Aggregation on the Couch: The Strategic Uses of Ambiguity and Hypocrisy

ion, while never socially neutral, always remains socially volatile. Without constant reference to changing social dynamics and consequences, students of procedure can scarcely know what they are talking about.114 Viewed in that light, doctrine (1) reflecting the reality that the effects of legal rules are more important to clients’ goals and their lawyers’ strategies than are the purposes of legal rules, and (2) hewing to the limited purposes of the grant of diversity jurisdiction in the context of judgemade law, looks very different than it does in Hart’s account. It may even look normatively appealing. Although I do not regard this part of Professor Issacharoff’s argument as persuasive, he is on firm ground in suggesting that, given CAFA, the premises of the nonconstitutional aspect of Erie that drove the decisions in Klaxon and Guaranty Trust are ripe for reexamination.115 In doing so, however, perhaps mindful that hypocrisy is the coin of the realm within the beltway, he tries to beat Congress at its own game. CAFA does not deprive state courts of jurisdiction,116 and neither, as Professor Issacharoff seems to suggest, does it leave “single state class actions . . . unaffected.”117 As to the former, lawyers were quick to recognize the possibility that some defendants (such as those seeking a coupon settlement) might prefer to remain in state court, and hence might not remove a case over which CAFA confers jurisdiction.118 As to the latter, CAFA’s mandatory carve-out for local actions does not affect jurisdiction over a class action seeking relief only for citizens of one state and only for damages sustained in that state as a result of a product sent into the state by a defendant, unless that defendant, if a corporation, is incorporated or has its principal place of business in that state.119 The example prompts me to wonder whether, in winning the battle, CAFA’s proponents may not lose the war, because the statute shines a spotlight on the manifest 114. Id. at 257. 115. See Issacharoff, supra note 7, at 1865. R 116. See id. at 1864 (“There are simply no other courts [besides federal courts] in the game any more.”); id. at 1865 (asserting that CAFA “takes away precisely the power of state courts to adjudicate nationwide class actions”); id. at 1864 (characterizing “nationwide class action[s]” as “a class of cases that [can], by virtue of CAFA, only proceed in federal court”). But see id. (observing that “Congress decree[d] that, in the great bulk of these cases, there will be no more state court proceedings”). 117. See id. at 1870. Professor Issacharoff is here talking about his proposed choice of law rule, but he links its application to “the jurisdictional predicate for cases brought into federal court under CAFA.” Id. 118. See Kenneth B. Forrest et al., Wachtell, Lipton, Rosen & Katz, The Class Action Fairness Act of 2005 Becomes Law, Feb. 24, 2005, at http://www.venulex.com/viewdoc. asp?documentID=4690 (on file with the Columbia Law Review) (noting that as a result of “potential settlement burdens in federal class actions generally” some defendants may “decide to forego removal and choose to remain in state court”). 119. See Pub. L. No. 109-2, § 4(a)(2), 119 Stat. 4, 10 (2005) (to be codified in relevant part at 28 U.S.C. § 1332(d)(4)). The same is true of the statute’s discretionary carve-out. See id., § 4(a)(2), 119 Stat. at 9–10 (to be codified in relevant part at 28 U.S.C. § 1332(d)(3)). \\server05\productn\C\COL\106-7\COL712.txt unknown Seq: 19 13-NOV-06 13:04 1942 COLUMBIA LAW REVIEW [Vol. 106:1924 absurdity of continuing to treat a corporation engaged in national commerce (and likely to have a national or international shareholder base) as if it were an outsider in forty-eight out of fifty states.120 For the present, however, the example confirms what is apparent to any sentient reader of the statute’s statement of findings and purposes. They are, at best, window dressing.121 Less charitably, they meet the philosopher Harry Frankfurt’s definition of “bullshit,” because they are made with apparent indifference to their truth content.122 Professor Issacharoff refers to the high-minded statements of purpose in CAFA when it is convenient for him to do so, namely in aid of an argument that, in the absence of uniform federal substantive law, we need choice of law rules that reflect the existence of a national market.123 Elsewhere in his essay, however, he acknowledges that the goal of CAFA’s proponents was to ensure that nationwide classes of the sort that some 120. See 28 U.S.C. § 1332(c)(1) (2000) (“[A] corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business . . . .”). 