alec class action improvements act

8/6/2019 ALEC Class Action Improvements Act

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Jt!!ersonian Principks in ActionClass Actions Improvements Act

SummaryThis Act makes everal evisions o the basicclassaction statuteor rule that hasbeenadoptednsome orm by moststates i.e., Rule 23 of the FederalRule of Civil Procedure).For the mostpart, he revisions larify Ru1.e3 by makingmoreexplicit key intetpretations f the rule thathavebeenoffered n recentyearsby federal as somestate) ourts. In particular, he Act tracksRule 23. principally making ive changeshat states ouldadopt n an effort to achievemodest(but significant) mprovementso their statutes nd/orcourt rulesgoverning he useofthe classactiondevice:(a) TheAct would authorizeappellate eview of trial court orders ertifying or denying

certiticationof proposed lassestrackinga recentsimilar changeo federalRule 23).(b) TheAct would establish rule limiting the scope f plaintiff classactions o residents f thestate n which the classaction s filed (emulating he view of some tate ourts hat theyshoulddevote heir imited resources rimarily to resolving he claimsof their own citizens,not the housands f out-of-state esidents laims ypically assertedn interstate lassactions).(c) TheAct would adoptan explicit classwideproof prerequisiteor class ertification(embracing prevailingpolicy of federalcourts o ensure hat he dueprocess ights of

unnamed lassmembers nddefendants reprotected t trial).(d) TheAct would adda maturity factor to the class ertificationprerequisitesadoptinganother revailingpolicy of federalcourts o ensure hat classactionsarenot employedprematurely).(e) Finally, he Act would add a administrative rocess actor o the classcertificationprerequisitescodifying he federalcourtpolicy are not neededwhere he allegationsasserted rewithin the purview of a federalor state egulatoryagency).In addition, l-e Act (i) would eliminatedefendant lassactions that s, instancesn which aplaintiff seekso suea classof defendants),ii) would require hat,the rial court considerwhether he expense nd effort required o litigate the caseon a classbasisisustified by theI There s substantialuqifonnity among he state statutesand statecmtt? &s that goveti class certification.Forty stateshave adopted sometimeswith minor modifications) the current (1966) version of Fed. R. Civ. P. 23.Two states Mississippi and Virginia) have no formal class action StaNteS or ruler at all.

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amount f the recovery hat each lassmember s likely to obtain (a provision hat hasbeenincluded n Michigansclassaction ule); (iii) would codify the federalcourtpolicy that (b)(2)cfass ctionsarenot availablewheremonetary elief is sought, iv) would makeclear hat heappropriateiming for trial court consideration f class ertification ssues aries rom case ocase trackinga proposed mendmento the FederalRulesof Civil Procedure),v) would requirethat a trial court give a written explanation f a decision o certify (or not to certify) a proposedclass, vi) would establish hat class ertificationmay be granted nly where here s a full recordandwhere he proponents aveprofferedclearandconvincingevidencehat the certificationprerequisites avebeensatisfied, vii) would codify the federalcourt view that thereshouldbeno presumptionn favor of class ertification, viii) would establish rebuttable resumptionagainst he certificationof classes sserting laimsaboutwhich he classmemberswould have oproveknowledge, eliance,or causation n an ndividual basis, ix) would add anguage tressingthat class ertificationdoesnot excuse achclassmembers urden o proveeachelement fhis/herclaim; (x) would addspecifications oncerninghe categories f information hat shouldbe ncluded n any noticessent o the unnamed lassmembers; xi) would clarify that theproponents f class ertificationhave he exclusive urdenof paying or any classnotice(consistent ith federalCOURolicy); (xii) would clarify that he rule doesnot authorize issuesclassactions casesn which proponents eek o haveout-of-context rials on ssueshat favortheir position,depriving he ury of the opportunity o udge the whole story); (xiii) wouldspecifybasicprocedureshat a trial court should ollow in reviewinga proposed lassactionsettlement; nd (xiv) would confirm hat unnamed lassmembersmay be subject o court-approved iscovery egarding heir individual claims.These rovisionsmay be mplemented s a statuteor as a changen state ulesof civil procedure,asappropriate. f the statehasadopted statecourt ule governing lassactions, he egislaturesability to change hat rule may be limited under he stateconstitutionor rules enablingact-typestatute.The provisions f the Act assumehat the statepresentlyhasadoptedFed.R. Civ. P. 23 (or asimilar rule) as ts classaction ule. If the statehasadopted nother lassaction rule, someadaptationmay be necessary.SuggestedProvisions[Title, enacting clause, etc.]Section 1:. Title. The following Act shall be known andmay be cited as heClassActionImprovements ct.Section 2. Revisions to Class Action [Statute/Rule]. [Section/Rule of the 1shallbe deleted nd eplacedn its entirety~withhe following:

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(a) Prerequisites to a ClassAction. One or moremembers f a classof [nameof state] esidentsmay sueas epresentativeartieson behalfof all members fthe classonly if (1) the class s so numeroushat oinder of all memberss impracticable,(2) thereare questions f law or fact as o which the court or ury could reasonablyeachconclusions r findings applicabl: o all classmembers,3) the claimsor defenses f therepresentativeartiesare ypical of the claimsor defenses f the class, 4) therepresentativeartieswill fairly andadequately rotect he nterests fthe class,and 5)the class s definedso as o permit he dentificationof classmembers eforeanymeritsadjudications ccur.

(b) Class Actions Maintainable. An actionmay be maintained saclassaction f theprerequisites f subdivision a) aresatisfied,and n addition:(I) theprosecution f separate ctionsby or againstindividual members f the classwould createa risk of

(A) inconsistent r varyingadjudicationswithrespecto individual members f the classwhich would establishincompatible tandards f conduct or the party opposing he class,or.

(B) adjudicationswith respect o individualmembers f the classwhich would as a practicalmatterbe dispositiveofthe nterests f the othermembers ot panics o the adjudications rsubstantiallympair or impede heir ability to protect heir interests; r(2) theparty seeking o maintain he classactiondoesnot seekany monetary elief and he party opposing he classhas actedor refusedto act on groundsgenerallyapplicable o the class, herebymaking appropriatefinal iqjunctive elief or corresponding eclaratory elief with respect o the classas a whole; or(3) the court finds (i) that the questions f law or fact asto which the court or jury could reasonably each conclusions or findingsapplicable o all classmembers redominateover any questionsaffecting onlyindividual members, ii) that the evidence ikely to be admittedat trial regardingthe elementsof the claims for which certification s soughtand of the defmsesthereto s substantially he sameas to all classmembers,and (iii) that a classaction s superior o otheravailablemethods or the fair and efficient adjudication

of the controversy. The matterspertinent o the findings nclude: (A)the interestof members f the class n individually controlling the prosecutionor defense fseparate ctions; B) the extent,nature,and maturity of any itigation concerningthe controversy alreadycommenced y or against membersof the class; (C)whether t is probable hat the amountwhich may be recovered y individual classmembers will be large enough in relation to the expense and effort ofadministering he action o justify maintaining he caseas a classaction; (D) thedesirability or undesirabilityof concentrating he litigation of the claims n the3

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particular orum; (E) the difficulties likely to be encounteredn the managementof a classaction; and (F) the extent o which the allegationsat issueare subject othe urisdiction of federalor state egulatoryagencies.(c) Determfnatioa by Order Whether Class Action to beMaintained; Notice; Judgment.

(1) Whenpracticable fter he commencementf an actionbroughtasa classaction, he courtshall, after hearing,determine y orderwhether t is to be so maintained.An orderunder his subsectionmay be altered,amended, r withdrawnat any ime before he decisionon the merits.(2) If the court inds that the actionshouldbe maintained s aclassaction, t shall certify the actionaccordinglyon the basisof a writtendecisionsetting orth all reasons hy the actionmay be so maintained nddescribing ll evidencen supportof the determination.(3) A court shallnot certify that an actionmaybe maintainedasa classactionunless, n the basisof a full recordon the relevant ssues,heproponents roffer clearand convincingevidencehat the actioncomplieswith allrequirementsor suchcertification. Any doubt as o whether his burdenhasbeenmet shall be resolved n favorofdenying class ertification.The court shalldecertifya classactionuponany showing hat an actionhasceasedo satisfy heapplicable rerequisitesor maintaining he caseasa classaction.(4) Thereshallbe a rebuttablepresumption gainst hemaintenance f a classactionas o claims or which classmemberswould have o

proveknowledge, eliance,or causation n an ndividual basis.(5) The determinationhat an action may be maintained saclassactionshall not relieveany memberof the class rom the burdenof provingall elements f the members ause f action, ncluding ndividual njury and heamountof damages.(6) In any classactionmaintained ndersubsectionb)(3), hecourt shall direct o the members f the class he bestnoticepracticable nder hecircumstances,ncluding ndividual notice o all memberswho canbe dentifiedthrough easonable ffort. Thenotice shall nelude:

(i) a generaldescription f the action, ncluding herelief sought,and he names f the remesentative arties;(ii) a statement f the right of a memberof the class obe excluded rom the actionby submittingan election o be excluded,including he mamter nd ime for exercising he election;

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the class; (iii) a description fpossible inancialconsequencesor(iv) a generaldescription f any counterclaim r noticeof intent to assert counterclaim y or againstmembers f the class,including he relief sought;W a statementhat the udgment,whether avorable rnot, will bind members f the classwho arenot excluded rom the action;(vi) a statementhat any member f the classmayintervenen the actionanddesignate eparate ounsel;(vii) the address f counselo whommembers f theproposed lassmay direct nquiries;and(viii) other nformation hat the court deems ppropriate.

(7) The plaintiff shall bear he expense f the notificationrequiredby the foregoingsubsection.The court may requireotherparties o thelitigation to cooperaten securing he names ndaddressesf the personswithinthe class or the purpose fproviding individual notice,but any costs ncurredbythe party n providing suchcooperation hall be paid nitially by the partyclaiming he classaction. Upon terminationof the action, he COWI ay allow astaxablecostsall or part of the expensesncurredby the prevailingparty.(8) The udgment n an actionmaintained sa classactionundersubsectionsb)(l) or (b)(2), whetheror not favorable o the class, hallincludeanddescribehosewhom he court inds o be members f the class. Thejudgment n an action maintained sa classactionundersubdivision b)(3),whetheror not favorableo the class, hall ncludeand specifyor describehoseto whom he noticeprovided n subsectionc)(2) was directed,andwho havenotrequested xclusion, nd whom he court inds to be members f the class.(9) Whenappropriate, classmay be divided nto subclassesand eachsubclassreatedasa class,and he provisionsof this rule shall hen beconstrued ndappliedaccordingly.

(e) Orders in Conduct of Actions. In the conductof actions o whichthis [section/rule] pplies, he courtmay makeappropriate rders: 1) detezmininghecourse f proceedings r prescribingmeasureso preventundue epetitionorcomplication n the presentation f evidence r argument; 2) requiring, or the protectionof members f the classor otherwise or the fair conductof the action, hat noticebegiven n suchmanneras he courtmay direct o someor all of the members of any step nthe action,or of the proposed ntry ofjudgment, or of the opportunityof membersosignify whether hey consider he representationair and adequate,o intervene and3


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present laimsanddefenses, r otherwise o come nto tbeaction; (3) imposingconditionson the representativeartiesor on interveners; 4) requiring hat the pleadingsbe amendedo eliminate herefiomallegations s o representationf absent ersons, ndthat he actionproceed ccordingly; 5) dealingwith similar proceduralmatters.(0 Dismissal or Compromise.

(1) A class action shall not be dismissedor compromisedwithout the approval of the court, and notice of the proposed dismissalorcompromise hall begiven to all members f the class n suchmanneras he courtdirects.(2) Before approving the dismissal or a compromiseof anaction hat the court hasdeterminedmay be maintained sa classaction, he courtshall hold a hearing o determinewhether he termsof the proposed ismissalorcompromise re fair, reasonable nd adequateor the class. At suchhearing,allparties to the action, including membersof the class, shall be permitted anopportunity o be heardas he court may direct.

(g) Discovery. Representativeartiesand ntervenors re subject odiscoveryn the samemannerasparties n other civil actions.Otherclassmembers resubject o discovery n the samemanneraspersonswho arenot parties,but may berequiredby the court o submit o discovery rocedures pplicable o the representativepartiesand nterveners.(b) Appeals. The courtsof appeals hall hearappealsrom ordersof

district courtsgrantingor denyingclassactioncertificationunder his section fanoticeof appeal s filed within ten daysafter entry of the order.Se&ion 3. [Severability clause.]Section 4. [Repealer clause.]Section 5. [Effective date.]

Approved by the ALEC Board ofDirectors September13, 2000

alec class action improvements act

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