Modeling Class Counsel

• Publication year: 2021

81 Nebraska L. Rev. 1397. Modeling Class Counsel

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Geoffrey C. Hazard, Jr.(fn*)

Modeling Class Counsel

TABLE OF CONTENTS

I. Introduction .......................................... 1397
II. Class Counsel in a Damages Class Suit ................. 1398
III. The Ordinary Client-Lawyer Relationship.. ............. 1399
IV. Contrast: Class Counsel ............................... 1402
V. The Private Attorney General Analogy .................. 1403
VI. The Corporate Representative Analogy .................. 1406
VII. The Client with Diminished Capacity Analogy ........... 1408
VIII. Conclusion ............................................ 1411

I. INTRODUCTION

The class suit has become an established and increasingly prominent institution of our procedural system. Our system of law enforcement through private litigation, including class suits and other aggregative civil procedures, is virtually unique throughout the world and is an integral element of the American governance system. The class suit is a powerful litigation mechanism and therefore has become one of our "institutions."(fn1)

A key institution in class suit procedure is the role of plaintiff's counsel. There has been an abundance of judicial consideration of that role and nearly as much attention in law review literature. Nevertheless, a clear concept of the role of class counsel, and counsel's relationship to the class, has been difficult to formulate.

So far as client-lawyer relationships are concerned, some class suits are not much different from nonclass proceedings. This is true of litigation on behalf of an unincorporated association or other group that has organizational form apart from the legal matter at issue. An example of this type is a suit framed as a class suit in response to

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limitations on the capacity of the client. For example, a suit by a labor union may have to be brought as a class suit because the governing procedural rules do not permit an unincorporated association to maintain certain types of claims.(fn2) Another such type of class suit is that sponsored (and financed) by a social action group, such as the American Civil Liberties Union or, in recent years, the Washington Legal Foundation. Here, the sponsoring organization is the authoritative voice in dealings with class counsel, subject to due regard for the interests of the individual class members.

In contrast is the class suit for damages organized by class counsel and conducted on a contingent fee basis. Some thoughtful analysts have drawn a general distinction among these characteristics of class suit litigation: One type is said to be "social action" (by the sponsoring group), the other type is "entrepreneurial" (by the initiating lawyer). No doubt this distinction is no more distinct than many others that the law undertakes to make. However, it is unnecessary to refine this distinction to make the point that the chief procedural and ethical difficulties have arisen in class suits where the primary claim is for damages on behalf of a dispersed group of claimants.

II. CLASS COUNSEL IN A DAMAGES CLASS SUIT

It is recognized that, in the entrepreneurial class suit, the role of plaintiff's counsel is the key.(fn3) It is typically the class counsel who conceives of a class claim, defines the substantive basis for the claim, selects the target of the suit, and lays the venue where the litigation is to be prosecuted. Class counsel must prevail in the critical pre-certifi-cation stage of a suit seeking class status, perhaps also in certification itself. (I say "perhaps" only because class suits may be settled, and often are settled, before certification). Class counsel is instrumental in settlement negotiations, most class suits being settled at the point of certification or shortly thereafter, if indeed settlement has not been previously agreed upon. Often the certification and settlement stages are compressed into each other, in which event the role of class counsel is even more salient.

However, the proper role of class counsel remains a matter of great uncertainty and controversy. The American Law Institute's Restatement (Third) of Law Governing Lawyers, published just a few years

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ago, noted a variety of special problems concerning the authority and responsibility of class counsel. But, having identified these peculiarities, the Restatement in virtually all instances undertook no definitive resolutions, and for good reason. Neither the rules of procedure, nor the profession's ethical codes, nor the judicial decisions had developed a clear definition of the role.

Meanwhile, the Standing Committee on Rules of Practice and Procedure of the Judicial Conference of the United States has given extended consideration to the problems of class suits, including the role of class counsel. But these deliberations also have not come to illuminating conclusions. Class suits, and the lawyers who specialize in them, continue to be lauded as necessary instruments of justice and condemned as purveyors of blackmail.

About the best that analysts have been able to do is identify class counsel as a "private attorney general."(fn4) For reasons that others have suggested and which I shall explicate, this term is unhelpful at best, and on balance adds to the confusion. We therefore need to begin again, and this exposition is an effort in that direction.

The conclusion suggested here is paradoxical, perhaps bizarre. I will suggest that the best analogy to representation of a class is representation of an incompetent. This approach has been implied in suggestions from various sources. It is explicit in suggestions that, when there is no sponsoring organization for the class party, there should be a guardian for the class.(fn5) It is implicit in the Private Securities Litigation Reform Act adopted a few years ago by Congress. This Paper endeavors to extend the analysis of that idea.

III. THE ORDINARY CLIENT-LAWYER RELATIONSHIP

A first step in the analysis is to bring to mind the characteristics of the normal client-lawyer relationship as a basis for contrast. In this step, the analysis is perhaps complementary to a thoughtful earlier study done by my colleague Professor David L. Shapiro.(fn6)

The ordinary client relationship is more or less explicit in the law governing lawyers, as set forth in the Restatement (Third) of the Law

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Governing Lawyers, and as regulated in the ethical codes, particularly the American Bar Association's Model Rules of Professional Conduct. I will use the Model Rules as my primary framework.

The basic rules of the ordinary client-lawyer relationship are found in Model Rules 1.1 (Competence), 1.2 (Scope of Representation), 1.3 (Diligence), 1.4 (Communication), 1.5 (Fees), 1.6 (Confidentiality) and

1.7 (Conflict of Interest). These rules presuppose that a client is in existence prior to the formation of a client-lawyer relationship.(fn7) Indeed, the Model Rules now address the category of "prospective client." The rules further presuppose that the person who becomes a client had previously undertaken a deliberative process that resulted in a decision to seek legal counsel.(fn8) Of course, for a person who is sued a defendant the decision whether to engage a lawyer has been preempted by the plaintiff's choice, except when the defendant decides to default or to defend pro se. However, the basic point is that a client is a person who previously was a prospective client, who concluded that he had a problem requiring a lawyer, and who mobilized himself to "cross the river," so to speak, to transform a conflict into a legal dispute.

Upon a prospective client's initiative to become a client, the rules contemplate a discussion with a lawyer about whether engaging legal counsel is indeed appropriate, about the scope of the representation (Rule 1.2), and about the lawyer's compensation (Rule 1.5). The comment to Rule 1.1 refers to the "matter" that a lawyer is engaged to handle. The term "matter" is used in the Model Rules, and in common professional parlance, to indicate the task or engagement involved.

The legal concepts of the ordinary client-lawyer relationship in the older ABA Model Code of Professional Responsibility are somewhat different, but their import is the same. So also is the common law essentially the same. At early common law, an accused in a criminal case could not have a lawyer, and the use of lawyers in civil cases was optional. The developed common law visualizes the usual relationship between client and lawyer as being contractual.(fn9) A contractual relationship is to be contrasted with, for example, a status relationship, such that a litigant could not appear pro se and therefore would be obliged to participate through counsel. A contractual relationship presupposes a legally...