The Corrective Justice State

Joseph Williams & Josh Boak, Obama Heralds $26 Billion Settlement, Politico, available at http://www.politico.com/news/stories/0212/72668.html.

Id.

See Michael R. Marrus, Some Measure of Justice: The Holocaust Era Restitution Campaign of the 1990s (2009).

Shaila Dewan & Jessica Silver-Greenberg, Foreclosure Deal Credits Banks for Routine Efforts, N.Y. Times, Mar. 27, 2012 (observing that banks can erase more than $2 billion of their obligation under the settlement by donating or “demolishing abandoned houses” and another $1 million to help defaulted homeowners move out). See also Office of Mortgage Settlement Oversight 4, First Take: Progress Report from the Monitor of the National Mortgage Foreclosure Settlement, Aug. 29, 2012 (observing that the bulk of the help in the first six months of the settlement—over $8 billion—came in the form of short sales, in which lenders allow homeowners to sell for less than what they owe), available at https://www.mortgageoversight.com/wp-content/uploads/2012/08/ProgressReport08292012.pdf.

For representative editorials reprimanding state governments and attorneys general across the country for allocating proceeds of the mortgage settlement to other causes, see Phyllis Sallow-Kaye, Mortgage Settlement Fund Must Go to N.J. Homeowners, Times of Trenton, Feb. 22, 2012; From the Editors, States Steal Federal Foreclosure Funds at Their Own Peril, Bloomberg News, July 4, 2012; Chuck Bean & Frank J. Principi, Virginia Lawmakers Shouldn’t Divert Foreclosure Funds, Wash. Post, Mar. 9, 2012; Marc H. Morial, Mortgage Settlement Funds Should Assist Arizona Families, The Arizona Republic, Aug. 11, 2012, available at http://www.azcentral.com/arizonarepublic/opinions/articles/2012/08/09/20120809morial0811-mortgage-settlement-funds-should-assist-ariz-families.html?nclick_check=1.

I have discussed these trends in a series of recent articles. See Adam S. Zimmerman, Distributing Justice, 86 N.Y.U. L. Rev. 500 (2011) (tracing the rise of federal agency settlement funds, which collected over $10 billion over the past decade); Adam S. Zimmerman & David M. Jaros, The Criminal Class Action, 159 U. Pa. L. Rev. 1385 (2011) (tracing the rise of massive criminal restitution funds in deferred and non-prosecution agreements between corporate defendants and federal prosecutors); Adam S. Zimmerman & Michael D. Sant’Ambrogio, The Agency Class Action, 112 Colum. L. Rev. 1992 (2012) (the rise of federal agency–based settlement funds and recommending reforms adopted from complex litigation). For other recent accounts, see Margaret Lemos & Max Minzer, For Profit Public Enforcement, 127 Harv. L. Rev. 853 (2014); Margaret H. Lemos, Aggregate Litigation Goes Public: Representative Suits by State Attorneys General, 126 Harv. L Rev. 487 (2012); Verity Winship, Fair Funds and the SEC’s Compensation of Injured Investors, 60 Fla. L. Rev. 1103 (2008); Barbara Black, Should the SEC Be a Collection Agency for Defrauded Investors? 63 Bus. Law. 317, 318–20 (2008).

See, e.g. Donald G. Gifford, Impersonating the Legislature, State Attorneys General and Parens Patriae Production Litigation, 49 B.C. L. Rev. 913 (2008); Richard P. Iouyub & Theodore Eisenberg, State Attorney General Actions, the Tobacco Litigation, and the Doctrine of Parens Patriae, 74 Tul. L. Rev. 1859 (1999).

Dewan & Greenberg, supra note 4; Office of Mortgage Settlement Oversight 4, supra note 4 (tracking first six months of homeowner assistance through settlement), available at https://www.mortgageoversight.com/wp-content/uploads/2012/08/ProgressReport08292012.pdf; Jackie Calmes & Helene Cooper, BP Chief to Express Contrition in Remark to Panel, N.Y. Times, June 16, 2010.

Jules L. Coleman, The Practice of Principle: In Defense of a Pragmatist Approach to Legal Theory (2001); Ernest R. Weinrib, The Idea of Private Law (1995).

Kenneth Abraham, What Is a Tort Claim? An Interpretation of Contemporary Tort Reform, 51 Md. L. Rev. 172, 173 (1992) (describing the core conception of a tort claim as “the right to custom tailored compensation for the actual loss suffered by the claimant.”); John C. P. Goldberg, Wrongs Without Recourse: A Comment on Jason Soloman’s Judging Plaintiffs, 61 Vand. L. Rev. En Banc 9, 10 (2008).

See, e.g. Samuel Issacharoff, Regulating After the Fact, 56 DePaul L. Rev. 375, 377–80 (2007) (“What really sets the United States apart is the fact that its basic regulatory model is ex post rather than ex ante, a form of regulation that draws heavily on its common-law tradition.”); Robert Reich, Regulation Is Out, Litigation Is In, The American Prospect, Dec. 19, 2001 (“‘Regulation’ is a bad word. So how are these regulatory issues being handled? Through lawsuits.”)

See, e.g. Richard A. Nagareda, Class Actions in the Administrative State: Kalven and Rosenfield Revisited, 75 U. Chi. L. Rev. 603, 605 (2008) [hereinafter Class Actions in the Administrative State] (“The question here is: [I]f the function of the class action today is indeed to operate in parallel with public regulation, then can that function achieve fruition without supplanting the institutional boundaries on regulatory power?”); Richard A. Nagareda, Outrageous Fortune and the Criminalization of Mass Torts, 96 Mich. L. Rev. 1121, 1125 (1998) [hereinafter Outrageous Fortune]; Richard A. Nagareda, Turning from Tort to Administration, 94 Mich. L. Rev. 899, 921 (1996) (describing class action settlements as “miniature” private agencies) [hereinafter Turning from Tort]; Myriam Gilles & Gary B. Friedman, Exploding the Class Action Agency Costs Myth: The Social Utility of Entrepreneurial Lawyers, 155 U. Pa. L. Rev. 103, 108 (2006) (“Once upon a time, scholars considered deterrence of future wrongdoing the strongest justification for small-claims class action litigation”); William B. Rubenstein, On What a Private Attorney General Is—And Why It Matters, 59 Vand. L. Rev. 2129, 2142–55 (2005) (mapping overlapping public and private interests served by class actions and other lawsuits); Samuel Issacharoff, Group Litigation of Consumer Claims: Lessons from the U.S. Experience, 34 Tex. Int’l. L.J. 135, 149 (1999) (“[A]ggregation through a class action is an indispensable mechanism for allowing private enforcement of consumer claims.”)

