Class Actions
 Basics
 Advantages
 Disadvantages
1. Making the Motion
2. Certification Requirements
3. Appointing Counsel
4. Denial of Certification and Statute of Limitations
5. Appeal of Certification Orders
6. Modifying or Decertifying a Certification Order
7. Class Notice
8. Settlements
9. Arbitration Agreements & CA Waivers
10. Pre-Certification Discovery
11. Dueling Class Actions
12. Preclusion
Basics
 Rule 23 permits CAs even where a contrary state rule would otherwise prohibit CAs if
filed in state court
 When an action is certified as a CA, the court must approve aspects of the litigation
that would otherwise be solely in the control of the parties, including choice of counsel
and settlement, to protect the interests of absent CMs
 Best for situations where there is widespread, uniform violation of the same law
resulting in injuries too small to justify individual lawsuits
 Article III Standing: representative parties who have a direct and substantial interest
have standing; the question whether they may be allowed to present claims on behalf
of others who have similar, but not identical, interest depends not on standing, but on
assessment of typicality/adequacy of representation
o Purpose – to ensure that the injury a plaintiff suffers defines the scope of the
controversy he is entitled to litigate
Advantages of CAs:
 Often the only means of obtaining relief for small/modest individual damages
 Plaintiff CA attorneys usually earn a contingency fee and advance costs of the litigation
 Once a CA is filed, it tolls the limitation periods for the putative class
 CAs can help regulators control conduct that threatens to harm various markets
 Deterrent effect on would-be defendants because the total liability in CAs is usually
greater than in an individual suit
 Consumer CAs can enforce regulatory standards and deter fraudulent conduct that
might evade government review
 Finality / global peace for Ds
Disadvantages of CAs:
 Take longer to resolve
 CMs give up their rights to proceed individually and have limited control over the
litigation
 Even if successful, damages to each CM may not make them whole
 Huge potential liability for Ds
1. Making the Motion
 Timing
o Court must rule on class certification at an “early practicable time” after a person
sues or is sued as a class rep – 23(c)(1)
 Balancing Test – 23(c)(1)(A)
 Early resolution of the certification question, against
 The needs of the parties to have a meaningful amount of time to
muster the resources to bring/defend against the motion (discovery)
 Before merits determination to prevent “one way intervention” of plaintiffs
waiting for a successful outcome to join the case
 Court may rule on dispositive motions before certification
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 Courts may issue a preliminary injunction in a putative class action
because the inunction ruling is merely a prediction regarding the
merits and not a final determination
 Court may deny certification on motion before a plaintiff files a motion to
certify
 Usually a D motion to strike the class allegations  not likely to be
granted if P has not had adequate time to support his Rule 23
allegations
2 Approaches for Class Certification Motion
o Rigorous approach – treat the motion like a motion for summary judgement and
include a detailed factual record (better)
 Informs the court that you have a strong case and class certification is
necessary to resolve the dispute
o Bare-bones approach – simply lays out the Rule 23 certification requirements
and states that those factors are satisfied
 Allows you to gloss over any potential problems with the class
Evidence Standard
o Rule 23 does not set forth “a mere pleading standard” but requires evidence
sufficient to support a rigorous analysis (which will entail some overlap with the
merits of the underlying claim) - Wal-Mart Stores v. Dukes (2011)
 Evidence that may be considered
 Pleadings
 Sufficient extrinsic evidence
o Deposition testimony
o Discovery responses
o Items subject to judicial notice
 Expert reports
 Sampling evidence: permissibility turns on the degree to which the
evidence is reliable – Tyson Foods v. Bouaphakeo (2016)
Certification Motion Should Be Accompanied By:
o Supporting brief
o Affidavits or declarations
Brief should cover:
o The proposed class easily satisfies the Rule 23 requirements
o Ascertainability of class
o Absent class members will suffer absent certification
o Defendant has acted badly
If court grants certification, it issues a Proposed Certification Order – 23(c)(1)(B):
o Order includes
 Define the class and any subclasses
 Identify class claims, issues, or defenses
 Common claims or defenses
 Timeframe (including cutoff dates for eligibility, if any)
 Geographical limitations, if any
 Define and specify the class claims, issues, or defenses
 Formally appoint class counsel
 Specify that the requirements of Rule 23(a) have been met
 Identify the subsection of Rule 23(b) under which the action is proceeding
o Certification may be conditional
o CA can be certified as to particular common issues, while the rest of the litigation
proceeds on an individual basis (such as certifying the issue of liability only,
leaving the damages for individualized treatment)
 Dispositive Motions
o D may preemptively move to decertify a class or strike class allegations from
complaint
 Decertifying a Class Action
o Authority – court has discretion to alter/amend a class certification order,
including:
 Decertifying a subclass
 Ordering decertification at any time before final judgement
o Strategy
 Pros: a successful motion to decertify can drastically affect a case and your
client’s potential liability
 Cons: a questionable motion to decertify can
 District your team from other pressing discovery needs
 Be expensive for your client
 Frustrate the court
 Focus P on areas to develop the record for purposes of summary
judgement or trial
 Be overturned on immediate appeal if granted
o Procedure – court may decertify at any time, but a request to decertify must
 Be timely made once grounds for the request are known (usually after
some time for discovery)
 Follow any “meet and confer” requirements imposed by local rules
 Even if not required, you should still meet and confer because
o It may open the door to settlement discussions or voluntary
narrowing of the classes
o Even if the motion is still necessary, it may be possible to
negotiate a stay or narrowing of discovery while the motion is
pending
o Motion to decertify
 Notice
 Set hearing date
 State with some specificity the grounds for the motion
 Include a request to 1) notify affected CMs once motion is granted
and 2) modify any pertinent deadlines
 Memorandum in support, detailing the:
 Procedural history of the case
o When case was filed/certified
o Description of the class/subclasses
o Discovery taken to date relevant to certification
o Pending deadlines
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o Compliance with any meet and confer obligations
 Underlying facts as they differ between certification and since
discovery
 Argument demonstrating that the evidence no longer warrants class
treatment under Rule 23 based on
o New evidence
o Intervening change in law
o Other issue demonstrating clear error or injustice in certification
 Supporting evidence
 Proposed order – should state the scope of the decertification order and
the effect, if any, on:
 Future deadlines/procedures in the case
 Notice to the class
Bases for decertification
 Class conflict
 Individualized liability – when questions of liability must be determined
individually, D has a strong argument that a CA is not the fairest and most
efficient means of adjudication
 Where certification was based on evidence that a uniform policy
applied to the class, but discovery has revealed that no such policy
existed or that it applied only to a low percent of the class
o Conversely, if a small portion is situated differently, court may
narrow the scope of the class rather than decertify
 Widely available defenses
 Issues of privity, consumer fault, etc.
