JACK B. WEINSTEIN, Senior District Judge.
In October 2015, this court stayed class certification in the above-captioned cases and referred the critical issue of an appropriate definition of "flushable" wipes and related matters to the Federal Trade Commission ("FTC"). See Belfiore v. Procter & Gamble Co., 311 F.R.D. 29 (E.D.N.Y. 2015), reconsideration denied, 140 F.Supp.3d 241 (E.D.N.Y. 2015); Order Staying Cases 14-CV-1142, 15-CV-2909, 15-CV-2910, 15-CV-2928, and 15-CV-4579, Oct. 9, 2015.
Motions to reconsider and lift the stay were denied in order to provide the FTC with time to reach, in its discretion, a national "flushable" wipes definition applicable to manufacturers and retailers—and protective of consumers nationwide. See Belfiore v. Procter & Gamble Co., 140 F.Supp.3d 241, 246 (E.D.N.Y. 2015) ("Referral to the FTC in the present case is appropriate. The FTC is specifically granted broad power to regulate advertising and should be afforded the opportunity to determine a uniform definition of `flushable' applicable on a national, and perhaps international, basis"); Kurtz v. Kimberly-Clark Corp., No. 14-CV-1142, 2015 WL 8481833, at *3-4 (E.D.N.Y. Dec. 10, 2015). It was noted that "allowing the FTC to develop a common definition of `flushable' reduces the substantial risk of inconsistent judgments and facilitates the prospect of an injunctive class settlement, aiding manufacturers, retailers, and the public." Belfiore, 140 F. Supp. 3d at 246; see also Belfiore, 311 F.R.D at 78-79.
The cases before us are individual consumer cases. There is a larger issue of possible liability to, and protection of, waste disposal plant operations by municipalities and others, not before this court. See, e.g., City of Perry, Iowa v. Procter & Gamble Co., et al., ___ F. Supp. 3d ___, 2016 WL 2939511 (S.D.N.Y. May 19, 2016).
At the time of this court's December 10, 2015 memorandum and order in the case of Kurtz v. Kimberly-Clark Corp., the FTC had entered into a final consent decree with Nice-Pak Products, Inc. ("Nice-Pak"), concerning its "flushable" wipe product. See Kurtz, WL 8481833 at *4. The agency was apparently continuing to investigate additional manufacturers of "flushable" wipes, including two of the defendants in actions currently before this court. See id.
On June 10, 2016, the Administrative Conference of the United States adopted a recommendation providing guidance to administrative agencies "on the use of aggregation techniques to resolve similar claims in adjudications." See Aggregation of Similar Claims in Agency Adjudication, 81 Fed. Reg. 119, 40259-61 (June 21, 2016) (attached to this order). It recognized "aggregation as a useful tool to be employed in appropriate circumstances." Id. at 40260. Although the recommendation is non-binding, the Administrative Conference recognized a federal agency's broad discretion to aggregate cases:
Id. (footnotes omitted).
The newly adopted recommendation presents an important route that will be carefully considered by administrative and other agencies, as well as by the Bench, the Bar, and academia, in connection with mass actions that should be aggregated. See Michael Sant'Ambrogio & Adam Zimmerman, Inside the Agency Class Action (June 15, 2016) (unpublished manuscript) (on file with the court and attached to this order) (analyzing the use of aggregate procedures in administrative agencies as well as the challenges and benefits of aggregate agency adjudication); see also Michael Sant'Ambrogio & Adam Zimmerman, Administrative Conference of the United States, Aggregate Agency Adjudication (June 9, 2016), available at https://www.acus.gov/report/aggregate-agency-adjudication-final-report.
The captioned cases may be particularly appropriate for aggregate agency resolution. The parties are encouraged to explore the opportunity for aggregate adjudication of their claims before the FTC pursuant to the new federal recommendation by the Administrative Conference of the United States.
SO ORDERED.
Recommendation 2016-1, Consumer Complaint Databases. This recommendation encourages agencies that make consumer complaints publicly available through online databases or downloadable data sets to adopt and publish written policies governing the dissemination of such information to the public. These policies should inform the public of the source and limitations of the information and permit entities publicly identified to respond or request corrections or retractions.
Recommendation 2016-2, Aggregation of Similar Claims in Agency Adjudication. This recommendation provides guidance to agencies on the use of aggregation techniques to resolve similar claims in adjudications. It sets forth procedures for determining whether aggregation is appropriate. It also considers what kinds of aggregation techniques should be used in certain cases and offers guidance on how to structure the aggregation proceedings to promote both efficiency and fairness.
The Appendix below sets forth the full texts of these two recommendations. The Conference will transmit them to affected agencies, Congress, and the Judicial Conference of the United States. The recommendations are not binding, so the entities to which they are addressed will make decisions on their implementation.
The Conference based these recommendations on research reports that are posted at: https:// www.acus.gov/65th. A video of the Plenary Session is available at: new.hvestream.com/ACUS/65thPlenary, and a transcript of the Plenary Session will be posted when it is available.
Dated: June 16, 2016.
Consumer Complaint Databases
Adopted June 10, 2016
Some federal agencies maintain records of consumer complaints and feedback on products and services offered by private entities. Taking advantage of recent technological developments, several agencies have recently begun to make such information available to the public through online searchable databases and downloadable data sets that contain complaint narratives or provide aggregate data about complaints. Examples of such online searchable databases include: the Consumer Product Safety Commission's database of consumer product incident reports ("Saferproducts.gov"); the National Highway Traffic Safety Administration's database of recalls, investigations, and complaints ("Safercar.gov"); and the Consumer Financial Protection Bureau's database of financial products and services complaints ("Consumer Complaint Database").
As documented by the Executive Office of the President's National Science and Technology Council, agencies are constantly improving databases that publish consumer complaints and information, and are gradually developing best practices for such disclosures.
Recommendation
To the extent permitted by law, agencies that make consumer complaints publicly available (whether in narrative or aggregated form) through online databases or downloadable data sets should adopt and publish online written policies governing the public dissemination of consumer complaints through databases or downloadable data sets. These policies should:
1. Inform the public of the source(s) and limitations of the information, including whether the information is verified or authenticated by the agency, and any procedures used to do so;
2. permit entities publicly identified in consumer complaints databases or downloadable data sets to respond, as practicable, or request corrections or retractions, as appropriate; and
3. give appropriate consideration to privacy interests.
Aggregation of Similar Claims in Agency Adjudication
Adopted June 10, 2016
Federal agencies in the United States adjudicate hundreds of thousands of cases each year—more than the federal courts. Unlike federal and state courts, federal agencies have generally avoided aggregation tools that could resolve large groups of claims more efficiently. Consequently, in a wide variety of cases, agencies risk wasting resources in repetitive adjudication, reaching inconsistent outcomes for the same kinds of claims, and denying individuals access to the affordable representation that aggregate procedures promise. Now more than ever, adjudication programs, especially high volume adjudications, could benefit from innovative solutions, like aggregation.
The Administrative Procedure Act (APA)
Yet, even as some agencies face large backlogs, few have employed such innovative tools. There are several possible explanations for this phenomenon. The sheer number of claims in aggregate agency adjudications may raise concerns of feasibility, legitimacy, and accuracy because aggregation could (1) create diseconomies of scale by inviting even more claims that further stretch the agency's capacity to adjudicate; (2) negatively affect the perceived legitimacy of the process; and (3) increase the consequence of error.
Notwithstanding these risks, several agencies have identified contexts in which the benefits of aggregation, including producing a pool of information about recurring problems, achieving greater equality in outcomes, and securing the kind of expert assistance high volume adjudication attracts, outweigh the costs.
The Administrative Conference recognizes aggregation as a useful tool to be employed in appropriate circumstances. This recommendation provides guidance and best practices to agencies as they consider whether or how to use or improve their use of aggregation.
1. Aggregate adjudication where used should be governed by formal or informal aggregation rules of procedure consistent with the APA and due process.
2. Agencies should consider using a variety of techniques to resolve claims with common issues of fact or law, especially in high volume adjudication programs. In addition to the aggregate adjudication procedures discussed in paragraphs 3-10, these techniques might include the designation of individual decisions as "precedential," the use of rulemaking to resolve issues that are appropriate for generalized resolution and would otherwise recur in multiple adjudications, and the use of declaratory orders in individual cases.