Steven M. Davidoff & David Zaring, Regulation by Deal: The Government’s Response to the Financial Crisis, 61 Admin. L. Rev. 463 (2009) (outlining “regulation by deal” as the process of striking deals with—and taking stakes in—individual firms in order to influence the firms’ behavior).

See, e.g. William Blackstone, Commentaries *2 (1769) (describing “private wrongs” as “an infringement or privation of the private or civil rights belonging to individuals”); Palsgraf v. Long Island R.R., 162 N.E. 99, 101 (N.Y. 1928) (“Negligence, like risk, is thus a term of relation. Negligence in the abstract, apart from things related, is surely not a tort, if indeed it is understandable at all.”)

See John C.P. Goldberg & Benjamin Zipursky, Torts As Wrongs, 88 Tex. L. Rev. (2010) (collecting “corrective justice” accounts of tort law). See also, e.g. Jules L. Coleman, Risks and Wrongs (1992) 329 (“There are two essential components in the concept of corrective justice … wrongfulness and responsibility.”); Weinrib, supra note 9 at 34–35 (claiming that a tortious act is “an act of wrongdoing”); Richard A. Epstein, A Theory of Strict Liability, 2 J. Legal Stud. 151, 151 (1973) (seeking to reconcile tort theory with “common sense notions of individual responsibility”).

See, e.g. Saul Zipkin, A Common Law Court in a Regulatory World, 74 Ohio St. L.J. 285 (2013); Robert A. Kagan, Adversarial Legalism: The American Way of Law 4, 16 (2001); Cass Sunstein, The Limits of Compensatory Justice 281–82, in Compensatory Justice NOMOS XXXII (1991); Cass R. Sunstein, Standing and the Privatization of Public Law, 88 Colum. L. Rev. 1432 (1988).

Kate Andrias, The President’s Enforcement Power, 88 N.Y.U. L. Rev. 1031. 1063, 1087–88 (2013).

See, e.g. See Gretchen Morgenson, Countrywide to Distribute Settlement to Its Clients, N.Y. Times, July 21, 2011, at B1 (describing unprecedented settlement struck between Federal Trade Commission and Countrywide Home Loan for excessive fees during mortgage crisis); Press Release, FTC, FTC Urges Consumers to Cash Restitution Checks Mailed by Wachovia Bank (Jan. 13, 2009), available at http://www.ftc.gov/opa/2009/01/wachovia.shtm (describing $150 million fund established by FTC and Office of the Comptroller of the Currency settlement with Wachovia Bank for victims of telemarketing fraud); Press Release, SEC, Goldman Sachs to Pay Record $550 Million to Settle SEC Charges Related to Subprime Mortgage CDO (July 15, 2010), available at http://sec.gov/news/press/2010/2010-123.htm.

Zimmerman, supra note 6 at 510 (tracing the rise of federal agency–based settlement funds, which collected over $10 billion over the past decade). These figures do not account for a recent settlement several federal agencies, the DOJ and JP Morgan, after it sold low-quality mortgage-backed securities that collapsed in value during the 2008 financial crisis. That $13 billion settlement—the highest ever by a single defendant—will allocate $10 billion to victim compensation. See JP Morgan, Feds, Agree to $13 Billion Settlement, CBS News, Nov. 19, 2013 (noting that the company will pay more than $6 billion to compensate investors, pay $4 billion to help struggling homeowners and pay the remainder as a fine), available at http://www.cbsnews.com/8301-201_162-57612888/jp-morgan-chase-feds-agree-to-$13-billion-settlement/.

Ben Protess & Jessica Silver-Greenberg, In Extracting Deal From JP Morgan, US Aimed for Bottom Line, N.Y. Times, Nov. 20, 2013 at A1.

Well before the BP Oil Spill, British Petroleum paid over $53 million into a restitution fund for direct and indirect purchasers of propane to settle criminal price fixing charges as part of larger settlement with the US Attorney for the Northern District of Illinois. See Deferred Prosecution Agreement, United States v. B.P. America Inc., No. 07 CR 683 (N.D. Ill. Oct. 25, 2007) (on file with author).

Press Release, State Attorney General E-book Settlements, $69 Million Attorneys General Settlement Provides Money Back for Certain E-book Purchases (Oct. 17, 2012), available at http://www.prnewswire.com/news-releases/69-million-attorneys-general-settlement-provides-money-back-for-certain-e-book-purchases-174552291.html; Complaint, Petru v. Apple, 11 CV 03892, Aug. 9, 2001, available at http://newsandinsight.thomsonreuters.com/uploadedFiles/Reuters_Content/2011/08_-_August/e-booksantitrust--hagens2.pdf.

Computer Associates settled criminal securities violations, by among other things, agreeing to set up a $225 million fund for victims. See Deferred Prosecution Agreement, United States v. Computer Associates Int’l, No. 04-837 (E.D.N.Y Sept. 22, 2004) (on file with authors). The fund administrator in that case, Kenneth R. Feinberg, struggled to determine how much, and how differently, to compensate claimants in the second fund. United States v. Computer Associates, Plan of Allocation for Restitution Fund 2 n.2 (June 2005) (describing disputed claims by holders, purchasers, and sellers of defendants’ stock) [hereinafter “Computer Associates Plan of Allocation”], available at http://www.computerassociatesrestitutionfund.com/pdf/carf1plan.pdf.

Among other things, Obama touted his new Trade Enforcement Unit charged with redressing unfair trade practices in countries like China; a Financial Crimes Unit designed to crack down on large-scale fraud and protect people’s investments; and a unit of federal prosecutors and leading state attorneys general focused on the mortgage crisis. See Office of the Press Secretary, Remarks by the President in the State of the Union Address, Jan. 24, 2012 (“This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”), available at http://www.whitehouse.gov/the-press-office/2012/01/24/remarks-president-state-union-address.

Jules L. Coleman, The Practice of Principle: In Defense of a Pragmatist Approach to Legal Theory (2001); Weinrib, supra note 9.

Matthew Diller, Tort and Social Welfare Principles in the Victim Compensation Fund, 53 Depaul L. Rev. 719, 731 (2003); Kenneth Abraham, What Is a Tort Claim? An Interpretation of Contemporary Tort Reform, 51 Md. L. Rev. 172, 173 (1992); Sunstein, The Limits of Compensatory Justice, supra note 16 at 281–82.

Abraham, supra note 26 at 173 (describing the core conception of a tort claim as “the right to custom tailored compensation for the actual loss suffered by the claimant.”); John C. P. Goldberg, Wrongs Without Recourse: A Comment on Jason Solomon’s Judging Plaintiffs, 61 Vand. L. Rev. En Banc 9, 10 (2008). But see Tsachi Keren-Paz, Torts, Equalitarianism and Distributive Justice 8 (2007) (articulating a distributive justice account of tort law).

