Class Actions

Question 1

Define: Class Action

Answer 1

When one or more named plaintiffs represent a class of commonly situated absent plaintiffs

Question 2

What are the prerequisites of a class action?

Answer 2

(CANTS)

1. Commonality: common issues of fact or law and common injuries must take up a vital part of the lawsuit.
2. Adequacy: named plaintiff and class counsel must fairly and adequately represent the class. Interests of the named parties cannot conflict with the interests of the rest of the class they represent.
3. Numerosity: the class must be so numerous that joinder of all would be impracticable. (Courts have found classes of 40 are sufficient)
4. Typicality: the claims of the named plaintiff are typical of the class.
5. Superiority: (only needed in common question suits and MI class actions) - show that the class action is superior to the alternative methods of adjunction, and show that common questions of fact or law predominate over individual class.

Question 3

What are the types of class actions?

Answer 3

1. Common Question Suits: most common. Plaintiffs sue under a common question of fact or law
2. Inconsistent Results Suits: separate actions would create a risk of inconsistent results for the party opposing the class or would impair the interests of other absent members.
3. Injunctive Relief Suits: a D has acted or refused to act on grounds applicable to the class. And injunctive or declaratory relief is appropriate for the class as a whole.

Question 4

Class Action Notice

Answer 4

1. Notice of pendency of the class action is required in common question suits (and in Michigan class actions)
2. Notice must state the nature of the action, definition of the class, the class claims, issues or defenses, the right to opt out and how to do so, and the binding effect of a class judgment
3. Notice must be sent to all members who can be identified with reasonable effort

Question 5

Is personal jurisdiction over absent class members required in a class action?

Answer 5

No. In class actions based on diversity jurisdiction, only citizenship of the names representatives of the class is considered.

Question 6

Is court approval needed for a settlement or dismissal of a class action?

Answer 6

Yes

Question 7

Requirements under Class Action Fairness Act (CAFNA)

Answer 7

Federal Courts have jurisdiction suits if:

1. there are over 100 or more plaintiffs
2. plaintiffs are seeking an amount over $5 Million
3. Any single plaintiff is from a different state than any defendant

Question 8

When is a mandatory decline of jurisdiction appropriate in class actions?

Answer 8

A district court must decline jurisdiction is substantially all of the parties are from the same state and the injuries occurred in that state.

Question 9

When is discretionary decline of jurisdiction appropriate in class actions?

Answer 9

A district court may decline jurisdiction if over ⅓ (but less than ⅔) of the proposed class are citizens of the state and primary defendants are also citizens of that state.