ARTICLE · 09 JANUARY 2001

Rule 23 Purpose and Prerequisites

Ross & Hardies

United StatesEmployment and HR

Timothy Klenk

Co-written by Ms Mary Margaret Moore & Mr Stephen B. Mead

The authors wish to recognize the valuable assistance of Erin Fleming, Kirk Hanson, and John Killacky in preparing this chapter.

Scope of Article
Text of Rule 23
Purposes of Rule 23

Conservation of Time, Effort, and Expense
Providing Forum for Small Claimants
Deterrence of Illegal Activities
Expansion of Effect of Judgments

Prerequisites to Maintaining Class Action Under Rule 23

Requirements of Rules 23(a) and 23(b) in General
1. Scheme of Rules 23(a) and 23(b)
  1. Rule 23(a) - General Requirements
  2. Rule 23(b) - General Requirements
2. Overlapping Requirements of Rules 23(a) and 23(b)
3. Burden of Establishing That Class Action Prerequisites Have Been Met
Prerequisites Under Rule 23(a)
1. Purpose of Rule 23 (a)
2. Class Certification Hearing
3. Defining the Class
4. Rule 23(a) Requirements
  1. Numerosity
    (1) Burden of showing numerosity
    (2) Other factors making joinder impractical
    (3) Size of class (a) Class too small
    (b) Class numerous enough
  2. Common Questions of Law and Fact
  3. Typicality
  4. Adequacy of Representation
    (1) Requirement in general
    (2) Adequacy of representative party (a) Is representative party a member of the class?
    (b) Do interests of representative party coincide with interests of class?
    (c) Does representative party’s relationship to his attorney indicate that he is more interested in recovering attorneys’ fees than in obtaining relief for class?
    (d) Can representative party afford to pay for cost of litigation, including cost of notice to class?
    (e) Do personal characteristics of plaintiffs render them inadequate representatives? (3) Adequacy of attorney for class (a) Is attorney for class legally qualified to represent class? (i) General rule
    (ii) Criteria applied for determining adequacy of counsel (b) Does attorney for class meet requisite ethical standards for representing class? (i) Potential for abuse of Rule 23
    (ii) Solicitation of class members
    (iii) Improper communications with class members
    (iv) Collusive settlements
5. Article III (Case or Controversy) Standing
  1. Requirement of Standing
  2. Mootness
Prerequisites Under Rule 23(b)
1. Rule 23(b)(1) Class Actions
  1. Rule 23(b)(1)(A)
    (1) Does Rule 23(b)(1)(A) apply to actions for damages?
    (2) Does Rule 23(b)(1)(A) apply to medical monitoring claims?
    (3) Can the party opposing a class action waive application of Rule 23(b)(1)(A)?
  2. Rule 23(b)(1)(B)
    (1) Does Rule 23(b)(1)(B) apply to actions for damages?
    (2) Does Rule 23(b)(1)(B) apply when a decision in an individual action might be applied as precedent?
  3. Rule 23(b)(2) Class Actions
    1. Action by Party Opposing Class with Respect to Class
    2. Injunction or Corresponding Declaratory Relief Appropriate
    3. Predominance of Common Issues Inquiry
  4. Rule 23(b)(3) Class Actions
    1. Predominance of Common Questions
      (1) Defining common and individual questions
      (2) Determining predominance (a) Different tests (i) Economies of time and effort test
      (ii) Outcome-determinative test
      (iii) Common nucleus of operative facts test (b) Predominance of damage issues
      (c) Predominance and individualized defenses
      (d) Predominance in fraud cases
    2. Superiority
      (1) Factors relating to superiority determination (a) "Other" factors
      (b) Class members' interest in controlling litigation
      (c) Pending litigation
      (d) Desirability of concentrating litigation in particular forum
      (e) Difficulties in management of class action
      (f) Available alternatives to class actions (2) Purposes of Rule 23(b)(3) class actions - convenience and desirability (a) Convenience to class members asserting claims
      (b) Convenience to parties opposing class
      (c) Convenience to courts

Recent Class Action Developments

Class Certification Appeals Under Rule 23(f)
Proposed Changes to Rule 23
Legislative Action Affecting Rule 23

I. SCOPE OF ARTICLE

Whether a class action can be maintained in the federal courts depends on whether the prerequisites set forth in Fed.R.Civ.P. 23(a) and 23(b) (Rule 23) are satisfied. This chapter discusses these prerequisites. Because courts often base their determination as to satisfaction of these prerequisites on the purposes underlying Rule 23, those purposes are also considered.

This article is designed to assist counsel seeking either to maintain or to defeat a class action by directing them to cases and other authorities relating to the issues on which the class action determination will depend. For this reason, the authors have attempted to define those issues, to present some of the arguments that can be made with respect to them, and to provide references to authorities relating to them.

II. TEXT OF RULE 23

For the reader’s convenience, Rule 23 is set forth here in its entirety:

(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:

(1) the prosecution of separate actions by or against individual members of the class would create a risk of

(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or

(B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or

(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or

(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.

(C) Determination by Order Whether Class Action to be Maintained; Notice; Judgment; Actions Conducted Partially as Class Actions.

(1) As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional, and may be altered or amended before the decision on the merits.

(2) In any class action maintained under subdivision (b)(3), the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall advise each member that (A) the court will exclude the member from the class if the member so requests by a specified date; (B) the judgment, whether favorable or not, will include all members who do not request exclusion; and (C) any member who does not request exclusion may, if the member desires, enter an appearance through counsel.

(3) The judgment in an action maintained as a class action under subdivision (b)(1) or (b)(2), whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action under subdivision (b)(3), whether or not favorable to the class, shall include and specify or describe those to whom the notice provided in subdivision (c)(2) was directed, and who have not requested exclusion, and whom the court finds to be members of the class.

(4) When appropriate (A) an action may be brought or maintained as a class action with respect to particular issues, or (B) a class may be divided into subclasses and each subclass treated as a class, and the provisions of this rule shall then be construed and applied accordingly.

(D) Orders in Conduct of Actions. In the conduct of actions to which this rule applies, the court may make appropriate orders: (1) determining the course of proceedings or prescribing measures to prevent undue repetition or complication in the presentation of evidence or argument; (2) requiring, for the protection of the members of the class or otherwise for the fair conduct of the action, that notice be given in such manner as the court may direct to some or all of the members of any step in the action, or of the proposed extent of the judgment, or of the opportunity of members to signify whether they consider the representation fair and adequate, to intervene and present claims or defenses, or otherwise to come into the action; (3) imposing conditions on the representative parties or on intervenors; (4) requiring that the pleadings be amended to eliminate therefrom allegations as to representation of absent persons, and that the action proceed accordingly; (5) dealing with similar procedural matters. The orders may be combined with an order under Rule 16, and may be altered or amended as may be desirable from time to time.

