Foreign citizens in transnational class actions

Cornell Law Review

Volumn 97, Issue 1, 2011, Pages 87-130

  Simard, Linda Sandstrom ^a   Tidmarsh, Jay ^b  

^a SUFFOLK UNIVERSITY   (United States)

^b NOTRE DAME LAW SCHOOL   (United States)

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EID: 83455172587     PISSN: 00108847     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (106)

1. -130 S. Ct. 2869, 2875 (2010).
2. For pre-Morrison analyses of "foreign-cubed" actions, see Hannah L. Buxbaum, Multinational Class Actions Under Federal Securities Law: Managing Jurisdictional Conflict, 46 COLUM. J. TRANSNAT'L L. 14, 17 (2007);
3. Stephen J. Choi & Linda J. Silberman, Transnational Litigation and Global Securities Class-Action Lawsuits, 2009 WIS. L. REV. 465, 466.
4. "Foreign- cubed" actions are also known as "f-cubed" actions. Richard A. Nagareda, Aggregate Litigation Across the Atlantic and the Future of American Exceptionalism, 62 VAND. L. REV. 1, 33 n.147 (2009).
5. See Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 172 (2d Cir. 2008).
6. Aff'd, 130 S. Ct. 2869 (2010).
7. -519 F.2d 974 (2d Cir. 1975).
8. Morrison abrogated this conclusion. Morrison, 130 S. Ct. at 2877-83.
9. Bersch, 519 F.2d at 996 ("[I]f defendants prevail against a class they are entitled to a victory no less broad than a defeat would have been.").
10. Rule 23(b) describes four different types of class action. See FED. R. CIV. P. 23(b)(1)(A), (b)(1)(B), (b)(2), (b)(3).
11. Because Rule 23(b)(3) is the only class action available when class members primarily seek damages, and because the (b)(3) class action is the most common form of class action, see JAY TIDMARSH & ROGER H. TRANGSRUD, MODERN COMPLEX LITIGATION 379 (2d ed. 2010), the inclusion of foreign class members is principally a concern in, and has been litigated in the context of, Rule 23(b)(3).
12. Bund Zur Unterstützung Radargeschädigter e. V. v. Raytheon Co., No. EP-04-CV-127- PRM, 2006 WL 3197645, at *4-*5 (W.D. Tex. Aug. 30, 2006) (noting that both American and German citizens were members of a class seeking medical monitoring).
13. See, e.g., Grovatt v. St. Jude Med., Inc. (In re St. Jude Med., Inc., Silzone Heart Valve Prods. Liab. Litig.), 425 F.3d 1116, 1121 (8th Cir. 2005) (rejecting certification of a medical-monitoring class and noting that "[a]lthough Rule 23(b)(2) contains no predominance or superiority requirements, class claims thereunder still must be cohesive").
14. See, e.g., Borochoff v. Glaxosmithkline PLC, 246 F.R.D. 201, 203, 205 (S.D.N.Y. 2007);
15. In re Royal Ahold N.V. Sec. & ERISA Litig., 219 F.R.D. 343, 355 (D. Md. 2003).
16. But see Marsden v. Select Med. Corp., 246 F.R.D. 480, 486 & 489 n.7 (E.D. Pa. 2007) (appointing an Austrian citizen as lead plaintiff and dismissing concerns that Austria would not recognize the judgment as " speculative").
17. -242 F.R.D. 76, 95 (S.D.N.Y. 2007);
18. see also Kern v. Siemens Corp., 393 F.3d 120, 129 n.8 (2d Cir. 2004) (noting "significant doubts" about the superiority of a class action that included Austrian citizens when Austrian courts would not bind these citizens to an American class judgment).
19. One issue is the standard of proof that the person opposing the class must bear. Bersch had suggested that a defendant must show to a "near certainty" that a foreign country will not recognize the judgment; a "possibility" was insufficient. 519 F.2d at 996.
