Class Action Law in Georgia: Emerging Trends in Litigation, Certification, and Settlement - Jeffrey G. Casurella and John R. Bevis

• Publication year: 1997

Class Action Law in Georgia: Emerging Trends in Litigation, Certification, and Settlementby Jeffrey G. Casurella and John R. Bevis^**

The lawyers have twisted it into such a state of bedevilment that the original merits of the case have long disappeared from the face of the earth .... It's about nothing but Costs now.

Charles Dickens

Bleak House

In the litigation world, few words trigger more attention and more debate than the term "class action." At the term's first appearance, the playing field is set. Plaintiffs urge that class actions are a necessary vehicle to litigate paltry and duplicitous claims otherwise inconvenient or uneconomical to prosecute. In response, defendants argue class actions constitute an abuse complicated by individuality and unmanage-ability. Rarely do the parties agree to the utility of class actions. Notwithstanding this classic disagreement, this type of litigation serves a useful purpose, filling a vacuum left otherwise empty when legislatures fail to legislate and attorneys general fail to prosecute matters that adversely affect certain segments of our society.

Georgia's class action statute ("Georgia Rule 23"),¹ is loosely modeled on rule 23 of the Federal Rules of Civil Procedure ("Rule 23"). Because there are so few definitive Georgia decisions interpreting Georgia Rule 23, Georgia courts historically rely upon federal decisional law for guidance.² By virtue of this and through judicial fiat, the Georgia Supreme Court authorizes class actions in addition to the provisions of Georgia Rule 23 when there are common questions of law or fact involved and a common relief is sought.³ Still, there exists significant procedural differences between the state statute and its federal counterpart. How then will recent developments in federal class action jurisprudence play out in class actions brought in the Georgia courts?

Regardless of the advocacy, it is well established that the discretion of the trial judge in certifying or refusing to certify a class action is respected in all cases in which discretion is not abused.⁴ Like all jurisdictions, Georgia courts bear out the definitive ruling that class certification is strictly a procedural matter; the decision is not based on whether the complaint states a cause of action or whether the plaintiffs may ultimately prevail on the merits. The proper focus is whether numerosity, typicality, commonality, and adequacy of representation are satisfied.⁵

I. Establishing the Requisite Elements of Class Certification

Because the plaintiff bears the burden of showing the requisite elements for class certification,⁶ ethical and practical prefiling considerations mandate plaintiff's counsel to determine whether the circumstanc- es of the case warrant class status and whether the client will serve as an adequate representative. The litigation revolves around these two considerations, for unlike a case on the merits, the failure to satisfy any one of the four requisites sounds a swift death knell to class certification and thus to the merits of the uniform practices being challenged.

A. Numerosity

There exists no bright-line test for determining numerosity. Although mere allegations are insufficient, plaintiffs are not required to establish the exact number of persons they seek to represent.⁷ A good-faith numerosity estimate of the number of individuals involved is sufficient.⁸ The final determination rests on the court's practical judgment in light of the particular facts of each case.⁹ With conditional certification comes a flexibility that "enhances the usefulness of the class action device" to ensure that "actual, not presumed, conformity with Rule 23(a)" exists.¹⁰ When the numerosity question is a close one, a balance is struck in favor of finding numerosity because the court has the option to decertify the class if the evidence does not yield sufficient numbers to satisfy numerosity.¹¹ Notwithstanding these ethereal considerations, one reported decision in Georgia has upheld a finding of numerosity with as few as twenty-five class members.¹²

B. Commonality and Typicality

The utility of a class action allows people of modest means a convenient way to recoup damages while, at the same time, prevents a multiplicity of suits based on a single wrong suffered by many but common to all.¹³ For these reasons commonality and typicality tend to merge.¹⁴ Commonality relates to the mode of the challenged practice, and typicality relates to the similarity of the claims among the members.¹⁵ There must be a nexus between the class representative's claims or defenses and the common questions of fact or law that unite the class.¹⁶ Where there is not, commonality and typicality do not exist, and the case cannot proceed as a class action. Particular factual differences, differences in the amount of damages claimed, or even the availability of certain defenses against a class representative do not necessarily render a named plaintiff's claims atypical.¹⁷ Essentially, the class representative's claim is typical of the class claims if all arise from the "same event" or "pattern or practice" and are based on the same legal theory—as long as the plaintiffs and the class have an interest in prevailing on similar legal claims.¹⁸

