Adam Zimmerman, Presidential Settlements
, 163 U. Pa. L. Rev.
__ (forthcoming 2015), available at SSRN
In his famous, unfinished article The Forms and Limits of Adjudication, Lon Fuller posited that certain types of claims—he called them “polycentric” disputes— were incapable of resolution through adjudication. In these disputes the number of interested parties is so large and the potential ramifications of the dispute so vast that it is impossible for each person affected by the decision to participate in the decision-making process through proofs and reasoned arguments—participation which, Fuller argued, was the sine qua non of adjudication. According to Fuller, the binary nature of a second decision-making mechanism—voting—also made elections a poor means for resolving mass disputes, with their multifaceted nuances. Therefore, the only legitimate mechanisms to resolve polycentric disputes were negotiation or managerial direction. One type of dispute that Fuller held out as an exemplar of polycentrism was a labor dispute over wages in a centralized economy: the way in which different levels of increase in wages would have ripple effects across the economy made it unimaginable that a judge or a voter could determine the question of a proper wage.
Of course, Fuller’s claim is contestable, both theoretically and factually. In particular, the rise of complex litigation, which emerged as a significant legal phenomenon after Fuller drafted his article in 1957, has tested the assumption that large-scale disputes cannot be resolved through proofs and reasoned arguments. But the course of complex litigation over the past sixty years has also given Fuller’s thesis some support. Consider, for example, the aggregation techniques that courts in complex disputes have employed: class actions that limit participation rights in return for the promise of adequate representation and MDL proceedings whose bellwether trials are designed to channel most cases into settlement and whose settlement structures take their inspiration from administrative agencies and insurance companies. In each of these, the right of each affected individual to participate through proofs and arguments falls by the wayside. Likewise, some of the “best practices” for resolving aggregate litigation—for instance, providing separate representation for each interest group to prevent conflicts of interest within groups and using statistical sampling to ensure that issues of liability and damages are determined accurately on a macro scale—highlight the difficulty of guaranteeing the individual participation and the individualized assessment of claims that lie at the heart of Fuller’s adjudicatory paradigm.
Fuller’s paradigm casts a long shadow over complex litigation. In recent years courts have seemed especially reluctant to stray too far from the traditional understanding of adjudication that Fuller describes. Courts have declined to head down adventurous doctrinal paths that would facilitate the aggregation of large numbers of cases: think, for instance, of the many cases narrowly construing Federal Rule 23, Wal-Mart’s rejection of the use of trial by statistics, and the increasing judicial resistance to cy pres relief. Whatever the merits of these decisions (and some of them seem to me more defensible than others), convincing a present-day court to use its adjudicatory powers to resolve “polycentric” claims in a single, comprehensive lawsuit is an uphill climb. Yet even if courts are reluctant to adjudicate mass disputes, the disputes themselves continue to proliferate. Predictably, substitute mechanisms have stepped into the breach.
Adam Zimmerman has explored many non-judicial dispute-resolution mechanisms. His latest article turns to another one: presidential settlements, which are deals brokered by the White House that extinguish the legal rights of claimants in favor of an executive-branch compensation system, without judicial involvement or imprimatur. The BP oil spill settlement is perhaps the largest and most recent example. As Zimmerman recognizes, however, presidents have been hammering out similar deals since the earliest days of the Republic. In the past four decades alone, President Carter negotiated, and President Reagan implemented, the Algiers Accords, providing a compensation mechanism for claims arising from the Iranian Revolution; President Clinton engineered a settlement between Holocaust victims and banks that had confiscated Jewish bank accounts; and President George W. Bush brokered a deal between the government of Libya and the victims of the Lockerbie bombing. Over the years presidents have also intervened to resolve labor disputes—a role that calls to mind Fuller’s argument that such disputes are classically polycentric and therefore beyond the legitimate reach of adjudication. Continue reading "The Settler-in-Chief"