Some of us have been accused of being mere fanboys of Judge Posner. Maybe that’s not so bad — better to admire the output of one of America’s foremost intellectuals (who else has written so thoughtfully on judging, antitrust, domestic intelligence, plagiarism, sex, bankruptcy, economics, etc?) than, say, a narcissistic athlete or an empty-headed entertainer. Anyway, we’re here to prove it just ain’t so. We’ve actually found a trend (okay – two cases) where Posner seems to have gone kind of soft on class actions.
In the past we’ve observed that reining in class actions has been one of the signal successes of recent mass tort defense. In the wake of Amchem Products Inc. v. Windsor, 521 U.S. 591 (1997) and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), one is hard-pressed to locate mass tort class certifications that have been affirmed. In fact, there are two that stand out, and both have Posner’s fingerprints on them.
Most recently, we have the window rot case, Pella Corp v. Saltzman, 606 F.3d 391 (2010) (per curiam). In that case, the Seventh Circuit affirmed certification of two classes: those who replaced their windows and those who have not. Plaintiffs alleged that Pella committed consumer fraud “by not publicly declaring the role of that the purported design defect plays in allowing rot.” For those plaintiffs who replaced their windows, the district court certified six statewide liability classes under Fed. R. Civ. P. 23(b)(3) on the theory that Pella violated state consumer fraud laws by failing to disclose the defect. For those who have not, the district court certified a class under Fed. R. Civ. P. 23(b)(2) to determine entitlement to declarations that all the windows had the defect, that Pella must notify consumers of the defect, and that Pella must pay for an inspection, followed by an individual claims adjudication process. The Seventh Circuit granted interlocutory review “in order to address the contention that consumer fraud claims are inappropriate for class treatment.” Sadly, the Seventh Circuit rejected that contention.
Pella is a per curiam opinion, with Posner as one of the three members of the panel. So why do we treat this as a Posner opinion? The Pella opinion basically navigates between two prior Posner opinions. One of those is the other pro-class certification case, Mejdrech v. Met-Coil Sys. Corp., 319 F.3d 910 (7th Cir. 2003). The second is a case we like rather better, one that rejected class certification of a consumer fraud class action, Thorogood v. Sears, Roebuck and Co., 547 F.3d 742 (7th Cir. 2008). The Pella decision finds Mejdrech, not Thorogood, the more apt precedent, and does so in classic Posner terminology, analyzing “the risk of error in having complex issues that have enormous consequences decided by one trier of fact rather than letting a consensus emerge from multiple trials. [citing Mejdrech and Thorogood] This is not a case where the issues are so complex, and Pella does not claim that the consequences are so high, that a decentralized process of multiple trials is necessary for an accurate evaluation of the claims.” If those words weren’t written by Posner, they were written by someone channelling him.
Mejdrech involved an allegation that a leaking storage tank on a factory owner’s property contaminated soil and groundwater beneath plaintiffs’ homes. Judge Posner wrote in that case that class action treatment is appropriate “when the judicial economy from consolidation of separate claims outweighs any concern with possible inaccuracies from their being lumped together in a single proceeding for decision by a single judge or jury.” Mejdrech, 319 F.3d at 911. The court held that whether the defendant leaked chemicals in violation of law and whether those chemicals reached the soil and groundwater beneath Plaintiffs were common and straightforward issues. Plaintiffs would still have to prove on an individual basis “the fact and extent of their individual injuries.” Id. at 912.
It’s no big surprise that we much prefer the analysis in Thorogood, where the Seventh Circuit rejected a national consumer fraud class action. Plaintiff sued on behalf of himself and people scattered across 28 states and the District of Columbia who had purchased a half million Kenmore dryers advertised as containing stainless steel drums. Plaintiff claimed that Kenmore ads were deceptive because consumers were misled into believing that the drums were made entirely of stainless steel and that, therefore, there was no risk of rust stains on clothes. Judge Posner noted the significant downsides of class actions:

• conflicts of interest between members of the class and their lawyers (the former having such small stakes in the case so that they cannot manage the latter, who have large stakes, i.e., fees);
• the danger of a single throw of a device determining the outcome of a large number of separate claims;
• asymmetric risk, i.e., no big deal to individual plaintiffs vs. potential bankruptcy of a public corporation. (It was, after all, Judge Posner who wrote In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1298-99 (7th Cir. 1995)); and
• undermining federalism.

