Class Action Suits
Class action lawsuits are governed by FRCP 23. Negative value suits (costs outweigh the amount of recovery) prevent Plaintiffs from brining suits alone; therefore, class action suits let them band together to defray cost.
Parties must determine class actions during the complaint stage. Typically, the complaint states “Plaintiff and on behalf of all persons similarly situated.”
Prerequisites of FRCP 23
To receive certification, the class must satisfy the following prerequisites:
· Numerocity – The class is so numerous that joinder must be impracticable due to separations of geography and time and the number of Plaintiffs.
· Commonality – The class must show that a logical relationship exists between questions of law and fact.
· Typicality – Class representatives must be typical of the class.
· Adequate representation – Class representation must fairly and adequately represent the class to ensure fairness to all members. All members will be bound by the judgment even though they never attended court.
Types of Class Action Suits
Under FRCP 23, four types of class action suits exist. To sue with a class action, the class must satisfy at least one of these:
· Prejudice Class Action
· Injunctive and Declaratory Relief
· Damage Class Actions
· Hybrid Class Action (not tested on this)
Prejudice Class Action
FRCP 23(b)(1) governs the use of prejudice class actions. This type of class action is further divided into two types:
· Separate actions create a risk of incompatible standards for the party opposing the class. This normally refers to injunctive relief in which courts impose inconsistent obligations on the defendant.
· The judgment would be dispositive of the interests of the other members who are not parties to the individual adjudications.
Injunctive and Declaratory Relief
Under this type of class action suit, the class can seek an injunction or another type of declaratory judgment. Monetary damages are not available in these suits! This is normally applicable when the opposing party acted or refused to act on grounds that apply generally to the class so that final injunctive relief is appropriate to the entire class.
Damage Class Action
Superiority – Class action must be the most efficient method for litigation. Under Castano, this is not satisfied when the rationale is speculative and the issue is novel. The following list provides considerations:
· Interest of class members to individually control separate actions
· Whether and to what extent any litigation concerning the controversy has already been undertaken
· Advantages or disadvantages of litigating claims in the particular forum
· Likely difficulties in managing the class action
Predominance – Common questions of law or fact predominate over any individual issue. To establish this, show the common issues/questions of law to the Court. Under Castano, this is not satisfied when class members must prove individual issues. Question: Do common issues predominate over individual issues?
Five-Step Process for Filing a Class Action
File Class Action Complaint
Defendant will file motion to dismiss.
Class Certification Decision 23(c)(1)(A)
· Class certification is normally filed early.
· The Court can order a certification, or it can wait on the parties to file it.
· In certifying a class, the court must consider the following:
· Interest of individual control
· Extent and nature of litigation elsewhere on the same subject
· The desirability of having the whole package in this court
· Difficulties in managing the class action
· When certifying a class, the court must define the class and class claims, issues or defenses
Court Appoints Class Counsel 23(g)
, not complete diversity.
· Amount in controversy – Raised to $5 million dollars; class members can aggregate claims to meet this requirement
· Must have at least 100 class members
· Discretionary provision – Subsections 3 and 4 grant courts discretion, allowing them to decline jurisdiction when appropriate.
Mass Torts Act
Established under 28 U.S.C. 1369, the Mass Torts Act requires the following elements:
· Minimal diversity
· Single accident
· 75+ natural persons who died
· One of the subfactors:
· A defendant resides in one state, and a substantial part of the accident took place in another state or location, regardless of whether the defendant is also a resident of the state where a substantial part occurred;
· Any two defendants reside in different states, regardless of whether defendants are also residents of the same state or states; or
· Substantial parts of the accident took place in different states.
The Mass Torts Act does not have an amount in controversy requirement.
Class Action Settlement
When settling a class, the court must approve it by holding a fairness hearing to analyze the fairness of the settlement. Because all class members will be bound by the settlement, notice of settlement must be given by all members. Additionally, the class must be cohesive to ensure the settlement will bind the entire class.
Once a settlement is certified as damages, the court must provide another right to opt out under the settlement.
Disco
