Certifying Statutory Class Actions in the Shadow of Due Process

December
2017
Tyler J. Domino

Recognizing privacy harms, Congress has created a patchwork of statutes that provide private rights of action with statutory damages. These statutes allow individuals to vindicate procedural and substantive violations without having to show actual damages. At the same time, however, through the rise of the Internet, some companies interact with millions of users a day. If the claims are aggregated, these companies rightly fear that an inadvertent violation of one of these statutes will lead them into bankruptcy. And they rightly fear that users with weak claims will seek class certification to coerce them into settlements for the benefit of class counsel alone. However, refusing to certify these classes practically eliminates the substantive rights Congress attempted to protect.

By raising due process concerns at the certification stage, courts can signal to litigants that the liability faced will not be as astronomical as rote multiplication would imply. This could, somewhat, level the playing field in settlement negotiations while maintaining the deterrence effect Congress intended to create. And it allows large, Internet-based companies to decide to go to trial against weak claims without the fear of crippling liability.

This article appears in the December 2017 Issue: Volume 92, Number 6