3. Agencies should take steps to identify whether their cases have common claims and issues that might justify adopting rules governing aggregation. Such steps could include:
a. Developing the information infrastructure, such as public centralized docketing, needed for agencies and parties to identify and track cases with common issues of fact or law;
b. Encouraging adjudicators and parties to identify specific cases or types of cases that are likely to involve common issues of fact or law and therefore prove to be attractive candidates for aggregation; and
c. Piloting programs to test the reliability of an approach to aggregation before implementing the program broadly.
4. Agencies should develop procedures and protocols to assign similar cases to the same adjudicator or panel of adjudicators using a number of factors, including:
a. Whether coordination would avoid duplication in discovery;
b. Whether it would prevent inconsistent evidentiary or other pre-hearing rulings;
c. Whether it would conserve the resources of the parties, their representatives, and the agencies; and
d. Where appropriate, whether the agencies can accomplish similar goals by using other tools as set forth in paragraph 2.
5. Agencies should develop procedures and protocols for adjudicators to determine whether to formally aggregate similar claims in a single proceeding with consideration of the principles and procedures in Rule 23 of the Federal Rules of Civil Procedure, including:
a. Whether the number of cases or claims are sufficiently numerous and similar to justify aggregation;
b. Whether an aggregate proceeding would be manageable and materially advance the resolution of the cases;
c. Whether the benefits of collective control outweigh the benefits of individual control, including whether adequate counsel is available to represent the parties in an aggregate proceeding;
d. Whether (or the extent to which) any existing individual adjudication has (or related adjudications have) progressed; and
e. Whether the novelty or complexity of the issues being adjudicated would benefit from the input of different adjudicators.
6. Agencies that use aggregation should ensure that the parties' and other stakeholders' interests are adequately protected and that the process is understood to be transparent and legitimate by considering the use of mechanisms such as:
a. Permitting interested stakeholders to file amicus briefs or their equivalent;
b. Conducting "fairness hearings," in which all interested stakeholders may express their concerns with the proposed relief to adjudicators in person or in writing;
c. Ensuring that separate interests are adequately represented in order to avoid conflicts of interest;
d. Permitting parties to opt out in appropriate circumstances;
e. Permitting parties to challenge the decision to aggregate in the appeals process, including an interlocutory appeal to the agency; and
f. Allowing oral arguments for amici or amicus briefs in agency appeals.
7. Agencies that use aggregation should develop written and publicly available policies explaining how they initiate, conduct, and terminate aggregation proceedings. The policies should also set forth the factors used to determine whether aggregation is appropriate.
8. Where feasible, agencies should consider assigning a specialized corps of experienced adjudicators who would be trained to handle aggregate proceedings, consistent with APA requirements where administrative law judges are assigned. Agencies should also consider using a panel of adjudicators from the specialized corps to address concerns with having a single adjudicator decide cases that could have a significant impact. Agencies that have few adjudicators may need to "borrow" adjudicators from other agencies for this purpose.
9. Agencies should make all decisions in aggregate proceedings publicly available. In order to obtain the maximum benefit from aggregate proceedings, agencies should also consider designating final agency decisions as precedential if doing so will:
a. Help other adjudicators handle subsequent cases involving similar issues more expeditiously;
b. Provide guidance to future parties;
c. Avoid inconsistent outcomes; or
d. Increase transparency and openness.
10. Agencies should ensure the outcomes of aggregate adjudication are communicated to policymakers or personnel involved in rulemaking so that they can determine whether a notice-and-comment rulemaking proceeding codifying the outcome might be worthwhile. If agencies are uncertain they want to proceed with a rule, they might issue a notice of inquiry to invite interested parties to comment on whether the agencies should codify the adjudicatory decision lin whole or in part) in a new regulation.
IFR Doc, 2016-14536 Filed 6-20-16; 8:45 am)
Boaters using the Wild and Scenic Snake River would be subject to a Special Recreation Permit Fee (boateruse permit fee) of $5.00 to $10.00 per person that would be collected from all private and commercial boaters and their occupants. The implementation of the fee on the Wild and Scenic Snake River is comparable to other federal dayuse fees within the current Four Rivers reservation system for the Selway, Middle Fork Salmon, Main Salmon and other sections of the Snake Rivers. The area subject to the fee is the Snake River beginning at Hells Canyon Dam to Cache Creek Ranch (approximately 70 miles).
The exceptions to this boater-use permit fee are:
• Travel by private, noncommercial boat to any land in which the person has property rights.
• Any person who has right of access for hunting or fishing privileges under specific provisions of treaty or law.
• Individual outfitter/guides and their associated employees, while acting in an official capacity under the terms of their permit.
At this time there is no boater-use permit fee on the Wild and Scenic Snake River for float or power boats. Boater-use for private float and power boats is currently managed though a national reservation system, which limits the amount of boats during the primary use season to meet management plan direction. A $6.00 transaction cost is associated with this reservation permit and is completely retained by the reservation contractor. In the future the reservation permit fee will be continued in conjunction with the application of this proposed boater-use permit fee for private boaters.
At this time the listed boater-use permit fee is only a proposal and further analysis and public comment will occur before a decision is made. Funds from the proposed fee would be used for administrative and operational needs in the recreation area to enhance user experience and safety, sustain natural and cultural resources, and facility maintenance and improvements.
Public Open House: A series of public open houses are scheduled to answer questions brought forth by the public. The open house dates are:
1. July 5, 2016, 6 p.m. to 8 p.m., Boise, ID.
2. July 6, 2016, 6 p.m, to 8 p.m., Riggins, ID.
3. July 7, 2016, 6 p.m. to 8 p.m., Clarkston, WA.
4. July 8, 2016, 6 p.m. to 8 p.m., Joseph, OR.
Electronic Comments: Electronic comments must be submitted in a format such as an email message, plain text (.txt), rich text format (.rtf), or Word (.docx) to comments-pacificnorthwestwallowa-whitman@fsled.us. Emails submitted to email addresses other than the one listed above, in other formats than those listed, or containing viruses will be rejected. Comments can also be submitted at http://www.fs.usda.gov/ detail/wallowa-whitman/specialplaces/ Tcid=fseprd481691. It is the responsibility of persons providing comments to submit them by the close
Federal agencies in the United States adjudicate hundreds of thousands of cases each year. Yet even with this high volume of cases, agencies have not widely deployed tools used in federal court to efficiently resolve large groups of claims, such as class actions and other complex litigation procedures.
A handful of federal administrative programs, however, have quietly bucked this trend—employing class action rules, collective claim handling, and even the kinds of "trials by statistics" once embraced by federal judges around the United States. The Equal Employment Opportunity commission, for example, created an administrative class action procedure, modeled after Rule 23 of the Federal Rules of Civil Procedure, to resolve "pattern and practice" claims of discrimination by federal employees before administrative judges. Since the early 1990s, the National Vaccine Injury Compensation Program has used "Omnibus Proceedings," which resemble federal multidistrict litigation, to pool together common claims that allege a vaccine injured large groups of children. And facing a backlog of hundreds of thousands of claims, recently the Office of Medicare Hearings and Appeals announced a new "Statistical Sampling Initiative"—a pilot program that will use trained and experienced experts to resolve hundreds of common medical claims at a time by statistically extrapolating the results of a few hearing outcomes.
These efforts to employ the tools of aggregation in administrative proceedings have received little examination. Consequently, very little is known about: (1) how agencies choose cases or claims appropriate for aggregation, (2) which aggregation tools these agencies use, (3) the successes and failures of these programs, and (4) the other types of proceedings in which different aggregation tools might facilitate more expeditious, consistent, and fair handling of large groups of claims.
Based on our examination of recent efforts by federal agencies to aggregate administrative proceedings and dozens of interviews with the key policymakers involved, we identify the types of agency adjudications in which aggregate procedures have the greatest potential, the challenges and obstacles to greater use of aggregation, and broader lessons about what aggregation procedures mean for adjudications conducted by federal agencies.
