Sunday, February 7, 2016

Class Action Lawsuits

When working with students to prepare for Civil Procedure on the MBE, a topic that comes up frequently is class action lawsuits. This post will summarize some aspects that I believe are important to know for purposes of the MBE:

When is a class action proper?

There are some requirements here. First, the class of plaintiffs must be so numerous that joinder of all members is impracticable. In addition, there must be questions of law or fact common to the class, named parties' interests must be typical of the class, and named parties must adequately represent the interests of the absent members of the class. In addition, one of the following must be true: separate actions would create a risk of inconsistent results or impair the interests of unnamed parties; the defendant has acted or refused to act on grounds applicable to the class, and injunctive or declaratory relief is appropriate for the class as a whole; or common questions of law or fact predominate over individual issues and a class action is superior to alternate methods of adjudication.

When should the court decide whether to certify the class?

This should be decided at an early practicable time, but a court can determine that a class action is not appropriate at any time. When the court certifies a class, the court must define the class, issues, and defenses. Further, the court must appoint class counsel who must fairly and adequately represent the class.

What effect does a class action judgement have?

All members of a class will be bound by the judgement rendered in a class action except those in a common question class action who notify the court that they do not wish to be bound. For this reason, notice to all members of a class is required in a common question class action lawsuit.

How is jurisdiction analyzed in a class action lawsuit?

In class actions founded on diversity only the citizenship of the named representatives of the class is taken into account in establishing whether the diversity requirement is satisfied. One class representative's claim generally must exceed $75,000. Class members with claims not exceeding this amount may invoke supplemental jurisdiction provided that doing so does not destroy diversity.

Must the court approve dismissal of a class action?

Yes, the court must approve dismissal or settlement. In a common question class action lawsuit, the court may provide the parties with a second opportunity to opt out.

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