The Trust Barrier to Consumer Participation in Class Actions - Public Comments of Professor Amanda M. Rose, Consumers and Class Action Notices: An FTC Workshop

I applaud the FTC’s ongoing efforts to ensure that class action settlements provide appropriate benefits to consumers, and I was grateful for the opportunity to serve as a panelist at the FTC’s recent workshop focused on its staff report, Consumers and Class Actions: A Retrospective and Analysis of Settlement Campaigns. The staff report, which summarizes the findings of the FTC’s Administrator Study and Notice Study, sheds important light on current practices in claims administration and on the effectiveness of those practices. Most importantly, it suggests that a pernicious trust barrier exists to consumer participation in class actions, highlighting the need for bold and fundamental reform to remove it. While the FTC presently lacks authority to enact the needed reform, it can and should help advocate for it. I have a recommendation for what this reform should look like. As I outline in section III and explore more fully in a working paper titled Classaction.gov, Congress should authorize the creation of a government-run class action website and supporting administration (collectively, “Classaction.gov”) that would centralize and standardize many of the services that private claims administrators provide today. Classaction.gov holds the potential to dramatically increase the number of class members that actually share in settlement funds, while at the same time reducing the costs associated with notice and claims administration — thus leaving more money on the table for victims. It would also produce important additional benefits. For example, it would render class actions transparent, allowing researchers and the public to intelligently assess their value in our society, and could facilitate reforms designed to reduce class action agency costs.