USA – NEW YORK Law and Practice Contributed by: Sam Lieberman, Claiborne Hane and Ben Hutman, Sadis & Goldberg LLP
the same class of litigants (or an overlapping class), the court must appoint a lead plaintiff (ie, class repre- sentative) to oversee the litigation until the court rules on whether the case can proceed as a class action. Litigation then advances normally through dispositive motion practice, discovery and depositions, similar to how typical bilateral cases prepare for trial. In class action litigation, however, the lead plaintiff files a motion for class certification prior to trial, seeking a court order appointing them as the class representa- tive. The deadline for motions for class certification is set by the court, usually during discovery. The federal rules require that a motion for class certification be filed at “an early practicable time” (Rule 23 (c)(1)(A)). This lead plaintiff’s class certification motion must satisfy the requirements set forth in Rule 23 in federal court litigation or Article 9 in New York state court litigation. Federal class actions under Rule 23 must satisfy a two-step certification analysis. First, the plaintiff must satisfy the four prerequisites of Rule 23 (a): numerosity, commonality, typicality and adequacy of representation. If those are met, the action must also fit within one of the three categories of Rule 23 (b): (b)(1) for risk of inconsistent adjudications, (b)(2) for injunctive or declaratory relief or (b)(3) for damages actions where common questions predominate and a class action is superior to individual suits. The motion for class certification must be supported by eviden- tiary submissions, and federal courts apply a “rigorous analysis” standard, sometimes requiring mini-merits inquiries to test whether the Rule 23 requirements are truly met ( Wal-Mart Stores, Inc. v Dukes , 564 U.S. 338, 350–51 (2011)). Once certified, Rule 23 (b)(3) classes for monetary damages require notice to the other class members, using the “best practicable” method, informing absent class members of an opportunity to opt out of the class action. Class action settlements must receive court approval after a fairness hearing under Rule 23 (e), and class members may object before the court issues a final judgment. Judgments rendered in certified federal class actions are binding on all members who do not opt out.
New York’s class action procedure under Article 9 follows a similar structure but applies more flexibly. Plaintiffs must demonstrate five elements: numeros- ity, commonality, typicality, adequacy and that a class action is a “superior” method of adjudication. Unlike Rule 23, Article 9 does not divide class actions into three categories, and courts generally apply a more liberal standard, resolving close questions in favour of certification. After certification, notice in New York is discretionary rather than automatic, and opt-out rights are typically available to all class members regardless of the relief sought. Settlements also require court approval under CPLR 908, but historically some state courts enforced that rule only for certified classes – a split only recently settled by the New York Court of Appeals in Desrosiers v Perry Ellis Menswear, LLC , 30 N.Y.3d 488, 499 (2017), which held that notice and approval are required even for settlements that are reached before a ruling on a motion for class certification. Overall, while the pro- cedural stages of filing, certification, notice, trial and settlement mirror the federal model, New York courts emphasise flexibility and access, whereas federal courts emphasise structure and judicial gate-keeping. 3.3 Standing Standing is a constitutional prerequisite to invoking the jurisdiction of the courts. Article III of the US Con- stitution limits federal judicial power to “cases” and “controversies”, which requires a plaintiff to demon- strate (i) an injury in fact (ii) that is fairly traceable to the defendant’s conduct and (iii) likely to be redressed by a favourable decision ( Lujan v Defenders of Wild- life , 504 U.S. 555, 560–61 (1992)). The Supreme Court defined injury in fact as “an invasion of a legally pro- tected interest which is (a) concrete and particular- ized, and (b) actual or imminent, not conjectural or hypothetical” (id at 560). A mere interest in seeing the law obeyed or a generalised grievance about govern- ment action is not sufficient. In 2016, the Supreme Court emphasised that a “con- crete” injury must be “real, and not abstract”, though it need not be tangible ( Spokeo, Inc. v Robins , 578 U.S. 330, 340 (2016)). Even where Congress creates statu- tory rights, plaintiffs must still show a concrete harm; “a bare procedural violation, divorced from any con-
364 CHAMBERS.COM
Powered by FlippingBook