Class Actions and Mass Tort Litigation: Aggregative Justice in a Global Context

1. Class Actions and Mass Tort Litigation: Aggregative Justice in a Global Context Professor Linda S. Mullenix University of Trento, Italy Spring 2007 – Rule 23 Lecture

2. The American Class Action Rule • Promulgated and enacted in 1938 • Drafted by federal judiciary • Enacted by Congress (legislature) • Part of Federal Rules of Civil Procedure • Fed. R. Civ. P. 23 (“Rule 23”) • Almost seventy years experience with class action litigation

3. The American Class Action Rule • American class action practice unique • U.K. (England & Wales) • Group action procedure (2001) • Canadian class action experience: • Quebec, Ontario, British Columbia (1990s) • Currently all Canadian provinces, except 3 • Australia (after 2000) • Federal class action rule • Some Australian states

4. The American Class Action Rule • American Class Action Evolving Rule: • Enacted in 1938 • Amended three times • Major revision in 1966 • 1966 version modern version • Provision (f) added in 1998 • Provisions (g), (h) added in 2003

5. The American Class Action Rule • The original 1938 Rule 23 • Provided for three types of class actions: • Pure, spurious, and hybrid class actions • Categories difficult to apply • Courts confused about categories • Courts render inconsistent decisions • Rule unworkable; not used frequently

6. The American Class Action Rule • Amendment of Class Action Rule 23: • By early 1960s, class action rule not much used for aggregative litigation • Need for reform of rule • Advisory Committee studies need for new rule • New rule promulgated in 1966 • Concurrent new major substantive civil rights legislation enacted by U.S. Congress – creation of new rights

7. The American Class Action Rule • 1966 Amendment to Rule 23 (class action rule): • Purpose: liberal amendment • Make it easier to pursue class litigation • Provide procedural means to enforce new substantive rights, especially civil rights • Old categories of pure, spurious, and hybrid actions eliminated • New class categories created

8. The American Class Action Rule • 1966 Amendment to Rule 23 (class action rule): • Central purpose: creation of injunctive class action • Also, new category for damages class action • No further amendment until 1998 • 1998: provision for immediate appeal of class certification decisions • 2003: provisions for counsel appointment and attorney fees

9. The American Class Action Rule • Jurisprudential Theory of American Class Action Procedure: • Representational litigation, not actual litigation • One person (or persons) represent large groups of other persons (claimants) • These claimants are “class members” or “absent class members” • Absent class members claims are virtually represented by the “class representative”

10. The American Class Action Rule • Jurisprudential Theory of American Class Action Procedure: • Class litigation involves due process concerns • Due process means fundamental fairness in process (constitutional requirement) • Due process must protect absent class members • Must have “adequate representation” for a class action to proceed • Must have a fair and adequate settlement to resolve class claims

11. The American Class Action Rule • Due Process Protections in Class Litigation: • Requirement of class certification for case to proceed as a class action • Requirement of judicial approval & oversight • Requirement of adequate class representative and adequate class counsel • Requirement of notice to class members in damage class actions

12. The American Class Action Rule • Due Process Protections in Class Litigation: • Requirement of “opt-out” provision in damage class actions • Requirement of fairness hearing to approve settlement (fair, adequate, & reasonable) • Provision for immediate appeal of class certification decision • Possibility for direct & collateral attack of class judgment – judgment not binding if due process is lacking

13. The American Class Action Rule • Creating a Class Action: • Implicit Requirements (not in the rule): • Proper definition of the class (not vague, too general) • Class representative(s) with standing • Claims must be ripe (matured or timely) • Claims may not be moot (resolved by events) • Claims must be real and not hypothetical

14. The American Class Action Rule • Creating a Class Action: • Explicit requirements in Rule 23 • Rule 23(a) threshold requirements: • Numerosity (numbers of class members) • Commonality • Typicality • Adequacy (of class representative and class counsel)

15. The American Class Action Rule • Creating a Class Action: • Explicit requirements in Rule 23(b) • Three categories of types of class actions: • Rule 23(b)(1) – prejudice classes • Rule 23(b)(2) – injunctive or declaratory class actions/not for monetary damages • Rule 23(b)(3) – damage class actions

16. The American Class Action Rule • Class Categories Rule 23(b)(1) and (b)(2): • Claimants are homogeneous and have same interests • No notice provided to class members • Class is mandatory: no opt-out rights • Class judgment is binding on all class members • Class judgment has res judicata effect

17. The American Class Action Rule • Creating a Class Action: • Rule 23(b)(3) damage class actions: • Claims may be heterogeneous • Must show predominance of common questions • Must show that class action is “superior” means to resolve the dispute • Court may consider four other factors, including manageability

18. The American Class Action Rule • Creating a Class Action: • Rule 23(b)(3) damage class actions: • For damage class actions: • Must provide notice to all class members of the pending action • Must provide for opportunity to “opt-out” of the class • Two opportunities to opt-out (after certification or after notice of proposed settlement) • Class judgment not binding on persons who opt-out

19. The American Class Action Rule • Other Provisions Governing Class Actions: • Judicial management & control of the litigation (Rule 23(d) • Class action settlements and fairness hearings (Rule 23(e)) • Interlocutory appeal of class certification decisions (Rule 23(f)) • Appointment of class counsel (Rule 23(g)) • Payment of attorney fees (Rule 23(h))

20. The American Class Action Rule • Other considerations: • Judge must approve (certify) a proposed class action to proceed as a class action • Class actions not certified may proceed as individual litigation • Classes certified that proceed to trial litigate the claims of the class representative • Most class actions settle before trial

21. The American Class Action Rule • Historical Use of Class Action Litigation: • 1960s-1970s: chiefly injunctive class actions: • Public law litigation • Institutional reform litigation (prisoners’ rights; mental health facilities) • Civil rights litigation: • School desegregation • Employment discrimination • Housing dsicrimination

22. The American Class Action Rule • Historical Use of Class Action Litigation: • Late 1970s-1990s: era of mass tort litigation: • Asbestos litigation • Dalkon Shield litigation • DES litigation • Agent Orange litigation • Breast implant litigation • Medical device & pharmaceutical litigation

23. The American Class Action Rule • Historical Use of Class Action Litigation: • Late 1990s-current: damage class actions: • Small claims consumer class actions • Antitrust class actions • Products liability class actions • Securities violations class actions • Employment discrimination class actions

24. The American Class Action Rule • Other Class Action Reforms: • Class Action Fairness Act of 2005: • Enacted by Congress • Jurisdictional statute • Creates new federal jurisdiction for class actions • Provides for removal of class actions from state courts into federal courts • Does not affect Rule 23 requirements

25. Fini