May 23, 2006 1:42PM

Scapegoating Milberg Weiss

Saul Levmore is asking the right questions about the Milberg Weiss prosecution here. “Milberg, who?,” you ask. 

(Warning: boring lawyer‐​talk follows.) 

Milberg is the titanic plaintiffs class action firm that was just indicted for paying professional plaintiffs to serve as figureheads for the firm’s class action suits. Those who love to hate class actions tend to love this prosecution. But as Levmore asks, what, exactly, is so bad about lawyers paying professional plaintiffs to act as figureheads, anyway?

Hundreds of lawyers hate the firm and they are quick to say that plaintiffs are paid to lie, to agree to settlements that are not in the interest of other class members, to lie about having been consulted about conflict of interest questions, and so forth. Some of these possibilities seem implausible, or at least somewhat puzzling, in a world in which named plaintiffs are rarely consulted at all, and in which judges must approve settlements (for better or worse) but are hardly accused of paying too much attention to the wishes of the named, nominal plaintiffs. 

Let’s not kid ourselves: class actions are bounty‐​hunting enforcement actions designed to deter wrongdoing, rather than compensate victims. Named plaintiffs play a negligible role in these lawsuits, because the suits aren’t brought for their parochial benefit. The suits are brought to punish the target, not to remedy individual injuries. The “named plaintiff” is a virtual legal fiction – a stubby appendage of an older system of corrective justice and individual rights which our legal system has, for all intents and purposes, thrown over the side.

Now, I happen to like that old, lost, fundamentally liberal view of the law, in which state coercion is limited to aiding individuals, rather than promoting collective (i.e. state) interests. But the incentive system set up under our current class action system simply isn’t designed to promote attention to individual remedial interests. And prosecuting Milberg Weiss for paying kickbacks to figurehead plaintiffs isn’t going to change that fact. 

Radical, systemic solutions are necessary. One is to force lawyers to recruit not just named plaintiffs, but class members, by requiring absent class members to affirmatively “opt in” to the class litigation – thereby forcing lawyers to sell their representation to entire class. By making class actions fully contractual, lawyers may act less as self‐​interested regulatory bounty‐​hunters and more like the advocates‐​for‐​hire of old. See this piece for further discussion. 

But this is a solution that our political system can’t stomach. And so we’re left, instead, with the Milberg prosecution: a symbolic, ineffectual fit of pique.