Statutory qui tam actions as a response to the Supreme Court’s ruling in Concepcion

Law professor Janet Alexander has written "To Skin a Cat: Qui Tam Actions as a State Legislative Response to Concepcion." Here is the abstract:

Supreme Court’s decision in Concepcion is widely regarded as heralding
the demise of small-claims class actions whenever contracts of adhesion
are involved in the transaction — which means for virtually all
consumer and employment claims. Amending the Federal Arbitration Act to
overturn Concepcion would be a relatively simple exercise in legislative
drafting. But in the current political climate such efforts are
unlikely to succeed. Thus far proposed federal legislation has failed to
pass, and federal agency regulation of class waivers has been lacking.
State legislatures might have the political ability to pass corrective
legislation, but virtually all state limitations on class waivers in
mandatory arbitration clauses are foreclosed by federal preemption under
Concepcion. This Article proposes an alternative approach that
could be taken at the state level: statutory qui tam actions to enforce
civil penalties for violations of state consumer protection and
employment laws. A qui tam action is a representative action brought on
behalf of the state, to enforce the state’s claim for civil penalties,
rather than a class action to recover compensation for individual
injuries. The penalties are owed to the state, with a share of the
recovery payable to the plaintiff as an incentive to private
enforcement. The action is for the public benefit, for the law
enforcement purpose of ensuring compliance with state law, rather than
for private benefit. Thus the rationale of Concepcion simply does not
apply to such actions. Indeed, allowing private parties to contract away
the state legislature’s chosen means of enforcing claims belonging to
the state would seriously impair the state’s ability to execute core
governmental functions. It would be an intrusion into state sovereignty
that should give pause to neo-federalists such as the majority in
Concepcion. California’s Private Attorneys General Act (PAGA),
which provides a mechanism for private enforcement of civil penalties
for violation of the state labor code, is an example of how a state
might use the qui tam model to hold defendants accountable for mass
harms without being vulnerable to FAA preemption under Concepcion. After
describing the operation of PAGA and how courts have interpreted it, I
propose some simple adjustments that would increase the likelihood that
courts would find Concepcion inapplicable to a PAGA-style qui tam
statute. Qui tam actions are not a perfect substitute for class actions,
because they can provide only limited compensation to victims. But they
may be able to provide greater deterrence than state enforcement
agencies are capable of.

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