Class certification in the age of aggregate proof

New York University Law Review

Volumn 84, Issue 1, 2009, Pages 97-173

  Nagareda, Richard A ^a,b  

^a Department of Law ^*

^b VANDERBILT UNIVERSITY   (United States)

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EID: 66349086456     PISSN: 00287881     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (426)

1. FED. R. CIV. P. 23(f);
2. see also infra note 25 (discussing impact of Rule 23(f)).
3. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997)
4. (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)).
5. See David L. Shapiro, Class Actions: The Class as Party and Client, 73 NOTRE DAME L. REV. 913, 919 (1998) (urging conception of class as distinct "entity").
6. See, e.g., In re Lucent Techs., Inc., Sec. Litig., 327 F. Supp. 2d 426, 441 (D.N.J. 2004) (presenting table of illustrative class settlements involving recoveries of more than $100 million);
7. William S. Lerach, Keynote Address at the Council of Institutional Investors Spring Meeting: Achieving Corporate Governance Enhancements Through Litigation (Mar. 27, 2001), in 24 T. JEFFERSON L. REV. 1, 8-9 (2001) (highlighting class settlements that have achieved changes in corporate governance).
8. 417 U.S. 156, 177 (1974).
9. The leading decision is In re Initial Public Offerings Securities Litigation, 471 F.3d 24 (2d Cir. 2006) [hereinafter IPO].
10. Accord Oscar Private Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d 261, 268-69 (5th Cir. 2007) (holding that loss causation must be established by preponderance of evidence at certification stage);
11. Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676-77 (7th Cir. 2001) (noting that judge can delve into merits to ensure that certification requirements are met).
12. For commentary urging the inclusion of a preliminary injunction-like standard in Rule 23, see generally Robert G. Bone & David S. Evans, Class Certification and the Substantive Merits, 51 DUKE L.J. 1251 (2002),
13. and Geoffrey C. Hazard, Jr., Class Certification Based on Merits of the Claims, 69 TENN. L. REV. 1 (2001). An effort by the Advisory Committee on the Civil Rules to insert into Rule 23 something modestly approaching such a standard ultimately went nowhere in the late 1990s.
14. See Proposed Rules: Amendments to Federal Rules, 167 F.R.D. 523, 559 (1996) (proposing to condition certification of opt-out class actions upon determination that "probable relief to individual class members justifies the costs and burdens of class litigation").
15. On the controversy over this proposal, see DEBORAH R. HENSLER ET AL., CLASS ACTION DILEMMAS 31-33 (2000).
16. See Szabo, 249 F.3d at 676-77 (overturning class certification when district court had misread Eisen to require acceptance of factual allegations in complaint pertinent to satisfaction of Rule 23 requirements).
17. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 316 (3d Cir. 2008) ("[T]he requirements set out in Rule 23 are not mere pleading rules.").
18. IPO, 471 F.3d at 41.
19. The approach prevailing today brings the law of class certification largely into accord with the view in a prescient earlier article, by Geoffrey P. Miller, Review of the Merits in Class Action Certification, 33 HOFSTRA L. REV. 51 (2004).
20. In many areas of class action litigation, either the Seventh Amendment or an applicable statute confers a right to jury trial. See, e.g., U.S. CONST, amend. VII ("preserving]" right to jury trial in "Suits at common law, where the value in controversy shall exceed twenty dollars");
21. U.S.C §1981a(c) (2000) (providing right to jury trial in employment discrimination actions seeking compensatory or punitive damages);
22. Curtis v. Loether, 415 U.S. 189, 194 (1974) (interpreting Seventh Amendment right to jury trial to extend to statutory claims that involve "legal rights and remedies, enforceable in an action for damages in the ordinary courts of law").
23. O.W. Holmes, The Path of the Law, 10 HARV. L. REV. 457, 469 (1897).
24. On the related significance of probabilistic thinking for Holmes's conception of negligence in tort, see LOUIS MEN AND, THE METAPHYSICAL CLUB 346 (2001).
25. Commentary on the role of social science in law advances a similar observation, though not with reference to class actions. In an important 1986 article, John Monahan and Laurens Walker ventured that "social science research, when used to create a legal rule, is more analogous to 'law' than to 'fact,' and hence should be treated much as courts treat legal precedent." John Monahan & Laurens Walker, Social Authority: Obtaining, Evaluating, and Establishing Social Science in Law, 134 U. PA. L. REV. 477, 478 (1986). The present Article works out the institutional implications of this observation about the nature of modern law in the context of the contemporary debate over class certification.
26. 522 F.3d 215, 229 (2d Cir. 2008).
27. 509 F.3d 1168, 1174-75, 1180-82 (9th Cir. 2007),
28. reh'g en banc granted, Nos. 0416688, 04-16720, 2009 WL 365818 (9th Cir. Feb. 13, 2009).
29. Id. at 1190.
30. See supra note 16.
31. The most forceful statement of this view appears in Schwab v. Philip Morris USA, Inc., 449 F. Supp. 2d 992, 1020-21 (E.D.N.Y. 2006),
32. rev'd sub nom. McLaughlin v. Am. Tobacco Co., 522 F.3d 215 (2d Cir. 2008).
33. See FED. R. CIV. P. 23(b)(3) ("A class action may be maintained if... the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members . . . .").
34. As Part I,B.3, infra, shall elaborate, the concern over circularity goes beyond mere logical fastidiousness to the role of the class action within the array of institutions for lawmaking. At bottom, the two leading Supreme Court decisions on the class action device in recent decades-Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997),
35. and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999)-rest on a well-taken skepticism about circularity in class certification, precisely due to its potential to displace other avenues for law reform such as public legislation.
36. See Hansberry v. Lee, 311 U.S. 32, 40-41 (1940) (characterizing class action as "recognized exception" to "principle of general application in Anglo-American jurisprudence that one is not bound by a judgment in personam in a litigation in which he is not designated as a party or to which he has not been made a party by service of process").
37. The Supreme Court recently reiterated the stringency of the general rule against nonparty preclusion in Taylor v. Sturgell, 128 S. Ct. 2161, 2172 (2008), again characterizing "properly conducted class actions" as one of the rare and narrowly defined exceptions to the rule.
38. McLaughlin, 522 F.3d at 220.
39. This Article thus fits within existing scholarship that sees the discretionary latitude available today to trial-level judges in many aspects of civil litigation as the unanticipated byproduct of the 1938 revamping of the Federal Rules and that urges enhanced appellate oversight as a response. See generally Jonathan T. Molot, An Old judicial Role for a New Litigation Era, 113 YALE LJ. 27, 77-94 (2003);
40. Stephen C. Yeazell, The Misunderstood Consequences of Modern Civil Process, 1994 WIS. L. REV. 631, 646-66.
41. I am grateful to Michael Solimine for highlighting the connection between the prescriptions offered here and the adoption of Rule 23(f) in 1998. By expressly providing for interlocutory appellate review, Rule 23(f) dramatically increased the sheer number of occasions for appellate scrutiny of class certification rulings. See Barry Sullivan & Amy Kobelski Trueblood, Rule 23(f): A Note on Law and Discretion in the Courts of Appeals, 246 F.R.D. 277, 288 (2008) (noting that "but for the promulgation of Rule 23(f), review likely would not have occurred in [169 class certification] cases" reviewed by appellate courts during eight-year period after rule adoption);
42. see also Michael E. Solimine & Christine Oliver Hines, Deciding To Decide: Class Action Certification and Interlocutory Review by the United States Courts of Appeals Under Rule 23(f), 41 WM. & MARY L. REV. 1531, 1562 (2000) (describing pre-Rule 23(f) vehicles for interlocutory review of class certification determinations as "at best extremely difficult" to invoke successfully).
43. One can understand this Article, in part, as specifying what appellate courts should do upon such review, now that Rule 23(f) is in effect. On the variation in adoption of state counterparts to Rule 23(f), see Richard D. Freer, Interlocutory Review of Class Action Certification Decisions: A Preliminary Empirical Study of Federal and State Experience, 35 W. ST. U. L. REV. 13, 22-23 (2007).
44. The transformation of the Equal Protection Clause in no less than Brown v. Board of Education, 347 U.S. 483, 495 (1954), stemmed from litigation in the form of a class action. I accordingly part company with those who contend that class actions should labor under a special disadvantage as vehicles by which to change preexisting doctrine.
45. See Mark Moller, The Rule of Law Problem: Unconstitutional Class Actions and Options for Reform, 28 HARV. J.L. & PUB. POL'Y 855, 857 (2005) ("[T]he Due Process Clause limits courts' authority to unsettle the rules governing proof of claims in the class context.").
