USA Law and Practice Contributed by: Roger Cooper and Lina Bensman, Cleary Gottlieb Steen & Hamilton
3.9 Funding and Costs In the United States, named plaintiffs seeking to represent a class often enter into contingency fee arrangements with their attorneys. If plaintiffs recover monetary damages – either through a judgment or settlement – their attorneys recover a portion of that amount consistent with Rule 23 (h) of the Federal Rules of Civil Procedure. Typically, a contingency fee arrangement provides for a percentage of the total recovery to be paid to plaintiffs’ attorneys, or for a multiple of fees incurred based on the number of hours worked. Third parties also sometimes fund class action litiga- tion (or fund class members who opt out to pursue their claims separately). The practice has been rap- idly growing, and is expected to continue its growth over the next several years. There is no current federal legislative restriction limiting commercial funding for class claims. Federal law prohibits the Legal Services Corporation, a non-profit corporation that is the larg- est single funder of civil legal aid in the country, from funding class action lawsuits, and some states have adopted similar restrictions on public funding for class actions. (See 42 U.S.C. 2996–2996l.) As in any other civil litigation, parties to a class action or putative class action may also attempt to shift the costs of expenses and attorneys’ fees to the opposing party. Costs not including attorneys’ fees – such as travel expenses, filing fees, and other costs or fees – may be allowed to the prevailing party under Federal Rule of Civil Procedure 54 (d)(1). Attorneys’ fees are considered separately. Under Federal Rule of Civil Procedure 23 (h), the court may award reasonable class action attorneys’ fees that are authorised by law or the parties’ agreement. A class member, or a member of the party from whom pay- ment is sought, may object to the motion for attor- neys’ fees, and the court may hold a hearing on the motion or refer the amount of the award to a special master or magistrate judge as provided in Rule 54 (d). 3.10 Disclosure and Privilege United States discovery is conducted pre-trial, during a specified phase. Discovery in class actions lawsuit follows the same rules as in other civil litigation cases.
• when appropriate, dividing a class into subclasses (eg, when the class definition includes people with similar claims but divergent interests or positions); • when appropriate, creating classes with respect to particular issues; • issuing orders that determine the course of pro- ceedings or prescribing measures to prevent undue repetition or complication in presenting evidence or argument; • managing communications with class members, including notices from the court to the class (eg, certification notice, settlement notice), communica- tions from class members (eg, decision to opt in/ opt out) and communications between the parties and class members; • assessing reasonable attorney’s fees for class counsel; and • approving class settlement. 3.7 Length and Timetable for Proceedings The length of a class action proceeding will depend on the types of claims involved and the court in which the case is brought. As many class actions are settled before reaching a final adjudication on the merits, they may be concluded within a broad range of time, from a few months to a few years. Reaching finality generally takes a significant amount of time, including because there may be appeals at multiple stages. 3.8 Mechanisms for Changes to Length/ Timetable/Disposal of Proceedings Courts have extremely broad discretion to manage the schedule of a class action proceeding, and can set leisurely or aggressive schedules for discovery, briefing and trial. Courts can also require potentially dispositive issues to be briefed sua sponte. Parties can request that the court set deadlines for dates that the parties request or agree to, and can also ask that existing deadlines be modified or extended. Requests for reasonable extensions are usually granted. The parties can seek summary judgment to avoid trial. A motion for summary judgment tests whether, based on all the evidence (including evidence obtained dur- ing discovery), there are any genuine issues of mate- rial facts and whether the movant is entitled to judg- ment as a matter of law.
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