20. -242 F.R.D. at 95.
21. See, e.g., In re Alstom SA Sec. Litig., 253 F.R.D. 266, 282 (S.D.N.Y. 2008);
22. Marsden, 246 F.R.D. at 486.
23. Rhonda Wasserman, Transnational Class Actions and Interjurisdictional Preclusion, 86 NOTRE DAME L. REV. 313, 316 (2011).
24. See 242 F.R.D. at 103-05.
25. Frietsch v. Refco, Inc., No. 92 C 6844, 1994 WL 10014, at *11 (N.D. Ill. Jan. 13, 1994).
26. See 242 F.R.D. at 95-102.
27. See Brief for the Republic of France as Amicus Curiae Supporting Respondents at 26 & n.20, Morrison v. Nat'l Austl. Bank Ltd., 130 S. Ct. 2869 (2010) (No. 08-1191).
28. See Vivendi, 242 F.R.D. at 104-05.
29. For additional cases, see, for example, Cromer Fin. Ltd. v. Berger, 205 F.R.D. 113 (S.D.N.Y. 2001) (certifying a class that included foreign investors);
30. CL-Alexanders Laing & Cruikshank v. Goldfield, 127 F.R.D. 454 (S.D.N.Y. 1989) (denying certification of a class of foreign investors);
31. compare Blechner v. Daimler- Benz AG, 410 F. Supp. 2d 366, 373 (D. Del. 2006) (noting nonrecognition issues in the course of dismissing a securities fraud case).
32. For overviews of recent efforts, see Deborah R. Hensler, The Globalization of Class Actions: An Overview, 622 ANNALS AM. ACAD. POL. & SOC. SCI. 7, 9-17 (2009);
33. Christopher Hodges, Collective Redress in Europe: The New Model, 29 CIV. JUST. Q. 370, 372-74 (2010);
34. Rachael Mulheron, The Case for an Opt-Out Class Action for European Member States: A Legal and Empirical Analysis, 15 COLUM. J. EUR. L. 409, 415-27 (2009).
35. For example, in 2005 the Netherlands enacted the Wet collectieve afwikkeling massaschade (Collective Settlement of Mass Damages Act, or WCAM), a statute that allows Dutch courts to settle-but not litigate- transnational disputes on a class-wide, opt-out basis. Stb. 2005, p. 340.
36. translated in MINISTERIE VAN VEILIGHEIDE EN JUSTITIE, DE NEDERLANDSE WET COLLECTIEVE AFWIKKELING MASSASCHADE 8-12 (2008), available at http://www.rijksoverheid.nl/bestanden/documenten-enpublicaties/richtlijnen/2008/ 06/24/de-nederlandse-wet-collectieve-afwikkeling-massaschade/litwcamfrenknl.pdf.
37. For a description of WCAM, see MINISTERIE VAN VEILIGHEIDE EN JUSTITIE, THE DUTCH "CLASS ACTION (FINANCIAL SETTLEMENT) ACT" ("WCAM") (2008), available at http://www.rijksoverheid.nl/bestanden/documenten-en- publicaties/circulaires/2008/06/24/the-dutch-class-action-financial-settlement- act-wcam/wcamenglish.pdf.
38. The WCAM is open not only to Dutch citizens, but also to citizens of other countries. See Madeleine Giansanti Çaǧ et al., Europe, 44 INT'L LAW. 645, 652 (2010) (noting that two recent settlements in Dutch courts "demonstrate that WCAM has truly global potential to settle class claims, at least against Dutch defendants").
39. Because Dutch courts would likely accord an American class judgment preclusive effect, see Vivendi, 242 F.R.D. at 105, class members dissatisfied with the outcome of an American class action would probably be unable to use the WCAM procedure.
40. Cf. In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 333 F.3d 763, 769 (7th Cir. 2003) (issuing an antisuit injunction against plaintiffs who attempted to commence state-court class actions after the federal court held that no federal-court class action was permissible).
