A fair amount of attention has been given in the legal media to the Fairness in Class Action Litigation Act of 2017, H.R. 985, which has passed the House of Representatives and is currently under consideration by the Senate. Corporate groups and the defense bar have sung its praises, and the plaintiffs’ bar has railed against it. Less attention has been given to areas where, if this bill becomes law, courts will need to decide what it means. Here are a few thoughts on that:

  1. Type and Scope of Injury Requirement: The bill provides that a class action for monetary relief may not be certified unless the plaintiff “affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.” A court is required to conduct a “rigorous analysis” of this question. Expect extensive disputes over what constitutes the “same type and scope of injury.” This does not appear to mean that every class member has the same amount of damages. What constitutes “type” and “scope” would be left to the courts to figure out.
  2. Class Representative Conflicts of Interest: The bill requires disclosure in a class action complaint regarding whether any named plaintiff is a relative or present or former employee of class counsel, or present or former client of class counsel with respect to a different matter, or has any other contractual relationship with class counsel. It further requires that “the complaint shall describe the circumstances under which each class representative or named plaintiff agreed to be included in the complaint . . . .” Courts would have to determine what level of detail is required here, and the extent to which, if any, the attorney-client privilege applies. Courts would also need to determine what type of motion could be used to attack a complaint that the defendant claims insufficiently complies with these requirements, perhaps a Rule 12(b)(6) motion to dismiss.
  3. Ascertainability: The bill further provides that a class cannot be certified unless the class is “defined with reference to objective criteria and the party seeking to maintain such a class action affirmatively demonstrates that there is a reliable and administratively feasible mechanism (a) for the court to determine whether putative class members fall within the class definition and (b) for distributing directly to a substantial majority of class members any monetary relief secured for the class.” I expect courts would continue to debate, as many of them currently are, what constitutes a “reliable and administratively feasible mechanism.” Could this include self-identification by affidavit, or not? Would compliance with this requirement depend on how many people come forward?
  4. Attorneys’ Fees: The bill would require that attorneys’ fees in cases involving monetary awards be limited to a “reasonable percentage” of funds actually received by class members, and that attorneys’ fees could not exceed the amounts actually received by class members. In cases involving equitable relief, attorneys’ fees would be limited to a “reasonable percentage of the value of the equitable relief, including any injunctive relief.” The litigation here seems likely to focus on what constitutes a “reasonable percentage,” and how you value the equitable relief. There is some existing precedent on these issues, and the extent to which Congress intends to either adopt or modify that precedent could be an issue.
  5. Issues Classes: The bill provides that a court may not certify an issues class under Rule 23(c)(4) unless the court determines, after a “rigorous analysis,” that “the entirety of the cause of action from which the particular issues arise satisfies all the class certification prerequisites of Rule 23(a) and Rule 23(b)(1), Rule 23(b)(2), or Rule 23(b)(3).” I don’t see a lot of room for debate here, although the application of the other requirements of Rule 23, of course, remain hotly debated by the courts.
  6. Stays of Discovery: The bill mandates a stay of discovery pending a motion to dismiss, motion to transfer, motion to strike the class allegations or other motion to dispose of the class allegations, unless particularized discovery is necessary to preserve evidence or prevent undue prejudice. Would this mean that a defendant would be entitled to multiple stays of discovery if it files, seriatim, a motion to dismiss and then, if that is denied, a motion to strike the class allegations or to deny certification?
  7. Appeals: The bill makes appeals of class certification orders mandatory, providing that “[a] court of appeals shall permit an appeal from an order granting or denying class-action certification under Rule 23 of the Federal Rules of Civil Procedure.” Would this mean that a court of appeals is required to hear multiple interlocutory appeals in a case that involves more than one certification order, or a partial decertification of the class? Would an order granting or denying a motion to strike class allegations be appealable?
  8. Rulemaking Authority Provision: The bill provides that “Nothing in this title shall restrict in any way the authority of the Judicial Conference and the Supreme Court to propose and prescribe general rules of practice and procedure under chapter 131 of title 28, United States Code.” Would this mean that the Judicial Conference and the Supreme Court, by virtue of their rulemaking power, could directly override any part of this bill (if enacted), at any time?
  9. Retroactivity: The bill provides that “[t]he amendments made by the title shall apply to any civil action pending on the date of enactment of this title or commenced thereafter.” Would this mean that, if a case is pending where the court has certified a class already, it must revisit certification following the enactment of this law? Would a court have to reevaluate a class settlement or attorneys’ fees that had been approved? Would a court of appeals have to accept an appeal it had previously rejected under Rule 23(f)? There seem to be lots of questions here that courts would need to decide.
Print:
EmailTweetLikeLinkedIn
Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.