New Article: “The Second-Class Class Action: How Courts Thwart Wage Rights by Misapplying Class Action Rules”

New Article: Nantiya Ruan & Scott A. Moss, The Second-Class Class Action: How Courts Thwart Wage Rights by Misapplying Class Action Rules, 61 Am. U. L. Rev. 523 (2012).  Abstract below:

Abstract: 
Courts apply to wage rights cases an aggressive scrutiny that not only disadvantages low-wage workers, but is fundamentally incorrect on the law. Rule 23 class actions automatically cover all potential members if the court grants plaintiffs’ class certification motion. But for certain employment rights cases – mainly wage claims but also age discrimination and gender equal pay claims – 29 U.S.C. § 216(b) allows not class actions but “collective actions” covering just those opting in affirmatively. Courts in collective actions assume a gatekeeper role as they do in Rule 23 class action, disallowing many actions by requiring a certification motion proving strict commonality among members.

But conditioning § 216(b) collective actions on certification motions proving commonality is fundamentally incorrect. Section 216(b) is not an opt-in version of Rule 23; it is a liberalized form of simple Rule 20 joinder, which permits joint suit whenever claims share one common issue and address related events. No text authorizes any § 216(b) certification inquiry like Rule 23 does. Nor is judicial gatekeeping justified by economic logic: Rule 23 classes present principal-agent and asymmetric information problems because lead plaintiffs may inadequately represent unengaged members; but all § 216(b) collective actions members are full plaintiffs with individual claims, obviating the need for judicial scrutiny.

These cases commonly are high-impact challenges to entire industry pay practices, seeking millions in unpaid wages for thousands of workers. Especially for low-wage workers, disallowing collective actions ends the claims; individual suits are cost-prohibitive. Even when collective actions proceed, certification motions yield cost and delay, thwarting claims and deterring attorneys.

With certification motions improper, courts should presumptively allow collective actions whenever workers at the same employer press the same statutory claims. Defendants should bear the burden of challenging collective actions in a Rule 21 misjoinder or Rule 12 dismissal motion. Courts, lacking Rule 23 gatekeeping powers, still would wield three more modest powers: deciding defendants’ motions; supervising requested notice to potential opt-ins; and policing whatever modest asymmetric information and principal-agent problems may arise in multiple-plaintiff representation, by enforcing ethics rules on avoiding conflicting interests and keeping clients informed decision-makers.

The Article concludes with two explanations for such pervasive judicial error. In a complex, once-obscure field, courts heavily relied upon early precedent that proved incorrect, yielding path-dependent “lock-in” of bad law. Less charitably, courts’ mishandling of collective actions is just another example of federal courts erecting procedural hurdles to rights-vindicating litigation.

About these ads

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s