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Class Action Law
South Texas College of Law Houston
Rensberger, Jeffrey L.

 
Class Actions Rensberger Fall 2014
 
 
1)      Introduction: The Basic Issues of Complex Litigation
a)      Aggregation
i)        Pros
(1)    Leads to greater efficiency
(2)    Cheaper
(3)    Same outcome – like cases should be treated like – get all of them at that right result
(4)    Way to avoid – have one proceeding
ii)       Con
(1)    Autonomy – what if 15 P’s and counsel?
(2)    Pro-plaintiff “bias”
(a)    Helpful to plaintiffs
(3)    Efficiency gains are only for P and not D
b)      Rules v. Approach
i)        FRCP
ii)       Federalism
(1)    Vertical
(a)    Relative authority of federal govt vs. state govts
(i)      Cannot enjoin state courts from litigating
(2)    Horizontal
(a)    From one state to another
(i)      i.e. not all P’s maybe from same state
 
 
2)      Joinder: Permitted, Required, and Forbidden Parties
a)      Introduction
i)        Rule 18 – Joinder of Claims
(1)    A party asserting a claim, counterclaim, cross-claim, or third-party claim may join, as independent or alternative claims, as many claims as it has against an opposing party
(a)    As long as you have one valid claim, can join other claims as well
(b)   Unfettered joinder
ii)       Party Joinder allows:
(1)    Permissive Joinder – Rule 20
(2)    Mandatory Joinder – Rule 19
(3)    Intervener – Rule 24
b)      Permissive Party Joinder – Rule 20
i)        Permissive Party Joinder – Two or more parties agreeing to sue together in a single suit as Plaintiffs or two or more parties being named in a single suit as Defendants
(1)    The initial choice of structuring the lawsuit is made by the Plaintiff(s)
ii)       Policy
(1)    Efficiency is promoted by joining claims together rather than separate litigation of related claims
(2)    Plaintiff autonomy is served by reserving to the Plaintiff the decision of whether to take advantage of the efficiency allowed by Rule 20
(3)    Rule 20 is permissive, which serves the goal of letting the Plaintiff be the master of his suit
(4)    Note tension between efficiency and Plaintiff autonomy
iii)     Test
(1)    Persons may join in one action as Plaintiffs if/Persons may be joined in one action as Defendants if:
(a)    1 – Claims arise by the same transaction or occurrence or series of transactions or occurrence, and
(i)      Events Separated in Time and Place
1.       Can nonetheless be a series of transactions or occurrences if they are logically connected
2.       Look for a common policy or decision by the Defendant that affects all Plaintiffs
a.       Employment cases; different Plaintiffs all affected by same Employer policy
b.      Products liability cases; different Plaintiffs all affected by same product defect
3.       Arguments against such joinder:  Variation among Plaintiffs
a.       E.g., different exposures or health history in a toxic tort case
(b)   2 – Any question of law or fact common to all these persons will arise in the action
(i)      The Role of Substantive Law
1.       Whether common questions of law or fact exist is driven by the substantive law
a.       Changing the substantive law affects joinder
b.      Makes new issues relevant and those issues may be common to the Defendants or Plaintiffs
2.       Example: Hall (market share liability)
a.       If allow this theory of recovery, there is now a question common to all Defendants—the market share
3.       For this reason, choice of law (which state’s law applies to each Plaintiff) also affects the availability of joinder
iv)     Consolidation and Severance Under Rule 42: the Partner of Joinder
(1)    Rule 42, for the sake of efficiency, operates as a limit on the Plaintiff autonomy embedded in Rule 20
(2)    Applies only to cases pending in the same district
(3)    Using Rule 42(a), the judge may consolidate separate cases within the same district if they share a common question of law or fact
(4)    This overcomes (for the sake of efficiency) Plaintiffs' initial choice not to join
(5)    Effect of Consolidation on bystander Defendants
(a)    Defendants with a  marginal role; lower likelihood of liability
(b)   Have to participate in consolidated discovery and other pretrial procedures
c)       Compulsory Party Joinder
i)        Compulsory Party Joinder – persons required to be joined if feasible
ii)       Policies
(1)    Efficiency (“complete relief”)
(2)    Protection Against Prejudice (“interest”)
(a)    To Party
(b)   To Non-Party
(3)    Core problem: These policies might indicate the joinder of a person that cannot be joined (jurisdictional limitations)
iii)     Test
(1)    1st – Is joinder feasible?
(a)    If party is subject to service of process, and
(b)   Joinder will not deprive the court of subject matter jurisdiction,
(i)      Then –> joinder cause no jurisdictional problems
(2)    2nd – If feasible, is party necessary?
(a)    Person must be joined if:
(i)      (a)(1)(A) – No complete relief is available to current parties without the outsider (because inefficient), OR
(ii)    (a)(1)(B) – that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may stop person from protecting interest OR leave an existing party open to risk (prejudice)
(b)   Purpose of rule – meant to prevent extreme inefficiency
(i)      Very rare to find indispensable parties
(ii)    Can the court NOT accord complete relief among existing parties?
1.       If they can, then it’s ok to move without rule 19 joinder
2.       Rule 19 does not require the most efficient litigation; it merely forbids especially inefficient litigation (making litigation pointless)
(3)    3rd – If joinder is desirable but impossible due to jurisdictional limitations, should action proceed anyway?
(a)    If a person who is required to be joined if feasible cannot be joined, the court must determine whether the action s

drops out, the intervener must show standing
ii.       Standing satisfied by interest part of intervention analysis
iii.      If no standing, then was there really an interest in the suit?
(iii)   Relationship to Rule 19
1.       Similar “interest” language
2.       But Rule 24 is more specific: “interest in property or transaction”
3.       Nonetheless, most courts read Rule 24 more broadly than Rule 19
a.       A given person is more likely to be held a proper intervenor than an indispensable party
b.      On account of the consequences
(b)   Risk of practical impairment
(i)      Need only show that the interest “might” be impaired
(c)    Not adequately represented
(i)      Minimal burden – plausible concern that your interest might not be adequately represented
(ii)    Exception – if state or agency is charged by law with representing the interest of the proposed intervenor, is a party in the case – that raises a rebuttable presumption of adequate representation
(d)   Timely
(i)      The applicant must intervene as soon as it has reason to know that its interest may be adversely affected by the outcome of the pending litigation
(ii)    Factors:
1.       Time intervener knew of should have known of its interest in the case,
2.       Prejudice to existing parties resulting from the delay in seeking intervention,
3.       Prejudice to the intervener if intervention is denied, and
4.       Unusual circumstances militating for or against a finding of timeliness
(2)    Other Requirements
(a)    No supplemental jurisdiction (likewise for Rule 19 parties)
(b)   Can impose limits on participation of interveners
e)      Failure to Join and Res Judicata
i)        Intervention is not Compulsory
(1)    Not bound by judgment if don’t join
(a)    Claim not later barred by failure to intervene (Martin v. Wilks)
(2)    Parties know better than outsiders what effect suit will have on non-parties
(a)    So parties should use Rule 19 to solve the absentee problem
(b)   Cf. Plaintiff autonomy
(i)      Responsibility follows from the Plaintiff’s power to control
(3)    New Statute (42 U.S.C. §2000e-2(n)(1): 
(a)    A non-party cannot bring an action drawing into question an employment discrimination judgment if had notice and a chance to participate or had adequate representation
(i)      In context of employment discrimination ONLY