46. See Henry P. Monaghan, Constitutional Fact Review, 85 COLUM. L. REV. 229, 233-37 (1985) ("[L]aw and fact have a nodal quality; they are points of rest and relative stability on a continuum of experience.");
47. see also HENRY M. HART, JR. & ALBERT M. SACKS, THE LEGAL PROCESS 349 (William N. Eskridge, Jr. & Philip P. Frickey eds., 1994) (noting criticism that "law" and "fact" are "at best. .. nothing more than labels to describe a conclusion about division of function"). Writing outside the class action setting, John Monahan and Laurens Walker likewise speak in functional rather than essentialist terms, noting that "[t]he principal similarity between social science [research] and law is that both are general-both produce principles applicable beyond particular instances. Facts, in contrast, are specific to particular instances."
48. Monahan & Walker, supra note 14, at 490.
49. Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803).
50. See supra notes 14, 27 (discussing Monahan and Walker's conception of social science in law).
51. For an insightful account of the difficulties that continue to be presented by statistical analysis in civil rights litigation generally, see D. James Greiner, Causal Inference in Civil Rights Litigation, 122 HARV. L. REV. 533 (2008).
52. See infra Part LC (framing concept of dissimilarity as main focus of class certification inquiry, as undertaken by courts today under Rule 23).
53. See infra text accompanying notes 150-53, 193-95 (offering illustrations of judicial overreach resulting in displacement of summary judgment in securities fraud and RICO class actions, respectively).
54. See Daniel A. Farber & Brett H. McDonnell, "Is There a Text in This Class?": The Conflict Between Textualism and Antitrust, 14 J. CONTEMP. LEGAL ISSUES 619, 624 (2005) ("Antitrust law today is widely understood to be a variant of the common law . . . .").
55. Tristin K. Green, A Structural Approach as Antidiscrimination Mandate: Locating Employer Wrong, 60 VAND. L. REV. 849 (2007);
56. see also Linda Hamilton Krieger, The Content of Our Categories: A Cognitive Bias Approach to Discrimination and Equal Employment Opportunity, 47 STAN. L. REV. 1161 (1995) (arguing for adaptation of Title VII jurisprudence to address unconscious discrimination);
57. Susan Sturm, Second Generation Employment Discrimination: A Structural Approach, 101 COLUM. L. REV. 458 (2001) (proposing proactive regulatory regime to combat structural discrimination).
58. For criticism of proposals to address structural discrimination through antidiscrimination law, see Samuel R. Bagenstos, The Structural Turn and the Limits of Antidiscrimination Law, 94 CAL. L. REV. 1 (2006).
59. 472 U.S. 797 (1985).
60. FED. R. CIV. P. 23(b)(3).
61. The prototype here was the desegregation class action familiar to the rule drafters in the 1960s. See FED. R. CIV. P. 23(b)(2) advisory committee's note to 1966 amendments (citing "[i]llustrative" school desegregation cases).
62. FED. R. CIV. P. 23(b)(2). Rule 23(b)(1)(A) also authorizes mandatory class treatment when individual actions by class members "would create a risk of . .. inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct" for the defendant.
63. On the convergence in real-world practice between Rules 23(b)(1)(A) and 23(b)(2), see 2 ALBA CONTE & HERBERT B. NEWBERG, NEWBERG ON CLASS ACTIONS §4:8, at 31-32 (4th ed. 2002).
64. Dukes v. Wal-Mart, Inc., 509 F.3d 1168, 1185 (9th Cir. 2007),
65. reh'g en banc granted, Nos. 04-16688, 04-16720, 2009 WL 365818 (9th Cir. Feb. 13, 2009).
66. McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 222 (2d Cir. 2008).
67. See FED. R. CIV. P. 23(C)(1)(A) (requiring court to "determine by order whether to certify the action as a class action").
68. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 (1974).
69. See FED. R. CIV. P. 23(C)(2) (requiring individualized notice in opt-out class action to all class members "who can be identified through reasonable effort"). Such notice would have been expensive in Eisen, amounting to several hundreds of thousands of dollars at the then-current postage rate of six cents per mailing.
70. U.S. at 167.
71. 417 U.S. at 168 (quoting district court's ruling).
72. 457 U.S. 147, 160 (1982). The Falcon Court's notion of "prob[ing] behind the pleadings" operated in some tension with the then-existing rule language, which directed the court to make its class certification determination "[a]s soon as practicable."
73. FED. R. CIV. P. 23(c)(1) (1966 amendments). Rule amendments in 2003 eased this tension by calling for the class certification determination to be made "[a]t an early practicable time."
74. FED. R. CIV. P. 23(c)(1)(A). The advisory committee noted that "[t]ime may be needed to gather information necessary to make the certification decision," including by way of "controlled discovery into the 'merits,' limited to those aspects relevant to making the certification decision on an informed basis."
75. FED. R. CIV. P. 23(C)(1)(A) advisory committee's note to 2003 amendments.
76. See Szabo v. Bridgeport Machs., Inc., 199 F.R.D. 280, 284 (N.D. Ind. 2001) ("[S]ince the class determination is made at the pleading stage of the action, the substantive allegations in the complaint are accepted as true for purposes of the class motion."),
77. rev'd, 249 F.3d 672 (7th Cir. 2001).
78. The purported assimilation of motions for class certification to motions for dismissal took place prior to the additional guidance on the latter subject in Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007), which called for judicial inquiry into whether the complaint states "a claim to relief that is plausible on its face."
79. See supra note 22 (noting that Supreme Court has repeatedly characterized class action as exception to general rule against preclusion of nonparties).
80. In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d 124, 135 (2d Cir. 2001);
81. Caridad v. Metro-N. Commuter R.R., 191 F.3d 283, 292 (2d Cir. 1999).
82. 509 U.S. 579 (1993).
83. Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997).
84. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999).
85. Visa Check, 280 F.3d at 135.
86. 471 F.3d 24 (2d Cir. 2006).
87. The IPO opinion was authored by Judge Newman, who earlier had written Caridad v. Metro-North Commuter Railroad, 191 F.3d 283, 286 (2d Cir. 1999).
88. The IPO panel also included Judge Sotomayor, the author of Visa Check, 280 F.3d at 129.
89. The three-judge panel sought to explain its disavowal of circuit precedent without en banc review by reference to the intervening 2003 amendments to Rule 23, which call for the class certification determination to be made "at an early practicable time." IPO, 471 F.3d at 39. This explanation is a considerable stretch, for the 2003 amendments did not so much make new law for class certification as they confirmed practices extant at the time of Caridad and Visa Check.
90. FED. R. CIV. P. 23(c)(1) advisory committee's note to 2003 amendments.
91. E.g., Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 2004);
92. Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001).
93. See In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 307 (3d Cir. 2008) (adopting framework for class certification analysis substantially similar to that in IPO);
94. Oscar Private Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d 261, 268 (5th Cir. 2007) (relying heavily on IPO).
95. Compare Dukes v. Wal-Mart, Inc., 474 F.3d 1214, 1229 (9th Cir. 2007) (citing Caridad and Visa Check),
96. with Dukes v. Wal-Mart, Inc., 509 F.3d 1168, 1181 (9th Cir. 2007) (superseding previous opinion and omitting citations to Caridad and Visa Check),
97. reh'g en banc granted, Nos. 04-16688, 04-16720, 2009 WL 365818 (9th Cir. Feb. 13, 2009).
98. See infra text accompanying notes 128-32 (discussing IPO court's refusal to extend fraud-on-the-market doctrine to market for initial public offerings of securities).
99. For a similar reading of Eisen, see Miller, supra note 11, at 65, arguing that courts nonetheless may "inquire into the merits whenever doing so is convenient or useful to resolve a certification question."
100. IPO, 471 F.3d at 40-41.
101. See id. at 42 (disavowing earlier decisions whereby class counsel need only make "some showing" to satisfy class certification requirements).
102. See id. at 41 ("[T]he determination as to a Rule 23 requirement is made only for purposes of class certification and is not binding on the trier of facts, even if that trier is the class certification judge.").
103. See, e.g., Basic Inc. v. Levinson, 485 U.S. 224, 246 (1988) ("Recent empirical studies have tended to confirm Congress' premise that the market price of shares traded on well-developed markets reflects all publicly available information, and, hence, any material misrepresentations. ").
104. See id. at 246-47 (citing widespread judicial and scholarly acceptance of fraud-onthe-market doctrine).
105. In this regard, the concept of reliance encompassed in the fraud-on-the-market doctrine differs from reliance in common law fraud, whereby reliance lies in the inducement of the transaction itself, not just its execution at an elevated price. For a cogent explanation of how the fraud-on-the-market doctrine and common law fraud conceptualize differently the reliance element, see Merritt B. Fox, After Dura: Causation in Fraud-on-the-Market Actions, 31 J. CORP. L. 829, 831-32 (2006).
106. On the stumbling block to class certification often presented by reliance elements in consumer litigation, see generally Samuel Issacharoff, The Vexing Problem of Reliance in Consumer Class Actions, 74 TUL. L. REV. 1633 (2000).
107. See infra Part II.A (discussing difficulties encountered by efforts to extend fraud-onthe-market doctrine to initial public offerings and market for light cigarettes).