(E) Dismissal or Compromise. A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.

(F) Appeals. A court of appeals may in its discretion permit an appeal from an order of a district court granting or denying class action certification under this rule if application is made to it within ten days after entry of the order. An appeal does not stay proceedings in the district court unless the district judge or the court of appeals so orders.

III. PURPOSES OF RULE 23

Lawyers seeking to maintain or defeat a class action based on the existence or nonexistence of the prerequisites found in Rules 23(a) and 23(b) will be most successful if they keep in mind the purposes for which Rule 23 was promulgated and relate their arguments for maintaining or defeating the class to those purposes.

A. Conservation of Time, Effort, and Expense

Perhaps the most frequently cited reason for Rule 23’s existence is that it saves the time, effort, and expense of litigants and the courts by combining multiple lawsuits into one action. As stated by Justice Stevens in General Telephone Company of Southwest v. Falcon, 457 U.S. 147, 72 L.Ed.2d 740, 102 S.Ct. 2364, 2369 (1982), "the class-action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every [class member] to be litigated in an economical fashion under Rule 23." See also Catholic Social Services, Inc. v. Immigration & Naturalization Service, 182 F.3d 1053, 1059 – 1060 (9th Cir. 1999); Lowery v. Circuit City Stores, Inc., 158 F.3d 742, 758 n.5 (4th Cir. 1998); Allison v. Citgo Petroleum Corp., 151 F.3d 402, 414 (5th Cir. 1998); In re General Motors Corporation Pick-Up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768, 783 (3d Cir. 1995); Dhamer v. Bristol-Myers Squibb Co., 183 F.R.D. 520, 533 (N.D.Ill. 1998).

There is, however, considerable debate as to whether Rule 23 has actually fulfilled this purpose. For example, the chairman of the Judicial Conference’s Advisory Committee on Civil Rules wrote, "Class actions are being certified at unprecedented rates, and they are involving a substantial [number], if not a majority, of all American citizens." Senate Subcommittee Holds Hearing on Class Action Litigation Reform, 66 U.S.L.W. 2294 (Nov. 18, 1997) (statement of Judge Paul V. Niemeyer). Nonetheless, others view the class action as "an important tool that brings representation to the unrepresented, and results in important discrimination and consumer decisions." Id. (statement of Senator Grassley, R-Iowa).

There can be little doubt that many actions that would not have been filed as individual actions have been filed as class actions under Rule 23. In addition, Rule 23 has resulted in many suits being maintained on behalf of large classes of plaintiffs that otherwise would have been prosecuted on behalf of only a few individuals. Many of these actions are extremely complex and consume innumerable hours of the time of both the courts and the litigants. Often, absent class action procedures, there would have been few (or no) other lawsuits involving the same defendants and the same issues. As a result, it seems that one practical effect of Rule 23 has been to encourage litigation that would not otherwise exist, thereby resulting in substantial inconvenience, rather than convenience, to the parties and the courts.

Cognizant of the increased burden created by class litigation, the Judicial Conference’s Advisory Committee on Civil Rules has considered additional certification requirements for Rule 23. One such consideration for certification under Rule 23(b)(3), informally named the "just ain’t worth it" factor, considers "whether the probable relief to individual class members justifies the costs and burdens of class litigation." Edward H. Cooper, The (Cloudy) Future of Class Actions, 40 Ariz.L.Rev. 923, 937 (1998). In the area of securities litigation, Congress has taken legislative action in an effort to reap the efficiency benefits of the class action device while minimizing abuse. See, e.g., Private Securities Litigation Reform Act of 1995, 15 U.S.C. §77z-1(a). For a discussion of other proposals to reform class action litigation, see §§2.74 - 2.75.

B. Providing Forum for Small Claimants

The fact that Rule 23 has in reality created a heavier burden on the courts rather than relieving their already heavy workload suggests that perhaps the real thrust of the Rule is to provide a means of recovery for people who have legitimate claims but would otherwise not assert them - either because the amounts they would recover are too small or because they are unaware of the existence of their claims. The courts sometimes refer to such suits as "negative value" class actions, meaning that the costs incurred to bring each claim individually would exceed the potential individual recovery. See Castano v. American Tobacco Co., 84 F.3d 734, 748 (5th Cir. 1996); In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1300 (7th Cir.), cert. denied, 118 S.Ct. 184 (1995).

Initially, federal courts were reluctant to recognize broad use of the class action device to provide a forum for small claimants. See In re Hotel Telephone Charges, 500 F.2d 86, 90 – 91 (9th Cir. 1974); Eisen v. Carlisle & Jacquelin, 479 F.2d 1005, 1016 – 1017 (2d Cir. 1973) (Eisen III); Hackett v. General Host Corp., 455 F.2d 618, 625 – 626 (3d Cir. 1972). See also Zahn v. International Paper Co., 414 U.S. 291, 38 L.Ed.2d 511, 94 S.Ct. 505 (1973) (restricting availability of diversity jurisdiction class actions to classes in which every member of class satisfies amount-in-controversy requirement of 28 U.S.C. §1332).

The negative value suit, however, has come into vogue. In Amchem Products, Inc. v. Windsor, 521 U.S. 591, 138 L.Ed.2d 689, 117 S.Ct. 2231, 2246 (1997), Justice Ginsburg wrote:

The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.
Quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997).

See also

In re Masonite Corporation Hardboard Siding Products Liability Litigation, 170 F.R.D. 417, 426 (E.D. La. 1997).

Nonetheless, one of the most important impediments to small claimants seeking to bring class actions in federal court may be crumbling. In 1973, the Supreme Court held that diversity class actions brought under 28 U.S.C. §1332 could be maintained only if every plaintiff class member met the $10,000 (now $75,000) amount-in-controversy requirement. Zahn, supra, 94 S.Ct. at 524. In 1990, however, Congress passed the Judicial Improvements Act, Pub.L. No. 101-650, 140 Stat. 5089. See 28 U.S.C. §1367. 28 U.S.C. §1367(a) grants district courts supplemental jurisdiction over "other claims that are so related to claims in the action within [the court’s] original jurisdiction that they form part of the same case or controversy." While 28 U.S.C. §1367(b) carves out exceptions to this rule, the related claims of unnamed class action plaintiffs are not among those exceptions.