A crisis is brewing in Medicare. In 2003, Congress created the Office of Medicare Hearings and Appeals (OMHA)—a specialized administrative court designed to resolve billing disputes between the federal government and hospitals, nursing homes, medical equipment providers, and others.
Medicare's problems are hardly unique in the administrative state. The number of claims languishing on administrative dockets and in other specialized courts has become a new crisis — producing significant backlogs, arbitrary outcomes and new barriers to justice.
But what made OMHA unique was its response. Last year, OMHA announced that it would adopt a fascinating new pilot program that allows medical providers with large numbers of similar claims to conduct "trials by statistics." Dubbed the "Statistical Sampling Initiative," a medical provider with more than 250 similar claims would have the option to try a small sampling of those claims before an administrative law judge and extrapolate the average result to the rest.
Although OMHA's Statistical Sampling Initiative is just in its initial stages, it is notable for two reasons. First, it diverges from the Supreme Court's approach in the federal courts, which appeared to reject such "trials by formula."
Second, it is very rare that agencies exercise this freedom. Federal agencies and specialized courts in the United States adjudicate hundreds of thousands more cases each year than our federal court system. But they have long avoided tools used by courts to efficiently resolve large groups of claims, like class actions and other complex litigation procedures.
Part of the reason for agencies' restrained, individualized approach to adjudication stems from the perceived limits of what courts and administrative judges can do to resolve claims brought by large groups of people. For years, the Supreme Court and scholars have said that legislative bodies—not judges—should respond to problems of mass harm.
That same line between the appropriate role of courts and legislative bodies also exists inside administrative agencies. Before the Administrative Procedure Act (APA),
A handful of federal administrative programs, however, have quietly bucked this trend—employing class action rules, collective claims handling and even the kinds of "trials by statistics" embraced by innovative federal judges around the United States.
Although commentators and courts frequently hold up public administrative schemes as an efficient alternative to group litigation in court,
To date, no study has examined these nascent efforts to employ the tools of aggregation in administrative proceedings. Indeed, there has been little attention to how agencies may draw upon the lessons of the federal courts in adjudicating claims by large groups of people.
Our project begins to fill this gap by taking a look inside some of the few agencies that experiment with aggregate adjudication. After examining recent efforts by federal agencies to aggregate administrative proceedings and interviewing the key policymakers involved, we identify the types of agency adjudications in which aggregate procedures have the greatest potential, the challenges and obstacles to greater use of aggregation, and broader lessons about what aggregation procedures mean for adjudication by federal agencies.
This Article proceeds in three parts. Part I sets out the legal framework for adopting aggregate litigation procedures in federal courts and administrative agencies. Federal courts have long enjoyed authority to aggregate large groups of similar cases in one of two ways. First, courts may formally aggregate claims by, for example, permitting one party to represent many others in a single lawsuit. Second, courts may informally aggregate claims. In informal aggregation, different claimants with very similar claims each retain separate counsel and advance a separate lawsuit, but in front of the same adjudicator or on the same docket in an effort to expedite cases, conserve resources, and assure consistent outcomes.
Part II describes different approaches to formal and informal aggregate adjudication with a focus on three federal programs—EEOC's use of class actions, the NVICP's use of "omnibus proceedings," which centralize many individual cases raising similar claims before the same adjudicator, and OMHA's use of consolidation, statistical sampling, and mediation to resolve thousands of similar cases in the same proceeding. Those case studies illustrate that aggregate adjudication techniques raise unique challenges. The sheer number of claims in aggregate agency adjudication may: (1) create "diseconomies of scale"—inviting even more claims that stretch adjudicators' capacity to administer justice to many people; (2) impact the perceived "legitimacy" of the process and challenge due process; and (3) increase the consequence of error. In other words, just like many kinds of administrative systems, aggregate adjudication struggles to deal with many different kinds of constituencies feasibly, legitimately, and accurately.
But, as we detail below, each program has sought to ameliorate these concerns by adopting aggregate procedures cautiously and responsibly. Among other things, they have responded to challenges of aggregation by (1) slowly rolling out aggregate procedures to avoid replacing old backlogs with new ones; (2) relying on panels of adjudicators to reduce allegations of bias or illegitimacy or providing additional opportunities for individuals to meaningfully participate in the process; and (3) allowing cases raising scientific and novel factual questions to "mature"
Part III considers the broader implications for adjudication by federal courts and agencies. Courts and commentators frequently view administrative programs as more legitimate than aggregation in federal or state court.
Civil and administrative proceedings begin with the premise that every person deserves her or his own "day in court." Plaintiffs in civil court receive personalized hearings to sort out private disputes with others.
Both systems, however, have exceptions—grouping together and resolving large groups of similar claims, or what we call "aggregation."
But federal courts use other procedures to group together large numbers of cases. As noted above, the most famous kind of "aggregate lawsuit" is the class action—a single lawsuit that includes claims or defenses held by many different people. Other kinds of formal aggregations include derivative lawsuits by a shareholder on behalf of a corporate organization,
Courts also group together civil claims in far more informal ways.
Aggregate procedures in federal court seek to provide more access, efficiency, and consistency than individualized litigation. Aggregate litigation in federal and state courts has long sought to provide more legal access by enabling the resolution of claims that otherwise would not be brought individually. Formal aggregate procedures are thought to enable litigation when damages are too small for individuals to justify the high costs of retaining counsel.
Aggregate procedures also seek more efficient resolutions than piecemeal individual adjudication. Aggregation hopes to avoid the duplicative expenditure of time and money associated with traditional oneon-one adjudications,
Finally, aggregate procedures seek more uniform application of law. At bottom, aggregate proceedings and settlements seek consistency and distributive fairness—to treat like parties in a like manner.
But large cases also create new risks. Class actions require judicial review, for example, to ensure class counsel faithfully represent absent class members, to provide a forum to hear from dissenting interest groups, and to ensure that the final settlement adequately reflects the underlying merits and the public interest. Thus, even as they aspire to promote more efficiency, consistency, and legal access, class action lawsuits struggle to (1) promote efficiency when processing large volumes of cases; (2) ensure legitimacy when clients lack input and control over the outcome and when attorneys serve disparate interests (or their own); and (3) achieve accuracy when group-wide outcomes or settlements blur characteristics or overlook the merits of many different kinds of cases.
Informally aggregated cases may also complicate legitimacy and accuracy. First, lawyers experience conflicts when they settle individual cases in informal aggregations, particularly because the success of any one case often depends on the same lawyer or judge resolving hundreds of similar claims.
Second, informal aggregation can compromise accuracy—particularly when the same plaintiff and defense counsel settle large groups of cases in bulk. This is sometimes a result of perverse incentives created by the ways parties must organize themselves to process large volumes of claims. For example, plaintiffs and defendants have complained that multidistrict litigation favors volume over knowledge: attorneys often receive coveted and lucrative positions on steering committees based on the sheer number of clients they retain in the litigation.
In other words, like many kinds of bureaucratic systems, formal and informal aggregate litigation struggles to govern many different kinds of constituencies feasibly, legitimately, and accurately. As set forth below, agencies also enjoy power to formally and informally aggregate claims. When they have exercised this power, they have sought to adopt tools that take advantage of the benefits of aggregation while minimizing the potential dangers.
Congress regularly creates administrative courts in which the adjudicators do not enjoy the life tenure and salary protections provided to federal judges by Article III of the Constitution. When Congress vests adjudicatory power in such "non-Article III courts," it usually employs one of its enumerated powers in Article I, in combination with the Necessary and Proper Clause.
When Congress creates non-Article III courts, it both defines their jurisdiction and typically grants them substantial discretion to prescribe rules of practice and procedure to carry out their statutory mandates.
Where an agency's organic statute does not set forth any specific procedural requirements, the Administrative Procedure Act (APA) provides certain minimum procedural requirements for different types of agency action. But the Supreme Court has repeatedly prohibited courts from imposing additional procedural requirements on agencies,
For this reason, in FCC v. Pottsville, the Supreme Court rejected a challenge to the FCC's authority to consolidate three licensing applications for the same facility in a single hearing so as to consider the applications "on a comparative basis."