 Complete lack of any reasonable mechanism to assess the different
individualized damages amounts
Burden of proof – always on proponent of certification
 P’s motion to certify
 When D moves to strike class allegations, deny certification, or decertify,
burden of proof generally remains with P to establish that the Rule 23
requirements are met but may depend on the precise argument made by D
Notice to class of granted decertification
 Generally required unless there is no risk of prejudice to CMs
 Where notice of certification for a 23(b)(3) class has not been sent
 The case has received little publicity
Appellate review
 Order GRANTING decertification are appealable within 14 days of entry (no
equitable tolling)
 Standard = abuse of discretion
 Order DENYING decertification is interlocutory and not appealable until
final judgement
 Standard = abuse of discretion
 Notice – for any class certified under Rule 23(b)(3) or a Rule 23(e)(1) settlement class,
court must direct to the CMs “the best notice that is practicable under the
circumstances” AND an opportunity to “opt out” – 23(c)(2)(B)
o Form of notice
 Individual notice to all members who can be identified through reasonable
effort
 U.S. mail
 Electronic means
 Other appropriate means
o Third-party administration – considering obtaining outside help to:
 Manage notice distribution
 Collect responses from CMs
 Perform necessary follow-up if any notices are undeliverable
o Contents of notice - set forth the CM’s rights and obligations in clear/concise
language
 Nature of the CA
 Identify named plaintiffs
 Summarize the statute of the litigation
 Specific the court in which the case is pending
 Definition of the certified class/subclasses
 Cross claims, issues, or defenses
 Advise CMs of their right to retain separate counsel
 Request for exclusion from the class
 Explain that if CMs do nothing they will be included in the class and
will be bound by the judgement
 Instruct CMs that if they want to opt out, they must formally request
exclusion (usually by completing a form)
o Will not be eligible to share any recovery
o Will be free to assert the same/similar claims individually
against the D in a separate future proceeding
 Time and manner for requesting exclusion
 Binding effect of a judgement on CMs:
 If Ps prevail, CMs share the recovery
 If Ps lose, the CMs are barred from later bringing the same/similar
claims individually against the D (unless the theory is different due to
being individual and not class-based)
2. Certification Requirements
 Must be more than legal conclusions for each element  requires pleading sufficient
facts supporting each factor – Amchem Prods. v. Windsor (1997)
 Rule 23(a)
o Numerosity: number of class members must be so numerous that joinder of all
members is impracticable – 23(a)(1) – General Tel. Co. v. Falcon (1982)
 Factors
 Judicial economy arising from avoiding multiple actions
 Geographic dispersion of class members
 Financial resources of class members
 The members’ ability to institute individual suits
 Injunctive relief requests that could affect future class members
 Purpose – ensures a class will be certified only if individual suits will not be
an effective mechanism for resolving a dispute
o Commonality: questions of law or fact exist that are common to the class –
23(a)(2)
 Test – all CMs’ claims depend upon at least one significant question of
law/fact such that determination of its truth or falsity will resolve an issue
that is central to the validity of each claim in one stroke  Wal-Mart Stores
v. Dukes (2011), General Tel. Co. v. Falcon (1982)
 Key inquiry = whether class treatment will generate common answers
apt to drive the resolution of the litigation, not simply whether plaintiffs
have raised common questions
o Commonality of damages NOT required
 Not a mere pleading standard  requires affirmative evidence
 Purpose
 Promotes fair and adequate representation of the interests of
absentee class members
 Promotes practical and efficient case management
 Examples
 NO commonality - Wal-Mart Stores v. Dukes (2011): absence of
proof of a general corporate policy of invidious discrimination
pervading the local level, where 1.5 million women alleged different
conduct by different managers at different stores
o Typicality: the class rep’s claims/defenses must be typical of the class such that
proving the rep’s individual claim advances the CMs claims – 23(a)(3)
 Test
 Do other members have the same or similar injury
 Whether the action is based on conduct that is not unique to the
named plaintiffs
 Have other CMs been injured by the same defendant and course of
conduct
 Purpose – to assure the interests of the named rep aligns with those of the
class
 NOT met where a rep’s claims are subject to a unique defense or where
the laws applying to the claims differ from those of the class
o Adequacy of Representation: the representative parties will fairly and
adequately protect the interests of the class as a whole (CM seeking same relief)
– 23(a)(4)
 Test – whether the class rep
 Has any conflicts with other class members
 Will prosecute the action vigorously on behalf of the class
 If standard not met, court may:
 Substitute a new rep
 Add additional reps - In re Gen. Motors Corp. Engine Interchange
Litig. (7th Cir. 1979)
 Create subclasses with their own reps
 Limit the class to a group that would be adequately represented by
the existing rep
 Obligations of class rep
 Burden of proof is on the moving party
 The CA judgement is subject to collateral attack by members of the
class for lack of due process if their interests were not adequately
represented
 There is a fiduciary obligation to CMs to understand the basic facts of
the case
 Rep agrees to be minimally involved with sufficient interest in the
case to ensure vigorous prosecution
 Must have sufficient interests at stake
 Other adequacy considerations
 Class rep may not act pro se due to role as fiduciary of the class
 May be a non-human such as unincorporated associations, trustees,
and assignees
 Purpose – constitutional protection of due process required in order to bind
absent class members to final judgement – Hansberry v. Lee (1940): CA
judgement subject to collateral attack by absent CMs for lack of DP if their
interests were not adequately represented
 Pro Tip: proceed with multiple putative class reps in case one is found not
adequate; however, each new rep brings new challenges, broader
discovery, and settlement complications
 Rule 23(b) – Grounds for maintaining a class
o 23(b)(1) – risk that separate actions by or against individual members of the
proposed class might produce inconsistent results
 23(b)(1)(A): risk of prejudice from separate actions establishing
incompatible standards of conduct
 Examples:
o Suit brought by trustees to determine distribution of settlement
proceeds
o Suit against department of social services for placing a
Medicaid lien on state workers’ compensation settlement in
violation of federal law
 23(b)(1)(B): judgements in individual suits would adversely affect the rights