121. See Pub. L. No. 109-2, § 2, 119 Stat. at 4–5. The findings and purposes are replete with assertions about supposed abuses of the class action device that bear no obvious relationship to the purposes of the grants of judicial power on which the legislation rests. See C. Douglas Floyd, The Limits of Minimal Diversity, 55 Hastings L.J. 613, 652–57 (2004) [hereinafter Floyd, Limits] (discussing same phenomenon in Class Action Fairness Act of 2003, H.R. 1115, 108th Cong. (2003)). The one notable exception is the finding that state and local courts are “sometimes acting in ways that demonstrate bias against out-of-State defendants.” Pub. L. No. 109-2, § 2(a)(4)(B), 119 Stat. at 5. Even that finding gives pause when considered together with the statement of purpose to “restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases of national importance under diversity jurisdiction.” Id. § 2(b)(2), 119 Stat. at 5. I am not aware of research that supports the existence of such an intent divorced from the existence of or potential for bias against outof-state litigants. See Floyd, Limits, supra, at 652 n.171, 655–56. It is true that CAFA’s findings and purposes make a number of references to interstate commerce, see Pub. L. No. 109-2, § 2(a)(2), (4), 119 Stat. at 4–5, and Professor Issacharoff assumes an exercise of power under the Commerce Clause in arguing for a federal choice of law solution in national market cases. See Issacharoff, supra note 7, at 1843, 1866–67. It is not clear that R Congress does in fact have “the interstate commerce authority to prescribe distinct jurisdictional treatment for national market claims,” id. at 1866, if in exercising that purported power it prescribes no substantive law and leaves state courts free to exercise concurrent jurisdiction and to apply state law. See C. Douglas Floyd, The Inadequacy of the Interstate Commerce Justification for the Class Action Fairness Act of 2005, 55 Emory L.J. 487, 507–20 (2006) [hereinafter Floyd, Inadequacy]; Floyd, Limits, supra, at 656. Which is to say that I regard Congress’s references to interstate commerce in CAFA’s findings and purposes as an element of the window dressing, if not of the “bullshit,” to which I refer. See Floyd, Inadequacy, supra, at 532 (“[T]he repeated invocation of the language of the Commerce Clause in the statement of findings and purposes and the legislative history . . . is a red herring.”). 122. See Harry G. Frankfurt, On Bullshit (2005). 123. See Issacharoff, supra note 7, at 1861–62, 1865–66. R \\server05\productn\C\COL\106-7\COL712.txt unknown Seq: 20 13-NOV-06 13:04 2006] AGGREGATION ON THE COUCH 1943 state courts had certified would not be certified at all.124 From that perspective, of course, CAFA enables the kind of strategic manipulation of federal jurisdiction that concerned Justice Brandeis. This time, however, defendants are seeking different “procedural” law or, at least, different judges with different attitudes toward aggregate litigation. It would be poetic justice if the statute could be read to authorize the federal courts to formulate and apply federal choice of law rules and if, in doing so, the federal courts privileged Congress’s statement of purposes over the effects that everyone knows the statute’s proponents sought to bring about. I do not believe, however, that Professor Issacharoff makes a persuasive argument to that end. We may agree that Klaxon was not constitutionally compelled and that Congress could prescribe choice of law rules selecting state law.125 We may even agree that either the constitutional and statutory diversity grants126 or the Rules of Decision Act (viewed, as it originally was, as a choice of law statute)127 could at one time have been interpreted to authorize federal judge-made choice of law rules. Klaxon has been on the books for sixty-five years, however, and, as Professor Issacharoff acknowledges,128 there is evidence that in enacting CAFA, Congress did not intend to alter the ordering of federal and state lawmaking authority established by Erie and its progeny.129 Finally, although it is always a treacherous business to interpret Congress’s refusal to legislate, the fail124. See id. at 1862 (“CAFA clearly sought to keep in place the inherited choice of law regime, under the assumption that the spiral of choice of law dictates of the multiple states where the claims accrue would effectively bar nationwide class actions.”). 125. See supra text accompanying note 97. R 126. See Study of the Division of Jurisdiction Between State and Federal Courts 446–47 (Official Draft 1969). 