41. But see In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 134 F.3d 133, 146 (3d Cir. 1998) (reversing an antisuit injunction against a state-court class action designed to settle a case on terms that the federal court had disapproved when the federal court lacked personal jurisdiction over the state-court class members).
42. Cf. Bersch, 519 F.2d at 996 (summarizing Judge Friendly's concerns).
43. Thomas D. Rowe, Jr., State and Foreign Class-Actions Rules and Statutes: Differences from-and Lessons for?-Federal Rule 23, 35 W. ST. U. L. REV. 147 (2007) (reviewing various state class-action approaches).
44. Second, with the advent of the Class Action Fairness Act (CAFA), class actions that include foreign members fall within federal jurisdiction-via either original or removal jurisdiction-as long as one defendant is a citizen of an American state and the total amount in controversy exceeds $5 million. 28 U.S.C. §§ 1332(d)(2)(B), 1453(b) (2006).
45. Most transnational class actions are likely to meet these conditions. Cf. id. § 1332(d)(4)-(5), (9) (listing certain exceptions to CAFA jurisdiction). We further limit our discussion to Rule 23(b)(3) class actions (and not Rule 23(b)(1) or (b)(2) class actions) because most class actions are (b)(3) damages class actions. See supra note 7. In limiting the discussion to (b)(3) class actions, which involve an opt-out right, see FED. R. CIV. P. 23(c)(2)(B)(v), we also avoid thorny personal-jurisdiction questions that would arise if an American court sought to bind a foreign citizen to an American judgment without affording an opt-out right. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812-15 (1985) (holding that the Due Process Clause requires state courts to provide an opt-out right to class members over whom it does not have personal jurisdiction, but leaving open whether this requirement applied in all cases or only in cases seeking damages).
46. Bersch, 519 F.2d at 996;
47. Vivendi, 242 F.R.D. at 95.
48. See Vivendi, 242 F.R.D. at 81.
49. See Morrison v. Nat'l Austl. Bank Ltd., 130 S. Ct. 2869 (2010).
50. In re Vivendi Universal, S.A. Sec. Litig., 765 F. Supp. 2d 512, 587 (S.D.N.Y. 2011).
51. -24 Both assumptions are common in the economic literature analyzing incentives to sue or settle. See RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW 598 (7th ed. 2007); Steven Shavell, Suit, Settlement, and Trial: A Theoretical Analysis Under Alternative Methods for the Allocation of Legal Costs, 11 J. LEGAL STUD. 55, 56-58 (1982). For the most part, these assumptions are not especially critical, at least when the parties retain their same attitude toward wealth maximization and risk preference throughout the course of the American and potential foreign litigation. But see infra note 105 (discussing the effect of risk taking on the calculus of foreign citizens who must decide whether to sue in a foreign forum).
52. -25 See Kansas v. Colorado, 129 S. Ct. 1294, 1298 (2009). There are exceptions to the rule. First, losing parties sometimes must pay some costs of the winning party.
53. See, e.g., 28 U.S.C. § 1920 (2006). Second, some statutes provide for fee shifting, under which the losing party also pays the winning party's attorneys' fees.
54. See, e.g., 42 U.S.C. § 1988(b) (2006).
55. See generally Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247-62 (1975) (discussing the American rule and its exceptions).
56. See Samuel Issacharoff & Geoffrey P. Miller, Will Aggregate Litigation Come to Europe?, 62 VAND. L. REV. 179, 184 (2009);
57. cf. Owen M. Fiss, The Political Theory of the Class Action, 53 WASH. & LEE L. REV. 21, 22-24 (1996) (arguing that class actions provide a mechanism to allow private interests with small claims to protect public values);
58. Judith Resnik, Money Matters: Judicial Market Interventions Creating Subsidies and Awarding Fees and Costs in Individual and Aggregate Litigation, 148 U. PA. L. REV. 2119, 2145 (2000) (suggesting that the incentive structure at play in the American class-action rule was seen as an alternative to centralizing enforcement power within the government).