The legislative history accompanying 28 U.S.C. §1367 indicates that the section was not intended to affect the jurisdictional requirements in diversity-only class actions and specifically cites Zahn, supra, as unaffected by the new section. H.R. 101-734, reprinted in 1990 U.S.C.C.A.N. 6860, 6875 n.17. Nevertheless, the Fifth Circuit found 28 U.S.C. §1367 clear and unambiguous and thus declined to look at the legislative history. Acknowledging - and then ignoring - the fact that omission of class actions from the exceptions to 28 U.S.C. §1367 "may have been a clerical error," the court held that the plain language of the statute authorizes supplemental jurisdiction over unnamed class members, as long as the class representatives meet the amount-in-controversy requirement. In re Abbott Laboratories, 51 F.3d 524, 528 - 529 (5th Cir. 1995), aff’d by an equally divided Court, 120 S.Ct. 1578 (2000) (per curiam).

At the time of this writing, only the Seventh Circuit has followed the Fifth Circuit’s lead in Abbott Laboratories. See Stromberg Metal Works, Inc. v. Press Mechanical, Inc., 77 F.3d 928, 932 (7th Cir. 1996) (applying rule to joinder); In re Brand Name Prescription Drugs Antitrust Litigation, 123 F.3d 599, 607 (7th Cir. 1997) (applying rule to class actions). The only other circuits to rule on the issue have rejected Abbott Laboratories’ overruling of Zahn. See Meritcare, Inc. v. St. Paul Mercury Insurance Co., 166 F.3d 214, 222 (3d Cir. 1999); Leonhardt v. Western Sugar Co., 160 F.3d 631, 641 (10th Cir. 1998). The Second Circuit has declined to rule on the issue. E. R. Squibb & Sons, Inc. v. Accident & Casualty Insurance Co., 160 F.3d 925, 934 (2d Cir. 1998). The April 2000 per curiam opinion of the equally divided Supreme Court, which affirmed the Fifth Circuit decision, Free v. Abbott Laboratories, Inc., 529 U.S. 333, 146 L.Ed.2d 306, 120 S.Ct. 1578 (2000) (O’Connor, J., abstaining), carries no precedential value and is a poor predictor of the continued viability of Zahn. In those circuits that have rejected Free, therefore, each individual class member must continue to satisfy the amount-in-controversy requirement.

C. Deterrence of Illegal Activities

Class actions were designed "not only to compensate victimized members of groups who are similarly situated … but also to deter violations of the law, especially when small individual claims are involved. Disgorgement of illegal gains from wrongdoers, together with …. application of the recovery for the benefit of class members under cy pres doctrines, would fulfill the deterrence objectives of class actions."
Gammon v. GC Services Limited Partnership, 162 F.R.D. 313, 321 (N.D.Ill. 1995), quoting Herbert B. Newberg and Alba Conte, NEWBERG ON CLASS ACTIONS §4.36 (3d ed. 1992).

With this and similar language, courts have recognized the value of the class action to deter numerous types of illegal conduct. See Simer v. Rios, 661 F.2d 655, 676 n.43 (7th Cir. 1981), in which the Seventh Circuit noted that the policy of deterring illegal activities can outweigh manageability problems in class actions.

In another context, the Supreme Court has recognized a legislative intent to allow certain individual actions to proceed in the name of the public good:

Section 1988 [
addressing fee shifting under the Civil Rights statutes] is not a ‘relief act for lawyers.’ … Instead, it is a tool that ensures the vindication of important rights, even when large sums of money are not at stake, by making attorney’s fees available under a private attorney general theory. [Citation omitted.] Farrar v. Hobby, 506 U.S. 103, 121 L.Ed.2d 494, 113 S.Ct. 566, 578 (1992) (O’Connor, J., concurring).

As a result, some courts have taken a liberal approach to the issue of standing in class actions. See Association of Community Organizations for Reform Now v. Fowler, 178 F.3d 350, 364 - 365 (5th Cir. 1999). But see Hamm v. Rhone-Poulenc Rorer Pharmaceuticals, Inc., 187 F.3d 941, 952 (8th Cir. 1999) (dismissing class action for lack of standing, despite private attorney general rationale).

The principal criticism of the "private attorney general" theory is much the same as the response to the small claimant argument. The courts have recognized the interest of deterring illegal activities but have not found the class action the ideal means of deterrence. For example, in Spegon v. Catholic Bishop of Chicago, 989 F.Supp. 984, 987 (N.D.Ill. 1998), the court stated:

This Court does not question the congressional wisdom behind these statutes, but rather the lawyers who have chosen to hijack these statutes for their own selfish ends. The legislative vision of public rights being vindicated by plaintiffs acting as a ‘private attorney general’ …. has unfortunately given way to a flood of insignificant claims being litigated in the hopes of large attorney’s fees. [
Citation omitted.]

Thus, although class actions may have some deterrent effect on illegal activities, at least when there are no other effective means of enforcement, the potential for the misuse of class actions and their inherent difficulties often make them an inefficient means of accomplishing the desired result. Even when there may be no other effective means of enforcing a public policy or law, the problems inherent in the management of large class action suits may make it impossible to ensure the constitutional rights of all of the parties to the action. See, e.g., In re General Motors Corporation Pick-Up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768, 794 - 797 (3d Cir. 1995); Aiello v. Providian Financial Corp. (In re Aiello), 231 B.R. 693 (N.D.Ill. 1999).

D. Expansion of Effect of Judgments

In the majority opinion in the well-known case Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 40 L.Ed.2d 732, 94 S.Ct. 2140, 2152 (1974) (Eisen IV), the Supreme Court explained that "Rule [23] was intended to insure that the judgment, whether favorable or not, would bind all class members who did not request exclusion from the suit."

However, while absent class members are normally bound by the judgment in the action, should the court determine that their interests were not adequately represented by the class members who were present, due process is not satisfied, and absent class members are allowed to collaterally attack the judgment. Crawford v. Honig, 37 F.3d 485, 487 (9th Cir. 1994), citing Hansberry v. Lee, 311 U.S. 32, 85 L.Ed. 22, 61 S.Ct. 115, 118 – 119 (1940) (absent class members not bound by modification of injunction could collaterally attack proceedings when modification was beyond scope of original decision, modification was made during settlement negotiations without notice to absent class members, and absent class members’ interests were not adequately represented during modification proceedings).