Accordingly, the Court recognized that the Commission possessed this discretion regardless of whether it chose to promulgate a rule of procedure or created an ad hoc rule tailored to a specific case.
Similarly, there is nothing in the APA that would prevent an agency from using aggregation in adjudicatory proceedings in appropriate cases. Indeed, prohibiting aggregation mechanisms under the APA would be at odds with the substantial flexibility the Supreme Court has granted agencies when choosing the best procedural format for decisions that affect large groups of people.
In some ways, federal agencies enjoy more power to develop procedural rules than Article III courts. The Rules Enabling Act states that Article III courts may only "prescribe general rules of practice and procedure" that do not "abridge, enlarge or modify any substantive right."
The recognition by federal courts that Congress generally vests administrative agencies with considerable procedural flexibility reflects a basic feature of administrative law: agencies must have the authority to shape their own rules and, when appropriate, to adapt those rules to the types of cases and claims that they hear. This means that absent an express statutory prohibition or other clear indication of congressional intent to the contrary, administrative agencies may use aggregate procedures to handle their cases more expeditiously, consistently, and fairly than would be possible with individual, case-by-case adjudication.
As we note above, most agencies have resisted using class actions and other complex procedures like federal courts. But agencies not only have power, but, on rare occasions, have used that power to aggregate claims formally and informally.
The EEOC's experience, discussed more fully below in Section II.A., is illustrative. Congress vested the EEOC with the power to hear discrimination claims brought by federal employees and "to issue such rules, regulations, orders and instructions as it deems necessary and appropriate to carry out its responsibilities under this section."
In 2004, the Postal Service challenged EEOC's class action rule. The Office of Legal Counsel (OLC) for the Department of Justice (DOJ) rejected that challenge and confirmed the EEOC's broad authority to use class actions to aggregate claims.
In addition, like Article III courts, which aggregate with different levels of formality, many Article I courts and administrative agencies also aggregate claims and cases without adopting a formal procedure to do so. For example, the Office of Special Masters (OSM) in the NVICP has not promulgated a rule on aggregation. But, for some two decades, the OSM has relied instead on its general authority to "determine the format for taking evidence [and] . . . hearing argument[,]" and to "apply [its] expertise" from one case to another.
In addition to the techniques described above, some agencies have used their formal power to consolidate enforcement actions against large groups of defendants to efficiently dispose of common claims.
Agencies also may employ many different forms of informal aggregation to streamline certain categories of claims. The Executive Office for Immigration Review—which hears all cases involving detained aliens, criminal aliens, and aliens seeking asylum—offers one example of this kind of informal aggregation. In the past year, it has created special "surge courts" to respond to over 2,000 Central American asylum cases pending in West Texas.
Although we do not address all of these forms of aggregation, the three case studies below illustrate a range of aggregate techniques used to resolve large groups of cases in administrative programs, the challenges each has faced, and potential lessons for the future.
The EEOC is the nation's lead government enforcer of federal civil rights laws prohibiting discrimination in employment based on race, color, sex, religion, national origin, age, disability, and genetic information, as well as reprisal for protected activity.
The process is somewhat different for federal government employees. Federal employees must first file a complaint with the EEO Office of their federal employer. When the agency's investigation is completed, the employee may then either ask for a final decision from the agency or request a hearing before an EEOC AJ.
More than 100 AJs work in EEOC regional offices around the country in order to adjudicate disputes between federal employees and their federal employers.
Although federal employees must generally go through the administrative complaint process, there are several different points during the process at which the employee may quit the process and file a lawsuit in federal court, including after the agency's decision on the employee's complaint, so long as no appeal has been filed with the EEOC, and after the EEOC's decision on an employee's appeal from a final order.
The EEOC's regulations grant EEOC AJs the power to certify and hear class actions against federal employers in administrative proceedings.
The EEOC's use of class action procedures—which are loosely modeled after Rule 23 of the Federal Rules of Civil Procedure—makes the EEOC something of an outlier in our federal administrative state.
Three other agencies have formally considered, and rejected, class action procedures, reasoning that they lack the capacity, authority, or good reason to do so. First, just last year, the Federal Communications Commission (FCC) considered and then rejected a proposal to hear class actions in its own adjudications for alleged violations of the Federal Communications Act.
Second, the CFTC similarly considered and rejected the use of class actions for its own adjudication process involving broker-dealer disputes.
Finally, the Court of Appeals for Veterans Claims (CAVC) recognized the value of consolidating similar disability claims by veterans, but rejected class actions without more explicit authority to do so.
In contrast, the EEOC has heard petitions for class actions for over three decades. Even in the four years following the Supreme Court's decision in Walmart v. Dukes
Based on our review of EEOC class actions filed over the past four years, they most commonly involve workplace discrimination claims based on race (28), sex (26), disability (24), and age (18). Of those cases, many follow the same pattern that class actions follow in federal court. A majority of cases were dismissed or remanded as untimely filed or on the merits. Twenty-two cases have settled. Of twenty-five actions where adjudicators considered whether or not to certify them as class actions, adjudicators rejected eighteen and certified seven for trial.
EEOC class action procedures mostly track Rule 23(a) of the Federal Rules of Civil Procedure, with one important difference. Like federal courts, EEOC AJs hear class actions based on a petition, typically filed by lawyers from a highly specialized bar, demonstrating (1) that the proposed class is so numerous that a consolidated complaint of the members of the class is impractical; (2) that there are questions of fact common to the class; (3) that the claims of the agent of the proposed class are typical of the claims of the class; and (4) that the class or representative will fairly and adequately protect the interests of the class.
But EEOC class actions have no equivalent to Rule 23(b) of the Federal Rules of Civil Procedure.
Second, unlike some federal class actions, see Fed. R. Civ. P. 23(b)(3), EEOC class actions do not require that common questions "predominate" over individual issues before certifying a class action. This "predominance" requirement is often a difficult hurdle for parties to meet in federal court. Among other things, federal courts have rejected class actions that raise too many questions of law, vexing causation questions, and in rare cases, highly individualized damages because of a fear that individual issues among class members will overwhelm the common ones.
Other EEOC class action regulations resemble federal class actions under Rule 23(b)(2), which permit class actions for declaratory or injunctive relief where "the party opposing the class has acted or refused to act on grounds generally applicable to the class."
In our conversations with EEOC AJs, they described two important values associated with the EEOC class action procedure. First, class actions permit the EEOC to consistently apply decisions to groups of claimants working for the same employer. Second, AJs saw the class action procedure as a way to pool information about employers' policies and assess their lawfulness—to identify patterns that otherwise might escape detection in an individual proceeding. In some cases, the scale and visibility of an EEOC class action itself attracts the attention of government agencies, leading to workplace reforms. For example, after an EEOC class of disabled applicants challenged the State Department's "world-wide" availability requirement for foreign-service workers—a policy that rejected candidates for promotion unless they could work without accommodation—the State Department was alerted to a systematic problem in its hiring practices.
Indeed, the design of the EEOC class action process appears to promote collaborative reform. Following an EEOC AJ's decision on the merits, the federal employer is given time to "accept, reject, or modify" the AJ's recommendations and final report.
Class actions before the EEOC rarely encourage the filing of what some call "negative value" claims—claims where the cost of litigation itself outweighs any potential award.
Despite the AJ's generally positive view of EEOC class actions, they also identified some of the same challenges associated with complex litigation in state and federal courts, including concerns with diseconomies of scale, accuracy, and participation. First, EEOC class action proceedings are time-intensive. They may take years of motion practice, class discovery, appeals, and fairness hearings to determine the reasonableness of settlements. This means that before certifying a class AJs must ensure that a class action is feasible and likely to resolve the claims more efficiently than individual adjudications.
Second, AJs cited accuracy concerns associated with managing complex statistical evidence and other expert testimony. As a result, EEOC AJs may rely on procedures like Daubert hearings to screen out unreliable expert testimony and hold workshops in which they share insights on handling complex expert testimony.
