these proposed actions sought injunctive relief based in equity. Where a proposed (b)(2) injunctive class also entailed damages, such as in some employment discrimination litigation, courts typically refused to certify the class, except in narrow instances where damages could be shown to be incidental to the injunctive relief. In addition, many courts refused to certify proposed mass tort medical monitoring classes under Rule 23(b)(1)(A) or (b)(2) because medical monitoring classes could not be used to obtain damages as an end run around the Rule 23(b)(3) predominance requirements, or where the class members lacked “cohesiveness.”¹⁷⁶

The Reporters’ solution to the impediments to certifying Rule 23(b)(1)(A) and (b)(2) classes was simply to define the problem away in Section 2.04. Thus, eschewing the classic distinctions between law and equity-based class actions, the Reporters instead created a new vocabulary of divisible and indivisible remedies to guide analysis.¹⁷⁷ In addition, the Reporters changed existing law to afford litigants a right to exit the class where the action entailed a damages remedy.¹⁷⁸

The Reporters suggested that “[t]he vocabulary of this Section—focused on the functional distinction between divisible and indivisible relief rather than on the formal categories of law and equity—was designed to explicate with greater precision the approach taken in recent years by courts under the auspices of Rules 23(b)(1)(A) and (b)(2).”¹⁷⁹ The Principles then substituted its rhetorical preference to liberalize certification of Rule 23(b)(1)(A) and (b)(2) class actions, replacing existing doctrinal jurisprudence and eroding doctrinal distinctions among existing class categories.

Finally, the Reporters noted that it might be helpful to achieve this end by amending Rule 23 to incorporate the vocabulary of divisible and indivisible remedies, but that amendment of Rule 23 was not necessary for courts to implement the approach of Section 2.04.¹⁸⁰

Since 2010, courts have not engaged with Section 2.04 or its proposal for courts to reconsider class certification of proposed (b)(1)(A) and (b)(2) classes using a functional approach. Instead, the only reference to Section 2.04 has been in support of refusal to certify a medical monitoring class because of the presence of individualized issues, relying on established jurisprudence.¹⁸¹

A major target of the aggregationists was the Second Circuit’s decision in Stephenson v. Dow Chemical¹⁸² and the application of the Rule 23(a) adequacy requirement for class certification. In Stephenson, the court upheld a collateral attack by Vietnam veterans challenging the preclusive effect of a prior Agent Orange settlement because of a lack of adequate representation at class certification. The court permitted the collateral attack because of conflicts of interest between currently injured and future claimants.

The Reporters contended that Stephenson was wrongly decided because the court relied on conflicts engendered by the settlement agreement and not on class conflicts present at the time of certification.¹⁸³ The Reporters disapproved of Stephenson because it undermined the finality of class settlements, rendering agreements vulnerable to collateral attack on adequacy grounds years after settlement approval.¹⁸⁴ Section 2.07 called for a limitation of Stephenson by redefining adequacy to narrowly embrace a duty of loyalty of attorneys and claimants to avoid “structural conflicts of interest” at class certification.¹⁸⁵

Although the Reporters’ root-and-branch attempt to repudiate the Stephenson decision recast class preclusion doctrine, the Reporters nonetheless characterized their provisions as merely describing “the emerging understanding of due process in the context of aggregate litigation.”¹⁸⁶ In attacking Stephenson, the Reporters stated that the Stephenson decision had not “garnered much following in subsequent case law.”¹⁸⁷ The Reporters utilized Stephenson to more broadly criticize existing judicial decisions construing the Rule 23(a) adequacy requirement.¹⁸⁸

Since 2010, no court has cited Section 2.07 concerning intersystem preclusion and collateral attack of prior class decisions.

The problem of settlement of future claimants in mass tort litigation was a focal point in the Supreme Court’s Amchem and Ortiz decisions.¹⁸⁹ The Court repudiated two nationwide global settlements of asbestos claims because of findings that the class representatives had not adequately represented future claimants in the litigation and settlement negotiations.¹⁹⁰ The Court’s analysis centered on the intraclass conflict between presently injured and future claimants who had not manifested injury at the time of settlement. The Court indicated that intraclass conflicts should be addressed by structural assurances of due process¹⁹¹ but did not specify what structural assurances would satisfy this requirement.

The aggregationists criticized the Court’s treatment of the future claimant problem in Amchem and Ortiz as “overly formalistic,”¹⁹² noting that many settlements were denied approval because of the parties’ failure to create subclasses of litigants with differing interests. The aggregationists complained that the requirement to create subclasses frequently increased cost of litigation and magnified difficulties of accomplishing settlement in the presence of numerous represented parties. The aggregationists favored a more liberalized approach to the approval of settlement classes, centering analysis on a settlement’s avoidance of “structural conflicts of interest” among class members.¹⁹³ In Section 3.10, the Reporters suggested that their proposal was consistent with “emerging trends in mass-harm settlement,” but was nonetheless “inconsistent with some of the more formalistic readings of Amchem and Ortiz.”¹⁹⁴ Again, the Reporters skewed their views of an emerging trend to comport with their goal of nudging courts towards a more relaxed acceptance of settlement classes with differing claimant interests.