The ability to obtain a judgment that will be binding on all members of the class can be advantageous to both the plaintiffs and the defendants as well as the courts. In some cases, a defendant may be faced with a number of actual or threatened suits in which the relief granted could be inconsistent. In such cases, defendants may desire adjudications by a single court that will bind all plaintiffs or potential plaintiffs. Even when the relief requested by the plaintiffs is not inconsistent, defendants who are convinced that they have not violated the law may wish to avoid the expense involved in defending multiple suits by having the legality of their behavior determined once and for all with respect to all potential plaintiffs. Likewise, a group of plaintiffs may desire to obtain an adjudication against a defendant that will assure that the defendant treats the plaintiffs and all other similarly situated persons equally.

As far as class actions that are brought under Rule 23(b)(1) are concerned, the binding effect of a judgment on the class is necessary to protect the party opposing the class from inconsistent standards of conduct and to protect class members from adjudications that could dispose of their interests. Similarly, under certain circumstances, a judgment affecting the entire class may be necessary to assure that the party opposing a Rule 23(b)(2) class action will treat all class members equally. However, under Rule 23(b)(3), the binding effect of a judgment on all class members is not as important because the determination in one case will not have as great an impact on other class members. Thus, Rule 23 allows class members in subsection (b)(3) class actions to "opt out" of the class. There is no such right under subsections (b)(1) and (b)(2). Rule 23(c)(2). See Ortiz v. Fibreboard Corp., 527 U.S. 815, 144 L.Ed.2d 715, 119 S.Ct. 2295, 2311 (1999); Ticor Title Insurance Co. v. Brown, 511 U.S. 117, 128 L.Ed.2d 33, 114 S.Ct. 1359, 1363 (1994). Similarly, because the binding effect of a Rule 23(b)(3) judgment for or against a class is really a matter of convenience rather than necessity, the Rule provides for the balancing of the advantages of a class-wide judgment against the difficulties in managing the class action, and for the consideration of other factors that go to the question of whether a class action is "superior" to other methods of adjudicating the controversy between the parties.

IV. PREREQUISITES TO MAINTAINING CLASS ACTION UNDER RULE 23

A. Requirements of Rules 23(a) and 23(b) in General

1. Scheme of Rules 23(a) and 23(b)

The criteria for determining whether a class action can be maintained in federal court are set forth in Rules 23(a) and 23(b). In order to proceed as a class action, or be certified to facilitate settlement, a suit must satisfy all of the criteria of Rule 23(a) and the criteria contained in one of the three subsections of Rule 23(b). See In re General Motors Corporation Pick-Up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768, 796 (3d Cir. 1995); Gaspar v. Linvatec Corp., 167 F.R.D. 51, 55 (N.D.Ill. 1996).

a. Rule 23(a) - General Requirements

Rule 23(a) provides that "[o]ne or more members of a class may sue or be sued as representative parties on behalf of all [class members]" if four specific requirements are satisfied. The first requirement is that "the class is so numerous that joinder of all members is impractical." Id. This is often called the "numerosity" requirement. The second requirement is that there be "questions of law or fact common to the class." Id. This requirement is sometimes referred to as the "commonality" or "common question" requirement. The third requirement is "typicality" — "the claims or defenses of the representative parties" must be "typical of the claims or defenses of the class." Id. Finally, the court must find that "the representative parties will fairly and adequately protect the interests of the class" (adequacy of representation). Id. Each of these four prerequisites must be established for an action to proceed as a class action.

b. Rule 23(b) - General Requirements

Rule 23(b) describes three different types of class actions and sets forth the requirements for each. Under the scheme of Rule 23, the requirements of only one of the three different types of class actions set forth in subsection (b) must be satisfied (in addition to all of the requirements of subsection (a)). In promulgating Rule 23(b), the Supreme Court rejected the "true," "hybrid," and "spurious" designations of the old Rule 23 and attempted to "describe in more practical terms the occasions for maintaining class actions." Advisory Committee Notes, Fed.R.Civ.P. 23(b), 28 U.S.C.A.

Rule 23(b)(1) describes a category of cases in which class action treatment is necessary to avoid substantial prejudice to the parties. Rule 23(b)(1)(A) relates to cases in which inconsistent or varying adjudications "would establish incompatible standards of conduct for the party opposing the class." An example of a Rule 23(b)(1)(A) class action is a case in which conduct urged by one class member might be alleged by another to be illegal. Rule 23(b)(1)(B) refers to cases in which the interests of one class member might, as a practical matter, be prejudiced by the adjudication of a controversy with another. An example of a Rule 23(b)(1)(B) class action is an action against a fund that is insufficient to satisfy the claims of all persons with claims against it. See, e.g., Ortiz v. Fibreboard Corp., 527 U.S. 815, 144 L.Ed.2d 715, 119 S.Ct. 2295 (1999).

Rule 23(b)(2) applies when "the party opposing the class has acted or refused to act on grounds generally applicable to the class," thereby making final injunctive or declaratory relief appropriate with respect to the class as a whole. It does not apply to actions that are predominantly for money damages. Rule 23(b)(2) is most often applied in civil rights cases in which some policy of the defendant is alleged to discriminate against all members of a class. One example is a case in which an employer is alleged to have applied criteria that discriminate on the basis of race or sex for hiring or promoting employees. See, e.g., Munoz v. Orr, 200 F.3d 291, 297 - 298 (5th Cir. 2000).

The most frequently invoked provision of Rule 23(b) is subsection (b)(3). This subsection permits class actions when the court finds that common questions of law or fact predominate over individual questions (predominance) and that "a class action is superior to other available methods for the fair and efficient adjudication of the controversy" (superiority). Rule 23(b)(3). It further sets forth four nonexclusive criteria to be considered in determining whether the superiority test is met. They are (1) the interest of other class members in controlling the case, (2) the nature and extent of other litigation involving the same controversy, (3) the desirability of concentrating the claims of all class members in one forum, and (4) the difficulties likely to be encountered in the management of a class action. Plaintiffs commonly seek certification under Rule 23(b)(3), for example, in mass tort cases (see, e.g., In re General Motors Corporation Pick-Up Truck Fuel Tank Products Liability Litigation, 55 F.3d 768, 784 (3d Cir. 1995)), in antitrust cases (see, e.g., Paper Systems, Inc. v. Mitsubishi Corp., 193 F.R.D. 601 (E.D.Wis. 2000)), and in securities litigation (see, e.g., In re Ikon Office Solutions, Incorporated, Securities Litigation, 194 F.R.D. 166 (E.D.Pa. 2000)).

Although an action must meet all of the requirements of Rule 23(a) to be maintained as a class action, it is necessary for it to meet the requirements of only one of the three subdivisions of Rule 23(b).

