Class Actions Summary

A profoundly new look exists in litigation today. That new look is the ever popular class action, litigation by or against a class of persons too numerous to be joined as parties to an action. Environmental, consumer, and personal injury actions have multi­plied in the use of this procedural device. The NCCUSL, there­fore, decided a uniform act pertaining to class actions in state courts is now necessary and important to the adequate disposition of class action suits with interstate effects.


The operation of a class action is relatively simple to grasp. A group which is identifiable represents the class, as either plaintiffs or defendants. The court certifies the legiti­macy of the class. The representatives proceed in their roles in the law suit. If the suit is a plaintiff's class action and the plaintiffs prevail, then damages are awarded to the class. Pro­vision must be made to payout the award to the class. If the class is a defendant class, and plaintiffs prevail, provision has to be made to collect the award. It is to accomplish these ends that the Uniform Class Actions Act is directed.


Establishment of a class action depends upon allegation and certification of the class. There are two qualities that need to be established. The first is the numerosity of the class. The second is the commonality of the controversy between members of the class. Thus, it must be alleged that "the class is so numerous or so constituted that joinder of all members, whether or not otherwise required or permitted, is impracticable," and that "there is a question of law or fact common to the class."


The court must certify these bases for a class action. It holds a hearing for the purpose, and certifies the action if it finds the conditions of numerosity and common controversy have been met, that the class action will result in a fair adjudi­cation of the issues and that the representation will protect the class' interests. In the question of fair adjudication lies the crux of most of the determination. In this regard, the court will consider matters such as the possibility of varying or inconsistent decisions if multiple suits were allowed, and whether the relief sought is appropriate to the interests of the class. The court has substantial guidelines for the determi­nation.


Once these determinations are made in favor of the class action, litigation can proceed. However, provisions to take care of key problems are required. Although the representatives can conduct litigation, as agents of the class, the class itself is entitled to certain things, such as appropriate notice and means of collection and distribution of awards. It is to these things that the rest of the Uniform Class Actions Act is devoted.


In a class action in a state court, there may be the problem of the multi-state class. The Uniform Class Actions Act permits jurisdiction over class members out-of-state if a basis for juris­diction exists against these class members as individuals, or in the event the law of the other state permits jurisdiction over its residents on a reciprocity basis. Reciprocity is very much a basis for jurisdiction in states enacting the Uniform Class Actions Act, since it authorizes jurisdiction by other states permitting the same exercise within their own borders. Reciprocity is guaran­teed as states enact these provisions.


Once a class is certified, effort must be made to give notice to its members. The Uniform Class Actions Act specifies the contents of the notice, but more broadly defines the means of giving notice. Personal notice must be given if a class member's identity and whereabouts can be ascertained with reasonable dili­gence and his or her estimated recovery does not exceed $100.00. However, the means of publishing notice to others is less circum­scribed. The reason is that notice must be tailored to the nature of the class. The court has the power to determine the best means of publication and to order notice accordingly. Thus, ordinary newspapers might be used, but also channels of communication within groups, such as unions or consumer groups, would be permitted. Notice can be fitted to the circumstances.


Although a plaintiff class action is for the benefit of the class, to be binding on all members, there must be provision for those who do not wish to have their rights adjudicated to exclude themselves. A member of a plaintiff class may elect to be ex­cluded. If he or she does, the litigation does not bind him or her. Defendant class members cannot be excluded, however, and are bound once the class is certified.


At all times, the court may make orders to protect class members, assuring adequate representation. A class member who is not a representative party may have his or her own legal coun­sel. Discovery proceeds much as in any lawsuit, but with regard to the nature of the class. Counterclaims also follow the normal pattern, but may be against a class as a whole or against indivi­dual members of the class. A subclass or individual member of a defendant class may counterclaim, as well as the whole of a de­fendant class. These are some of the provisions which deal with the administration of a class action.


Perhaps the most interesting aspect of a class action is the distribution of the award. If class members are fewer, the division and distribution are simpler, but many classes are vast in nature. A class award then, by definition, will create an administrative problem as to distribution. There is also the matter of unclaimed shares in the award, even after every effort is made to reach all class members and to encourage them to come forward for their shares.


In the Uniform Class Actions Act, the parties must expedi­tiously list the members of a class entitled to relief. The court then supervises the distribution of the funds. If there is a re­mainder, because all members have not been identified or have not claimed their share, the court must decide whether to treat it as unclaimed property or as a return to the defendant. The determination depends on the nature of defendant's wrongful acts and upon the possibility of unjust enrichment. If the defendant's acts are not willful and if there is no evidence of great culpa­bility or of unjust enrichment as a result, the remainder can be turned back to the defendant.


Otherwise, the remainder escheats to the states involved as unclaimed property.


 The Uniform Class Actions Act simplifies and organizes the class action lawsuit. It deals with the important problems, and provides a complete procedure for the purpose. The class action has been created because of widespread damage suffered by or caused by large groups of people. Historically, such injuries could not be remedied until the class action developed. It is an action of importance in a highly urbanized and industrialized society. The Uniform Class Actions Act provides rational law to govern the conduct of the class action lawsuit.