of other CMs (limited fund) – Ortiz v. Fibreboard Corp. (1999)
 Requirements: a showing that
o The limited fund is inadequate to satisfy all the claims
o The class as a whole receives more benefit than serial litigation
would produce
o The class will comprise everyone who might state a claim on
common facts with a common legal theory to be paid from the
limited fund
 Examples:
o Plaintiffs laying claim to insurance proceeds, a deposit account,
company assets in a liquidation sale, or proceeds of a ship sale
in a maritime case
o The fact that a company would maintain limited assets to
continue operations does not preclude limited fund settlement
o 23(b)(2) – party opposing a class has acted or refused to act in a manner
applicable to the class generally, thereby making injunctive or declaratory relief
appropriate with respect to the entire class - Wal-Mart Stores v. Dukes (2011):
 Applies when a single injunction/declaratory judgement would provide relief
to each CM
 Not applicable where the plaintiff cannot obtain an injunction
individually or a statute prohibits injunctive/declaratory relief
 Primarily for civil rights class actions
o 23(b)(3) – situations where ordinary money-damages claims of class members
may be resolved, in whole or in part, on a class-wide basis
 Requirements
 Common questions of law or fact predominate over individual ones
o Found if CMs can prove their claims with the same evidence
without time-consuming individual inquiries overwhelming the
common questions – Tyson Foods, Inc. v. Bouaphakeo (5th
Cir. 2020): where each individual’s damages would be
different, inquiry does not defeat predominance because
calculations could be made via formula)
 CA is the superior method for resolving the controversy – Factors:
o Interests of the CMs in individual controlling their own litigation
o Nature and extent of any relevant, pending litigation brought by
or against members of the class
o Desirability of concentrating the litigation in the particular forum
o Difficulties likely to arise in managing the CA
3. Appointing Counsel – 23(g)
 Court must appoint class counsel at certification – (23)(g)(1)(A)
o May appoint interim counsel before certification
 Court issues an order to applicants to provide the court with info/argument for why they
should be selected – 23(g)(1)(C)
 Factors for Choosing Class Counsel
o Work done by counsel in identifying or investigating potential claims in the
pending action
o Counsel’s knowledge of the applicable law
 Show necessary experience by pointing to pass successes or association
with other experienced counsel
o The resources that counsel will commit to representing the class
 Court may allow counsel to advance litigation costs
 Court may allow attorneys to propose terms for attorney’s fees and
nontaxable costs
o Any other matter pertinent to counsel’s ability to best “represent the interests of
the class” – 23(g)(2)
 Counsel as partner/relative of class rep – not permissible
 Conflicts of interest
 Attorney previously represented the D
 Attorney is a potential witness in the CA
 Attorney sued the same D in another CA
 Attorney represents opposing parties within the same proposed class
 If there is opposition to class counsel, court may permit discovery into the
matter
4. Denial of Certification and Statute of Limitations
 SOL is generally tolled from filing until the denial of class certification
 Following denial, absent putative CMs may intervene in the action or file individual
actions
 Preclusive Effect of Denial of Certification – split of authority:
o In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig. (7th Cir. 2003):
“every person included in the district court’s class definition still has the right to
proceed on his own. What such person now lacks is the right to represent a …
class of others similarly situated”
o In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., (3rd
Cir. 1998)
5. Appeal of Certification Orders
 Certification order or denial is not a final judgement so it is not appealable
o Court of appeals has discretion to permit an immediate appeal from an order
granting/denying certification upon an application made within 14 days of the
order  exception to the rule
o Motion for reconsideration filed within 14 days tolls the 14-day period to appeal
6. Modifying or Decertifying a Certification Order
 Order may be altered, amended, or vacated at any time before final judgement sua
sponte – 23(c)(1)(C)
o After final judgement, can only be amended for egregious error
 Decertification orders are appealable – 23(f)
7. Class Notice
 Optional for Rule 23(b)(1) and 23(b)(2) classes because absent CMs don’t have optout rights
o Ortiz v. Fibreboard Corp. (1999) – 23(b)(1)
o Wal-Mart Stores v. Dukes (2011) – 23(b)(2)
 Mandatory for Rule 23(b)(3) – “best notice that is practicable under the circumstances,
including individual notice to all members who can be identified through reasonable
effort” shortly following certification order
o Acceptable forms – 23(c)(2)(B)
 U.S. mail
 Electronic means
 Other appropriate means
o For a settlement class, the first notice of certification may include the notice of
settlement
 Description of Notice – following info must be included:
o Nature of the action
o Class definition (including when the class period begins and ends)
o Class claims, issues, or defenses
o Ability of a class member to enter an appearance in the CA through an attorney
o Ability to opt-out of the class
o Time and manner restrictions for opting out
o Binding nature of the class judgement on all individuals the court finds to be
members of the class who did not request to be excluded
 Cost burden of notice – usually class counsel
o Cost can be shifted in certain circumstances
 When liability was conclusively proven – preliminary injunction, partial
summary judgement, or other procedure
 As a court-ordered sanction
 When settlement requires it
8. Settlements
 Court must approve (and may modify) settlement in a certified class action or a
proposed settlement class to achieve:
o Fairness
o Reasonableness
o Adequacy
 Types of CA Settlements
o Injunction: D may agree to cease certain conduct in the settlement
o Medical monitoring: settlement may establish an ongoing health monitoring
program to check for certain medical conditions
o Named-plaintiff settlements: D may settle the named P’s claims without providing
compensation to the unnamed CMs
 Court dismisses the claims of the absent CMs without prejudice, allowing
them to refile
o Coupon: CMs may receive coupons that they can use to buy discounted
merchandise/services instead of a monetary recovery
 Generally disfavored by courts because they:
 Don’t provide meaningful compensation to CMs
 Fail to disgorge ill-gotten gains form the D
 Require CMs to do future business with the D in order to receive
compensation
o Cy pres: CMs make claims against an escrow fund established by the D, with
remaining funds going to an alternative source such as a charity and do not
revert back to D.
