Class Actions

Special Multiparty Litigation: Supplement

Interpleader
Rule 22: permits interpleader.
- It can only be used if some basis for federal SMJ and some basis for federal venue apply.
The Class Action
- Brought by or against a representative (or multiple representatives) on behalf of a group.
- Raises significant due process issues, because they do bind persons who are not technically parties.
Development of Federal Rule 23
- Federal Rule 23 governs class action practice in federal court.
- Almost all class actions involve a P class, in which the class is asserting a claim (or claims) against a D (or Ds).
o Possible to have a D class.
o Also possible to have P class against D class.
Class Representatives and Class Members
- The person (or persons) suing on behalf of a P class is named as a formal party in the case. (representative, named
representative)
- All federal rules relating to parties apply to her e.g. must respond to interrogatories.
- Privity
- A valid final judgment on the merits binds parties to the case and those who were represented by parties to the case.
- Class members not parties not subject to various Federal Rules
- Party opposing the class may have a legit interest in obtaining information from class members.
- Courts on occasion have allowed members to answer questions under oath.
o Though class members are not parties, they have no license to ignore court orders. Can be dropped. Brennan v.
Midwestern United.
Potential for Abuse
- Irony praised for its efficiency because it permits one large case to take the place of thousands of smaller cases. But, when
it involves multiple small claims, the class action creates litigation that otherwise would not exist at all.
- Enormously coercive. Because class action permits the assertion of huge potential liability in a single case, it creates
overwhelming pressure on the D to settle.
- Some empirical studies suggest that class claims (at least in certain substantive areas) are settled regardless of the class claim
on the merits.
- Usual case, the representative does not recover anything other than personal damages.
o Usually, the representative is motivated by principlea desire to get justice for the class.
- Also possible that the real moving party is the lawyer contingency fee basis.
- One concern of class action concerns sweetheart deals were D offers to pay lawyer a lot and give coupons to the class.
big reason for the passage of the Class Action Fairness Act.
Role of the Court
- The only person who can protect the class from overreaching by lawyers is the courtthe judge who oversees the class
action.
- Rule 23(e) provides that no certified class action may be settled or voluntarily dismissed without court approval.
Due Process: How Can Class Members Be Bound by a Class Judgment
Hansberry v. Lee (1068)
- Concerned the enforcement of a racially restrictive covenant in a subdivision in Chicago. The covenant forbade homeowners
in the subdivision (who were white) from renting or selling their property to non-whites.
- Such covenants were generally enforceable (before Shelley v. Kramer)
- Covenant in Hansberry provided that it would be effective only if 95% of the frontage in the development signed it.
- Outcome depended upon the validity of the judgment in the earlier case of Burke v. Kleiman.
o In Burke, a white homeowner named Kleiman did not favor the restrictive covenant, rented property to a black
family named Hall.
o Other owners, led by Burke, sued for injunctive relief stipulated that 95% had signed the covenant. In fact only
54% percent signed the covenant. because of stipulation court upheld the covenant. Was a class action, thus
arguably bound all owners in the subdivision.
- A few years later, white homeowner entered into contract to sell house to black family Hansberry. Lee sued in state court to
stop the sale.

Hansberry proved only 54% of the relevant homeowners ever signed the covenant.
Court recognized, but concluded that the judgment in Burke v. Kleiman bound the people who were trying to sell the
Hansberrys.
Holding: SC reversed. Held that the people selling to the Hansberrys were not bound by the class action judgment in Burke.
Generally, one cannot be bound by a judgment unless she is a party to the case. However, to an extent not precisely defined
by judicial opinion, a judgment in a class action may bind members of the class or those represented who were not made
parties to it. Here, the claims of the class members were different, because they were not held jointly. Rather, each person
who signed the covenant entered an agreement with the others who signed the agreement. Those in favor of the covenant and
those opposed to it are not members of the same class. So a representative from one camp cannot bind someone in the other.
Takeaway: Under Hansberry, due process permits a class judgment to bind class members only if they are members of the
same class as the representative. If the representative and the class members disagree on the key issue in the litigation, they
are not members of the same class; the representative cannot represent people who disagree with her on that key issue. Need
proper represenatation.
o Can be disagreement on remedy and strategy. SLA as class members and the representative are united on the core
issues in litigation, however, there will be no constitutional problem with the judgments binding all class members.
o Notice: Nothing stated in Hansberry. Later Mullane notice reasonably certain to reach most of those interested in
objecting is likely to safeguard the interest of all, since any objection sustained would inure to the benefit of all.
Rule 23: requires notice of the pendency of class action in only one of three types of class action. IN all class cases, however,
the representation must be adequate. So the drafters of the Rule seem to have concluded that, at least in some types of class
action, adequate representation (without notice) satisfies due process.

