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Chapter 7: Class Actions

Updated 2017 by Sarah Somers

This chapter discusses a range of issues related to class action practice.1 Legal aid lawyers historically have used class actions to obtain relief for large groups of clients in a broad range of substantive areas. Since 1996, however, organizations funded by the Legal Services Corporation (LSC) have been barred from bringing or participating in class actions and must explore other approaches for systemic relief, such as declaratory judgment actions.2 Nonetheless, for those attorneys able to bring class actions, this chapter reviews the strategic considerations underlying the decision whether to bring a class action. It then discusses the class certification requirements set forth in Rule 23 of the Federal Rules of Civil Procedure, including amendments adopted in 2003, 3 how to define and manage the class action, and settlement issues.

In addition, in February 2005, the Class Action Fairness Act of 2005 (CAFA) was signed into law.4 CAFA was passed in an effort to limit forum shopping for perceived abuses of the class action mechanism in state courts seen as plaintiff–friendly. CAFA expands federal jurisdiction over class actions by requiring only minimal diversity in cases in which the amount in controversy, defined as the aggregated claims of individual class members, exceeds $5 million.5 The broad removal provision allows removal by home state defendants and does not require the consent of all defendants.6 In addition, the court may decline to exercise jurisdiction over class actions in which over one-third but less than two-thirds of the proposed plaintiff class and the primary defendants are citizens of the state of filing upon consideration of several factors set forth in the statute.7 Not always consistently, the federal appellate courts are deciding a range of jurisdictional issues arising from CAFA.8 If such issues come up in your practice, consult your circuit’s most recent decisions on them.9

Updated 2017 by Sarah Somers