At the conclusion of every class action lawsuit, a judge must hold a fairness hearing to assess the reasonableness of the outcome. The fairness hearing contains the promise of providing real monitoring of class counsel. In practice, it has not fulfilled this promise and scholars have largely, therefore, forsaken it. In this Article, William Rubenstein provides a sustained investigation of the fairness hearing, arguing that since it will inevitably take place, we ought to perfect not abandon it. To that end, he explores four types of mechanisms that might assist the judge at the fairness hearing: a devil’s advocate, employed by the court to argue against the settlement; bonds, posted by the settling parties and used to pay the attorneys’ fees of private objectors who raise valid concerns; labels, like food nutrition labels, compelled by a public agency to provide more transparency to the elements and quality of the settlement; and certification marks, like the Good Housekeeping Seal of Approval, created by an independent private group to signal class members and judges as to the adequacy of the settlement terms.
Examining this new set of disparate proposals enables an assessment of the underlying question of institutional design: namely, whether adversarial or regulatory, public or private, approaches are likely to be most efficacious at identifying and curtailing problematic settlements and hence controlling class counsel. Given that at a fairness hearing a judge is charged with reviewing two distinct sets of concerns—the process by which the settlement was achieved and the content of the settlement in light of the strengths or weaknesses of the plaintiffs’ claims—Professor Rubenstein concludes that these roles require a combination of adversarial and regulatory approaches. For review of the substance and value of the class’s legal claims, adversarial presentation of issues is the preferred procedure and a judge the favored decisionmaker. For review of the settlement process, investigatory oversight is the needed procedure and an administrative inquisitor the ideal agent. The proposed settlement of a class action should trigger a two-part process involving both a judicial assessment of the value of the claims and a regulatory assessment of the process of settlement. Such an enriched proceeding holds the promise of providing meaningful constraints on class counsel.