USA – NEW YORK Law and Practice Contributed by: Sam Lieberman, Claiborne Hane and Ben Hutman, Sadis & Goldberg LLP
Sadis & Goldberg LLP 551 Fifth Avenue, 21st Floor
New York NY 10176 USA
Tel: +1 212 573 8164 Fax: +1 212 573 6663 Email: info@sadis.com Web: www.sadis.com
1. Policy Development of Collective Redress/Class Action Mechanisms 1.1 History and Policy Drivers of the Legislative Regime The class action in United States federal courts traces its origins to the 19th century, where representative suits were permitted when joinder of all interested parties was impracticable. The original version of the rule governing federal class actions, Federal Rule of Civil Procedure 23 (“Rule 23”), was adopted in 1938. It loosely categorised class action lawsuits into “true”, “hybrid” and “spurious” actions – labels that gener- ated confusion and inconsistent treatment. Rule 23 underwent a major reform in 1966, when it was comprehensively rewritten into its modern struc- ture. Most notably, the reform distinguished between three categories of class actions: • class actions necessary to avoid the risk of incon- sistent or prejudicial adjudications; • class actions seeking injunctive or declaratory relief; and • most common, class actions seeking monetary damages. This 1966 revision transformed class actions from a rarely used procedural relic into a powerful tool for aggregate litigation, particularly in civil rights, con- sumer protection and securities law cases. Subse- quent decades saw first expansion and later retrench- ment, including:
• the enactment of the Class Action Fairness Act of 2005, which channels large multistate class action suits from state courts into federal courts; and • the US Supreme Court imposing stricter class certification standards in cases such as Wal-Mart Stores, Inc. v Dukes , 564 U.S. 338 (2011) and Comcast Corp. v Behrend , 569 U.S. 27 (2013). New York followed a parallel but later trajectory. His- torically, representative actions in New York were gov- erned by a provision dating back to 1849, allowing suits “when the question is one of a common or gen- eral interest of many persons”. However, the modern New York class action did not take shape until the enactment of Article 9 of the New York Civil Practice Law and Rules (CPLR) (“Article 9”) in 1975. New York legislators modelled Article 9 on the Rule 23 reforms in 1966. But they intentionally made New York’s rules more flexible by omitting the rigid framework of three categories of class actions. 1.2 Basis for the Legislative Regime, Including Analogous International Laws Under federal law, class actions are authorised by Rule 23, one of the courts’ procedural rules. Under New York law, class actions are authorised by Article 9, a statute. 1.3 Implementation of the EU Collective Redress Regime There is no applicable information in this jurisdiction.
362 CHAMBERS.COM
Powered by FlippingBook