Class actions are a type of action that most people have heard of but that may not be well understood. In Klier v. Elf Atochem North America, Inc. a class action was initiated against the operator of an industrial plant in Bryan, Texas. The class was divided into three subclasses for the purposes of settlement. Members of each class were granted specific remedies for their disparate injuries.
Class actions are a useful tool when a large number of people have been harmed by a single defendant but none or few of them have suffered sufficient harm to warrant filing an independent claim. Class action proceedings have res judicata power over plaintiffs who do not opt out. That means that if a plaintiff does not opt out of a class action, the verdict or settlement that results will be binding on that person and prevent them from filing that same claim in the future. If a plaintiff feels that his or her injury warrants a separate claim, that person is free to do so only after opting out of the class action.
In order to certify a class for a class action under the Federal Rules of Civil Procedure in the first place, a court must find that the class is so numerous that joinder of all members is impracticable, that there are questions of law or fact common to the class, that the claims or defenses of the representative parties are typical of the claims and defenses of the class and that the representative parties will fairly and adequately protect the interests of the class. Each of these requirements must be met in order for an action to go forward as a class action.
A class action necessarily requires a great deal of people to be involved. No hard number is found in the Federal Rules but joinder rules exist that are capable of incorporating many parties into a lawsuit before it becomes impracticable. Joinder rules lead to cases that are somewhat confusing from time to time but more people have to be involved to make certifying a class appropriate.
The people in the class must also be similarly situated. If there are not common issues of law or fact, a class action is not appropriate. In Klier v. Elf Atochem North America Inc. the court certified three subclasses. The people in each subclass were similarly harmed. There were questions of fact common to each subclass, as well. Each set of plaintiffs alleged that they had been harmed by the same plant. These subclasses were created so that the case could be settled instead of going to trial. One of the subclasses did not exhaust the resources allotted to it so the court utilized the doctrine of cy pres to distribute the remaining funds. That was determined to be a mistake and is the subject of another post on this blog.
Class representatives necessarily must represent the class. If the claims or defenses they present are atypical of the class, they are not accurately representing the interest of that class. This is likely the reason that the court split the Klier v. Elf Atochem North America, Inc. into three subclasses for the purposes of settlement. The representatives of each subclass likely had slightly divergent interests. In order to avoid a conflict of interest, the court split the class.
The fourth aspect of certifying a class to pursue a class action suit is part and parcel of the third aspect but requires something more. The representatives have a duty to the other members of the class to hire competent attorneys and to pursue claims that are in the best interest of the class as a whole. In order for a class action to be successful, someone must step up and take the lead. Without adequate representation, a class cannot be certified. Furthermore, it is unlikely that anyone would even begin a class action if nobody planned to step up and become the class representative.
The Klier v. Elf Atochem North America, Inc. opinion can be read here. The duties and obligations of the class representatives continued after the trial in that case. The rights of the class members were not fully realized after the initial settlement so the work continued. You can read more about the Fifth Circuit’s determination in the opinion and this blog post.
If you have any potential claim, contact the Berniard Law firm, toll-free, at 504-521-6000.