2. Overlapping Requirements of Rules 23(a) and 23(b)

Counsel seeking either to establish or to defeat a class action should be aware of the substantial overlap between the requirements of Rule 23(a) and Rule 23(b). For example, counsel attempting to defeat a class action may be unable to show that there are no common issues, a requirement under Rule 23(a), but may be able to use many of the same facts and arguments to establish that common questions do not predominate over individual questions as required by Rule 23(b)(3). The same facts and arguments might also be used to establish that the action would be unmanageable (Rule 23(b)(3)(D)) because of the inordinate amount of trial time that would be required to deal with individual issues. Similarly, if a class is not "so numerous that joinder of all members is impracticable" (Rule 23(a)(1)), it may be unlikely that "a class action [would be] superior to other available methods for the fair and efficient adjudication of the controversy" (Rule 23(b)(3)). If "the claims or defenses of the representative parties" are not "typical of the claims or defenses of the class" (Rule 23(a)(3)), it is unlikely that the class representative will "fairly and adequately protect the interests of the class" (Rule 23(a)(4)), that common issues will predominate over individual issues (Rule 23(b)(3)), or that a class action will be superior to other methods of adjudicating the controversy between the parties (id.).

3. Burden of Establishing That Class Action Prerequisites Have Been Met

It is well established that the party seeking to maintain an action as a class action has the burden of establishing that each of the prerequisites for a class action has been met. General Telephone Company of Southwest v. Falcon, 457 U.S. 147, 72 L.Ed.2d 740, 102 S.Ct. 2364, 2372 (1982); Retired Chicago Police Association v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993); Reyes v. Walt Disney World Co., 176 F.R.D. 654, 656 (M.D.Fla. 1998); Gaspar v. Linvatec Corp., 167 F.R.D. 51, 55 (N.D.Ill. 1996).

Nevertheless, there are a number of cases holding that when there is a doubt as to whether the prerequisites for a class action exist, doubt should be resolved in favor of the allowance of the class. See, e.g., Kidwell v. Transportation Communications International Union, 946 F.2d 283, 305 (4th Cir. 1991); Duprey v. Connecticut Department of Motor Vehicles, 191 F.R.D. 329, 331 (D.Conn. 2000); Singer v. AT&T Corp., 185 F.R.D. 681, 685 (S.D.Fla. 1998) ("Doubts regarding the propriety of class certification should be resolved in favor of certification."). Similarly, the district court in Edgington v. R. G. Dickinson & Co., 139 F.R.D. 183, 188 (D.Kan. 1991), stated that "courts have erred in favor of certification since the decision is not set in stone, but is subject to later modification."

These cases, however, should not be read to give the impression that class action status will be granted automatically. Even courts that take a liberal approach to class certification recognize that courts "may certify a class action only after undertaking a ‘rigorous analysis’ to assure that all of the requirements of Rule 23 have been met." Duprey, supra.

It is also well settled that there is no requirement as to which party must seek a ruling with respect to the propriety of the class. See, e.g., Graves v. Walton County Board of Education, 686 F.2d 1135, 1140 (5th Cir. 1982). In fact, the court itself "has an independent obligation to decide whether an action was properly brought as a class action even if neither party moves for a ruling." Gore v. Turner, 563 F.2d 159, 165 (5th Cir. 1977); Nagel v. ADM Investor Services, Inc., 65 F.Supp.2d 740, 746 - 747 (N.D.Ill. 1999).

B. Prerequisites Under Rule 23(a)

1. Purpose of Rule 23(a)

Rule 23(a) provides that "[o]ne or more members of a class may sue or be sued as representative parties" [emphasis added] if four specific conditions are met. The enumerated conditions are (a) numerosity, (b) commonality, (c) typicality, and (d) adequacy of representation. In addition to these explicit requirements, courts have found several implicit criteria, namely that (a) there be a definable class, (b) the class members have standing to bring their claims, and (c) the controversy is live, not moot.

The primary purpose of Rule 23(a) is to protect the due process rights of absent class members. Because all potential class members are bound by final judgments, the Rule 23(a) requirements "effectively limit the class claims to those fairly encompassed by the named plaintiff’s claims." General Telephone Company of Southwest v. Falcon, 457 U.S. 147, 72 L.Ed.2d 740, 102 S.Ct. 2364, 2369 (1982). As one court has stated, "Compliance with the rule might prevent [a court] from lumping people with divergent interests into a single class, but the rule is meant to do just that." [Emphasis in original.] In re Asbestos Litigation, 90 F.3d 963, 1008 (5th Cir. 1996).

Additionally, Rule 23(a) ensures that class treatment is a necessary and efficient means of resolving a dispute. Baby Neal ex rel. Kanter v. Casey, 43 F.3d 48, 55 (3d Cir. 1994). Nonetheless, matters of fairness, efficiency, or general policy do not diminish the need to carefully apply the Rule 23(a) requirements. General Telephone Company, supra, 102 S.Ct. at 2369 – 2370. More recently, some litigants have attempted to avoid the Rule 23 requirements in order to achieve global settlements of mass tort claims. Soundly rejecting such an end-run around Rule 23 in the context of a settlement, the Supreme Court stated:

The safeguards provided by the Rule 23(a) and (b) class-qualifying criteria, we emphasize, are not impractical impediments - checks shorn of utility - in the settlement-class context…. [
T]he standards set for the protection of absent class members serve to inhibit appraisals of the chancellor’s foot kind — class certifications dependent upon the court’s gestalt judgment or overarching impression of the settlement’s fairness. Amchem Products, Inc. v. Windsor, 521 U.S. 591, 138 L.Ed.2d 689, 117 S.Ct. 2231, 2248 (1997).

See also Clay v. American Tobacco Co.,

188 F.R.D. 483, 489 (S.D.Ill. 1999); Hendricks-Robinson v. Excel Corp., 164 F.R.D. 667, 669 (C.D.Ill. 1996).

The boundaries, however, of this inquiry are unclear:

While the Court may not consider arguments directly on the merits, it takes into account the substantive elements of plaintiff’s claims and it looks to the proof necessary to those elements so as to envision the form trial on those issues would take.
Clay, supra.

This approach contemplates a review of the manageability problems inherent in class action trials. At the same time, however, it necessarily implicates the ability of the parties to establish the substantive elements of their class-wide claims. See id.; Elliott v. ITT Corp., 150 F.R.D. 569, 573 (N.D.Ill. 1992).

Thus, preliminary evidentiary hearings have often been required when a determination of class certification cannot be made on the basis of the pleadings alone. See, e.g., Small, supra. Such hearings, however, are not required, and the failure to hold a hearing is not grounds for reversal of a class certification decision "unless the parties can show that the hearing, if held, would have affected [the parties’] rights substantially." Grayson, supra.