108. See Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n.15 (1977) (noting that "[p]roof of discriminatory motive is critical" for Title VII actions under "disparate treatment" theory).
109. See id. at 340 n.20 ("Statistics show[ing] racial or ethnic imbalance are probative . . . because such imbalance is often a telltale sign of purposeful discrimination ....").
110. See id. at 360 (discussing illustrative rebuttal arguments for employers).
111. See Michael D. Green, D. Michal Freedman & Leon Gordis, Reference Guide on Epidemiology, in FED. JUDICIAL CTR., REFERENCE MANUAL ON SCIENTIFIC EVIDENCE 335, 348-49 (2d ed. 2000) (discussing concept of "relative risk" in epidemiology).
112. See id. at 335 ("Epidemiology is the field of public health and medicine that studies the incidence, distribution, and etiology of disease in human populations.").
113. For a straightforward explanation in toxic tort litigation, see Sterling v. Velsicol Chemical Corp., 855 F.2d 1188,1200 (6th Cir. 1988).
114. See generally Green et al., supra note 70, at 381 (noting that specific causation "is beyond the domain of the science of epidemiology").
115. In nontechnical terms, differential diagnosis in clinical medicine proceeds by way of a process of elimination. For purposes of designing an appropriate course of treatment for the individual patient, the clinical physician eliminates other potential causes of the patient's condition, leaving only the exposure in question. See Michael B. Kent Jr., Daubert, Doctors and Differential Diagnosis: Treating Medical Causation Testimony as Evidence, 66 DEF. COUNS. J. 525,526 (1999) (describing differential diagnosis as "a process of elimination");
116. Wendy Michelle Ertmer, Note, Just What the Doctor Ordered: The Admissibility of Differential Diagnosis in Pharmaceutical Product Litigation, 56 VAND. L. REV. 1227, 1240 (2003) (same).
117. As one court has described the case law: [T]here is no common set of factual circumstances predictive of whether a court will certify a medical monitoring class. It is easy to find cases, for example, where a court granted class certification to plaintiffs in a limited geographic region who sought medical monitoring after suffering single-source exposure to a toxin in their drinking water, and just as easy to find cases where a court denied certification under similar conditions-and there is no obvious or simple way to reconcile the two different results. Similarly, courts have ruled oppositely in different cases involving plaintiff classes seeking medical monitoring for illnesses allegedly caused by: (1) addiction to nicotine in the same brands of cigarette; and (2) adverse side effects of the same prescription drug. In re Welding Fume Prods. Liab. Litig., 245 F.R.D. 279, 304 (N.D. Ohio 2007).
118. See generally Barnes v. Am. Tobacco Co., 161 F.3d 127, 138-40 (3d Cir. 1998) (discussing elements and objectives of medical monitoring).
119. The gap in time between exposure and disease manifestation creates a window during which the defendant may be enjoined to take action to mitigate the effects of the tortious exposure. The analogy here is to the familiar notion that a motorist who negligently runs over a pedestrian is under an affirmative obligation to mitigate the resulting harm-say, to take the injured person to the hospital for proper treatment. See John CP. Goldberg & Benjamin C. Zipursky, Unrealized Torts, 88 VA. L. REV. 1625,1709-10 (2002) (discussing this analogy). The medical monitoring remedy operates injunctively to enforce this affirmative obligation on the defendant's part. When properly crafted, the remedy also operates injunctively vis-à-vis exposed persons, covering their medical expenses only as incurred via the court-supervised monitoring program rather than simply paying them damages to spend as they wish.
120. See PRINCIPLES OF THE LAW OF AGGREGATE LITIG. §2.04 cmt. b, illus. 2 (Council Draft No. 2, 2008). As a matter of current doctrine, nonetheless, it remains the case that the various states conceptualize medical monitoring quite differently.
121. See Welding Fume, 245 F.R.D. at 291-92 (discussing how "[t]he law of medical monitoring varies from state to state").
122. See infra notes 133-37 and accompanying text.
123. See infra notes 190-92 and accompanying text.
124. This is to suggest not that a defendant is obligated to come forward with proof of its own in support of a motion for summary judgment, only that a defendant might choose to do so. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) ("[W]e find no express or implied requirement in Rule 56 that the moving party support its motion with affidavits or other similar materials negating the opponent's claim.").
125. 382 F.3d 1241 (11th Cir. 2004).
126. For example, the health care providers alleged that the managed care industry had conspired to engage in "downcoding," whereby the software used to process reimbursement claims systematically reduced the payment for certain service codes. Id. at 1248.
127. See id. at 1257-58 (summarizing Eleventh Circuit precedent at that time on RICO reliance element). As I shall elaborate later in connection with other RICO class litigation, the Supreme Court subsequently rejected the existence of a reliance element as a matter of civil RICO doctrine.
128. See infra note 189 and accompanying text (discussing Bridge v. Phoenix Bond & Indem. Co., 128 S. Ct. 2131 (2008)). The point here, however, turns not on the niceties of RICO but on the formulation of the proof offered in Klay on the supposed reliance element.
129. See Klay, 382 F.3d at 1259 ("The alleged misrepresentations in the instant case are simply that the defendants repeatedly claimed they would reimburse the plaintiffs for medically necessary services they provide to the defendants' insureds, and sent the plaintiffs various . . . forms claiming that they had actually paid the plaintiffs the proper amounts.").
130. See id. ("It does not strain credulity to conclude that each plaintiff, in entering into contracts with the defendants, relied upon the defendants' representations and assumed they would be paid the amounts they were due.").
131. Poulos v. Caesars World, Inc., 379 F.3d 654 (9th Cir. 2004).
132. As the court explained: Gamblers do not share a common universe of knowledge and expectations-one motivation does not "fit all." Some players may be unconcerned with the odds of winning, instead engaging in casual gambling as entertainment or a social activity. Others may have played with absolutely no knowledge or information regarding the odds of winning such that the appearance and labeling of the machines is irrelevant and did nothing to influence their perceptions. Still others, in the spirit of taking a calculated risk, may have played fully aware of how the machines operate. Id. at 665-66.
133. See FED. R. CIV. P. 23(a)(4) ("One or more members of a class may sue or be sued as representative parties on behalf of all members only if... the representative parties will fairly and adequately protect the interests of the class.").
134. FED. R. CIV. P. 23(b)(3).
135. See supra notes 13-14 and accompanying text (discussing Holmes's prescient prediction about role of statistics in law).
136. See generally IAN AYRES, SUPER CRUNCHERS (2007) (discussing data analysts' work with large data sets and their effect on commercial industries).
137. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) ("The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights."
138. (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997))).
139. Schwab v. Philip Morris USA, Inc., 449 F. Supp. 2d 992,1020 (E.D.N.Y. 2006),
140. rev'd sub nom. McLaughlin v. Am. Tobacco Co., 522 F.3d 215 (2d Cir. 2008).
141. As Judge Weinstein observed, the right-remedy connection, too, traces its lineage to no less than the Supreme Court's foundational decision on the power of judicial review in Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803).
142. Schwab, 449 F. Supp. 2d at 1020.
143. McLaughlin, 522 F.3d at 219 (citation omitted).
144. Schwab, 449 F. Supp 2d at 1020-21.
145. See. e.g., FED. R. EVID. 702 (expert testimony);
146. id. R. 802 (hearsay);
147. id. R. 403 (unduly prejudicial evidence).
148. One commentator contends: Class certification is important, but it is not the merits, and thus some relaxation of Daubert, on both sides, seems advisable-call it Daubert-Lite. Testimony that plainly does not meet Daubert would be rejected, but in close cases the testimony should be allowed, with the judge exercising discretion to hear and evaluate it, a much less problematic matter than allowing a jury to do so. Alan B. Morrison, Determining Class Certification: What Should the Courts Have To Decide?, 8 Class Action Litig. Rep. (BNA) 541, 543 (July 27, 2007). The same source goes on to clarify how this judicial "evaluation" should proceed as to class certification: It will generally be the plaintiff that is asking for the benefit of the doubt, and in close cases, given the stage at which the [class certification] determination must be made, it is preferable to err on the side of continuing the litigation than ending it for all practical purposes.
149. Id.
150. For a contrary argument that Daubert analysis of expert submissions "is necessary, but not sufficient," for class certification, see Heather P. Scribner, Rigorous Analysis of the Class Certification Expert: The Roles of Daubert and the Defendant's Proof, 28 REV. LITIG. 71, 111 (2008).
151. FED. R. CIV. P. 11(b).
152. Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1974 (2007) (interpreting demand in FED. R. CIV. P. 8(a)(2) for "a short and plain statement of the claim showing that the pleader is entitled to relief").
153. 521 U.S. 591 (1997).
154. 527 U.S. 815 (1999).
155. See Georgine v. Amchem Prods., Inc., 157 F.R.D. 246, 316 (E.D. Pa. 1994) (characterizing fairness, reasonableness, and adequacy of proposed class settlement as "a predominant issue for purposes of Rule 23(b)(3)").
