52 RI Bar J., No. 2, Pg. 5 (September, 2003). Jurisdiction for Class Actions Problematic.

• Author: BRIAN C. NEWBERRY, ESQ.

Rhode Island Bar Journal

Volume 52.

52 RI Bar J., No. 2, Pg. 5 (September, 2003).

Jurisdiction for Class Actions Problematic

Jurisdiction for Class Actions ProblematicBRIAN C. NEWBERRY, ESQ.Brian C. Newberry is a senior litigation associate in the Providence office at Hinckley, Allen & Snyder LLP.The unsuspecting practitioner may not realize that jurisdiction over class actions does not automatically arise in Rhode Island.

Any new lawyer surely knows that in order to obtain a federal forum for a class action lawsuit, parties must show either a self-evident federal question or diversity jurisdiction. However, class actions in federal court based solely on a federal question are limited and on diversity jurisdiction (fn1) are rarer still, leaving a substantial number of class action suits that may only be brought in state court. (fn2)

As a result, there are any number of class action suits that simply cannot be brought in this state - as is evidenced by the emerging case law discussed below from the new business calendar on which all state court class actions are now being heard by a single judge.

The difficulty arises from the fundamental principle that Superior Court jurisdiction is limited to claims valued at $5,000 or greater. Clearly, the value of most individual claims within class action suits is far below this threshold. Were it otherwise, such claims would normally be brought as separate lawsuits rather than within the context of a class suit where control over the individual claims is limited and the interests of the class as a whole are paramount. Since class actions generously exist to vindicate the rights of class members whose financial stake in the outcome is real but too small to pursue individually, this is not surprising.

As an obvious and practical concern, a class suit will only meet the Superior Court jurisdictional threshold if the individual class members may aggregate the value of their claims into a collective whole. While such claims could be brought in the state District Court individually, because that court has no rule analogous to Superior Court R.C.P. 23 or any other provision allowing for a class action mechanism, it is doubtful whether such cases may be brought there collectively. In any event, the District Court is not a forum suited for adjudication of such disputes.

The result is that if a proposed class action does not meet the Superior Court jurisdictional threshold and if a federal forum is also foreclosed, it cannot be brought in the state courts of Rhode Island. How then can one formulate a class action suit that will meet the Superior Court jurisdictional threshold? The answer will depend upon the nature of the claims asserted.

In 1983 the Supreme Court decided Carvalho v. Coletta, 457 A.2d 614 (R.I. 1983). This case was ostensibly a class action suit brought by a car owner against a towing company claiming that the towing company's actions in towing illegally parked cars in the City of Providence amounted to illegal conversion of property. Further, since the towing was done at the request of the Providence Police Department, plaintiff claimed a deprivation of property without due process in violation of each class member's civil rights. Each individual claim failed to meet the $5,000 jurisdictional threshold since, at most, each proposed class member faced out-of-pocket expenses of a few hundred dollars in towing fees plus some...