The Class Action Playbook

The Class Action Playbook

Brian Anderson
Andrew Trask

1
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Library of Congress Cataloging-in-Publication Data

Anderson, Brian C.
The class action playbook/Brian Anderson, Andrew Trask.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-19-539025-4 alk. paper
1. Class actions (Civil procedure)—United States. I. Trask, Andrew. II. Title.
KF8896.A95 2010
347.73'53—dc22 2010014448
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 Contents

ACKNOWLEDGMENTS xi

THE STRATEGIC APPROACH TO CLASS-ACTION LITIGATION xiii

CHAPTER 1 What Class Actions are and Why they Exist 1

§ 1.1 The Tradition of Single-Plaintiff Lawsuits 2
§ 1.1.1 The Limitations of Single-Plaintiff Lawsuits 3
§ 1.2 Methods of Aggregating Parties 3
§ 1.2.1 Joinder (Rule 20) 4
§ 1.2.2 Intervention (Rule 24) 6
§ 1.2.3 Consolidation (Rule 42) 7
§ 1.2.4 Multi-District Litigation 8
§ 1.2.5 Other Forms of Aggregation 9
§ 1.3 Class Actions 11
§ 1.3.1 Benefits of the Class-Action Device 12
§ 1.3.2 Costs of the Class-Action Device 15

CHAPTER 2 Class Certification Requirements 19

§ 2.1 Numerosity 21
§ 2.1.1 Feasibility of Joinder 21
§ 2.1.2 Ascertainability 23
§ 2.2 Commonality 25
§ 2.3 Typicality 27
§ 2.4 Adequacy of Representation 30
§ 2.5 Rule 23(b)(1) Classes 33
§ 2.5.1 Rule 23(b)(1)(a) “Incompatible Result” Classes 33
§ 2.5.2 Rule 23(b)(1)(b) “Limited Fund” Classes 35
§ 2.6 Rule 23(b)(2) Injunction Classes 35
§ 2.6.1 Hybrid Classes 38
§ 2.7 Rule 23(b)(3) Damages Classes 38
§ 2.7.1 Predominance of Common Issues 39
§ 2.7.2 Superiority 45
§ 2.8 Class Counsel 50
vi Contents

CHAPTER 3 Constructing a Class Action Lawsuit 53

§ 3.1 Types of Class Actions 54
§ 3.1.1 Securities 55
§ 3.1.2 Labor/Employment 57
§ 3.1.3 Product Liability 59
§ 3.1.4 Consumer Fraud 59
§ 3.1.5 Antitrust 60
§ 3.1.6 Environmental 61
§ 3.1.7 Civil Rights 62
§ 3.1.8 Statutory Violations 63
§ 3.2 Identifying a Potential Class Action 64
§ 3.3 Forum Considerations 67
§ 3.4 Selecting Appropriate Defendants 73
§ 3.5 Identifying Class Representatives 75
§ 3.6 Drafting the Complaint 77
§ 3.6.1 Selecting Claims 78
§ 3.6.2 Selecting Remedies 79
§ 3.6.3 Defining the Proposed Class 81
§ 3.6.4 Pleading 82
§ 3.7 Working With Other Plaintiff’s Counsel 83

CHAPTER 4 Pre-Certification Steps 85

§ 4.1 Plaintiff’s Opening Moves 87
§ 4.1.1 Media Coverage 88
§ 4.1.2 Generating External Pressure on Defendants 89
§ 4.2 Defendant’s Response to Complaint 91
§ 4.2.1 Invoking Arbitration 91
§ 4.2.2 Removal 93
§ 4.2.2.1 Diversity Jurisdiction/Class Action
Fairness Act 94
§ 4.2.2.2 Federal Question Jurisdiction 96
§ 4.2.2.3 Appeals 97
§ 4.2.3 Consolidation 98
§ 4.2.4 Motion to Dismiss 98
§ 4.2.4.1 Standing 101
§ 4.2.4.2 Personal Jurisdiction 101
§ 4.2.4.3 Pleading Deficiencies 102
§ 4.2.4.4 Substantive Legal Problems 103
§ 4.2.5 Motion to Strike/Early Challenge to Class Certification 104
§ 4.2.6 Answer 106
§ 4.2.7 Offer of Judgment 108
§ 4.2.8 Motion for Sanctions 109
§ 4.3 Amending the Complaint 110
§ 4.4 Case Management Orders 111
 Contents vii

§ 4.4.1 Timing 111

§ 4.4.2 Discovery Procedures 112
§ 4.4.3 Motions Practice 113
§ 4.4.4 Appointment of Lead Counsel 114
§ 4.5 Pre-Certification Discovery 115
§ 4.5.1 Initial Disclosures 116
§ 4.5.2 Protective Orders 116
§ 4.5.3 Plaintiff’s Discovery 117
§ 4.5.3.1 Interrogatories 118
§ 4.5.3.2 Document Requests 120
§ 4.5.3.3 Requests for Admission 121
§ 4.5.3.4 Depositions 121
§ 4.5.4 Defendant’s Discovery 125
§ 4.5.4.1 Interrogatories 125
§ 4.5.4.2 Document Requests 125
§ 4.5.4.3 Requests for Admission 126
§ 4.5.4.4 Depositions 126
§ 4.6 Expert Witnesses 128
§ 4.7 Pre-Certification Summary Judgment Motion 129

CHAPTER 5 The Class Certification Motion 133

§ 5.1 Plaintiff’s Certification Motion 136
§ 5.1.1 Themes 137
§ 5.1.2 Arguments in Support of Certification 141
§ 5.1.2.1 Numerosity 141
§ 5.1.2.2 Commonality 141
§ 5.1.2.3 Typicality 142
§ 5.1.2.4 Adequacy 142
§ 5.1.2.5 Availability of Rule 23(b)(1) 143
§ 5.1.2.6 Availability of Rule 23(b)(2) 144
§ 5.1.2.7 Availability of Rule 23(b)(3) 145
§ 5.1.2.7.1 Predominance 145
§ 5.1.2.7.2 Superiority 147
§ 5.1.2.8 Adequacy of Counsel 148
§ 5.1.3 Packaging the Presentation 148
§ 5.2 Defendant’s Certification Opposition 151
§ 5.2.1 Themes 151
§ 5.2.2 Arguments Against Certification 153
§ 5.2.2.1 Numerosity 153
§ 5.2.2.2 Commonality 154
§ 5.2.2.3 Typicality 155
§ 5.2.2.4 Adequacy 157
§ 5.2.2.5 Predominance 158
§ 5.2.2.6 Superiority 159
§ 5.2.3 Packaging the Presentation 161
viii Contents

§ 5.3 Plaintiff’s Certification Reply 163

§ 5.4 The Certification Hearing 164

CHAPTER 6 Post-Certification Steps 167

§ 6.1 Interlocutory Appeal 168
§ 6.1.1 Rule 23(f) Standards for Obtaining Interlocutory Appeal 168
§ 6.1.2 Grounds for Appeal 169
§ 6.1.3 How Appellate Courts Review Certification Orders 175
§ 6.1.4 Stays 175
§ 6.1.5 Packaging the Rule 23(f) Petition 176
§ 6.1.6 Packaging the Rule 23(f) Petition Response 177
§ 6.2 Class Notice 177
§ 6.2.1 When/Why Notice Required 178
§ 6.2.2 Timing of Notice 179
§ 6.2.3 Form of Notice 180
§ 6.2.4 Content of Notice 185
§ 6.2.5 Cost of Notice 189

CHAPTER 7 Trial Preparation 191

§ 7.1 Trial Structure 193
§ 7.1.1 Unitary Class Trial 193
§ 7.1.2 Bifurcated Trial 193
§ 7.2 Pre-Trial Discovery 196
§ 7.3 Jury vs. Bench Trial 196
§ 7.4 Post-Certification Summary Judgment 198
§ 7.5 Decertification Motion 200
§ 7.6 In Limine Motions 200
§ 7.7 Jury Instructions/Verdict Forms 201
§ 7.8 Press Issues 202
§ 7.9 The Trial 202
§ 7.10 Post-Trial Motions 206

CHAPTER 8 Settling Class Actions 207

§ 8.1 Legal Background 209
§ 8.1.1 Rule 23(e) 210
§ 8.1.2 Class Action Fairness Act (CAFA) 214
§ 8.2 Types of Settlements 216
§ 8.2.1 Claims-made (“Reverter”) Settlements 216
§ 8.2.2 Cy Pres Funds 217
§ 8.2.3 Coupons 219
§ 8.2.4 Injunctions/Consent Decrees 222
§ 8.2.5 Therapeutic Relief 222
§ 8.2.6 Named Plaintiff Settlements 224
§ 8.3 Class-wide Settlement Steps 224
 Contents ix

§ 8.3.1 Mediation 226

§ 8.3.2 Drafting the Settlement Agreement 227
§ 8.3.3 Preliminary Approval Order 230
§ 8.3.4 Class Settlement Notice 232
§ 8.3.5 Opt-Outs/Objections 233
§ 8.3.6 Final Approval Hearing 236
§ 8.3.7 Settlement Implementation 237
§ 8.4 Attorneys’ Fees 237
§ 8.4.1 Determining Reasonable Fee 238
§ 8.4.1.1 Lodestar 238
§ 8.4.1.2 Percentage of Common Fund 239
§ 8.4.1.3 Negotiation of Fees 240
§ 8.4.2 Court Approval of Fees 240

CHAPTER 9 Class Action Judgments 241

§ 9.1 Enforcing Preclusion 243
§ 9.1.1 Res Judicata 244
§ 9.1.2 Collateral Estoppel 244
§ 9.1.3 The All-Writs Act and Anti-Injunction Act 246
§ 9.2 Challenging Preclusion 247
§ 9.2.1 Due Process 247
§ 9.2.2 Adequacy of Representation 248
§ 9.3 Limiting Collateral Exposure 249
§ 9.3.1 Government Actions 250
§ 9.3.2 Opt-Out Suits 250

CHAPTER 10 International Class Action Practice 253

§ 10.1 Multi-National Class Actions Litigation Teams 255
§ 10.1.1 Types of Multi-National Class Actions 255
§ 10.1.1.1 Alien Tort Claims Act 256
§ 10.1.1.2 “Foreign-Cubed” Class Actions 257
§ 10.1.2 Prudential Challenges 257
§ 10.1.2.1 Political Question Doctrine 258
§ 10.1.2.2 Act of State Doctrine 259
§ 10.1.2.3 Comity 260
§ 10.1.3 Procedural Challenges 261
§ 10.1.3.1 Jurisdiction 261
§ 10.1.3.2 Service of Process 261
§ 10.1.3.3 Forum non conveniens 262
§ 10.1.4 Certifying a Multi-National Class 264
§ 10.1.5 Enforcing Foreign Judgments 264
§ 10.2 Aggregated Litigation Devices in Other Countries 265
§ 10.2.1 The Canadian Model 267
x Contents

§ 10.2.2 The Australian Model 270

§ 10.2.3 The Opt-In Model 271
§ 10.2.4 The Ombudsman/Consumer Association Model 273
§ 10.2.5 Mass Joinder Proceedings/Quasi-Class Actions 274
§ 10.2.6 The “Test Case” Model 275

INDEX 277
 Acknowledgments

We could not have written this book by ourselves. We had a great deal of
help. Samantha Cassetta and Matt Gallaway, our editors at Oxford University
Press, provided feedback and encouragement. Deborah Reese and Sydney
Carr, our assistants, and Michelle Lipinski, our editorial assistant, worked
incredibly hard to make sure we had all of the resources we needed to com-
plete the manuscript. Our colleagues at McGuireWoods LLP and O’Melveny
& Myers LLP gave us the time time and space we needed to write. Kevin
Daniel, Allison Hart, Peggy McCormick, Addis Abebe, Jayne Sabolinksi, and
Justin Parady provided valuable research assistance and cite-checking help.
Ted Frank and Garrett Wotkyns reviewed portions of the manuscript and
provided invaluable suggestions. Maria Pucci and Manojkumar Lakshmanan
(along with his team at Glyph International) made everything look profes-
sional. And our families—Merry, Eric, Laura, and Mark Anderson, and
Kathleen Lawton-Trask—put up with us and offered every kind of support
one can imagine. We are very grateful.
All errors, of course, remain ours.
 The Strategic Approach to Class-Action Litigation

This book is not a treatise. It is not a casebook. And it is not an argument for
or against class actions. It is a practitioner’s and a law student’s guide to how
class actions work and the strategic decisions plaintiffs’ and defendants’
counsel each must make as they represent their clients in this kind of high-
stakes litigation.
Comprehensive literature already exists debating whether class actions are
good for the American legal system.1 There are numerous treatises catalogu-
ing in minute detail the law governing class actions.2 But there are no books
discussing the strategies involved in prosecuting or defending a class action.
As we discuss throughout this book, class actions are different than other
civil litigation. Any lawsuit requires a lawyer to think strategically along one
dimension: Will the tactics he adopts help his client win the case on the
merits?3 In class action litigation, because of the centrality of the debate over
whether to certify a class, there is another dimension: Will these tactics help
the lawyer obtain (or defeat) class certification? These two dimensions may
conflict. Strategies that may help a litigant win a motion on the merits can
undermine its arguments when debating certification, and vice versa.4
What is strategy? The term means different things to different people.
Some legal scholars define strategy as the accumulated choices made by a lit-
igator5—a possibly accurate description, but not very enlightening. Carl von

1. For a sampling of this literature, See §§ 1.3.1–2.

2. See, e.g.,Charles Alan Wright et al., Federal Practice and Procedure (3d ed. 2005);
Alba Conte & Herbert B. Newberg, Newberg on Class Actions (4th ed. 2002).
3. We recognize that this is a simplified view. Just as Carl von Clausewitz once famously pro-
claimed that “war is nothing but the continuation of policy by other means,” litigation is the
continuation of business (or policy) by other means. See Carl von Clausewitz, On War
69 (Michael Howard and Peter Paret, eds. & trans.) (Princeton University Press 1984). That
characteristic gives most litigation at least two dimensions of strategy. For more on the “busi-
ness” dimension of litigation strategy, see §§ 4.1.1, 8.2–3.
4. Strategists in other arenas, like military conflict, have also noted this phenomenon. See Cf.
Edwin N. Luttwak, Strategy: The Logic of War and Peace xii (Rev. & expanded ed.
2001) (discussing how different dimensions of strategy may work against one another).
5. See Lynn M. LoPucki & Walter O. Weyrauch, A Theory of Legal Strategy, 49 Duke L. J. 1405,
1412 (2000).
xiv The Strategic Approach to Class-Action Litigation

Clausewitz, perhaps the premier military strategist in Western history,

referred to strategy as “the use of engagements for the object of a war.”6 That
definition is more useful when applied to litigation, although it is worth
removing from a purely military context, and making a few of Clausewitz’s
assumptions explicit. For our purposes, strategy is:

(1) a plan for action toward a goal;

(2) that comprises a series of actions over time; and
(3) that assumes other parties will oppose (or otherwise interfere with)
the plan.

This definition combines the hallmarks of both the classic and modern defini-
tions of strategy. Clausewitz and similar strategists draw a distinction between
strategy and tactics. Tactics are short-term plans for handling an immediate
conflict. Strategy is the longer-term coordination of tactics. But the most
important component of our definition of strategy is the one that Clausewitz
only assumed. Strategy does not operate in a vacuum: It assumes the exis-
tence of other parties who will, at worst, actively oppose the strategy, and, at
best, merely get in the way. Our definition of strategy includes this dynamic
quality: Unlike a mere plan, a strategy aims to anticipate and respond to the
actions of the other side.7
The purpose of this book is to discuss the points at which class-action liti-
gators—whether representing plaintiffs or defendants—must make strategic
decisions. We identify those decision points, and then discuss the tactical
choices available to each side. To the extent possible, we also try to evaluate
the strength of various tactics available in each circumstance.
Each side in class-action litigation is subject to certain constraints that
affect its initial moves, as well as its responses to the other side. Some of these
constraints the parties cannot change during the course of the litigation.
Following the analogy of military strategy, one might think of these
constraints as the “terrain” on which the litigation is fought.8 In class-action
litigation, that terrain comprises several features:

6. Clausewitz, On War 128.

7. This is the insight that drives most modern students of strategy. Douglas Baird, et al.,
Game Theory and the Law 1 (1994) (“Strategic behavior arises when two or more indi-
viduals interact and each individual’s decision turns on what that individual expects the
others to do.”); Avinash K. Dixit & Barry J. Nalebuff, The Art of Strategy: A Game
Theorist’s Guide to Success in Business and Life xvi (2008).
8. See Clausewitz, On War 348–51 (“geography and the character of the ground bear a close
and ever-present relation to warfare”); Ralph D. Sawyer, The Seven Military Classics
of Ancient China 175–83 (translation of discussion of adapting tactics to terrain from Sun
Tzu’s Art of War). This analogy is hardly far-fetched. In his discussion of strategy during oral
argument, Justice Scalia advised advocates to both “[o]ccupy the most defensible terrain”
 The Strategic Approach to Class-Action Litigation xv

Facts. As John Adams famously argued, “Facts are stubborn things.”9 While
either side may do its best to massage inconvenient facts or cast them in a
favorable light, if the facts do not support a cause of action, or if they support it
all too well, then the party without the facts on its side likely will not prevail.
Law. There is room in litigation to “advance” the law, but it is unrealistic
to assume that any party in a specific case will win by asserting an unprece-
dented legal argument. Instead, we assume that most legal change is incre-
mental, and so parties are constrained by the law as it stands when motions
(or cases) are decided.
Courts. At every stage, each party must convince the court of, if not the
ultimate merit, at least the immediate merit of its position. Most judges are
conscientious, hardworking, and scrupulous about reigning in their con-
scious biases. However, judges are not immune from structural pressures.
Federal courts have long been overworked10 and may remand cases to state
court or seek early resolution (either by dismissal or settlement) when possi-
ble. In state court, elected judges, more than appointed judges with lifetime
tenure, will feel some debt to those who helped them win election.11
Ethics. Regrettably, not every lawyer in class-action practice acts ethically.
Parties engaged in high-stakes litigation may stoop to paying clients to serve as
class representatives12 or withhold necessary documents in discovery.13 But,
for the purposes of this book, we assume that less-than-ethical lawyers on each
side are outliers. Why? First, we like to think the best of people. More impor-
tantly, ethical rules are a real constraint on behavior. If a lawyer breaks those
rules and gets caught (which in the long run seems likely), he faces severe con-
sequences that include disbarment, criminal conviction, and imprisonment.
The threat of these outcomes is enough to constrain most sensible parties.
Each side also is constrained by several other factors, although these
factors can change over the course of the litigation. These are the resources
available to the lawyers, and they can be depleted or replenished depending
on circumstances.

and “[y]ield indefensible terrain—ostentatiously.” Antonin Scalia & Bryan A. Garner,

Making Your Case: The Art of Persuading Judges 19–21 (2008).
9. David McCullough, John Adams 68 (2008). The full quotation, from Adams’s defense of
British soldiers involved in the Boston Massacre, is: “Facts are stubborn things, and whatever
may be our wishes, our inclinations, or the dictums of our passions, they cannot alter the
state of facts and evidence.” Id.
10. See generally Richard A. Posner, The Federal Courts: Challenge and Reform
(1996).
11. For more on how structural pressures affect judges, see § 3.3.
12. See generally Patrick Dillon & Carl M. Cannon, Circle of Greed: The Spectacular
Rise and Fall of the Lawyer Who Brought Corporate America To Its Knees (2010)
(describing federal indictment of plaintiffs’ lawyers for kickback scheme).
13. See Diaz-Fonsea v. Puerto Rico, 451 F.3d 3, 25–26 (1st Cir. 2006) (affirming Rule 37 sanctions
against defendant who did not produce relevant documents in discovery).
xvi The Strategic Approach to Class-Action Litigation

Money. Litigation costs money, lots of it.14 Without a steady flow of money,
vendors will not process documents, experts will not develop opinions, and
lights will not stay on in offices.15
Time. Time is the ultimate budget constraint. Everyone is allowed 24 hours
per day, no more. When time is short, lawyers are prone to make unforced
errors.16 Moreover, because of forces like inflation and impatience, money is
worth more today than it is tomorrow.17
Each of these forces operates in the same way on the plaintiff and the
defendant. Both sides must contend with the facts of the case, the state of the
law, and the individual characteristics of the court in which they litigate. And
both sides must make the most of the time and the money available to them.
However, the environments in which each side makes these strategic deci-
sions differ greatly, and those differences have significant effects on the deci-
sions each side will make. Therefore, it is fruitful to discuss the structural
pressures both the plaintiff and the defendant face.

The Parties

There is a deep ideological divide between plaintiffs’ and defense lawyers.

Given the high stakes and high visibility of aggregated litigation, it is not
surprising that class actions are controversial.18 Advocates see class-action
litigation as a way for large numbers of victimized “Davids” to collectively
obtain justice from a misbehaving “Goliath” when individualized lawsuits
are economically impractical.19 Opponents see class-action litigation as a
means by which profit-motivated lawyers exploit the in terrorum nature of

14. See Butler v. Home Depot, 1997 WL 605754 at *1 (N.D. Cal. Aug. 29, 1997) (class counsel
advanced more than $1,000,000 in expenses for litigation). Litigation can have other costs as
well. Money is just most easily measured.
15. See Luttwak, Strategy 41 (“In the realm of strategy, therefore, economic principles collide
with the demands of war-effectiveness.”); see also Jonathan Harr, A Civil Action 346–51
(1996) (discussing effects of running out of funds in mid-litigation).
16. Clausewitz, On War 207.
17. See Dixit & Nalebuff, The Art of Strategy 354–55; Dillon & Cannon, Circle of
Greed 84-85 (describing how slowed pace placed financial pressure on plaintiffs’ lawyers).
18. This is a common phenomenon. Back in 1806, the famed military strategist Carl von
Clausewitz observed that “[e]ven where there is . . . no animosity to start with, the fighting
itself will shake up hostile feelings.” Clausewitz, On War 138.
19. See Katz v. Carte Blanche Corp., 496 F.2d 747, 772 (3d. Cir. 1974) (“the social desirability of
consumer class actions was to insure that a David plaintiff has a Goliath capability against the
Goliath propensities of his adversary . . .”) (Aldisert, J. dissenting); see also Dillon &
Cannon, Circle of Greed 15 (plaintiffs’ lawyers “viewed themselves as avenging angles for
the little people case on the slag heap of free enterprise”).
 The Parties xvii

an aggregated case to extort windfall settlements from unpopular companies

or industries.20 The primary reason for these different caricatures of class
actions is that plaintiffs and defendants live in worlds that are structured dif-
ferently. (There are arguably different personality types separating most
plaintiffs’ lawyers from most defendants’ lawyers, which result in each side
approaching the risks of litigation in different ways. But it is difficult to say
whether the structures attract the personality types, or are the product of
them.)
In this book, we refrain from judging the motives of either side. Rather
than argue about whether class actions prompt greedy plaintiff’s lawyers to
extort nuisance settlements from blameless defendants, or empower socially
conscious plaintiff’s lawyers to take on unethical corporations, we assume that
some lawsuits are closer to the former caricature, and some to the latter. From
a strategic standpoint, it matters less which side is in the right than which side
is making the right moves. We will talk about goals and incentives, but those
discussions are general and descriptive. Generally, plaintiffs’ counsel wants to
win the largest possible recovery for his clients at the minimum possible
expense, while defense counsel wants to put the litigation behind his client
with a minimum of expense and effort.
Plaintiffs. Class-action plaintiffs (or, more accurately, their lawyers) are
entrepreneurs.21 They must finance their entire lawsuit up front, with no guar-
antee of return, a high risk of loss, and the small possibility of a substantial
return-on-investment.22 A plaintiffs’ lawyer does not have to be completely

20. See, e.g., Myrian Gilles, Opting Out of Liability: The Forthcoming, Near-Total Demise of the
Modern Class Action, 104 Mich. L. Rev. 373, 373–74 (2005) (characterizing “moralist corner”
of class-action critics as offering “the somewhat less nuanced objection that plaintiffs’ law-
yers are, well, immoral” and “focus[ing] on the low state of ethical practice in class actions
and the sell-out lawyers who, for millions in fees, are willing to sign away the rights of tens of
thousands of faceless and lawyerless class members”) (internal quotations omitted).
21. The existence of entrepreneurial class-action lawyers is well documented by scholars on both
sides of the plaintiff-defendant divide. See John C. Coffee Jr., The Regulation of Entrepreneurial
Litigation: Balancing Fairness and Efficiency in the Large Class Action, 54 U. Chi. L. Rev. 877,
882–83 (1987); Myrian Gilles & Gary B. Friedman, Exploding the Class Action Agency Costs
Myth: The Social Utility of Entrepreneurial Lawyers, 155 U. Pa. L. Rev. 103, 135 (2006) (“the
overwhelming majority of consumer class actions are lawyer-initiated and lawyer-driven; the
claims are developed by lawyers who then present the litigation opportunity to individuals or
entities with standing to sue”).
22. Jane Schapiro, Inside a Class Action: The Holocaust & the Swiss Banks (2003) 40,
108–09 (describing plaintiffs’ funding issues) Cf. In re Cendant Corp. Sec. Litig., 404 F.3d 173,
194 (3d Cir. 2005) (noting that, in securities cases, “one or more attorneys or firms will often
perform substantial work on behalf of the class during the period prior to appointment of a
lead plaintiff. Throughout this time, counsel will have no guarantee that their client will be
appointed lead plaintiff, or that the lead plaintiff ultimately appointed will select them as lead
counsel.”).
xviii The Strategic Approach to Class-Action Litigation

self-funding; alternative methods of financing do exist.23 But make no mis-

take: money is critical to prosecuting a class action against a well-financed
corporate or government defendant.24
As a result, to maintain a stream of revenue that will finance future cases,
most plaintiffs’ lawyers treat their cases like investment products.25 They
invest substantial resources into promising cases, and they perform due dili-
gence before pursuing a given theory.26 Plaintiffs’ lawyers tend to be risk-
neutral to risk-seeking. While their worst-case outcome involves spending
large amounts of time and money for no return, the best case involves a large
return for comparatively little investment.
Plaintiffs’ counsel have two sets of adversaries to watch: the defendants,
and other plaintiffs’ lawyers. The more obvious adversary—the defendant—
will test the merits of the case at every stage—hoping either to defeat it com-
pletely, or to induce plaintiffs’ counsel to agree to a de minimis settlement.
Less obvious, but of more interest, is the fact that a plaintiff’s lawyer’s
other adversaries are other plaintiffs’ counsel. This competition plays out on
a number of fronts: Plaintiffs’ counsel will compete to identify, frame, and file
the best cases first; to secure appointment as lead counsel in consolidated
proceedings;27 and to obtain the greatest share of any fee award. If excluded
from a given class action, competing counsel may object to other lawyers’
proposed class-wide settlements to justify sharing in the fee recovery
generated by the settlement.28 This intense competition among plaintiffs’

23. For a more detailed discussion of third-party litigation financing, see Marial Rodak, It’s
About Time: A Systems Thinking Analysis of the Litigation Finance Industry and Its Effect on
Settlement, 155 U. Pa. L. Rev. 503, 518–19 (2006) (summarizing proponents’ arguments);
John Beisner, et al., Selling Lawsuits, Buying Trouble: Third Party Litigation Funding in the
United States, U.S. Chamber Institute for Legal Reform (Oct. 2009) (summarizing opponents’
arguments).
24. William Greider, Is This America’s Top Corporate Crime Fighter?, NATION, Aug. 5, 2002, at
11, 14 (“I saw in those days that, if the plaintiffs’ lawyers had two things—money and brains—
they could do it. But money was the most important thing . . .”) (quoting William Lerach).
25. See Blair v. Equifax Check Serv., 181 F.3d 832, 834 (7th Cir. 1999) (“Many class suits are pros-
ecuted by law firms with portfolios of litigation, and these attorneys act as champions for the
class even if the representative plaintiff would find it uneconomical to carry on with the case.
These law firms may carry on in the hope of prevailing for a single plaintiff and then winning
class certification (and the reward of larger fees) on appeal, extending the victory to the
whole class.”) (internal citation omitted).
26. See Note, Risk-Preference Asymmetries in Class Action Litigation, 119 Harv. L. Rev. 587, 594
(2006) (because class-action lawyers advance litigation costs to plaintiffs, they operate in a
“mixed decision frame” similar to a traditional investor).
27. See In re Cendant Corp. Sec. Litig., 404 F.3d 173, 181 (3d Cir. 2005) (noting “copycat com-
plaints” that were “entrepreneurial efforts taken by firms attempting to secure lead counsel
status”).
28. Cf. id. at 184 (“Of the forty-five excluded firms and attorneys, fourteen objected and requested
attorneys’ fees.” The district court rejected all of those fee petitions.).
 The Parties xix

counsel29 is nothing new. Sixty-five years ago, Franklin Wood reported to the
New York Chamber of Commerce that lawyers for plaintiffs in shareholder
derivative suits frequently jockeyed for position as “general” counsel in charge
of the litigation, which would allow them to collect more fees.30
That trend has continued to the present day.31 (In fact, it may have been
intensified by the passage of the Class Action Fairness Act in 2005.)32 A deci-
sion in the U.S. Court of Appeals for the Third Circuit, In re Cendant
Corporation Securities Litigation,33 provides a recent example of how intense
the competition among plaintiffs’ firms can become.
The Cendant litigation arose out of a classic stock drop: In 1998, the value
of Cendant corporation’s stock fell 47% after it announced that it would have
to restate its 1997 financial statements because of what it called “accounting
irregularities,” and what the plaintiffs called fraud.34 Between April and
August 1998, various plaintiffs’ firms filed at least 64 lawsuits connected to
the restatement.35 The U.S. District Court appointed three public pension
funds as Lead Plaintiffs, and those funds retained two law firms to serve as
Lead Counsel.36
The Lead Plaintiffs and Lead Counsel ultimately settled the litigation for
$3.2 billion in damages and $55 million in attorneys’ fees.37 While 58 law
firms had participated in the litigation in some form, the Lead Counsel split
their fees with only 12 other firms.38 Fourteen of the 45 excluded firms

29. Economists sometimes refer to industries like these—where individuals on the bottom tier
make little, those at the top make orders of magnitude more, and fierce competition results—
as “tournaments.” See Steven D. Levitt & Stephen J. Dubner, Freakonomics: A Rogue
Economist Explores the Hidden Side of Everything (2005) 98–106 (explaining tour-
nament industries in context of competition among drug dealers).
30. Franklin Wood, N.Y. Chamber of Commerce, Survey and Report Regarding
Stockholders’ Derivative Suits, 112 (1944), cited in Stephen J. Choi and Robert B.
Thompson, Securities Litigation and its Lawyers: Changes During the First Decade after the
PSLRA, 106 Colum. L. Rev. 1489, 1491 & n.4 (2006).
31. See, e.g., In re Initial Public Offerings Sec. Litig., 471 F.3d 24, 27 (noting that consolidated case
began when “thousands of investors filed class actions against 55 underwriters, 310 issuers,
and hundreds of individual officers” alleging violations of federal securities laws).
32. See Howard M. Erichson, CAFA’s Impact on Class Action Lawyers, 156 U. Pa. L. Rev. 1593,
1622 (2008) (noting that federal courts are more likely to consolidate disparate class actions
and name a single lawyer or committee as “lead counsel”). If there is only one chance to
control litigation on a given cause of action, the competition to control that litigation may be
fiercer than if the lawyer can simply file a competing lawsuit in another jurisdiction.
33. 404 F.3d 173 (3d Cir. 2005).
34. In re Cendant Corp., 404 F.3d at 182.
35. Id.
36. Id.
37. Id. The $55 million fee was approved after the Third Circuit indicated it would view an award
of $262 million as excessive. Id. It noted that $55 million was only 1.7% of the $3.2 billion at
stake, and that the lawyers had collectively put more than 35,000 hours into the case. Id.
38. Id.
xx The Strategic Approach to Class-Action Litigation

objected and requested separate awards of attorneys’ fees; when the District
Court rejected those requests, they appealed.39
The appeals took various forms: Two firms asked the court to certify an
additional “stub” class for their clients, who had fallen outside the certified
class period;40 three firms—which had made separate requests for payment to
the District Court that were denied—appealed the denial of their fee petitions
on the ground that they had added value to the case by preparing and filing
complaints.41 Noting that “simply doing work on behalf of the class does not
create a right to compensation; the focus is on whether that work provided a
benefit to the class,”42 the Third Circuit panel rolled up its collective sleeves
and sifted through the attorneys’ bills.
We will refrain from a blow-by-blow recounting of the court’s decisions
here, but it is worth noting two observations it made as it denied the appeal,
which summarize the strategic pressures the plaintiffs’ counsel face:

“each firm’s complaint is the price of admission to a lottery that might result in
it being named lead counsel”43
“the lead plaintiff, and indeed the entire class, has an incentive to deny compen-
sation to non-lead counsel.”44

There is no question that these pressures drive a number of plaintiffs’ strategic

decisions.45
Defendants. Whereas plaintiffs’ counsel are entrepreneurial and competi-
tive, defense counsel tend to be more client-driven. They generally charge by
the hour (although this is changing as corporate clients pressure their lawyers
to accept fixed litigation budgets), and are paid as they go by their clients.
Defense counsel tend to be somewhat—though progressively less—insulated
from the rough-and-tumble world the plaintiffs inhabit. This is not to say that
defense firms do not fight to attract clients, or worry about interference from
other firms. Indeed, competition among defense firms to represent corporate
clients has grown more intense, a progression best illustrated by the develop-
ment of formalized Request for Proposal processes in which companies

39. Id. at 184.

40. Id. at 184–85.
41. Id. at 184.
42. Id. at 191 (emphasis in original).
43. Id. at 196.
44. Id. at 198.
45. As the Cendant court pointed out, those strategic pressures have can have both good and bad
effects on counsel. Id. at 199 (observing that “lead plaintiffs and lead counsel are likely to be
repeat players in the securities class action business. They will therefore want to develop a
reputation for fair dealing-especially since lead counsel in one class action are likely to be
non-lead counsel in another, and will therefore want to maintain good relations with the rest
of the securities plaintiffs’ bar”).
 The Parties xxi

pit defense firms against each other for access to their business. However,
unlike competition among plaintiffs’ firms, competition for work among
defense firms occurs at a level unlikely to affect the strategic choices within
the litigation itself.
As a result, defense strategies tend toward the conventional, avoiding bold
moves. Often, a defendants’ counsel’s strategy will weigh the costs and risks
of the immediate move against the marginal benefit of that move.46 Defense
counsel also are constrained by their clients’ desire to minimize expenses.
When the business cycle is good, oversight of fees tends to be looser; but
when times are tighter, clients exert more scrutiny over bills. Finally, defense
counsel are constrained by their client’s strategic goals. Those goals will
include winning the litigation; but for the defendant, winning isn’t every-
thing. Most corporate defendants also are concerned with maximizing stock
price, and maintaining good public relations.47 As a result, the defendant will
not always act solely in the interest of winning the immediate litigation.
Defense counsel view their defense of class actions, much like their work
on individual cases, as services for their client. The service may be on a larger
scale—the defendant may have a chance to sell more hours—but a case is still
a case. The steps involved in defending a proposed class action are largely
similar to those involved in defending a more conventional single-plaintiff
action. A lawyer defending an individual product-liability lawsuit (for
example) would recognize most of the strategies employed by a lawyer
defending a product-liability class action. Defendants tend to be risk-neutral
to risk-averse; after all, they only stand to lose from litigation. Even a success-
ful outcome requires the expenditure of attorneys’ fees and other litigation-
related expenses.
Throughout this book, many of the strategic choices made on each side
will be shaped by these differences between counsel. Plaintiffs’ counsel will
seek to minimize their investment and maximize their opportunity for an
early, lucrative payout. Defense counsel will seek to implement a litigation
defense that the client views as cost-effective and effective on the merits.

46. Much has been written about the problems with (and likely demise of) the billable hour. See,
e.g., Susan Saab Fortney, The Billable Hours Derby: Empirical Data on the Problems and
Pressure Points, 33 Fordham Urban L.J. 171 (2005). However, it is still the most common
method of paying for litigation defense.
47. See Chapters 4, 8. See also Luttwak, Strategy 212 (discussing logic of long-term decisions
in both presence and absence of conflict).
xxii The Strategic Approach to Class-Action Litigation

Methods

After more than 30 years (combined) of litigating class actions, we have

developed some finely honed instincts about what issues are likely to arise in
a given lawsuit. We rely on that experience and those instincts as our baseline
in writing this book. However, we supplement that personal experience with
a thorough review of scholarly literature on class actions, and a comprehen-
sive review of the various reported opinions on class actions. We have done
this, not just to confirm our understanding of the law, but to see what the
reported cases tell us about which tactics the parties have employed, and how
successful those tactics have proven.
Because individual strategies continually evolve, there is no way we could
predict every strategy that would be useful when litigating class actions. Our
approach instead is to identify the points in class-action litigation that force
strategic choices, identify those choices, and discuss the most common tactics
each side employs. Such a body of knowledge should allow most lawyers to
avoid re-inventing the wheel, and provide further basis for research on the
most effective tactics available.
While this work is ambitious, we do not aim to make it a treatise on class
actions. (Several thorough treatises and casebooks already exist, and there is
no need for another.) As a result, we have cited only enough law to give the
reader an idea of its current state, what we would consider a “most represen-
tative” collection. We cite mostly court-of-appeals cases, and have tried to
keep any editorializing out of the descriptions. We also have stayed away
from unpublished cases.
However, we have used cases for a second, equally important purpose: to
illustrate each side’s tactics. To that end, we have used whatever example
seems to best illustrate the strategy or tactic we are describing. We still try to
avoid unpublished cases, but sometimes judges feel freer to describe the tacti-
cal maneuverings in their courtroom when the opinion will not be published
in a recognized report. We also have used empirical data when possible. And,
at times, we have relied on anecdotal evidence about a particular tactic when
we could document it in some other way.
We have also included exemplar briefings from a case one of the authors
(Anderson) litigated through an eve-of-trial settlement. The case, Chamberlan
v. Ford Motor Company, involved allegations of a defect in the intake mani-
fold (a device that routes air and antifreeze through the engine) installed in
certain vehicles.48 It was extensively litigated at a high level of skill by counsel
for both sides. We have referred to these exemplar briefs to illustrate

48. For more on the case, see generally Chamberlan v. Ford Motor Co., 314 F. Supp. 2d 953 (N.D.
Cal. 2004) (denying defendant’s motion to dismiss); Chamberlan v. Ford Motor Co., 402 F. 3d
952 (9th Cir. 2005) (denying defendant’s Rule 23(f) petition for interlocutory appeal of class
 Methods xxiii

various places where the demands of a class action demand different tactical
moves than individual litigation.
A note about language. Plaintiffs are most often individuals of either sex.
Class-action defendants are almost always corporations or institutions. For
clarity’s sake, we refer to a generic plaintiff or plaintiffs’ counsel as “she,” and
a generic defendant as “it.” Everyone else in the litigation (judges, witnesses,
pundits) are, by process of elimination, referred to as “he.”
Finally, in a spirit of full disclosure, we acknowledge that we both special-
ize in defending class actions, and that neither of us has ever prosecuted one.
(Most class-action practitioners fall exclusively into either the plaintiffs or
defendants’ camp, although some have done a token amount of work on “the
other side” to develop perspective or the ability to advertise that they know
both sides of the divide.)
This raises a fair question: “How can a pair of defense lawyers write a book
that fairly and accurately describes both the plaintiffs’ and defendants’ strate-
gies?” Our best answer is that we hope the proof is in the reading. In writing
this book, we have aimed to provide an unbiased analysis of the strategic
choices facing both sides in class actions. To that end, we have tried not to
speculate about plaintiffs or their motives. Our discussions of the plaintiff’s
side of class-action litigation rely heavily on personal interviews with plain-
tiff’s lawyers, or statements or writing by plaintiff’s lawyers. We also have
tried to be explicit about our assumptions and our biases.
In the end, we have either succeeded in providing an unbiased analysis or
we have not. If we have, that should be reason enough to trust our analysis. If
we have not, our biases still may make for useful reading. Defendants should
get a good sense of strategy from their fellow-traveler authors, and plaintiffs
should get an extensive view of how the other side thinks.

certification); Chamberlan v. Ford Motor Co., 369 F. Supp. 2d 1138 (N.D. Cal. 2005) (granting
in part and denying in part defendant’s motion for summary judgment).
 CHAP TER

1
What Class Actions are and Why they Exist

§ 1.1 The Tradition of Single-Plaintiff Lawsuits 2

§ 1.1.1 The Limitations of Single-Plaintiff Lawsuits 3

§ 1.2 Methods of Aggregating Parties 3

§ 1.2.1 Joinder (Rule 20) 4
§ 1.2.2 Intervention (Rule 24) 6
§ 1.2.3 Consolidation (Rule 42) 7
§ 1.2.4 Multi-District Litigation 8
§ 1.2.5 Other Forms of Aggregation 9

§ 1.3 Class Actions 11

§ 1.3.1 Benefits of the Class-Action Device 12
§ 1.3.2 Costs of the Class-Action Device 15
2 Chapter 1 What Class Actions are and Why they Exist

The Rule 23 class action is a recent invention. Any number of legal treatises
and law review articles will provide the same basic historical overview of how
the class action evolved into its current state.1 According to these accounts,
class actions started with various group litigation devices in medieval England
(usually involving the imposition of taxes or tithes). In the United States,
these evolved into “spurious” class actions.2 Finally, in 1966, the Advisory
Committee for the federal rules enacted Federal Rule of Civil Procedure 23,
which authorized judges, under specified conditions, to certify lawsuits for
prosecution by a “class representative” on behalf of large numbers of “class
members,” with the resulting judgment binding on all class members.3
Subsequent amendments have further defined the process under which indi-
vidual litigation may be certified as a class action.4
This chapter does not describe the history of the class action, nor is it an
extended analysis of the policy implications of class actions. Instead, it exam-
ines what problems the modern class action is designed to address, and the
costs and benefits of using a class action for those purposes. This discussion
should accomplish two goals: (1) provide a functional account of what class
actions are and what purposes they serve; and (2) inform practitioners of the
various concerns they likely will have to address when litigating a class action.

§ 1.1 The Tradition of Single-Plaintiff Lawsuits

Ordinarily, a lawsuit is filed by a single plaintiff against a single defendant, and

the plaintiff produces specific evidence of how that defendant unlawfully
harmed her.5 Most of the time, the single-plaintiff, or “individual,” lawsuit is still
an effective vehicle for resolving a dispute because it allows each side to intro-
duce all relevant evidence that supports its claims or defenses, enabling the court
to rule as necessary on the legal sufficiency of these claims, and the jury to find
facts that lead to a judgment in favor of either the plaintiff or the defendant.
Following the so-called “American Rule,”6 each side bears its own fees in
individual litigation. However, in certain instances, a state may have passed

1. See generally Stephen C. Yeazell, From Medieval Group Litigation to the Modern
Class Action (1987).
2. Fed. R. Civ. P. 23, Advisory Committee Notes, 1937 Adoption and 1966 Amendment.
3. Fed. R. Civ. P. 23, Advisory Committee Notes, 1966 Amendment.
4. Fed. R. Civ. P. 23, Advisory Committee Notes, 1998 Amendment, 2003 Amendments.
5. See Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 155 (1982) (class action device is “an exception
to the usual rule that litigation is conducted by and on behalf of the individual named parties
only.”); see also Mark Moller, The Rule of Law Problem: Unconstitutional Class Actions and
Options for Reform, 28 Harv. J.L. & Pub. Pol’y 855, 860 (2005) (“The common law typically
has preferred individualized proof of liability.”).
6. For more discussion of the effect of the “American rule” on litigation strategy, see § 10.2.
 Methods of Aggregating Parties 3

legislation that awards attorneys’ fees either to a prevailing plaintiff or, more
rarely, to any prevailing party (including the defendant). This legislation can
include consumer-fraud statutes, labor-relations statutes, or even statutes
that recognize contractual fee-shifting provisions.7

§ 1.1.1 The Limitations of Single-Plaintiff Lawsuits

Despite their many advantages, as a practical matter single-plaintiff lawsuits

can be inadequate for dealing with situations in which a defendant has engaged
in unlawful conduct that harms a large number of people to a modest degree.
To begin, each lawsuit must be tried separately, in front of a separate fact-
finder, and a separate legal referee. These separate lawsuits can lead to incon-
sistent outcomes—in which a court finds the defendant’s conduct unlawful in
one case, but lawful in another. These inconsistencies can undermine public
respect for the judicial system, which—in principle—should reliably deter-
mine “the truth” about the legal propriety of a defendant’s actions. They also
raise fairness concerns: due to happenstance, two similarly situated plaintiffs
could receive different outcomes from litigation against the same defendant,
even though those claims rely on the same facts and the same law.
Bringing a lawsuit also costs money. The plaintiff must hire a lawyer, who,
in turn, must spend money developing the facts and law of the case: research-
ing the elements of her claims, hiring experts, reviewing documents and other
evidence. If the defendant’s liability to the plaintiff is clear, and if the claim is
worth a large amount of money (because the plaintiff’s compensatory dam-
ages are high, punitive damages are likely, or the losing defendant will be
liable for attorneys’ fees), then it makes sense for the plaintiff to incur the up-
front cost of pursuing the lawsuit. But if the defendant’s liability is harder to
prove (because the law in the area is not well-developed, or proving liability
will require expensive discovery and expert testimony) and the plaintiff’s
individual claim is worth a small amount of money (because her individual
compensatory damages are small), then it makes no sense for her to pursue
the claim and it will be difficult to find a lawyer to bring that individual case.

§ 1.2 Methods of Aggregating Parties

Although class actions are the most recognizable form of aggregated litigation,
lawsuits brought on behalf of large numbers of people that seek substantial
monetary awards and injunctions against continued unlawful conduct take

7. For more on fee-shifting rules, see § 8.4.1.

4 Chapter 1 What Class Actions are and Why they Exist

many different forms, and methods for aggregating litigation are constantly
evolving. There are a number of methods that share some common features
with class-action practice. In fact, the original revision of Rule 23 borrowed
language from Rules 19 (which governs mandatory joinder) and 24 (which
governs intervention).8
In practice, when a lawyer represents a large number of people pursuing
similar claims against the same defendant (for example, personal injury
claims against the maker of an allegedly defective drug), he will develop effi-
cient ways to avoid reinventing the wheel for each claim, including preparing
joint (or cloned) pleadings, serving identical discovery requests and responses,
using joint experts, and negotiating for settlement on behalf of the group as
opposed to any individual.9
Similarly, lawyers representing a defendant being sued by a large group of
people asserting similar claims (for example, the lawyer for the defendant
drug company) will also develop strategies for avoiding redundancy, litigat-
ing common issues in uniform fashion, but also seeking to debate dissimilar
claims separately, and insisting on individualized discovery and trials where
substantive legal or evidentiary issues may differ from plaintiff to plaintiff.
In the discussion below, we provide a brief overview of these other meth-
ods of aggregation, and their respective limitations.

§ 1.2.1 Joinder (Rule 20)

Conceptually, the simplest method of aggregating claims is just to join them

in the same lawsuit. Rule 20 allows several plaintiffs asserting similar claims
against the same defendant to bring their individual claims in a single lawsuit.
The Rule provides that:

Persons may join in one action as plaintiffs if:

(A) they assert any right to relief jointly, severally, or in the alternative with
respect to or arising out of the same transaction, occurrence, or series
of transactions or occurrences; and
(B) any question of law or fact common to all plaintiffs will arise in the
action.

8. See Roger H. Trangsrud, James H. Humphreys Complex Litigation Lecture: The Adversary
System and Modern Class Action Practice, 76 Geo. Wash. L. Rev. 181, 184–85 (2008) (discuss-
ing how Rule 23(b)(1)(a)–(b) “borrow language from Rule 19—the indispensable parties
rule—and Rule 24—the intervention rule”).
9. Howard M. Erichson, Beyond the Class Action: Lawyer Loyalty and Client Autonomy in Non-
Class Collective Representation, 2003 U. Chi. Legal F. 519, 533 (“Regardless of whether plain-
tiffs’ claims are formally aggregated, the lawyer representing many similarly situated clients
necessarily handles the litigation on a group basis.”).
 Methods of Aggregating Parties 5

In certain cases, such as the determination of property rights, joinder of par-

ties allows for a full airing in a single forum of all issues that might possibly
arise in a controversy.10 The principal advantage of joinder is that—compared
to trying the same claims individually—it may reduce costs by allowing the
joined parties to pool their resources in determining common issues.11 In
addition, each individual claimant retains full control over her own claims,
allowing her a full voice in strategy decisions. There is no doctrinal limit to
how many parties may join in a single lawsuit.
The primary drawback of joinder is that, since each individual claimant
has an independent voice in the proceedings, all strategy decisions must be
negotiated, and those negotiations will not always proceed easily.12 The more
parties joined, and the more complex the issues to be tried, the more likely
that the trial will tax the ability of a jury to keep track of the facts to be deter-
mined.13 And, as that confusion increases, so does the possibility of prejudice
to some party, whether one of the plaintiffs or one of the defendants.14 Indeed,
even settlement of a joined action may not benefit all plaintiffs equally.15

10. Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 119–20 (1968) (discussing
efficiencies from joinder of claims).
11. Richard Epstein, Class Actions: Aggregation, Amplification and Distortion, 2003 U. Chi.
Legal F. 475, 486 (2003) (“[T]he hope of parties in a permissive joinder situation is that the
cost of suit will rise less rapidly than the value of the amalgamated claims, so that in union
they will find strength.”); Note, The Challenge of the Mass Trial, 68 Harv. L. Rev. 1046, 1047
(1955) (“If litigation were divided among several trials, either by issues or by parties, the
aggregate time required to dispose of it might be greater than the time required for a single
trial. There might be much duplication in the introduction of evidence, and the administra-
tive details of a trial, such as the selection of jurors, would be repeated several times.”).
12. Epstein, Class Actions: Aggregation, Amplification and Distortion, 2003 U. Chi. Legal F. at
486 (“[T]ypically [joined parties] quickly learn that these negotiations are fraught with dif-
ficulty, for someone has to put together the pool that divides expenses and recovery, and
someone has to decide how much each claimant should contribute, both initially and
thereafter.”).
13. Note, The Challenge of the Mass Trial, 68 Harv. L. Rev. at 1046–47.
14. See In re Brooklyn Navy Yard Asbestos Litig., 971 F.2d 831, 853 (2d Cir. 1992) (“The systemic
urge to aggregate litigation must not be allowed to trump our dedication to individual jus-
tice, and we must take care that each individual plaintiff ’s—and defendant’s—cause not be
lost in the shadow of a towering mass litigation.”); Note, The Challenge of the Mass Trial, 68
Harv. L. Rev. at 1047 (“The presence of a large number of parties makes it difficult to give a
separate and informed consideration to each party’s case.”).
15. See, e.g., Howard M. Erichson, Beyond the Class Action: Lawyer Loyalty and Client Autonomy
in Non-Class Collective Representation, 2003 U. Chi. Legal F. 519, 525 (“Such mass collective
representation raises a number of problems. One is the problem of inequitable settlement
allocations among members of the collectively represented group, without the procedural
safeguards of class actions. Lawyers representing the mass of plaintiffs often have little or
no incentive to allocate settlements fairly among their clients, and may have incentives to
allocate settlements unfairly.”).
6 Chapter 1 What Class Actions are and Why they Exist

In addition, joinder cases, once resolved, only bind those parties actually
named in the lawsuit.16 As a result, plaintiffs have less settlement leverage
than they might if they could offer a global peace to the defendants on behalf
of all those who arguably were injured by the defendant’s conduct (whether
or not they chose to retain a lawyer and file a lawsuit at that time and in that
court).17
Traditional joinder actions also raise conflicts of interest. If the various
plaintiffs’ interests are not identically aligned, then the lawyer representing
them may find himself continually choosing between the best interests of the
group and the best interests of an individual client.18 This conflict may be
particularly acute when settling an aggregated case, where the defendant
understandably will demand a release from all plaintiffs.19

§ 1.2.2 Intervention (Rule 24)

While it is the most common, joinder is not the only method of aggregation
available under the federal rules. A party may also intervene in (in other
words, insert herself into) a lawsuit brought by another plaintiff against a
defendant if the outcome of the litigation would materially affect her
legal rights. Rule 24 provides for both intervention of right and permissive
intervention:

(a) Intervention of Right.

On timely motion, the court must permit anyone to intervene who:
(1) is given an unconditional right to intervene by a federal statute; or

16. See, e.g., Id. at 524 (“In non-class litigation, the judgment binds only the named parties and
their privies, whereas a class action judgment binds the entire class, except those who have
opted out.”).
17. This is not to say that plaintiffs in joinder actions will enjoy no enhanced bargaining leverage.
See Id. at 533 (“In many cases, however, lawyers with large numbers of related claims negoti-
ate settlement of those claims either as an entire group or in bundles.”). Instead, it recognizes
that plaintiffs in joinder actions lack one important bargaining chip provided by other forms
of collective litigation.
18. Id. at 561–62. One issue that has arisen is which plaintiff should try her case first: The lawyer
will want to bring the strongest case first, either to prevent preclusion of certain issues or to
set a precedent for a high settlement value; individual plaintiffs, however, have strong incen-
tives (such as an immediate need for funds) to bring their own individual lawsuits first. See,
Mekdeci v. Merrell Nat’l Labs., 711 F.2d 1510, 1516–21 (11th Cir. 1983) (refusing to allow
counsel to withdraw from representing plaintiff who insisted on proceeding with litigation in
advance of other, arguably stronger, claimants with same counsel).
19. Erichson, Beyond the Class Action: Lawyer Loyalty and Client Autonomy in Non-Class
Collective Representation, 2003 U. Chi. Legal F. at 572 (“Worse yet, plaintiffs’ counsel may
have financial interests that conflict with equitable allocation of the settlement.”).
 Methods of Aggregating Parties 7

(2) claims an interest relating to the property or transaction that is the

subject of the action, and is so situated that disposing of the action may,
as a practical matter, impair or impede the movant’s ability to protect its
interest, unless existing parties adequately represent that interest.
(b) Permissive Intervention.
(1) In General.
On timely motion, the court may permit anyone to intervene who:
(A) is given a conditional right to intervene by a federal statute; or
(B) has a claim or defense that shares with the main action a common
question of law or fact.

Intervention most often occurs when there is some property, indivisible right,
or limited fund in dispute and the intervenor has a tangible interest in the
outcome of the dispute, meaning that she has a legitimate desire to ensure
that her legal interests are represented. Intervention “represents an accom-
modation between two potentially conflicting goals: to achieve judicial econ-
omies of scale by resolving related issues in a single lawsuit, and to prevent
the single lawsuit from becoming fruitlessly complex or unending.”20 While
denial of permissive intervention is rare,21 the fact that intervention is essen-
tially an “opt-in” procedure means that Rule 24 is rarely used to aggregate a
large number of parties.

§ 1.2.3 Consolidation (Rule 42)

Aggregation does not have to occur at the instigation of the parties. A federal
court may consolidate separately filed lawsuits before it that it finds to be
related. As Rule 42 states:

(a) Consolidation.
If actions before the court involve a common question of law or fact, the court
may:
(1) join for hearing or trial any or all matters at issue in the actions;
(2) consolidate the actions; or
(3) issue any other orders to avoid unnecessary cost or delay.

Since consolidation occurs at the discretion of the court, any party may move
for consolidation. Consolidation does not formally affect the rights of any of

20. United States v. Tex. E. Transmission Corp., 923 F.2d 410, 412 (5th Cir. 1991) (internal quota-
tions omitted).
21. See United States v. Pitney Bowes, Inc., 25 F.3d 66, 73 (2d Cir. 1994) (“Reversal of a district
court’s denial of permissive intervention is a very rare bird indeed”).
8 Chapter 1 What Class Actions are and Why they Exist

the individual parties in the litigation.22 Each party still must provide its own
proof or argument.23 Nor does consolidation necessarily last for the life of the
lawsuit; a court may separate the actions once it has resolved any common
issues.24 Still, consolidation allows common issues to be litigated together in
a more efficient fashion than would otherwise be possible, and ensures a uni-
form outcome for those issues.
If the consolidated lawsuits have been filed by different firms, then the
plaintiffs’ (and potentially, the defendant’s) lawyers will also face a challenge
in coordinating their efforts for the course of the consolidation.25

§ 1.2.4 Multi-District Litigation

In 1968, Congress created a mechanism for centralizing similar lawsuits filed

in multiple federal district courts, allowing these “multi-district” actions to be
consolidated in a single district court for pretrial proceedings, including
motions to dismiss, discovery, motions for summary judgment, and motions
for class certification (though not for trial).26 The purpose of multi-district
litigation (sometimes referred to as “MDL”) is to temporarily consolidate
lawsuits raising similar issues of law or fact so that those issues can be liti-
gated uniformly and efficiently before a single judge.27 Once the purpose of
the consolidation has been achieved, the court remands the cases to their
original district courts.28

22. Johnson v. Manhattan Ry. Co., 289 U.S. 479, 496–97 (1933) (“consolidation is permitted as a
matter of convenience and economy in administration, but does not merge the suits into a
single cause, or change the rights of the parties, or make those who are parties in one suit
parties in another”).
23. Id. at 496–97 (“consolidation is permitted as a matter of convenience and economy in admin-
istration, but does not merge the suits into a single cause, or change the rights of the parties,
or make those who are parties in one suit parties in another”).
24. Fed. R. Civ. P. 42 (b) (“For convenience, to avoid prejudice, or to expedite and economize, the
court may order a separate trial of one or more separate issues, claims, crossclaims, counter-
claims, or third party claims. When ordering a separate trial, the court must preserve any
federal right to a jury trial.”).
25. Erichson, Beyond the Class Action: Lawyer Loyalty and Client Autonomy in Non-Class
Collective Representation, 2003 U. Chi. Legal F. at 541.
26. 28 U.S.C. § 1407. The MDL panel is empowered to consolidate antitrust cases under the
Clayton Act for trial. Id. § 1407(h).
27. 28 U.S.C. § 1407 (a) (“transfers for such proceedings will be for the convenience of parties
and witnesses and will promote the just and efficient conduct of such actions”).
28. 28 U.S.C. § 1407(a); see also Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S.
26, 28 (1998) (“28 U. S. C. § 1407(a) authorizes the Judicial Panel on Multidistrict Litigation
to transfer civil actions with common issues of fact to any district for coordinated or consoli-
dated pretrial proceedings, but imposes a duty on the Panel to remand any such action to the
 Methods of Aggregating Parties 9

Multi-district litigation, like Rule 42 consolidation, poses special challenges

for competing plaintiffs’ firms that may have to coordinate efforts.29 Among
other issues, given the size of many MDL proceedings, some plaintiffs’ law-
yers may have to assume leadership positions over the others, either as lead
counsel or as members of a plaintiffs’ steering committee.30 As a result, MDL
cases (whether or not they are class actions) frequently assume many of the
characteristics of representative litigation.31 Multi-district litigation presents
mixed results for defendants as well. On the one hand, consolidating a large
number of single-plaintiff cases together for coordinated discovery into the
defendant’s alleged misconduct creates an environment in which the defen-
dant will be subjected to more searching, expensive, and disruptive discovery
than would occur in any single lawsuit standing alone. On the other hand,
MDL coordination allows the defendant to obtain some measure of control
over what might otherwise become an unwieldy mess of constituent actions,
with different judges directing it to provide different bundles of discovery to
different plaintiffs, or reaching inconsistent rulings on key legal disputes that
are uniform to all claims. At the same time, because the cases are coordinated
only for those matters that are truly common among all cases, the defendant
still retains the right to litigate plaintiff-specific issues on an individual basis,
either in the MDL proceeding or after the case is remanded to its original
district court.

§ 1.2.5 Other Forms of Aggregation

These methods are not the only ways to aggregate parties and claims that
share similar attributes. To begin, certain types of litigation, such as share-
holder derivative actions, bankruptcy proceedings, qui tam lawsuits, or law-
suits by individuals seeking wide-ranging injunctive relief may share
characteristics of representative litigation.32

original district at or before the conclusion of such pretrial proceedings.”) (internal quota-
tions and citation omitted).
29. Howard M. Erichson, Beyond the Class Action: Lawyer Loyalty and Client Autonomy in Non-
Class Collective Representation, 2003 U. Chi. Legal F. 519, 541; see also Charles Silver &
Geoffrey P. Miller, The Quasi-Class Action Method of Managing Multi-District Litigations:
Problems and a Proposal, 63 Vand. L. Rev. 107, 118 (2010).
30. Erichson, Beyond the Class Action, 2003 U. Chi. Legal F. at 531 (“Although non-class formal
aggregation, in theory, can gather claims in which each plaintiff is represented by counsel
on an individual basis, much of the work in practice is performed by lawyers on the MDL
steering committees or in other leadership positions.”).
31. Id. at 531 (“The dominant role of hub lawyers in MDL and statewide consolidations results
in de facto group representation.”).
32. See generally Id.
10 Chapter 1 What Class Actions are and Why they Exist

Collective actions. Certain statutes (like the Fair Labor Standards Act) for-
mally provide for collective actions.33 As in a class action, a plaintiff in a col-
lective action trades individual control over her lawsuit for the economies of
scale and bargaining leverage that come with group litigation.34 However,
FLSA collective actions follow different procedural rules than class actions.35
At the “notice stage” of the collective action, the trial court decides whether it
should notify other “similarly situated” employees who might wish to “opt
in” to the litigation.36 If discovery subsequently shows that the case should
not be a collective action, the court will decertify it.37
Private attorney-general actions. Some statutes will allow any interested
party to bring an action on behalf of the general public, in essence acting as
an attorney general.38 If there is no general statute allowing for private attor-
ney-general actions, a plaintiff may ask the government for permission to
bring a lawsuit on its behalf in a qui tam capacity.
For plaintiffs’ lawyers, private attorney-general actions of this type are an
attractive alternative to class actions. They do not have to persuade the judge
to certify a class and put them in charge of it because they already hold the
attorney general’s power to sue on behalf of the state’s citizens. Those same
laws also allow plaintiffs’ lawyers to collect a sizable fine if they prove a tech-
nical violation of the law (even if it caused no citizen any actual harm).39
Finally, plaintiffs’ counsel are more likely to litigate the case in a state court,
before an elected or appointed judge who may have incentives to favor the
state’s Attorney General over an out-of-state corporation.
Private attorney-general actions can raise ethical issues, however. The
private lawyers whom elected attorneys general hire to represent the state
sometimes are major financial contributors to their campaigns—an arrange-
ment that may have at least the appearance of impropriety.40 This has led to

33. 29 U.S.C. § 216(b). For more on FLSA collective actions, see § 3.1.2.
34. Howard M. Erichson, Beyond the Class Action: Lawyer Loyalty and Client Autonomy in
Non-Class Collective Representation, 2003 U. Chi. Legal F. 519, 529 (“As in a class action,
plaintiffs in collective representation relinquish most of their control over the litigation.
Relinquishing autonomy is a perfectly rational decision for many plaintiffs, given the
potential advantages of group representation.”).
35. De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 306 (3d Cir. 2003) (describing differences
between FLSA collective action and Rule 23 class action).
36. 29 U.S.C. § 216(b) (“No employee shall be a party plaintiff to any such action unless he gives
his consent in writing to become such a party and such consent is filed in the court in which
such action is brought.”).
37. Anderson v. Cagle’s, Inc., 488 F. 3d 945, 953 (11th Cir. 2007).
38. See, e.g., Cal. Bus. & Profs. Code § 17200; D.C. Code § 28-3905 (k)(1).
39. John H. Beisner, et al., Class Action “Cops”: Public Servants or Private Entrepreneurs?,
57 Stan. L. Rev. 1441, 1457–58 (2005).
40. This is similar to the “pay to play” issues in securities class actions. For more discussion of
this issue, see Chapter 3.
 Class Actions 11

statutes and court decisions in some states regulating the terms under which
attorneys’ general retain private counsel to represent the state.41
Informal aggregation. The plaintiff (or her lawyers) might also consider
informal aggregation, filing separate lawsuits in different jurisdictions, but
coordinating efforts with other plaintiffs’ firms filing similar suits. Informal
aggregation offers some distinct benefits to plaintiffs. Plaintiffs who share
information or divide labor may benefit from economies of scale, making
greater resources available for each individual case.42 Moreover, if the lawyers
are willing to coordinate their settlement discussions, they may enjoy
enhanced leverage in negotiation, much like that of other collective bargain-
ing efforts.43
The disadvantages of informal aggregation are similar to those of mass
joinder cases. However, there are some additional problems of which plain-
tiffs’ lawyers must be aware. First, counsel is likely to spend less time propor-
tionately developing the facts and legal issues; to litigate a case on the scale of
a class action, however, a lawyer must spend much of his time recruiting
plaintiffs to bring in enough cases to make litigation economically viable.44
An additional drawback to informal aggregation is that, because cases pro-
ceed to trial as individual cases, an individual plaintiff may not understand
the extent to which she has ceded control of the case to her lawyers. As a
result, the conflict-of-interest issues present in mass joinder cases are exacer-
bated in informal aggregation.

§ 1.3 Class Actions

Finally, we come to the class action. Under Federal Rule 23 (and its state
court equivalents), the litigation proceeds with an individual plaintiff

41. See, e.g., Florida Transparency in Private Attorney Contracting Act (signed April 14, 2010)
(requiring public disclosure of retention agreements and capping fees); Meredith v. Ieyoub,
700 So. 2d 478, 481 (La. 1997) (finding contingency fee agreement between state and private
firm violated the principles of separation of powers).
42. Erichson, Beyond the Class Action: Lawyer Loyalty and Client Autonomy in Non-Class
Collective Representation, 2003 U. Chi. Legal F. at 542 (“Scale economies result from the
sharing of information and divvying up of work among coordinating lawyers. The pooling of
resources permits greater investment in the litigation.”).
43. Id. at 542 (“To the extent lawyers coordinate their negotiation efforts, enhanced bargaining
leverage may result as well.”).
44. Howard M. Erichson, Beyond the Class Action: Lawyer Loyalty and Client Autonomy in Non-
Class Collective Representation, 2003 U. Chi. Legal F. 519, 547 (quoting Alex H. MacDonald,
Esq.: “the first and most pivotal thing to do in a mass tort is to get the cases, is to get the good
cases”).
12 Chapter 1 What Class Actions are and Why they Exist

(or small group of plaintiffs) who offer proof at trial of her individual claim.
If the individual plaintiff prevails in the litigation, then the class prevails. If
she loses, then the class loses. If she settles the case on a class-wide basis, that
settlement benefits the entire class, and the claims of the entire class are
released.
It should go without saying in the following discussion that the benefits of
class actions will be most pronounced in class actions in which there is a
strong fit between the facts of the case and the requirements of Rule 23. (These
requirements will be discussed at greater length in Chapter 2.) Similarly, the
costs of class actions will be most pronounced in class actions that are brought
(or certified) despite the fact that they do not fit well with Rule 23’s require-
ments. Which class actions are which? Lawyers (and, after the fact, scholars)
will continue to debate that question hotly on a case-by-case basis.

§ 1.3.1 Benefits of the Class-Action Device

Used properly, class actions confer certain benefits on society at large. They
can also save the judiciary time and resources. And they can provide finality
and certainty of outcome to the various parties.
Vindication of small, diffuse claims. When used properly, class actions can
level the playing field between powerful and well-funded corporations on the
one hand, and scattered individual consumers on the other.45 Small-value
claims may not be worth the expense to prosecute by themselves.46 By aggre-
gating multiple smaller claims into a single large lawsuit, a class action can
make litigation of lower-value claims viable.47

45. See, Mark Moller, The Rule of Law Problem: Unconstitutional Class Actions and Options for
Reform, 28 Harv. J.L. & Pub. Pol’y 855, 862–63 (2005).
46. Byron G. Stier, Crimtorts, Class Actions, and the Emerging Mass Tort Method, 17 Widener
L.J. 893, 896–97 (2008) (“[T]he most significant systemic concern comes not from large-
value claims, but from small-value claims. A small-value claim may not be sufficient to inter-
est a plaintiff ’s attorney in taking the case on contingency fee, and so, the case may not be
brought at all, risking underdeterrence, as well as problems for other tort goals of corrective
justice and compensation.”) (internal footnote omitted).
47. See, e.g., Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 161 (1974) (“A critical fact in this litigation
is that petitioner’s individual stake in the damages award he seeks is only $70. No competent
attorney would undertake this complex antitrust action to recover so inconsequential an
amount. Economic reality dictates that petitioner’s suit proceed as a class action or not at
all.”); Thorogood v. Sears, Roebuck & Co., 547 F.3d 742, 744 (7th Cir. 2008) (Posner, J.) (“The
class action is an ingenious device for economizing on the expense of litigation and enabling
small claims to be litigated . . . If every small claim had to be litigated separately, the vindica-
tion of small claims would be rare. The fixed costs of litigation make it impossible to
litigate a $50 claim . . . at a cost that would not exceed the value of the claim by many times.”).
See also Epstein, Class Actions: Aggregation, Amplification and Distortion, 2003 U. Chi.
Legal F. at 485 (“Quite simply the unthinkable becomes thinkable when the basic scenario
 Class Actions 13

The attraction of the class-action device is that it enables a plaintiff to bring

a “negative value” lawsuit. If someone believes she has a 50 percent chance of
prevailing in a lawsuit against a major corporation in a claim seeking $100 in
compensatory damages, she is unlikely to sue (and unlikely to find a lawyer to
represent her) because the cost of litigating far exceeds the potential outcome
of the case. On the other hand, if there is a 50 percent chance of proving that
a major corporation’s unlawful conduct caused 1 million people to incur
$100 each in losses, then a judge’s order certifying the case for class-wide liti-
gation creates a lawsuit whose expected value is $50 million (1 million x $100
x 0.50) in compensatory damages alone. Given these stakes, it makes eco-
nomic sense for the proposed class representative (and her lawyers) to pursue
the case vigorously, taking whatever discovery is needed and hiring whatever
experts are needed to prove liability. Even better from a plaintiff’s perspec-
tive, the mammoth economic threat such a suit poses makes it far more likely
the defendant will settle the lawsuit on negotiated terms.48
Judicial efficiency. There is also no question that, under the right circum-
stances, trying only one case instead of a thousand cases on identical facts
saves both the litigants and the judiciary time and money. For example, the
litigants do not have to file, and the judges do not have to decide, repetitive
briefings on the same legal issue.49 Even if the class action does not resolve
every contested issue between the class and the defendant, if the issues are
sufficiently similar, all parties may see some efficiencies from trying common
issues in a common forum.

changes—that is, what would otherwise be an unprofitable suit, given the low probability of
success and high costs of bringing the suit, becomes a profitable one.”).
48. This applies to class-wide settlements. It should be noted that, in some cases, defendants may
be more likely to settle small-dollar claims on an informally negotiated basis (through, say, a
customer-service program) than a formal class-wide settlement that includes extensive brief-
ing and payment of attorneys’ fees. A defendant’s propensity to settle claims on an individual
or aggregated basis will depend on a number of factors, including its perception of the merits
of those claims, its need for a final resolution to any disputes, and the expected additional
costs of either a class-wide settlement or a series of individual settlements.
49. Gen Tel. Co. of the Sw., 457 U.S. at 156 (“Class relief is peculiarly appropriate when the issues
involved are common to the class as a whole and when they turn on questions of law appli-
cable in the same manner to each member of the class. For in such cases, the class-action
device saves the resources of both the courts and the parties by permitting an issue potentially
affecting every class member to be litigated in an economical fashion under Rule 23 . . .”)
(internal quotations omitted); Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 550 (1974) (“A
federal class action is no longer ‘an invitation to joinder’ but a truly representative suit
designed to avoid, rather than encourage, unnecessary filing of repetitious papers and
motions.”); Newton v. Merrill Lynch, Pierce, Fennel & Smith, Inc., 259 F.3d 154, 192 (3d Cir.
2001) (“One of the paramount values in [class actions] is efficiency. Class certification enables
courts to treat common claims together, obviating the need for repeated adjudications on the
same issue.”) (internal quotations omitted).
14 Chapter 1 What Class Actions are and Why they Exist

The judiciary and the defendant can also benefit from a properly certified
class action. If thousands of individuals have the same grievance against the
same defendant, it is a waste of judicial resources to open thousands of dock-
ets in order to repeatedly litigate these essentially identical disputes.50 Why
commit hundreds or thousands of judges and juries to deciding questions
that may have already been litigated? And why force each plaintiff to go
through the expense of hiring a lawyer to bring the same case that has already
been brought dozens of times before? It is far more efficient, for all concerned,
to consolidate these identical claims for litigation in a single class action.
Deterrence. Class actions can deter some corporate malfeasance.51 Because
class actions allow claimants to band together in a single lawsuit, they increase
the likelihood that a defendant will be held accountable for its bad conduct.
And because the aggregated liability in a class action is greater than in a
smaller individual lawsuit, a defendant may think twice before engaging in
questionable conduct.
Regulation. Class actions also can provide ad hoc regulation of corporate
conduct, using litigation to obtain judicial determinations regarding the pro-
priety of defendants’ conduct that regulatory agencies have not provided.52
There is little question that, in certain cases, class actions have been effective
as a “fourth branch” of government, and have raised issues overlooked by
legislatures and regulatory agencies. That said, the question of whether the
United States should have a private “fourth branch” has been open to heated
debate.53
Certainty. Uncertainty poses a cost of its own.54 In fact, the rule of law (as
conceived in the United States) relies in part on consistent, predictable,

50. See, e.g., Jenkins v. Raymark Indus., 782 F.2d 468, 473 (5th Cir. 1986) (finding certification of
class “clearly superior to the alternative of repeating, hundreds of times over, the litigation of
the state of the art issues with, as that experienced judge says, ‘days of the same witnesses,
exhibits and issues from trial to trial.’”).
51. Blackie v. Barrack, 524 F. 2d 891, 903 (9th Cir. 1975) (noting “substantial role that the deter-
rent effect of class actions plays in accomplishing the objectives of the securities laws”);
Myriam Gilles & Gary B. Friedman, Exploding the Class Action Agency Costs Myth: The Social
Utility of Entrepreneurial Lawyers, 155 U. Pa. L. Rev. 103, 139 (2006) (“the primary goal in
small-claims class actions is deterrence”).
52. See, e.g., Beisner, et al., Class Action “Cops”: Public Servants or Private Entrepreneurs?, 57
Stan. L. Rev. at 1451 & n. 53 (quoting plaintiffs’ firm website: “Because the government has
limited resources, private parties need to pick up the slack. Our entire system of government
is based on private initiatives, and class actions are no different.”).
53. See generally John H. Beisner, et al., Class Action “Cops”: Public Servants or Private
Entrepreneurs?, 57 Stan. L. Rev. 1441 (2005).
54. See Jonathan T. Molot, A Market in Litigation Risk, 76 U. Chi. L. Rev. 367, 374 (2009) (“the
uncertainty surrounding a significant potential liability may increase a company’s cost of
capital by depressing its stock price or increasing the interest rate it must pay on its debt”).
 Class Actions 15

outcomes to litigation.55 Uncertainty costs can be particularly acute where

large numbers of potential plaintiffs may have similar claims. Disposing of
claims one by one presents plaintiffs with potential outcomes that may differ
based not just on different factual circumstances or legal rules, but also differ-
ent legal counsel, different judges, and different juries.56 Trying the issue once
in a single jurisdiction reduces the uncertainty from these variations. Similarly,
defendants may prefer to define and cap their exposure to liability rather than
face the unpredictability of recurring litigation in different jurisdictions.57

§ 1.3.2 Costs of the Class-Action Device

The class-action device is far from flawless, however. In fact, legislators, law-
yers, and legal scholars have debated its potential adverse consequences for
some time. We will focus on only a few of those consequences here, those of
most importance to the litigants themselves.58
Conflation of Issues. In cases where the disposition of the claims of thou-
sands of people may rise or fall on the proof of a single litigant’s claims, courts
may face a large temptation to ignore inherently individualized issues in
order to simplify the litigation.59

55. See Danny J. Boggs, Challenges to the Rule of Law: or Quod Licet Jovi Non Licet Bovi, 2007
Cato S. Ct. Rev. 7, 7 (“The rule of law means that, to the extent that fallible judges are
capable of adhering to it, the expectation is that when you go before a court, the outcome
depends on the merits of your case, not your political status, relation to the court, or other
personal characteristics. It does not mean that the law is a mechanical enterprise—it cannot
be. But it should mean that the judge will apply the same standards to the merits of your case,
as to those of any other case, whatever the color of your skin or the content of your
character.”)
56. See Byron G. Stier, Jackpot Justice: Verdict Variability and the Mass Tory Class Action, 80
Temple L. Rev. 1013, 1015, 1019 (2007) (“A growing, thorough body of empirical jury
research has detailed the substantial variability of jury verdicts.”).
57. William B. Rubenstein, Finality in Class Action Litigation: Lessons from Habeas, 82 N.Y.U. L.
Rev. 790, 830–31 (2007) (once a class action is completed, “[t]he defendant knows the extent
of its liability, if any, and the distraction of litigation ends. The defendant may now proceed
with its underlying business affairs more clearly.”).
58. Andrews v. Am. Tel. & Telegraph Co., 95 F.3d 1014, 1025 (11th Cir. 1996).
59. See, e.g., Cimino v. Raymark Indus., 751 F. Supp. 649, 652 (E.D. Tex. 1990) (certifying class for
trial and remarking “[i]t is not enough to chronicle the existence of [the asbestos] problem
and to lament congressional inaction. The litigants and the public rightfully expect the courts
to be problem solvers.”); and Cimino v. Raymark Indus., 151 F.3d 297, 338 (5th Cir. 1998)
(Garza, J., concurring) (reversing certification and observing “Judge Parker made a valiant
and admirable effort to take such action. Unfortunately, however, this Court is without the
power to sanction or condone his approach.”).
16 Chapter 1 What Class Actions are and Why they Exist

Class actions do not just risk ignoring important nuances in claims; they
also may magnify the errors resulting from ignoring those nuances.60 When
the claims of hundreds or thousands of plaintiffs depend on the outcome of a
single trial involving a single representative, the risk that a particularly strong
(or particularly weak) case will distort the outcome for the other claimants is
far greater.61 As the Seventh Circuit Court of Appeals (no stranger to efficiency-
based arguments) has warned:

[T]he benefits [of efficiency from class actions] are elusive. The central planning
model—one case, one court, one set of rules, one settlement price for all
involved suppresses information that is vital to accurate resolution. What is the
law of Michigan, or Arkansas, or Guam, as applied to this problem? Judges and
lawyers will have to guess, because the central planning model keeps the litiga-
tion far away from state courts. . . . And if the law were clear, how would the
facts (and thus the damages per plaintiff ) be ascertained? One suit is an all-or-
none affair, with high risk even if the parties supply all the information at their
disposal. Getting things right the first time would be an accident.62

Drain on judicial resources. In some cases, a thorough class-action trial

may be even more of a drain on judicial resources than the individual law-
suits might have been. For example, in declining to certify a class of vehicle
owners who claimed that their vehicles had caught fire because of a faulty
ignition switch, the District of New Jersey specifically calculated how much
time it would take to provide a hearing of all of the relevant issues:

Even assuming that the number of contested claims could—as plaintiff suggests—
through discovery be narrowed to 3,000, and that the individual “rebuttal trials”
were to average just four hours each (a conservative estimate), the second phase
of the trial would take approximately twelve years of judicial time. This would

60. Thorogood, 547 F.3d at 744 (“A further problem with the class action is the enhanced risk of
costly error. When enormous consequences turn on the correct resolution of a complex fac-
tual question, the risk of error in having it decided once and for all by one trier of fact rather
than letting a consensus emerge from several trials may be undue.”) (Posner, J.) (internal
quotation omitted); see also Epstein, Class Actions: Aggregation, Amplification and Distortion,
2003 U. Chi. Legal F. 4at 478 (“In practice, many (but by no means all) class actions do more
than amplify the status quo ante: sometimes they also distort the outcomes by imposing lia-
bilities that are, when the transformations of substance and procedure are taken into account,
far more onerous than a rule of simple multiplication would provide.”).
61. Thorogood, 547 F.3d at 744 (“[W]hen the central issue in a case is given class treatment and
so resolved by a single trier of fact, a trial becomes a roll of the dice; a single throw will deter-
mine the outcome of a large number of separate claims—there is no averaging of divergent
responses from a number of triers of fact having different abilities, priors, and biases.”)
(internal quotation omitted).
62. In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 288 F.3d 1012, 1020 (7th Cir. 2002)
(emphasis in original).
 Class Actions 17

not serve the public well, nor would it provide relatively prompt remediation of
the valid claims that exist.63

In a footnote, the court pointed out that the “lengthy trial would also neces-
sarily preclude resolution of most of the Court’s normal caseload of 400 civil
and 80 criminal cases filed per year during this period.”64 In other words,
there is a very real opportunity cost to certifying class actions of lesser merit.
Potential for abuse. Finally, the potential for abuse of class actions is
another very real cost.65 This is not to say that class-action lawyers are
unethical.66 Rather, it recognizes that there are strong incentives to misuse
the device. Given its ability to transform even small claims into attention-
grabbing bet-the-company litigation, some plaintiffs may file lawsuits of
questionable merit hoping to collect a quick settlement from a risk-averse
defendant. There are also strong incentives for both plaintiffs’ counsel and the
defendant to use class actions as a means of quickly capping liability by pro-
viding a large payout to the plaintiffs’ lawyers while providing only an illusory
benefit to the proposed class.67
A number of scholars (and even some judges) have characterized this
public policy concern as an agency problem: class members are too diffuse to
oversee their attorneys, and large fee payouts tempt attorneys to watch out
for their own interests at the expense of the class.68 Indeed, since the court,
rather than the class, determines counsel’s fees, there is a particular danger
that the attorneys’ interests will differ from their clients’.69 In addition, class

63. In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 194 F.R.D. 484, 496 (D.N.J. 2000)
(footnote omitted).
64. In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 194 F.R.D. at 496 n.11.
65. Piambino v. Bailey, 757 F.2d 1112, 1139 (11th Cir. 1985) (“Rule 23 class actions accomplish
many salutary goals; at the same time, they can cause great mischief.”).
66. See, e.g., Myrian Gilles, Opting Out of Liability: The Forthcoming, Near-Total Demise of the
Modern Class Action, 104 Mich. L. Rev. 373, 373–74 (2005) (characterizing “moralist corner”
of class-action critics as offering “the somewhat less nuanced objection that plaintiffs’ law-
yers are, well, immoral” and “focus[ing] on the low state of ethical practice in class actions
and the sell-out lawyers who, for millions in fees, are willing to sign away the rights of tens of
thousands of faceless and lawyerless class members”) (internal quotations omitted).
67. See, e.g., Thorogood, 547 F.3d at 744–45 (“The defendants in class actions are interested in
minimizing the sum of the damages they pay the class and the fees they pay the class counsel,
and so they are willing to trade small damages for high attorneys’ fees . . . The result of these
incentives is to forge a community of interest between class counsel, who control the plain-
tiff ’s side of the case, and the defendants.”) (internal citations omitted).
68. See, e.g., Id. at 744 (“The class members are interested in relief for the class but the lawyers are
interested in their fees, and the class members’ stakes in the litigation are too small to moti-
vate them to supervise the lawyers in an effort to make sure that the lawyers will act in their
best interests.”).
69. Culver v. City of Milwaukee, 277 F.3d 908, 910 (7th Cir. 2002) (“The lawyer for the class is not
hired by the members of the class and his fee will be determined by the court rather than by
18 Chapter 1 What Class Actions are and Why they Exist

members are often so dispersed that they do not know their representative
plaintiff, whom they are trusting to guard their interests.70 If the named plain-
tiff has been recruited by plaintiffs’ attorneys, and the recovery is particularly
small, she may have greater loyalty to counsel than to the class.71
Given these risks, class actions are carefully regulated under the Federal
Rules of Civil Procedure. Specifically, Rule 23 governs the inquiry the court
must conduct before certifying a class, and the showings the plaintiff must
make to meet that inquiry. The terms of the court’s inquiry will influence
every debate in a class-action lawsuit, from the defendant’s response to the
complaint through the jury instructions and verdict form at the trial.
Therefore, in the next chapter, we examine the requirements of Rule 23.

contract with paying clients. The cases have remarked the danger that the lawyer will sell out
the class in exchange for the defendant’s tacit agreement not to challenge the lawyer’s fee
request.”) (Posner, J.).
70. Id. at 910 (“The class action is an awkward device, requiring careful judicial supervision,
because the fate of the class members is to a considerable extent in the hands of a single
plaintiff (or handful of plaintiffs, when, as is not the case here, there is more than one class
representative) whom the other members of the class may not know and who may not be able
or willing to be an adequate fiduciary of their interests.”).
71. Id. (“Often the class representative has a merely nominal stake . . . and the real plaintiff in
interest is then the lawyer for the class, who may have interests that diverge from those of the
class members.”).
 CHAP TER

2
Class Certification Requirements

§ 2.1 Numerosity 21
§ 2.1.1 Feasibility of Joinder 21
§ 2.1.2 Ascertainability 23

§ 2.2 Commonality 25

§ 2.3 Typicality 27

§ 2.4 Adequacy of Representation 30

§ 2.5 Rule 23(b)(1) Classes 33

§ 2.5.1 Rule 23(b)(1)(a) “Incompatible Result” Classes 33
§ 2.5.2 Rule 23(b)(1)(b) “Limited Fund” Classes 35

§ 2.6 Rule 23(b)(2) Injunction Classes 35

§ 2.6.1 Hybrid Classes 38

§ 2.7 Rule 23(b)(3) Damages Classes 38

§ 2.7.1 Predominance of Common Issues 39
§ 2.7.2 Superiority 45

§ 2.8 Class Counsel 50

20 Chapter 2 Class Certification Requirements

Federal Rule of Civil Procedure 23 is the centerpiece of class-action litigation.

It is the decision rule that sets class actions apart from individual litigation.
And, as this book argues, the debate over whether a class action meets Rule 23’s
requirements shapes everything else in the litigation from the construction of
the complaint through the final disposition, appeals, and even subsequent liti-
gation over the res judicata effect of a class action. Therefore, we offer this sum-
mary of the requirements of Rule 23, and the issues the rule raises in litigation.
Any discussion of class certification requirements runs the risk of appear-
ing either “pro-plaintiff” or “pro-defense.” That is why there is such a contro-
versy over which treatises to use in briefing Rule 23—some practitioners view
certain treatises as advancing either a “watered down” interpretation of Rule
23’s requirements that favors plaintiffs, or an “overly demanding” interpreta-
tion that favors defendants. We intend with the discussion below to offer a
functional overview—nothing more—of these requirements. There are
thousands of permutations of how these issues might play out in the course
of litigation, and covering every last one of them would make this book too
large to be useful. (That said, in Chapter 5 we will address the most common
ways each side argues these requirements.)
State rules governing a class action can differ from the federal Rule 23 in a
number of ways.1 However, many states’ class-action rules are modeled after
Rule 23, and many other states consider federal discussions of Rule 23 per-
suasive, if not controlling, authority.2
All class actions must meet the four requirements of Rule 23(a):

(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.3

In addition, each class action must satisfy the requirements of either Rule
23(b)(1), 23(b)(2), or 23(b)(3). Rule 23(b) requires:
A class action may be maintained if Rule 23(a) is satisfied and if:
(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

1. For example, Virginia does not have any rule governing class actions, so class actions are not
permitted in Virginia state court.
2. See, e.g., Banker v. Circuit City Stores, Inc., 7 So. 3d 992, 997 n.1 (Ala. 2005).
3. Fed. R. Civ. P. 23(a).
 Numerosity 21

(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 sub-
stantially impair or impede their ability to protect their interests;
(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 correspond-
ing 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 mem-
bers 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 perti-
nent to these findings include:
(A) the class members’ interests in individually controlling the prose-
cution 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.4

Finally, the court must also appoint class counsel under Rule 23(g), requir-
ing it to make a separate inquiry into counsel’s ability to fairly and adequately
represent the proposed class.5

§ 2.1 Numerosity

Rule 23(a)(1) states that a court may certify a class only if it “is so numerous
that joinder of all members is impracticable.”6 The question at the heart of this
requirement is whether the litigation is large and complex enough to justify
certifying a class instead of using one of the other aggregation methods
described in Chapter 1. Despite the label, numerosity does not focus so much
on the number of putative class members as it does on whether aggregating the
claims of the known class members would be feasible without a class action.

§ 2.1.1 Feasibility of Joinder

The plaintiff need not identify the exact number of claimants in the class.7
However, she does have to show that a sufficiently large number of people are

4. Fed. R. Civ. P. 23(b).

5. Fed. R. Civ. P. 23(g).
6. Fed. R. Civ. P. 23(a)(1).
7. See Hinman v. M&M Rental Center, Inc., 545 F. Supp. 2d 802, 806 (N.D. Ill. 2008) (“plaintiffs
are not required to allege the exact number or identity of the class members, and I may make
common sense assumptions in determining numerosity”).
22 Chapter 2 Class Certification Requirements

in the class to meet her Rule 23 burden, and courts have denied class certifica-
tion where plaintiffs have not made sufficient effort to show numerosity.8
It should be clear why smaller classes would not satisfy the numerosity
requirement. If a class has only five members, then joinder is not impracticable;9
in fact, lawsuits often go forward with five or more joined plaintiffs. While
there is no magic number for satisfying numerosity, most courts will allow a
class with at least 40 members to proceed.10
But impracticability of joinder does not have to be based solely on num-
bers. Joinder may be feasible in other circumstances, even with large numbers
of plaintiffs. For example, if most of the proposed class live in the same, small
geographic region, then joinder may be feasible even with more than 40
plaintiffs.11
Aside from pure numbers, when analyzing numerosity lawyers should
look at:

• Geographic diversity. While geographic diversity is not a requirement

for demonstrating numerosity, the tighter the geographic concentration
of the proposed class, the more likely it is that joinder may be
feasible.12
• Evidence of the number of claimants. Estimates of class size that are
derived from known facts are likely to be sufficient for most courts.13
For example, a plaintiff who alleged racial discrimination by the owner
of various rental properties, and who was able to show that the defen-
dant landlord managed more than 200 properties and fielded more
than 1,200 inquiries during the class period, would likely meet the
numerosity requirement.14

8. See Vega v. T-Mobile USA, 564 F.3d 1256, 1267 (11th Cir. 2009) (reversing certification of
statewide class partly because plaintiff “has not cited, and we cannot locate in the record, any
evidence whatsoever (or even an allegation) of the number of retail sales associates T-Mobile
employed during the class period in Florida who would comprise the membership of the
class”).
9. Cook County College Teachers Union, Local 1600 v. Byrd, 456 F.2d 882, 885 (7th Cir. 1972)
(class of nine teachers “is not too large to have made joinder impracticable”).
10. See Steven v. Abraham, 275 F.3d 220, 226–27 (3d Cir. 2001).
11. See Liberty Lincoln Mercury, Inc. v. Ford Marketing Corp., 149 F.R.D. 65, 74 (D.N.J. 1993)
(“Practicability of joinder depends on a number of factors, including: the size of the class,
ease of identifying members and determining addresses, ease of service on members if
joined, geographical dispersion and whether proposed members of the class would be able to
pursue remedies on an individual basis.”).
12. Liberty Lincoln Mercury, 149 F.R.D. at 74 (“Practicability of joinder depends on a number of
factors, including: . . . geographical dispersion”).
13. Miller v. Spring Valley Properties, 202 F.R.D. 244, 247 (C.D. Ill. 2001) (“this court is entitled to
make common sense assumptions in making a determination of numerosity”).
14. Miller, 202 F.R.D. at 247–48.
 Numerosity 23

• Plaintiff ’s ability to identify class members. While a class does need to

be ascertainable (see below), some courts have ruled that if the plaintiff
can identify each individual class member by name, the class may not
be too numerous for joinder to be practical.15

§ 2.1.2 Ascertainability

“Ascertainability” means that the class is defined in such a way that it is

easy to determine, through objective criteria, whether an individual is a
member of the class.16 “All shareholders of Acme, Corp. as of December 31,
2010” is an ascertainable class definition because it requires only a single fac-
tual inquiry to determine who is in the class. On the other hand, a class
defined as “All shareholders of Acme Corp. who bought shares because of
Acme’s fraud and lost money when that fraud was revealed” requires a ruling
on the merits of the plaintiff’s claim. (Was there a fraud? Did it cause this
individual to buy Acme stock?) These merits-based (or “fail-safe”) classes are
not ascertainable.
Some courts treat “ascertainability” as a threshold inquiry.17 In fact, the
leading treatise on civil procedure addresses the question before it begins its
discussion of the specific requirements of Rule 23(a).18
However, doctrinally, this inquiry has evolved from discussions of numer-
osity, because if the class is not properly defined at the outset there is no way
of telling how many people are in it. A merits-based (also known as a
“fail-safe”) class is like Schrödinger’s cat:19 until the verdict, there is no way of

15. See Liberty Lincoln Mercury, 149 F.R.D. at 74 (“Practicability of joinder depends on a number
of factors, including: . . . ease of identifying [class] members . . .”).
16. See Roman v. ESB, Inc., 550 F. 2d 1343, 1348 (4th Cir. 1976).
17. In re Fosamax Prods. Liab. Litig., 248 F.R.D. 389, 395 (S.D.N.Y. 2008) (“Rule 23 contains the
additional, implicit requirement that an ascertainable class exists and has been properly
defined.”).
18. See 7A Charles Alan Wright et al., Federal Practice and Procedure § 1760 at
142–47 (3d ed. 2005) (“Further, the class must not be defined so broadly that it encompasses
individuals who have little connection with the claim being litigated; rather it must be
restricted to individuals who are raising the same claims or defenses as the representative.
The class definition also cannot be too amorphous.”) (internal footnotes omitted).
19. For those who went to law school to avoid studying quantum physics, here is the basic con-
cept behind Schrödinger’s cat: You put a cat in a box with a gun that will fire if it is set off by
a decaying uranium atom. The atom has a 50% chance of decaying during the time the cat is
in the box. If the atom decays, the cat dies. If the atom does not decay, the cat lives. As a result,
before the box is opened, physicists consider the cat to be half-alive and half-dead. There is
no way of telling which state the cat is in until you open the box. See Michio Kaku,
Hyperspace: A Scientific Odyssey through Parallel Universes, Time Warps, and
the 10th Dimension 260–61 (1994).
24 Chapter 2 Class Certification Requirements

telling whether the class has 1,000 members or none at all. If the plaintiffs
prove their case, then the class has 1,000 members. If they do not, then the
class has none; it never existed, which means the defendant’s “victory” is
hollow because nobody is bound by the defense judgment.20 At its heart, that
is a numerosity problem.
To see this problem at work in actual litigation, take the case of Forman v.
Data Transfer Inc.21 Forman challenged a practice known as “blast-faxing,” in
which a company, to advertise its products, would send out a fax to as many
fax numbers as possible.22 Blast-faxing was prohibited by a federal statute, the
Telecommunications Protection Act (TCPA), which imposed a $500 penalty
for each unsolicited fax.23 In this case, the plaintiff sued Data Transfer, claim-
ing that it had sent it an unsolicited fax,24 and seeking to represent a class of
“all residents and businesses who have received unsolicited facsimile adver-
tisements since January 1, 1992 from Data Transfer, Inc.”25 The plaintiff
moved for class certification, and Data Transfer opposed, challenging, among
other things, the class definition. The court denied certification on ascertain-
ability grounds, explaining:

Although no magic number exists as to the numerosity requirement, at a

minimum, plaintiff must “define the class in a way that enables the court to
determine whether a particular individual is a class member.” However, plaintiff
faces a unique problem because the proposed class definition flies directly in the
face of a basic tenet of class certification: a court may not inquire into the merits
of the case at the class certification stage. . . . Here, defining the purported class
as “all residents and businesses who have received unsolicited facsimile adver-
tisements” requires addressing the central issue of liability to be decided in the
case. Determining a membership in the class would essentially require a mini-
hearing on the merits of each case. The proposed class definition is
untenable.26

In other words, defining the class in this way does not eliminate the need for
fact-intensive individual inquiries that could preclude efficient aggregation of

20. Adashunas v. Negley, 626 F.2d 600, 604 (7th Cir. 1980) (“The new class definition, if allowed,
would result in a ‘fail-safe’ class, a class which would be bound only by a judgment favorable
to plaintiffs but not by an adverse judgment.”).
21. 164 F.R.D. 400 (E.D. Pa. 1995).
22. Forman v. Data Transfer, Inc., 164 F.R.D. 400, 402 (E.D. Pa. 1995).
23. 47 U.S.C. § 227(a)(4), (b)(3); see also Forman, 164 F.R.D. at 402.
24. Forman, 164 F.R.D. at 402.
25. Id. at 402.
26. Id. at 403 (internal citations omitted, emphasis in original); but see Hinman v. M&M Rental
Center, Inc., 545 F. Supp. 2d 802, 808 (N.D. Ill. 2008) (certifying class of “[a]ll persons who . . .
were sent, without permission, telephone facsimile messages of material advertising the
commercial availability of any property, goods, or services by or on behalf of defendant.”).
 Commonality 25

claims in a class action; it just shifts those merits inquiries from the trial to the
pretrial class notice. As a result, ascertainability requires lawyers to pay atten-
tion to several questions:

• Is the class defined using objective criteria? “All people who received a fax
from defendant between the dates of January 1 and January 15, 2010,” is
objective. “All people who received an unsolicited fax from defendant”
is not.
• Does the definition refer to causation. “All people who bought stock in
Acme between January 1 and January 15, 2011,” does not refer to cau-
sation. “All people who lost money on Acme stock because of its fraud”
does.
• Does the class definition assume any of the ultimate facts that plaintiffs
will have to prove? “All people who bought a 2005 Mazda Miata with a
defective crankshaft” assumes an ultimate fact (the crankshaft is defec-
tive). “All people who bought a 2005 Mazda Miata” does not.