59. See generally Jay Tidmarsh, Rethinking Adequacy of Representation, 87 TEX. L. REV. 1137, 1160 n.106 (2009).
60. see also Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 130 S. Ct. 1431, 1465 n.3 (2010) (Ginsburg, J., dissenting) ("A court's decision to certify a class accordingly places pressure on the defendant to settle even unmeritorious claims."). The plaintiff may also seek class certification when it is not in her best financial interests to do so-either because she is altruistic or because the lawyer, who can obtain a much larger fee in a class action, deceives the plaintiff about the form of litigation that is in her best interests
61. 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.'"
62. (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)));
63. see also Shady Grove, 130 S. Ct. at 1460 (Ginsburg, J., dissenting) (noting that using Rule 23 can "transform a $500 case into a $5,000,000 award"). For a classic article on large-scale, small stakes litigation and the agency-cost problems it poses
64. see Jonathan R. Macey & Geoffrey P. Miller, The Plaintiffs' Attorney's Role in Class Action and Derivative Litigation: Economic Analysis and Recommendations for Reform, 58 U. CHI. L. REV. 1 (1991).
65. A famous example is described in Kamilewicz v. Bank of Boston Corp., 92 F.3d 506, 508 (7th Cir. 1996), in which a state-court negative-value class settlement had resulted in a $2.19 recovery and a $91.33 assessment of attorneys' fees for some class members-thus leaving these class members $89 to the bad as a result of their lawsuit. Cf. Issacharoff & Miller, supra note 28, at 184 (noting the power of the "unselected and effectively un- supervised agent" to bind absent class members).
66. See FED. R. CIV. P. 23(a)(2)-(4), (g);
67. Hansberry v. Lee, 311 U.S. 32, 43-46 (1940) (discussing due process considerations regarding adequate class representation). Although only Rule 23(a)(4) specifically mentions the adequacy of the class representative's representation, the commonality requirement of Rule 23(a)(2) and the typicality requirement of Rule 23(a)(3) "tend to merge" into the adequacy requirement of Rule 23(a)(4). Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 157 n.13 (1982). Rule 23(g) discusses the conditions under which class counsel is deemed adequate.
68. see also PRINCIPLES OF THE LAW OF AGGREGATE LITIGATION § 1.05 cmt. f (2010) [hereinafter AGGREGATE LITIGATION] ("[A] lawyer may not help one client by harming another. ⋯ A lead lawyer must act for the benefit of all parties and represented persons ⋯ ."). The formulation has been criticized as too minimal, especially in negative-value cases, because it allows the class representative(s) and class counsel to capture all the excess value from class aggregation rather than to share it equitably among class members.
69. Patrick Woolley, Collateral Attack and the Role of Adequate Representation in Class Suits for Money Damages, 58 KAN. L. REV. 917, 944-47 (2010). Although these concerns are overdrawn due to real-world constraints on the self-aggrandizing behavior of class representatives and counsel
70. no one argues for a lower floor on adequate representation than "do no harm." We therefore adopt that floor as the minimal necessary statement of adequacy. 38 FED. R. CIV. P. 23(b)(3)
71. -38 FED. R. CIV. P. 23(b)(3).
