April 3, 2017

Private: Deconstructing the Administrative State Through the Courts

Alexandra D. Lahav

by Alexandra D. Lahav, Professor of Law at the University of Connecticut and Author of In Praise of Litigation

The Senate Judiciary Committee is considering a bill – passed along partisan lines in the House – that threatens the way Americans have enforced the law for seventy five years. The bill is called the Fairness in Class Action Litigation Act (FICALA) and its results are likely to strike a major blow against class actions and aggregate litigation. 

The recent hearings on Supreme Court nominee Neil Gorsuch highlighted the threat that current lawmakers pose to the administrative state – the apparatus that has, since the New Deal, allowed the executive to pass regulations that support our voting rights, clean air and water, workplace safety and more. But in the discussions one thing seems to have been missing: a major way that regulations are enforced in the United States is by individuals and groups bringing lawsuits. Congress has enabled these lawsuits by creating private rights of action in areas as diverse as employment discrimination and internet privacy.

For the last thirty years, the Supreme Court has been eroding these regulations by creating barriers to suit: forced arbitration has been repeatedly upheld (even when it goes against state contract law), requirements for bringing a claim have increased and collective actions are harder to certify. If most of the enforcement of the law is left up to us, through the courts, the process of shutting the courthouse door also means that regulations will not be enforced. Now Congress is taking its turn to shut the courthouse door.

The new law proposes to disable enforcement in two ways. First, it makes bringing a lawsuit harder, increasing cost and delay. It does this by creating vague requirements that will increase litigation – such as requiring plaintiffs to show at the outset that all the potential class members have suffered the “same type and scope of injury” or provide an “administratively feasible” way to distribute funds to a majority of class members. Since nobody knows what these wiggle words mean, there will be significant litigation just to define them. How will this help class members?  It will not, but it will help defendants prevent class certification, increasing their leverage to get sweetheart settlements. Furthermore, there will be an appeal as of right in each class action, meaning that cases will take longer than ever as they go up and down the appellate chain. 

A second way the new law proposes to disable enforcement is by starving plaintiffs’ attorneys. This is a tricky topic because, truth be told, plaintiffs’ attorneys have sometimes abused their position. They have also gotten great results for class members in some cases. Instead of improving the situation, rewarding the good and limiting the bad, the bill actually creates incentives for plaintiffs’ attorneys to do worse for class members because it does not allow them to be paid until all class members are paid and until the attorneys have provided an accounting to the court. (Along with a number of other provisions, such as forbidding class representatives to hire lawyers they have hired before). I love the idea of requiring an accounting, but delaying the entire fee until the case is completely done will merely incentivize attorneys to settle quickly and distribute money even quicker, leaving many class members without compensation. And in so doing will make it harder for the most responsible attorneys to do the job right. A better solution would have been to treat attorneys like contractors people hire to repair their home: part of the fee should be paid upon settlement and the rest upon completion. But the purpose of this legislation is not to come up with the best solution to a problem, but rather to use our distrust of lawyers to cut off our rights entirely. We need these lawyers to bring the cases. Yes, they ought to be policed -- but not eliminated. 

Perhaps the worst, because it is the most stealthy, provision is one capping attorney’s fees for injunctive actions to the “value” of the injunction. The purpose of an injunction is that monetary damages cannot provide relief. What is the monetary value of a non-discriminatory workplace or a school that is accessible to everyone?  While it has a savings clause (“unless otherwise specified by Federal Statute”) it is not clear how this provision would be read in conjunction with civil rights fee shifting statutes. What is clear is that in the hands of a court that wants to limit enforcement, this could be a powerful weapon.  Congressional leaders say they do not want to affect civil rights cases, but if so, why include this provision? 

All of these provisions are procedural and technical on purpose to distract from what is really going on. The plan is to let us keep our rights, but make sure we haven’t the means to enforce them.   Justice Scalia wrote in 2013 upholding forced arbitration: “the fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy.” But Justice Marshall gave the best counter-argument to this position, long before the rise of the administrative state, in the case of Marbury v. Madison: “The government of the United States has been emphatically termed a government of laws, and not of men. It will certainly cease to deserve this high appellation, if the laws furnish no remedy for the violation of a vested legal right.”