 Used where the individuals injured are not likely to come forward and prove
their claims or cannot be given notice of the case
o Claims-made (reverter): same as cy pres except remaining funds revert back to
D
 Settlement Procedure – Rule 23(e)
o Parties negotiate and reach a settlement
o Plaintiff files a motion for preliminary approval of CA settlement
o Court holds initial fairness hearing (preliminary approval hearing)
 If the settlement would bind CMs, the court may approve it only after a
hearing which finds that it is fair, reasonable, and adequate, after
considering:
 If the class can be properly certified under Rule 23
 Adequacy of representation
 Whether the proposal was negotiated at arm’s length
 Adequacy of relief to the class, considering:
o The costs, risks, and delay of trial and appeal
o The likely effectiveness of the proposed method of distributing
relief to the class, including a description of any claims process
o Any proposed award of attorney’s fees
o Any agreements related to the settlement, such as incentive
payments to named Ps or agreements between counsel
 Equitable treatment of CMs
o Notice of the proposed settlement is generally provided to CMs (and opt-out
chance for 23(b)(3) class)
 Includes date of fairness hearing
o Objections are filed
o Court holds final fairness hearing (final approval hearing)
 Notice of proposed settlement - Court must direct notice in a reasonable manner to all
CMs who would be bound by the settlement
o If preliminary approval is obtained, notice must be given to all CMs in such a
manner as the court directs - 23(e)(1)
o Notice includes:
 Description of the actions/proceedings
 Description of the essential terms of the proposed settlement
 Disclosure of any special benefits provided to the class reps
 Parties seeking approval must file a statement identifying any
agreement made in connection with the proposal
 Information regarding attorney’s fees
 The time/place of the hearing to consider approval of the settlement, and
the method for objecting to (or opting out if permitted) the settlement
 Explanation of the procedures for allocating/distributing settlement funds
 If the settlement provides different kinds of relief for different
categories of CMs, clearly set out those variations
 Prominently displayed address and phone number of class counsel and the
procedure for making inquiries
o Forms of notice
 Mail/email to individual CMs is most common
 In some circumstances, notice by publication may suffice, either alone or in
addition to individually mailed/emailed notice
 In addition to the above methods, notice commonly includes a website with
detailed info about the litigation, including claim forms if appropriate
 Social media posting or in-business posters may also be used
 Notice of a proposed settlement may need to meet a higher standard in
certain cases, such as if the CMs are required to file claim forms in order to
participate in the settlement
o If the CA was certified under Rule 23(b)(3), the court may refuse approval unless
it affords a new “opt out” opportunity
 Objections to the settlement
o Any CM may object to the proposal if it requires court approval under Rule 23(e),
and objections may be withdrawn only with the court’s approval
o Objection brief includes:
 Introduction
 Name of objector and evidence that they are a member of the
class/subclass to which the objections apply
 Specific grounds for each objection, based on the Rule 23(e) factors
o Explanation of each of the grounds that gives sufficient info for
the parties to respond
 Scope: a clear statement as to whether each objection applies to:
o Only the objector
o A subclass
o The entire class
 Argument
 Relief requested, such as:
 Creation of a subclass – such as when the type, value, or risk of
claims differs among the CMs
 Denial of motion to approve the settlement – on grounds such as:
o The amount is not adequate to compensate the class
o Allocation of damages among the classes/CMs is not fair
o Requirements for certification under Rule 23 are not met
o The claims process is too onerous
o The plan for unclaimed damages is unfair or unreasonable
o The proposed amount of attorney’s fees is unreasonable
 Additional discovery or disclosures – such as how the settlement was
reached
 Denial of the attorney’s fees petition
o People who may object include:
 Individual CMs
 Entity CMs
 Named Ps, who may object despite class counsel’s agreement to the
settlement
o People who can NOT object:
 Non-members
 People who have opted out of a CA and are not bound by the settlement
(no standing to object)
 Non-settling Ds, unless the D’s legal interests will be prejudiced by the
settlement, such as where its claim for contribution will be barred
o Prepare for the fairness hearing by:
 Checking the subsequent history of any cases cited in your objection to
ensure their legitimacy is not in question
 Review the key cases you cited and cases cited in any written response
filed by the parties
 Prepare an outline of your points