It is important to note that any evidentiary rulings made during the class certification hearing do not bear on any future rulings considering the merits of the case at trial or during dispositive motions. O’Connor v. Boeing North American, Inc., 184 F.R.D. 311, 330 (C.D.Cal. 1998).

Because of the inherent difficulties in making a class certification decision without considering the merits, most courts err in favor of certification, retaining the power to alter, modify, or decertify the class as the issues are refined and before an ultimate decision on the merits. Clay, supra; Ziemack v. Centel Corp., 163 F.R.D. 530, 533 (N.D.Ill. 1995).

3. Defining the Class

Before a court applies the prerequisites of Rule 23(a), the proposed class must be identified. Identification provides notice of the burdens that a class action might entail and ensures that those parties who are harmed by the defendant will receive relief. Simer v. Rios, 661 F.2d 655, 670 (7th Cir. 1981). The MANUAL FOR COMPLEX LITIGATION THIRD (1995) (MCL3d) provides pertinent guidance to the litigator in this respect:

Class definition is of critical importance because it identifies the person (1) entitled to relief, (2) bound by a final judgment, and (3) entitled to notice in a Rule 23(b)(3) action. It is therefore necessary to arrive at a definition that is precise, objective, and presently ascertainable….. Definitions, particularly under (b)(3), should avoid criteria that are subjective (e.g., a plaintiff’s state of mind) or that depend on the merits (e.g., persons who were discriminated against). Such definitions frustrate efforts to identify class members, contravene the policy against considering the merits of a claim in deciding whether to certify a class, and create potential problems of manageability.
MCL3d §30.14.

When defining a class, the type of certification sought is paramount. Class definitions sought to be certified under Rule 23(b)(3) undergo greater scrutiny because of the notice and opt-out provisions of Rule 23(c)(2). See Yaffe v. Powers, 454 F.2d 1362, 1366 (1st Cir. 1972). Conversely, "notice to the members of a (b)(2) class is not required and the actual membership of the class need not therefore be precisely delimited." Id. See also McKenzie v. City of Chicago, 175 F.R.D. 280, 289 - 290 (N.D.Ill. 1997).

Precision in class identification also ensures that the class members are bound by the final judgment. Class definitions that bind the plaintiff class only in the case of a favorable judgment are referred to as "fail-safe" definitions and are not certified. Adashunas v. Negley, 626 F.2d 600, 603 (1980) (upholding district court’s refusal to certify proposed class consisting of children entitled to public education who have learning disabilities and "who are not properly identified"). See also Castano v. American Tobacco Co., 160 F.R.D. 544, 558 (E.D.La. 1995); Caleb & Co. v. E. I. DuPont De Nemours & Co., 110 F.R.D. 316, 322 (S.D.N.Y. 1986).

It has been held that there is no requirement that every potential class member included in the initial class definition has suffered an injury at the hand of the defendant. National Organization for Women, Inc. v. Scheidler, 172 F.R.D. 351, 357 (N.D.Ill. 1997), appeals consolidated, 223 F.3d 615 (7th Cir. 1999) (argued on Sept. 14, 2000). See also In re Life USA Holding, Inc., 190 F.R.D. 359, 364 (E.D.Pa. 2000); Smith v. University of Washington Law School, 2 F.Supp. 2d 1324, 1341 (W.D.Wash. 1998); Elliott v. ITT Corp., 150 F.R.D. 569, 575 (N.D.Ill. 1992). In Scheidler, the district court certified a plaintiff class consisting of "all women’s health centers in the United States at which abortions are performed," despite objections that the class was too broad. Id. In addition to express allegations of injury to each class member, the court found that the alleged conspiracy among defendants potentially affected every clinic that performed abortions and that the class of women’s health care centers was therefore proper. Id.

Although the MCL3d declares that class definitions employing "state of mind" criteria should be avoided, cases on this issue go both ways.

At best, the general statement that state of mind issues are present serves as a shorthand method of alerting the court and the parties that there might be difficulty in identifying the class members….. [T]he presence of state of mind issues should not be an automatic reason for denying class certification.
Scheidler, supra, 172 F.R.D. at 358, quoting Simer, supra, 661 F.2d at 669.

See also Harris v. General Development Corp.,

127 F.R.D. 655, 659 (N.D.Ill. 1989). But see Insolia v. Philip Morris, Inc., 186 F.R.D. 535, 547 (W.D.Wis. 1998) ("A class may not be defined on the basis of the state of mind of individual class members."); Schwartz v. Upper Deck Co., 183 F.R.D. 672, 679 (S.D.Cal. 1999) ("A class description is insufficient, however, if membership is contingent on the prospective member’s state of mind.").

In Scheidler, the plaintiffs sought certification of a "class of all women who are not NOW members who have used or may use the services of women’s health centers that provide abortions." Scheidler, supra. The defendants objected to the inclusion of those women who "may use" the services of the clinics, claiming that plaintiffs’ reliance on "the future subjective intentions of an unidentified group of women" to define the class was insufficient. Id. Rather than refuse to certify, the court drew on the plaintiffs’ certification brief to redefine the class in terms of the defendants’ conduct. The modified definition, therefore, read:

The class of women who are not NOW members and whose rights to the services of women’s health centers in the United States at which abortions are performed have been or will be interfered with by defendants’ unlawful activities.
172 F.R.D. at 359.

The court did not explain how a class of women whose use of the services of such facilities "will be interfered with by defendants’ unlawful activities" (which, of course, would depend on which women might use those facilities) was any more identifiable than a class of women who "may use" those facilities. And, of course, the inclusion of these unidentifiable women also depended on the additional imponderable of which of these unidentified women’s rights will be interfered with by defendants’ unlawful activities.

With regard to classes containing future members, the MCL3d warns that the members of classes seeking certification under Rule 23(b)(3) "should ordinarily be ascertainable as of the time of judgment." MCL3d §30.14. Classes certified with respect to certain issues under Rule 23(c)(4) may be defined in a manner tailored to that issue and not as though certified for all purposes. Id.

In sum, an identifiable class must exist before it can be certified. Although courts are reluctant to apply per se rules to the class certification process, all classes should be precisely defined by reference to presently existing objective criteria, ensuring that the identity of all class members is presently ascertainable.