§ 2.2 Commonality

The second requirement of Rule 23(a) is that the litigation present disputed
“questions of law or fact common to the class.”27 In other words, the lawsuit
must call upon the court or jury to decide a factual or legal issue whose out-
come logically must be the same for each class member. This requirement
probes the cohesiveness of the class, and the efficiency of using Rule 23. If the
class has common issues, then it may be efficient to bind the class to the
outcome of the named plaintiff’s claim.
For example, in a proposed class action against a state welfare agency
alleging that the agency neglected the children in its care, the common ques-
tions might include whether the agency had complied with its legal mandates,28
or whether injunctive relief would be appropriate for the class members.29
Commonality does not require that every question of law or fact in the
lawsuit be common to the class.30 In fact, a number of courts have held that

27. Fed. R. Civ. P. 23(a)(2).

28. Baby Neal ex rel. Kanter v. Casey, 43 F.3d 48, 56 (3d Cir. 1994).; see also Dukes v. Wal-Mart
Stores, Inc., __ F.3d __, No. 04-16688 (slip op.) at 6186 (9th Cir. Apr. 26, 2010) (en banc)
(common issue is whether Wal-Mart’s policy of giving store managers discretion regarding
pay and promotion decisions has discriminatory effects against female employees).
29. Baby Neal, 43 F.3d at 57.
30. See Hanlon v. Chrysler Corporation, 150 F. 3d 1011, 1019 (9th Cir. 1998) (“Rule 23(a)(2) has
been construed permissively. All questions of fact and law need not be common to satisfy the
rule.”); see also 7A Wright, et al., Federal Practice and Procedure § 1763 at 215–17
26 Chapter 2 Class Certification Requirements

commonality exists if there is any issue of law or fact common to the class,31
or have simply presumed that common issues exist.32
While it is not hard to identify at least one relevant common issue lurking
in virtually any class action, this does not mean that courts will find common-
ality in every circumstance. In the context of Rule 23(a)(2), a question is not
common if its resolution “turns on a consideration of the individual circum-
stances of each class member.”33 So the question of whether a defendant
engaged in fraudulent conduct toward the class may not be common if it
turns out that the defendant made different representations to different class
members. In fact, some courts have gone so far as to announce that if a
nationwide class will be tried under the varying laws of different jurisdictions,
there cannot be any common legal issues.34
As a result, neither the plaintiff nor the defendant should simply assume
that the commonality requirement can be met. While commonality is a com-
paratively simple inquiry, the defendant may challenge it successfully if the
issues portrayed as common to the class do not apply in identical fashion to
all class members. For example, taking the state welfare agency lawsuit above,
if the class were expanded from the children under the care of a single state
welfare agency to children under the care of several state welfare agencies, the
questions of whether each agency met its mandate, or whether injunctive
relief would be appropriate for all class members may no longer be common
issues. Different agencies may have operated under different mandates and
employed different policies, and the injunctive relief appropriate for children
subject to one agency might do the children subject to a different agency no
good. (For a fuller treatment of how both plaintiffs and defendants may
approach commonality when briefing class certification, see Chapter 5.)
So what should litigants look for when analyzing commonality?

(“It is important to note that this provision does not require that all of the questions of law
and fact raised by the dispute be common; nor does it establish any quantitative or qualitative
test of commonality.”).
31. See Dukes v. Wal-Mart, Inc., 474 F. 3d 1214, 1225 (8th Cir. 2007) (“The commonality test is
qualitative rather than quantitative—one significant issue common to the class may be suf-
ficient to warrant certification.”); Baby Neal, 43 F.3d at 56 (“The commonality requirement
will be satisfied if the named plaintiffs share at least one question of fact or law with the
grievances of the prospective class.”).
32. See 7A Wright, et al., Federal Practice and Procedure § 1763 at 218 (“In other [cases],
the court simply has stated that ‘clearly’ or ‘certainly’ common questions exist, without indi-
cating the basis for that conclusion or shedding any light on the way Rule 23(a)(2) might be
applied in other cases.”).
33. See Thorn v. Jefferson-Pilot Life Ins. Co., 445 F.3d 311, 319 (4th Cir. 2006) (quoting 7A Wright
et al., Federal Practice and Procedure § 1763).
34. See In re Bridgestone/Firestone Tires Prods. Liab. Litig., 288 F.3d 1012, 1015 (7th Cir. 2002)
(“No class action is proper unless all litigants are governed by the same legal rules. Otherwise
the class cannot satisfy the commonality and superiority requirements of Fed. R. Civ. P.
23(a), (b)(3).”).
 Typicality 27

• Are there any common legal rules uniting all of the class members? Are
the class members all asserting the same claim? If so, are they doing so
under the same substantive state law?
• Are there any common factual issues that apply to all of the class mem-
bers? For the most part, this is a question of properly defining the
issues. The question: “does the defendant owe the class members dam-
ages,” may appear common to the entire class, but it is defined so
broadly as to be meaningless. On the other hand, the question of
whether each class member paid a defendant the same fee and then
used the same service could be a common question.35

§ 2.3 Typicality

Rule 23(a)(3) requires that “the claims or defenses of the representative par-
ties are typical of the claims or defenses of the class.” The typicality require-
ment ensures that the named plaintiff is equipped to bring a collective, rather
than an individual, lawsuit.36 Typicality “serve[s] as a guidepost for deter-
mining whether maintenance of class action is economical and whether [a]
named plaintiff’s claim and class claims are so interrelated that interests of
class members will be fairly and adequately protected in their absence.”37 The
primary question the typicality requirement asks is: By proving her individ-
ual case, could the named plaintiff prove everyone else’s claims at the same
time? Courts have formulated this question in a number of ways,38 but the

35. See Robinson v. Fountainhead Title Group Corp., 252 F.R.D. 275, 287 (D. Md. 2008) (“The
putative class shares common issues of fact in that each paid fees to Assurance and each
closed their loan using Fountainhead’s services. The legitimacy vel non of Assurance as an
entity also is a question of law common to the class.”).
36. Deiter v. Microsoft Corp., 436 F.3d 461, 466–67 (4th Cir. 2006) (“The representative party’s
interest in prosecuting his own case must simultaneously tend to advance the interests of the
absent class members. For that essential reason, plaintiff ’s claim cannot be so different from
the claims of absent class members that their claims will not be advanced by plaintiff ’s proof
of his own individual claim.”); In re Am. Medical Sys., 75 F.3d 1069, 1082 (6th Cir. 1996) (“A
necessary consequence of the typicality requirement is that the representative’s interests will
be aligned with those of the represented group, and in pursuing his own claims, the named
plaintiff will also advance the interests of the class members.”).
37. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 626 n.20 (1997).
38. See In re Am. Med. Sys., 75 F.3d 1069, 1082 (6th Cir. 1996) (“A necessary consequence of the
typicality requirement is that the representative’s interests will be aligned with those of
the represented group, and in pursuing his own claims, the named plaintiff will also advance
the interests of the class members.”); In re Welding Fumes Prods. Liability Litig., 245 F.R.D.
279, 304 (N.D. Ohio 2007) (“Having pored over these cases seeking a unifying theme, the
Court has noticed two factors worthy of mention. The first is that, when examining typicality,
Courts tend to have one of two perspectives. Courts focus either on: (a) the defendant’s
28 Chapter 2 Class Certification Requirements

most common is: “as goes the claim of the named plaintiff, so go the claims of
the class.”39
The typicality inquiry provides a useful (if underused) framing device for
the courts. If proof of the named plaintiff’s claims would not necessarily prove
all of the absent class members’ claims, then they are not typical of those
asserted by the proposed class.40 Typicality does not require that that the
named plaintiff’s claims be completely identical to those of every class mem-
ber.41 It is enough if both the named plaintiff’s and class members’ claims arise
from similar conduct and implicate the same legal theories.42 As a result,
courts have noted that the typicality inquiry “tends to merge” with the ade-
quacy and predominance inquiries.43 However, while the predominance
inquiry searches for those parts of the class claims that are similar to one
another, the typicality inquiry asks how great the differences are.44 “Thus, it
follows that the appropriate analysis of typicality must involve a comparison
of the plaintiffs’ claims or defenses with those of the absent class members.”45
So what should plaintiffs and defendants look for as typicality issues?

• Unique defenses. Because the outcome of the class’s claims relies on the
outcome of the named plaintiff ’s individual claim, the court must be care-
ful that the named plaintiff ’s claim would not undermine the class claim.
Therefore, if the class would be bound by a defense that is unique to the

conduct, and the degree to which it affected each plaintiff equally, or (b) the effects on the
plaintiff class of the defendants’ conduct, and the degree to which those effects are similar
from plaintiff to plaintiff. Put more simply, the first focus is on what the defendants did; the
second focus is on how the plaintiffs were affected by what defendants did.”) (emphasis in
original).
39. Sprague v. Gen. Motors Corp., 133 F.3d 388, 399 (6th Cir. 1998) (“The premise of the typicality
requirement is simply stated: as goes the claim of the named plaintiff, so go the claims of the
class.”); see also Deiter, 436 F.3d at 466 (same).
40. Sprague, 133 F.3d at 399 (finding no typicality because “[i]n pursuing their own claims, the
named plaintiffs could not advance the interests of the entire early retiree class.”).
41. Deiter, 436 F.3d at 467 (“That is not to say that typicality requires that the plaintiff ’s claim and
the claims of class members be perfectly identical or perfectly aligned.”); Daffin v. Ford Motor
Co., 458 F.3d 549, 553 (6th Cir. 2006) (“The mere fact that Daffin’s throttle body assembly
stuck, while other class members’ throttles have not stuck, does not render Daffin
atypical.”).
42. James v. City of Dallas, Texas, 254 F.3d 551, 571 (5th Cir. 2001).
43. Amchem Prods., 521 U.S. at 626 n.20.
44. Deiter, 436 F.3d at 467 (“But when the variation in claims strikes at the heart of the respective
causes of actions, we have readily denied class certification.”); In re Welding Fume, 245 F.R.D.
at 303 (“commonality focuses on similarities, while typicality focuses on differences.”) (citing
Dukes, 474 F.3d at 1232 n.10).
45. Deiter, 436 F.3d at 467.
 Typicality 29

named plaintiff, the plaintiff is not typical of the class.46 Even only an
“arguable defense” may be enough to stand in the way of certification.47
Unique defenses may include: an assertion that the class representative
was treated differently from other class members,48 the named plaintiff
engaged in the same conduct as the defendant,49 or the named plaintiff
engaged in conduct that undermined the cause of action she now asserts.50
However, merely speculative defenses may not be enough to defeat
certification.51
• Wide variations in factual situations. This inquiry is similar to the pre-
dominance inquiry under Rule 23(b)(3).52 When there are too many
factual variations in the class claims, the court may hold that the
named plaintiff ’s proof would not prove the claims of other class mem-
bers operating under different sets of facts, making her atypical.53

46. Beck v. Maximus, 457 F.3d 291, 297 (3d Cir. 2006) (“Other courts of appeal emphasize, as do
we, the challenge presented by a defense unique to a class representative—the representative’s
interests might not be aligned with those of the class, and the representative might devote
time and effort to the defense of the issue at the expense of issues that are common and
controlling for the class.”).
47. See Ross v. Bank South N.A., 837 F.2d 980, 990–91 (11th Cir. 1988); but see Feder v. Elec. Data
Sys., 429 F.3d 125, 136–37 (5th Cir. 2005) (presence of “arguable” unique defenses not suffi-
cient grounds to overturn district court’s ruling certifying class).
48. See Joseph L. v. Conn. Dep’t of Children and Families, 161 F. Appx. 72, 75 (2d Cir. 2005) (in
class action seeking right to hearing to contest conditions of treatment, fact that named
plaintiff had been offered hearing rendered him atypical of class); Gaston v. Exelon Corp., 247
F.R.D. 75, 84 (E.D. Pa. 2007) (named plaintiffs in employment-discrimination class action
were not typical where they had been disciplined for legitimate); Porter v. Nationscredit
Consumer Disc. Co., 229 F.R.D. 497, 499 (E.D. Pa. 2005) (named plaintiffs in TILA class
action were not typical where they had received disclosures from defendant).
49. See Boca Raton Cmty. Hosp., Inc. v. Tenet Healthcare Corp., 238 F.R.D. 679, 694 (S.D. Fla.
2006) (refusing to certify class because named plaintiff ’s conduct was identical to defen-
dant’s, rendering it vulnerable to defense of unclean hands).
50. See Spann v. AOL Time Warner, Inc., 219 F.R.D. 307, 318 (S.D.N.Y. 2003) (no typicality in
ERISA class where named plaintiffs did not exhaust administrative remedies before bringing
lawsuit); Rocco v. Nam Tai Elecs., Inc., 245 F.R.D. 131, 136 (S.D.N.Y. 2007) (refusing to certify
securities-fraud class action where named plaintiff bought more of defendant’s securities
after alleged fraud was revealed).
51. See Beck, 457 F.3d at 300 (“To defeat class certification, a defendant must show some degree
of likelihood a unique defense will play a significant role at trial. If a court determines an
asserted unique defense has no merit, the defense will not preclude class certification.”).
52. This is an example of how these inquiries tend to merge. See Amchem Prods., 521 U.S. at 626
n.20. For more on predominance, see § 2.7.1.
53. See Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 340 (4th Cir. 1998) (“the
contract claims of plaintiffs are not typical of claims of franchisees who entered into [fran-
chise agreements] containing different language”); In re Vioxx Products Liability Litig., 239
F.R.D. 450, 460 (E.D. La. 2006) (variations in factual allegations and governing legal rules
precluded typicality); Blain v. Smithkline Beecham Corp., 240 F.R.D. 179, 187–89 (E.D. Pa.
2007) (no typicality where class members had different medical histories and took different
30 Chapter 2 Class Certification Requirements

Determining typicality is a balancing act. Not every variation between the

named plaintiff’s claims and the claims of the class will render a named plain-
tiff atypical, but at the same time, the mere fact that a named plaintiff is will-
ing to sue the defendant will not make her typical of the proposed class.

§ 2.4 Adequacy of Representation

Rule 23(a)(4) requires the named plaintiff to show that “the representative
parties will fairly and adequately protect the interests of the class.”54 While
the typicality requirement asks whether the named plaintiff could represent
the class (because she is enough like the rest of the class to make a class law-
suit workable), the adequacy requirement asks whether the named plaintiff
should do so.
This is not a rhetorical distinction. Among other differences, the adequacy
requirement protects all parties’ due process rights. Because the named plain-
tiff is litigating on behalf of class members who are not present in the court-
room (and who may not even be aware of their claims), due process requires
that the she possess undivided loyalties to those absent class members.55
Otherwise, class members may find their valid claims barred by res judicata,
or settled for less than their full value by a plaintiff with a weak claim or a
clear conflict of interest.56
Courts tend to make two inquiries into the adequacy of the class represen-
tative.57 The first asks whether any conflict of interest exists between the
named plaintiff and the class.58 The second asks whether the class representa-
tive is competent to carry out her fiduciary duties to the proposed class by
effectively overseeing her counsel and testifying on behalf of the class.59

doses of Paxil); Doe v. Unified School Dist. 259, 240 F.R.D. 673, 680 (D. Kan. 2007) (no
typicality where “harassment allegations took place in different settings, with different stu-
dents and involving other relationships”); O’Neill v. The Home Depot U.S.A., Inc., 243 F.R.D.
469, 478 (S.D. Fla. 2006) (“The differences identified in the proposed class members’ indi-
vidual experiences with the purchase of Home Depot’s damage waiver precludes a finding of
commonality and typicality.”).
54. Fed. R. Civ. P. 23(a)(4).
55. Broussard, 155 F.3d at 338.
56. London v. Wal-mart Stores, Inc., 340 F.3d 1246, 1253 (11th Cir. 2003).
57. See Sweet v. Pfizer, 232 F.R.D. 360, 370 (C.D. Cal. 2005).
58. Amchem Prods., 521 U.S. at 625 (“The adequacy inquiry under Rule 23(a)(4) serves to
uncover conflicts of interest between named parties and the class they seek to represent.”);
Broussard, 155 F.3d at 337–39 (no adequacy where conflict of interest among class
members).
59. See Berger v. Compaq Computer Corp., 257 F.3d 475, 482–83 (5th Cir. 2001) (adequacy
“require[s] the class representatives to possess a sufficient level of knowledge and
 Adequacy of Representation 31

Both of these inquiries stem from the same concern: Because the named
plaintiff is representing the legal interests of people she does not know and
has likely never met, the court must consider her to be a fiduciary to the
class.60 If the named plaintiff is going to serve as a fiduciary, the court must
ensure that she has no competing interests that would undermine her ability
to represent the interests of the class, and that she has the personal character-
istics that class members would look for in a representative.
The inquiry into conflicts between the named plaintiff and the class does
not focus on hypotheticals;61 instead, it focuses on conflicts involving issues
fundamental to the class and specific to the litigation.62 There are several
kinds of conflicts that might concern the court. The first is that the conduct
the plaintiff challenges may be harmful to some class members, but helpful to
others.63 The second kind involves conduct that allegedly harmed the entire
class, but where proving the claims of one part of the class may undermine
the claims of another part.64 The third involves unique defenses that are avail-
able against the named plaintiff but not the rest of the class. The “unique

understanding to be capable of ‘controlling’ or ‘prosecuting’ the litigation.”); Kirkpatrick

v. JC Bradford & Co., 827 F.2d 718, 727 (11th Cir. 1987) (class certification properly denied
where “where the class representatives had so little knowledge of and involvement in the
class action that they would be unable or unwilling to protect the interests of the class against
the possibly competing interests of the attorneys”).
60. See Culver v. City of Milwaukee, 277 F.3d 908, 910 (7th Cir. 2002) (“the fate of the class mem-
bers is to a considerable extent in the hands of a single plaintiff (or handful of plaintiffs,
when, as is not the case here, there is more than one class representative) whom the other
members of the class may not know and who may not be able or willing to be an adequate
fiduciary of their interests”).
61. See In re Neurontin Mktg. and Sale Practices Litig., 244 F.R.D. 89, 108 (D. Mass. 2007) (“The
conflict that will prevent a plaintiff from meeting the Rule 23(a)(4) prerequisite must be
fundamental, and speculative conflict should be disregarded at the class certification stage.”)
(internal quotation omitted). That said, a court may imply a conflict in the absence of hard
evidence if it believes there is a realistic possibility of conflict. Colomar v. Mercy Hosp., Inc.,
242 F.R.D. 671, 679 (S.D. Fla. 2007).
62. See Pickett v. Iowa Beef Processors, 209 F.3d 1276, 1280 (11th Cir. 2000) (“It is axiomatic that
a putative representative cannot adequately protect the class if his interests are antagonistic
to or conflict with the objectives of those he purports to represent.”).
63. See Pickett, 209 F.3d at 1280–81 (while named plaintiffs lost money on forward contracts,
other class members benefitted, rendering named plaintiffs inadequate representatives); see
also Samuel Issacharoff & Richard A. Nagareda, Class Settlements Under Attack, 156 U. Pa. L.
Rev. 1649, 1678 (2008) (“[N]o representative, no matter how capable or faithful, can ade-
quately represent a class comprised of persons whose interests in the litigation diverge. No
agent, in other words, can adequately serve multiple principals when the interests of the
principals themselves conflict.”).
64. See Broussard, 155 F.3d at 338 (“The first group, former franchisees, have an interest only in
maximizing any damages Meineke would have to pay. But because of the EDP releases, EDP
franchisees are unable to benefit from a damage award. In fact, one group of EDP franchisees
sought to intervene below and appear as amici on appeal, claiming that their ongoing busi-
ness relationship with Meineke and their interests in the long-term financial health of the
32 Chapter 2 Class Certification Requirements

defense” inquiry is similar to that for typicality.65 But where the typicality
inquiry focuses on whether proof of the unique defense will advance the class
claims,66 here the question is whether the unique defense will prevent the
named plaintiff from fulfilling her duty to represent the interests of the
class.67
In addition to looking at whether conflicts exist between the named plain-
tiff and the proposed class, Rule 23(a)(4) also examines whether the named
plaintiff has the ability to oversee class counsel effectively. Factors to consider
in this inquiry are:

• Does the named plaintiff know enough about the case to oversee class
counsel?68 This does not mean that the named plaintiff must be an expert
in the field in which she is suing.69 However, she cannot be completely
ignorant of the subject matter of the case.70
• Does the named plaintiff have enough independence to oversee class
counsel? The focus of this inquiry is whether the named plaintiff has
some personal or professional relationship with class counsel that
would compromise her loyalty to the class.71
• Does the named plaintiff have the personal qualities to serve as a class
representative? The defendant is entitled to explore the personal traits
that might bear directly on the named plaintiff ’s ability to represent

company were imperiled by plaintiffs’ efforts to wring a large damage award out of
defendants.”).
65. Beck, 457 F.3d at 296 (“Because of the similarity of these two inquiries, certain questions—like
whether a unique defense should defeat class certification—are relevant under both.”).
66. See § 2.3, above.
67. See Doll v. Chicago Title Ins. Co., 246 F.R.D. 683, 687 (D. Kan. 2007) (“unique defenses can
make a representative inadequate because they are likely to usurp a significant portion of the
litigant’s time and energy”).
68. See Kirkpatrick, 827 F.2d at 727 (a “potential class is entitled to more than blind reliance upon
even competent counsel by interested and inexperienced representatives”); Hillis v. Equifax
Consumer Servs., Inc., 237 F.R.D. 491, 502 (N.D. Ga. 2006) (no adequacy where plaintiff was
“unfamiliar with many of the specific allegations that form the basis for the claims”).
69. Hicks v. Client Servs., Inc., 2008 WL 5479111, *9 (S.D. Fla. 2008) (named plaintiff ’s lay under-
standing of case was enough to make her an adequate class representative).
70. See In re Enron Secs. & ERISA Litig., 529 F. Supp. 2d 644, 733 (S.D. Tex. 2006) (finding several
proposed named plaintiffs inadequate class representatives where they “lacked knowledge of
the mediation in the case. They did not know why certain parties were dismissed and others
added. They did not know the names of other putative class representatives.”).
71. London, 340 F.3d at 1255 (“Long-standing personal friendship” and prior business relation-
ship between plaintiff and counsel rendered plaintiff inadequate class representative); Susman
v. Lincoln Am. Corp., 561 F.2d 86, 94–95 (7th Cir. 1977) (counsel’s brother and colleague were
inadequate class representatives).
 Rule 23(b)(1) Classes 33

the class at trial.72 Those traits include, but are not limited to, the
named plaintiff ’s credibility and her personal integrity.73

§ 2.5 Rule 23(b)(1) Classes

Rule 23(b)(1) states that a class action may be maintained if:

(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 prac-
tical 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 interests.74

Rule 23(b)(1) addresses cases where multiple suits would create a risk of
inconsistent rulings or establish incompatible standards of conduct and
where individual actions would—as a practical matter—decide the interests
of absent class members.75 A notable feature of Rule 23(b)(1) class actions is
that class members are not entitled to notice of the pendency of the class
action, nor allowed to opt out of the class. Practically, as discussed below, a
plaintiff will rarely invoke either prong of the rule.76

§ 2.5.1 Rule 23(b)(1)(a) “Incompatible Result” Classes

A Rule 23(b)(1)(A) class may be maintained if “prosecuting separate actions

by or against individual class members would create a risk of inconsistent

72. In re WorldCom Inc., 358 B.R. 585, 604 (S.D.N.Y. 2006) (“To determine the adequacy of
representation by class representatives, courts generally consider only those challenges to the
personal characteristics of the class representatives that arise out of or touch on the prosecu-
tion of the class action litigation”) (internal quotations omitted).
73. Davidson v. Citizens Gas & Coke Util., 238 F.R.D. 225, 229 (S.D. Ind. 2006) (“personal char-
acteristics, such as the credibility and integrity of a putative class representative, have a direct
bearing on their ability to adequately represent absent members of the class”).
74. Fed. R. Civ. P. 23(b)(1).
75. Petrolito v. Arrow Fin. Servs., LLC, 221 F.R.D. 303, 312–13 (D. Conn. 2004).
76. Samuel Issacharoff, Governance and Legitimacy in the Law of Class Actions, 1999 Sup. Ct.
Rev. 337, 349 (“Because of the requirement that there in fact be a limited fund, Rule 23(b)(1)
was rarely invoked until the rise of the settlement class action in the 1990s.”).
34 Chapter 2 Class Certification Requirements

or varying adjudications with respect to individual class members that

would establish incompatible standards of conduct for the party opposing
the class.”77
The language of Rule 23(b)(1)(A) is arguably broad enough to justify
certification of any proposed class action, but courts have applied it in a more
limited fashion.78 Rule 23(b)(1)(A) classes are for the benefit of parties oppos-
ing the class—to prevent them from being required by different courts to act
inconsistently toward identically situated adversaries.79 The classic example
of a Rule 23(b)(1)(A) class is an owner of water rights in a river who is sued
by downriver owners to establish the nature of their respective rights. A court
may certify this case under Rule 23(b)(1)(A) because, if several downriver
plaintiffs sued the upriver defendant separately, different courts might issue
incompatible judgments against the defendant—providing one downriver
owner with different rights than another. In that case, the defendant could
not comply with all courts’ orders because complying with one court order
might require violating another.80
Rule 23(b)(1)(A) is generally reserved for cases seeking injunctive relief.
Courts are more reluctant to certify classes seeking compensatory damages
under Rule 23(b)(1)(A); courts are queasy about litigating monetary damage
claims on a classwide basis without affording absent class members notice
and opt-out rights. Specifically, courts have held that Rule 23(b)(1)(A) does
not cover class situations where the “inconsistent result” is that some mem-
bers might recover damages while others do not, reasoning that “inconsis-
tency” is not the same as “incompatibility”—while it may be “inconsistent” to
require the defendant to pay one plaintiff and not another plaintiff identically
situated, this result does not place the defendant in the untenable position of
having to comply with one court’s injunctive order in a manner that violates
another court’s injunctive order.81

77. Fed. R. Civ. P. Rule 23(b)(1)(A).

78. Petrolito, 221 F.R.D. at 313.
79. Amchem Prods., 521 U.S. at 614; United Brotherhood of Carpenters & Joiners, Local 899 v.
Phoenix Associates, 152 F.R.D. 518, 523 (S.D. W. Va. 1994) (certifying class under Rule 23(b)
(1)(A) because allegations of conduct violating union agreement could produce inconsistent
outcomes in individual cases); Boggs v. Divested Atomic Corp., 141 F.R.D. 58, 67 (S.D. Ohio
1991) (certifying class under Rule 23(b)(1)(A) because it was “unlikely that two different
courts would tailor a remedial order in the same fashion, and . . . therefore entirely conceiv-
able that different remedial orders would contain incompatible provisions”).
80. Amchem Prods., 521 U.S. at 614.
81. Id.; see also In re Dennis Greenman Sec. Litig., 829 F.2d 1539, 1545 (11th Cir. 1987) (“Rule
23(b)(1) does not apply to actions seeking compensatory damages”); In re Ford Motor Co.
Ignition Switch Prod. Liab. Litig., 174 F.R.D. 332, 354 (D.N.J. 1997) (“This case is substantially
about defendants’ potential obligation to pay monetary damages or repair certain vehicles.
Defendants would be not required to adopt inconsistent conduct by paying damages to, or
repairing the vehicles belonging to, only some of the putative plaintiffs in this action.”).
 Rule 23(b)(2) Injunction Classes 35

§ 2.5.2 Rule 23(b)(1)(b) “Limited Fund” Classes

Rule 23(b)(1)(B) governs cases in which there is only a limited fund from
which to pay damages to class members.82 A Rule 23(b)(1)(B) class may be
maintained if

prosecuting separate actions by or against individual class members would

create a risk of 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 interests.83

Theoretically, a court will certify a case under Rule 23(b)(1)(B) when either
party shows that the defendant lacks sufficient funds to satisfy the identical
claims of all potential class members, making it unfair to later claimants that
the first few litigants to reach a favorable final judgment will exhaust the lim-
ited fund.84 Practically, however, if there is no indication that the defendant
either has severely limited assets or is close to insolvency, courts will not cer-
tify a class under this subsection of the rule.85

§ 2.6 Rule 23(b)(2) Injunction Classes

Rule 23(b)(2) governs the certification of classes for injunctive relief to the
class members. It states that a class action may be certified if:

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.86

Rule 23(b)(2) was “designed specifically for civil rights cases seeking broad
declaratory or injunctive relief for a numerous and often unascertainable or

82. Amchem Prods., 521 U.S. at 614 (“Rule 23(b)(1)(B) includes, for example, ‘limited fund’
cases, instances in which numerous persons make claims against a fund insufficient to satisfy
all claims.”).
83. Fed. R. Civ. P. 23(b)(1)(B).
84. Larionoff v. United States, 533 F. 2d 1167, 1170 (D.C. Cir. 1976) (noting district court certified
class of enlisted Navy personnel seeking payment of variable reenlistment bonuses under
Rule 23(b)(1)(B)).
85. See Ortiz v. Fibreboard Corp., 527 US 815, 864 (1999) (the “applicability of Rule 23(b)(1)(B)
to a fund and plan purporting to liquidate actual and potential tort claims is subject to ques-
tion, and its purported application in this case was in any event improper”).
86. Fed. R. Civ. P. 23(b)(2).
36 Chapter 2 Class Certification Requirements

amorphous class of persons.”87 Rule 23(b)(2) classes are also commonly used
to obtain injunctive remedies in antitrust cases (e.g., to enjoin price-fixing)
and employment discrimination cases (e.g., to enjoin discriminatory prac-
tices). Class members are not entitled to notice of the pendency of the litiga-
tion and may not opt out of a Rule 23(b)(2) class.88 As a result, a plaintiff
seeking certification under Rule 23(b)(2) must seek injunctive relief,89 and
most courts have also held that Rule 23(b)(2) certification is only available
when the injunction is the primary form of relief sought.90
Monetary relief may be appropriate when it is incidental to the injunctive
relief sought; meaning that “the computation of damages is mechanical,
‘without the need for individual calculation,’ so that a separate damages suit
by individual class members would be a waste of resources.”91 (Other courts
have framed the inquiry differently, asking whether, if monetary relief were
not available, the plaintiff would still have brought the lawsuit.)92 Courts
focus on the predominance of injunctive relief because awarding monetary
damages frequently requires analysis of the particular circumstances of indi-
vidual class members under Rule 23(b)(3).93 And, in cases like that, due pro-
cess requires that absent class members receive both notice and an opportunity

87. Barnes v. Am. Tobacco Co., 161 F.3d 127, 142 (3d Cir. 1998).
88. In re Allstate Ins. Co., 400 F.3d 505, 506 (7th Cir. 2005) (Posner, J.) (“A Rule 23(b)(2) class
action does not require giving class members notice of the suit and a chance to opt out of it
and bring their own, individual suits; a Rule 23(b)(3) class action does. The thinking behind
this distinction is that declaratory or injunctive relief will usually have the same effect on all
the members of the class as individual suits would.”).
89. Christ v. Beneficial Corp., 547 F.3d 1292, 1298 (11th Cir. 2008) (refusing to certify class under
Rule 23(b)(2) where underlying statute did not allow for injunctive relief).
90. Clay v. Am. Tobacco Co., 188 F.R.D. 483, 495 (S.D. Ill. 1999) (refusing to certify class under
Rule 23(b)(2) where “it is obvious that the primary relief sought by the plaintiffs in this case
is monetary relief ”).
91. In re Allstate Ins. Co., 400 F.3d at 507 (quoting Manual for Complex Litigation (Fourth)
§ 21.221 (2004)); see also Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (5th Cir. 1998)
(incidental damages are “damages that flow directly from liability to the class as a whole on
the claims forming the basis of the injunctive or declaratory relief ”) (emphasis in original).
92. Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 164 (2d Cir. 2001) (court should
ask whether “even in the absence of a possible monetary recovery, reasonable plaintiffs would
bring the suit to obtain the injunctive or declaratory relief sought”); see also Dukes, No.
04-16688 (slip op.) at 6217 (court should focus on “whether the monetary relief sought
determines the key procedures that will be used, whether it introduces new and significant
legal and factual issues, whether it requires individualized hearings, and whether its size and
nature—as measured by recovery per class member—raise particular due process and man-
ageability concerns”).
93. Allison, 151 F.3d at 413, 416–17 (certification under Rule 23(b)(2) not appropriate when
determining whether monetary relief appropriate required individualized inquiries into
effect of discriminatory conduct on particular class members).
 Rule 23(b)(2) Injunction Classes 37

to opt out and pursue their claims individually.94 These requirements are sub-
stantive, not technical, so courts frown on requests for injunctive relief that
do nothing more than order defendants to pay money to the plaintiff.95
Rule 23(b)(2) “does not relieve a court of its obligation to determine
whether the existence of individual issues precludes certification.”96 For Rule
23(b)(2) to apply, “the class claims must be cohesive.”97 In fact, some courts
have held that a “Rule 23(b)(2) class should actually have more cohesiveness
than a Rule 23(b)(3) class.”98 The focus on cohesiveness (or, as some courts
have put it, “homogeneity”) stems from the fact that the “latter half of Rule
23(b)(2) requires that final injunctive relief be appropriate for the class as a
whole.”99 Since, unlike with Rule 23(b)(3) classes, class members cannot opt
out of injunctive relief awarded to a Rule 23(b)(2) class, it is far more impor-
tant to the court that various class members’ interests not diverge.100
So what kinds of cases will qualify as class actions under this subsection?
Courts have certified classes alleging disparate treatment and disparate-
impact claims under Title VII101 and challenging discriminatory treatment in
insurance practices that violated 42 U.S.C. § 1981.102

94. Lemon v. Int’l Union of Operating Engineers, Local No. 139, 216 F.3d 577, 580 (7th Cir. 2000)
(“in recognition of the potential divergence of interests within the class, each class member
in actions for money damages is entitled as a matter of due process to personal notice and
an opportunity to opt out of the class action”).
95. See Richards v. Delta Air Lines Inc., 453 F.3d 525, 528 (6th Cir. 2006) (refusing to certify
23(b)(2) class where plaintiff “effectively seeks a declaratory judgment that Delta owes mon-
etary damages and an injunction requiring Delta to pay them”).
96. See Dhamer v. Bristol-Myers Squibb Co., 183 F.R.D. 520, 529 (N.D. Ill. 1998).
97. Barnes v. Am. Tobacco Co., 161 F.3d 127, 143 (3d Cir. 1998).
98. Clay, 188 F.R.D. at 495.
99. Shook v. Bd. of County Comm’ners of El Paso, 543 F.3d 597, 604 (10th Cir. 2008) (“Put differ-
ently, Rule 23(b)(2) demands a certain cohesiveness among class members with respect to
their injuries, the absence of which can preclude certification.”); Allison, 151 F.3d at 413
(“because of the group nature of the harm alleged and the broad character of the relief
sought, the (b)(2) class is, by its very nature, assumed to be a homogenous and cohesive
group with few conflicting interests among its members”).
100. In re St. Jude Med., Inc., Silzone Heart Valve Prod. Liab. Litig., 425 F.3d 1116, 1121 (8th Cir.
2005) (“Because unnamed members are bound by the action without the opportunity to opt
out of a Rule 23(b)(2) class, even greater cohesiveness generally is required than in a Rule
23(b)(3) class.”); In re Allstate Ins. Co., 400 F.3d at 507 (“[T]he fact that declaratory or
injunctive relief is sought (and no, or only incidental, damages) should not automatically
entitle the class to proceed under Rule 23(b)(2). There can be critical differences among
class members that are independent of differences in the amount of damages.”); Allison, 151
F.3d at 413 (“because of the group nature of the harm alleged and the broad character of the
relief sought, the (b)(2) class is, by its very nature, assumed to be a homogenous and cohe-
sive group with few conflicting interests among its members”).
101. See Dukes, 474 F.3d at 1237; Robinson, 267 F. 3d at 155.
102. See In re Monumental Life Ins. Co., 365 F.3d 408, 411–12 (5th Cir. 2004).
38 Chapter 2 Class Certification Requirements

2.6.1 Hybrid Classes

Occasionally, when faced with requests to certify a class that seeks both injunc-
tive relief and substantial monetary damages, a court may certify a “divided”
class103 or a “hybrid” class.104 These hybrid certifications are still compara-
tively rare.105 In a hybrid class, the court either certifies the injunctive aspects
of the suit under Rule 23(b)(2) and the damages under Rule 23(b)(3),106 or
certifies the class under Rule 23(b)(2) for both the equitable and monetary
relief and then exercises its plenary authority under Rules 23(d)(1)(B) and
23(d)(1)(E) to provide all class members with personal notice and opportu-
nity to opt out.107 However, despite recognizing that hybrid certification may
be possible, some courts have expressed concern that hybrid classes may
violate the Seventh Amendment.108

§ 2.7 Rule 23(b)(3) Damages Classes

The requirements of Rule 23(b)(3) apply to proposed class actions in which

the plaintiffs primarily seek monetary damage awards. Unlike Rules 23(b)(1)
and (b)(2), Rule 23(b)(3) authorizes “opt-out” classes, meaning that mem-
bers of the class may elect not to participate in the class action, presumably
because they believe they can protect their legal rights more effectively on

103. See Jefferson v. Ingersoll Int’l, Inc., 195 F.3d 894, 898 (7th Cir. 1999).
104. This certification is also sometimes referred to as “composite” certification. See Fisher v. Va.
Elec. & Power Co., 217 F.R.D. 201, 214 (E.D. Va. 2003) (“Instead of divided certification, a
district judge may grant composite certification. Composite certification allows a court to
certify the class under Rule 23(b)(2) for both monetary and equitable remedies and exercise
its plenary authority under Rules 23(d)(2) and 23(d)(5) to provide all class members with
personal notice and the opportunity to opt out, as if the class were certified under Rule
23(b)(3).”).
105. To date, hybrid certification has been most common in Title VII cases involving back pay,
which courts have agreed is an equitable, easy-to-calculate remedy. See In re Monumental
Life Ins. Co., 365 F. 3d at 418 (“Equitable monetary relief is compatible with a rule 23(b)(2)
class. Importantly, this pronouncement has been limited to the context of title VII backpay,
a remedy designated by statute as ‘equitable.’”); Dukes, 474 F.3d at 1237 (“it is well-
established that backpay is an equitable, make-whole remedy under Title VII that is fully
consistent with Rule 23(b)(2)”).
106. See Jefferson, 195 F.3d at 898.
107. See Eubanks v. Billington, 110 F.3d 87, 94–95 (D.C. Cir. 1997) (“the language of Rule 23 is
sufficiently flexible to afford district courts discretion to grant opt-out rights in (b)(1) and
(b)(2) class actions” in limited cases).
108. See Allison, 151 F.3d at 426 (“the Seventh Amendment precludes a partial certification of a
class action on the plaintiffs’ claims for equitable relief ”).
 Rule 23(b)(3) Damages Classes 39

their own through individual litigation.109 As a result, in addition to showing

numerosity, commonality, typicality and adequacy, the plaintiff must also
show that “the questions of law or fact common to class members predomi-
nate over any questions affecting only individual members, and that a class
action is superior to other available methods for fairly and efficiently adjudi-
cating the controversy.”110 (These two requirements are often shorthanded to
“predominance” and “superiority.”)

§ 2.7.1 Predominance of Common Issues

Courts examining the predominance requirement look at two different kinds

of predominance: factual and legal. Factual predominance evaluates whether
the class trial will focus more on the common evidentiary issues plaintiffs
raise, or on those facts that are specific to each plaintiff or claimant. Legal
predominance focuses on whether the legal issues to be resolved are common
to the class, or specific to smaller groups of class members.
Factual predominance. The basic principle behind the factual predomi-
nance inquiry is that individualized factual issues should not swamp the
common issues at trial. For example, in the recent case Gintis v. Bouchard
Transportation Co., Inc.,111 the plaintiffs brought a proposed class action for
property damage caused when a fuel barge struck an offshore reef, spilling
98,000 barrels of oil across 90 miles of Massachusetts coastline.112 The defen-
dants admitted they had been negligent in causing the spill,113 although they
refused to concede liability to any individual property owners.114 The
Massachusetts government took charge of the cleanup efforts, supervising a
“Unified Command” consisting of the Coast Guard, the commonwealth’s
Department of Environmental Protection, the defendants, and an unnamed
“Licensed Site Professional.”115 The Command used a common methodology
for cleaning the spill, dividing the coastline into segments and categorizing
them by the degree of oil contamination.116 When the plaintiffs (all of whom
owned property on the affected coastline) moved for class certification, the
trial court declined, relying heavily on a previous case in the jurisdiction.117

109. The procedure for opting out of a Rule 23(b)(3) class action is discussed in more detail in §§
6.2.1 and 8.3.5.
110. Fed. R. Civ. P. 23(b)(3).
111. 596 F.3d 64 (1st Cir. 2010) (Souter, J.).
112. 596 F.3d at 65.
113. Id. at 67.
114. Id. at 66.
115. Id. at 65.
116. Id.
117. Id. at 66.
40 Chapter 2 Class Certification Requirements

The First Circuit Court of Appeals reversed; technically, its ground for doing
so was that the lower court had not engaged in a “rigorous analysis” of the
certification motion, but the opinion (by retired Supreme Court Justice
Souter) suggested “plaintiffs presented substantial evidence of predominat-
ing common issues.”118 Among the predominating common issues it found
were the defendants’ admission of negligence,119 the plaintiffs’ intent to use
the Command’s records to prove harm to their parcels,120 the plaintiffs’
expert’s common methodology for determining damages,121 and the defen-
dants’ uniform objection to the admissibility of the Command’s records.122
While Gintis provides an excellent illustration of a situation in which
common issues predominate over claimant-specific issues, courts have also
recognized a number of instances when individualized issues may predomi-
nate over any common issues. Among them:

• Causation. Torts or other causes of action requiring the plaintiffs to

prove that a specific chain of events caused personal injury or monetary
loss may lead to a predominance of individual issues.123 In particular,
both sides should watch for cases where the alleged defect is not
common to the entire class,124 or where individual use of the product or
service may vary from class member to class member.125

118. Id.
119. Id. at 67.
120. Id.
121. Id.
122. Id.
123. See Duncan v. Northwest Airlines, Inc., 203 F.R.D. 601, 612 (W.D. Wash. 2001) (“plaintiff is
pursuing a negligence claim, which requires an individualized examination of causation
and proof of present injury”); Mahoney v. R.J. Reynolds Tobacco Co., 204 F.R.D. 150, 157
(S. D. Iowa 2001) (“Causation is another area in which individualized inquiries will prove
critical.”); In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 194 F.R.D. 484, 491 (D.N.J.
2000) (no factual predominance where individual issues of causation).
124. See Badillo v. Am. Tobacco Co., 202 F.R.D. 261, 265 (D. Nev. 2001) (“the products in question
are not of a single identifiable brand or design”); Sanneman v. Chrysler Corp., 191 F.R.D.
441, 450 (E.D. Pa. 2000) (declining to certify class where there were “at least eight model
years, 13 different manufacturing plants and hundreds of makes and models, with hundreds
of different kinds and colors of paint supplied by two different paint companies.”); Emig v.
Am. Tobacco Co., 184 F.R.D. 379, 391 (D. Kan. 1998) (“[c]igarettes have not been a static
product”).
125. See Rink v. Cheminova, Inc., 203 F.R.D. 648, 666 (M.D. Fla. 2001) (“While Plaintiffs’ theories
of defectiveness and negligence are constant, the circumstances of this program were not,
and the proof will likely involve distinct considerations of each shipment of Fyfanon, its
storage, and the circumstances of each spraying.”); Badillo, 202 F.R.D. at 265 (“It does not
require an expert to conclude that the exposure to secondhand tobacco smoke of an
employee who works in one area of a particular casino would be different from that of an
employee who works in another area. The permutations are endless and do not lend them-
selves easily to grouping under the rubric of a class action.”).
 Rule 23(b)(3) Damages Classes 41

• Reliance. Reliance is a specialized form of causation. In fraud (and cer-

tain other tort) claims, each claimant must prove that she relied on the
allegedly false information the defendant put out.126 As a result, ques-
tions of individual reliance can preclude certification of a class because
the individual inquiries into what information each claimant received
(and whether that information caused her to make the decision that
led to her injury) will swamp other common issues in the litigation.127
There are several arguments that plaintiffs can make to counter the
problem of reliance, with varying degrees of success. These will be dis-
cussed in more detail in Chapter 5.
• Affirmative defenses. The presence of individualized affirmative
defenses to any of plaintiff ’s claims also may cause a court to find that
claimant-specific factual issues predominate over common ones.128

126. See In re St. Jude Med., Inc., 522 F.3d 836, 838 (8th Cir. 2008) (“In a typical common-law
fraud case, a plaintiff must show that he or she received the defendant’s alleged misrepresen-
tation and relied on it.”); Morgan v. Markerdowne Corp., 201 F.R.D. 341, 349 (D.N.J. 2001)
(“The rule is well-established that fraud cases based on alleged oral misrepresentations are
unsuitable for class action treatment”); Van West v. Midland Nat’l Life Ins. Co., 199 F.R.D.
448, 454 (D.R.I. 2001) (“to the extent that the alleged misrepresentations include different
statements made to individual class members by a variety of agents or brokers, it would
require proof of what each class member was told and the nature of the relationship between
Midland and the particular agent or broker making the statements”); Begley v. Acad. Life Ins.
Co., 200 F.R.D. 489, 498 (N.D. Ga. 2001) (“Because the common scheme does not appear to
have been followed on a consistent basis, individual issues of whether a material fact was
misrepresented to a particular class member and whether such class member detrimentally
relied thereupon predominates over any common issue.”).
127. Fed. R. Civ. P. 23 advisory committee’s note (discussing the 1966 Amendment to subdivi-
sion (b)(3): “[A]lthough having some common core, a fraud case may be unsuited for treat-
ment as a class action if there was material variation in the representations made or in the
kinds or degrees of reliance by the persons to whom they were addressed.”); see also In re St.
Jude Med., Inc., 522 F.3d at 838 (“Because proof often varies among individuals concerning
what representations were received, and the degree to which individual persons relied on
the representations, fraud cases often are unsuitable for class treatment.”); Gariety v. Grant
Thornton LLP, 368 F.3d 356, 362 (4th Cir. 2004) (“Because proof of reliance is generally
individualized to each plaintiff allegedly defrauded, fraud and negligent misrepresentation
claims are not readily susceptible to class action treatment, precluding certification of such
actions as a class action.”) (internal citations omitted); Szabo v. Bridgeport Machs., Inc., 249
F.3d 672, 674 (7th Cir. 2001) (declining to certify class where “oral representations may vary
substantially from one dealer (or occasion) to another, destroying the commonality of the
claims.”); Andrews v. AT & T Co., 95 F.3d 1014, 1025 (11th Cir. 1996) (decertifying class in
part because “the plaintiffs would . . . have to show, on an individual basis, that they relied
on the misrepresentations, suffered injury as a result, and incurred a demonstrable amount
of damages”); Castano v. Am. Tobacco Co., 84 F.3d 734, 745 (5th Cir.1996) (“[A] fraud class
action cannot be certified when individual reliance will be an issue.”).
128. See Vega, 564 F.3d at 1274 (no factual predominance where “T-Mobile apparently would
proffer individualized and varying evidence to defend against claims of individual
class members by showing what they knew or should have known about the charge back
42 Chapter 2 Class Certification Requirements

As a result, both sides should check whether the legal claims asserted
are subject to any particular affirmative defenses. Individual affirma-
tive defenses that may predominate over common issues include (but
are not limited to) assumption of risk,129 comparative negligence,130
and the statute of limitations.131

Legal predominance. The basic principle behind legal predominance has

been summarized by the Seventh Circuit Court of Appeals: “No class action
is proper unless all litigants are governed by the same legal rules.”132 This
principle does not necessarily mean that class actions under the laws of sev-
eral states are impossible; just that if a proposed class requires decisions under
the laws of more than one state, those laws cannot conflict in ways that would
change the outcome of the litigation.133
Legal predominance most often arises as an issue when plaintiffs have
brought state-law claims in either a nationwide or a multi-state class action.
At that point, the court must determine whether the individualized legal
issues raised by the laws of the various states swamp the common legal
questions raised by the class.134
Often, single-state classes will meet the legal predominance test. (Not
always, however; sometimes, even single-state class actions may—if not
defined properly—implicate the laws of various jurisdictions.) It is also pos-
sible to bring a nationwide class that meets the legal predominance test, pro-
vided the plaintiff invokes the exact same law for all of the class members.135

procedures”); Castano, 84 F.3d at 742 n.15 (“Each of these factual differences impacts the
application of legal rules such as causation, reliance, comparative fault, and other affirma-
tive defenses.”); but see Winkler v. DTE, Inc., 205 F.R.D. 235, 244 (D. Ariz. 2001) (certifying
class of buyers car dealership because applicability of defendant’s affirmative defense “is a
common issue appropriate for consideration on a class-wide basis”).
129. See Arch v. Am. Tobacco Co., 175 F.R.D. 469, 491 (E.D. Pa. 1997) (“Assumption of risk is an
inherently individual question, turning as it does upon the subjective knowledge and
behavior of individual plaintiffs.”).
130. See Castano, 84 F.3d at 742 n.15; Rink, 203 F.R.D. at 667; Duncan, 203 F.R.D. at 613 (“the
allocation of liability under the various comparative fault rules would involve the individual
knowledge of each plaintiff and would require examination of the extent to which each
individual flight attendant volunteered for the flights”); Sanneman, 191 F.R.D. at 454.
131. Mahoney, 204 F.R.D. at 159); Sanneman, 191 F.R.D. at 454; but see Winkler, 205 F.R.D. at 244
(“The interpretation of the discovery rule’s application to the present case is a common legal
issue, and a finding in the Plaintiffs’ favor would dispose of the need for individual
assessments.”).
132. In re Bridgestone/Firestone, Inc., 288 F.3d at 1015.
133. Klay v. Humana, Inc., 382 F.3d 1241, 1262 (11th Cir. 2004) (“if a claim is based on a principle
of law that is uniform among the states, class certification is a realistic possibility”).
134. See Cole v. Gen. Motors Corp., 484 F.3d 717, 725–30 (5th Cir. 2007).
135. Klay, 382 F.3d at 1262.
 Rule 23(b)(3) Damages Classes 43

These classes are most common when the plaintiff invokes a federal law,136
although they may also occur if the state-law claims the proposed class asserts
are uniform across the states.
Over time, federal courts have held that, in classes that encompass the laws
of all 51 jurisdictions in the United States,137 individualized legal issues are
likely to predominate over common legal issues.138 Theoretically, it is still
possible that a plaintiff could demonstrate that common legal issues would
predominate over individual ones in a class trial, but practical experience so
far has indicated that she would face an uphill battle in doing so.
To begin, the plaintiff would have to demonstrate that, whatever the cause
of action she invokes, there are no material differences in the way that law is
applied across the fifty states.139 So far, federal courts have found very few
causes of action that can meet this test: courts have held that the laws of the
fifty states vary in applying (among other claims) negligence,140 negligent
misrepresentation,141 unjust enrichment,142 fraud,143 breach of warranty,144

136. Klay, 382 F.3d at 1257–58 (certifying nationwide RICO class).

137. The fifty states plus the District of Columbia. Theoretically, it is also possible for nationwide
class actions to include claims under the laws of U.S. territories like Puerto Rico, Guam, or
the United States Virgin Islands.
138. In re Bridgestone/Firestone, Inc., 288 F.3d at 1015 (“state laws about theories such as those
presented by our plaintiffs differ, and such differences have led us to hold that other war-
ranty, fraud, or products-liability suits may not proceed as nationwide classes”); Oxford
v. Williams Cos., 137 F. Supp. 2d 756, 764 (E.D. Tex. 2001) (“with probably thousands of
plaintiffs and the requirement to apply the various state laws . . . predominance . . . cannot be
achieved.”); In re Ford Motor Co. Ignition Switch, 174 F.R.D. at 349 (“no federal court ha[s]
tried a class action that would require the application of the laws of fifty-one jurisdictions”).
139. See Cole, 484 F.3d at 725–30.
140. In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1301 (7th Cir. 1995) (Posner, C.J.) (individual
issues predominate in nationwide negligence class because “[t]he voices of the quasi-
sovereigns that are the states of the United States sing negligence with a different pitch.“);
Harding v. Tambrands, Inc., 165 F.R.D. 623, 629 (D. Kan. 1996) (“There is no one standard
of negligence, for example, which would be applicable to all members of the plaintiff class.
The law of negligence is not uniform and cannot be abstracted into a single instruction.”).
141. See Weikel v. Tower Semiconductor Ltd., 183 F.R.D. 377, 402 (D.N.J. 1998); In re Control Data
Corp. Secs. Litig., 116 F.R.D. 216 (D. Minn. 1986).
142. Thompson v. Jiffy Lube Int’l, Inc., 250 F.R.D. 607, 626 (D. Kan. 2008) (“Because of such varia-
tions [in state laws], federal courts have generally refused to certify a nationwide class based
upon a theory of unjust enrichment.”); but see Agostino v. Quest Diagnostics, Inc., 256 F.R.D.
437, 464 (D.N.J. 2009) (finding “no actual conflicts among the laws of unjust enrichment”).
143. See In re Bridgestone/Firestone, Inc., 288 F.3d at 1015 (“differences [in state laws] have led us
to hold that other . . . fraud . . . suits may not proceed as nationwide classes”); In re Ford
Motor Co. Vehicle Paint Litig., 182 F.R.D. 214, 223 (E.D. La. 1998).
144. See In re Bridgestone/Firestone, Inc., 288 F.3d at 1015 (“differences [in state laws] have led us
to hold that other warranty . . . suits may not proceed as nationwide classes”).
44 Chapter 2 Class Certification Requirements

breach of contract,145 and violations of consumer-protection acts.146 A few

courts have found that legal variations would not swamp smaller multi-
jurisdictional classes in which the legal rules governing each state-law claim
did not differ materially.147 Similarly, some courts have found that subclass-
ing may minimize legal variations.148 And some district courts have allowed
multi-state classes to proceed under the laws of a single state where the appli-
cable choice-of-law rule would select the law of the forum jurisdiction or the
defendant’s home state.149
The legal predominance inquiry is not confined to the elements of these
causes of actions. Affirmative defenses, like the applicability of the statute of
limitations150 or assumption of risk151 also may affect predominance.
Nonetheless, plaintiffs’ lawyers have tried a number of approaches to bring
nationwide class actions based on state-law claims—some successful, some
not. We will discuss the arguments they have advanced in greater detail in
Chapter 5.

145. Agostino, 256 F.R.D. at 467–68; Bishop’s Property & Invs., LLC v. Protective Life Ins. Co., 255
F.R.D. 619, 625 (M.D. Ga. 2009) (variations in state law governing implied contract claims
swamped common issues); but see Klay, 382 F.3d at 1263 (“A breach is a breach is a breach,
whether you are on the sunny shores of California or enjoying a sweet autumn breeze in
New Jersey.”).
146. See In re Bridgestone/Firestone, Inc., 288 F.3d at 1018 (“State consumer-protection laws vary
considerably, and courts must respect these differences rather than apply one state’s law to
sales in other states with different rules.”).
147. Dornberger v. Metro. Life Ins. Co., 182 F.R.D. 72, 79–82 (S.D.N.Y. 1999) (finding legal varia-
tion did not preclude predominance where court could use subclasses to group nine
European jurisdictions).
148. Miles v. Am. Online, Inc., 202 F.R.D. 297, 305 n.6 (M.D. Fla. 2001) (“To the extent there are
any meaningful state law deviations in the unfair and deceptive trade practice statutes, the
Court may choice [sic] to create subclasses or decertify those subclasses that are unmanage-
able.”); Dornberger, 182 F.R.D. at 79–82.
149. In re St. Jude Med., Inc., 522 F.3d at 840–41 (declining to certify class on other grounds, but
noting that “district court eliminated the diversity of legal issues by applying Minnesota law
to all claims” and assuming for sake of argument that “it is proper under Minnesota choice
of law principles and the Constitution to apply Minnesota law to every claim”); In re Great
Southern Life Ins. Co. Sales Practices Litig., 192 F.R.D. 212, 217–19 (N.D. Tex. 2000) (apply-
ing Texas law to claims of policyholders from 46 states).
150. See In re Jackson Nat’l Life Ins. Co. Premium Litig., 183 F.R.D. 217, 222 (W.D. Mich. 1998);
Thompson v. Am. Tobacco Co., Inc., 189 F.R.D. 544, 556 (D. Minn. 1999) (“Determining
whether a class member’s claim is barred by the statute of limitations would take thousands
of ‘mini-trials’”.).
151. Castano, 84 F.3d at 743 n.15 (variations in law governing assumption of risk precluded
certification).
 Rule 23(b)(3) Damages Classes 45

§ 2.7.2 Superiority

Rule 23(b)(3) also states that the court must find that “a class action is
superior to other available methods for fairly and efficiently adjudicating
the controversy.”152 That finding requires the court to make four separate
inquiries:

(A) the class members’ interest 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.153

While courts will not always separate out these four factors in determining
whether a proposed class is superior, it is worth examining each inquiry in
turn.
Individual interest. This factor is closely linked to the question of opt-outs.
If the individual members of the class have a compelling interest in controlling
separate lawsuits, then it is likely that they would opt out of class litigation,
suggesting it is not superior to individual litigation. If enough litigants opt out
of the class, then it does not provide any judicial finality for defendants, and
essentially becomes no different than a simple mass-joinder action, except
that it might bar class members from asserting other legal theories later.154
The “individual interest” inquiry turns on the cost of litigating the class
members’ claims, and the complexity of the issues surrounding those claims.
The less the lawsuit is worth, the more likely it is that individuals will have no
interest in controlling their own lawsuits. If individual lawsuits are likely to
be “negative-value” suits (that is, they would cost more to litigate than any
possible recovery), then the court will find there is no compelling individual
interest in controlling the litigation.155 (Conversely, if individual claims are

152. Fed. R. Civ. P. 23(b)(3).

153. Id.
154. In re Fosamax, 248 F.R.D. at 403 (“certification of the proposed monitoring-only class could
lead to the result that class members who fail to opt out will be barred from later seeking
damages by operation of res judicata”).
155. See Thorogood v. Sears, Roebuck & Co., 547 F.3d 742, 744 (7th Cir. 2008) (“The class action
is an ingenious device for economizing on the expense of litigation and enabling small
claims to be litigated. . . . If every small claim had to be litigated separately, the vindication
of small claims would be rare. The fixed costs of litigation make it impossible to litigate a $50
claim . . . at a cost that would not exceed the value of the claim by many times.”); see also
Samuel Issacharoff & Richard A. Nagareda, Class Settlements Under Attack, 156 U. Pa. L.
Rev. 1649, 1651 (2008) (“Some cases have value when aggregated but are simply not
46 Chapter 2 Class Certification Requirements

worth enough on their own, then a class action may not be superior to indi-
vidual litigation.)156 Moreover, if the issues in the litigation are complex
enough to require extensive, unwieldy discovery, it is possible that no indi-
vidual litigant would be willing to pursue an individual lawsuit.157
However, this does not mean that all low-recovery suits are negative-value
suits. For example, the presence of statutory attorneys’ fees may give indi-
viduals an incentive to pursue smaller lawsuits.158 And if individual plaintiffs
could join other, related claims to their individual lawsuits, they might have
an interest in pursuing smaller-value claims.159 Similarly, if individualized
issues are likely to predominate in the lawsuit, it is likely that individual liti-
gants will have a compelling interest in controlling their own lawsuits.160
Other litigation. The most convincing evidence that individuals have an
interest in pursuing their own litigation is the presence of other individual law-
suits against the defendant.161 These do not have to be individual lawsuits for
compensatory damages; courts also will consider lawsuits seeking injunctive

viable—they have ‘negative value,’ in the modern economic parlance of class action law—as
individual claims.”).
156. See Castano, 84 F.3d at 748 (no superiority where “individual damage claims are high, and
punitive damages are available in most states”); County of Santa Clara v. Astra USA, Inc., 257
F.R.D. 207, 213 (N.D. Cal. 2009) (no superiority where “the sums at stake are likely large
enough for the 340B entities to justify launching their own stand-alone suits. Each entity
would be able to protect its own interests. Put differently, the 340B entities are not consum-
ers with small claims that need a collective action to vindicate their rights. They are sophis-
ticated and, more to the point, they have sufficiently large stakes involved to justify their
own litigation catered to their own circumstances”). Substantial damages on their own may
not make individual litigation superior, however. See Gintis, 596 F.3d at 67–68 (suggesting
individual recoveries between $12,000 and $39,000 may not justify individual lawsuits once
court considered cost of retaining environmental expert).
157. In re EDS Secs. Litig., 226 F.R.D. 559, 570–71 (E.D. Tex. 2005) (class action superior because
“there is no indication that any member of the class would prefer to prosecute its own claim,
especially since this is a sophisticated action involving extensive discovery that would be
impractical for any one individual to control”).
158. See Castano, 84 F.3d at 748 (plaintiffs’ proposed class action not superior in part because
statutory attorneys’ fees available for individual lawsuits).
159. In re Fosamax, 248 F.R.D. at 402 (finding individual interest in litigation because “[t]here is
no reason . . . why class members must limit the relief they seek to dental monitoring”).
160. Id. (finding individual interest in pursuing lawsuits where “[c]lass members may wish to
seek a monitoring program that is tailored, under the advice of their own physicians, to
their individual preferences and unique medical histories”).
161. Id. at 403 (finding no individual interest in litigation where “[h]undreds of other Fosamax
users have already filed suit against Merck seeking similar relief under many legal theories,
and more lawsuits are filed each week”); Blaine, 240 F.R.D. at 192 (“The existence of indi-
vidual lawsuits filed in jurisdictions outside of the forum generally weighs against
certification.”).
 Rule 23(b)(3) Damages Classes 47

or other equitable relief or lawsuits that include the class claims with other
related individual damages claims.162
Conversely, courts often will find the absence of any other litigation an
indication that individuals do not have an interest in controlling separate
lawsuits.163
Desirability of concentrating litigation in a particular forum. Courts tend
to find class actions superior to individual litigation when there are actual
efficiencies to be gained from aggregating the cases; for example, when the
class action will resolve the predominant issue in the litigation.164 If class
members share common issues, then courts often find concentrating litiga-
tion into a single forum desirable.165 Consolidation allows a number of plain-
tiffs to try certain fact-intensive issues requiring common proof—such as the
meaning of a uniform contract term, the effect of certain disclosures on a
stock’s price, or the definition of a market in an antitrust case—only once, to
a uniform result.
However, in some cases, novel legal theories may convince a court that
concentrating litigation in a single forum is not a good idea.166 In particular,
concentrating novel (or “immature”)167 litigation in a single forum may
deprive all parties of information about the value of each lawsuit. Judge
Easterbrook discussed this concern in In re Bridgestone/Firestone, Inc. Tires
Prods. Liability Litigation:

Efficiency is a vital goal in any legal system—but the vision of “efficiency”

underlying this class certification is the model of the central planner. . . .

162. See Gregory v. Finova Capital Corp., 442 F.3d 188 (4th Cir. 2006) (class action not superior
when adversary bankruptcy proceeding already addressed same issues).
163. See In re Reliant Energy ERISA Litig., No. Civ.A. H-02-2051, 2005 WL 2000707, *4 (S.D. Tex.
Aug. 18, 2005) (“the absence of other litigation concerning these same claims indicates that
the individual class members have little interest in pursuing independent actions”).
164. See Fisher, 217 F.R.D. at 227 (E.D. Va. 2003) (proposed class action superior to individual
litigation “[g]iven the efficiency gains that will result from a resolving the predominant
common issues on a representative basis”).
165. Coco v. Inc. Village of Bele Terre, 233 F.R.D. 109, 116 (E.D.N.Y. 2005) (“Given the large
number of potential plaintiffs and the commonality of their claims, certifying the class
will allow a more efficient adjudication of the controversy than individual adjudications
would do.”).
166. In re Fosamax, 248 F.R.D. at 403 (“Assuming that it would be appropriate for a court to
determine whether someone who takes an FDA-approved drug is entitled to medical moni-
toring even before the FDA recommends such monitoring for any user of the drug, a more
cautious, case-by-case approach focusing on the particular factual circumstances of indi-
vidual plaintiffs would be more prudent.”).
167. See Castano, 84 F.3d at 740–41 (‘while the tort is immature . . . class certification cannot be
found to be a superior method of adjudication”); In re Rhone-Poulenc Rorer, 51 F.3d at 1300
(no superiority where “[f]or this consensus or maturing of judgment the district judge pro-
poses to substitute a single trial before a single jury instructed in accordance with no actual
law of any jurisdiction”).
48 Chapter 2 Class Certification Requirements

The central planning model—one case, one court, one set of rules, one settle-
ment price for all involved—suppresses information that is vital to accurate
resolution. What is the law of Michigan, or Arkansas, or Guam, as applied to
this problem? Judges and lawyers will have to guess, because the central plan-
ning model keeps the litigation far away from state courts. . . . And if the law
were clear, how would the facts (and thus the damages per plaintiff ) be ascer-
tained? One suit is an all-or-none affair, with high risk even if the parties supply
all the information at their disposal. Getting things right the first time would be
an accident. Similarly Gosplan or another central planner may hit on the price
of wheat, but that would be serendipity. Markets instead use diversified deci-
sionmaking to supply and evaluate information. Thousands of traders affect
prices by their purchases and sales over the course of a crop year. This method
looks “inefficient” from the planner’s perspective, but it produces more infor-
mation, more accurate prices, and a vibrant, growing economy.168

Following Judge Easterbrook’s logic in Bridgestone/Firestone, some courts

have expressed skepticism about certifying a strict-liability class with an
abnormally large payout.169
Some courts have also found that the geographic dispersal of plaintiffs,
witnesses, or evidence may reduce the benefit from concentrating the litiga-
tion into a single forum.170 In addition, some courts have found that, where
variations in state law predominate, individual class members may have a
strong interest in bringing suits in separate fora.171
Manageability. The manageability requirement “encompass[es] the whole
range of practical problems that may render the class action format inappro-
priate for a particular suit.”172 One factor that affects manageability is whether
the case will be tried in front of a judge or a jury.173 Generally speaking, courts

168. In re Bridgestone/Firestone, Inc., 288 F.3d at 1020 (emphases in original).

169. Hillis, 237 F.R.D. at 506–07 (no superiority where statutory damages would lead to crippling
damages award).
170. See Zinser v. Accufix Research Institute, Inc., 253 F.3d 1180, 1191–92 (9th Cir. 2001) (“where
the potential plaintiffs are located across the country and where the witnesses and the par-
ticular evidence will also be found across the country, plaintiffs have failed to establish any
particular reason why it would be especially efficient for this Court to hear such a massive
class action lawsuit”).
171. See In re Control Data Corp. Secs. Litig., 116 F.R.D. 216 (D. Minn. 1986) (“Notwithstanding
the constitutional ability to apply Minnesota law, the court believes that the class members
have a significant interest in individually controlling the prosecution of these tort claims in
the forum of their choice because of the significant variations in state law with regard to the
alleged common law torts, especially negligent misrepresentation.”) (internal footnote
omitted).
172. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 164 (1974) (internal quotations omitted); see also
Andrews v. Am. Tel. & Telegraph Co., 95 F.3d 1014, 1023 (11th Cir. 1996) (same).
173. See In re Reliant Energy, 2005 WL 2000707 at *4 (finding superiority where “[t]he entire case
will be tried to the Court without a jury”). Ironically, plaintiffs’ lawyers often prefer jury
trials.
 Rule 23(b)(3) Damages Classes 49

are more concerned that a lay jury will be overwhelmed by numerous indi-
vidualized legal or factual issues than that judges themselves (highly trained
and experienced legal experts) will be. Hence, certain manageability issues
may cause more concern in jury trials than bench trials.
However, manageability also includes any logistical problems that may be
posed by a class where individual issues predominate over common issues. In
this way, the predominance and superiority inquiries are tightly linked. For
example, many courts have held that the logistical issues raised by a class
action invoking the laws of all fifty states—particularly the need to issue accu-
rate but understandable jury instructions—render a class action inferior to
other forms of litigation.174
A trial plan is not a prerequisite for a finding of superiority,175 but, it is
certainly helpful to the court.176 Therefore, if plaintiffs do not submit a trial
plan, the court will still require them to discuss how they intend to try the
various issues in the litigation on a class-wide basis.
Viable alternatives. The court must also determine whether the class action
is superior to other methods of resolving the controversy.177 The alternative
method does not necessarily have to be litigation. For example, courts have
found superiority to be lacking where there is some form of governmental
regulation already in place.178
Several courts have found that manageability:

should be considered only in relation to alternative means of adjudication and

thus should not be used to deny certification in the face of novel challenges, but
‘only where the attention and resources which would have to be devoted strictly
to administrative matters will overwhelm any relief ultimately accruing to the
plaintiff class.’179

174. See Oxford, 137 F. Supp. 2d at 764 (applying property and remedies laws of 51 jurisdictions
“would be an unmanageable task for this, or any, court”); Lyon v. Caterpillar, Inc., 194 F.R.D.
206, 221 (E.D. Pa. 2000) (“If I find plaintiff ’s jury instructions confusing, how can I expect
a lay jury to wade through these question[s]?”).
175. Feder, 429 F.3d at 139 (“We did not hold . . . that the submission of a trial plan was a prereq-
uisite for a finding of superiority. Instead, we stated that a court must consider ‘how a trial
on the alleged causes of action would be tried.”) (internal quotations omitted).
176. See Vega, 564 F.3d at 1279 n.20 (“[C]ourts must consider how a case will be tried as part of
the superiority assessment. Accordingly, the proposal of a workable trial plan will often go
a long way toward demonstrating that manageability concerns do not excessively under-
mine the superiority of the class action vehicle.”) (internal citations omitted); Robinson v.
Tex. Auto Dealers Ass’n, 387 F.3d 416, 426 (5th Cir. 2004).
177. Sanneman, 191 F.R.D. at 455 (“To find superiority, a court must find all other methods of
resolving the issues in a case to be inferior to a class action.”).
178. In re Bridgestone/Firestone, Inc., 288 F.3d at 1019 (“Regulation by the NHTSA, coupled with
tort litigation by persons suffering physical injury, is far superior to a suit by millions of
uninjured buyers for dealing with products that are said to be failure-prone.”).
179. See Fisher, 217 F.R.D. at 227 (internal quotations omitted).
50 Chapter 2 Class Certification Requirements

This means that the manageability inquiry most often pits the class action
against individual litigation,180 but may also force a comparison with govern-
ment investigation or mediation and arbitration.
So, what issues should lawyers look for in determining whether a pro-
posed class action is superior?

• The value of an individual claim. The smaller the claim (assuming it is

the only claim an individual could bring), the more likely it is that a
class action will be superior to individual litigation.
• The presence of other individual litigation. If other litigants have
brought suits on an individual basis, that is a powerful argument that
a class action may not provide enough benefits to overcome its costs.
• Statutes that enable small-claims litigation. Consumer-fraud acts and
other statutes authorizing attorneys’ fees (like the TCPA or FACTA)
allow for small-claims litigation. In addition, the presence of statutory
damages (like in the TCPA or FACTA) may also mean that individual
litigation is superior to a class action.
• The presence of other, related claims that individuals could bring. If cer-
tifying the class may require class members to forgo other, more valu-
able claims (such as claims for fraud based on oral representations, or
personal-injury claims from exposure to hazardous materials), then a
class action may not be a superior alternative to individual litigation.
• The presence of government regulation of some kind. What government
agencies are involved in the issue? Do they often regulate similar
issues? Have they specifically said that they have no interest in
regulating?

§ 2.8 Class Counsel

The court’s Rule 23 inquiry no longer ends with Rule 23(a) and (b). The court
must also appoint class counsel under Rule 23(g). Rule 23(g) provides:

(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 litiga-
tion, and the types of claims asserted in the action;

180. See id. at 228 (internal quotations omitted).

 Class Counsel 51

(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 Rule 23(h); and
(E) may make further orders in connection with the appointment.
(2) 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 Rule 23(g)(1) and (4). If
more than one adequate applicant seeks appointment, the court must appoint
the applicant best able to represent the interests of the class.
(3) Interim Counsel.
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.
(4) Duty of Class Counsel.
Class counsel must fairly and adequately represent the interests of the class.

Because Rule 23(g) is relatively new, there is little caselaw that explicates its
requirements. As a result, many courts still use the Rule 23(a)(4) framework
to evaluate whether class counsel will fairly and adequately represent the
interests of the class.181
Plaintiffs’ lawyers typically support their requests for appointment as class
counsel with declarations listing the other class actions they have brought
and their outcomes, and attesting that they have the resources, skill, and will-
ingness to represent the class.
Challenges to the adequacy of class counsel are comparatively rare.182
Despite the adversarial relationship between class-action plaintiffs’ and
defense counsel, the bar in general still aspires to collegiality, and so defense
lawyers are loath to attack plaintiffs’ lawyers personally.183 In addition,
defense lawyers sense (rightly, we believe) that judges dislike attacks on other
counsel.184 This does not mean that a defendant will never challenge the

181. See Evans v. IAC/Interactive Corp., 244 F.R.D. 568, 578–79 (C.D. Cal. 2007).
182. In fact, it is common for courts to note that defendants have not challenged the adequacy of
plaintiffs’ counsel. See Robinson v. Fountainhead Title Group Corp., 252 F.R.D. 275, 288
(D. Md. 2008) (“Defendants do not challenge class counsel’s competency”).
183. Linda S. Mullinex, Taking Adequacy Seriously: The Inadequate Assessment of Adequacy in
Litigation and Settlement Classes, 57 Vand. L. Rev. 1687, 1701 (2004) (discussing defense
counsel’s “inability or disinclination to call proposed class counsel as a witness for examina-
tion on adequacy issues”).
184. Bogner v. Masari Invs., LLC, 257 F.R.D. 529, 533 (D. Ariz. 2009) (“The character and ethics
of class counsel may conceivably bear on the adequacy of representation. One, however,
52 Chapter 2 Class Certification Requirements

adequacy of class counsel, just that it will only do so when adequacy is clearly
lacking, and when it has clear evidence indicating just that.
So what factors might render class counsel inadequate to represent a
class?

• Failure to conduct a thorough investigation into the class claims. If class

counsel have not met their duty to investigate the claims of their class
representatives, a court may rule that class counsel itself has not per-
formed adequately.185
• Failure to inform class representatives of their duty to the class. Class
representatives are not lawyers, but they are expected to have an edu-
cated layperson’s understanding of their claims. So if the class repre-
sentative has no idea of her responsibilities, the court may decide that
class counsel has not fulfi lled its responsibility to educate the named
plaintiff.186
• Conflicting representation of more than one class. Often, a plaintiff ’s
firm will represent more than one class in similar litigation. In some
instances, that may lead to a clear conflict between two different
classes, which can be grounds for disqualifying class counsel.187

Rule 23 provides the legal basis for the class action, so a thorough under-
standing of its dictates and its limits is important for both the plaintiff and the
defendant. However, merely understanding the rule is not enough to provide
either side with an understanding of the realities that dictate class-action
practice. Therefore, beginning with the next chapter, we will examine how
financial pressures, institutional pressures, and other legal rules shape class-
action litigation. We begin with the various strategic considerations that go
into filing a class-action complaint.

should not lightly impugn the integrity or professional ethics of another.”) (internal quota-
tions omitted); see also Mullinex, Taking Adequacy Seriously, 57 Vand. L. Rev. at 1701–02
(“The prospect of having to evaluate professional competence is painful; both judges and
even opposing counsel are uncomfortable passing judgment on another attorney’s career.”).
185. See Evans, 244 F.R.D. at 578–79 (refusing to certify class because class counsel inadequate
where they relied on false factual declarations to support class certification motion);
Williams v Balcor Pension Investors, 150 F.R.D. 109, 119–20 (N.D. Ill. 1993) (finding class
counsel inadequate where they did not adequately investigate class representatives before
filing class certification motion).
186. Porter v. Nationscredit Consumer Discount Co., 229 F.R.D. 497, 499 (E.D. Pa. 2005)
(“Counsel’s apparent failure to properly inform Ms. Porter of her presumable role and
responsibilities as lead Plaintiff is just one of the many reasons that the Court harbors a
concern over Plaintiff ’s Counsel’s ability to adequately represent any class.”).
187. See Moore v. Margiotta, 581 F. Supp. 649, 651 (E.D.N.Y. 1984) (simultaneous representation
of both taxpayer class and insurance broker class in RICO case against local government
grounds for disqualifying class counsel).
 CHAP TER

3
Constructing a Class Action Lawsuit

§ 3.1 Types of Class Actions 54

§ 3.1.1 Securities 55
§ 3.1.2 Labor/Employment 57
§ 3.1.3 Product Liability 59
§ 3.1.4 Consumer Fraud 59
§ 3.1.5 Antitrust 60
§ 3.1.6 Environmental 61
§ 3.1.7 Civil Rights 62
§ 3.1.8 Statutory Violations 63

§ 3.2 Identifying a Potential Class Action 64

§ 3.3 Forum Considerations 67

§ 3.4 Selecting Appropriate Defendants 73

§ 3.5 Identifying Class Representatives 75

§ 3.6 Drafting the Complaint 77

§ 3.6.1 Selecting Claims 78
§ 3.6.2 Selecting Remedies 79
§ 3.6.3 Defining the Proposed Class 81
§ 3.6.4 Pleading 82

§ 3.7 Working With Other Plaintiff’s Counsel 83

54 Chapter 3 Constructing a Class Action Lawsuit

One striking way in which class actions differ from other lawsuits is their
entrepreneurial origins. Unlike most individual lawsuits, in which a client
who has been harmed approaches a lawyer, the typical class action involves a
lawyer who has unearthed a class-wide wrong that caused class-wide injury.
The lawyer then recruits a client and files a lawsuit. As a result, constructing a
successful class action requires far more than just taking a client’s statement,
matching it to a legal theory, and filing a complaint. Instead, it requires stra-
tegic vision, extensive research, and high tolerance for financial risk.1
This chapter provides an overview of the strategic issues that confront a
plaintiff’s attorney at each step of constructing a class action. It begins by
examining the built-in risks and benefits of filing class actions in specific areas
of law. Then it moves to more practical issues: identifying the potential class
issues in an inciting incident; selecting the appropriate forum and appropri-
ate defendants; identifying and recruiting class representatives; defining the
proposed class; selecting class-wide causes of action and remedies; and,
finally, pleading the initial claim.

§ 3.1 Types of Class Actions

While each class action poses its own unique set of legal and factual
challenges, many class actions fall into specific types which—either because
of the substantive law that governs them or the specific facts applicable to
them—offer distinct opportunities and pose distinct challenges for each side.
Following are some of the major areas of substantive law into which class
actions fall. These types are not rigid; certain class actions may combine
aspects of more than one type. And these descriptions are (necessarily) sim-
plifications of often-complex bodies of law. But these simplifications should
provide a guide to the most common types of class actions, and the issues
each raises.
Some plaintiffs’ lawyers focus primarily on one substantive area of class
practice (such as securities, labor, or antitrust); others find it better business
strategy to file a number of different kinds of claims and manage a diversified
portfolio of class-action cases.2

1. See Pinto v. Princess Cruise Lines, Ltd., 513 F. Supp. 2d 1334, 1340 (S.D. Fla. 2007) (“From the
time Class Counsel filed suit, there existed a real possibility that they would achieve no recov-
ery for the Class and hence no compensation. Class Counsel’s investment of time and expenses
has always been at risk and wholly contingent on the result they achieved.”).
2. See Note, Risk-Preference Asymmetries in Class Action Litigation, 119 Harv. L. Rev. 587, 595
(2005) (“Class counsel . . . can diversify against risk much like an insurer can.”).
 Types of Class Actions 55

§ 3.1.1 Securities

The typical securities class action involves a shareholder suing a corporation

on behalf of a class of shareholders because its management’s dishonest con-
duct caused its share price to drop,3 harming the various shareholders. This
dishonest conduct usually involves either affirmative misrepresentations—or
the withholding of information—about events that materially influence the
value of the company’s stock. A securities class action usually involves allega-
tions that corporate management engaged in improper accounting methods
to disguise poor company performance, in order to keep the stock price arti-
ficially high. The harm occurs when the truth is revealed, driving the stock
price down from its peak.
A number of courts have remarked that securities-fraud allegations are
particularly well suited to resolution by class litigation.4 They do offer distinct
advantages to plaintiffs’ lawyers equipped to handle them: much of the evi-
dence is both publicly available (in the form of stock prices and public disclo-
sures), and presumed to apply to the class as a whole.5 As a result, the popular
perception is that securities class actions are easier to certify than other types
of class actions.6
Partly because of the perceived ease of certifying a class, securities class
actions themselves have become heavily regulated. The Private Securities
Litigation Reform Act (PSLRA)—originally passed to curb perceived abuses

3. Stephanie Planich, et al., 2008 Trends: Subprime and Auction-Rate Cases Continue to Drive
Filings, and Large Settlements Keep Averages High, NERA Economic Consulting, July 2008,
at 8 (noting that large price drops affect the probability that a securities class action will be
filed).
4. Green v. Wolf Corp., 406 F.2d 291, 296 (2d Cir. 1968) (securities class action “may well be the
appropriate means for expeditious litigation of the issues, because a large number of individu-
als may have been injured, although no one person may have been damaged to a degree which
would have induced him to institute litigation solely on his own behalf ”); Eisenberg v. Gagnon,
766 F.2d 770, 785 (3d Cir. 1985) (“Class actions are a particularly appropriate and desirable
means to resolve claims based on the securities laws, since the effectiveness of the securities
laws may depend in large measure on the application of the class action device.”(internal
quotation omitted)); In re Vivendi Universal, S.A. Sec. Litig., 242 F.R.D. 76, 91 (S.D.N.Y. 2007)
(“As courts have frequently noted, class action treatment is particularly appropriate when
plaintiffs seek redress for violations under the securities laws.”).
5. Basic, Inc. v. Levinson, 485 U.S. 224, 250 (1988) (“It is not inappropriate to apply a presump-
tion of reliance supported by the fraud-on-the-market theory.”); see also Amchem Prods. Inc. v.
Windsor, 521 U.S. 591, 625 (1997) (“Predominance is a test readily met in certain cases
alleging consumer or securities fraud or violations of the antitrust laws.”).
6. This does not mean that certification is automatic for securities class actions, however. See
Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F. 3d 154, 162 (3d Cir. 2001) (affirming
denial of certification of securities class).
56 Chapter 3 Constructing a Class Action Lawsuit

by members of the plaintiffs’ bar7—imposes a number of additional require-

ments on the plaintiff and her counsel before filing a complaint.
Before a plaintiff files a securities complaint, she must certify through a
sworn statement that she:

• reviewed the complaint and authorized filing;

• did not buy the security just to file suit;
• is willing to serve as a class representative, even if that means giving
testimony at trial;
• has provided all information about her transactions in the stock during
the class period;
• has identified all securities actions in which she has participated in the
last three years; and
• will not accept payment beyond her pro-rata share of recovery.8

A securities plaintiff must also provide notice to class members within 20

days of filing a complaint.9 The PSLRA imposes additional burdens at the
motion-to-dismiss stage, including requiring the plaintiff to specifically plead
facts showing how defendant’s misconduct caused her investments to suffer
a loss (known as “loss causation”)10 and to specifically plead facts underlying
any allegations of falsity or the defendant’s state of mind (scienter).11
Despite these additional statutory requirements, securities class actions
remain a popular form of class action, especially in the wake of the Enron-era
scandals of the early 2000’s and the financial industry calamities of 2008.12
One distinct subset of the securities class action is the retirement plan
“company stock” class action under the Employee Retirement Income Security
Act (“ERISA”).13 Because the substantive law underlying the litigation is dif-
ferent—ERISA, instead of the securities laws—ERISA “company stock” class

7. Stephen J. Choi & Robert B. Thompson, Securities Litigation and its Lawyers: Changes During
the First Decade after the PSLRA, 106 Colum. L. Rev. 1489, 1489 (2006); see also Patrick
Dillon & Carl M. Cannon, Circle of Greed: The Spectacular Rise and Fall of the
Lawyer Who Brought Corporate America to Its Knees (2010) 225 (noting that
Republican Congressional staffers called the PSLRA the “Get Lerach Act” after the promi-
nent securities lawyer William Lerach).
8. 15 U.S.C. §§ 77z-1(a)(2)(A)–78u-4(a)(2)(A).
9. Id. §§ 77z-1(a)(3)(A)(i)(II), 78u–4(a)(3)(A)(i)(II).
10. Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 346–48 (2005).
11. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007).
12. John C. Coffee, Jr. & Stefan Paulovic, Class Certification: Developments Over the Last Five
Years, 2002-2007: The Future of Class Actions, 8 Class Action Litig. Report (BNA) 787
(Oct. 26, 2007) (“Securities class actions have long been the largest single category of class
actions.”).
13. 29 U.S.C. § S 1001 et seq. ERISA class actions are a recent growth area. See Coffee & Paulovic,
Class Certification Developments, 8 Class Action Litig. Report (BNA) 787.
 Types of Class Actions 57

actions are not subject to the PSLRA. However, the general theory of liability—
that plaintiffs who work for a particular employer invested in a retirement plan
(usually a 401(k)), which in turn invested in the stock of the plaintiffs’ employer
that lost value—is very similar to a securities class action. As a result, some
firms will specialize in ERISA-based securities class action, filing them parallel
to other securities lawsuits.
The market for securities class actions tends to be saturated, dominated by
a few large firms, and therefore more difficult to enter successfully.14 Securities
class actions tend to attract established, well-funded plaintiffs’ firms with
large institutional clients.15
Given these environmental factors, securities class actions often delve into
the merits of plaintiff’s claims faster than in other class actions. The defendant
will often file a motion to dismiss (or motion for summary judgment) deny-
ing that it knowingly committed any fraudulent act. To the extent that the
defendant does challenge certification, it will most likely focus on arguing
that the plaintiff is not an adequate class representative, on demonstrating
that the particular securities market was efficiently traded, and on reducing
the length of the defined class period.

§ 3.1.2 Labor/Employment

The typical labor or employment class action challenges a policy or pattern of

conduct at an employer firm that allegedly harmed certain categories of its
employees. That conduct might involve discrimination16 or not paying
required wages or benefits.17 In some cases, plaintiffs might also bring—and
courts might consider—class actions involving more individualized allega-
tions, such as a pattern of sexual harassment.18 The most common recent fil-
ings have been wage-and-hour actions, which allege that the plaintiff was not
paid for all the time she actually worked, and invoke either the Fair Labor

14. Choi & Thompson, Securities Litigation and its Lawyers, 106 Colum. L. Rev. at 1518.
15. For one example of competition to represent an institutional investor that was made public, see
http://www.law.com/jsp/tal/digestTAL.jsp?id=1202437875355&Plaintiffs_Secrets_Revealed_
Proposals_from_Florida_Pension_Fund_Beauty_Contest_Are_Treasure_Trove_of_Client_
and_Fee_Info.
16. See, e.g., Carpenter v. Boeing Co., 456 F.3d 1183, 1187 (10th Cir. 2006) (“Discrimination suits
are often filed as putative class actions.”).
17. See In re Wal-Mart Stores, Inc. Wage and Hour Litig., 505 F. Supp. 2d 609 (N.D. Cal. 2007).
18. For an in-depth discussion of the challenges faced by one firm that ultimately prevailed in
bringing a sexual-harassment class action, see Clara Bingham & Laura Leedy Gansler,
Class Action: The Story of Lois Jenson and the Landmark Case that Changed
Sexual Harassment Law (2002).
58 Chapter 3 Constructing a Class Action Lawsuit

Standards Act, (“FLSA”), state minimum-wage laws, or both.19 Labor class

actions have proved a growth area for complaints in recent years.20
The FLSA—which generally requires employers to pay set minimum
wages and overtime rates—also allows for collective actions under 29 U.S.C.
§ 216(b), provided the members of the proposed class are “similarly situated.”21
The procedure for obtaining certification of FLSA collective actions is differ-
ent than that for Rule 23 class actions,22 and is generally considered more
permissive.23 FLSA certification usually occurs in two parts. First, at the
“notice stage,” the trial court decides (based on pleadings and affidavits)
whether it should notify potential class members of the actions.24 At this
point, it considers two factors: (1) are there other employees who want to join
the action, and (2) are those employees “similarly situated” to the plaintiff?25
If the court decides in favor of notice (and with it, conditional certification),
it informs the putative class members with a court-ordered notice and pro-
vides them an opportunity to opt into (not out of) the class.26 Once any other
plaintiffs have opted in, discovery commences.27
Once discovery is mostly complete, the defendant moves for decertifica-
tion if appropriate.28 “[T]he more material distinctions [are] revealed by the
evidence, the more likely the district court is to decertify the collective
action.”29 That said, some individualized issues may not justify decertification
if the underlying law has granted the plaintiff certain “procedural
advantages.”30 If the court decertifies the proposed opt-in class action, it
dismisses the opt-in plaintiffs without prejudice to reasserting their claims
individually.31

19. Coffee & Paulovic, 8 Class Action Litig. Report (BNA) 787; see also Ellis v. Edward
D. Jones & Co., L.P., 527 F. Supp. 2d 439, 459 n.19 (W.D. Pa. 2007) (noting “explosion” of
hybrid lawsuits including both state and FLSA actions”).
20. Howard M. Erichson, CAFA’s Impact on Class Action Lawyers, 156 U. Pa. L. Rev. 1593,
1619–21 (2008) (noting rise in FSLA class-action filings); see also Coffee and Paulovic, Class
Certification Developments, 8 Class Action Litig. Report (BNA) 787.
21. The Age Discrimination in Employment Act has also borrowed this mechanism. 29 U.S.C. §
626(b); see also Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001).
22. Bouapha v. Tyson Foods, Inc., 564 F. Supp. 2d 870, 887 (N.D. Iowa 2008) (“Despite their con-
fusing semantic similarities, the differences between class actions and collective actions are
great.”).
23. Thiessen, 267 F.3d at 1105 (noting “similarly situated” standard easier than Rule 23).
24. See Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1214 (5th Cir. 1995).
25. Anderson v. Cagle’s, Inc., 488 F.3d 945, 953 (11th Cir. 2007).
26. Mooney, 54 F.3d at 1213–14.
27. Id.
28. Id. at 1214.
29. Anderson, 488 F.3d at 953.
30. See Thiessen, 267 F.3d at 1107–1108 (district court erred in decertifying proposed “pattern or
practice” class because of presence of individualized affirmative defenses).
31. Mooney, 54 F.3d at 1214.
 Types of Class Actions 59

In general, labor class actions (and FLSA collective actions) center around
the scope of the defendant’s alleged conduct. The plaintiff will try to show
that the conduct is part of a pattern or practice that affected a large number of
employees in a similar fashion. The defendant will try to show that it treated
individual employees differently.

