Faculty Bibliography

Courts reward attorneys for investing time in class action lawsuits more generously than they reward them for investing money in the costs of those suits. Class counsel may directly profit on time investments in two ways: by billing lawyers at market rates though paying those lawyers less and by receiving multiplied fee awards. Those same attorneys in those same situations may also recover their costs but courts may not — or at least do not — permit the attorneys either to mark up their costs or to receive cost multipliers. As cost profits are rarely even debated, there is no good defense of why they are unavailable, but one assumes that courts are less comfortable awarding attorneys a markup on their copying machine than they are for their legal work. The assumption that costs cannot be directly profitable appears therefore to belittle costs, relegating them to a secondary position in the fee and cost award analysis and treating them as something of a tagalong or afterthought. Our goal in this Article is to give costs their due. We describe current jurisprudence, demonstrating how, given a choice between investing profitable time or reimbursable costs, profit-maximizing attorneys will find time investment more attractive than cost investment. We then explore the effects of this bias, showing that because cost investments are not directly rewarded, profit-maximizing attorneys will predictably (1) avoid certain cases; (2) select suboptimal modes of proceeding within cases they do bring; and then (3) settle those cases prematurely. Assuming that conclusion is unfortunate, we consider and propose mechanisms for remedying it. While our proposals are initial and therefore tentative, our commitment to the project of centering costs is not: it is grounded in the belief that the legal system’s anti-cost-investment bias impedes access to justice for individuals whose claims can be established only with substantial cost investments by entrepreneurial lawyers. Centering costs — and considering measures as conventionally discouraged as permitting third parties to profit from cost investments — has the potential to serve a larger public good.

Stephen Yeazell’s pathbreaking study of the history of group litigation revealed how disparate societies have shaped the rules of group litigation to meet their own needs. Professor Yeazell thereby demonstrated that procedural rules are socially contingent rather than universal in nature. In this Essay honoring Steve, I transform that lesson into a new approach to joinder rules. Specifically, I argue that if joinder rules arise out of specific social situations, then the simplest approach to joinder is to adopt a default rule calling for the shape of litigation to reflect the shape of the social activity that gave rise to the litigation. Labeling this concept “social loyalty,” I argue that it provides a new way of identifying what cases ought to be adjudicated in the aggregate and a new defense of their aggregation.

Cited as persuasive authority in more than 600 federal and state court decisions, Newberg on Class Actions provides comprehensive, step-by-step coverage from pretrial through final resolution. The text focuses on the benefits of the class action, particularly in achieving judicial economy and in providing court access to small claimants who would otherwise be without judicial remedy. Newberg discusses fundamental characteristics, evolving controversies, and applying a theoretical framework to various areas of the law. It examines strategy, technique, agreements and settlements, torts, fees, constitutionality, and damages, and provides detailed analysis of various types of class actions involving: Antitrust Bankruptcy Consumer credit and fraud Intellectual property Shareholder derivative suits And more