Since 2010, no courts have cited Section 3.10.

The Principles endorsed existing class action jurisprudence that provided objectors with compensation when their objections materially improved a settlement.¹⁹⁵ The Reporters noted that this provision reflected existing authority and would not require a rule change.¹⁹⁶ However, a gap in the law existed regarding objector compensation when objectors successfully convinced a court to reject a settlement in its entirety. In Section 3.08, the Principles provided a mechanism for awarding objectors fees in this circumstance.¹⁹⁷ The Reporters suggested that this provision arguably would not require a rule change.¹⁹⁸

The Reporters also set forth provisions to sanction class counsel and defense attorneys who misrepresented the benefits of settlements, or objectors pressing insubstantial objections that were not reasonably advanced for the purpose of improving or rejecting a settlement.¹⁹⁹ The Reporters indicated that these sanctioning provisions might require a rule change in jurisdictions whose rules did not cover these situations.

A court has cited Section 3.08 once, declining to sanction an objector for filing an alleged frivolous appeal.²⁰⁰

The Principles most controversial provisions centered on proposals to govern non-class aggregate settlements.²⁰¹ When the Principles project began in 2004, courts had scant experience with non-class aggregate settlements accomplished under an MDL umbrella. By 2010, the use of MDL procedure for aggregating claims was burgeoning along with non-class aggregate settlements.²⁰² The Reporters favored development of non-class settlements grounded in contractual principles rather than the due process representational principles undergirding traditional class litigation. The new non-class aggregate settlement paradigm invested substantial power in the attorneys litigating these cases, and substantially less judicial authority in judges overseeing MDL litigation. The Reporters therefore attempted to set forth liberal principles that endorsed and supported this procedural development.

The Principles defined non-class aggregate settlements in terms of the interdependency of claimants with a potential for conflict of interests among individual claimants. Unlike class litigation where class claimants are represented by class counsel who have a fiduciary duty to all class claimants, claimants in a non-class aggregate settlement are represented individually by many attorneys. The claimants may have claims that vary in liability theories or damages or other remedies. In such an aggregate settlement situation, all claimants must be informed of potential or actual conflicts and consent to the aggregate settlement. The Principles therefore identified the central problem of non-class settlements as an ethical problem in the context of the aggregate settlement rule.²⁰³

The Principles’ most controversial proposals set forth alternative circumstances in which non-class aggregate settlements could bind individual claimants, entailing different concepts of consent. Thus, claimants would be bound if each were permitted to review the settlements of all others subject to the agreement, or to the formula by which proceeds would be divided among claimants.²⁰⁴ In addition, claimants would be bound if each participating claimant entered into a written agreement to be bound to a substantial-majority vote of all claimants concerning an aggregate settlement proposal.²⁰⁵ Finally, claimants to a non-class aggregate settlement were provided with only limited avenues for judicial review.²⁰⁶

Legislative or rulemaking bodies would need to set forth the criteria for settlements that could be resolved by substantial majority vote of claimants.²⁰⁷ The Reporters acknowledged that their proposals departed from existing rules of professional responsibility in all jurisdictions.²⁰⁸ The Reporters included a proposed model rule for how the provisions for non-class aggregate settlements might be codified.²⁰⁹

The Principles’ provisions for non-class aggregate settlements were interesting for what the Reporters did not address. They did not address issues relating to judicial management over non-class settlements conducted under MDL auspices, including judicial authority to make interim rulings or orders. The Reporters did not address issues relating to attorney fee arrangements in non-class aggregate settlements or judicial authority over non-class aggregate fee arrangements. Nor did they address issues relating to appointment of counsel in non-class aggregate settings, or judicial authority to approve or disapprove a non-class aggregate settlement.

Since 2010, the use of MDL procedure to aggregate cases has increased dramatically.²¹⁰ It is difficult to assess non-class aggregate settlements because such settlements typically do not result in published records. In a relatively small number of instances non-class settlements have garnered attention when there are disputes relating to attorney fees.²¹¹ Thus, it is difficult to assess the extent to which the Principles’ proposals for non-class aggregate litigation have gained traction in federal or state courts. To date, only one court has cited these provisions.²¹² This does not mean, however, that actors in arena are not conducting their aggregate litigation in conformity with and reliance on the Principles.

Ironically, perhaps, the Principles of the Law of Aggregate Litigation was outdated when finally published in 2010. In carefully crafting the Principles during the first decade of the twenty-first century, the Reporters were fighting the last complex litigation wars of the 1990s. Thus, the Reporters devoted most of their efforts to recast Rule 23 class action litigation and jurisprudence. The Principles project largely eluded the most significant development in complex litigation after 2010: the MDL domination of the federal civil docket and developing problems with the resolution of aggregate litigation under MDL auspices.

