Chapter § 5.05 Commencing the Class Action124

• Jurisdiction: United States
• Publication year: 2020

§ 5.05 Commencing the Class Action¹²⁴

The class representatives and the claims they assert on behalf of the class play a critical role in class actions, particularly at the outset of a suit.¹²⁵ These claims “shape and define the litigation, the complaint, and the policy, pattern, or practice claims asserted on behalf of the class,” and their “individual circumstances will determine jurisdiction and venue.”¹²⁶ The class representatives must have standing, and their individual claims must withstand a motion to dismiss. Also, those claims must support the prerequisites for class certification under Rule 23(a) and one of the three provisions under Rule 23(b).¹²⁷ Accordingly, when commencing the class action, class counsel should give careful consideration to who they select as class representatives, assuming they have a choice, and what claims the representatives assert on behalf of the class.

[1] Choosing the Appropriate Class Representative

A crucial early decision for class counsel is ensuring that the proposed class representatives are similarly situated to the other members of the class, that their interests are typical of the rest of the class, and that they can fairly and adequately represent all the other members of the class. In other words, the class representatives’ interests should be “sufficiently aligned with those of the class members” for purposes of the Rule 23 analysis (e.g., such as having suffered the same type of losses under similar circumstances), and they should not have a conflict of interest with the other class members.¹²⁸ Beyond the requisites for certification, the class representative should be able to understand and articulate the class claims, participate in discovery, work closely with class counsel, participate in the settlement process, and “competently, responsibly and vigorously prosecute” the putative class action.¹²⁹ Therefore, “counsel should give careful attention to these issues in the selection of named plaintiffs, to the extent real choices are available.”¹³⁰ Doing so may reduce the number of defenses asserted by opposing counsel concerning, among other things, the adequacy of the class representatives,¹³¹ predominance or the need for subclasses.¹³²

[2] Drafting the Class Complaint

The contents of the class action complaint are largely dictated by the Rule 23 requirements. Class counsel should also review the Class Action Fairness Act of 2005¹³³ before drafting a complaint. To articulate the best claims that will survive a class certification motion, it’s important to carefully define the core or common issues of the putative class. If possible, the class should avoid claims that involve individual reliance or particularized causation. Instead, they should focus on claims that encompass a broad scope of the issues, because, as discussed in section 5.02, courts will deny certification when the non-common issues of multiple plaintiffs intertwine with or predominate over the common issues.¹³⁴ Therefore, the class should attempt to allege one central legal issue when seeking class certification.

It is important to recognize, however, that there will be individual issues.¹³⁵ Many times, asserting individual claims will be unavoidable. A class representative may seek immediate injunctive relief or individual monetary relief. In this case, it is important not to diminish or cloud the claims common to the class controversy.

The class must also decide whether to assert various theories of liability that will lead to a similar result or whether a single theory of liability that is applicable to all class members is more beneficial. A more complex complaint, obviously, affords the defense a greater opportunity to assert added challenges to class certification.

[3] Claims to Avoid

As a general matter, the class should avoid asserting claims that raise “significant individualized questions going to liability.”¹³⁶ For instance, courts often deny class certification where claims require a showing of individual reliance or materiality.¹³⁷ Courts have, however, certified a class where the elements are “determined using objective criteria that apply to the entire class and do not require individualized determination.”¹³⁸ Common causes of action that courts have held don’t lend themselves to class certification due to their reliance or materiality elements, including fraud,¹³⁹ breach of express warranty,¹⁴⁰ breach of fiduciary duty,¹⁴¹ and negligent misrepresentation.¹⁴² The class should also...