Third, some AJs expressed concern about meaningful participation, given the fact that class members cannot opt-out of the class proceeding. They worried about the due process rights of absent class members who could not directly participate in or exit the action, and accordingly, felt additional pressure to assure that counsel adequately represented their interests before certifying the class action. The EEOC AJs have addressed this challenge by making extra efforts to ensure that attorneys representing a class with absent class members have sufficient experience, resources, and skill to adequately represent large groups of similar claims.
Congress created the NVICP in 1986 to provide people injured by vaccines with a "no-fault" alternative to lawsuits in federal court.
Generally a petitioner can get compensation under the vaccine injury program in two ways. In a "table" case, the petitioner has an initial burden to prove an injury listed in the Vaccine Injury Table.
OSM adjudicators possess an interesting mix of powers—falling somewhere in between Article I judges and agency adjudicators. On the one hand, Congress expressly considered—and then rejected—creating a new department within HHS to hear claims arising out of the vaccine program.
Like most benefit programs, many vaccine claims proceed one at a time. However, sometimes, this small office of eight adjudicators has had little alternative but to find ways to streamline the disposition of large groups of cases—particularly those raising similar scientific questions. Relying on its inherent authority to use "specialized knowledge" to resolve common scientific questions in a consistent and informed way, the OSM has relied upon combinations of procedures that loosely resemble multidistrict litigation, bellwether hearing procedures, and creative casemanagement techniques to efficiently resolve cases that raise common scientific questions, in ways designed to increase public participation and input.
One way that the OSM has handled large groups of claims raising similar scientific questions is through the "omnibus proceeding." In an omnibus proceeding, a single adjudicator or set of adjudicators will hear claims that raise the same general scientific question of causation. Even though the Act that created the vaccine program contains no provision for class action suits (or anything like it), special masters developed the concept of the omnibus proceeding because the "same vaccine and injury often involve the same body of medical expertise."
Special Masters have pointed to two sources of informal authority to justify this procedure. First, they point to the broad discretion afforded Special Masters in the adjudication of claims that arise out of the program. Among other things, the Vaccine Act permits special masters to make evidentiary findings without following the formal rules of evidence, and gives them broad license "to determine the format for taking evidence and hearing argument."
The use of omnibus proceedings dates back to 1992, when Special Master George Hastings decided an omnibus proceeding involving 130 cases that alleged a rubella vaccine caused chronic arthritis and other related problems.
At the time, there was "only a very, very limited amount of data directly applicable" because "this issue really ha[d] not been scientifically studied."
The general proceeding helped expedite the evaluation of a common, as well as still-evolving scientific question of general causation. In addition, the proceeding made otherwise "small dollar" claims for joint pain worthwhile. "Following the 1993 Decision, over 130 related cases were either resolved or voluntarily dismissed based upon the Special Master's findings."
The Vaccine Program uses two types of omnibus proceedings. The first involves hearing evidence on a general theory of causation—like whether or not, as Special Master Hastings' considered, a rubella vaccine causes chronic arthritis or other categories of joint problems. The Special Master makes findings based on that evidence and orders the parties to file papers establishing the extent to which the facts of individual cases fit within the court's general findings.
According to Chief Special Master Vowell, however, most omnibus proceedings work like bellwether trials in federal district court— organizing individual cases that raise similar issues in front of the same adjudicator, in the hopes that the outcome in one or a few cases will help other similarly situated parties understand the strengths and weaknesses of their cases, thereby facilitating the settlement of the remaining cases:
Special Masters adopted this approach in the "Omnibus Autism Proceeding," which was established in order to determine whether a causal link existed between childhood vaccines and autism. Between 2005 and 2006, over 5,000 cases alleging an association between autism and either the MMR vaccine (which does not contain thimerosal) or vaccines containing the preservative thimerosal, or both, have been filed with the NVICP.
In so doing, the special masters in each case considered a wealth of scientific evidence common to every case. As Chief Special Master Vowell observed: "The evidentiary record in this case . . . encompasses, inter alia, nearly four weeks of testimony, including that offered in the Cedillo and Hazlehurst cases; over 900 medical and scientific journal articles; 50 expert reports (including several reports of witnesses who did not testify); supplemental expert reports filed by both parties post-hearing, [and] the testimony of fact witnesses on behalf of [the injured child and his] medical records."
There are drawbacks associated with omnibus proceedings. First, some agencies use ALJs who are assigned randomly to each individual case to reduce allegations of bias or gamesmanship.
Second, omnibus proceedings raise interesting questions about the legitimacy of using an adjudication process to settle complex scientific questions. Many plaintiffs in the Omnibus Autism Proceeding were anxious about commencing cases together, as were members of the public health community, who "found it unsettling that the safety of vaccines must be put on trial before three "special masters" in an obscure vaccine court. Said one: "the truth about scientific and medical facts is not, ultimately, something than can be decided either by the whims of judges or the will of the masses."
Finally, Special Masters and staff had to invest substantial resources tracking, assessing attorney's fees for, and closing individual cases still pending long after the court resolves common questions involving the Omnibus Autism Proceeding. To alleviate these problems, the Special Master's office may in the future require those who agree to participate in future omnibus proceedings to be bound by the outcome of such "test cases."
The Office of Medicare Hearings and Appeals (OMHA) operates in HHS and hears appeals involving Medicare benefits.
OMHA is the third of four levels of administrative appeals available in the Medicare health insurance program—Medicare Parts A, B, C, and D.
The Medicare appeals process varies depending on which Part is involved, but Medicare Parts A and B are most relevant to OMHA's use of aggregation. Under Medicare Parts A and B, the reimbursement process generally begins with a provider or supplier submitting a bill to Medicare for a service they performed for a covered beneficiary.
If the claimant is not satisfied with the redetermination by the MAC, it can initiate a Level 2 appeal, which will be reviewed by a Qualified Independent Contractor (QIC) retained by CMS, who reconsiders the medical necessity of the services provided to the covered beneficiary.
Parties may appeal the decision of OMHA under any Part to the Medicare Appeals Council, which is part of the Departmental Appeals Board of HHS and independent of OMHA and its ALJs. The decisions of the Medicare Appeals Council are themselves subject to review in federal district court if the amount in controversy is at least $1,350.
The OMHA appeals process began to experience significant backlogs in 2012. The number of appeals received by OMHA grew from 59,600 in 2011 to 117,068 in 2012, 384,151 in 2013, and 473,563 in 2014. Put differently, the number of claims increased 800% from 2006 to 2014. Meanwhile, the number of appeals decided by OMHA only grew from 53,864 in 2011 to 61,528 in 2012, 79,377 in —, and 87,270 in 2014. Thus, despite the increased productivity of OMHA's ALJs and the total number of appeals decided each year, OMHA could not keep pace with the huge number of new cases coming in the door. As a result, average wait times for the processing of appeals grew from 121 days in 2011 to 603 days in 2015.
Most of the increased number of appeals involved claims under Medicare Part A and Part B. The dramatic surge in these appeals was caused primarily by stepped up efforts to recover excess billing under several post-payment audit programs conducted by private contractors
It is important to note, however, that appeals by individual beneficiaries receive priority processing. Thus, most of the parties suffering from the delays caused by the backlogs were businesses—often service providers or medical suppliers—with sometimes hundreds or thousands of similar appeals on behalf of different Medicare beneficiaries.
Faced with an existential crisis, OMHA began to explore ways to reduce the backlog and process a much larger number of appeals without adding more ALJs. Among several initiatives, OMHA introduced two pilot programs using aggregation mechanisms to resolve large groups of claims in a single proceeding: (1) the Statistical Sampling Initiative; and (2) the Settlement Conference Facilitation.
Section 931 of the Medicare Modernization Act directs the Secretary of HHS to establish "specific regulations to govern the appeals process." The Secretary has utilized her broad discretion to develop administrative procedures to promulgate regulations authorizing OMHA ALJs to consolidate two or more cases in one hearing at the request of the appellant or on "his or her own motion," "if one or more of the issues to be considered at the hearing are the same issues that are involved in another hearing or hearings pending before the same ALJ."