One may understand the Principles’ lack of attention to MDL litigation because the earliest MDLs to draw attention emerged after the ALI launched the Principles project in 2004. Moreover, during the five years drafting the Principles, the troubling issues relating to MDL aggregate litigation were nascent and developing slowly. However, aware of this background, parallel universe of MDL litigation, the Reporters envisioned and proposed a non-class aggregate settlement regime and tacked a few novel controversial sections to the end of the Principles.

The impact of the Principles can be judged on its own terms. On the one hand, the project accomplished its greatest success with the 2018 Rule 23 amendments that codified recommendations relating to class action settlement and notice. On the other hand, it took the Advisory Committee on Civil Rules eight years after publication of the Principles to amend Rule 23. Moreover, the 2018 Rule 23 amendments can hardly be characterized as a radical rewriting of the class action rule.

Never known as a radical institution forging revolutionary changes to federal procedure, the Advisory Committee proceeded as it always has done: glacially, deliberately, and conservatively. Thus, consistent with prior practice, the Advisory Committee merely codified what by 2018 had become well-received practice. One might question whether the Advisory Committee independently might have amended Rule 23 in the same fashion, without the nudge from the Principles’ project. Notably, the Advisory Committee did not amend Rule 23 to effectuate the Principles’ more radical suggestions, including recasting the terminology of class action procedure or changing existing class categories. The Advisory Committee did not create an opt-in class, and again declined to add a Rule 23 provision for certification of settlement classes by applying liberalized standards.

Regarding the Principles’ judicial impact, the Reporters’ efforts to inspire reinterpretation of class principles through judicial interpretation have had scant impact. Compared to Restatement projects, it might fairly be said that the Principles has garnered meager judicial attention over the nineteen years since publication of the first draft in 2004. Generally, judges have not been buying what the Principles had to sell. The Reporters’ recommendations for changing established jurisprudence largely have failed to gain judicial traction.

The Principles’ star citation in a 2011 Supreme Court decision concerning intersystem preclusion merited a footnote reference. The Court has not cited any other provisions. More than one-third of reported federal citations reference the Principles’ recommendations for cy pres relief. However, although a few courts have embraced the cy pres recommendations wholesale, other courts have qualified their endorsements. No other section of the Principles has garnered as much attention as the cy pres provision. Instead, courts have made scattered references to various principles, in many instances providing footnote fodder or additional support to existing jurisprudence in the Manual for Complex Litigation (Fourth) or the Wright and Miller treatise on federal procedure. Some courts have cited the Principles for unremarkable statements of law relating to the adequacy and fiduciary duties of class representatives.

Moreover, a citation survey of the Principles is notable not so much for what judges have endorsed but for what they have not endorsed. Judges have not adopted the terminology of divisible and indivisible remedies. Judges have not recast the conventional understanding of mandatory classes under Rules 23(b)(1)(A) and (b)(2). Judges have not embraced the suggestions that class certification problems be considered through a functional lens. The Principles has not succeeded in changing prevailing applications of the predominance requirement for class certification. While some judges have looked to the Principles for guidance on certifying limited issues classes, most continue to rely on existing jurisprudence to determine that certification decision. Judges have not embraced the concept of an opt-in class. Judges have not eviscerated the Amchem and Ortiz holdings. While a few courts have cited the Principles’ views on preclusion, judges have not wholesale overruled the Stephenson decision. Finally, courts have not relied on the Principles’ recommendations concerning non-class aggregate settlements.

For committed aggregationists, the legislative and judicial impact of the Principles might be characterized as underwhelming, if not disappointing. The impact has the quality of the proverbial tree falling in a forest with no one there. Who now remembers, let alone cites, the predecessor ALI Complex Litigation Project? Will the Principles of the Law of Aggregate Litigation likewise slip into relative footnote obscurity? It also might be noted that the Reporters and Advisers spent some time advocating their product to international audiences. At this time, it is difficult to assess what impact the Principles may have made abroad among other legal systems considering aggregate litigation initiatives, apart from explaining American aggregation approaches to foreign readers. This impact must await further study. Nonetheless, for critics skeptical of trends in aggregate litigation, the Principles’ meager domestic impact probably provides a source of some relief: in the end, the most extreme aggregationists failed to breach the barricades of federal procedure.

The experience of drafting, finalizing, and publishing the Principles suggests that the ALI processes worked just as they should. The ALI deliberative drafting and comment procedures served to temper the excesses of the Reporters’ initial goals. Defense reactions and contributions served to counterbalance the plaintiffs’ program to liberate class action procedure from restrictive jurisprudence. Everyone could reasonably rely on the Advisory Committee on Civil Rules to do nothing revolutionary. The Reporters’ intellectually rich linguist formalism and opaque jargon may have served as a prophylactic protecting against judicial experimentation. Predictably, judges comfortable with the law have continued to turn to received jurisprudence when managing class litigation. Thus, the next revolution in aggregate procedure will have to wait for another day.