Adam Zimmerman on Class Action Waivers and State Attorney General Settlements

On Thursday, April 26, Assistant Professor Adam Zimmerman will participate in a conference at Cardozo Law School analyzing the U.S. Supreme Court’s landmark decision in AT&T Mobility v. Concepcion. In that case, the Court effectively validated the use of class waivers in arbitration agreements by holding that the Federal Arbitration Act preempted broad-based attempts to find such provisions unconscionable.  

Adam is ideally suited to grapple with the issues Concepcion raises. His scholarship explores the way class action attorneys, regulatory agencies and criminal prosecutors provide justice to large groups of victims through overlapping systems of tort law, administrative law and criminal law. In his short stint at St. John’s, Adam has compiled a remarkable publication record, with his articles appearing in the New York University Law Review, the University of Pennsylvania Law Review, and the Duke Law Journal. His latest article, The Agency Class Action (co-authored with Michael Sant’Ambrogio) is forthcoming in the Columbia Law Review and was selected for presentation at the prestigious Yale-Stanford-Harvard Junior Faculty Forum.

In his talk, Adam will explore whether State Attorney General (“SAG”) settlements should adopt procedural safeguards from class action law to compensate victims of widespread harm in light of Concepcion.  Adam argues that SAGs increasingly seek to regulate large companies that violate state and federal laws in high-profile, nationally-coordinated lawsuits that mirror the size and scope of class actions—from the national foreclosure crisis to electronic publishing to the British Petroleum oil spill.  But just as SAGs seek to regulate corporate America by using the threat of lawsuits to encourage sweeping institutional reforms, they have also made victim restitution a significant component of the settlement agreements they execute with corporate defendants to legitimize and justify their actions.  To date, however, no consensus exists with respect to how SAGs should balance their increased interest in private compensation against their broader public mission to vindicate states’ sovereign interests or policy.  Nor has any consensus developed about the kinds of procedural safeguards that should protect victims entitled to compensation.

Rules for victim compensation in SAG settlements have become all the more pressing, now, as the Supreme Court limits the ability of federal courts to hear class actions and other forms of aggregate litigation in cases like Concepcion.  As a result of those cases, what  Adam calls “executive branch settlements” – settlements brokered by federal prosecutors, federal agencies and state attorneys general – may provide the only way to compensate similar categories of injured parties more accurately and fairly.

Adam will discuss several potential reforms that SAGs could adopt to give victims more voice in their own redress while preserving the SAG’s discretion to represent the broader interests of his or her state.  In the end, SAG settlements will have to come to grips with many of the complicated trade-offs that have long existed in class action litigation between deterrence, compensation, and victim participation, without undermining SAG’s institutional authority as executive officers of their respective states.

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