Sheila Scheuerman on Statutory Damages and Class Actions

Professor Sheila Scheuerman (Charleston; picture, left) has posted on SSRN her article, Due Process Forgotten: The Problem of Statutory Damages and Class Actions, Mo. L. Rev. (forthcoming 2009).  Here's the abstract:

This article analyzes the due process problem that arises when two litigation mechanisms converge: statutory damages and class actions. Individually, the class action device and statutory damages serve a similar function: encouraging litigation by offsetting disincentives to suit where the alleged wrongdoing involves nominal financial harm. When combined, however, they create the potential for unintended bet-the-company liability. Courts have struggled with how to address these statutory damages class actions because the prevailing legal framework is jurisprudentially flawed and ignores the realities of modern class action litigation. This article assesses the current due process jurisprudence in this area, and proposes an analytical framework drawn from the Supreme Court's punitive damages jurisprudence. Indeed, the article shows that the modern due process standard for punitive damages - known as the BMW guideposts - in fact evolved from a test developed in early Supreme Court precedent analyzing the constitutional limits on statutory damages. Thus, the article argues that the BMW guideposts should apply to aggregate statutory damages awards, and furthermore should be considered before, not after, class certification.

BGS