Class Actions & How it Works
Generally, the spirit envisioned by the following rules apply to class actions so we use them for educational purposes. There will be similar, and current rules applicable in each jurisdiction which may however prevail.
Generally, one or more members of a class may sue or be sued as representative parties on behalf of all members 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.
Types of Class Actions.
A class action may be maintained if the necessary prerequisites are met, and:
(1) prosecuting separate actions by or against individual class
members would create a risk of:
(A) inconsistent or varying adjudications with respect to individual
class members that would establish incompatible standards of conduct
for the party opposing the class; or
(B) adjudications with respect to individual class members that, as a
practical matter, would be dispositive of the interests of the other
members not parties to the individual adjudications or would
substantially impair or impede their ability to protect their
(2) the party opposing the class has acted or refused to act on
grounds that apply generally to the class, so that final injunctive
relief or corresponding declaratory relief is appropriate respecting
the class as a whole; or
(3) the court finds that the questions of law or fact common to class
members predominate over any questions affecting only individual
members, and that a class action is superior to other available
methods for fairly and efficiently adjudicating the controversy. The
matters pertinent to these findings include:
(A) the class members’ interests in individually controlling the
prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy
already begun by or against class members;
(C) the desirability or undesirability of concentrating the litigation
of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
(A) Time to Issue. At an early practicable time after a person sues or
is sued as a class representative, the court must determine by order
whether to certify the action as a class action.
(B) Defining the Class; Appointing Class Counsel. An order that
certifies a class action must define the class and the class claims,
issues, or defenses, and must appoint class counsel or litigants to act in person.
(C) Altering or Amending the Order. An order that grants or denies
class certification may be altered or amended before final judgment.
The court must direct to class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice must clearly and concisely state in plain, easily understood language:
(i) the nature of the action;
(ii) the definition of the class certified;
(iii) the class claims, issues, or defenses;
(iv) that a class member may enter an appearance through an attorney
if the member so desires;
(v) that the court will exclude from the class any member who requests
(vi) the time and manner for requesting exclusion; and
(vii) the binding effect of a class judgment on members under rules.
Whether or not favorable to the class, the judgment in a class action must:
(A) include and describe those whom the court finds to be class members; and
(B) include and specify or describe those to whom notice was directed, who have not requested exclusion, and whom the court finds to be class members.
When appropriate, an action may be brought or maintained as a class action with respect to particular issues.
When appropriate, a class may be divided into subclasses that are each treated as a class under this rule.
Conducting the Action.
(1) In General. In conducting an action under this rule, the court may issue orders that:
(A) determine the course of proceedings or prescribe measures to
prevent undue repetition or complication in presenting evidence or
(B) require—to protect class members and fairly conduct the
action—giving appropriate notice to some or all class members of:
(i) any step in the action;
(ii) the proposed extent of the judgment; or
(iii) the members’ opportunity to signify whether they consider the
representation fair and adequate, to intervene and present claims or
defenses, or to otherwise come into the action;
(C) impose conditions on the representative parties or on intervenors;
(D) require that the pleadings be amended to eliminate allegations
about representation of absent persons and that the action proceed
(E) deal with similar procedural matters.
Combining and Amending Orders.
An order may be altered or amended from time to time and may be combined with an order under specific rules.
Settlement, Voluntary Dismissal, or Compromise.
The claims, issues, or defenses of a certified class may be settled, voluntarily
dismissed, or compromised only with the court’s approval. The
following procedures apply to a proposed settlement, voluntary
dismissal, or compromise:
(1) The court must direct notice in a reasonable manner to all class
members who would be bound by the proposal.
(2) If the proposal would bind class members, the court may approve it
only after a hearing and on finding that it is fair, reasonable, and
(3) The parties seeking approval must file a statement identifying any
agreement made in connection with the proposal.
(4) If the class action was previously certified, the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so.
(5) Any class member may object to the proposal if it requires court
approval under this subdivision (e); the objection may be withdrawn
only with the court’s approval.
Appeals A court of appeals may permit an appeal from an order
granting or denying class-action certification under this rule if a
petition for permission to appeal is filed with the circuit clerk
within 14 days after the order is entered. An appeal does not stay
proceedings in the district court unless the district judge or the
court of appeals so orders.
(1) Appointing Class Counsel. Unless a statute provides otherwise, a court that certifies a class must appoint class counsel. In appointing class counsel, the court:
(A) must consider:
(i) the work counsel has done in identifying or investigating
potential claims in the action;
(ii) counsel’s experience in handling class actions, other complex
litigation, and the types of claims asserted in the action;
(iii) counsel’s knowledge of the applicable law; and
(iv) the resources that counsel will commit to representing the class;
(B) may consider any other matter pertinent to counsel’s ability to
fairly and adequately represent the interests of the class;
(C) may order potential class counsel to provide information on any
subject pertinent to the appointment and to propose terms for
attorney’s fees and nontaxable costs;
(D) may include in the appointing order provisions about the award of
attorney’s fees or nontaxable costs under rules; and
(E) may make further orders in connection with the appointment.
Standard for Appointing Class Counsel.
When one applicant seeks appointment as class counsel, the court may appoint that applicant only if the applicant is adequate under any relevant rules. If more than one adequate applicant seeks appointment, the court must appoint
the applicant best able to represent the interests of the class.
The court may designate interim counsel to act on
behalf of a putative class before determining whether to certify the
action as a class action.
Duty of Class Counsel.
Class counsel must fairly and adequately represent the interests of the class.
Attorney’s Fees and Nontaxable Costs.
In a certified class action, the court may award reasonable attorney’s fees and nontaxable costs that are authorized by law or by the parties’ agreement. The following procedures apply:
(1) A claim for an award must be made by motion under rules, subject to the provisions of this subdivision (h), at a time the court sets. Notice of the motion must be served on all parties and, for motions by class counsel, directed to class members in a reasonable manner.
(2) A class member, or a party from whom payment is sought, may object
to the motion.
(3) The court may hold a hearing and must find the facts and state its
legal conclusions under rules.
(4) The court may refer issues related to the amount of the award to a
special master or a magistrate judge, as provided in rules.