Although OMHA ALJs rarely formally consolidate appeals, ALJs often informally combine appeals to be heard in the same proceeding even without a formal consolidation order or process, when the appeals involve the same organization, issues of law or fact, or the same representative. Consider the following three examples:
(a) Background on Statistical Sampling in the Medicare Program Aside from the kinds of group procedures described above, the Medicare program has used statistical sampling since 1972 to estimate Medicare overpayments in light of the enormous administrative burden of auditing businesses on an individual claim-by-claim basis.
Courts have also consistently rejected claims that statistical sampling in the Medicare and Medicaid programs violates due process under the Mathews v. Eldridge balancing test, reasoning that the private interest "at stake is easily outweighed by the government interest in minimizing administrative burdens."
The use of statistical sampling and other aggregation techniques in Medicare appeals, as opposed to the CMS auditing program, emerged "organically" in the late 1990s.
As the number of Medicare Part A and Part B appeals spiked, OMHA formally adopted the Statistical Sampling Initiative (SSI) as a way to formalize and systematize the process that had begun with individual ALJs. OMHA proceeded cautiously in designing the pilot program, concerned that its backlog elimination efforts might create new backlogs. OMHA also had to address concerns of DOJ and CMS about allowing companies with a history of fraud or wrongdoing to participate in the pilot program.
OMHA attorneys, ALJs, and statisticians developed criteria for piloting the new program on a limited basis. The pilot program was restricted to appellants with at least 250 claims on appeal that fell into certain specified categories of Part A or Part B claims and were currently assigned to an ALJ or filed within a 3-month period in 2013, but not yet scheduled for a hearing.
Most of the eligible participants in the program to date are providers of medical supplies and equipment. Notably, a single diabetic supplies proceeding would account for 17,134 claims, dwarfing the other statistical trials, which only resolve caseloads of 400 to 600 cases at a time. Our interviewees suggested that these cases lend themselves to sampling because the claims involved are more similar than inpatient provider care, which is more varied and individualized.
Although OMHA ALJs rotate randomly, a small number of ALJs have committed to be randomly selected within the statistical sampling program. This allows OMHA to take advantage of their expertise in handling such matters. OMHA is guided special policies on statistical sampling.
Although OMHA plans to expand the statistical sampling program, OMHA identified a number of challenges. First, OMHA adjudicators and staff were mindful that aggregation risks creating diseconomies of scale— they strongly hoped to avoid aggravating backlogs and claims by creating an unmanageable aggregate litigation process, particularly given limited staff and large caseloads.
OMHA addressed the question of efficiency by taking a very conservative approach to the pilot program so as not to create a new backlog while attempting to deal with its existing backlog. The pilot program was initially confined to appeals already assigned to ALJs or filed during a single quarter of 2013. In addition, the ALJs participating in the pilot did so on a voluntary basis, and their work in the pilot program is in addition to their regular workload.
The pilot program addressed the challenge of expertise by selecting ALJs to participate with experience in statistical sampling. This, of course, is in some tension with the random assignment of ALJs, as it creates a smaller pool from which an ALJ is drawn.
After providers expressed concern with having one ALJ hear large numbers of their claims, OMHA began outreach efforts to bolster the legitimacy of the pilot program, but it plans to do more on this front in the future. In addition to addressing the "all eggs in one basket" concern, OMHA may want to be mindful of other challenges as it expands the program.
OMHA is currently considering expanding the program beyond the limited universe of appeals eligible to participate in the pilot program.
An expanded statistical sampling program may use multiple ALJs to hear different parts of a sample of claims. For example, instead of a single ALJ hearing a sample of 100 cases, ten ALJs might each hear ten cases from the sample. This would help to allay appellants' concern that statistical sampling before a single ALJ risks a bad decision being extrapolated across the entire universe of claims. Many Medicare claims appellants are repeat players who have positive or negative opinions about particular ALJs. Indeed, our interviewees suggested that some appellants already try to exploit the power of ALJs to consolidate appeals to "ALJ shop." For example, an appellant with multiple appeals pending before different ALJs might request that all its cases be consolidated with the ALJ the appellant believes will provide it with the most favorable decision. Spreading the sample among more than one randomly selected ALJ will help alleviate the concern that the entire universe of claims will be decided by an ALJ that the party hopes to either avoid or obtain.
Expanding the statistical sampling program may also help overcome challenges faced by many mass government benefits programs. Agencies frequently struggle to consistently hear cases in mass adjudication systems, like OMHA, where appellants continually file appeals involving similar legal and factual issues, and even on the same issue for the same beneficiary with a different service date. However, consolidating large numbers of appeals in a smaller number of proceedings using statistical sampling may make it easier to track these decisions.
Moreover, aggregating large numbers of appeals in a smaller number of proceedings using statistical sampling may make it easier for the Secretary to coordinate the work of OMHA with other agencies and departments. The relationship between CMS and OMHA can make it difficult to implement uniform policy. OMHA may approve a payment on appeal and the next day CMS can deny the same provider's claim on behalf of the same beneficiary for the same DME, with only a different date of service. Indeed, even the Medicare Appeals Council, which issues the Secretary of HHS's final decision in these appeals, does not bind OMHA and CMS beyond the appeals that it reviews. Aggregate adjudication provides agency heads with an opportunity to take a thoughtful first crack at important questions of law and policy by the agency's most experienced and expert adjudicators, with the benefit of a fully developed record and competent counsel.
Along the same lines, agency aggregation may een increase the ability of the political branches to ensure agency accountability.
In addition to statistical sampling, OMHA has begun to experiment with an aggregate settlement initiative. CMS has always had discretion to settle disputes with Medicare providers and suppliers, but the Settlement Conference Facilitation (SCF) Pilot represents an effort by OMHA to provide a formal framework for encouraging the settlement of large numbers of cases.
The SCF Pilot began in June 2014. Once again mindful of avoiding the creation of new backlogs, the SCF Pilot was limited to groups of at least 20 appeals or appeals comprising at least $10,0000 in the aggregate filed in 2013 and that met certain specified criteria.
The claims must be for the "same" or sufficiently "similar" items or services to qualify for the SCF pilot program. OMHA takes a "common sense" approach to the meaning of "same" or "similar." For example, all wheelchairs, whether electronic or manual, or nutritional supplies for people with digestive troubles, including both the nutritional supplements and the device to deliver them, would be the "same" or "similar" items. But wheelchairs and diabetes test strips are not related, even if stemming from the same illness, and would not be the "same" or "similar."
Under the pilot program, OMHA facilitates a discussion between CMS and the appellant regarding potential resolution through settlement. OMHA devoted one attorney trained in facilitation, working full-time along with four other trained facilitators working on a rotating basis. This attorney and a second mediator attend each settlement conference as a team. If the parties reach an agreement, a settlement agreement is drafted by OMHA and signed by the parties. OMHA then dismisses the appeals. If no agreement is reached, the appeals return to their prior status and positions in the appeals queue.
OMHA has found that many appellants are more comfortable with mediation, particularly given the plethora of courthouse programs designed to promote alternative dispute resolution. OMHA received twenty-five requests for settlement conferences in connection with the pilot project. OMHA did not itself invite any parties to participate in the pilot program (in contrast to the statistical sampling initiative) because enough parties applied on their own, and OMHA has limited resources to devote to the pilot.
Phase I resolved 2,400 appeals.
As OMHA expands the cases eligible for the SCF program, it has sought to eliminate the risk of uncommon, unclear and cherry-picked cases that undermine aggregation. First, only after determining that the appellant has appeals appropriate for the SCF program based on their similarity, does OMHA invite the appellant to apply to participate in the program. Second, the claims appealed must be ascertainable. They may not involve items or services billed under unlisted, unspecified, unclassified, or miscellaneous healthcare codes. These claims are difficult to settle because they do not have an approved reimbursement amount.
Third, settlement discussions must be comprehensive. The request must include all of the party's pending appeals for the same items or services that are eligible for SCF. For example, if an appellant has fifty wheelchair appeals pending that meet the SCF requirements, the appellant must request SCF for all fifty wheelchair appeals. In addition, appellants may not request SCF for some but not all of the items or services included in a single appeal.
Each case study illustrates the unique benefits and challenges offered by aggregate agency adjudication. Like federal courts, each tribunal has used aggregate adjudication to pool information about common and recurring problems, as well as to eliminate the duplicative expenditure of time and money associated with traditional one-on-one adjudication.
