Presidential settlements.

• Author: Zimmerman, Adam S.
• Position: Introduction through I. The Rise of Presidential Settlements C. Modern Presidential Settlements 1. The Algiers Accords, p. 1393-1427

Large groups regularly turn to the White House to resolve complex disputes collectively, much like a class action. These presidential settlements go hack as far as the early Republic and were particularly popular in the Progressive Era, when President Teddy Roosevelt famously brokered settlements among private groups following a rash of accidental injuries and deaths in mining, rail, and even football. More modern variants include mass compensation schemes like the Holocaust victim settlement, the Pan Am tog settlement, and the BP oil spill settlement brokered by Presidents Bill Clinton, George W. Bush, and Barack Obama, respectively. In each case, the President helped resolve a sprawling class action-like dispute among warring parties while advancing a broader executive agenda. Just as the President has extended power over the administrative state, presidential settlements demonstrate the growth of executive authority in mass dispute resolution to provide restitution for widespread harm.

But this use of executive power creates problems for victims purportedly served by presidential settlements. When the President settles massive private disputes, the President resolves them like other forms of complex litigation but without the oversight, transparency, and participation thought necessary to resolve potential conflicts of interest among the victims. The President's other duties aggravate conflicts with groups who may rely entirely on the settlements for relief

This Article recommends that the President adopt complex litigation principles to reduce conflicts of interest, increase transparency, and improve public participation in White House-driven settlements. Envisioning the President as the "settler-in-chief" this Article also raises new questions about how the coordinate branches of government, as well as actors inside the White House, may regulate executive settlements consistent with the separation of powers.

INTRODUCTION I. THE RISE OF PRESIDENTIAL SETTLEMENTS A. Defining Characteristics of Presidential Settlements B. History of Presidential Settlements 1. Presidential International Claims Settlements 2. Presidential Labor Settlements C. Modern Presidential Settlements 1. The Algiers Accords 2. The Holocaust Settlements 3. The Lockerbie Settlement II. CONGRESSIONAL RESPONSES A. International Claims B. Labor-Related Settlements III. APPLYING COMPLEX LITIGATION PRINCIPLES A. The Costs and Benefits of Aggregate Litigation B. Best Practices from Complex Litigation 1. Legitimate Decisionmaking 2. Loyal Decisionmaking 3. Accurate Decisionmaking IV. THE PRESIDENT AS "SETTLER-IN-CHIEF" A. Can Congress Regulate the Settler-in-Chief? B. Can the Settler-in-Chief Regulate Himself? CONCLUSION INTRODUCTION

On June 15, 2010, President Barack Obama made his first-ever address to the American public from the Oval Office. (1) In an eighteen-minute speech devoted to an oil rig explosion that killed eleven people and caused a catastrophic oil spill in the Gulf of Mexico, President Obama declared war on the "oil industry lobbyists[,] ... corrupt regulators, foreign energy suppliers and conservative policy makers" that had sidelined his plans for energy and climate change. (2) "The one approach I will not accept," said the President, "is inaction." (3)

President Obama soon made good on his promise to act, calling BP's chief executives to the West Wing to negotiate compensation for the thousands of fishermen, businesses, and coastal residents impacted by the BP oil spill. (4) According to participants, the negotiations mirrored the kind of eleventh-hour negotiations often seen in mass tort litigation. (5) Administration and BP officials haggled over the final details of the compensatory scheme in a White House meeting that stretched for hours, punctuated by tense breakout sessions where each side huddled separately to determine the size and scope of the deal. (6) But instead of private attorneys bargaining on the steps of a courthouse, this massive settlement culminated in a last-ditch, private, twenty-five minute session between BP's chairman and President Obama "[u]nder the famous portrait of a charging Theodore Roosevelt on horseback." (7)