Diller, supra note 26 at 731–33.

Coleman, Risks and Wrongs, supra note 15 at 304–05 (describing a “corrective justice” account of tort law); Jules L. Coleman, The Practice of Corrective Justice, in Philosophical Foundations of Tort Law 58 (D. Owen ed., 2001).

William M. Landes & Richard A. Posner, The Economic Structure of Tort Law (1987).

Coleman, The Practice of Corrective Justice, supra note 29 at 58.

Jean Hampton, Correcting Harms Versus Righting Wrongs: The Goal of Retribution, 39 UCLA L. Rev. 1659, 1666 (1992) (equating tort-based compensation with entitlements that recognize a person’s intrinsic value); Deborah R. Hensler, Money Talks: Searching for Justice Through Compensation for Personal Injury and Death, 53 Depaul L. Rev. 417, 422 (2003) (“tort victims may evaluate offers of compensation and awards, not just in terms of how well these offers and awards match material losses, but also how well the accord with their sense of personal dignity.”)

John C. P. Goldberg, The Constitutional Status of Tort Law: Due Process and the Right to a Law for the Redress of Wrongs, 115 Yale L. J. 524, 541–49 (2005).

Goldberg, Wrongs Without Recourse supra note 27 at 14. For that reason, some have characterized tort as a law of “civil recourse.” While corrective justice and civil recourse differ in some material ways, both contemplate state action that values the moral dignity of injured parties. John C. P. Goldberg, Twentieth-Century Tort Theory, 91 Geo. L.J. 513, 521–25 (2003); Benjamin C. Zipursky, Rights, Wrongs and Recourse in the Law of Torts, 51 Vand. L. Rev. 1 (1998).

G. Edward White, Tort Law in America: An Intellectual History 14–15 (1999); 1 Francis Hillard, The Law of Torts, or Private Wrongs 82 (1859) (“the liability to make reparation” rests upon the “original moral duty, enjoined upon every person, so to conduct himself or exercise his own rights as not to injure another”).

S. Rep. No. 104-179, at 12 (1995) (quoting S. Rep. No. 97-532, at 30 (1982)), reprinted in 1996 U.S.C.C.A.N. 924, 925. see also A Bill to Provide for Restitution of Victims of Crimes, and for Other Purposes: Hearing on S. 173 Before the S. Comm. on the Judiciary, 104th Cong. 1–2 (1995) (statement of Sen. Orrin Hatch, Chairman, S. Comm. on the Judiciary) (advocating for lawmakers to recognize victims’ rights); 141 Cong. Rec. 3911 (1995) (statement of Rep. Mark Foley) (“For far too long we have forgotten the innocent victims of crime.”).

Rigas Family to Cede Assets to Adelphia, N.Y. Times, Apr. 26, 2005. See also Press Release, U.S. Dep’t of Justice, Beazer Homes USA Inc. Reaches $50 Million Settlement of Mortgage and Accounting Fraud with United States Charlotte, N.C. (Jul. 1, 2009) (describing a $50 million victim restitution agreement for victims of mortgage fraud as “hold[ing] the company responsible for the fraud of its employees, and put[ing] money back in the hands of victimized home-owners.”), available at http://www.justice.gov/usao/ncw/press/beazer.html.

Press Release, U.S. Dep’t of Justice, Prudential Financial Subsidiary Agrees to Pay $600,000,000 in Largest Resolution of Market Timing Case (Aug. 26, 2006), available at http://www.justice.gov/usao/ma/Press%20Office%20-%20Press%20Release%20Files/Prudential -Agreement/Prudential.pdf.

United States v. Computer Associates, Plan of Allocation for Restitution Fund 1 (June 2005) [hereinafter “Computer Associates Plan of Allocation”], available at http://www.computerassociatesrestitutionfund.com/pdf/carf1plan.pdf.

See, e.g. U.S. Sec. & Exch. Comm’n, FY 2012 Annual Performance Report & FY 2012 Annual Performance Plan 23 available at http://www.sec.gov/about/reports/sec-fy2012-annual-performance-report-fy2014-annual-performance-plan.pdf; The Federal Trade Commission: Withdrawal of the Commissions Policy Statement on Monetary Equitable Remedies in Competition Cases (July 31, 2012), available at http://www.ftc.gov/os/2012/07/120731commissionstatement.pdf (“The policy of depriving wrongdoers of the fruits of their misconduct is evident in the Commission’s consumer protection work, where the Commission regularly seeks and attains monetary remedies. Accordingly, while disgorgement and restitution are not appropriate in all cases, we do not believe they should apply only in ‘exceptional cases,’ as previously set out…”)

Press Release, State Attorneys General, Feds Reach $25 Billion Settlement with Five Largest Mortgage Servicers on Foreclosure Wrongs, National Association of Attorneys General (Feb. 9, 2012), available at http://naag.org/state-attorneys-general-feds-reach-25-billion-settlement-with-five-largest-mortgage-servicers-on-foreclosure-wrongs.php. North Carolina Attorney General Roy Cooper similarly observed the settlement’s attempt to right an injustice between victims and their wrongdoers: “This settlement is a big first step toward addressing the wrongs … Through a powerful agreement, backed by a federal court order and supervised by an independent monitor, we will ensure that servicers are fair with consumers.” Id.

Rigas Family to Cede Assets to Adelphia, N.Y. Times, Apr. 26, 2005.

See, e.g. The Need for Increased Fraud Enforcement in the Wake of the Economic Downturn, Hearing Before the S. Comm. on the Judiciary, 111th Cong. 4 (2009) (statement of Rita Glavin, Acting Assistant Att’y Gen., Criminal Div., United States Dep’t of Justice) (“The Department’s many victim–witness coordinators and law enforcement officials work tirelessly to help ensure that what money is recovered reaches the victims of the crimes.”), available at http://judiciary.senate.gov/pdf/09-02-11GlavinTestimony.pdf.

Zimmerman, supra note 6 at 527–39 (describing trends in federal agencies such as SEC, FTC, and FDA); Winship, Policing Compensatory Relief, supra note 6.

18 U.S.C. §3771(a)(2)-(4) & (c)(1). See, e.g. Douglas Evan Beloof, The Third Model of Criminal Process: The Victim Participation Model, 1999 Utah L. Rev. 289, 290 (observing that the victims’ rights movement “has shaken conventional assumptions about the criminal process to their foundation”).

Id. §3771(a)(5); see also id. §3664(d)(1) (“[T]he attorney for the government after consulting... with all identified victims, shall promptly provide the probation officer with a listing of amounts subject to restitution.”); In re Dean, 527 F.3d 391, 395–96 (5th Cir. 2008) (discussing the CVRA-established victims’ right to confer with the attorney for the government)

Id. §3771(a)(6); see also Dolan v. United States, 130 S. Ct. 2533, 2540 (2010) (“‘[J]ustice cannot be considered served until full restitution is made.”’ (alteration in original) (quoting S. Rep. No. 104-179, at 20 (1995))).