Smith v. Swormstead
- Class of one group of clergy members sued another group to recover its share of a book fund established by the church.
Members split North-South over slavery. Though 5k preachers were not joined as parties, all were bound by the class
litigation because the parties interested are numerous, and the suit is for an object common to them all.
Supreme Tribe of Ben_hur v. Cauble
- A class-action on behalf of the members of a fraternal benefits organization bound all 70k members. As in smith, the class
members shared a identical and non-separable interests.
Prerequisites of Any Class Action Under Rule 23 (a)
- The rule prescribes specific factors for determining at the outset whether a case should proceed as a class action. Satisfaction
of the requirements of Rule 23 will avoid the constitutional problems of the type encountered in Hansberry.
- The class representatives complaint contains all the elements of any complaint under Rule 8(a). alleges it is a class action,
will define the class, says she is suing on behalf of the class.
- The case does not become a class until the court enters an order certifying it as such.
- Thus, at some point after filing the case (and after the D has responded to the complaint) the class representative will make a
motion to certify the case as a class action.
o Focus on the motion will be whether the class 1) satisfies the prerequisites of a class in Rule 23(a), and 2) falls
within one of three types of classes recognized in Rule 23 (b).
Implicit Requirements of a Class
- The prudent lawyer will continually assure the judge that his will be a manageable task.
- There is no need to name each class member. Defining the group by salient characteristics is sufficient. The idea is to reassure
the judge that if the court eventually has to distribute a remedy, it can find the people who should get it.
- Different level of specificity depends on the type of class.
- Class can include future members, but only in rare instances group needs to be well-defined, relatively small, and discrete.
o Robertson v. NBA: Basketball player brought suit against merger, saying it brought anti-competitive behavior.
Wanted to include members that would become basketball players in the future. Court said ok, because only so
many people would become basketball players in the future and they would be easily identifiable and manageable.
The Four Express Prerequisites
- Party seeking certification has burden of persuading court that all requirements are satisfied.
1. Rule 23(a)(1) Numerosity:
o Does not appear in Rule 23; courts made it up to cover the requirement in Rule 23 (a)(1) that the class be so
numerous that joinder of all members is impracticable.:
Otherwise the affected persons can join as co-plaintiffs under Rule 20(a)(1).
o Will be done on a case-by-case basis.
o Sheer number of putative numbers is a factor. No magic number. General rule
Fewer than 21 insufficient, more than 40 sufficient, in between varies depending on other factors.
However, even exceptions to these.
o Geographic dispersion of class members is relevant.
o For diversity of citizenship purposes looks only at representative if joinder would make it impossible to satisfy
complete diversity, joinder is arguably impracticable.

If individual claims are so small that members would not be expected to pursue them, joinder may be seen as
impracticable.
Philliphs Petroluem v. Shutts: Case involving a class of claimants whose claim averaged 100 dollars; the
Court explained most Ps would have no realistic day in court if class action were not available.
o Mental disability, ability to speak English, individuals too intimidated alone factors to be considered.
2. Rule 23 (a)(2): Commonality:
o The rule requires there be questions of law or factcommon to the class.
o Through the years, the only difficult issue about commonality came up not under Rule 23 (a)(2), but under Rule 23
(b)(3). That provision requires that common questions predominate over individual questions.
Wal-Mart Stores, Inc. v. Dukes
- Court reversed a Ninth Circuit decision which upheld a class of potentially 1.5 million members.
- Consisted of female employees of Wal-Mart, and alleged gender discrimination in violation of Title VII.
- P asserted discretion of managers with regards to setting pay and awarding promotion, exercised disproportionately in favor
of men.
- Sought desultory and injunctive
- Punitive and back-pay
o

