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The Five Changes to Rule 23 Every Class Action Attorney Needs to Know

Andre Regard

The Five Changes to Rule 23 Every Class Action Attorney Needs to Know
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As of December 1, 2018, Federal Rule of Civil Procedure 23 was significantly amended to put into place and uniform practices that were previously being done on a court-by-court basis. These amendments focused on the rules governing federal class-action notice, settlement approval and notice, and appeal. The highlights are as follows:

  1. Notice by electronic means is now specifically mentioned in Rule 23(c)(2) as an appropriate means of providing notice to the class, given the proposed class has sufficient access to the internet. This amendment is consistent with the trend of courts, and society, to use electronic communications rather than traditional first-class mail.
  2. Preliminary approval is now required before ordering notice of a proposed settlement. Rule 23(e)(1) now requires the parties to demonstrate that the court will be able to approve the proposed settlement and certify the class, if not already certified. A defendant’s support of class certification for settlement purposes does not precluded it, however, from later objecting to a motion for class certification if the court rejects the proposed settlement.
  3. For settlement approval, Rule 23(e)(2) now requires that courts analyze four factors: (1) the adequacy of representation by class representatives and class counsel; (2) whether settlement negotiations were done fairly at arm’s length; (3) the adequacy of relief provided under the settlement (including the terms of any proposed award of attorney fees); and (4) the equity of treatment of class members relative to one another. The court will balance the proposed relief against the risks, delay, and costs of trial and appeal. This amendment was intended to provide a uniform list of core considerations to what previously varied from circuit to circuit.
  4. An objection to a proposed settlement must now indicate to whom it applies (e.g., does the objection apply to the objector only, some subset of the class, or the entire class), and must be stated with specificity. This amendment to Rule 23(e)(5) was designed to assist unrepresented objectors and discourage bad-faith objectors.
  5. Interlocutory appeal is available only for the actual denial or grant of class certification, but appeals under Rule 23(f) are not permitted to appeal the grant or denial of a preliminary-stage motion seeking approval to issue notice.

Hopefully, these rule changes will provide a more streamlined class-action process that is fairer to both the class and defendants.