72. On using manageability as a surrogate for superiority, see FED. R. CIV. P. 23(b)(3)(D) (stating that "the likely difficulties in managing a class action" can be considered in deciding whether a class action meets the requirements of predominance and superiority);
73. see also Six (6) Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1304-07
74. (9th Cir. 1990) (upholding certification after examining only issues of manageability); compare Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 191 (3d Cir. 2001) (noting that a class action must be the "best" method for resolving the dispute, but in fact analyzing superiority almost exclusively in terms of the class action's manageability);
75. Romero v. Producers Dairy Foods, Inc., 235 F.R.D. 474, 491 (E.D. Cal. 2006) ("Whether a case is manageable as a class action can be an overriding consideration in determining superiority." (internal quotation marks omitted)). But see Wal-Mart Stores, Inc. v. Visa U.S.A. Inc. (In re Visa Check/MasterMoney Antitrust Litig.), 280 F.3d 124, 140 (2d Cir. 2001) ("[F]ailure to certify an action under Rule 23(b)(3) on the sole ground that it would be unmanageable is disfavored ⋯ ."). On using predominance to determine superiority, see In re TFT-LCD (Flat Panel) Antitrust Litig., 267 F.R.D. 291, 314 (N.D. Cal. 2010) ("[I]f common questions are found to predominate in an antitrust action, ⋯ courts generally have ruled that the superiority prerequisite of Rule 23(b)(3) is satisfied." (internal quotation marks omitted)).
76. See, e.g., In re Cmty. Bank of N. Va., 418 F.3d 277, 309 (3d Cir. 2005) ("The superiority requirement asks a district court to balance, in terms of fairness and efficiency, the merits of a class action against those of alternative available methods of adjudication." (internal quotation marks omitted));
77. Klay v. Humana, Inc., 382 F.3d 1241, 1269 (11th Cir. 2004) ("Our focus is not on the convenience or burden of a class action suit per se, but on the relative advantages of a class action suit over whatever other forms of litigation might be realistically available to the plaintiffs."). The American Law Institute has also taken this view. See AGGREGATE LITIGATION
78. David Betson & Jay Tidmarsh, Optimal Class Size, Opt-Out Rights, and "Indivisible" Remedies, 79 GEO. WASH. L. REV. 542, 554-68 (2011). In analyzing whether a foreign court's nonrecognition of an American outcome should serve as yet another ground for finding a lack of superiority-the concern of this Article-we can ignore concerns for optimal class size, except to note that the optimal size of the class helps to define the aggregate benefit that the class can expect to achieve. The size of this aggregate benefit, as well as the effect of excluding class members on this benefit, is relevant to our analysis.
79. See generally Jeanne C. Finegan, Five Key Considerations for a Successful International Notice Program, 78 U.S.L.W. 2611 (Apr. 20, 2010) (discussing issues about giving effective class notice to foreign citizens). Notice of the right to opt out must be given in all Rule 23(b)(3) class actions.
80. See FED. R. CIV. P. 23(c)(2)(B). In addition, the court will direct that notice be given in the event of a settlement
81. Cf. Castano v. Am. Tobacco Co., 84 F.3d 734, 741 (5th Cir. 1996) (refusing to certify a nationwide mass-tort class action in part because "variations in state law may swamp any common issues and defeat predominance").
82. But see Klay v. Humana, Inc., 382 F.3d 1241, 1261, 1262 (11th Cir. 2004) (acknowledging Castano's rule but stating that "if a claim is based on a principle of law that is uniform among the states, [or] if the applicable state laws can be sorted into a small number of groups, each containing materially identical standards, then certification ⋯ can be appropriate").
83. Niccum v. Meyer (In re Meyer), Nos. 97-2318, 97-2492, 98-2090, 1998 WL 538160, at *6 (7th Cir. Aug. 21, 1998).
84. But see Zivitz v. Greenberg, 279 F.3d 536, 540 (7th Cir. 2002)
85. " (citing Pasquale v. Speed Prods. Eng'g, 654 N.E.2d 1365, 1382 (Ill. 1995))); Turner v. Municipality of Anchorage, 171 P.3d 180, 190 (Alaska 2007) ("The purpose of offset ⋯ is avoiding double recovery; therefore, if the prior payment was for a different injury than the one compensated at trial, no issue of double recovery arises.");
86. RESTATEMENT (SECOND) OF TORTS § 920A(2) (1977) (describing situations in which an offset is not appropriate). Although our assumption is that a foreign court will deduct the gross amount received by a plaintiff in the American action, the plaintiff nets less than this amount in the American case due to the costs of litigation (i.e., for a foreign class member f, the amount netted is X(f) -C(f)CA). Some foreign courts adopt a similar principle.
