USA Law and Practice Contributed by: Roger Cooper and Lina Bensman, Cleary Gottlieb Steen & Hamilton
If federal courts lack jurisdiction, a class action may be brought in any state court with jurisdiction to hear the case. 3.2 Overview of Procedure Claims asserted in class actions remain subject to limitation periods. The limitation period for any such claim, and any related tolling rules, vary depending on the claim and applicable law. The substantive legislation that creates a cause of action that can be brought on a class basis, such as the federal securi- ties laws, may also include a statute of repose. Stat- utes of repose cannot be equitably tolled, and there- fore impose an absolute bar against asserting a claim once the repose period has run. The general framework for bringing a class action where a named plaintiff (or plaintiffs) brings claims on behalf of a group of absent plaintiffs is outlined below. Class actions where claims are asserted against a class of defendants are possible, but rare. Such “defendant class” actions are intended for situ- ations where separate lawsuits against each individual defendant would be impractical or lead to inconsistent rulings, such as in cases involving numerous parties with a shared responsibility. Filing of Complaint and Class Certification The plaintiffs’ counsel files a complaint as a putative class action and lists one or more named plaintiffs who sue on behalf of a proposed class (or classes) of similarly situated plaintiffs. As noted in 3.1 Mecha- nisms for Bringing Collective Redress/Class Actions , in order for a litigation to proceed as a class action, the class must first be certified at a stage following the filing of the complaint. There are no particular rules for when certification has to be considered by the court, but a United States court will typically first consider motions to dismiss based on the adequacy of the pleadings and the legal adequacy of plaintiff’s theory, and only proceed to consider class certification if the motion to dismiss fails to dispose of the claims. To obtain class certification, a plaintiff must show by a preponderance of the evidence that all four require- ments of Rule 23 (a) of the Federal Rules of Civil Pro- cedure are met, and that the action meets the require- ments of at least one of the three types of classes
under Rule 23 (b). Many jurisdictions also impose a requirement that the class be “ascertainable”, mean- ing that the members of the class may be identified by objective criteria and, in some jurisdictions, that there is a reliable and feasible way of determining who fits the criteria. The four requirements of Rule 23 (a) are: • numerosity – that the class is so numerous that joinder of all members is impracticable (whether a class is sufficiently “numerous” will depend on the specific case, but generally a class of 40 or more individuals is enough); • commonality – that there are questions of law or fact common to the class; • typicality – that the claims or defences of the representative parties are typical of the claims or defences of the class; and • adequacy – that the named plaintiff and their coun- sel will fairly and adequately protect the interests of the class. The three types of class actions under Rule 23 (b) are: • inconsistent adjudication or limited fund actions – class actions brought where separate, individual actions would create a risk of either (i) inconsist- ent or varying adjudications that would establish incompatible standards of conduct for defendants, or (ii) substantially impairing or impeding class members’ ability to protect their interests because an adjudication of individual class members’ rights would, as a practical matter, be dispositive of the interests of other class members; • injunctive or declaratory relief actions – class actions where defendants have acted or refused to act on grounds that apply generally to the class, such that final injunctive relief or corresponding declaratory relief is appropriate to the class as a whole; and • monetary actions – class actions seeking monetary relief, where the court finds that questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other avail- able methods to fairly and efficiently adjudicate the controversy.
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