156. The district court effectively had used a class certification standard nowhere stated in Rule 23-one positing that, "if a settlement is 'fair,' then certification is proper." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 622 (1997). At the time, Rule 23(e) merely required judicial approval for class settlements.
157. FED. R. CIV. P. 23(e) (1966 amendments). The rule now includes the yardstick of whether the proposed settlement is "fair, reasonable, and adequate"-incorporating the approval standard that had emerged in case law under the original rule.
158. FED. R. CIV. P. 23(e) advisory committee's note to 2003 amendments.
159. Amchem, 521 U.S. at 623 ("[I]t is not the mission of Rule 23(e) to assure the class cohesion that legitimizes representative action in the first place.").
160. Id. at 620.
161. Id. at 623.
162. Id. at 622.
163. Ortiz v. Fibreboard Corp., 527 U.S. 815, 859 (1999) ("Fibreboard was allowed to retain virtually its entire net worth.").
164. Id. at 824-25.
165. See Air Transportation Safety and System Stabilization Act, 49 U.S.C. §40101 (Supp. V 2005).
166. Ortiz, 527 U.S. at 864.
167. The Ortiz Court went even further than the Amchem Court in inviting federal asbestos reform legislation. See 527 U.S. at 821 ("[T]his litigation defies customary judicial administration and calls for national legislation.").
168. See supra notes 46-47 and accompanying text (discussing this approach as among "the most extravagant overreadings" of Eisen).
169. Ipo, 471 F.3d 24, 41 (2d Cir. 2006).
170. See In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 307 (3d Cir. 2008) ("Factual determinations supporting Rule 23 findings must be made by a preponderance of the evidence.");
171. Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 202 (2d Cir. 2008) (same).
172. See supra notes 42-44 and accompanying text (discussing context of Eisen).
173. FED. R. CIV. P. 23(b)(3).
174. Id. R. 23(b)(2);
175. see supra text accompanying notes 38-40 (noting that some disputes concerning aggregate proof in contested class certifications have arisen with respect to Rule 23(b)(2) rather than Rule 23(b)(3)).
176. See, e.g., Allison v. Citgo Petrol. Corp., 151 F.3d 402, 413 (5th Cir. 1998) ("[B]ecause of the group nature of the harm alleged and the broad character of the relief sought, the (b)(2) class is, by its very nature, assumed to be a homogenous and cohesive group with few conflicting interests among its members."). By contrast, the Rule 23(b)(3) class is cohesive due to the predominance requirement.
177. This observation builds on the extensive analysis of the predominance requirement in Allan Erbsen, From "Predominance" to "Resolvability": A New Approach to Regulating Class Actions, 58 VAND. L. REV. 995, 1005-06 (2005).
178. Poulos v. Caesars World, Inc., 379 F.3d 654, 665-66 (9th Cir. 2004).
179. FED. R. CIV. P. 23(b)(3).
180. PRINCIPLES OF THE LAW OF AGGREGATE LITIG. §2.04 cmt. a, at 112 (Council Draft No. 2, 2008). The rule text does at least allude to this attribute of indivisibility in its reference to relief "respecting the class as a whole."
181. FED. R. CIV. P. 23(b)(2).
182. 509 F.3d 1168 (9th Cir. 2007),
183. reh'g en banc granted, Nos. 04-16688, 04-16720, 2009 WL 365818 (9th Cir. Feb. 13, 2009).
184. Another, similar employment discrimination class action against Costco has garnered class certification in the Ninth Circuit. Ellis v. Costco Wholesale Corp., 240 F.R.D. 627 (N.D. Cal. 2007). The Wal-Mart and Costco class actions carry forward to the context of sex discrimination the basic litigation strategy-broadly speaking-in other class actions that involved aggregate statistical analysis offered to show a pattern or practice of racial discrimination.
185. E.g., Satchell v. FedEx Corp., [2005] 86 Empl. Prac. Dec. (CCH) ¶ 42,116 (N.D. CaI. Sept. 28, 2005) (certifying class);
186. Rhodes v. Cracker Barrel Old Country Store, Inc., No. Civ.A.4:99-CV-217-H, 2002 WL 32058462 (N.D. Ga. Dec. 31, 2002) (declining to certify class).
187. For an account of this genre of employment discrimination class actions in the generalinterest press, see Roger Parloff, The War over Unconscious Bias, FORTUNE, Oct. 15,2007, at 90.
188. See supra Part I.B.1.a (summarizing theory behind fraud-on-the-market doctrine).
189. See infra note 132 (citing illustrative cases).
190. The term "loss causation" is a shorthand rendering of statutory language that places on the plaintiff "the burden of proving" that the defendant's fraud "caused the loss for which the plaintiff seeks to recover." 15 U.S.C. §78u-4(b)(4) (2006).
191. See supra notes 53-61 and accompanying text (discussing IPO court's answers to first-generation questions concerning class certification).
192. IPO, 471 F.3d 24, 42 (2d Cir. 2006).
193. Id. at 42-43.
194. Id. at 42.
195. See, e.g., Unger v. Amedisys Inc., 401 F.3d 316, 322-25 (5th Cir. 2005) (overturning class certification for lack of sufficient inquiry into applicability of fraud-on-the-market doctrine to "small-cap stocks traded in less-organized markets");
196. West v. Prudential Sec, Inc., 282 F.3d 935, 938 (7th Cir. 2002) (holding fraud-on-the-market doctrine inapplicable when alleged fraud involves non-public information);
197. Freeman v. Laventhol & Horwath, 915 F.2d 193, 198-99 (6th Cir. 1990) (holding fraud-on-the-market doctrine inapplicable to market for newly issued tax-exempt municipal bonds).
198. But see In re Salomon Analyst Metromedia Litig., 544 F.3d 474, 482 (2d Cir. 2008) (declining to adopt "bright-line rule" that would prohibit application of fraud-on-the-market doctrine to secondary actors, such as research analysts).
199. Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 342 (2005)
200. Id. at 346.
201. Id. at 347.
202. Id. at 342.
203. Id. at 342-43.
204. See generally Allen Ferrell & Atanu Saha, The Loss Causation Requirement for Rule 10b-5 Causes of Action: The Implications of Dura Pharmaceuticals, Inc. v. Broudo, 63 Bus. LAW. 163 (2007) (discussing numerous loss causation issues in light of Dura);
205. Fox, supra note 64 (discussing Dura and issues that remain unanswered);
206. James C. Spindler, Why Shareholders Want Their CEOs To Lie More After Dura Pharmaceuticals, 95 GEO. LJ. 653 (2007) (discussing problems with "ex post market decline" rule that Dura adopts to satisfy loss causation element).
207. 487 F.3d 261 (5th Cir. 2007).
208. See id. at 263 (observing that decline in Allegiance Telecom's share price took place amidst news that firm had missed analysts' expectations concerning its earnings, had suffered greater financial losses than some analysts had anticipated, and had "a very thin margin of error for meeting revenue covenants" for year at hand-all in addition to correction of allegedly fraudulent misstatement at issue).
209. Id.
210. Id. at 271.
211. Id.
212. Id. at 268 (citing IPO, All F.3d 24, 27 (2d Cir. 2006)).
213. Id. at 269. Since Dura, district courts outside of the Fifth Circuit have rejected the notion in Oscar that a plaintiff class must make a showing of loss causation as a precondition to class certification.
214. See, e.g., Lapin v. Goldman Sachs & Co., 254 F.R.D. 168, 186 (S.D.N. Y. 2008) (holding that plaintiff class is not required to prove loss causation by preponderance of evidence in order to satisfy Rule 23 requirements);
215. In re Micron Techs., Inc. Sec. Litig., 247 F.R.D. 627, 633-34 (D. Idaho 2007) (holding that loss causation relates to merits but not to Rule 23 inquiry);
216. Roth v. Aon Corp., 238 F.R.D. 603, 609 (N.D. I11 2006) (explaining that loss causation is "factual question[]" that should not be addressed at class certification stage).
217. Much of the dispute between the Oscar majority and Judge Dennis in dissent concerned the interpretation of Fifth Circuit precedent on whether a showing of loss causation is necessary to invoke the fraud-on-the-market presumption. Compare Oscar, 487 F.3d at 268-69,
218. with id. at 275-76 (Dennis, J., dissenting).
219. Id. at 269 ("The assumption that every material misrepresentation will move a stock in an efficient market is unfounded, at least as market efficiency is presently measured.").
220. Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 341-42 (2005).
221. Oscar, 487 F.3d at 274 (Dennis, J., dissenting).
222. JOHN BARTLETT, BARTLETT'S FAMILIAR QUOTATIONS 608 (Justin Kaplan ed., 17th ed., Little, Brown and Co. 2002) (1882) (attributing quote to Sigmund Freud).
223. FED. R. CIV. P. 23(b)(3);
224. see supra Part IC (explaining how on-the-ground application of Rule 23(b)(3) operates differently from what one might expect based solely upon rule text).