87. DSee Aśmundsson v. Iceland, 2004-IX Eur. Ct. H.R. 307, 319 (2004) (describing "the basic principle in the law on liability that the claimant should receive full compensation, but not more"); Miller v. Cooper, [1994] 1 S.C.R. 359, 396 (Can.)
88. Jameson v. Cent. Elec. Generating Bd., [2000] 1 A.C. 455 (H.L.) 471-72 (appeal taken from Eng.) ("The basic rule is that a plaintiff cannot recover more by way of damages than the amount of his loss. ⋯ The principle of full satisfaction prevents double recovery." (internal quotation marks omitted)).
89. see, e.g., INTERNATIONAL CIVIL PROCEDURE 752 (Shelby R. Grubbs ed., 2003) (noting that in Switzerland the losing party must pay both court costs and the winning party's attorneys' fees), the calculation of C(f)F is somewhat complex. It is roughly equivalent to the formula already described
90. In other words, the total net cost is: (1) Y(J) -C(J) -X(J) + (2) C(J)F(all) + (3) Ý(H1) -Ć(H1)F + (4) X(R) -C(R)CA) + (5) X́(Q) -Ć(Q) + (6) C(Q)F -C(Q)CA + (7) Z(Q + R) + (8) ̂a. See supra notes 65-73 and accompanying text. If any of these eight costs is less than zero, it is treated as being equal to zero; that set of costs does not exist on the facts presented. 75 Cf. Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 996 (2d Cir. 1975) (noting the policy concern of relitigation as a reason for disallowing foreign citizens to join domestic class suits).
91. For federal cases declining to certify mass torts in part because they were positivevalue suits and in part because their value put inordinate pressure on the defendant to settle, see, for example, Castano v. Am. Tobacco Co., 84 F.3d 734, 748-49 (5th Cir. 1996); In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1299-1300 (7th Cir. 1995).
92. See In re Vivendi Universal, S.A. Sec. Litig., 242 F.R.D. 76, 105 (S.D.N.Y. 2007) (noting that the Netherlands' recent enactment of its WCAM procedure made it likely that it would recognize an American class judgment).
93. -84 For an economic analysis demonstrating this intuitive point, see Barbara Luppi & Francesco Parisi, Litigation and Legal Evolution: Does Procedure Matter? 18-20 (Univ. of Minn. Law Sch. Legal Studies Research Paper No. 10-09, 2010), available at http://papers.ssrn. com/sol3/papers.cfm?abstract- id=1555784.
94. For a discussion of empirical evidence on fee shifting, see Avery Wiener Katz & Chris William Sanchirico, Fee Shifting in Litigation: Survey and Assessment 25-34 (Univ. of Pa. Law Sch. Inst. for Law & Econ. Research Paper No. 10- 30, 2010), available at http://papers.ssrn.com/sol3/papers.cfm? abstract-id=1714089.
95. Rejecting the Bersch-Vivendi approach does not mean that all foreign citizens would therefore become class members. Other requirements of Rules 23(a) and (b) might require exclusion of some foreign citizens. See supra notes 7, 47-49 and accompanying text. 86 See supra notes 59-60 and accompanying text. Realization of the second of these benefits is contingent on the relative cost-effectiveness of the American class action.
96. See THOMAS E. WILLGING ET AL., FED. JUDICIAL CTR., EMPIRICAL STUDY OF CLASS ACTIONS IN FOUR FEDERAL DISTRICT COURTS 52-53 (1996) (noting a median opt-out rate of 0.1% or 0.2% of the total class membership in a study of federal class actions).