Holding: Court held 5-4 that the class failed to satisfy commonality requirement of Rule 23 (a)(2). (Court held unanimously that the
class could not be certified under Rule 23 (b)(2).)
- Majority said Rule 23 (a)(2) requires only a single question of law or fact in common to the class, but held that there was
none. Saying that all Ps suffered a violation of federal employment law was insufficient. Rather, they need to have suffered
the same injury so their claims can productively be litigated at once.
- The court required evidence supporting the Ps contention that they satisfied the prerequisites of Rule 23 (a) Court held that
a party seeking class certification must proffer convincing proof that the requirements are met.
- Ps also failed in their attack on the Wal-Mart policy of allowing local managers to exercise discretion over pay and
promotion. They failed to identify a common mode of exercising discretion that pervades the entire company. Anecdotal
evidence did not suffice Affidavits from some members not good enough.
3.

4.

Rule 23(a)(3): Typicality:

o Mandates that the representative claims (defenses) be typical of those of the class.
o Important for due process. Without a typical claim, it is difficult to see what incentive the representative would have
to assert the class claims vigorously.
o Rule 23 (a)(3) does not require that the representatives claims be exactly the same in all particulars of the class.
Courts focus on essential characteristics of the claims and recognize that minor factual differences, even as to
damages, will not make class treatment improper.
o It is important that the representative suffer the same general kind of harm suffered by the class.
o The fact that a representative is subject to a defense that class members generally are not may preclude a finding of
typicality (or adequacy of representation)
o Also important that the representative suffered a typical harm at the hands of the same Ds as class members.
Three ways around this problem:
First, case may be structured with multiple representatives, one having deal with each of the Ds.
(R1 deal with those with D1 etc.)
o Will not work if too many Ds for practicable joinder. might be structured as D class.
Second, if Ds had engaged in a conspiracy the representatives need not have had dealings with
each D.
Third, it is possible that members of a class have a juridical relationship that enables the court to
conclude that one may speak for and bind the others. seems limited to persons who occupy
coordinate governmental positions. E.g. jailers of a single state.
Rule 23 (a)(4)(and Rule 23 (g)): Protecting the Class Interests:
o Requires that the representative fairly and adequately protect interests of the class. assuring that class members
can be bound consistent with due process.
o Rule 23(g) court must appoint class counsel, who is also charged with providing fair and adequate representation of
class members interests.
o In contrast to class counselwho, under rule 23(g)(2), must be the applicant best able to represent the interests of
the classthere is no requirement that the class representative be the best available. Rule 23(a)(4) requires
adequate protection of the class interests fiduciary duty of loyalty.
o Class representative must litigate with vigor need not have detailed knowledge of the law, but must have some
understanding of the nature of the dispute.
o Lawyers fee often contingency basis.

But representative must pay various coasts of the litigation as they are incurred Court must be convinced that the
representative can finance this aspect of litigation.
E.g. In a class action under Rule 23 (b)(3), the representative must pay to give the required notice to class
members.

Types of Class Actions Recognized Under Rule 23(b)

