Navigating the World of Class Actions
By Catharine Brooke Wooten
Catharine Brooke Wooten is an associate with the law firm of Morris, Manning and Martin, LLP, in Atlanta, working in the firm’s Litigation Practice Group. She may be reached at
One misstep and a company could find itself the target of class action litigation, often a high-stakes game in which the legal expenses can be high and the risks (and rewards) much higher. Knowing how to successfully maneuver through the world of class actions gives young lawyers a strategic advantage.
Class actions allow large groups to litigate, in a single action, multiple claims involving similar or identical questions of law or fact that arise from the same set of operative facts. The litigation of claims by the representative party, or “named plaintiff,” will determine the rights and remedies of all class members. In federal courts, class actions are governed by Federal Rule of Civil Procedure 23 and may proceed only when they satisfy all requirements of this rule. Most state courts have class actions provisions, although not all states have embraced the Rule 23 guidelines. Some states, such as Virginia, do not provide for class actions at all.
Class actions can be pursued on behalf of proposed state or nationwide classes, although certification of a nationwide class is difficult because state laws can differ significantly. Plaintiffs’ attorneys still aggressively pursue nationwide class actions, and a defense attorney will take early steps to dismiss the case and defeat class certification.
Jurisdiction. First, the defense will remove the case to federal court, if possible. Many proposed class actions are filed in state court, but federal courts often are more favorable for defendants, making removal a critical first step for the defense of a putative class action. The Class Action Fairness Act of 2005 (CAFA) made it easier for defendants to remove class actions to federal court. A class action defendant may remove a case to federal court under CAFA if 1) there is minimal diversity (i.e., any member of a class of plaintiffs is a citizen of a state different from any defendant), 2) the proposed class contains at least 100 members, and 3) the amount in controversy is at least $5 million. See 28 U.S.C. § 1332(d).
Rule 12(b)(6) Motions. Second, the defense will move to dismiss some or all of the named plaintiff’s claims. Proposed class actions are often pled as generally as possible, with little emphasis on the named plaintiff’s facts. The plaintiffs’ attorneys take this approach to avoid identifying individual issues of fact and to set the stage for class certification early in the litigation. As a result, some or all of the named plaintiff’s claims may be subject to a motion to dismiss for failure to state a claim under Rule 12(b)(6). The 12(b)(6) briefing process allows defense counsel to highlight individual facts about the named plaintiff’s claims early in the litigation and may result in an early dismissal.
Discovery. Third, both sides will conduct written document and deposition discovery to explore the named plaintiff’s claims and issues relating to class treatment. The named plaintiff’s deposition is critical and allows defense counsel an opportunity to explore the elements of Rule 23 and to determine whether the named plaintiff’s claims can be litigated on behalf of the class. During the named plaintiff’s deposition, the defense seeks information necessary to support a motion for summary judgment and to defeat class certification.
Summary Judgment. Fourth, the defense will move for summary judgment on the named plaintiff’s claims based upon facts established during discovery. The named plaintiff must submit proof of a valid claim to proceed on behalf of the class.
Class Certification. Fifth, the defense will try to defeat class certification. The class certification phase in a class action is critical and perhaps more important than the trial of the case. This phase will determine whether the case will proceed on behalf of one or a few plaintiffs or on behalf of an entire class. In opposing class certification, a defendant will object on the grounds that class treatment is inappropriate, showing, for example, that individual issues of material fact make the case unsuitable for class treatment, the named plaintiff will not adequately represent the class, or the case cannot be efficiently managed as a class action. The named plaintiff has the burden of proving that class treatment is appropriate.
Although class actions are procedurally complex, early steps can be taken to prepare for and succeed at the class certification phase. The above strategies will help counsel anticipate early obstacles and opportunities while navigating their class actions cases.