At a recent meeting, the Advisory Committee on Civil Rules of the Judicial Conference of the United States discussed, at an early stage, potential amendments to the federal class action rule, as well as a potential rule requiring disclosure of third-party litigation funding. No specific proposed amendments are before the committee at this stage (see the agenda packet for more details).

The potential amendments to Rule 23 include:

  • Superiority Requirement (Rule 23(b)(3)): The potential amendment would expressly state that courts can consider non-litigation remedies, such as voluntary  refunds, recalls, etc., in deciding whether a class action would be superior to other methods for resolving the dispute. While some courts have considered these under the existing rule, others have concluded that the current rule does not allow these to be considered because it refers to “adjudicating.” Defense bar organizations have supported this proposal.
  • Incentive Awards: The committee is considering whether to amend the rule to expressly permit incentive awards for class representatives, effectively resolving the circuit split created by an Eleventh Circuit decision (see my blog post) that disallowed them in that circuit. This proposal seems likely to draw some support from both sides of the class action bar, although some members of the committee may not view its role as including resolving a circuit split.
  • Pre-Certification Settlement Approval: The committee is considering a proposal that would require court approval of individual settlements between named plaintiffs and the defendant(s). Prior to 2003, some courts had interpreted the then-existing version of Rule 23 as requiring such approval. The 2003 amendment to Rule 23(e) made clear that approval was required only if a class had been certified (or was being proposed to be certified for settlement purposes, as a 2018 amendment clarified). The concern motivating this potential change appears to be plaintiffs including class allegations in complaints for purposes of settlement leverage and then pursuing early individual settlements. It is unclear what the standard would be for court approval of an individual settlement pre-class certification. This rule change could create an impediment and delay in resolving putative class actions that have little merit. It might dissuade plaintiffs’ lawyers from including class allegations in complaints where they have no serious intention of pursuing them, although the pre-2003 rule did not appear to have that effect.

As to third-party litigation funding, which is likely used in some class actions, while no specific proposal is before the committee, proponents of a new rule have suggested that it be modeled on the portion of Rule 26(a) that requires disclosure by defendants of insurance policies that may provide coverage for a judgment against the defendants. Concerns motivating these proposals include the potential for conflicts of interest or undue influence by the litigation funder. Any new rule may need to specify what types of arrangements need to be disclosed, in which types of cases (if not all cases), and what information needs to be disclosed. Congress is also considering potential legislation requiring disclosure. The defense bar generally supports disclosure of litigation funding arrangements.

Overall, these are all important proposals that have and will continue to generate strong views on both sides of them. I don’t think any of them, however, are likely to be game changers in class action litigation. The potential superiority rule change and third-party litigation funding disclosure likely would be most significant for lawyers defending class actions and their clients.

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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.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and most of the class actions I’ve defended have been brought against insurance companies. I’ve also handled some involving products liability, managed care, health care, utilities, financial services, higher education and environmental issues.

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 work, you might find me running lines or watching a musical with my teenage daughter who hopes to be a Broadway star (or taking her to voice or dance lessons) or reading a good book.

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