Posner Leaves ‘Enormous Imprint’ on Class Actions

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By Perry Cooper

Judge Richard Posner’s many class action rulings over the years have been “enormously influential,” and have cut both in favor of, and against, the aggregated litigation device, defense and plaintiffs’ attorneys alike tell Bloomberg BNA.

Attorneys involved in class practice aren’t necessarily fans of all of his opinions. But general consensus exists that Posner took seriously the judiciary’s role as guardian of unnamed class members.

Posner abruptly retired from the U.S. Court of Appeals for the Seventh Circuit Sept. 2, after more than three decades on the bench.

“Judge Posner played a critical gatekeeping role for class actions at the appellate level,” complex litigation professor Elizabeth Chamblee Burch, of the University of Georgia Law School in Athens, Ga., told Bloomberg BNA.

“He is a master of understanding incentives and discerning the many ways in which class action abuses might take root,” she said. “He’s penned many a teachable case, for students, practitioners, and judges alike.”

Early v. Late Posner

Frequent class settlement objector Ted Frank called Posner’s early opinions the inspiration for his work as director of the libertarian Competitive Enterprise Institute Center for Class Action Fairness in Washington.

“He’s effectively one of the intellectual grandfathers of all of our work,” Frank, who argued before Posner five times, told Bloomberg BNA.

He specifically praised Posner’s “razor-sharp” opinions in Pearson v. NBTY, Inc., In re Walgreen Stockholder Litigation, and Redman v. Radioshack Corp., all of which rejected deals that Posner said benefited class counsel at the expense of the class.

“I’m confident that one day this decade a different court of appeals will disagree with one of those Posner opinions, the Supreme Court will take up the circuit split, and then tell us that Posner was right all along,” Frank said.

Defense attorney Jonah M. Knobler said the law-and-economics perspective Posner championed in his early years on the Seventh Circuit made him a class action skeptic.

“Many of his opinions became part of the anti-class-action canon and are still cited routinely by defendants,” Knobler, of Patterson Belknap Webb & Tyler LLP in New York, told Bloomberg BNA.

He pointed to In re Rhone-Poulenc Rorer Inc., which Knobler said made commonplace the defense argument that plaintiffs use class certification to extract “blackmail settlements,” and “also basically drove a stake through the heart of the personal-injury class action.”

But Knobler lamented the more plaintiff-friendly shift of Posner’s later opinions, especially in small-dollar class actions, like the moldy washing machine case Butler v. Sears, Roebuck and Co., in which Posner held that the fact that damages aren’t identical across all class members shouldn’t preclude class certification.

“No longer was Posner concerned about the need for a litany of individualized damages hearings if the case were litigated,” Knobler said. “And no longer was he particularly concerned about the potential for ‘blackmail settlements'—indeed, he came to view the likelihood of a forced settlement as a virtue of class certification.”

Whether the legacy of “early Posner” or “late Posner” prevails depends on what the U.S. Supreme Court does in the next few years, Knobler said.

“It seems likely that Posner’s late-stage view that ‘efficiency’ is the crucial criterion would meet resistance from the conservative wing of today’s court,” he said. “His earlier statements on the ‘downsides’ of class actions may be ingrained too deeply in our legal culture—and, if so, he may end up being a victim of his own success.”

Unified View of Class Fairness

Jonathan D. Selbin takes a more positive view of Posner’s decisions that criticize class actions than one might expect from a plaintiffs’ attorney. Selbin, of Lieff Cabraser Heimann & Bernstein LLP in New York, argued the moldy washer cases before Posner.

He admitted Rhone-Poulenc had a detrimental effect on class action practice, but said it wasn’t driven by an “inveterate hostility to the class device by Judge Posner.”

Instead, it reflected “real and practical concerns about the effective—and fair—use of the civil rules and case management tools to adjudicate complex liability issues, particularly in high value individual cases,” he told Bloomberg BNA.

Consequently, Posner’s opinions in the moldy washers case didn’t mean he’d had a change of heart, Selbin said. “To me, they were part of a unified and consistent view about when such tools were efficient and fair to use, and when they were not, which is the very thing Rule 1 of the Civil Rules mandates,” he said.

Rule 1 of the Federal Rules of Civil Procedure says the rules should be applied to “secure the just, speedy, and inexpensive determination” of every case.

Posner’s opinions overturning class settlements that weren’t fair to the class were also part of his “unified view of what class actions should and should not be about,” Selbin said.

“Almost without exception, I agreed with the rulings in those cases, because they sought to implement best practices and to safeguard the rule from abuse,” he said, referring to the rule that governs class procedures, Federal Rule of Civil Procedure 23.

Essential Tool for Justice

Plaintiffs’ advocate Arthur Bryant said Posner had an enormous influence on the development of class action jurisprudence, for better and for worse.

On the positive side, “he understood and clearly articulated that class actions are an essential tool for resolving some disputes efficiently and ensuring that justice is done when otherwise the defendant might get off scot-free,” Bryant, chairman of Public Justice, a consumer advocacy organization in Oakland, Calif., told Bloomberg BNA.

Bryant cited Posner’s oft-quoted quip in Carnegie v. Household International, Inc., a consumer finance opinion: “The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”

Posner also “understood that class actions can be abused and that it’s the judiciary’s role more than anyone else’s to make sure that they aren’t,” Bryant said.

But Bryant criticized Posner for viewing class actions through a law and economic lens that the federal rules of procedure and the law “simply do not establish or apply.” Sometimes that led to equitable results, but often it took him and the law astray, Bryant said.

The Poze Goes

President Ronald Reagan appointed Posner to the Seventh Circuit in 1981. He served as its chief judge from 1993 to 2000.

Posner, who retired at age 78, called his court tenure a “tremendous honor” in a statement. He also noted that he had authored more than 3,300 opinions during his time on the bench.

It is fitting that Posner retired before his 80th birthday. He had become even more outspoken recently, and particularly critical of the octogenarians on the U.S. Supreme Court.

In October he stunned a room of class action attorneys by saying he would jettison the federal rule governing class actions in place of a more holistic judgment of whether a class action is appropriate.

A recent biography by William Domnarski reveals that Posner used the catchphrase “the Poze knows” for himself as a teenager.

Now, as Texas appellate attorney Kendyl Hanks Greenberg Traurig LLP remarked on Twitter, “Alas, #ThePozeGoes.”

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com

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