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The ABCs of Class Actions

By on November 12, 2015 in Practice Tips

How To Prosecute a Class Action Lawsuit, from Case Selection to Final Approval

Presented at the National Consumer Law Center’s 24th Annual Consumer Rights Litigation Conference, November 12–15, 2015
  • Advantages: Class action procedure allows you to get relief for large numbers of consumers who might never have brought suit individually. Class-wide injunctive relief can also change business practices for the benefit of consumers.
  • Challenges: Class actions are time consuming and expensive to litigate. They require a large investment of attorney time and expense. There is always a risk of recovering nothing, and a long wait for recovery even in cases that go relatively smoothly.
  • Case Selection: New Case Checklist
    • Claims and Defenses
      • Identify the elements of each common-law or statutory claim.
      • Consider what evidence will be needed to prove each claim and whether the same evidence can be used to prove that element as to the entire class.
      • Consider what affirmative defenses might be available and whether they raise potential individual issues.
      • Beware arbitration clauses!
    • Class Definition
      • Include all potential plaintiffs whose claims can be proved with common evidence as to key liability issues.
      • Define your class by clear, objective criteria.
      • Specify the geographic scope and time period.
      • Exclude employees, officers, and directors of Defendant, attorneys for the parties, and any judges assigned to the case as well as their staff and immediate family.
    • Class Size (at least large enough that individual suits would be unmanageable)
    • Class Representative
      • Adequacy
      • Standing
      • Spell out duties in retainer agreement
    • Forum
      • Read recent class certification decisions in the jurisdiction where you plan to file.
      • Original federal jurisdiction may be available under the Class Action Fairness Act, 28 U.S.C. § 1332(d).
    • Relief
      • Damages
      • Injunctive/Declaratory Relief
    • Collection Risk
  • Cases that are well-suited to class actions
    • Defective products
      • Breach of Warranty
      • Failure to disclose (state statutes)
    • Consumer Fraud (state statutes)
    • Breach of Contract (e.g., unauthorized fees or charges imposed by common policy)
    • Federal consumer-protection statutes
      • Fair Credit Reporting Act
      • Fair Debt Collection Practices Act
      • Telephone Consumer Protection Act
      • Equal Credit Opportunity Act
  • Progress of a Class Action
    • Filing
      • Consider associating co-counsel with class-action experience.
      • Check for other similar pending cases.
      • Set a realistic schedule that will allow you the time you need to get any discovery required to support your class certification motion.
    • Class Certification Requirements – Rule 23(a)-(b)
      • Ascertainaility: the class is defined by objective criteria;
      • Numerosity: the class is so numerous that joinder of all members is impracticable;
      • Commonality: there are questions of law or fact common to the class;
      • Typicality: the claims or defenses of the representative parties are typical of the claims or defenses of the class;
      • Adequacy: the representative parties will fairly and adequately protect the interests of the class; and either
      • Predominance (Rule 23(b)(3) damages class): common questions predominate and class action is superior; or
      • Uniform practice (Rule 23(b)(2) injunctive relief class): uniform policy or practice making injunctive or declaratory relief appropriate for the class as a whole.
    • Appeal – Rule 23(f) petition for interlocutory appeal may be considered on expedited basis, at Court of Appeals’ discretion.
    • Notice
      • Upon certification, “best notice practicable” must be sent to Rule 23(b)(3) class members.
      • Notice by first-class mail is presumptively adequate.
      • Notice to Rule 23(b)(2) class members is not required.
    • Appointment of Class Counsel
      • Under Rule 23(g), the court must appoint class counsel when the class is certified (and may do so earlier if warranted).
      • If more than one candidate applies, the court must chose counsel “best able” to represent the class.
    • Settlement
      • Mediation
        • Agree on a neutral mediator experienced in class cases.
        • Can be pursued at any stage of the case and supported by informal information exchange if discovery is in early stages.
      • Relief to Class
        • Cash is generally best
          • Gift cards or in-kind relief can also offer real value to the class, especially if offered in the alternative, or if Defendant is willing to offer more total consideration in this form.
          • Claims Procedure may be appropriate if Defendant does not have information required to determine which class members were injured or class members’ damages. Design the claim form to make it as simple as possible for class members to submit claims.
          • Injunctive relief can also provide significant value if it mandates concrete changes in business practices that benefit consumers.
      • Settlement administrator
      • Notice
      • Release (consistent with factual predicate of suit)
      • Fees (negotiate separately)
    • Approval
      • Preliminary Approval Motion
        • Memorandum showing benefits of settlement to the class.
        • Attach fully executed Settlement Agreement
        • Declaration of Counsel
        • Proposed Class Notice
        • Declarations of class representatives (optional)
        • Proposed Order
          • Preliminary finding that settlement is fair, reasonable, and adequate
          • Approval of form of class notice
          • Approval of notice and settlement administration plan
          • Schedule for notice, objections, and final approval briefing and hearing
      • Final Approval
        • Allow at least 100 days for notice, objections, and final approval and fee briefing before the final approval hearing.
        • Be sure to set the deadline for filing your attorneys’ fee application before the objection deadline.
        • Objectors can appear and argue at the final fairness hearing.
        • Following the fairness hearing, the court will issue an order approving the settlement as fair, reasonable, and adequate and awarding attorneys’ fees, expenses, and service awards.

About The Author

Amy E. Tabor represents clients in complex cases, including class actions, commercial litigation, and antitrust matters. She practices at the nationally recognized class-action firm, Caddell & Chapman. She is licensed to practice in both Texas and California.

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