§ 3.1.3 Product Liability

The typical product-liability class action involves a consumer suing a manu-

facturer for releasing an allegedly defective product into the marketplace.
The alleged defect can be in either design or manufacture. Debates over the
certifiability of products-liability class actions center on issues of causation
and injury. The plaintiff will argue that the alleged defect caused the same
injury across the class. The defendant will argue that variations in design,
manufacture, or use mean that causation and injury cannot be established on
a class-wide basis.
Product liability class actions, while popular through the 1990s and early
2000s, are now widely perceived as difficult to certify.32 The primary reason
for this change is the number of courts that have held that causation of legally
cognizable injury is difficult to establish on a class-wide basis.33 Plaintiffs who
still pursue products-liability classes now bring fraudulent concealment,
breach-of-warranty, or breach-of-contract claims, and ask for damages that
do not require proving a specific, concrete injury.34

§ 3.1.4 Consumer Fraud

In the typical consumer-fraud class action, the plaintiff claims that she was
misled (either by an affirmative misrepresentation or the omission of impor-
tant information) into overpaying for some good or service. Consumer fraud
is not industry specific, it can exist almost anywhere. Consumer fraud cases
are appealing because they tell a compelling story: Unscrupulous corporation
with vast resources takes advantage of unwitting consumers. Moreover, indi-
viduals often have not lost enough money to justify prosecuting individual

32. See Amchem Prods. Inc., 521 U.S. at 620–22 (noting that mass torts are generally not suitable
for certification); In re Am. Med. Sys., 75 F.3d 1069, 1089 (6th Cir. 1996) (recognizing national
trend of denying certification to proposed products-liability class actions); In re Fosamax
Prods. Liab. Litig., 248 F.R.D. 389, 396 (S.D.N.Y. 2008) (“Lower courts almost unanimously
have rejected class certification in pharmaceutical products liability actions . . .”).
33. In re Fosamax Prods. Liab. Litig., 248 F.R.D. at 395.
34. See Robinson v. Am. Honda Motor Co., Inc., 551 F.3d 218, 223–25 (4th Cir. 2009) (plaintiffs
brought breach-of-warranty case claim alleging tires wore down too quickly).
60 Chapter 3 Constructing a Class Action Lawsuit

lawsuits, and consumer protection agencies may lack the resources to inves-
tigate all alleged frauds.
The central debate in a consumer-fraud class action focuses on reliance.
Most courts have held that “a fraud class action cannot be certified where
individual reliance will be an issue.”35 As a result, the plaintiff will seek to
remove the question of individual reliance from the case, either by invoking
a consumer-fraud statute that arguably does not require it,36 or by recasting
her claim as another cause of action, like breach of contract or breach of war-
ranty.37 The defendant, on the other hand, will seek to make individual reli-
ance (or its cousin, causation) the most important issue in the case.

§ 3.1.5 Antitrust

In the typical antitrust class action, the plaintiff sues a firm for either conspir-
ing to fix prices or engaging in some other anticompetitive conduct that
resulted in artificially inflated prices for the product.38 Antitrust class claims
are attractive because courts often rule that liability may be proven on a class-
wide basis, even if damages are more individualized.39 Some trial courts have
gone so far as to say the inherent nature of antitrust class actions justifies
certification:

It is well recognized that private enforcement of [antitrust] laws is a necessary

supplement to government action. With that in mind, in an alleged horizontal
price-fixing conspiracy case when a court is in doubt as to whether or not to
certify a class action, the court should err in favor or allowing the class.40

While the Third Circuit has since disavowed this dictum,41 the sentiment
remains popular among some trial courts. Antitrust class actions also involve

35. See, e.g., Castano v. Am. Tobacco Co., 84 F.3d 734, 745 (5th Cir. 1996).
36. See In re Mercedes-Benz Tele Aid Contract Litig., 257 F.R.D. 46, 66 n.9 (D.N.J. 2009) (noting
that New Jersey Consumer Fraud Act does not require proof of reliance).
37. See Robinson, 551 F.3d at 223–25.
38. The former conduct is a violation of Section 1 of the Sherman Act; the latter a violation of
Section 2. 15 U.S.C. §§ 1–2.
39. See, e.g., Amchem Prods. Inc., 521 U.S. at 625 (“Predominance is a test readily met in certain
cases alleging . . . violations of the antitrust laws.”); Cordes & Co. Fin. Servs. v. A.G. Edwards
& Sons, Inc., 502 F.3d 91, 105 (2d Cir. 2007).
40. Cumberland Farms, Inc. v. Browning-Ferris Indus., Inc., 120 F.R.D. 642, 645 (E.D. Pa. 1988)
(citations omitted).
41. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 321 (3d Cir. 2008) (“These statements
invite error. Although the trial court has discretion to grant or deny class certification, the
court should not suppress ‘doubt’ as to whether a Rule 23 requirement is met—no matter the
area of substantive law.”).
 Types of Class Actions 61

an attractive populist rhetoric,42 as well as established methods of proving

class-wide liability using economic formulae and statistics.
However, antitrust cases have experienced some backlash in recent years.
As the Third Circuit has observed, “certain antirust class actions may present
prime opportunities for plaintiffs to exert pressure upon defendants to settle
weak claims.”43 And other appellate courts have pointed out that a trial court
may not assume that class-wide evidence exists for all antitrust claims.44
There are two central debates in an antitrust class action. The first con-
cerns whether the plaintiff can prove the effect of anticompetitive conduct on
a class-wide basis.45 The other, related debate concerns the definition of the
relevant market.46 The plaintiff will try to define both antitrust injury and the
relevant market in a way that allows her to demonstrate the elements of an
antitrust claim using class-wide proof. The defendant, on the other hand, will
emphasize the varied behaviors of customers in the relevant market that
make proving antitrust injury an individualized issue.

§ 3.1.6 Environmental

In the typical environmental class action, the plaintiff sues the defendant for
contaminating the local environment in some fashion.47 For example, a firm

42. Kristian v. Comcast Corp., 446 F.3d 25, 58 (1st Cir. 2006) (“[W]ithout some form of class
mechanism—be it class action or class arbitration—a consumer antitrust plaintiff will not
sue at all.”).
43. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d at 310.
44. See, e.g., Robinson v. Tex. Auto. Dealers Ass’n, 387 F.3d 416, 425 (5th Cir. 2004) (trial court
abused discretion by assuming predominance of allegedly common issues); Blades v.
Monsanto Co., 400 F.3d 562, 571 (8th Cir. 2005) (“The ability to use common evidence to
show impact on all class members cannot always be assumed.”).
45. See In re Hydrogen Peroxide Antitrust Litig., 552 F.3d at 311.
46. See Heerwagen v. Clear Channel Commc’ns, 435 F.3d 219, 224 (2d Cir. 2006) (“resolution of
the class action motion boiled down to one pivotal question: whether the relevant market for
assessment of plaintiff ’s § 2 claim was national, thus justifying a national class”). This is also
a central merits debate in most antitrust cases. See Republic Tobacco Co. v. N. Atl. Trading Co.,
381 F.3d 717, 737 (7th Cir. 2004) (plaintiff could not avoid defining specific market in
monopolization claim because “[e]conomic analysis is virtually meaningless if it is entirely
unmoored from at least a rough definition of a product and geographic market”).
47. See Gintis v. Bouchard Transp. Co., Inc., 596 F.3d 64, 65–66 (1st Cir. 2010) (suing tugboat
company for accident that spilled oil along Massachusetts coastline); Mejdrech v. Met-Coil
Sys. Corp., 319 F.3d 910, 910–911 (7th Cir. 2003) (Posner, J.) (granting appellate review “in
order to determine the appropriateness of class action treatment in pollution cases”); Sterling
v. Velsicol Chem. Corp, 855 F.2d 1188, 1192 (6th Cir. 1988) (“[P]laintiffs, who either lived or
owned property near defendant’s landfill, brought a class action for personal injuries and
property damage resulting from hazardous chemicals leaking from the landfill and contami-
nating the local water supply.”).
62 Chapter 3 Constructing a Class Action Lawsuit

that dumps waste into groundwater,48 or releases contaminants into the air,49
may be the focus of an environmental class action. Unlike a number of other
class actions, environmental classes are frequently defined by reference to
geographic areas.50
Environmental class actions will often assert causes of action such as
negligence,51 trespass,52 nuisance,53 and violation of state54 or federal environ-
mental statutes. And the damages they seek usually center on damage to (or
diminution in value of) property.55 As a result, environmental class actions are
likely to center on issues of ascertainability56 and causation.57 The plaintiff will
try to show that a single incident or pattern of conduct caused harm to a group
of claimants; the defendant, on the other hand, will argue that determining
causation of injury presents too many individual issues to certify a class.

§ 3.1.7 Civil Rights

Civil rights class actions have a long and storied history. In fact, the 1966
amendments to Rule 23 were enacted in large part to enable the beneficial
effects of various civil rights class actions.58

48. Sterling, 855 F.2d at 1192; Turner v. Murphy Oil USA, Inc., 234 F.R.D. 597, 602 (E.D. La. 2006)
(plaintiffs sued oil company for Hurricane Katrina-related oil spill that, among other things,
polluted groundwater).
49. Trimble v. Asarco, Inc., 232 F.3d 946, 950 (8th Cir. 2000) (plaintiffs alleged lead smelter had
released contamination into air).
50. Mejdrech, 319 F.3d at 911 (“The class members’ homes occupy a contiguous area the bound-
aries of which are known precisely.”); Labavue v. Olin Corp., 231 F.R.D. 632, 638, 641 (S.D.
Ala. 2005) (defining class as “all property owners within a 20 to 25 kilometer radius of Olin’s
McIntosh facility”); Olden v. La-Farge Corp., 203 F.R.D. 254, 268 (E.D. Mich. 2001) (plaintiffs
defined class as “all owners of single family residences in the City of Alpena whose property
was invaded by toxic pollutants and contaminants which originated from Defendant’s
facility”).
51. See Labavue, 231 F.R.D. at 640; Olden, 203 F.R.D. at 259.
52. See Olden, 203 F.R.D. at 259.
53. See Gintis, 596 F.3d at 66; Olden, 203 F.R.D. at 259.
54. See Gintis, 596 F.3d at 66 (plaintiffs asserted causes of action under Massachusetts environ-
mental-damage statutes).
55. Labavue, 231 F.R.D. at 638 (plaintiffs seek “recovery for alleged property damage on the
theory that mercury contamination originating from Olin has diminished the value of their
property”).
56. See id. at 662–65.
57. See Gintis, 596 F.3d at 67 (“focus will be on the plaintiffs’ claims that common evidence will
suffice to prove injury, causation and compensatory damages”); Labavue, 231 F.R.D. at 680 &
n.103 (discussing role of causation in certification debate for various environmental class
actions and noting “the causation inquiry is critical”).
58. See Fed. R. Civ. P. 23, Advisory Committee Notes, 1966 Amendments, Subdivision (b)(2)
(“Illustrative are various actions in the civil-rights field, where a party is charges with
 Types of Class Actions 63

In the typical civil rights class action, the plaintiff sues the defendant for
violating some right guaranteed by the United States Constitution. Civil
rights class actions are most effective when challenging a pattern or practice
of discriminatory conduct, as opposed to conduct that may be the exception
to the rule.59 And, because they usually challenge some ongoing practice, they
often involve requests for injunctive relief.60
Civil rights class actions have become harder to certify in recent years.
Since Title VII has been revised to allow for jury trials, compensatory dam-
ages, and punitive damages, the justifications for seeking sweeping injunctive
relief in a class action have lessened.61

§ 3.1.8 Statutory Violations

Entrepreneurial class-action lawyers may also seek out statutes that may
grant large damage awards. For example, in the late 1990s, class actions
against “blast faxers” under the Telecommunications Protection Act
(“TCPA”)62 were popular;63 since then, class actions alleging violations of the
Fair and Accurate Credit Transaction Act of 2003 (“FACTA”)64 have come
into vogue.65 (The TCPA imposes a $500 penalty on any entity that sends an
“unsolicited” fax;66 FACTA imposes between $100 and $1,000 in statutory
damages on any vendor who fails to redact all but the last five digits of a
credit-card number on a receipt.)67 Because the alleged violations of these
statutes are technical, meaning the plaintiff need not demonstrate actual
harm in order to prove liability, and because violations (if they occur) tend to

discriminating unlawfully against a class, usually one whose members are incapable of spe-
cific enumeration.”).
59. Cooper v. Fed. Reserve Bank, 467 U.S. 867, 876 (1984); see also Reid v. Lockheed Martin
Aeronautics Co., 205 F.R.D. 655, 659–60 (N.D. Ga. 2001).
60. See Miller v. Spring Valley Props., 202 F.R.D. 244, 247 (C.D. Ill. 2001) (“Plaintiffs seek a per-
manent injunction enjoining Defendants from discriminating against African Americans in
violation of the Fair Housing Act and remedial relief to remedy the past effects of Defendants’
alleged discriminatory practices.”).
61. See Reid, 205 F.R.D. at 660–61.
62. 47 U.S.C. § 227 et seq.
63. See, e.g., Kenro, Inc. v. Fax Daily, Inc. 962 F. Supp. 1162 (S.D. Ind. 1997); Forman v. Data
Transfer, Inc., 164 F.R.D. 400 (E.D. Pa. 1995).
64. 15 U.S.C. § 1681 et seq.
65. See, e.g., Cicilline v. Jewel Food Stores, Inc., 542 F. Supp. 2d 831, 834 (N.D. Ill. 2008) (certifying
FACTA class); Ramirez v. MGM Mirage, Inc., 524 F. Supp. 2d 1226, 1237 (D. Nev. 2007)
(denying motion to dismiss FACTA class action). See also Sheila B. Scheuerman, Due Process
Forgotten: The Problem of Statutory Damages and Class Actions, 74 Mo. L. Rev. 103, 112–13
(2009) (enumerating various FACTA class actions).
66. 47 U.S.C. § 227(b)(3).
67. 15 U.S.C. § 1681n(a)(1)(A).
64 Chapter 3 Constructing a Class Action Lawsuit

involve a single company practice that affects large numbers of people, there
may be little individualized evidence for the jury to evaluate at trial.
There are risks to pursuing mandatory statutory penalties in a class action.
Some courts may balk at what they view as large-stakes “gotcha” litigation
where millions of dollars of liability may turn on a technical violation of a
statute.68 As a result, they may deny class certification simply to avoid bank-
rupting a defendant as a result of an innocent mistake that caused little harm.
While they might not explicitly say so, courts may exercise judicial discretion
to deny class certification by looking more carefully at, for example, the supe-
riority requirement.69 Or they might invoke the absurdity doctrine of statu-
tory interpretation, which counsels that “statutes are not to be applied
according to their literal terms when doing so achieves a result manifestly not
intended by the legislature.”70

§ 3.2 Identifying a Potential Class Action

Not all lawsuits are well suited to be class actions. Ironically, individual cases
with extremely compelling facts—a particularly sympathetic plaintiff, a clear-
cut fraudulent statement, large potential damages—can be the worst candi-
dates for expanding into a class action. A particularly sympathetic plaintiff
may not be typical of other class members; a clear-cut fraudulent statement
may be difficult to prove on a class-wide basis; and large potential damages to
individual victims may indicate that individual lawsuits are not only feasible,
but a better alternative than class-action litigation.
A plaintiff’s lawyer interested in class litigation should look for conduct
involving a large-scale, uniform harm, preferably one in which the harm per
person is too small to justify individual lawsuits. These characteristics fit well
with “the policy at the very core of the class mechanism,” which “is to over-
come the problem that small recoveries do not provide the incentive for any
individual to bring a solo action prosecuting his or her rights.”71
A plaintiff’s lawyer should ask himself whether the case has nationwide
scope. If so, can it be pursued under federal law? If not, can plaintiff argue for

68. See Blanco v. CEC Ent. Concepts, L.P., No. CV 07-0559 GPS (JWJx), 2008 WL 239658 (C.D.
Cal. Jan. 10, 2008) (“In essence, this is a class action for a technical violation of FACTA . . .”).
69. Parker v. Time-Warner Ent. Co., 331 F.3d 13, 22 (2d Cir. 2003) (remanding and suggesting
lower court could decline to certify FACTA class action based on statutory damages awards);
Leysoto v. Mama Mia I., 255 F.R.D. 693, 694 (S.D. Fla. 2009) (finding FACTA class action not
superior because of size of statutory damages award).
70. Parker, 331 F.3d at 23 (Newman, J., concurring).
71. Amchem Prods., 521 U.S. at 617.
 Identifying a Potential Class Action 65

the extraterritorial application of state law? Or is the case worth filing as a

state-only class?72
In selecting a legal theory, a plaintiff must watch out for the danger of
federal preemption. She must also beware of other legal restrictions on claims,
such as class-action caps under the Truth in Lending Act.73 It is also impor-
tant to make sure that there are no strong matter-of-law defenses against the
claim. And the plaintiff must also watch out for various pre-filing require-
ments; in addition to those in the PSLRA, some states’ consumer-fraud acts
and warranty statutes may require pre-filing notice to the defendant of its
alleged breach or bad conduct.
The single most important component to successfully identifying a poten-
tial class action is extensive research. At least in successful cases, much of
plaintiff’s counsel’s work is done long before any complaint is filed.74 Ideally,
the plaintiff should be prepared to sketch the contours of a summary judg-
ment motion by the time she files her complaint.75 The plaintiff should know
specifically what the defendant’s bad conduct was, what effect that conduct
had on the class, how to prove causation on a class-wide basis, and how to
establish damages on a class-wide basis. Researching the complaint before
filing it costs both time and money, both of which are being spent with no
guarantee of return.76 However, strong research up front reduces the need to
rely on extensive discovery for basic information about the value and likely
arc of a case, and allows for greater leverage at any early settlement talks when
the plaintiff may be in greater control of the facts than the defendant is.
Some lawyers will follow the news, watching for various corporate disas-
ters, investigative reports of widespread frauds or defective products,77

72. Different plaintiffs’ firms will have different tolerances for profit margins on a case. Some
firms specialize in low-overhead, but comparatively low-recovery cases. Other firms special-
izing higher-margin lawsuits may be able, in individual cases, to subsidize a lower-margin
state court lawsuit if the reasons are compelling.
73. See Johnson v. W. Suburban Bank, 225 F. 3d 366, 374 (3d Cir. 2004) (“individual plaintiff
recoveries available in a class action may be lower than those possible in individual suits
because the recovery available under TILA’s statutory cap on class recoveries is spread over
the entire class”).
74. See Jonathan T. Molot, A Market in Litigation Risk, 76 U. Chi. L. Rev. 367, 384 (2009) (“More
prominent, successful plaintiffs’ lawyers take only more valuable cases, and they engage in
serious due diligence before they decide to take a case.”).
75. Dillon & Cannon, Circle of Greed 83 (plaintiffs’ lawyer William Lerach viewed com-
plaint as “instrument of torture” for defendant); Jane Schapiro, Inside a Class Action:
The Holocaust And The Swiss Banks 28 (2003) (plaintiff ’s attorney spent months com-
piling documents before filing complaint).
76. Id. at 40, 108–09 (describing resources spent on preparing complaint).
77. See In re Synthroid Marketing Litig., 264 F.3d 712, 714 (7th Cir. 2001) (noting that after pub-
lication of drug study, “lawyers across the county began filing class action suits”); In re
Orthopedic Bone Screw Prods. Liab. Litig., 176 F.R.D. 158, 165 (E.D. Pa. 1997) (noting plain-
tiffs pursued claims following 20/20 broadcast examining the screws used during spinal
66 Chapter 3 Constructing a Class Action Lawsuit

government investigations of alleged corporate wrongdoing,78 or where a

company has engaged in a product recall of some kind.79 (Sometimes, plain-
tiff’s counsel do not have to follow the news: press coverage of some issues
may simply bring clients to their door;80 this, however, is not an event on
which counsel can rely.)
There are good reasons to follow government investigations in looking for
controversies that may be well suited to class litigation. To begin, they
may require less investment relative to the return they ultimately provide,
since the government has already done much of the necessary work to
prepare the case for trial.81 As a result, cases following government investiga-
tions can move faster.82 They may also be more valuable than non-investigated
cases: at least one study has found that—for securities class actions—an offi-
cial investigation may increase the settlement value of the case by as much as

fusion surgery); see also Dillon & Cannon, Circle of Greed 343 (“Ritually, William
Lerach . . . scanned the headlines of the national and local newspapers . . . look[ing] for early
signs of corporate misdeeds.”).
78. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d at 308 (noting that “[a]fter the United States
Department of Justice and the European Commission began investigating possible violations
of the antitrust laws in the hydrogen peroxide industry, several plaintiffs filed class action
complaints against producers of hydrogen peroxide and persalts”); Krell v. Prudential Ins Co.,
148 F.3d 283, 292 (3d Cir. 1998) (“While the Task Force was conducting its investigation,
parties continued to file individual claims and class actions against Prudential in both state
and federal court.”); Baum v. Great W. Cities, Inc., 703 F.2d 1197, 1201–02 (10th Cir. 1983)
(class action followed FTC investigation); Jones v. Allercare, Inc., 203 F.R.D. 290, 294 (N.D.
Ohio 2001) (class action followed EPA-urged product recall); see also William B. Rubinstein,
On What a “Private Attorney General” Is—And Why It Matters, 57 Vand. L Rev. 2129, 2159
(2004) (“On the heels of the Justice Department’s pursuit of Microsoft for antitrust viola-
tions, class action attorneys filed cases on behalf of private consumers of Microsoft products
in state courts throughout the country.”); Jeffrey Toobin, “ The Man Chasing Enron,” The New
Yorker, Sept. 9, 2002, at 86 (describing how Lerach “shadow[s] the procession of corporate
disasters”).
79. See Diaz-Ramos v. Hyundai Motor Co., 501 F.3d 12, 14 (1st Cir. 2007) (plaintiff filed class
action in Puerto Rico after Hyundai launched recalls of various model-year Accents whose
suspensions were susceptible to corrosion in “salt belt” states); Cole v. Gen. Motors Corp., 484
F.3d 717, 719 (5th Cir. 2007) (plaintiffs filed class action after receiving notice of Cadillac
recall from GM).
80. Schapiro, Inside a Class Action 54–55 (press coverage of Swiss Bank controversy
prompted plaintiff to approach counsel).
81. See, e.g., John H. Beisner, et al., Class Action “Cops”: Public Servants or Private Entrepreneurs?, 57
Stan. L. Rev. 1441, 1453–54 (2005) (“The reason class action lawyers prefer to follow—rather
than to lead— government investigations is simple: those lawyers prefer ‘no research’ lawsuits
that appear likely (from the investigation itself) to yield lucrative settlements with only a mini-
mal investment of time and money.”).
82. See Dillon & Cannon, Circle of Greed 177 (Lerach noted in pitch to institutional inves-
tor than, in proposed securities class action against Charles Keating, “We’ve got the govern-
ment out front, and they’re getting documents within forty-eight hours, where it might take
us a year . . .”)
 Forum Considerations 67

20 percent.83 Indeed, the publicity resulting from a government investigation

(or government litigation) may provide very attractive background atmo-
spherics for litigation.84
However, there are also a number of risks to piggybacking upon govern-
ment investigations. First, assuming the plaintiff seeks monetary damages, a
class action based on a government investigation may flunk the superiority
test of Rule 23—a court may find that class litigation is not the “superior” way
to address the wrongdoing because a regulatory agency is already addressing
the issue.85 In addition, given the plaintiffs’ firms that are out researching new
causes of action (and, as discussed below, given that sometimes nudging the
government into investigation may be one firm’s litigation tactic), following
a government investigation runs the risk of filing a lawsuit that has ceded
a significant head start to other plaintiffs’ firms.86

§ 3.3 Forum Considerations

For a long time, the phrase “forum-shopping” evoked for defendants images
of plaintiff’s counsel settling in a “magnet jurisdiction” or “judicial hellhole,”
and using a heavily politicized state court as a preferred forum in which to file
large numbers of industry-shaking class actions.87 On the other side, plain-
tiffs would argue that keeping a case in state court allowed them to leverage
their “greater familiarity with state procedure,” afforded a “greater likelihood
of securing justice for clients,” and kept cases in front of “local judges . . .

83. See Planich, et al., 2008 Trends, NERA Economic Consulting, July 2008, at 22 (“We find
that cases with any kind of official investigation, consent decree or penalty settle for approxi-
mately 20% more than cases without any official action. This includes any announced inves-
tigation by any official body (the SEC, the New York Attorney General’s Office, etc.) relevant
to the allegations in the complaint. Although many such investigations result in no finding of
fault, this broad measure of official action has greater predictive power for settlements than
does a measure that considers only cases where there was some finding of fault.”).
84. See William H. Page, Class Certification in the Microsoft Indirect Purchaser Litigation, 1
J. Comp. L. & Econ. 303, 328 (2005) (noting rash of state-law indirect-purchaser class actions
against Microsoft: “The Microsoft indirect purchaser plaintiffs undoubtedly expected to ben-
efit from the rulings in United States v. Microsoft.”).
85. See Kamm v. Cal. City Dev. Co., 509 F.2d 205 (9th Cir. 1975); Brown v. Blue Cross & Blue
Shield, Inc., 167 F.R.D. 40, 46 (E.D. Mich. 1996) (refusing to certify class where state attorney
general had already settled with defendant for public benefit).
86. See Lentell v. Merrill Lynch & Co., 396 F.3d 161, 164–65 (3d Cir. 2005) (noting that “[w]ithin
weeks [of the New York Attorney General’s Investigation] some 140 class action complaints
were filed, relying on the NYAG’s application to allege securities fraud”).
87. See generally Kevin M. Clermont & Theodore Eisenberg, Exorcising the Evil of Forum
Shopping, 80 Cornell L. Rev. 1507 (1995).
68 Chapter 3 Constructing a Class Action Lawsuit

elected by the very people whose disputes they will hear, motivating speedy
and fair adjudication.”88
While there are elements of truth to each side’s caricature,89 relying on
them obscures many of the strategic choices that go into choosing a forum in
which to bring a class-action lawsuit. A favorable judge and favorable sub-
stantive law are of course helpful, and it is naïve to think that either side will
not try to focus the litigation in a court likely to be sympathetic to its argu-
ments. But guarantees are few and far between. Judges appointed or elected
by Democrats do not always side with plaintiffs and Republican judges do not
always side with defendants. Further, jurisdictions that develop reputations
as biased toward either side tend to implode over time. Indeed, the tendency
of some state courts to “rubber stamp” class actions was one of the factors
that led to the passage of the Class Action Fairness Act (CAFA).90 CAFA
moved a number of class actions that formerly were filed as a matter of course
in state court into federal court instead.91
But the passage of CAFA did not eliminate the need to carefully determine
in which forum one should bring a class action.92 First, plaintiffs now face the
question of whether it is better to seek more limited remedies on behalf of a
smaller class in order to keep their case in state court. And second, while
plaintiffs now file cases in federal court much more frequently,93 they still
have to decide in which federal court to file.

88. Erik B. Walker, Keep Your Case in State Court, Trial, Sept. 2004, at 22, 22.
89. See, e.g., John H. Beisner & Jessica Davidson Miller, They’re Making a Federal Case Out of
It . . . in State Court, 25 Harv. J. L. & Pub. Pol’y, 43 (2001) (making case for reforming juris-
dictional requirements based on disproportionate number of class-action filings in Madison
County, Illinois); Davis v. Cannon Chevrolet-Olds, Inc., 182 F.3d 792, 798–99 (11th Cir. 1999)
(Nangle, concurring) (noting that “Plaintiffs’ attorneys are increasingly filing nationwide
class actions in various state courts, carefully crafting language . . . to avoid . . . the federal
courts”).
90. See S. Rep. No. 109–14, at 22–23; H.R. Rep. No. 108–144, at 12–14. See also Richard A.
Nagareda, Aggregation and Its Discontents: Class Settlement Pressure, Class-Wide Arbitration,
and CAFA, 106 Colum. L. Rev. 1872, 1912 (2006) (“At its extremes, the class certification
game prior to CAFA involved a search for the anomolous state court that would certify a
nationwide class action even though federal courts and, for that matter, most other state
courts would not.”); Howard M. Erichson, CAFA’s Impact on Class Action Lawyers, 156 U. Pa.
L. Rev. 1593, 1601 (2008) (“Mistrust of class action lawyers, combined with mistrust of the
state court judges charged with monitoring them (or at least of the state court judges whom
class action lawyers were thought most likely to seek out), propelled the expansion of federal
jurisdiction over class actions.”).
91. For a further discussion of CAFA’s requirements and effects see § 4.2.2.1.
92. Samuel Issacharoff & Richard A. Nagareda, Class Settlements Under Attack, 156 U. Pa. L. Rev.
1649, 1660–61 (2008) (Forum matters . . .”).
93. Erichson, CAFA’s Impact on Class Action Lawyers, 156 U. Pa. L. Rev. at 1610 (“CAFA has
increased not only the number of class action removals to federal court, but also the number
of class action original filings in federal court. Indeed, the increase in original filings exceeds
the increase in removals.”).
 Forum Considerations 69

The question of where to file a class action remains a detailed, fact-intensive

inquiry. Among the many factors a plaintiff must consider:

• What is the state substantive law?

• What is the federal procedural law in the circuit?94
• Which judges might hear the case?
• What local lawyers might have influence in the jurisdiction?
• Does the firm have a relationship with any of them?
• Will the demographics of the jurisdiction produce viable named
plaintiffs?

One pre-CAFA empirical study identified the three factors most strongly
related to a plaintiff’s choice of forum as: (1) attorney perceptions that the
judges would rule favorably for their client; (2) the source of law applicable to
claims; and (3) “state connections,” a measurement of in-state claimants or
in-state transactions.95 Other factors that had a statistically significant rela-
tionship to choice of forum included: the substantive law, discovery rules,
and the location of any competing class actions.
Law. The legal environment has a real effect on forum-choice decisions.96
Differences in substantive law can drive the decision to file certain kinds of
cases in different jurisdictions. For example, a plaintiff filing a consumer class
action against a major cell-phone carrier might want to file in a state (such as
California) that has overturned contractual requirements for arbitration of
cell-phone contracts as unconscionable.97 In each of these cases, finding a
favorable legal environment is an important consideration.98
The Second Circuit, for example, reviews grants of class certification under
a lenient “abuse of discretion” standard, but gives denials of certification a
more searching de novo standard of review.99 As a result, plaintiffs, when

94. Id. at 1612 (“federal court forum selection tends to focus on the law applied by the courts of
appeals, and sometimes on specific judges hearing related cases”).
95. See Thomas E. Willging & Shannon R. Wheatman, Attorney Choice of Forum in Class Action
Litigation; What Difference Does It Make?, 81 Notre Dame L. Rev. 591, 602 (2006). The
statistics were based on attorney responses to questionnaires.
96. Id. at 602.
97. See § 4.2.1.
98. Erichson, CAFA’s Impact on Class Action Lawyers, 156 U. Pa. L. Rev. at 1607 (noting that
“[w]hereas pre-CAFA forum shopping by class action plaintiffs focused on identifiable jury
pools and judges, often in small counties, post-CAFA forum shopping focuses on circuit law,
and more often lands in big cities”).
99. See, e.g., Parker, 331 F.3d at 18 (“We review class certification rulings for abuse of discretion.
We review de novo the district court’s conclusions of law that informed its decision to deny
class certification.”).
70 Chapter 3 Constructing a Class Action Lawsuit

possible, will file class actions in the Second Circuit.100 The panoply of appel-
late decisions also suggests that the Ninth Circuit is a more favorable venue
for plaintiffs bringing a class action than the Fourth, Fifth, or Seventh Circuits.
In addition, some plaintiffs, hoping to certify nationwide classes, based on
state-law causes of action, may file in the defendant’s home state in order to
reduce any potential choice-of-law issues.
Judges. The plaintiff will also look at which jurisdictions have the best
judges (that is, the most likely to favor her claims) for her lawsuit.101 In state
courts—where, often, judges are elected—this can also mean looking at the
local political climate. This consideration is not limited to state courts, how-
ever. The plaintiff may also favor certain federal districts because the mix of
potential judges is more favorable to her interests.102
In federal court, this analysis may require determining which districts
have more judges appointed by Democratic presidents as opposed
to Republican presidents. While a judge’s party affiliation is not a guarantee
of favorable treatment to one side or the other, it still provides a decent rule-
of-thumb for determining his sympathies.103 In fact, a conscientious plaintiff
will devote a great deal of energy to determine which judges might prove
favorable.
Finally, the plaintiff may look to which courts have the most experience
adjudicating class actions. Some local courts, like the Philadelphia Court of
Common Pleas, have established “mass tort” dockets.104 Some federal dis-
tricts, and even individual judges (such as Judge Weinstein in the Eastern

100. Planich, et al., 2008 Trends, NERA Economic Consulting, July 2008, at 4 (“Historically,
securities class action filings have been concentrated in the Second Circuit . . . and the Ninth
Circuit . . . This remains the case in 2008. Year-to-date, the Second Circuithas seen more than
twice as many filings as the Ninth, due in large part to subprime and auction-rate cases . . .”).
101. Willging & Wheatman, Attorney Choice of Forum in Class Action Litigation, 81 Notre
Dame L. Rev. at 602–04.
102. Erichson, CAFA’s Impact on Class Action Lawyers, 156 U. Pa. L. Rev. at 1614 (“According to
the FJC data, seventy percent of the federal districts saw post-CAFA increases in diversity
class actions, sixteen percent decreased, and fourteen percent had no change. Notable
increases occurred in the Central District of California, the District of New Jersey, the
Northern District of California, the Eastern District of Pennsylvania, and the Eastern
District of New York.”).
103. Kevin M. Clermont & Theodore Eisenberg, CAFA Judicata: A Tale of Waste and Politics, 156
U. Pa. L. Rev. 1553, 1585 (2008) (regression analysis indicates that judges appointed
by Democratic presidents tend to rule in favor of remanding cases under CAFA more
frequently than judges appointed by Republican presidents); Richard A. Posner, How
Judges Think 73 (Harvard 2008) (“[A]part from the play of unconscious influences,
we cannot expect federal judges to be complete political eunuchs, their decisions never
influenced by politics because they have no politics. Such political neuters are unlikely to
be appointed.”).
104. See Deborah R. Hensler & Mark. A. Peterson, Understanding Mass Personal Injury Litigation:
A Socio-Legal Analysis, 59 Brook. L. Rev. 961, 964 (1991).
 Forum Considerations 71

District of New York) likewise have developed reputations for expertise in

class actions.
This homework does not guarantee results, however—at least not in decid-
ing between state and federal courts. One empirical study found that federal
and state judges “were about equally likely to certify cases as class actions,”
although federal courts were more likely to deny certifying a class, while state
courts were more likely to take “no action.”105 The study also found no differ-
ence among state and federal courts regarding how they rule on dispositive
procedural motions.106 The study did find differences in the amount recov-
ered in settlements: median recovery was almost three times greater in state
court than in federal court, while per-plaintiff recovery was greater in federal
court.107
Different jurisdictions may also operate at different paces, which can pro-
vide additional sources of pressure on the defendant.108 The Eastern District
of Virginia, for example—known locally as the “Rocket Docket”—provides
very strict deadlines for bringing a case to class certification, and, ultimately,
trial. A plaintiff’s lawyer who believes the imminence of a class action trial
will pressure the defendant to settle may find such a jurisdiction attractive.
Similarly, other jurisdictions have reputations for being less stringent with
deadlines, allowing the parties to control the pace to a greater degree. These
jurisdictions may be more attractive to those plaintiff’s lawyers who want suf-
ficient time to develop a discovery record involving a complex matter,109 but
they come with the added cost of allowing the defendant greater control over
the pace as well.
Demographics. A plaintiff may also look to file in a jurisdiction in which a
large number of potential named plaintiffs reside. This allows the plaintiff to
trust that, even if one class representative is disqualified for some reason,
other plaintiff candidates exist for whom the court is still an appropriate
venue. Moreover, a jurisdiction that produces a number of potential class
representatives will likely furnish a more sympathetic jury pool.
A plaintiff will occasionally file a class action in a given jurisdiction because
that is where the defendant is located. For example, most securities class

105. Willging & Wheatman, Attorney Choice of Forum in Class Action Litigation, 81 Notre
Dame L. Rev. at 605. It is unclear what Willging and Wheatman mean by “no action,”
particularly since their certification figures appear to include certification for settlement
purposes. Id.
106. Id.
107. Id. at 605–06.
108. For more on the effect of pace on class-action litigation, see § 4.4.1.
109. See Dillon & Cannon, Circle of Greed 178 (describing how Milberg Weiss transferred
case “from a problematic federal judge in Los Angeles intent on a quick start to the trial—thus
foreshortening the plaintiffs’ discovery, in a complicated, multidefendant case that Lerach
likened to a stew simmering slowly—to a court in Tucson, Arizona, that Lerach believed
would prove much friendlier terrain”).
72 Chapter 3 Constructing a Class Action Lawsuit

actions are filed in the Second Circuit, home to New York City, America’s
financial center.110
Local politics. Finally, the plaintiff will also look at the role played by—for
lack of a better term—local politics. Many jurisdictions with favorable sub-
stantive law or pro-plaintiff judges also have a well-developed local bar, which
has usually invested considerable time and resources into developing the
“natural resources” of the jurisdiction. This local bar is unlikely to look favor-
ably on carpetbagging.
As a result, a plaintiff filing class actions in a foreign jurisdiction must
consider forging alliances with local lawyers.111 To the defendant, these alli-
ances may look like a traditional pairing of a class-action specialist firm with
“local counsel” who is admitted in the jurisdiction and has earned credibility
with the local courts. But often, the relationship is different than that. It often
requires cutting a local lawyer in on a share of the profits in exchange for an
agreement not to interfere with a case that has been filed on their turf without
their approval.112
Multiple jurisdictions. A final consideration is whether to bring a single
statewide or nationwide class action in one court, or to file several single-state
class actions in different courts. Bringing several single-state class actions in
multiple courts can create additional pressure on the defendant. It can also
reduce risk for the plaintiff. If even one state court certifies a class, the plain-
tiff wins, but if a single court denies class certification based on state law, that
will not necessarily doom other attempts at certifying a class under a different
state’s law.113

110. Planich, et al., 2008 Trends, NERA Economic Consulting, July 2008, at 4 (noting that,
while securities class actions are concentrated in both the Second and Ninth Circuits, in
2008 “the Second Circuit has seen more than twice as many filings as the Ninth, due in large
part to subprime and auction-rate cases; the financial institutions that these cases target are
concentrated in New York”).
111. Dillon & Cannon, Circle of Greed 88 (describing alliances between “referral” firms that
originated cases and Milberg, which would assume control of case).
112. See id. 89 (describing how Milberg Weiss “so dominated the field of class action securities
lawsuits that ‘if other firms did not come to us with California cases, they very much risked
being excluded altogether from those cases,’ Lerach wrote in an article, describing the his-
tory of Milberg Weiss”).
113. See In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 333 F.3d 763, 766–67 (7th Cir.
2003) (“Relitigation can turn even an unlikely outcome into reality. Suppose that every state
in the nation would as a matter of first principles deem inappropriate a nationwide class
covering these claims and products. What this might mean in practice is something like
‘9 of 10 judges in every state would rule against certifying a nationwide class’ (in the federal
courts, it has meant that 3 of 4 judges have ruled against the proposed nationwide classes).
Although the 10% that see things otherwise are a distinct minority, one is bound to turn up
if plaintiffs file enough suits—and, if one nationwide class is certified, then all the no-
certification decisions fade into insignificance. A single positive trumps all the negatives.
Even if just one judge in ten believes that a nationwide class is lawful, then if the plaintiffs
 Selecting Appropriate Defendants 73

There are strategic costs to pursuing multi-front litigation. For one thing,
it is more expensive than single-front litigation. It also requires forging alli-
ances with numerous local law firms, which dilutes the profits any one firm
will receive. And coordinating among multiple firms and courts can prove
difficult, particularly if one or more of the cases appear likely to settle.

§ 3.4 Selecting Appropriate Defendants

There are several factors the plaintiff must consider when selecting an appro-
priate defendant. First, the plaintiff will look at the depth of the defendant’s
pockets.114 At the very least, the defendant must be solvent. After all, if the
defendant does not have available funds, or enters bankruptcy shortly after
the complaint is filed, then the plaintiff will receive no relief. In addition, the
plaintiff will often try to confirm whether the defendant carries liability
insurance that can cover at least part of the cost of a settlement or verdict. A
defendant with insurance may be more likely to settle than one who has to
pay all losses completely out-of-pocket, making it a more attractive target for
litigation.115
In addition, selecting a defendant with bad press can also provide a
distinct advantage early in the litigation.116 A defendant that already feels
targeted by the media or government regulators may be more inclined to
settle a case quickly to avoid further adverse publicity, or because it fears
that its poor public reputation may undermine any chance of exoneration by
the courts.117 (On the other hand, as discussed in § 3.2, a potential defendant
with bad press is likely to attract a number of competing lawsuits.)

file in ten different states the probability that at least one will certify a nationwide class is
65% (0.9 10 = 0.349). Filing in 20 states produces an 88% probability of national class certi-
fication (0.920 = 0.122). This happens whenever plaintiffs can roll the dice as many times as
they please—when nationwide class certification sticks (because it subsumes all other suits)
while a no-certification decision has no enduring effect.”).
114. See Dillon & Cannon, Circle of Greed 74 (Weiss and Lerach worked to prevent “over-
looking [any] wealthy culpable defendant”).
115. Cf. Richard H. Thaler & Cass R. Sunstein, Nudge: Improving Decisions About Health,
Wealth & Happiness (Yale 2008) at 51 (discussing loss aversion and how people like to
play with “house money”).
116. See generally William H. Page, Class Certification in the Microsoft Indirect Purchaser
Litigation, 1 J. Comp. L. & Econ. 303 (2005) (noting rise in certification of indirect-purchaser
class actions attributable almost solely to litigation against Microsoft).
117. See, e.g., Dillon & Cannon, Circle of Greed 174, 177 (describing how case against crim-
inally accused banker Charles Keating grew stronger with each new revelation from govern-
ment). For more on the effect of publicity on the defendant, see §§ 4.1.2–3.
74 Chapter 3 Constructing a Class Action Lawsuit

The plaintiff must also decide how many defendants to sue. Certain kinds
of cases, like securities fraud class actions, may require the plaintiff to name
multiple defendants.118 Suing multiple defendants also confers some strategic
benefits. It provides the plaintiff multiple sources for recovery, and it allows
the plaintiff to pursue some theories (like conspiracy or civil RICO) that
would be more difficult to prove against only a single defendant. In addition,
much as plaintiff lawyers face difficulties coordinating multiple lawyers in a
single lawsuit, defense lawyers face the same problems: this is especially true
if the plaintiff sues multiple defendants who have incentives to point fingers
at each other, rather than bury their disagreements and present a common
defense. (One example of this is when the plaintiff sues the manufacturer of
an allegedly defective component in a consumer product, the assembling
manufacturer of the finished product, and the chain of stores that sold the
product to consumers. Another is when the plaintiff sues both a firm that has
misstated its earnings to inflate its stock price and the accounting firm that
performed its business audits.)
Of course, suing multiple defendants also entails risks. The plaintiff faces
an increased discovery burden. On offense, she must depose more witnesses
and process more documents. On defense, there are more parties that may
serve interrogatories,119 seek documents, and notice depositions. In addition,
suing multiple defendants can significantly slow the pace of the litigation.
The coordination problems among defendants can lead to requests for exten-
sions, and, in general, it takes more time to reach agreement with multiple
defendants on anything (protective orders, case management orders, settle-
ment) than it would with a single defendant. Moreover, the plaintiff must
ensure that the defendants have some significant connection to each other;
otherwise the number of defendants alone may render the class action
unmanageable.120

118. Securities-fraud plaintiffs often must name multiple defendants because of the proportion-
ate liability provisions of the PSLRA. See Regents of the Univ. of Cal. v. Credit Suisse First
Boston, Inc., 482 F.3d 372, 379 (5th Cir. 2007) (noting that trial court ordered defendants to
prepare list of non-parties who might share responsibility for losses).
119. Fed. R. Civ. P. 33(a)(1) limits the number of interrogatories each party may serve on another
party to 25. The more defendants a plaintiff joins in the litigation, the more interrogatories
it faces.
120. See Santa Clara v. Astra USA, Inc., 257 F.R.D. 207, 210 (N.D. Cal. 2009) (“Plaintiff has joined
a dozen different defendants in a similar suit on a similar theory but raises stand-alone
allegations against each. Plaintiff nevertheless moves to certify a single class consisting of all
California 340B entities allegedly overcharged by any of the dozen defendants. . . .
Certification at this stage would be a massive undertaking fraught with a long list of questions
that will vary from defendant to defendant.”).
 Identifying Class Representatives 75

§ 3.5 Identifying Class Representatives

In the early 1990s, William Lerach said: “I have the greatest law pratice in the
world. No clients.”121 Lerach has been quoted often for this statement, because
it reflects a deep truth about plaintiff-side practice: identifying, recruiting,
and dealing with named plaintiffs can be one of the most challenging aspects
of filing a class action.
Despite the stories pundits may tell about American lawsuits run amok,
most individuals are not litigious; instead, they view lawsuits as enormous
sinks of time and resources.122 The kind of non-lawyer who is committed
enough to see a class-action lawsuit through to its finish may prove very dif-
ficult to control at depositions or in court.123 Conversely, a named plaintiff
who is easier to control may not be as engaged with the lawsuit, and so may
lack the appearance of independent judgment courts require from an ade-
quate class representative.124
In recent years, the difficulty of finding adequate clients has been illus-
trated by several trends. First, there has been a resurgence in challenges to a
plaintiff’s adequacy under Rule 23(a)(4). Second, the emergence of “pay-to-
play” practices, where plaintiffs’ firms make political contributions to state
comptrollers who oversee pension funds in return for consideration as class
counsel in securities class actions indicates that at least in securities
class actions, competition for adequate clients remains fierce.125 At its worst,
the indictment and prosecution of lawyers who ran kickback schemes for
named plaintiffs shows the lengths some lawyers will go to in order to recruit
plaintiffs.126

121. Dillon & Cannon, Circle of Greed 74; see also Jeffrey Toobin, “The Man Chasing Enron,”
The New Yorker, Sept. 9, 2002, at 87.
122. See, e.g., Choi and Thompson, Securities Litigation and its Lawyers, 106 Colum. L. Rev. at
1504 (“Serving as a lead investor and monitoring litigation costs money and takes the time
of employees who otherwise could be engaged in alternative income-producing
activities.”).
123. See Andrews v. Bechtel Power Corp., 780 F.2d 124, 132–38 (1st Cir. 1985) (describing tensions
between named plaintiff and class counsel); see also Gary L. Sasso, Class Actions: De Minimis
Curat Lex?, 31(4) Litigation 20–21 (Summer 2005) (“Not surprisingly, individuals who
willingly throw themselves into class action litigation often carry a great deal of baggage
with them, such as personal grudges against the defendant, knowledge of the allegedly with-
held facts, late-filed claims, waiver, contributory fault, lack of injury, unclean hands, releases
of the claims they seek to prosecute, or agendas that are antagonistic to the interests of
absent class members.”).
124. For more about plaintiff adequacy, see §§ 2.4.1, 5.2.2.4.
125. See Stephen J. Choi, et al., The Price of Pay to Play in Securities Class Actions, Working Paper
Draft 22 December 2009, SSRN.com/abstract=1527047 (describing effects of “pay-to-play”
practices).
126. See generally Dillon & Cannon, Circle of Greed; James B. McDonald, Milberg’s Monopoly:
Restoring Honesty and Competition to the Plaintiffs’ Bar, 58 Duke L.J. 505, 506 (2009).
76 Chapter 3 Constructing a Class Action Lawsuit

Nonetheless, there are a number of accepted tools a lawyer can employ to

identify an appropriate representative for his proposed class action.
Advertising. While traditionally, bar associations have frowned on adver-
tising for clients, it is an extremely effective way to identify potential class
representatives. For example, a number of firms spend heavily on Google
advertising, looking for possible class representatives.
Plaintiffs’ firms also use websites to advertise potential class actions. One
of the more common methods is to announce that the firm is investigating a
“potential class action” about a specific subject, and ask anyone interested (or
who might have information) to contact the firm.127 Similarly, some firms
will set up a website officially addressing the subject matter of the lawsuit.128
If the announced investigation draws responses, the firm knows that there is
a potential class action; if not, it may abandon its lawsuit with little difficulty.
In general, web advertising has become an effective tool for finding potential
class representatives.129 In addition, some plaintiff lawyers may use “aggrega-
tor websites” (like ClassAction.com) that, for a fee, will match a lawyer with
possible litigants.130
Existing client relationships. Since the PSLRA was passed, securities plain-
tiffs’ lawyers have made attempts to build relationships with large institu-
tional investors.131 This is a more common strategy in securities class
actions—where institutional investors are repeat players in litigation—than
in other types of class actions. Indeed, some plaintiff firms now offer free
“investment monitoring” services to institutional investors: The firm offers to
monitor the investor’s investments; in return, the investor agrees to use the
firm if it files a lawsuit.132
There is a risk to using repeat clients outside the securities class-action
context: Clients can come to be viewed as “professional plaintiffs,” which can
call their adequacy as class representatives into question.133 Even in securities

It is fair to note that, of the 56 cases listed in the Milberg indictment, only three were post-
PLSRA class actions. Choi and Thompson, Securities Litigation and its Lawyers, 106 Colum.
L. Rev. at 1511.
127. See Robert H. Klonoff, et al., Making Class Actions Work: The Untapped Potential of the
Internet, 69 U. Pitt. L. Rev. 727, 738–40 (2008).
128. Id.
129. See In re Enron Corp. Secs. & ERISA Litig., 529 F. Supp. 2d 644, 726–27 (S.D. Tex. 2006)
(named plaintiff “believes he learned on the Internet about the proposed class action
suit.”).
130. Klonoff, et al., Making Class Actions Work, 69 U. Pitt. L. Rev at 741–42 (describing function
of aggregator websites).
131. Choi & Thompson, 106 Colum. L. Rev. 1489, 1506.
132. Iron Workers Local No. 25 Pension Fund v. Credit-Based Asset Servicing & Securitization,
LLC, — F. Supp. 2d.—, 2009 WL 1444400, *2 (S.D.N.Y. May, 26, 2009).
133. Some courts, however, have observed that a “professional plaintiff ” may not necessarily be
an inadequate class representative. See Murray v. GMAC Mortgage Corp., 434 F. 3d 948, 954
 Draft ing the Complaint 77

class actions, the use of “investment monitoring” agreements may compro-

mise an investor’s ability to serve as an adequate class representative.134
Referrals/extended network. Some plaintiffs’ counsel will also make inqui-
ries through their extended network of friends, colleagues, staff, and even
family in order to identify potential class representatives. There are signifi-
cant risks to this practice, however. If the named plaintiff’s relationship to the
plaintiff firm is too close, then the court may find the named plaintiff to be an
inadequate class representative.135
“Pay to play.” Perhaps the most controversial method of client recruit-
ment involves making campaign donations to politicians who oversee large
institutional funds (such as pension finds) in the hopes of receiving favorable
treatment for work assignments down the line.136
These are, of course, only some of the most common methods plaintiff’s
counsel use to identify potential class representatives. Some of the rest, like
buying an assignment in bankruptcy137 are necessarily rare. Others may not
have been developed yet. To a great extent, recruiting practices are limited by
only two things: plaintiff’s counsel’s imagination, and the bar’s canon of
ethics.

§ 3.6 Drafting the Complaint

The complaint is arguably the most important document in the plaintiff’s

case. It lays out the blueprint for the litigation: what the claims are, the allega-
tions supporting them, the discovery needed to prove the case,138 even
whether or not the proposed class can be certified.

(7th Cir. 2006) (“What the district judge did not explain, though, is why ‘professional’ is a
dirty word. It implies experience, if not expertise.”) (Easterbrook, J.).
134. Iron Workers Local No. 25 Pension Fund v. Credit-Based Asset Servicing & Securitization,
LLC, 2009 WL 1444400, *2 (monitoring arrangement “cast in doubt the adequacy of the
fund to serve as lead plaintiff ”).
135. See London v. Wal-Mart Stores, Inc., 340 F.3d 1246, 1255 (11th Cir. 2003) (“[L]ong-standing
personal friendship” and prior business relationship between plaintiff and counsel rendered
plaintiff inadequate class representative); Susman v. Lincoln Am. Corp., 561 F.2d 86, 94–95
(7th Cir. 1977) (counsel’s brother and colleague were inadequate class representatives).
136. See Choi, et al., The Price of Pay to Play in Securities Class Actions, Working Paper Draft 22
December 2009, SSRN.com/abstract=1527047 (describing effects of “pay-to-play”
practices).
137. Cordes & Co. Fin. Servs., 502 F.3d at 103.
138. See In re St. Jude Med., Inc. Sec. Litig., 629 F. Supp. 2d 915, 920 (D. Minn. 2009) (“The
amended complaint is the document as to which discovery was conducted.”).
78 Chapter 3 Constructing a Class Action Lawsuit

§ 3.6.1 Selecting Claims

The plaintiff has several strategic goals when pleading her claims. First, she
needs claims that will survive a motion to dismiss.139 Second, she needs claims
that can encourage settlement. Third, she needs claims that will survive pre-
certification motions practice.
Sometimes, plaintiffs’ lawyers may include claims for strategic reasons
that are not strictly related to the merits of the case. For example, plaintiffs
may include negligence or other unintentional tort claims (like negligent
misrepresentation), not because they fit the facts of the case, but because they
can allow the defendant to draw on insurance policies in settling, rather than
just a litigation budget. The hope is that including such allegations will moti-
vate the defendant to settle the case rather than litigate, because it can pass the
costs of settlement on to the insurance carrier.140
The plaintiff may also file claims in order to expand the scope of discovery
she can take of the defendant, even if she does not expect ultimately to prevail
in those claims (or even see them included as part of any certified class action).
Some plaintiffs lawyers assert every conceivable claim they can imagine in a
putative class action in order to “occupy the field” of the litigation—not want-
ing another lawyer to obtain control over the same class members by filing a
different claim that to date has not been asserted. Finally, the plaintiff may
include all conceivable claims suspecting that the defendant will eventually
enter into a class-wide settlement, and therefore want the broadest possible
release.
The plaintiff may also exclude claims for strategic reasons. For example, a
number of class-action plaintiffs will file cases that appear similar to personal-
injury cases, but exclude personal-injury claims from the lawsuit in order to
avoid defendants’ argument that the claims cannot be certified because the
issue of what caused class members’ personal injuries is inherently individu-
alized.141 Similarly, the plaintiff may try to plead around allegations of fraud,

139. See, e.g., Gilles & Friedman, Exploding the Class Action Agency Cost Myth: The Social Utility
of Entrepreneurial Lawyers, 155 U. Pa. L. Rev. 103, 156 (“Where class actions survive dis-
positive motions, they settle.”).
140. Former plaintiffs’ counsel William Lerach would occasionally do the opposite, filing fraud
claims against officers or directors of a corporation personally with the intention of prevent-
ing them from invoking their insurance policies. “Rather than fight the charge and risk
losing indemnification, the overwhelming percentage of the companies . . . sued chose to
settle without ever going to court.” See Dillon & Cannon, Circle of Greed 162.
141. See, e.g., Benedict v. Altria Group. Inc., 241 F.R.D. 668, 675 (D. Kan. 2007) (noting that
named plaintiff “has chosen not to pursue a claim for personal injury, which would likely
inject individual issues defeating class certification”).
 Draft ing the Complaint 79

recasting them as breach-of-contract claims in order to eliminate any prob-

lems causation or reliance might cause at certification.142
The Class Action Fairness Act (CAFA) has also affected the kinds of claims
plaintiffs bring in class actions.143 And one intriguing trend is an apparent
increase in class actions that invoke federal questions (as opposed to just
arising under state substantive law).144

§ 3.6.2 Selecting Remedies

There are several considerations to choosing remedies for a class action. The
choice of remedy has a very real effect on whether or not a class can be certi-
fied. To begin, if a plaintiff seeks primarily injunctive relief instead of money,
then she may ask the court to certify her class under Rule 23(b)(2) instead of
Rule 23(b)(3), meaning, in practical terms, that she will not have to demon-
strate that certain common issues predominate among the class, or that the
class action is superior to all other forms of relief. Moreover, the choice of
relief itself may have an effect on the plaintiff’s ability to demonstrate that she
meets the Rule 23 requirements: for example, a plaintiff who asks for a “vir-
tual recall” of a defective product (in the form of damages representing a uni-
form cost to repair) may run afoul of the superiority prong of Rule 23(b)(3),
since there are government agencies tasked with ensuring that unsafe prod-
ucts are taken off the market.145
All else being equal, a plaintiff will usually prefer a damages award. One
cannot run a law firm on injunctive relief alone, and it is easier to calculate a

142. See Sarah Roshanne Anchors, Mass Market Fraud Theory: Dispensing With Individual
Reliance in Class Actions Where Plaintiffs Allege Pervasive Misrepresentations to the Public,
43 Tort Trial & Ins. Prac. L.J. 221, 222 (2008) (discussing consumer-plaintiff attempts to
plead around causation requirements in fraud actions).
143. Erichson, CAFA’s Impact on Class Action Lawyers, 156 U. Pa. L. Rev. at 1615–16 (“Certain
categories of class actions—contract, fraud, property damage, labor—increased after CAFA,
while personal injury class actions decreased and civil rights class actions held steady. . . .
The FJC data show no change or a slight decrease in personal injury tort class actions but an
increase in class actions claiming property damage, breach of contract, and fraud. To a class
action lawyer deciding which mass litigation opportunities justify a substantial investment
of time and money, personal injury class actions may have appeared worth pursuing in state
court before CAFA, but post-CAFA, if the cases would be removed to a federal court where
class certification is unlikely, the lawyer may choose instead to pursue a different legal
theory, demand a different type of relief, or pursue different sorts of cases.”).
144. Id. at 1617 (noting “increase in federal question class actions”).
145. See In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 288 F.3d at 1019 (“Regulation by
the NHTSA, coupled with tort litigation by persons suffering physical injury, is far superior
to a suit by millions of uninjured buyers for dealing with consumer products that are said to
be failure-prone.”) (emphasis in original).
80 Chapter 3 Constructing a Class Action Lawsuit

reasonable attorney’s fee by reference to a cash payment than it is to place a

value on injunctive (or other non-monetary) relief.146
That said, seeking injunctive relief offers several strategic advantages: it
allows plaintiff to focus almost exclusively on the defendant’s alleged bad
conduct, allows her to emphasize her desire to protect absent class members,
can stop behavior that affects absent class members, and can justify invoking
Rule 23(b)(2) instead of Rule 23(b)(3) for class certification. In addition,
injunctive relief may provide more relief to the class (and more fees to the
attorneys) at less cost to everyone: injunctions may not cost the defendant as
much as cash out of pocket, injunctions may cost less to oversee, and notice
to the class may cost less as well.147 Rule 23(b)(2) classes also do not require
the same extensive notice as Rule 23(b)(3) classes.148
Rule 23(b)(2) allows a court to certify a class where “the party opposing
the class has acted or refused to act on grounds generally applicable to the
class, thereby making appropriate final injunctive relief or corresponding
declaratory relief with respect to the class as a whole.”149 It was originally
adopted in 1966, and began as a method of enforcing federal social welfare
and civil rights laws.150
If a plaintiff is hoping to bring a 23(b)(2) or a hybrid class action, she may
focus more on equitable relief, including claims for equitable accounting, dis-
gorgement, restitution, constructive trust, equitable estoppel, and rescission.151

146. See Geoffrey P. Miller & Lori S. Singer, Nonpecuniary Class Action Settlements, 60 L. &
Contemp. Problems 97, 107 (1997). Alternatively, plaintiffs’ counsel could request fees
based on their billed work, but these tend to be lower awards than fees tied to the amount
of relief the class receives. For more on fee calculations, see § 8.4.
147. Fed. R. Civ. P. 23(c)(2), Advisory Committee Notes 2003 (“The authority to direct notice to
class members in a (b)(1) or (b)(2) class action should be exercised with care. For several
reasons, there may be less need for notice than in a (b)(3) class action. There is no right to
request exclusion from a (b)(1) or (b)(2) class. The characteristics of the class may reduce
the need for formal notice. The cost of providing notice, moreover, could easily cripple
actions that do not seek damages. The court may decide not to direct notice after balancing
the risk that notice costs may deter the class relief against the benefits of notice.”). For a
fuller discussion, see Chapter 6.
148. See Rule 23(c)(2)(A).
149. Fed. R. Civ. P. 23(b)(2); see also DG v. DeVaughn, 594 F.3d 1188, 2010 U.S. App. LEXIS 2597,
*29 (10th Cir. 2010) (certifying class because “injunction applies to the proposed class as a
whole without requiring differentiation between class members”).
150. See Fed. R. Civ. P. 23, Advisory Committee Notes, 1966, (b)(2) (“Illustrative are various
actions in the civil rights field where a party is charged with discriminating unlawfully
against a class, usually one whose members are incapable of specific enumeration.”); see also
Thomas R. Grande, Innovative Class Action Techniques: The Use of Rule 23(b)(2) in Consumer
Class Actions, 14 Loyola Consumer L. Rev. 251, 257 (2002).
151. See, Grande, Innovative Class Action Techniques: The Use of Rule 23(b)(2) in Consumer Class
Actions, 14 Loyola Consumer L. Rev. at 257.
 Draft ing the Complaint 81

However, if it appears the plaintiff is really seeking monetary relief, then

Rule 23(b)(3) will apply instead. Therefore, a plaintiff must walk a fine line in
bringing a hybrid class—too much focus on monetary relief, and the class
may be subject to the arguably more rigorous 23(b)(3) standard.152 Too much
focus on equitable relief, and the total relief to the class may appear too small
to justify substantial attorneys’ fees.

§ 3.6.3 Defining the Proposed Class

The class definition must answer certain basic questions: who will be entitled
to relief? Who will be bound by the judgment? As a corollary to the require-
ment to define a class, many courts have held that a class must be ascertain-
able.153 Defining a class is not like framing an appellate issue. Unlike many
forms of pleading, it is actually counterproductive to import advocacy into
the class definition. The class definition cannot be merits-oriented. In other
words, “defining the purported class [cannot] require[] addressing the cen-
tral issue of liability to be decided in the case.”154
Defining a class in terms of those who were treated “unfairly,” “improperly,”
“wrongly,” “unconstitutionally,” “unreasonably,” or who were “defrauded,” are
surefire ways of drawing an objection that the class cannot be defined without
deciding the merits of the case first.155 Even language that contemplates “sub-
stantially similar” conduct or products may raise questions about the ascertain-
ability of the class, because it is not sufficiently objective.156
Given these constraints, the soundest classes are defined solely in terms of
objectively verifiable criteria: “all people who bought Acme stock between

152. See, e.g., Presbyterian Church of Sudan v. Talisman Energy, Inc., 226 F.R.D. 456, 468 (S.D.N.Y.
2005) (applying Rule 23(b)(3) to plaintiffs’ claims because “[t]he plaintiffs’ request for a
constructive trust is an ill-disguised claim for damages. Consequently, the plaintiffs’ request
is precisely the sort of sham request for injunctive relief that the Second Circuit has stated
cannot support a Rule 23(b)(2) certification.”).
153. Benedict v. Altria Group, Inc., 241 F.R.D. 668, 680 & n. 57 (D. Kan. 2007) (noting an “implied
requirement of Rule 23 that [plaintiff ] identify an ascertainable class”); Daigle v. Shell Oil
Co., 133 F.R.D. 600, 602 (D. Colo. 1990) (“Although not expressly required by Rule 23 . . . it
is obvious that the party seeking certification must establish that an identifiable class
exists.”); Adashunas v. Negley, 626 F.2d 600, 604 (7th Cir. 1980) (refusing to certify class as
“not adequately defined” where it was not “nearly ascertainable”).
154. Forman, 164 F.R.D. at 403 (refusing to certify class where “defining the purported class as
‘all residents and businesses who have received unsolicited facsimile advertisements’
requires addressing the central issue of liability to be decided in the case”) (emphasis in
original); see also Kenro, 962 F. Supp. at 1169 (refusing to certify class where plaintiffs
“simply incorporated the language of the statutory prohibition into [their] class
definition”).
155. See, e.g., Forman, 164 F.R.D. at 403.
156. For more on class definition, see § 2.1.2.
82 Chapter 3 Constructing a Class Action Lawsuit

January 1 and December 31, 2011;” “all people who bought the 2011 Acme
Auto Mobile;” “all employees of Wal-Mart between January 1 and December
31, 2011.” There can be a risk even to these definitions. If a statute excludes
relief for a subset of purchasers, the defendant may argue that the class action
as defined will require individualized inquiries to adjudicate. Folding those
inquiries into the definition does not eliminate the issue, however; it just
turns a predominance problem into an ascertainability problem.
The plaintiff also needs to take care not to define classes in an overbroad
fashion.157 Finally, the plaintiff should also avoid continually revising the
class definition. Revising a class definition is not always fatal; sometimes, a
court will simply adopt the most recent iteration of the class definition.158
However, in other cases, the court may view a continually revised definition
as evidence that a class is not ascertainable, or that plaintiffs’ counsel have not
adequately considered the ramifications of certifying a class, and hence
cannot be trusted when they argue the case can be managed on a class basis.159
Similarly, if the revision to the class definition appears to be strategic, a court
may consider it as reason to suspect plaintiffs’ motives when they move it to
grant some other relief.160

§ 3.6.4 Pleading

The plaintiff faces a very real dilemma when pleading a class-action com-
plaint. The more specific details she pleads, the likelier it is that she will

157. See Prado-Steiman v. Bush, 221 F.3d 1266, 1280–81 (11th Cir. 2000) (declining to certify
certain class claims because of the “overbreadth of [the] class”); Thompson v. Jiffy Lube Int’l,
Inc. 250 F.R.D. 607, 621 (D. Kan. 2008) (“Plaintiff ’s arguments are hampered by the excep-
tionally broad nature of the proposed classes, which makes it difficult to determine who
would qualify as a class member and doubtful that many of the stated issues would apply to
all or substantially all of the defined classes.”); Pop’s Pancakes, Inc. v. NuCO2, Inc., 251 F.R.D.
677, 680 (S.D. Fla. 2008) (“The Court questions whether the proposed class definitions suf-
ficiently identify proper potential class members, as the definitions are overly broad because
they include all entities that leased equipment and paid a full administrative fee.”); In re
Fosamax Prods. Liab. Litig., 248 F.R.D. at 397 (“The proposed class is uncertifiable for over-
breadth alone.”).
158. Pop’s Pancakes, Inc. 251 F.R.D. at 680 (noting plaintiffs’ class definition changed from com-
plaint to motion, and analyzing definition in certification motion).
159. In re FEMA Trailer Formaldehyde Prods. Liab. Litig., Case 2:07-md-01873-KDE-ALC, 2008
WL 5423488 at 2 n.1 (E.D. La. Dec. 29, 2008) (“This Court also reasons that this sub-class
should be denied strictly because it is not adequately defined (i.e., one specific definition has
not been provided to this Court for consideration; three very different definitions have been
provided).”).
160. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 345, 353 (1978) (when plaintiffs arbitrarily
limited class definition to exclude some shareholders with legitimate claims in order to
facilitate notice, court took redefinition of class as evidence that plaintiffs sought only to
reduce notice costs).
 Working With Other Plaintiff ’s Counsel 83

provide the defendant with grounds to move for dismissal, or to oppose cer-
tification. However, the vaguer her pleadings, the more likely her complaint
will be dismissed under Rule 8(a).161 CAFA has also affected the way in which
the plaintiff drafts her complaint. A plaintiff who wishes her case to remain
in state court must ensure that her pleading is precise enough to limit the
proposed class to one within CAFA’s “local controversy” exception.162
In general, the plaintiff will plead as much of the defendant’s bad conduct
as she can. Given the need to establish that the harms for which she seeks
redress are class-wide, she may plead only minimal facts about her own indi-
vidual claims, lest the defendant seize on some detail as grounds for arguing
that she is atypical, or that common issues will not predominate over the
litigation. She must, however, ensure that she has pled more than just conclu-
sory allegations that she has met the elements of each cause of action she
asserts.163

§ 3.7 Working With Other Plaintiff ’s Counsel

In a perfect world, a given plaintiff’s lawyer will bring a class action against a
corporate wrongdoer without any involvement by co-counsel. This tactic
allows the lawyer sole control over the prosecution of the class action and
results in that lawyer receiving all attorneys’ fees the court ultimately awards
if the case settles or is litigated to a favorable result. If the subject matter of the
litigation is sufficiently low-profile, it may be possible for the sole practitioner
or small firm lawyer to control the litigation in this manner.
For many plaintiffs’ lawyers, there is not actually a choice between pro-
ceeding on one’s own and teaming with another firm. If the stakes are large
enough, the firm will need to divide labor and rely on other firms that special-
ize in specific aspects of class-action litigation. For some smaller class actions,
it may be possible to “go it alone.” For larger cases, however, a team approach
(or “consortium”) may be unavoidable. (However, technology is changing
this to a certain degree. It is now sometimes possible to “go it alone” in a given
smaller case while actually relying on a larger network of plaintiffs’ lawyers
with similar interests.)164

161. For more on Rule 8(a) dismissals, see § 4.2.4.3.

162. Lewis v. Ford Motor Co., 610 F. Supp. 2d 476, 487 (W.D. Pa. 2009) (court found jurisdiction
under CAFA in part because “Plaintiffs’ imprecise drafting of the Complaint has opened them
to a much broader potential class . . .”). For more on removal under CAFA, see § 4.2.1.1.
163. See generally Ashcroft v. Iqbal, — U.S. ——, 129 S. Ct. 1937 (2009).
164. See, e.g., Bryon G. Stier, Resolving the Class Action Crisis: Mass Tort Litigation as Network,
2005 Utah L. Rev. 863, 895–96 (2005) (discussing effect of better communications technol-
ogy on smaller plaintiffs’ firms).
84 Chapter 3 Constructing a Class Action Lawsuit

There are structural incentives for even larger plaintiff firms to team up
with smaller firms. First, there are the benefits from division of labor. As sev-
eral scholars have observed:

The dominant class action model is a pyramid-shaped structure comprised of

numerous small firms. Two or more co-lead counsel typically sit on top of the
pyramid. The co-lead counsel are empowered to make all decisions relating to
the litigation, and to submit a unified fee application at the close of the case.
Beneath them on the pyramid are lawyers tasked with responsibility for impor-
tant areas of the case and, in the lower strata, attorneys whose duties include the
yeoman’s work of document review and so forth.165

In addition, in some areas—like securities litigation—larger firms have

become more willing to pair with smaller firms “in an effort to build a client
group with the largest financial interest, a new requirement for lead plaintiffs
which had been specified in the PSLRA.”166
Also, in certain cases, it makes sense for smaller firms to partner with
larger firms. In addition to mollifying potential rivals, a smaller firm may
need the expertise of a larger class-action firm to establish adequacy of coun-
sel. (This is particularly true for a smaller firm that may not have tried any
class actions before.)
The construction of a strong class-action lawsuit represents a significant
investment of time, effort, and money for the plaintiff. Once the plaintiff files
her complaint, however, she subjects it to a gantlet of substantive and proce-
dural challenges. She also embarks on a prolonged effort to acquire enough
evidence to show a court that her case should be certified on behalf of the
proposed class for trial. These various challenges form the subject of the next
chapter.

165. Gilles & Friedman, Exploding the Class Action Agency Cost Myth, 155 U. Pa. L. Rev. at
148–49.
166. Choi & Thompson, Securities Litigation and its Lawyers, 106 Colum. L. Rev. at 1490.
 CHAP TER

4
Pre-Certification Steps

§ 4.1 Plaintiff’s Opening Moves 87

§ 4.1.1 Media Coverage 88
§ 4.1.2 Generating External Pressure on Defendants 89

§ 4.2 Defendant’s Response to Complaint 91

§ 4.2.1 Invoking Arbitration 91
§ 4.2.2 Removal 93
§ 4.2.2.1 Diversity Jurisdiction/Class Action Fairness Act 94
§ 4.2.2.2 Federal Question Jurisdiction 96
§ 4.2.2.3 Appeals 97
§ 4.2.3 Consolidation 98
§ 4.2.4 Motion to Dismiss 98
§ 4.2.4.1 Standing 101
§ 4.2.4.2 Personal Jurisdiction 101
§ 4.2.4.3 Pleading Deficiencies 102
§ 4.2.4.4 Substantive Legal Problems 103
§ 4.2.5 Motion to Strike/Early Challenge to Class Certification 104
§ 4.2.6 Answer 106
§ 4.2.7 Offer of Judgment 108
§ 4.2.8 Motion for Sanctions 109

§ 4.3 Amending the Complaint 110

§ 4.4 Case Management Orders 111
§ 4.4.1 Timing 111
§ 4.4.2 Discovery Procedures 112
§ 4.4.3 Motions Practice 113
§ 4.4.4 Appointment of Lead Counsel 114

§ 4.5 Pre-Certification Discovery 115

§ 4.5.1 Initial Disclosures 116
86 Chapter 4 Pre-Certification Steps

§ 4.5.2 Protective Orders 116

§ 4.5.3 Plaintiff’s Discovery 117
§ 4.5.3.1 Interrogatories 118
§ 4.5.3.2 Document Requests 120
§ 4.5.3.3 Requests for Admission 121
§ 4.5.3.4 Depositions 121
§ 4.5.4 Defendant’s Discovery 125
§ 4.5.4.1 Interrogatories 125
§ 4.5.4.2 Document Requests 125
§ 4.5.4.3 Requests for Admission 126
§ 4.5.4.4 Depositions 126

§ 4.6 Expert Witnesses 128

§ 4.7 Pre-Certification Summary Judgment Motion 129

 Plaintiff ’s Opening Moves 87

Because the debate over certification is the central focus of a class action, it has
an effect on every opening move in the litigation. Both the plaintiff and the
defendant must develop the facts supporting their version of the merits—while
still keeping an eye on whether those facts will support or undermine a bid for
certification. The large potential stakes in class actions also have an effect, justify-
ing moves on either side that might be deemed too costly in individual litigation.
In most class actions, these opening moves are the heart of the litigation.
The structure of procedural orders, the resolution of dispositive motions, and
the facts revealed in discovery all contribute to whether a class is ultimately
certified. Moreover, none of these moves are costless. Each requires—at a
bare minimum—attorney time. Many (like document review) also require
large expenditures on third-party vendors, contract attorneys, or hired
experts. As a result, each of these pre-certification moments will also influ-
ence each party’s attitude towards settlement.
For the plaintiff, the process of preparing the case for certification may
seem more like a gantlet. She must ensure her complaint survives any early
dispositive motions, such as a motion to dismiss or a pre-certification motion
for summary judgment. She must develop a record that supports both certifi-
cation of a class and an eventual trial verdict. She needs to encourage the
defendant to negotiate and then convince it to settle for as much as possible.
And—in securities and other consolidated class actions—her counsel need to
position themselves to be appointed class counsel, fending off any challenges
from other plaintiffs’ counsel with competing agendas. As a result, to the
extent possible, the plaintiff will prize flexibility throughout this process. She
may prefer vagueness to specificity in her pleadings, and she will resist
responding to discovery that may prevent her from developing alternative
theories of recovery as emerging events require.
The defendant has three goals through this process: (1) dispose of the case
on the merits, if possible; (2) develop a record to support the denial of class
certification; and (3) convince the plaintiff the case is not worth much.
Depending on the defendant’s view of the merits, it may try to aim the case
towards either an early dispositive motion or settlement negotiations. Given
the one-sided nature of class-action discovery,1 the defendant may also resist
answering many of the plaintiff’s discovery requests. Doing so allows the defen-
dant to limit the plaintiff’s flexibility, and also reduces the defendant’s costs.

§ 4.1 Plaintiff ’s Opening Moves

While, in some class actions, the “file and wait” strategy might be effective,
most plaintiffs prefer to generate as much momentum as possible early in

1. See § 4.4.2.
88 Chapter 4 Pre-Certification Steps

the case. Among other benefits, doing so keeps the defendant reacting to events
rather than deploying its resources to develop its own story on the merits.
Keeping the case moving also may convey a sense of urgency to the court.2
One factor that influences how aggressively the plaintiff will move is
whether her counsel faces any competition for representing the class. The
more potential competition there is, the greater the need for an aggressive
approach. Whether accurate or not, there is a perception that “first-to-file”
plaintiffs—and those who make early strides in prosecuting a case—enjoy an
advantage in securing lead-counsel appointments.3
Another factor dictating a need for an aggressive approach is the degree to
which the alleged wrong has received public attention. Cases conducted
under the glare of publicity can place additional pressure on defendants.4 If
the media is reporting on the alleged product defect, environmental disaster,
or stock scandal, the plaintiff will need to file her suit and commence discov-
ery as quickly as possible, in order to take advantage of any public outcry.

§ 4.1.1 Media Coverage

Media coverage can place additional pressure on the defendant.5 In the short-
term, it may affect sales, and force the defendant to either spend time and
money defending itself in the press, or risk allowing the plaintiff to shape its
public image. It may also affect the defendant’s stock price,6 which may gen-
erate pressure from shareholders to resolve the litigation quickly. Combined,
these pressures may motivate a defendant to settle particularly controversial
matters. Plaintiffs’ attorney Morris Ratner described his strategy for inducing
a number of powerful international banks to settle claims related to the
alleged mismanagement of World War II-era bank accounts as follows:

The credible threat of an involuntary judgment posed by the class action litiga-
tion combined with (1) intense media attention, (2) political pressure from

2. Cf. Business Guides, Inc. v. Chromatic Commc’ns Enters., Inc., 498 U.S. 533, 549 (1991) (infer-
ring urgency from plaintiff ’s request for immediate injunction).
3. See Jane Shapiro, Inside A Class Action: The Holocaust And The Swiss Banks 35
(2003) (attorney Ed Fagan “was intent on being the first one out of the gate and on securing a
position as lead counsel”); Patrick Dillon & Carl M. Cannon, Circle of Greed: The
Spectacular Rise and Fall of the Lawyer Who Brought Corporate America to Its
Knees 366 (2010) (discussing “rush to the courthouse” in securities class actions).
4. See Morris A. Ratner, The Settlement of Nazi-Era Litigation through the Executive and Judicial
Branches, 20 Berkeley J. Int’l L. 212, 213 (2002); Dillon & Cannon, Circle of Greed 177
(Lerach stressed advantages of media coverage in pitch to institutional investor client).
5. For a general discussion, see Steven Garberg & Anthony G. Bower, Newspaper Coverage of
Automotive Product Liability Verdicts, 33 L. & Soc’y Rev. 93 (1999).
6. See Jeffrey Haymond & James E. West, Class Action Extraction, 116 Pubic Choice 91, 103–04
(2003) (finding statistically significant relationship between threat of class action and drop in
stock price).
 Plaintiff ’s Opening Moves 89

well-situated victims’ advocates, (3) the ongoing efforts of institutions such as

the World Jewish Restitution Organization, and (4) mounting public support
within Switzerland to face past wrongs, to produce immense pressure on the
Swiss bank defendants to address their liability.7

Media coverage can provide other benefits as well. Coverage that men-
tions plaintiff’s counsel’s involvement in a case can signal that a firm has
staked a claim to litigation, which may discourage competition. Extensive
press coverage can also provide “free” discovery: if the story is newsworthy,
journalists may investigate the defendant’s conduct on their own,8 and media
coverage may also encourage additional witnesses to come forward.9 Finally,
media pressure may force the defendant to make tactical mistakes the plain-
tiff can exploit later in the litigation. For example, a number of defendants
have inadvertently waived work product protection over litigation-related
materials by disclosing them to public-relations firms.10
There are drawbacks to using the press to prosecute a class action, how-
ever. While an established plaintiffs’ firm might have the clout to generate
coverage that supplements discovery or uncovers new witnesses, most law
firms will not. Moreover, journalists will not ask the same questions—or tell
the same story—as the plaintiff wants. Even when there may be significant
overlap between the agendas of the press and a given plaintiff, the press
will not have the same understanding of the legal theories the plaintiff is pur-
suing. More importantly, facts that tell compelling individual stories may
undermine the more generalized story the plaintiff will want to tell at class
certification.

§ 4.1.2 Generating External Pressure on Defendants

There are several other avenues for generating external pressure on defen-
dants. Assuming her complaint was not inspired by one,11 a plaintiff may
petition for a government investigation of defendant’s conduct. State attor-
neys-general, for example, may have strong incentives to intervene, like an
aggressive desire to protect the public good, a need to fill depleted state cof-
fers, or even a need to generate positive publicity to facilitate re-election.
Plaintiff’s attorney Richard Scruggs allied himself with state prosecutors

7. Ratner, The Settlement of Nazi-Era Litigation, 20 Berkeley J. Int’l L. at 213.

8. See Jeffrey Toobin, “The Man Chasing Enron,” The New Yorker, Sept. 9, 2002, at 88.
9. Id. at 91.
10. See, In re Vioxx Prods. Liab. Litig., 501 F. Supp. 2d 789, 807 (E.D. La. 2007); United States
v. Philip Morris, Inc., 209 F.R.D. 13, 17 (D.D.C. 2002).
11. See § 3.2.
90 Chapter 4 Pre-Certification Steps

when litigating a series of fraud suits against tobacco companies.12 And plain-
tiffs’ firm Cohen Milstein joined forces with various politicians when prose-
cuting its Holocaust-related class actions against Swiss banks.13
Public investigations offer other benefits to plaintiff’s counsel. The
increased scrutiny of defendant’s activity may convince a court (or later, a
jury) that there is a genuine wrong that only a class-wide verdict can remedy.
A public investigation also may provide free discovery for the plaintiff, or
generate information she would otherwise have difficulty obtaining.14 Finally,
a finding of wrongdoing, defect, or threat to safety can significantly increase
the value of a plaintiff’s case.15
Public investigations carry their own risks, however. The investigation
could exonerate the defendant. While a plaintiff still may sue an exonerated
defendant on the ground that privately enforced statutes require higher stan-
dards of conduct, it is more difficult to generate viable legal theories or public
outrage if a government agency has not found any wrongdoing. And, if a
government agency does decide to investigate, the fact that it has taken an
active role in addressing the problem gives the defendant a much stronger
argument that a class action is not superior to other methods of resolving the
controversy.16
The plaintiff also may coordinate with special-interest groups to pressure
the defendant into early resolution of controversial litigation.17 There are a
number of public-interest groups that involve themselves in class-action liti-
gation; some because they have a genuine interest in advancing a specific

12. Alan Lange & Tom Dawson, Kings of Tort, 80–85 (2009); see also Dillon & Cannon,
Circle of Greed 128–29 (describing “symbiotic” relationship between William Lerach and
then-New York Attorney General Eliot Spitzer in corporate fraud cases).
13. Shapiro, Inside a Class Action at 69 (noting assistance from Senator Alfonse D’Amato,
who was holding concurrent Senate hearings on issue), 201 (coordination with California
state officials).
14. See Kevin Roddy, Workshop Transcript, Panel 7: Class Actions As An Alternative to Regulation:
The Unique Challenges Presented By Multiple Enforcers And Follow-On Lawsuits, 18 Geo.
J. Legal Ethics 1311, 1319 (2005) (describing cooperation with FTC in investigation of
Rexall); Dillon & Cannon, Circle of Greed 177 (government investigation of Charles
Keating was producing documents in 48 hours that might otherwise take months).
15. See Deborah R. Hensler & Mark. A. Peterson, Understanding Mass Personal Injury Litigation:
A Socio-Legal Analysis, 59 Brook. L. Rev. 961, 969 (1991) (“the Food and Drug
Administration’s (‘FDA’) decision to prohibit silicone breast implantation under most cir-
cumstances likely increased the value of pending and future breast implantation claims and
encouraged a large number of new claims”).
16. For a fuller discussion of defendant’s superiority argument, see § 5.2.2.6. See also Shapiro,
Inside a Class Action 138–39 (describing plaintiffs’ efforts to coordinate with State
Department and Commerce Department to avoid “the vise of the U.S. Government”).
17. See, e.g., Ratner, The Settlement of Nazi-Era Litigation, 20 Berkeley J. Int’l L. at 213.
 Defendant’s Response to Complaint 91

policy agenda,18 others because they have close ties to members of the trial
bar. This tactic requires caution, however. To the extent the group is per-
ceived as too enmeshed with the plaintiffs’ bar, it will lack the credibility to
force a settlement; to the extent a group is independent, it may actively under-
mine a plaintiff’s settlement efforts in its pursuit of its own public policy
agenda.19

§ 4.2 Defendant’s Response to Complaint

There are three questions a defendant must consider when responding to the
complaint. First, is the litigation in the right forum? Is the plaintiff’s com-
plaint better addressed by arbitration, or by a federal or state regulatory
agency? If the complaint is best addressed by litigation, has it been filed in the
correct court?20 Second, has the defendant stated a proper legal claim? Would
a court, properly briefed, dismiss some (or all) of plaintiff’s claims? Finally, if
the plaintiff has brought a claim in the proper court that will survive a motion
to dismiss, how should the defendant answer the complaint?

§ 4.2.1 Invoking Arbitration

Defendants that have a contractual relationship with the plaintiff (such as a

franchise agreement or cell-phone plan) may have included a mandatory
arbitration clause in the contract. If so, the defendant may consider invoking
its arbitration rights. Most federal courts have held that, unless express lan-
guage in the agreement states otherwise, Section 4 of the Federal Arbitration

18. See generally Robert C. Fellmuth, et al., Summit: Taking the Offensive: Court Strategy, 40 San
Diego L. Rev. 115 (2003) (counsel from Public Citizen Litigation Group, NAACP Legal
Defense and Educational Fund, and American Civil Liberties Union discuss use of class
actions in advancing policy goals).
19. See Shapiro, Inside a Class Action at 96–100 (noting tension between plaintiffs and
World Jewish Congress, and referring to tensions between plaintiffs in human-rights litiga-
tion against Estate of Ferdinand Marcos and Amnesty International); 141–42 (describing
how Independent Committee of Independent Persons requested discovery stay opposed by
plaintiffs); Fellmuth, et al., Taking the Offensive, 40 San Diego L. Rev. at 141 (representative
from Public Citizen Litigation Group discusses objecting to private firms’ attorneys fees in
class settlements).
20. Samuel Issacharoff & Richard A. Nagareda, Class Settlements Under Attack, 156 U. Pa. L. Rev.
1649, 1660–61 (2008) (“Forum matters. It may appear banal to observe that the court in
which a case is situated, the rules and substantive laws that operate, and even the presiding
judge all have important effects on the prospects of a case.”).
92 Chapter 4 Pre-Certification Steps

Act (“FAA”) prohibits class-wide arbitration of claims.21 Depending on the

language of the arbitration clause, the defendant could either shift litigation
of the class claims into arbitration (where, presumably, they would be cheaper
to resolve),22 or shut down the class aspects of the case completely.23
Simply invoking arbitration may not settle the matter, however. In most
cases, the plaintiff will challenge the enforceability of the arbitration clause.
In cases where invoking arbitration merely shifts the venue for the class
claims, the plaintiff must weigh any cost advantages against the loss of her
preferred forum, as well as the lost leverage from the imposition of discovery
under the federal rules. In cases where arbitration would preclude class treat-
ment, opposition is almost certain.
The trend in state courts is to find arbitration clauses that contain class-
action waivers to be unenforceable because they are “unconscionable.”24
Federal courts, however, have split in how they address class-action waivers
in arbitration clauses. The Second Circuit has held some class-action waivers
to be per se unconscionable.25 The Ninth Circuit has adopted the analysis
adopted by the state court in which the federal court sits,26 which has led trial

21. See Champ v. Siegel Trading Co., 55 F.3d 269, 276 (7th Cir. 1995) (section 4 of Federal
Arbitration Act requires enforcement of arbitration provision according to terms).
22. See Christopher R. Drahozac & Quentin R. Wittrock, Franchising, Arbitration and the Future
of the Class Action, 3 Entrepreneurial Bus. L.J. 275, 280–94 (2009) (discussing differing
effects of class arbitration waivers and class action waivers).
23. See Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U. S. ____, slip op. at 23 (2010) (where
arbitration agreement is silent as to class arbitration, “parties cannot be compelled to submit
their dispute to class arbitration.”).
24. See Fiser v. Dell Computer Corp., 188 P.3d 1215, 1221 (N.M. 2008) (“While we agree that
Defendant’s “terms and conditions” may not rise to the level of an adhesive contract, we
nevertheless conclude that the terms are unenforceable because there has been such an over-
whelming showing of substantive unconscionability.”); Tillman v. Commercial Credit Loans,
Inc., 655 S.E.2d 362, 370 (N.C. 2008) (“We conclude that, taken together, the oppressive and
one-sided substantive provisions of the arbitration clause at issue in the instant case and the
inequality of bargaining power between the parties render the arbitration clause in plaintiffs’
loan agreements unconscionable.”); McKee v. AT&T Corp., 191 P.3d 845, 852 (Wash. 2008)
(class-action waiver “conflicts with Washington’s fundamental public policy favoring the
availability of class-based relief for small consumer claims”); Discover Bank v. Superior Court,
36 Cal. 4th 148, 153 (2005) (“we conclude that, at least under some circumstances, the law in
California is that class action waivers in consumer contracts of adhesion are unenforceable”).
See also Drahozac & Wittrock, Franchising, Arbitration and the Future of the Class Action, 3
Entrepreneurial Bus. L.J. at 277–78 (observing “an increasing number of courts holding
class action arbitration waivers to be unenforceable”).
25. In re Am. Express Merchs’ Litig., 554 F.3d 300, 320 (2d Cir. 2009) (“We therefore hold that the
class action waiver in the Card Acceptance Agreement cannot be enforced in this case
because to do so would grant Amex de facto immunity from antitrust liability by removing
the plaintiffs’ only reasonably feasible means of recovery.”)
26. See Hoffman v. Citibank, N.A., 546 F.3d 1078, 1083 (9th Cir. 2008) (instructing court on
remand to “specifically address whether the enforceability of this class arbitration waiver
under South Dakota law is contrary to a fundamental policy of California”).
 Defendant’s Response to Complaint 93

courts to find some arbitration clauses valid,27 and others unconscionable.28

The Third Circuit disagrees, holding that the FAA preempts state court rul-
ings striking class-action arbitration waivers.29 As a result, the defendant
should be prepared to brief a motion to compel arbitration.

§ 4.2.2 Removal

If the plaintiff filed the case in state court, the defendant should consider
removing it to federal court. While the ideological balance of federal courts
changes over time, appointed, life-tenured federal judges tend to treat certifi-
cation more rigorously than elected state court judges,30 and there is a more
developed (and hence more predictable) body of precedent governing class
certification.31 There are drawbacks to removing a case to federal court: most
importantly, some states may not impose the same onerous electronic-
discovery obligations as federal courts.32 However, most defendants will find
that, on balance, the advantages of removal outweigh the problems.
The procedure for removal is simple. A defendant must file a notice of
removal with the appropriate federal court within 30 days of being served
with the complaint.33 (A defendant already litigating in state court may file a
notice of removal within 30 days after receiving some paper that provides
new grounds for removal.)34 The notice should contain a short and plain
statement of the grounds justifying the removal, and include copies of all
documents served on the defendant in state court.35
Once the defendant has removed the case to federal court, the plaintiff has
the option of moving the court to remand the case to state court under 28

27. See Carideo v. Dell, Inc., 520 F. Supp. 2d 1241, 1250 (W.D. Wash 2007).
28. See Chalk v. T-Mobile USA, Inc., 560 F.3d 1087, 1095–97 (9th Cir. 2009).
29. Gay v. CreditInform, 511 F.3d 369, 378 (3d Cir. 2007).
30. See Haymond & West, Class Action Extraction, 116 Public Choice at 94–95 (“in states
where judges are elected, there is evidence to support the claim that judges will transfer out-
of-state resources to in-state recipients”).
31. See Samuel Issacharoff & Catherine M. Sharkey, Backdoor Federalism, 53 UCLA L. Rev. 1356,
1356 (2006) (discussing “considerable benefits that flow from national regulatory uniformity
and to protect an increasingly unified national (and international) commercial market from
the imposition of externalities by unfriendly state legislation”).
32. See Michael R. Pennington & Robert J. Campbell, The Class Action Fairness Act and the New
Federal E-Discovery Rules: To Remove or Not to Remove?, 56 Fed. Lawyer 42, 47 (2009).
33. 28 U.S.C. § 1446(b); see also Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344,
347–48 (1999) (30-day period for filing removal begins running when defendant is formally
served with complaint). The defendant also files a notice in state court that informs it the case
has been removed.
34. See, e.g., Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694–96 (9th Cir. 2005) (finding
removal on receipt of amended complaint “timely” under 28 U.S.C. § 1446(b)).
35. 28 U.S.C. § 1446(a)–(b). For an exemplar removal notice, see Appendix 4A.
94 Chapter 4 Pre-Certification Steps

U.S.C. § 1447(c). If the removal notice was defective for some reason—it was
filed late, the defendant did not give notice to the state court or the plaintiff—
then the plaintiff must move to remand within 30 days.36 If the plaintiff wishes
to remand for lack of subject-matter jurisdiction, she may do so at any time,
although the earlier she does so, the more credible her argument will seem.

§ 4.2.2.1 Diversity Jurisdiction/Class Action Fairness Act

Much of the fight over diversity jurisdiction has been obviated by the passage
of the Class Action Fairness Act (“CAFA”).37 CAFA grants federal courts
original jurisdiction over any action in which the proposed class has at least
100 members,38 minimal diversity exists (meaning any one member of the
class hails from a different state than any one defendant),39 and the aggregate
amount in controversy exceeds $5 million, excluding interest and costs.40
There are a few exceptions to CAFA. A court may remand a case where
between one- and two-thirds of the class (and the primary defendants) are
citizens of the same state.41 And it must remand if the case concerns a “local
controversy” (meaning more than two-thirds of the plaintiff class comes from
the same state as one defendant, the principal conduct occurred in the state,
and no related class actions have been filed in the previous three years);42 if
the primary defendant and at least two-thirds of the class come from the same
state;43 or if the lawsuit concerns any security under § 2(a)(1) of the Securities
Act of 1933.44
The defendant may also remove “mass actions” under CAFA.45 CAFA
defines a “mass action” as a lawsuit brought on a non-class basis by 100
or more plaintiffs in which the claims involve common questions of law or
fact.46 An action is not a mass action under CAFA if: (1) the alleged conduct

36. 28 U.S.C. § 1447(c).

37. 28 U.S.C. § 1332. CAFA also included several provisions governing class settlements, which
will be discussed in Chapter 8.
38. 28 U.S.C. § 1332(d)(5)(B).
39. 28 U.S.C. § 1332(d)(2)(A).
40. 28 U.S.C. § 1332(d)(6).
41. 28 U.S.C. § 1332(d)(3).
42. 28 U.S.C. § 1332(d)(4)(A).
43. 28 U.S.C. § 1332(d)(4)(B).
44. 28 U.S.C. § 1332(d)(9)(C).
45. 28 U.S.C. § 1332(d)(11)(A) (defining “mass action”).
46. 28 U.S.C. § 1332(d)(11)(B); see also Lowery v. Ala. Power Co., 483 F.3d 1184, 1202–03 (11th
Cir. 2007) (lawsuit is mass action under CAFA if it meets “(1) an amount in controversy
requirement of an aggregate of $5,000,000 in claims; (2) a diversity requirement of minimal
diversity; (3) a numerosity requirement that the action involve the monetary claims of 100 or
more plaintiffs; and (4) a commonality requirement that the plaintiffs’ claims involve
common questions of law or fact.”).
 Defendant’s Response to Complaint 95

occurred in the forum state and the effects were limited to surrounding states;
(2) the defendant moved to join the claims; (3) the claims were asserted on
behalf of the public pursuant to a private attorney general statute; or (4) the
claims were coordinated solely for pretrial proceedings.47 Courts have so far
disagreed over whether at least one plaintiff must assert a claim greater than
the $75,000 individual amount-in-controversy requirement.48
As a practical matter, the defendant should offer evidence that the removed
class action meets each of CAFA’s requirements. A number of courts have
held that the defendant still bears the burden of showing that CAFA-based
jurisdiction exists.49 Even in those jurisdictions that have not placed the
burden on the defendant, much of the debate surrounding CAFA jurisdiction
involves the kind of evidence the defendant proffers to meet each require-
ment. For example, a number of cases involving the amount-in-controversy
requirement have turned on the quality of evidence presented to the court.50
That said, the burden is not an onerous one: An affidavit usually suffices as
“evidence.”51
The plaintiff bears the burden of demonstrating that one of CAFA’s excep-
tions to federal diversity jurisdiction applies.52 Similarly, debates involving

47. 28 U.S.C. § 1332(d)(11)(B)(ii).

