Class Actions Under Federal Rule of Civil Procedure 23

Congress has helped out big business in a lot of ways over the last six years, and one of the big changes was trying to force almost all “class action” lawsuits into Federal Court, where the majority of the Judges have been appointed by conservative Republican presidents. Class Actions are usually associated with Securities Fraud litigation, but have also been used to address a great many other types of claims for mass injuries due to the culpable misconduct or negligence of a single, large defendant. We are likely to be made part of a class involuntarily, which is when you will start receiving notices from the class plaintiffs' lead counsel, telling you that you have the right to “opt out” of the settlement if you don't agree with it. On June 14, 2007, a Federal Grand Jury in Covington, Kentucky indicted three Fen-Phen lawyers for conspiracy to commit wire fraud, and demanded return of $46 Million in misappropriated funds, plus another $21 Million in fees. There have been many objections to sweetheart deals between plaintiff lawyers and defendants that salt the settlement heavily with fees, and provide little meat for the class members. I have gotten a few class action awards over the years. I turned down the videotape on how to drive my tends-to-roll Bronco II, as arriving years too late. I got about the cost of a CD from the CD Price-Fixing Settlement. And I have $25 in my pocket from Toyota Motor Credit, that apparently charged me special fees because of my Hispanic surname. Big haul.

The main rule governing the maintenance of class actions in the Federal Courts are prescribed in Federal Rule of Civil Procedure 23, which provides in relevant part:

Rule 23. Class Actions

(a) Prerequisites to a Class Action.

One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

(b) Class Actions Maintainable.

An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:

(1) the prosecution of separate actions by or against individual members of the class would create a risk of

(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or

(B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or

(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or

(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.


Federal Rule of Civil Procedure 23

CLASS ACTION