Getting a Class Certified Under Rule 23 and Sending Out Notice of Settlement

In the prior post, we discussed what a class action is. In this post we go into how to get a class action certified in a Court. As we said in the last post, in federal court Rule 23 sets the standard.

Federal Rule 23

So what does Rule 23 require? To maintain a class, the plaintiff must show that there exists an identifiable group of numerous people. As a general rule of thumb, at least 40 people are needed, though most classes are substantially larger. To be clear, the case does not need 40 named plaintiffs—it just needs one. Rather, what happened to the named plaintiff must have happened to the other people in the group. That is, all of the class members must have been harmed in a similar way such that they have “common issues of law and fact.” This means that common evidence will be used to prove questions regarding each of their claims. Going back to the TCPA example, a common factual issue would be “Did the defendant company call everyone in the class using the same equipment?” and a legal issue would be whether that dialer equipment qualifies as an ATDS.

Rule 23 also requires that the named plaintiff’s claims be “typical” of those of the rest of the class members. This means that the named plaintiff have the same or substantially the same type of claim as everyone else in the class. If there are common issues of law and fact and the named plaintiff is part of the class, typicality is generally satisfied. Relatedly, Rule 23 requires that the named plaintiff and his/her lawyers be “adequate” representatives. This generally means that the named plaintiff not have any conflicts of interest with the class and that his/her lawyers have experience in class actions.

If the complaint primarily seeks a declaration for the class or an injunction (an order compelling the defendant to either do something or refrain from doing something) then the named plaintiff must also show that the defendant has acted (or refused to act) on grounds generally applicable to the class as a whole. If the class seeks damages, the plaintiff must demonstrate that the common issues in the case predominate—that they are central issues that will cut to the heart of the case—over any individual issues and that a class action is manageable and superior to any other methods for resolving the dispute.

Class Action Notices and Settlements

If a class is certified, notice is sent to the class members notifying them of the case and providing them with an opportunity to exclude themselves from the case. This is how most people come into contact with class actions—a class is certified through a class action settlement and notice goes out to class members advising them of the settlement. For people who exclude themselves, nothing about the case will affect them and they will have the ability to sue the defendant separately. People who don’t exclude themselves will be bound by whatever the outcome of the case/settlement happens to be.

If there is no settlement, the case will proceed to trial as a class. This is rare, however, since by combining the claims the class representatives generally have substantial leverage to negotiate a deal. Put simply, if an individual class member has a claim for $50 and there are 1 million class members, then the case is worth $50 million—substantially riskier for the defendant to lose than the $50 it might have to pay if it took the individual case to trial.


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