Understanding the Standards for Class Certification Under Rule 23

Rules 23(a) and (b) contain the substantive requirements for certifying a class.  In order to maintain a class action, the plaintiff bears the burden of establishing the four class requirements of Rule 23(a) — numerosity, commonality, typicality and adequacy — and must also demonstrate that one of the three bases in Rule 23(b) has been met.  Rule 23(b)(3) permits a class action to be certified when common questions of law and fact predominate as to all members of the class and a class action is superior to alternative methods for the fair and efficient adjudication of the controversy.  Rule 23(b)(2) authorizes a class action when the party opposing the class has acted on grounds generally applicable to the class, making final injunctive or declaratory relief appropriate with respect to the class as a whole.  Rules 23(b)(3) and 23(b)(2) are the two bases most frequently used in antitrust actions.[1]

In determining the propriety of a class action, “the question is not whether the . . . plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met.”  Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974) (quoting with approval Miller v. Mackey Int’l Inc., 452 F.2d 424, 429 (5th Cir. 1971)).  See also Cox v. American Cast Iron Pipe Co., 784 F.2d 1546, 1557 (11th Cir), cert. denied, 479 U.S. 883 (1986).  The most pertinent considerations in a court’s ruling on a motion pursuant to Rule 23 are the requirements of the rule itself and the allegations in the complaint, which must be accepted as true for the purpose of deciding whether a class should be certified.  E.g., Shelter Realty Corp. v. Allied Maintenance Corp., 574 F.2d 656, 661 n.15 (2d Cir. 1978); Westlake v. Abrams, 565 F. Supp. 1330, 1337 (N.D. Ga. 1983).  In making the necessary Rule 23 determination, “it is generally inappropriate for the Court to consider whether plaintiffs will prevail on the merits of their claim.”  In re Domestic Air, 137 F.R.D. at 684.  Furthermore, the policies underlying the need for class action litigation in general necessarily require that Rule 23 be interpreted liberally.  “[For] the interests of justice require that in a doubtful case . . . any error, if there is to be one, should be committed in favor of allowing a class action.”  Eisenberg v. Gagnon, 766 F.2d 770, 785 (3d Cir.), cert. denied, 474 U.S. 946 (1985) (quoting Esplin v. Hirschi, 402 F.2d 94, 101 (10th Cir. 1968), cert. denied, 394 U.S. 928 (1969)).  See also  Giles v. Ireland, 742 F.2d 1366, 1372 (11th Cir. 1984); Freeman v. Motor Convoy, Inc., 700 F.2d 1339, 1347 (11th Cir. 1983).

Each of the elements of Rule 23 is discussed more fully below.

  1. The Class Requirements of Rule 23(a)

Rule 23(a) provides:

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.

Fed. R. Civ. P. 23(a).  All four of these class requirements must be met before a class may be certified under Rule 23.

  1. Numerosity

Rule 23 does not define what a class is or how its members should be determined.  In general, however, to satisfy the numerosity requirement, although a plaintiff need not prove the exact number or identity of class members, he must show that the number is exceedingly large and that joinder is impracticable.  See Evans v. United States Pipe & Foundry Co., 696 F.2d 925, 930 (11th Cir. 1983); In re Carbon Dioxide Antitrust Litig., 149 F.R.D. at  232.  Class actions consisting of fewer than 150 members have been held to satisfy the numerosity requirement, e.g., Kreuzfeld, A.G. v. Carnehammar, 138 F.R.D. 594, 599 (S.D. Fla. 1991) (certifying a class of approximately 130 members and noting that the numerosity requirement has been satisfied with as few as 25 or 30 class members) as have class actions involving millions of class members, e.g., In re NASDAQ Market-Makers Antitrust Litig., 169 F.R.D. 493 (S.D.N.Y. 1996) (class of at least a million securities investors certified); In re Disposable Contact Lens Antitrust Litig., 170 F.R.D. 524 (M.D. Fla. 1996) (class of 15 to 18 million members certified); In re Domestic Air Transp. Antitrust Litig., 137 F.R.D. 677 (N.D. Ga. 1991) (certifying class of approximately 12.5 million airline ticket purchasers).  Furthermore, where the putative class is geographically dispersed across the United States, as is the case in many antitrust actions, joinder of all class members is almost always considered impracticable.  E.g., Walco Invs., Inc. v. Thenen, 168 F.R.D. 315, 338 (S.D. Fla. 1996).

  1. Commonality

Rule 23(a)(2) requires that in order for an action to be certified as a class action, the claims of the class members must involve common questions of law and fact.  This “commonality” requirement of Rule 23(a)(2) is satisfied if the “named representatives’ claims have the same essential characteristics as the claims of the class at large.” Appleyard v. Wallace, 754 F.2d 955, 958 (11th Cir. 1985) (quoting De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983)).  The rule does not require that every question of law or fact be common to each class member, Cox v. American Cast Iron Pipe Co., 784 F.2d at 1557, but rather that all class members share a “substantially identical factual situation” and that the “questions of law raised by the plaintiff are applicable to each class member.”  In re Amerifirst Sec. Litig., 139 F.R.D. 423, 428 (S.D. Fla. 1991) (quoting Weiss v. York Hospital, 745 F.2d 786, 808 (3d Cir. 1984), cert. denied, 470 U.S. 1060 (1985)).  See also Powers v. Stuart-James Co., 707 F. Supp. 499, 502 (M.D. Fla. 1989).

