USA Law and Practice Contributed by: Roger Cooper and Lina Bensman, Cleary Gottlieb Steen & Hamilton
having experienced the same harm or having the same grievance as other class members. There is no specific numerical floor or ceiling as to the number of members in a class action, but the proposed class must meet the “numerosity” requirement under Rule 23 (a) of the Federal Rules of Civil Procedures, as noted in 3.2 Overview of Procedure . In the Second Circuit, numerosity is presumed if the class contains at least 40 members. ( Ansoumana v Gristede’s Operat- ing Corp , 201 F.R.D. 81, 85 (S.D.N.Y. 2001), quoting Consolidated Rail Corp v Town of Hyde Park , 47 F.3d 473, 483 (2d Cir.1995).) Under Rule 23 and the rules of most states, class actions generally proceed on an opt-out basis. Wheth- er a class member may opt out of a class depends on the relief being sought. • In an action for monetary relief, once a class is certified, class members are automatically part of the class and must affirmatively opt out, or they will be bound by the resolution of the class action litigation. • In an action for injunctive or declaratory relief, or an action that seeks to prevent inconsistent adjudica- tions with the same defendants or distribute limited funds, there are no opt-in or opt-out procedures, because the court’s rulings will impact all class members. 3.5 Joinder Procedurally, plaintiffs can move to join additional defendants through the following. • Permissive joinder (Rule 20) – Rule 20 permits the joinder of parties when the claims arise out of the same events and involve the same legal questions. Joinder of parties under Rule 20 is not required and is often referred to as “permissive” joinder. Rule 20 allows the addition of defendants who were involved in the same transaction or occurrence that forms the basis of the class action. • Necessary joinder (Rule 19) – Rule 19 states that a party is necessary to a lawsuit when one of two conditions arise: (i) the party must be present in order to award “complete relief,” or (ii) the party has an interest in the action so that their interest cannot be represented and protected without that
party appearing in the lawsuit. In class actions, this might apply when a party’s absence would prevent complete relief to the class or expose existing par- ties to inconsistent obligations. Procedurally, defendants can move to join additional defendants through the following. • Impleader (Rule 14) – Rule 14 governs the proce- dures and requirements of impleader, also some- times known as third-party practice. This allows existing defendants to bring in third parties who may be liable for all or part of the plaintiff’s claim. By impleading a third-party defendant, the original plaintiff is now engaged in a lawsuit against the original defendant; and the original defendant is a plaintiff against the third party. The court has broad discretion to manage class actions and determine whether additional parties should be joined. It is generally easier to join parties early in the litigation, before significant discovery has occurred. It is necessary to determine whether juris- diction may be acquired over the additional parties before trying to join them in a lawsuit. All standard jurisdictional requirements must be met for any addi- tional parties. 3.6 Case Management Powers of Courts In addition to the broad inherent authority that courts have to manage the litigations that are before them, as noted in 3.5 Joinder , courts have broad discretion to manage specific aspects of class actions, including in the following ways: • determining whether a putative class action meets the certification requirements of Rule 23 upon the filing of a motion for class certification; • appointing class counsel; • when multiple putative class actions complaints are filed by different plaintiffs (represented by different counsel) within a short period of time, deciding which of the competing plaintiffs will be the lead plaintiff (and, consequently, which law firm will take the lead in the litigation) – it is possible for several plaintiffs to co-lead a case, with several law firms sharing a lead counsel role;
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