managing class actions

personal jurisdiction in a class action

so long as Rule 23's notice and opt-out provisions complied with there is PJ

is there PJ in mandatory class/classes without opt out or notice?

yes--> there is only PJ is class actions that bind known plaintiffs

allstate standard

For a state's law to be applied, that state "must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair

subject matter jurisdiction

comes from 1331 federal q and 1332 diversity

1331 jurisdiction

if class rep pleads federal COA then the fed court has original SMJ so the case can filed here or removed here

1332 jurisdiction

when parties are citizens of different states + amount in controversy exceeds $75k

diversity in class action

only need complete diversity of named parties

amount in controversy req

members must independently meet AIC

no piggyback

if one member meets AIC can't aggregate claims to reach $75k

1367 jurisdiction

supplemental jurisdiction

if one claim can be heard in fed court then all claims can be heard

1367 supplemental jurisdiction literally

if one members met AIC + all named parties are diverse then other members could attach even if they didnt meet the AIC

1367 supplemental jurisdiction statutory

Zahn ruling persists

all members must independently meet AIC

no piggybacking

class action fairness act

reformed to get class actions into federal court easier

only need minimal diversity

only need one defendant to remove to get to federal court

local controversy exception

exception to removal to federal court under class action fairness act

keeps the case in state court

local controversy elements

1. where majority of the class are citizens of forum

2. at least 1 local defendant is significant and

3. no other class action about this event in the last three years

what makes a defendant "significant"?

significant role in the litigation and significant relief sought from

pathways to get a class action into federal court

1. case arises under federal law -> 1331

2. true diversity + each plaintiff meets AIC -> 1332

3. complete diversity of named parties + one plaintiff meets AIC -> 1332 + 1367

4. minimal diversity + aggregate $5M damages -> 1332(d)

rule 23(e)

demands notice when court approves a settlement

anyone can object to the settlement

the form of notice is at the court's discretion

rule 23(c)

permits notice to be given when a class is certified

requires notice to a damages class + opt out info

court approval of settlement requirement

settlement must be fair, reasonable, and adequate

why does court have to approve a class action settlement?

because the class isn't representing itself in requesting the settlement agreement or amount

acts as a safeguard against the inherent conflict of interest between counsel, payment, and good representation

how does a court approve a settlemt?

1. fairness hearing that there is a mutual interest not to litigate

2. Reed reasonableness factors to ensure settlement is in the best interest

reed factors

1. existence of fraud/collusion

2. complexity, expense, and likely duration of litigation if no settlement

3. stage of proceedings + amount of discovery completed

4. probability of plaintiff's success on merits

5. range of possible recovery

6. opinions of class counsel, class reps, and absent members

the two most important Reed reasonableness factors

probability of plaintiffs success on merits and range of possible recovery

cy pres + fluid recoveries

when giving money to the class is not practically feasible because finding the missing class is too difficult or the small recovery to plaintiffs would be consumed by administrative costs

cy pres relief

using funds to pay for something that offers some potential benefit to the class

such as building a park near affected class or teaching similarly situated groups

fluid recovery

distributing the funds to the class through a market system

like coupons or rebates