- - Tuesday, July 3, 2012

It’s not often that one gets a chance to write about Major League Baseball (MLB) as a teaching tool for the evils of the class-action system. So pardon my enthusiasm for baseball metaphors.

Last month, the New York Times reported that MLB fired the arbitrator who overturned a 50-game suspension imposed by the league on National League Most Valuable Player Ryan Braun for a positive drug test. This was not just any arbitrator; rather, he had been MLB’s longest-serving arbitrator and even was chairman of the Major League Baseball-Major League Baseball Players Association Arbitration Panel. There was nothing to indicate that the arbitrator got the facts wrong or misapplied legal or equitable principles. Despite the fact that an arbitrator is charged with impartially settling disputes between parties, he apparently made one decision MLB did not like and was fired for it. Evidently, it’s one strike and you’re out when it comes to issues MLB feels strongly about. Do you think the other panel arbitrators got the signal?

This problem is strikingly relevant to class-action litigation. To cover all the bases for approval of their proposed settlements, plaintiff’s and defendant’s attorneys regularly hire retired judges or law professors as closers to recommend that judges sitting in the public courts of law approve proposed class-action settlement agreements.

Are privately retained retired judges, like MLB arbitrators, going to be rehired by plaintiff’s attorneys if they raise issues like class counsel is overstaffing the case and spending too much time on routine tasks, or the attorneys’ hourly rates are excessive? Highly unlikely. How can privately retained judges impartially review a class-action settlement agreement when they risk losing their lucrative positions if they question the fees sought by their patrons?

It’s bad enough that private judges are incentivized to accommodate the attorney’s fees requested by plaintiff’s attorneys, but the problem is much worse. Imagine a bright and hardworking judge in a state or federal court, facing the budget woes and salary freezes that seem to go hand in hand with public service these days. Picture such a judge pondering the benefits of early retirement and “going private.” How could such a future career choice not influence the decisions a judge makes in class-action lawsuits during his time on the bench? Could any modestly savvy judge with aspirations of entering the lucrative world of private judging ($800 to $1,000 an hour or more) ever review an attorney’s fee request as a public judge without contemplating how that decision would be viewed by future employers?

Just as Major League Baseball has the last word in its arbitration process, class-action lawyers have gamed the class-action system in such a way that private judging taints our public court system. This is largely unrecognized by the general public.

Class-action lawsuits are the big leagues in litigation these days. Unfortunately, lawyers have gained control of the scoring system so that fee awards are an unending series of grand slams. Class members and consumers - you and I - are the big losers.

Lawrence W. Schonbrun is executive director of Class Action Watch and has appeared on behalf of unnamed class members and objectors in approximately 150 class actions throughout the United States.

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