48. Compare Lowery, 483 F.3d at 1205 (“it seems clear that the $75,000 provision was not
intended to bar district courts from asserting jurisdiction over the entire case if each indi-
vidual plaintiff ’s claims do not exceed $75,000”), with Abrego v. Dow Chemical Co., 443 F.3d
676, 689 (9th Cir. 2006) (“we do conclude—as should be obvious—that the case cannot go
forward unless there is at least one plaintiff whose claims can remain in federal court”)
(emphasis in original).
49. See Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1021 (9th Cir. 2007); Blockbuster, Inc. v.
Ga1eno, 472 F.3d 53, 58 (2d Cir. 2006) (“[W]e hold that CAFA did not change the traditional
rule and that defendant bears the burden of establishing federal subject matter jurisdiction.”);
Evans v. Walter Indus., 449 F.3d 1159, 1164 (11th Cir. 2006) (“CAFA does not change the
traditional rule that the party seeking to remove the case to federal court bears the burden of
establishing federal jurisdiction”); Morgan v. Gay, 471 F.3d 469, 473 (3d Cir. 2006) (“Under
CAFA, the party seeking to remove the case to federal court bears the burden to establish that
the amount in controversy requirement is satisfied.”); Brill v. Countrywide Home Loans, Inc.,
427 F.3d 446, 448 (7th Cir. 2005); Abrego, 443 F.3d at 683–84.
50. See Guglielmino v. McKee Foods Corp., 506 F.3d 696, 701 (9th Cir. 2007) (requiring defendant
to prove amount in controversy by preponderance of evidence); Brill v. Countryside Home
Loans,, 427 F.3d 446, 449 (7th Cir. 2005) (“part of the removing party’s burden is to show not
only what the stakes of the litigation could be, but also what they are given the plaintiff ’s
actual demand[]”) (emphasis in original).
51. Lewis v. Ford Motor Co., 610 F. Supp. 2d 476, 484 (W.D. Pa. 2009) (accepting affidavit because
“made under penalty of perjury and based on [witness’s] personal knowledge”).
52. Preston v. Tenet Healthsystem Mem. Med. Center, Inc., 485 F.3d 804, 812–13 (5th Cir. 2007);
Serrano, 478 F.3d at 1022; Hart v. FedEx Ground Package Sys.Inc., 457 F.3d 675, 680 (7th Cir.
2006); Evans, 449 F.3d at 1164 (“[T]he plaintiffs bear the burden of establishing that they fall
within CAFA’s local controversy exception”).
96 Chapter 4 Pre-Certification Steps

the local controversy exception tend to turn on the type and amount of evi-
dence presented to the court.53

§ 4.2.2 2 Federal Question Jurisdiction

28 U.S.C. § 1441(b) provides that a party can remove a lawsuit “founded on a

claim or right arising under the Constitution, treaties or laws of the United
States,” regardless of whether diversity jurisdiction exists. The plaintiff can
usually plead around federal-question jurisdiction by simply not mentioning
federal law.54 The defendant nevertheless may invoke the “substantial federal
question” doctrine to argue that, although the plaintiff has asserted state-law
claims, resolving them would require the court to resolve disputed issues of
federal law.55 In some cases, the defendant can still remove a class action on
federal preemption grounds,56 but courts tend not to favor this strategy.
There are two additional subsets of federal-question jurisdiction that occa-
sionally affect class actions. The first involves the Securities Litigation Uniform
Standards Act (“SLUSA”). SLUSA provides that no “covered class action”

may be maintained in any State or Federal court by any private party alleging:
(A) a misrepresentation or omission of a material fact in connection with the
purchase or sale of a covered security; or (B) that the defendant used or
employed any manipulative or deceptive device or contrivance in connection
with the purchase or sale of a covered security. . . . Any covered class action
brought in any State court involving a covered security, as set forth [above] shall
be removable to the Federal district court for the district in which the action is
pending . . . .57

Roughly speaking, a “covered class action” under SLUSA is any litigation in

which the plaintiff seeks damages on behalf of at least 50 other people, and the
litigation is based on common questions of fact or law.58 The definition does
not include an “exclusively derivative action” on behalf of shareholders.59

53. Evans, 449 F.3d at 1164–65. See also Richard L. Marcus, Assessing CAFA’s Stated Jurisdictional
Policy, 156 U. Pa. L. Rev. 1765, 1784–85 (2008).
54. Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 & n.7 (1987) (plaintiff is “master of the claim;
he or she may avoid federal jurisdiction by exclusive reliance on state law”); Indeck Maine
Energy, L.L.C. v. ISO New England, Inc., 167 F. Supp. 2d 675, 684 (D. Del. 2001) (“If the plain-
tiff has asserted only state law claims, even though he could have asserted federal claims,
there is no federal question jurisdiction.”).
55. See Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005).
56. See Arana v. Oschner Health Plan, 338 F.3d 433, 435 (5th Cir. 2003) (federal court had juris-
diction over ERISA claim).
57. 15 U.S.C. §§ 78bb(f)(1)–(2); see also 15 U.S.C. §§ 77p(b)–(c) (identical provision amending
the Securities Act of 1933).
58. 15 U.S.C. § 77p(f)(2)(A).
59. 15 U.S.C. § 77p(f)(2)(B).
 Defendant’s Response to Complaint 97

As a result, SLUSA allows for removal of most securities class actions to fed-
eral court, whether or not they explicitly invoke federal securities laws.
Second, cases related to bankruptcy proceedings may also be removable to
federal court: “the district courts shall have original but not exclusive juris-
diction of all civil proceedings arising under title 11 (the Federal Bankruptcy
Code), or arising in or related to cases under title 11.”60 The question of which
cases “relate to” bankruptcy has been hotly debated in the federal courts,61
and is beyond the scope of this discussion, but class-action litigators should
pay attention to whether the litigation might implicate any bankruptcy
proceedings, thus giving rise to removal.

§ 4.2.2.3 Appeals

Generally, an order denying remand is considered interlocutory; therefore it

is not reviewable except as part of an appeal from final judgment.62 There are
a few exceptions: the court may certify the question for appellate review;63 the
plaintiff may appeal pursuant to the collateral order doctrine;64 or, in extraor-
dinary cases, she may seek mandamus.65 Similarly, an order granting remand
is generally not appealable, except the defendant may appeal:66 (1) a remand
not based on a defect in the removal notice;67 (2) pursuant to the collateral
order doctrine;68 or (3) if the remand order is coupled with some other order

60. 28 U.S.C. § 1334(b).

61. Compare Celotex Corp. v. Edwards, 514 U.S. 300 (1995) (noting most circuits have held “an
action is related to bankruptcy if the outcome could alter the debtor’s right, liabilities, options,
or freedom of action (either positively or negatively) and which in any way impacts upon the
handling and administration of the bankruptcy estate”) (citation omitted) with In re Turner,
724 F.2d 338, 341 (2d Cir. 1983) (“related to” jurisdiction requires a “significant connection”
between the litigation and the bankruptcy).
62. Bender v. Pa. Co., 148 U.S. 502 (1893); Willoughby v. Sinclair Oil & Gas Co., 188 F.2d 902
(10th Cir. 1951).
63. 28 U.S.C. § 1292(b).
64. The collateral order doctrine applies if the remand satisfies “three conditions: It must conclu-
sively determine the disputed question, resolve an important issue completely separate from
the merits of the action, and be effectively unreviewable on appeal from a final judgment.”
Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 431 (1985) (citation omitted).
65. See, e.g., In re Daimler-Chrysler Corp., 294 F.3d 697, 698–99 (5th Cir. 2002) (issuing writ of
mandamus directing Texas district court to recall its remand order because a Delaware court
had previously ordered that all cases be transferred to Delaware).
66. Things Remembered, Inc., v. Petrarca, 516 U.S. 124, 127–28 (1995).
67. Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 345 (1976) (allowing appeal where
district court remanded because docket was too crowded); Quackenbush v. Allstate Ins. Co.,
517 U.S. 706, 712–13 (1996) (allowing appeal of remand based on abstention).
68. Quackenbush, 517 U.S. at 710.
98 Chapter 4 Pre-Certification Steps

that precedes it “in logic or in fact” (for example, an order dismissing some of
plaintiff’s claims).69
CAFA has created one opportunity for the losing party in a class action
remand decision to seek interlocutory appeal. Under CAFA, a party may seek
interlocutory review of an order granting or denying remand based upon
CAFA’s jurisdictional principles within seven days after its entry.70 If the
Court of Appeals grants the petition, it must decide the appeal within sixty
days (which may be extended sua sponte by the court by up to ten days or by
stipulation of the parties for an unlimited time). If the court does not rule on
the appeal within the applicable time period, it is deemed denied.

§ 4.2.3 Consolidation

One final consideration is whether the case should be consolidated with any
other litigation. As discussed in Chapter 3, different plaintiffs may file over-
lapping class actions in different jurisdictions, either as part of a coordinated
national strategy or as a result of fierce competition among plaintiff’s firms.71
Federal courts allow for consolidation of scattered but related litigation under
the auspices of the Judicial Panel on Multi-district Litigation (“JPML”).72 The
defendant should be cautious in moving to consolidate cases under the JPML:
it has a “commonality” standard that, while different from Rule 23(a)’s stan-
dard, sounds very similar.73 If the defendant is not careful how it frames the
similarities between cases for purposes of consolidation, the plaintiff may
quote those similarities back in her class certification motion.74

§ 4.2.4 Motion to Dismiss

Motions to dismiss are quite common in class actions. A recent study of pre-
CAFA class actions in the federal courts found that defendants filed motions

69. See Waco v. U.S. Fid. & Guar. Co., 293 U.S. 140, 143 (1934); First Nat’l Bank v. Genina Marine
Servs., Inc., 136 F.3d 391, 394 (5th Cir. 1998).
70. 28 U.S.C. § 1453(c). This appellate device does not extend to class actions where removal was
based on non-CAFA jurisdictional arguments (like federal question jurisdiction). See Wallace
v. Louisiana Citizens Property Ins. Corp., 444 F.3d 697, 702–03 (5th Cir. 2006).
71. See §§ 3.2, 3.3, 3.7.
72. See § 1.2.4.
73. See Mark Herrmann & Pearson Bownas, An Uncommon Focus on “Common Questions”: Two
Problems With the Judicial Panel on Mulitdistrict Litigation’s Treatment of the “One or More
Common Questions of Fact” Requirement for Centralization, 82 Tulane L. Rev. 2297, 2299
(2008) (noting “the MDL Panel sometimes borrows a key term of art from Rule 23—whether
common factual questions ‘predominate’ over unique factual questions”).
74. See Herrmann & Bownas, Uncommon Focus on “Common Questions”, 82 Tulane L. Rev. at
2307–12 (noting dilemma faced by class action defendants when seeking MDL consolidation).
 Defendant’s Response to Complaint 99

to dismiss for failure to state a claim in 39 percent of all cases, and that courts
decided roughly 40 percent of those motions in favor of the defendant.75
For the defendant, the motion to dismiss is the first chance to rid itself of
a meritless case; failing that, it is a method of pruning bad claims and educat-
ing the court on its side of the case. In fact, even if a motion to dismiss fails, it
may still frame the issues for the court in ways that reduce the defendant’s
liability.76
For the plaintiff, the motion to dismiss is the first—and primary—battle in
the lawsuit: losing means losing the case, but defeating a motion to dismiss
can force the defendant to begin negotiating settlement.77
A defendant will move to dismiss for one of three reasons. First, the motion
to dismiss, if granted, would end the case completely. Second, the motion, if
granted, would result in the dismissal of some plaintiffs or some claims, effec-
tively carving the lawsuit into smaller parts that are less amenable to class-
wide proof. Third, the mere act of deciding the motion would require the
court to educate itself about issues that would favor the defendant at sum-
mary judgment or class certification.
For an example of how the motion to dismiss helps the defendant at a class
certification briefing, look at In re FEMA Trailer Formaldehyde Products
Liability Litigation,78 a proposed class action that alleged that various manu-
facturing defendants had built emergency trailers for hurricane victims that
contained unsafe levels of formaldehyde, a chemical preservative. The defen-
dants moved to dismiss several of the plaintiffs’ claims that were brought
under varying state laws.79 The trial court denied the motion to dismiss, but
when it ruled on class certification, it held that the named plaintiffs were not
typical of the proposed class in part because of the legal variations among the

75. Federal Judicial Center, Impact of the Class Action Fairness Act on the Federal
Courts: Preliminary Findings from Phase Two’s Pre-CAFA Sample of Diversity
Class Actions 5–6 (2008).
76. See Chris Guthrie, et al., Blinking on the Bench: How Judges Decide Cases, 93 Cornell. L.
Rev. 101, 105, 121 (2007) (discussing “anchoring effects”).
77. See Synfuel Tech., Inc. v. DHL Express (USA), Inc., 463 F.3d 646, 648 (7th Cir. 2006) (“After the
district court denied Airborne’s motion to dismiss, the company decided to come to the
table.”); see also Shapiro, Inside a Class Action: The Holocaust and the Swiss Banks
at 136 (“’All we need to do is state a claim and stay alive,’ [plaintiffs’ attorney] Hausfeld con-
cluded.”); 144 (plaintiffs concluded if they survived motion to dismiss, bankers would
negotiate).
78. Case 2:07-md-01873-KDE-ALC, 2008 WL 5423488 (E.D. La. Dec. 29, 2008). This opinion
was not published in either the F.R.D. or F. Supp. 2d reporters. Perhaps because of that fact,
the court was particularly candid about the effects of previous motions on its certification
decision.
79. 2008 WL 5423488 at *7 n.6. The plaintiffs had brought causes of action for, among other
things, liability under the Louisiana Products Liability Act, strict liability under Mississippi
law, liability under Alabama’s Extended Manufacturer’s Doctrine, and negligence under
Texas law. Id. at 13–14.
100 Chapter 4 Pre-Certification Steps

claims of various class members.80 The trial court specifically stated that these
legal variations were “evident in the Court’s Order and Reasons [on the
Motion to Dismiss], wherein the Court analyzed these claims in considerable
detail according to the laws of the applicable states.”81 Courts are rarely this
explicit about how earlier rulings eventually influence their class-certification
decisions, but there is little doubt that the process of sifting through compli-
cated choice-of-law analyses or individualized allegations about statutes of
limitations can convince a court that a full-fledged class trial will be more
work than it can adequately manage.82
A defendant will not move to dismiss a complaint if it believes denial is
assured, or if the denial would pave the way to eventually certifying a class. To
use another concrete example, take the case of In re Bridgestone/Firestone,
Inc. ATX, ATX II and Wilderness Tires Products Liability Litigation
(“Bridgestone/Firestone”).83 Bridgestone/Firestone arose from a well-publi-
cized recall of various tires that were alleged to cause serious accidents because
the treads would separate from the rest of the tire, making the vehicle lose
control. Following the recall, hundreds of lawsuits were filed in different
courts against both Bridgestone/Firestone and Ford Motor Company (which
had used the tires on a number of its vehicles).84 The JPML transferred the
various lawsuits to a trial court in the Southern District of Indiana.85 Once the
various plaintiffs had filed a consolidated master complaint, the defendants
moved to dismiss it.86 The motion-to-dismiss debate focused on choice of
law: should the trial court apply the law of each claimant’s state of residence,
or the laws of Michigan and Tennessee, where the defendants were
headquartered?87 The district court decided to apply Michigan and Tennessee
law, and then denied the defendants’ motion to dismiss.88
That decision proved a turning point for the litigation, leading inexorably
to the court’s certifying a nationwide class because the defendants’ strongest
potential argument—that variations among different state laws precluded
certification—was no longer available. Indeed, when one of the defendants

80. Id. at *9.

81. Id. at *8 n.7.
82. See Guthrie, et al., Blinking on the Bench, 93 Cornell L. Rev. at 119 (“We have found that
anchors trigger intuitive judicial decision making.”).
83. In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 205 F.R.D. 503, 509 (S.D. Ind. 2001)
(noting that it had ruled that court could apply the law of Michigan—Ford’s home state—in
deciding Ford’s motion to dismiss, and then using that choice-of-law ruling as basis to certify
class).
84. For a description of this dynamic, see § 3.2.
85. In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 155 F. Supp. 2d 1069, 1076 (S.D. Ind.
2001).
86. Id. at 1076.
87. Id. at 1078–85.
88. Id. at 1117.
 Defendant’s Response to Complaint 101

asked the court to reconsider its decision on choice of law, it declined to do

so, observing that “[i]t is clear that Firestone seeks review of the choice of law
determination, not because of its impact on the Court’s substantive rulings
that certain claims alleged in the Master Complaint should not be dismissed,
but instead because of its impact on the propriety of class certification.”89
And, when the court did certify a class, it said that: “The choice of law deter-
mination set forth in the July 27, 2001 Order is, in fact, an important element
of the class certification analysis.”90
Should the defendant decide to move to dismiss, there are certain legal
flaws that occur more frequently in class actions that it should watch for.
Most of these occur because the plaintiff has attempted to plead her com-
plaint to implicate as many class-wide issues as possible.91

§ 4.2.4.1 Standing

In some instances, plaintiffs’ counsel’s rush to file a new class action may lead
them to file a case in the name of a plaintiff who either lacks standing to assert
certain claims or lacks standing to sue certain defendants. The former may be
caused by an imperfect fit between the named plaintiff’s factual situation
and the class-wide allegations.92 The latter occurs most frequently in multi-
defendant class actions.
Motions challenging standing have the added rhetorical benefit of sug-
gesting to the court that, since there is no live controversy, the lawsuit is
entirely the invention of plaintiff’s counsel.

§ 4.2.4 2 Personal Jurisdiction

Rule 12(b)(2) allows a party to move to dismiss a claim when there is a “lack
of jurisdiction over the person.”93 Ordinarily, there is little reason for a defen-
dant to move for dismissal based on personal jurisdiction.94 However, a Rule
12(b)(2) motion may be the best response when the client is convinced it has

89. Bridgestone/Firestone, 205 F.R.D. at 509. The Bridgestone/Firestone litigation ultimately

reached a different conclusion: the Seventh Circuit reversed certification, in an opinion by
Judge Easterbrook that provided subsequent defendants with useful language for opposing
class certification. In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 288 F.3d 1012
(7th Cir. 2002). For some potential uses of Judge Easterbrook’s opinion, see §§ 5.2.2.5–6.
90. Bridgestone/Firestone, 205 F.R.D. at 509.
91. See § 3.8.
92. To the extent this is true, it may also be a sign of typicality or adequacy problems. See §§ 2.3,
2.4.1.
93. Fed. R. Civ. P. 12(b)(2).
94. This discussion does not cover some of the grounds for dismissal that might exist in multi-
national class actions, such as forum non conveniens or comity. For a greater discussion of the
problems and strategies involved in multinational class actions, see § 10.1.
102 Chapter 4 Pre-Certification Steps

simply been wrongly named. To demonstrate that it did not manufacture the
product (or make the hiring or firing decision, etc.), a defendant would have
to wait until it could produce the right facts in discovery before challenging
its inclusion in the case. But Rule 12 does allow for limited discovery into
whether the court has personal jurisdiction over a defendant.95 As a result, a
defendant who has compelling evidence that it did not distribute or sell the
product in question, or did not do so in the jurisdiction in which the plaintiff
has brought suit, may introduce that evidence through a Rule 12 personal
jurisdiction motion.96

§ 4.2.4.3 Pleading Deficiencies97

Moving to dismiss based solely on deficiencies in plaintiff’s pleadings has

become a more feasible strategy since the Supreme Court’s ruling in Ashcroft
v. Iqbal.98 Iqbal, along with a predecessor case—Bell Atlantic v. Twombly99—
established that plaintiffs cannot rely solely on conclusory pleadings, and
instead must plead facts that establish a plausible theory of the case.100 As
discussed in greater detail in Chapter 3, given the strategic pressure on the
plaintiff to file vague pleadings where possible, the Iqbal and Twombly opin-
ions provide the defendant with additional leverage at an earlier stage of the
litigation.
In addition, in cases pleading fraud of some kind, a plaintiff will be subject
to the heightened pleading standard of Rule 9(b).101 As a result, the plaintiff
must identify, with particularity, who made the fraudulent representations,
where and when the representation took place, and what the content of that
representation was.102

95. See Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50, 50–51 (1st
Cir. 2002) (court must consider whether plaintiff has adduced specific evidence in favor of
jurisdiction).
96. See Diaz-Ramos v. Hyundai Motor Co., 501 F.3d 12, 14 (1st Cir. 2007) (noting that co-defen-
dant Hyundai American Technical Center, Inc. filed and won motion to dismiss under Rule
12(b)(2) because plaintiff “cannot show that HATCI has in any way purposely entered the
Puerto Rico market”).
97. For a discussion of these issues from the plaintiff ’s perspective, see § 3.8.
98. — U.S. ——, 129 S. Ct. 1937 (2009).
99. 550 U.S. 554 (2007).
100. Iqbal, 129 S. Ct. at 1949 (“To survive a motion to dismiss, a complaint must contain suffi-
cient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’”).
101. Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.”) (citation omitted).
102. See Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007) (complaint should allege “the
date, time and place of the alleged fraud or otherwise inject precision or some measure of
substantiation into a fraud allegation,”); ABC Arbitrage Plaintiffs Group v. Tchuruk, 291 F.3d
336, 350 (5th Cir. 2002) (Rule 9(b) requires complaint to “specify each allegedly misleading
 Defendant’s Response to Complaint 103

Similarly, in securities cases, the PSLRA requires that the complaint “state
with particularity facts giving rise to a strong inference that the defendant
acted with the required state of mind.”103 Group pleading (referring to “defen-
dants” in an undifferentiated fashion) cannot satisfy this requirement.104
The disadvantage to moving to dismiss based solely on pleading deficien-
cies is that the plaintiff may simply move to amend to address those deficien-
cies, a motion the court is likely to grant.105 However, there are advantages
as well. If the defendant forcefully attacks the plausibility of the plaintiff’s
claims, it can begin framing its side of the story earlier, and plant doubts
about the merits of the plaintiff’s claims. In addition, by forcing the plaintiff
to provide more specific (or more plausible) pleadings, the defendant can pin
the plaintiff down to its legal theory earlier in the case, giving her less room to
maneuver during the period leading up to class certification.
Given the effect of these holdings, the motion to dismiss has supplanted
the motion for more definite statement, which the defendant used to file
when a plaintiff had filed a vague complaint. Motions for more definite state-
ment were always comparatively rare in federal courts: a recent survey of pre-
CAFA class action filings found that defendants filed these motions in only
about 3 percent of cases.106

§ 4.2.4.4 Substantive Legal Problems

As in any litigation, defendants may file motions to dismiss based on substan-

tive legal problems that invalidate plaintiff’s claims as a matter of law.
However, because of the particular constraints imposed by Rule 23 on any
class to be certified, certain substantive legal problems occur more frequently
in class-action complaints.
Often, in order to keep the complaint generalized, the plaintiff will avoid
specifically alleging facts showing how she was personally injured. Indeed, an
entire wave of products-liability and consumer-fraud class actions have

statement . . . identify the speaker” and “explain the reason or reasons why the statement is
misleading”); Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993) (“Specifically,
the complaint must: (1) specify the statements that the plaintiff contends were fraudulent,
(2) identify the speaker, (3) state where and when the statements were made, and (4) explain
why the statements were fraudulent.”).
103. 15 U.S.C. § 780–4(b)(2).
104. See In re Cross Media Mktng. Corp. Secs. Litig., 314 F. Supp. 2d 256, 262–64 (S.D.N.Y. 2004)
(dismissing securities complaint where plaintiffs tried to allege scienter through group
pleading).
105. See, e.g., id. at 269 (dismissing complaint without prejudice to refiling of amended
complaint).
106. Federal Judicial Center, Impact of the Class Action Fairness Act on the Federal
Courts: Preliminary Findings from Phase Two’s Pre-CAFA Sample of Diversity
Class Actions 5 (2008).
104 Chapter 4 Pre-Certification Steps

asserted what are often called “no-injury” theories of liability, arguing that a
latent defect or a missing piece of non-material information reduced the
value of the product plaintiff bought, warranting a class-wide recovery of the
inflated price of the product, regardless of each class member’s individual
circumstances.107 In cases like these, the plaintiff may specifically exclude
from the class anyone who has suffered an actual injury from the product.108
In these cases, the defendant will often move to dismiss because the plaintiff
has not alleged an essential element of her claim.109 (Most—though not all—
causes of action require the plaintiff to prove injury as an element.)110
The plaintiff may also refrain from making any specific allegations regard-
ing how the alleged product or practice caused the injury to the class.111 There
is a clear strategic reason for doing this: the more specific the plaintiff is about
causation, the stronger the possibility that the defendant can argue that prov-
ing causation will require individualized inquiries that predominate over any
class-wide issues.112 However, like with no-injury claims, claims where the
named plaintiff has not alleged any causation may face dismissal because the
plaintiff has not alleged an essential element.113

§ 4.2.5 Motion to Strike/Early Challenge

to Class Certification

Contrary to common perception, the defendant does not have to wait for the
plaintiff to move for class certification in order to debate the propriety of class
treatment. Nothing in Rule 23 prevents the defendant from moving the court

107. See In re Bridgestone/Firestone, Inc., 288 F.3d at 1014–15, 1017; Briehl v. Gen. Motors Corp.,
172 F.3d 623 (8th Cir. 1999).
108. See § 3.6.1. These allegations may create claim-splitting problems if they are allowed to
proceed. See Feinstein v. Firestone Tire & Rubber Co., 535 F. Supp. 595, 606 (S.D.N.Y. 1982)
(refusing to certify class action for economic losses where plaintiffs also had personal injury
claims because of “significant risks” that class members would “later [be told] that they had
impermissibly split a single cause of action”).
109. See Briehl, 172 F.3d at 628–29 (dismissing no-injury claims because plaintiffs did not ade-
quately plead damages element).
110. See In re Bridgestone/Firestone, Inc. Tire, Prods. Liab. Litig., 288 F.2d at 1017 (“No injury, no
tort, is an ingredient of every state’s law.”); but see Lloyd v. Gen. Motors Corp., 916 A.2d 257,
265 (Md. 2007) (recognizing exception to economic loss doctrine in Maryland for product-
liability claims that invoke safety concerns).
111. See § 3.6.1.
112. See § 5.2.2.5.
113. See Dura Pharms. v. Broudo, 544 U.S. 336, 348 (2005) (affirming dismissal of securities-
fraud lawsuit where plaintiffs did not adequately allege loss causation); Powell v. Barrett, 496
F.3d 1288, 1319 (11th Cir. 2007) (affirming dismissal of claims related to allegations of
unconstitutional strip searches where plaintiffs did not adequately allege causation against
county).
 Defendant’s Response to Complaint 105

to deny certification.114 While a defendant may file a motion to deny certifica-

tion after discovery, “sometimes the issues are plain enough from the plead-
ings to determine whether the interests of the absent parties are fairly
encompassed within the named plaintiff’s claim . . .”115 In other words, the
Supreme Court has indicated that, in certain circumstances, a defendant
might be able to defeat certification of a class before the plaintiff moves for
certification, thereby saving the court and the parties from expensive discov-
ery directed at a pointless debate of class treatment.116 In fact, Rule 23(d)(i)
(D) provides that a court may issue an order “requiring that the pleadings be
amended to eliminate therefrom allegations as to representation of absent
persons.”117
Since a motion to strike is a discovery-free class certification opposition, it
is likely to be decided on a Rule 12(b)(6) standard.118 As a result the defendant
should only pursue this strategy when it is clear from the face of the com-
plaint that there is no way a plaintiff could convince a court to certify a class.
Several issues in particular lend themselves to motions to strike:

• Fatal defect in the class definition. In some circumstances, the plaintiff

defines the proposed class in such a way that the court cannot deter-
mine membership without inquiry into the merits of the case.119
Sometimes, this is simply the result of sloppy drafting. Other times,
however, defining the class in any other way makes it too broad to
certify. In these cases, defendants may consider striking the class allega-
tions because the class is not ascertainable.120
• Plaintiff is not a member of the class. In some circumstances, the allega-
tions in the complaint reveal that the named plaintiff is not a member of
the class–or a subclass—she seeks to represent; in those cases, courts

114. See Vinole v. Countrwide Home Loans, Inc., 571 F.3d 935, 939 (9th Cir. 2009) (“Rule 23 does
not preclude a defendant from bringing a ‘preemptive’ motion to deny certification.”).
115. Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982).
116. See also Cook County College Teachers Union, Local 1600 v. Byrd, 456 F.2d 882, 885 (7th Cir.
1972) (one opposing class action may move for an order determining that the action may
not be maintained as a class suit); Stubbs v. McDonald’s Corp., 224 F.R.D. 668, 674 (D. Kan.
2004) (“Federal courts have used motions to strike to test the viability of a class at the earli-
est pleading stage of the litigation.”).
117. Fed. R. Civ. P. 23(d)(i)(D).
118. See Picus v. Wal-Mart Stores, Inc., 256 F.R.D. 651, 653 (D. Nev. 2009).
119. For a more extensive discussion, see §§ 2.1, 3.6.
120. See John v. Nat’l Sec. Fire & Cas. Co., 501 F.3d 443, 445 (5th Cir. 2007) (“Where it is facially
apparent from the pleadings that there is no ascertainable class, a district court may dismiss
the class allegation on the pleadings.”).
106 Chapter 4 Pre-Certification Steps

have found that plaintiffs may be per se not adequate to represent those
classes.121
• Superiority. In certain cases (particularly in the wake of a public inves-
tigation), some courts have held that, based on the complaint and the
public record to which the plaintiff has referred, a class action may not
be superior to other forms of resolving the controversy.122
• Collateral estoppel. If a plaintiff in a proposed class action was also a
proposed member of a class action another court refused to certify,
and if that court already rejected the same bases for certification, the
named plaintiff may be estopped from pursuing class treatment in the
new case.123

While some defendants have successfully convinced courts to strike class

allegations,124 courts will often provide plaintiffs with additional chances to
allege that the requirements of Rule 23 have been met.125 As a result, the
defendant should only move to strike when it is confident it can win com-
pletely, or when doing so will support an eventual motion to deny or opposi-
tion to class certification.

§ 4.2.6 Answer

As in individual litigation, answering the complaint is sometimes preferable

to moving to dismiss. The defendant may not believe it has good arguments
for dismissing all of the claims asserted in the complaint (meaning it must file

121. Stubbs, 224 F.R.D. at 674–75 (striking class allegations on adequacy grounds where employ-
ment-discrimination class plaintiff was not member of subclasses he sought to represent).
122. Baum v. Great W. Cities, Inc. of New Mexico, 703 F.2d 1197, 1210 (10th Cir. 1983) (affirming
dismissal of class allegations because likely existence of individual issues undermined supe-
riority); Kamm v. California City Development Co., 509 F.2d 205, 210–11 (9th Cir. 1975)
(affirming dismissal of class allegations without discovery where “the [public] record itself
provided a sufficient evidentiary base on which the ‘superiority’ question might be deter-
mined” and administrative remedy already provided was superior).
123. For more on the preclusive effect of prior case rulings, see § 9.1.
124. See John, 501 F.3d at 445 (affirming dismissal of class allegations because it was “facially
apparent from the pleadings that there is no ascertainable class”); Mantolete v. Bolger, 767
F.2d 1416, 1424 (9th Cir. 1985) (“[T]he plaintiff bears the burden of advancing a prima facie
showing that the class action requirements of Fed. R. Civ. P. 23 are satisfied or that discovery
is likely to produce substantiation of the class allegations. Absent such a showing, a trial
court’s refusal to allow class discovery is not an abuse of discretion.”); Baum, 703 F.2d at
1210 (affirming dismissal of class allegations in fraud case because likely existence of indi-
vidual issues undermined superiority).
125. See John, 501 F.3d at 445 (noting that “[b]ecause this case is ongoing, [plaintiffs] may amend
their complaint pursuant to the district court’s discretion under Federal Rule of Civil
Procedure 15”).
 Defendant’s Response to Complaint 107

at least a partial answer), or it may not want to risk a ruling adverse to its
longer-term interests.
For the most part, answering a class-action complaint is similar to answer-
ing a complaint in individual litigation. The two primary differences are in
how the defendant treats the class-related allegations and what affirmative
defenses the defendant asserts.
The defendant may deny class-related allegations, or, in some cases, treat
them as matters of law to be demurred or denied. Because the burden of
establishing that a class action is appropriate rests on the plaintiff,126 a defen-
dant does not have to assert that a class action is inappropriate as an affirma-
tive defense. (In fact, since the defendant bears the burden of proving
affirmative defenses, asserting that a class may not be certified as an affirma-
tive defense risks undercutting its argument that the plaintiff bears the burden
of persuasion on certification issues.)
There are no affirmative defenses unique to class actions. However, it is
worth noting that a court must consider what affirmative defenses the defen-
dant has asserted when it determines whether class certification is appropri-
ate, particularly if those defenses will introduce factual variations of their
own.127 Therefore, the defendant may assert affirmative defenses in the answer
that are inherently individualized, and pointing out that the claims of some
putative class members may be barred by—among other things—the statute
of limitations,128 comparative negligence,129 assumption of risk,130 or accord
and satisfaction.131 In addition, because res judicata is an affirmative defense,
a defendant facing multiple class actions where one has already reached

126. See Garierty v. Grant Thornton, LLP, 368 F.3d 356, 363 (4th Cir. 2004). For fuller discussion,
see § 5.1.
127. See, e.g., Sanneman v. Chrysler Corp., 191 F.R.D. 441, 454 (E.D. Pa. 2000) (refusing to certify
class where “Defendant’s affirmative defenses present more issues to be decided on an indi-
vidual basis”). Not all courts have agreed with this line of reasoning, however. See Winkler
v. DTE, Inc., 205 F.R.D. 235, 244 (D. Ariz. 2001) (certifying class because deciding affirma-
tive defenses in plaintiff ’s favor “would dispose of the need for individual assessments”);
Olden v. La-Farge Corp., 203 F.R.D. 254, 270 (E.D. Mich. 2001) (“The mere existence of
individualized defenses does not bar class certification.”). For a fuller discussion, see
§ 5.2.2.5.
128. See, e.g., Thorn v. Jefferson-Pilot Life Ins. Co., 445 F.3d 311, 320–21 (4th Cir. 2006) (affirming
denial of class certification, in part, because determining accrual for statute-of-limitations
purposes would require individualized inquiries); Barnes v. Am. Tobacco Co., 161 F.3d 127,
149 (3d Cir. 1998).
129. See Gunnells v. Healthplan Servs., Inc. 348 F.3d 417, 438 (4th Cir. 2003) (“the affirmative
defense[] of comparative negligence . . . pose[s] significant obstacles to class certification”).
130. Id. (“The affirmative defense[] of . . . assumption of risk . . . pose[s] significant obstacles to
class certification”).
131. See Jones v. Allercare, Inc., 203 F.R.D. 290, 303, 305 (N.D. Ohio 2001) (finding no predomi-
nance in part because of individual issues associated with trying affirmative defense of
accord and satisfaction).
108 Chapter 4 Pre-Certification Steps

a final judgment should make sure it asserts that defense in its answer.132 If
the defendant does not assert any of these affirmative defenses in its answer,
the court may find it has waived them if it tries to argue that they create vari-
ations that would preclude class certification.133

§ 4.2.7 Offer of Judgment

Rule 68 allows the defendant to make an offer of judgment to the plaintiff.134

If the plaintiff declines the offer, then she may be responsible for any litiga-
tion costs incurred after the offer was made.135
In the past, defendants have occasionally used Rule 68 as a way of “pick-
ing off” a named plaintiff by making the offer of judgment and then moving
to dismiss plaintiffs’ claims as moot.136 The Supreme Court has warned
lower courts against allowing this tactic to succeed.137 And the Third Circuit
has forbidden it because it would interfere with Rule 23’s policy objectives
of allowing for aggregation of small claims.138 If the defendant intends to
try this tactic, it must make the offer before the plaintiff moves for class
certification.
There is a second possible use to Rule 68: the defendant might also make
an offer of judgment at the beginning of litigation as a means of limiting its
ultimate costs. If the plaintiff (or, more specifically, her counsel) declines the
offer and then does not prevail in getting the class certified and winning more
than the offer, she will be responsible for the remaining costs in the lawsuit.

132. See Carr v. Tillery, 591 F.3d 909, 913 (7th Cir. 2010).
133. Hillis v. Equifax Consumer Servs., 237 F.R.D. 491, 500 (N.D. Ga. 2006) (“Defendants’ ability
to assert this argument depends upon their having a viable set-off defense. The problem for
Defendants is that they failed to plead the defense of set-off in their answers.”).
134. Fed. R. Civ. P. 68 (“More than 10 days before the trial begins, a party defending against a
claim may serve on an opposing party an offer to allow judgment on specified terms, with
the costs then accrued.”).
135. Id. (“If the judgment that the offeree finally obtains is not more favorable than the unaccepted
offer, the offeree must pay the costs incurred after the offer was made.”).
136. See Weiss v. Regal Collections, 385 F.3d 337, 339–40 (3d Cir. 2004) (defendants made Rule 68
offer of judgment, then moved to dismiss plaintiffs’ claims as moot); Carroll v. United
Compucred Collections, Inc., 399 F.3d 620, 622 (6th Cir. 2005) (same).
137. See Deposit Guaranty Nat’l Bank v. Roper, 445 U.S. 326, 339 (1980) (“Requiring multiple
plaintiffs to bring separate actions, which effectively could be ‘picked off ’ by a defendant’s
tender of judgment before an affirmative ruling on class certification could be obtained, obvi-
ously would frustrate the objectives of class actions; moreover it would invite waste of judi-
cial resources by stimulating successive suits brought by others claiming aggrievement.”).
138. See Weiss, 385 F.3d at 345 (denying defendant’s motion to dismiss because in part because
“[a]llowing defendants to ‘pick off ’ putative lead plaintiffs contravenes one of the primary
purposes of class actions-the aggregation of numerous similar (especially small) claims in a
single action.”).
 Defendant’s Response to Complaint 109

In essence, this tactic tests the plaintiff’s confidence in the likelihood (and by
proxy, the propriety) of certifying the proposed class. This tactic is also con-
troversial (though not prohibited),139 and a number of courts have struck
these offers on policy grounds.140

§ 4.2.8 Motion for Sanctions

Rule 11 requires that “[e]very pleading, written motion, and other paper shall
be signed by at least one attorney of record.”141 This signature represents to
the court that the pleading is “not submitted for any improper purpose,” the
legal contentions are warranted by law, and the factual allegations have evi-
dentiary support.142 If an attorney falsely represents these facts to the court,
he faces sanctions at the court’s discretion.
Tempting as a Rule 11 motion can sound to parties locked in high-stakes
litigation, a court will rarely grant it, and the potential costs of failure are
great. A poorly founded Rule 11 motion can alienate a court, harden opposi-
tion from opposing counsel, and lay the groundwork for later personal attacks
against the defendant’s lawyer. However, in certain limited circumstances,
the Rule 11 motion may still be appropriate.
Leaving aside the general application when there has been some fraud on
the court, there are two situations peculiar to class-action practice that might
warrant a Rule 11 letter or motion. First, when a plaintiff has clearly made no
factual investigation into whether a defendant is actually the proper defen-
dant to sue (particularly in suits involving multiple defendants), and second,
when a given plaintiff did not suffer the injury alleged in the complaint.
(Theoretically, Rule 11 motions are also possible against a class-action defen-
dant, but they are much less common in practice.)

139. See Id. at 344 & n.12 (discussing controversy over applying cost-sharing provision of Rule
68 to class actions); Marek v. Chesny, 473 U.S. 1, 35 n. 49 (1985) (Brennan, J., dissenting)
(noting conflict of interest between named plaintiff and class in face of offer of judgment).
From the defense perspective, there is nothing underhanded about this tactic. Faced with a
potentially meritless class action, a Rule 68 offer of judgment would force plaintiffs’ counsel
(who often assume the costs of bringing the class certification motion instead of the named
plaintiff ) to rethink any tactics based on imposing large costs on the defendant.
140. See, e.g., Ziegenfuse v. Apex Asset Mgmt., 239 F.R.D. 400, 403 (E.D. Pa. 2006) (“Whichever
approach a defendant takes under Rule 68, the purpose is to dampen the efforts of the puta-
tive representative in pursuing the class action, if not to cause her to withdraw. It is an
attempt to inject a conflict of interest between her and those she seeks to represent. The use
of Rule 68 to shift the risk of costs is simply a more indirect and perhaps somewhat more
subtle means to undermine Rule 23 and the procedural and substantive benefits it
affords.”).
141. Fed. R. Civ. P. 11.
142. Id.
110 Chapter 4 Pre-Certification Steps

A Rule 11 letter to opposing counsel can be a useful way of broaching the

subject of a case’s weak factual foundation without crossing the Rubicon by
filing an actual motion. In sending a letter, the defendant can send a strong
signal as to where and how it believes a plaintiff’s complaint to be insufficient.
The most important point in sending a Rule 11 letter is to be dispassionate
and specific. Rule 11 letters are not an occasion for rhetoric. They are surgical
strikes, designed only to inform the other side of clear and demonstrable
deficiencies and build a record of sanctionable conduct.

§ 4.3 Amending the Complaint

Rule 15 allows for liberal amendment of the complaint.143 As a result, the

plaintiff may respond to an initial motion to dismiss by amending her com-
plaint to address legal defects the defendant has identified.144 The plaintiff
may also amend a complaint because she has identified new defendants,145
new potential class representatives,146 or new facts that may give rise to new
claims.147
This tactic suffers from the law of diminishing returns. In addition to cre-
ating demonstrable prejudice to the defendant,148 repeated amendment may
signal to the court that the plaintiff does not have a coherent theory of the
case. It may also try the court’s patience,149 a resource both sides spend only
sparingly. Moreover, multiple amendments may signal to the defendant that

143. See Fed. R. Civ. P. 15(a)(2) (“The court should freely give leave [to amend] when justice so
requires.”).
144. See, e.g., Knudsen v. Liberty Mut. Ins. Co., 411 F.3d 805, 806 (7th Cir. 2005) (observing that
“plaintiffs proposed to amend the class definition in a way that would make them members,
and hence eligible to be representatives” and noting that “Plaintiffs routinely amend their
complaints, and proposed class definitions”) (Easterbrook, J.).
145. See Braud v. Transport Serv. Co. of Ill., 445 F.3d 801, 802 (5th Cir. 2006) (noting plaintiffs
amended class-action complaint to add new defendant).
146. See Phillips v. Ford Motor Co., 435 F.3d 785, 786 (7th Cir. 2006) (plaintiffs amended com-
plaint to add new class representative) (Posner, J.).
147. See Heerwagen v. Clear Channel Commc’ns, 435 F. 3d 219, 223 (2d Cir. 2006) (plaintiff
amended complaint to add unjust enrichment claim).
148. Panetta v. SAP Am., Inc., 294 Fed. App’x 715, 718 (3d Cir. 2008) (denying late amendment
because of prejudice to defendant).
149. Kendall v. Visa USA, Inc., 518 F.3d 1042, 1051–52 (9th Cir. 2008) (affirming denial of leave
to amend because plaintiffs “were already granted leave to amend once and were given an
opportunity to conduct discovery to discover the facts needed to plead their causes of
action, yet their First Amended Complaint contained the same defects as their original
Complaint”); In re St. Jude Med., Inc., Secs. Litig., 629 F. Supp. 2d 915, 921 (D. Minn. 2009)
(refusing to allow second amendment of complaint in response to summary judgment
motion).
 Case Management Orders 111

the plaintiff lacks substantial evidence supporting her case, which can signifi-
cantly reduce any possibility of a substantial settlement. And, at a certain
point, amendment is simply no longer an option. The Federal Rules now
require a judge to identify a cutoff date after which amendment of the com-
plaint is no longer allowed.150 In addition, in securities class actions, the
PSLRA may require plaintiffs to republish notice after an amendment to the
complaint,151 and in certain cases may bar amendment completely.152

§ 4.4 Case Management Orders

As is well documented by psychologists and behavioral economists, starting

places matter.153 And, in many cases, the negotiation of the procedural rules
for managing the litigation through a court-approved case management
order is the starting place for the parties to maneuver for tactical advantage in
a class-action lawsuit. It sets the schedule for the case, establishes a procedure
for resolving discovery disputes, dictates motion practice, and even deter-
mines who may speak for each side.

4.4.1 Timing

The case management order has great significance, because it controls the
pace of the litigation. As the Fifth Circuit recently observed: “Rule 23(c)(1)
(A) no longer demands that the district court rule on certification ‘as soon as
is practicable,’ but instead insists only upon ruling ‘at an early practicable
time.’”154 As a result, the parties often have room to debate the schedule in the

150. Fed. R. Civ. P. 16(b), Advisory Committee Notes, 2007 (court “must enter [a] scheduling
order that limits the time to . . . join other parties and to amend the pleadings. . . .”); see also
In re Milk Prods. Antitrust Litig., 195 F.3d 430, 437 (8th Cir. 1999) (“When the district court
has filed a Rule 16 pretrial scheduling order, it may properly require that good cause be
shown for leave to file an amended pleading that is substantially out of time under that
order.”); O’Neill v. Home Depot U.S.A., Inc., 243 F.R.D. 469, 483 (S.D. Fla. 2007) (denying
leave to amend after class certification motion had been filed).
151. See In re Morgan Stanley and Van Kampen Mut. Fund. Sec. Litig., No. 03 Civ. 8208 (RO), 2006
WL 1008233, at *2 (S.D.N.Y. Apr. 18, 2006); Teamsters Local 445 Freight Div. Pens. Fund v.
Bombardier Inc., No. 05 Civ. 1898 (SAS), 2005 WL 1322721, at *3 (S.D.N.Y. June 1, 2005).
152. See N.J. Carpenters Pension & Annuity Funds v. Biogen IDEC Inc., 537 F.3d 35, 57 (1st Cir.
2008) (reserving right to bar late amendments to theory of case, in light of damage to
PLSRA’s statutory purpose from late amendment).
153. See generally Richard Thaler & Cass Sunstein: Nudge: Improving Decisions about
Health, Wealth and Happiness (2008) (discussing how “choice architecture” influences
strategic decisions).
154. Oscar Private Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d 261, 267 (5th Cir. 2007).
112 Chapter 4 Pre-Certification Steps

case management order. An aggressive case management order can put addi-
tional pressure on the defendant (or the plaintiff), while a less aggressive
order can provide more breathing room for either side to prepare its case. In
general, the conventional wisdom is that a faster pace favors the plaintiff,
while a slower pace favors the defendant.
The faster pace usually favors the plaintiff because it keeps the defendant
off-balance and preserves a sense of urgency, keeping the case fresh in the
court’s view. In addition, the earlier in a case the court must make a class
certification decision, the more likely it is to view the case in terms of gener-
alities and commonalities, which argue in favor of certifying a class. Finally,
because of the entrepreneurial posture of most class actions, more time rep-
resents a drain on resources for the plaintiff,155 if only because it increases the
opportunity cost of the capital that the plaintiff has already spent on the liti-
gation. (On the other hand, if the plaintiff’s lawyers have limited resources, a
more aggressive class-certification schedule can put them at a disadvantage,
since they may not be able to collect and process the discovery in time to use
it in briefing class certification.)
The slower pace favors the defendant because it provides more time to
develop the case. The more time a judge invests in understanding the legal
and factual nuances of a case, the less likely he is to certify a class based on
sweeping generalities. The longer a case goes on, the less dramatic it seems,
and the greater the chance the plaintiff will lose enthusiasm for the case.
Finally, because for the defendant money spent on litigation represents an
expense rather than an investment, a slower pace tends to represent a poten-
tial savings rather than an opportunity cost. (There is an exception to this
analysis. If the expected liability from the litigation is sufficiently large, it may
depress the defendant’s balance sheet, which could encourage it to move more
quickly.) As a result, the defendant will often push for a class-certification
schedule that allows for a more careful consideration of the issues.
In some jurisdictions (like the Eastern District of Virginia), the court will
set deadlines with little input from counsel. In others, counsel will meet and
confer about appropriate deadlines, and then present either an agreed sched-
ule to the court, or two conflicting schedules.

§ 4.4.2 Discovery Procedures

The most important question is whether to proceed immediately with merits-

related discovery or to bifurcate the discovery process into class-related and
merits-related discovery.

155. See Dillon & Cannon, Circle of Greed 84–85 (defense strategy “inexorably slowed the
pace of litigation, [and] Lerach and [co-counsel] Savett were indeed feeling the squeeze of
time and money”).
 Case Management Orders 113

Courts have taken two different approaches to discovery. Some have

divided discovery into class certification-related discovery and merits-related
discovery.156 Others have conflated class- and merits-related discovery.157
Each approach offers a mix of strategic benefits and costs. If certification is in
doubt, keeping the two phases separate may reduce costs for both sides.
However, where certification-related and merits-related issues are likely to
overlap, bifurcation may lead to an increase in discovery disputes that will do
little to contain costs for either side.158
The parties will also need to determine whether to modify the discovery
limits imposed by the federal (or local) rules. Currently, the federal rules of
civil procedure limit each party to 25 interrogatories and ten seven-hour
depositions.159 It is possible that these limits will work for both sides if the
class action has no more than a few named plaintiffs, involves simple issues,
and requires testimony from only a few defense witnesses. More likely, how-
ever, the case is more complicated, and either the plaintiff or the defendant
will press to expand those limits.
In general, the plaintiff will favor expanded discovery. The cost of respond-
ing to discovery tends to exceed the cost of serving it. And in most class
actions, which pit an individual consumer or employee against a corporate
defendant, the defendant will have more potentially relevant evidence in its
possession than the plaintiff. As a result, extensive discovery will be more
costly to the defendant than to the plaintiff.

§ 4.4.3 Motions Practice

Another question the parties must resolve is whether to build additional

motions practice into the schedule. The defendant will often be interested in
preserving opportunities to challenge the plaintiff’s pleadings before class
certification. As a result, it will press for a motion-to-dismiss briefing and
possibly summary-judgment briefing before the class certification motion
has been filed or fully briefed.
While the plaintiff will likely oppose further motions practice, she will have
to consider several strategic factors. A court is not likely to forbid any motions
briefing. In addition, if motions briefing is not included in the scheduling

156. See Labavue v. Olin Corp., 231 F.R.D. 632, 640 (S.D. Ala. 2005) (“the parties conducted
bifurcated discovery, limited (in theory at least) to class certification issues”).
157. See In re Rail Freight Fuel Surcharge Antitrust Litig., 258 F.R.D. 167, 173 (D.D.C. 2009).
158. See Id. at 174 (denying request for bifurcation because if discovery were “bifurcated, this
Court would likely have to resolve various needless disputes that would arise concerning
the classification of each document as ‘merits’ or ‘certification’ discovery”).
159. Fed. R. Civ. P. 33, 34.
114 Chapter 4 Pre-Certification Steps

order, the default assumption may be that it can occur at any time.160 The
larger question is whether the court will suspend discovery while it decides a
motion to dismiss, or whether it will allow summary judgment briefing to
predate class certification briefing. From the plaintiff’s perspective, any addi-
tional dispositive motions simply lengthen the gantlet she must survive before
her investment in the litigation begins to pay off.

§ 4.4.4 Appointment of Lead Counsel

Finally, if multiple plaintiffs have filed overlapping lawsuits, the case manage-
ment order must also appoint lead counsel for the litigation. For securities
litigation in particular, this can be an involved process. The PLSRA requires
the various plaintiffs to compete to be named as lead plaintiff, which requires
a finding that the lead plaintiff is the “most capable of adequately represent-
ing the interests of class members.”161 The lead plaintiff must then appoint a
lead counsel who must be approved by the court, based on, among other
factors: (1) who has filed the complaint or made a motion for appointment in
response to a notice to class members about the pendency of the suit; (2) who
has the “largest financial interest in the relief sought by the class”; and (3) who
otherwise satisfies the requirements of Rule 23.162
While those three factors will create a presumption that a particular plain-
tiff should be lead plaintiff, that presumption is rebuttable.163 A competing
plaintiff may rebut the presumption by offering evidence that the presumptive
lead plaintiff either (1) will not adequately protect the interests of the class;
or (2) is subject to “unique defenses” that make it incapable of adequately
representing the class.164 This inquiry is not a full-fledged investigation into
whether the proposed lead plaintiff is adequate or typical,165 but just whether
it can demonstrate “prima facie” typicality and adequacy.166
This determination represents a strategic balancing act for each plaintiff.
On the one hand, each plaintiff with a plausible claim to lead plaintiff status
has a strong financial incentive to do everything she can to be appointed; as
lead, she will control the purse strings, and the overall strategy of the litigation.

160. This assumption may depend on the local rules of the jurisdiction.
161. 15 U.S.C. § 78u-4(a)(3)(B)(i). The competition can be intense. See Asher v. Baxter Int’l, Inc.,
505 F.3d 736, 737 (7th Cir. 2007) (noting “extended wrangling about who should be the
‘lead plaintiff ’ . . . and thus which firm would control the plaintiffs’ side of the litigation”).
162. 15 U.S.C. § 78u-4(a)(3)(B)(iii)(I).
163. 15 U.S.C. § 78u-4(a)(3)(B)(iii)(II).
164. 15 U.S.C. § 78u-4(a)(3)(B)(iii)(II). See also In re Royal Ahold N.V. Secs. & ERISA Litig., 219
F.R.D. 343, 348 (D. Md. 2003).
165. See §§ 2.3–4.
166. In re Royal Ahold N.V. Secs. & ERISA Litig., 219 F.R.D. at 350.
 Pre-Certification Discovery 115

On the other hand, too vigorous a fight (by, say, attacking the prima facie
adequacy and typicality of other plaintiffs) may plant some doubt about the
efficacy of the class action in the court’s mind, may carve off possible sources
of damages,167 or provide the defendant later with strong arguments that the
lead plaintiff is not typical or adequate to represent the proposed class.168

§ 4.5 Pre-Certification Discovery

As in general litigation, discovery is one of the most important phases of the

lawsuit: it is the primary source of information (and admissible evidence)
about plaintiff’s claims and defendant’s defenses. Even in general litigation,
the extent of discovery has become a major concern.169 Indeed, a recent report
by the Joint Project of the American College of Trial Lawyers Task Force on
Discovery found that:

[D]iscovery is increasingly expensive and . . . the expense and burden of discov-

ery are having substantial adverse effects on the civil justice system. There is a
serious concern that the costs and burdens of discovery are driving litigation
away from the courts and forcing settlements based on the costs, as opposed to
the merits, of the cases.170

Because class actions aggregate hundreds (or thousands) of individual

claims, the volume of discovery can become truly punishing, turning litiga-
tion into a battle of attrition.171

167. See Id. at 353–54 (disqualifying potential named plaintiffs for lack of subject-matter juris-
diction because they were foreign investors buying foreign stock on foreign markets). There
are strong strategic and policy justifications for making these challenges early. It is better for
most of the class if it weeds out representatives with fatal flaws before the class certification
inquiry. But the potential downside of the strategy must be considered as well.
168. See §2.3–4. In some ways, this choice is similar to one faced by political candidates. If one
party’s presidential candidates face a hotly contested primary, they face a strong incentive to
do everything they can to secure the nomination. However, every attack made during the
primary provides the other party’s candidate with ammunition for the (more important)
general election.
169. This concern is hardly new. See Blue Chip Stamps v. Manor Drug Stores, 421 US 723, 741
(1975) (“The prospect of extensive deposition of the defendant’s officers and associates and
the concomitant opportunity for extensive discovery of business documents, is a common
occurrence in this and similar types of litigation.”).
170. Joint Project of the Am. College of Trial Lawyers Task Force on Discovery and the Institute
for the Advancement of the Am. Legal Sys., Aug. 1, 2008, at 1.
171. See In re Rail Freight Fuel Surcharge Antitrust Litig., 258 F.R.D. at 173 (plaintiffs served 70
document requests and 100 deposition notices on defendants); In re Tyco Int’l Ltd.
Multidistrict Litig., 535 F. Supp 2d 249, 254 (D. N.H. 2007) (“It would be difficult to overstate
116 Chapter 4 Pre-Certification Steps

Discovery serves several purposes: (1) it gets information from one’s

opponent necessary to try the case, (2) it tests the opponent’s factual claims,
and (3) it makes one’s opponent spend money. This final point is one of the
many ways in which the plaintiff (or the defendant) can leverage the other
side into settlement decisions.172

§ 4.5.1 Initial Disclosures

Rule 26(a) now requires both the plaintiff and the defendant to provide some
information at the outset of the case. Each party must identify: (a) names and
contact information of witnesses that party intends to rely on; (b) documents
it may use to support its claims or defenses; (c) a compilation of damages; and
(d) any insurance agreements.173
There is some leeway as to how much information needs to be disclosed in
the initial disclosures. In some instances—for example, when a product man-
ufacturer faces a class action after a series of personal injury suits—
documents may be available and organized such that providing them with
the initial disclosures will save some resources later in responding to certain
discovery requests.

§ 4.5.2 Protective Orders

Unlike in individual-to-individual litigation (in which neither private indi-

vidual likely cares about the information that may come out in the litigation),
or in business-to-business litigation (in which both sides have similar inter-
ests in protecting proprietary information), in class actions the two sides have
strong incentives to treat business-confidential information differently. The
defendant is more likely to have confidential business information that
requires protection, while the plaintiff is more likely to have a strong interest

the volume of discovery in this case. Co-lead counsel propounded over 700 requests for
admission, document requests, and interrogatories participated in over 220 depositions in
New York, Florida, Massachusetts, and New Hampshire; and reviewed some 82.5 million
pages of documents produced by defendants. . . . Moreover, because of the complexity of the
alleged fraud, Co-lead counsel needed to retain expert consultants and forensic accountants
to assist them in interpreting the information they obtained through discovery.”); In re
Bankamerica Corp. Secs. Litig., 210 F.R.D. 694, 701 (E.D. Mo. 2002) (“During several years
of discovery, the parties have taken more than seventy-five depositions, reviewed a million
and a half documents, and agreed to thousands of stipulations of fact.”).
172. Shapiro, Inside A Class Action at 139 (“Without the threat of discovery, the bankers
would not be motivated to come to the table.”), 189 (same).
173. Fed. R. Civ. P. 26(a)(1)(A)(i)-(iv).
 Pre-Certification Discovery 117

in disseminating information, either to place additional pressure on the

defendant,174 or to allow for uses outside of the litigation.
The most common areas of dispute in confidentiality orders are:

• Definition of confidential information. The defendant usually wants to

make the definition of confidential information as broad as possible.
The plaintiff may characterize this as an attempt to prevent other liti-
gants from learning about the alleged problem.175 However, for many
corporate defendants, aggressively protecting proprietary business
information is an important component of protecting the company’s
comparative advantage.
• Sharing provisions. The plaintiff will often propose provisions allowing
her to share information with other plaintiff ’s firms pursuing similar
litigation. The defendant will usually oppose these provisions.
• Provisions for challenging designations. One key issue is who bears the
burden of demonstrating whether a challenged designation is appro-
priate. Should the defendant have to convince the court that its desig-
nation was supportable, or does the plaintiff have to show that it was
not? The parties will also often include a meet-and-confer process for
resolving confidentiality disputes without involving the court. There
are reasons a party might choose not to do so (a strategy of litigating
the litigation, deep distrust of the other party), but demonstrating to
the court an intent to spare it pettier disputes can help both sides
establish credibility.

§ 4.5.3 Plaintiff ’s Discovery

There are generally several purposes to a plaintiff’s discovery of the defen-

dant. The first is to document as many facts about the case as possible, provid-
ing support for debate over class certification and other dispositive motions.
Sometimes, the plaintiff may use discovery as a means of refining her original
theory of the case into a theory that can be certified for class treatment and
prevail at trial.176 However, discovery also has a collateral use—particularly

174. See §§ 4.1.2.3.

175. See Muehlbauer v. Gen. Motors Corp., No. 05 C 2676, 2009 WL 874511, at *3 (N.D. Ill. Mar.
31, 2009) (“plaintiffs argue that . . . it is a matter of public safety that [the documents] be
released”); see also Robert C. Fellmuth, et al., Summit: Taking the Offensive: Court Strategy,
40 San Diego L. Rev. 115, 156 (2003) (representatives of public-interest groups express
concern over documents about safety defects kept confidential in litigation).
176. Cf. In re St. Jude Med., Inc. Secs. Litig., 629 F. Supp. 2d at 920–21 (plaintiff sought to update
theory underlying class complaint after discovery).
118 Chapter 4 Pre-Certification Steps

for plaintiffs—as a means of wearing down one’s opponent’s means and will
to litigate.177 Finally, the plaintiff may also use discovery to research new
potential causes of action.
There are a number of reasons for conducting aggressive discovery. Most
obviously, the more information a plaintiff has about her case, the better. In
some cases, discovery can produce information that substantially increases
the value of the case.178 These serve at least two goals beyond learning more
information about the case: (1) they impose additional costs on the defen-
dant, and (2) massive discovery efforts can either reveal a pattern of recalci-
trance, or force the defendant into making mistakes in complying with
discovery requests, either of which can become a focus of the litigation. If the
plaintiff has alleged that a defendant covered up a defect in a product, or
material information that would have reduced a stock’s price, then the defen-
dant’s failure to produce requested discovery can appear part of a similar
pattern of bad conduct.
The defendant may object to the plaintiff’s discovery as not allowable
unless she can establish a prima facie case that the class can be certified.179

§ 4.5.3.1 Interrogatories

Interrogatories are a scarce resource. Unless the case management order

directs otherwise, the federal rules limit each party to 25 interrogatories per
opposing party.180

177. See Carl von Clausewitz, On War 77 (Michael Howard and Peter Paret, eds. and trans.)
(Princeton Univ. Press 1984) (“If you want to overcome your enemy, you must match your
effort against his powers of resistance, which can be expressed as the product of two insepa-
rable factors, viz. the total means at his disposal and the strength of his will. The extent of
the means at his disposal is a matter—though not exclusively—of figures, and should be
measurable. But the strength of his will is much less easy to determine and can only be
gauged approximately by the strength of the motive animating it. Assuming you arrive in
this way at a reasonably accurate estimate of the enemy’s power of resistance, you can adjust
your own efforts accordingly; that is, you can either increase them until they surpass the
enemy’s or, if this is beyond your means, you can make your efforts as great as possible.”)
(emphasis in original).
178. See Deborah R. Hensler & Mark. A. Peterson, Understanding Mass Personal Injury Litigation:
A Socio-Legal Analysis, 59 Brook. L. Rev. 961, 969 (1991) (noting that, in asbestos litiga-
tion, “the discovery of the ‘Sumner-Simpson’ papers, indicating knowledge among major
defendants of asbestos’ injurious effects, exposed these defendants to significant punitive
damages. This increased the value of all asbestos claims against those defendants, not simply
those claims directly involved in the relevant discovery.”).
179. See Heerwagen, 435 F.3d at 234; Manolete, 767 F.2d at 1424 (“Although in some cases a dis-
trict court should allow discovery to aide the determination of whether a class action is
maintainable, the plaintiff bears the burden of advancing a prima facie showing that the
class action requirements of Fed. R. Civ. P. 23 are satisfied or that discovery is likely to pro-
duce substantiation of the class allegations.”).
180. Fed. R. Civ. P. 33(a)(1).
 Pre-Certification Discovery 119

For the plaintiff, interrogatories may cover any number of topics. However,
certain interrogatories are likely to be standard, as they deal with questions
that recur in almost all cases against a corporate defendant. Among other
questions, the plaintiff may ask for:

• the identity of any corporate witnesses;

• a list of all products sharing a common component;
• a list of all lawsuits related to plaintiff ’s complaint; and
• an estimation of the size of the proposed class.

The plaintiff may also ask the defendant to identify prospective class mem-
bers. There are at least three reasons to do this. First, prospective class
members are potential witnesses. Second, they are potential clients. Third, the
more potential class members the plaintiff can identify earlier in the case, the
more they can defray some of the costs of issuing notice later.
While each of these strategic goals is sound, the United States Supreme
Court has ruled much of that information off-limits in Oppenheimer Fund,
Inc. v. Sanders.181 In Oppenheimer, the plaintiffs filed a securities class action
against the Oppenheimer Fund, an open-ended diversified investment com-
pany.182 During the course of the litigation, the Court of Appeals for the
Second Circuit issued a ruling in another class action, Eisen v. Carlisle
& Jacquelin, that the trial court in that case had erred when it ordered the
defendants to pay 90 percent of the costs of notifying members of a Rule
23(b)(3) class that had been certified.183 In the course of discovery, the plain-
tiffs had learned that determining the names and addresses of the class mem-
bers (necessary for notice) would cost approximately $16,000.184 At that
point, the plaintiffs embarked on several strategies to reduce the cost of class
notice.185 So the plaintiffs sought an order requiring the defendants to pro-
vide a list of all class members, arguing that the federal discovery rules autho-
rized the court to do so.186 The Supreme Court ultimately decided that the
rules did not. It observed that “a court is not required to blind itself to the
purpose for which a party seeks information,”187 and holding that:
“Respondents’ attempt to obtain the class members’ names and addresses

181. 437 U.S. 340, 352 (1978).

182. Id.
183. See Id. at 344 (citing Eisen v. Carlisle & Jacquelin, 479 F.2d 1005 (2d Cir. 1973)). The Eisen
case would be appealed at least one more time, eventually resulting in a seminal Supreme
Court opinion on class actions.
184. Oppenheimer Fund, 437 U.S. at 345.
185. See generally Id. at 345–53. Plaintiffs’ tactics for reducing the cost of class notice will be
discussed at greater length in Chapter 6.
186. Id. at 340.
187. Id. at 352 n.17
120 Chapter 4 Pre-Certification Steps

cannot be forced into the concept of ‘relevancy’ described” in the federal

rules.188
Contention interrogatories. Many lawyers spend several of their interroga-
tories on so-called “contention interrogatories,” asking for each side to list all
facts and evidence underlying one of the contentions in the case. For example,
a plaintiff might serve an interrogatory that reads:

INTERRGATORY NO. 1:List each fact and identify each document that
supports your denial that the class is so numerous as to render joinder imprac-
ticable. (See Answer. ¶ 36.)

This practice is not limited to plaintiffs. A defendant might serve the mirror
image of that interrogatory, seeking each fact and document that supports the
plaintiff’s assertion of numerosity. The difficulty with these interrogatories is
that they are too easy to ignore. The opposing party can almost always avoid
answering them in any meaningful fashion, claiming that they seek attorney
work product, or that discovery is not complete yet. While technically, a party
is under a continuing duty to update its responses to interrogatories, it is rare
for any party to do so in response to a contention interrogatory.

§ 4.5.3 2 Document Requests

Unlike interrogatories, the Federal Rules do not limit the number of

document requests a party may file.189 Document requests can vary greatly
from class action to class action. For some, straightforward fraud or over-
charge cases, the plaintiff may not require many documents. For more com-
plex cases, like Sherman Act conspiracy cases or complicated securities-fraud
cases, discovery may be much more voluminous, involving, potentially, years
of discovery and tens of millions of documents.190
The plaintiff will also request electronically stored information (commonly
referred to as “ESI”). The increasing complexity of discovery of ESI (often
referred to as “e-discovery”) has spawned a cottage industry of consultants
and contract attorneys. Much of the give-and-take of e-discovery is beyond
the scope of this chapter, but we will briefly mention a few topics that both
parties should consider in responding to document requests in general:

• Disputes over format. More sophisticated litigants will likely use com-
patible systems for reading and producing documents, but occasionally
they will not. More often, despite the fact that some electronic docu-
ments will not exist in a searchable format, the plaintiff will ask for all

188. Id. at 352.

189. See generally Fed. R. Civ. P. 34.
190. See Regents of the Univ. of Cal. v. Credit Suisse First Boston, Inc., 482 F.3d 372, 378 (5th Cir. 2007)
(“Years of discovery have ensued, and tens of millions of documents have been produced.”).
 Pre-Certification Discovery 121

documents to be searchable. Complying with that request may require

reformatting documents, leading to a debate over who should bear the
cost of doing so.
• Disputes over search terms. Because e-discovery often resides in data-
bases, the plaintiff may have to request that the defendant conduct
searches for her. This can lead to conflict over how to conduct the
searches. The plaintiff will want the searches to be as broad as possible.
The defendant may resist providing some information to the plaintiff
(like a list of all searchable fields) because doing so may reveal propri-
etary information beyond the scope of the case.

4.5.3.3 Requests for Admission

Requests for admission are a powerful, if underused, discovery tool. Because

any request not properly denied is deemed admitted, the opposing party must
answer them fully and on time. While requests for admission are powerful,
they are also limited. The response is limited to “admit” or “deny.”
Still, the plaintiff can use requests for admission to lock the defendant into
admitting certain essential facts. For example, the plaintiff could ask the
defendant to admit:

• The defendant used certain common language in its representations to

the class;
• The terms of a uniform contract;
• The existence of an official policy that affected the class in a uniform
manner;
• The existence of an environmental incident on a given date.

4.5.3.4 Depositions

The plaintiff usually focuses on three different types of depositions: (1) 30(b)(6)
depositions of corporate representatives of defendants; (2) individual deposi-
tions of key fact witnesses; and (3) depositions of any experts who are assisting
the opposition to class certification. In addition, some plaintiffs will try to take
depositions of high-ranking executives at a defendant company (sometimes
called “apex” depositions), although these have become rarer since courts
have ruled that a party must show good cause to depose a top-level corporate
executive.
The federal rules limit the number of depositions that may be taken,191 and
the time each deposition may take,192 although a party may ask the court to
extend deposition limits. For the plaintiff, who often has, at most only a few

191. Fed. R. Civ. P. 30(a)(2)(A)(i) (default limit on depositions is 10).

192. Fed. R. Civ. P. 30(d)(1) (default option is “1 day of 7 hours”).
122 Chapter 4 Pre-Certification Steps

witnesses to offer for depositions, this may seem a more attractive option
than for defendants.
Rule 30(b)(6) depositions. Rule 30(b)(6) provides that:

a party may name as the deponent a public or private corporation, a partnership,

an association, a governmental agency, or other entity and must describe with
reasonable particularity the matters for examination. The named organization
must then designate one or more officers, directors, or managing agents, or
designate other persons who consent to testify on its behalf; and it may set out
the matters on which each person designated will testify. . . . The persons desig-
nated must testify about information known or reasonably available to the
organization.

The 30(b)(6) deposition is appropriate when the plaintiff knows that

someone at the defendant corporation knows (or can be educated about) par-
ticular subjects important to the case, but does not know who that witness is.
It is also useful for topics where a plaintiff has some general knowledge of the
facts involved, but needs additional information about the corporation or
various document-handling practices. Most importantly, the 30(b)(6) depo-
sition is often the plaintiff’s best chance to bind a corporate defendant to a
particular statement or point of view.
30(b)(6) depositions are usually formally noticed, and include a descrip-
tion of the topics to be addressed as well as documents to be provided. A
party may not serve more than one 30(b)(6) notice on a single corporation.193
As a result, plaintiffs will often issue a 30(b)(6) notice that combines multiple
topics into a single deposition.
Topics vary widely, depending on the availability of evidence in other
forms, the maturity of the litigation, and the plaintiffs’ knowledge of the facts
to date. However, some topics may include:

• the location of records from which class members’ names and addresses
may be derived should a class be certified;194
• the number of potential members of class as defined;195 and
• any company practices or procedures that will apply to the entire
class.196

193. Fed. R. Civ. P. 30(a)(2)(A)(i)–(ii) (“A party must obtain leave of court, and the court must
grant leave to extent consistent with Rule 26(b)(2) . . . if the parties have not stipulated to the
deposition, and . . . the deponent has already been deposed in the case. . . .”); Ameristar Jet
Charter, Inc. v. Signal Composites, Inc., 244 F.3d 189, 192 (1st Cir. 2001) (applying Rule 30
(a)(2)(A)(ii) to Rule 30(b)(6) notice).
194. See Oppenheimer Fund, 437 U.S. 340 at 344.
195. See Id. at 344–45.
196. See § 2.2, 5.1.2.2; see also Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, (11th Cir. 2008)
(plaintiffs offered testimony of 30(b)(6) witness to demonstrate common issues).
 Pre-Certification Discovery 123

The first thing the defendant does when receiving a 30(b)(6) notice is to
narrow the scope. Given the strong incentives for the plaintiff to load the
30(b)(6) notice with multiple topics, often one witness could not know—or
be educated—on all potential topics. Defense counsel can formally object to
the notice, opt to informally negotiate the scope if that seems more appropri-
ate, or present separate witnesses to speak to different topics within the
notice.
Under the federal rules, the defendant does not have to provide the wit-
ness who is most knowledgeable on each topic. In fact, the defendant can
select whomever it wants, provided that witness can be educated on certain
facts and speaks on behalf of the defendant. Since the witness may be called at
trial as well, it makes sense to avoid people who cannot communicate effec-
tively, or who can be unnerved easily into making mistakes. A witness who
comes off as well-spoken and sincere can be educated on subject matter more
easily than a brilliant but combative witness can be educated to be more
appealing to a jury.
If discovery deadlines are tight, or if there are a large number of deposi-
tions in the case, a defendant may be tempted to combine a 30(b)(6) and
personal deposition. The advantages are: fewer witnesses to prepare, and less
preparation time overall. The risk is: confusing a 30(b)(6)’s personal opinions
with the company position. Therefore, it is important to distinguish between
the witness’s personal knowledge and the knowledge he gains from the edu-
cation process.
If a 30(b)(6) witness is not adequately prepared to discuss the subject
matter identified in his notice, the defendant may be subject to sanctions.197
Equally important, if an inadequately prepared 30(b)(6) witness misstates the
facts or answers questions imprecisely, he may commit the defendant to a
position that makes it more difficult to defend the lawsuit.
The defense attorney has two other jobs in preparing a 30(b)(6) witness.
First, he needs to educate the witness about the themes of the case, so the
witness understands what the case is about. Second, the attorney must ensure
the witness understands the peculiarities of a class action. Since the class-
certification opposition may rely on showing how individual issues of proof
predominate over common issues, testimony from a corporate representative
about the various facts required to establish each individual class member’s
claims can help persuade a court that a class is not certifiable.198

197. See Fed. R. Civ. P. 37(d) (failure to appear for 30(b)(6) deposition is grounds for sanctions);
Black Horse Lane Assoc., L.P. v. Dow Chemical Corp., 228 F.3d 275, 304 (3d Cir. 2000) (inad-
equate preparation for 30(b)(6) deposition may constitute failure to appear).
198. See Pop’s Pancakes, Inc. v. NuCO2, Inc., 251 F.R.D. 677, 686–87 (S.D. Fla. 2008) (finding that
plaintiffs could not demonstrate commonality based in part on testimony of “corporate
representative”).
124 Chapter 4 Pre-Certification Steps

Individual depositions. A plaintiff may also name individual witnesses she

would like to depose. The plaintiff will most often seek to depose: people with
lots of emails or other documents, witnesses from prior related lawsuits or
investigations, people identified as possible witnesses in a 30(b)(6) deposi-
tion, and corporate executives. The plaintiff may also seek to depose former
employees that she has reason to believe might testify more candidly about
issues related to the lawsuit; unemployed former employees and employees
now working for competitors of the defendant are often good starting
points.
Like with 30(b)(6) witnesses, the more an individual defense witness
knows about specific facts that will show why individual issues predominate
over common ones, the more useful the witness is to the defendant.199 As a
result, when preparing an individual witness, the defendant should make sure
the witness knows as much as possible about the role of class certification in
the case.
Apex Depositions. “Apex” depositions, or corporate executive depositions
are particularly controversial. While in some cases, like the Enron litigation,
corporate executives may be defendants themselves,200 in most cases, apex
depositions run a high risk of proving more harassing than probative.201 As a
result, most courts require that plaintiffs must show good cause before
they allow an apex deposition to proceed.202 Specifically, the plaintiff must
show: (1) that the corporate executive possesses relevant knowledge about
the case; (2) that the corporate executive also possesses unique knowledge
pertinent to the issues in the case; and (3) that the plaintiff has exhausted less
intrusive means of seeking the same information.203 One effective tactic
defendants have employed to block apex depositions is to preemptively file

199. See Id. at 682 (finding that plaintiffs could not demonstrate commonality based in part
because of salesman’s testimony “that he was taught to explain anything in the agreements
to the customers they sat down with and that he explains the charges that he is aware of to
every customer including” the charge at issue in the case).
200. See In re Enron Corp. Secs. & ERISA Litig., 529 F. Supp. 2d 644 (S.D. Tex. 2006).
201. See Folwell v. Hernandez, 210 F.R.D. 169, 173 (M.D.N.C. 2002) (courts “must be attuned to
the possibility that the noticing of the deposition of a high level executive may have the
potential for harassment”).
202. See Mulvey v. Chrysler Corp., 106 F.R.D. 364, 366 (D.R.I. 1985) (a high-level executive is a
“singularly unique and important individual who can be easily subjected to unwarranted
harassment and abuse. He has a right to be protected, and the courts have a duty to recog-
nize his vulnerability”); Liberty Mutual Ins. Co. v. Superior Court, 10 Cal. App. 4th 1282,
1288 (1992) (“federal decisions recognize the potential for abuse and generally do not allow
a plaintiffs deposition power to automatically reach the pinnacle of the corporate
structure”).
203. See Thomas v. International Business Machines, 48 F.3d 478, 483–84 (10th Cir. 1995) (uphold-
ing protective order barring deposition of top executive where lower level employees were
available).
 Pre-Certification Discovery 125

an affidavit by the executive stating that he has no specific knowledge relevant

to the case.204
Expert depositions. If either side identifies experts, then the other side will
want to take the experts’ depositions. There are some ways in which expert
depositions differ from individual and 30(b)(6) depositions. For one thing,
any preparation done, including the substance of conversations, is subject to
discovery.

§ 4.5.4 Defendant’s Discovery

The defendant faces a profound asymmetry in class-action discovery.

Corporate defendants will often have many documents (including ESI), many
potential witnesses, and lots of institutional knowledge to serve as the basis
for interrogatory responses. By contrast, in most class actions, an individual
named plaintiff will have comparatively little information: usually she will
have kept only a few (if any) documents relative to her claim, will be in pos-
session of only a few facts that inform her claim, and is often the only witness
the defendant can depose. This imbalance will be somewhat lessened if the
plaintiff is an institutional investor in a securities class action; but even there
the plaintiff is likely to have far less relevant information than the defendant.

4.5.4.1 Interrogatories

The most effective interrogatories will lock in the facts of the plaintiff’s claim.
They should aim at the journalist’s basic “5 W’s and an H”: who, what, when,
where, why and how. The defendant can use interrogatories to discover:

• What events may have given rise to the claim (the purchase of a prod-
uct, the various days that an employee might have worked overtime).
• When and where those events took place.
• Who witnessed the events.

§ 4.5.4 2 Document Requests

However, most plaintiffs have comparatively few documents relevant to their

claim. For a products-liability class action, they may—if they are organized—
have kept the receipt from their purchase and documentation of the warranty.

204. See Mulvey, 106 F.R.D. at 366 (granting protective order because corporate executive filed
affidavit professing ignorance to the information the plaintiffs sought); Evans v. Allstate Ins.
Co., 216 F.R.D. 515, 519 (N.D. Okla. 2003) (granting protective order because corporate
executives filed affidavits stating that they had no personal knowledge of the facts of
the case).
126 Chapter 4 Pre-Certification Steps

For a FLSA class action, they might have time records and pay stubs.
Nonetheless, a defendant can use document requests to discover:

• Any correspondence the plaintiff participated in about the subject of

the lawsuit;
• The plaintiff ’s participation in internet forums on the subject;
• The plaintiff ’s purchase records;
• The plaintiff ’s maintenance of an allegedly defective product;
• Any advertising the plaintiff may have seen and kept;
• Any other printed disclosures the plaintiff may have received;
• Any contracts the plaintiff has related to the lawsuit.

The plaintiff may object to at least some of these requests by claiming that
the documents are equally in the defendant’s possession.

§ 4.5.4 3 Requests for Admission

Like plaintiffs, a defendant can use requests for admission to pin down named
plaintiffs as to the theory of the case they are asserting.
For example, the defendant can request that the plaintiff admit:

• That she received certain disclosures;

• That she did not hear or see certain alleged misrepresentations;
• That she bought her product or security on a certain date;
• That her contract contains certain terms.

§ 4.5.4.4 Depositions

As with the plaintiff, the deposition is possibly the single most important dis-
covery tool a defendant can use. Asking questions of the plaintiff will reveal
whether she had a legal and factual basis to bring her claims in the first place,
what evidence exists to support her claims, what variations may exist between
her claims and other class members’ claims, whether she has enough inde-
pendence from counsel to represent the class, and whether she has exercised
sufficient oversight of counsel to represent the class. Questions to ask
include:

• When did plaintiff retain counsel?

• When did plaintiff learn she had a claim?
• When did plaintiff buy the product?

Typicality. This probes the details of the plaintiff’s specific claims. Because
plaintiffs are often recruited after the theory of the case has been developed,
 Pre-Certification Discovery 127

they rarely fit the facts perfectly. (This is true even in securities and antitrust
cases.)
Predominance. Particularly when there is more than one named plaintiff,
asking the same questions of each can yield variations in vital elements of the
claim, like reliance on allegedly fraudulent statements. Questions include:

• Did the plaintiff ever actually see or hear the allegedly fraudulent
statement?
• Did the plaintiff ever see any information that corrected the fraudulent
information?205

Superiority. Investigate other avenues the plaintiff could have pursued (or
did pursue). Questions may include:

• Did the plaintiff consider an individual lawsuit?

• Did the plaintiff approach the company about the alleged injury?
• Did the plaintiff make a report to the appropriate government
authorities?

Adequacy. Adequacy is one of the most important areas of a named-plain-

tiff deposition.206 Questions include:

• Can you explain, in your own words, the claims you are bringing?
• Can you explain your responsibility to the rest of the class?207
• Do you have any personal relationship with class counsel?208
• Do you have any business relationship with class counsel?209

205. Cf. Oscar Private Equity Invs., 487 F.3d at 262 (“Given the lethal force of certifying a class of
purchasers of securities enabled by the fraud-on-the-market doctrine, we now in fairness
insist that such a certification be supported by a showing of loss causation that targets the
corrective disclosure appearing among other negative disclosures made at the same time.”).
206. See Linda S. Mullinex, Taking Adequacy Seriously: The Inadequate Assessment of Adequacy
in Litigation and Settlement Classes, 57 Vand. L. Rev. 1687, 1707 (2004) (“To establish a
record concerning the adequacy of the class representative, defense counsel routinely
depose all class representatives prior to the motion for class certification.”); for more on
adequacy, see §§ 2.4, 5.2.2.4.
207. See, e.g., In re FEMA Trailer Formaldehyde Prods. Liab. Litig., Case 2:07-md-01873-KDE-
ALC, Document 1014 at 20 (E.D. La. Dec. 29, 2008) (denying certification in part on ade-
quacy grounds and noting that “proposed class representatives believe that they have no
responsibility to other class members”).
208. See London v. Wal-Mart Stores, Inc., 340 F.3d 1246, 1255 (11th Cir. 2003) (“The long-standing
personal friendship of [plaintiff ] and [counsel] casts doubt on London’s ability to place the
interests of the class above that of class counsel.”).
209. See Id. (noting concerns about adequacy because “the former financial relationship creates
a potential conflict of interest”) (emphasis in original).
128 Chapter 4 Pre-Certification Steps

A defendant may also wish to investigate the character of the named plain-
tiff.210 Questions may include:

• Have you ever been convicted of a felony?211

These questions may draw objections (and even instructions not to answer)
from plaintiffs’ counsel, invoking the attorney-client privilege.212

§ 4.6 Expert Witnesses

Experts have become integral to all kinds of litigation, but given the sprawling
size and complex issues involved in class actions, they can be particularly
important for explaining issues to the judge and jury.213
Benefits. A good expert can explain complicated concepts to a judge or jury
in ways that are surprisingly easy to grasp, and extremely difficult to refute.
In addition, experts can be used in other ways. At times over the last sev-
eral decades, plaintiffs have used experts as the primary evidence that certifi-
cation was appropriate, because courts were reluctant to engage in a “battle of
the experts” at the certification stage.214 This particular tactic is falling out of

210. See Id. at 1254 (vigorous prosecution and lack of apparent conflict may not be sufficient to
establish adequacy “if the named plaintiffs . . . do not possess the personal characteristics
and integrity necessary to fulfill the fiduciary role of class representative”) (internal quota-
tions omitted).
211. See Maddox & Starbuck, Ltd. v. British Airways, 97 F.R.D. 395, 397 (S.D.N.Y. 1983) (named
plaintiff ’s conviction for an unrelated criminal offense imposed “stigma that prevents it
from proceeding as the class representative”); but see Benedict v. Altria Group, Inc., 241
F.R.D. 668, 674 (D. Kan. 2007) (while named plaintiff ’s “convictions for felony theft,
burglary, writing bad checks, and possession of drug paraphernalia” were “more than a bit
troubling . . . at the end of the day, the court is unpersuaded that [plaintiff ’s] criminal his-
tory, as a matter of law, renders her an inadequate class member”).
212. See Mullinex, Taking Adequacy Seriously: The Inadequate Assessment of Adequacy in
Litigation and Settlement Classes, 57 Vand. L. Rev. at 1707 n.86 (“To the extent that plain-
tiff ’s counsel invoke attorney-client privilege (and instruct the class representative not to
answer questions), taking the class representative’s deposition frequently may prove to be a
frustrating exercise for defense counsel. Such invocations of attorney-client privilege in this
context are usually inappropriate and improper invocations of the privilege. Defense coun-
sel have the right to make inquiries of the class representative that have bearing on the
adequacy issue, and no privilege shields the class representative from answering these
questions.”).
213. See § 7.9.
214. See Manual for Complex Litigation (Fourth) (2004) § 21.21.
 Pre-Certification Summary Judgment Motion 129

favor, as more appellate courts recognize the need to “rigorously examine”

the expert’s opinions at the class certification stage.215
Risks. The primary risk with retaining an expert witness is that all work he
engages in is discoverable. Every draft of his report, every piece of informa-
tion he receives, must be turned over to the other side. As a result, litigants
are often limited in exactly what they can show to an expert. Attorney work
product, such as memoranda of interviews or other notes from factual
investigations, may only be turned over if the litigant wants to see that same
material brandished in front of a jury in open court.
Rebuttal experts. Finally, a party may put up an expert specifically to rebut
expert testimony offered by the other party. The benefit of this strategy is that
there will not be undisputed expert testimony on key issues. The drawback is
that, most often, courts will split the difference on any factual issue that
involves a “battle of the experts.”

§ 4.7 Pre-Certification Summary Judgment

Motion

Finally, both parties may consider motions for summary judgment before the
plaintiffs file a motion for class certification.216 These motions are not uncom-
mon. (A recent study of pre-CAFA class actions in the federal courts found
that, of the cases that were disposed of by motion in its sample, 34.8 percent

215. See, e.g., In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 323 (3d Cir. 2008) (“Expert
opinion with respect to class certification, like any matter relevant to a Rule 23 requirement,
calls for rigorous analysis.”); Blades v. Monsanto Co., 400 F.3d 562, 575 (8th Cir. 2005) (“We
have stated that in ruling on class certification, a court may be required to resolve disputes
concerning the factual setting of the case. This extends to the resolution of expert disputes
concerning the import of evidence concerning the factual setting—such as economic evi-
dence as to business operations or market transactions.”).
216. See, e.g., Schweizer v. TransUnion Corp., 136 F.3d 233, 239 (2d Cir. 1998) (“There is nothing
in Rule 23 which precludes the court from examining the merits of plaintiff ’s claims on a
proper . . . Rule 56 motion for summary judgment simply because such a motion ‘precedes
resolution of the issue of class certification.’”) (citation omitted); Curtin v. United Airlines,
Inc., 275 F.3d 88, 92 (D.C. Cir. 2001) (“nothing in Eisen or Rule 23(c) requires the district
court to rule on class certification before granting or denying a motion for summary judg-
ment”); Kehoe v. Fidelity Bank & Trust, 421 F.3d 1209, 1211 (11th Cir. 2005) (“it is within the
court’s discretion to consider the merits of the claims before their amenability to class certi-
fication”) (internal quotations omitted); Larsen v. JBC Legal Group, P.C., 235 F.R.D. 191,
193–94 (E.D.N.Y. 2006) (“The district court may consider a motion for summary judgment
before a motion for class certification.”); Evans v. Taco Bell Corp., No. Civ. 04CV103JD, 2005
WL 2333841, at *4 n.6 (Sep. 23, 2005) (“It is well-settled that, absent prejudice to the plain-
tiff, a court may decide a defendant’s motion for summary judgment before taking up the
issue of class certification.”).
130 Chapter 4 Pre-Certification Steps

were disposed of by a motion for summary judgment.)217 Some courts,

however, may be skeptical of the plaintiff’s filing a pre-certification motion
for summary judgment.218
For the defendant, a pre-certification motion for summary judgment may
present a “win-win” scenario. The motion allows the defendant to focus on
the individual named plaintiff’s ability to prove her claims, based on actual
facts instead of deliberately vague allegations. If the court grants the motion,
the case either goes away entirely, or is carved into smaller components.219
If the court denies the motion, it often does so because it has found a “genu-
ine issue of material fact” that demonstrates the individualized nature of the
plaintiff’s claims.220
However, those same genuine issues of material fact will prevent a plaintiff
from being able to offer class-wide proof of her claims. After all, if a jury must
decide the facts of the named plaintiff’s individual claims, it will have to make
the same fact-intensive determination for each class member’s claims. That
alone may be reason enough not to certify a class.221
The plaintiff, on the other hand, may wish to move for summary judgment
against the defendant when doing so will make the issues simpler for the
court to decide at class certification.222

217. Federal Judicial Center, Impact of the Class Action Fairness Act on the Federal
Courts: Preliminary Findings from Phase Two’s Pre-CAFA Sample of Diversity
Class Actions 9 (2008).
218. See Larsen, 235 F.R.D. at 194 (denying plaintiff ’s pre-certification summary judgment
motion, noting that pre-certification summary judgment motions are acceptable when filed
by defendants); but see Vega v. Credit Bureau Enterprises, No. CV-02-1550, 2005 WL 711657,
at *10 (E.D.N.Y. Mar. 29, 2005) (granting plaintiff ’s motion for summary judgment and
motion for class certification).
219. Bennett v. Behring Corp., 737 F.2d 982, 985 (11th Cir. 1984) (“In 1979, Behring Corporation’s
motion for summary judgment as to the state law class action claims was granted, and the
individual fraud claims of the class representatives were settlement and dismissed”) (inter-
nal citation omitted).
220. See, e.g., Benedict, 241 F.R.D. at 680–81, 683 (denying defendant’s motion for partial sum-
mary judgment on plaintiff ’s consumer-fraud claim because “a genuine issue of material
fact exists as to causation,” and simultaneously denying plaintiff ’s motion for class certifica-
tion because “it is not at all clear to the court how [plaintiff ] and other class members can
recover damages caused by the statements without showing individual reliance on them”);
Barnes, 161 F.3d at 133–34 (noting that trial court decertified class “[a]fter reviewing the
summary judgment record,” because “the individual issue of addiction, which plaintiffs had
previously represented as playing no part in this case, is still actually part of the present
case”).
221. See Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 178–79 & n.20 (3d
Cir. 2001) (noting trial court relied on summary judgment record to determine that indi-
vidual issues would predominate over classwide issues).
222. See, Smith v. Univ. of Wash. Law School, 233 F.3d 1188, 1196–97 (9th Cir. 2000) (noting
plaintiff filed partial motion for summary judgment that was denied by trial court); Hills,
 Pre-Certification Summary Judgment Motion 131

Because the pre-certification stage involves so many disparate tactics, it

can be easy for either the plaintiff or the defendant to lose sight of their ulti-
mate goals. But all of these different battles lead to a single turning point in
the litigation: the debate over whether the case can proceed on a class-wide
basis. That debate is the subject of the next chapter.

237 F.R.D. at 495 (deciding plaintiffs’ motion for partial summary judgment and motion for
class certification simultaneously).
 CHAP TER

5
The Class Certification Motion

§ 5.1 Plaintiff’s Certification Motion 136

§ 5.1.1 Themes 137
§ 5.1.2 Arguments in Support of Certification 141
§ 5.1.2.1 Numerosity 141
§ 5.1.2.2 Commonality 141
§ 5.1.2.3 Typicality 142
§ 5.1.2.4 Adequacy 142
§ 5.1.2.5 Availability of Rule 23(b)(1) 143
§ 5.1.2.6 Availability of Rule 23(b)(2) 144
§ 5.1.2.7 Availability of Rule 23(b)(3) 145
§ 5.1.2.7.1 Predominance 145
§ 5.1.2.7.2 Superiority 147
§ 5.1.2.8 Adequacy of Counsel 148
§ 5.1.3 Packaging the Presentation 148

§ 5.2 Defendant’s Certification Opposition 151

§ 5.2.1 Themes 151
§ 5.2.2 Arguments Against Certification 153
§ 5.2.2.1 Numerosity 153
§ 5.2.2.2 Commonality 154
§ 5.2.2.3 Typicality 155
§ 5.2.2.4 Adequacy 157
§ 5.2.2.5 Predominance 158
§ 5.2.2.6 Superiority 159
§ 5.2.3 Packaging the Presentation 161

§ 5.3 Plaintiff’s Certification Reply 163

§ 5.4 The Certification Hearing 164

134 Chapter 5 The Class Certification Motion

The main event in most class actions is the court’s ruling on a plaintiff’s class
certification motion.1 If certification is denied, the plaintiff may abandon the
litigation entirely, either by dismissing the case voluntarily or by settling her
claims on an individual basis for nominal relief.2 If the court does certify a
class, the pressure on the defendant to settle a “bet-your-company” lawsuit
becomes immense, and the opportunities to appeal are limited.3
For the plaintiff, the primary goal of the certification motion is to get some
kind of class action certified; regardless of whether she proceeds to trial, cer-
tification increases the value of her case.4 A secondary goal is to set up her
story at trial. The plaintiff’s fallback position is to make sure that there are
issues to appeal if class certification is denied.
For the defendant, the primary goal is to get the court to deny certification
outright and, failing that, certify something less than the entire action for
en masse adjudication. A secondary goal is to make sure it preserves any
appellate issues. A third goal is, in the course of arguing class certification, to
advance the merits of the defendant’s case, or at least not concede the merits
of plaintiff’s claims.
The central debate in class-certification briefing is whether the most
important issues in the case are similar enough to be tried on a class-wide
basis, or too disparate to be contained in a single trial. If the issues are suffi-
ciently similar, then a class trial will satisfy due process and promote judicial
efficiency; if not, it will create more complications than it eliminates, and risk
an unfair result for absent class members or the defendant. In this debate,
the plaintiff will focus on the defendant’s alleged misconduct, arguing that it
is the dominant issue determining liability in the case, that it adversely
affected all class members uniformly, and that class litigation is the only eco-
nomically feasible way for the many victims of the defendant’s misconduct to
hold it to account for its unlawful actions. By contrast, the defendant will
focus on the named plaintiff (and possibly other individual class members),
arguing that her ability to prove each element of her class claims turns on
individual issues because its challenged conduct was not uniform across the

1. See Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 337 (4th Cir. 1998) (refer-
ring to “ruling that had the largest impact on the conduct of this lawsuit, class certification”).
2. See, e.g., Carpenter v. Boeing Co., 456 F.3d 1183, 1189 (10th Cir. 2006) (“When class-action
status is denied, the plaintiffs may need to abandon the case, or settle for a pittance, because
the cost of continuing will far outweigh any potential recovery in the individual actions
remaining.”).
3. See, e.g., Prado-Steiman v. Bush, 221 F.3d 1266, 1274 (11th Cir. 2000) (granting certification
may “raise [] the cost and stakes of the litigation so substantially that a rational defendant
would feel irresistible pressure to settle”).
4. For more on how the plaintiff and defendant each value the case, see § 8.2.
 The Class Certification Motion 135

proposed class, and therefore different class members were differently affected
by its conduct.
A recent class-certification ruling summarizes both plaintiff’s and defen-
dant’s rhetorical strategies. The trial court was discussing how different courts
have ruled on typicality, but its point applies more generally:

Having pored over these cases seeking a unifying theme, the Court has noticed
two factors worthy of mention. The first is that, when examining typicality,
Courts tend to have one of two perspectives. Courts focus either on: (a) the
defendant’s conduct, and the degree to which it affected each plaintiff equally,
or (b) the effects on the plaintiff class of the defendants’ conduct, and the degree
to which those effects are similar from plaintiff to plaintiff. Put more simply, the
first focus is on what the defendants did; the second focus is on how the plain-
tiffs were affected by what defendants did. And because the latter is naturally
more variable, this focus more often leads to denial of certification.5

Indeed, class-action litigation can sometimes seem almost fractal in nature.