97. The usual concern with class actions is the opposite: that they use the power of large numbers to convert weak claims into litigation juggernauts that defendants must settle at an inflated price. See, e.g., Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 130 S. Ct. 1431, 1465 n.3 (2010) (Ginsburg, J., dissenting) ("A court's decision to certify a class accordingly places pressure on the defendant to settle even unmeritorious claims."); In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1299 (7th Cir. 1995) (Posner, J.) (issuing a writ of mandamus against an order certifying a class action in part because of "a concern with forcing these defendants to stake their companies on the outcome of a single jury trial, or be forced by fear of the risk of bankruptcy to settle even if they have no legal liability").
98. -101 28 U.S.C. § 1332(d)(2)(B) (2006). By virtue of the generous jurisdictional and removal provisions of the Class Action Fairness Act
99. FED. R. CIV. P. 82.
100. Again, we assume that the included citizens otherwise meet the requirements of Rule 23 or the comparable state-court rule. See supra note 7 and accompanying text. For an extended discussion of the circumstances under which foreign citizens have incentive to file subsequent foreign litigation, see supra Part II.C. In brief, a court should include any foreign citizen s when X(s) > PN P(s)F L(s)F -C(s)F and exclude any foreign citizen t when PN P(t)F L(t)F -C(t)F > X(t). See supra note 56 (discussing this formula in detail). The group of foreign citizens S is the combination of the groups of foreign citizens H and R in our prior analysis. See supra notes 59, 63 and accompanying text. The group of foreign citizens T is the combination of groups of foreign citizens J and Q. See supra notes 59, 61 and accompanying text.
101. -105 An exception to this statement involves foreign citizens who are risk takers and who are therefore unduly optimistic about their chances to recover more in subsequent foreign proceedings than they obtained in the American class judgment or settlement. For these class members, the second cost is in play, and possibly the first if the gamble pays off with a higher foreign judgment. Previously we assumed risk neutrality. See supra note 24.
102. See Ortiz v. Fibreboard Corp., 527 U.S. 815, 848-61 (1999); Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 619-29 (1997).
103. See, e.g., JAY TIDMARSH, FED. JUDICIAL CTR., MASS TORT SETTLEMENT CLASS ACTIONS: FIVE CASE STUDIES 76 & n.191, 79-83 (1998) (describing a worldwide mass-tort settlement class action in which class members were scheduled to receive different levels of compensation based on numerous factors).
104. A related difficulty is the implicit requirement of Rule 23(a) that a class be defined with sufficient specificity that the parties and court can determine who must receive notice of the right to opt out and who will be bound by the judgment. Bratcher v. Nat'l Std. Life Ins. Co. (In re Monumental Life Ins. Co.), 365 F.3d 408, 413 (11th Cir. 2004). Under the incentive rule, a court's order defining the class would need to contain language along the lines of this: "Class membership extends only to those foreign citizens who will receive more from this class action than they expect to receive as a net benefit in a foreign proceeding." Depending as it does on subsequent contingencies, such a class definition may be too vague to satisfy Rule 23(a). See Rice v. City of Phila., 66 F.R.D. 17, 20-22 (E.D. Pa. 1974) (refusing to certify a damages class action when the class definition swept presently unknowable future class members into the class).
105. Cf. Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 996 (2d Cir. 1975) (identifying the potential problem of relitigation as the motivation for excluding foreign citizens from domestic class actions).
106. Express consent is required and would likely take the form of a motion to intervene. See FED. R. CIV. P. 24(a)-(b) (describing conditions under which intervention of right and permissive intervention are permitted); cf. id at 23(d)(1)(B)(iii), (C) (recognizing the possibility that class members will intervene). Declining to opt out of the class action is an inadequate indicator of consent, given the reality of opt-out practice. Cf. supra note 87 (discussing the rarity of opting out). Instead, express consent is equivalent to an opt-in process. A defendant could avoid the effect of a foreign citizen's consent by showing that, in at least one hospitable foreign forum, the foreign citizen's express consent would not bar relitigation.