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Class Action:

Class action, also referred to as representative action, is governed by the Federal Rules of Civil Procedure, Rule 23 and 28 U.S.C.A. § 1332 (d).

Class actions can be brought before federal courts under the following conditions:

- if the claim arises under federal law, or

- if 28 USCA § 1332 (d) applies (federal district courts have original jurisdiction over any civil action where the amount in dispute is larger than $5,000,000, and 1. any member of a class of plaintiffs is a citizen of a State different from any defendant; 2. any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or 3. any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state).

Class action lawsuits can also be brought under state law (in some cases courts may then extend their jurisdiction to all the members of the class - including international plaintiffs or defendants.

Anecdotal avidence shows that federal courts are more favorable for defendants, and state courts more favorable for plaintiffs. 

The Class Actions Fairness Act 2005 gave federal courts original jurisdiction for all class actions with damages over $5,000,000 - so there are now more possibilities (albeit there are exceptions) for moving the case to the federal courts.

The following are the requirements for a class action to be admitted:
- SIZE of the class: the class must be so large as to make individual suits impractical,

- COMMONALITY: there must be legal or factual claims in common,

- TYPICALITY: the claims or defenses must be typical of the plaintiffs or defendants, and

- REPRESENTATION: the representative parties must adequately protect the interests of the class.

 

OTHER IMPORTANT FEATURES OF U.S. CLASS ACTION

OPT-OUT: the U.S. class action is an opt-out mechanism.

JURIES: most cases are decided by juries.

PUNITIVE DAMAGES: punitive damages are available and can indeed by quite significant, although they are often reduced upon appeal.

CONTINGENCY FEES: attorney fees are normally paid on a contingency basis. See link to our glossary for explanation.

NO LOSER PAYS RULE: litigants are liable for their own costs only.

 

Multi-district litigation (MDL Litigation):

It is not a class action procedure. It is a procedure applied in U.S. federal courts to transfer to one federal judge "all pending civil cases of a similar type filed throughout the United States. The decision whether cases should be transferred is made by a panel of seven federal judges appointed by the Chief Justice of the United States Supreme Court. The Judicial Panel on Multidistrict Litigation meets periodically to review requests that cases be consolidated for pretrial matters pursuant to 28 U.S.C. § 1407, (http://www.jpml.uscourts.gov/Rules/28_usc_1407.pdf ) a law passed by Congress. Although the panel meets in different cities in the United States on a periodic basis, the Clerk of the Panel is permanently stationed in Washington, D.C." (Source: Class Action Litigation Information, by T.E. Eble).

See the Link to the U.S. Judicial Panel on Multidistrict Litigation (JPML).

For mode details on the American models - see the Stanford Law School Global Class Actions Exchange.