225. By contrast, when the dispute between the experts pertains to whether the class is relevantly similar or fatally dissimilar, the framework of IPO properly governs. See, e.g., In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 322-24 (3d Cir. 2008) (overturning certification of antitrust class action on ground that district court had erroneously declined to weigh competing expert submissions on whether all, or only some, members of proposed class had suffered injury from alleged price-fixing conspiracy).
226. See Oscar, 487 F.3d at 269 (insisting upon proof of loss causation "at the class certification stage by a preponderance of all admissible evidence");
227. see also supra note 115 (citing other circuits' adoption of preponderance standard for Rule 23 requirements).
228. See Jathon Sapsford, Lawyers Profit by Challenging Colleagues' Fees, WALL ST. J., May 7, 2004, at Bl (noting that class settlement in suit against Visa and MasterCard involved "one of the largest antitrust awards in U.S. history").
229. 280 F.3d 124 (2d Cir. 2001), disavowed by IPO, 471 F.3d 24 (2d Cir. 2006).
230. Id. at 131. Tying arrangements are illegal per se under antitrust law if the seller has appreciable market power.
231. Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 17-18 (1984).
232. Visa Check, 280 F.3d at 124.
233. See id. at 153 (Jacobs, J., dissenting) ("[F]ine jewelers, for example, would rarely be presented with an off-line debit card.").
234. See id. ("[T]hese plaintiffs have used the credit cards (the tying product) and off-line debit cards (the tied product) in different proportions . . . .").
235. See id. at 133-34 (majority opinion) (summarizing disagreement in parties' expert submissions).
236. Id.
237. See id. at 134 (discussing defendants' expert's assertion regarding consequences of breaking tie).
238. See id. at 154,156-58 (Jacobs, J., dissenting) (explaining how, on defendants' expert's view, alleged price-fixing conspiracy would have dramatically different effects on different retailers, depending upon their respective mixes of credit- and debit-card transactions).
239. Id. at 135 (majority opinion).
240. See id. at 155-58 (Jacobs, J., dissenting) (urging adoption of "package" measure of damages as matter of law and explaining how it would give rise to fatal dissimilarities in proposed class).
241. See id. at 154 (noting that damage calculation question remained "open" in Second Circuit at time of Visa Check);
242. see also id. at 155-56 (citing cases in other circuits that had resolved damage-calculation question in favor of "package" approach for tying cases);
243. PHILLIP E. AREEDA, HERBERT HOVENKAMP & EINER ELHAUGE, ANTITRUST LAW ¶ 1769c (2d ed. 2004) ("[I]n most cases a premium price on the tied product must be accompanied by a reduction in the price of the tying product.").
244. See Sapsford, supra note 154, at Bl (estimating dollar value of class settlement). The Second Circuit's disavowal of Visa Check years later in IPO notably did not come with a rebate check for the settling defendants in the former case.
245. A class action under the Washington Consumer Protection Act provides a striking example of such state-law claims. See Kelley v. Microsoft Corp., 251 F.R.D. 544, 549 (W.D. Wash. 2008), class decertified, No. C07-0475 MJP, 2009 WL 413509, at *1 (W.D. Wash. Feb. 18, 2009). The plaintiff consumers alleged inflation in the retail prices of computers designated by Microsoft as "Windows Vista Capable." The consumers characterized this designation as misleading, arguing that the computers in question actually were able to run only a stripped-down version of the Vista operating system and not other, premium versions of Vista with enhanced functions.
246. Id. at 548. The district court initially certified the class on the plaintiffs' "price inflation" theory, pointing to the absence of Washington case law thereon and the resulting inability to say with certainty that "such a theory would be rejected by Washington courts."
247. Id. at 559 & n.3. This is a considerable dereliction, for the court shied away from construing the Washington statute in the same breath in which the court noted the contrary legal constructions of similar statutes in other states.
248. See id. at 558-59 (citing similar class actions elsewhere). The court instead should have engaged fully the question of whether the Washington consumer statute, properly read, embraces the price-inflation theory. Only upon so concluding affirmatively-not merely noting the absence of guidance either way from Washington courts-should the court have proceeded to certify the class.
249. Later in the same case, the court adhered to its mistaken view that the uncertainty over whether the Washington consumer statute embraces the plaintiffs' "price inflation" theory did not endanger the class certification. Kelley, 2009 WL 413509, at *5. The court nonethless reversed course, decertifying the class on other grounds. The court noted that plaintiffs' expert, by his own admission, could not pin down "a specific shift in the demand" or "any single price effect" in the market for computers designated as Vista capable.
250. Id. at *6, 7. As a result, in the court's view, the plaintiffs could not establish a class-wide causal connection between the alleged misrepresentation and retail computer prices.
251. See id. at *8 ("Absent evidence of class-wide price inflation, Plaintiffs cannot demonstrate that common questions predominate over individual considerations.").
252. Even while decertifying the class, however, the court denied Microsoft's motion for summary judgment, leaving open the possibility that some individual consumers might be able to "demonstrate causation through evidence of individual deception," id.-that is, not based simply on the prevailing market price for their computers. On the proper approach to disputes over causation elements in proposed class actions involving alleged market-wide distortions in pricing,
253. see the discussion of a similar dispute, the McLaughlin light cigarettes class action under RICO, infra notes 193-96 and accompanying text.
254. See 18 U.S.C. § 1964(c) (2006). Invocation of federal law also avoids potential barriers to certification of a nationwide class that stem from the need to apply dissimilar state laws.
255. See Richard A. Nagareda, Bootstrapping in Choice of Law After the Class Action Fairness Act, 74 UMKC L. REV. 661, 663 (2006) ("Where the claims of class members across the country arise under state law rather than federal law, significant doubt often will attend the suggestion that common questions 'predominate' over individual ones.").
256. If anything, the recent Class Action Fairness Act (CAFA) of 2005, Pub. L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C), makes a civil RICO claim even more attractive for plaintiffs. Prior to CAFA, class counsel intent upon keeping a nationwide class action in state court would have wanted to avoid the inclusion of a federal-law claim, for fear that it would facilitate removal based upon the existence of a federal question.
257. See 28 U.S.C. § 1367(a) (2006) (authorizing assertion of supplemental jurisdiction over statelaw claims upon proper subject-matter jurisdiction over federal claims that are part of "same case or controversy").
258. Now that CAFA greatly facilitates the removal of proposed nationwide class actions for state-law claims, see id. § 1332(d)(2) (granting federal courts original jurisdiction over class actions with minimal diversity and more than $5 million incontroversy), there is no longer a jurisdictional deterrent to the inclusion of an additional, federal-law claim.
259. 18 U.S.C. § 1964(c) (2006).
260. See id. § 1961(1)(B) (listing mail fraud criminalized by id. § 1341 as among possible predicate acts for civil RICO liability).
261. The criminal prohibition section of RICO, id. § 1962(b), prohibits the defendant from "acquir[ing] or maintain[ing]" an "interest" in an enterprise "through a pattern of racketeering activity." The civil right of action under RICO, in turn, cross-references § 1962.
262. Id. § 1964(c).
263. 522 F.3d 215 (2d Cir. 2008),
264. rev'g Schwab v. Philip Morris USA, Inc., 449 F. Supp. 2d 992 (E.D.N.Y. 2006).
265. Evidence of the industry's misinformation campaign is now legion, to the point where it is hardly accurate to describe the claims on that topic in McLaughlin as merely "alleged." See, e.g., United States v. Philip Morris USA, Inc., 449 F. Supp. 2d 1, 41 (D.D.C 2006) (noting that Tobacco Industry Research Committee served as "sophisticated public relations vehicle" to "deny the harms of smoking and reassure the public").
266. See, e.g., Castano v. Am. Tobacco Co., 84 F.3d 734 (5th Cir. 1996) (decertifying nationwide smoker class in tort).
267. McLaughlin, 522 F.3d at 220.
268. Id. at 221.
269. See infra notes 189-90 and accompanying text (discussing Bridge v. Phoenix Bond & Indem. Co., 128 S. Ct. 2131 (2008)).
270. McLaughlin, 522 F.3d at 222 (citing Second Circuit precedents).
271. Id. at 229.
272. See Schwab v. Philip Morris USA, Inc., 449 F. Supp. 2d 992, 1230, 1234 (E.D.N.Y. 2006) (discussing defendants' economic experts),
273. rev'd sub nom. McLaughlin, 522 F.3d 215.
274. Id. at 1020.
275. See United States v. Philip Morris USA, Inc., 396 F.3d 1190, 1198 (D.C Cir. 2005) (holding that criminal RICO prosecution may obtain only "forward-looking" remedies "aimed at future violations," not "backward-looking" remedies, such as disgorgement, "focused on remedying the effects of past conduct").
276. Schwab, 449 F. Supp. 2d at 1138-50,1163-70.
277. Id. at 1020-21.
278. McLaughlin, 522 F.3d at 220.
279. See id. at 224 & n.5 (characterizing class as "invok[ing] the fraud-on-the-market presumption set forth in Basic Inc. v. Levinson," notwithstanding "plaintiffs' contention that they 'are not advocating the same "fraud-on-the-market" presumption applicable in a securities case'").