From the 30,000-foot view the plaintiff advocates, all issues look common:
contracts are uniform, misrepresentations are substantially similar, and rea-
sons for not hiring are all part of a larger pattern or practice.6 But from the
close-up view the defendant advocates, every class member is unique, and
common proof could never resolve everyone’s claims.7 One could say that the
outcome of the class certification debate turns on whether the court decides
that the lawsuit is best viewed through a telescope or a microscope.
The following discussion assumes the traditional briefing sequence, in
which the plaintiff files a motion to certify a class, the defendant files a
response opposing certification, and the plaintiff files a reply brief.8 It identi-
fies the most common themes and arguments that each side uses in briefing
certification.

5. In re Welding Fumes Prods. Liab. Litig., 245 F.R.D. 279, 304 (N.D. Ohio 2007).
6. Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97,
103 (2009) (“The implication invited by class counsel is that only by taking an aggregate, class-
wide perspective does the wrong allegedly committed by the defendant come into focus. The
ultimate factfinder would be entitled to disbelieve the plaintiffs’ aggregate proof, just as it
might disbelieve any other form of evidence. But that recognition—so certification propo-
nents contend—is all the more reason for a court not to abort consideration from a class-wide
perspective by withholding class treatment in the first place.”).
7. Id. at 102 (in defense briefs “the wrongs, if any, committed vis-à-vis class members are not the
same; rather, they exhibit individualized features that cannot plausibly comprise a cohesive
unit”).
8. This trend has begun to reverse in recent years—see § 4.2.5—although it is likely to remain the
predominant method of briefing class certification. For concrete examples of these briefs, see
Appendices 5A–5C.
136 Chapter 5 The Class Certification Motion

§ 5.1 Plaintiff ’s Certification Motion

There are two approaches to filing a class-certification motion.9 In the first

approach, the plaintiff treats class certification as similar to summary judg-
ment or trial. She lays out a detailed factual recitation of the defendant’s bad
conduct, and refers to it frequently as she explains how many people it
affected, specifically identifies common issues stemming from that miscon-
duct, describes how the named plaintiff’s claim is typical of the claims the rest
of the class would bring, explains how she is an adequate representative of the
class based on her conduct in the litigation and her motivation to sue, and
explains how a class action is otherwise appropriate because it will promote
efficient resolution of the class claims and discourage similar wrongdoing in
the future. The benefit of this approach is its persuasive power. It signals
to the court (and to the defendant) that the plaintiff has a strong case to make
on the merits, and that the only practical way to bring that strong case to trial
is to certify a class.10
In the other approach, the plaintiff files a bare-bones certification motion
that does little more than lay out the Rule 23 requirements for certifying a
class, cites authorities holding that those requirements are usually easily met
and asserts—in conclusory fashion—that those requirements have been met.
She then reserves the meat of her arguments for the reply brief.11 There is
sound strategy behind this option as well. First, filing a minimal class certifi-
cation brief allows the plaintiff to ease a very real tension in making a thor-
ough argument for class certification: the more rigorously the plaintiff
analyzes each Rule 23 requirement in her initial brief, the more she risks
highlighting potential problems with the class for both the defendant and
the court. Instead, by simply laying out each Rule 23 requirement with a min-
imal analysis of how it has been met, the plaintiff can shift the burden of
identifying potential problems with certification to the defendant.12 This
approach allows the plaintiff to use the reply to rebut defendant’s critiques of

9. This discussion assumes the traditional sequence of the plaintiff filing a motion to certify,
and the defendant opposing. For more on motions to deny certification, see § 4.2.5.
10. For an example of this kind of class certification motion, see App. 5A.
11. For an extreme example of this tactic, see Karnes v. Fleming, No. H-07-0620, 2008 WL
4528223, at *1 (S.D. Tex. July 31, 2008) (plaintiff filed motion for class certification before
initial Rule 16 scheduling conference, followed later by 83 page reply brief). For further indi-
rect evidence of this tactic, see Hicks v. Client Servs., Inc., No. 07-61822-CIV., 2008 WL
5479111 (S.D. Fla. Dec. 11, 2008) (slip op.) (numerous references to plaintiffs’ burden, but
analyzes several class claims by referring to defendants’ challenge and then plaintiffs’
response).
12. While theoretically, the defendant could argue that the plaintiff has not met her burden in
demonstrating a class can be certified, it will rarely rely solely on that argument. Since defen-
dants tend to be risk-averse, it will likely make all relevant arguments against certification in
its opposition.
 Plaintiff ’s Certification Motion 137

class certification; if the rebuttal is persuasive, the court will be more likely to
certify the class.
In either case, the plaintiff’s primary challenge is to fulfill her burden of
persuading the court that her proposed class meets all of the requirements of
Rule 23.

§ 5.1.1 Themes

A good class certification brief is not just a collection of legal and factual
arguments. It instead stresses some theme that explains to the court why it
should certify the proposed class. There are several reasons why themes are
important to a brief. The first is that they provide an organizing principle for
the brief, making it easier for the court to understand. The second is that well-
chosen themes can influence a judge’s final decision. Judges, like all people,
are intuitive thinkers, and cannot help being influenced by the way in which
issues—even procedural issues—are framed.13 With forty-five years of
modern class-action practice to draw from, plaintiffs have found certain
themes particularly reliable in persuading a court to certify a class.
The ease of certifying a class. One theme the plaintiff may stress is the com-
parative ease of certifying a class. She will point out that the trial court has
wide discretion to certify a class,14 and argue that Rule 23 should be con-
strued liberally.15 She will point out that some courts have held that, in close
cases, the court should err in favor of certification because it may always
decertify the class later.16 The plaintiff may also argue that the court should
not delve too deep into the merits of her claims in determining whether

13. Chris Guthrie, et al., Blinking on the Bench: How Judges Decide Cases, 93 Cornell L. Rev.
101, 105, 117 (2007).
14. See Allison v. Citgo Petroleum Corp., 151 F.3d 402, 407 (5th Cir. 1998) (“district court main-
tains substantial discretion in determining whether to certify a class action”); In re Terazosin
Hydrochloride Antitrust Litig., 220 F.R.D. 672, 684 (S.D. Fla. 2004). (“the district court retains
broad discretion in determining whether an action should be certified as a class action”).
15. See Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 424 (4th Cir. 2003) (“federal courts
should give Rule 23 a liberal rather than a restrictive construction, adopting a standard of
flexibility in application which will in the particular case ‘best serve the ends of justice for the
affected parties and . . . promote judicial efficiency”) (internal quotations omitted).
16. See Daffin v. Ford Motor Co., 458 F.3d 549, 554 (6th Cir. 2006) (“If at a subsequent point in
the litigation the district court determines that the express warranty is limited to defects that
manifest themselves within the warranty period, the district court may consider at that point
whether to modify or decertify the class.”); see also App. 5A at 12. This particular argument
has become more difficult to advance in light of the 2003 amendments to Rule 23, which
deleted any reference to “conditional certification.” See Fed. R. Civ. P. 23, 2003 Advisory
Committee Notes; In re Hydrogen Peroxide Antitrust Litig., 552 F. 3d 305, 319 (3d Cir. 2009)
(“Additionally, the 2003 amendments eliminated the language that had appeared in Rule
23(c)(1) providing that a class certification ‘may be conditional.’ The Advisory Committee’s
138 Chapter 5 The Class Certification Motion

certification is appropriate because the class certification ruling is not the

right time to evaluate the merits of the case.17
Occasionally, the plaintiff may take the “no merits” argument a step fur-
ther, and argue that a court should not look past the pleadings at all in deter-
mining whether certification is appropriate.18 This argument is becoming
outdated: many federal appellate courts now hold that a trial court not only
can, but should, examine some evidence in determining whether class certifi-
cation is appropriate.19 This argument can backfire in another way: by
continuing to make the (now discredited) argument that a court should look
only at the pleadings in certifying a class, a plaintiff can actually highlight the
need for examining evidence carefully, which may prove counter to her aims
if that review reveals important claimant-specific issues of fact or law that
preclude class-wide litigation.
Fairness. Another theme the plaintiff invariably will stress is the court’s
obligation to certify a class action in order to promote fairness for the legal
rights of the proposed class. Pundit Mark Moller describes one use of this
theme in plaintiffs’ briefing of a series of related class actions brought by doc-
tors against health-management organizations (HMOs):

The doctors . . . appealed to considerations of fairness, a value they claimed

excused them from proving each claim individually. “The individual claims of
many [doctors],” said the plaintiffs “are so small that the cost of individual liti-
gation would be far greater than the value of those claims.” Unless a class were
certified, they argued, no doctors would file suit, leaving the medical profession
without a remedy. Accordingly, they contended that it would be fair to eliminate

note explains: ‘A court that is not satisfied that the requirements of Rule 23 have been met
should refuse certification until they have been met.’”) (internal footnote omitted).
17. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 (1974) (“[W]e find nothing in either the
language or history of Rule 23 that gives a court any authority to conduct a preliminary
inquiry into the merits of a suit in order to determine whether it may be maintained as a class
action.”). The Eisen Court was primarily concerned with courts that conditioned certification
on whether “petitioner was ‘more than likely’ to prevail on his claims.” Id.
18. See App. 5A at 12.
19. See In re Hydrogen Peroxide, 552 F. 3d at 307 (“the court must resolve all factual or legal dis-
putes relevant to class certification, even if they overlap with the merits—including disputes
touching on elements of the cause of action.”); Oscar Private Equity Invs. v. Allegiance Telecom,
Inc. 487 F.3d 261, 268 (5th Cir. 2007) (“A district court still must give full and independent
weight to each Rule 23 requirement, regardless of whether that requirement overlaps with
the merits.”); In re Initial Pub. Offerings Secs. Litig., 471 F.3d 24, 27 (2d Cir. 2006). (“the fact
that a Rule 23 requirement might overlap with an issue on the merits does not avoid the
court’s obligation to make a ruling as to whether the requirement is met”); Szabo v. Bridgeport
Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001) (“if some of the considerations under Rule
23(b)(3), such as ‘the difficulties likely to be encountered in the management of a class action’,
overlap the merits . . . then the judge must make a preliminary inquiry into the merits”).
 Plaintiff ’s Certification Motion 139

the elements of proof that made class litigation untenable: individuated reliance
and proof of actual damages.20

A plaintiff will often stress this “David vs. Goliath” formulation, arguing
that her case is one in which essentially powerless individuals with legiti-
mate grievances against a deep-pocketed corporation need the procedural
advantages and economic leverage of a certified class to vindicate their
claims.21
Defendant’s bad conduct. The third key theme in a plaintiff’s class-
certification briefing usually will be that defendant has engaged in serious
misconduct, and the only way to remedy that misconduct and deter its recur-
rence is to certify a class for trial.22
There are several reasons for a plaintiff to emphasize the defendant’s bad
conduct in her class certification brief. First, the more bad conduct the defen-
dant appears to have engaged in, the more convinced the court may become
about the need to certify a class as a first step toward righting the wrongs the
defendant has committed. (There is, of course, a tension between this tactic
and any argument that the court should not delve into the merits of the
claims. Similarly, there may be tension between the defendant’s arguments
that some merits inquiry may be necessary, but that its allegedly bad conduct
is irrelevant to the class-certification debate.)
Second, by keeping the focus on the defendant’s conduct, the plaintiff
strengthens (at least rhetorically) her argument that the defendant’s uniform
misconduct, not the specific circumstances of any given class member’s claim,

20. Mark Moller, The Rule of Law Problem: Unconstitutional Class Actions and Options for
Reform, 28 Harv. J.L. & Pub. Pol’y 855, 862 (2005).
21. See Katz v. Blanche Corp., 496 F.2d 747 (3d. Cir. 1974) (“While there is biblical if not histori-
cal support for the motion that one David did slay a Goliath, the social desirability of con-
sumer class actions was to insure that a David plaintiff has a Goliath capability against the
Goliath propensities of his adversary . . .”); In re Am. Express Merch. Litig., 554 F.3d 300, 320
(2d. Cir. 2009) (noting that “[t]he plaintiffs continually refer to themselves as ‘small mer-
chants’ and as ‘small businesses’”); Mitchell-Tracey v. United Gen. Title Ins. Co., 237 F.R.D.
551, 560 (D. Md. 2006) (“This is precisely the kind of case that class actions were designed
for, with small or statutory damages brought by impecunious plaintiffs who allege similar
mistreatment by . . . comparatively powerful defendant.”) (internal quotations omitted). This
runs counter to at least one judge’s observation about the judicial temperament: “Most judges
are (surprisingly to non judges) unmoved by the equities of the individual case . . . just as
doctors tend to be callous about sick people, judges tend to be callous about pathetic litigants
because they have seen so many of them. This is true of liberal judges as well as conservative
judges.” Richard A. Posner, How Judges Think 119 (2008).
22. See Patrick Dillon & Carl M. Cannon, Circle of Greed: The Spectacular Rise and
Fall of the Lawyer Who Brought Corporate America to Its Knees 152–53 (2010).
140 Chapter 5 The Class Certification Motion

will be the predominant issue at any class trial.23 That makes certifying a class
more palatable for the court.24
Third, by focusing on the defendant’s wrongdoing, the plaintiff can high-
light the need for class litigation to create opportunities to deter future wrong-
doing by this defendant and others in the same industry—one of the most
persuasive policy arguments for certifying a class.25
The need for a class action to address the problem. The plaintiff will also
stress that, without a class action (indeed, without this class action), she and
the unnamed class members will receive no relief for the wrongs they have
suffered. In doing so, the plaintiff often will focus on the small value of indi-
vidual claims,26 as well as the vast resources available to the defendant.
But the plaintiff will also describe the inadequacy of any remedial effort the
defendant has already made, or the government’s inability (or refusal) to
force the defendant to correct the problem, and use that to suggest that the
only effective means of regulating defendant’s conduct is to allow her to act as
a “private attorney general,” holding the defendant accountable for its mis-
conduct through private litigation.27

23. See, In re Jackson Nat’l Life Ins. Co. Premium Litig., 183 F.R.D. 217 (W.D. Mich. 1998) (“In
making this assessment, the Court is urged by plaintiffs to focus on the common course of
Jackson National’s misconduct said to be relevant to all of the putative class members’ claims.”).
24. See In re Serzone Prods. Liab. Litig., 231 F.R.D. 221, 240 (S.D.W.V. 2005) (finding predomi-
nance where determination of liability “focuses upon the actions of ” the defendant); Mick v.
Level Propane Gases, Inc., 203 F.R.D. 324, 331 (S.D. Ohio 2001) (certifying statewide class to
determine common issue of “whether Level’s practices were deceptive”); Miles v. Am. Online,
202 F.R.D. 297, 304–05 (M.D. Fla. 2001) (redefining class to only include those “for whom
reliance may be inferred by the class member’s conduct”).
25. Blackie v. Barrack, 524 F. 2d 891, 903 (9th Cir. 1975) (noting “substantial role that the deter-
rent effect of class actions plays in accomplishing the objectives of the securities laws”);
Myriam Gilles & Gary B. Friedman, Exploring the Class Acton Agency Costs Myth: The Social
Utility of Entrepreneurial Lawyers, 155 U. Pa. L. Rev. 103 (2006) (arguing generally that class
actions are useful because of deterrence of corporate conduct rather than compensation to
individual claimants). For more on deterrence, see § 1.3.1.
26. See Eisen, 417 U.S. at 161 (1974) (“A critical fact in this litigation is that petitioner’s individual
stake in the damages award he seeks is only $70. No competent attorney would undertake
this complex antitrust action to recover so inconsequential an amount. Economic reality
dictates that petitioner’s suit proceed as a class action or not at all.”); Thorogood v. Sears,
Roebuck & Co., 547 F.3d 742, 744 (7th Cir. 2008) (Posner, J.) (“The class action is an ingenious
device for economizing on the expense of litigation and enabling small claims to be litigated.
. . . If every small claim had to be litigated separately, the vindication of small claims would
be rare. The fixed costs of litigation make it impossible to litigate a $50 claim . . . at a cost that
would not exceed the value of the claim by many times.”). See also Richard Epstein, Class
Actions: Aggregation, Amplification and Distortion, 2003 U. Chi. Legal F. 475, 485 (2003)
(“Quite simply the unthinkable becomes thinkable when the basic scenario changes—that is,
what would otherwise be an unprofitable suit, given the low probability of success and high
costs of bringing the suit, becomes a profitable one.”).
27. See Johnson v. W. Suburban Bank, 225 F. 3d 366, 369 (3d Cir. 2000) (plaintiff argued that
TILA class-action provision “is meant to serve public policy goals through plaintiffs who act
 Plaintiff ’s Certification Motion 141

§ 5.1.2 Arguments in Support of Certification

§ 5.1.2.1 Numerosity

Because numerosity is rarely an issue, the plaintiff will often not spend much
time on it in the class certification brief. Where appropriate, the plaintiff will
focus on how the defendant has no reasonable grounds to contest numerosity.28
In addition, she will point at the approximate number of class members she
alleges exist, and cite caselaw that indicates that so long as a class includes more
than either 20 or 40 people, it should be certified.29 She may also argue that,
because of geographic dispersal or other reasons, joinder of all class members
will be impracticable.30

§ 5.1.2.2 Commonality

Because commonality overlaps with predominance, the plaintiff often will

not spend much time discussing commonality in her brief. The plaintiff will
instead stress that commonality is a very low bar to pass, and that she only
needs to show the existence of one common issue of law or fact for the
commonality requirement to be met.31 The plaintiff may also include a list of
purported common issues of law or fact;32 this will frequently be the same list
she provided in their complaint. Finally, the plaintiff may add common issues
that were uncovered in discovery, demonstrating to the court that discovery
has shown that it will be possible to try additional important issues in the
lawsuit on a class-wide basis.

as private attorneys general”); see also John H. Beisner, et al., Class Action “Cops”: Public
Servants or Private Entrepreneurs?, 57 Stan. L. Rev. 1441, 1451 (2005) (providing further
examples of private attorney-general rhetoric). This strategy comports with Judge Posner’s
advice to emphasize the “background or general facts that influence a legislative decision” to
judges. Posner, How Judges Think 118.
28. See, e.g., Lemire v. Wolpoff & Abramson, LLP, 256 F.R.D. 321, 324 (D. Conn. 2009); Reid
v. Lockheed Martin Aeronautics Co., 205 F.R.D. 655, 666 (N.D. Ga. 2001).
29. See Thompson v. Jiffy Lube Int’l, Inc., 250 F.R.D. 607, 616 (D. Kan. 2008) (plaintiff provided
estimate of class size based on total number of Jiffy Lube customers and number of com-
plaints); see also App. 5A at 12.
30. See Colo. Cross-Disability Coal. v. Taco Bell Corp., 184 F.R.D. 354, 358 (D. Colo. 1999) (“The
fact that a class is dispersed over several counties weighs in favor of a finding of
numerosity.”).
31. Baby Neal ex rel. Kanter v. Casey, 43 F.3d 48, 56 (3d Cir. 1994) (“The commonality require-
ment will be satisfied if the named plaintiffs share at least one question of fact or law with the
grievances of the prospective class.”). See also § 2.2, App. 5A at 13.
32. See Thompson, 250 F.R.D. at 616 (in support of commonality, plaintiff “identified a laundry
list of asserted common factual issues”).
142 Chapter 5 The Class Certification Motion

§ 5.1.2.3 Typicality

Here, too, the plaintiff will stress the low bar she has to meet to demonstrate
typicality. If there are no material factual differences between the named
plaintiff and other class members, she will point that out. If discovery has
identified some potential factual differences, the plaintiff will argue that the
circumstances of her individual claims do not have to be identical in all
respects to those asserted by absent class members, so long as she can assert
the same legal claims.33
The plaintiff may also tie her typicality argument back to the defendant’s
alleged bad conduct, arguing that because the named plaintiff has encoun-
tered the same course of conduct as the rest of the class, she is typical of the
class.34
Finally, the plaintiff may frame typicality in the negative, stressing what
will not demonstrate a lack of typicality.35 That may allow her to address
potential vulnerabilities while still making a strong argument that she has
met the requirements of Rule 23(a)(3).

§ 5.1.2.4 Adequacy

The plaintiff will once again stress the low bar she has to meet to demonstrate
adequacy of representation. The most common formulation the plaintiff will

33. Deiter v. Microsoft Corp., 436 F.3d 461, 467 (4th Cir. 2006) (“That is not to say that typicality
requires that the plaintiff ’s claim and the claims of class members be perfectly identical or
perfectly aligned.”); Daffin, 458 F.3d at 553 (“The mere fact that Daffin’s throttle body assem-
bly stuck, while other class members’ throttles have not stuck, does not render Daffin
atypical.”).
34. Dukes v. Wal-Mart, Inc., 474 F.3d 1214, 1232 (9th Cir. 2007) (“even though individual
employees in different stores with different managers may have received different levels of
pay and were denied promotion or promoted at different rates, because the discrimination
they allegedly suffered occurred through an alleged common practice—e.g., excessively sub-
jective decision-making in a corporate culture of uniformity and gender stereotyping—their
claims may be sufficiently typical to satisfy Rule 23(a)(3)”); Daffin, 458 F.3d at 552 (“Daffin’s
claim is typical of the class because the class members’ theory is that Ford breached its express
warranty by providing vehicles with defectively designed throttle body assemblies, causing
Daffin and other class members to receive vehicles worth less than vehicles that conform to
the promises allegedly contained in the warranty agreement.”); In re Enron Corp. Secs. Litig.,
529 F. Supp. 2d 644, 674 (S.D. Tex. 2006) (“The Court agrees with Lead Plaintiff that the
claims of the proposed class representatives are typical because they arise from the same
alleged Ponzi scheme, material misrepresentations, and course of conduct to defraud inves-
tors and artificially inflate the price of Enron’s and Enron-related entities’ publicly traded
securities while concealing Enron’s debt, all of which purportedly induced them and the
putative class to invest in these securities; and they are grounded in the same legal theory,
federal securities law.”); see also App. 5A at 14.
35. See Daffin, 458 F.3d at 553 (“The mere fact that Daffin’s throttle body assembly stuck, while
other class members’ throttles have not stuck, does not render Daffin atypical.”).
 Plaintiff ’s Certification Motion 143

use is that she should be deemed an adequate representative so long as she has
no important identifiable conflicts of interest with the proposed class.36
A savvy plaintiff will also stress that differences in factual proof do not neces-
sarily translate to a conflict of interest between herself and the rest of the
proposed class.37
In some cases (usually if she has performed poorly in depositions), the
plaintiff may seek to preempt attacks on her adequacy by pointing to cases
holding that a class representative does not need to have extensive knowledge
of the lawsuit,38 or that she is still adequate even if she delegates large portions
of supervising the litigation to the attorneys.39 The general theme that
plaintiffs’ counsel will emphasize is that the named plaintiff is a regular per-
son—not a specialist in class actions—and should not be held to the same
high standard as an attorney.

§ 5.1.2.5 Availability of Rule 23(b)(1)

Unless there is a true attempt to change some institutional policy or an actual

limited fund at stake, plaintiffs rarely invoke Rule 23(b)(1) as a basis for cer-
tifying a class. Rule 23(b)(1)(A), which seeks to protect the class defendant
against being whipsawed by “inconsistent adjudications,” is arguably broad
enough to apply to any class action, but courts have applied it in much more
limited fashion.40 As a result, a plaintiff seeking to certify a Rule 23(b)(1)(A)
class must show that there is an actual policy or right that would produce

36. Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 625 (1997) (“The adequacy inquiry under Rule
23(a)(4) serves to uncover conflicts of interest between named parties and the class they seek
to represent.”); see also Alba Conte & Herbert B. Newberg, Newberg on Class Actions
§3.01 at 3–5 (4th ed. 2002) (defining adequacy requirement as “the named plaintiff have no
conflicts of interest with class members and that he or she prosecute the action vigorously on
behalf of the class”).
37. See Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 626 (5th Cir. 1999); see also App. 5A
at 15.
38. See Benway v. Res. Real Estate Servs., LLC, 239 F.RD. 419, 425–426 (D. Md. 2006) (“Rule 23
does not require the representative plaintiffs to have extensive knowledge of the intricacies of
litigation, rather, the named plaintiffs must have a general knowledge of what the action
involves and a desire to prosecute the action vigorously.”)
39. Kirkpatrick v. JC Bradford & Co., 827 F. 2d 718, 727 (11th Cir. 1987)) (“[A]dequate class
representation generally does not require that the named plaintiffs demonstrate to any par-
ticular degree that individually they will pursue with vigor the legal claims of the class.
Although the interests of the plaintiff class certainly would be better served if the named
plaintiffs fully participate in the litigation, the economics of the class action suit often are
such that counsel have a greater financial incentive for obtaining a successful resolution of a
class suit than do the individual class members.”); Morris v. Transouth Fin. Corp., 175 F.R.D.
694, 698 (M.D. Ala. 1997) (adequacy does not require representatives to “play a personal role
in the direction and management of the action”).
40. Petrolito v. Arrow Fin. Servs., LLC, 221 F.R.D. 303, 313 (D. Conn. 2004).
144 Chapter 5 The Class Certification Motion

different outcomes in different cases, rather than just a risk that some class
members might receive relief while others might not.41
Similarly, while a plaintiff could theoretically argue that any class action
should be certified under Rule 23(b)(1)(B) because the defendant has only a
“limited fund” with which to pay the potential classwide damage award
(because no defendant has infinite assets), a plaintiff generally can only seek
Rule 23(b)(1)(B) certification when she can show that the defendant has very
limited assets, or is at risk of insolvency.42

§ 5.1.2.6 Availability of Rule 23(b)(2)

Rule 23(b)(2) is usually available for a plaintiff who is seeking primarily

injunctive relief.43 In general, the arguments in favor of certification under
Rule 23(b)(2) are simple: the plaintiff will allege that the defendant is engag-
ing in some conduct (or has implemented some policy) that harms the mem-
bers of the class in a similar fashion, and an injunction will cure the harm.44
Recently, plaintiffs have begun to invoke Rule 23(b)(2) as a basis for seek-
ing certification more frequently, even when they are also asserting claims
for damages.45 The primary argument the plaintiff advances when doing so
is that the relief she seeks is primarily injunctive in nature, and so there is no
need to provide the class with notice or opportunities to opt out, and no
need to show a predominance of common issues over claimant-specific
ones.46 Courts have split over whether damages need to be “incidental” to

41. For more on the applicability of Rule 23(b)(1)(A), see § 2.5.1.

42. See, e.g., Doe v. Karadzic, 192 F.R.D. 133, 143 (S.D.N.Y. 2000) (declining to certify a 23(b)(1)(B)
class against an individual defendant in a case with potential damages of $10 billion dollars
because plaintiffs presented to the Court “no credible evidence whatsoever concerning the
whereabouts or amount of defendant’s assets or the lack thereof ”); In re “Agent Orange” Prod.
Liab. Litig., 506 F. Supp. 762, 789–90 (E.D.N.Y. 1980) (refusing to certify 23(b)(1)(B) class
where plaintiffs offered no evidence of defendants’ insolvency, despite potentially large number
of individual claimants with potentially large individual claims).
43. See § 2.6.
44. See Robinson v. Metro-N. Commuter R.R. Co., 267 F. 3d 147, 155 (2d Cir. 2001) (seeking
injunctive relief to address “company-wide policy of delegating to department supervisors
discretionary authority to make employment decisions related to discipline and
promotion”).
45. While certification under Rule 23(b)(2) is itself difficult, several courts have ruled that its
focus on injunctive relief means that “[c]lass certification centers on the defendants’ alleged
unlawful conduct, not on individual injury.” In re Monumental Life Ins. Co., 365 F. 3d 408, 415
(5th Cir. 2004). Since the plaintiff prefers to keep the focus on the defendant’s conduct, this
can work to her advantage.
46. See In re Monumental Life Ins. Co., 365 F. 3d at 415.
 Plaintiff ’s Certification Motion 145

the injunctive relief,47 or merely need to be “appropriate” in addition to the

injunctive relief.48

§ 5.1.2.7 Availability of Rule 23(b)(3)

Plaintiffs still invoke Rule 23(b)(3) most commonly when seeking to certify a
class action, because it unambiguously allows for the recovery of monetary
damages. When arguing for certification under Rule 23(b)(3), the plaintiff
will often broadly focus on the efficiency of the class action device generally,
as well as the lack of available alternatives.

§ 5.1.2.7.1 Predominance

Predominance may be the most difficult criterion for the plaintiff to argue in
a class-certification motion. First, the plaintiff’s burden is greater on predom-
inance than it is on commonality; it is not sufficient merely to identify a
common issue, the plaintiff must demonstrate that a class-wide determina-
tion of those common issues would resolve all important issues presented
by the lawsuit.49 Second, determining whether class-wide issues would
“predominate” in any trial does not involve a black-or-white mathematical
test—instead the court must make an unavoidably subjective determination
of how it believes the trial will proceed, and which issues will require the
majority of its (and the jury’s) attention. Third, because the bar is higher
(and because the defendant is likely to load a lot of argument into the pre-
dominance section), rhetorically, the plaintiff is in the position of proving
a negative—she must argue that there are no individualized issues before
she even knows what issues the defendant will identify as individualized.
Finally, there is a fundamental tension in arguing that common issues pre-
dominate over individual issues: the more words the plaintiff spends discussing
predominance, the more nuances may reveal themselves, any of which might
convince the court that the litigation contains a predominant individual
issue.
These challenges do not mean that the plaintiff can never win a predomi-
nance argument. Several tactics that have proven effective over time at
demonstrating compliance with the predominance requirement.

47. See Allison, 151 F.3d at 411 (“monetary relief may be obtained in a (b)(2) class action so long
as the predominant relief sought is injunctive or declaratory”).
48. See Robinson, 267 F. 3d at 164 (“when presented with a motion for (b)(2) class certification of
a claim seeking both injunctive relief and non-incidental monetary damages, a district court
must consider the evidence presented at a class certification hearing and the arguments of
counsel, and then assess whether (b)(2) certification is appropriate in light of the relative
importance of the remedies sought, given all of the facts and circumstances of the case”).
49. For more on the predominance requirement of Rule 23(b)(3), see § 2.7.
146 Chapter 5 The Class Certification Motion

Arguing bad conduct. The plaintiff can argue predominance and common-
ality together, taking the opportunity to rehearse the account of defendants’
“bad conduct” she advanced in her complaint. The more she can cement
that story with the court, the more likely it is that the court will eventually
believe that the defendant’s common course of bad conduct will be the sole
predominating issue at trial.50 (This also allows the plaintiff to spend the
lion’s share of her brief discussing evidence that will not vary from class
member to class member.)
Presuming reliance. The plaintiff faces a large obstacle in fraud-based cases,
because, to prove common law (and sometimes statutory) fraud, she must
prove that she relied on the allegedly deceptive conduct. Since reliance is usu-
ally a claimant-specific question, courts often decline to certify fraud-based
classes.51 One tactic the plaintiff may employ is to argue that, because of the
nature of the defendant’s fraudulent conduct, the court should presume that
the members of the class relied on that conduct in buying their product or
otherwise falling victim to an alleged fraud.52 This tactic has been most effec-
tive in securities cases, where courts have frequently ruled that, given the
right circumstances, a “fraud on the market” occurred because the defen-
dant’s fraudulent conduct led to an artificially high price for the security,
meaning that any investors who bought the security during the relevant
period already “relied” on the defendant’s allegedly fraudulent conduct.53
However, plaintiffs have also argued that courts should presume reliance in
other widespread fraud cases, with varying degrees of success.54

50. See Chip Heath & Dan Heath, Made to Stick: Why Some Ideas Survive and Others
Die, 165–203 (2007) (explaining that emotional accounts have more “stickiness” than dry
recitations of facts or ideas); Chaim Perelman & L. Orbechts-Tytecha, The New
Rhetoric: A Treatise on Argumentation 174–75 (1969) (discussing how repetition adds
weight to argument).
51. For more on reliance, see § 2.7.1.
52. See In re Neuotonin Mktg. Litig., — F.R.D. ——, 2009 WL 1323835, *14 (D. Mass. May 13,
2009) (plaintiffs “ask[ed] the Court to permit a statistical analysis to function as common
proof of causation for millions of disparate and varied human interactions that resulted in
off-label prescriptions for Neurontin”).
53. Basic Inc. v. Levinson, 485 U.S. 224, 246 (1988) (allowing rebuttable presumption of reliance
in securities-fraud class action because “the market price of shares traded on well-developed
markets reflects all publicly available information, and, hence, any material misrepresenta-
tions”). Even in these cases, however, presuming reliance is not automatic. Gariety v. Grant
Thornton LLP, 368 F.3d 356, 364 (4th Cir. 2004)
54. See In re Mercedes-Benz Tele Aid Contract Litig., 257 F.R.D. 46, 74–75 (D.N.J. 2009) (allowing
presumption of reliance under New Jersey Consumer Fraud Act); Stanich v. Travelers Indem.
Co., 249 F.R.D. 506, 518 (S.D. Ohio 2008) (“Where there are uniform presentations of alleg-
edly misleading information, or common omissions throughout the entire class, especially
through form documents, courts have found that the element of reliance may be presumed
class-wide, thereby obviating the need for an individualized inquiry of each class member’s
reliance.”).
 Plaintiff ’s Certification Motion 147

Framing state-law variations. If the plaintiff is aware of a particular argu-

ment that the defendant will definitely advance, she can spend time address-
ing that argument and setting the terms of the debate. To take one of the most
common examples, in nationwide products-liability class actions based
on state law-based tort or fraud claims, the defendant will (almost) always
argue that variations in the laws of the fifty states will predominate over any
other questions in the litigation.55 As a result, a number of plaintiffs have
argued in their class certification motions either that (1) state laws do not
conflict on the issue in front of the court,56 or (2) that there is some alterna-
tive (like applying the law of a single state) that the court may use to avoid any
predominance problems the defendant will raise.57

§ 5.1.2.7.2 Superiority

The plaintiff will usually stress the following themes when arguing that a class
action is superior to other methods of adjudicating the controversy.
Efficiency. The plaintiff may argue that a class action offers an efficient out-
come for wide-scale litigation.58 She can focus on the value of not having to
present the same evidence about the defendant’s wrongful conduct multiple
times.59 She can also point out the benefit of a consistent outcome in deciding
common issues presented by each of the class members.
Negative-value suits. The plaintiff will stress the presence of negative-value
suits, in which the cost of pursuing an individual lawsuit would exceed any
recovery an individual plaintiff might receive.60 The most common argument
is that, if class certification is denied in cases like these, the class members will
have no recourse for vindicating their claims. Or, in other words, a class

55. For more on defendant’s state-law variations arguments, see § 5.2.2.5. For more on state-law
variations generally, see § 2.7.1.
56. See Klay v. Humana, Inc., 382 F.3d 1241, 1262 (11th Cir. 2004) (“if a claim is based on a prin-
ciple of law that is uniform among the states, class certification is a realistic possibility”).
57. See In re Mercedes-Benz Tele Aid Contract Litig., 257 F.R.D. at 69 (applying New Jersey law to
nationwide claims).
58. See Newton v. Merrill Lynch, Pierce, Fennel & Smith, Inc., 259 F.3d 154, 192 (3d Cir. 2001)
(“One of the paramount values in class actions is efficiency.”) (internal quotations omitted).
59. See id. (“Class certification enables courts to treat common claims together, obviating the
need for repeated adjudications on the same issue.”) (internal quotations omitted); Fisher v.
Va. Elec. & Power Co., 217 F.R.D. 201, 227 (E.D. Va. 2003) (citing “efficiency gains that will
result from a resolving the predominant common issues on a representative basis”).
60. See Hanlon v. Chrysler, 150 F.3d 1011, 1023 (9th Cir. 1998) (class action superior where “liti-
gation costs would dwarf potential recovery” in individual cases); Coco v. Village of Belle
Terre, 233 F.R.D. 109, 116 (E.D.N.Y. 2005) (finding class action superior to other forms of liti-
gation where “the interest of members of the class in individually controlling the prosecution
of separate actions is minimal, as the costs and expenses of bringing individual suits would
far exceed any individual recoveries”); see also App. 5A at 22.
148 Chapter 5 The Class Certification Motion

action is the best (and possibly only) way to hold the defendant accountable
for stealing $100 from 1 million different people.
Lack of realistic alternatives. The plaintiff may also argue that there are no
suitable alternatives to certifying a class. For example, if the defendant is
likely to propose that the court rely on government action instead of private
litigation to address the alleged wrongdoing, the plaintiff may argue that the
government agency charged with overseeing the subject matter of the lawsuit
is underfunded or simply not interested in regulating the problem at hand.61
Similarly, if there is a record of individual litigation on the issue, the plaintiff
may seek to distinguish the class claims from the individual lawsuits that have
already been prosecuted.
Manageability. It is rare for a plaintiff to make a separate manageability
argument. Instead, most plaintiffs choose to argue that, because common
issues predominate, it is logical that a class trial would be manageable.
A plaintiff who chooses to address manageability explicitly may do so by pre-
senting a trial plan.62

§ 5.1.2.8 Adequacy of Counsel

To demonstrate adequacy of counsel under Rule 23(g), the plaintiff will often
simply argue that at least one of the firms representing her has successfully
prosecuted prior class actions.63 She may also attach the résumé of the firm or
the attorney, listing the various other class actions in which they have been
appointed as class counsel.64

§ 5.1.3 Packaging the Presentation

The length of the class certification brief can vary greatly. As discussed above,
some plaintiffs will file only minimal opening briefs, saving their substantive
arguments for the reply briefing. Others may go into further depth, sometimes

61. See Amalgamated Workers Union of V.I. v. Hess Oil V.I. Corp., 478 F. 2d 540, 543 (3d Cir. 1973)
(administrative action by Virgin Islands Department of Labor not superior to proposed class
action); Stanich, 249 F.R.D.at 522 (action by Ohio Department of Insurance not superior to
class action).
62. For more on trial plans, see § 5.1.3.
63. See App. 5A at 15.
64. Linda S. Mullinex, Taking Adequacy Seriously: The Inadequate Assessment of Adequacy in
Litigation and Settlement Classes, 57 Vand. L. Rev. 1687, 1700 (2004) (evidentiary proffer of
counsel’s adequacy “may come in the form of an affidavit from the proposed class counsel, or
a photocopy of the class counsel’s entry in Martindale Hubbell or some similar law firm
publication, typically attached as an exhibit to the motion for class certification.”).
 Plaintiff ’s Certification Motion 149

producing voluminous initial briefing.65 However, most plaintiff’s briefs have

at least the following elements.
Rehearsal of facts against defendant. The background section is critically
important to plaintiff’s class-certification brief.66 The plaintiff’s goal here is to
frame the debate in terms of the defendant’s bad conduct, essentially provid-
ing a preview of what her opening argument will look like at trial. The back-
ground section will often focus on the defendant’s policies and practices, and
on conduct that, while not linked to any individual plaintiff, shows that the
defendant was acting in a uniformly shameful fashion.67
Discussion of class certification requirements. As discussed in greater detail
above, the plaintiff will often keep her discussion of the class certification
requirements perfunctory in the main brief. This is frequently consistent with
the themes she seeks to stress: (1) certifying a class is not that difficult, and (2)
the defendant’s bad conduct is a predominant common issue. Moreover, the
more the plaintiff delves into nuance on the class certification brief, the more
ammunition she provides the defendant when it argues that a close examina-
tion of the case reveals many individualized issues of fact or law.
Use of experts. There are several different kinds of experts the plaintiff
might invoke at class certification. Mostly, the plaintiff might proffer experts
on the subject matter of the litigation, who can testify both to the merits, and
to how to establish her case with common proof. For example, in an antitrust
case, the plaintiff’s expert might testify that his statistical analysis will show
that the defendant’s participation in a price-fixing conspiracy affected the
entire class in the same way.68 Similarly, in a sex-discrimination class action,

65. See Labavue v. Olin Corp., 231 F.R.D. 632, 637 (S.D. Ala. 2005) (noting parties submitted
“more than 200 pages of briefs and over 800 exhibits in support of their respective posi-
tions”). It is worth noting that the trial court in this case considered the volume—especially
of exhibits—to be excessive. Id. at 642 & nn.16–18 (noting the parties’ exhibits “constitut[ed]
an agglomeration of paper standing several inches taller than the 7’6” Houston Rockets
center Yao Ming,” and calling the briefing “a vast time sinkhole, wasting unfathomed judicial
resources and delaying other court business”).
66. Antonin Scalia & Bryan A. Garner, Making Your Case: The Art of Persuading
Judges 7 (2008) (discussing importance of factual discussion at trial level).
67. See Heath & Heath, Made to Stick: Why Some Ideas Survive and Others Die
165–237 (discussing effect of emotional stories on persuasive content). For an extreme exam-
ple, see Labavue, 231 F.R.D. at 638 n.3 (“Plaintiffs’ briefing of the history of events at the Olin
facility frequently lapses into vituperative disparagement of defendants. For example, plain-
tiffs deride Olin’s ‘corporate greed’ and ‘arrogance,’ lambast its ‘profits over people corporate
philosophy,’ accuse it of hiring a contractor ‘who enjoyed Olin’s brand of deceit,’ characterize
Olin as an ‘unrepentant polluter,’ and lament that ‘[t]here is no end to Olin’s misconduct.’”)
(internal citations omitted). See also App. 5A at 2–10.
68. See In re Hydrogen Peroxide Antitrust Litig., 552 F. 3d at 312 (“Plaintiffs’ expert . . . offered an
opinion purporting to show that ‘there is common proof that can be used to demonstrate
that the alleged conspiracy to raise prices, restrict output and allocate customers would have
impacted all purchasers of hydrogen peroxide, sodium perborate, and sodium percarbonate.’
150 Chapter 5 The Class Certification Motion

the plaintiff might offer expert evidence that demonstrates the existence of
company-wide patterns of discrimination against women.69 Depending on
the subject matter of the litigation, the plaintiff might also offer a statistician
to demonstrate that she can demonstrate causation and damages elements
with common statistical proof, a tactic that has met with mixed success. (This
tactic appears most successful when used to demonstrate the common impact
of widespread discriminatory70 or anticompetitive71 conduct, less so when
plaintiffs seek to use it to substitute for proof of causation in traditional tort
actions.)72
Charts/visual evidence. Plaintiffs will often use charts to help keep straight
variations in state laws, product models, or prices of goods in different mar-
kets. Ideally, the plaintiff will group like with like, allowing her to highlight
similarities rather than differences. The plaintiff may also use other visual
evidence to make her points.73
Trial plan. The plaintiff also must discuss how the case will be tried. Many
courts have indicated that this goal is best served by submission of a trial
plan.74 Nonetheless, a number of plaintiffs either forgo this requirement, or

[His] ‘market analysis’ suggested that conditions in the hydrogen peroxide industry favored
a conspiracy that would have impacted the entire class.”).
69. Dukes v. Wal-Mart, Inc., 474 F. 3d 1214, 1225 (9th Cir. 2007) (“Plaintiffs presented . . . expert
opinions supporting the existence of company-wide policies and practices [and] expert sta-
tistical evidence of class-wide gender disparities attributable to discrimination”); see also
Melissa Hart & Paul M. Secunda, A Matter of Context: Social Framework Evidence in
Employment Discrimination Class Actions, 78 Fordham L. Rev. 37, 39 (2009) (“In the high-
stakes world of class action employment discrimination litigation, the battle over expert tes-
timony often determines the fate of the case. If the district court accepts the plaintiffs’ social
science expert testimony, chances are high that the proposed class will be certified. On the
other hand, rejection of the expert evidence generally comes hand-in-hand with a denial of
class certification.”).
70. See Dukes, 474 F.3d at 1228 (“It is well-established that commonality may be established by
raising an inference of class-wide discrimination through the use of statistical analysis.”);
Caridad v. Metro-N. Commuter R.R., 191 F.3d 283, 292 (2d Cir. 1999) (plaintiff used statisti-
cal evidence relevant to showing class-wide impact of alleged discrimination).
71. See In re Visa Check/MasterMoney Antitrust Litig., 280 F. 3d 124, 131 (“In support of their
motion for class certification, plaintiffs submitted an expert report . . .”)
72. See McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 232 (2d Cir. 2008) (refusing to certify class
where plaintiffs offered statistical evidence of effect of misrepresentation on price of ciga-
rettes); In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 194 F.R.D. 484, 495 (D.N.J.
2000) (refusing to certify class where plaintiff offered statistical evidence of vehicle fires to
create “rebuttable presumption” of causation).
73. Dillon & Cannon, Circle of Greed 116 (describing Lerach’s preferred graph, which laid
out a timeline of alleged misconduct compared to stock price); 151 (describing use of visual
aids during trial); Posner, How Judges Think 248 (visual evidence underused by
lawyers).
74. Fed. R. Civ. P. 23, 2003 Advisory Committee Notes (“An increasing number of courts require
a party requesting class certification to present a ‘trial plan’ that describes the issues likely to
 Defendant’s Certification Opposition 151

treat it as perfunctory. (There are sound strategic reasons for doing so. Among
them, a specific, detailed trial plan provides the defendant with a convenient
target to raise doubts about the viability of class certification, or the thor-
oughness of plaintiff’s analysis of the trial.)
However, the plaintiff should carefully consider providing a trial plan.
While not all courts require a trial plan before certifying a class,75 if the plain-
tiff does not provide a trial plan that addresses real issues for the trial, the
defendant may provide one of its own. And there is little doubt that the defen-
dant’s trial plan will emphasize the problems with trying the class, without
offering many solutions.

§ 5.2 Defendant’s Certification Opposition

For many defendants, the class certification opposition is the single most
important brief they will file in the case. (For some antitrust and securities
cases, in which the class-certification standards may be easier to meet,
the opposition brief may not be decisive, but will still have a large effect on the
remainder of the litigation by shaping the contours of the class and setting the
stage for favorable ground rules for trial.)

§ 5.2.1 Themes

Divide and conquer. The primary theme in every opposition to class certifica-
tion is the difficulty of proving so many class members’ claims in a single trial.
While the plaintiff emphasizes commonalities among the class, the defendant
will highlight differences, variations, and nuances.76 It will argue that unless
the court improperly relaxes the plaintiff’s burden of proving all substantive
elements of her claims, or deprives the defendant of its right to proffer all
exonerating evidence (whether common or individualized), the trial will be
so complicated as to be unmanageable. The defendant will usually advance
this argument by focusing as much attention as possible on the potentially

be presented at trial and tests whether they are susceptible of class-wide proof.”); see also In
re Hydrogen Peroxide Antitrust Litigation, 552 F. 3d at 319.
75. See Feder v. Elec. Sys. Data Corp., 429 F.3d 125, 139 (5th Cir. 2005) (“We did not hold in
Robinson, however, that the submission of a trial plan was a prerequisite for a finding of
superiority. Instead, we stated that a court must consider how a trial on the alleged causes of
action would be tried.”) (internal quotation omitted).
76. In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1300 (7th Cir. 1995) (Posner, J.) (“nuance can
be important” in class actions).
152 Chapter 5 The Class Certification Motion

outcome-determinative differences in the facts, and legal issues, that would

apply to different members of the proposed class.
Class actions are procedural. The defendant will also stress that the class
action is only a procedural device, and therefore, under the Rules Enabling
Act, cannot change the parties’ substantive rights. In other words, the plain-
tiff cannot be excused from her burden of proving—and the defendant cannot
be denied the right to challenge—each element of the claims asserted, simply
because doing so is necessary to facilitate efficient class litigation.77
Class actions are extraordinary measures. The defendant may stress the
unique nature of the class action. It will describe how a class action is a depar-
ture from the norm of individual litigation between a single plaintiff
and a single defendant.78 It will also argue that, because of the due process
implications of class litigation, the court should only consolidate the claims
of large numbers of people if it is convinced it can do so both efficiently and
without compromising the due process rights of all class members and the
defendant.
The court must engage in a “rigorous analysis.” The defendant will also
stress the need for the court to conduct a “rigorous analysis” of the proposed
class litigation to ensure it meets all Rule 23 requirements.79 In part, that
means that the court cannot simply rely on the allegations in plaintiffs’ plead-
ings.80 It also means that the court can (and should) examine the merits of the
case to the extent that inquiry will help it understand how the case will be
tried.81
Plaintiff bears a heavy burden. The defendant will remind the court that,
since she is asking the court to certify a class, the plaintiff—not the defen-
dant—bears the burden of demonstrating that she has met all of the require-
ments of Rule 23.82 In fact, at this point, several federal courts have held that

77. Calagaz v. Calhoon, 309 F.2d 248, 253 (5th Cir. 1962) (“Rule 23(a) is a convenient procedural
device that keeps a plaintiff from being disabled by the weight of numbers. It does not change
jurisdictional requirements.”).
78. General Tel. Co. v. Falcon, 457 U.S. 147, 155 (1982) (class action device is “an exception to the
usual rule that litigation is conducted by and on behalf of the individual named parties
only.”); see also App. 5B at 6.
79. See Falcon, 457 U.S. at 161; see also App. 5B at 7.
80. See Gariety v. Grant Thorton LLP, 368 F.3d 356, 365 (4th Cir. 2004) (“If it were appropriate for
a court simply to accept the allegations of a complaint at face value in making class action
findings, every complaint asserting the requirements of Rule 23(a) and (b) would automati-
cally lead to a certification order, . . .”).
81. See In re Hydrogen Peroxide, 552 F.3d at 308 (“Factual determinations supporting Rule 23
findings must be made by a preponderance of the evidence.”); In re Initial Pub. Offerings Sec.
Litig., 471 F.3d 24, 27 (2d Cir. 2006) (“the fact that a Rule 23 requirement might overlap with
an issue on the merits does not avoid the court’s obligation to make a ruling as to whether the
requirement is met”).
82. Gariety, 368 F.3d at 363.
 Defendant’s Certification Opposition 153

the plaintiff must prove, by a preponderance of the evidence, that she has met
the requirements of Rule 23.83 As a result, the defendant can often profitably
point to the ways in which plaintiff has not met her burden of persuasion, if
only because her brief has not thoroughly analyzed the issues presented by
the proposed class action.
What will the trial look like? The defendant may also describe to the court
what a class trial will look like if the parties paid attention to all of the poten-
tially relevant issues.84 If there are individualized issues of fact or law, the
defendant may point out exactly what kinds of inquiries the court will have to
engage in, including issues specific to subclasses or to individual class
members.85 The defendant may also point to specific jury instructions the
court may have to administer.86 The defendant will stress that the court (and
the jury) could not possibly keep all issues straight and render a sensible ver-
dict based on the evidence presented.

§ 5.2.2 Arguments Against Certification

§ 5.2.2.1 Numerosity

While the defendant may concede numerosity in many cases, there are cir-
cumstances in which challenging it is appropriate. First, the defendant can
challenge numerosity when the class actually does not contain enough mem-
bers to justify certification.87 Second, it can argue that argue that, despite the
numbers, joinder is feasible because, for example, the class is not that geo-
graphically diverse.88 Third, the defendant may be able to challenge numerosity

83. See In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d at 320; Alaska Elec. Pension Fund
v. Flowserve Corp., 572 F. 3d 221, 228 (5th Cir. 2009).
84. See In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 194 F.R.D. 484, 496 & n.11 (D.N.J.
2000) (class trial including hearings for proposed “related claims” would “take approximately
twelve years of judicial time”).
85. See Steering Comm. v. Exxon Mobil Corp., 461 F. 3d 598, 603 (5th Cir. 2006) (“While it is
certainly true that the cause of the fire itself is an issue common to the class, each individual
plaintiff must meet his or her own burden of medical causation, which in turn will depend
on any number of the factors enumerated by the experts who testified at the class certifica-
tion hearing.”).
86. See In re Rhone-Poulenc Rorer, 51 F.3d at 1300 (importance of nuance “is suggested by a
comparison of differing state pattern instructions on negligence and differing judicial formu-
lations of the meaning of negligence and the subordinate concepts”).
87. See Pruitt v. City of Chicago, 472 F. 3d 925, 926–27 (7th Cir. 2006) (in class with only 40
members from same city, joinder was practical) (Easterbrook, J.). Challenging numerosity is,
admittedly, a rare event, since few lawyers will invest the substantial time and resources
needed to pursue a class action on behalf of fewer than forty people.
88. See Andrews v. Bechtel Power Corp., 780 F.2d 124, 132 (1st Cir. 1985) (“Although the Bechtel
subclass had a maximum number of forty-nine members, numbers alone do not
154 Chapter 5 The Class Certification Motion

based on the plaintiff’s failure to meet her burden of providing evidence of

numerosity—that is, even if it were reasonable to assume there must be many
class members, the plaintiff’s failure to present evidence supporting that find-
ing precludes granting her motion.89 Finally, the defendant can challenge
numerosity by challenging the definition of the class. As discussed in greater
detail in Chapter 2, if the class definition is based on the merits of the case,
then, technically, the class has no members until a verdict has been rendered
in plaintiffs’ favor.90

§ 5.2.2.2 Commonality

At first blush, commonality appears difficult for a defendant to challenge. The

bar is set relatively low.91 However, the defendant can often take the plaintiff’s
list of “common questions” (identified in her complaint or her motion for
class certification) and show why they are not really common because differ-
ent claimant-specific packages of evidence may be relevant to the outcome of
each question. Particular challenges that have worked in the past include:
The class members’ conduct is not common. This approach will typically
come with challenges to the adequacy and typicality of the named plaintiff.92
To begin, the defendant describes the plaintiff’s particular experience: how
she came to invest in the defendant’s securities, buy its products, or become
exposed to its chemicals. The defendant then highlights the non-common
issues that the plaintiff’s conduct raises, and contrasts them with the conduct
of other putative class members, showing why those differences are material.
Proof of liability will not be common. The primary argument here tends to
be over causation. The most glaring example is in fraud-based cases.93 A par-
ticular subset of this argument that is worth examining in closer detail
involves securities-fraud class actions. Plaintiffs often argue that a class action
is particularly appropriate in securities-fraud cases because there has been a
“fraud on the market”: where efficient markets exist, a court may presume

determine numerosity. Judge Mazzone correctly noted that the members of the subclass
came from the same small geographic area—all living in southeastern Massachusetts—and,
therefore, could join or be joined in a suit of named parties.”).
89. See Golden v. City of Columbus, 404 F.3d 950, 966 (6th Cir. 2005) (no numerosity because
“reference to the total number of tenants in Columbus is not probative of the number of ten-
ants reasonably likely to face the harm for which Golden seeks redress”).
90. For more on ascertainability, see § 2.1.2. See also App. 5B at 26.
91. For more on commonality, see § 2.2.
92. As a number of courts have noted, commonality, typicality and adequacy all “tend to merge”
in the evaluation of whether a class should be certified. See Falcon, 457 U.S. at 157, n. 13.
93. Oscar Paine Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d 261, 265 (5th Cir. 2007) (“As a
matter of practice, the oft-chosen defensive move is to make any showing that severs the link
between the misrepresentation and the plaintiff ’s loss . . .”) (emphasis in original). For more
on the intersection between fraud and predominance, see §§ 2.7.2.
 Defendant’s Certification Opposition 155

that fraudulent statements are transmitted to all investors in the price of the
stock.94 However, it is often possible to challenge whether the plaintiff bought
those securities in an efficient market.95 Outside of publicly traded securities
(or other demonstrably efficient markets), courts will rarely presume reliance
in order to certify a class.96
Proof of defendant’s conduct will not be common. Often, despite plaintiffs’
intense focus on defendants’ “bad conduct,” the conduct at issue will not in
fact be common to the entire class. If plaintiffs have alleged some form of
fraudulent concealment of a problem, for example, knowledge of that prob-
lem (and with it, intentional concealment from the public) may have evolved
over time.97
Proof of injury will not be common. A number of courts have held that
mere variations in the proof of damages by themselves will not prevent class
certification.98 However, if the damages to be proved might vary so much that
some plaintiffs will have actually been harmed while others might not (such
as when plaintiffs must prove diminution in value), then variations in the
proof of damages may not be common at all.99

§ 5.2.2.3 Typicality

In arguing typicality, the defendant will focus on the various ways in which the
named plaintiff’s individual claim differs from those of the proposed absent
class members. Not all differences will render a named plaintiff atypical.100
However, differences that could change the outcome at trial will. The theme
for the defendant to remember “is simply stated: as goes the claim of the

94. See Basic, Inc. v. Levinson, 485 U.S. 224, 241–42 (1988).
95. See Oscar Private Equity Invs., 487 F.3d at 269–70; see also Steven Serajeddini, Loss Causation
and Class Certification, 108 Mich. L. Rev. 255, 263–67 (2009) (explaining types of evidence
used to rebut fraud-on-market presumption in securities markets).
96. McLaughlin, 522 F.3d at 224 (“Basic involved an efficient market—the market in securities
traded on the New York Stock Exchange—capable of rapidly assimilating public informa-
tion into stock prices; the market for consumer goods, however, is anything but efficient.”).
97. See In re Ford Motor Co. Vehicle Paint Litig., 182 F.R.D. 214, 220 (E.D. La. 1998) (refusing to
certify class where “there is evidence that Ford’s state of knowledge was not uniform over
the period in issue and that certain of its alleged ‘concealing’ activities occurred in 1992,
which could not have affected plaintiffs’ purchasing 1990 model-year vehicles”).
98. See McLaughlin, 522 F.3d at 231 (“the fact that damages may have to be ascertained on an
individual basis is not, standing alone, sufficient to defeat class certification”).
99. Montgomery v. New Piper Aircraft, Inc., 209 F.R.D. 221, 230 (S.D. Fla. 2002) (refusing to
certify class of aircraft purchasers because “[c]alculating damages under FDUTPA requires
an in-depth analysis of market-value depletion due to the ‘deceptive’ trade practice. Such an
inquiry automatically invokes an aircraft-by-aircraft inquiry into (1) when and where each
plane was purchased, (2) when the plane was sold (if applicable), and (3) the current market
value of each plane”).
100. See § 2.3.
156 Chapter 5 The Class Certification Motion

named plaintiff, so go the claims of the class.”101 As a result, there are several
issues that the defendant should look for in deciding whether to challenge
typicality.
The named plaintiff has a particularly strong claim. Sometimes, the named
plaintiff is an individual who has had such a bad experience with the defen-
dant that she has become motivated to file a lawsuit—despite the fact that
most class members’ experiences were satisfactory. Ironically, in cases like
these, the better the particular named plaintiff’s story, the better the chances
of defeating class certification, because the defendant can show that the class
representative’s personal claim is so much stronger than that of most putative
class members that she is “atypical” of the class.102
The named plaintiff is subject to unique defenses. If the named plaintiff’s
situation is sufficiently unusual, then she may be subject to unique defenses.103
Some of the more potent unique defenses include: unclean hands,104 unique
treatment from defendants,105 or conduct that undermines the cause of
action.106

101. Sprague v. Gen. Motors Corp., 133 F.3d 388, 399 (6th Cir. 1998).
102. Broussard, 155 F.3d at 340 (plaintiff franchisees could not represent other franchisees
because language in their franchise contracts differed, “mak[ing] plaintiffs’ case stronger”);
see also App. 5B at 27–28.
103. See Beck v. Maximus, 457 F.3d 291, 297 (3d Cir. 2006) (“Other courts of appeals emphasize,
as do we, the challenge presented by a defense unique to a class representative—the repre-
sentative’s interests might not be aligned with those of the class, and the representative
might devote time and effort to the defense at the expense of issues that are common and
controlling for the class.”); Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner,
& Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990) (“[C]lass certification is inappropriate where
a putative class representative is subject to unique defenses which threaten to become the
focus of the litigation”); Hanon v. Data Prods. Corp., 976 F.2d 497, 508 (9th Cir. 1992)
(same).
104. See, e.g., Boca Raton Cmty. Hosp., Inc. v. Tenet Healthcare Corp., 238 F.R.D. 679, 694 (S.D.
Fla. 2006) (refusing to certify class because named plaintiff ’s conduct was identical to
defendant’s, rendering it vulnerable to defense of unclean hands).
105. See, e.g., Joseph L. v. Conn. Dep’t of Children and Families, 161 F. App’x 72, 75 (2d Cir. 2005)
(in class action seeking right to hearing to contest conditions of treatment, fact that named
plaintiff had been offered hearing rendered him atypical of class); Exelon v. Gaston, 247
F.R.D. 75, 84 (E.D. Pa. 2007) (named plaintiffs in employment-discrimination class action
were not typical where they had been disciplined for legitimate reasons); Porter
v. NationsCredit Consumer Disc. Co., 229 F.R.D. 497, 499 (E.D. Pa. 2005) (named plaintiffs
in TILA class action were not typical where they had received disclosures from defendant).
106. See, e.g., Spann v. AOL Time Warner, Inc., 219 F.R.D. 307, 318 (S.D.N.Y. 2003) (no typicality
in ERISA class where named plaintiffs did not exhaust administrative remedies before
bringing lawsuit); Rocco v. Nam Tai Elecs., Inc., 245 F.R.D. 131, 136 (S.D.N.Y. 2007) (refusing
to certify securities-fraud class action where named plaintiff bought more of defendant’s
securities after alleged fraud was revealed).
 Defendant’s Certification Opposition 157

§ 5.2.2.4 Adequacy

In challenging plaintiff’s compliance with the adequacy of representation

requirement, the defendant may focus on the following issues:
The plaintiff has abdicated responsibility to her lawyers. As discussed above,
courts have repeatedly held that not all professions of ignorance or deference
to plaintiff’s counsel render a named plaintiff inadequate.107 However, evi-
dence that the named plaintiff cannot exercise independent oversight over
her attorneys may render her inadequate.108 As a result, the defendant may
argue that certain facts about the named plaintiff show that she has abdicated
responsibility to her lawyers. Those facts may include:

• an ignorance of key facts in the litigation;109

• a willingness to speculate without foundation;110
• references to blind reliance on counsel.111

The plaintiff has conflicts with the class. Intra-class conflicts are a very real
reason to find a named plaintiff inadequate.112 The defendant should look for,
among other things, whether the conduct plaintiff challenges might actually
benefit other members of the proposed class,113 or whether the named plain-
tiff would wind up in competition with the class members for any relief from
the lawsuit.114

107. See §§ 2.4, 5.1.2.4.

108. See Berger v. Compaq Computer Corp., 257 F.3d 475, 482–83 (5th Cir. 2001)
109. See id. at 481 n.10 (defendant argued that the named plaintiffs’ “shortcomings include
taking positions in conflict with the Complaint [and] basing allegations on
misinformation”).
110. See id. (defendant argued that the named plaintiffs’ deposition testimony showed them
“speculating without foundation about accusations of fraud against individuals”).
111. See id. (defendant argued that the named plaintiffs’ deposition testimony showed “blind
reference on counsel”).
112. See § 2.4.
113. See Pickett v. Iowa Beef Processors, 209 F.3d 1276, 1280–81 (11th Cir. 2000) (while named
plaintiffs lost money on forward contracts, other class members benefitted, rendering
named plaintiffs inadequate representatives).
114. See Gen. Tel. Co. v. EEOC, 446 U.S. 318, 331 (1980) (“In employment discrimination litiga-
tion, conflicts might arise, for example, between employees and applicants who were denied
employment and who will, if granted relief, compete with employees for fringe benefits or
seniority. Under Rule 23, the same plaintiff could not represent these classes.”); Armstrong v.
Powell, 230 F.R.D. 661, 678 (W.D. Okla. 2005) (noting “potential for conflict between the
former employees and current employees, as the former employees may focus on the poten-
tial for monetary relief because they would not benefit from the injunctive relief sought by
the current employees”).
158 Chapter 5 The Class Certification Motion

The plaintiff is too close to her lawyers. If the named plaintiff has a close
personal relationship with her lawyers, that may render her inadequate.115
Among other questions, the defendant may probe into whether the named
plaintiffs are business partners,116 employees,117 blood relations,118 related by
marriage,119 or longstanding friends.120
The plaintiff lacks the personal character to represent the class. The defen-
dant should be careful about advancing this argument, since courts are under-
standably reluctant to pass judgment on the character of a plaintiff relatively
early in the litigation. However, if evidence exists that clearly impeaches the
plaintiffs’ personal integrity (for example, a previous criminal conviction),
the defendant may consider challenging adequacy on this basis.121

§ 5.2.2.5 Predominance

Many of the arguments a defendant will advance about why individual issues
will predominate over common issues will be similar to those described above
in the commonality section. From a defendant’s viewpoint, the primary dif-
ference between commonality and predominance is the stringency of the
standard.
The defendant’s opposition will often attempt to paint the court a portrait
of a class trial that (if the court respects all parties’ due process rights) would
devolve into chaos. The defendant may walk the court through each element
of each proposed class claim, identifying those elements that would require
different packages of evidence for different class members.122 Having
gone through that thorough analysis, the defendant may circle back and
argue that resolution of any common issues will still leave many important
claimant-specific issues that require individualized discovery, motions, and

115. See Susman v. Lincoln Am. Corp., 561 F.2d 86, 95 (7th Cir. 1977); London v. Wal-Mart Stores,
Inc., 340 F.3d 1246, 1255 (11th Cir. 2003).
116. See London, 340 F.3d at 1255 (finding potential conflict of interest where named plaintiff
was former business partner of class counsel).
117. See Shroder v. Suburban Coastal Corp., 729 F. 2d 1371, 1374–75 (11th Cir. 1984) (employee
of counsel not adequate class representative).
118. See Susman, 561 F.2d at 95 (plaintiff whose brother was class counsel not adequate class
representative).
119. See Petrovic v. Amoco Oil Co., 200 F. 3d 1140, 1155–56 (8th Cir. 1999) (named plaintiff who
was sister-in-law of counsel not adequate class representative).
120. See London, 340 F.3d at 1255 (finding conflict of interest where named plaintiff was close
personal friend of class counsel).
121. See, e.g., Davidson v. Citizens Gas & Coke Util., 238 F.R.D. 225, 229 (S.D. Ind. 2006) (“per-
sonal characteristics, such as the credibility and integrity of a putative class representative,
have a direct bearing on their ability to adequately represent absent members of the
class”).
122. See App. 5B at 7–25.
 Defendant’s Certification Opposition 159

hearings—so many, in fact, that there is no way that single trial could resolve
the putative class members’ claims.
Here are some of the most common reasons a defendant may invoke to
show how the predominance requirement has not been met:
State law variations predominate. While, with the accumulation of federal
cases refusing to certify multi-state classes, plaintiffs do not assert multi-state
class actions as frequently, this is still one of the primary reasons to deny class
certification in a given case.123
Individual issues of causation will predominate. In many tort class actions,
such as those asserting fraud or negligence, class members may not be able to
prove causation using general proof.124 For example, in product-defect class
actions, plaintiffs will often seek to prove the existence of a “common defect.”
Defendants may challenge the predominance of proof of that defect by point-
ing to variations in design, manufacturing, and owner use that would affect
whether the defect manifested itself.
Individual issues of damages will predominate. Courts do not always find
variations in damages to be enough to defeat certification.125 However, if
there are other problems establishing predominance, then courts may find
variations in establishing damages to be one more reason not to certify a
class.126

§ 5.2.2.6 Superiority

The defendant will usually stress several issues in arguing that class litigation
is not the superior way to resolve the class members’ legal rights.
Individual litigation is superior to class action litigation. There are three
situations in which this argument is particularly persuasive. The first is when
there has been a developed history of plaintiffs filing individual lawsuits over
the issue presented by the class action.127 In those cases, the defendant has a
persuasive empirical argument that plaintiffs who really need legal relief can
seek—and, in fact, have sought—it on their own.

123. In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 288 F.3d at 1015 (“No class action is
proper unless all litigants are governed by the same legal rules.”); see also Samuel Issacharoff
& Richard A. Nagareda, Class Settlements Under Attack, 156 U. Pa. L. Rev. 1649, 1682–83
(2008) (noting defendant’s strategic use of variations in state laws).
124. For more on how causation intersects with predominance, see § 2.7.1.
125. See McLaughlin, 522 F.3d at 231.
126. O’Sullivan v. Countrywide Home Loans, 319 F.3d 732, 744 (5th Cir. 2003); King’s Choice
Neckwear, Inc. v. FedEx Corp., Civil Action No. 07-CV-275 (DMC), 2009 WL 689718, at *4
(Mar. 11, D.N.J. 2009) (declining to certify class where individual liability issues predomi-
nate and it “appears that the Court would be required to conduct a series of ‘mini-trials’ to
determine damages”).
127. In re Stucco Litig., 175 F.R.D. 210, 218 (E.D.N.C. 1997) (“the number of independent actions
already filed also raises some concern as to the potential size of the opt out class”).
160 Chapter 5 The Class Certification Motion

The second is when the value of individual damages claims are high on
their own.128 In this case, the defendant may argue that there is no real obsta-
cle to the plaintiff (or any individual class member) seeking relief if she really
believes she was injured, and that a plaintiff who suffered significant damages
probably would prefer to hire her own lawyer and sue the defendant in her
local court.
The third is when the statute under which plaintiff has brought her claim
authorizes attorneys fees (like a state consumer-fraud act).129 In these cases,
there are no structural impediments to an individual bringing his own law-
suit. In fact, a number of these statutes, in their legislative histories, will
explicitly state that the reason for the attorneys’-fee provisions is to enable
individuals to file their own lawsuits.
Class litigation is not superior to government action. In some cases, plain-
tiffs’ lawsuit may cover the same ground as a government regulatory agency.
In those cases, defendants may argue that the superior way of resolving the
controversy is to allow the government agency to do its job.130 This argument
is stronger if the agency has actually begun an investigation, or performed
some other action.131 This argument does not always persuade, and, in cer-
tain instances, courts have split on whether a particular agency’s action is
superior to class-action litigation.
A class action will not be superior because it is not manageable. A number of
courts also find that class actions are not superior to other forms of litigation

128. See Castano, 84 F.3d at 748 (no superiority where “individual damage claims are high, and
punitive damages are available in most states”); County of Santa Clara v. Astra USA, Inc., 257
F.R.D. 207, 213 (N.D. Cal. 2009) (no superiority where “the sums at stake are likely large
enough for the 340B entities to justify launching their own stand-alone suits. Each entity
would be able to protect its own interests. Put differently, the 340B entities are not consum-
ers with small claims that need a collective action to vindicate their rights. They are sophis-
ticated and, more to the point, they have sufficiently large stakes involved to justify their
own litigation catered to their own circumstances”); Blaine v. SmithKline Beecham Corp.,
240 F.R.D. 179, 192 (E.D. Pa. 2007) (“because the potential value of each individual’s claim
is high, each has a compelling interest in controlling strategic decisions throughout the liti-
gation and having those decisions made by the attorney of his or her choice”).
129. See Castano, 84 F.3d at 748 (plaintiffs’ proposed class action not superior in part because
statutory attorneys’ fees available for individual lawsuits).
130. In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 288 F.3d at 1019 (“Regulation by the
NHTSA, coupled with tort litigation by persons suffering physical injury, is far superior to
a suit by millions of uninjured buyers for dealing with consumer products that are said to be
failure-prone.”) (emphasis in original); In re Ford Motor Co. Ignition Switch Prods. Liab.
Litig., 174 F.R.D.at 353 (where plaintiffs brought no-injury class action alleging defect in
ignition switch system, “the administrative remedy provided by NHTSA, including recall of
vehicle for inspection and/or repair, is more appropriate than civil litigation seeking money
damages in a federal court”).
131. Kamm v. Cal. City Dev. Co., 509 F.2d 205, 211 (9th Cir. 1975) (state agency investigation into
land fraud superior where “the court here is not simply considering ‘possible administrative
relief ’, but rather a remedy which has already been instituted”).
 Defendant’s Certification Opposition 161

because they are not manageable.132 From a doctrinal standpoint, this inquiry
is very similar to the analysis of predominance. From a rhetorical standpoint,
the defendant’s argument focuses on how the mechanics of making individual-
ized inquiries that will render the litigation unmanageable. In particular, defen-
dants will often focus on the amount of court time required to hear testimony
from each individual witness,133 or the difficulties in instructing a jury on a
number of varying claims that frequently involve conflicting state laws.134
In addition, a defendant may be able to make several rebuttal points to
plaintiffs’ class-action arguments. For example, several courts have found
that the presence of negative-value suits by themselves may not be enough to
justify finding a class action superior to other forms of litigation.135
Certifying a class will create inordinate pressure to settle. While not yet
a common argument, at least one court has held that the fact that certifying a
class “would place hydraulic pressure on defendants to settle . . . weighs in the
superiority analysis.”136 Other courts, however, have held that mere pressure
to settle is not enough to render a class action inferior to other methods of
resolving the litigation.137

§ 5.2.3 Packaging the Presentation

Background section. Defendants often face a strong temptation to issue a

point-by-point rebuttal of the bad conduct plaintiffs allege in their background
section. While no defendant should allow false statements of fact to pass
unchallenged, this usually is not as productive a strategy as other alternatives.

132. See Newton, 259 F.3d at 191 (“In terms of efficiency, a class of this magnitude and complex-
ity could not be tried. There are simply too many uncommon issues, and the number of
class members is surely too large. Considered as a litigation class, then, the difficulties likely
to be encountered in the management of this action are insurmountable.”) (internal cita-
tions omitted).
133. See, e.g., In re Ford Motor Co. Ignition Switch Prods. Liab. Litig., 194 F.R.D. at 496 (“Even
assuming that the number of contested claims could—as plaintiff suggests—through
discovery be narrowed to 3,000, and that the individual ‘rebuttal trials’ were to average just
four hours each (a conservative estimate), the second phase of the trial would take approx-
imately twelve years of judicial time. This would not serve the public well, nor would it
provide relatively prompt remediation of the valid claims that exist.”).
134. Lyon v. Caterpillar, Inc. 194 F.R.D. 206, 221 (E.D. Pa. 2000) (“If I find plaintiff ’s jury instruc-
tions confusing, how can I expect a lay jury to wade through these question[s]?”).
135. See Newton, 259 F.3d at 191 (presence of some negative-value suits “by itself is insufficient
to overcome the hurdles of predominance and superiority and efficient and fair manage-
ment of a trial, which Rule 23(b) requires”).
136. See, e.g., id. at 192.
137. See In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d at 145 (“The effect of certifica-
tion on parties’ leverage in settlement negotiations is a fact of life for class action litigants.
While the sheer size of the class in this case may enhance this effect, this alone cannot defeat
an otherwise proper certification.”).
162 Chapter 5 The Class Certification Motion

The most effective use of the background section is often to: (1) tell the
defendant’s story in a way that highlights the various individualized issues
that might arise during the course of the trial, and (2) focus on the plaintiffs’
conduct that will be necessary to prove the elements of each claim at trial. For
example, if the defendant is accused of negligence, the brief may note that any
trial of such claims will require a claimant-specific inquiry to determine if
each class member participated in acts that could constitute contributory or
comparative negligence.138 If the defendant is accused of fraud, the brief will
likely note that litigating fraud claims requires proving, on a claimant-specific
basis, what representations each class member heard, and whether she relied
on those representations to her detriment.139
Argument section. The defendant faces a different challenge than the plain-
tiff in drafting the argument section. On the one hand, it will want to high-
light as many variations, nuances, and complications as it can to show why a
class-wide trial will not resolve the issue in front of the court. On the other
hand, the defendant also needs to produce a readable, understandable brief
that fits within any page-limits the court imposes.
Expert reports. At the class-certification stage, the defendant uses expert
reports for three purposes: to provide a preview of what the expert will say
about the merits at trial, to explain what factual nuances may prevent certifi-
cation of the class, and to rebut plaintiff’s experts. Defense expert reports can
shore up a number of the defendant’s points, such as demonstrating that the
class as defined is not ascertainable140 or that common factual issues will not
predominate over individualized issues of causation.141
In addition, certain types of class actions may require specific expert
reports. A defendant in a securities class action will often rely on an event
study to rebut the applicability of the efficient-market hypothesis (which
allows the court to presume reliance on any fraudulent statements).142

138. See § 2.7.1 (discussing role of affirmative defenses in predominance analysis).

139. See In re St. Jude Med., Inc., 522 F.3d 836, 838 (8th Cir. 2008) (“Because proof often varies
among individuals concerning what representations were received, and the degree to which
individual persons relied on the representations, fraud cases often are unsuitable for class
treatment.”); Szabo, 249 F.3d at 674 (declining to certify class where “oral representations
may vary substantially from one dealer (or occasion) to another, destroying the commonal-
ity of the claims”).
140. See Cook v. Rockwell Int’l Corp., 151 F.R.D. 378, 383 (D. Colo. 1993) (defense experts chal-
lenged plaintiffs’ estimates of exposure to hazardous materials given dispersion patterns).
The trial court ultimately certified a medical monitoring class and property class for further
proceedings. Id. at 384.
141. See Steering Comm., 461 F. 3d at 603 (defense experts explained individual factors required
to establish causation in proposed class action regarding oil leak); Sanneman v. Chrysler
Corp., 191 F.R.D. 441, 444 n.2 (E.D. Pa. 2000) (defense expert explained individualized
causes of peeling paint).
142. See In re Enron Corp. Sec. & ERISA Litig., 529 F. Supp. 2d 644, 662 (S.D. Tex. 2006)
(“Moreover, argue the Financial Defendants, the market for the Foreign. Debt Securities
 Plaintiff ’s Certification Reply 163

Similarly, a defendant in an antitrust class action will often submit an expert

report providing an econometric analysis of prices during the class period, to
show that there is no common class-wide proof establishing the causes for
higher or lower prices.143
State-law variations appendix. Throughout the 1990s and early 2000s, the
state-law variations appendix was a mainstay for defense lawyers. As plain-
tiffs sought to certify nationwide classes asserting state-law claims, defendants
would provide extensive analyses of the crippling variations in the laws of the
various states. In cases where the defendant uses a state-law appendix, it will
often provide a preview of the greatest conflicts in the argument section of the
brief, with a more thorough discussion of all states in the appendix. If a defen-
dant elects to use a state-law variations appendix, thoroughness is critical.

§ 5.3 Plaintiff ’s Certification Reply

Plaintiff’s reply is often where she truly joins the argument. Once the plaintiff
is aware of the specific critiques the defendant has raised, she will discuss
those arguments in further depth.144
The plaintiff faces a real challenge with the class certification reply. If the
defendant has raised a number of different arguments against certifying a
class, the plaintiff must address each one without leaving the impression that
the class trial will devolve into a series of disparate but necessary debates over
various legal and factual issues. There are several ways the plaintiff can accom-
plish this balancing act:

• Return to defendant’s alleged bad conduct.145 This tactic has two distinct
advantages. First, it reminds the court that the defendant’s bad conduct
is the central issue in the case, and that that issue is common to all of the
class members. Second, many courts may be reluctant to allow defen-
dants to benefit from individualized issues that may have arisen because
of their own negligence or fraudulent conduct.

was inefficient. [The] data reflect that the Foreign Debt Securities were thinly traded in the
secondary market, while . . . . Deutsche Bank’s expert on market efficiency[] shows they had
small weekly turnover rates and low trading frequencies.”).
143. See In re Hydrogen Peroxide, 552 F.3d at 313 (“Defendants offered the opinion of their own
expert economist . . . to ‘provide an independent expert assessment of whether certification
of the proposed class of Plaintiffs is appropriate in this matter.’”).
144. See Winkler v. DTE, Inc., 205 F.R.D. 235, 238 (D. Ariz. 2001) (“in response to concerns
raised in the Defendant’s Response, the Plaintiffs revised their proposals and presented the
following classes and subclasses”).
145. See App. 5C at 2–17.
164 Chapter 5 The Class Certification Motion

• Show where variations are superficial or inconsequential. Sometimes,

defendants will offer variations that, while superficially appealing,
have little effect on the litigation’s central common issues. In these
cases, showing why even just a few of these variations will not affect a
class trial can persuade the court that the other variations are similarly
inconsequential.
• Show where variations or conflicts are speculative. Depending on the
level of discovery the defendant conducted, it may argue that certain
conflicts among class members or certain variations exist, even though
it lacks hard evidence to back up its claims. In those cases, the plaintiff
may to point out the speculative nature of the argument.146
• Suggest subclassing. If a limited number of issues will have an effect on
the litigation, the plaintiff may also suggest creating a limited number
of subclasses, which will allow for different proof without devolving
into individual trials.147 The plaintiff should be careful to ensure that
each subclass can still independently meet the requirements of Rule
23.148
• Offer a trial plan. If the plaintiff has not already, she may offer a trial
plan to counteract the defendants’ criticisms.149 The plaintiff may sug-
gest bifurcation of common issues from non-common issues, or the
use of special jury instructions to avoid predominance problems.

§ 5.4 The Certification Hearing

One issue both sides will need to decide is whether to have a class certification
hearing, and, if so, whether it should be merely oral argument or be a full-
fledged evidentiary hearing.
While nothing in Rule 23 requires a court to hold oral argument, it is con-
sidered good practice to do so.150 Some courts will decide class certification
on the basis of briefing only.151 However, many courts will afford the parties

146. See Gunnells, Inc., 348 F.3d at 430 (“To defeat the adequacy requirement of Rule 23, a con-
flict ‘must be more than merely speculative or hypothetical.’”) (quoting 5 Moore’s Federal
Practice § 23.25[4][b][ii] (2002)).
147. See Miles v. Am. Online, Inc., 202 F.R.D. 297, 305 n.6 (M.D. Fla. 2001) (noting that variations
in state law could be overcome by creation of subclasses).
148. Fed. R. Civ. P. 23(c)(5) (“When appropriate, a class may be divided into subclasses that are
each treated as a class under this rule.”); see also In re Ins. Brokerage Antitrust Litigation, 579
F. 3d 241, 271 (3d Cir. 2009).
149. See App. 5C at Ex. A.
150. See Manual for Complex Litigation (Fourth), § 21.21 (2004).
151. See, e.g., In re Ford Motor Co. Bronco II Prod. Liab. Litig., 177 F.R.D. 360, 363 (E.D. La. 1997)
(finding “no hearing necessary”).
 The Certification Hearing 165

an opportunity for at least oral argument, and some will hold full evidentiary
hearings, complete with testimony from witnesses.152
Oral argument provides each party with the chance to spotlight the themes
important to the class certification debate, and to emphasize its strongest
arguments. Oral argument also allows each side to address the concerns of the
court. If budget or technology allows, each side might consider bringing visual
aids, such as PowerPoint presentations or blowups of charts or photographs.
While each side will have points it wants to make sure it raises or empha-
sizes, the hearing is for the court’s benefit, and it is usually wisest to allow the
court to direct the proceedings as it wishes.
For most class actions, the briefing of class certification represents the
climax of both sides’ efforts. If the court refuses to certify a class, then little
remains in the litigation but to resolve the plaintiff’s individual claims, a task
that can usually be accomplished through an inexpensive settlement or a brief
trial. If the court certifies a class, however, the parties face several options for
resolving the class-wide claims, including a class trial or a class-wide settle-
ment. However, before any of these events may occur, the losing party will
likely appeal the certification ruling. And if a class has been certified, then the
parties must notify the class of the claims asserted on its behalf. These post-
certification steps are the subject of the next chapter.

152. See, e.g., Andrews v. Am. Tel. & Telegraph Co., 95 F.3d 1014, 1019–20 (11th Cir. 1996)
(“Andrews, along with the other named plaintiffs in Harper, testified at the hearing.”);
Labavue, 231 F.R.D. at 637 (“The parties also presented live testimony and argument in a
two-day class certification hearing . . .”).
 CHAP TER

6
Post-Certification Steps

§ 6.1 Interlocutory Appeal 168

§ 6.1.1 Rule 23(f) Standards for Obtaining Interlocutory Appeal 168
§ 6.1.2 Grounds for Appeal 169
§ 6.1.3 How Appellate Courts Review Certification Orders 175
§ 6.1.4 Stays 175
§ 6.1.5 Packaging the Rule 23(f) Petition 176
§ 6.1.6 Packaging the Rule 23(f) Petition Response 177

§ 6.2 Class Notice 177

§ 6.2.1 When/Why Notice Required 178
§ 6.2.2 Timing of Notice 179
§ 6.2.3 Form of Notice 180
§ 6.2.4 Content of Notice 185
§ 6.2.5 Cost of Notice 189
168 Chapter 6 Post-Certification Steps

While we have characterized the certification decision as the “main event” in

class-action litigation, the litigation does not end with the certification deci-
sion. Given the tremendous effect the certification decision has on class-
action litigation, it is virtually certain that the party that loses the motion will
seek an interlocutory appeal. And if the court certifies a class, then it must
also order notice to all of the class members.

§ 6.1 Interlocutory Appeal

Once class certification has been decided, the losing party will usually wish to
appeal immediately under Rule 23(f). For a losing defendant, the risk of trying
the case as a class action and then appealing an adverse judgment is usually
too high to accept; if that were the only path forward, the defendant would
likely settle instead, even if it believes an appellate court likely would reverse
the class certification order. For a losing plaintiff, it is often not economically
viable to try her case as an individual lawsuit through to judgment and then
appeal; instead, the plaintiff often will decide to dismiss the case in its entirety,
even if she believes an appellate court would likely reverse the class certifica-
tion denial.

§ 6.1.1 Rule 23(f) Standards for Obtaining

Interlocutory Appeal

Despite the fact that a class-certification decision is not a “final judgment”

under 28 U.S.C. § 1291, Rule 23(f) allows the losing party to petition the
Court of Appeals for an interlocutory appeal of the class-certification deci-
sion. Specifically, Rule 23(f) provides that 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 10 days after the order is entered. An appeal does
not stay proceedings in the district court unless the district court or the court of
appeals so orders.1

This rule represents a departure from the “final judgment” rule, which holds
that appellate courts should only review judgments that have been rendered
final.2 Petitions for interlocutory appeal are reviewed at the sole discretion of

1. Fed. R. Civ. P. 23(f).

2. See, e.g., 28 U.S.C. § 1291 (“The courts of appeals . . . shall have jurisdiction of appeals from all
final decisions of the district courts of the United States . . .”).
 Interlocutory Appeal 169

the appellate court “on the basis of any consideration that the court of appeals
finds persuasive,” an exercise of discretion similar to the Supreme Court’s
grant of certiorari.3 The petition is due within ten days after the certification
decision has issued.4 While a motion for reconsideration filed in the lower
court within the ten-day period can toll the deadline,5 that ten-day deadline is
otherwise not negotiable.6
If the appellate court grants the petition for review, it will order briefing on
the merits of the appeal and oral argument. If it denies the petition, the appel-
late effort is over, at least until the case reaches a final judgment.