But, as also illustrated above, aggregate agency adjudication raises unique challenges and costs of its own by: (1) potentially creating "diseconomies of scale"-inviting even more claims that stretch courts' capacity to administer justice to many people; (2) impacting the perceived "legitimacy" of the process and challenging due process; and (3) increasing the consequence of error. In other words, just like many kinds of administrative systems, aggregate adjudication struggles to deal with many different kinds of constituencies feasibly, legitimately, and accurately.
Nevertheless, each program has responded to these concerns by adopting aggregate procedures responsibly. They have cautiously piloted aggregate procedures to avoid replacing new backlogs with old ones. Where appropriate, they have also relied on panels of adjudicators to reduce allegations of bias and provided additional opportunities to assure individuals voluntarily participate in the process. Finally, some have developed guidance to standardize the use of statistical evidence, while others require cases raising novel factual or scientific questions to mature before centralizing claims before a single decisionmaker. This part summarizes the benefits of aggregation and the ways that these agencies have attempted to respond to their challenges.
As set out above, when used effectively, aggregate agency adjudication may fulfill important goals of efficiency, consistency and access in adjudication.
Promoting Efficiency. The efficiencies afforded by aggregation can be especially helpful in the administration and review of large benefit programs, such as those reviewed by the NVICP and OMHA.
Promoting Consistency. Aggregate procedures can provide uniform and consistent application of the law,
Promoting Legal Access and Generating Information. Finally, aggregate agency adjudications illustrate how aggregate proceedings can foster legal access, while pooling information about policies and patterns that otherwise might escape detection in individualized trials.
Similarly, the NVICP's omnibus proceedings allow any party alleging a vaccine-related injury to benefit from the record developed in test cases and general causation hearings by the most qualified experts and experienced legal counsel.
As these examples illustrate, aggregation procedures may offer agencies another way to efficiently and consistently expand access to agency tribunals, while improving the caliber of representation and information provided to them.
Even as agencies adopt aggregate procedures, they confront long acknowledged concerns about aggregation in federal court, including fears of inefficiency, legitimacy and accuracy.
Efficiency. First, agency adjudicators and staff observed that aggregating claims raises the possibility of diseconomies of scale— inviting more backlogs and claims difficult to manage with limited staff and large caseloads. OMHA adjudicators and personnel acknowledged they hoped to avoid creating "a backlog to another backlog" when it developed a formal program to use statistical evidence to resolve large groups of common claims commenced by a single provider or supplier. AJs with the EEOC, all with decades of experience hearing class actions, observed that class action proceedings involved substantial time and resources, sometimes requiring extensive motion practice and complex statistical proofs to establish unlawful patterns of discrimination. Even more informal aggregation, like the NVICP's Omnibus Proceedings, has required adjudicators to invest resources tracking and closing individual cases still pending long after the court resolves common questions involving a particular vaccine.
In each case, however, adjudicators have responded to concerns about inefficiency by using aggregate tools cautiously, through active case management; relying on experienced counsel and special masters to avoid duplicative motions; and where appropriate, by encouraging settlement. OMHA, for example, rolled out its pilot statistical sampling program for a very limited category of claims, those filed before 2013; actively identified cases, using its database, to find appellants with large volumes of identical claims; and proceeded on a voluntary basis, with the consent of the parties. Special Masters in NVICP rely on steering committees of private lawyers to organize and manage common discovery. They also often allow evolving scientific and novel factual questions to "mature"— putting off centralizing novel cases involving a single vaccine until receiving the benefit of several opinions and conclusions from different Special Masters about how a case should be handled expeditiously. EEOC AJs similarly rely on experienced bar and active judicial management to expedite cases for trial and, in many cases, settlement.
Still, an overly cautious approach can also limit the full value of agency aggregation. For example, OMHA's Statistical Sampling Initiative is hindered in what it can achieve by both the limited pool of eligible claims and its decision to require the parties' affirmative consent to participate in the program.
Legitimacy. Adjudicators and staff also highlighted concerns about legitimacy—particularly given that the model for administrative adjudication typically imagines individualized hearings in which each claim has its day in court before a neutral decisionmaker. EEOC AJs, for example, noted that the inability of parties to opt-out of class actions seeking damages was an additional source of "pressure" for adjudicators to make appropriate decisions and narrowly define the class. Some hospitals and medical suppliers reported that they resisted OMHA's statistical sampling program out of a fear that a single adjudicator's view about the medical necessity of a small sampling of claims would be extrapolated to thousands of others. Even omnibus proceedings raise interesting questions about the legitimacy of using an adjudication process to settle complex scientific questions. Many plaintiffs in the Autism Omnibus Proceedings were anxious about commencing cases together, as were members of the public health community, who as noted above "found it unsettling that the safety of vaccines must be put on trial before three `special masters'" in an obscure vaccine court.
Each of these systems have responded to these concerns by diversifying decisionmaking bodies, assuring adequate representation, and increasing opportunities for individual participation and control in the aggregate proceeding. Special Masters in the Vaccine Program, for example, relied on a panel of three adjudicators in the Autism Omnibus Proceeding to allay concerns about bias. As OMHA considers expanding its statistical sampling initiative, some of its members have said they will consider permitting multiple adjudicators to hear sampled cases. Finally, the EEOC relies on many rules adopted from the Federal Rules of Civil Procedure to increase legitimacy and participation, scrutinizing and screening class counsel to ensure they adequately represent class members; holding "fairness hearings" where class members can voice their concerns with any proposed resolution or settlement; and, in a departure from the federal rules, requiring mini-trials to test individual claims and defenses remaining in adjudications involving damages.
Accuracy. Finally, each case study illustrates how the efficiency with which aggregation resolves large numbers of claims puts pressure on the ability of adjudicators to achieve accurate decisions, when concentrating many cases before the same judge. As noted, many appellants before OMHA worried about the accuracy of any final statistical extrapolation. EEOC AJs observed that unlike federal judges, who benefit from the Reference Manual of Scientific Evidence, no similar guidance exists for EEOC judges tasked with deciding statistical or other technical evidentiary questions frequently raised in EEOC proceedings. Special Masters in the NVICP exist precisely because Congress assumed that over time they would develop expertise in the complex medical and scientific questions frequently raised in the program; and yet, in proceedings where groups allege new theories of general causation for large numbers of vaccines, decisionmakers warned of the importance of getting the science right in a single adjudication.
Agencies have responded to these concerns, as well, by requiring that aggregated claims are sufficiently similar to avoid distorting outcomes and by developing guidelines and screens to address complex statistical evidence. OMHA, for example, relies on its database of billing codes to ensure that claims are sufficiently similar to warrant aggregation, and uses statistical experts along with detailed guidelines for statistical evidence. Special Masters in NVICP wait for cases to mature before treating them in groups, which helps assure that hasty decisions do not adversely impact other related claims; adjudicators also afford attorneys additional time to assure their experts have time to develop and understand the relationship between a vaccine and a new disease. EEOC AJs, like the federal courts, still carefully screen complex evidentiary issues common to the class, relying on guidelines long-established in federal court under Daubert v. Merrell Dow Pharmaceuticals, Inc.
The EEOC, NVICP, and OMHA demonstrate the potential of aggregation to improve agency adjudication in a variety of ways. But most administrative proceedings remain highly individualized. Even most informal adjudications, which are not governed by any of the structural protections of the Administrative Procedure Act, often proceed in a traditional, individualized, case-by-case manner.
So what explains the limited use of aggregation by federal agencies to date? And what, if anything, can it tell us about how agencies and policymakers view the relationship between adjudication, rulemaking and enforcement?
We explore three explanations below. First, agencies may resist aggregate adjudication because they believe Congress or agency policymakers may better resolve large groups of claims through prospective legislation or a rulemaking process. Second, and related, agencies may resist aggregate procedures to avoid stretching adjudication beyond their appropriate limits. Third, agencies may resist aggregation in order to insulate adjudication from renegade private attorneys general. All of these explanations arise out of perceived limits of what courts and administrative judges can do to resolve claims brought by large groups of people.