See Michele L. Landis, “Let Me Next Time Be ‘Tried By Fire’”: Disaster Relief and the Origins of the American Welfare State 1789–1874, 92 Nw. U. L. Rev. 967, 978–79 (1998).

See Brandon L. Garrett, Structural Reform Prosecution, 93 Va. L. Rev. 853, 914 (2007) (discussing forward looking reforms in criminal deferred and non-prosecution agreements)

Lemos & Max Minzer, supra note 6; Miriam H. Baer, Choosing Punishment, 92 B.U. L. Rev. 577, 603–11 (2012).

Baer, supra note 50 at 628 (“The public admired Eliot Spitzer because he seemed to have the ability to rise above regulatory paralysis when other agencies seemed unable or unwilling to do so. In a world where regulation is weak and regulators are either captured or tied up in red tape, retributive punishment may offer public actors a powerful yet flexible alternative.”)

See, e.g. Sunstein, The Limits of Compensatory Justice, supra note 16 at 281–82.

John P. Harding, Eric Rosenblatt, & Vincent W. Yao, The Contagion Effect of Foreclosed Properties, 66 J. Urb. Econ. 164, 174 (2009) (observing that “nearby distressed property has a significant, negative effect on the prices of nearby homes over and above the overall trend in market prices”); G. Thomas Kingsley, Robin Smith, & David Price, The Impact of the Foreclosure Crises on Families and Communities, The Urban Institute 13–20 (2009) (finding the impact of concentrated foreclosures on communities include “declining property values,” “deteriorating” physical condition of neighborhoods, increased “crime, social disorder and population turnover,” more “fiscal stress,” and the “deterioration” of local government services), available at http://www.urban.org/UploadedPDF/411909_impact_of_forclosures.pdf.

FTC v. Mylan Labs. Inc., 62 F. Supp. 2d 25, 36 (D.D.C. 1999).

Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977).

See, e.g. Comments of Roxane C. Busey, Chair of the American Bar Ass’n, Section of Antitrust Law, Response to the Commission’s Request for Comment on the Remedial Use of Disgorgement (Mar. 13, 2002), available at http://www.ftc.gov/os/comments/disgorgement/aba.pdf (last checked Mar. 1, 2010); Press Release, Federal Trade Commission, FTC Reaches Record Financial Settlement to Settle Charges of Price-Fixing in Generic Drug Market (Nov. 29, 2000), available at http://www.ftc.gov/opa/2000/11/mylanfin.htm (last visited Mar. 5, 2010) (describing dissenting views of Commissioner Thomas Leary as a “backdoor approach” to monetary recoveries unavailable under antitrust law).

This approach stands in contrast with forms of “fluid recovery” traditionally available in administrative and criminal cases—where defendants often compensate the government for the costs of past and future public investigations. See infra notes 59–63 and accompanying text.

The majority reasoned that consumers were the “real parties in interest” because the State sought monetary damages on their behalf, even though the consumers had authority to seek such relief on their own. Mississippi ex rel. Hood v. AU Optronics Corp., 701 F.3d 796, 799–803 (5th Cir. 2012).

Compare Mississippi ex rel. Hood, 701 F.3d at 799–803 with AU Optronics Corp. v. South Carolina, 699 F.3d 385, 392–94 (4th Cir. 2012) (finding that the State of South Carolina “seeks substantial relief that is available to it alone”); Nevada v. Bank of Am. Corp., 672 F.3d 661, 669–72 (9th Cir. 2012) (“Nevada’s sovereign interest in protecting its citizens and economy from deceptive mortgage practices is not diminished merely because it has tacked on a claim for restitution.”); and LG Display Co. v. Madigan, 665 F.3d 768, 772–74 (7th Cir. 2011) (rejecting the Fifth Circuit’s “claim-by-claim” approach and holding that, in light of the “essential nature and effect of the proceeding,” the State of Illinois was the real party in interest). The Supreme Court recently granted certiorari to determine whether a parens patriae action is removable to federal court as a “mass action” under the Class Action Fairness Act.

In January 2009 Lilly pled guilty in the Eastern District of Pennsylvania to federal criminal charges of introducing misbranded drugs into interstate commerce in connection with its promotion of Zyprexa for off-label uses. Eli Lilly & Company, Press Release, Lilly Resolves Investigations of Past Zyprexa Marketing and Promotional Practices (Jan. 15, 2009), available at https://investor.lilly.com/releasedetail.cfm?ReleaseID=359242

In re Zyprexa Prods. Liab. Litig., 671 F. Supp. 2d 397, 434 (E.D.N.Y. 2009) (dismissing most state attorney general actions under the “Individualized Proof Rule,” a “now widely held view of aggregate litigation, particularly in the products liability or fraud context, that statistical proof is in most instances insufficient to show reliance, loss-causation, or injury on the part of individual class members”).

Bank of America Corp., 653 F. Supp. 2d 507, 512 (2009).

Id. at 510.

SEC v. Bank of American Corp., Nos. 09-6829, 10-0215, 2010 WL 624581 at *4–6 (S.D.N.Y. Feb. 22, 2010) (approving $150 “fair fund” for Bank of America investors).

Id. at 5.

See, e.g. Amanda M. Rose, Reforming Securities Litigation Reform: Restructuring the Relationship Between Public and Private Enforcement of Rule 10b-5, 108 Colum. L. Rev. 1301, 1312–15 (2008) (“Rule 10b-5 class actions fail to provide meaningful compensation to the class members on whose behalf they are brought”); John C. Coffee, Jr., Reforming the Securities Class Action: An Essay on Deterrence and Its Implementation, 106 Colum. L. Rev. 1534, 1545 (2006) (“From a compensatory perspective, the conclusion seems inescapable that the securities class action performs poorly.”); Janet Cooper Alexander, Rethinking Damages in Securities Class Actions, 48 Stan. L. Rev. 1487, 1507 (1996) (observing that, in securities cases, “[t]he compensation rationale does not persuasively justify the present measure of damages.”); but see James J. Park, Shareholder Compensation as Dividend, 108 Mich. L. Rev. 323, 340–42 (2009) (noting the limitations of some arguments, like diversification, to real securities fraud losses).

