The John M. Olin Center

Paper Abstract

3. Assaf Hamdani & Alon Klement, The Class Defense, 10/2004; subsequently published in California Law Review, Vol.  93, No. 3, May 2005, 685-741. 

Abstract: Lawmakers, courts, and legal scholars have long recognized that consolidating the claims of dispersed plaintiffs with similar grievances may promote justice and efficiency. In this Article, we argue that justice and efficiency also mandate that similarly positioned defendants be provided with an adequate procedure for consolidating their claims. We explore the circumstances under which costly litigation and collective action problems will prevent dispersed defendants with plausibly valid defense claims from confronting plaintiffs in court and analyze the troubling fairness and deterrence implications of such failure. We then demonstrate that aggregating claims will rectify the imbalance between the common plaintiff and defendants. To achieve defendant consolidation, we propose to implement what we label as the class defense device. We outline the novel features that will make the class defense both effective and fair—i.e., that will provide class attorneys with proper incentives, adequately protect the due process rights of absentee defendants, and keep to a minimum the omnipresent risk of collusion. Finally, we show that the class defense procedure affords would-be defendants greater protection than its alternatives. Specifically, we demonstrate that the class defense is a superior framework for resolving many disputes—such as lawsuits against credit card and cable companies—that currently take the form of class actions.

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