In Thorogood, Judge Posner concluded that these negatives of a class action outweighed the positives. Actually, there were no positives. Sears never advertised that its stainless steel meant there would be no rust stains. During oral argument the plaintiff’s attorney asked the bench to “ask your wives whether they are concerned about rust stains in their dryers.” Posner reported back that, “None is.” Oops. So the common issue is frivolous.
What to say or do about Pella and Mejdrech? Let’s limit them. They do not involve claims of personal injury. They are not drug or device cases. They arguably do not apply to claims of failure-to-warn. The courts in both cases emphasized that the class issues did not involve such individual issues as proximate cause, reliance, and damages. That is, by “carving at the joints of the parties dispute” (Mejdrech, 319 F.3d at 911), the court created a narrow class action that did not seek to address individual issues.
But we are frankly a bit skeptical about that — we just don’t know how the cases will actually play out. Moreover, all of those negatives identified by Judge Posner are still there, and are still overwhelming. In fact, even if some individual issues are reserved for individual treatment, the class action still creates asymmetric risk (also with asymmetric discovery). such that the settlement-as-extortion threat remains prominent. In truth, we might never get the chance to see how those cases will play out.
All of which leaves us irretrievably disappointed with Judge Posner’s opinions in Mejdrech and Pella. In Posner’s book, How Judges Think (2008), it’s clear that Posner favors legal pragmatism, as opposed to legalism. Legalism pretends that judges simply follow clear rules – the judge-as-umpire fiction uttered by future Chief Judge Roberts. By contrast, Posner approvingly cites Holmes’s opening sentence in The Common Law (1881): “The life of the law has not been logic; it has been experience.” Posner admits that judges are occasional legislators. But he believes they can still be constrained, even if there aren’t clear, concrete rules. Pragmatism means that judges attend to the consequences of their decisions. If those consequences are assessed in terms of economics or some sort of social science — as opposed to pure political predilection — there is still a respectable degree of objectivity and consistency. Posner’s formula for assessing class certification – weighing “the risk of error in having complex issues decided by one trier of fact rather than letting a consensus emerge from multiple trials” — sounds like an effort to ground such determinations in pragmatism. But it’s not as if many of those determinations will be supported by data.
For those of us who actually litigate class actions, the negative factors identified by Judge Posner in Rhone-Poulenc (and acknowledged in the later decisions) are real. And the “weighing” discussed in Mejdrech and Thorogood can end up like any judicial weighing test — not a test at all, but a vehicle for arriving at a desired result. Who knows what animates that desire? We don’t doubt that Posner approaches such a weighing test with good faith, good information, good methods, and more-than-good intelligence. But we’re not always dealing with Judge Posner. In How Judges Think, Posner conjectures that the “zone of reasonableness” for judges “has a U-shaped relation to intellectual ability. Both the most able and the least able appellate judges are likely to stretch the zone – the most able because they will be quick to see, behind the general statement of a rule, the rule’s purpose and context, which limit the extent to which the general statement should control a new case; the least able because of difficulty in understanding the orthodox materials and a resulting susceptibility to emotional appeals by counsel, or, what is closely related, difficulty in grasping the abstract virtues of the systemic considerations that limit idiosyncratic judging, such as the value of the law’s being predictable.” How Judges Think, pp. 86-87.
Yeah. What he said. The weighing test in Mejdrech and Pella could, in the hands of the “least able” — the clumsy, confused, or biased — result in some foolish class certifications. At the end of Mejdrech, here is what Posner wrote: “We can see, in short, no objection to the certification other than one based on a general distaste for the class-action device.” Mejdrech, 319 F.3d at 912. We plead guilty to harboring that “general distaste.” It has been earned by experience.