Nagareda, Outrageous Fortune, supra note 12 at 1125 (“[T]ort law insists upon a causal connection between even a highly blameworthy defendant and some injured plaintiff as the essential predicate for a judgment of liability. By contrast, criminal law has long punished conduct that falls well short of a completed crime, though it does so subject to important institutional and doctrinal limitations.”); Richard A. Nagareda, Future Mass Tort Claims and the Rule-Making/Adjudication Distinction, 74 Tul. L. Rev. 1781, 1792–94 (2000) (“Administrative law stands as a body of legal principles especially apt for this enterprise, given the administrative nature of the compensation regimes advanced as substitutes for the ordinary tort system.”)

For example, in 1996, Congress permitted courts to impose restitution orders on defendants, even when there is no “identifiable victim” of the crime, like drug offenses. Such “community restitution” is split between state agencies that manage crime victim assistance and substance abuse programs. See 18 U.S.C. § 3663(c)(3)(A)-(B); U.S. Sentencing Guidelines Manual §§5E1.1 (2012). See also, e.g. Bebchick v Public Utilities, 318 F.2d 187 (D.C. Cir. 1963) (affirming regulatory agency’s use of fluid recovery by ordering transit authority to return excess fares to transit riders in the form of lower prices); United States v. Exxon Corp., 773 F.2d 1240, 1286 (Temp. Emer. Ct. App. 1985) (ordering the distribution of the escrowed funds to the states as the appropriate method of restitution.)

See Keren-Paz, supra note 27 at 8; State Documentation Project, http://www.spdp.org/index.htm (last visited Feb. 25, 2013) (documenting Temporary Assistance to Needy Families and Medicaid programs in all 50 states through 2000).

Some states, like New York and Maryland, reject applications for victim compensation absent “financial need.” In the Uniform Crime Reparations Act, the ABA adopted a slightly more flexible financial means test called “financial stress,” designed to minimize the impact of crime on one’s way of life, whether “rich, poor or middle class.”

See Matthew Diller, Tort and Social Welfare Principles in the Victim Compensation Fund, 53 Depaul L. Rev. 719, 732 (2003) (describing principles of distributive justice in compensation funds); John Rawls, A Theory of Justice 266 (1999) (articulating prominent theories of distributive justice); Aristotle, Nicomachaen Ethics 117–20 (Martin Oswald, trans. 1962).

See, e.g. John Fabian Witt, The Accidental Republic 71–102 (2003) (describing the evolution of collective insurance funds and workers’ compensation); 42 U.S.C. § 300aa-11 (2000) (creating a fund and compensation scheme for vaccine related injuries); Fed. R. Civ. P. 23(e) (class action settlements).

For example, it is not uncommon for a large settlement fund to follow “damage averaging,” using grids or compensation schemes that ignore some components of an individual claim to expedite payment to many different people. See, e.g. Am. Law Inst., Principles Of The Law: Aggregate Litigation § 1.04 cmt. f (2010) [hereinafter ALI REPORT]; In re MetLife Demutualization Litig., 689 F. Supp. 2d 297, 342 (E.D.N.Y. 2010) (“Fluid recoveries” of this type, which do not call for direct calculation and distribution of precise recoveries to the class members, can be a “fair means of delivering value to class members without undue administrative costs.”) (collecting cases).

For example, as a matter of DOJ policy, victims of crime have first priority of forfeited funds over law enforcement and equitable sharing with federal, state, and local agencies. Criminal Div., Dep’t of Justice, Asset Forfeiture Policy Manual, Ch. 12, Sec. 1, 171 (2012).

Compare, e.g. United States v. Taylor, 582 F. 3d 558, 566 (5th Cir. 2009); United States v. Boccagna, 450 F. 3d 107 (2d Cir. 2006)(requiring offset observing that “it can fairly be said that the primary and overreaching purpose of the MVRA is to make victims of crime whole, to fully compensate these victims for their losses and to restore these victims to their original well-being.”); United States v. Smith, 297 F. Supp. 2d 69, 72–73 (D.D.C.2003) (finding that when funds forfeited to the Government have been returned to the victim, they must be offset against the amount of restitution due; otherwise there would be a “double recovery”) with United States v. Bright, 353 F.3d 1114, 1119 (9th Cir. 2004) (“[E]ven if the money were eventually restored to the victims, reducing Bright’s loss calculation by the amount seized would distort the magnitude of his crime[.]”)

Garrett, supra note 49 at 858.

See Blackstone, supra note 14 at 356; United States v. Brennan, 526 F. Supp. 2d 378, 382 (E.D.N.Y. 2007).

Federal Probation Act, 43 Stat. 1259 (1925), codified as amended at 18 U.S.C. § 3651 (1982).

See, e.g. Helvering v. Mitchell, 303 U.S. 391, 400 (1938) (approving delegation of flexible finings power to administrative agencies); Porter, 328 U.S. at 400 (holding that war-time price administrator may seek restitution against landlords charging excessive rents); Robert De Mario Jewelry, 361 U.S. at 337 (holding Secretary of Labor was authorized to seek restitution against employers for lost wages).

Id.

Pub. L. No. 97-291, 96 Stat. 1248 (1982).

Pub. L. No. 101-647, tit. V, 104 Stat. 4789 (1990).

Pub. L. No. 104-132, tit. II, 110 Stat. 1214 (1996).

Pub. L. No. 108-405, tit. I, 118 Stat. 2260 (2004).

The Mandatory Victim Restitution Act of 1996, for example, was hailed as part of a move “toward a more victim-centered justice system,” which would help transform a criminal justice system that Congress believed was ignoring the plight of victims. Matthew Dickman, Should Crime Pay: A Critical Assessment of the Mandatory Restitution Act of 1996, 97 Cal. L. Rev. 1687, 1688–9 (2009).

Zimmerman & Jaros, supra note 6 at 1406–1408. Non-prosecution agreements (NPAs) are made before charges are filed and the agreement is maintained by the parties. Deferred prosecution agreements (DPAs) are made after the government has filed a formal charging document with the court. Courts generally do not review NPAs, and only very rarely review DPAs.

See Department of Justice, Asset Forfeiture Reports, available at http://www.justice.gov/jmd/afp/02fundreport/.

The Anti-Deficiency Act, 31 U.S.C. § 1341(a) (2006) and The Miscellaneous Receipts Act, 31 U.S.C. § 3302(b) (2006), for example, require executive branch agencies to avoid committing federal funds without congressional approval and to deposit any monies “collected” into the general Treasury account. However, such laws do not specifically cover occasions, like those described here, where a federal agency or the Department of Justice enters a settlement with a defendant; see also Todd David Peterson, Protecting the Appropriations Power: Why Congress Should Care About Settlements at the Department of Justice, 2009 B.Y.U. L. Rev. 327, 342–47 (describing “sweeping” authority of executive branch to exercise its power to settle cases in conformity with its discretion to enforce federal law)

See also, e.g. Conference Report on Sarbanes-Oxley Act of 2002, 148 Cong. Rec. E1463-04; see also 148 Cong. Rec. E1451, available at 2002 WL 1748471 (July 25, 2002) (“[T]he investor restitution in this bill will enable investors who lose money in the markets as a result of corporate malfeasance to reclaim the gains of corporate criminals.”).