The final agreement contained many features familiar to a typical sprawling class action settlement: (1) an independent $20 billion fund, (2) an experienced special master, (8) and (3) a distribution scheme for thousands of oil spill victims. (9) But unlike a class action, no court approved the overarching terms of the deal. (10) Nor did any process exist for victims' representatives to participate formally in discussions over the structure of the settlement. (11) Although the settlement was the first triumphal moment for President Obama since news broke about the BP disaster, the Gulf Coast Claims Facility materialized outside any kind of traditional court process. It was, by its terms, a presidential settlement. (12)

President Obama's highly publicized efforts to resolve private disputes while advancing public policy, such as the BP oil spill fund, are hardly unique. Over the course of American history, large groups have repeatedly turned to the White House to resolve private disputes collectively, much like class action litigation. Such deals date back at least as far as the early Republic and were particularly popular with President Teddy Roosevelt, who famously brokered settlements among private groups following a rash of accidental injuries and deaths in mining, (13) rail, (14) and even football. (15) More recent settlements include mass compensation schemes such as the Iranian-American settlements, (16) the Holocaust victim settlement, (17) and the settlement of claims arising from the 1988 bombing of Pan Am 103 over Lockerbie, Scotland, (18) brokered under Presidents Jimmy Carter, Bill Clinton, and George W. Bush, respectively.

In each case, the White House--and not the courthouse--was the forum for resolving sprawling, group-wide settlements. But the location of each settlement also gave the President an opportunity to advance his own policy agenda over legislative opposition or judicial inaction. Like the well-examined way the President has extended executive power over the burgeoning administrative state, (19) large compensation agreements represent another way that the President has expanded the boundaries of executive power.

This Article argues that this phenomenon creates problems for groups purportedly served by presidential settlements. Even though presidential settlements resolve private claims on behalf of groups in ways that resemble large class action settlements, separation-of-powers principles limit the judicial review, transparency, and plaintiff participation ordinarily thought necessary to resolve potential conflicts of interest among the victims who rely on such settlements for relief. (20)

Arguably, victims benefit when politically accountable actors, like the President, resolve claims with settlements that not only compensate large groups of people, but also take into account broader policy concerns, like deepwater drilling reforms or fairer foreclosure procedures. (21) Unlike private counsel, whom courts may appoint to represent victims without the victims' consent, (22) voters themselves choose public officials to represent their interests in democratic elections. (23) And while commentators observe that class action settlement schemes sometimes resemble illegitimate "private administrative agencies," (24) the result of a presidential settlement ironically grows out of negotiations by the chief executive, who oversees many real life administrative agencies. (25) And, in some cases, the executive branch may be the only branch capable of delivering relief to groups of victims in a crisis. (26)

But without procedures to hear victims' concerns, address conflicts of interest, or distribute funds, presidential settlements raise many of the same kinds of concerns as do abusive forms of mass litigation. The interests of the President, after all, may conflict with the interests of victims--much like class action attorneys working on a contingency fee. (27) Presidential administrations may seek quick deals to promote their own agendas, respond to national emergencies, or hide their own embarrassing missteps. (28) Like other executive branch settlements brokered by federal agencies, prosecutors, and state attorneys general, (29) presidential settlements may share the same size and complexity as class actions, but without similar procedural safeguards for the victims they purport to serve.

Presidential settlements also raise unique concerns. First, presidents can use the "bully pulpit" to raise the national profile of a dispute, creating unique political pressure on parties to settle disputes out of court. (30) Second, presidents have far more discretion when negotiating settlements than other public officials, who must abide by rules designed to ensure they hear from affected parties or explain their decisionmaking, such as victims' rights laws, (31) the Administrative Procedure Act, (32) and sunshine-in-government rules. (33) No similar rules constrain the President when the President brokers settlements on behalf of private parties. (34) Third, presidential settlements have constitutional consequences. When presidents step in to shape policies without objection from Congress, courts may defer to that historical practice as a constitutional "gloss" on what the President can do without congressional approval--generating new obstacles to transparency and judicial review. (35) Over the course of U.S. history, presidential settlements have generated some of the greatest opportunities for testing--and expanding--the limits of executive power. (36)

Many scholars have evaluated specific kinds of presidential settlements from other perspectives--including their influence on modern debates about separation of powers, (37) labor relations, (38) and international...