- Assuming party convinces court it has the prerequisites of Rule 23(a) then demonstrate that the case fits into of the types
of classes Recognized by Rule 23 (b).
- Must be at least one of these, can be more.
Rule 23 (b)(1): The Prejudice Class Action
- Because the Rule is concerned with avoiding potential prejudice (either to absentees or to a party) these are mandatory
classes, because members have no right to request exclusion. (Like Rule 19(a)(1)(B), except here so many absentees that
joinder is not feasible)
- Rule 23(b)(1)(A) permits a class action if individual suits would create a risk of inconsistent or varying adjudications with
respect to individual class members that would establish incompatible standards of conduct for the party opposing the
class.
o E.g. one ruling might force D convert stocks, others not to cant satisfy one without violating the other.
o As with Rule 19, inconsistent outcomes in damages claims will not satisfy Rule 23(b)(1)(A).
- Rule 23 (b)(1)(B) provides for a class action if individual suits would create a risk of adjudications with respect to
individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to
the individual adjudications or would substantially impair or impede their ability to protect their interests.
o E.g. Limited fund for recovery.
o Courts take different approaches about the degree of proof needed to invoke Rule 23 (b)(1)(B)
- Actions under Rule 23 (b)(1) are mandatory class actions class members have no right to opt out.
- Sometimes Ds will seek certification of a P class under Rule 23(b)(1)(B) might prefer to do it all at once.
o Ps might prefer to do it individually, could possibly collect more.
- Ortiz v. Fibreboard Corp.
o Three requirements for a limited fund class action
Parties must demonstrate (not merely assert) that the available funds are insufficient to cover numerous
claims.
The proposed distribution must be equitable.
Court was quite concerned that the agreement permitted the manufacturer to retain nearly all its net worth
- In addition to limited fund, there is another theory called, limited generosity, on which Rule 23(b)(1)(B) might be certified.
o According to the argument, the court should should certify a class action for punitive damages and none will be left
out.
- No matter what theory is used, it is important that all potential claimants be members of the class.
Rule 23(b)(2): Injunctive or Declaratory Relief
- Rule 23(b)(2) class action is appropriate when the party opposing the class (usually the D) has acted or refused to act on
grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate
respecting the class as a whole.
- Mandatory class members have no right to exclusion.
- Typical class actions under Rule 23(b)(2) deal with employment discrimination or with claims to restructure public
institutions.
- A class judgment will permit any member of the class to enforce the injunction. (Against the employer for instance.)
- Rule 23(b)(2) speaks only of injunctive and declaratory relief.
o Some courts have permitted classes to recover money in limited circumstances.
E.g. back pay from past promotion discrimination
Wal-Mart v. Dukes
- Court rejected practice of permitting recovery of individual damages in a Rule 23(b)(2) class.
- In rejecting the rule, court emphasized two points:
o The injunctive or declaratory relief sought must be the same for each member. A class action cannot be used to
vindicate unique individual equitable claims against the D.
o Second, Rule 23 (b)(2) does not authorize class action when each member would be entitled to an individualized
award of monetary damages. This is true even if the award is of back pay, notwithstanding that back pay may be
considered equitable relief.
- Beyond this, the Court hinted that due process requires that class members be given notice and the right to opt out of any
class action seeking monetary relief.
Rule 23(b)(3): Common Questions Predominate
- A class action is appropriate under Rule 23(b)(3) when, 1) common questions predominate over individual questions, and 2)
the class action is superior to other means of adjudicating the dispute.

o Usually, but not always, involves claims for damages.

Because the Rule 23(b)(3) class tends to be a disparate group, the drafters imposed special procedural protections.
o First, the court must give notice to all class members of the pendency of the class action, including individual notice
to those who can be identified with reasonable effort.
o Second, class members have the right to opt outto leave the class action and proceed on their own (or not sue at
all.)
o These protections are required only in the Rule 23(b)(3) class action.
The Need for Predominant Common Questions
- The questions of law or fact common to class members must predominate over any questions affecting only individual
members. (Need not share every issue in the case)
o Rules Advisory Committee concluded in its Notes that a mass accident resulting in injuries to numerous persons
would ordinarily not be appropriate for class action too much variance
- However, courts changed attitude to this and have allowed for mass tort actions in certain situations. Huge burden on the
judicial system with mass tort litigation.
o E.g. cataclysmic event such as large gas explosion.
o Jenkins Tort action where D used a common state of the Art defense for asbestos product.
A good example of how it is easier to find predominance of common questions if one defines the class
relatively narrowly.
Superiority of the Class Action
- Superior to other available methods for fairly and effectively adjudicating the controversy. 4 non-exclusive factors.
o Drafters clearly intended to force the judge to consider whether any other toolsjoinder, multidistrict litigation,
consolidation etc.might be more readily managed than the class action.
Wont be easy to manage, just has to be better.
-

