A. Overview of Class Action Theory

• Library: South Carolina Damages (SCBar) (2009 Ed.)

A. Overview of Class Action Theory

A class action is a representative action that provides a means by which numerous claims may be pursued and effectively managed for unitary disposition. Class actions provide several benefits in the public interest. First, class action procedures are designed to avoid a multiplicity of individual litigations, thus conserving judicial resources and public funds. Second, class actions provide a fair and just means for claims sometimes numbering into the hundreds or thousands to be resolved with finality in a reasonable period of time compared to hundreds or thousands of repetitive lawsuits. Third, class actions provide a vehicle by which numerous small claims, impractical to pursue on an individual basis, may be adjudicated when a wrongful act has affected a large number of people. Finally, class actions may deter corporate or business wrongdoings by businesses that may be predisposed to wrongfully take money from consumers with the belief that no lawyer would represent an individual in a case involving relatively small monetary loss.

Prior to the adoption of the South Carolina Civil Rules of Procedure, a restrictive approach was imposed by statute and case law on actions which sought to adjudicate multiple claims in South Carolina state courts.² The rejection of this restrictive approach, and a move to contemporary case management and utilization of representative actions permitted by the South Carolina Rules of Civil Procedure, was discussed in McGann v. Mungo? Thus, with the adoption of Rule 23, class action procedures became an accepted pragmatic and contemporary method of resolving complex litigation.⁴

Rule 23 provides as follows:
(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if the court finds (1) the class is so numerous that joinder of all members is impractical, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, (4) the representative parties will fairly and adequately protect the interest of the class, and (5) in cases in which the relief primarily sought is not injunctive or declaratory with respect to the class as a whole, the amount in controversy exceeds one hundred dollars for each member of the class.
(b) (1) Derivative Actions by Shareholders. In a derivative action brought by one or more shareholders or members to enforce a right of a corporation or of an unincorporated association, the corporation or association having failed to enforce a right which may properly be asserted by it, the complaint shall be verified and shall allege that the plaintiff was a shareholder

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