USA – NEW YORK Law and Practice Contributed by: Sam Lieberman, Claiborne Hane and Ben Hutman, Sadis & Goldberg LLP
2. Legal Framework 2.1 Collective Redress and Class Action Legislation Under federal law, litigants can seek collective redress by filing a class action complaint pursuant to Rule 23 of the Federal Rules of Civil Procedure. The named plaintiff must satisfy four prerequisites set forth in Rule 23 (a) – numerosity, commonality, typicality and adequate representation. This requires a litigant to show that: • the class is so numerous that it would be impracti- cable to join each class member in the litigation; • the class members’ claims share common issues of law and fact that merit common consideration by the court; • the proposed class representative’s claims are typi- cal of the class’s claims; and • the class representative and class counsel will adequately represent the class. Rule 23 (a) “effec- tively ‘limit[s] the class claims to those fairly encompassed by the named plaintiff’s claims’” ( General Telephone Co. of Southwest v Falcon , 457 U.S. 147, 156 (1982)) (citation omitted). Rule 23 (b) identifies three types of federal class actions: • mandatory class actions necessary to avoid the risk of inconsistent or prejudicial adjudications; • mandatory class actions seeking injunctive or declaratory relief; and • most commonly, class actions seeking monetary damages. Monetary damages class actions require a litigant to further establish that (i) a class action is “superior” to other methods of adjudication and (ii) common ques- tions of law and fact “predominate” over individual- ised questions. New York state court class actions are governed by Article 9 of New York’s Civil Practice Law and Rules. There are numerous similarities between Rule 23 and its New York state analogue, as Article 9 was modelled on the modern Rule 23. The most significant difference is that New York’s Article 9 does not provide three cat-
egories of class actions with different additional stat- utory requirements, but instead requires litigants to merely show that a class action is a “superior” method of adjudication in comparison to the alternatives. New York courts have traditionally interpreted Article 9 lib- erally in favour of class certification, particularly for consumer protection and wage claims. 2.2 Scope of Areas of Law to Which the Legislation Applies While there are no explicit prohibitions on the legal claims that a litigant may seek to have certified in a class action, there are practical limitations. For exam- ple, courts may be reluctant to certify a class of legal claims for damages arising out of fraudulent oral mis- representations if the putative class members were told different things by different people, and suffered different harms, such that individual issues of fact and law predominate over common ones. 2.3 Definition of Collective Redress/Class Actions The US Supreme Court described class actions as a procedural device that “enables a federal court to adjudicate claims of multiple parties at once, instead of in separate suits” ( Shady Grove Orthopedic Assocs., P.A. v Allstate Ins. Co. , 559 U.S. 393, 408 (2010)). It is “an exception to the usual rule that litigation is con- ducted by and on behalf of the individual named par- ties only” ( Wal-Mart Stores, Inc. v Dukes , 564 U.S. 338, 348 (2011)) (citation omitted). 3. Procedure for Bringing Collective Redress/Class Actions 3.1 Mechanisms for Bringing Collective Redress/Class Actions No response has been provided in this jurisdiction. 3.2 Overview of Procedure A class action begins when one or more plaintiffs file a class action complaint in federal or state court on behalf of a class of similarly situated plaintiffs. The class action complaint must include specific class action allegations and a class definition that precisely describes whose legal claims would be adjudicated in the action. If more than one plaintiff seeks to represent
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