4. Rule 23(a) Requirements

a. Numerosity

Rule 23(a)(1) permits a class action only when "the class is so numerous that joinder of all members is impracticable." This "numerosity" rule, which makes class actions improper when there are so few potential class members that they could easily be joined as plaintiffs or defendants, should not be confused with the rule established in cases involving so many potential class members that class action treatment would render the action unmanageable. Rule 23(b)(3)(D); Marisol A. by Forbes v. Giuliani, 929 F.Supp. 662, 689 - 690 (S.D.N.Y. 1996); Brooks v. Southern Bell Telephone & Telegraph Co., 133 F.R.D. 54, 59 (S.D.Fla. 1990).

(1) Burden of showing numerosity

As is the case with respect to the other prerequisites for class actions, the burden of showing that the class is too numerous to make joinder practical is on the party seeking to establish the class. The courts have often emphasized this burden with respect to the numerosity requirement, stating that the mere allegation of numerosity, or speculation as to the number of class members, is insufficient. See, e.g., Roe v. Town of Highland, 909 F.2d 1097, 1100 (7th Cir. 1990); Fleming v. Travenol Laboratories, Inc., 707 F.2d 829, 833 (5th Cir. 1983); Danis v. USN Communications, Inc., 189 F.R.D. 391, 400 (N.D.Ill. 1999); Schwartz v. Upper Deck Co., 183 F.R.D. 672, 681 (S.D.Cal. 1999). In Abrams v. Kelsey-Seybold Medical Group, Inc., 178 F.R.D. 116, 128 (S.D.Tex. 1997), the court refused to grant certification when it had to speculate as to the number of people suffering from discriminatory employment practices for transfers and promotions. But cf. Israel v. Avis Rent-A-Car Systems, Inc., 185 F.R.D. 372, 377 – 378 (S.D.Fla. 1999), rev’d on other grounds by Rutstein v. Avis Rent-A-Car Systems, Inc., 211 F.3d 1228 (11th Cir. 2000), in which the court granted conditional certification based on an "allegation" of numerosity, subject to further evidence of the actual number of potential class members.

Although the purported class representative cannot satisfy the numerosity requirement through a speculative showing, the representative need not allege the exact number of class members when the exact figure is difficult to determine. Cwiak v. Flint Ink Corp., 186 F.R.D. 494, 496 (N.D.Ill. 1999); Gomez v. Comerford, 833 F.Supp. 702, 706 (N.D.Ill. 1993). Likewise, the representative need not disclose the identity of the class members, and "common sense [assumptions]" and public documents may support a finding that the numerosity requirement has been satisfied. Talbott v. GC Services Limited Partnership, 191 F.R.D. 99, 102 (W.D.Va. 2000); Civic Association of Deaf of New York City, Inc. v. Giuliani, 915 F.Supp. 622, 632 (S.D.N.Y. 1996); Scholes v. Stone, McGuire & Benjamin, 143 F.R.D. 181, 184 (N.D.Ill. 1992). In Anderson v. Pennsylvania Department of Public Welfare, 1 F.Supp.2d 456, 461 (E.D.Pa. 1998) (citing Vergara v. Hampton, 581 F.2d 1281, 1284 (7th Cir. 1978)), the court upheld a class certification based on census figures even though it was difficult to determine the exact number of class members. Furthermore, when the numerosity question is close, the Eleventh Circuit has held that certification should be granted because the court has the option to decertify pursuant to Rule 23(c)(1). Leszczynski v. Allianz Insurance, 176 F.R.D. 659, 670 (S.D.Fla. 1997) (quoting Evans v. United States Pipe & Foundry Co., 696 F.2d 925, 930 (11th Cir. 1983)).

(2) Other factors making joinder impractical

It must be remembered that the numerosity requirement does not depend on the number of class members in the abstract, but on whether it would be practical for that number of persons to be joined as parties to the suit. In determining whether joinder would be practical, the courts have properly looked to the circumstances involved in each case. As the Supreme Court said in General Telephone Company of Northwest, Inc. v. Equal Employment Opportunity Commission, 446 U.S. 318, 64 L.Ed.2d 319, 100 S.Ct. 1698, 1706 (1980): "The numerosity requirement requires examination of the specific facts of each case and imposes no absolute limitations." See also In re American Medical Systems, Inc., 75 F.3d 1069, 1079 (6th Cir. 1996); Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir. 1993).

One significant factor in determining the practicality of joinder is the geographic location of the class members. Joinder is made more difficult when the potential parties are widely scattered. Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 624 – 625 (5th Cir. 1999); Brosious v. Children’s Palace Retail Stores, 189 F.R.D. 138, 145 (D.N.J. 1999); Dale Electronics, Inc. v. R.C.L. Electronics, Inc., 53 F.R.D. 531, 534 (D.N.H. 1971). In Dale, the court held that a class of 13 satisfied the numerosity requirement. The court stated, however, that "[i]n the instant case . . . the locations of the defendants range from California to New York, and from North Carolina to Nebraska. Joinder is not only impracticable, but impossible." Id.

Courts also consider the possibility of future claimants, especially when the class action seeks injunctive relief. Unknown future claimants not only increase the size of the class but also increase the impracticality of joinder. Thus, even if the known class is small, courts may hold that numerosity is satisfied if the decision will benefit future classes of indeterminate size. San Antonio Hispanic Police Officers’ Organization, Inc. v. City of San Antonio, 188 F.R.D. 433, 442 (W.D.Tex. 1999); Krislov v. Rednour, 946 F.Supp. 563, 568 (N.D.Ill. 1996); United States ex rel. Green v. Peters, 153 F.R.D. 615, 618 (N.D.Ill. 1994).

Another factor sometimes considered by the courts is judicial economy. Courts will sometimes find the numerosity requirement to be met if joinder of all of the class members would be inefficient or costly or would needlessly hinder resolution of the litigation. See, e.g., Gaspar v. Linvatec Corp., 167 F.R.D. 51, 56 (N.D.Ill. 1996); Trief v. Dun & Bradstreet Corp., 144 F.R.D. 193, 198 (S.D.N.Y. 1992); Town of New Castle v. Yonkers Contracting Co., 131 F.R.D. 38, 40 (S.D.N.Y. 1990). In some cases, even a small class action may be more judicially economical than joinder of all of the class members. But in many cases it would be likely that, if class certification were denied, there would be no other lawsuits.