The resistance of some agencies to aggregation might stem from the fact that adjudicatory agencies themselves already represent a form of aggregation. When policymakers channel cases raising similar legal and scientific issues into a specialized system, before adjudicators with expertise in the area, and resolve them according to uniform criteria, they aggregate cases in ways that resemble class actions settlements. Indeed, commentators often call class action settlements a privatized, administrative system" that compensates victims like "public administrative agencies."
Yet shifting the resolution of certain categories of cases from the Article III courts to administrative tribunals does not eliminate the common issues of law and fact that must be repeatedly resolved in caseby-case adjudication, nor the need for parties to harness expertise and adequate counsel to represent them in complex cases.
To be sure, when agencies have the authority and the ability, they can resolve common questions by other means, most prominently rulemaking.
Nevertheless, rulemaking has not proved to be an effective tool for resolving all common issues of law or fact in agency adjudications. First, the law generally disfavors retroactive rulemaking.
Second, as the Supreme Court has observed, "problems may arise in a case which the administrative agency could not reasonably foresee, problems which must be solved despite the absence of a relevant rule."
Third, the beneficiaries of many administrative programs most impacted by agency adjudications often have the least access to the rulemaking process.
In sum, aggregating certain cases or claims within an agency, even one with rulemaking power, does not eliminate the usefulness of aggregation as a tool in certain circumstances. Even agency adjudicators may need flexibility, in the trenches, to aggregate "all the way down."
The fact that most agencies have not adopted aggregate procedures to manage large groups of common claims may reflect the conceptual line that the law has long drawn between the adjudication of bi-lateral disputes, on the one hand, and policymaking in response to more diffuse harm, on the other.
Lon Fuller famously defined the "essence" of adjudication as the right of affected parties to participate in the proceeding by "presenting proofs and legal arguments" to the decisionmaker.
Fuller cited the example of the U.S. government's regulation of prices and wages during World War II by the War Manpower Commission, the Office of Price Administration and the War Production Board.
Fuller believed that such polycentric problems—involving many different parties with interdependent interests—were better handled outside the courts, through private bargaining or political elections. Nor did he see a solution in assigning such disputes to administrative agencies to be resolved through adjudication:
Fuller's framework turned out to be very persuasive in administrative law. Formal rulemaking under the APA, which shares many of the characteristics of adjudication, fell out of favor in the post-war period for the reasons Fuller suggested.
This division is reflected in the APA itself, which provides distinct sets of rules and procedures for "adjudication" and agencies' broader policymaking powers using rulemaking and enforcement.
Fuller's concern with judicial handling of polycentric disputes also underlies some of the criticism of the federal class action. It manifests itself in concerns over the ability of courts to adequately protect absent class members whose interests may diverge from those of the named plaintiffs before the court.
One can almost hear the echo of the "pull" on Fuller's spider web in the "tugs" of Justice Ginsburg's opinion.
Although the courts' concern with adequate representation of absent class members may be less acute in the context of injunctive relief,
The response to Fuller's concerns is often to re-direct these types of polycentric issues to the administrative state. The rationale is that agencies can more efficiently and legitimately handle these types of mass adjudicatory problems and are more politically accountable than courts and entrepreneurial plaintiffs' attorneys.
What our study illustrates, however, is that even as cases move from the judiciary to administrative agencies, adjudicators must continue to engage in the kind of bargaining and active case management that Fuller viewed as inconsistent with adjudication. Without the ability to consolidate and aggregate cases, rely on steering committees, subclass interest groups, and turn to statistical consultants, agency adjudicators could not efficiently hear and consistently resolve large groups of cases within already aggregated systems. Far from being inconsistent with adjudication—as the APA and legal process theorists like Lon Fuller have long posited—tools that allow judges to actively organize and manage cases have proven to be an essential part of an adjudicative process that must rely on "the presentation of proof and reasoned argument."
Consider the NVICP, which Congress established to create a no-fault alternative for children injured by a particular vaccine. This represents a policy choice by Congress allocating costs and benefits stemming from vaccination in a polycentric system, where many bilateral disputes between injured parties and vaccine manufacturers have repercussions for public health writ large. Congress also believed that a group of specialized adjudicators could resolve difficult questions of causation more efficiently, consistently, and fairly than courts. But when confronted with an influx of claims that the same vaccine caused the same type of injury among a large group of claimants, the NVICP special masters turned to the very same tools used by the courts in mass-tort cases. The NVICP special masters created an ad hoc system to pool claims before the same adjudicator and form steering committees of claimants' counsel, who then coordinated to offer the best expert testimony they could in support of their clients' claims. Even after Congress consolidated vaccine cases before a specialized tribunal under the Vaccine Act, the tribunal could not avoid using aggregation to meaningfully resolve its own large influx of similar claims.
OMHA is coming to the same realization in the context of Medicare appeals. In 2003, Congress moved all Medicare disputes from the Social Security Administration to OMHA, another specialized tribunal with unique expertise resolve very complicated medical disputes. Now facing an "existential" test, OMHA has turned to aggregation to handle a deluge of appeals regarding similar types of claims by the same parties.
Specialized administrative courts, including the Vaccine Court, have recently come under scrutiny for failing to deliver the promised expeditious and rationalized compensation decisions.
With the possible exception of the EEOC, the turn to aggregation by the agencies we studied was motivated primarily by a desire to resolve rather than enable claims. The NVICP developed its omnibus proceedings in response to an influx of cases, not to make it easier for injured parties to file cases. OMHA was established to resolve the inevitable disputes that arise in the administration of a mass benefits program while affording beneficiaries due process. The EEOC, by contrast, turned to the class action in order to enhance the ability of plaintiffs to act as private attorneys general in furtherance of federal anti-discrimination policy. It was not responding to any type of backlog. It is noteworthy that the EEOC's administrative class action mimics the class actions brought by employees against private employers in federal court.
Indeed, other agencies that have specifically considered and rejected using aggregate adjudication have cited concerns with enabling more claims. As noted above, the FCC rejected a proposal to hear class actions in its own adjudications of alleged violations of the Federal Communications Act because, among other reasons, it would "needlessly divert" the resources of its lone ALJ to adjudicating extremely "factintensive and complex" cases, that can just as easily be filed in federal court.
This is interesting because one function of the class action is to enable claims that would otherwise not be brought in individual litigation because the damages are too small for individuals to justify the costs of litigation.
Perhaps agencies are disinclined to use aggregation to enable litigation because agencies typically have their own enforcement powers and worry that an unaccountable private attorney general might upset an agency's carefully calibrated enforcement regime.
This seems inconsistent with the way that many agencies have recently touted class actions in federal court—a private complement to otherwise overburdened, government actors unable to respond to fraudulent investment schemes,
Yet again, an agency might dispute "the notion that all laws warrant enforcement to the letter in all instances."
We do not take a position on whether agencies should make greater use of aggregation as a tool to complement their own enforcement regimes with private attorney generals. But, agency resistance to using private attorney generals in their adjudicatory proceedings may underscore the power of aggregation as an enforcement mechanism. Just as scholars have long examined the rise of "private attorney generals" in our federal and state courts, the use of private attorneys general in agency adjudications is an issue that bears examination. Federal agencies have only begun to explore the forms and limits of aggregation in their adjudicatory proceedings.
Moving cases involving large groups of people to administrative agencies does not solve the risks inherent in individual adjudication of such cases: long backlogs, inconsistent results, and obstacles to justice for those without access to legal and technical expertise. But agencies have shown they can respond to such problems by using their existing authority to aggregate cases themselves—with proper attention to avoiding diseconomies of scale and ensuring the legitimacy and accuracy of their decisions.
More broadly, aggregate agency adjudication raises broader questions about the way we think about the nature of adjudication. Rather than building formal walls between policymaking and adjudication to make adjudication legitimate—which we have done in both class action law and within the administrative state—some judicial proceedings require integrating rulemaking and other managerial tools to ensure the legitimacy of adjudication itself. The central question raised by such cases turns not on any abstract concept of adjudication or policymaking, but instead, how to best adapt procedure to "fairly insure[] the protection of the interests" at stake.