§ 6.1.2 Grounds for Appeal

Given their unfettered discretion to allow (or decline) immediate appeals of

class certification decisions, different circuits have adopted different stan-
dards for determining whether to allow interlocutory appeals. Several courts
of appeal, including the Second Circuit, have expressed concern about
interfering with the trial court’s discretion to decide whether a proposed class
warrants certification.7
Over time, appellate courts have identified several categories of class certi-
fication rulings that they are more likely to review on appeal. These categories
are not exclusive; several circuits have explicitly left “open the possibility that
a petition failing to satisfy [the enumerated] requirements may nevertheless
be granted where it presents special circumstances that militate in favor of an
immediate appeal,”8 or to “deny leave to appeal in cases that seem superfi-
cially to fit into one of these . . . pigeonholes,”9 and a number of courts accept

3. Fed. R. Civ. P. 23(f), Advisory Committee Note, 1998.

4. Id.
5. Jenkins v. Bellsouth Corp., 491 F.3d 1288, 1290 (11th Cir. 2007).
6. See, e.g., Jenkins, 491 F.3d at 1289 (denying district court’s attempt to allow appellants to file
untimely appeal by vacating and then reinstating class certification order in order to toll dead-
line); Delta Airlines v. Butler, 383 F.3d 1143, 1145 (10th Cir. 2004) (court has no discretion to
extend deadline for 23(f) appeals); McNamara v. Felderhof, 410 F.3d 277, 281 (5th Cir. 2005)
(deadline may not be extended by motion to reconsider); Gary v. Sheahan, 188 F.3d 891,
892–93 (7th Cir. 1999) (“to ensure that there is only one window of potential disruption, and
to permit the parties to proceed in confidence about the scope and stakes of the case thereaf-
ter, the window of review is deliberately small”).
7. Sumitomo Copper Litig. v. Credit Lyonnais Rouse, 262 F.3d 134, 139 (2d Cir. 2001) (“Our deter-
mination of whether the district court’s decision is sufficiently questionable to warrant inter-
locutory review will be tempered by our longstanding view that the district court is often in
the best position to assess the propriety of the class”); Prado-Steiman v. Bush, 221 F.3d 1266,
1273 (11th Cir. 2000) (“Rule 23(f) should not be a vehicle for courts of appeals to micro-
manage complex action class litigation as it unfolds in the district court.”).
8. Sumitomo Copper, 262 F.3d at 140.
9. Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 294 (1st Cir. 2000).
170 Chapter 6 Post-Certification Steps

or deny petitions under Rule 23(f) without ever disclosing their reasons for
doing so.10 Indeed, as Judge Diane Wood (of the Seventh Circuit Court of
Appeals) once observed:

The vast majority of our rulings on 23(f) motions are not published. It just hap-
pens quietly in the chambers of the judges and we normally don’t take them, so
you’re going to have a distorted view of what’s going on if you’re looking only at
the published opinions.11

However, published decisions granting or denying Rule 23(f) petitions do

offer some guidance as to the circumstances in which courts will allow inter-
locutory review of class certification orders.
The petitioner’s strongest strategy is to explain the special circumstances
posed by the particular case. While the following discussion explores some of
the factors appellate courts have expressly stated will guide their decision
whether to review an order, given their wide discretion under Rule 23(f), the
overriding justification will always be that the court is interested in the ques-
tions the case poses. So, above all else, a Rule 23(f) petition should make the
case interesting to the court.
What follows is a list of the various justifications federal appellate courts
have invoked for hearing Rule 23(f) appeals, along with some general advice
as to when and how to offer those justifications.
Death knell. The most dramatic-sounding category is the “death-knell”
case, in which the grant or denial of class certification will effectively end the
litigation, either because the aggregate damages available to a certified class
are so large the defendant will have no choice but to settle,12 or because the

10. See, e.g., Busby v. JRHBW Realty, Inc., 513 F.3d 1314, 1319 (11th Cir. 2008) (noting that it
“accepted jurisdiction over this appeal pursuant to Federal Rule Civil Procedure 23(f),” but
not citing reason for doing so).
11. Diane P. Wood, FTC Workshop—Protecting Consumer Interests In Class Actions, September
13–14, 2004: Workshop Transcript: Panel 2: Tools for Ensuring that Settlements Are “Fair,
Reasonable, and Adequate,” 18 Geo. Legal Ethics 1197, 1213 (2005).
12. Blair v. Equifax Check Serv., 181 F.3d 832, 834 (7th Cir. 1999) (“just as a denial of class status
can doom the plaintiff, so a grant of class status can put considerable pressure on the defen-
dant to settle, even when the plaintiff ’s probability of success on the merits is slight”); In re
New Vehicle Canadian Export Antitrust Litig., 522 F.3d 6, 8 (1st Cir. 2008) (“Interlocutory
appeals from class certification under Rule 23(f) are especially appropriate . . . where a doubt-
ful class certification results in financial exposure to defendants so great as to provide substan-
tial incentives for defendants to settle non-meritorious cases in an effort to avoid both risk of
liability and litigation expense.”); Carpenter v. Boeing Co., 456 F.3d 1183, 1189 (10th Cir. 2006)
(“when class-action status is granted, the defendant may be facing such enormous potential
liability that a significant settlement becomes the only prudent course”); In re James, 444 F.3d
643, 646 (D.C. Cir. 2006) (noting death-knell requirement); Chamberlan v. Ford Motor Co.,
402 F.3d 952, 959 (9th Cir. 2005) (“[r]eview of class certification decisions will be most appro-
priate when . . . there is a death-knell situation for either the plaintiff or the defendant that is
 Interlocutory Appeal 171

named plaintiff’s claim is so small it is not practical to pursue on an individ-

ual basis.13 The policy behind reviewing these cases is sound: if the litigation
is voluntarily abandoned before a final judgment, the class certification deci-
sion becomes effectively unreviewable. However, this guideline does not pro-
vide much guidance: most named plaintiffs will argue that they cannot afford
to prosecute their cases individually (this is, after all, the basis for many argu-
ments that a class action is superior to individual litigation); and most defen-
dants will argue that—meritorious or not—they will have little choice but to
settle with a certified class rather than take the case to trial. As a result, some
courts have refused to accept these claims at face value, examining “record
evidence regarding the financial resources of the parties” and the “existence
and potential impact of related litigation” when a plaintiff claims a death
knell,14 and requiring a defendant to make a “showing that it lacks the
resources to defend [the] case to a conclusion and appeal if necessary or that
doing so would run the risk of ruinous liability.”15 Others have noted that a
“death knell” on its own is not enough reason to grant an appeal if the peti-
tioners cannot “make a substantial showing that the district court’s decision

independent of the merits of the underlying claims”); Newton v. Merrill Lynch, Pierce, Fenner
& Smith, Inc., 259 F.3d 154, 165 (3d Cir. 2001) (granting Rule 23(f) review where “certifying
the class may place unwarranted or hydraulic pressure to settle on defendants”); Prado-
Steiman, 221 F.3d at 1274 (death knell justification may exist “where the grant of class status
raises the cost and stakes of the litigation so substantially that a rational defendant would feel
irresistible pressure to settle”); Waste Mgmt. Holdings, 208 F.3d at 293 (“an appeal ordinarily
should be permitted when the grant of class status raises the stakes of the litigation so substan-
tially that the defendant likely will feel irresistible pressure to settle”).
13. See, e.g., Blair, 181 F.3d at 834 (“For some cases the denial of class status sounds the death
knell of the litigation, because the representative plaintiff ’s claim is too small to justify the
expense of litigation.”); In re New Vehicle Canadian Export, 522 F.3d at 8 (“By the same token,
an erroneous failure to certify a class where individual claims are small and may deprive
plaintiffs of the only realistic mechanism to vindicate meritorious claims.”); Carpenter, 456
F.3d at 1189 (“When class-action status is denied, the plaintiffs may need to abandon the case,
or settle for a pittance, because the cost of continuing will far outweigh any potential recovery
in the individual actions remaining.”); Chamberlan, 402 F.3d at 959 (“[r]eview of class certifi-
cation decisions will be most appropriate when . . . there is a death-knell situation for either
the plaintiff or the defendant that is independent of the merits of the underlying claims”);
Newton, 259 F.3d at 165 (granting Rule 23(f) review where “some of the securities claims
pressed by the putative class members may be too small to survive as individual claims”);
Prado-Steiman, 221 F.3d at 1274 (death knell justification may exist “where a denial of class
status means that the stakes are too low for the named plaintiffs to continue the matter”);
Waste Mgmt. Holdings, 208 F.3d at 293 (“an appeal ordinarily should be permitted when a
denial of class status effectively ends the case”).
14. Prado-Steiman, 221 F.3d at 1274.
15. Chamberlan, 402 F.3d at 960 (refusing to grant 23(f) review where “Ford’s [death-knell]
claims are conclusory and are not backed up by declarations, documents, or other evidence
demonstrating potential liability or financial condition”); Tardiff v. Knox County, 365 F.3d 1,
3 (1st Cir. 2004) (finding “irresistible pressure to settle” based on “the financial and similar
information provided by the two [defendants] counties in this case”).
172 Chapter 6 Post-Certification Steps

to grant certification is questionable.”16 It is unlikely that a court will find a

“death knell” for defendants in cases where the plaintiff does not seek mone-
tary relief.17
Of course, requiring a factual showing to support a “death knell” claim
forces a balancing act for a defendant seeking appeal. The more evidence the
defendant must put forward that losing a trial would cripple it financially, the
more leverage the plaintiff has in any subsequent settlement negotiations,
forcing the price of the eventual settlement up.
Legal development. A second category of Rule 23(f) appeals concern cases
in which the appellate review would “facilitate the development of the law” by
deciding an important question of either class-action procedure or substan-
tive law that would otherwise “escape effective disposition at the end of the
case.”18 Truly novel questions of law are particularly attractive to appellate
courts.19 The question of law should be specific to class actions, however:
“a novel legal question will not compel immediate review unless it is of fun-
damental importance to the development of the law of class actions . . . .”20
Courts tend to be skeptical of parties who invoke legal development as a
reason to accept an appeal. As the Court of Appeals for the Eleventh Circuit
has noted, given the heightened stakes of class-action litigation, routine issues
can take on greater significance, making it “relatively easy for a litigant to
identify some question of law implicated by the class certification decision
and in good faith characterize that question as novel or unsettled.”21 Its solu-
tion was to identify several circumstances in which legal development might
prove particularly helpful, such as “when an issue is arising simultaneously
in related actions involving the same or similarly-situated parties or is one
that seems likely to arise repeatedly in the future,”22 or where “the unsettled
issue relates specifically to the requirements of Rule 23 or the mechanics of
certifying a class.”23

16. Sumitomo Copper, 262 F.3d at 140.

17. In re Veneman, 309 F.3d 789, 794 (D.C. Cir. 2002) (“As this case now stands, however, the
farmers may not seek compensatory relief, so the Department faces no possibility of a mas-
sive damage judgment. A ‘death knell’ will come, if at all, when and if the district court
authorizes the class to proceed with its monetary claims.”).
18. Blair, 181 F.3d at 835.
19. In re New Motor Vehicles Canadian Export, 522 F.3d at 7 (“Interlocutory appeals from class
certification under Rule 23(f) are especially appropriate where the plaintiffs’ theory is novel
. . .”); In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 322 (3d Cir. 2008) (“One impor-
tant reason for granting interlocutory appeals under Fed. R.Civ.P. 23(f) is to address ‘novel or
unsettled questions of law’ like those presented here.”).
20. Sumitomo Copper, 262 F.3d at 140.
21. Prado-Steiman, 221 F.3d at 1274.
22. Id. at 1275.
23. Id.; see also In re Hydrogen Peroxide, 552 F.3d at 322 (“Faced with complex, fact-intensive
disputes, trial courts have expended considerable effort to interpret and apply faithfully the
 Interlocutory Appeal 173

The Seventh Circuit Court of Appeals has taken a pragmatic approach that
may assist appellants in crafting their 23(f) petitions. In Szabo v. Bridgeport
Machines, Inc., it observed that “at critical junctures the district judge cited
only decisions by other district judges,” which “implie[d] that important legal
principles have evaded attention by appellate courts.”24
Bad decision. Some courts are more likely to accept a Rule 23(f) petition if
the “petitioner has shown a substantial weakness in the class certification
decision, such that the decision likely constitutes an abuse of discretion.”25
These courts will extend appellate review in these circumstances in order to
“spare the parties and the district court the expense and burden of litigating
the matter to final judgment only to have it inevitably reversed . . . on an
appeal after final judgment.”26
This category of Rule 23(f) appeals is perhaps the loosest, because, by defi-
nition, any litigant who appeals a class certification decision will characterize
it as substantively (and egregiously) incorrect. As a result, courts must expend
a great deal of extra effort in determining whether a decision is actually weak
enough to justify appellate review. Several courts have offered some concrete
examples of what kind of errors they consider enough to justify Rule 23(f)
review:

• the district court expressly applies the wrong Rule 23 standard;27

• the district court overlooks controlling precedent;28 or
• the district court incorrectly applies the substantive law of the claims
at issue.29

requirements of Rule 23. One important reason for granting interlocutory appeals under
Fed. R. Civ. P. 23 is to address novel or unsettled questions of law like those presented here.”)
(internal citations omitted).
24. Szabo v. Bridgeport Machines, Inc., 249 F.3d, 672, 675 (7th Cir. 2001).
25. Prado-Steiman, 221 F.3d at 1274 (emphasis in original); see also Chamberlan, 402 F.3d at 959
(“we view interlocutory review as warranted when the district court’s decision is manifestly
erroneous”).
26. Prado-Steiman, 221 F.3d at 1274–75; see also Chamberlan, 402 F.3d at 959 (“We see no reason
for a party to endure the costs of litigation when a certification decision is erroneous and
inevitably will be overturned.”).
27. Prado-Steiman, 221 F.3d at 1275 (manifest error “when the district court expressly applies
the incorrect Rule 23 standard”).
28. Id. (manifest error when the district court “overlooks directly controlling precedent”).
29. Cf. Regents of Univ. of Cal. v. Credit Suisse First Boston (USA), Inc., 482 F.3d 372, 380 (5th Cir.
2007) (noting that case “gives rise to unsettled questions of law concerning . . . the district
court’s theory of ‘deceptive act’ liability” and subsequently reversing district court’s applica-
tion of law).
174 Chapter 6 Post-Certification Steps

Nonetheless, many litigants take the opportunity afforded by this category

to provide a brief overview of the merits of their appeal in the Rule 23(f)
petition.
Public Interest. “The fact that the lawsuit involves a government entity, or
has a strong public interest component, may also lend the issue particular
importance and urgency.”30 In fact, in Prado-Steiman v. Bush, a class action
that challenged the state’s administration of Medicaid-related services to the
developmentally disabled, the Eleventh Circuit granted appellate review
under Rule 23(f) specifically because of the public-interest component of the
case:

this lawsuit has tremendous importance to thousands of developmentally-

disabled persons in the State of Florida, many of whom have a critical need for
prompt delivery of the services and benefits they claim to have been denied by
the State. There is also a broader but no less compelling public interest in deter-
mining promptly the scope of the State’s administrative and financial obliga-
tions under the Medicaid program with respect to such persons.31

Courts treat the invocation of public interest most seriously when a gov-
ernmental entity is involved in the litigation. To date, the invocation of a
“strong public interest component” without government involvement has
not led to acceptance of a Rule 23(f) appeal.
Rule 23(c)(1)(B). An emerging basis for seeking interlocutory review of
certification orders is the District Court’s non-compliance with Rule 23(c)(1)
(B), which requires that: “An order that certifies a class action must define the
class and the class claims, issues, or defenses, and must appoint class counsel
under Rule 23(g).”32
The Third Circuit (as of this writing, the only court of appeals to address
the question) has held that

the requirement of Rule 23(c)(1)(B) that a certification order “define the class
and the class claims, issues, or defenses,” means that the text of the order or an
incorporated opinion must include (1) a readily discernible, clear, and precise
statement of the parameters defining the class or classes to be certified, and
(2) a readily discernible, clear, and complete list of the claims, issues, or defenses
to be treated on a class basis.33

While an order that does not conform to the requirements of Rule 23(c)(1)
(B) may not, by itself, justify a review of the lower court’s certification

30. Prado-Steiman, 221 F.3d at 1275.

31. Id. at 1278.
32. Fed. R. Civ. P. 23(c)(1)(B).
33. See Wachtel v. Guardian Life Ins. Co. of Am., 453 F.3d 179, 187–88 (3d Cir. 2006).
 Interlocutory Appeal 175

decision,34 it may still attract the appellate court’s attention. Therefore, it makes
sense to invoke this provision where possible.

§ 6.1.3 How Appellate Courts Review Certification Orders

Because a class-certification decision is frequently fact-intensive and the

product of a trial court’s in-the-trenches judgment, most appellate courts
review it for abuse of discretion.35 (The Second Circuit exercises even greater
deference if it is reviewing a decision to certify a class than if it is reviewing a
decision to deny certification.)36 The one exception is when the appellate
court reviews the legal standard on which the trial court has based its deci-
sion—the appellate court reviews that question de novo.37
In addition, appellate courts also now check to see whether a district court
conducted a “rigorous analysis” of the class certification requirements.38

§ 6.1.4 Stays

A party is not entitled to an automatic stay during the pendency of its Rule
23(f) petition. Instead, Rule 23(f) leaves the question of whether to stay pro-
ceedings while an appeal is pending to the discretion of either the district or
the appellate court.39 Ordinarily, this means that the appealing party will have
to move either the district court or the appellate court to stay proceedings
while it appeals the class certification order. While some courts have expressed
concern that parties will file Rule 23(f) petitions in order to delay proceedings
in the trial court,40 they have granted stays where the class certification order

34. Cf. Chamberlan, 402 F.3d at 961–62 (dismissing argument that district court only spent one
sentence discussing predominance requirement).
35. See Wachtel, 453 F.3d at 184 (“We review the District Court’s decisions on class certification
for abuse of discretion. The District Court abuses its discretion only if its decision rests upon
a clearly erroneous finding of fact, an errant conclusion of law, or an improper application of
law to fact.”) (internal quotations omitted); Prado-Steiman, 221 F.3d at 1278.
36. McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 221 (2d Cir. 2008) (“We will exercise even
greater deference when the district court has certified a class than when it has declined to do
so.”) (internal quotation omitted).
37. See Regents of the Univ. of Calif., 482 F.3d at 380.
38. Robinson v. Texas Automobile Dealers Ass’n, 387 F.3d 416, 421 (5th Cir. 2004) (“Although we
review the certification decision using a deferential standard, a district court must conduct a
rigorous analysis of the rule 23 prerequisites before certifying a class.”) (internal quotations
omitted).
39. Fed. R. Civ. P 23(f) (“An appeal does not stay proceedings in the district court unless the
district judge or the court of appeals so orders.”).
40. Sumitomo Copper, 262 F.3d at 140 (“parties should not view Rule 23(f) as a vehicle to delay
proceedings in the district court”).
176 Chapter 6 Post-Certification Steps

has noted thorny problems in certifying (or denying certification to) a class,41
and where “the likelihood of error on the part of the district court tips the
balance of hardships in favor of the party seeking the stay.”42
As a practical matter, the appealing party is more likely to obtain a stay of
proceedings if the Court of Appeals grants the petition for review, thus
launching a merits appellate process that likely will require many months to
complete.

§ 6.1.5 Packaging the Rule 23(f) Petition

Because appellate courts have absolute discretion about whether to accept a

Rule 23(f) petition, the strategy for the petition differs from appeals of right
at the end of the case. Instead, a Rule 23(f) petition is most effective when it
resembles a certiorari petition to the Supreme Court. (For an exemplar Rule
23(f) petition, see Appendix 6A.)
Argue Policy. Unlike trial courts, appellate courts are not as bound by legal
precedent.43 Combined with the appellate court’s discretion to reject 23(f)
petitions, this means that successful Rule 23(f) petitions will place the par-
ticular lawsuit (as well as the alleged legal error) in a larger context, explain-
ing why an appellate decision correcting the error will help other practitioners
and judges avoid the same kinds of errors.44
Do not assume the court knows all the issues. Appellate judges are general-
ists, and are not likely to know all the issues in the same detail as the lawyers
or even the trial court.45 Therefore, it makes sense for the parties to explain
any technical issues, and provide a precise accounting of any of the relevant
facts of the case.
Remember local rules. Finally, the petitioner must make sure to adapt the
brief to the needs of the specific court. As discussed in greater detail above,
each Circuit Court of Appeals has formulated its own test for granting
Rule 23(f) petitions, and petitions that speak to the specific test adopted by
the Circuit have a greater chance for success. In addition, some courts may

41. See, e.g., Wachtel, 453 F.3d at 183 (granting stay of litigation during pendency of Rule 23(f)
appeal where lower court had denied stay).
42. Sumitomo Copper, 262 F.3d at 140.
43. Richard A. Posner, How Judges Think 220 (Harvard 2008).
44. See Antonin Scalia & Bryan A. Garner, Making Your Case: The Art of Persuading
Judges 76–77 (Thompson/West 2008) (discussing use of policy arguments in obtaining
certiorari).
45. Posner, How Judges Think at 205 (“No judge of [a federal court of appeals] can be an
expert in more than a small fraction of the fields of law that generate the appeals he must
decide, or can devote enough time to an individual case to make himself, if only for the
moment (knowledge obtained by cramming is quickly forgotten), an expert in the field out
of which the case arises.”).
 Class Notice 177

have specific page limits for the Rule 23(f) petition—and those limits
are likely to be more stringent than for an opening merits brief. Most courts
also have specific contents and formatting requirements. And finally, as
almost anyone who has ever submitted a 23(f) brief will know from experi-
ence, it is important not to forget the need for the Rule 26.1 corporate disclo-
sure statement.46

§ 6.1.6 Packaging the Rule 23(f) Petition Response

The prevailing party in the trial court does not want the underlying litigation
interrupted, or the class certification ruling placed in doubt, by an
interlocutory appeal. Hence, that party almost certainly will oppose the Rule
23(f) petition. That opposition typically will be due quickly (as few as ten
days) after the petition is filed. (For an exemplar Rule 23(f) Response, see
Appendix 6B.)
The party opposing interlocutory appeal will use its opposition to argue
that the appellant has not met Rule 23(f)’s criteria.47 This tactic may include
arguing that there were no underlying errors in the certification ruling, or
that any errors that may exist are not important enough to justify interlocu-
tory review. The opponent of the appeal will also likely emphasize the court’s
discretion to dismiss a petition even if it does meet one or more of the Rule
23(f) criteria for the jurisdiction. (If the defendant has filed the Rule 23(f)
petition, the plaintiff may also argue that granting the petition would inter-
rupt the underlying litigation; and that the trial court will have the opportu-
nity to modify its certification order as the trial progresses.)

§ 6.2 Class Notice

If the court has certified a class, the other issue that requires immediate atten-
tion is notice. (This is also an issue if the class is certified for settlement
purposes.)48 Rule 23(c)(2) requires that, after a class is certified, the class be
notified of the existence of the class action, as well as its effect on their legal
rights and their options for protecting those rights. Members of Rule 23(b)(1)
and (b)(2) classes (which do not allow members to opt out) need only receive
“appropriate notice.”49 For Rule 23(b)(3) classes, class members must receive

46. Fed. R. App. P. 26.1.

47. See Appendix 6B.
48. For more on settlement notice, see § 8.3.4.
49. Fed. R. Civ. P. 23(c)(2)(A).
178 Chapter 6 Post-Certification Steps

“the best notice that is practicable under the circumstances, including indi-
vidual notice to all members who can be identified through reasonable
effort.”50

§ 6.2.1 When/Why Notice Required

Why require notice? Because the rules recognize that the vast majority of
class members are likely unaware that a class action existed in the first place,
and due process requires that they be informed of the action if it will affect
their legal rights. The average class member will have had no contact with her
class representative (the named plaintiff) or her counsel; therefore due pro-
cess requires that she be given some chance to intervene or opt out of the
lawsuit if possible.51 In Rule 23(b)(3) class actions, which formally allow for
opt outs, this interest is particularly strong.52
Once a class has been certified, a judgment (whether for or against the
defendant) will bind the entire class.53 In class actions under Rule 23(b)(1) or
23(b)(2), all class members will be bound by a judgment in either direction,
and therefore due process requires that they be informed of their rights.54 In
Rule 23(b)(3) class actions (also known as “opt-out” classes), each class
member must receive the opportunity to opt out of the class before trial or
settlement.55

50. Fed. R. Civ. P. 23(c)(2)(B).

51. See In re Auction Houses Antitrust Litig., No. 00 Civ. 0648(LAK), 2001 WL 170792, *5
(S.D.N.Y. Feb. 22, 2001) (class actions “subject absent class members, who typically have no
role in supervising the litigation brought on their behalf, to the risk that their rights will be
lost, prejudiced, or sold out too cheaply through inadequate representation. In consequence,
Rule 23 provides that no class action may be dismissed or settled without court approval,
typically after notice to the class and an opportunity for its members to object and often after
affording class members the right to exclude themselves from the case.”).
52. Fed. R. Civ. P. 23(c)(2), Advisory Committee Notes, 1966 (“[T]he interests of the individuals
in pursuing their own litigation may be so strong here as to warrant denial of a class action
altogether. Even when a class action is maintained under subdivision (b)(3), this individual
interest is respected.”).
53. Fed. R. Civ. P. 23(c)(3), Advisory Committee Notes, 1966 (“The judgment in a class action
maintained as such to the end will embrace the class . . . The judgment has this scope whether
it is favorable or unfavorable to the class.”).
54. Id. (judgment in a Rule 23(b)(1) or 23(b)(2) class binds “those found by the court to be class
members . . . In a (b)(1) or (b)(2) action the judgment ‘describes’ the members of the class but
need not specify the individual members”).
55. Id. (judgment in a Rule 23(b)(3) class binds “those to whom the notice prescribed by subdivi-
sion (c)(2) was directed, excepting those who requested exclusion or who are ultimately
found by the court not to be members of the class. . . . [I]n a (b)(3) action the judgment
‘specifies’ the individual members. . . .”); see also Eisen v. Carlisle & Jacquelin, 417 U.S. 156,
173 (1974) (“Rule 23(c)(2) provides that, in any class action maintained under subdivision
(b)(3), each class member shall be advised that he has the right to exclude himself from the
 Class Notice 179

So long as due process has been observed, the parties (particularly the
defendant) may rely on the preclusive effect of any judgment or settlement in
subsequent litigation.56 The preclusive effect applies even to an individual
class member who objects to the settlement,57 even if the individual class
member did not actually receive notice.58

§ 6.2.2 Timing of Notice

Rule 23(c)(2) does not take any stance on when notice should issue. Several
courts have held that the plaintiff does not have to propose a proper notice in
her motion for class certification.59 Instead, as Wright and Miller point out,
notice “should be sent as soon as the court determines that a class action is
proper . . . so as to provide the absentees with a full and meaningful opportu-
nity to intervene to protect their rights or to opt out.”60 That said, if certifica-
tion of the class induces the parties to negotiate a settlement, they may delay

action on request or to enter an appearance through counsel, and further that the judgment,
whether favorable or not, will bind all class members not requesting exclusion.”); 7A Charles
Alan Wright, et al., Federal Practice and Procedure § 1786 at 492 (3d ed. 2005)
(“Notice is crucial to the entire scheme of Rule 23(b)(3). . . . Without the notice requirement
it would be constitutionally impermissible to give the judgment binding effect against the
absent class members.”).
56. Reppert v. Martin Lumber & Cedar Co., Inc., 359 F.3d 53, 56–57 (1st Cir. 2004) (“After such
appropriate notice is given, if the absent class members fail to opt out of the class action, such
members will be bound by the court’s actions, including settlement and judgment, even
though those individuals never actually receive notice.”). For more on the preclusive effects
of class actions, see Chapter 9.
57. Reppert, 359 F.3d at 58 (“[A] court-approved settlement containing a release may be applied
against a class member who is not a representative member, even if that member objects to
the settlement, so long as acceptable procedural safeguards have been employed.”) (internal
quotations omitted).
58. DeJulius v. New Eng. Health Care Employees Pension Fund, 429 F.3d 935, 944 (10th Cir. 2005)
(denying request to intervene where class member did not receive notice until after opt-out
deadline); Silber v. Mabon, 18 F.3d 1449, 1451 (9th Cir. 1994) (“We hold that Argyris’s
due process rights were not violated even though he did not actually receive notice of the
settlement and opt out date in time to opt out before the deadline.”).
59. See Butler-Jones v. Sterling Casino Lines, L.P., No. 6:08-cv-01186-Orl-35DAB, 2008 WL
5274384, at *1 (M.D. Fla. Dec. 18, 2008) (“Plaintiffs are not required to propose a proper
notice in their Motion for Class Cert[ification]. The issue of proper notice may be addressed
should it become necessary to the litigation and, at such time, be presented to the Court.”).
60. 7A Wright, Federal Practice and Procedure § 1786 at 499; see also Manual for
Complex Litigation (Fourth) § 21.311 at 288 (2004) (“Ordinarily, notice to class mem-
bers should be given promptly after the certification order is issued.”).
180 Chapter 6 Post-Certification Steps

notice for a reasonable period in order to complete settlement talks.61 (Should

this occur, both Rule 23(c) and 23(e) will govern the settlement notice.)62
In other words, notice should issue long enough before either the trial or
the settlement fairness hearing that the absent class members can review the
notice and make a reasonable decision whether or not to remain in the class.
How long is that that period? As with anything in litigation, it depends on the
individual facts of the case. However, Judge Friendly, writing for the Second
Circuit Court of Appeals in 1983, found that six weeks appeared to be an
adequate amount of time.63 Similarly, the Tenth Circuit Court of Appeals
found a notice scheme sufficient even though some (but not all) notices were
sent out only two weeks before a settlement hearing.64 Notice still may be
timely even if some class members do not receive the notice in time to opt out
of the class; in fact, some courts have found notice schemes to be sufficient
even if a small portion of class members receive notice after the settlement
hearing has taken place.65
Furthermore, the parties may have to issue notice again should the court
amend the order certifying the class to modify the class definition, changing
the number of class members.66

§ 6.2.3 Form of Notice

One important issue is the form that the proposed notice should take. This
debate will have a very real effect on both cost and—potentially—the size of
the class.67

61. Manual for Complex Litigation (Fourth) § 21.311 at 288 (“When the parties are near-
ing settlement, however, a reasonable delay in notice might increase incentives to settle and
avoid the need for separate class notices of certification and settlement.”).
62. In re Global Crossing Secs. & ERISA Litig., 225 F.R.D. 436, 448 (S.D.N.Y. 2004) (“Where, as
here, the parties seek simultaneously to certify a settlement class and to settle a class action,
the elements of Rule 23(c) notice (for class certification) are combined with the elements of
Rule 23(e) notice (for settlement or dismissal).”); see also Manual for Complex Litigation
(Fourth) § 21.633 at 321–22.
63. Weinberger v. Kendrick, 698 F.2d 61, 71 (2d Cir. 1982) (Friendly, J.) (six weeks not abuse of
discretion); see also In re Bankamerica Corp. Secs. Litig., 210 F.R.D. 694, 707–08 (E.D.
Mo. 2002) (six to seven weeks appropriate timing for notice).
64. DeJulius, 429 F.3d at 947 (finding notice sufficient where “it is undisputed that all of the
notices were sent out nearly two weeks prior to the settlement hearing, and it is likely that a
large number of the notices were sent out much earlier than that”).
65. Silber, 18 F.3d at 1451 (“We hold that Argyris’s due process rights were not violated even
though he did not actually receive notice of the settlement and opt out date in time to opt out
before the deadline.”).
66. Manual for Complex Litigation (Fourth) § 21.311.
67. Id. § 21.311 at 291 (“The mode and extent of notice implicates issues of cost and fairness to
parties and class members, and raises the potential for prejudice to one side or the other.”).
 Class Notice 181

“Appropriate notice.” Class notice disseminated in connection with Rule

23(b)(1) and 23(b)(2) class actions need only be “appropriate.”68 In general, this
provision has allowed courts wide discretion in deciding what kind of notice to
issue,69 although the Advisory Committee for the Federal Rules of Civil
Procedure has expressed concern that formal notice of the kind required in
23(b)(3) class actions may “cripple” class actions that do not seek damages.70
While the question of what constitutes “appropriate notice” has not been
tested much in the courts, the Advisory Committee has noted that:

Notice calculated to reach a significant number of class members often will pro-
tect the interests of all. Informal methods may prove effective. A simple posting
in a place visited by many class members, directing attention to a source of
more detailed information, may suffice.

In general, then, “appropriate notice” tends to involve a balancing between

containing costs and reaching as many class members as possible.71
“Best notice practicable.” For Rule 23(b)(3) classes (or “hybrid” 23(b)(2)/
23(b)(3) classes),72 the plaintiff must provide the “best notice practicable.”73
The “best notice practicable” does not necessarily mean actual notice to every
class member.74 However, it does require providing individual notice (most
often by mail) where individual class members can be identified by reason-
able effort.75 What does “reasonable effort” mean? As a practical matter, at

68. Fed. R. Civ. P. 23(c)(2)(A).

69. Manual for Complex Litigation (Fourth) § 21.311 at 287 (“Rule 23(c)(2)(a) recognizes
the court’s authority to direct ‘appropriate’ notice in Rule 23(b)(1) and (b)(2) class actions,
but contemplates different and more flexible standards for those cases than for Rule 23(b)(3)
actions.”).
70. Fed. R. Civ. P. 23(c)(2), Advisory Committee Notes, 2003 (“The authority to direct notice to
class members in a (b)(1) or (b)(2) class action should be exercised with care. . . . The char-
acteristics of the class may reduce the need for formal notice. The cost of providing notice,
moreover, could easily cripple actions that do not seek damages. The court may decide not to
direct notice after balancing the risk that notice costs may deter the pursuit of class relief
against the benefits of notice.”); see also Manual for Complex Litigation (Fourth) §
21.311 at 287.
71. Fed. R. Civ. P. 23(c)(2), Advisory Committee Notes 2003 (“The court should consider the
costs of notice in relation to the probable reach of inexpensive methods.”).
72. Fed. R. Civ. P. 23(c)(2), Advisory Committee Notes 2003 (“If a Rule 23(b)(3) class is certified
in conjunction with a (b)(2) class, the (c)(2)(B) notice requirements must be satisfied as to
the (b)(3) class.”).
73. Fed. R. Civ. P. 23(c)(2)(B).
74. DeJulius, 429 F.3d at 944; Reppert, 359 F.3d at 56 (“Individual notice of class proceedings is
not meant to guarantee that every member entitled to individual notice receives such notice,
but it is the court’s duty to ensure that the notice ordered is reasonably calculated to reach the
absent class members.”) (internal quotations omitted).
75. Eisen, 417 U.S. at 176 (“individual notice to identifiable class members is not a discretionary
consideration to be waived in a particular case. It is, rather, an unambiguous requirement of
182 Chapter 6 Post-Certification Steps

least one court has held that it requires the parties to identify “the name and
last known address of each class member known to the parties or capable of
being identified from business or public records available to them.”76 More
generally, it means that the plaintiff has some flexibility to omit search methods
for which the costs of the search will outweigh the marginal benefit of the addi-
tional names and addresses generated.77 However, the fact that a method of
finding notice costs a lot does not, by itself, make the method unreasonable.78
Overall, the plaintiff must provide individual notice where possible regardless
of the cost.79
On occasion, plaintiffs have proposed reducing the cost of individual
notice by sending it with routine mailings by the defendant (like credit card
bills or stock prospectuses),80 a measure sometimes known as “piggyback
notice.” Defendants have offered several arguments against piggyback notices:
They are prejudicial (because they force the defendant to implicitly endorse a
lawsuit against itself),81 and may violate a defendant’s First Amendment
rights (since the court—a government entity—is forcing the defendant into
an unwanted communication).82 As a result, the Manual for Complex
Litigation recommends that “[b]efore requiring a defendant to use its own
mailings to provide certification notice, the court should require class coun-
sel to show the absence of feasible alternatives.”83

Rule 23. . . . [E]ach class member who can be identified through reasonable effort must be
notified that he may request exclusion from the action and thereby preserve his opportunity
to press his claim separately or that he may remain in the class and perhaps participate in the
management of the action.”).
76. Hitt v. Nissan Motor Co., 552 F.2d 1088, 1098 (5th Cir. 1977) (internal footnote omitted).
77. Hitt, 552 F.2d at 1099 (“Obviously, the word ‘reasonable‘cannot be ignored. In every case,
reasonableness is a function of anticipated results, costs, and amount involved. A burden-
some search through records that may prove not to contain any of the information sought
clearly should not be required. On the other hand, a search, even though calculated to reveal
partial information or identification, may be omitted only if its cost will exceed the antici-
pated benefits.”).
78. Id. at 1100 (“While the mechanical process of examining the cards may prove to be expensive
and time-consuming, the individual right of absentee class members to due process makes
the cost and effort reasonable.”).
79. Eisen, 417 U.S. at 176 (“There is nothing in Rule 23 to suggest that the notice requirements
can be tailored to fit the pocketbooks of particular plaintiffs.”).
80. See Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 356 n.22 (1978) (“a number of courts
have required defendants in Rule 23(b)(3) class actions to enclose class notices in their own
periodic mailings to class members in order to reduce the expense of sending the notice”); In
re NASDAQ Market-Makers Antitrust Litig., 169 F.R.D. 493, 515 n.19 (S.D.N.Y. 1996)
(describing cost savings from “piggyback notice”).
81. See Katz v. Carte Blanche Corp., 496 F.2d 747, 757 (3d Cir. 1974) (en banc) (referring to
defendant’s “nonfrivolous claim” that it would be prejudiced by mailing class notice).
82. See generally Pac. Gas & Elec. Co. v. Public Util. Comm’n, 475 U.S. 1 (1986) (forcing utility to
place third-party newsletter in mailings violated its First Amendment rights).
83. Manual for Complex Litigation (Fourth) § 21.311 at 293.
 Class Notice 183

Publication notice alone usually does not meet the requirements of due
process. Courts have long recognized that “[c]hance alone brings to the atten-
tion of even a local resident an advertisement in small type inserted in the
back pages of a newspaper and if he makes his home outside the area of the
newspaper’s normal circulation the odds that the information will never
reach him are large indeed.”84 However, there are many class actions brought
on behalf of persons whose name and address cannot readily be divined—
retail purchasers of small-value consumer items are one notable example—
and so mailed notice is not possible. Under these circumstances, a notice
program that includes individual notice to those class members who can be
identified, and reasonably targeted publication notice to the remainder of the
class, is likely to meet with a court’s approval.85 Given the advances in tech-
nology in the last decade, several courts have considered electronic notice of
some kind (such as publishing notice on a Web site the class members are
likely to encounter) to be as good as, if not better than, publication in news-
papers.86 Among other advantages, Internet notice is cheaper and easier to

84. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 315 (1950).
85. See, e.g., DeJulius, 429 F.3d at 947 (notice program that included newspaper publication
satisfied the notice requirement); Reppert, 359 F.3d at 57 (publication notice in thirty-three
newspapers satisfied due process for class member who did not receive direct mail notice);
Mirfasihi v. Fleet Mortgage Co., 356 F.3d 781, 786 (7th Cir. 2004) (Posner, J.) (“When indi-
vidual notice is infeasible, notice by publication in a newspaper of national circulation (here
USA Weekend, a magazine that is included in hundreds of Sunday newspapers) is an accept-
able substitute.”); In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d
283, 327 (3d Cir. 1998) (individual notice to 8 million class members, plus publication notice
and unsolicited television news coverage, sufficient to meet due process); In re Global
Crossing, 225 F.R.D. at 446 (notice scheme acceptable where, in addition to individual notice
where possible, “Plaintiffs’ counsel also arranged to publish the Court-approved Summary
Notice in The New York Times, The Wall Street Journal, USA Today, and 16 regional newspa-
pers”); Mangone v. First USA Bank, 206 F.R.D. 222, 232 (S.D. Ill. 2001) (mailed notice to 18.5
million class members plus publication for three days in USA Today and on Web sufficient);
Krangel v. Golden Rule Resources, Ltd., 194 F.R.D. 501, 505 (E.D. Pa. 2000) (“The mailing of
the notice to identifiable class members and major financial institutions and publication of
the summary notice in The Wall Street Journal and The Globe and Mail was the best means
practicable to notify class members and, thus, satisfies Rule 23.”).
86. Mirfasihi, 356 F.3d at 786 (“But in this age of electronic communications, newspaper notice
alone is not always an adequate alternative to individual notice. The World Wide Web is an
increasingly important method of communication, and, of particular pertinence here, an
increasingly important substitute for newspapers.”) (internal citation omitted); In re Global
Crossing, 225 F.R.D. at 447, 449 (notice sufficient where, in addition to individual and news-
paper notice, “Plaintiffs’ lead counsel published the full Notice (in English and Spanish), and
the Summary Notice on their websites, as well as on a special website created for this settle-
ment: www.globalcrossinglitigation.com.”) (internal citation omitted); see also Manual for
Complex Litigation (Fourth) § 21.311 at 288 (“Posting notices on dedicated internet
sites, likely to be visited by class members and linked to more detailed certification informa-
tion, is a useful supplement to individual notice, might be provided at a relatively low cost,
184 Chapter 6 Post-Certification Steps

update quickly.87 Internet notice is only adequate, though, if the parties antic-
ipate that the absent class members are likely to visit the website containing
the notice.88
If class members are not readily identifiable, the more targeted the notice
is to the class, the more likely a court will find the notice sufficient. For exam-
ple, in In re Motorsports Merchandise Antitrust Litigation,89 plaintiffs brought
a price-fixing class action against vendors of merchandise sold at various
NASCAR-sanctioned stock-car races.90 The parties reached a settlement, but
faced a problem: sales of NASCAR merchandise at races were usually cash
transactions, neither merchant nor customer kept good records, and “many
items themselves likely have been lost, consumed or destroyed,” making it
difficult to determine who was in the class.91 In this case, plaintiffs spared
little expense in designing notice: They hired a communications firm that
developed a demographic profile of class members that included their likely
media consumption.92 Relying on that profile, the plaintiffs published their
notice in auto-racing and NASCAR publications, in local media serving areas
with racetracks, and on the Internet.93 The court found this publication notice
sufficient, and took particular note of the fact that it was targeted to media the
class members would likely encounter.94

and will become increasingly useful as the percentage of the population that regularly relies
on the internet for information increases.”).
87. Manual for Complex Litigation (Fourth) § 21.311 at 288 (“An advantage of Internet
notice is that follow-up information can easily be added, and lists can be created to notify
class members of changes that may occur during the litigation. Similarly, referring class
members to an Internet site for further information can provide complete access to a wide
range of information about a class settlement.”); see generally, Brian Walters, Best Notice
Practicable in the Twenty-First Century, 2003 U.C.L.A. J. L. & Tech. 4.
88. Stoffel v. SBC Comm’ns, Inc., 254 F.R.D. 294, 300 (W.D. Tex. 2008) (“Plaintiffs’ proposal to
provide notice via the Internet does not appear likely to provide notice to former employees,
as former employees who never received Telephone Concession benefits are unlikely to visit
AT&T’s internet websites or the websites of the Notice Administrator or Plaintiffs’ Lead Class
Council.”).
89. 112 F. Supp. 2d 1329 (N.D. Ga. 2000).
90. In re Motorsports, 112 F. Supp. 2d at 1330.
91. Id. at 1332.
92. Id.
93. Id.
94. Id. (“Because class members cannot be identified personally, notice by publication is consti-
tutionally sufficient. This is especially true where, as here, Plaintiffs’ counsel published the
Summary Notice in newspapers in the areas where racetracks are located, in stockcar racing
magazines, and also on the Internet for an extended period.”) (internal citations omitted); see
also In re Lorazepam and Clorazepate Antitrust Litig., 205 F.R.D. 369, 382 (D.D.C. 2002)
(approving costs for notice of settlement where “[t]he Plaintiff States, Rust Consulting, and
Kinsella Communications made similar extensive efforts to notify settlement group mem-
bers who could not be notified directly, by compiling relevant specific demographic statistics,
and targeting accordingly the use of media including magazines, newspapers, television, an
 Class Notice 185

How does notice actually work? In finding a notice scheme sufficient, the
District Court for the Eastern District of Pennsylvania described, step by step,
how one set of parties went about providing notice for a settlement class:95

Defendants are compiling the last known addresses and social security num-
bers for each of the members of the proposed settlement class. After prelimi-
nary approval of the Settlement, this information will be transferred to the
Settlement Administrator (an accounting and class action administration firm
located in Philadelphia, PA), which will confirm or update the postal addresses
and send the final text of the notice (and claim form, when applicable) via first
class mail to each member of the class. If any notices are returned as undeliver-
able, the Settlement Administrator will take further steps to correct known
addresses and resend notices to those recipients. A copy of the settlement notice
also will be posted on the settlement website, and within ten business days after
the mailing of notices, a copy of the notice will be published in the National
edition of USA Today for one weekday. Because class counsel believe that using
the last known address information in conjunction with the Settlement
Administrator’s efforts to update contact information will provide notice to vir-
tually all members of the settlement class, the parties feel that one publication
will suffice to apprise any remaining class members of the action.96

§ 6.2.4 Content of Notice

Most adults who pay with a credit card, use a cell phone, or drive a car have
seen at least one class notice in their lives. Class notices have a reputation for
being long and opaque, reading much like the credit cards agreements, cell-
phone calling plans, or warranties that the plaintiff complained about in the
first place.97 Some of this complexity is unavoidable: It is extremely difficult
to balance accuracy and clarity, and the presence of lawyers likely tips the
scale in the wrong direction.98 Nonetheless, the federal rules require that

Internet website, press releases, toll-free telephone lines, and pharmacy point-of-sale dis-
plays.”) (internal footnotes omitted).
95. Settlement classes, as opposed to litigation classes, have a few different requirements that will
be described in greater detail in Chapter 8. However, this is an adequate description of notice
in both situations.
96. Mehling v. N.Y. Life Ins. Co., 246 F.R.D. 467, 477–78 (E.D. Pa. 2007).
97. See, e.g., Edward H. Cooper, The (Cloudy) Future of Class Actions, 40 Ariz. L. Rev. 923, 962
(1998) (“Despite conscientious efforts to draft plain-English class-action notices, examples
abound of notices that even most lawyer class members discard unread.”).
98. Fed. R. Civ. P. 23(c)(2), Advisory Committee Notes 2003 (“It is difficult to provide informa-
tion about most class actions that is both accurate and easily understood by class members
who are not, themselves, lawyers. Factual uncertainty, legal complexity, and the complica-
tions of class-action procedure raise the barriers high.”).
186 Chapter 6 Post-Certification Steps

class-certification notice be written in plain, easily understood language.99

The PSLRA in particular expresses a strong preference for “plain language
statements.”
In reality, there are only a few components to an effective notice. Notice
must include:

• a description of the nature of the action;

• the definition of the class (or any subclasses) certified;
• the class claims, issues, or defenses that were certified for class
treatment;
• notification that a class member may enter an appearance through an
attorney;
• notification that the court will exclude from the class anyone who
requests exclusion;
• a description of how to request exclusion, including the deadline for
doing so; and
• a description of the binding effect of any class-wide judgment.100

In addition, while not required, a class notice should include the position
of each of the parties; the identity of each of the parties (including class rep-
resentatives); the identity of counsel for each party; the relief sought in the
class action; and the risks and benefits of membership in the class.
The PSLRA makes some of these “best practices” formal requirements for
securities class actions. In addition to the requirements of Rule 23(c)(2)(B),
the PSLRA also requires that any notice contain:

(A) Statement of recovery—the amount of the settlement determined in the

aggregate and on an average per share basis;
(B) Statement of potential outcome of case—amount of damages per share
recoverable if plaintiffs were to prevail on every claim. If the parties are
unable to agree on damages, a statement concerning the issues on which
the parties disagree;

99. Id. (“The direction that class-certification notice be couched in plain, easily understood
language is a reminder of the need to work unremittingly at the difficult task of communi-
cating with class members.”); Hitt, 552 F.2d at 1104 (notice to the class “must also contain
an adequate description of the proceedings written in objective, neutral terms, that, insofar
as possible, may be understood by the average absentee class member. This does not mean
that they must be made cognizant of every material fact that has taken place prior to the
mailing of their individual notice, or that class members must be given notice which is
perfectly correct in its form. For example, an overly detailed notice would not only be
unduly expensive, but would also confuse class members and impermissibly encumber
their rights to benefit from the action.”) (internal citations omitted).
100. See Fed. R. Civ. P. 23(c)(2)(B).
 Class Notice 187

(C) Statement of attorneys’ fees—statement of fees and costs to be applied for

in the aggregate and on a per share basis;
(D) Identification of lawyers’ representatives—the name, telephone number,
and address of counsel available to answer questions; and
(E) Reasons for settlement—a brief statement explaining the reasons why the
parties are proposing the settlement.101

In addition, some courts have expressed a strong preference that the notice
also “include specific reference to [other] pending actions.”102
Given the need for plain-language notice, courts usually will approve gen-
eral descriptions of any proposed class settlement.103 What does this mean in
practical terms? To take one example, in In re Prudential Ins. Co. America
Sales Practice Litigation Agent Actions, counsel represented a class that alleged
a number of improper insurance practices. In the notice, counsel identified
four categories of improper practices covered by the litigation.104 The court of
appeals observed that three of the categories, involving sales claims-financed
insurance, abbreviated payment, and investment plans, required “some
understanding of insurance policies.”105 However, it pointed out that the
fourth, a catch-all category for “other improper sales practices,” was “arguably
easier for the uninformed layman to comprehend, and may in fact encourage
class members to respond to the Class Notice.”106 This does not mean that
class notice must sacrifice precision to simplicity: Courts have held that
complexity that only reflects the complexity of a proposed settlement may
still pass court scrutiny.107
In general, courts expect notice to contain information that class members
(as opposed to lawyers) might find useful. As a result, courts have encouraged
class counsel to include their contact information, so class members know

101. In re Global Crossing, 225 F.R.D. at 449; see also15 U.S.C. §§ 78u-4(a)(7), 77z-1(a)(7).
102. Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 116 n.22 (2d Cir. 2005) (“We note,
however, that class notices do sometimes include specific reference to pending actions.
Obviously, this information is helpful to class members. We strongly encourage the inclu-
sion of such information in the future.”) (internal citation omitted).
103. Weinberger, 698 F.2d at 70 (2d Cir. 1982) (internal quotations omitted) (“Numerous deci-
sions, no doubt recognizing that notices to class members can practicably contain only a
limited amount of information, have approved very general descriptions of the proposed
settlement. . . .”); Wal-Mart Stores, Inc., 396 F.3d at 116 (notice that quoted the release
language “in its entirety” was sufficient to inform class members of scope of release).
104. 148 F.3d 283, 328 (3d Cir. 1998).
105. Id.
106. Id. (internal footnotes omitted).
107. In re Ind. Energy Holdings PLC Secs. Litig., 302 F.Supp.2d 180, 185 (S.D.N.Y. 2003) (approv-
ing settlement notice containing several pages of complex formulae for allocation of settle-
ment because “[t]he resulting complexity is a necessary by-product of that plan”).
188 Chapter 6 Post-Certification Steps

who to ask for more information about the litigation.108 Courts have been less
concerned with information that intervening counsel would find useful for
challenging the settlement, such as the exact class size,109 or the method of
calculating a class member’s exact damages.110
In addition to being accessible to the layman, the content of the class
notice must be neutral.111 This is not to say there will be no debate over the
content of the notice. The defendant will want to ensure that the description
of the lawsuit in the notice does not shade over into an improper solicitation
of claims. The plaintiff will want to be sure that the notice does not discourage
class members with meritorious claims from participating.112
What is really at stake is the size of the class. From a cynical perspective,
the plaintiff wants to craft the notice to ensure that as many people as possible
participate in the class (or at least do not opt out), thus increasing the size of
the class, and the amount of attorneys’ fees counsel can collect.113 (One other
potentially cynical tactic: Securities plaintiffs may wish to minimize the
number of responses to PSLRA notice in order to reduce competition for the
position of lead counsel.)114 The defendant’s incentive depends on its assess-
ment of liability: if it believes that class members do not have valid claims (or
if the claims are so small that they are not worth bringing individually), then
it will want to encourage as many opt-outs as possible to minimize payouts.
If it believes that the class members have valid claims that are large enough to

108. Reppert, 359 F.3d at 55 (upholding notice that “included a toll-free number and the address
of a web-site, established to provide potential class members with information about the
class action and to make available appropriate forms for their active participation in the
proceedings or to allow them to opt out of the suit”).
109. In re Lorazepam & Clorazepate, 205 F.R.D. at 379 (“there is no requirement that the class
size be specified in the notice”).
110. In re PayneWebber Ltd. Partnerships Litig., 171 F.R.D. 104, 124 (S.D.N.Y. 1997) (“Nor does
the adequacy of notice turn on the ability of an individual Class Member to calculate the
amount of his or her actual recovery under the settlement.”).
111. Weinberger, 698 F.2d at 70; Hitt, 552 F.2d at 1104 (5th Cir. 1977) (notice to the class “must
also contain an adequate description of the proceedings written in objective, neutral terms,
that, insofar as possible, may be understood by the average absentee class member.”) (inter-
nal citations omitted).
112. Mirfasihi, 356 F.3d at 785 (“Notice of a pending suit that might offer only remote prospects
of success might confuse class members and precipitate imprudent opting out.”).
113. See Brennan v. Midwestern United Life Ins. Co., 450 F.2d 999, 1001 (7th Cir. 1971)
(“Approximately 600 persons received the notice; of these, 535 became class members by
not executing and returning the form (included with the notice) indicating their desire to
be excluded.”). Depending on how the settlement is structured, the number of participants
in the class may not directly affect the fee, but in general, the larger the class, the easier it is
to justify large fees.
114. In re Ind. Energy Holdings, 302 F.Supp.2d at 186–87 (plaintiffs’ firm accuses lead counsel of
“publish[ing] notice in the Investor’s Business Daily ‘with the obvious intention of attracting
the least attention legally possible so as to eliminate competition for the office of Lead
Counsel’”).
 Class Notice 189

vindicate, then it will want to discourage opt-outs to maximize the scope of

release. If the notice is too confusing to understand, or downplays the possi-
ble success of the settlement, then it might encourage class members with
otherwise valid claims to opt out.115 Conversely, if the notice is unduly
optimistic, it might encourage class members to stay in and release their
claims too cheaply.

§ 6.2.5 Cost of Notice

As should be clear by now, disseminating notice to a class is not cheap.

Mailing notice to individual class members can get expensive quickly. As a
matter of doctrine, cost of notice is not a controversial issue: Courts have long
held that plaintiffs must bear the cost of notice in class actions.116 However,
as a practical matter, since the costs of notice can be significant, the plaintiff
may (understandably) seek to shift as much of that cost onto the defendant as
possible.117 In general, courts do not look kindly on attempts to shift the cost
of notice to defendants,118 even the more inventive attempts.119
However, in certain limited instances, courts may be amenable to shifting
some of the cost or burden of notice to the defendant. If the “defendant can
perform one of the tasks necessary to send notice, such as identification, more
efficiently than the representative plaintiff, the district court has discretion to
order him to perform the task under Rule 23(d),” and may have some discre-
tion to allocate the cost of complying with that order.120 If the cost of provid-
ing the information is so low as to be “insubstantial,” or if the defendant

115. Mirfasihi, 356 F.3d at 785 (“Notice of a pending suit that might offer only remote prospects
of success might confuse class members and precipitate imprudent opting out.”).
116. See Eisen, 417 U.S. at 179 (“the plaintiff must pay for the cost of notice as part of the ordinary
burden of financing his own suit”); Oppenheimer Fund, 437 U.S. at 356 (“The general rule
must be that the representative plaintiff should perform the tasks [necessary to send class
notice], for it is he who seeks to maintain the suit as a class action and to represent other
members of his class.”).
117. See Oppenheimer Fund, 437 U.S. at 356; Hitt, 552 F.2d at 1100 (“plaintiffs argue that defen-
dants should be required at their own expense to supply the names and addresses of the
class members. . . . They contend somewhat obliquely that this requirement is necessary to
comply with due process standards. . . . [and] they assert that since defendants are ‘inti-
mately familiar’ with the information contained in the RDR cards, having used them in
their daily operations, the class information is more readily ascertainable by defendants.”)
(internal footnotes omitted).
118. See Oppenheimer Fund, 437 U.S. at 356 (“ordinarily there is no warrant for shifting the cost
of the representative plaintiff ’s [notice-related] tasks to the defendant”).
119. See generally Larsen v. JBC Legal Group, P.C., 235 F.R.D. 191 (E.D.N.Y. 2006) (refusing plain-
tiff ’s request to have summary judgment and class certification decided simultaneously so
defendant would be required to pay costs of notice).
120. See Oppenheimer Fund, 437 U.S. at 350.
190 Chapter 6 Post-Certification Steps

would have performed the notice-related task in its regular course of

business, a court might decide not to make the plaintiffs pay the costs.121 In
general, however, a district court “should be considerably more ready to place
the cost of the defendant’s performing an ordered tasks on the representative
plaintiff, who derives the benefit.”122
Both the interlocutory appeal process and the class notice process exist in
part to ensure that any class-wide trial of a plaintiff’s claims has been
thoroughly tested, and that the class is informed of—and prepared for—the
possible outcomes of that trial. And it is the class trial itself that forms the
focus of the next chapter.

121. See Id. at 359. A court might also decide to make the defendant bear some costs of notice if
the defendant would receive equal benefit from the task performed.
122. Id. at 358.
 CHAP TER

7
Trial Preparation

§ 7.1 Trial Structure 193

§ 7.1.1 Unitary Class Trial 193
§ 7.1.2 Bifurcated Trial 193

§ 7.2 Pre-Trial Discovery 196

§ 7.3 Jury vs. Bench Trial 196

§ 7.4 Post-Certification Summary Judgment 198

§ 7.5 Decertification Motion 200

§ 7.6 In Limine Motions 200

§ 7.7 Jury Instructions/Verdict Forms 201

§ 7.8 Press Issues 202

§ 7.9 The Trial 202

§ 7.10 Post-Trial Motions 206

192 Chapter 7 Trial Preparation

If the court has certified a class and either party is unwilling to settle, then
trial is the next logical step in a class action. Despite the huge risk and expense
associated with it, a class trial can make sense for either side under certain
conditions. For a plaintiff with a strong case facing a recalcitrant defendant
who refuses to settle, a class trial can vindicate the premise of the lawsuit.
A victory can force important changes in how the defendant does business, or
obtain monetary compensation for the defendant’s victims.1 Even if the
plaintiff ultimately loses, the costs of defending a meritorious case through to
a verdict may deter the defendant from similar wrongdoing in the future. As
a further benefit for plaintiff’s counsel, the act of taking the case through trial
adds to counsel’s experience (important for class-counsel appointments),
and adds credibility to her commitments to litigate other class actions through
to a verdict.2 Similarly, for a defendant who firmly believes in the propriety of
its conduct, a class trial presents an opportunity to refute forcefully a baseless
attack on its conduct. Further, the act of defending the class action all the way
to trial may deter other plaintiffs’ lawyers from asserting class actions against
the company in the hopes of obtaining a nuisance-value settlement.3
There have been few trials of class actions. As a result, there is not as much
guidance from federal cases about how to conduct a class trial as opposed to
other stages of class-action litigation. There are, however, many excellent
books that discuss how to conduct trials in the U.S. court system, and we have
no intention of rehashing them. Instead, we will focus on those portions of the
trial where a class action forces different strategic choices. As a result, we will
not cover certain issues—like voir dire, or certain evidentiary objections—
that, while important in a trial, are not substantially different in a class trial.
Strategically, the parties have several goals in a class trial. The plaintiff will
seek a jury verdict; but, at the same time, she will try to make a complex case
as easy to comprehend as possible. The defendant will also be seeking a jury
verdict. But, assuming it believes the class was wrongly certified, it will also

1. See generally Clara Bingham & Laura Leedy Gansler, Class Action: The Landmark
Case That Changed Sexual Harassment Law (2003) (describing 11-year litigation against
recalcitrant defendant). The case described in the book, Jenson v. Eveleth Mines, ultimately
settled on the courthouse steps, but provides a powerful example of the benefits a plaintiff may
obtain for a class if she is unflinching about preparing for trial.
2. See Avinash K. Dixit & Barry J. Nalebuff, The Art of Strategy: A Game Theorist’s
Guide to Success in Business and Life 211–212 (2008) (discussing importance of reputa-
tion in repeat-player strategic games); Douglas G. Baird, et al., Game Theory & the Law,
178-85 (1998) (discussing strategy of building reputation for credible aggression in repeat-
player games). Class-action plaintiffs’ counsel who earn reputations as credible trial threats are
likely to settle cases more easily, and possibly at a premium over their colleagues. See Patrick
Dillon & Carl M. Cannon, Circle of Greed: The Spectacular Rise and Fall of the
Lawyer Who Brought Corporate America to Its Knees 82 (2010).
3. Dixit & Nalebuff, The Art of Strategy, 211–212; Baird, et al., Game Theory & the Law,
178–85.
 Trial Structure 193

try to demonstrate the unmanageability of the class trial to the court. Its goal
will be either (1) an order decertifying the class, or (2) a class trial that does
no more than answer truly common issues while giving each individualized
issue due consideration untainted by the common-issue phase. In addition,
each side will also seek to preserve any issues necessary for appeal.

§ 7.1 Trial Structure

Given the complexity of the issues involved in class trials, the structure can
have a large effect on how the jury (or judge) understands the issues. There
are, generally, two different structures for class trials: (1) a unitary, “front-
to-back” trial of all class claims, and (2) a bifurcated trial, in which the court
tries common issues first, and then allows for trial (or some other administra-
tive resolution) of any individual claims or causes of action. Each of these
structures poses specific strategic challenges.4

§ 7.1.1 Unitary Class Trial

In a unitary class trial, the entire case is tried in front of a single jury in a single
proceeding. This is what most people consider a “trial.” However, unitary
trials are not the only—or even necessarily the best—option for class trials.
There are some strategic advantages for the plaintiff in holding a unitary
class trial. To the extent the plaintiff is trying to tell a complete, emotionally
compelling story, she may want a single trial, so the jury may see the conduct
that led to liability as well as the effect it had on the class.
From the defendant’s standpoint, if the class was erroneously certified,
a unitary trial may expose that error more vividly than a trial that is divided
into stages. However, in a unitary trial the defendant also risks the court’s
agreeing to streamline procedures at the cost of the defendant’s due process
rights, which could lead to an adverse verdict.

§ 7.1.2 Bifurcated Trial

In a bifurcated trial, the court severs the issues into two (or more) phases. The
parties will generally present evidence on one discrete set of issues (such as
the question of defect or liability) to the jury, and wait for a verdict on those

4. For a series of exemplar briefs that raise the issues discussed here, see Appendices 7A
(defendant’s bifurcated litigation proposal), 7B (plaintiff ’s trial structure proposal), and 7C
(defendant’s response to plaintiff ’s trial structure proposal).
194 Chapter 7 Trial Preparation

issues before proceeding with the next set.5 The idea underlying bifurcation
of class trials is that the common issues can be severed from individual issues
that might otherwise cause problems for a class trial.
Generally, federal courts will allow bifurcation (or even finer distinctions)
of trials into joint trials of issues common to the class, followed by individual
trials of non-common issues.6 If the issues to be tried separately are suffi-
ciently distinct, then bifurcation is possible.7 However, as the Seventh Circuit
Court of Appeals has warned, bifurcation must “carve at the joint,” so that
subsequent juries do not re-examine factual issues decided by the first jury.8
Conducted properly,9 bifurcation can help all parties. For the plaintiff,
bifurcation can simplify the logistics of presenting a complex case. For the

5. Manual for Complex Litigation (Fourth) § 11.632 at 122 (2004) (“Severance may take
the form of having evidence on discrete issues presented sequentially, with the jury returning
a verdict on an issue before the trial moves on to the next issue.”).
6. Manual for Complex Litigation (Fourth) § 11.631 at 121–22 (“[T]he judge may con-
sider severing for a joint trial those issues on which common evidence predominates, reserv-
ing noncommon issues for subsequent individual trials.”); see also In re Rhone-Poulenc Rorer,
Inc., 51 F.3d 1293, 1302 (7th Cir. 1995) (Posner, C.J.) (“Bifurcation and even finer divisions of
lawsuits into separate trials are authorized in federal district courts.”); Mullen v. Treasure Chest
Casino, L.L.C., 186 F.3d 620, 623 (5th Cir. 1999) (describing bifurcation between common and
individualized issues at trial); In re Bendectin Litig., 857 F.2d 290, 296 (6th Cir. 1988) (describ-
ing trifurcation of consolidated products-liability class actions); In re Estate of Marcos Human
Rights Litig., 910 F. Supp. 1460, 1462 (D. Haw. 1995) (describing trifurcation of human-rights
class action against deposed Filipino dictator); Watson v. Shell Oil Co., 979 F.2d 1014, 1017–18
(5th Cir. 1992) (affirming four-stage plan for class trial).
7. In re Plywood Antitrust Litig., 655 F.2d 627, 636 (5th Cir. 1981) (“in a bifurcated proceeding,
the issue or issues to be tried separately in the second trial must be so distinct and separable
from the others that a trial of it or them alone may be had without injustice”).
8. In re Rhone-Poulenc Rorer, 51 F.3d at 1302–03 (“However, as we have been at pains to stress
recently, the district judge must carve at the joint. Of particular relevance here, the judge must
not divide issues between separate trials in such a way that the same issue is reexamined by
different juries.”) (internal citations omitted). To address this issue, the Manual for Complex
Litigation (Fourth) has advised that, where possible, the court should retain the same jury
for the second issue. § 11.632 at 122 (“Generally, when issues are severed for separate trials,
they should be tried before the same jury unless they are entirely unrelated.”).
9. What does proper bifurcation look like? In Cimino v. Raymark Industries, 151 F.3d 297, 305–06
(5th Cir. 1998), while the Fifth Circuit reversed the trial court on other grounds, it noted that
the trial court had properly bifurcated the case for trial:
It was clear from the beginning of, and throughout, the phase III trials that the two juries
were not to, and did not, determine whether exposure to any of defendants’ products
was a cause of the sample plaintiffs’ complained-of condition. In phase III the court
instructed the jury that they were to assume exposure was sufficient to be a producing
cause of all the disease categories. As plaintiffs admit in their brief here, in the phase III
trial “the juries were told to assume that the claimants had sufficient exposure.” Indeed,
for the most part evidence of exposure and its likely or possible results was not allowed.
Id. (internal footnotes omitted). See also Mullen, 186 F.3d at 623 (“Under the court’s plan,
the liability issues common to all class members will be tried together in an initial trial phase.
 Trial Structure 195

defendant, bifurcation may help reduce trial costs: if the jury decides the first
issue in favor of the defendant, then there is no need to try any more of the
case.10 If the issue is decided against the defendant, then the trial can proceed
to the subsequent phases.11
However, bifurcation carries with it a number of risks. First, conducted
improperly, bifurcation may violate the Seventh Amendment, which prohib-
its a jury from re-examining the findings of a previous jury.12 If the judge
does not bifurcate the issues properly, then a second jury may wind up re-
examining findings of liability.13 In addition, defendants may be concerned
that, as some defendants have shown, bifurcation may increase the odds of
the jury finding for the plaintiff.14 Finally, the plaintiff also has reason to be
wary of bifurcation: depending on how the issues are divided, the plaintiff

Those common issues include whether the employees of the Casino are seamen within the
meaning of the Jones Act, whether the Casino is a vessel within the meaning of the Jones Act,
whether the Casino was rendered unseaworthy by the air quality aboard, and whether
Treasure Chest was negligent in relation to the Casino’s ventilation system. If the class pre-
vails on the common liability issues in phase one, the issues affecting only individual class
members will be tried in a second phase in waves of approximately five class members at a
time. These limited issues include causation, damages, and comparative negligence.”).
10. In re Bendectin Litig., 857 F.2d at 317 (“Many courts have in fact permitted separate issue
trials when the issue first tried would be dispositive of the litigation. The courts do so because
the efficiency of the trial proceedings is greatly enhanced when a small part of the case can be
tried separately and resolve the case completely.”). In the Bendectin case, this is precisely what
happened: the jury found for the defendants, and that resolved the litigation. Id. at 294.
11. Stoffels v. SBC Commc’ns, Inc., 254 F.R.D. 294, 296 (W.D. Tex. 2008) (“The first phase of the
trial in this case will address whether the ‘Telephone Concession’ is an ERISA plan. Should
the Court hold that it is, the action will proceed to the second phase of the trial, addressing
what relief, if any, is available under the Plan.”); In re Estate of Marcos, 910 F. Supp. at 1463–64
(“On September 22, 1992, in the liability phase of the trial, the jury found defendants liable
to 10,059 plaintiffs, for the acts of torture, summary execution and disappearance. On
February 23, 1994 the jury awarded plaintiffs $1.2 billion in exemplary damages.”).
12. U.S. Const., amend. VII (“In Suits at common law, where the value in controversy shall
exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury,
shall be otherwise reexamined in any Court of the United States, than according to the rules
of the common law.”).
13. In re Rhone-Poulenc Rorer, Inc., 51 F.3d at 1303 (“The plan of the district judge in this case is
inconsistent with the principle that the findings of one jury are not to be reexamined by a
second, or third, or nth jury. The first jury will not determine liability. . . . Unless the defen-
dants settle, a second (and third, and fourth, and hundredth, and conceivably thousandth)
jury will have to decide, in individual follow-on litigation by class members . . . such issues as
comparative negligence—did any class members knowingly continue to use unsafe blood
solids after they learned or should have learned of the risk of contamination with HIV?—and
proximate causation. Both issues overlap the issue of the defendants’ negligence.”).
14. See Byron G. Stier, Jackpot Justice: Verdict Variability and the Mass Tort Class Action, 80
Temple L. Rev. 1013, 1020 (2007) (“In [a] study in which jurors heard the same toxic tort
trial and the effect of separated trials was examined, 72% of juries in a bifurcated or trifur-
cated trial found for plaintiff.”).
196 Chapter 7 Trial Preparation

may find herself trying a case with “sterilized” facts, robbed of those atmo-
spherics that give her case its emotional punch.15

§ 7.2 Pre-Trial Discovery

Merits discovery. If pre-certification discovery was bifurcated into certifica-

tion-related and merits-related discovery, then the parties will finish any dis-
covery needed to try the case. For the most part, this discovery resembles
pre-trial discovery in more conventional trials.
Discovery of absent class members. After the class has been certified, the
defendant may seek discovery of the absent class members, if necessary.16 “If
necessary” is an important qualifier; courts frown on discovery that would
confuse, mislead, or harass absent class members.17 So, what is necessary dis-
covery? Information aimed at determining the merits of defendant’s affirma-
tive defenses counts.18
Sometimes, discovery of absent class members will reveal new claimant-
specific issues. If so, the defendant faces a tactical choice as to how best to
address these new variations. The defendant could move to decertify the class,
or seek a bifurcated trial at that point.

§ 7.3 Jury vs. Bench Trial

Another strategic decision the parties must consider (if they have not already
done so) is whether to demand a jury trial on some—or all—issues.19

15. In re Bendectin Litig., 857 F.2d at 315–16 (plaintiffs complained of trifurcation “as unfairly
prejudicial in that trying the question alone prejudiced plaintiffs by creating a sterile trial
atmosphere”).
16. Brennan v. Midwestern United Life Ins. Co., 450 F.2d 999, 1004 (7th Cir. 1971) (“absent class
members may, under certain circumstances, be required to submit to discovery under Rules
33 and 34 and that the sanctions of Rule 37 are available to compel compliance with such
discovery orders”).
17. See Hawkins v. Holiday Inns, Inc., No. C-72–217, 1977 WL 1379, at *2 (W.D. Tenn. Feb. 28,
1977) (court refused to allow discovery of absent class members because “The set of inter-
rogatories Holiday Inns proposes to serve on class members is 24 pages long and contains 72
questions. A more complicated, obtuse, and vexatious set of interrogatories would be difficult
to draw.”); cf. Brennan, 450 F.2d at 1005 (“there is nothing in the record to suggest that the
discovery procedures were used as a tactic to take undue advantage of the class members or
as a stratagem to reduce the number of claimants”).
18. Brennan, 450 F.2d at 1005 (allowing discovery “directed at obtaining information relating to
certain defenses raised by Midwestern in the principal trial”).
19. The parties do not necessarily need to make this decision before the final pretrial conference.
Manual for Complex Litigation (Fourth) § 11.62 at 120 (“Although a general demand
 Jury vs. Bench Trial 197

The parties do not have to conduct a full jury trial on each issue: there are
several alternatives, including deciding the issue by motion, submitting the
issue to an advisory jury,20 a special master,21 or allowing the issue to be
decided by bench trial.
Each party should consider several variables when deciding whether to
demand a jury trial.
Quality of the jury pool. Assuming the case has not been transferred, it is
likely that the plaintiff has selected a venue where she believes the jury pool is
likely to provide a favorable verdict.22 However, if the case has been trans-
ferred for some reason, then each party should survey the demographics,
average verdict size, and other relevant facts about the district to determine
whether their case stands a better chance in front of a jury.
Quality of the bench. It probably goes without saying that each side will
determine whether they are likely to receive favorable rulings from the
judge.23 However, there are other questions to consider. Among them: How
thoughtful is the judge? How capable is he of handling either complex fact
patterns or cutting-edge techniques for consolidating facts? How often has he
been reversed? While immediately favorable rulings are, of course, of vital
importance (among other reasons, they may influence settlement discus-
sions), neither side will want to have a favorable verdict overturned on
appeal.
Requesting a bench trial may backfire, however. Courts have much more
discretion in structuring a bench trial, and may place severe limits on each
side’s ability to present evidence. For example, the court might limit the
amount of time each party has to put on its case.24 Moreover, while most
judges are extremely conscientious about their fact-finding duties, even they

for a jury trial may have been made early in the litigation, the final pretrial conference is an
appropriate time to consider whether the parties are entitled to a jury trial on particular
issues and, if not, whether those issues should be decided in a separate trial (which may be
concurrent with the jury trial), decided by motion, or submitted to an advisory jury.”) (inter-
nal footnotes omitted).
20. See Manual for Complex Litigation (Fourth) § 11.62 at 120.
21. In re Estate of Marcos, 910 F. Supp. at 1462 (noting that special master presented report on
compensatory damages).
22. See § 3.3.
23. As we discussed in Methods and Assumptions, we are using party affiliation (in the form of
appointing president) as a rough proxy for judicial ideology, and therefore pro-plaintiff or
pro-defense leanings.
24. McLain v. Lufkin Indus., Inc., 519 F.3d 264, 272, 282 (5th Cir. 2008) (“When the case finally
went to bench trial, the court strictly limited each party to twenty hours for the presentation
of its case.”). The Fifth Circuit does note that the bench trial followed “[p]rotracted pretrial
proceedings . . . includ[ing] two class certification hearings, two interlocutory appeals to this
court, and a two-year mediation effort.” Id. See also Pierce v. County of Orange, 526 F.3d 1190,
1200 (9th Cir. 2008) (trial court did not abuse discretion by limiting trial to 3 days per side).
198 Chapter 7 Trial Preparation

can have difficulty overcoming their personal preconceptions.25 And given

the long gestation period for most class actions, the judge will have ample
time to form preconceptions about the case.
Complexity of the case. The more complex the lawsuit, the more likely the
parties will request a bench trial. A judge is more likely to keep track of the
facts in light of the various procedural and legal issues that will arise than
a jury. In addition, a judge may issue a memorandum opinion with findings
of fact,26 which will allow the parties to determine exactly what the preclusive
effect of the verdict is, and which will facilitate any appeals.
Timing. If the trial will contain both jury and non-jury issues, then the
court will likely have to try the jury issues first.27 This may present complica-
tions for some bifurcation plans.

§ 7.4 Post-Certification Summary Judgment

Assuming there are grounds to do so, either party can move for summary
judgment after a class has been certified. The plaintiff’s post-certification
summary judgment motions are usually aimed at reducing the issues to be
tried by obtaining liability determinations against the defendant in advance
of trial (thus limiting trial to the determination of damages). The defendant
can file two different kinds of summary judgment motions: those directed
against individual class members, and those directed against the entire class.
At this point, while the effect of a defendant’s summary judgment motions
may look similar (dismissal of some or all claims), there are subtle tactical
differences, discussed below.
Plaintiff class-wide summary judgment motions. Once a class has been
certified, the plaintiff may wish to move for summary judgment on certain
issues. Doing so accomplishes two goals: (1) victory on these motions

25. See Richard A. Posner, How Judges Think 68 (2008) (“Preconceptions matter even when
the only thing the judge is doing is finding facts.”); Chris Guthrie, et al., Blinking on the
Bench: How Judges Decide Cases, 93 Cornell L. Rev. 101, 105, 117 (2007) (discussing judges’
inability to completely override intuitive decisionmaking).
26. DeFelice v. US Airways, Inc., 497 F.3d 410, 417 (4th Cir. 2007) (“Approximately one month
after conclusion of the trial, the district court issued a comprehensive 58-page memorandum
opinion, granting judgment to U.S. Airways.”); Frederick L. v. Dep’t of Pub. Welfare of Pa., 364
F.3d 487, 491 (3d Cir. 2004) (“Following a three-day bench trial in May 2002, the District
Court issued a memorandum opinion on September 5, 2002 in favor of DPW.”).
27. Manual for Complex Litigation (Fourth) § 11.62 at 120 (“If both jury and nonjury
issues are to be tried, the judge should determine whether Beacon Theatres, Inc. v. Westover
requires that the jury issues be decided first.”) (internal footnotes omitted).
 Post-Certification Summary Judgment 199

increases pressure on the defendants to settle;28 (2) victory on these motions

also simplifies the trial, requiring the jury to decide fewer issues. The primary
risk for the plaintiff is that the court will rule against the motions based on the
evidence rather than the lack of undisputed facts. The court might also deny
the plaintiff’s motion by embracing a rigorous interpretation of the elements
of her claims, making proof more difficult at trial.
Class-wide summary judgment motions. There is little risk for the defen-
dant in filing a class-wide summary judgment motion after a class has been
certified. If the defendant wins, then it has either narrowed the class at trial,
or obtained a judgment with preclusive effect against the entire class.29 If the
defendant loses, then it faces the same risks it would have without the sum-
mary judgment motion. Further, the act of briefing summary judgment can
force the plaintiff to be more specific about how she proposes to prove her
claims on a class-wide basis, and prompt the court to establish more precise
instructions to the parties regarding the legal elements of the claims. All of this
allows the parties to better prepare for trial, and may provide the defendant
an opportunity either to further educate the judge about the individualized
nature of the certified claims, or raise the bar as to the standard of proof the
plaintiff must meet in order to prevail at trial.
Individualized summary judgment motions. Summary judgment motions
directed against individual plaintiffs may still be possible after the class has
been certified. If the defendant prevails, the entire case may be dismissed.30 In
addition, an individualized summary judgment motion may provide a means
of challenging the certification decision. Sometimes a court will certify a class
because it had not thought through the implications of trying the elements of
the plaintiff’s claims on a class-wide basis. Forcing the court to consider the
law governing those claims as it rules on the plaintiff’s claims may cause it to
acknowledge the role of claimant-specific issues in the litigation, which could
lead to either decertification of the class or claimant-specific procedures for
litigating individual issues. Finally, an individualized summary judgment
motion may help the defendant to preserve the record of any erroneous inter-
pretations of law for an eventual appeal.
Both individual and class-wide summary judgment motions can provide
strategic advantages to the defendant regardless of the outcome. If the defen-
dant wins, it potentially wins against the entire class. But even if it loses, if the

28. Cf. Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 427 (2d Cir. 2007) (“Settlement
negotiations began with certain defendants only after the court denied defendants’ motions
for summary judgment”).
29. See Id. at 427 (trial court granted post-certification summary judgment motion for defendant
Q Model Management because the agency had been founded after the alleged conspiracy had
begun, and had never joined the trade association that allegedly served as conspiracy’s hub).
30. See Nelson v. Tennessee Gas Pipeline Co., 243 F.3d 244, 247 (6th Cir. 2001).
200 Chapter 7 Trial Preparation

denial turns on contested material facts, then the case may turn on individu-
alized issues, laying the groundwork for a decertification motion.

§ 7.5 Decertification Motion

Once post-certification discovery has been completed and any summary

judgments have been resolved, the defendant may consider a motion to
decertify the class.31 The defendant will likely focus on commonality or man-
ageability: if the plaintiff cannot prove key elements of her claims without
resorting to individualized evidence, there may be sufficient grounds for
decertification.32 In response, the plaintiff’s strongest strategy is often to show
why it is not necessary to establish individual elements of a given claim—
either because the law does not require them, or because they have already
been established with common evidence.33
The primary risk to a decertification motion is that it may tax the court’s
patience—the court may view this as an improper attempt to re-litigate issues
it has already considered and decided. (It may also create the impression that
the court considered the propriety of the class a number of times, which the
appellate court may conflate with a “rigorous analysis.”) However, even if
the defendant loses the decertification motion, it may succeed in limiting the
class somewhat, reducing its overall exposure to an adverse verdict.34

§ 7.6 In Limine Motions

While motions in limine are a part of any trial, some motions are more likely
to arise in class trials. For example, the defendant may wish to file motions in
limine limiting the plaintiff’s use of summary evidence, or of statistical

31. In re Scrap Metal Antitrust Litig., 527 F.3d 517, 524 (6th Cir. 2008) (noting court denied
defendant’s motion to decertify class).
32. See Pierce, 526 F.3d at 1200 (trial court did not abuse discretion by decertifying damages class
“in light of expected difficulties identifying class members and determining appropriate
damages”).
33. For more information on decertification motions, see Appendices 7D (exemplar decertifica-
tion motion), 7E (exemplar decertification opposition), and 7F (exemplar decertification
reply).
34. In re Plywood Antitrust Litig., 655 F.2d at 631 (“Thereafter, the actions were reassigned to
Judge Pointer who, following defendants’ motions to decertify the classes, confirmed the
prior certification but redefined the class to include only direct purchasers.”).
 Jury Instructions/Verdict Forms 201

evidence that it believes papers over important variations.35 Similarly, the

plaintiff may move to exclude defendant’s use of evidence that emphasizes
the variations among the class, or to admit its own statistical or summary
evidence. If the record supports it, each side should consider moving to
exclude experts under Federal Rule of Evidence 702 and 703.36

§ 7.7 Jury Instructions/Verdict Forms

Jury instructions and special verdict forms both have great strategic weight in
class actions. Jury instructions tell the jury how to interpret the facts in light
of the governing law. Depending on how the instructions are worded, the
jury may make sweeping factual decisions, or more specific findings that
depend on variations among the class members. Therefore, much like in indi-
vidual trials, each side will press for jury instructions that favor its interpreta-
tion of the facts.37 The defendant may have a secondary strategic consideration.
If it intends to appeal the certification of the class, the defendant will also
want the jury instructions to reflect what it perceives as the full complexity of
the case.
Special verdict interrogatories are also extremely helpful for the jury in
sifting through the various complex issues raised at a class trial.38 In fact, a
number of class trials have involved the use of special verdict interrogato-
ries.39 The plaintiff may resist the use of special interrogatories; the more

35. See Pierce, 526 F.3d at 1200 (trial court did not abuse discretion in excluding survey
evidence).
36. In re Scrap Metal, 527 F.3d at 524 (noting court denied defendant’s motion to exclude
expert).
37. See Otto v. Variable Annuity Life Ins. Co., 134 F.3d 841 (7th Cir. 1998) (class plaintiff appealed
instructions giving jury discretion to decide terms of contract).
38. Manual for Complex Litigation (Fourth) § 11.633 at 123 (2004) (“Special verdict forms
or interrogatories accompanying a general verdict form may help the jury focus on the issues,
reduce the length and complexity of the instructions, and minimize the need for, or scope of,
retrial in the event of reversible error.”).
39. See Pickett v. Tyson Fresh Meats, Inc., 420 F.3d 1272, 1277–78 (11th Cir. 2005) (“The jury’s
‘verdict’ consisted of answers to a number of interrogatories. Specifically, the jury was
asked—‘yes’ or ‘no’—whether it found, by a preponderance of the evidence: 1. That there is a
nationwide market for fed cattle? 2. That the defendant’s use of [marketing agreements] had
an anti-competitive effect on the cash market for fed cattle? 3. That the defendant lacked a
legitimate business reason or competitive justification for using [marketing agreements]? 4.
That the defendant’s use of [marketing agreements] proximately caused the cash market
price to be lower than it otherwise would have been? 5. That the defendant’s use of [market-
ing agreements] injured each and every member of the plaintiffs’ class? . . . The verdict form
instructed the jury that, if it did answer “yes” to all of those questions, it should answer these
additional questions: 6. What amount, if any, do you find that defendant’s use of [marketing
202 Chapter 7 Trial Preparation

questions the jury has to answer, the more likely it will answer some of those
questions in the negative. Some courts are also resistant to jury instructions
and verdict forms that depart from approved models, because any departures
may increase the chance that a verdict will be reversed on appeal.

§ 7.8 Press Issues

Because of their size and stakes, class trials may attract the notice of the press
more frequently than smaller trials on the same issues. As a result, both sides
may need to determine a media strategy.40 The plaintiff will likely have more
freedom to work the press; as a private individual, she is unlikely to have a
preexisting media-relations strategy, or business goals that conflict with any
message she may want to send during trial. Moreover, the plaintiff’s media
strategy will likely focus on publicizing the defendant’s alleged misconduct.
Should the case proceed to trial, defense counsel should try to coordinate
their efforts closely with their client’s press office. In particular, this may be the
time to begin rehearsing some of the defendant’s merits story to counteract
any negative press.

§ 7.9 The Trial

At trial, the primary concern is how to turn voluminous discovery and

numerous varied factual issues into a format that a jury can understand,
retain, and digest back in the jury room. For each side, many of the strategic
concerns are the same as for a trial in individual litigation: opening and clos-
ing statements and testimony of appearing witnesses, for example, operate
much as they would in an individual trial.41 However, some concerns—which
factual issues to stipulate, how to admit statistical or summary evidence,

agreements] damaged the cash market price of fed cattle sold to [the defendant] during the
period from February 1, 1994, through October 31, 2002? 7. Did the defendant’s use of [mar-
keting agreements] depress the cash market price for fed cattle purchased by [the defendant]
by an equal percentage for each year of the class period? If your answer is yes, by what per-
cent?”); Deadwyler v. Volkswagen of Am., Inc., 884 F.2d 779, 781 (4th Cir. 1989) (noting that
the “jury retired to consider the evidence and to make findings on the nine issues submitted
by way of special verdict interrogatories”).
40. For more on media relations, see § 4.1.1.
41. For discussions of the strategic concerns in a “standard” trial, see, e.g., Bruce L. Hay and
Kathryn E. Spier, Burdens of Proof in Civil Litigation: An Economic Perspective, 26 J. Legal
Studs. 413, 417 (1997).
 The Trial 203

whether to use taped testimony or deposition excerpts—pose different chal-

lenges at a class trial than they do at an individual trial.
Stipulations. One tool both parties can use is the stipulation, a mutual
agreement about the existence of certain facts or the admissibility of certain
evidence. Stipulations help to narrow the issues that will actually be tried,
making them particularly helpful in class trials.42 Certain class-wide issues may
lend themselves to stipulation, such as the appropriate amount of damages
in an antitrust case.43 Stipulations also allow each side to engage in strategic
bargaining, stipulating to the admission of certain evidence in exchange for
the admission of other, more favorable evidence, or concessions on trial
structuring. The plaintiff will often favor stipulations, since they reduce the
amount of complex evidence she must present to a jury.44 However, much as
at an individual trial, the plaintiff will also be careful not to stipulate to facts
that might carry greater emotional weight if established before the jury.
Stipulations can pose strategic risks for the defendant as well. A defendant
trying a class action over objection (because it believes the class should not
have been certified in the first place) will often take care not to concede issues
that it has already argued are too complex to be tried on a class-wide basis.45
Statistics. Another way of condensing complex issues is to employ statisti-
cal techniques. Plaintiffs tend to favor this technique, as it tends to remove
questions from individualized issues and present issues as if they were uni-
form (or at least manageable) along the continuum of the class. Statistics can
work particularly well in certain class actions. For example, securities cases
that try the question of fraud on the market may use statistics to show when
the alleged fraud occurred, its effect on pricing, and the effect of any later
corrective disclosures.
The defendant may consider challenging the use of statistical techniques.
Leaving aside the merits of a given technique, challenging the plaintiff’s ability
to use random sampling will both (1) demonstrate to the court the difficulties

42. See Frederick L. v. Dep’t of Pub. Welfare, 364 F.3d 487, 490 (3d Cir. 2004) (“On May 6, 2002,
the parties filed extensive joint stipulations regarding the facts underlying this case.”);
Brennan v. Midwestern United Life Ins. Co., 286 F. Supp. 702, 704 (N.D. Ind. 1968) (“Prior to
the trial of this case, the parties entered into extensive discovery and voluminous
stipulations.”).
43. In re Plywood, 655 F.2d at 632 n.1 (“The damage figures set out below were stipulated to by
the parties as the appropriate amounts prior to trebling if the jury’s verdict is permitted to
stand.”).
44. In re Bendectin Litig., 857 F.2d at 295 (noting plaintiffs’ offers to stipulate on a number of
issues).
45. In re Bendectin Litig., 857 F.2d at 295 (defendant “argued that substantive law differences
among the various jurisdictions represented by plaintiffs prevented consolidation as to any
other issue [than whether Bendectin was an unreasonably dangerous product], regardless of
whether the cases had been originally filed in Ohio or had been subsequently transferred
there.”).
204 Chapter 7 Trial Preparation

of presenting varied factual issues in a single trial, and (2) force the plaintiff
into presenting repetitious evidence that may alienate the jury.
To see how these debates might play out, consider the case of In re Estate
of Marcos Human Rights Litigation,46 a class action that alleged that the late
Filipino dictator Ferdinand Marcos had tortured a number of his citizens. In
that case, the court allowed the use of statistical evidence in order to deter-
mine compensatory damages. The trial was divided into different phases.
After the parties had tried liability, the plaintiffs tried the issue of compensa-
tory damages by presenting the damages sustained by a random sample of the
class as representative of the entire class.47 They began by having a Special
Master review the depositions of 137 class members, as well as hearing live
testimony from a few of them.48 The Special Master then presented a report
to the jury recommending the damages for these class members, which (ide-
ally) would provide a statistically valid basis for determining damages for the
rest of the class.49 The defendants challenged the procedure, arguing (1) that
they had not had the opportunity to cross-examine all of the class members
because the testimony of only a sample was presented in the report in viola-
tion of the Seventh Amendment,50 and (2) that each claim should be indi-
vidually tried.51 The trial court overruled them, holding that the defendants
had had a chance to depose any of the class members they wanted,52 and that
“[t]he use of aggregate procedures, with the help of an expert in the field
of inferential statistics, for the purpose of determining class compensatory
damages is proper.”53
Nonetheless, courts tend to remain cautious about the use of statistics in
cases that might not ordinarily use statistical evidence.54
Studies. Both the plaintiff and defendant might also rely on the use of sci-
entific studies. On one hand, studies may benefit the plaintiff by distilling
large amounts of raw evidence down into a manageable number of facts and

46. In re Estate of Marcos, 910 F. Supp. at 1462.

47. Id.
48. Id.
49. Id.
50. Id.
51. Id. at 1464.
52. Id. at 1464 n.5.
53. Id. at 1464.
54. In re Fibreboard Corp., 893 F.2d 706, 710 (5th Cir. 1990) (“We are pointed to our experience
in the trial of Title VII cases and securities cases involving use of fraud on the market con-
cepts and mathematical constructs for examples of workable trials of large numbers of claims.
We find little comfort in such cases. It is true that there is considerable judicial experience
with such techniques, but it is also true we have remained cautious in their use.”).
 The Trial 205

documents. On the other, technical studies may rob the trial of some of its
emotional impact.55
Summaries. The parties may also submit other summaries into evidence,
so long as the underlying raw evidence is admissible.56 Summaries have sev-
eral obvious benefits: they allow the parties to work through a large amount
of complex evidence quickly while telling a coherent story, and any attempts
to undermine them may appear nit-picking, which is more likely to alienate
jurors. Summaries of this type also work well in bench trials.57 However,
because the raw evidence itself must be admissible, the submitting party must
remember to leave enough time for its opponent to review the underlying
evidence.58
Testimony. As with other complex trials, both parties may rely more exten-
sively on recorded—rather than live—testimony.59 Similarly, the parties may
designate portions of depositions taken before trial.60
Expert testimony. Finally, expert testimony may summarize and shape the
evidence. In addition to allowing an efficient summary, expert testimony
places a human face (the expert’s) on the facts, and carries with it the stamp

55. In re Bendectin Litig., 857 F.2d at 313 n.18 (“At trial, the proof adduced by plaintiffs to prove
causation consisted of highly technical scientific studies, including toxicity studies on labora-
tory animals, chemical studies of the biochemical properties of Bendectin, and epidemio-
logical studies or case histories of persons exposed to the drug.”).
56. Manual for Complex Litigation (Fourth) § 11.492 at 101 (“Whenever possible, volu-
minous or complicated data at trial should be presented by counsel through summaries,
including compilations, tabulations, charts, graphs, and extracts. Federal Rule of Evidence
1006 creates an exception to the ‘best evidence’ rule, allowing writings, recording, or photo-
graphs that cannot conveniently be examined in court to be presented in the form of ‘charts,
summaries or calculations.’ The rule does not affect the requirement that the originals be
admissible.”).
57. Id. § 11.492 at 101–02 (“While counsel in jury cases usually recognize the need for summa-
ries, they may overlook their utility in nonjury cases; the trial judge should not be expected
to ‘wad[e] through a sea of uninterpreted raw evidence.’”) (internal footnote omitted).
58. Id. at 102 (“Summaries may be offered under Federal Rule of Evidence 611(a) solely as an aid
to understanding, with the underlying evidence separately admitted into the record.
Whenever possible, however, summaries should be received as substantive evidence under
Rule 1006, in lieu of the underlying data. When summaries are so used, opposing parties
must be given an adequate opportunity to examine the underlying data in advance of trial
and raise objections in time to enable the proponent of the summary to make necessary
corrections.”).
59. See In re Bendectin Litig., 857 F.2d at 314–15 (referring to plaintiffs’ revision of deposition
videotapes for trial); Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 336 (4th
Cir. 1999) (“plaintiffs’ tort and statutory unfair trade practices claims prominently featured
171 taped excerpts of statements made by Meineke representatives at so-called ‘final review
sessions’ that preceded the execution of any franchise agreement—all but one of the sessions
involving absent class members”).
60. See DeFelice, 497 F.3d 410, 417 (“The parties also designated portions of depositions of ten
additional witnesses and submitted roughly two hundred documentary exhibits to the
court.”).
206 Chapter 7 Trial Preparation

of authority. As a result, either or both parties may rely heavily on presenting

expert testimony during the trial.61

§ 7.10 Post-Trial Motions

The post-trial motion represents the last chance for each party to secure a
ruling in its favor from the trial court. For the most part, the mechanics of
post-trial motions are similar to those of single-plaintiff trials.62 However,
there are a few instances in which the class character of the trial may affect the
ways in which the post-trial motions are conducted. For example, defendants
may move for a judgment not withstanding the verdict challenging the named
plaintiffs’ ability to represent the class.63 Also, both the plaintiff and the defen-
dant will submit proposed jury instructions and verdict forms. These, too,
will reflect the class nature of the trial: the plaintiff will submit jury instruc-
tions and verdict forms that highlight common issues; the defendant will
submit materials that pay close attention to the individualized issues of cau-
sation, injury, and damages that arose at trial.64
To some extent, a class trial represents a strategic failure for both sides.
Given the stakes involved in a class action, neither side wants to risk an
adverse jury verdict. Instead, the plaintiff is hoping to settle the class claims
on favorable terms, and the defendant hoping for either an early disposition
or early settlement of the case. Moreover, given the size of the stakes in most
class actions, neither side will want to commit its fortunes to a jury trial if
there is any way to avoid doing so.
The most reliable method of avoiding a trial on class issues—the class-
wide settlement—is the subject of the next chapter.

61. DeFelice, 497 F.3d at 417 (“The court then held a six-day bench trial, at which eleven fact
witnesses and five experts testified on behalf of the Employees and two experts testified on
behalf of U.S. Airways.”); Broussard, 155 F.3d at 336 (“Plaintiffs’ expert outlined a damages
formula, by which he purported to calculate the lost profits damages of all class members on
a ‘global’ basis. He testified that every Meineke franchisee lost $8.16 in sales for each dollar of
allegedly misallocated WAC funds and projected a 34% profit margin for all franchisees.”).
62. Pickett, 420 F.3d at 1277 (“Before the case was submitted to the jury, Tyson moved the district
court for judgment as a matter of law under Fed. R. Civ. P. 50(a). The motion asserted, among
other grounds, that Tyson had proven a number of competitive justifications for using
marketing agreements, the factual existence of which were not disputed by any evidence.”).
63. Brown v. Pro Football, Inc., 821 F. Supp. 20, 23 (D.D.C. 1993) (after adverse verdict, defen-
dants filed JNOV challenging “plaintiffs’ use of certain individuals as representative of the
class claims”).
64. For examples of how these issues may arise in instructions or verdict forms, see Appendices
7G (plaintiffs’ proposed jury instructions) and 7H (defendant’s proposed jury instructions).
 CHAP TER

8
Settling Class Actions

§ 8.1 Legal Background 209

§ 8.1.1 Rule 23(e) 210
§ 8.1.2 Class Action Fairness Act (CAFA) 214

§ 8.2 Types of Settlements 216

§ 8.2.1 Claims-made (“Reverter”) Settlements 216
§ 8.2.2 Cy Pres Funds 217
§ 8.2.3 Coupons 219
§ 8.2.4 Injunctions/Consent Decrees 222
§ 8.2.5 Therapeutic Relief 222
§ 8.2.6 Named Plaintiff Settlements 224

§ 8.3 Class-wide Settlement Steps 224

§ 8.3.1 Mediation 226
§ 8.3.2 Drafting the Settlement Agreement 227
§ 8.3.3 Preliminary Approval Order 230
§ 8.3.4 Class Settlement Notice 232
§ 8.3.5 Opt-Outs/Objections 233
§ 8.3.6 Final Approval Hearing 236
§ 8.3.7 Settlement Implementation 237

§ 8.4 Attorneys’ Fees 237

§ 8.4.1 Determining Reasonable Fee 238
§ 8.4.1.1 Lodestar 238
§ 8.4.1.2 Percentage of Common Fund 239
§ 8.4.1.3 Negotiation of Fees 240
§ 8.4.2 Court Approval of Fees 240
208 Chapter 8 Settling Class Actions

If a class action is not dismissed and does not go to trial, it must settle. Of the
many class actions filed each year, very few are actually tried to a final judg-
ment.1 Most are either dismissed or settled somewhere along the way. As a
result, any attorney litigating a class action should be prepared for the possi-
bility of settlement. For the plaintiff, the settlement is usually the desired end-
game. For the defendant, settlement is often—though not always—a last
resort.
Certifying a class solely for settlement purposes was not always the norm;
in fact, the first edition of the Manual for Complex Litigation “strongly disap-
proved of settlement classes.”2 However, settlement classes have proven an
attractive mechanism for disposing of mass torts that threaten to overwhelm
the federal judiciary—such as litigation related to Agent Orange, the Dalkon
Shield, and allegedly defective silicone breast implants.3
With the obvious exception of the settlement amount (which the plaintiff
will want to maximize, and the defendant minimize), settlement is one of the
few times that most of the plaintiff’s and defendant’s interests can align.4
Neither side wants to bear the risk of a costly and time-consuming trial,5
neither side wants to spend further time and money litigating over discovery,
and both sides want to ensure that any settlement is impervious to challenge
from objectors. Each side receives specific benefits from a settlement as well.
The defendant minimizes any adverse publicity that might result from a
public trial of the facts underlying the plaintiff’s allegations. It may also avoid

1. In general, very few lawsuits are tried to final judgment. See, e.g., Andrew F. Daughety &
Jennifer F. Reinganu, Endogenous Sequencing in Models of Settlement & Litigation, 9 J.L. Econ.
& Org. 314, 314 (1993) (“Most lawsuits never go to trial.”); Gyu Ho Wang, et al., Litigation &
Pre-Trial Negotiation under Incomplete Information, 10 J.L. Econ. & Org. 187, 187 (1994)
(noting that “[o]nly a small proportion of cases will result in full litigation”). While there is no
comprehensive empirical study, it appears that class trials are even rarer than individual trials.
Moreover, securities class actions very rarely go to trial. Between 1995 and 2008, only 21
shareholder class actions went to trial; between 2000 and 2008, only four. Six of those 21 cases
had at least a partial settlement before trial was completed. See Stephanie Planich, et al.,
NERA Economic Consulting, 2008 Trends: Subprime and Auction-Rate Cases
Continue to Drive Filings, and Large Settlements Keep Averages High 11–12
(2008), http://www.nera.com/image/BRO_Recent_Trends_0708_final.pdf.
2. In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 778 (3d Cir.
1995).
3. Id. at 778.
4. Most, not all. As discussed in more detail below, the plaintiff (or more accurately, her counsel)
has a strong interest in closing the settlement quickly and getting paid. The defendant has an
interest in minimizing any further discovery.
5. See Byron G. Stier, Jackpot Justice: Verdict Variability and the Mass Tory Class Action, 80
Temple L. Rev. 1013, 1015, 1019 (2007) (discussing empirical studies of “substantial variability
of jury verdicts”).
 Legal Background 209

the disruption to employees from extensive discovery and depositions.6

The plaintiff’s attorneys receive a potentially large payout with far less effort
than would be required in trying the case and enduring appeals. Further, the
named plaintiff may receive an “incentive award” for bringing the suit and
obtaining a class-wide recovery.7 Even the trial court has a strong incentive to
approve the settlement, since doing so will clear a lengthy and unwieldy case
from its crowded docket.8 Indeed, this is one of the reasons why appellate
courts express such strong fears that potential collusion could lead to cheap
settlements of meritorious claims,9 or that misaligned incentives could lead
to settlement of meritless claims.10 These concerns about the ill effects of col-
lusive settlements serve as the backdrop for the law governing the class settle-
ment process.

