Obsolete Date: 3/1/1999
(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 matterwould 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) 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.
(4) 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.
(f) Jurisdiction Over Multi-State Classes (Reserved).
(g) Notice of Action.
(1) Following certification, the court by order, after hearing, shall direct the giving of notice to the class.
(2) The notice, based on the certification order and any amendment of the order, shall include:
(A) a general description of the action, including the relief sought, and the names and addresses of the representative parties;(B) a statement of the right of a member of the class under subdivision (h) to be excluded from the action by filing an election to be excluded, in the manner specified, by a certain date;(C) a description of possible financial consequences on the class;(D) a general description of any counterclaim being asserted by or against the class, including the relief sought;(E) a statement that the judgment, whether favorable or not, will bind all members of the class who are not excluded from the action;(F) a statement that any member of the class may enter an appearance either personally or through counsel;(G) an address to which inquiries may be directed; and(H) other information the court deems appropriate;
(3) the order shall prescribe the manner of notification to be used and specify the members of the class to be notified. In determining the manner and form of the notice to be given, the court shall consider the interests of the class, the relief requested, the cost of notifying the members of the class, and the possible prejudice to members who do not receive notice.
(4) Each member of the class, not a representative party, whose potential monetary recovery or liability is estimated to exceed $100 shall be given personal or mailed notice if his identity and whereabouts can be ascertained by the exercise of reasonable diligence.
(5) For members of the class not given personal or mailed notice under paragraph (4), the court shall provide, as a minimum, a means of notice reasonably calculated to apprise the members of the class of the pendency of the action. Techniques calculated to assure effective communication of information concerning commencement of the action shall be used. The techniques may include personal or mailed notice, notification by means of newspaper, television, radio, posting in public or other places, and distribution through trade, union, public interest, or other appropriate groups.
(6) The plaintiff shall advance the expense of notice under this subdivision if there is no counterclaim asserted. If a counterclaim is asserted the expense of notice shall be allocated as the court orders in the interest of justice.
(7) The court may order that steps be taken to minimize the expense of notice.
(1) A member of a plaintiff class may elect to be excluded from the action unless (A) he is a representative party, (B) the certification order contains an affirmative finding under subparagraph (A), (B), or (C) of subdivision (c) (1), or (C) a counterclaim under subdivision (k) is pending against the member or his class or subclass.
(2) Any member of a plaintiff class entitled to be excluded under paragraph (1) who files an election to be excluded, in the manner and in the time specified in the notice, is excluded from and not bound by the judgment in the class action.
(3) the elections shall be made a part of the record in the action.
(4) A member of a defendant class may not elect to be excluded.
(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.
(j) Discovery by or Against Class Members.
(1) Discovery under applicable discovery rules may be used only on order of the court against a member of the class who is not a representative party or who has not appeared. In deciding whether discovery should be allowed the court shall consider, among other relevant factors, the timing of the request, the subject matter to be covered, whether representatives of the class are seeking discovery on the subject to be covered, and whether the discovery will result in annoyance, oppression, or undue burden or expense for the members of the class.
(2) Discovery by or against representative parties or those appearing is governed by the rules dealing with discovery by or against a party to a civil action.
(1) A defendant in an action brought by a class may plead as a counterclaim any claim the court certifies as a class action against the plaintiff class. On leave of court, the defendant may plead as a counterclaim a claim against a member of the class or a claim the court certifies as a class action against a subclass.
(2) Any counterclaim in an action brought by a plaintiff class must be asserted before notice is given under subdivision (g).
(3) If a judgment for money is recovered against a party on behalf of a class, the court rendering judgment may stay distribution of any award or execution of any portion of a judgment allocated to a member of the class against whom the losing party has pending an action in or out of state for a judgment for money, and continue the stay so long as the losing party in the class action pursues the pending action with reasonable diligence.
(4) A defendant class may plead as a counterclaim any claim on behalf of the class that the court certifies as a class action against the plaintiff. The court may certify as a class action a counterclaim against the plaintiff on behalf of a subclass or permit a counterclaim by a member of the class. The court shall order that notice of the counterclaim by the class, subclass, or member of the class be given to the members of the class as the court directs, in the interest of justice.
(5) A member of a class or subclass asserting a counterclaim shall be treated as a member of a plaintiff class for the purpose of exclusion under subdivision (h).
