August 31, 2018 feature

Slamming the Brakes on Nationwide Class Actions

State law differences drive settlement of class actions off track

By Stephen Carr

A nationwide class action offers the possibility of a swift, comprehensive resolution to what could otherwise be low-stakes, piece-meal litigation in courtrooms around the country.

Problems persist when trying a nationwide class action under the laws of up to fifty states

Problems persist when trying a nationwide class action under the laws of up to fifty states

Image Illustration by Elmarie Jara | iStockphoto by Getty Images

But practical problems persist when trying a nationwide class action under the laws of up to fifty different states. An important new decision may make it more difficult to certify a nationwide class based on state law and, according to the decision’s dissenter, could “deal a major blow to multistate class actions.”

The decision comes, somewhat surprisingly, in the context of a settled class action—an area where practical concerns are less pressing because the actual case will never be tried. Settled class actions are designed to avoid the potential wastefulness of litigating multiple state class actions, while providing class members timely relief. The decision is a reminder that even when a class exists merely to resolve all claims, class counsel and the courts must carefully scrutinize the interests of all class members and be especially aware of possible harms to absent plaintiffs.

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