 If using a demonstrative exhibit, send it to the other parties at least a week
in advance
o Objector attorney’s fees
 Court may award attorney’s fees to objectors who either:
 Provided services that contributed to an increase in the common fund
available to a class
 Aided the court’s review of a CA settlement
 Otherwise advanced the interests of the class or assisted the court
 Request made by motion within 14 days of the court’s order on the
settlement, including:
 Notice of motion and motion
 Memo including:
o Grounds for the request – how the objection benefited the class
or assisted the court
o Amount sought
o Terms of any agreement regarding the fees
 Declaration/affidavit describing the:
o Background/experience of the lawyers who performed the work
and their usual billing rates
o Work performed and time spent
o Objectors may appeal the final approval of a class settlement (notice filed within
30 days)
 May not appeal preliminary approval
 Must remain a member of the class (can’t opt out)
 Standard of review = abuse of discretion
 Before consideration is provided to an objector in connection with
dismissing an appeal, the court must have a hearing and approve the
consideration
 Terms in settlement agreement
o Costs – D will often cover the expense of administering the settlement
o Compensation for non-settling Ds – if not all Ds are settling in a multi-D suit, the
settlement may include a provision to lower any potential judgement against the
remaining Ds
o Confidentiality – terms of CA settlements are generally public (Rule 23(e)), but
confidentiality clauses may be permitted to safeguard CM privacy
o Walk-away rights – these allow D to reject the settlement if a certain
number/percentage of CMs opt out of the agreement
 P may seek walk-away rights if a large number of CMs make claims and
reduce the value of the settlement per member
o Scope of release – settlement agreements usually contain a release to at
minimum avoid a future dispute over the same claims being litigated
 Ds generally want a broad/expansive release
 Ps seek a more limited release confined to the specific claims in the case
o Allocation of funds – settlements may contain a formula to offer more
compensation to those CMs who have suffered greater harm
 Must have a record to justify the different treatment
o Clear-sailing – these provisions state that the D will not dispute class counsel’s
request for attorney’s fees
 Courts subject such fee requests to heightened scrutiny in light of the
potential for collusion between class counsel and the D (D wouldn’t agree
to that without receiving something in return, usually to the detriment of the
class)
o Quick-pay provisions – seek to pay class counsel quickly in order to deter
opportunistic objectors aiming to derail the settlement with meritless claims
 Courts may reject such a quick payout of fees before CMs are paid
o Incentive payments – extra payments provided to the named Ps for taking an
active role in the case
 Courts often allow these, but may scrutinize the amount, especially if its
much greater than the payouts to the unnamed CMs
 Seeking Fees in Settlement
o To obtain an award of attorney’s fees or reimbursement of nontaxable costs in a
CA, an attorney generally must:
 File a motion under Rule 54(d)(2)
 Must be served on all parties
 Must be directed to CMs in a reasonable manner
 Combine this motion with the notice of settlement
 Court sets a deadline for objections to the fee request that gives
CMs adequate time to review the papers/conduct discovery if
appropriate
 Have provided a clear palpable benefit to the class
 Include sufficient evidence showing the entitlement to the fee award
o Rights of objectors include
 To present arguments/evidence in response to a
settlement/disposal/compromise
 Discovery on the terms of the proposed settlement
 Objections may only be withdrawn on court approval if being withdrawn for
consideration
o Fee and costs application should be in the form of an affidavit and include:
 Case history describing the litigation
 Memorandum of law noting the legal authority in support of the fee request
 Detailed time records identifying the lawyer who worked on the case and
how the time was spent, such as
 Phone calls, emails, and other communications
 Preparing/drafting court documents
 Discovery tasks
 Work on giving notice to CMS
 Settlement negotiations
 Preparation for trial/other court appearances
 Appeals
 An inventory of the costs of the suit, including:
 Filing costs
 Class administration
 Providing notice to the class
 Travel expenses
 Paralegal support
 Serving process
 Depositions
9. Arbitration Agreements & CA Waivers
 Purpose – Strong Defense Weapon
o Can turn a dispute involving millions of potential claimants and multi-millions in
all-in exposure into a simple bilateral dispute
o Can effectively end litigation or lead to a favorable settlement on an individual
basis
 Who Benefits from the CA Waiver – the party facing potential CA liability!