Zimmerman, supra note 6 (describing adoption of harm-compensation policies by federal agencies, including the SEC, FTC, and FDA).

Timothy Meyer, Federalism and Accountability: State Attorneys General, Regulatory Litigation, and the New Federalism, 95 Calif. L. Rev. 885, 886 (2007) (describing how SAGs have “used litigation to become a regulatory force at the national level”); Lemos, supra note 6 (describing rise of state attorney general lawsuits, bolstered by growing statutory authority, to compensate large groups of victims).

See Memorandum from Larry D. Thompson, Deputy Attorney Gen., to the Heads of Dep’t Components, US Attorneys 4 (Jan. 20, 2003), available at http://www.justice.gov/dag/cftf/corporate_guidelines.htm (“Indicting corporations for wrongdoing enables the government to address and be a force for positive change of corporate culture, alter corporate behavior, and prevent, discover, and punish white collar crime.”)

For a variety of discussions about this particular phenomenon, see Prosecutors in the Boardroom (Anthony S. Barkow & Rachel E. Barkow eds., 2011). See also Garrett, supra note 49 at 860; Peter Spivack & Sujit Raman, Regulating The ‘New Regulators’: Current Trends In Deferred Prosecution Agreements, 45 Am. Crim. L. Rev. 159, 161 (2008).

Garrett, supra note 49 at 900; Baer, supra note 50, at 1065; Spivack & Raman, supra note 93 at 161.

See GAO, DOJ Has Taken Steps to Better Track Its Use of Deferred and Non-Prosecution Agreements, but Should Evaluate Effectiveness 1 (Dec. 2009).

See Spivack & Raman, supra note 93 at 182.

Garrett, supra note 49 at 860 (observing that judicial review is also very “deferential at the charging stage, [] giving prosecutors especially wide discretion.”). See also United States v. Cannons Eng. Corp., 899 F. 2d 79, 84 (1st Cir. 1990) (“[T]he policy of the law [is] to encourage settlements” and “has particular force where, as here, a government actor committed to the protection of the public interest has pulled the laboring oar in constructing the proposed settlement”).

For example, a year after private attorneys commenced class actions against several large banks alleging they defrauded non-profits through bid-rigging, 25 state attorneys general settled with the same defendants, establishing a large settlement fund for the same set of victims. Private attorneys argued that the government fund “hijacked” their lawsuit: “That’s what happens when you have two different processes … the defendant can pick door number one or door number two.” Nate Raymond, Plaintiffs Lawyers in Muni Bond Derivative MDL Object to UBS Bid-Rigging Settlement, AmericanLawyer.Com, May 11, 2011, available at http://www.law.com/jsp/tal/digestTAL.jsp?id=1202493650539.

Richard J. Pierce, Sidney A. Shapiro & Paul R. Verkeul, Administrative Law and Process 1 (2004).

See Lumen Mulligan & Glen Staszewski, An Agency Approach to the Supreme Court’s Interpretation of Procedural Rules, 59 U.C.L.A. L. Rev. 1188, 1206–12 (2013) (describing the historical shift from adjudication to rulemaking as the primary method by which agencies implement policy); Jeffrey J. Rachlinski, Rulemaking Versus Adjudication: A Psychological Perspective, 32 Fla. St. U. L. Rev. 529, 532, 537 (2005); Jerry L. Mashaw et al., Administrative Law: The American Public Law System (6th ed., 2009) 455 (noting that rulemaking prevents “the disposition of individual cases from altering [the agency’s] policies or (which is much the same thing) from implicitly generating policies that agency managers view as undesirable”).

American Hospital Ass’n v. NLRB, 499 U.S. 606, 612 (1991). See also M. Elizabeth Magill, Agency Choice of Policymaking Form, 71 U. Chi. L. Rev. 1383, 1386–90 (2004) (describing a range of policy-making tools that are generally available to an agency). While criminal law actions seem quite distinct from administrative law in this way, the former has many of the characteristics of the latter in its administration. Among other things, the Department of Justice uses internal rule making to control prosecutors and provides some rudimentary guidelines to US Attorneys on restitution. See Zimmerman & Jaros, supra note 6 at 1398–400; Rachel E. Barkow, Institutional Design and the Policing of Prosecutors: Lessons from Administrative Law, 61 Stan. L. Rev. 869, 873 (2009); Gerard E. Lynch, Our Administrative System of Criminal Justice, 66 Fordham L. Rev. 2117, 2149 (1998).

See Mulligan & Staszewski, supra note 100 at 1207 (reviewing the reasons for administrative law scholars’ general preference for rulemaking over adjudication); Magill, supra note 101 at 1403 n.69 (collecting scholarship and noting the general preference for rulemaking over adjudication).

See, e.g. Garrett, supra note 49; Miriam H. Baer, Insuring Corporate Crime, 83 Ind. L.J. 1035, 1065–67 (2008). See also David M. Jaros, Unfettered Discretion: Criminal Orders of Protection and Their Impact on Parent Defendants, 85 Ind. L. J. 1445, 1448 (2010) (describing the “ever-expanding nature of the criminal law … in the direction of broader liability”).

Garrett, supra note 49 at 857. Professor Richard Epstein, for example, compares such agreements to “the confessions of a Stalinist purge trial, as battered corporations recant their past sins and submit to punishments wildly in excess of any underlying offense.” Richard A. Epstein, Op-Ed., The Deferred Prosecution Racket, Wall. St. J., Nov. 28, 2006, at A14.

Baer, supra note 103 at 1037.

See, e.g. Cong. Oversight Panel, An Assessment of Foreclosure Mitigation Efforts After Six Months 103 (2009); Cong. Oversight Panel, The Foreclosure Crisis: Working Toward a Solution 44–56 (2009). Other government programs such as Hope for Homeowners and FHASecure have also failed homeowners. The FHASecure refinancing program refinanced only around 4,100 delinquent borrowers before the program ended in December 2008. Michael Corkery, Mortgage ‘Cram-Downs’ Loom as Foreclosures Mount, Wall St. J., Dec. 31, 2008, at C1. The HOPE for Homeowners program succeeded in refinancing only 130 loans between October 2008 and September 2010. See Adam J. Levitin & Tara Twomey, Mortgage Servicing, 28 Yale J. on Reg. 1, 3 n. 5 (2011).