280. Id. at 224.
281. 128 S. Ct. 2131, 2145 (2008). Writing for a unanimous Court, Justice Thomas squarely grounded the Bridge holding in the text of RICO, which nowhere states a reliance element. To the contrary, the relevant language lists mail fraud among the possible predicate acts of racketeering under RICO, "even if no one relied on any misrepresentation," and the statute goes on to confer a private right of action to all persons injured "by reason of" such acts.
282. Id. at 2138. The Court noted that "a person can be injured 'by reason of a pattern of mail fraud even if he has not relied on any misrepresentations."
283. Id. at 2139.
284. Id. at 2141 (discussing Holmes v. Sec. Investor Prot. Corp., 503 U.S. 258 (1992)).
285. Interestingly enough, after the Second Circuit's reversal of the class certification in McLaughlin, Judge Weinstein proceeded to certify another RICO class-this time, of third-party payors with respect to alleged manufacturer overcharges for the prescription drug Zyprexa. In re Zyprexa Prods. Liab. Litig., 253 F.R.D. 69, 81-82 (E.D.N.Y. 2008). On the proximate causation element, Judge Weinstein sought to distinguish McLaughlin, opining that "[p]roof in the instant case is not generalized."
286. Id. at 195. As this Article was going to press, the Second Circuit granted, pursuant to Rule 23(f), leave to appeal Judge Weinstein's class certification order.
287. Eli Lilly & Co. v. UFCW Local 1776, No. 08-4685-CV (2d Cir. Jan. 15, 2009) (order granting said appeal).
288. E.g., McLaughlin, 522 F.3d at 226.
289. Id. at 227.
290. See supra notes 141-42 and accompanying text (discussing evidence suggesting lack of loss causation in Oscar).
291. Inability to show proximate causation on a class-wide basis simply by reference to the market price does not necessarily mean that individual smokers would be unable to show a proximately causal connection between the tobacco industry's misdeeds and some manner of RICO-covered loss. But the loss on such an account would not consist of some portion of the market price said to embed the fraud but, rather, the entire purchase price-at least for those light-cigarette smokers who could show that they would have quit smoking had the industry come clean about the risks of the product. Much of the publichealth critique of light cigarettes holds precisely that the industry created them to keep relatively health-conscious smokers in the market who otherwise might have quit. See Schwab v. Philip Morris USA, Inc., 449 F. Supp. 2d 992, 1064 (E.D.N.Y. 2006),
292. rev'd sub nom. McLaughlin, 522 F.3d 215.
293. McLaughlin, 522 F.3d at 220.
294. See supra Part LC (discussing language of Rule 23(b)(2) and (b)(3)).
295. See Int'l Bhd. of Teamsters v. United States, 431 U.S. 324,335 n.15 (1977) (describing difference between disparate treatment and disparate impact claims).
296. See Griggs v. Duke Power Co., 401 U.S. 424,431-32 (1971) (holding that "absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as 'built-in headwinds' for minority groups and are unrelated to measuring job capability").
297. See Kolstad v. Am. Dental Ass'n, 527 U.S. 526, 534 (1999) (discussing 42 U.S.C. § 1981a(b)(1) (2000)).
298. Teamsters, 431 U.S. at 340 n.20. In statistical terms, courts often seek to distinguish between a random result and one that raises an inference of discrimination by asking whether the result observed is more than two or three standard deviations from the mean distribution.
299. E.g., Hazelwood Sch. Dist. v. United States, 433 U.S. 299, 311 n.17 (1977) ("[A] fluctuation of more than two or three standard deviations would undercut the hypothesis that decisions were being made randomly with respect to race ....");
300. Lopez v. Laborers Int'l Union Local # 18, 987 F.2d 1210,1214 (5th Cir. 1993) (using benchmark of three standard deviations). Any touchstone cast in terms of standard deviations works only if one has an aggregation of data.
301. See, e.g., Dukes v. Wal-Mart, Inc., 509 F.3d 1168,1180 n.6 (9th Cir. 2007) (discussing purpose of regression analyses).
302. Teamsters, 431 U.S. at 360.
303. Basic Inc. v. Levinson, 485 U.S. 224, 250 (1988);
304. Teamsters, 431 U.S. at 359-60.
305. FED. R. CIV. P. 23(b)(2).
306. The class certification in Dukes proceeded under Rule 23(b)(2). 509 F.3d at 1185.
307. See, e.g., Davis v. Coca-Cola Bottling Co., 516 F.3d 955, 968-69 (11th Cir. 2008) (requiring class treatment for pattern-or-practice cases seeking declaratory or injunctive relief);
308. Bacon v. Honda of Am. Mfg., Inc., 370 F.3d 565, 575 (6th Cir. 2004) (same).
309. Cf Gen. Tel. Co. of the Nw., Inc. v. EEOC, 446 U.S. 318, 331 (1980) ("[U]nlike the Rule 23 class representative, the EEOC is authorized to proceed in a unified action . . . even though competing interests are involved and particular groups may appear to be disadvantaged.").
310. One of the pre-IPO decisions disavowed by the Second Circuit shied away from the weighing of competing expert submissions in a pattern-or-practice class action precisely due to overlap with the merits. Caridad v. Metro-N. Commuter R.R., 191 F.3d 283,292 (2d Cir. 1999).
311. See Teamsters, 431 U.S. at 337 & n.17 (noting locations of defendant's trucking terminals in communities with substantial African American populations but absence of African Americans among defendant's line drivers).
312. Parloff, supra note 124, at 96 (discussing Stender v. Lucky Stores, Inc., 803 F. Supp. 259 (N.D. Cal. 1992)).
313. One prominent article on Title VII highlights this notion of generational shift in its title. Sturm, supra note 34 (referring to "second generation employment discrimination"). One sees the need for a similar kind of generational shift identified by commentary in another area of public law that enjoys similarly widespread societal support: environmental regulation. Regulatory action dating from the 1970s to address the low-hanging fruit of air pollution from industrial factories is now a well-established feature of the legal landscape. What remain are harder-to-reach emissions by private individuals-in plain English, suburbanites' SUVs and the like-as the available targets for efforts to prompt major additional reductions of air pollution.
314. Michael P. Vandenbergh, From Smokestack to SUV: The Individual as Regulated Entity in the New Era of Environmental Law, 57 VAND. L. REV. 515, 517-18 (2004). Attention to the latter sorts of emissions would involve reconceptualizing environmental law itself to focus as much on the alteration of individual behavior as on the regulation of corporate behavior.
315. Id. at 521;
316. see also generally Michael P. Vandenbergh, Order Without Social Norms: How Personal Norm Activation Can Protect the Environment, 99 NW. U. L. REV. 1101 (2005) (analyzing legal options to induce private individuals to alter their pollution-generating behavior). Such a move has the potential to endanger the social consensus built up for the latter enterprise.
317. 509 F.3d 1168 (9th Cir. 2007),
318. reh'g en banc granted, Nos. 04-16688, 04-16720, 2009 WL 365818 (9th Cir. Feb. 13, 2009).
319. For examples of similar employment discrimination class actions, see supra note 124.
320. Dukes, 509 F.3d at 1174.
321. Id. at 1183.
322. Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137, 145, 148 (N.D. Cal. 2004),
323. affd. 509 F.3d 1168,
324. reh'g en banc granted, Nos. 04-16688, 04-16720, 2009 WL 365818 (9th Cir. Feb. 13, 2009).
325. Id. at 150.
326. Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 339 (1977).
327. Dukes, 222 F.R.D. at 151, 154. The report of plaintiffs' expert sociologist, Dr. William T. Bielby, is available at http://www.walmartclass.com/ staticdata/reports/r3.html.
328. On the role of Dr. Bielby as a repeat-player expert in pattern-or-practice class actions, see Parloff, supra note 124, at 102. Commentators raise serious questions about the proper scope of admissibility for this kind of sociological analysis.
329. See John Monahan, Laurens Walker & Gregory Mitchell, Contextual Evidence of Gender Discrimination: The Ascendance of "Social Frameworks," 94 VA. L. REV. 1715, 1748-49 (2008) (distinguishing between admissible sociological research on susceptibility to discrimination generally and inadmissible "subjective, unscientific extrapolation" to defendant company "from general research conducted outside the case").
330. Dukes, 222 F.R.D. at 155-56, 160-61. The report of plaintiffs' expert labor statistician, Dr. Richard Drogan, is available at http://www.walmartclass.com/staticdata/reports/ r2.pdf.
331. Dukes, 222 F.R.D. at 156.
332. Parloff, supra note 124, at 96.
333. Dukes, 222 F.R.D. at 156.
334. Id. at 146. As to promotion, the plaintiffs also relied on comparisons between WalMart and its competitors, though the methodological soundness of those comparisons is disputed.