o Generally the entity/business that inserted the CA waiver into its arbitration
clause
o CA waivers are most beneficial where the claimant seeks to aggregate a large #
of small claims that would be economically infeasible for each claimant to
individually pursue their claim in arbitration
 Examples of such claims:
 Action to recover a small monthly fee allegedly wrongfully charged to
all customers under a cell phone contract
 An action to recover an allegedly unearned or improperly disclosed
banking fee
 Types of Contracts which may be subject to a CA Waiver – consumer enters into an
ongoing contractual relationship with a service provider/merchant
o Contracts of adhesion – form contracts that provide the consumer little if any
ability to negotiate the terms
 Procedural unconscionability is hard to prove but turns on the manner in
which the contract was negotiated and the respective positions of the
parties at the time, focusing on the level of oppression/surprise involved
 Give consumer an opportunity to review the agreement before
becoming bound
 Terms of arbitration clause should be clearly explained in agreement
 Substantive unconscionability: when the contract is unjustifiably one-sided
to such an extent that it “shocks the conscience”
 Do not write onerous one-sided terms – such as making the
consumer bear the cost of arbitration
 American Arbitration Association (AAA) allows companies to register
their arbitration clauses to ensure they comply with Due Process
 Federal Arbitration Act (FAA): provides for uniform and broad enforcement of
arbitration agreements when it applies, preempting state laws and court decisions that
disfavor arbitration – AT&T Mobility LLC v. Concepcion (2011): SC ruled that CA
waivers in arbitration agreements are enforceable
o Provides that agreements to arbitrate are “valid, irrevocable, and enforceable,
save upon such grounds as exist aw law or in equity for the revocation of any
contract”  preempts anti-arbitration state laws
o If a dispute is subject to arbitration pursuant to an agreement governed by the
FAA, a party to the agreement may apply to a federal district court for an order
compelling arbitration rather than litigation in court
 Agreement may be waived by inaction – always check for an agreement to
arbitrate and whether it contains a CA waiver
o Policy = favoring arbitration
o Subject to a few exceptions, the FAA applies to arbitration agreements that
involve interstate/foreign commerce
 Class arbitration is not available unless clearly allowed under the express terms of the
arbitration clause (ambiguous agreement not sufficient)
o D should NOT consent to class arbitration
 Arbitral orders are not appealable
 Class arbitration raises the specter of a possibility of devastating CA award
against D without the procedural safeguards of the court system
o Mass individual arbitration – uncommon, mainly in employment litigation
 More likely where the arbitration clause contains terms favorable to P
 Because of the potential of a multiplicity of claims, D costs can quickly
escalate where an entity is faced with mass individual arbitration
 Strategies for Drafting CA Waivers - Entities can minimize the risk that their arbitration
agreement and CA waiver may be invalidated by:
o Writing clear, concise arbitration clauses that take into account the current state
of the law, including:
 Parties to the agreement
 Categories of claims that are arbitrable
 Identity of the arbitrator (and rules applicable to arbitration), and
 Categories of claims subject to the CA waiver
 Who bears the cost of arbitration – requiring entity to pay cost (excluding
claimant’s attorney’s fees) of any non-frivolous claim may lessen the risk
that the arbitration agreement is deemed unconscionable
o Include a severability clause: requires any unenforceable terms to be excised
from the agreement, but requires all other terms to be implemented
 Gives entity full benefits of the arbitration clause and CA waiver as allowed
by law
 This is preferable to a nonseverability clause: “poison pill” that invalidates
the entire arbitration agreement if any portion of the CA waiver is found
unenforceable (although nonseverability clause eliminates the risk of being
forced to arbitrate class claims)
 Plaintiffs – Importance of Determining Whether a CA Waiver is in Play
o Foremost consideration – well drafted arbitration clause can kill a CA
o In evaluating a consumer CA case, attempt to determine whether the P is in a
contractual relationship with the D business  obtain a copy of the contract
o If contract contains arbitration agreement / CA waiver, scrutinize the language to
determine whether there are any exceptions
 Enforcing CA Waivers
o Comes into play once a P files a CA suit in court
 D should first decide whether they want to stay in P’s chosen forum
 If P filed in state court, D should consider whether removal to federal
court is possible under federal question/diversity or CAFA
 Federal law (FAA) is more favorable to enforcing arbitration
o Motion to Compel Arbitration – once D has chosen a forum
 D should include a request to stay its obligation to answer the complaint
pending the resolution of the Motion to Compel Arbitration (MCA)
 Order granting MCA is not immediately appealable
 Order denying MCA – D may take an interlocutory appeal under FAA
o D should seek to stay proceedings in the trial court pending
resolution of the appeal of the denial of MCA to avoid
expense/risk of litigating in 2 forums at once
o Petition to Enforce an Arbitration Award under FAA
 Must be a basis for federal subject matter jurisdiction (diversity/FQ)
 Petition must be filed within 1 year of the award
10. Class Certification Discovery
 Need for discovery depends on the complexity of the issues
o Simple issue = employees challenging D’s overtime policies
o Complex issue = alleging D’s product is defective  extensive fact/expert
discovery may be needed to identify the alleged defect and to show that it is of a
type that was or may be experienced by a large number of buyers
o CA discovery is bifurcated – focusing first on certification issues (although there
may be some overlap with the merits)
 Scope of Discovery – focuses on disputed facts bearing on certification within the
exclusive knowledge of the opposing party
o Scope of D’s practices – pertinent to numerosity/typicality, such as:
 Employee time/pay records, as well as texts between putative CMs and
their manager for a wage and hour action
 Automated credit dispute forms exchanged between a creditor and a credit
reporting company relating to the putative CMs in a FCRA case
 Identifies and contact info of putative CMs, which could lead to evidence
pertinent to commonality/typicality
o Named P’s experiences – pertinent to commonality, typicality, and P’s adequacy
to represent the class, such as:
 D permitted to depose a named P who purchased a defective product in a
products liability case (even though the P sought to dismiss his individual
claim)
 Employee P alleging unsafe working conditions may be required to produce
her medical records
o Pre-certification discovery cannot be used to identify someone to become a
named P
 Discovery Plans – timeline and substantive plan for class certification discovery and
the class certification motion
o Generally includes:
 Topics
 Must be able to tie each matter to one of the 23(a) or 23(b) factors
 Court more likely to allow certification discovery on matters
exclusively in possession of the opposing side
 Methods – because certification discovery is discretionary, your plan should
be specific as to the:
 People to be deposed or topics for entity depositions
 Number of interrogatories
 Number of document requests
 Expert Witnesses – either side may submit expert declarations in support of
its brief on class certification
 If testimony is straightforward – parties may agree to disclose expert
declarations/allow time for depositions
o Whether it is necessary to depose the other side’s expert will
depend on the complexity of the issues
 If testimony is more complex – more formal Rule 26(a)(2) disclosure
and rebuttal disclosure process followed by depositions is more
appropriate
 Testimony must satisfy Daubert standards
o Plaintiff’s Discovery Plan
 Create a chart of the Rule 23(a) and 23(b) issues and the evidence you
have or need to establish each one
 Once you identify gaps in your evidence, create a discovery plan that
identifies which discovery methods may be used to obtain the evidence
 Scour all public info first (D’s website, Sec. of State, SEC, news, prior
cases against D, etc.
