Offers of judgment and tenders of relief before class certification; when is it permissible to pick off the class representative.

Extract

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Offers of judgment and tenders of relief before class certification; when is it permissible to pick off the class representative.

Class actions present unique problems with regard to settlement and dismissal. The problems are particularly thorny before there has been a determination by the court on the issue of class certification. The difficulties lie in the representative nature of class actions. Class actions typically are brought by a small number of individual litigants suing as representatives of a class of persons who are generally unknown except that they have certain characteristics in common with the representatives. For this reason, the class representatives and the court have an obligation to ensure that class members, who may not know of the existence of the case and often play little, if any, role in its prosecution, are fairly represented. This obligation is reflected in Rule 1.220 in the adequacy of representation requirement, the notice and exclusion provisions, and the fairness requirements for settlement and dismissal. (1) The obligation arises before the class is certified. The fiduciary duty of class representatives and their counsel to protect the interests of class members springs to life upon the filing of the action. (2) Class members may as a matter of law rely upon the filing and forgo filing individual suits during the pendency of the case, or at least until certification of the class is denied. (3) The settlement of a certified class has binding effect on all class members who do not opt out.

Class actions afford unique opportunities for economies that otherwise would not be available, particularly in "negative value" suits in which an individual litigant "might not consider it worth the candle to embark on litigation in which the optimum result might be more than consumed by the cost." (4) The class action procedure facilitates such suits by allowing individual litigants to pool resources and attract counsel with the incentive of common fund attorney fee recoveries. (5) Such suits play an important regulatory role in today's mass market economy with the class representative taking on the mantle of a "private attorney general" in the absence of governmental regulatory action. (6)

The potential for large judgments and negative publicity created by class actions also presents class defendants with unique problems. In the early stages of the suit these are largely tactical. Counsel experienced in class litigation appreciate that the court's decision on certification is often the most significant decision in the case. (7) Precluding a decision on certification is, therefore, of paramount importance.

Among oth...

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