335. See Parloff, supra note 124, at 98 (noting plaintiffs' expert's conclusion that women comprise 56.5 percent of store managers at Wal-Mart's top twenty competitors but also noting Wal-Mart's contention that if it "had counted its highest-level hourly-wage supervisors as 'managers'..., the way it believes several of [the] comparator firms do, the entire purported disparity [vis-à-vis those firms] vanishes").
336. See supra notes 215-16 and accompanying text.
337. See U.S. GEN. ACCOUNTING OFFICE, WOMEN'S EARNINGS: WORK PATTERNS PARTIALLY EXPLAIN DIFFERENCE BETWEEN MEN'S AND WOMEN'S EARNINGS 2 (2003), available at http://www.gao.gov/new.items/d0435.pdf (reporting that "[w]hen we account for differences between male and female work patterns as well as other key factors, women earned, on average, 80 percent of what men earned in 2000," or equivalently, men earned twenty-five percent more).
338. The Dukes class encompasses women who have worked in hourly jobs at Wal-Mart since 1998. 509 F.3d at 1175.
339. See, e.g., U.S. EQUAL EMPLOYMENT OPPORTUNITY COMM'N, GLASS CEILINGS: THE STATUS OF WOMEN AS OFFICIALS AND MANAGERS IN THE PRIVATE SECTOR 1 (2004), available at http://www.eeoc.gov/stats/reports/glassceiling/index.pdf ("The term 'glass ceiling' is generally used to refer to instances where women and minorities have progressed within a firm but, despite their ambitions and qualifications, find it difficult to make the movement into key higher level management positions, or management positions at all.").
340. Id. at 5-6. "EEO-1 " refers to the form on which private employers beyond the size of small businesses must report information to the EEOC concerning their workforce.
341. The cause of these disparities in pay and promotion across the economy is the subject of arguments for change in Title VII doctrine. See, e.g., Vicki Schultz, Telling Stories About Women and Work: Judicial Interpretations of Sex Segregation in the Workplace in Title VII Cases Raising the Lack of Interest Argument, 103 HARV. L. REV. 1749, 1756 (1990) (criticizing tendency of courts in existing Title VII cases to "assume[ ] that women's aspirations and identities as workers are shaped exclusively in private realms that are independent of and prior to the workworld").
342. In technical terms, one way of looking at the statistical proof in Dukes is by comparison to epidemiological evidence in a toxic tort or product liability case. See supra Part LB.La (discussing nature of epidemiological research). By analogy, the statistical proof proffered by the Dukes plaintiffs seeks to support an inference of specific causation (intentional discrimination) with respect to each female employee within the proposed class based on evidence of general causation that, even on its own terms, shows only a quite modest-if any-elevated risk in the exposed population by comparison to the background risk of differences in pay and promotion across male-female lines in the United States as a whole.
343. See supra note 34 (citing illustrative articles).
344. McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 224 & n.5 (2d Cir. 2008).
345. Krieger, supra note 34.
346. Id.
347. For extensive discussions of the social psychology of unconscious discrimination, see Symposium, Unconscious Discrimination Twenty Years Later: Application and Evolution, 40 CONN. L. REV. 927 (2008),
348. and Symposium, Behavioral Realism, 94 CAL. L. REV. 945 (2006).
349. See, e.g., Bagenstos, supra note 34, at 3 ("[Structural employment inequalities cannot be solved without going beyond the generally accepted normative underpinnings of antidiscrimination law.");
350. Green, supra note 34, at 850 (recognizing that Title VII "falls short of addressing the problem" of structural discrimination);
351. Krieger, supra note 34, at 1217 ("The overwhelming conclusion is that there now exists a fundamental 'lack of fit' between the jurisprudential construction of discrimination and the actual phenomenon it purports to represent.").
352. See Bagenstos, supra note 34, at 43 ("[B]ecause implicit biases draw on widely shared cultural understandings, any effort to eliminate those biases requires a massive, society-wide effort to change the significance of race and gender in our culture."). On this critical view, structural discrimination entails a problematic importation into the areas of sex, race, and the like of a discrimination concept more closely akin to that in disability law, with its central directive to private employers to accommodate the disabled in the workplace.
353. See id. at 3-4 (analyzing structural discrimination in light of disability discrimination concepts).
354. Green, supra note 34, at 852-53.
355. The word choice here is neither fleeting nor accidental. Green repeatedly uses the word "facilitate" or a variant when seeking to rebut the contention that structural discrimi-nation would foist onto employers the cost of something that is not otherwise their responsibility. See id. at 851 ("An employer that facilitates discriminatory workplace decisionmaking engages in the wrong of treating individuals differently on the basis of protected group status or characteristics and, perhaps more importantly, is worthy of fault for its role in that wrong.");
356. id. at 853 ("[E]mployer facilitation of discriminatory bias in workplace decisionmaking violates the longstanding norm against different treatment in employment on the basis of protected characteristics . . . .");
357. id. at 889 ("Employers as organizational actors are active, causal participants in the wrong of structural discrimination, and prevailing norms concerning organizational facilitation of individual acts of wrongdoing suggest that employers should be held responsible for their role in that wrong.");
358. id. at 899 ("Under a structural approach to discrimination, one can accept that implicit biases have been 'programmed into our brains by overarching societal influences' and at the same time expect employers to refrain from creating work environments that facilitate the operation of those biases in workplace decisionmaking . . . .").
359. My use of the term stems from the title of Robert L. Rabin, Enabling Torts, 49 DEPAUL L. REV. 435 (1999).
360. GUIDO CALABRESI, THE COST OF ACCIDENTS 135-40 (1970).
361. See John CP. Goldberg & Benjamin C Zipursky, Responsibility in Tort for Injuries Inflicted by Another: How To Explain Remote Actor Liability Without Enabling Tort Reform 29-37 (unpublished manuscript, on file with the New York University Law Review) (contending that courts overwhelmingly have rejected "enabling torts" doctrine).
362. See id. at 5 (noting that liability hinges on either attributing plaintiffs injury to defendant or defendant breaching affirmative duty to plaintiff).
363. Dukes v. Wal-Mart, Inc., 509 F.3d 1168, 1181 (9th Cir. 2007).
364. Id. at 1179.
365. Id. at 1194 (Kleinfeld, J., dissenting).
366. See supra notes 215-16 and accompanying text (citing pertinent language from district court's class certification opinion).
367. Dukes v. Wal-Mart, Inc., Nos. 04-16688, 04-16720, 2009 WL 365818 (9th Cir. Feb. 13, 2009).
368. Resort to the authority for issue class certification in FED. R. CIV. P. 23(C)(4) would not alter the analysis here, for class certification of any sort turns on whether all of the members of the plaintiff class can be understood to be the victims of the same wrong. If so, then class certification flows easily. If not, then there is no other common thread to tie together the would-be class members.
369. See supra note 157 and accompanying text (noting Wal-Mart's role as class representative in Visa Check).
370. The Dukes class complaint pleaded a disparate impact claim in addition to one of disparate treatment. Plaintiffs' Third Amended Complaint ¶¶ 102-03, Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137 (N.D. Cal. 2004) (No. C-01-2252 MJJ), 2002 WL 33645690.
371. Given that punitive damages are not a remedy available for a disparate impact claim, see supra text accompanying note 200, and given that the Dukes class certification nonetheless encompassed the plaintiffs' demand for punitive damages,
372. see 509 F.3d at 1188, the certification could have stemmed only from the disparate treatment theory. The potential for punitive damages adds to the settlement pressure exerted by the class certification in Dukes by increasing the unpredictability of the result in the event of a class-wide trial.
373. Cf. Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2625 (2008) (noting, upon detailed examination of empirical literature, "the stark unpredictability of punitive awards").
374. See Sturm, supra note 34, at 524-37 (discussing these and other potential employer responses to problem of structural discrimination).
375. But see Bagenstos, supra note 34, at 29 (contending that these kinds of prescriptions would "serve the interest of the intermediaries themselves, by promoting a market for their own services"). A lazier response on the part of employers might be simply to make the numbers come out "right."
376. But see 42 U.S.C. § 2000e-2(j) (2000) (providing that "[n]othing contained in [Title VII] shall be interpreted to require any employer ... to grant preferential treatment" to any Title VII-protected group "on account of an imbalance" of such persons in the employer's workforce by comparison to those "in the available work force");
377. Bagenstos, supra note 34, at 38-39 ("[T]he notion that a good employment policy results in proportional racial and gender representation in all workplace positions is extraordinarily controversial."). For their part, structural discrimination proponents disavow an objective to precipitate the use of such an approach, effective though it might be to insulate wouldbe defendants from litigation.
378. E.g., Sturm, supra note 34, at 541-42.
379. See 347 U.S. 483, 495 (1954) (noting class-action nature of Brown).
380. See supra Part I.B.3 (discussing circularity problem with class certifications, highlighting both Amchem and Ortiz).
381. For proposed asbestos reform legislation, see, for example, Fairness in Asbestos Injury Resolution Act of 2005, S. 852, 109th Cong. (2005).