See Sant’Ambrogio & Zimmerman, supra note 6 at 2017–19; Mark Seidenfeld, Why Agencies Act: A Reassessment of the Ossification Critique of Judicial Review, 70 Ohio St. L.J. 251 (2009); Richard J. Pierce, Jr., Judicial Review of Agency Actions in a Period of Diminishing Agency Resources, 49 Admin. L. Rev. 61 (1997); Mark Seidenfeld, Demystifying Deossification: Rethinking Recent Proposals to Modify Judicial Review of Notice and Comment Rulemaking, 75 Tex. L. Rev. 483 (1997).

Zipkin, supra note 16 (finding Supreme Court decisions to limit court access are based on a judicial role “centered on resolving disputes that stem from personal harms” inconsistent with modern “legislative or regulatory frameworks”); Kagan, supra note 16 at 4, 16; Sunstein, The Limits of Compensatory Justice, supra note 16 at 281–82 (describing limits of corrective justice metaphor in judicial challenges to administrative action); Sunstein, Standing and the Privatization of Public Law, supra note 16.

See Allen v. Wright, 468 U.S. 737 (1984); Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26 (1976); Warth v. Seldin, 422 U.S. 490 (1975).

Indus. Union Dep’t v. Am. Petrol. Inst., 448 U.S. 607 (1980).

Eisen v. Carlisle, 417 U.S. 156 (1974). For critiques that challenge the compensatory objectives of small-claim, consumer class actions, see Brian T. Fitzpatrick, Do Class Action Lawyers Make Too Little? 158 U. Pa. L. Rev. 2043 (2008) (“But small-stakes class actions serve no insurance function. Rather, the only function they serve is deterrence.”); Myriam Gilles & Gary Friedman, Exploding the Class Action Agency Costs Myth: The Social Utility of Entrepreneurial Lawyers, 155 U. Pa. L. Rev. 103, 104 (2006) (“In reality, there is generally no legitimate utilitarian reason to care whether class members with small claims get compensated at all. Nor is there any economic reason to fret that entrepreneurial plaintiffs’ lawyers are being overcompensated.”).

Epstein, supra note 15 at 151–204; Ernest J. Weinrib, Causation and Wrongdoing, 63 Chicago-Kent L. Rev. 407–50 (1987).

See Lemos, supra note 6; Zimmerman, supra note 6; Zimmerman & Jaros, supra note 6.

In the $225 million Computer Associates settlement brokered by federal regulators and prosecutors, for example, institutional investors, bondholders, and individual stockholders all ultimately petitioned the administrator to distribute funds differently. See United States v. Computer Associates, Plan of Allocation for Restitution Fund 2 n.2 (June 2005) (describing disputed claims by holders, purchasers, and sellers of defendants’ stock), available at http://www.computerassociatesrestitutionfund.com/pdf/carf1plan.pdf. Similar conflicts exist in state attorney general settlements and federal agency settlements. See Lemos, supra note 6; Zimmerman, supra note 6.

See United States v. Computer Associates, Plan of Allocation for Restitution Fund 2 n.2 (June 2005) (describing disputed claims by holders, purchasers, and sellers of defendants’ stock) [hereinafter “Computer Associates Plan of Allocation”], available at http://www.computerassociatesrestitutionfund.com/pdf/carf1plan.pdf.

Perhaps, unsurprisingly, Eliot Spitzer and Christopher Christie, two prosecutor-turned-governors, sought to create massive restitution funds in connection with highly publicized corporate misconduct. See Barbara Moses, The “Discovery” of Analysts Conflicts on Wall Street, 70 Brook. L. Rev. 89, 99–105 (2004) (describing the evolution of the global settlement between the investment banks and government actors and former New York Attorney Eliot Spitzer); Bear, Stearns & Co., Inc, 626 F. Supp. 2d 402, 406 (S.D.NY. 2009) (chastising the government in same settlement for “tortured restructuring and embarrassing consequences” that resulted from the failure to identify investor losses). See also Stephanie Saul, Bristol Meyers Seen as Settling Case with U.S., N.Y. Times, June 6, 2005 (describing terms of Chris Christie’s $300 settlement with Bristol Meyers).

See Alexandra D. Lahav, The Law and Large Numbers: Preserving Adjudication in Complex Litigation, 59 Fla. L. Rev. 383, 394–95 (2007) (comparing “capture” by special interest groups of public agencies to collusion between defense and class counsel at the expense of the plaintiff class); Jim Rossi, Bargaining in the Shadow of Administrative Procedure: The Public Interest in Rulemaking Settlement, 51 Duke L.J. 1015, 1026 (observing the private incentives and high litigation costs may lead agency negotiators to “make concessions in settlement that are not in the public interest.”).

Bear, Stearns & Co., Inc, 626 F. Supp. 2d at 412.

Id. See also Bank of America Corp., 653 F. Supp. 2d at 512 (observing that the settlement between the SEC and Bank of America suggested “a rather cynical relationship between the parties”).

Under the Class Action Fairness Act of 2005, for example, class counsel must distribute copies of any class action notice to the DOJ and all fifty state attorneys general offices. The DOJ or the state attorney general then may intervene to ensure greater transparency and fairness in the settlement. See 28 U.S.C. §1715 (Supp. V 2005).

See S. Rep. No. 109-14, at 35 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 34; see also 151 Cong. Rec. S450 (daily ed. Jan. 25, 2005) (statement of Sen. Kohl) (explaining government watchdog provisions in CAFA); 147 Cong. Rec. 22740 (2001) (statement of Sen. Grassley) (same).

See, e.g. In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 288 F.3d 1012, 1018 (7th Cir. 2002) (stating that claims are not manageable if they are to be adjudicated under the laws of the fifty states and multiple territories); Spence v. Glock, 227 F.3d 308, 311 (5th Cir. 2000) (observing that variations in the law “may swamp any common issues and defeat predominance” (internal quotation marks omitted)); Castano v. Am. Tobacco Co., 84 F.3d 734, 743–46 (5th Cir. 1996) (reversing class action certification because of differences in state law).

Such a determination may raise federalism concerns that are beyond the scope of this paper. For almost 20 years, class action scholars have debated the merits of a single federal law to permit parties to bring class action claims. See American Law Inst., Complex Litigation Project § 6.01 cmt. a, at 398–99 (Proposed Final Draft, Apr. 5, 1993) (explaining desirability of applying law of single state to particular issue that is common to all claims); Larry Kramer, Choice of Law in Complex Litigation, 71 N.Y.U. L. Rev. 547, 549 (1996); Simon C. Symeonides, The ALI’s Complex Litigation Project: Commencing the National Debate, 54 La. L. Rev. 843 (1994). It is worth considering whether competing concerns of efficient restitution may, in some cases, override such federalism concerns.

See, e.g. United States v. Agate, 613 F. Supp. 2d 315 (E.D.N.Y 2009) (awarding restitution in sixty-two defendant criminal action involving the Gambino crime family).

Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 292 (1960) (“[I]t needs no argument to show that fear of economic retaliation might often operate to induce aggrieved employees quietly to accept substandard conditions.”); Craig Becker & Paul Strauss, Representing Low Wage Workers in the Absence of a Class: The Peculiar Case of Section 16 of the Fair Labor Standards Act and the Under Enforcement of Minimum Labor Standards, 92 Minn. L. Rev. 1317, 1326–28 (2008).

Lemos, supra note 6; Zimmerman, supra note 6 at 551–53; Samuel Issacharoff, The Governance Problem in Aggregate Litigation, 81 Fordham L. Rev. 3165 n.86 and accompanying text (2013) (observing that “agency costs may be present even in the American litigation context when public agencies take on enforcement authority on behalf of affected groups of citizens”).

Richard A. Nagareda, Mass Torts in a World of Settlement 207 (2007) (“Defendants still can seek to get themselves into a more attractive regulatory regime for the future by buying off the plaintiff localities in their proprietary guise.”)

Nagareda, supra note 127 at 212–14 (observing, in a related context, that attempting to require “some version of the separate representation requirement” on government settlements cripples the “threat of regulation” by limiting the “hammer of potential disgorgement.”)

Nagareda, supra note 127 at 260 (observing potential of MDL process to facilitate negotiated rulemaking regarding compensation grid and attorneys’ fees in mass tort litigation).

Nagareda, Turning from Tort, supra note 12 at 945.

See, e.g. id at 1164–65; William B. Rubenstein, On What a Private Attorney General Is—And Why It Matters, 59 Vand. L. Rev. 2129, 2142–55 (2005) (mapping overlapping public and private interests served by class actions and other lawsuits).

Id.

See, e.g. Nagareda, Class Actions in the Administrative State, supra note 12 at 605 (describing two foundational challenges for class action settlements “consists of what one might describe as a class in search of a settlement,” while “the second involves a settlement in search of a class.”); Samuel Issacharoff, Preclusion, Due Process, and the Right to Opt Out of Class Actions, 77 Notre Dame L. Rev. 1057, 1065 (2002) (explaining the opt-out right for class members as “a recognition of at least a formal right to litigant autonomy in cases that could plausibly be cast as stand-alone claims for recompense”). But see Robert M. Cover, For James Wm. Moore: Some Reflections on a Reading of the Rules, 84 Yale L.J. 718 (1975) (challenging idea that “that the procedural needs of a complex antitrust action … and an environmental class action … are sufficiently identical to be usefully encompassed in a single set of [procedural] rules which makes virtually no distinctions [between them]”).

Negative value class actions principally serve to deter wrongdoing and exact substantial reforms from emerging industries. Richard Posner, Economic Analysis of the Law 349–50 (1972) (observing that “the importance of receipt of damages by the injured party to motivate him to operate the legal machinery is inapplicable here, since the stakes are too small to induce any victim to bear any of the burden of obtaining legal redress.”); Kenneth W. Dam, Class Actions: Efficiency, Compensation, Deterrence, and Conflict of Interest, 4 J. Legal Stud. 47, 73 (1975) (concluding that the class action serves the deterrence purpose when “the individual claims are too small to make actual compensation of the class members financially feasible”).

Cf., e.g. Myriam Gilles & Gary B. Friedman, Exploding the Class Action Agency Costs Myth: The Social Utility of Entrepreneurial Lawyers, 155 U. Pa. L. Rev. 103, 108 (2006)

Sunstein, The Limits of Compensatory Justice, supra note 16 at 288. ALI Report § 3.0_ (recommending “dispens[ing] with direct, individual notice,” where “personal notice may not make economic sense.”).

ALI Report § 2.04 (distinguishing indivisible from divisible remedies).

See Ali Report § 2.04(c) (suggesting courts “authorize aggregate treatment of common issues concerning an indivisible remedy … even though additional divisible remedies are also available that warrant individual treatment or aggregate treatment with the opportunity of claimants to exclude themselves”); Elizabeth C. Burch, Adequately Representing Groups, 81 Fordham L. Rev. 3043, 3044 (2013) (“When the underlying right arises from an aggregate harm—a harm that affects a group of people equally and collectively—and demands an indivisible remedy, courts should tolerate greater conflicts among group members when evaluating a subsequent claim of inadequate representation.”)

For that reason, the Mortgage Foreclosure Settlement expressly preserved private lawsuits. See Philip A. Lehman, Consumer Prot. Div., N.C. Dep’t of Justice, National Mortgage Settlement: Executive SUMMARY OF Multistate/Federal Settlement of Foreclosure Misconduct Claims 4 (2012), available at http://portal.hud\.gov/hudportal/documents/huddoc?id=natlsetexecsum%282%29.pdf.

15 U.S.C. § 15(c). Some state statutes also create rights to opt-out of parens patriae actions. See, e.g. Alaska Stat. § 45.50.577(b) (2011) (Alaska antitrust statute providing for notice by publication and right to opt-out of parens patriae action by filing notice with court), Ark. Code Ann. § 4-75-212 (2011) (same). Others do not. See Conn. Gen. Stat. §§ 35–24 to 35–46 (2011) (Connecticut antitrust statute lacking provisions for notice and opt-out), 740 Ill. Comp. Stat. 10/7 (2010) (same).

15 U.S.C. § 15(a).

Cal. Bus. & Prof. Code 16760(b)-(c).

See Myriam Gilles, Opting Out of Liability: The Forthcoming, Near-Total Demise of the Modern Class Action, 104 Mich. L. Rev. 373 (2005); see also Robert H. Klonoff, The Decline of Class Actions, 90 Wash. L. Rev. 729 (2013) (exhaustively demonstrating barriers to class actions since the mid-1990s), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2038985; Myriam Gilles & Gary Friedman, After Class: Aggregate Litigation in the Wake of AT&T Mobility v. Concepcion, 79 U. Chi. L. Rev. 623 (2012).

See, e.g. ALI Report § 3.07 (recommending different procedures for notice based on size and variability of putative awards); Nagareda, Class Actions in the Administrative State, supra note 12 at 605 (describing two foundational challenges for class action settlements “consists of what one might describe as a class in search of a settlement,” while “the second involves a settlement in search of a class.”) But see Robert M. Cover, For James Wm. Moore: Some Reflections on a Reading of the Rules, 84 Yale L.J. 718 (1975) (challenging idea that “that the procedural needs of a complex antitrust action … and an environmental class action … are sufficiently identical to be usefully encompassed in a single set of [procedural] rules which makes virtually no distinctions [between them]”).

Richard Nagareda, Embedded Aggregation in Civil Litigation, 95 Cornell L. Rev. 1105, 1164 (2010).

Id.