The New Class Action Regluators

Professor Adam Zimmerman presented at the University of Kansas' 50th Anniversary Perspectives on the Modern Class Action. An excerpt from his presentation, "The Intersection of Agencies and Class Actions," appears below.

Federal agencies have quickly become some of the most important regulators of class actions and court access—particularly as stalemates, splits and institutional constraints limit the Supreme Court and federal rules committees from reforming class actions. But we have yet to appreciate how powerful agencies really are in regulating court access or what, if anything, courts should do about it.

 
Agencies have many different tools to regulate class actions, and in turn, private enforcement of law. Relying on varying degrees of authority—statutes, funding, licensing and litigation positions—agencies can enable, disable or de-stablize litigation.

First, agencies may enable litigation in several ways. They may bar companies from mandating arbitration with others; create evidentiary presumptions or require disclosures that minimize the number of individual issues required to group together cases in federal courts; and they may even hear class actions and other kinds of aggregate litigation, themselves, reducing backlogs and improving opportunities for judicial review. 

Should the Education Department Hear Class Actions when Colleges Collapse?

By: Professor Adam Zimmerman

This op-ed originally appeared on RegBlog.

Last month, ITT Educational Services—one of the nation’s largest for-profit colleges—announced that it was shutting its doors in the wake of several state and federal fraud investigations. The closure comes as the U.S. Department of Education cracks down on shady colleges that lure unwitting students with false promises of money and jobs. But behind the controversy over “predator schools” lies a more vexing problem: how the government will handle thousands of claims by ITT’s former students seeking federal loan forgiveness.

Federal law has long entitled students to federal loan forgiveness when they are left in the lurch by colleges that commit fraud or go bankrupt. The principle behind this rule is that students are doubly punished when they rack up crippling debt in schools that can never provide them with a marketable degree. But after the closure of Corinthian Colleges, a for-profit educational institution that collapsed two years ago under similar circumstances to those involving ITT, the backlog of claims brought by students seeking debt relief from the Education Department swelled to over 25,000. If another 30,000 ITT students go down the same road, it could be years before the Department decides whether these students are entitled to relief under federal law. As important, no existing process ensures that students with similar claims will be treated in the same way and that independent experts will make these determinations.

Prof. Lazaroff Sees O'Bannon Decision as Casualty of Smaller Court

Today, the U.S. Supreme Court announced that it would not review the case of O’Bannon v. NCAA antitrust case. The decision lets stand a Ninth Circuit Court of Appeals ruling that the NCAA is subject to antitrust scrutiny but that schools are not required to compensate student athletes with money “untethered to educational purposes.”

Professor Emeritus Dan Lazaroff, former director of the Sports Law Institute at Loyola Law School, Los Angeles, is available for commentary. Of the decision, the antitrust expert says:

“This is not a surprising result, given the fact that other antitrust cases against the NCAA are pending in the Ninth and other federal circuits. Some of the ongoing litigation sweeps more broadly than O'Bannon, so it makes sense for the court to consider these issues down the road with a more complete picture of where the lower federal courts stand. The court likes to take up cases when there is a conflict in the circuits, so waiting increases the likelihood of that. Being down one justice might have been a factor. My sense is that any vote by the eight could easily break down 4 -4, and that would make for a big waste of everybody's time.”