382. See RICHARD A. NAGAREDA, MASS TORTS IN A WORLD OF SETTLEMENT 80-84 (2007) (situating in separation-of-powers terms efforts at asbestos-litigation reform in Amchem and Ortiz class settlements).
383. See Meritor Sav. Bank v. Vinson, 477 U.S. 57, 73 (1986) (holding that "a claim of 'hostile environment' sex discrimination is actionable under Title VII");
384. Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971) (accepting disparate impact theory).
385. The disparate impact theory remains the subject of debate. See, e.g., Michael Selmi, Was the Disparate Impact Theory a Mistake?, 53 UCLA L. REV. 701,768-82 (2006) (arguing that adoption of disparate impact theory inhibited development of more expansive theory of intentional discrimination).
386. See supra note 189 (discussing said rejection).
387. See supra note 33 and accompanying text (noting common law-like approach to interpretation of antitrust laws).
388. See generally, e.g., Nicholas Quinn Rosenkranz, Federal Rules of Statutory Interpretation, 115 HARV. L. REV. 2085 (2002) (contending that adoption of uniform rules for interpretation of federal statutes is constitutional and that Congress should adopt such rules).
389. Id.
390. This is not to say that aggregate proof cannot also be invoked as part of an effort to garner certification of state-law claims, as in the consumer fraud context. See, e.g., supra note 168 (discussing illustrative consumer fraud class action).
391. See, e.g., Cole v. Gen. Motors Corp., 484 F.3d 717, 725 (5th Cir. 2007) ("Plaintiffs assert that they have analyzed the applicable laws of the fifty-one jurisdictions and they are 'virtually the same.'. . . [The defendant], on the other hand, provided the district court with extensive charts . . . showing . . . variations among the states [on several elements of the plaintiffs' claims].").
392. Linda S. Mullenix, Gridlaw: The Enduring Legacy of Phillips Petroleum Co. v. Shutts, 74 UMKC L. REV. 651, 653 (2006).
393. See PRINCIPLES OF THE LAW OF AGGREGATE LITIG. § 2.05(a) (Council Draft No. 2, 2008) ("To determine whether multiple claims involve common issues [appropriate for aggregate treatment], the court must ascertain the substantive law governing those issues.");
394. id. § 2.05(a) cmt. a, at 125 (emphasizing court's "obligation" to make a "threshold determination" as to choice of law).
395. 472 U.S. 797 (1985).
396. See id. at 816 ("We must first determine whether Kansas law conflicts in any material way with any other law which could apply.").
397. Id. at 818. Even here, there remains an outlier. Construing its own class action rule, rather than Rule 23, the Arkansas Supreme Court has embraced the jaw-dropping notion of first certifying a nationwide class and only later asking hard questions about differences in applicable state law.
398. See Gen. Motors Corp. v. Bryant, 374 Ark. 38 (2008) ("[I]t is possible that other states' laws might be applicable to the class members' claims. However, we cannot say that our class-action jurisprudence requires an Arkansas circuit court to engage in a choice-of-law analysis prior to certifying a class . . . ."). The Bryant court sought to offer solace by "recognizing the caveat that a class can always be decertified at a later date if necessary."
399. Id. One is reminded here of the character Emily Litella, played in the 1970s by comedienne Gilda Radner on the television show Saturday Night Live. Under the approach to class actions in the Arkansas system described in Bryant, a court is to proceed merrily forward in the face of a bona fide argument that disabling dissimilarities exist within the class due to material differences in the law applicable to different class members' claims. But thereafter, upon belatedly realizing its error, the court simply can tell all those whose time it has wasted, "Never mind."
400. See generally Emily Litella, in WIKIPEDIA, http:// en.wikipedia.org/wiki/Emily-Litella (last visited Feb. 4, 2009) (describing Litella character).
401. Considerable latitude exists, at least as a matter of constitutional due process and full faith and credit under current doctrine, as "it is not enough" for the forum state to "misconstrue the law of another State." Sun Oil Co. v. Wortman, 486 U.S. 717, 730-31 (1988).
402. A constitutional violation occurs only when the court's construction "contradict[s]" the law of the other state "that is clearly established and that has been brought to the court's attention," id. at 731-in essence, only if the certifying court effectively raises its middle finger to a coequal sovereign's law that has been thrust before the court's eyes.
403. For arguments that the proposed class-wide format of litigation should not alter the choice-of-law analysis, see Larry Kramer, Choice of Law in Complex Litigation, 71 N.Y.U. L. REV. 547, 572-79 (1996),
404. and Richard A. Nagareda, Aggregation and Its Discontents: Class Settlement Pressure, Class-Wide Arbitration, and CAFA, 106 COLUM. L. REV. 1872, 1914-15 (2006).
405. For an argument in favor of selecting the law of the defendant's principal place of business for nationwide class litigation of state-law claims, see Samuel Issacharoff, Settled Expectations in a World of Unsettled Law: Choice of Law After the Class Action Fairness Act, 106 COLUM. L. REV. 1839, 1867-71 (2006).
406. Samuel Issacharoff & Richard A. Nagareda, Class Settlements Under Attack, 156 U. PA. L. REV. 1649, 1655-56, 1660-66 (2008) (noting how CAFA addresses problem of anomalous court).
407. In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 333 F.3d 763, 766-67 (7th Cir. 2003) (Easterbrook, J.).
408. Issacharoff & Nagareda, supra note 269, at 1663.
409. See generally S. REP. NO. 109-14, at 4 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 5 ("[M]ost class actions are currently adjudicated in state courts, where the governing rules are applied inconsistently (frequently in a manner that contravenes basic fairness and due process considerations) and where there is often inadequate supervision over litigation procedures and proposed settlements.").
410. See, e.g., Edward A. Purcell, Jr., The Class Action Fairness Act in Perspective: The Old and the New in Federal Jurisdictional Reform, 156 U. PA. L. REV. 1823,1876-77 (2008) (characterizing CAFA as having "tilted the playing field even more sharply in favor of corporate defendants").
411. This latitude stems from the combination of general jurisdiction, e.g., Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984), and the liberal venue rule for corporations, 28 U.S.C. § 1391(c) (2006).
412. At this early stage of the post-CAFA period, empirical research has yet to pursue the question of variations in filings across federal districts. At the circuit level, early empirical research does document variations in filings of class actions involving state-law claims. See Emery G. Lee III & Thomas E. Willging, The Impact of the Class Action Fairness Act on the Federal Courts: An Empirical Analysis of Filings and Removals, 156 U. PA. L. REV. 1723, 1762 (2008) ("[T]he Second, Third, and Ninth Circuits all experienced large percentage increases in diversity original proceedings between the [pre- and post-CAFA] periods, which suggests that circuit law with respect to class certification does, indeed, factor into a plaintiffs' attorney's decision about which federal forum to choose.").
413. See Adam B. Cox & Thomas J. Miles, Judging the Voting Rights Act, 108 COLUM. L. REV. 1,17-18 (2008) ("Within judicial districts, trial judges are randomly assigned to cases . . . .").
414. Insofar as multiple class actions concerning the same subject are filed within the federal system, transfer of all such actions to a single federal district court by the Judicial Panel on Multidistrict Litigation under 28 U.S.C. § 1407 (2006) can function as an additional constraint on anomalous judges.
415. For a revisionist view in favor of forum shopping, see Debra Lyn Bassett, The Forum Game, 84 N.C. L. REV. 333, 395 (2006), arguing that "[t]he availability of more than one legally-authorized forum results in legitimate choice, and lawyers ethically are compelled to seek the most favorable forum to further their clients' interests."
416. For criticism of this feature of CAFA, see Purcell, supra note 273, at 1874-75, condemning the lack of removal power for absent class members under CAFA.
417. See FED. R. CIV. P. 23(f) ("A court of appeals may permit an appeal from an order granting or denying class-action certification under this rule if a petition for permission to appeal is filed with the circuit clerk . . . .").
418. See generally Stephen N. Subrin, How Equity Conquered Common Law: The Federal Rules of Civil Procedure in Historical Perspective, 135 U. PA. L. REV. 909 (1987) (describing historical background of Federal Rules);
419. Yeazell, supra note 24 (describing unintended consequences of Federal Rules).
420. For empirical data on the decline of trials in civil litigation generally, see Marc Galanter, The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts, 1 J. EMPIRICAL LEGAL STUD. 459, 460-76 (2004).
421. The term served as the focal point for Symposium, The Vanishing Trial, 1 J. EMPIRICAL LEGAL STUD., at v (2004).
422. 127 S. Ct. 1955, 1974 (2007) (interpreting Rule 8(a) to require pleading of "enough facts to state a claim to relief that is plausible on its face," at least in context of claim under § 1 of Sherman Act).
423. See supra notes 49-51 and accompanying text (summarizing admissibility standard of Daubert and its progeny).
424. Celotex Corp. v. Catrett, 477 U.S. 317 (1986);
425. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986);
426. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986).