Courts also consider the ability of class members to bring individual claims. This consideration includes several factors. Courts have suggested that the magnitude of the claims and the financial ability of the class members to bring individual suits may make joinder impractical. See, e.g., National Organization for Women, Inc. v. Scheidler, 172 F.R.D. 351, 357 (N.D.Ill. 1997), appeals consolidated, 223 F.3d 615 (7th Cir. 1999) (argued on Sept. 14, 2000); Rodger v. Electronic Data Systems Corp., 160 F.R.D. 532, 536 – 537 (E.D.N.C. 1995). The Supreme Court has held that "[w]here it is not economically feasible to obtain relief within the framework of a multiplicity of small individual suits for damages, aggrieved persons may be without effective redress unless they may employ the class-action device." Deposit Guaranty National Bank, Jackson, Mississippi v. Roper, 445 U.S. 326, 63 L.Ed.2d 427, 100 S.Ct. 1166, 1174 (1980). See also Arenson v. Whitehall Convalescence & Nursing Home, Inc., 164 F.R.D. 659, 663 (N.D.Ill. 1996). Courts will also consider the physical ability of potential class members to initiate individual lawsuits. Sherman v. Griepentrog, 775 F.Supp. 1383, 1389 (D.Nev. 1991). In Anderson v. Pennsylvania Department of Public Welfare, 1 F.Supp.2d 456, 461 (E.D.Pa. 1998), the court granted certification when the class members in a managed health care program had substantially limited mobility and vision that would impair their ability to pursue individual claims.

Courts also consider the individual circumstances of particular cases when deciding impracticality of joinder. For example, joinder may be impractical when there is a fear of social stigmatism or reprisal for individual lawsuits. When alleged acts of police brutality occurred in a homosexual bar, one court held that the numerosity requirement was satisfied on the grounds that the potential social prejudice against homosexuals could deter individual class members from bringing their own suits. Patrykus v. Gomilla, 121 F.R.D. 357 (N.D.Ill. 1988); Johns v. DeLeonardis, 145 F.R.D. 480, 482 – 483 (N.D.Ill. 1992). But see Christiana Mortgage Corp. v. Delaware Mortgage Bankers Association, 136 F.R.D. 372, 378 (D.Del. 1991) (fear of retaliation in commercial setting, not civil rights setting, would not support finding of impracticability of joinder).

The courts are divided as to the effect that a number of potential plaintiffs opting out pursuant to Rule 23(b)(3) should have on the numerosity requirement. In Gaspar, supra, 167 F.R.D. at 57, the court held that, even if "most of the class members ultimately may opt out of the class, this possibility should not preclude class certification. Rather it is something to consider if or when it comes to fruition." Other judges in the Northern District of Illinois have taken a similar position. See, e.g., Scholes v. Tomlinson, 145 F.R.D. 485, 489 (N.D.Ill. 1992); Scholes v. Stone, McGuire & Benjamin, 143 F.R.D. 181, 184 (N.D.Ill. 1992) ("the court cannot speculate on how investors may exercise their opt-out privilege"). However, it appears that other courts have been more willing to dismiss class actions when a large portion of the class opts out. See National Union Fire Insurance Company of Pittsburgh, PA v. Midland Bancor, Inc., 158 F.R.D. 681, 685 (D.Kan. 1994); Daigle v. Shell Oil Co., 133 F.R.D. 600, 603 (D.Colo. 1990).

(3) Size of class

Although there are no established numerical guidelines for determining when Rule 23(a)(1) is satisfied, courts have recognized in some cases that more than 40 class members is adequate and less than 21 is inadequate. See, e.g., Chandler v. Southwest Jeep Eagle, Inc., 162 F.R.D. 302, 307 (N.D.Ill. 1995); Evans v. Evans, 818 F.Supp. 1215, 1219 (N.D.Ind. 1993). A few courts have instituted a presumption that numerosity is met if the class is larger than 25 – 30 members. Rodger v. Electronic Data Systems Corp., 160 F.R.D. 532, 535 (E.D.N.C. 1995); In re Kirschner Medical Corporation Securities Litigation, 139 F.R.D. 74, 78 (D.Md. 1991). There are, however, several exceptions to these generalizations. The widely divergent decisions on the question of how many class members make joinder impracticable make it helpful to compare cases in which classes have been held to be too small with cases in which classes have been held large enough to justify class action treatment. The following are some of the cases to which counsel arguing the numerosity question may wish to refer.

(a) Class too small

In the following cases, the court determined that the class was too small:

8 class members -Tate v. Weyerhaeuser Co., 723 F.2d 598, 609 (8th Cir. 1983);

11 class members - National Association of Government Employees v. City Public Service Board of San Antonio, Texas, 40 F.3d 698 (5th Cir. 1994);

16 class members - Smith v. Babcock, 748 F.Supp. 501, 505 n.3 (E.D.Mich. 1990), rev’d, 19 F.3d 257 (6th Cir. 1994);

approximately 20 class members - Rowe v. Morgan Stanley Dean Witter, 191 F.R.D. 398, 415 - 416 (D.N.J. 1999);

32 class members - Levels v. Akzo Nobel Salt, Inc., 178 F.R.D. 171, 176 (N.D. Ohio 1998);

35 class members - Ansari v. New York University, 179 F.R.D. 112, 115 – 116 (S.D.N.Y. 1998);

39 likely class members (200 potential class members) - Hum v. Dericks, 162 F.R.D. 628, 634 - 635 (D.Haw. 1995);

118 – 138 class members - Primavera Familienstiftung v. Askin, 178 F.R.D. 405, 409 – 410 (S.D.N.Y. 1998);

123 class members - Liberty Lincoln Mercury, Inc. v. Ford Marketing Corp., 149 F.R.D. 65, 74 (D.N.J. 1993); and

841 governmental bodies - Utah v. American Pipe & Construction Co., 49 F.R.D. 17, 18 (C.D.Cal. 1969).

(b) Class numerous enough

In the following cases, the court determined that the class was numerous enough:

13 class members - Dale Electronics, Inc. v. R.C.L. Electronics, Inc., 53 F.R.D. 531, 534 (D.N.H. 1971);

18 class members - Gaspar v. Linvatec Corp., 167 F.R.D. 51, 56 (N.D.Ill. 1996);

22 class members - Lanning v. Southeastern Pennsylvania Transportation Authority, 176 F.R.D. 132, 147 (E.D.Pa. 1997);

35 – 40 class members - Markham v. White, 171 F.R.D. 217, 221 (N.D.Ill. 1997);

40 – 50 class members - Scholes v. Stone, McGuire & Benjamin, 143 F.R.D. 181, 184 (N.D.Ill. 1992);

200 class members - Smith v. Texaco, Inc., 88 F.Supp.2d 663, 674 (E.D.Tex. 2000); and

850 class members — Warnell v. Ford Motor Co., 189 F.R.D. 383, 390 (N.D.Ill. 1999).

Rule 23 Purpose and Prerequisites

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