 Methods used by Ps at Certification Stage:
 Depositions (either under Rule 30(b)(6) or individual depos of D’s
employees) to establish common practices
 Document request seeking categories such as:
o D’s written policies relating to the practices at issue
o Incident reports/investigations relating to the practices at issue
o All docs relating to the named Ps
 Interrogatories seeking identification of:
o # of people affected by D’s conduct (putative CMs)
o Facts relating to defenses asserted in the answer and which
may be uniquely applicable to any named P
o Defendant’s Discovery Plan – internal and external
 May need to do internal interviews/review ASAP to fully understand D’s
business/practices before developing a comprehensive
discovery/certification plan
 Methods used by Ds at Certification Stage:
 Document requests to the named Ps seeking:
o All docs relating to the D’s challenged practices
o All docs relating to any potential individual defenses
 Interrogatories to the named Ps relating to any potential defenses
 Depositions of named Ps
 Discovery Methods – class certification motions must be supported by appropriate
evidence, including:
o Depositions
o Interrogatories
o Document requests
o Requests for admissions
o Expert discovery
 Dispositive Motions – unlikely to be granted without allowing Ps time for discovery
o D seeking to delay certification discovery to bring a motion for summary
judgement should support its request to stay discovery with specific/compelling
evidence that SJ is likely to expeditiously resolve the case
 Sampling: in many CAs it is appropriate to rely on a sample of putative CMs for
purposes of certification – Wal-Mart Stores, Inc. v. Dukes (2011), Tyson Foods, Inc.
v. Bouaphakeo (2016)
o Sampling Requirements:
 Representative sample size for each subclass
 Difference between limiting discovery to a representative sample and
D using a limited number of CMs to demonstrate that certification is
not appropriate
o D not required to rely on representative sample to rebut
commonality evidence and argue that it would be necessary to
litigate individual defenses
 Random sampling
 If sample if chosen by either side, it won’t further the certification
analysis because each side will choose CMs whose records support
its side
 Procedures agreed by the parties or set by the court – if court does not, the
parties’ methodology should:
 Be put in writing
 Exclude the named Ps from the list of CMs for the sampling purpose
 Identify which random process will be used to select the CMs, such
as the specific program/website
 Include a representative sample of each subclass
 Both sides are limited to the sample for purposes of certification
o Commonality and typicality can be evaluated using discovery from a sample of
CMs, which saves costs
o If a D is arguing for sampling – prepare to demonstrate the burden of providing
the requested discovery for all CMs with specific cost/time estimates
 Unnamed Class Members – generally not subject to discovery at certification stage
(requires a court order and a showing of particularized need)
o Party seeking discovery must demonstrate that the discovery sought from
unnamed CMs is:
 Relevant to class issues
 Not unduly burdensome or harassing
 Not sought for an improper purpose, such as to discourage participation
o Kinds of discovery permitted from unnamed CMs include:
 Nonmandatory questionnaires of limited length and in plain language
 Depositions where the CMs’ participation in the lawsuit is not likely to be
chilled
11. Dueling Class Actions
 Attack Outline
o 1. Is there more than 1 CA pending at the same time?
 Start thinking about Anti-Injunction Act implications
o 2. What is the configuration of the 2 suits?
 Federal on Federal – no injunction
 Rare – means MDL panel didn’t such up 1 or more cases
 Fed courts cannot enjoin each other under AIA (Grider)
 If legal remedy is available  no injunction
o Right to object under 23(e) is a legal remedy
 State on Fed or State on State – no injunction
 State courts can’t enjoy fed courts or each other
 Federal on State – injunction possible!
o 3. Consider Status of the 2 Cases: Has the state court issued a final judgement?
 If so – fed court must afford Full Faith & Credit (Matushita, General
Motors)
 Would the law of the original state afford the judgement preclusive
effect?
o If so, should the fed court refuse to give preclusive effect?
 Statutory repeal of FF&C for this claim?
 Matushita: state can settle claims that it could not have heard in trial
o Example = settlement of exclusively federal claims
o Policy – settling a claim doesn’t present uniformity problems in
interpreting federal law
 Exception = Due Process Violations  Collateral Attack
o Adequate representation problems
o Notice / opt-out issues?
 If not – what is the status in the fed case?
 Final judgement in fed court (certification/approval of settlement) –
AIA Re-Litigation Exception  issue preclusion
o Argue – what issue did fed court adjudicate and is it the same?
 If fed court denies certification under Rule 23, that may
not be the same issue as the state court’s decision to
certify under the state rule (Bayer)
o Argue – are these the same parties?
 If fed court denies certification, the state P was never
represented!
 Principles of comity apply instead (to avoid the
anomalous court problem)
 Settlement is “imminent” – AIA Aid of Jurisdiction Exception
o Analogize to a res (historical purpose)
 Limited fund (Asbestos) – if other Ps continue, it depletes
fund
 Injunction class – everyone gets it or they don’t
 Opt-out classes
 Case on remand and not near settlement – no injunction (General
Motors – coupon deal)
o 4. Use All-Writs Act to effectuate the injunction
 There may be parallel CA going forward at once (state/federal)
o Efficiency problem – duplication of effort by parties/judges, inconsistent opinions
o D may leave cases in state court to encourage reverse auction
 When there are multiple CAs, pressure to settle – first to settle wins
 D can push price down by playing the P attorneys off each other
o Anomalous court problem – if you file in enough courts, eventually one will certify
the class
 If class wasn’t certified, absent members were never represented  can
file again
 Principle Doctrines
o Full Faith & Credit – Constitutional and statutory
o Anti-Injunction Act: federal court can’t enjoin state court litigation proceeding at
the same time, except:
 Where expressly authorized by congress (rare)
 Where it’s in the necessary aid of federal court’s jurisdiction
 Scenario #1 - Case is removed from state court but state won’t let go
of it
 Scenario #2 – where the court is adjudicating with respect to a res
 To protect or effectuate federal judgements (re-litigation exception)
 Requires a final judgement on the merits
 Designed to give preclusive effect to federal court decision
o All-Writs Act: gives affirmative power to issue injunction if you’re justified under
AIA
o Rooker-Feldman Doctrine: federal courts can’t review state court decisions
12. Preclusive Effect
 Preclusion Generally
o Defensive Non-Mutual Issue Preclusion (DNIP): bar asserted by D as a
“shield” to prevent P from relitigating an issue that P previously litigated and lost
against another D2.
