Coattail Class Actions: Reflections on Microsoft, Tobacco, and the Mixing of Public and Private Lawyering in Mass Litigation

Ask anyone who follows legal news to name the two biggest litigation news stories in the United States at the start of the twenty-first century, and they will answer without blinking: Microsoft and tobacco. The Microsoft litigation, they will tell you, claims a place in the pantheon of antitrust landmarks that includes Standard Oil, Alcoa, and AT&T. The tobacco litigation is the most massive in a string of mass torts including asbestos, Dalkon Shield, and breast implants; it is arguably the most important public health matter ever litigated. Microsoft and tobacco each fit so well and so interestingly in their own line of antitrust or product liability cases that it would be easy to miss what the two stories have in common. The Microsoft and tobacco litigations each involve allegations of wrongful conduct causing widespread harm, committed by actors so powerful they seemed immune to attack by private litigants. In each case, government lawsuits broke down the barriers to successful litigation, and private litigants, particularly those pursuing class actions, rode the government\u27s coattails. This pattern is not limited to tobacco and Microsoft, nor is it new; in antitrust, securities, civil rights, and consumer fraud litigation, private plaintiffs have been riding government coattails for years. This Article examines coattail class actions and related developments in Microsoft, tobacco, and other recent litigation involving widespread harm. It does not address whether the government entities and private plaintiffs have valid claims in the Microsoft and tobacco cases, nor does it consider whether the underlying substantive law itself is just or wise. For purposes of this discussion, my interest in these cases is not to enter the raging debate over the legal and factual issues in them,9 but rather to look at whether their procedural structure of interdependent public and private actions offers a sensible model for the resolution of claims of widespread harm. Part One looks at the Microsoft antitrust litigation and the tobacco litigation as illustrations of the relationship between government litigation and subsequent class actions. Part Two examines two related developments that mix public and private lawyer roles: the use of private litigators to prosecute government lawsuits, and the nature of recent government recoupment actions. Part Three considers the differences between government lawyers, who owe duties to government entities and face largely political incentives, and class action lawyers, who owe duties to the class and face largely fee-based incentives. With the idea that government lawsuits and private class actions serve different purposes even when targeted at the same conduct, I turn to several specific implications. Part Four looks at implications for government suits. I suggest that government lawyers should consider the issue preclusive value of adjudications, the public value of discovered information, and the impact of settlement agreements that compromise private litigants\u27 remedies or procedural mechanisms. I also suggest that contingent fees are generally inappropriate for government retention of private litigators. Part Five turns to implications for coattail class actions themselves. I contend that while prior government litigation does not render a class action illegitimate, the government action does matter for the outcome of the coattail class action. Prior government litigation substantially increases the likelihood of successful prosecution of the class action, but in some cases it should reduce the likelihood or amount of punitive damages, as well as the amount of legal fees awarded to class counsel. While much of what I discuss in this Article is equally true of individual lawsuits that piggyback on government litigation, I focus on class actions because as representative litigation they share an essential attribute of government actions, and thus present most starkly the question of who should represent the interests of injured citizens in litigation: government officials or class representatives and class counsel