C. Adequacy of Representation

The individual ability of a plaintiff to represent a class of similarly injured persons is a paramount consideration. Two important aspects of the adequate representation requirement are (1) whether the plaintiff's counsel is experienced and competent and (2) whether the named plaintiff's interests are antagonistic to those of the class.¹⁹ To this end, courts permit inquiries into the personal characteristics and integrity of the proposed plaintiff and class counsel.²⁰

1. Competency of Counsel. In determining whether a plaintiff's counsel is competent, courts generally look to whether counsel is qualified, experienced, and generally able to conduct the proposed litigation.²¹ "The adequacy requirement mandates an inquiry into the zeal and competence of the representative's counsel and into the willingness and ability of the representative to take an active role in and control the litigation and to protect the interest of absentees."²² Most defendants, however, do not belabor the question of whether a plaintiff's chosen counsel will adequately represent the interests of the class and seldom insist that plaintiff's counsel provide evidence setting forth qualifications and experience for the court to evaluate the ability of the lawyers to prosecute the action. There is no concurrent requirement to test the competence and experience of the defense counsel. Rather, the focus in the adequacy of representation requirement turns to the abilities and understandings of the persons proposed as the class representatives.

2. Ability of the Named Plaintiff to Represent the Class. The primary criterion for determining whether a named plaintiff will fairly and adequately represent the class is the forthrightness and vigor with which the representative party is expected to assert and defend the interests of the members of the class.²³ The challenges most frequently made in this regard are to the named representative's understanding of the case and his or her ability to singly fund the litigation.

a. A Named Plaintiff's Understanding of the Case. To avoid the vesting of unbridled discretion and anointing of the class attorney as the true class representative, courts will consider the knowledge and willingness of the named plaintiff to measure that person's ability to adequately represent the class.²⁴ Ironically, the very lack of sophistication and financial wherewithal that makes individuals vulnerable prey to sophisticated corporate practices often serves as the leading argument of why the class representative is inadequate.²⁵ Courts harmonize this dichotomy by requiring a generalized, as opposed to a specific and detailed, understanding of the case. Indeed, a plaintiff's lack of detailed knowledge of all the facts and issues in the case has never been deemed to be proof of bad faith, frivolous proceedings, or maintenance by class counsel because reliance may rightfully be placed upon the attorney's advice and investigation.²⁶ Thus, many courts hold that the knowledge of a class representative is of minimal importance in highly complex matters.²⁷ All that is required is that class representatives have a working knowledge of the case and understand their respective roles as class representatives.²⁸

b. Financial Ability of the Class Representative to Singly Fund the Litigation. Notwithstanding the general knowledge requirement, the mandate that a named plaintiff "fairly ensure the adequate representation of all" typically gives rise to an inquiry by a defendant whether the class representative has the financial ability to fund the case.²⁹ This is perhaps one of the most fertile areas for a defendant to explore in crafting a response to a motion for class certification. In no other litigation arena is it possible to challenge standing based solely upon the plaintiff's financial status. Despite this, it is routine for a defendant to advance the argument that a named plaintiff who is not able to singly fund the litigation cannot fairly and adequately represent the class.³⁰ Though such an argument is frequently made, it has never been accepted as a sole basis to deny class certification.

Generally, courts eschew the question of whether litigants are rich or poor.³¹ "[I]f financial capacity is emphasized, it may mean that poorer claimants will be prevented from maintaining class actions. Accordingly, discretion is required; although the ability to fund the case is a factor, it probably should not be a determinative factor."³² Courts, therefore, normally will not permit an in-depth examination of the finances of the class representative,³³ and although questions concerning the financial ability of the named plaintiff to fund the...