RULE 23. CLASS ACTIONS
(t) Stay on Appeal only upon Order. An appeal from an order of a district court certifying an action as a class action or modifying an order of certification, or refusing to certify an action as a class action or modify an order of certification, does not stay proceedings in the district court unless the district court or the supreme court so orders.
(t) (u) Short Title. This rule may be cited as the "Model Class Actions Rule."
Rule 23 was amended, effective February 15, 1977; January 1, 1995; March 1, 1999; .
Rule 23 is substantially the same as the Model Class Actions Rule as drafted by the National Conference of Commissioners on Uniform State Laws. Prior to February 15, 1977, the effective date of this rule, Rule 23 was the same as Fed.R.Civ.P. 23.
Rule 23 was revised, effective _____________________. A new subdivision (t) was added to clarify that an appeal under paragraphs (d)(3) or (e)(4) does not stay district court proceedings unless a stay is ordered by the district court or the supreme court. It is expected that a stay will be sought first from the district court.
The following comments are based upon the official Comments to the Model Rule.
This subdivision sets forth the requirements that must be satisfied to authorize the bringing of a class action. Subdivision (b) authorizes the maintenance of a class action.
In connection with the finding under
paragraphs 2(B) subparagraphs (2)(B) and (C), see subdivisions paragraphs (c)(1) and (2).
After an action has been brought as a class action, if the court determines that there is an action pending in another court
an action which encompasses the action pending class action both as to general class and claim, the court hearing the class action may refuse to certify the action against or on behalf of the class if it concludes that this form is not the most appropriate one. The In making this decision, the court in making this decision shall must consider the sequence of the suits, the residence of the members of the class, where the transaction or occurrence involved took place, where the relevant evidence is available, and other pertinent facts.
Paragraph (4) presupposes the existence of rules of civil procedure which will allow the action to proceed on behalf of the representative parties as properly joined parties.
Denial of certification and the allowance of a personal action under paragraph (4) does not affect any possible intervention or joinder of class members who are not representative parties under the applicable state laws.
The jurisdictional provisions for multi-state classes were repealed, effective January 1, 1995, to conform with the Uniform Law Commissioners' Model Class Actions Rule, to allow application of the analysis found in Phillips Petroleum Company v. Shutts, 472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985), and to eliminate application of the more stringent "minimum contacts" test to class action plaintiffs.
The hearing required by paragraph (1), if the court wishes, can be combined with the hearing required by
subdivision paragraph (b) (1).
Subdivision (g) was amended, effective March 1, 1999, to allow notice via third-party commercial carrier as an alternative to mail.
Personal mailed notice to all members of the class is not required by this Rule. See Grant v. City of Lincoln, 225 N.W.2d 549 (Neb. 1975); Cartt v. Superior Court in and for County of Los Angeles, 50 Cal.App.3d 960, 124 Cal.Rptr. 376 (Ct. App. 1975).
The type of notice to be given may vary as to the persons to be notified
and, the form of notice, and, to some extent, the content. Paragraph (3) indicates that the court must consider a number of factors in deciding what type of notice to give.
Paragraph (8) would allow the court to order a defendant who has a mailing list of class members to cooperate with the representative parties in notifying the class members. Use of a computer or enclosing notice in a regular mailing would be possibilities.
Under some circumstances members of a plaintiff class cannot elect to be excluded and subdivision (h) is drafted to cover that situation. Such situations might arise in actions comparable to those under Federal Rule 23(b)(1); see 3B, Moore's Federal Practice, ¶ 23.35. In most situations members of a plaintiff class will be permitted to elect to be excluded.
The rules governing civil procedure in the courts of the State will normally govern procedures in class actions. Subdivision (i) covers certain matters that are found only in class actions and which deserve special consideration.
Paragraph Subparagraph (D) does not limit the power of the attorney general to participate in litigation under other provisions of applicable law.
Discovery against representative parties includes the representative parties' fee arrangement with counsel. Disclosure of this arrangement is required under subdivision (q).
The expense of notification of actions involving counterclaims is determined as provided in
subdivision paragraph (g)(7).
The nature of other costs and assessments against parties in a class action is left to the law generally applicable in the state. Subdivision (n) merely specifies the liability of class members if costs are assessed against the class and provides for assessment of the expense of notification under subdivision (g).
This section incorporates the idea of "fluid recovery," to benefit the class as a whole where distribution of damage awards to individual members is impracticable or a residue remains after distribution. See, State of West Virginia v. Charles Pfizer § Co., 314 F.Supp. 710 (S.D. N.Y. 1970); Bebchick v. Public Utilities Commission, 318 F.2d 187 (D.C. Cir.1963), cert. denied 83 S.Ct. 1304 (1963); Daar v. Yellow Cab Co., 433 P.2d 732, 63 Cal.Rptr. 724 (1967).
Courts under this rule have discretion to award attorney's fees in class actions where the class failed to win damages or equitable relief but the court feels the class action "prevailed" because the suit performed a valuable public service. See, Perham v. Southwestern Bell Telephone Co., 433 F.2d 421 (8th Cir. 1970).
Most of the factors listed in paragraph (5) derive from Lindy Bros. Builders, Inc. of Phila. v. American Radiator § Standard Sanitary Corp., 487 F.2d 161 (3rd Cir. 1973).
Subdivision (q) requires this information to be disclosed in order to assist the court in making determinations as to adequacy of representation by the representative parties and by the attorney for the class, as to any possible collusion between the representative parties and the attorney for the class, and as to any possible conflict of interests among the representative parties and the class members.
American Pipe and Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), held that the commencement of a class action under Federal Rule 23 suspends the applicable statute of limitations to all members of the class pending a determination of class action status. Subdivision (r) codifies the American Pipe case.
Effective , former subdivision (t), "Short Title," was relettered as subdivision (u), and a new subdivision (t) was added.
SOURCES: Joint Procedure Committee Minutes of January 24-25, 2002, pages 4-5; September 27-28, 2001, pages 13-15, 18-19; January 29-30, 1998, pages 18-19; April 28-29, 1994, page 23; September 20-21, 1979, pages 14-17; September 23-24, 1976, pages 62-76; Uniform Class Actions Rule (1976).
SUPERSEDED: N.D.R.C. § 28-0208 (1943).
CROSS REFERENCE: N.D.R.Civ.P. 19 (Joinder of Persons Needed for Just Adjudication), N.D.R.Civ.P. 20 (Permissive Joinder of Parties), and N.D.R.Civ.P. 24 (Intervention).