 Policy = promotes judicial economy by encouraging Ps to join all potential
Ds in a single action
o Offensive Non-Mutual Issue Preclusion (ONIP): bar asserted by P as a
“sword” to establish P’s claim against D and prevent D from relitigating issues
that D previously litigated and lost against another P2
 Courts less likely to allow because of non-joinder incentives / “wait and
see” plaintiffs
 Class Settlements
o Direct review – Rule 23(e): judge must approve settlements in certified CAs
 Problem = hard to get the full picture when the parties agree (no
adversarial proceeding)
 Other solutions:
 Special master to be devil’s advocate
 D posts bonds to pay objector fees
 Public agency labels settlements
 Private agency reviews/places trademarked seal
 Indicia of fairness:
 Transparency - how settlement was reached
 Rational relationship between distribution and the merits of the case
 Actual reasonable distribution of the proceeds among different Ps
 May grant 2nd opportunity for opt-out – rare
o Appeal – absent CM must appear and object in order to have standing to bring a
direct appeal of a settlement (Devlin)
 Can only appeal the specific issue you objected over
o Collateral Attacks – Epstein III
 Issue – when can a P challenge DP in a separate action? Identify what type
of “adequate representation” being challenged and match it with a
preclusion approach
 Claim Preclusion Approach (notice of settlement) – Unfair Settlement
challenge
o O’Scannlain: as long as court had a rule requiring adequate
representation that is sufficient
o Focus = opportunity to raise the question
o Justifications = finality / efficiency
 Issue Preclusion Approach – Structural Conflict
o Wiggins: consider whether issue was actually litigated and
determined
o Benefit – second judge might have more info than first judge
o Problem – doesn’t matter how much attention judge gave the
issue (some are much more cursory)
o Deterring Opt Outs
 Argue – does the deterrence alter P’s pre-existing right to sue?
 Is P in the same position before and after the class settlement?
o Inter-Op Hip Prosthesis: settlement ties up D’s assets with
liens and a trust for the class – nothing left for future P
o Prudential Insurance: P could bring his 2 claims that he opted
out, but couldn’t use any of the same evidence from the CA
 If P is NOT in the same position, did P consent to that?
o Prudential Insurance: P consented by keeping 2 claims in the
class
 Design Options
 Liens on D’s assets
 Right to withdraw clause – D can withdraw if too many people opt out
 MFN Clause – D will give class money if a future P settles for more
 Back-end opt out – additional opt out periods at the cost of, for
example, claims for punitive damages
 Non-Class Aggregate Settlements
o Rule 1.8(g)
 Must tell each person how much everyone will get and attorneys fees
 Requires consent of all parties
 Problem = temptation to pay off the squeaky wheel to avoid a hold-out
problem
o In-advance agreements are not allowed (Tax Authority v. Jackson Hewitt)
o Vioxx Settlement – D settles with P attorneys
 Attorneys must recommend to all clients, regardless of best interest
 Coercive – if clients back out, hard to find another Vioxx attorney
 Requires 85% consent – turns “strength in numbers” against Ps
 CA Preclusive Effect Cases
o Matushita v. Epstein (1996): Settlement of DE state class action had preclusive
effect on California federal class action where California Ps were members of the
class in the DE case
 Full Faith and Credit Act: decisions from a court in one state are given full
faith and credit in any court (including federal) in another state  so
California court must apply DE preclusion law, which would preclude claims
 Ginsburg concurrence/dissent: preclusion here is about adequate
representation, not FFC
 State court judgement not entitled to FFC if it does not satisfy the
requirements of Due Process (adequate representation in the class
action context)
 Ps argue that DE court never made an adequate representation
determination
o How can there be adequate rep. of counsel when the
settlement was negotiated in a jurisdiction that could not even
take the claims to trial?
o Stephenson v. Dow Chemical (2001): Ps exposed to Agent Orange during
class period but did not incur injuries until after the settlement claims period had
ended were NOT precluded from bringing individual suits because they were not
adequately represented  settlement focused on injured Ps, not exposure-only
Ps
 Should Ps have been bound?
 2nd Circuit – NO
o Can’t bar Ps injured after the fact – Amchem, Ortiz
o Inadequate representation issues
o Due process issues – Hansberry
 Argument for Yes
o Future injuries were foreseeable during settlement (adequate
representation met)
 Settlement put aside $ for future claims
o Settlement beget finality
o Ds would not pay as much money if they knew they could not
buy finality / res judicata
o Cooper v. Bank of Richmond (1984): individual Ps alleging discriminatory
treatment were NOT barred precluded from bringing individual claims, despite
the class claim about a pattern of discriminatory conduct was defeated on the
merits and binding on future attempts
 Just because a company did not engage in a pattern does not mean it did
not discriminate against individual employees
 Pay attention to the differences between class claims and individual claims
– here it made a substantive difference for preclusion purposes
o Shady Grove Orthopedic v. Allstate: state rules that conflict with the FRCP are
preempted and do not prohibit federal courts from using a federal CA rule for a
state law claim
 if Rule 23 answers the question in dispute, it governs, unless it exceeds its
statutory authorization or congress’ rulemaking power
 Rules Enabling Act (nor Erie) controls the validity of FRCP, even if it opens
federal courts up to actions that cannot proceed in state court