Aggregation as Disempowerment: Red Flags in Class Action Settlements

Class action critics and proponents cling to the conventional wisdom that class actions empower claimants. Critics complain that class actions over-empower claimants and put defendants at a disadvantage, while proponents defend class actions as essential to consumer protection and rights enforcement. This Article explores how class action settlements sometimes do the opposite. Aggregation empowers claimants’ lawyers by consolidating power in the lawyers’ hands.

Consolidation of power allows defendants to strike deals that benefit themselves and claimants’ lawyers while disadvantaging claimants. This Article considers the phenomenon of aggregation as disempowerment by looking at specific settlement features that benefit plaintiffs’ counsel and defendants without benefiting class members. Recognizing that protection of disempowered class members lies with judges who review settlement agreements, the Article identifies red flags to alert judges to problematic settlement terms and fee requests. By showing how certain settlement features reflect improper cooption of the power of aggregation, the Article offers a framework for understanding class action power dynamics and a path for reclaiming class actions as an empowerment mechanism.