Crowd-Classing Individual Arbitrations in a Post-Class Action Era

Authors

Myriam E. Gilles, Benjamin N. Cardozo School of LawFollow
Anthony J. Sebok, Benjamin N. Cardozo School of LawFollow

Publication Date

Winter 2014

Journal

DePaul Law Review

Abstract

Class actions are in decline, while arbitration is ascendant. This raises the question: will plaintiffs' lawyers skilled in bringing small value, large-scale litigation-the typical consumer, employment, and antitrust claims that have made up the bulk of class action litigation over the past forty years-hit upon a viable business model which would allow them to arbitrate one-on-one claims efficiently and profitably? The obstacles are tremendous: without some means of recreating the economies of scale and reaping the fees provided by the aggregative device of Rule 23, no rational lawyer would expend the resources to develop and arbitrate individual, small-value claims against well-heeled defendants. But despite these complications, we think there are at least two possible models that might allow for informal aggregation of like claims in at least some subset of cases.

One hybrid model would seek a judicial liability judgment upon which serial, individual arbitrations could later rely. The antecedent judicial judgment could take a number of different forms, so long as it has preclusive force that can be leveraged in subsequent arbitration hearings. A second, complementary model envisions "arbitration entrepreneurs" (either lawyers or nonlawyers) purchasing legally identical, individual claims which these legal capitalists believe to have value in the arbitral forum. Upon procuring as many discrete claims as the market will bear, the arbitration entrepreneur would seek to resolve the hundreds or even thousands of claims she has amassed in a single arbitral session. With one arbitration entrepreneur as the lawful owner of a multitude of claims, this form of aggregation implicates neither the prohibition against class arbitration nor the contractual definition of "a claim" subject to arbitration.

Volume

63

First Page

447

Publisher

DePaul University College of Law

Disciplines

Dispute Resolution and Arbitration | Labor and Employment Law | Law

Comments

Symposium: A Brave New World: The Changing Face of Litigation and Law Firm Finance: Nineteenth Annual Clifford Symposium on Tort Law and Social Policy

Recommended Citation

Myriam E. Gilles & Anthony J. Sebok, Crowd-Classing Individual Arbitrations in a Post-Class Action Era, 63 DePaul L. Rev. 447 (2014).
https://larc.cardozo.yu.edu/faculty-articles/775