Filing and Certification of a Class Action (and Possible Appellate Review of the Certification Decision)
Putative and Certified Classes
- Starts by filing a complaint, just a putative class. Not considered a class until the court certifies it.
- Rule 23 (c)(1)(A) says the court must make the certification determination at and early practicable time. often after
discovery, the representative might refine the class definition in the complaint.
- Often a watershed moment hugely litigated. If accepted as a class huge incentive to settle by D. If the claims
individually are small, litigation might not proceed.
Possible Appellate Review of Certification Decision
- Federal Rule 23(f) grants courts of appeals the discretion to review orders either granting or denying class certification.
- Study found that 53% of the cases in which courts of appeals undertook review under Rule 23 (f) resulted in reversal of class
action. Only 10% resulted in reversals of denial. good for Ds, bad for Ps.
- Most state courts have not adopted Rule 23(f) strong incentive to litigate in state court. However, Ds been given a strong
tool to remove state court class actions to federal court.
Definition of the Class and Appointment of Class Counsel
- IF the district court grants certification, it enters an order that, under Rule 23 (c)(1)(B) must define the class and the class
claims, issues, or defenses, and must appoint class counsel under Rule 23(g). not necessarily permanent. Rule 23(c)(1)(C)
expressly recognizes that an order regarding certification may be altered or amended before final judgment.
- Unless a statute provides otherwise, the court certifying a class action must appoint class counsel.
- Rule 23(g)(4): Class counsel must fairly and adequately represent the interests of the class.
- Rule 23(g)(1)(A) lists various factors the court must consider in making a finding, including work undertaken by the lawyer
in identifying and investigating the class claims, experience in handling complex litigation, her knowledge of the applicable
law, and the resources she will commit to representing the class.
- Rule 23 (b)(1)(B) counsels the court to look to any other facts pertinent to the lawyers ability to represent the class interests
fairly and adequately.
- Rule 23 (g)(2) provides detailed procedures for the appointment of class counsel.
- Multiple applicants, must appoint the best able to represent the interests of the class. Rule (g)(2)(B)
- The award may include any relevant provisions about the award of attorneys fees or nontaxable costs under Rule 23(h).
Certification on Fewer than all issues; Subclasses
- E.g. might be possible to have a class determination of the Ds liability. If successful, the court might permit individual proof
of damages.
- Subclasses, for instance if a class asserts a claim on which the standard of liability varies slightly from state to state.
- Courts take inconsistent with problem of authority with Rule 23(b)(3) classes, in which common questions must predominate
over individual questions.
Can the Court Look at the Merits?
- Court may consider the merits of the underlying dispute in ruling on class certificationbut only as required to make that
ruling.
Wal-Mart v. Dukes

First, it haled that a party seeking class certification must proffer convincing proof that the requirements are met.
Second, it hinted strongly that when considering expert witness testimony in the context of a certification, the trial judge must
apply the full federal standard for admissibility.

When a Class Might Be Treated as Such Even Before Certification

The SC has held that filing of a class action tolls the statute of limitations for all class members, even if class certification is
later rejected. Crown, Cork, & Steal Co. v. Parker
Notice to Class Members and Opting-Out
- Rule 23 has three provisions about notice.
- The first, in Rule 23 (c)(2)(B), is notice of the pendency of a class actions, which applies only to Rule 23 (b)(3) classes.
- Second, in Rule 23 (c)(2)(A), permits the court to give notice of the pendency of class actions under Rule 23 (b)(1) and (b)
(2).
- Third, in Rule 23 (e)(1), concerns notice of a settlement or dismissal of a class action. It applies to all classes (not just Rule
23(b)(3) classes).
- Rule 23(b)(3) class presents great stress between the desire for efficient resolution of numerous claims and the requirements
of due process. drafters imposed a notice requirement that does not exist in the other class actions.
- Under Rule 23 (c)(2)(B), the court is required to direct notice to all class members, including individual notice to all
members who can be identified through reasonable effort.
o In Wal-Mart the Court hinted that notice and the right to opt-out are constitutionally required in classes seeking
monetary relief.
- Rule 23(c)(2)(B) requires the notice to inform class members of these things: (1) the nature of the action;(2) the definition of
the class certified;(3) the class claims, issues, or defenses;(4) that a class member may enter an appearance through an
attorney if the member so desires;(5) that the court will exclude from the class any member who requests exclusion; (6) that
the class judgment will bind class members who do not properly request exclusion.
- Requesting exclusion (opting out) affirms to each class member that she does not have to depend on the class
representative and class counsel to protect her interest.
- Rule 23(c)(2)(B) requires that this notice be the best notice that is practicable under the circumstances including individual
notice to those members who are identifiable with reasonable effort.
o More stringent than the Constitution would require. Mullane v. Central Hanover Bank.
- Such notice is usually given by mail.
o It is not unusual to have some members who are reasonably identified and some who are not; in such a a case,
individual notice is given to those in the former group and publication noticenewspapers or televisionis
sufficient for the latter.
- Rep must foot bill of individual notice can be expensive, decreases likelihood of class action.
- The Rule 23 (c)(2)(B) notice emanates from the court.
o Court usually requires the lawyers to work together to craft something both sides can live with. often
problematic.
- Rule 23(c)(2)(B) requires that the notice clearly and concisely state the required contents in plain, easily understood
language.
- For Rule 23(b)(1) and (b)(2) no notice is required.
o But Rule 23(c)(2)(A) does permit the court, in its discretion, to give notice in such cases.
- Rule 23(d)(1) gives the court great discretion in handling class litigation. courts have the discretion to permit opt outs in
23(b)(1) and (2) cases.
- Drafters apparently concludedgiven the close relationship of most class members in Rule 23 (b)(1) and (b)(2) classesthe
adequacy of representation satisfies due process.
Wal-Mart
- While not holding that due process requires notice and the right to opt-out anytime a class seeks monetary recovery, the Court
hints in that direction. By implication, Rule 23(b)(1) and (b)(2) classes (which after Wal-Mart will rarely involve claims for
money) can be bound by representation, without notice and opt-out.
Judgment, Settlement, and Dismissal of a Class Action
- A judgment in a class action binds all class members, except those who properly requested exclusion from a Rule 23 (b)(3)
class. Rule 23(c)(3).
- Rule 23 does not permit the parties to settle or to enter voluntary dismissal of a certified class action. Rule 23(e) requires
court approval.
o Rule 23(e) applies only if the court has actually certified the class, and only if the settlement, dismissal or
compromise affects class issues.
- If the settlement appears fair to the court, it will direct notice under Rule 23(e)(1), which requires that the court must direct
notice in a reasonable manner to all class members who would be bound by the proposed settlement, voluntary dismissal, or
compromise. notice applies in all class actions.
- Under Rule 23(e)(5), class members have the right to object to the proposed settlement, voluntary dismissal, or compromise
of the class action.