(6) The court's refusal to allow, or the defendant's failure to plead, a claim as a counterclaim in a class action does not bar the defendant from asserting the claim in a subsequent action.
(l) Dismissal or Compromise.
(1) Unless certification has been refused under subdivision (b), a class action, without the approval of the court after hearing, may not be (A) dismissed voluntarily, (B) dismissed involuntarily without an adjudication on the merits, or (C) compromised.
(2) If the court has certified the action under subdivision (b), notice of hearing on the proposed dismissal or compromise shall be given to all members of the class in a manner the court directs. If the court has not ruled on certification, notice of hearing on the proposed dismissal or compromise may be ordered by the court which shall specify the persons to be notified and the manner in which notice is to be given.
(3) Notice given under paragraph (2) shall include a full disclosure of the reasons for the dismissal or compromise including, but not limited to, (A) any payments made or to be made in connection with the dismissal or compromise, (B) the anticipated effect of the dismissal or compromise on the class members, (C) any agreement made in connection with the dismissal or compromise, (D) a description and evaluation of alternatives considered by the representative parties and (E) an explanation of any other circumstances giving rise to the proposal. The notice also shall include a description of the procedure available for modification of the dismissal or compromise.
(4) On the hearing on the dismissal or compromise, the court may (A) as to the representative parties or a class certified under subdivision (b), permit dismissal with or without prejudice or approve the compromise, (B) as to a class not certified, permit dismissal without prejudice, (C) deny the dismissal, (D) disapprove the compromise, or (E) take other appropriate action for the protection of the class and in the interest of justice.
(5) The cost of notice given under paragraph (2) shall be paid by the party seeking dismissal, or as agreed in case of a compromise, unless the court after hearing orders otherwise.
(m) Effect of Judgment on Class. In a class action certified under subdivision (b) in which notice has been given under subdivision (g) or (l), a judgment as to the claim or particular claim or issue certified is binding, according to its terms, on any member of the class who has not filed an election of exclusion under subdivision (h). The judgment shall name or describe the members of the class who are bound by its terms.
(1) Only the representative parties and those members of the class who have appeared individually are liable for costs assessed against a plaintiff class.
(2) The court shall apportion the liability for costs assessed against a defendant class.
(3) Expenses of notice advanced under subdivision (g) are taxable as costs in favor of the prevailing party.
(o) Relief Afforded.
(1) The court may award any form of relief consistent with the certification order to which the party in whose favor it is rendered is entitled, including equitable, declaratory, monetary, or other relief to individual class or the class in a lump sum or installments.
(2) Damages fixed by a minimum measure of recovery provided by any statute may not be recovered in a class action.
(3) If a class is awarded a judgment for money, the distribution shall be determined as follows:
(A) the parties shall list as expeditiously as possible all members of the class whose identity can be determined without expending a disproportionate share of the recovery;(B) the reasonable expense of identification and distribution shall be paid, with the court's approval, from the funds to be distributed;(C) the court may order steps taken to minimize the expense of identification;(D) the court shall supervise, and may grant or stay the whole or any portion of, the execution of the judgment and the collection and distribution of funds to the members of the class as their interests warrant;(E) the court shall determine what amount of the funds available for the payment of the judgment cannot be distributed to members of the class individually because they could not be identified or located or because they did not claim or prove the right to money apportioned to them. The court after hearing shall distribute that amount, in whole or in part, to one or more states as unclaimed property or to the defendant.(F) in determining the amount, if any, to be distributed to a state or to the defendant, the court shall consider the following criteria: (i) any unjust enrichment of the defendant, (ii) the willfulness or lack of willfulness on the part of the defendant; (iii) the impact on the defendant of the relief granted; (iv) the pendency of other claims against the defendant; (v) any criminal sanction imposed on the defendant; and (vi) the loss suffered by the plaintiff class.(G) in order to remedy or alleviate any harm done, the court may impose conditions on the defendant respecting the use of the money distributed to him.(H) any amount to be distributed to a state shall be distributed as unclaimed property to any state in which are located the last known addresses of the members of the class to whom distribution could not be made. If the last known addresses cannot be ascertained with reasonable diligence, the court may determine by other means what portion of the unidentified or unlocated members of the class were residents of a state. A state shall receive that portion of the distribution that its residents would have received had they been identified and located. Before entering an order distributing any part of the amount to a state the court shall give written notice of its intention to make distribution to the attorney general of the state of the residence of any person given notice under subdivision (g) or (l) and shall afford the attorney general an opportunity to move for an order requiring payment to the state.
