Justifying Class Action Limits: Parsing the Debates over Ascertainability and Cy Pres

Abstract

The federal class action has lost its way. It was created about fifty years ago in a major revision to Rule 23 that envisioned a functional aggregation device aimed at promoting litigation efficiency and effective rights enforcement. Over the past twenty years, however, courts have added technical limitations that restrict the Rule’s functional efficacy. This Article, a contribution to a symposium on the fiftieth anniversary of the modern class action, examines two such limitations: a strict version of class ascertainability, and restrictions on Cy Pres relief. These two limitations are closely linked. The availability of Cy Pres reduces the pressure to require strict ascertainability, and insisting on strict ascertainability eases the pressure to use Cy Pres. Courts justify both limitations in functional terms as promoting the efficiency and fairness of class action litigation, but the functional arguments fail. In fact, requiring strict ascertainability and limiting the availability of Cy Pres have the opposite effect: they undermine the class action’s functional efficacy. This raises an important question: Why is support for these limitations so strong when the functional justifications are so weak?

The answer, I argue, is that strict ascertainability and limited Cy Pres have less to do with functional efficacy and much more to do with adjudicative legitimacy. Framed in legitimacy terms, the arguments are more difficult to address. The concern with adjudicative legitimacy implicates two related beliefs. The first holds that civil adjudication is primarily about compensating injured parties. Deterrence matters, but only if it is accompanied by a substantial compensatory benefit. The second belief is closely related to the first. It holds that civil adjudication is about adjudicating and enforcing legal rights belonging to individual right holders. Thus, even if class actions promote the effective enforcement of the substantive law, they can still lack legitimacy when they involve anonymous class members and prioritize deterrence over compensation for rights violations.

These beliefs fit a plausible conception of civil adjudication. Together, they describe a core feature that distinguishes adjudication from legislation and administration: its focus on legal rights and on remedies for rights violations. Yet this feature does not demand strict ascertainability or the Cy Pres limits that have become popular in recent years. Small-claim class actions, such as those enforcing consumer protection laws, share much in common with the less controversial 23(b)(2) class action for classwide injunctive relief. I develop the (b)(2) analogy and show how it can be used to justify the legitimacy of small-claim class actions with unidentifiable class members and liberal use of Cy Pres.

Keywords: Class Actions, Ascertainability, Cy Pres, Adjudicative Legitimacy

JEL Classification: K00, K10, K40, K41