The court holds a fairness hearing to determine whether to approve the settlement. Though the judge will consider the
reaction of the class members to the proposal, the court retains the ultimate authority whether to approve. Rule 23(e)(2).
Under Rule 23(e)(4), the court may refuse to approve settlement of a certified Rule 23(b)(3) class action unless the settlement
affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request
exclusion but did not do so.
In addition, Rule 23 (e)(3) requires the parties seeking approval to identify any agreement made in connection with the
proposed settlement, voluntary dismissal, or compromise.
Sometimes lawyers will agree to settlement terms before that notice is sent out. In such a case, the class may receive unified
notice under Rule 23(c)(2)(B) and Rule 23(e). They will be told that they are members of a Rule 23(b)(3) class and have the
right to request exclusion, and that the case is provisionally settled on terms listen in the notice.
SC held that the court must certify the class before approving settlement. Amchem Products, Inc. v. Windsor.

Jurisdiction and Related Issues

Personal Jurisdiction
Phillips Petroleum Co. v. Shutts
- Takeaway: Stands for the proposition that members of a Rule 23(b)(3) Plaintiff class need not have minimum contacts with
the forum state. Rather, their choiceafter receiving noticenot to opt out constitutes submission to the in personam
jurisdiction of the forum.
o Questions:
A class member will be bound by a class judgment unless she takes affirmative steps to opt out. But how
does a court have the power to command such an affirmative act unless the person being commended has
minimum contacts with the form? Court did not explain.
Does the holding apply to Rule 23(b)(1) and b(2) class actions? Court was careful to limit its holding to
23(b)(3) class relied heavily on opt out provision.
Maybe this means that members of mandatory classes should not be bound unless they have min.
contacts.
o But such a conclusion is contrary to the Courts emphasis in Shutts on the difference
between P class members and Ds.
Must there be min. contacts over members of a D class?
In Shutts court made it clear that its holding did not address D class.
It seems likely that only those D class members over whom the forum as in personam jurisdiction
over the representative may be bound.
Finally, did the court in Shutts, even with regard to P class, underestimate the possibility that the
class might lose and class members might be asked to contribute to an award of Ds costs (or justified
attorneys fees)? should these costs be borne entirely by named P passed on to class?
- Facts
o Class action brough in state court, 33k owners of royalty interests in gas wells, claimed D had delayed paying their
royalties and that they were entitled to recover interest on the delayed payments. Average claim $100 per.
o Class certified under Rule 23(b)(3) and the court gave notice to the class members. 3.4 k opted out. Of the remaining
only about 1k Kansas citizens. D concerned the others would not be bound by judgment sue separately.
- Holding:
o All class memberseven non-Kansas citizenswere bound by the judgment. Court emphasized difference between
Dswho must have minimum contact with the forumand the P class members.
D faces significant burden hire attorney, participate in discovery, possibly other relief and litigation costs
if she loses. Min. contact requirement of the Due Process Clause prevents the forum State from unfairly
imposing them upon the D.
A class action P is not required to do anything. Due process rights protected by individual notice
requirement.
Choice of Law
Phillips Petroleum Co. v. Shutts
- The class contended that the D had delayed making royalty payments on gas leases, and that the class members were entitled
to recover interest on the late payments. The legal interest rate for such claims may differ from state to state.
- Holding: SC reversed Kansas court, and held that the law of a state may apply only to parties who have some significant
connection with that state. Even though Kansas had PJ over all class members, Kansas law could not be applied to claims of
the non-Kansas members.
o Shutts court remanded with instruction for subclasses. (efficient, but complex)
E.g. Texas citizens Texas law would apply
Oklahoma Oklahoma law would apply, etc.
Subject Matter Jurisdiction