§ 8.1 Legal Background

Unlike settlements of individual lawsuits, class-action settlements are heavily

regulated. Much of this regulation stems from the concern over collusive
settlements. However, the rules governing class settlements have very real
effects on both their negotiation and their ultimate outcome.11

6. See Blue Chip Stamps v. Manor Drug Stores, 421 US 723, 741 (1975) (“The prospect of exten-
sive deposition of the defendant’s officers and associates and the concomitant opportunity
for extensive discovery of business documents, is a common occurrence in [class action] and
similar types of litigation.”).
7. See Rodriguez v. West Publ’g Corp., 563 F.3d 948, 958–59 (9th Cir. 2009).
8. See Susan P. Koniak, How Like a Winter?: The Plight of Absent Class Members Denied Adequate
Representation, 79 Notre Dame L. Rev. 1787, 1798 (2004) (“Judges, honest as they may be
and diligently as most may work, have an interest in settling any and all cases, and an even
bigger interest in seeing large and cumbersome class actions settle.”); see also Richard
A. Posner, How Judges Think 141 (2008) (“backlog pressure keeps [the judge] working
hard and reversal threat keeps him working carefully— though an alternative strategy is to
push the parties to settle, since settlements reduce backlog without risk of reversal”).
9. In re Gen. Motors Corp. Pick-Up Truck Litig., 55 F.3d at 778 (settlement class “is a vehicle for
collusive settlements that primarily serve the interests of defendants-by granting expansive
protection from law suits—and of plaintiffs’ counsel—by generating large fees gladly paid by
defendants as a quid pro quo for finally disposing of many troublesome claims”).
10. Mirfasihi v. Fleet Mortgage Corp., 551 F.3d 682, 687 (7th Cir. 2008) (Posner, J.) (“The lawyers
for the class could not concede the utter worthlessness of their claim because they wanted an
award of attorneys’ fees. The lawyers for Fleet were reluctant to argue the utter worthlessness
of the claim because they were able to negotiate a settlement that cost their client virtually
nothing—provided they did not take such a strong stand that it jeopardized the class lawyers’
shot at a generous award of attorneys’ fees, and hence the settlement.”).
11. Indeed, the heavily regulated nature of class settlements has led some scholars to question
whether a class settlement should be considered a purely private settlement, or more similar
to an “adjudication” like a trial. See Howard M. Erichson, Against Settlement: Twenty-Five
210 Chapter 8 Settling Class Actions

There are two primary sources of regulation: the provisions of Rule 23(e)
and various provisions of the Class Action Fairness Act (CAFA).

§ 8.1.1 Rule 23(e)

Rule 23(e) requires a court to determine whether the settlement is: (1) fair, (2)
reasonable, and (3) adequate to the plaintiff class.12 Specifically, it provides:

The claims, issues, or defenses of a certified class may be settled, voluntarily

dismissed, or compromised only with the court’s approval. The following proce-
dures 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
adequate.
(3) The parties seeking approval must file a statement identifying any agree-
ment made in connection with the proposal.
(4) If the class action was previously certified under Rule 23(b)(3), the
court may refuse to approve a settlement unless it affords a new oppor-
tunity 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.13

While Rule 23(e)(2) only requires that the court find the settlement to be
“fair, reasonable, and adequate,” the circumstances of particular settlements
have prompted various courts to consider additional factors in evaluating a
proposed settlement.14 Nonetheless, most of these additional factors link

Years Later, Foreword: Reflections on the Adjudication-Settlement Divide, 78 Fordham L.

Rev. 1117, 1123–24 (2009).
12. Fed. R. Civ. P. 23(e)(2).
13. Id.
14. See Nat’l Ass’n of Chain Drug Stores v. New England Carpenters Health Benefits Fund, 582 F.3d
30, 44 (1st Cir. 2009) (“Rule 23’s reasonableness standard has been given substance by case
law offering laundry lists of factors, most of them intuitively obvious and dependent largely
on variables that are hard to quantify”); Manual for Complex Litigation (Fourth)
§ 21.62 at 315 (2004) (“A number of factors are used to apply those criteria and evaluate a
proposed settlement. Deciding which factors apply and what weight to give them depends on
a number of variables: (1) the merits of the substantive class claims, issues, or defenses;
(2) whether the class is mandatory or opt-out; and (3) the mix of claims that can support
individual litigation, such as personal injury claims, and claims that are only viable within a
class action, such as small economic loss claims.”); see also City of Detroit v. Grinnell Corp.,
 Legal Background 211

back—even if only loosely—to the explicit requirements of fairness, reason-

ability, and adequacy.
“Fair.” Many courts use “fairness” as a loose synonym for all three Rule
23(e)(2) factors.15 The Manual for Complex Litigation is more precise:
“Fairness calls for a comparative analysis of the treatment of class members
vis-à-vis each other and vis-à-vis similar individuals with similar claims who
are not in the class.”16 This is one reason why both the Second and Ninth
Circuit Courts of Appeals, for example, looks at the class members’ reactions
to the settlement.17
“Reasonable.” To determine whether a settlement is “reasonable,” the
court looks at whether the proposed settlement actually responds to the alle-
gations in the complaint.18 If the settlement does not provide the kind of
relief requested in the complaint, there may be reason to question its reason-
ableness.19 That said, if the settling parties convince the court that the plaintiff
was unlikely to obtain the relief she originally sought, the court may accept a
plausible argument that the relief provided in the settlement is still fair.
The court’s primary concern when determining reasonableness is whether
the class will receive a comparatively good value in exchange for releasing its
claims.20

495 F.2d 448, 463 (2d Cir. 1974) (listing factors); In re Gen. Motors Corp. Pick-Up Truck Litig.,
55 F.3d at 806–07 (same); Rodriguez v. West Publ’g Corp., 563 F.3d 948, 963 (9th Cir. 2009)
(same); In re CP Ships Ltd. Sec. Litig., 578 F.3d 1306, 1318 (11th Cir. 2009) (same).
15. See Synfuel Techs., Inc. v. DHL Express (USA), Inc., 463 F.3d 646, 653 (7th Cir. 2006)
(“In order to evaluate the fairness of a settlement, a district court must consider the strength
of plaintiffs’ case compared to the amount of defendants’ settlement offer, an assessment of
the likely complexity, length and expense of the litigation, an evaluation of the amount of
opposition to settlement among affected parties, the opinion of competent counsel, and the
stage of the proceedings and the amount of discovery completed at the time of settlement.”)
(Wood, J.) (internal citations and quotations omitted); Krell v. Prudential Ins. Co. of Am., 148
F.3d 283, 316-17 (3d Cir. 1998).
16. Manual for Complex Litigation (Fourth) § 21.62 at 315 (2004).
17. Grinnell Corp., 495 F.2d at 463 (requiring examination of, among other factors, “the reaction
of the class to the settlement”); Rodriguez, 563 F.3d at 963 (same).
18. Manual for Complex Litigation (Fourth) § 21.62 at 315 (2004) (“Reasonableness
depends on an analysis of the class allegations and claims and the responsiveness of the set-
tlement to those claims.”); In re Gen. Motors Corp. Pick-Up Truck Litig., 55 F.3d at 810 (“In the
class action context, “the relief sought in the complaint” serves as a useful benchmark in
deciding the reasonableness of a settlement.”) (quoting Cotton v. Hinton, 559 F.2d 1326, 1330
(5th Cir. 1977)).
19. Id. at 810 (settlement not reasonable where “[t]he coupons offered by GM simply do not
address the safety defect that formed the central basis of the amended complaint filed barely
four months before the settlement.”). Even here, the Third Circuit conflates reasonableness
and adequacy. Id.
20. Id. at 807 (“This inquiry measures the value of the settlement itself to determine whether the
decision to settle represents a good value for a relatively weak case or a sell-out of an other-
wise strong case.”).
212 Chapter 8 Settling Class Actions

“Adequate.” According to the Manual for Complex Litigation, the ade-

quacy requirement determines whether the settlement provides enough relief
to the proposed class: “Adequacy of the settlement involves a comparison of
the relief granted relative to what class members might have obtained with-
out using the class action process.”21 At least one court has considered this to
be “[t]he most important factor relevant to the fairness of a class action.”22 To
determine whether the settlement is adequate, the trial court must establish a
“ballpark valuation” of the case, given both the value of the alleged claims and
the risk of plaintiff’s losing.23 Appellate courts have also warned against
demanding too large a settlement, given that “settlement is a compromise,”24
and have noted that even settlements representing only a fraction of the relief
the plaintiff demanded in the complaint may still be adequate.25 Regardless, if
a majority of the class members accept the settlement offer, the court will
presume that the settlement was adequate.26
In addition to showing the settlement is fair, reasonable, and adequate, the
parties must also establish that the settlement class meets the other require-
ments of Rule 23.27 In fact, since there will be no additional discovery into
the propriety of class treatment, courts may pay “heightened[] attention” to

21. Manual for Complex Litigation (Fourth) § 21.62 at 315 (2004).

22. Synfuel Techs, 463 F.3d at 653 (internal citations and quotations omitted). Judge Wood actu-
ally discussed this factor under the rubric of “fairness.”
23. Id. (“In conducting this analysis, the district court should begin by quantifying the net
expected value of continued litigation to the class. To do so, the court should estimate the
range of possible outcomes and ascribe a probability to each point on the range. Although we
have recognized that a high degree of precision cannot be expected in valuing a litigation, the
court should nevertheless insist that the parties present evidence that would enable possible
outcomes to be estimated, so that the court can at least come up with a ballpark valuation.”)
(internal citations and quotations omitted).
24. Krell, 148 F.3d at 316–17 (“In deciding the fairness of a proposed settlement, we have said
that the evaluating court must, of course, guard against demanding too large a settlement
based on its view of the merits of the litigation; after all, settlement is a compromise, a yield-
ing of the highest hopes in exchange for certainty and resolution.”) (internal quotations
omitted).
25. Grinnell Corp., 495 F.2d at 455 (“The fact that a proposed settlement may only amount to a
fraction of the potential recovery does not, in and of itself, mean that the proposed settle-
ment is grossly inadequate and should be disapproved.”).
26. Id. at 462 (“Any claim by appellants that the settlement offer is grossly and unreasonably
inadequate is belied by the fact that, from all appearances, the vast preponderance of the class
members willingly approved the offer.”).
27. Amchem Prods. v. Windsor, 521 U.S. 591, 620–21 (1997) (“Rule 23(e) . . . was designed to
function as an additional requirement, not a superseding direction, for the ‘class action’ to
which Rule 23(e) refers is one qualified for certification under Rule 23(a) and (b).”) (internal
citations omitted).
 Legal Background 213

the class definition28 and the adequacy of the proposed class representatives.29
As a result, the plaintiff should ensure that she has provided the court with
adequate evidence demonstrating that the class meets each of the require-
ments of Rule 23(a) and (b); failure to do so may result in the court’s refusing
to approve the settlement on even a preliminary basis.30
The only Rule 23 requirement that the settling parties do not have to prove
is manageability of class litigation (one of the superiority inquiries under
Rule 23(b)(3)): since the settlement class is specifically certified not to be
tried, there is no concern whether a trial will pose “intractable management
problems.”31 As a result, the defendant in particular should be certain that it
is comfortable conceding that the proposed settlement class is certifiable on
every issue but manageability. If the settlement falls through, for whatever
reason, the defendant will be on record saying the settlement class is
certifiable;32 and if a settlement is reversed on appeal, it may be judicially
estopped from arguing otherwise.33

28. Id. at 620 (“But other specifications of the Rule—those designed to protect absentees by
blocking unwarranted or overbroad class definitions—demand undiluted, even heightened,
attention in the settlement context. Such attention is of vital importance, for a court asked to
certify a settlement class will lack the opportunity, present when a case is litigated, to adjust
the class, informed by the proceedings as they unfold.”).
29. In re Gen. Motors Corp. Pick-Up Truck Litig., 55 F.3d at 797 (“Without determining that the
class actually was adequately represented, the district judge has no real basis for assuming
that the negotiations satisfactorily vindicated the interests of all the absentees. The focus on
the negotiation process also cannot address the part of the adequacy of representation
inquiry intended to detect situations where the named plaintiffs are unsuitable representa-
tives of the absentees’ claims.”).
30. See, True v. Am. Honda Motor Co., No. EDCV07-287-VAP, 2009 WL 838284, at *4 (C.D. Cal.
Mar. 25, 2009) (denying motion for preliminary approval without prejudice because plain-
tiffs had not provided evidence that named plaintiffs’ claims were typical of proposed class or
that named plaintiffs were adequate class representatives).
31. Amchem, 521 U.S. at 620 (“Confronted with a request for settlement-only class certification,
a district court need not inquire whether the case, if tried, would present intractable manage-
ment problems, see Fed. Rule Civ. P. 23(b)(3)(D), for the proposal is that there be no trial.”);
see also Carnegie v. Household Int’l, Inc., 376 F.3d 656, 660 (7th Cir. 2004) (“The defendants
are correct, however, that a class might be suitable for settlement but not for litigation. The
class might be unmanageable if the case were actually tried yet manageable as a settlement
class because the settlement might eliminate all the thorny issues that the court would have
to resolve if the parties fought out the case.”) (Posner, J.).
32. Id. at 662 (“Remember that the defendants themselves had argued that the class was appro-
priate for settlement purposes. That did not conclude the question whether it was appropri-
ate for litigation if the settlement fell through, as we have explained and as the district judge
recognized. But it was some indication that there were issues appropriate for determination
on a class basis.”).
33. Id. at 662 (“In the previous round of this protracted litigation the defendants had urged the
district court to accept the giant class as appropriate for a global settlement, had prevailed in
their urging, and so are now precluded by the doctrine of judicial estoppel from challenging
214 Chapter 8 Settling Class Actions

§ 8.1.2 Class Action Fairness Act (CAFA)

In addition to the requirements of Rule 23, the parties must also comply with
the provisions of the Class Action Fairness Act (“CAFA”). When CAFA was
passed in 2005, Congress, concerned about the collusive nature of some set-
tlements, added several provisions governing class settlements. Those provi-
sions require:

§ 1712. Coupon settlements

(a) CONTINGENT FEES IN COUPON SETTLEMENTS. If a proposed settle-
ment in a class action provides for a recovery of coupons to a class member, the
portion of any attorney’s fee award to class counsel that is attributable to the
award of the coupons shall be based on the value to class members of the cou-
pons that are redeemed.
(b) OTHER ATTORNEY’S FEE AWARDS IN COUPON SETTLEMENTS.
(1) IN GENERAL. If a proposed settlement in a class action provides for a
recovery of coupons to class members, and a portion of the recovery of
the coupons is not used to determine the attorney’s fee to be paid to
class counsel, any attorney’s fee award shall be based upon the amount
of time class counsel reasonably expended working on the action.
(2) COURT APPROVAL. Any attorney’s fee under this subsection shall be
subject to approval by the court and shall include an appropriate attorney’s
fee, if any, for obtaining equitable relief, including an injunction, if appli-
cable. Nothing in this subsection shall be construed to prohibit applica-
tion of a lodestar with a multiplier method of determining attorney’s fees.
(c) ATTORNEY’S FEE AWARDS CALCULATED ON A MIXED BASIS IN
COUPON SETTLEMENTS. If a proposed settlement in a class action provides
for an award of coupons to class members and also provides for equitable relief,
including injunctive relief
(1) that portion of the attorney’s fee to be paid to class counsel that is based
upon a portion of the recovery of the coupons shall be calculated in
accordance with subsection (a); and
(2) that portion of the attorney’s fee to be paid to class counsel that is not
based upon a portion of the recovery of the coupons shall be calculated
in accordance with subsection (b).
(d) SETTLEMENT VALUATION EXPERTISE. In a class action involving the
awarding of coupons, the court may, in its discretion upon the motion of a
party, receive expert testimony from a witness qualified to provide information
on the actual value to the class members of the coupons that are redeemed.

CAFA also requires the court to make written findings for each of the fac-
tors used to evaluate the fairness of the settlement.34 (These written findings

its adequacy, at least as a settlement class (the significance of this qualification will appear in
due course).”) (internal citation omitted).
34. 28 U.S.C. § 1712(e).
 Legal Background 215

apply to all class actions in federal court, not just those removed under
CAFA’s expansion of diversity jurisdiction.)
Notice to “appropriate” authorities. Within ten days of filing the proposed
settlement with the court, each defendant must serve notice on the “appro-
priate” state and federal officials.35 That notice must include:

• any complaints the plaintiff has filed, including attachments or exhibits;

• notice of any scheduled hearings;
• any notice to class members, whether proposed or finalized;
• any settlement agreement, whether proposed or finalized;
• any final judgment or notice of dismissal;
• a “reasonable estimate” of the number of class members in each state
(and, if feasible, their names), as well as their estimated share of settle-
ment claims;
• any written judicial opinion on the settlement.36

The “appropriate federal official” is either the Attorney General of the

United States, or, for banks, the primary federal regulator.37 The “appropriate
State official” is the person with the primary regulatory, supervisory, or licens-
ing authority over the defendant or, if no one like that exists, the state Attorney
General.38 If the defendant does not provide this notice, then the settlement
will not release any claims; any class member may choose not to be bound by
its terms.39
Under CAFA, the court may not approve a proposed class action settle-
ment until after the proposal has been filed with the appropriate regulators
for 90 days. To date, regulatory officials have usually refrained from offering
any objections or comments on proposed settlements.40 However, in high-
profile settlements or in settlements that appear to be the product of collu-
sion or inadequate representation by the plaintiff, state attorneys have been
known to object,41 and the reviewing court usually takes these objections
seriously.

35. Id. § 1715(b).

36. Id. § 1715(b)(1)-(8). Since many of these documents could not exist at the time the proposed
settlement is first filed, it stands to reason that CAFA contemplates serving additional notices
on the appropriate government officials should the proposed settlement be revised and
re-filed with the court.
37. Id. § 1715(a)(1).
38. Id. § 1715(a)(2).
39. Id. § 1715(e).
40. Farinella v. PayPal, Inc., 611 F. Supp. 2d 250, 255 (E.D.N.Y. 2009) (“After minor changes were
made in response to concerns by state Attorneys General relating to their ability to bring
suits in the future, the proposed settlement was resubmitted on March 9, 2007”).
41. See Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292, 1301 (S.D. Fla. 2007) (37 state
attorneys general objected to coupon settlement).
216 Chapter 8 Settling Class Actions

§ 8.2 Types of Settlements

So long as it can meet the requirements of Rule 23(e) and CAFA, a class-wide
settlement can take any number of forms, limited only by the creativity of the
parties and the open-mindedness of the court.42 That said, most class-wide
settlements fall into a few basic categories, some of which have received more
approval from courts, and some less.
The descriptions below offer a basic overview of the most common settle-
ment types, as well as the features that make them more or less attractive to the
plaintiff, the defendant, the court, objectors, and other interested third parties.43

§ 8.2.1 Claims-made (“Reverter”) Settlements

Conceptually, the simplest form of class-wide settlement is the “claims-

made,” or reverter, settlement. In a claims-made settlement, the defendant
establishes an escrow fund for the settlement, and class members make claims
against the fund. Any money left in escrow at the end of the claims period
reverts to the defendant. (Alternatively, the defendant can guarantee a “floor”
of payments without setting aside a separate fund, eliminating the need for
any reversion at the end of the process.)
The claims-made settlement has obvious benefits for the defendant: it
faces a known maximum payout, and it may recover any unclaimed funds.44
The plaintiff may also find a claims-made settlement attractive. Rhetoric
about deterrence and retribution aside, a claims-made settlement may
encourage the defendant to make more generous settlement offer,45 which
increases the plaintiff’s recovery and with it her attorneys’ fees. Moreover,
since claims-made settlements are often paid into escrow accounts, the class
members’ money is secure.46

42. See Michael Moffitt, Three Things To Be Against (“Settlement Not Included”), 78 Fordham L.
Rev. 1203, 1235 (2009) (“Settlement is an eclectic practice, with perhaps almost as many
forms as there are disputants. No simple characterization would accurately capture the full
range of things going on today under the umbrella of ‘settlement.’”).
43. While we believe this functional description of different settlements is the most useful for the
practitioner, it is hardly the only method of analyzing aggregate settlements. See Howard M.
Erichson, A Typology of Aggregate Settlements, 80 Notre Dame L. Rev. 1769 (2005) (catego-
rizing aggregated settlements according to “allocation” and “conditionality”).
44. Geoffrey P. Miller & Lori S. Singer, Nonpecuniary Class Action Settlements, 60 L. &
Contemporary Problems 97, 106 (1997).
45. Mirfasihi v. Fleet Mortgage Corp., 356 F.3d 781, 785 (7th Cir. 2004) (Posner, J.) (“A reversion
provision might encourage a more generous settlement offer.”).
46. Miller & Singer, Nonpecuniary Class Action Settlements, 60 L. & Contemporary Problems
at 106.
 Types of Settlements 217

Despite the obvious benefits to each party in the litigation, several com-
mentators have registered objections to this kind of settlement. Specifically,
they express concern that the ultimate value of the settlement to the class is
difficult to ascertain,47 and the relief the class ultimately receives may be
disproportionately small compared to the attorneys’ fees awarded.48 As dis-
cussed in greater detail below, courts are especially sensitive to the possibility
of excessive fee attorneys’ fees.49 In addition, courts are often hesitant to
approve any settlements that appear to involve self-dealing by either the
plaintiff’s attorneys or the defendant.

§ 8.2.2 Cy Pres Funds

Cy pres settlements are similar to claims-made settlements, except that,

instead of reverting to the defendant, any leftover funds are paid to an alter-
nate recipient (like a nonprofit registered under § 503(b)) that has some con-
nection to the gravamen of the litigation.50 Courts also employ cy pres relief
when the parties can show either that the class members are difficult to iden-
tify, or that they change constantly.51 In theory, the fund will be distributed
for a purpose as near as possible to the legitimate objectives underlying the
lawsuit, the interests of class members, and the interests of those similarly
situated.52 These settlements take their name from an old Norman French
expression, cy pres comme possible, which means “as near as possible,” (or,
more colloquially, “close enough”).53 The cy pres doctrine originally saved
charitable bequests that otherwise could no longer succeed: since the original
recipient no longer existed, the court would look for an alternate recipient
that would best serve the gift’s original purpose.54

47. Id. at 109.

48. As a result, some courts have limited the attorneys’ fees in claims-made settlements to an
amount based on those claims actually made by class members. Compare Manual for
Complex Litigation (Fourth) § 21.71 (2004); Strong v. BellSouth Telecommc’ns, Inc., 137
F.3d 844, 852–53 (5th Cir. 1998); and Wise v. Popoff, 835 F. Supp. 977, 982 (E.D. Mich. 1993)
with Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423 (2d Cir. 2007) and Williams
v. MGM-Pathe Commc’ns Co., 129 F.3d 1026 (9th Cir. 1997). See also Fed. R. Civ. P. 23 advi-
sory committee’s notes to the 2003 amendments, subd. h; 15 U.S.C. §§ 77z-1(a)(6), 78u-4(a)
(6) (PSLRA).
49. See § 8.4.
50. Masters, 473 F.3d at 435.
51. In re Airline Ticket Comm’n Antitrust Litig., 268 F.3d 624, 625 (8th Cir. 2001); Masters, 473
F.3d at 436.
52. In re Airline Ticket Comm’n, 307 F.3d at 682-83; see also Masters, 473 F.3d at 436.
53. In re Airline Ticket Comm’n, 307 F.3d at 682-83; Democratic Cent. Comm. v. Wash. Metro.
Area Transit Comm’n, 84 F.3d 451, 455 n.1 (D.C. Cir. 1996).
54. See Masters, 473 F.3d at 436; In re Airline Ticket Comm’n, 268 F.3d at 625.
218 Chapter 8 Settling Class Actions

There are several concerns surrounding cy pres settlements. First, as several

courts have pointed out, cy pres relief is susceptible to abuse: the plaintiff may
suggest the relief to inflate the amount paid “to the class” (justifying greater
attorneys’ fees)55 while the defendant will agree in order to reduce adminis-
trative costs and (potentially) steer the distribution to causes that will rebuild
its reputation.56 The plaintiff may argue that cy pres relief has a deterrent
effect: the defendant, hurt by the money it has to pay out, will reconsider
engaging in the same behavior.57 Some courts have accepted this argument;58
others have held that it does not address the doctrinal requirement of indirect
benefit to the class because it is “purely punitive.”59 Second, the parties must
decide who may claim the remainder of the fund after all the class members
have made their claims, leading to a surprising number of court battles.60
Finally, several courts have taken issue with parties’ failure to match the recip-
ient of the cy pres award to the subject matter of the lawsuit.61 In practice,
the parties often donate cy pres funds to local charities with little connection

55. See, e.g., SEC v. Bear, Stearns & Co., 626 F. Supp. 2d 402, 415 (S.D.N.Y. 2009) (“To the extent
attorney’s fee awards are determined using the percentage of recovery method, the recovery
and, therefore, the attorney’s fee award is exaggerated by cy pres distributions that do not
truly benefit the plaintiff class.”).
56. Id. at 415 (“In general, defendants reap goodwill from the donation of monies to a good
cause. However, defendants may also channel money into causes and organizations in which
they already have an interest.”); see also Geoffrey P. Miller & Lori S. Singer, Nonpecuniary
Class Action Settlements, 60 L. & Contemporary Problems 97, 109 (1997) (“The valuation
of a fluid recovery fund can be exceedingly complicated because some or all payments in a
fluid recovery go to persons other than class members who have suffered harm. If others get
part of the fund, the value of the settlement may not be the value to the class members only,
since the defendant is paying out additional sums. Should sums received by others receive
full credit in the valuation process? What about moneys that are paid for ostensibly elee-
mosynary purposes, such as charities or public education campaigns?”).
57. Mirfasihi v. Fleet Mortgage Corp., 356 F.3d 781, 784 (7th Cir. 2004).
58. Simer v. Rios, 661 F.2d 655, 676 (7th Cir. 1981) (cy pres relief may be appropriate where
underlying “statute embodies policies of deterrence, disgorgement, and compensation”).
59. Mirfasihi, 356 F.3d at 784. The Seventh Circuit did eventually sign off on that settlement,
even though it still contained a cy pres element. Mirfasihi v. Fleet Mortgage Corp., 551 F.3d
682, 687 (7th Cir. 2008).
60. See In re Lease Oil Antitrust Litig., 570 F.3d 244, 244 (5th Cir. 2009) (state of Texas intervenes
to contest distribution of cy pres funds); In re Airline Ticket Comm’n Antitrust Litig., 268 F.3d
624 625 (8th Cir. 2001) (“cy pres distributions of unclaimed funds have been controversial in
the courts of appeals”); Bear, Stearns & Co., 626 F. Supp. 2d at 412 (“[T]he question of what
to do with $79 million in unclaimed funds is unprecedented. It has stimulated a cy pres
feeding-frenzy of competing interests.”).
61. In re Airline Ticket Comm’n, 307 F.3d at 683 (“The last time this case was before us, we . . .
emphasize[d] the importance of tailoring a cy pres distribution to the nature of the underlying
lawsuit. In reversing the district court’s initial distribution of funds to local charities, we sug-
gested that the court failed to consider the full geographic scope of the case.”); Six Mexican
Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1312 (9th Cir. 1990); Bear, Stearns & Co., 626
F. Supp. 2d at 414 (“cy pres remedies often stray far from the ‘next best use’ for the undistributed
 Types of Settlements 219

to the issue addressed by the class action,62 or even to law schools.63 (The
problem is particularly acute if the cy pres distribution goes to a local charity
but the class has national scope.) None of these issues are insurmountable, but
they do advise caution in using cy pres relief as part of a settlement.

§ 8.2.3 Coupons

In a coupon settlement, in addition to any monetary relief the class members

receive coupons or discounts for the defendant’s products or services.64
Coupon settlements are attractive to the defendant because they do not
require the same cash outlay as other forms of settlement, and they may
encourage class members to do more business with it.65 They are attractive to
the plaintiff because the defendant will agree to them more quickly, and their
estimated value can help increase the amount of fees plaintiff’s attorneys may
seek.66
Coupon settlements are less attractive to absent class members. They come
with various restrictions (like expiration dates), and most discounts are not
transferable—meaning the class members will only receive relief if they buy
something else from the defendant.67 And, if there really were a problem with

funds and turn courts into a grant giving institution doling out funds to hospitals, legal
services organizations, law schools, and other charities”).
62. Bear, Stearns & Co., 626 F. Supp. 2d at 415 (“cy pres remedies often stray far from the “next
best use” for the undistributed funds and turn courts into a grant giving institution doling
out funds to hospitals, legal services organizations, law schools, and other charities”).
63. See, U.C. Davis School of Law, Reynoso Scholarship Receives $263,000 Cy Pres Award, http://
www.law.ucdavis.edu/news/news.aspx?id=2297 (cy pres fund for subscription overcharges
donated to law school scholarship) (last viewed Feb. 28, 2010); U. Colo. School of Law, Clinic
Receives Cy Pres Award from Alumnus, http://lawweb.colorado.edu/news/showArticle.
jsp?id=483 (portion of cy pres fund for insurance coverage case donated to law school) (last
viewed Feb. 28, 2010).
64. In re Mex. Money Transfer Litig., 267 F.3d 743, 748 (7th Cir. 2001).
65. Id. at 748 (“coupons serve as a form of advertising for the defendants”). There may be legiti-
mate impulses at play here as well. For example, in a products-liability case, if the source of
complaints was relatively harmless and could be fixed easily, a coupon settlement might be a
low-cost way of implementing a recall for those customers who wanted one.
66. Miller & Singer, Nonpecuniary Class Action Settlements, 60 L. & Contemporary Problems
at 111 (“When nonpecuniary settlements are being negotiated instead of cash awards, there
is an added level of complexity because the defendant and class counsel have an opportunity
to manipulate the valuation of the settlement in order to serve their individual purposes. The
problem of sacrificing class recovery for the attorneys’ fee becomes exacerbated. Because
the fee is typically in cash, the ratio of the fee to the class recovery can be manipulated by
exaggerating the value of the nonpecuniary class settlement.”).
67. Id. at 108 (“For [consumers], the right to receive a discount will be worthless, unless they can
transfer the coupon for value to someone who does want the item. Even if transfer of cou-
pons is permitted, the process is likely to be costly and inefficient, and the original holders of
220 Chapter 8 Settling Class Actions

a defendant’s product or practices, one might reasonably ask why the absent
class members would want to do business with that company again.68 Finally,
coupon settlements undermine deterrence (a frequently-offered rationale for
class damage awards). If the settlement simply drives more business to the
defendants, why would it refrain from similar allegedly wrongful behavior?69
These drawbacks have made coupon settlements controversial,70 and, as a
result, coupon settlements are now subject to heightened scrutiny under
CAFA. CAFA requires judges to issue a written finding as to whether a
coupon settlement is fair, reasonable, and adequate.71 It also grants courts the
authority to require testimony from an independent expert on the value of
the coupons to the proposed class.72 And it allows courts to treat a coupon
settlement like a cy pres settlement, requiring the defendant to give the value
of any leftover coupons to a designated charity or government organization.73
CAFA also limits the fees that plaintiffs’ attorneys can collect in coupon
settlements: any contingency fee claimed must be based on the value of the
coupons actually redeemed.74 And it prescribes methods of calculating

the coupons will surely receive less—often drastically less—than the amount of the discount
upon sale.”).
68. Id. (“In coupon settlements, class members receive the right to a discount on the purchase of
a product or service. If all class members intended to purchase the given product or service
already, and proceeded to do so using their coupons, valuation would be easy. In the real
world, however, many consumers do not want to purchase the item in question.”).
69. See In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 803 (3d
Cir. 1995) (“although the degree to which a settlement hurts a defendant is not ordinarily a
measure of the settlement’s adequacy, the fact that this settlement might actually benefit GM
by motivating current owners to buy new trucks from the company (the settlement may
arguably be viewed as a GM sales promotion device) certainly does little to allay the concern
that the settlement did not advance the interests of the class as much as it might have”).
70. See, e.g., Christopher R. Leslie, A Market-Based Approach to Coupon Settlements in Antitrust
and Consumer Class Action Litigation, 49 U.C.L.A. L. Rev. 991, 1041–67 (2002) (discussing
drawbacks to coupon settlements); Note, In-Kind Class Action Settlements, 109 Harv. L. Rev.
810, 821-23 (1996) (discussing dilemmas posed by coupon settlements).
71. 28 U.S.C. § 1712(e) (“In a proposed settlement under which class members would be awarded
coupons, the court may approve the proposed settlement only after a hearing to determine
whether, and making a written finding that, the settlement is fair, reasonable, and adequate
for class members.”).
72. Id. § 1712(d) (“In a class action involving the awarding of coupons, the court may, in its
discretion upon the motion of a party, receive expert testimony from a witness qualified to
provide information on the actual value to the class members of the coupons that are
redeemed.”).
73. Id. § 1712(e) (“The court, in its discretion, may also require that a proposed settlement agree-
ment provide for the distribution of a portion of the value of unclaimed coupons to 1 or more
charitable or governmental organizations, as agreed to by the parties.”).
74. Id. § 1712(a) (“If a proposed settlement in a class action provides for a recovery of coupons
to a class member, the portion of any attorney’s fee award to class counsel that is attributable
 Types of Settlements 221

attorneys’ fees on a non-contingency basis in coupon settlements.75 Courts

have extended this level of scrutiny to other “in-kind” settlements, even if
they do not technically qualify as coupon settlements under CAFA.76 In addi-
tion, CAFA’s notice requirement has led to intervention by state attorneys-
general in cases where coupon settlements appear to provide little value to the
class.77
So why use coupon settlements at all? Because they still have some use in
limited circumstances. In some cases, the fact that the coupon may be worth
more to the consumer than the defendant may provide a benefit to all
parties.78 For a defendant in financial distress, a coupon settlement may rep-
resent its best chance of offering a high-value settlement to the class.79 In
other cases, a coupon settlement may be the only way that a settlement will
occur at all.80 Finally, in certain circumstances, coupons are attractive even to
class members. In a class action in which the alleged harm is comparatively
minor and class members have repeat-business relationships with the defen-
dant, a coupon may in fact be almost as good as cash.81
In those cases, however, the parties are well advised to reduce the objec-
tionable aspects of coupon settlements. Such measures may include making
the coupons fully transferable and providing a reversion provision should
coupon usage fall below a certain threshold.

to the award of the coupons shall be based on the value to class members of the coupons that
are redeemed.”).
75. Id. § 1712(b)-(c).
76. Synfuel Techs., Inc. v. DHL Express (USA), Inc., 463 F.3d 646, 654 (7th Cir. 2006) (“CAFA
required heightened judicial scrutiny of coupon-based settlements based on its concern that
in many cases ‘counsel are awarded large fees, while leaving class members with coupons or
other awards of little or no value.’ We recognize that the pre-paid envelopes are not identical
to coupons, since they represent an entire product, not just a discount on a proposed pur-
chase. Nonetheless, they are a form of in-kind compensation that shares some characteristics
of coupons, including forced future business with the defendant and, especially for heavier
users, the likelihood that the full amount of Airborne’s gains will not be disgorged.”) (internal
citations omitted) (Wood, J.).
77. See Figueroa, 517 F. Supp. 2d at 1301 (37 state attorneys general objected to coupon
settlement).
78. Note, In-Kind Class Action Settlements, 109 Harv. L. Rev. 810, 821 (1996) (“Without scrip
there may be no zone of possible agreement between the defendants and the plaintiffs
because the defendants cannot offer enough to make settlement worthwhile for the plaintiffs,
and vice versa.”).
79. Lisa M. Mizzeti & Whitney R. Case, The Coupon Can Be the Ticket: The Use of “Coupon” and
Other Non-Monetary Redress in Class Action Settlements, 18 Geo. J. Legal Ethics 1431,
1433-34 (2005). Of course, if the defendant is in financial distress, it is less likely that the
coupon will be worth much to the class members.
80. Id. at 1434.
81. Id. at 1436.
222 Chapter 8 Settling Class Actions

§ 8.2.4 Injunctions/ Consent Decrees

Not all relief to class members must be monetary. The defendant may also
agree to cease some behavior or provide some other non-monetary relief. The
most common form of injunctive relief is for the defendant to agree to cease
its allegedly illegal behavior. For example, if the defendant is accused of dis-
crimination, it may cease making discriminatory hiring decisions.82 But the
defendant can also offer affirmative actions that have value to the class. For
example, a defendant that owned a number of non-handicap-accessible mini-
marts might agree to make all of its stores handicap-accessible within a cer-
tain time frame.83
Purely injunctive settlements may be problematic, however. Promises to
change conduct are easy, but compliance is not.84 And the court may be
reluctant to assume the task of enforcing injunctive relief over a period of
years.85 Under certain circumstances, injunctive relief may also signal possi-
ble collusion between the parties.86

8.2.5 Therapeutic Relief

In general, therapeutic relief means that the corporate defendant agrees to

some kind of restructuring or policy change in order to address the alleged
problems that formed the basis of the lawsuit.87 Therapeutic relief can include

82. See DeHoyos v. Allstate Corp., 240 F.R.D. 269, 284 (W.D. Tex. 2007) (“Additionally, injunctive
relief requiring Allstate to end its discriminatory practices is the appropriate and predomi-
nant form of relief sought and obtained by plaintiffs.”).
83. See Molski v. Gleich, 318 F.3d 937, 943 (9th Cir. 2002) (“ARCO is required to complete
certain accessibility enhancements (i.e., structural modifications to improve accessibility for
mobility-impaired individuals) within six years of the District Court’s final approval of the
decree”). The Molski settlement was overturned on appeal for reasons unrelated to the
accessibility enhancements.
84. See Voss v. Rolland, No. 08-1874, 2010 U.S. App. LEXIS 1017, at *2 (1st Cir. Jan. 19, 2010)
(noting “state’s inability to comply fully with an earlier settlement” that provided injunctive
relief to class).
85. See id., at *12 (noting trial court found noncompliance with settlement “four times between
2000 and 2007”).
86. In re Gen. Motors Corp. Pick-Up Truck, 55 F.3d at 803 (absence of monetary relief is “a prime
indicator of suspect settlements, [and] increases our sense that the class’s interests were not
adequately vindicated”); see also In re Mex. Money Transfer Litig., 267 F.3d 743, 748 (7th Cir.
2001) (“This is one of many class actions in which everyone other than the plaintiffs has been
paid in cash . . . That’s enough to raise suspicions . . .”).
87. Jayne W. Barnard, Corporate Therapeutics at the Securities and Exchange Commission, 2008
Colum. Bus. L. Rev. 793, 794 (2008).
 Types of Settlements 223

corporate restructuring (including reconfiguring a board of directors), hiring

compliance staff, or other improvements to legal compliance programs, such
as setting up ethics committees or employee training programs.88 “Corporate
therapy” allows for a wide range of innovative solutions to behavior that may
have affected an entire class.
Therapeutic relief is not common in class actions; it is more often invoked
by the SEC, or by plaintiffs in shareholder-derivative suits.89 However, a
growing number of securities class-action lawyers have begun to suggest
therapeutic relief in shareholder class actions.90
Therapeutic relief is difficult to value for purposes of determining attor-
neys’ fees in settlement.91 Courts evaluating therapeutic relief have found that
attorneys-fee awards must be valued within the context of the settlement as a
whole.92 Some courts have also found that therapeutic relief may enhance an
award of attorneys’ fees.93 However, these findings depend on the lawsuit;
while the kinds of structural changes deemed “corporate therapeutics” may
benefit shareholders, for example, they are worth less to consumers who
might not wish to do business with the company again.94

88. Id. at 794, 806–08.

89. Id. at 794.
90. Id. (“Class counsel have resolved many derivative suits and shareholder class actions in
recent years with what are known as ‘therapeutic’ settlements.”).
91. A number of courts have held that, in cases where therapeutic relief is part of the settlement,
the relief does not have to be monetary to justify an award of costs, or even fees. See Ramey
v. Cincinnati Enquirer, Inc., 508 F.2d 1188, 1194–95 (6th Cir. 1974); Cohn v. Nelson, 375 F.
Supp. 2d 844, 861 (E.D. Mo. 2005).
92. Id. at 847 (“The value of the Settlement must be considered in the context of the global reso-
lution of all of the securities-related actions that embroiled Charter and its officers and direc-
tors. The Settlement attempts to balance the interests of Charter as a going concern while at
the same time contributing to the resolution of complex litigation.”).
93. Id. (because Delaware law values “significant value upon non-monetary benefits obtained for
shareholders,” fee award for settlement including changes in corporate governance was
justified).
94. Synfuel Techs., Inc., 463 F.3d at 654 (“Finally, we are not persuaded by Synfuel’s contention
that the operational changes required by the settlement ‘will result in over $30 million in
savings that will flow directly into the pockets of Class members.’ These changes will benefit
only those class members who continue to purchase services from Airborne. The value of
these operational changes must also be discounted to account for the fact that at least some,
if not most, class members will not fail to record the weight of their packages in the future. It
is future customers who are not plaintiffs in this suit who will reap most of the benefit from
these changes.”).
224 Chapter 8 Settling Class Actions

§ 8.2.6 Named Plaintiff Settlements

It is possible to settle a class action on a named-plaintiff-only basis. In these

cases, the defendant provides a benefit to the named plaintiff (and generally
pays her lawyer as well), but the remainder of the class receives nothing. The
claims of the absent class members are dismissed without prejudice to their
bringing them again. Settlement on a named-plaintiff-only basis generally
does not require notice to the class, because they do not yet know about (and
therefore are not relying) on the class action.95
Since the named-plaintiff settlement provides no benefits to the class,
yields much less in attorneys’ fees, and does not provide a complete release of
claims, it is an option only when both sides have decided that certification of
a class is unlikely. At that point, the plaintiff will be happier with some relief
(and her counsel with some fees) than none. And, if there is little danger of
additional plaintiffs bringing the same claim, the defendant will be satisfied
with less than a complete release.

§ 8.3 Class-wide Settlement Steps

There are a number of steps in reaching a class-wide settlement, some of

which are the same as in regular litigation. For example, one party will have
to make an initial approach to the other side. Frequently, the plaintiff will
make a settlement overture early in the case, stressing the advantages to for-
going costly discovery and litigation in favor of a relatively simple solution
that can be provided to the class. In these instances, the plaintiff needs to be
careful that the settlement overture does not look too much like a naked
grab for cash. And the defendant needs to be careful that an early agreement
to settle does not convey a sense of desperation, thus driving up the cost of
settlement.
Settlement discussions may occur at any time during the litigation. They
may commence as early as the filing of the complaint,96 and as late as the eve

95. See Sikes v. Am. Tel. & Tel. Co., 841 F. Supp. 1572, 1579-80 (S.D. Ga. 1993) (given lack of
publicity “any absent unnotified proposed class members are not likely to have developed a
‘reliance interest’ in the proposed class action,” and therefore, notice to absent class members
was not necessary).
96. Denney v. Deutsche Bank AG, 443 F.3d 253, 261 (2d Cir. 2006) (“Class counsel opened settle-
ment negotiations with the Jenkens & Gilchrist Defendants in November 2003, soon after the
complaint was filed. . . . Given the uncertainty of insurance and the precarious position of
Jenkens & Gilchrist, lead counsel for the class ‘believed it was in the best interest of all Class
Members to immediately attempt to negotiate a global settlement.’”).
 Class-wide Settlement Steps 225

of trial.97 Frequently, the parties will begin settlement discussions after a dis-
positive moment in the litigation, such as the denial of a defendant’s motion
to dismiss,98 or the granting of a plaintiff’s motion for class certification.
The decision when to begin settlement talks is in one sense simple. As law-
and-economics scholars would say, one should consider settling when the
benefits to be gained from a settlement (relief for the plaintiff, release for the
defendant) outweigh the costs (including the costs of negotiation itself).99
From a strategic standpoint, however, the timing of settlement affects how
each party values any settlement, and so may affect the ultimate outcome of
the negotiation. Early in the case, the defendant may have more information
about the merits of plaintiff’s case than the plaintiff does, allowing it to mini-
mize the amount of any settlement proposal.100 At the same time, engaging in
early settlement talks may signal to the plaintiff that the defendant is worried
about the merits, implying there is some merit to the plaintiff’s claims and
increasing the perception of any settlement’s value.101 Finally, the timing of
the settlement may affect the level of scrutiny any class-wide settlement
receives from the court that must approve it.102

97. Masters, 473 F.3d at 427 (settlement reached after jury was empanelled); Wal-Mart Stores,
Inc. v. Visa U.S.A. Inc., 396 F.3d 96, 118 (2d Cir. 2005) (noting parties “struck a deal at the
courthouse steps”).
98. See, e.g., Masters, 473 F.3d at 427 (“Settlement negotiations began with certain defendants
only after the court denied defendants’ motions for summary judgment and were heavily
influenced by the real prospect of the defendants’ bankruptcy.”); Synfuel Techs., Inc., 463
F.3d at 648 (“After the district court denied Airborne’s motion to dismiss, the company
decided to come to the table.”).
99. See Richard A. Posner, Economic Analysis of Law 68–69 (5th ed. 1998).
100. See In re Gen. Motors Corp. Pick-Up Truck, 55 F.3d at 789 (“With early settlement, both
parties have less information on the merits. That is, they have less information on the
membership of the class, on the size of potential claims, on whether the settlement purports
to resolve class or individual claims, on the strengths and weaknesses of the case, and on
how class members will benefit from the settlement.”) (internal citation omitted); see also
Jonathan R. Macey & Geoffrey P. Miller, Judicial Review of Class Action Settlements, 1 J. of
Legal Analysis 167, 192 (2009) (“early settlements present substantial risks: The class
attorneys are vulnerable to settling cheap with a better-informed defendant, and early
reasonableness in settlement behavior may impair plaintiffs’ bargaining position.”); Andrew
F. Daughety & Jennifer F. Reinganu, Endogenous Sequencing in Models of Settlement &
Litigation, 9 J.L. Econ. & Org. 314, 315 (1993) (noting that in settings where one side has
more information than the other, timing of settlement offers may affect settlement
outcomes).
101. See Avinash K. Dixit & Barry J. Nalebuff, The Art of Strategy 241–62 (2008) (dis-
cussing information-signaling effects in strategy).
102. See Dunleavy v. Nadler, 213 F.3d 454, 458 (9th Cir. 2000) (“Settlements that take place prior
to formal class certification require a higher standard of fairness.”).
226 Chapter 8 Settling Class Actions

As this analysis implies, the plaintiff is usually ready to settle (for the right
price) from day one.103 Indeed, while a nontrivial number of class-action
plaintiffs file complaints with the intention of trying them to verdict if they
have to, very few actually hope for a trial as opposed to a settlement.104
The defendant, on the other hand, must weigh the advantages of a settle-
ment against the cost of continuing the litigation, and the likelihood that it
will succeed in opposing the plaintiff’s claims through verdict and appeal.
As a result, the defendant is often willing to settle colorable claims, even if it
believes it has a strong chance of prevailing at trial, simply because the cost of
reaching trial is high, and even a small risk of losing at trial may result in large
monetary losses.105 As a result, a defendant often will only negotiate a settle-
ment if it can deny any wrongdoing.106

§ 8.3.1 Mediation

While there is no requirement that parties in a class action engage in media-

tion, it is a commonly used method of beginning settlement talks.107 Mediation
offers several distinct advantages to the class-action litigant. First, as in any
hard-fought lawsuit, a mediator can help the parties reach a mutually agree-
able settlement. But mediation may also serve as evidence that the parties
reached their settlement only after extensive arms-length negotiations, and
therefore provide the court some comfort that the settlement did not result
from collusion between plaintiff’s and defendant’s counsel.108 In some cases,

103. There are some countervailing forces at work for the plaintiff. To the extent the court may
decide fees based on a lodestar or lodestar cross-check (see §§ 8.4.1.1, 8.4.2), her counsel
may resist early settlement before they have completed enough billable work.
104. See Richard A. Posner, Economic Analysis of Law 627 (5th ed. 1998).
105. See Mirfasihi v. Fleet Mortgage Corp., 356 F.3d at 783 (7th Cir. 2004) (“A colorable claim may
have considerable settlement value (and not merely nuisance settlement value) because the
defendant may no more want to assume a nontrivial risk of losing than the plaintiff
does.”).
106. Grinnell Corp., 495 F.2d at 459 (“One of the underlying premises on which such negotia-
tions are based, however, is that defendants never have to concede their guilt. They can
protest their innocence of any wrongdoing and assert that they are settling for purely
pragmatic business reasons.”).
107. See Wal-Mart Stores, Inc., 396 F.3d at 118 (noting parties engaged in mediation); Denney v.
Deutsche Bank AG, 443 F.3d 253, 261 (2d Cir. 2006) (noting parties engaged in three
mediation sessions before retired judge).
108. See Rodriguez v. West Publ’g Corp., 563 F.3d 948, 961 (9th Cir. 2009) (“Judge Weinstein, who
mediated the settlement, attested that the negotiations were conducted at arm’s length; there
was no evidence of collusion”); Farinella v. PayPal, Inc., 611 F. Supp. 2d 250, 274 (E.D.N.Y.
2009) (“This Circuit has recognized that the involvement of a mediator in pre-certification
settlement negotiations helps to ensure that the proceedings are free of collusion and undue
pressure.”).
 Class-wide Settlement Steps 227

the mediator may even provide the court with an “expert” opinion on whether
the settlement is “fair, reasonable, and adequate.”109

§ 8.3.2 Drafting the Settlement Agreement

Often, parties will begin with a “term sheet,” which is essentially an “agree-
ment to agree.” While many parties do draft a separate “Term Sheet”
document,110 the term sheet can take any number of alternate forms, such as
letters outlining the settlement terms.111 The parties will often disclose the
initial term sheet to the court at the preliminary fairness hearing.112
As a practical matter, the term sheet usually reflects the parties’ agreement
that the plaintiff will release her claims in exchange for specified consider-
ation from the defendant; and that both sides believe that the lawsuit is appro-
priate for settlement on a class-wide basis. Beyond that, the parties should
work out any other terms that they believe need to be addressed before nego-
tiations begin in earnest. What follows is a brief survey of some of the most
common (or most controversial) terms in class-action settlements.113
Compensation of non-settling parties. If only a few defendants in a multi-
defendant class action settle, the parties may agree to a method of reducing
judgment for the remaining parties in order to compensate them for any
potential loss of indemnification or contribution.114
Discovery. The parties may also focus on the amount of discovery to be
conducted. If settlement discussions begin at an early stage of the litigation,
the plaintiff may need to conduct due-diligence discovery so she can credibly
represent to the court that that the settlement is fair, reasonable, and ade-
quate.115 While it is in the defendant’s interest to allow enough discovery to

109. Rodriguez, 563 F.3d at 957 (noting that “[i]n [mediator] Judge Weinstein’s opinion, the set-
tlement ‘was arrived at through arm’s length negotiations by counsel who were skilled and
knowledgeable about the facts and law of this case,’ and it was ‘fair, reasonable and adequate
in light of the strengths and weaknesses of the claims and defenses and the risks of establish-
ing liability and damages.’”).
110. See In re Syncor ERISA Litig., 516 F.3d 1095, 1099 (9th Cir. 2008).
111. Masters, 473 F.3d at 427 (parties used letter agreements that “outlined the settlement terms,
including the amount of each defendant’s contribution and the manner of payment”).
112. Manual for Complex Litigation (Fourth) § 21.632 at 320.
113. For an exemplar settlement agreement, see Appendix 8A.
114. See, e.g., Denney, 443 F.3d at 262 (remanding settlement agreement “because the settlement
agreement fails to specify the judgment-reduction method that will be used to compensate
nonsettling defendants and third parties for the loss of their contribution and indemnity
claims, and thereby unfairly jeopardizes the rights of nonsettling parties”).
115. See In re Synthroid Mktg. Litig., 264 F.3d 712, 714–15 (7th Cir. 2001) (noting district judge
had rejected original settlement proposal because “too little discovery had been
completed”); Reynolds v. Beneficial Nat’l Bank, 260 F. Supp. 2d 680, 694-95 (N.D. Ill. 2003)
(same).
228 Chapter 8 Settling Class Actions

insulate the proposed settlement from accusations of collusion or reverse

auction, it will likely balk at allowing the plaintiff unfettered access to its
records; after all, avoidance of the cost, burden, and public embarrassment of
discovery is one of the benefits to defendant of settling the case. Therefore,
the defendant may negotiate limits to the scope of discovery.
Walk-away rights. The defendant’s “walk-away” right allows it to reject the
settlement if too many class members opt out of the settlement (meaning that
the defendant will not receive the peace it was negotiating for).116 The plaintiff
may also negotiate for walk-away rights in the event that too many claimants
come forward, depleting the settlement fund,117 although a walk-away term
like this risks signaling to the court that the plaintiff is less interested in
protecting the interests of the class than inflating her attorneys’ fees.
Effect of settlement talks. The parties may also negotiate about the eviden-
tiary or estoppel effects of the settlement talks. Federal Rule of Evidence 408
governs class-settlement negotiations the same way it does individual settle-
ment negotiations.118 However, it is still prudent for both parties to ensure
that their discussions do not undermine them should the settlement discus-
sions fall through. In particular, the defendant may wish to make clear that,
while a class might be certified for settlement purposes, it has not conceded
the difficulties in certifying a class for litigation purposes.119
Scope of Release. The parties may also focus on the scope of the release. The
defendant will want to draft the release as broadly as possible: from its per-
spective, it is purchasing freedom from liability, and it wants as much value
for its money as it can get.120 In addition, while the plaintiff is limited by the

116. See, e.g., Denney, 443 F.3d at 261 (settling defendants “Jenkens & Gilchrist reserved the
right, however, to terminate the settlement if anyone opted out”); In re Cmty. Bank of N. Va.,
418 F.3d 277, 286 (3d Cir. 2005) (“The proposed settlement states that if more that .5% of
the class members opt out of the settlement class, the settling defendants may terminate the
settlement.”); see also Richard Arsenault, et al., Settlement Strategies for Complex Global
Litigation, 43 Trial 40, 45 (Dec. 2007).
117. Id. at 45.
118. Petruzzi’s IGA Supermarkets v. Darling-Delaware Co., 998 F.2d 1224, 1247 (3d Cir. 1993).
119. See, e.g., In re Gen. Motors Corp. Pick-Up Truck, 55 F.3d at 780 (“For purposes of settlement
only and without prejudice to GM’s substantial opposition to class certification, the named
parties agreed to the certification of a settlement class of C/K pickup owners, described
below.”).
120. Carnegie v. Household Int’l, Inc., 376 F.3d 656, 663 (7th Cir. 2004) (noting that “[u]ntil [the
settlement was reversed on appeal, defendants] desperately wanted the RICO claim included
in the class settlement so that they wouldn’t have to face it in any other RAL suits”); Wal-Mart
Stores, Inc., 396 F.3d at 106 (“Broad class action settlements are common, since defendants
and their cohorts would otherwise face nearly limitless liability from related lawsuits in
jurisdictions throughout the country. Practically speaking, class action settlements simply
will not occur if the parties cannot set definitive limits on defendants’ liability.”) (internal
citations omitted); In re Gen. Am. Life Ins. Co. Sales Practices Litig., 357 F.3d 800, 805 (8th
Cir. 2004) (“There is no impropriety in including in a settlement a description of claims that
 Class-wide Settlement Steps 229

“identical factual predicate” doctrine from making the release too broad,121
she has little incentive to limit the scope of the release; she has received
the relief she bargained for, and will try to ensure that the settlement goes
through.
Allocation of settlement funds. Sometimes, different members of the class
have been injured differently. The parties may wish to allocate a specific
amount of the settlement to certain subgroups to reflect these variations.
A risk of this approach, however, is that allocation clauses can raise fairness
concerns, drawing objections from groups who believe their share was not
large enough.
Clear-sailing provisions. The defendant may agree not to oppose plaintiff’s
motion for attorneys’ fees, nor to dispute the amount of fees the plaintiff
requests, no matter how large. (Indeed, if the fees are coming from a common
fund, the defendant has little incentive to care how much the attorneys get.)
Some courts treat clear-sailing provisions as a red flag, signaling there may be
other fairness-based concerns about the settlement.122
Quick-pay provisions. The plaintiff may propose a “quick-pay” provision
which provide her counsel with their fee immediately. The logic behind the
“quick-pay” provision is that it may reduce the risk of sabotage by opportu-
nistic objectors. If objectors see that counsel has already been paid, they are
less likely to file meritless objections simply to extort fees of their own.123
Quick-pay provisions are risky, however. First, the defendant may balk at
paying plaintiff’s counsel first. Even if it does not, either the judge or a public-
interest objector may object to paying the plaintiff’s attorneys before the class as
either unreasonable or as evidence the class is not adequately represented.124
Incentive payments for named plaintiffs. Settlement agreements often
include some form of additional payment to the named plaintiffs,125 to

is somewhat broader than those that have been specifically pleaded. In fact, most settling
defendants insist on this.”).
121. Wal-Mart Stores, Inc., 396 F.3d at 106 (“Plaintiffs’ authority to release claims is limited by the
‘identical factual predicate’ and ‘adequacy of representation’ doctrines. Together, these legal
constructs allow plaintiffs to release claims that share the same integral facts as settled
claims, provided that the released claims are adequately represented prior to settlement.”).
122. See Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 525 (1st Cir. 1991) (scrutiny of class
settlement “particularly necessary where a clear sailing agreement strips any true market-
based check upon the scope and costs of counsel’s efforts”).
123. Brian T. Fitzpatrick, The End of Objector Blackmail?, 62 Vand. L. Rev. 1623, 1624 (2009).
124. Id. at 1626 (“one might object to quick-pay provisions on the ground that they are utterly self-
serving—they have, after all, transformed class action lawyers into something that had been
previously unknown in the law: contingency-fee lawyers that get paid before their clients . . .”).
125. Theodore Eisenberg & Geoffrey P. Miller, Incentive Awards to Class Action Plaintiffs: An
Empirical Study, 53 U.C.L.A. L. Rev. 1303, 1307 (2006) (finding 28% of settled class actions
between 1993 and 2002 included an incentive award to class representatives); see also
Rodriguez, 563 F.3d at 958 (“Incentive awards are fairly typical in class action cases.”)
(emphasis in original).
230 Chapter 8 Settling Class Actions

compensate them for their time complying with discovery, testifying at depo-
sitions, and generally acting as private attorneys general.126 Courts often
allow these payments, although several courts have not when the payments
sought appeared excessive.127 In fact, the Ninth Circuit Court of Appeals
recently criticized one settlement agreement in which several named plain-
tiffs received incentive awards pursuant to an agreement that had existed
since the beginning of the litigation.128

§ 8.3.3 Preliminary Approval Order

Once the parties have reached an agreement, they submit the proposed settle-
ment to the court for preliminary approval.129 This triggers the 10-day dead-
line (imposed by CAFA) for the defendant to notify the appropriate state and
federal officials of the proposed settlement.130
The preliminary approval process is not necessarily complicated.
Depending on the court’s familiarity with the case, the parties may simply
offer briefs and an informal presentation on the basic terms of the settle-
ment.131 The parties can present experts if they believe they will be persuasive,
but this typically is not done at this early juncture.132 While the process can
be informal, the parties should still prepare for an active bench; the more
questions they can answer at a preliminary stage,133 the less likely they will

126. Rodriguez, 563 F.3d at 958–59 (incentive awards “are intended to compensate class repre-
sentatives for work done on behalf of the class, to make up for financial or reputational risk
undertaken in bringing the action, and, sometimes, to recognize their willingness to act as
a private attorney general”).
127. See In re Synthroid Mktg. Litig., 264 F.3d at 723 (affirming rejection of incentive awards for
third-party payor plaintiffs because they did not require “additional compensation” to serve
as class representatives).
128. Rodriguez, 563 F.3d at 955 (“We agree that the ex ante incentive agreements created conflicts
among the five contracting class representatives, their counsel, and the rest of the class. We
disapprove of them.”).
129. Manual for Complex Litigation (Fourth) § 21.632 at 320 (“First, counsel submit the
proposed terms of the settlement and the judge makes a preliminary fairness evaluation.”).
130. 28 U.S.C. § 1715(b).
131. Manual for Complex Litigation (Fourth) § 21.632 at 320–21 (“In some cases, this
initial evaluation can be made on the basis of information already known, supplemented as
necessary by briefs, motions, or informal presentations by parties.”). For an exemplar pre-
liminary approval brief, see Appendix 8B.
132. Id. § 21.632 at 321 (“Individuals sometimes provide expert testimony regarding the valua-
tion of the settlement or even of its legal validity.”).
133. Id. (“The judge should raise questions at the preliminary hearing and perhaps seek an inde-
pendent review if there are reservations about the settlement, such as unduly preferential
treatment of class representatives or segments of the class, inadequate compensation or
harms to the classes, the need for subclasses, or excessive compensation for attorneys. The
 Class-wide Settlement Steps 231

have to pursue further court-ordered negotiations.134 If the parties seek class

certification at the same time as preliminary approval, then they should pre-
pare for a full class-certification hearing,135 albeit one in which the defendant
does not contest certification.
Where a class has not yet been certified, the court will often preliminarily
scrutinize the settlement to ensure that it appears sufficiently fair, reasonable,
and adequate to justify disseminating class notice.136 Once it is satisfied the
requirements of Rule 23(a) and CAFA have been met, it may issue a prelimi-
nary approval order.
The preliminary approval order should do four things:

• tentatively certify the settlement class;

• preliminarily approve settlement based on (a) an arms-length negotia-
tion, and (b) a settlement within the range of possible outcomes;
• address necessary logistical concerns (authorize notice, set the date for
the fairness hearing, and set deadlines for opt-outs and objections); and
• stay the litigation pending a fairness hearing.137

parties then have an opportunity to resume negotiations in an effort to remove potential

obstacles to court approval.”).
134. See Mirfasihi v. Fleet Mortgage Corp., 450 F.3d 745, 751 (7th Cir. 2006) (“It is understood
that mathematical certainty and precision is not possible in valuing claims, particularly at
this early stage in the litigation, but more is needed here to ensure that the information-
sharing class’s interests are properly considered.”).
135. Manual for Complex Litigation (Fourth) § 21.632 at 321 (“If the case is presented for
both class certification and settlement approval, the certification hearing and preliminary fair-
ness evaluation can usually be combined. The judge should make a preliminary determination
that the proposed class satisfies the criteria set out in Rule 23(a) and at least one of the subsec-
tions of Rule 23(b).”); see, e.g., Amchem Prods. v. Windsor, 521 U.S. 591, 620 (1997) (“other
specifications of the Rule—those designed to protect absentees by blocking unwarranted or
overbroad class definitions—demand undiluted, even heightened, attention in the settlement
context. Such attention is of vital importance, for a court asked to certify a settlement class will
lack the opportunity, present when a case is litigated, to adjust the class, informed by the pro-
ceedings as they unfold”). For more on full class certification hearings, see § 5.4.
136. See Weinberger v. Kendrick, 698 F.2d 61, 73 (2d Cir. 1982); Ace Heating & Plumbing Co.
v. Crane Co., 453 F.2d 30 (3d Cir. 1971); Lewis v. Starbucks Corp., No. 2:07-cv-00490-MCE-
DAD, 2008 WL 4196690, at *6 (E.D. Cal. Sept. 11, 2008) (“Preliminary investigation into the
instant case shows that the parties engaged in relevant discovery, negotiated the settlement
at arm’s-length in front of an impartial mediator, and obtained a compromise which should
provide class members with reasonable relief considering the likely damages incurred and
the difficulties inherent in establishing liability at trial. While the parties did not fully com-
plete discovery prior to settlement negotiations, approval of a class action settlement is
proper as long as discovery allowed the parties to form a clear view of the strengths and
weaknesses of their cases.”).
137. Manual for Complex Litigation (Fourth) § 21.632 at 321. This may involve enjoining
any competing class actions from proceeding. See, e.g., Figueroa, 517 F. Supp. 2d at 1298
(preliminary approval order enjoined four competing class actions).
232 Chapter 8 Settling Class Actions

§ 8.3.4 Class Settlement Notice

Once the court has made a preliminary finding of fairness, reasonableness,

and adequacy (and, if the class has not yet been certified, that it can be), then
it is time to issue notice of the proposed settlement.138 If the class has already
been certified for litigation purposes, then the parties may disseminate notice
of certification and notice of the settlement at the same time.139
The notice should inform the class members that the fairness hearing will
allow them to present arguments either for or against the settlement.140
It should also inform class members of the date by when they must submit
any written statements to the clerk of the court.141 Given the need for plain-
language notice, the court will usually approve a general description of the
settlement.142 While the PSLRA expresses a strong preference for “plain
language statements,” complexity that simply reflects the complexity of a
proposed settlement may still pass court scrutiny.143
It is wise to include in the notice that the terms of the settlement may be
subject to change, and that parties that remain in the class will be bound by
those changes; this warning will not protect parties that engage in a true “bait-
and-switch,” but may insulate against the need for a second notice for com-
paratively minor changes.144
In addition, the defendant must also notify the “appropriate” state and
federal officials of the settlement.145 Notice under CAFA must issue within 10

138. Manual for Complex Litigation (Fourth) § 21.633 at 321. For more on notice gener-
ally, see § 6.2.
139. See In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 448 (S.D.N.Y. 2004) (“Where,
as here, the parties seek simultaneously to certify a settlement class and to settle a class
action, the elements of Rule 23(c) notice (for class certification) are combined with the ele-
ments of Rule 23(e) notice (for settlement or dismissal).”); see also Manual for Complex
Litigation (Fourth) § 21.633 at 321.
140. Id. § 21.633 at 322.
141. Id.
142. Weinberger, 698 F.2d at 70 (“Numerous decisions, no doubt recognizing that notices to class
members can practicably contain only a limited amount of information, have approved very
general descriptions of the proposed settlement . . .”); Wal-Mart Stores, Inc. v. Visa U.S.A.
Inc., 396 F.3d 96, 114 (2d Cir. 2005).
143. In re Indep. Energy Holdings PLC Sec. Litig., 302 F. Supp. 2d 180, 185 (S.D.N.Y. 2003) (approv-
ing settlement notice containing several pages of complex formulae for allocation of settle-
ment because “[t]he resulting complexity is a necessary by-product of that plan.”).
144. See, e.g., Denney v. Deutche Bank AG, 443 F.3d 253, 271 (2d Cir. 2006) (“As the district court
observed, there is no basis for claiming bait-and-switch tactics. The original notice made
clear that the terms of the final settlement could change and that those who remained in the
class would be bound by these changes.”).
145. 28 U.S.C. § 1715(b) (“Not later than 10 days after a proposed settlement of a class action is
filed in court, each defendant that is participating in the proposed settlement shall serve
 Class-wide Settlement Steps 233

days of the preliminary settlement papers being filed with the court.146 If a
defendant does not comply with CAFA’s notice provision, the settlement
loses its binding effect on absent class members.147

§ 8.3.5 Opt-Outs/Objections

Rule 23(e)(3) permits courts to withhold approval from a settlement unless it

affords class members an opportunity to make an informed decision, based
on the proposed settlement terms, to opt out of the settlement.148
Overall, very few class members will opt out of class settlements.149 (This
makes sense: why refuse a recovery one did not have to work—or spend—
for?) While some class members have opted out of almost any kind of case,
certain kinds of class actions appear to encourage opting out more than
others (mass tort cases attract the most opt-outs, consumer class actions the
fewest).150
In addition, the parties must also allow class members the opportunity
to object to the class settlement.151 Formal intervention is not necessary.152

upon the appropriate State official of each State in which a class member resides and the
appropriate Federal official, a notice of the proposed settlement”).
146. Id.; see also Gates v. Rohm & Haas Co., 248 F.R.D. 434 (E.D. Pa. 2008) (noting during pre-
liminary approval of settlement that defendant had sent notice to regulatory authorities
“[w]ithin ten days of the filing with the Court of the proposed Settlement Agreement”).
147. 28 U.S.C. § 1715(e)(i).
148. Fed. R. Civ. P. 23(e)(3). See also Fed. R. Civ. P. 23(h)(1) (“A claim for an award must be made
by motion under Rule 54(d)(2), 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.”).
149. Theodore Eisenberg & Geoffrey Miller, The Role of Opt-Outs and Objectors in Class Action
Litigation: Theoretical and Empirical Issues, 57 Vand. L. Rev. 1529, 1532 (2004) (“Opt-outs
from class participation and objections to class action resolutions are rare: on average, less
than 1 percent of class members opt-out and about 1 percent of class members object to
class-wide settlements.”).
150. Id. at 1532 (“Opt-out rates vary by case type. Even in case categories in which the opt-out
rates are highest, however, the percentage of class members who exclude themselves is quite
low. The highest mean opt-out rate is 4.6 percent for the four mass tort cases for which data
were available. Employment discrimination cases rank second with an opt-out rate of 2.2
percent for the three cases in our sample with the necessary data. The opt-out rate for thirty-
nine consumer class action cases is less than 0.2 percent.”).
151. The court may also allow third parties who may be affected by the proposed settlement to
object. Technically, because they are not members of the class, these objectors are classified
as “intervenors.” See, e.g., Nat’l Ass’n of Chain Drug Stores v. New England Carpenters Health
Benefits Fund, 582 F.3d 30, 44 (1st Cir. 2009).
152. Devlin v. Scardelletti, 536 US 1, 14 (2002).
234 Chapter 8 Settling Class Actions

Objectors tend to have an adverse relationship to both plaintiffs and defen-

dants.153 Like opt-outs, while the chance of attracting objectors is low overall,
it also varies by type of case: civil rights and employment discrimination cases
appear to attract the most objectors, consumer class actions the fewest.154
Settlements with non-pecuniary relief attract more objectors than cash settle-
ments, probably because (as discussed above) their value to the class is harder
to pin down.155
Objectors may have varying motives for contesting the settlement. Some
objectors may be class members who, either out of a distaste for litigation or
loyalty to the defendant, wish to register their dissatisfaction with the fact that
a settlement is occurring at all.156 Some objectors may be plaintiffs from com-
peting class actions,157 or be represented by counsel who are seeking a larger
share of the settlement than their colleagues were willing to grant them.158
Some objectors may be government officials (granted status to object by
CAFA’s notice provisions) seeking to reduce the overall counsel fees or settle-
ment terms they believe not to be in the public interest.159 Some objectors

153. Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir. 1975) (“As an objector, Frackman was in an adver-
sary relationship with both plaintiffs and defendants and was entitled to at least a reasonable
opportunity to discovery against both.”).
154. Eisenberg & Miller, The Role of Opt-Outs and Objectors in Class Action Litigation, 57 Vand.
L. Rev. at 1532–33 (“Like the rate of opt-outs, the rate of objections varies depending on the
type of case. Civil rights and employment discrimination cases have (relatively speaking)
high objector rates, though their average rates are both less than 5 percent. Securities and
antitrust cases have lower objection rates. Consumer cases tend to have the lowest objection
rates of any case type with more than ten cases in our sample.”).
155. Geoffrey P. Miller and Lori S. Singer, Nonpecuniary Class Action Settlements, 60 L. &
Contemporary Problems 97, 120 (1997) (“Objectors are particularly likely to appear
when the litigating parties propose nonpecuniary settlements, because the settlement will
nearly always be vulnerable to the objector challenging the valuation of the settlement.”).
156. Id. at 120–21 n.64 (1997) (“Some objectors are simply uninformed class members who write
to the court, or, less commonly, appear during the settlement hearing, to voice opinions
having little relevance to the matters under consideration. For example, it is not uncommon
for class members to object to the settlement on the ground that they believe the defendant
has done nothing wrong-a commendably loyal opinion, but one with no relevance in a
settlement hearing.”).
157. See, e.g., Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292, 1298, 1302 (S.D. Fla. 2007)
(objectors included named plaintiffs from competing class actions); In re Bankamerica
Corp. Sec. Litig., 210 F.R.D. 694, 705 (E.D. Mo. 2002) (same).
158. Miller & Singer, Nonpecuniary Class Action Settlements, 60 L. & Contemporary Problems
at 120–21 n.64 (“A second class of objectors includes dissident plaintiffs’ attorneys who have
fallen out with lead counsel. The threat to object to the settlement is always a factor in the
negotiations among the attorneys in the plaintiffs’ consortium. If these negotiations break
down, the loser sometimes carries through with the threat. The true basis of the objection is
nearly always the fact that the objecting attorney believes that he or she is not receiving
sufficient compensation from lead counsel on the plaintiffs’ side.”).
159. See, e.g., Figueroa, 517 F. Supp. 2d at 1304 (state attorneys-general objected to proposed
coupon settlement); see also Miller & Singer, Nonpecuniary Class Action Settlements, 60 L. &
 Class-wide Settlement Steps 235

may have ideological objections to certain types of settlements, particularly

those that include large counsel fees compared to the compensation for the
class.160 Finally, some objectors are opportunistic, and seek to hold up the
settlement until they are paid to go away, or they collect attorneys’ fees on
behalf of counsel who recruited them.161
Objectors will also make varied arguments. Some objectors will argue that the
class settlement does not provide adequate relief to all of the class members.162 In
particular, some objectors will challenge the size of the attorneys’ fees,163 or other

Contemporary Problems at 120–21 n.64 (“These days, professional objectors can include,
not only private attorneys, but also, in some cases, state Attorneys General who see the
political and economic benefits in claiming public credit for reducing counsel fees or
enhancing class settlements.”).
160. See Robert C. Fellmuth, et al., Taking the Offensive: Court Strategy, 40 San Diego L. Rev.
115, 141 (2003) (Alan Morrison of Public Citizen Litigation Group: “We have managed to
anger our private partners in these lawsuits by coming in and objecting; pointing out that
fees have been excessive, which does not make us any more popular. But we’ve got to use
Rule 23(e) to protect the class members if the courts and the parties will not do it.”).
161. Mirfasihi v. Fleet Mortgage Corp., 551 F.3d 682, 687 (7th Cir. 2008) (Posner, J.) (“the objec-
tors were motivated to exaggerate the value of the [worthless] claim of the information-
sharing class so that they could get a generous award of attorneys’ fees”); In re Cmty. Bank of
N. Va., 418 F.3d 277, 311 (3d Cir. 2005) (“Simply put, those law firms have a pecuniary inter-
est in soliciting opt-outs or objectors; the greater number of opt-outs or objectors, the less
likely the proposed settlement will survive, and the more likely that the law firms will have
the opportunity to bring their own suits in search of lucrative attorney fees.”); In re
UnitedHealth Group Inc. PSLRA Litig., 643 F. Supp. 2d 1107, 1108-09 (D. Minn. 2009) (com-
paring objectors to “remoras” (bloodsucking, parasitic fish) and noting that “[t]heir goal
was, and is, to hijack as many dollars for themselves as they can wrest from a negotiated
settlement.”); see also Miller & Singer, Nonpecuniary Class Action Settlements, 60 L. &
Contemporary Problems at 120–21 n.64 (“Class action practice in the United States has
developed its own cohort of professional objectors: attorneys who enter a case after a settle-
ment is announced, manage not only to object to the settlement but to intervene as counsel
on behalf of a class member, and then threaten to disrupt the settlement unless they are
given a hefty reward. Their threat is not an idle one. As long as they can intervene, they can
appeal the settlement as of right, and during the appeal process, the settlement will be in
limbo. Class counsel will not be paid and class members will not receive their benefits. The
prospect of delaying a settlement for months or years by taking an appeal is the realistic
threat that objectors hold over the heads of the settling parties.”).
162. In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 781 (3d Cir.
1995) (objectors were owners of vehicle fleets who would not receive adequate relief under
proposed settlement).
163. Ironically, while this is a common argument, objection does not have any visible effect on
the fees awarded in settlements. Theodore Eisenberg & Geoffrey Miller, The Role of Opt-
Outs and Objectors in Class Action Litigation: Theoretical and Empirical Issues, 57 Vand. L.
Rev. 1529, 1533 (2004) (“We do not find robust evidence that the rate of opt-out or objec-
tion is statistically associated with the level of attorney fee or the fee’s proportion of the
client’s recovery. Class dissent does not appear to increase when the fee is high, nor does
dissent appear to exert a notable moderating effect on fees. The class’s recovery is the
overwhelmingly dominant feature in shaping the fee level.”)
236 Chapter 8 Settling Class Actions

provisions that may reduce the recovery to class representatives.164 Some objec-
tors, ironically, may object to having a class settlement at all.165 (For the most
part, these objectors will not be heard from at the final approval hearing.)

§ 8.3.6 Final Approval Hearing

The goal of the final approval hearing is to determine whether the settlement
is fair, reasonable, and adequate. Unlike the preliminary approval hearing, at
the final approval hearing, the judge is likely to exercise special vigilance on
behalf of the proposed class.166 In particular, the judge will look at the prob-
ability the plaintiff would prevail on her claims at trial, the expected costs of
any further litigation, and any evidence that the parties have colluded in for-
mulating the settlement agreement.167
The structure of the hearing is up to the court’s discretion. The court will
almost certainly hear oral argument.168 The parties will likely present further
briefing prior to the hearing.169 The parties can present witnesses, experts,
affidavits, and declarations at the final approval hearing.170 In addition, objec-
tors may appear and testify.171 Since the judge’s goal is to build a robust record
supporting its decision to certify a settlement class,172 the parties will likely
get the opportunity to present as much evidence as they wish.

164. Rodriguez v. West Publ’g Co., 563 F.3d 948, 963 (9th Cir. 2009) (objectors challenged incentive
awards to named plaintiffs).
165. See, e.g., Krell v. Prudential Ins. Co. of Am., 148 F.3d 283, 318 n.62 (3d Cir. 1998) (“The court
found that approximately 700 of those who opted out wrote; ‘to indicate they do not feel
they were misled in the purchase of their insurance, are satisfied with their policies, and do
not want to participate in the action against Prudential.’”).
166. Mirfasihi v. Fleet Mortgage Corp., 450 F.3d 745, 748 (7th Cir. 2006) (“District judges must
therefore exercise the highest degree of vigilance in scrutinizing proposed settlements of
class actions to consider whether the settlement is fair, adequate, and reasonable, and not a
product of collusion.”) (internal quotations omitted).
167. Id. at 748 (“Indeed, the district court judge functions as a fiduciary of the class, who is sub-
ject therefore to the high duty of care that the law requires of fiduciaries. As a general prin-
ciple, a district court should evaluate, among other things, the probability of plaintiff
prevailing on its various claims, the expected costs of future litigation, and hints of collu-
sion.”) (internal quotations omitted).
168. Farinella v. PayPal, Inc., 611 F. Supp. 2d 250, 257 (E.D.N.Y. 2009) (“Arguments were heard
on the motion for approval of the settlement and approval of attorneys’ fees and
expenses.”).
169. For exemplar final-approval briefing, see Appendices 8C-D.
170. Manual for Complex Litigation (Fourth) § 21.634 at 322.
171. Id.
172. Id. § 21.635 at 322–23 (“Even if there are no or few objections or adverse appearances before
or at the fairness hearing, the judge must ensure that there is a sufficient record as to the
basis and justification for the settlement. Rule 23 and good practice both require specific
 Attorneys’ Fees 237

§ 8.3.7 Settlement Implementation

Most often, the parties will delegate the implementation of the settlement
to a settlement administration company. Most settlement administration
companies will serve as the primary point of contact for the class members,
will take in any claims forms, and will issue checks.173 The settlement admin-
istrator reports back to the attorneys (and the court, if necessary) about the
progress of the settlement, including response rates from class members and
amounts paid out.
If there is some non-monetary form of relief (such as corporate therapeu-
tics or injunctive relief) then the court may stay involved long enough to
ensure that the injunctive relief is provided.

§ 8.4 Attorneys’ Fees

Attorneys’ fees present one of the larger—and more controversial—issues for

class settlements: namely, how much may the plaintiff’s attorneys collect?
This issue is of obvious importance to the plaintiff. But it is also important to
the defendant: after protracted litigation, few defendants want to pay over
a large sum to their chief adversary. More importantly, large attorneys’ fees
can be an indication that the settlement is the product of collusion,174 or is
otherwise unfair. On the other hand, not agreeing to sufficient fees may drive
the plaintiff away from the bargaining table.
The default rule in litigation is what is often known as the “American rule”:
each side pays its own lawyers’ fees.175 (This is in contrast to the “English
Rule,” in which the losing party must pay all lawyers’ fees.)176 Since most
individual plaintiffs lack the resources to pay large attorneys’ bills, plaintiffs’

findings as to how the settlement meets or fails to meet the statutory requirements. The
record and findings must demonstrate to a reviewing court that the judge has made the
requisite inquiry and has considered the diverse interests and the requisite factors in deter-
mining the settlement’s fairness, reasonableness, and adequacy.”).
173. See Staton v. Boeing Co., 327 F.3d 938, 948 (9th Cir. 2003) (“To receive an award, unnamed
class members must submit a claim form to an independent claims arbitrator (hired by class
counsel and approved by the district court), who will verify the validity of the claims against
Boeing’s records.”).
174. Manual for Complex Litigation (Fourth) § 21.62 at 317.
175. Goldberger v. Integrated Res., Inc., 209 F.3d 43, 47 (2d Cir. 2000) (“From time immemorial it
has been the rule in this country that litigants are expected to pay their own expenses,
including their own attorneys’ fees, to prosecute or defend a lawsuit.”).
176. See, e.g., Richard A. Posner, Law and Legal Theory in the UK and USA 83–93 (1996)
(discussing effect of “loser-pays” rule on tort filings in the United Kingdom).
238 Chapter 8 Settling Class Actions

counsel often must collect fees in one of two ways: either by bringing a statu-
tory cause of action that allows them to collect fees (such as violation of a
consumer-fraud statute), or through a provision in settlement agreement that
the defendant will pay the plaintiff’s attorneys’ fees as part of a “common
fund.”177
Regardless of how plaintiff’s attorneys collect, the fee will be subjected to
intense scrutiny by the court, and by third parties like objectors and the press.

§ 8.4.1 Determining Reasonable Fee

There are two commonly accepted ways of determining reasonable attorneys’

fees: either by reference to actual billed time (the “lodestar” method), or by
setting the fees as a percentage of the common fund available to the class.178
Deciding which approach to request is a major strategic decision for the
plaintiff. Lodestar fees may result in lower fee awards, and require plaintiffs’
counsel to keep good records of the work they actually performed. Percentage
fees are often more attractive to plaintiffs’ counsel179—they require less
accounting, and are often higher—but they are also more likely to draw objec-
tions. The decision will depend on a number of factors, including the nature
of the underlying claims (common-law claims tend to require a common-
fund approach, statutory claims may specifically authorize an award of rea-
sonable attorneys’ fees), jurisdiction, and counsel’s tolerance for risk.

§ 8.4.1.1 Lodestar

Generally, a lodestar fee is measured by multiplying the reasonable amount of

time expended on the case by a reasonable hourly rate.180 The lodestar method
is used most often when the plaintiff files for attorneys’ fees under a fee-
shifting statute. The court, may, at its discretion, adjust the base lodestar up or
down depending on various factors (e.g., the value of benefit the attorneys
conferred upon the class; the difficulty of the work involved; the degree of
skill required, etc.).181

177. Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980) (“Under the ‘common fund’ doctrine, ‘a
litigant or a lawyer who recovers a common fund for the benefit of persons other than him-
self or his client is entitled to a reasonable attorney’s fee from the fund as a whole.’”) (inter-
nal quotations omitted).
178. Wal-Mart Stores, Inc., 396 F.3d at 121 (“Courts may award attorneys’ fees in common fund
cases under either the ‘lodestar’ method or the ‘percentage of the fund’ method.”).
179. Goldberger, 209 F.3d at 46 (“Throughout the fee proceedings before Judge Kram, [plain-
tifffs’] counsel maintained they should be awarded a simple percentage of the recovery as a
fee, rather than having to submit to a review of their billed hours under the so-called lode-
star method.”).
180. Id.
181. Id. (“Courts in their discretion may increase the lodestar by applying a multiplier based on
factors such as the riskiness of the litigation and the quality of the attorneys.”).
 Attorneys’ Fees 239

Overall, there are benefits and costs to determining attorneys’ fees by the
lodestar method. Since calculating lodestar recovery requires the attorneys to
submit bills for actual work performed, this method is particularly useful
where the value of the recovery may be subject to multiple interpretations.
The defendant generally prefers the lodestar method if it is negotiating fees
separately from the rest of the settlement. (Otherwise, if the defendant is just
paying out a single number, it tends to focus on the bottom line, with less
concern about how the money gets distributed.)
However, lodestar recoveries may also provide an incentive for plaintiffs’
attorneys to inflate their bills, and engage in needless legal work.182 And,
because the court must review the bills to make sure they are reasonable, they
also take the court’s time.

§ 8.4.1.2 Percentage of Common Fund

If there is a common fund, the plaintiff may seek a percentage, much as her
counsel ordinarily would be awarded a contingency fee. For the plaintiff, a
common fund will yield more fees than the lodestar method if there is a com-
paratively large recovery and her counsel have invested comparatively lim-
ited time on the case. In addition, there will be less scrutiny of plaintiffs’
lawyers’ work: the lodestar method requires an analysis of time sheet and
expenses, simply awarding a percentage of the common fund does not.
Courts may also be careful about awarding fees under a common fund
because common funds can create a conflict of interest between the plaintiff’s
attorney and the class. Because the attorney and the class are all paid out of
the same fund, any money that goes to the attorney necessarily comes from
the class.183
Occasionally, even when awarding fees as part of a common fund, a court
will use the lodestar method as a point of comparison to ensure that the per-
centage calculation has not yielded an excessive award.184 This “lodestar cross-
check” can be an important tool, as it will frequently reduce the amount of a
common fund that goes to the plaintiff’s attorneys instead of the class itself.185

182. Id. (“In contrast, the “lodestar create[s] an unanticipated disincentive to early settlements,
tempt[s] lawyers to run up their hours, and compel[s] district courts to engage in a gimlet-
eyed review of line-item fee audits.”) (internal quotations omitted).
183. Martha Pacold, Attorneys’ Fees in Class Actions Governed by Fee-Shifting Statutes, 68 U. Chi.
L. Rev. 1007, 1015–16 (2001) (“the plaintiffs’ attorney and the plaintiffs are left to fight over
the division of the fund. This necessitates special care on the part of courts allocating
common funds”).
184. See Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423, 436 (2d Cir. 2007) (“The District
Court properly utilized the ‘percentage of the fund’ method in calculating counsel fees,
applying the lodestar method as a ‘cross check’ on the reasonableness of the requested
percentage.”).
185. Vaughn R. Walker & Ben Horwich, The Ethical Imperative of a Lodestar Cross-Check: Judicial
Misgivings About “Reasonable Percentage” Fees in Common Fund Cases, 18 Geo. J. Legal
240 Chapter 8 Settling Class Actions

§ 8.4.1.3 Negotiation of Fees

One issue that arises when negotiating a common fund is when to include the
fees. Most defendants want to pay a single lump sum and be done with the
litigation, which means that they want to negotiate the fees and the fund at
the same time. By contrast, most plaintiffs want to maximize the size of their
recovery, so they will try to negotiate the fund first, and their fee later.

§ 8.4.2 Court Approval of Fees

Regardless of the method the parties select for calculating fees, the court must
still approve the final fee amount, which ordinarily requires the plaintiff to
submit a fee request with accompanying briefing.186 Ordinarily, the court will
focus on several factors, including the time and labor counsel invested, the
complexity and magnitude of the litigation, and the relationship of the fee to
the settlement.187 Often, the court may use an alternative method of evaluat-
ing fees to “cross-check” the amount it awards: If the original calculation was
performed according to a lodestar, the court may compare the final fee
amount to a percentage of the common fund (and vice versa).
Leaving aside the court’s fiduciary duty to the class, the reason for all this
scrutiny of the settlement process is that it is the means by which the defen-
dant buys peace from further litigation. Of course, as we discussed earlier,
plaintiffs exist in a state of intense competition with each other.188 The mere
fact of a valid settlement reached with one plaintiff and her counsel will not
necessarily deter other plaintiffs from raising similar claims that are arguably
barred by the settlement. As a result, the defendant may have to return to
court to enforce the preclusive effect of the court’s class-action judgment. That
process is the subject of the next chapter.

Ethics 1453, 1466 (2005) (regression analysis indicated that lodestar cross-check tended to
reduce attorneys’ fees by approximately 20% in common-fund cases).
186. For an exemplar fee request, see Appendix 8E.
187. Masters, 473 F.3d at 436 (“Whatever method is used, the reasonableness of a common fund
fee award is governed by the so-called Goldberger factors: (1) counsel’s time and labor;
(2) the litigation’s complexities and magnitude; (3) the litigation risks; (4) quality of repre-
sentation; (5) the relationship of the requested fee to the settlement; and (6) considerations
of public policy. We recognize that courts have traditionally awarded fees for common fund
cases in the lower range of what is reasonable.”) (internal quotations omitted).
188. For more on this competition, see §§ 3.3, 3.5, 4.4.4.
 CHAP TER

9
Class Action Judgments

§ 9.1 Enforcing Preclusion 243

§ 9.1.1 Res Judicata 244
§ 9.1.2 Collateral Estoppel 244
§ 9.1.3 The All-Writs Act and Anti-Injunction Act 246

§ 9.2 Challenging Preclusion 247

§ 9.2.1 Due Process 247
§ 9.2.2 Adequacy of Representation 248

§ 9.3 Limiting Collateral Exposure 249

§ 9.3.1 Government Actions 250
§ 9.3.2 Opt-Out Suits 250
242 Chapter 9 Class Action Judgments

For the defendant, one unfortunate risk of class action litigation is that the
case may not be over even after the judgment is final. Since a class action is
brought by a representative instead of by all class members themselves, and
since plaintiffs’ attorneys are entrepreneurs in constant competition with
each other for viable cases, it is possible that a new plaintiff will bring a claim
against the defendant involving the same issue, even though she may have
belonged to a class that previously tried or settled a largely similar lawsuit. At
that point, the defendant may find itself litigating the preclusive effect of the
previous class action.
The basic principle behind preclusion is simple: “under elementary prin-
ciples of prior adjudication a judgment in a properly entertained class action
is binding on class members in any subsequent litigation.”1 (This, of course,
assumes a class was certified.)2 Similarly, class actions are entitled to full con-
sideration under the Full Faith and Credit Act.3 What complicates the issue is
a practical problem. The court that presided over the original class action
does not determine the preclusive effect of its own judgment.4 Instead,
a second court—in which the new plaintiff has filed her complaint—must
decide whether the prior class judgment has any preclusive effect.5 And that
court will not know as much about (or feel as attached to) the previous judg-
ment. (In fact, if the plaintiff has conscientiously chosen a forum likely to
favor her,6 the new court may even be actively suspicious of the previous
judgment.)
This situation poses a very real strategic problem for the defendant, the
new plaintiff, and the court. The primary benefit of class litigation is that it
takes a legal controversy affecting large numbers of people and conclusively
resolves it (either through a litigation judgment or settlement) on behalf of all
those affected. If the final judgment in a class action does not apply to all class

1. Cooper v. Fed. Reserve Bank of Richmond, 467 U.S. 867, 874 (1984); see also Supreme Tribe of
Ben-Hur v. Cauble, 255 US 356, 367 (1921) (“If the federal courts are to have the jurisdiction
in class suits to which they are obviously entitled, the decree when rendered must bind all of
the class properly represented.”).
2. See Mendez v. Radec Corp., 260 F.R.D 38, 47 (W.D. N.Y Aug. 20, 2009) (“[A]n individual’s
claims will not be barred by a judgment in favor of the defendant in an action brought under
Rule 23, if no class was ever certified. . . .”).
3. Matsushita Elec. Indus. Co. Ltd. v. Epstein, 516 U.S. 367, 374 (1996).
4. The certifying court can try to establish that effect by complying with Rule 23(c)(3)’s require-
ment to identify those persons in the class and those claims addressed in the litigation that
should be bound by any judgment.
5. Fed. R. Civ. P. 23, Advisory Comm. Note, 1966; In re U.S. Fin. Secs. Litig., 69 F.R.D. 24, 53 (S.D.
Cal. 1975) (“there is no case that holds this Court, on a motion to certify a class action under
Rule 23(c), must determine that its judgment, if rendered in favor of a defendant, will be res
judicata to all members of the class who do not ‘opt out’”).
6. See § 3.3.
 Enforcing Preclusion 243

members, the substantial effort involved in prosecuting the class action has
been for naught.
On the other hand, the new plaintiff (and possibly the new court) is likely
to resist the argument that a court can issue orders that strip away the legal
rights of large numbers of people to sue a wrongdoer, especially when those
people did not participate in (and may not even have known about) the previ-
ous litigation. Such orders comport with due process only if the absent class
members’ rights were adequately represented.

§ 9.1 Enforcing Preclusion

The defendant has a strong interest in enforcing the preclusive effect of previ-
ous class-action judgments. For the defendant, the value of the previous judg-
ment is the finality that it brings to a contested claim.7 Therefore the court
and the parties must balance between the parties’ desire that a litigated (or
settled) class action foreclose future litigation of the same claims, and the
court’s concern about any unfairness that might result from preventing
absent class members from relitigating similar claims at a later date.
This issue is also of concern to subsequent plaintiffs. For example, a class
plaintiff who files a new complaint whose subject matter overlaps previous
litigation may have to determine (or minimize) the preclusive effect of that
litigation. If the previous litigation was settled, and the defendant savvy
enough to obtain a broad release, the plaintiff will have to determine if there
is some way to either plead around the release or collaterally attack the
settlement.8
There are several different methods of enforcing class-action judgments.

