Class Actions and Mass Tort Litigation: Aggregative Justice in a Global Context

Professor Linda S. Mullenix

University of Trento, Italy

Spring 2007 – Rule 23 Lecture

The American Class Action Rule

Promulgated and enacted in 1938 Drafted by federal judiciary Enacted by Congress (legislature)

Part of Federal Rules of Civil Procedure Fed. R. Civ. P. 23 (“Rule 23”) Almost seventy years experience with class

action litigation

The American Class Action Rule

American class action practice unique U.K. (England & Wales)

Group action procedure (2001) Canadian class action experience:

Quebec, Ontario, British Columbia (1990s) Currently all Canadian provinces, except 3

Australia (after 2000) Federal class action rule Some Australian states

The American Class Action Rule

American Class Action Evolving Rule: Enacted in 1938 Amended three times Major revision in 1966 1966 version modern version Provision (f) added in 1998 Provisions (g), (h) added in 2003

The American Class Action Rule

The original 1938 Rule 23 Provided for three types of class actions: Pure, spurious, and hybrid class actions Categories difficult to apply Courts confused about categories Courts render inconsistent decisions Rule unworkable; not used frequently

The American Class Action Rule

Amendment of Class Action Rule 23: By early 1960s, class action rule not much

used for aggregative litigation Need for reform of rule Advisory Committee studies need for new rule New rule promulgated in 1966 Concurrent new major substantive civil rights

legislation enacted by U.S. Congress – creation of new rights

The American Class Action Rule

1966 Amendment to Rule 23 (class action rule): Purpose: liberal amendment Make it easier to pursue class litigation Provide procedural means to enforce new

substantive rights, especially civil rights Old categories of pure, spurious, and hybrid

actions eliminated New class categories created

The American Class Action Rule

1966 Amendment to Rule 23 (class action rule): Central purpose: creation of injunctive class

action Also, new category for damages class action No further amendment until 1998 1998: provision for immediate appeal of class

certification decisions 2003: provisions for counsel appointment and

attorney fees

The American Class Action Rule

Jurisprudential Theory of American Class Action Procedure: Representational litigation, not actual litigation One person (or persons) represent large

groups of other persons (claimants) These claimants are “class members” or

“absent class members” Absent class members claims are virtually

represented by the “class representative”

The American Class Action Rule

Jurisprudential Theory of American Class Action Procedure: Class litigation involves due process concerns Due process means fundamental fairness in

process (constitutional requirement) Due process must protect absent class

members Must have “adequate representation” for a

class action to proceed Must have a fair and adequate settlement to

resolve class claims

The American Class Action Rule

Due Process Protections in Class Litigation: Requirement of class certification for case to

proceed as a class action Requirement of judicial approval & oversight Requirement of adequate class representative

and adequate class counsel Requirement of notice to class members in

damage class actions

The American Class Action Rule

Due Process Protections in Class Litigation: Requirement of “opt-out” provision in damage

class actions Requirement of fairness hearing to approve

settlement (fair, adequate, & reasonable) Provision for immediate appeal of class

certification decision Possibility for direct & collateral attack of class

judgment – judgment not binding if due process is lacking

The American Class Action Rule

Creating a Class Action: Implicit Requirements (not in the rule):

Proper definition of the class (not vague, too general)

Class representative(s) with standing Claims must be ripe (matured or timely) Claims may not be moot (resolved by events) Claims must be real and not hypothetical

The American Class Action Rule

Creating a Class Action: Explicit requirements in Rule 23 Rule 23(a) threshold requirements:

Numerosity (numbers of class members) Commonality Typicality Adequacy (of class representative and class

counsel)

The American Class Action Rule

Creating a Class Action: Explicit requirements in Rule 23(b) Three categories of types of class actions: Rule 23(b)(1) – prejudice classes Rule 23(b)(2) – injunctive or declaratory class

actions/not for monetary damages Rule 23(b)(3) – damage class actions

The American Class Action Rule

Class Categories Rule 23(b)(1) and (b)(2): Claimants are homogeneous and have same

interests No notice provided to class members Class is mandatory: no opt-out rights Class judgment is binding on all class

members Class judgment has res judicata effect

The American Class Action Rule

Creating a Class Action: Rule 23(b)(3) damage class actions:

Claims may be heterogeneous Must show predominance of common questions Must show that class action is “superior” means

to resolve the dispute Court may consider four other factors, including

manageability

The American Class Action Rule

Creating a Class Action: Rule 23(b)(3) damage class actions: For damage class actions:

Must provide notice to all class members of the pending action

Must provide for opportunity to “opt-out” of the class

Two opportunities to opt-out (after certification or after notice of proposed settlement)

Class judgment not binding on persons who opt-out

The American Class Action Rule

Other Provisions Governing Class Actions: Judicial management & control of the litigation

(Rule 23(d) Class action settlements and fairness hearings

(Rule 23(e)) Interlocutory appeal of class certification

decisions (Rule 23(f)) Appointment of class counsel (Rule 23(g)) Payment of attorney fees (Rule 23(h))

The American Class Action Rule

Other considerations: Judge must approve (certify) a proposed class

action to proceed as a class action Class actions not certified may proceed as

individual litigation Classes certified that proceed to trial litigate

the claims of the class representative Most class actions settle before trial

The American Class Action Rule

Historical Use of Class Action Litigation: 1960s-1970s: chiefly injunctive class

actions: Public law litigation Institutional reform litigation (prisoners’ rights;

mental health facilities) Civil rights litigation:

School desegregation Employment discrimination Housing dsicrimination

The American Class Action Rule

Historical Use of Class Action Litigation: Late 1970s-1990s: era of mass tort

litigation: Asbestos litigation Dalkon Shield litigation DES litigation Agent Orange litigation Breast implant litigation Medical device & pharmaceutical litigation

The American Class Action Rule

Historical Use of Class Action Litigation: Late 1990s-current: damage class actions:

Small claims consumer class actions Antitrust class actions Products liability class actions Securities violations class actions Employment discrimination class actions

The American Class Action Rule

Other Class Action Reforms: Class Action Fairness Act of 2005:

Enacted by Congress Jurisdictional statute Creates new federal jurisdiction for class

actions Provides for removal of class actions from

state courts into federal courts Does not affect Rule 23 requirements

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