We here at the Drug and Device Law Blog haven’t always been kind to the work product produced by the American Law Institute. We’ve haven’t hesitated to criticize drafts of the “Principles of the Law of Aggregate Litigation” — for example, here and here.

Today, we’re striking a different tune.

Although we’re both members of the ALI, only one of us was able to attend the Members’ Consultative Group meeting on the aggregate litigation project held in Austin, Texas, on Saturday. And, although we’re still skeptical about pieces of this project, today we’re going to give credit where credit is due.

First, there are a bunch of very smart people — judges, scholars, and practitioners — working on this project.

Second, most of those people gain very little by spending time debating the details of a draft document that may ultimately help guide the development of the law governing aggregate litigation. Life-tenured federal judges sure aren’t going to lose their jobs if they blow off these Saturday meetings — but federal judges attend. Elected state court judges will gain no votes by attending these meetings — but state court judges are there. Scholars and practitioners, too, aren’t rewarded for spending time hammering out the details of this draft, but they show up. Whether or not the ultimate result is satisfactory to everyone, the process is wide open, and an awful lot of people contribute an awful lot of time to trying to make the project a success.

Finally, this stuff is not easy. Consider just a smattering of the issues that this group is wrestling with:

1. Essentially no one ever tries class actions to judgment. This means that class certification is, for all practical purposes, an elaborate dance leading to a settlement. If that’s so, shouldn’t the dance be carefully monitored and subject to close appellate scrutiny?

2. Rule 23(f) allows appeals from class certification orders, but the appellate courts have discretion to refuse to hear those appeals. If class certification is, for all intents and purposes, the endgame of a class action, shouldn’t the courts of appeals be required to hear those appeals?

3. If the courts of appeals are required to hear those appeals, shouldn’t the appellate courts consider the merits of dispositive motions that the trial court denied before granting class certification? A decision granting class cert will, after all, almost always result in the defendant paying a great deal of money. Before that money is paid, shouldn’t an appellate court decide whether the case should have been dismissed?

4. If appeals from class certification orders decide both the merits of the underlying case (to a limited degree) and the propriety of class certification, are those appellate decisions beginning to feel like binding judgments on the merits, entitled to the respect due to judgments?

And that’s just appeals from class certification orders. There are other tough questions, too, such as:

AmChem makes it terribly difficult for Article III judges to approve settlements that bring closure in mass torts. AmChem doesn’t forbid those settlements, of course — it just pushes them out of the Article III courts. From a policy perspective, is the country really better served by the alternatives to review by Article III judges? Those alternatives are having counsel enter inventory settlements (which are not regulated at all by the judiciary) or forcing companies into bankruptcy, where Article I judges will oversee the settlements. Perhaps inventory settlements or bankruptcies are better than settlements approved by Article III judges, but perhaps not. What, if anything, should be done?

Or chew on this for a while:

Plaintiffs’ counsel love to receive a fee calculated on a “percentage of the fund” basis: The defendant agreed to pay a gazillion dollars to settle the case. Plaintiffs’ counsel should receive a percentage of the gazillion. Period — no matter how much time counsel invested in the case.

Defendants (and many others) hate this approach. Why should counsel receive a fee that might amount to tens of thousands of dollars per hour worked? It’s an outrage! So defendants like courts to use a “lodestar” calculation to double-check the propriety of a requested fee. If plaintiffs’ counsel worked only 100 hours, and a reasonable fee is $500 per hour, then the court should not approve a “percentage of the fund” fee that is dramatically more than $50,000.

So far, so good.

But doesn’t this rule have an unintended consequence? If plaintiffs’ counsel knows in advance that the “percentage of the fund” fee award will be subject to a lodestar double-check, counsel will simply notice up oodles of depositions, request endless documents, and refuse to accept a settlement until the lodestar (hours worked times houly rate) begins to approach the percentage of the fund. Is that climate really dramatically better than one that allows an unchecked “percentage of the fund” fee award?

We don’t know the answers to these questions. And the working group at the ALI collectively probably doesn’t know the answers to them. But we’re delighted that a fair number of intelligent people are willing to devote their Saturdays to beating their heads against these walls.

We may not always like the results that ALI produces, but we’re mighty pleased that the process exists.