Class Action Conference Considers Proposals

In the wake of concerns raised about class action litigation abuses, the Judicial Conference Civil Rules Advisory Committee devoted its October 2001 meeting to a class action conference at the University of Chicago School of Law. About 70 state and federal judges, practicing lawyers from both sides of the litigation, academics, and veterans of earlier advisory committees gathered to offer advice on rule amendment proposals recently published for public comment and on possible rule responses to problems caused by overlapping class actions.

The first panels considered proposals to amend Rule 23, published for comment last August, that address such matters as the time of the class certification decision, notice, review of proposed settlements, appointment of class counsel, and awards of attorney fees. Although these proposals sparked lively comment and no small number of suggestions for improvement, the overall response supported the proposals. Many of the provisions were recognized as capturing and improving some of the "best practices" of class action litigation, with guidance and support for consistent application and future case law developments.

The Committee also sought advice on proposals aimed at competing, overlapping, and duplicative class action litigation proceeding simultaneously in state and federal court. Many of the participants agreed that duplicating and competing class actions have too often imposed onerous burdens on defendants and jeopardized the interests of class members. The burdens on defendants are obvious. The risks to plaintiffs include contests for control among competing attorneys, increased awards of attorney fees that diminish recovery for class members, and the "reverse auction," in which a defendant plays competing class representatives against each other for the least expensive settlement. In addition, overlapping and competing class actions hamper effective case management by state and federal courts and frustrate judicial scrutiny of certification motions, settlements, and fee requests resulting in wasted judicial effort. The question remains whether these problems can effectively be addressed by the current Rules Enabling Act process. Some participants voiced support for exploring solutions through Rule 23 revisions. Others, however, believed that it is better to look to Congress for reform, suggesting that perhaps the best legislation would expressly authorize further work by the rules committees.