Originally published December, 2003
On December 1, 2003, a number of amendments to the Federal Rules of Civil Procedure took effect, including significant amendments to Rule 23, which governs class actions in the federal courts. The amendments to Rule 23 are evolutionary in nature, providing for greater court oversight and control of class action procedures, while not altering the basic prerequisites for certifying a case as a class action or the different types of class actions. The new amendments focus on four areas: i) the timing of the certification decision, ii) judicial oversight of class action settlements, iii) appointment of class counsel and iv) fees awards for class counsel.
TIMING OF CLASS DECISION
The first significant change to Rule 23 involves the timing for making the class certification decision. Previously, Rule 23(c) required the court to decide whether to certify a case for class action treatment "as soon as practicable after commencement of an action." Rule 23(c) now requires the certification decision to be made "at an early practicable time." Although this language sounds similar to the old rule, the new rule expressly permits a court to delay the certification decision until more information applicable to the certification decision has been obtained. Even under the old rule, many courts did in fact delay the class certification decision; thus, the new rule specifically recognizes that practice as the sounder approach.
Because courts should now delay the certification decision until they are sure that class treatment is appropriate, the amended Rule 23(c) no longer provides for a class to be conditionally certified. Courts do retain authority to amend or decertify a class based on subsequently discovered information, and the rule is further clarified to permit a court to amend the certification order at any time prior to final judgment. Because the previous rule spoke in terms of permitting amendments to certification orders prior to a decision on the merits, it was often unclear whether a court retained authority to amend a class definition after judgment on liability had been obtained but before all the damages issues had been determined.
REQUIREMENT TO DEFINE CLASS AND CLASS ISSUES
The amended Rule 23(c) also requires a court to define the class and specify the class issues as part of the certification order. One side effect of requiring the court to identify the class issues as part of the certification order is that parties may now be permitted or required to...