Current Issue

Volume 73, Number 4

October 1998

The Inadequate Search for “Adequacy” in Class Actions: A Reply to Professors Kahan and Silberman

Alan B. Morrison

Although Matsushita II can be read in a way that might lead to some difficulties, Professor Morrison insists that its result is plainly correct and its basic message—that federal courts should look with considerable skepticism on state court class action settlements that release federal claims which state courts are forbidden to adjudicate—is a sound one, properly applied to the facts of that case. Matsushita II is a narrow case that would not and should not, lead to the broad-scale collateral attack predicted by Professors Kahan and Silberman. Given the practicalities of litigation (including the statute of limitations for securities cases and the substantial risks of sideline sitting), the opportunities for collateral attack are quite limited and the possibility of abuses very small. At the same time, Kahan and Silberman undervalue adequacy of representation, which is an essential element of due process that must exist to bind persons not parties to a lawsuit. Their proposed solution would prevent meaningful federal review and create practical problems without effectively addressing the problems of forum shopping and plaintiff shopping. The holding of Matsushita II, in contrast would encourage settlement of such actions in a single proceeding in a federal court that finally resolves the dispute.