Professors Kahan and Silberman offer a doctrinal and policy critique of the Ninth Circuit’s 1997 remand decision in Epstein v. MCA, Inc. (Matsushita II), which held that class counsel in a state court class action failed to adequately represent the class, and thus the class was not bound by the global settlement approved by the state court. As a result of the Matsushita II decision, absent class members have an unfettered ability to collaterally attack the “adequacy” of their representation by class counsel. The authors argue that this holding, premised on a misreading of the Supreme Court’s decision in Phillips Petroleum Co. v. Shutts, threatens to impede both state and federal class action settlements, create the potential for multiple and wasteful litigation of the issue of “adequacy of representation,” and motivate a new kind of forum shopping in the class action context. Although multi-jurisdictional class actions give rise to potential “plaintiff shopping” and “forum shopping” abuses, the authors contend that a broad right to collateral attack created by Matsushita II is not a good way to deal with these problems. In place of the Ninth Circuit rule, Professors Kahan and Silberman propose providing incentives to all parties to participate in the settlement action coupled with a narrower, process-based standard for collateral attack.
LawReview