(p) Attorney's Fees.
(1) Attorney's fees for representing a class are subject to control of the court.
(2) If under an applicable provision of law a defendant or defendant class is entitled to attorney's fees from a plaintiff class, only representative parties and those members of the class who have appeared individually are liable for those fees. If a plaintiff is entitled to attorney's fees from a defendant class, the court may apportion the fees among the members of the class.
(3) If a prevailing class recovers a judgment for money or other award that can be divided for the purpose, the court may order reasonable attorney's fees and litigation expenses of the class to be paid from the recovery.
(4) If the prevailing class is entitled to declaratory or equitable relief, the court may order the adverse party to pay to the class its reasonable attorney's fees and litigation expenses if permitted by law in similar cases not involving a class or the court finds that the judgment has vindicated an important public interest. However, if any monetary award is also recovered, the court may allow reasonable attorney's fees and litigation expenses only to the extent that a reasonable proportion of that award is insufficient to defray the fees and expenses.
(5) In determining the amount of attorney's fees for a prevailing class the court shall consider the following factors:
(A) the time and effort expended by the attorney in the litigation, including the nature, extent, and quality of the services rendered;(B) results achieved and benefits conferred upon the class;(C) the magnitude, complexity, and uniqueness of the litigation;(D) the contingent nature of success;(E) in cases awarding attorney's fees and litigation expenses under paragraph (4) because of the vindication on an important public interest, the economic impact on the party against whom the award is made; and(F) appropriate criteria included in the North Dakota Code of Professional Responsibility.
(q) Arrangements for Attorney's Fees and Expenses.
(1) Before a hearing under subdivision (b) (1) or at any other time the court directs, the representative parties and the attorney for the representative parties shall file with the court, jointly or separately:
(A) a statement showing any amount paid or promised them by any person for the services rendered or to be rendered in connection with the action or for the costs and expenses of the litigation and the source of all of the amounts;
(B) a copy of any written agreement, or a summary of any oral agreement, between the representative parties and their attorney concerning financial arrangements or fee; and
(C) a copy of any written agreement, or a summary of any oral agreement, by the representative parties or the attorney to share these amounts with any person other than a member, regular associate, or an attorney regularly of counsel with his law firm. This statement shall be supplemented promptly if additional arrangements are made.
(2) Upon a determination that the costs and litigation expenses of the action cannot reasonably and fairly be defrayed by the representative parties or by other available sources, the court by order may authorize and control the solicitation and expenditure of voluntary contributions for this purpose from members of the class, advances by the attorneys or others, or both, subject to reimbursement from any recovery obtained for the class. The court may order any available funds so contributed or advanced to be applied to the payment of any costs taxed in favor of a party opposing the class.
(r) Statute of Limitations. The statute of limitations is tolled for all class members upon the commencement of an action asserting a class action. The statute of limitations resumes running against a member of a class:
(A) upon filing an election of exclusion;(B) upon entry of a certification order, or of an amendment thereof, eliminating him from the class;(C) except as to representative parties, upon entry of an order under subdivision (b) refusing to certify the action as a class action; and(D) upon dismissal of the action without an adjudication on the merits.
(s) Uniformity of Application and Construction. This Rule shall be construed and applied to effectuate its general purpose to make uniform the law with respect to the subject of this Rule among states enacting it.
(t) Short Title. This Rule may be cited as the "Model Class Actions Rule."
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 March 1, 2003.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.
Rule 23 was amended, effective March 1, 2011. The language and organization of the rule were changed to make the rule more easily understood and to make style and terminology consistent throughout the rules.
The following comments are based on 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 subparagraphs (2)(B) and (C), see 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 which encompasses the 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.In making this decision, the court 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 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 class members 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, 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 (7) 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 are 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 5 Moore's Federal Practice, § 23.41 (3rd Ed. 2010). 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 deserve special consideration. Subparagraph (1)(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 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 when 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 when the class failed to win damages or equitable relief but the court finds 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 information regarding the arrangements for attorney's fees and expenses 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.
SOURCES: Joint Procedure Committee Minutes of April 29-30, 2010, pages 6, 9; April 25-26, 2002, pages 10-12; 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).