RULE 23. CLASS ACTIONS
(a) Commencement of a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all in a class action if:
(1) the class is so numerous or so constituted that joinder of all members, whether or not otherwise required or permitted, is impracticable; and
(2) there is a question of law or fact common to the class.
(b) Certification of Class Action.
(1) Unless deferred by the court, as soon as practicable after the commencement of a class action the court shall hold a hearing and determine whether or not the action is to be maintained as a class action and by order certify or refuse to certify it as a class action.
(2) The court may certify an action as a class action if it finds that (A) the requirements of subdivision (a) have been satisfied, (B) a class action should be permitted for the fair and efficient adjudication of the controversy, and (C) the representative parties fairly and adequately will protect the interests of the class.
(3) If appropriate, the court may (A) certify an action as a class action with respect to a particular claim or issue, (B) certify an action as a class action to obtain one or more forms of relief, equitable, declaratory, or monetary, or (C) divide a class into subclasses and treat each subclass as a class.
(c) Criteria Considered.
(1) In determining whether the class action should be permitted for the fair and efficient adjudication of the controversy, as appropriately limited under subdivision (b) (3), the court shall consider, and give appropriate weight to, the following and other relevant factors:
(A) whether a joint or common interest exists among members of the class;
(B) whether the prosecution of separate actions by or against individual members of the class would create a risk of inconsistent or varying adjudications with respect to individual members of the class that would establish incompatible standards of conduct for a party opposing the class;
(C) whether adjudications with respect to individual members of the class as a practical matter would be dispositive of the interests of other members not parties to the adjudication or substantially impair or impede their ability to protect their interests;
(D) whether a party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making final injunctive relief or corresponding declaratory relief appropriate with respect to the class as a whole;
(E) whether common questions of law or fact predominate over any questions affecting only individual members;
(F) whether other means of adjudicating the claims and defenses are impracticable or inefficient;
(G) whether a class action offers the most appropriate means of adjudicating the claims and defenses;
(H) whether members not representative parties have a substantial interest in individually controlling the prosecution or defense of separate actions;
(I) whether the class action involves a claim that is or has been the subject of a class action, a government action, or other proceeding;
(J) whether it is desirable to bring the class action in another forum;
(K) whether management of the class action poses unusual difficulties;
(L) whether any conflict of laws issues involved pose unusual difficulties; and
(M) whether the claims of individual class members are insufficient in the amounts or interests involved, in view of the complexities of the issues and the expenses of the litigation, to afford significant relief to the members of the class.
(2) In determining under subdivision (b)(2) that the representative parties fairly and adequately will protect the interests of the class, the court must find that:
(A) the attorney for the representative parties will adequately represent the interests of the class;
(B) the representative parties do not have a conflict of interest in the maintenance of the class action; and
(C) the representative parties have or can acquire adequate financial resources, considering subdivision (q), to assure that the interests of the class will not be harmed.
(d) Order on Certification.
(1) The order of certification shall describe the class and state: (A) the relief sought, (B) whether the action is maintained with respect to particular claims or issues, and (C) whether subclasses have been created.
(2) The order certifying or refusing to certify a class action shall state the reasons for the court's ruling and its findings on the factors listed in subdivision (c)(1).
(3) An order certifying or refusing to certify an action as a class action is appealable. (4) (3) Refusal of certification does not terminate the action, but does preclude it from being maintained as a class action.
(e) Amendment of Certification Order.
(1) The court may amend the certification order at any time before entry of judgment on the merits. The amendment may (A) establish subclasses, (B) eliminate from the class any class member who was included in the class as certified, (C) provide for an adjudication limited to certain claims or issues, (D) change the relief sought, or (E) make any other appropriate change in the order.
(2) If notice of certification has been given pursuant to subdivision (g), the court may order notice of the amendment of the certification order to be given in terms and to any members of the class the court directs.
(3) The reasons for the court's ruling shall be set forth in the amendment of the certification order.
An order amending the certification order is appealable. An order denying the motion of a member of a defendant class, not a representative party, to amend the certification order is appealable if the court certifies it for immediate appeal.
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(i) Conduct of Action.
(1) The court on motion of a party or its own motion may make or amend any appropriate order dealing with the conduct of the action including, but not limited to, the following:
(A) determining the course of proceedings or prescribing measures to prevent undue repetition or complication in the presentation of evidence or argument;
(B) requiring, for the protection of the members of the class or otherwise for the fair conduct of the action, that notice be given as the court directs, of (i) any step in the action, (ii) the proposed extent of the judgment, or (iii) the opportunity of members to signify whether they consider the representation fair and adequate, to enter an appearance and present claims or defenses, or otherwise to participate in the action;
(C) imposing conditions on the representative parties or on intervenors;
(D) inviting the attorney general to participate with respect to the question of adequacy of class representation;
(E) making any other order to assure that the class action proceeds only with adequate class representation; and
(F) making any order to assure that the class action proceeds only with competent representation by the attorney for the class.
(2) A class member not a representative party may appear and be represented by separate counsel.
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(u) The supreme court of North Dakota may in its discretion permit an appeal from an order of the district court certifying or refusing to certify an action as a class action, or from an order of the district court amending a certification order. An application for an appeal must be made to the supreme court within 10 days after entry of the order. An appeal does not stay proceedings in the district court unless the district court or the supreme court so orders. The supreme court may establish the procedure for applying for permission to appeal under this subdivision.
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.
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) and (C), see subdivisions (c)(1) and (2).
After an action has been brought as a class action, if the court determines that there is pending in another court an action which encompasses the action pending both as to general class and claim, the court hearing the 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 court in making this decision shall 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 (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 (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 (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.
Subdivision (u) was added, effective . This permissive appeal provision is substantially the same as subdivision (f) of the federal rule, except that this rule also includes appeals from amended certification orders. There are no restrictions on the discretion granted to the supreme court whether to permit an appeal. The supreme court is expected to develop standards for granting appellate review based upon any considerations that the court finds persuasive. The 10-day period for applying to the supreme court for permission to appeal is expected to lessen the likelihood that attempted appeals will interrupt continuing proceedings. The supreme court is expected to act expeditiously in determining whether to permit an appeal. Permission to appeal does not stay district court proceedings A request for a stay should first be requested from the district court, and if refused, the district court's action and explanation are expected to influence the supreme court's decision on the request.
SOURCES: Joint Procedure Committee Minutes of ; 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).