Earlier this year, it became clear that the Advisory Committee on Civil Rules is considering possible amendments to Rule 23. As Tony Lathrop’s post summarizes, the “front burner” issues at the moment largely concern class action settlements, focusing in on possible limits to cy pres relief and greater clarity on what Rule 23(e)’s “fair, reasonable, and adequate” criteria mean.

I think these are great ideas for possible amendments. I’m certainly on record about the possible problems that arise from cy pres relief, and I’ve also written about the proliferation of settlement standards that arise from Rule 23(e)’s vague language.

But, if we’re thinking about amending Rule 23 again, I have to ask, why be cautious? Why not really think about the ways in which class action litigation could be improved? The Advisory Committee is already grappling with several weighty issues, including the runaway cost of discovery, that have large class-action components. So why not look at ways to reform Rule 23 to help ensure the “just, speedy, and inexpensive” determination of proceedings?

What we would be looking for, then, are reforms that would reduce the expense of class actions and increase the odds that meritorious class actions got a fair hearing. A tall order, but one, as it turns out that was filled almost two decades ago. So here is my simple but radical proposal for class action reform: amend Rule 23 to make all class actions look like securities class actions.

Nineteen years ago, Congress passed the Private Securities Litigation Reform Act (“PSLRA”) to address the perceived scourge of runaway securities class actions. Strike suits were common: class action lawyers would wait for any drop in stock price, and then file a lawsuit. Courts would often rubber-stamp certification, leaving defendants with the choice of settling or risking bet-the-company liability.

The PSLRA enacted a number of reforms. Among them:

it imposed an automatic discovery stay as soon as any dispositive motion was filed (15 U.S.C. § 78u–4(b)(3)(B)); it required the court to conduct an independent inquiry into whether the pleadings meet the requirements of Rule 11 and, if they do not, it requires the imposition of sanctions (15 U.S. Code § 78u–4(c)); and it tied attorneys’ fees to relied actually obtained for class members. (15 U.S. Code § 78u–4(a)(6).)

There was, of course, a huge outcry. Opponents of the PSLRA argued it would would kill the securities class action. (Securities plaintiffs’ lawyers still maintain the statute is problematic.) But with the benefit of nineteen years of experience, we can say that those arguments were wrong. As NERA Consulting has continued to document in its yearly reviews of trends in securities class actions, complaint filings have remained largely stable at between 200 and 270 new cases per year since the PSLRA’s enactment. (See pages 2-3 of the linked report.)

So the PSLRA did not kill the securities class action. But, at the same time, we hear less about truly abusive securities class actions. Lazy, sloppy, or vague pleadings are weeded out at the motion to dismiss stage, without embarking on expensive discovery. (And the discovery stay ensures that costs don’t mount while the dismissal motion is pending.) The mandatory sanctions review acts as an effective deterrent against fishing expeditions. And while the fee provisions may not have reduced fees, they have increased awards to class members.

So why not take advantage of our findings from this two-decade experiment? Amend Rule 23 to add a discovery stay, sanctions review, and value-for-fees provision. The worst that happens is that plaintiffs’ lawyers will up their game.