7. See In re Baycol Prods. Litig., 593 F.3d 716, 726 (8th Cir. 2010) (emphasizing that “public policy
concerns of finality and repose . . . are particularly compelling concerns in MDL [class] pro-
ceedings. . . .”) (internal quotes omitted)). Samuel Issacharoff & Richard A. Nagareda, Class
Settlements Under Attack, 156 U. Pa. L. Rev. 1649, 1651 (2008) (“At the end of the day, all litiga-
tion is ultimately about repose. The value of a claim, whether litigated or settled, is a function
of the price of peace on the disputed issue. That price may be as low as zero for meritless
claims, but for claims that have at least some viability, the value corresponds directly to the
finality that resolution offers the defendant. The purpose of a judgment, whether litigated or
settled, is precisely the certainty that finality offers the parties.”).
8. Why didn’t this hypothetical subsequent plaintiff object at the settlement? She might not have
thought she had a claim yet. She might not have even read the settlement documents.
244 Chapter 9 Class Action Judgments

§ 9.1.1 Res Judicata

Like other lawsuits, class actions are bound by the principle of res judicata,
which operates as a complete bar to a new, repetitive lawsuit.9 In general, the
elements of res judicata are:

(1) there is a final judgment on the merits of an earlier action, and (2) there is
identity of the parties and (3) identity of the claims in both suits.10

In theory, this means that a final judgment in one class action bars the parties
from bringing all claims that were (or could have been) asserted there in
any subsequent litigation.11 Those claims may include any claims described
in a settlement release.12 (Courts may, however, hesitate to enforce the release
of claims the settling plaintiff did not possess.)13 Because res judicata is an
affirmative defense, the defendant must assert it as early as possible in the
follow-on action.14

§ 9.1.2 Collateral Estoppel

Even if a subsequent action is not barred by res judicata, specific issues that
have already been litigated may be subject to collateral estoppel (also known
as issue preclusion). Collateral estoppel has a wider reach than res judicata
because it does not necessarily require a final judgment.15 Generally, collat-
eral estoppel requires:

(1) [T]he issue sought to be precluded must be the same as that involved in the
prior action; (2) that issue must have been actually litigated; (3) it must have

9. See Reppert v. Marvin Lumber & Cedar Co., 359 F.3d 53, 56 (1st Cir. 2004).
10. Id. (internal citation omitted).
11. Cooper, 467 U.S. at 874 (“Basic principles of res judicata (merger and bar or claim preclusion)
and collateral estoppel (issue preclusion) apply. A judgment in favor of the plaintiff class
extinguishes their claim, which merges into the judgment granting relief. A judgment in
favor of the defendant extinguishes the claim, barring a subsequent action on that claim.
A judgment in favor of either side is conclusive in a subsequent action between them on any
issue actually litigated and determined, if its determination was essential to that judgment.”);
cf. Thompson v. Am. Tobacco Co., 189 F.R.D. 544, 550 (D. Minn. 1999) (finding named plain-
tiffs inadequate where they tried to “reserve” personal injury and damages claims); Feinstein
v. Firestone Tire & Rubber Co., 535 F. Supp. 595, 607 & n.16 (S.D.N.Y. 1982).
12. See Adams v. S. Farm Bureau Life Ins. Co., 417 F. Supp 2d 1373, 1381-82 (M.D. Ga. 2006)
(dismissing tort claims that had been released in prior class settlement).
13. See Hesse v. Sprint Corp., 598 F.3d 581; 2010 U.S. App. LEXIS 5017, *16 (9th Cir. Mar. 10,
2010) (refusing to enforce “broad release of claims [the plaintiff ] did not possess”).
14. Lawrence v. Household Bank (SB), NA, 505 F. Supp. 2d 1279, 1282 (M.D. Ala. 2007) (“Res
judicata, also known as claim preclusion, is an affirmative defense.”).
15. See In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 333 F.3d 763, 767 (7th Cir. 2003)
(“Although claim preclusion (res judicata) depends on a final judgment, issue preclusion
(collateral estoppel) does not.”).
 Enforcing Preclusion 245

been determined by a valid and final judgment; and (4) the determination must
have been essential to the prior judgment.16

A judgment does not necessarily bar all issues in subsequent litigation.

For example, if a defendant in an employment class action proved that it did
not engage in a “pattern and practice” of discrimination, that would not bar
a class member from later alleging that the defendant individually discrimi-
nated against her.17 (That said, the prior judgment would still be useful as
evidence that the defendant’s reason for firing the class member was not
pretextual.)18
The defendant does not have to limit its invocation of collateral estoppel
solely to substantive issues. Given the number of separate class actions that
can be filed over a single high-profile issue, the defendant may consider
invoking collateral estoppel to preclude any further class actions.19 As the
Seventh Circuit has held,

[U]nnamed class members have the status of parties for many purposes and are
bound by the decision whether or not the court otherwise would have had
personal jurisdiction over them. Just as they receive the fruits of victory, so an
adverse decision is conclusive against them. Devlin v. Scardelletti holds that
unnamed class members are entitled to appeal or seek certiorari without inter-
vening; any would-be member of the class could have sought certiorari from
our adverse decision. The premise of allowing class members to seek review by
a higher court is that otherwise they would be bound by defeat.20

As a result—assuming the previous class representative was found to be

adequate—the decision not to certify a class has collateral estoppel effect.21

16. In re Piper Aircraft Dist. Sys. Antitrust Litig., 551 F. 2d 213, 218-19 (8th Cir. 1977) (internal
citations omitted).
17. Cooper, 467 U.S. at 880 (“The judgment is not, however, dispositive of the individual claims
the Baxter petitioners have alleged in their separate action. Assuming they establish a prima
facie case of discrimination under McDonnell Douglas, the Bank will be required to articulate
a legitimate reason for each of the challenged decisions, and if it meets that burden, the
ultimate questions regarding motivation in their individual cases will be resolved by the
District Court.”).
18. Id. at 880.
19. There is a split in jurisdictions over whether a denial of class certification can estop further
attempts to certify a class. Compare In re Bridgestone/Firestone, 333 F.3d at 769 (“Our prior
judgment is binding in personam with respect to the unnamed class members. The district
judge must enforce that judgment by issuing an injunction that prevents all members of the
putative national classes, and their lawyers, from again attempting to have nationwide classes
certified over defendants’ opposition with respect to the same claims.”) with Clearwater
v. Ashland Chem. Co., 93 F.3d 176, 180 (5th Cir. 1996) (affirming district court order refusing
to enjoin re-litigation of class certification in state court under Anti-Injunction Act).
20. In re Bridgestone/Firestone, 333 F.3d at 768.
21. Id. at 768-69; see also In re Baycol, 593 F.3d at 724.
246 Chapter 9 Class Action Judgments

§ 9.1.3 The All-Writs Act and Anti-Injunction Act

Finally, if a plaintiff seeks to usurp a federal class judgment in state court (and
the federal judgment was in a multi-district proceeding), the defendant may
be able to enjoin the subsequent lawsuit under the Anti-Injunction Act and
the All Writs Act.22 True to its name, the Anti-Injunction Act generally pro-
hibits federal courts from interfering in state proceedings.23 But it also allows
a federal court to issue injunctions that are necessary to “protect or effectuate
its judgments.”24 Similarly, the All Writs Act authorizes federal courts to
“issue all writs necessary or appropriate in aid of their respective jurisdictions
and agreeable to the usages and principles of law.”25 (The phrase “in aid” is
particularly important; the All Writs Act does not apply if the injunction was
not “in aid” of federal jurisdiction.)26
Each of these statutes has the potential to help defendants forestall re-
litigation of class actions that have already been resolved. In fact, because of
the potential the All Writs Act has to usurp the proper functioning of state
courts, its power is strictly circumscribed. In part, it is limited by the Anti-
Injunction Act.27 And, as the Supreme Court has held, “[a]ny doubts as to
the propriety of a federal injunction against state court proceedings should
be resolved in favor of permitting the state courts to proceed in an orderly
fashion to finally determine the controversy.”28
There are some limits on what the All Writs Act can accomplish. For
example, a defendant cannot remove an action to federal court based primar-
ily on the All Writs Act.29 And to enforce an injunction under the All Writs
Act or Anti-Injunction Act, the defendant must still—as it would with any
other injunction—show that the injunction is equitable.30 Generally, federal
courts will find injunctive relief appropriate after evaluating:

(1) the threat of irreparable harm to the movant[,] (2) the balance between this
harm and the injury caused by granting the injunction, (3) the probability of
succeeding on the merits, and (4) the public interest.31

22. 28 U.S.C. § 1651.

23. 28 U.S.C. § 2283.
24. Id.; see also In re Baycol, 593 F.3d at 721.
25. 28 U.S.C. § 1651.
26. Retirement Sys. of Ala. v. J.P. Morgan Chase & Co., 386 F.3d 419, 425 (2d Cir. 2004).
27. 28 U.S.C. § 2283.
28. Atl. Coast Line R.R. Co. v. Bhd. of Locomotive Eng’rs, 398 U.S. 281, 297 (1970); see also
Retirement Sys. of Ala., 386 F.3d at 425–26.
29. Syngenta Crop Protection, Inc. v. Henson, 537 U.S. 28, 34 (2002).
30. In re Baycol, 593 F.3d at 726.
31. Id.
 Challenging Preclusion 247

At least one federal court has also held that “relitigating in state court an issue
previously decided in federal court constitutes irreparable harm,” but the
inability to get a state court to address the same issue is “not a legitimate harm
which must be balanced . . . .”32

§ 9.2 Challenging Preclusion

Much as the defendant wishes to enforce any previous class-action judgment,

the plaintiff in the newly filed action will try to avoid the preclusive effect of
any previous lawsuits. Putting aside the class members who either objected to
or opted out of the certified class,33 the plaintiff has two primary arguments
against the preclusive effect of a class action: (1) the class did not receive due
process, or (2) the class was not adequately represented during certification.

§ 9.2.1 Due Process

The most common inquiry into whether or not the class received due process
is whether its members received adequate notice of the class action. In Epstein
v. MCA, Inc., the Ninth Circuit held that so long as the court that reviewed
the settlement held a fairness hearing, provided notice, and enforced the opt-
out rights of any absent class members, then a reviewing court should not
engage in “collateral second-guessing of those determinations and that
review.”34
However, if monetary damages were at stake, and a class member was not
afforded her right to opt out, then the class judgment is not binding on her.35
Similarly, if the absent class member could not have received notice of the
class action (because, for example, it was disposed of before certification36 or
the notice did not inform the claimant that her cause of action was being
litigated),37 then due process requires that the absent class member get her
day in court through the prosecution of a new action. And if the notice were
deficient in other ways (for example, it did not inform the class members of

32. Id. (internal quotes omitted).

33. Wolfert v. Transamerica Home First, Inc., 439 F.3d 165, 169 (2d Cir. 2006).
34. Epstein v. MCA, Inc., 179 F.3d 641, 648 (9th Cir. 1999).
35. Brown v. Ticor Title Ins. Co., 982 F.2d 386, 392 (9th Cir. 1992) (“Because Brown had no
opportunity to opt out of the [previous] litigation, we hold there would be a violation of
minimal due process if Brown’s damage claims were held barred by res judicata.”).
36. Mendez, 260 F.R.D at 47.
37. Twigg v. Sears, Roebuck & Co., 153 F.3d 1222, 1227 (11th Cir. 1998).
248 Chapter 9 Class Action Judgments

the real effect of the class settlement or judgment), then it would not be ade-
quate to bind absent class members.38

§ 9.2.2 Adequacy of Representation

In order to determine whether a class judgment is binding, the court must

also determine whether the class representative adequately represented the
class. The adequacy inquiry at this stage is different than it was when the class
was certified. When judging the preclusive effect of a class judgment, the
court must engage in a

two-pronged inquiry: (1) Did the trial court in the first suit correctly determine,
initially, that the representative would adequately represent the class? and (2)
Does it appear, after the termination of the suit, that the class representative
adequately protected the interest of the class?39

The first prong is largely identical to the adequacy inquiry at class certifi-
cation.40 However, the subsequent court has the discretion to evaluate
the adequacy of the representatives with the benefit of hindsight.41 As a result,
a subsequent plaintiff may argue that she was somehow overlooked in
the previous litigation. For example, she may argue that previous named
plaintiff settled claims that—as a class representative—she did not personally
possess.42
The second prong, however, requires the court to examine the previous
class representative’s actual conduct during the litigation.43 So, for example,
a plaintiff might argue she was not adequately represented if the law govern-
ing the previous class action afforded less protection than the law governing

38. State v. Homeside Lending, Inc. 826 A.2d 997, 255–56 (Vt. 2003) (“we emphasize the one
essential fact that, in our judgment, the notice had to convey to comport with due process—
that is, that some, many, or all of the absent class members were actually in a defendant class
because their attorney’s fee exposure, under the fee requested by class counsel, exceeded their
economic benefit”).
39. Gonzales v. Cassidy, 474 F.2d 67, 72 (5th Cir. 1973).
40. See In re Baycol, 2010 U.S. App. LEXIS 176 at *19.
41. Stephenson v. Dow Chem. Co., 273 F.3d 249, 257–58 (2d Cir. 2001) (allowing plaintiffs whose
claims arose after depletion of settlement fund to proceed, because no court had “addressed
specifically the adequacy of representation” for their particular situation).
42. See Hesse, 598 F.3d 581, 2010 U.S. App. LEXIS 5017 at 16.
43. Gonzales, 474 F.2d at 75 (“We hold that the primary criterion for determining whether the
class representative has adequately represented his class for purposes of res judicata is
whether the representative, through qualified counsel, vigorously and tenaciously protected
the interests of the class. A court must view the representative’s conduct of the entire litiga-
tion with this criterion as its guidepost.”).
 Limiting Collateral Exposure 249

the current lawsuit.44 A plaintiff can also argue that the use of incentive pay-
ments to the named plaintiffs in the previous action compromised their ade-
quacy to represent the class.45 This after-the-fact finding does not require that
the first plaintiff have engaged in every conceivable tactic, however.46
While some plaintiffs have argued that a finding of adequacy may not be
valid if it was simply “assumed without deciding,” at least one circuit has
found that, so long as the issue was “actually presented” in the briefs and
“vigorously argued” by counsel, a ruling on class certification can still have
preclusive effect.47 The Ninth Circuit has held that, in most circumstances,
the certifying court’s determination of adequacy is not subject to collateral
attack.48 To date, no court has ruled on what effect Rule 23(c)(1)(B)’s require-
ment that the court issue findings related to each Rule 23(a) and (b) factor
would have on the preclusive effect of any class certification ruling.

§ 9.3 Limiting Collateral Exposure

Class actions that proceed to trial are big, public events. Even if the underly-
ing subject matter did not receive extensive publicity, the plaintiff will often
keep the press informed herself.49 As a result, once a given class action has
run its course, there may still be other parties—either government bodies,
non-profits, or just individuals who opted out of the original class—who wish
to bring claims based on the same subject matter. These parties will not be
subject to either res judicata or collateral estoppel, which means the defen-
dant will have to adopt different strategies to limit its exposure.

44. Wolfert, 439 F.3d at 173.

45. Homeside Lending, 826 A.2d at 1013 (since incentive payments in previous settlement had
defrayed negative effects of settlement, named plaintiffs were inadequate because “they no
longer protected the interests of the class, and particularly, they no longer protected the
interest of the class against the attorneys for the class”).
46. See In re Baycol, 593 F.3d at 725 (“adequacy of representation does not depend on whether
the putative representative appealed”).
47. Id.
48. Epstein, 179 F.3d at 648 (“Due process requires that an absent class member’s right to ade-
quate representation be protected by the adoption of the appropriate procedures by the cer-
tifying court and by the courts that review its determinations; due process does not require
collateral second-guessing of those determinations and that review.”); but see Hesse, 598 F.3d
581; 2010 U.S. App. LEXIS 5017 at *10–*11 (allowing collateral review of class action settle-
ment approved by Kansas state court).
49. See § 4.1.1.
250 Chapter 9 Class Action Judgments

§ 9.3.1 Government Actions

Just as class actions will sometimes follow government investigations, some-

times government action may follow litigation of a class action. Governments
have different goals and different tools at their disposal than class-action
plaintiffs. For example, a government agency may be able to exercise compul-
sory subpoena power. In certain situations, a government agency may
also bring criminal charges to address unlawful conduct that a class-action
plaintiff could only address with civil charges.
The defendant does have some options for limiting government action,
but they are largely informal. The defendant’s most common option for limit-
ing government attack on a class judgment is to negotiate for a mutually
agreeable resolution. For example, it can agree to some relief that is similar to
the relief it is affording to the class.

§ 9.3.2 Opt-Out Suits

In class actions for money damages, class members who exercise their right
to opt out of the litigation (usually known as “opt outs”) may also present a
strategic problem for defendants.50 Because an absent class member may
have a significant stake in the litigation, she might choose to opt out, wait
until the case has been tried, and then take a favorable verdict into court and
demand damages, arguing that she is entitled either to the same factual find-
ings because of collateral estoppel, or the same legal rulings because of stare
decisis.
An absent class member who opts out of the class will not necessarily
receive the benefit of collateral estoppel against the defendant should the class
prevail at trial.51 However, she can usually argue that the original case consti-
tutes stare decisis for the next case.52 A court will likely treat the case as
(extremely) persuasive, but not binding as collateral estoppel.
This will change the character of the subsequent litigation. Under these
circumstances, both the plaintiff and the defendant are free to try to distin-
guish rulings in the previous case that are not favorable to them, and to liken
the current case to the previous case where the rulings are favorable. However,
if the second case is brought in the same court as the first case, the stare decisis
effect of the original case is likely to be much stronger.

50. Generally, Rule 23(b)(1) and 23(b)(2) class actions do not allow for opt-outs. See §§ 2.5–6.
51. See Premier Elec. Constr. Co. v. Nat’l Elec. Contractors Ass’n, 814 F.2d 358, 367 (7th Cir. 1987)
(“class members who opt out may not claim the benefits of the class’s victory”).
52. Id.
 Limiting Collateral Exposure 251

In the introduction, we spoke of how the legal rules governing a lawsuit

form part of the “terrain” on which it is fought. To this point, we have assumed
that that the parties were fighting on United States soil, and that the preclu-
sive effect of any judgments would be enforced there. However, with the
advent of globalization of trade in goods and services, that is not always a safe
assumption. Therefore, in the next chapter, we address class actions that cross
international borders.
 CHAP TER

10
International Class Action Practice

§ 10.1 Multi-National Class Actions Litigation Teams 255

§ 10.1.1 Types of Multi-National Class Actions 255
§ 10.1.1.1 Alien Tort Claims Act 256
§ 10.1.1.2 “Foreign-Cubed” Class Actions 257
§ 10.1.2 Prudential Challenges 257
§ 10.1.2.1 Political Question Doctrine 258
§ 10.1.2.2 Act of State Doctrine 259
§ 10.1.2.3 Comity 260
§ 10.1.3 Procedural Challenges 261
§ 10.1.3.1 Jurisdiction 261
§ 10.1.3.2 Service of Process 261
§ 10.1.3.3 Forum non conveniens 262
§ 10.1.4 Certifying a Multi-National Class 264
§ 10.1.5 Enforcing Foreign Judgments 264

§ 10.2 Aggregated Litigation Devices in Other Countries 265

§ 10.2.1 The Canadian Model 267
§ 10.2.2 The Australian Model 270
§ 10.2.3 The Opt-In Model 271
§ 10.2.4 The Ombudsman/Consumer Association Model 273
§ 10.2.5 Mass Joinder Proceedings/Quasi-Class Actions 274
§ 10.2.6 The “Test Case” Model 275
254 Chapter 10 International Class Action Practice

As the world grows more interconnected, it is no longer accurate (or produc-

tive) to think of class actions as exclusively an American phenomenon. Goods
and services cross international borders with ease; so do various communica-
tions such as advertisements, customer-service contacts, investment solicita-
tions, stock advice, and intra-company emails.1 And as the legal and business
worlds grow more globalized, so does class-action practice. Class actions
brought in U.S. courts increasingly seek to represent claimants who live in
other countries, or target companies or individuals who live in other coun-
tries. Legal controversies that trigger class actions in the United States—
product safety recalls, antitrust conspiracies, environmental incidents, stock
drops—increasingly spawn related litigation in other countries where people
may have been similarly affected.
For legal scholars, the rise of international class actions is a great source
for research. Foreign class actions show how complex litigation strategy
develops under a different set of constraints: Different legal rules, different
law firm practices, and different social institutions combine to form litigation
that looks like American class-action litigation in some ways, but is remark-
ably dissimilar in others. And class-action practice in U.S. courts that impli-
cates international law highlights important issues in foreign relations and
raises cutting-edge procedural questions.2
For class-action lawyers, the globalization of class-action practice presents
a new potential market for plaintiffs’ firms, and a new front for defense coun-
sel. The events that give rise to class actions in the United States often know
no borders—a defective product sold in Canada, a fraudulently marketed
public stock sold to investors in the U.K., antitrust misconduct that raises the
price of a product for purchasers in the EU all may end up the subject of liti-
gation in American courts. Therefore, it seems logical for a plaintiff to pursue
class actions in other countries that recognize class action litigation and,
indeed, to urge other countries to adopt class action procedures to allow en
masse litigation of such controversies. For example, the plaintiffs’ firm
Hausfeld LLC has a London office, and advertises itself as a “global claimants
firm founded on a very simple yet largely unmet premise: global wrongs must
be accountable to global rights.”3 And many firms that engage in class-action
defense are already globalized—they have litigation departments in other
countries that can either help foreign companies defend themselves in U.S.

1. For an excellent overview of the effects of globalization, see generally Thomas L. Friedman,
The World Is Flat: A Brief History of the Twenty-First Century (2005).
2. See generally George A. Bermann, U.S. Class Actions and the “Global Class,” 19 Kan. J. L. &
Pub. Pol’y 91, 93 (2009) (calling global class actions “a vast middle ground of challenging
inter-jurisdictional problems for which resolution is still a real possibility and for which the
comparative civil procedure work exemplified by Robert Casad holds great promise”).
3. See http://hausfeldllp.com/pages/offices, last viewed Apr. 26, 2010.
 Multi-National Class Actions Litigation Teams 255

proceedings, or participate in the defense of aggregated lawsuits in other

countries’ courts.

§ 10.1 Multi-National Class Actions

Litigation Teams

Multi-national class action teams have become more common as some forms
of multi-national class actions—primarily claims under the Alien Tort Claims
Act,4 and Rule 10b-5 of the Securities Exchange Act5—have become more
frequent. In addition, with the advent of class-action decisions from other
countries that have foreign reach, it is now possible that American firms will
also have to contend with enforcing foreign judgments in the United States.

§ 10.1.1 Types of Multi-National Class Actions

An increasingly common kind of multi-national class action is one that arises

from litigation that spills from one country (like the United States) into
another (like Canada). For example, a number of U.S. plaintiffs’ firms have
begun partnering with foreign clients and firms,6 serving as “consultants” in
foreign class actions, and providing financing and advice to law firms in other
countries.7 Defendants have responded accordingly, often hiring American
class-action defense lawyers to assist in implementing a consistent, robust
international defense. (American lawyers take care how much control they
exercise, however. Foreign courts do not always take kindly to U.S. firms that
appear to be directing litigation in other countries.)8
In fact, a growing number of class actions with an international compo-
nent appear to be part of a coordinated litigation strategy, where a plaintiff
joins with other interest groups in an attempt to change the behavior of mul-
tinational corporations through political activity and targeted litigation in
several countries.9

4. 28 U.S.C. § 1350.
5. 15 U.S.C. § 78a.
6. See Hannah L. Buxbaum, Multinational Class Actions Under Federal Securities Law: Managing
Jurisdictional Conflict, 46 Colum. J. Transnat’l L. 14, 62 n.199 (2007) (noting alliance
formed between United States firm Labaton Sucharow & Rudoff and German firm TILP).
7. See Poulin v. Ford Motor Co. of Canada, 242 O.A.C. 209 ¶ 64 (Ont. S.C. Div. 2008) (noting
involvement of U.S. firm Motley Rice LLC as consultant on products-liability class action).
8. Id. at ¶ 64–69 (holding motion judge correctly considered role of U.S. firm in bringing litiga-
tion, plaintiff was “an unwitting pawn in this action, which was contrived and commenced by
plaintiff ’s counsel and his U.S. colleagues”) (internal quotation omitted).
9. See Patrickson v. Dole Food Co., Inc., 251 F.3d 795, 798 (9th Cir. 2001) (“In our case, banana
workers from Costa Rica, Ecuador, Guatemala and Panama brought a class action against
256 Chapter 10 International Class Action Practice

§ 10.1.1.1 Alien Tort Claims Act

The Alien Tort Claims Act (“ATCA”) provides standing to foreign nationals
to sue for torts in United States courts. ATCA provides, in its entirety: “The
district courts shall have original jurisdiction of any civil action by an alien
for a tort only, committed in violation of the law of nations or a treaty of the
United States.”10 The Second Circuit has held that “ATS claims may some-
times be brought against private actors, and not only state officials, when the
tortious activities violate norms of ‘universal concern’ that are recognized to
extend to the conduct of private parties—for example, slavery, genocide, and
war crimes.”11
As a result, under specific circumstances, ATCA has provided grounds to
sue companies headquartered anywhere in the world in U.S. courts for con-
duct occurring on foreign soil.12 Plaintiffs have used this statutory grant of
jurisdiction to challenge pharmaceutical companies’ use of untested drugs on
foreign nationals,13 the use of forced labor in building a gas pipeline,14 and
other instances where the defendant has allegedly violated internationally
recognized human rights.15 ATCA has also been used to assert claims for
aiding and abetting violations of customary international law.16 To plead an
aiding-and-abetting claim, the plaintiff must plead that the defendant
(1) provided practical assistance to the principal that had a substantial effect
on the commission of the crime, and (2) did so in order to aid the commis-
sion of the crime.17 Aiding-and-abetting theories have been used as the basis
for suing private companies that sold goods or services to government regimes
with poor human rights practices, arguing that the companies should be held
liable to the victims of the government’s misconduct because the companies

Dole Food Company, other major fruit companies and chemical companies . . . for injuries
allegedly sustained from exposure to DBCP in their home countries. This case represents one
front in a broad litigation war between these plaintiffs’ lawyers and these defendants. In some
of the cases, plaintiffs have reportedly won multimillion dollar settlements.”) (internal cita-
tions omitted); see also Phillip I. Blumberg, Asserting Human Rights Against Multinational
Corporations under United States Law: Conceptual and Procedural Problems, 50 Am. J. Comp.
L. 493, 516 (2002).
10. 28 U.S.C. § 1350.
11. See Abdullahi v. Pfizer, Inc., 562 F. 3d 163, 173 (2d Cir. 2009).
12. See generally Sosa v. Alvarez-Machain, 542 U.S. 692 (2004).
13. See generally Abdullahi, 562 F. 3d 163.
14. Doe v. Unocal Corp., 248 F. 3d 915, 920–21 (9th Cir. 2001).
15. Hilao v. Estate of Marcos, 103 F.3d 767 (9th Cir. 1996) (affirming final judgment in class
action against estate of Ferdinand Marcos seeking damages for victims of human rights vio-
lations imposed by Marcos government).
16. In re South African Apartheid, 617 F. Supp. 2d 228 (S.D.N.Y. 2009).
17. See In re Presbyterian Church of Sudan v. Talisman Energy, 582 F.3d 244, 259 (2d Cir. 2009)
(affirming dismissal of plaintiffs’ claims because plaintiffs had not pled purposeful action).
 Multi-National Class Actions Litigation Teams 257

knew the goods or services would help the government carry out its human
rights abuses. 18
These cases may prove difficult to certify, however. The broad interna-
tional problems they address (including war crimes, slavery, and genocide)
tend to implicate individualized issues that may predominate at any
trial.19Also, debate has persisted over whether a plaintiff can fairly invoke
ATCA to provide U.S. jurisdiction over human rights complaints that involve
events occurring in other countries, or that are brought against persons or
companies that did not directly violate any international law norms.

§ 10.1.1.2 “Foreign-Cubed” Class Actions

Another type of class action that might require a multinational team is the “for-
eign-cubed” class action: one that involves “a set of (1) foreign plaintiffs . . .
suing (2) a foreign issuer in an American court for violations of American secu-
rities laws based on securities transactions in (3) foreign countries.”20 In these
cases, the plaintiff must prove that the conduct central to the securities fraud
occurred on American soil21 or face dismissal.22

§ 10.1.2 Prudential Challenges

Unlike purely domestic class actions, international class actions raise a set of
issues involving foreign relations. As a result, the court must make a separate

18. In re South African Apartheid Litig., 617 F. Supp. 2d at 262 (alleging that defendants’ sale of
motor vehicles and provision of computer and banking services to apartheid government
knowingly facilitated its torture and killing of South Africans).
19. See Presbyterian Church of Sudan v. Talisman Energy, Inc., 226 F.R.D. 456, 482–85 (S.D.N.Y.
2005) (declining to certify ATCA class under Rule 23(b)(3) because individual issues as to
harms each class member suffered from genocidal campaign would predominate over
common issues).
20. Morrison v. Nat’l Australian Bank Ltd, 547 F.3d 167, 172 (2d Cir. 2008) (emphasis in origi-
nal); see also Blechner v. DaimlerChrysler AG, 410 F. Supp. 2d 366, 369 (D. Del. 2006) (class of
foreign investors sued German automotive manufacturer for not paying “control premium”
on shares bought outside U.S.).
21. In re CP Ships Ltd. Secs. Litig., 578 F.3d 1306, 1316–17 (11th Cir. 2009) (“[T]he alleged activ-
ity in Tampa represents substantial acts in furtherance of the fraud which directly caused the
claimed losses. We conclude that the district court properly exercised subject matter jurisdic-
tion over the claims of foreign purchasers.”) (internal footnotes omitted).
22. See Morrison, 547 F.3d at 176 (dismissing case for lack of subject-matter jurisdiction because
“[t]he actions taken and the actions not taken by the NAB in Australia were, in our view,
significantly more central to the fraud and more directly responsible for the harm to inves-
tors than the manipulation of numbers in Florida”); Blechner, 410 F. Supp. 2d at 369 (dismiss-
ing case where “[t]he outcome in this case will not affect American investors or markets”).
Morrison is currently under review by the United States Supreme Court. As of the time of this
writing, the Court had heard oral argument, but had not handed down a decision.
258 Chapter 10 International Class Action Practice

set of inquiries at the beginning of the litigation to insure the international

dimensions of the lawsuit do not raise issues that are better resolved by some
entity other than an American court.

§ 10.1.2.1 Political Question Doctrine

Some of the international claims a plaintiff might file (such as ATCA claims)
may rest in part on the actions of a foreign state. As a result, while U.S. law
may grant jurisdiction over those claims, the claims themselves may not be
justiciable. Determining whether a case is nonjusticiable under the political
question doctrine requires an inquiry into “six independent tests,” any one of
which can support dismissal:

(1) a textually demonstrable constitutional commitment of the issue to a

coordinate political department; or
(2) a lack of judicially discoverable and manageable standards for resolv-
ing it; or
(3) the impossibility of deciding without an initial policy determination of
a kind clearly for nonjudicial discretion; or
(4) the impossibility of a court’s undertaking independent resolution
without expressing a lack of the respect due coordinate branches of
government; or
(5) an unusual need for unquestioning adherence to a political decision
already made; or
(6) the potentiality of embarrassment from multifarious pronouncements
by various departments on one question.23

To the extent that this inquiry may overlap with considerations involving
the act of state doctrine, courts will likely find a political question.24 The court
will also likely find a class action nonjusticiable if it seeks to revisit agree-
ments negotiated by the United States at some point in the past.25

23. Baker v. Carr, 369 U.S. 186, 217 (1962).

24. See Alperin v. Vatican Bank, 410 F.3d 532, 560–61 (9th Cir. 2005) (dismissing claims based on
use of slave labor during WWII because “[c]ondemning—for its wartime actions—a foreign
government with which the United States was at war would require us to review an exercise
of foreign policy judgment by the coordinate political branch to which authority to make
that judgment has been ‘constitutionally committed.’”) (internal quotations omitted).
25. See Burger-Fischer v. DeGussa Ag., 65 F. Supp. 2d 248, 284–85 (D.N.J. 1999) (class action
invoked nonjusticiable political question because it essentially sought a judicial restructuring
of reparations under post-WWII Potsdam accords); Iwanowa v. Ford Motor Co., 67 F. Supp.
2d 424, 485 (D.N.J. 1999) (dismissing class action seeking reparations for forced labor in
German concentration camps as political question because “[t]he executive branch has
always addressed claims for reparations as claims between governments.”).
 Multi-National Class Actions Litigation Teams 259

Similarly, statements of interest from the executive branch of the United

States government are given “serious weight” in this analysis.26 Where the
U.S. government states that it has a foreign-policy interest in the immediate
case before the court, the court will generally find the issue nonjusticiable
because of the political question doctrine.27 However, a statement of interest
may not be dispositive.28

§ 10.1 2.2 Act of State Doctrine

The act of state doctrine prohibits American courts from adjudicating law-
suits challenging any public acts that a recognized sovereign power (a state)
commits in its own territory.29 The doctrine has two elements: (1) the action
is an official act by a foreign sovereign within its own territory; and (2) the
relief sought would require a judicial declaration of the invalidity of that
sovereign act.30
The defendant may invoke this doctrine if one of the entities named in an
international class action is a state actor, or if the allegations in the complaint
require a judgment about the validity of official acts of a foreign government
(for example, if the defendant is accused of conspiring with the government
to do something unlawful).31 As a result, the plaintiff may allege that the
entity she has sued is distinct from the foreign sovereign.32 The plaintiff may
argue against applying the act of state doctrine in particular cases on the
grounds that the state’s conduct violates recognized international norms
(occasionally referred to as jus cogen norms).33

26. See Sarei v. Rio Tinto, PLC, 487 F. 3d 1193, 1205 (9th Cir. 2007).
27. See Whiteman v. Dorotheum GmbH & Co., KG, 431 F.3d 57, 70–72 (2d Cir. 2005) (deferring
to executive branch’s statement of interest where executive sought to obtain compensation
for Holocaust victims through negotiation with Austria rather than class action).
28. See Sarei, 487 F. 3d at 1205 (“Guided by separation of powers principles, as well as the cases
discussed above, we conclude that although we will give the view in the [statement of inter-
est] ‘serious weight,’ it is not controlling on our determination of whether the fourth through
sixth Baker factors are present.”) (internal quotation omitted).
29. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401 (1964); see also Sarei, 487 F. 3d at
1208.
30. Sabbatino, 376 U.S. at 405.
31. See Sarei, 487 F. 3d at 1210 (dismissing claims for violation of United Nations Convention
Law of the Sea because Papua New Guinea’s exploitation of its own natural resources consti-
tuted a sovereign act).
32. See Alperin, 410 F.3d at 542 (noting that complaint distinguished between the Vatican as
sovereign entity and the Vatican Bank).
33. See Sarei 487 F. 3d at 1209–10 (allowing racial discrimination claims to proceed because
underlying acts violated jus cogen norms and therefore could not constitute official sovereign
acts).
260 Chapter 10 International Class Action Practice

§ 10.1 2.3 Comity

Another potential ground for dismissal of a class action involving events in

other countries is the doctrine of comity. International comity has been
defined as “the recognition which one nation allows within its territory to the
legislative, executive or judicial acts of another nation.”34 When courts follow
the doctrine of comity, they may decline to exercise their jurisdiction to hear
disputes involving events occurring abroad or foreign parties in deference to
the laws or interests of a foreign sovereign.35 Comity is a discretionary
doctrine for the court.36 Most courts require a showing of an actual conflict
between foreign law and U.S. law relevant to the pending dispute before the
defendant may invoke the doctrine of comity.37 A clear statement by a for-
eign government is a sufficient indicator of foreign law.38
The Second Circuit has warned that class actions involving international
issues may raise concerns not present in individual securities cases or govern-
ment enforcement because “a very small tail may be wagging an elephant and
. . . there is doubt that a judgment of an American court would protect the
defendants elsewhere.”39 While at least one federal appellate court has
reversed a lower court’s dismissal on comity grounds, it did leave open the
possibility that a class action might be dismissed should the foreign jurisdic-
tion actively object to United States jurisdiction.40 (This holding leaves open
the possibility of an extra-judicial strategy for defendants: convincing the
foreign government to actively object to jurisdiction over the litigation.)41

34. Hilton v. Guyot, 159 U.S. 113 (1895).

35. Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for S.D. Iowa, 482 U.S. 522, 544 n.27
(1987) (“Comity refers to the spirit of cooperation in which a domestic tribunal approaches
the resolution of cases touching the laws and interests of other sovereign states.”).
36. See Bodner v. Banque Paribas, 114 F. Supp. 2d 117, 129 (E.D.N.Y. 2000) (“The doctrine of
international comity neither impels nor obliges the United States district court to decline
jurisdiction in a particular case.”).
37. See Sarei, 487 F. 3d at 1211.
38. See Iwanowa, 67 F. Supp. 2d at 490 (“Although courts are not bound by a foreign govern-
ment’s pronouncement of which claims are cognizable, the principles of international comity
dictate that a court not interfere with a foreign sovereign’s pronouncement of its law.”).
39. IIT v. Vencap, Ltd., 519 F.2d 1001, 1017–18 n.31 (2d Cir.1975) (Friendly, J.); see also In re
Bayer AG Securities Litig., 423 F. Supp. 2d 105, 110 (S.D.N.Y. 2005) (quoting IIT).
40. Jota v. Texaco, 157 F.3d 153, 160 (2d Cir. 1998) (“When a court dismisses on the ground of
comity, it should normally consider whether an adequate forum exists in the objecting nation
and whether the defendant sought to be sued in the United States forum is subject to or has
consented to the assertion of jurisdiction against it in the foreign forum.”).
41. See Aguinda v. Texaco, Inc., 303 F.3d 470, 474 (2d Cir. 2002) (“Along with this motion, Texaco
submitted a letter from Ecuador’s ambassador to the United States addressed to the U.S.
Department of State, asserting that the Government of Ecuador considered the suit an affront
to Ecuador’s national sovereignty.”); but see In re South African Apartheid, 617 F. Supp. 2d at
286 (South African government’s objections to ATCA class action regarding apartheid-era
corporate conduct did not sway court to dismiss suit on political question grounds).
 Multi-National Class Actions Litigation Teams 261

§ 10.1 3 Procedural Challenges

The plaintiff bringing a class action on behalf of, or against, non-U.S. parties
faces a number of special procedural hurdles—such as establishing jurisdic-
tion, showing that she served process in a proper manner, that the lawsuit is
proceeding in the proper forum, that comity will be observed, and that all
parties have been joined—that do not arise as frequently in purely domestic
class actions. These additional hurdles require different strategies from both
the plaintiff and the defendant.42 For one thing, the motion to dismiss
becomes even more important to the defendant in multi-national class
actions, and there are more grounds on which the defendant can seek dis-
missal. For another, discovery is more difficult to conduct across interna-
tional borders.

§ 10.1.3.1 Jurisdiction

While jurisdiction-based motions to dismiss are less common in “domestic”

class actions, they are one means by which defendants in multinational class
actions may challenge the propriety of class-action litigation in the United
States. Particularly if any of the plaintiff, the conduct, or the defendant is
foreign, there is a very real question about whether or not United States courts
will have jurisdiction to hear the dispute.43

§ 10.1 3.2 Service of Process

Suing foreign defendants in U.S. courts also raises service-of-process issues.

The plaintiff must make sure that she has served the foreign corporation
properly. Rule 4(h) provides that “a foreign corporation . . . must be served in
a judicial district of the United States . . . or at a place not within any judicial
district of the United States, in any manner prescribed by Rule 4(f) for serving
an individual, except personal delivery. . .”44
Depending on where that corporation resides, service of process may be gov-
erned by either the Hague Convention on the Service Abroad of Judicial and
Extrajudicial Documents in Civil or Commercial Matters (the “Hague Service
Convention”)45 or by local rules. Local rules will vary by country, and in some

42. For a plaintiff-oriented discussion of these strategies, see generally Seth A. Northrop,
Exporting Environmental Justice by Importing Claimants: The Suitability and Feasibility of the
Globalization of Mass Tort Class Actions, 18 Geo. Int’l Envtl. L. Rev. 779 (2006).
43. Blechner, 410 F. Supp. 2d at 367 (dismissing securities class action for lack of subject-matter
jurisdiction).
44. Fed. R. Civ. P. 4(h).
45. Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or
Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163 (1969).
262 Chapter 10 International Class Action Practice

cases may be less onerous than the Federal Rules of Civil Procedure.46 Under
the Hague Service Convention, the plaintiff submits a request to the foreign
state’s Central Authority, which then effects service on the defendant.47

§ 10.1 3.3 Forum non conveniens

A United States court may dismiss a class action on forum non conveniens
grounds.48 The doctrine of forum non conveniens holds that where there is an
adequate forum to hear the dispute in the plaintiff’s home country, and public
and private interests would favor litigation there, bringing a lawsuit in a
United States court is not “convenient.”49
Among the “private interests” that would favor litigation in the plaintiff’s
home country are the ease of access to evidence, the availability of compul-
sory process for witnesses, the cost for witnesses to attend a trial, and any
other factors that might enhance the speedy and inexpensive administration
of justice.50
As the moving party, the defendant bears the burden of demonstrating the
adequacy of the alternative forum, as well as the balance of public and private
interests.51 That said, if the plaintiff alleges that the foreign forum is inade-
quate, she bears the initial burden of “producing evidence of corruption,
delay or lack of due process,” and the defendant bears the ultimate burden
of persuasion.52 In general, courts are more reluctant to find U.S. courts to be
convenient to a foreign plaintiff.53

46. Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 703 (1988) (“Notification au par-
quet permits service of process on a foreign defendant by the deposit of documents with a
designated local official.”).
47. See In re S. African Apartheid Litig., 643 F. Supp. 2d 423, 432 (S.D.N.Y. 2009).
48. See Aguinda, 303 F.3d at 473 (affirming dismissal of complaint on forum non conveniens
grounds); In re Union Carbide Corp. Gas Plant Disaster, 809 F.2d 195, 206 (2d Cir. 1987)
(affirming forum non conveniens dismissal).
49. Piper Aircraft v. Reyno, 454 U.S. 235, 241 (1981); see also Dirienzo v. Philip Servs. Corp., 294
F.3d 21, 29 (2d Cir. 2002) (“A forum non conveniens motion cannot be granted absent an
adequate alternative forum.”).
50. Dirienzo, 294 F.3d at 29–30.
51. Abdullahi, 562 F. 3d at 189 (2d Cir. 2009); see also Eastman Kodak Co. v. Kavlin, 978 F. Supp.
1078, 1087 (S.D. Fla. 1997) (denying motions to dismiss based on forum non conveniens
because “defendants have not met their burden of proving the existence of an adequate alter-
native forum to hear plaintiffs’ claims”).
52. Abdullahi, 562 F. 3d at 189.
53. Piper Aircraft Co., 454 U.S. at 256 (“When the home forum has been chosen, it is reasonable
to assume that this choice is convenient. When the plaintiff is foreign, however, this assump-
tion is much less reasonable. Because the central purpose of any forum non conveniens
inquiry is to ensure that the trial is convenient, a foreign plaintiff ’s choice deserves less
deference.”).
 Multi-National Class Actions Litigation Teams 263

A defendant asserting a forum non conveniens argument may argue that

the alternate forum is adequate for trying the case,54 or that discovery will be
difficult—if not impossible—to conduct in the United States.55 The plaintiff
will most frequently oppose that outcome by arguing that there is no way for
her to receive a fair trial in the foreign jurisdiction.56 She may argue that the
alternative jurisdiction is inadequate because it does not allow for class
actions, although so far that argument has met with limited success.57 (As
more countries adopt aggregated litigation procedures, this argument may
gradually lose force.)
Recently, some national governments have tried to influence this debate
by implementing “blocking statutes” that prohibit local courts in their coun-
tries from exercising jurisdiction over cases originally brought in the United
States, essentially “blocking” the transfer of a case on forum non conveniens
grounds.58
The primary tool the court has for sifting through this morass of conflict-
ing strategies is to look at the stated reasons for filing the action in the United
States. To the extent that a foreign plaintiff can state a plausible, legally valid
reason for filing the case in a U.S. court, the court will likely defer to her
judgment about the appropriate forum.59 The plaintiff can justify her choice
of forum on policy grounds: for example, foreign plaintiffs filing securities
class actions involving conduct connected to the United States can invoke the
federal court’s interest in enforcing this country’s securities laws.60 Similarly, if

54. Aguinda, 303 F.3d at 478 (defendants argued that Ecuador was adequate forum for trying
case); Sarei v. Rio Tinto, PLC, 221 F. Supp. 2d 1116, 1118 (C.D. Cal. 2002) (defendants argued
that either Papua New Guinea or Australia was superior forum for trying ATCA case involv-
ing mining practices in Papua New Guinea).
55. See Bodner, 114 F. Supp. 2d at 132–33. In Bodner, the court ultimately found that, even with
any discovery difficulties, the United States was an adequate forum for the proposed class
action.
56. Aguinda, 303 F.3d at 478 (noting “Plaintiffs contend that Ecuadorian Courts are subject to
corrupt influences and are incapable of acting impartially”).
57. See id. (“Plaintiffs’ third objection is that Ecuadorian courts do not recognize class actions.
On the other hand, Ecuador permits litigants with similar causes of action arising out of the
same facts to join together in a single lawsuit. While the need for thousands of individual
plaintiffs to authorize the action in their names is more burdensome than having them
represented by a representative in a class action, it is not so burdensome as to deprive the
plaintiffs of an effective alternative forum.”).
58. See M. Ryan Casey & Barrett Ristroph, Boomerang Litigation: How Convenient is Forum Non
Conveniens in Transational Litigation?, 4 B.Y.U. Int’l L. & Mgmt. Rev. 21 (2007).
59. Dirienzo, 294 F.3d at 28 (“To determine what amount of deference should have been given,
Iragorri instructs that the more it appears that a domestic or foreign plaintiff ’s choice of
forum has been dictated by reasons that the law recognizes as valid, the greater the deference
that will be given to the plaintiff ’s forum choice.”) (internal quotations omitted).
60. Id. at 28 (“In fact, plaintiffs offered a quite valid reason for litigating in federal court: this
country’s interest in having United States courts enforce United States securities laws.”).
264 Chapter 10 International Class Action Practice

a plaintiff’s—or defendant’s—arguments for choosing a forum seem primar-

ily strategic, that is reason to give the choice less deference.61

§ 10.1.4 Certifying a Multi-National Class

Several strategic issues arise when a plaintiff seeks to certify a multinational

class action in a United States court. The named plaintiff (if foreign) may face
problems demonstrating that she is a typical or adequate class representative.
For example, a foreign plaintiff in a securities class action may not be typical
or adequate if she bought her securities in a non-U.S. market where legal
duties differ from those imposed by U.S. securities laws.
In addition, a plaintiff may have difficulty demonstrating that a multi-
national class action is superior to other forms of litigation, particularly litiga-
tion in the foreign claimants’ home country. A plaintiff may also have difficulty
demonstrating that a class action is superior—or even appropriate—if the
class action will not have any preclusive effect in the foreign jurisdiction, rob-
bing defendants of their due process rights.62 Some courts have held that the
presence of other litigation in foreign jurisdictions does not mean that an
American class action is not superior, even for foreign claimants.63

§ 10.1.5 Enforcing Foreign Judgments

Given the imbalance between the number of class actions filed in the United
States and the number filed in other countries, enforcing foreign class-action
judgments in the U.S. is not yet a pressing issue.64 However, courts must also

61. See Id. at 29 (“[D]efendants’ current claims of inconvenience raise questions as to their
underlying motives. The way in which they have used procedural tactics ultimately to obtain
dismissal of plaintiffs’ suit in district court in favor of Canada counsels caution in evaluating
their forum non conveniens motion.”).
62. See In re Royal Ahold N.V. Securities and ERISA Litig., 219 F.R.D. 343, 352(D. Md. 2003)
(disqualifying foreign named plaintiffs from serving as lead plaintiff in securities action in
part because the possibility that “[f]oreign courts might not recognize or enforce such a deci-
sion from an American court, which would allow foreign plaintiffs in the class to file suit
against the defendant again in those foreign courts . . . must be considered in determining
whether a class action is the superior”).
63. In re Vivendi Universal, S.A. Securities Litig., 242 F.R.D. 76, 92 (S.D.N.Y. 2007) (“The actions
by putative class members currently pending before French courts against Vivendi do not, in
the Court’s view, change this calculus.”).
64. See Todd J. Burke, Canadian Class Actions and Federal Judgments: Recognition of Foreign
Class Actions in Canada, 17-OCT Bus. L. Today 49, 49 (2007) (“Given their relatively small
numbers, it is not surprising that the issue of enforcing Canadian class action judgments has
yet to produce a significant body of case law in the United States.”). However, given Canada’s
 Aggregated Litigation Devices in Other Countries 265

consider the problem of enforcing American judgments in foreign courts. A

number of countries refuse to enforce formal judgments entered by American
courts in the absence of a formal, bilateral agreement with the United States.65
Many countries will refuse to enforce judgments that violate their local public
policy, and, because U.S. securities and class-action rules are more aggressive
than most other countries’, settlements and judgments in the U.S. may violate
public policy in other countries.66
However, the fact that foreign jurisdictions may not recognize an American
class-action judgment does not automatically preclude certifying a class in
the U.S. that includes foreign claimants.67
One final concern is whether the court will be able to provide notice in
foreign jurisdictions, since a class action cannot be binding without notice to
all absent class members. A number of courts, however, have either found
that this is not a fatal objection,68 or have implemented creative procedures
(usually involving publication notice) to provide notice to absent class mem-
bers in other countries.69 (It is arguable whether these publication schemes
protect a defendant’s due process rights in the same way as publication notice
in the United States, where the class-action judgment is certain to have pre-
clusive effect.)

§ 10.2 Aggregated Litigation Devices in

Other Countries

Any overview of complex litigation devices in other countries will necessarily

oversimplify a number of issues. Countries do not have static legal systems;
as a result, a number of countries may be in the process of adopting laws that

recent foray into certifying multinational securities class actions, see Silver v. IMAX Corp.,
2009 O.J. No. 5585 (On. S.C.), that moment may arrive sooner rather than later.
65. See In re Vivendi Universal, 242 F.R.D. at 105 ((excluding putative Austrian class members
because “[t]he United States and Austria are not party to a reciprocity treaty, nor has an
Austrian decree been published that would provided for the enforcement of a U.S.
judgment”).
66. See Id. at 96–105 (analyzing effect of enforcing class-action judgment in France, United
Kingdom, Germany, Austria, and the Netherlands, and concluding that Germany’s public
policy would not allow enforcement of class-action judgments).
67. See id. at 106–07 (“in considering whether the threat of nonrecognition defeats the superior-
ity of the proposed class, the Court should not ignore practical realities that reduce the risk
that defendants would in fact be prejudiced by any potential nonrecognition in the form of
duplication of effort or inconsistent results”).
68. See id. at 107–08 (“As long as the Court is persuaded that ‘class counsel acted reasonably in
selecting means likely to inform persons affected,’ notice will be considered adequate”).
69. See id. (provisionally approving notice that includes publication in multinational media and
creation of multilingual website).
266 Chapter 10 International Class Action Practice

either enhance or restrict litigants’ rights to bring aggregated litigation, and

the political debates surrounding those efforts will vary from country to
country based on each nation’s experience with complex litigation.70
Countries may also enforce group-litigation laws differently, even if those
laws have similar texts.
There are several other structural factors that can influence the strategic
choices in quasi class-action litigation outside the U.S.:
Cost-shifting. Since many countries do not follow the American rule
(which allows one-way fee shifting), determining who bears the costs of a
lawsuit has a large impact on whether aggregated litigation goes forward. For
example, scholars have noted that, in a number of European countries, rules
governing recovery of costs have limited the practicality of mass litigation of
one kind or another.71 And in Australia, one of the more important class-
action decisions to date has been Campbells Cash and Carry Pty Ltd v. Fostif
Pty Limited,72 which approved the use of third-party litigation funding in
representative actions (including class actions).73
Judiciary. In the United States, the (federal) judiciary is politically
appointed and provided lifetime tenure. The result is judges who have spe-
cific political outlooks even as they aspire toward only “calling balls and
strikes.”74 Other common-law countries (like Canada, the UK, and Australia)
have judiciaries that are more inquisitorial, and continental legal systems
(like France and Germany) have more bureaucratic, fully inquisitorial judges;
in other words, it is common for such judges to question witnesses at length
themselves, or even bring expert witnesses retained by the opposing sides
together to debate each other face to face. Each of these nuances affects the
process of aggregating litigation differently.
There are a number of different class-action or aggregated-litigation
devices available in other countries, each of which interacts in unique ways
with the legal system surrounding it. Rather than exhaustively catalogue each
of these systems (which others have attempted with varying degrees of

70. See Samuel P. Baumgartner, Class Actions and Group Litigation in Switzerland, 27 Nw. J. Int’l
L. & Bus. 301, 303–04 (2007) (describing debates in Switzerland over adoption of class-
action legislation).
71. See Deborah R. Hensler, The Globalization of Class Actions: An Overview, 622 Annals of
the Am. Academy of Pol. & Soc. Sci. 7, 9 (2009); Ken Daly, Cartels & Deterrence—Creeping
Criminalisation & the Class Action Boom, 1 Bloomberg European Bus. L. J. 315, 324.
(2007).
72. Campbells Cash and Carry Pty Ltd v. Fostif Pty Limited, (2006) 229 C.L.R. 386.
73. Id. at ¶ 425. Since the Campbells Cash & Carry decision, one litigation funder in Australia
described the class-action environment in Australia as “spectacular.” Adele Ferguson,
“Shareholder class actions have tripled,” The Australian, Jan. 2, 2009.
74. Richard A. Posner, How Judges Think, 73 (2008).
 Aggregated Litigation Devices in Other Countries 267

success), we will briefly describe seven different kinds of aggregated-litigation

systems, and the strategic considerations raised by each.
This overview brings our strategic discussion full circle. In Chapter 1, we
discussed the strategic issues raised by various methods of aggregating litiga-
tion that do not invoke Rule 23. Some of those issues will recur as we look at
the challenges involved in litigating aggregated cases in countries that have
not enacted the American model of opt-out class litigation.

§ 10.2.1 The Canadian Model

Currently, seven of Canada’s thirteen provinces and territories have rules

allowing for class actions, and Canada’s Supreme Court has allowed class-
action approaches in the other jurisdictions as well.75
Most Canadian provinces have enacted some form of the Class Proceedings
Act. Under the Act, a class action may proceed if:

(a) the pleadings or the notice of application discloses a cause of action;

(b) there is an identifiable class of two or more persons that would be repre-
sented by the representative plaintiff or defendant;
(c) the claims or defenses of the class members raise common issues;
(d) a class proceeding would be the preferable procedure for the resolution of
the common issues; and
(e) there is a representative plaintiff or defendant who:
(i) would fairly and adequately represent the interests of the class;
(ii) has produced a plan for the proceeding that sets out a workable method
of advancing the proceeding on behalf of the class and of notifying class
members of the proceeding; and
(iii) does not have, on the common issues for the class an interest that is in
conflict with the interests of other class members.76

Canadian class-action requirements are generally similar to Rule 23, but

do contain some important differences. Section 5(1)(a) requires the court to
conduct a brief inquiry into the merits of the claim (similar to a motion-to-
dismiss inquiry under the Federal Rules of Civil Procedure) as part of its class
certification determination; in the U.S., by contrast, judges are instructed not
to base their certification ruling on the perceived strength or weakness of the
claim on the merits. The numerosity requirement is easier to meet because
two class members suffices; in the U.S., this would not be enough for a class
action. And the Class Proceedings Act requires the plaintiff to submit a trial

75. Burke, Canadian Class Actions and Federal Judgment, 17-OCT Bus. L. Today 49, 49 (2007).
76. Class Proceedings Act, 1992, S.O. 1992, c. 6, § 5.
268 Chapter 10 International Class Action Practice

plan, where the U.S. caselaw only strongly encourages it.77 But the most con-
sequential distinction between the Canadian Class Proceedings Act and U.S.
requirements for certifying damages class actions is that Canada has no “pre-
dominance” requirement: the plaintiff need not show that the “common”
issues in the litigation predominate over individual issues. This makes
Canadian courts more willing to authorize class trials to resolve common
issues that U.S. courts would not consider important enough to justify
certifying a class. In Canada, it is commonplace to certify a class action pro-
ceeding for the sole purpose of resolving “common” issues (such as whether
a drug was defective), fully recognizing that, if a pro-plaintiff judgment is
reached on the common issues, follow-on individualized trials will be required
to determine which (if any) class members are entitled to receive monetary
damages based on the outcome of claimant-specific elements of their claims.
As in the United States, the plaintiff in a Canadian class action bears the
burden of demonstrating that a class action deserves certification.78 Also as in
the United States, the focus at certification is not on the merits of plaintiff’s
claims, but on the procedural question of whether a class action is the appro-
priate vehicle for litigating those claims (although this assertion is at some
tension with the Section 5(1)(a) requirement that the pleading disclose a
cause of action).79
Canada also has a “loser pays” system for most lawsuits.80 However, sev-
eral provinces do not apply the loser-pays rule to certain class actions in
which the plaintiff filed a test case, raised a novel point of law, or even simply
filed a non-frivolous case.81 Canadian firms also do not employ contingency

77. Compare Feder v. Elec. Data Sys., 429 F.3d 125, 139 (5th Cir. 2005) (trial plan not prerequisite
for class action).
78. Hollick v. City of Toronto [2001] 3 S.C.R. 158, ¶ 25 (“the class representative must show some
basis in fact for each of the certification requirements set out in s. 5 of the Act, other than the
requirement that the pleadings disclose a cause of action.”); see also Holmes v. Jastek Master
Builder 2004 Inc., [2009] SKQB 421, ¶ 3 (“The onus is on the plaintiffs to satisfy the court that
the conditions have been met and all conditions must be met in order for the action to be
certified.”).
79. Hollick, [2001] 3 S.C.R. 158, ¶ 16 (“The question at the certification stage is not whether the
claim is likely to succeed, but whether the suit is appropriately prosecuted as a class action.”);
see also Allen v. Aspen Group Resources Corp., [2009] CanLII 67668, ¶ 38 (S.C.J.) (“A certifica-
tion motion does not embark on an assessment of the merits of the action. I am not required
to determine whether the plaintiff ’s claims are likely to succeed. The issue before me at this
stage is simply whether the action can be appropriately prosecuted as a class action.”).
80. Burke, Canadian Class Actions and Federal Judgments, 17-OCT Bus. L. Today 49, 49
(2007).
81. See Jacob Ziegel, Class Actions to Remedy Mass Consumer Wrongs: Repugnant Solution or
Controllable Genie? The Canadian Experience, 27 Penn. St. Int’l L. Rev. 879, 888
(2009) (“The Ontario Act provides that the court may relieve the unsuccessful plaintiff from
having to pay costs if the class action was a test case, raised a novel point of law, or involved
a matter of public interest. The British Columbia, Saskatchewan and Manitoba Acts are more
 Aggregated Litigation Devices in Other Countries 269

fees as often as American firms, which may deter some Canadian plaintiffs
from launching class actions.82 (This is not to say that Canada does not allow
class-action litigants to find ways to fund costs in advance; the Superior Court
of Ontario recently approved an indemnity agreement allowing for third-
party funding of securities class actions.83) However, on the whole there are
still greater financial barriers to bringing a class action in Canada than there
are in the United States.84
In recent years, the Canadian class-action system has become more attrac-
tive to plaintiffs, and more active in general: class action filings increased
from only two in 1996 to 107 in 2008.85 Some of the attraction stems from the
lack of a predominance requirement, making it easier for plaintiffs to obtain
certification of a class.86 Indeed, one study found that as of September 2008,
Ontario courts had certified 176 out of 236 class actions brought before them,
a certification rate of almost 75 percent.87 In addition, a number of promi-
nent Canadian judges have gone on record promoting the class-action device
as a method of increasing Canadians’ access to justice.88
Recent rulings from the Superior Court of Ontario have made Canada a
more attractive forum for securities and antitrust plaintiffs. The Superior
Court of Ontario has held that securities plaintiffs do not have to prove reli-
ance on any misrepresentation to recover for their losses.89 It also recently
certified a class action involving investors from other countries, based on the
theory that misrepresentations in secondary (non-Canadian) markets justified

plaintiff-friendly and provide that costs may only be awarded against the plaintiff if the
action was frivolous, and even then the award is discretionary.”) (internal footnotes
omitted).
82. See Alle, [2009] CanLII 67668, ¶ 34 (noting plaintiff “eventually retained counsel in 2003 but
was unable to come to a satisfactory fee arrangement with the lawyer. He had to borrow
money, which he has since repaid, from another member of the proposed class in order to
pay the lawyer.”).
83. See Metzler Inv. GMBH v. Gildan Activewear Inc., [2009] CanLII 41540, ¶¶ 62–63 (On. S.C.)
(holding third-party indemnity agreement was neither inherently champertous nor against
public policy). The court did require modifications to the agreement to reduce the amount of
direct control the third-party investor had over the litigation. Id. ¶¶ 59–60.
84. See Ziegel, Class Actions to Remedy Mass Consumer Wrongs, 27 Penn. St. Int’l L. Rev. at 880
(“Litigation in Canada is, for the most part, enormously expensive and time consuming.”).
85. Julie Triedman, “New Players at the Table: How Canadian plaintiffs lawyers have joined the class
action game,” The American Lawyer, Aug. 1, 2009, http://www.law.com/jsp/tal/PubArticleTAL.
jsp?id=1202432561786&pCANADA_REPORTp__New_Players_at_the_Table.
86. Id.
87. Id.
88. Id.
89. Silver, 2009 O.J. No. 5585 ¶ 12; Allen, 2009 CanLII 67668 ¶ 122. This ground is different than
the U.S. “fraud on the market” theory. Instead of presuming reliance, the Superior Court of
Ontario ruled that the Ontario securities laws require the defendant to prove some form of
alternate loss causation.
270 Chapter 10 International Class Action Practice

including the claims of investors from other countries.90 And, in another

recent case, it relaxed the certification standard that the Court of Appeal had
previously applied to antitrust claims.91 Canadian plaintiffs have also pursued
class actions in cases of consumer loss, environmental damage, and medical
product negligence.92
These developments do not mean that Canadian class actions are evolving
parallel to those in the United States, or in a uniformly pro-certification direc-
tion. First, Canadian class actions are mostly based in specific provinces,
which have not implemented class-action rules in the same ways. Moreover,
various Canadian courts have held that certain kinds of lawsuits are not ame-
nable to class-action treatment. For example, to date, Canadian courts have
not been as welcoming to wage-and-hour (or “off-the-clock”) class actions.93
Also, in recent years, some Canadian appellate courts have reversed certification
orders in cases in which there appear to be few important common issues,
and many individualized issues.94

§ 10.2.2 The Australian Model

Australia has a unique class-action regime that resembles the United States’s,
with a few very important differences. The most important difference is that
in Australia, a lawsuit filed as a class action is presumed to be a class action
unless and until the judge orders it decertified.95 Australia also has a more

90. Silver, 2009 O.J. No. 5585 (On. S.C.) ¶ 16.

91. See Irving Paper Ltd. v. Atofina Chems. Inc. (On. S.C. 2008) (published opinion not available);
see also Chadha v. Bayer Inc., Docket C38651 (On. C.A. 2003).
92. Rachael Mulheron, The Class Action in Common Law Legal Systems: A
Comparative Approach, 13 (2004).
93. See Fresco v. Canadian Imperial Bank of Commerce, [2009] CanLII 31177, ¶ 4 (On. S.C.) (“it
is my conclusion that this is not a proper case for certification and that a class proceeding is
not the preferable procedure for resolving the claims of class members for unpaid overtime”).
The opinion did leave open the possibility that misclassification wage-and-hour claims
(where employees are erroneously classified as management and therefore not paid over-
time) may still be appropriate for class-action treatment.
94. See Merck Frosst Canada, Ltd. v. Wuttunee, [2009] SKCA 43, ¶ 52 (Sasketchewan Ct. App.)
(“the most intractable difficulty with this action lies in the diversity of the claims sought to be
advanced on a common basis, and in the related question of whether such an action is man-
ageable as a class action”); Poulin, 242 O.A.C. 209 at ¶49 (motion judge did not err in finding
insufficient common issues to merit certification in door-latch products-liability case).
95. Mulheron, The Class Action in Common Law Legal Systems, at 23–24 (“The Australian
schema operates entirely differently, in that an action commenced as a class action under Pt
IVA proceeds unless a judge orders otherwise.”) (internal footnotes omitted).
 Aggregated Litigation Devices in Other Countries 271

stringent version of the superiority requirement, sometimes referred to as the

“no-need” requirement.96
In addition, Australia has a loser-pays system, and does not allow for con-
tingency fees.97 (It does, however, allow lawyers to take cases on a “no win, no
fee” basis, which would limit some of the downside risk to prosecuting a class
action.)98 However, Australia has recently approved the use of third-party
litigation funding in representative actions—essentially allowing venture
capitalists to “invest” in a class action by financing its prosecution in return
for a share of any winnings.99 Indeed, one leading Australian plaintiffs’ class
action firm (Slater & Gordon) is the first law firm in the world to become a
public corporation, in which stockholders share in any profits and losses
emanating from the firm’s portfolio of lawsuits.
Given the availability of third-party funding and the presumptive certifi-
cation, the plaintiff’s primary strategic goals will be recruiting an adequate
class representative, securing funding, and asserting causes of action that can
withstand dispositive motions. The defendant, on the other hand, is likely to
concentrate its attention on any dispositive motions. Secondarily, it may seek
to establish a record for decertifying the class, particularly by establishing that
there is not a need for the class action. But at the end of the day, defendants
in Australian class actions should be prepared to try cases on a classwide basis
that would not proceed as class actions in U.S. courts.100

§ 10.2.3 The Opt-In Model

Many European states have considered (or implemented) some form of

opt-in—rather than opt-out—class action.101 Whereas in an opt-out class

96. Id. at 238 (“The Australian schema expressly requires the court to ask, under § 33N(1)(b),
whether the relief sought could be obtained by means other than a class action. It is appar-
ent that this ‘no-need’ argument has been postulated elsewhere by judiciaries . . .”) (internal
footnotes omitted).
97. See Bernard Murphy & Camille Cameron, Access to Justice and the Evolution of Class Action
Litigation in Australia, 30 Melbourne Univ. L. Rev. 399, 423–24 (2006) (discussing cost
structure).
98. See Murphy & Cameron, Evolution of Class Action Litigation in Australia, 30 Melbourne
Univ. L. Rev. at 423–24.
99. See Campbells Cash and Carry, (2006) 229 C.L.R. at 441–442, 467–468.
100. For example, a class action trial recently occurred in Australia concerning whether the pre-
scription drug Vioxx was defectively designed and fraudulently marketed. Peterson v. Merck
Sharpe & Dohme (Aust) Pty Ltd. [2010] FCA 180. By contrast, all putative class actions in
the U.S. involving Vioxx-related personal injury claims have, as of this writing, been denied
either at the trial or appellate stages.
101. See generally Rachael Mulheron, The Case for an Opt-Out Class Action for European Member
States: A Legal and Empirical Analysis, 15 Colum. J. Eur. L. 409 (2009) (surveying opt-in
regimes in Europe).
272 Chapter 10 International Class Action Practice

action, a person fitting within the class definition is a class member unless she
affirmatively requests exclusion from the class, in an opt-in class action, a
person fitting within the class definition must affirmatively request inclusion
to be included in the final judgment. As an example of this kind of class
action, we focus on England’s Group Litigation Order (GLO), primarily
because it is more likely that an English-speaking reader will find herself
litigating in England than in, say, Germany or Denmark.
While, as of the time of this writing England continues to debate whether
to adopt an opt-out class action regime, it adopted a “Group Litigation Order”
(GLO) in 2000.102 The GLO is an “opt-in regime (in contrast to the opt-out
regimes of countries like the United States), in which litigants must affirma-
tively choose to litigate by entering their names on the group register, or
having their claims adjoined by judicial consolidation to the group action” in
order to litigate.103
There are five criteria the court must consider before certifying a GLO
proceeding: (1) there must be a “number of claims”104 (numerosity); (2) that
give rise to “common or related issues of fact or law”105 (commonality); (3)
managing the litigation must allow the court “to deal with cases justly”106
(suitability); (4) the GLO must have the consent of either the Lord Chief
Justice, the Vice Chancellor, or the Head of Civil Justice107 (screening); and
(5) the GLO must be more appropriate than consolidation of claims or a
representative proceeding108 (superiority). While British Courts have certi-
fied a number of GLOs for personal injury and negligence cases, they have
been reluctant to certify other negative-value suits, such as mass overcharges,
anti-competitive behavior, or shareholder actions.109
Once the GLO has been certified, the court specifies a “management court”
that oversees the claims, and establishes the register for the individual claim-
ants.110 At that point, any order or judgment that issues in the case is binding
on all individuals in the register.111 The management court has the discretion
to alter the issues in the order, to order claims to proceed as test cases, and to

102. Mulheron, The Class Action in Common Law Legal Systems at 94. As in the United
States, there are other methods of aggregating claims under certain circumstances. Id.,
87–88 (describing use of declaratory and injunctive relief to aggregate claims of similarly
situated individuals for litigation).
103. Id. at 99 (internal footnotes omitted).
104. English Civ. Pro. R. 19.11(1).
105. English Civ. Pro. R. 19.10, 19.11(1).
106. English Civ. Pro. R. 1.1(1).
107. PD 19B ¶ 3.3.
108. PD 19B ¶ 2.3.
109. Mulheron, The Class Action in Common Law Legal Systems at 12–15.
110. Id. at 97–98 (Hart Publishing 2004).
111. Id.
 Aggregated Litigation Devices in Other Countries 273

establish the binding effect of any orders on parties that may join the action
later.112
England is not the only country to have established an opt-in scheme for
aggregated litigation. Germany also allows for opt-in “Model Case
Proceedings” for certain securities cases.113 And Denmark has recently
enacted a new class-action provision that allows for opt-in class actions.114
As Rachael Mulheron has pointed out, the primary strategic difference
between opt-in GLO litigation and U.S.-style opt-out class-action litigation is
that the GLO system “inevitably entail[s] ‘individualized’ litigation en
masse.”115 While opting in only requires a claim form, amendment may be
very costly if the defendant alleges any pleading deficiencies.116 As a result,
the litigation becomes “front-loaded,” making early dispositive motions more
important.117 On the plaintiff’s side, the GLO requires aggressive recruiting
and rigorous screening of potential class members to ensure an effective GLO,
requiring a larger up-front expenditure of resources.118 On the defendant’s
side, conduct of en masse individualized litigation also suggests that discov-
ery of the claimants may be more important than it is in a Rule 23 class action.
Finally, since the GLO regime is essentially an opt-in mass joinder device,
courts may very well inquire into the relative costs and benefits of issuing a
GLO in a given case, an inquiry that may spur similar tactics to a debate over
the superiority of class actions under Rule 23.

§ 10.2.4 The Ombudsman/Consumer Association Model

A number of European countries (such as Belgium, Bulgaria, Cyprus, the

Czech Republic, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Malta, the Netherlands, Norway, Poland,
Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and Switzerland) allow
consumer ombudsmen or consumer associations to bring a representative

112. Id.
113. Christopher Hodges, The Reform of Class and Representative Actions in
European Legal Systems: A New Framework for Collective Redress in Europe, 11
(Hart Publishing 2008); Mulheron, The Case for an Opt-Out Class Action for European
Member States 15 Colum. J. Eur. L. at 419.
114. For a description, see Erik Werlauff, Class Actions in Denmark, 622 Annals of the Am.
Academy of Pol. & Soc. Sci. 202 (2009).
115. Mulheron, The Case for an Opt-Out Class Action for European Member States, 15 Colum. J.
Eur. L. at 428.
116. Id.
117. Id.
118. Id. at 428–29.
274 Chapter 10 International Class Action Practice

proceeding seeking either injunctions or damages,119 a device that enables

some of the same public-policy goals as class actions.
Consumer association litigation fills a similar niche to consumer class
actions in the United States. It is unlikely that, at least in the near future, most
European countries will adopt an opt-out regime like Rule 23’s. Most European
countries still abide by a loser-pays rule that is likely to discourage the more
frequent filings one sees in the United States.120 The European practice of
using judges to determine damage awards also discourages entrepreneurial
class actions, reducing the number filed relative to the United States.121 Given
these institutional constraints, most European litigators expect to see collec-
tive litigation driven by consumer groups rather than plaintiffs’ lawyers.122

§ 10.2.5 Mass Joinder Proceedings/Quasi-Class Actions

A number of countries have quasi-class action procedures that allow for mass
joinder or aggregation of similar claims. These include Austria (which has a
mass-joinder provision),123 Estonia (which allows for joint claims),124
Finland,125 Germany,126 Hungary (which allows for joint claims),127 Japan,128
Lithuania (which allows for merging of cases),129 and Switzerland (which
allows for cumulate claims).130
Mass-joinder claims will raise similar strategic issues to those in U.S. law-
suits brought under Federal Rules of Civil Procedure 20 and 42.131 For the
plaintiffs, the joinder of a large number of claimants in a single proceeding

119. See Hodges, The Reform of Class and Representative Actions in European Legal
Systems at 11–12.
120. See Richard A. Posner, Law and Legal Theory in the UK and USA, 83–93 (1996)
(discussing the effect of, among other things, the “loser-pays” rule on tort filings in the
United Kingdom).
121. See Collective litigation in Europe: A survey from the Economist Intelligence Unit (2007) at 5.
122. Id. at 3.
123. See Hodges, The Reform of Class and Representative Actions in European Legal
Systems, at 10–11.
124. See Id. at 10–11.
125. See Hensler, The Globalization of Class Actions: An Overview, 622 Annals of the Am.
Academy of Pol. & Soc. Sci. at 13.
126. See Id.
127. See Hodges, The Reform of Class and Representative Actions in European Legal
Systems at 11.
128. See Hensler, The Globalization of Class Actions: An Overview, 622 Annals of the Am.
Academy of Pol. & Soc. Sci. at 13.
129. See Hodges, The Reform of Class and Representative Actions in European Legal
Systems at 12.
130. See id.
131. For more discussion of these rules, see §§ 1.2.1, 1.2.3.
 Aggregated Litigation Devices in Other Countries 275

will likely lead to coordination problems in implementing strategy. In addi-

tion, there may be conflicts of interest among plaintiffs—for example, several
individual plaintiffs may see benefits from having their individual claims
heard first, while the group as a whole may benefit from someone else pre-
senting the first claims at a trial. The defendant is likely to have a strong
incentive to litigate rather than settle, since it is unlikely that settling a mass-
joinder proceeding will provide any global resolution of the issues underlying
the litigation.

§ 10.2.6 The “Test Case” Model

Several countries, such as Austria,132 Germany,133 and Greece,134 have

adopted a formal “test case” model. On its face, the test case model is similar
to the use of bellwether trials in the United States in certain mass torts, in
which a single plaintiff asserts claims in a single trial, and the verdict is used
as the basis of determining other plaintiffs’ similar claims.
As in U.S. mass-tort cases using bellwether trials, it is reasonable to project
that one of the strongest disputes will be over the selection of the plaintiff for
the “test case.” To the extent party discovery is allowed in these regimes, it
would likely focus on the suitability of the test plaintiff.
These are hardly the only countries to have adopted class-action proce-
dures. A number of Asian countries have adopted representative actions of
one kind or another, and China specifically allows for class actions,135 which
are governed by Articles 54 and 55 of the Chinese Civil Procedure Law.136
(According to one commentator, in the 1990s, Chinese class actions focused
primarily on “disputes over low quality products, consumer fraud, environ-
mental pollution, economic contracts, and local government actions.”)137

132. Mulheron, The Case for an Opt-Out Class Action for European Member States, 15 Colum. J.
Eur. L. at 416.
133. Id. at 418.
134. Id. at 419.
135. Note, Class Action Litigation in China, 111 Harv. L. Rev. 1523, 1524 (1998).
136. Id. at 1526–27.
137. Id. at 1528.
 Index

A discretion to reject petitions, 176

Absent class members, 27n36 examining expert’s opinions at class
binding effect of settlement on, 233 certification stage, recognition of, 129
coupon settlements and, 219–20 review of certification orders, 168–69,
discovery of, 196 170, 175
due process and, 247–48 to stay proceedings, 175
notice to, 265 warning against proposed settlement, 212
right to adequate representation, 249 Appropriate notice, 177, 181.
right to opt out, 247, 251 See also Class notice
Access to justice, 269 Ascertainability, 23–25
Act of state doctrine, 259 Assumption of risk, 42n128, 44n150,
Adequacy of counsel, 84 107n130
plaintiff’s certification motion, 148 ATCA. See Alien Tort Claims Act (ATCA)
Adequacy of representation, 30–33, Attorney’s fees, for class-action
248–49 settlement, 237–40
and class-action settlement, 212–13 court approval of, 240
defendant’s certification reasonable fees, determining, 238–49
opposition, 157–58 Australia
named-plaintiff deposition, 127–28 aggregated-litigation devices in, 270–271
plaintiff’s certification motion, 142–43 Austria
Advertising, for class representatives, 76 mass joinder proceedings/quasi-class
Aggregating parties, methods of, 3–9 actions in, 274
consolidation, 7–8 test case model in, 275
intervention, 6–7
joinder, 4–6 B
multi-district litigation, 8–9 Best notice practicable, 181–82.
Aggregation, 9–11 See also Class notice
collective actions, 10 Bifurcated trial, 193–96. See also Trial
informal, 11 Breach of contract, 44n144, 60, 79
private attorney-general actions, 10–11 Breach of warranty, 43n141, 60
Alien Tort Claims Act (ATCA), 256–57
All-Writs Act, 246–47 C
Answer, 106–8 CAFA. See Class Action Fairness Act
Anti-Injunction Act, 245n19, 246–47 (CAFA)
Antitrust class action, 60–61 Canada
Apex depositions, 121, 124–25. aggregated-litigation devices in, 267–70
See also Depositions Class Proceedings Act, 267–68
Appeal, 97–98 Case management orders
interlocutory, 168–77 discovery procedures, 112–13
Appellate court, 61, 138 lead counsel, appointment of, 114–15
278 Index

Case management orders (cont.) Class certification requirements, 19

motion practice, 113–14 adequacy of representation, 30–33
timing of, 111–12 class counsel, 50–52
Certification commonality, 25–27
hearing, 164–65 damage classes, 38–50
motion. See Class certification motion hybrid classes, 38
motion to strike/early challenges to, 104–6 incompatible result classes, 33–34
orders, appellate court’s review injunction classes, 35–38
of, 168–69, 170, 175 limited fund classes, 35
post-certification, 167–90, 198–200 numerosity, 21–25
pre-certification, 85, 115–28 plaintiff’s certification motion,
-related discovery, 112–13 141–48, 149
requirements. See Class certification typicality, 27–30
requirements Class counsel
rulings for abuse of discretion, 69–70 adequacy of, 51–52
Charts/visual evidence. See also Evidence appointing, 50–51
plaintiff’s certification motion, 150 Class notice, 177–90
China content of, 185–89
test case model in, 275 cost of, 189–90
Civil rights class action, 62–63 form of, 180–185
Claims reasons for, 178–79
preclusion. See Res judicata of removal, filing, 93–94
selecting, 78–79 for settlement, 232–33
Claims-made (reverter) settlements, 216–17 timing of, 179–80
Class-action device, 11–18 to appropriate authorities, 215
benefits of, 12–15 Class Proceedings Act (Canada), 267–68
costs of, 15–18 Class representatives, 2
Class Action Fairness Act (CAFA), 68, 79, adequacy of representation by, 29–31, 33,
83, 94–96, 98, 214–15, 220–221, 230, 231, 127n206, 143, 213, 248
232–33 duty to the class, failure to inform, 52
Class action lawsuit, constructing, 53–84 identifying, 75–77
antitrust, 60–61 personal claim, 156
civil rights, 62–63 unique defenses against, 29n46, 156n103
class representatives, identifying, 75–77 Class settlement notice, 232–33
complaint, drafting, 77–83 Class-wide settlement, 224–37
consumer fraud, 59–60 class settlement notice, 232–33
environmental, 61–62 drafting the agreement, 227–30
forum considerations, 67–73 final approval hearing, 236
labor/employment, 57–59 implementation of, 237
potential class action, identifying, 64–67 mediation, 226–27
product liability, 59 opt-outs/objections, 233–36
securities, 55–57 preliminary approval order, 230–231
selecting appropriate defendants, 73–74 Collateral estoppel, 106, 244–45
statutory violations, 63–64 Collateral exposure, limiting, 249–51
working with other plaintiff’s government actions, 250
counsel, 83–84 opt-out suits, 250–251
Class certification motion, 133 Collective actions, 10
defendant’s certification Comity, 101n94, 260
opposition, 151–63 Commonality, 25–27
hearing, 164–65 defendant’s certification
plaintiff’s certification motion, 136–51 opposition, 154–55
plaintiff’s certification reply, 163–64 plaintiff’s certification motion, 141
 Index 279

Common fund invoking arbitration, 91–93

negotiating, 240 motion for sanctions, 109–10
percentage of, 239 motion-to-dismiss, 98–104
Comparative negligence, 42n129, 107n129, motion to strike/early challenges to class
162, 195. See also Negligence certification, 104–6
Complaint offer of judgment, 108–9
amending, 110–111 removal, 93–98
defendant’s response to, 91–110 Denmark
drafting, 78–83 opt-in class actions, 273
Conflicts of interest, 6, 30n58, 143, 275 Depositions
Consolidation, 7–8, 98 apex, 121, 124–25
Consumer-fraud class action, 59–60 of corporate representatives of
Contention interrogatories, 120. See also defendants, 122–23
Interrogatories defendant’s discovery, 126–28
Contingency fees, 11n41, 12n46, 220, expert, 125
239, 271 individual, 124
Cost-shifting, 266 plaintiff’s discovery, 121–25
Costs of class action, 15–18 Discovery
Coupon settlements, 214, 219–22. of absent class members, 196
See also Settlement of class actions class certification-related, 112–13
Court approval of attorney’s fees, 240 e-discovery, 120–121
Cy pres funds, 217–19. See also Settlement of merits-related, 112–13
class actions pre-certification. See Pre-certification
discovery
D pre-trial, 196
Damage classes, 38–50 Diversity jurisdiction, 94–96. See also
defendant’s certification Jurisdiction
opposition, 158–61 Document requests
plaintiff’s certification motion, 145–48 defendant’s discovery, 125–26
predominance, 39–44 plaintiff’s discovery, 120–121
superiority, 45–50 Drafting the complaint, 77–83
Death-knell claim, 170–172 pleading, 82–83
Decertification motion, 200. proposed class, defining, 81–82
See also Motion selecting claims, 78–79
Defendant(s) selecting remedies, 79–81
depositions of corporate representatives Drafting the settlement agreement, 227–30
of, 122–23 Due process, 247–48
plaintiff’s external pressure on, 89–91
selecting, 73–74 E
Defendant’s certification opposition, 151–63. Electronically stored information
See also Motion (ESI), 120–121
arguments against certification, 153–61 Employee Retirement Income Security Act
packaging the presentation, 161–63 (ERISA), 56–57
themes, 151–53 England
Defendant’s discovery Group Litigation Order, 272–73
depositions, 126–28 En masse litigation, 134, 254, 273
document requests, 125–26 Environmental class action, 61–62
interrogatories, 125 Equitable relief, 80, 81 See also Relief
requests for admission, 126 ERISA. See Employee Retirement Income
Defendant’s response to complaint Security Act (ERISA)
answer, 106–8 ESI. See Electronically stored information
consolidation, 98 (ESI)
280 Index

Estonia multiple jurisdictions, 72

mass joinder proceedings/quasi-class substantive law, 69–70
actions in, 274 Forum non conveniens, 101n94, 262–64
Evidence Fraud, 23, 43n141
charts/visual, 150 consumer, 50, 59–60, 160
statistical, 203–4 securities, 74, 146n53, 154
Existing client relationships Fraud-on-the-market theory, 55n5,
and class representatives 127n205, 146, 154–55, 203, 269n89
identification, 76–77 Full Faith and Credit Act, 242
Expert depositions, 125. See also Depositions Funding class actions
Experts common, 239–40
rebuttal, 129 cy pres, 217–19
reports, for defendant’s certification limited, 35
opposition, 162–63 third-party litigation, 271
role in plaintiff’s certification
motion, 149–50 G
Expert testimony during trial, 205–6. Geographic diversity, 22
See also Testimony Germany
Expert witnesses, 128–29. See also mass joinder proceedings/quasi-class
Witness(es) actions in, 274
test case model in, 275
F GLO. See Group Litigation Order (GLO)
FAA. See Federal Arbitration Act (FAA) Greece
FACTA. See Fair and Accurate Credit test case model in, 275
Transaction Act of 2003 (FACTA) Group Litigation Order (GLO), 272–73
Factual predominance, 39–42.
See also Predominance H
Fair and Accurate Credit Transaction Act of Hearing, 16, 170
2003 (FACTA), 50, 63 certification, 164–65
Fair Labor Standards Act (FLSA), 10, final approval, 236
57–58, 126 preliminary fairness, 227
Fairness, 138–39 settlement fairness, 180
and class-action settlement, 211 Hungary
Fatal defect, in class definition, 105 mass joinder proceedings/quasi-class
Federal Arbitration Act (FAA), 91–93 actions in, 274
Federal-question jurisdiction, 96–97. Hybrid classes, 38
See also Jurisdiction
Final approval hearing, 236. I
See also Hearing Impropriety, 10
Finland Incompatible result classes, 33–34
mass joinder proceedings/quasi-class Individual depositions, 124.
actions in, 274 See also Depositions
FLSA. See Fair Labor Standards Act (FLSA) Individual interest inquiry, 45–46
Foreign class-action judgments, Informal aggregation, 11. See also Aggregation
enforcing, 264–65 Initial disclosures, pre-certification
Foreign-cubed class actions, 257 discovery, 116
Forum, 67–73 Injunction classes, 35–38
demographics of jurisdiction, 71–72 plaintiff’s certification motion, 144–45
desirability of concentrating litigation Injunctions/consent decrees, 222.
in, 47–48 See also Settlement of class actions
judges, appointment of, 70–71 Injunctive relief, 35–38, 79–80, 144–45.
local politics, 72 See also Relief
 Index 281

In limine motions, 200–201. See also Motion complexity of the case, 198
Interlocutory appeal, 168–77 quality of the bench, 197–98
appellate court’s review of certification quality of the jury pool, 197
orders, 175 timing of, 198
bad decision, 173–74 Jury instructions
death-knell claim, 170–172 during trial preparation, 201–2
legal development, 172–73 Jus cogen norms, 259
packaging the petition, 176–77
packaging the petition response, 177 L
public interest, 174 Labor/employment class action, 57–59
review of certification orders, 174–75 Lead counsel, appointment of, 114–15
standards for, 168–69 Legal predominance, 42–44.
stays, 175–76 See also Predominance
Internet notice, 184. See also Class notice Liability
Interrogatories no-injury theories of, 104
contention, 120 product, 59
defendant’s discovery, 125 proof of, 154–55
plaintiff’s discovery, 118–20 Limited fund classes, 35
Intervention plaintiff’s certification motion, 143–44
permissive, 7 Lithuania
of right, 6–7 mass joinder proceedings/quasi-class
Issue preclusion. See Collateral estoppel actions in, 274
Lodestar fee, 238–39
J Loser-pays system, 237
Japan Australia, 271
mass joinder proceedings/quasi-class Canada, 268–69
actions in, 274 Louisiana Products Liability Act, 99
Joinder, 4–6
feasibility of, 21–23 M
impracticability of, 22 Manageability of class actions, 48–49, 148,
JPML. See Judicial Panel on Multi-district 200, 213
Litigation (JPML) Mass joinder proceedings/quasi-class
Judges, appointment of, 70–71 actions, 274–75
Judgment MDL. See Multi-district litigation (MDL)
foreign class-action, 264–65 Media coverage, 88–89
motion for summary, 129–31, 198–200 Mediation, 226–27
offer of, 108–9 Monetary relief, 81 See also Relief
preclusive effect of, 241–51 Motion
Judicial Panel on Multi-district Litigation case management orders, 113–14
(JPML), 98, 100 class certification. See Class certification
Judiciary, 266 motion
Jurisdiction decertification, 200
demographics of, 71–72 in limine, 200–201
dismissing securities class action post-trial, 206
for, 261 for sanctions, 109–10
diversity, 94–96 to strike/early challenges to class
federal-question, 96–97 certification, 104–6
multiple, 72 Motion for summary judgment
personal, 101–2 class-wide, 199
subject-matter. See Subject-matter individualized, 199–200
jurisdiction plaintiff class-wide, 198–99
Jury vs. bench trial, 196–98. See also Trial pre-certification, 129–31
282 Index

Motion-to-dismiss generating external pressure on

defendant’s response to defendants, 89–91
complaint, 98–104 is not a member of the class, 105–6
forum non conveniens, media coverage, 88–89
denying, 262–64 Plaintiff ’s certification motion, 136–51.
jurisdiction-based, 261 See also Motion
personal jurisdiction, 101–2 arguments in support of
pleading deficiencies, 102–3 certification, 141–48
standing, 101 defendant’s bad conduct, 139–40
substantive legal problems, 103–4 ease of certifying a class, 137–38
Multi-district litigation (MDL), 8–9 fairness, 138–39
Multinational class, certifying, 264 need for class action, 140
Multi-national class action litigation packaging the presentation, 148–51
teams, 255–65 Plaintiff ’s certification reply, 163–64
class actions, types of, 255–57 Plaintiff ’s discovery, 117–25
foreign judgments, enforcing, 264–65 depositions, 121–25
multinational class, certifying, 264 document requests, 120–121
procedural challenges, 261–64 interrogatories, 118–20
prudential challenges, 257–61 requests for admission, 121
Pleading, 109, 152
N class-action complaint, 82–83
Named-plaintiff settlements, 224. deficiencies, 102–3, 273
See also Settlement of class actions Political question doctrine, 258–59
Negligence, 43n139 Post-certification, 167–90
comparative, 42n129, 107n129, 195 class notice, 177–90
misrepresentation of, 43n140 interlocutory appeal, 168–77
Numerosity, 120, 267 summary judgment, 198–200
ascertainability, 23–25 Post-trial motions, 206. See also Motion
defendant’s certification Potential class action, identifying, 64–67
opposition, 153–54 Pre-certification, 85. See also Certification
feasibility of joinder, 21–23 amending the complaint, 110–111
plaintiff’s certification motion, 141 case management orders, 111–15
defendant’s response to
O complaint, 91–110
Offer of judgment, 108–9. discovery. See Pre-certification discovery
See also Judgment expert witnesses, 128–29
Ombudsman/consumer association motion for summary judgment, 129–31
model, 273–74 plaintiff’s opening moves, 87–91
Opting-in, 7, 10, 58, 271–73 Pre-certification discovery, 115–28
under Group Litigation Order, 272–73 defendant’s discovery, 125–28
Opting-out, 178 initial disclosures, 116
in damage classes, 38, 45 plaintiff’s discovery, 117–25
class-action settlement, 233–36 protective orders, 116–17
class action judgments, 250–251 Preclusive effect, of class action
judgments, 241–51
P challenging, 247–49
Pay-to-play practices, 75, 77 collateral exposure, limiting, 249–51
Personal jurisdiction. See also Jurisdiction enforcing, 243–47
motion-to-dismiss, 101–2 Predominance
Piggyback notice, 182 defendant’s certification
Plaintiff, 87–91 opposition, 158–59
ability to identify class members, 23 factual, 39–42
 Index 283

legal, 42–44 attorney’s fees, 237–40

named-plaintiff deposition, 127–28 claims-made (“reverter”)
plaintiff’s certification motion, 145–47 settlements, 216–17
Preliminary approval order, 230–231 class settlement notice, 232–33
Press issues and trial preparation, 202 coupons, 214, 219–22
Pre-trial discovery, 196. cy pres funds, 217–19
See also Discovery drafting the agreement, 227–30
Private Attorney Contracting Act, 11n41 final approval hearing, 236
Private attorney-general actions, 10–11 implementation of, 237
Private Securities Litigation Reform Act injunctions/ consent decrees, 222
(PSLRA), 55–56, 65, 84, 103, 111, 114, legal background, 209–15
186–87, 188 mediation, 226–27
Product-liability class action, 59 named-plaintiff settlements, 224
Proposed class, defining, 81–82 opt-outs/objections, 233–36
Protective orders, pre-certification preliminary approval order, 230–231
discovery, 116–17 therapeutic relief, 222–23
confidential information, definition Single-plaintiff lawsuits, 2–3
of, 117 limitations of, 3
provisions for challenging SLUSA. See Securities Litigation Uniform
designations, 117 Standards Act (SLUSA)
sharing provisions, 117 Standing, 101
PSLRA. See Private Securities Litigation Stare decisis effect, 250
Reform Act (PSLRA) Statute of limitations, 42n130, 44n149,
Publication notice, 183. 107n128
See also Class notice Statutory violations
class action and, 63–64
R Stays, 175–76
Reasonableness, 182n77 Subject-matter jurisdiction.
and class-action settlement, 211 See also Jurisdiction
Rebuttal experts, 129. See also Experts dismissing securities class action for, 261
Referrals/extended network, 77 Substantive law, 54, 56, 69–70
Relief Substantive legal problems
equitable, 80, 81 motion-to-dismiss, 103–4
injunctive, 35–38, 79–80, 144–45 Summary judgment. See also Judgment
monetary, 81 pre-certification motion for, 129–31
Remedies, selecting, 79–81 post-certification, 198–200
Removal of case to federal court, 93–98 Superiority, 45–50, 106
appeals, 97–98 defendant’s certification
diversity jurisdiction, 94–96 opposition, 159–61
federal-question jurisdiction, 96–97 named-plaintiff deposition, 127
Requests for admission plaintiff’s certification motion, 147–48
defendant’s discovery, 126 Switzerland
plaintiff’s discovery, 121 mass joinder proceedings/quasi-class
Res judicata, 20, 30, 107–8, 244, 248n43 actions in, 274
Reverter settlements. See Claims-made
settlements T
Telecommunications Protection Act
S (TCPA), 24, 50, 63
Securities class action, 55–57 Test case model, 275
Securities Litigation Uniform Standards Act Testimony
(SLUSA), 96–97 of appearing witnesses, 205
Settlement of class actions, 207 expert, 205–6
284 Index

Therapeutic relief, 222–23. post-certification summary

See also Settlement of class actions judgment, 198–200
Third-party litigation funding, 271 post-trial motions, 206
TILA. See Truth in Lending Act (TILA) press issues, 202
Trial, 202–6 pre-trial discovery, 196
bifurcated, 193–96 structure of trial, 193–96
expert testimony during, 205–6 Truth in Lending Act (TILA), 65
jury vs. bench, 196–98 Typicality, 27–30
plaintiff’s certification motion, defendant’s certification opposition, 155–56
150–151 named-plaintiff deposition, 126–27
preparation for. See Trial preparation plaintiff’s certification motion, 142
scientific studies, use of, 204–5
statistical evidence, use of, 203–4 U
stipulations, 203 Unitary class trial, 193. See also Trial
summaries, 205 United States
testimony of appearing test case model in, 275
witnesses, 205 Unjust enrichment, 43n141
unitary class, 193
Trial preparation, 191 V
decertification motion, 200 Verdict forms
in limine motions, 200–201 during trial preparation, 201–2
jury vs. bench trial, 196–98 Vigorous prosecution of class
jury instructions/verdict forms, 201–2 action, 143n38