Federal Question Jurisdiction

- A p class may invoke federal question jurisdiction by asserting a claim that arises under federal law. So if the claim itself (not
an anticipated defense) arises under federal law, the class action may be heard in federal court, regardless of citizenship of the
parties and regardless of the amount in controversy.
Diversity of Citizenship Jurisdiction
- In regular diversity case, each P must be of a different citizenship from each D and the amount in controversy must exceed
75k.
- In Ben-Hur v. Cauble the SC established that only the representatives citizenship must be diverse from that of the opposing
party. SLA as the representative was of diverse citizenship from the D, diversity was established, and the judgment bound all
class members.
- Amount in Controversy
o Under regular diversity case, the aggregation rules applicable in diversity of citizenship cases generally also apply in
the class action context. Snyder v. Harris
Those rules provide that multiple Ps generally may not aggregate their claims to satisfy the amount in
controversy requirement.
In the unfortunate decision of Zahn v. International Paper CO., the court held that the claim of each class
memberindividuallymust meet the amount in controversy. (Cannot be reconciled with Ben Hur)
o Effect of Zahn has been tempered by the supplemental jurisdiction.
- Exxon Mobil Corp. v. Allapattah
o Holding in Zahnthat a class can invoke diversity of citizenship jurisdiction only if the claim of each member
exceeds 75kremains goods law.
o What Allapattah and Section 1367 do is recognize that the representatives jurisdictionally sufficient claim invokes
diversity jurisdiction (and gets the case into federal court invokes diversity of citizenship and her claim > 75k),
after which supplemental jurisdiction can be exercised over members jurisdictionally insufficient claims. (point may
be significant, because the exercise of supplemental jurisdiction is discretionary and may be declined in
circumstances found in 1367 (c)). 1367 (b) does not remove supplemental jurisdiction over claims asserted under
Rule 23.
- One problem, Section 1367 may only permit supplemental jurisdiction in cases involving a single D.
o 1367 (b) (diversity) removes supplemental jurisdiction over claims joined by Ps against persons made parties under
Rule 20. Rule 20 is the provision allowing joinder of multiple Ps or Ds.
If a P class action were asserted against multiple Ds (joined under Rule 20) this provision of 1367 (b)
would deprive the court of supplemental jurisdiction.
Venue
-

No special venue provision for class actions. Generally, 28 USC Section 1391 will apply. General choices for venue are any
district where all Ds reside or in which a substantial part of the claim arose.

The Class Action Fairness Act (CAFA)

- Relaxes federal SMJ for class action and provides Ds with liberal rights ro remove class actions from state to federal courts.
Incentive for Ds to go to fed court:
o Rule 23 requirements strictly enforced
o 23 (f) immediate appellate review
o Federal court pleading under Twombly and Iqbal may be more rigorous
o Feeling that summary J more available in fed court
o Proof involving expert witnesses seem to be more-strict in fed court
- Worked a profound reallocation of judicial authority in large interstate cases and ensures that state courts will play a less
important role in such disputes.