127. The Rules of Decision Act is codified at 28 U.S.C. § 1652 (2000). For a description of the early view that the Act was a choice of law statute, see William A. Fletcher, The General Common Law and Section 34 of the Judiciary Act of 1789: The Example of Marine Insurance, 97 Harv. L. Rev. 1513, 1513–38 (1984) (arguing that Rules of Decision Act originally meant that federal courts were required to follow “local” (state) law in cases where such law applied, but could follow other law—not, in modern terms, exclusively federal or exclusively state—in cases where “local” (state) law did not apply). 128. See Issacharoff, supra note 7, at 1866. R 129. See, e.g., S. Rep. No. 109-14, at 49 (2005), reprinted in 2005 U.S.C.C.A.N. 3, 46 (“[T]he Act does not change the application of the Erie Doctrine, which requires federal courts to apply the substantive law dictated by applicable choice-of-law principles in actions arising under diversity jurisdiction.”); id. at 61 (“[C]lass action decisions rendered in federal court should be the same as if they were decided in state court—under the Erie doctrine, federal courts must apply state substantive law in diversity cases.”); id. at 66 (“[U]nder the Erie doctrine, federal courts apply state substantive law in diversity cases. Consequently, a removed class action should have the same substantive law applied to it, regardless of whether it is in federal or state court.”). The recognition that some litigants entitled to access to federal court under CAFA might nonetheless choose to file (or remain) in state court, see supra note 118 and accompanying text, might make this R legislative history look more like a principled choice than a strategic response to opposition wrapped in the flag of federalism. Moreover, it highlights the fact that, because Professor Issacharoff’s goal is to facilitate national solutions and not to provide a neutral \\server05\productn\C\COL\106-7\COL712.txt unknown Seq: 21 13-NOV-06 13:04 1944 COLUMBIA LAW REVIEW [Vol. 106:1924 ure of a proposed amendment that was quite clearly intended to leave space for results of the sort that Professor Issacharoff champions is hardly favorable to his suggested interpretation.130 Turning now to that portion of Professor Nagareda’s essay that considers the impact of CAFA on the class action landscape, recall that the problem confronting him is very different from that confronting his colleague. Professor Issacharoff seeks authority for federal choice of law rules that would facilitate the certification of nationwide classes. Having advanced the ideal that aggregation should not alter the substantive law (or substantive rights) elsewhere in his essay, Professor Nagareda would like to find authority enabling the federal courts not to follow state choice of law doctrine that “bootstraps” in order to certify nationwide classes. Without forthrightly advocating that result in the “choice . . . whether aggregation or forum should alter substantive law,”131 he pursues an argument for the latter, also advanced in an earlier article132— namely that CAFA might be deemed an “affirmative countervailing consideration[ ]” sufficient to warrant a departure from Klaxon under the authority, such as it is, of the Byrd decision.133 Although the result Professor Nagareda would prefer is obvious, a posture of agnosticism is evidently comfortable for him, because he believes that recognizing the choice of principles that CAFA presents should force litigants who have a stake in the other aggregation debates he chronicles to acknowledge the primacy of legislation as a law-reform vehicle and hence the inconsistency with that principle of their positions in some of those other debates. I do not see it that way. The facts that CAFA is a statute and that a decision to depart from Klaxon when state choice of law doctrine was perceived to “bootstrap” presumably would have to be attributed to its authority do not speak at all to broader questions of institutional authority or legitimacy. It would hardly be necessary for defendants making that argument “to embrace the primacy of legislation as the appropriate vehicle for law reform”;134 they would simply embrace the proposition that this statute changed the and unbiased forum, the imperfections of his proposed solution include the fact that the choice of law rules he advocates would be applicable only in federal court. 130. See Nagareda, Discontents, supra note 6, at 1919 (discussing Senate action R rejecting proposed amendment that “merely would have reminded the federal courts that they ‘shall not deny class certification’ simply because ‘the law of more than 1 State will be applied’” (quoting S. Amendment 4 to S. 5, 109th Cong., 151 Cong. Rec. S1215 (daily ed. Feb. 9, 2005))).