Prof. Sharkey Posts Article on CAFA Settlement Notice Provision
Professor Catherine M. Sharkey (NYU) has recently posted an Article entitled CAFA Settlement Notice Provision: Optimal Regulatory Policy? on SSRN. Here is the Abstract:
Written for The University of Pennsylvania Law Review's symposium, Fairness to Whom? Perspectives on the Class Action Fairness Act of 2005, this article evaluates the largely ignored settlement notice provision. The provision mandates that notice of every class action settlement within CAFA's purview must be provided to appropriate federal and state officials. The relevant federal official is the U.S. Attorney General. As for the states, the relevant official is the one who has primary regulatory or supervisory responsibility with respect to the defendant, or who licenses or otherwise authorizes the defendant to conduct business in the State, or, by default, the AG of any state in which any class member lives.
Some legal scholars have begun to ask whether CAFA's settlement notice provision will awaken a sleeping giant. The scant existing commentary is of two minds. This perhaps reflects the juxtaposition of the lofty goal of aggressive AG monitoring against the fact that the AGs lack a precise mandate for official review, let alone any additional resources for the endeavor.
At this early juncture, it is too soon to tell whether the CAFA settlement notice provision will have a significant impact on private settlements of class actions, let alone any wider impact in motivating state AGs to police more aggressively certain types of misconduct. To the extent that the provision does have a marked effect, it will most likely be due to the increased availability of information and to the facilitation of coordinated efforts on behalf of groups of state AGs. In order to assess the overall effect, it is necessary to delve beneath the layer of formal activity to probe the informal bargaining and negotiation taking place at the behest of state AGs.
The settlement notice provision also provides a window on an even grander topic: CAFA as regulatory policy. As if through a refracting lens, the view of CAFA is transformed by the angle from which it is viewed. The Article sets forth a series of progressively unfolding dyads in order to highlight the state/federal, ex ante/ex post, and public/private dimensions of regulatory policy implicated by CAFA. This triad of matrices proves a useful framework for evaluating the design of optimal regulatory policy - a large domain of which the CAFA settlement notice provision is but one small part.
The full-text version of this Article may be downloaded by visiting http://ssrn.com/abstract=1133137.