The most striking procedural difference between individual and representative litigation is the plaintiff’s motion for class certification. Although class certification should occur “early” in a case, it is better for defendants to have the opportunity to take discovery on class certification issues to better position themselves to defeat class certification. Although defendants faced with a putative class action are still afforded the usual dispositive motion opportunities, in practice, defeating class certification is the difference between potentially large liability and little to no liability. Accordingly, for defendants, apart from early successful motions to dismiss or for summary judgment, class certification is the biggest event in the life of the case.
The reason for this relates to class actions for low-value claims. If a defendant defeats class certification, the named plaintiff’s individual claims survive, but because those damages are so minimal, litigation would not be worth the costs to the plaintiff to proceed. Even where a named plaintiff prevails at class certification, defendants tend to favor quick settlements, forgoing strong defenses on the merits to avoid often uncertain and potentially disastrous liability. Settlement after a class is certified not only limits ongoing litigation costs but also bars all class members identified in the settlement class from bringing subsequent litigation on the same issue. As a result, class actions rarely proceed to a full trial on the merits.
Class actions also require specialized discovery. To certify a class, plaintiffs must prove that the class meets all explicit and implicit requirements of Federal Rule of Civil Procedure 23. In Rule 23 discovery, plaintiffs inquire about the accused practice or product from the defendant. They use traditional discovery tools, including document requests, interrogatories, depositions, and experts. For defendants, Rule 23 discovery is a time to depose the plaintiff to distinguish the plaintiff’s claims from those he or she is attempting to assert on behalf of the class and to test the plaintiff’s adequacy to represent a class.
Due to the impact of class certification, many practitioners seek to bifurcate Rule 23 discovery from merits discovery. In some cases, Rule 23 discovery proceeds first and merits discovery occurs only if a class is certified. If a defendant is confident that it can defeat class certification or wants to limit discovery costs, this may be a good strategy. On the other hand, in conducting the required rigorous analysis at class certification, judges may peek at the merits of the plaintiff’s claims. Accordingly, defendants should present merits evidence they think could defeat class certification. Another option is to sequence merits discovery of the plaintiff’s individual claims before Rule 23 discovery. This strategy may be appropriate where a defendant has a basis for a strong early summary-judgment motion on the named plaintiff’s individual claims.
A third striking difference between aggregate and individual litigation is how quickly a class action can expand with additional class representative and tag-along cases from different jurisdictions. Although joinder and multidistrict litigation are not unique to class actions, the frequency of having multiple plaintiffs, representing multiple state classes, causes an already complex class action to become even more complex very quickly. A class action may begin with one or two named plaintiffs seeking to certify a statewide class, but if certified, copy-cat cases in other states may follow. All of the sudden, the defendant may be facing much larger potential liability and the original plaintiff’s counsel may lose control of the case. Practically, it also means more moving parts for the practitioners on both sides of the “v.”
Two years in, the more class actions I handle, the more I see recurring issues and new strategies employed by other practitioners. While the unique procedure, the discovery strategies, and the complexity of cases are three issues that struck me as important for practitioners to consider, class action practice is incredibly diverse and changing rapidly thanks to a U.S. Supreme Court taking up class action appeals. There is nothing much more exciting than having the U.S. Supreme Court making law in your practice area.
Keywords: litigation, class actions, derivative suits, class certification, copy-cat cases, legal strategy, Federal Rule of Civil Procedure 23