In most antitrust actions, particularly price-fixing cases that allege a conspiracy among the defendants, the commonality requirement is easily satisfied.  In fact, numerous courts have held “that allegations concerning the existence, scope, and efficacy of an alleged antitrust conspiracy present important common questions sufficient to satisfy the commonality requirement of Rule 23(a)(2).” In re NASDAQ Market-Makers Antitrust Litig., 169 F.R.D. at 509 (finding common issues in price-fixing case against NASDAQ market-makers).  See e.g. In re Catfish Antitrust Litig., 826 F. Supp. at 1034 (all class members “share a unity of interest” in how the facts illustrate the misconduct and violations of law alleged); In re Potash Antitrust Litig., 159 F.R.D. at 689; In re Workers’ Compensation, 130 F.R.D. at 105 (“[a]ntitrust, price-fixing conspiracy cases, by their nature, deal with common legal and factual questions about the existence, scope and effect of the alleged conspiracy”); Town of New Castle v. Yonkers Contracting Co., 131 F.R.D. 38, 41 n.4 (S.D.N.Y. 1990) (“We agree with plaintiffs that the issue of the existence and effect of an antitrust conspiracy involves common questions of law and fact.”); Thillens, Inc. v. Community Currency Exch. Ass’n., 97 F.R.D. 668, 677 (N.D. Ill. 1983) (“The overriding common issue of law is to determine the existence of a conspiracy.”); Jennings Oil Co. v. Mobil Oil Corp., 80 F.R.D. 124, 128 (S.D.N.Y. 1978) (commonality requirement satisfied when plaintiff raises “common questions of the existence, scope and effect of the alleged conspiracy”).  See also 4 H. Newberg & A. Conte, Newberg on Class Actions, §18.05 (3d ed. 1992).

  1. Typicality

The “typicality” element of Rule 23(a)(3) requires “a nexus between the class representative’s claims or defenses and the common questions of fact or law which unite the class.”  Kornberg v. Carnival Cruise Lines, Inc., 741 F.2d 1332, 1337 (11th Cir. 1984), cert. denied, 470 U.S. 1004 (1985).  “A plaintiff’s claim is typical if ‘it arises from the same event or practice or course of conduct that gives rise to the claims of the other class members, and her or his claims are based on the same legal theory.’”  In re Domestic Air, 137 F.R.D. at 698 (quoting 3 Newberg on Class Actions, §18.09 at 464).  Obviously, in order to satisfy this requirement, the named plaintiff must be an actual member of the class, but typicality does not require that all claims or defenses be identical, and where a strong similarity of legal theories is present, the typicality requirement will be satisfied despite the existence of substantial factual differences.  Appleyard v. Wallace, 754 F.2d at 958.  However, the presence or absence of an adverse interest between the representative party and other class members is an additional factor affecting “typicality.”  Tidwell v. Schweiker, 677 F.2d 560, 566 (7th Cir. 1982), cert. denied, 461 U.S. 905 (1983).  See also In re Catfish Antitrust Litig., 826 F. Supp. 1019 (N.D. Miss. 1993).

In a typical antitrust action, the named plaintiff is seeking to prove that defendants committed the same unlawful acts in the same method against an entire class.  Thus, in those situations, most courts have found that all members of the class have identical claims, and therefore, the typicality requirement of Rule 23(a)(3) is usually satisfied.  See, e.g.Kirkpatrick v. J.C. Bradford & Co., 827 F.2d 718, 722-25 (11th Cir. 1987), cert. denied, 485 U.S. 959 (1988); Kennedy v. Tallant, 710 F.2d 711, 717 (11th Cir. 1983).

  1. Adequacy

Rule 23(a)(4) requires that the named plaintiffs fairly and adequately protect the interests of the class.  This “adequacy” requirement is met if it appears that (1) the named plaintiffs have interests in common with, and not antagonistic to, the interests of the other class members, and (2) the plaintiffs’ attorneys are qualified, experienced, and generally able to conduct the litigation.  Kirkpatrick v. J.C. Bradford & Co., 827 F.2d at 726; In re Carbon Dioxide Antitrust Litig., 149 F.R.D. at 233; Powers v. Stuart-James Co., 707 F. Supp. at 503.  The first aspect of the adequacy  requirement is usually satisfied unless the named plaintiff has an interest that might be in some way adverse to other class members.  In typical antitrust actions, however, the representative plaintiff’s interests are in common with the interests of the class, and have no interests adverse or antagonistic to any class member.

With respect to the second prong of the “adequacy” inquiry  — the qualifications of counsel — the named plaintiff’s attorneys must exhibit that they are qualified and experienced in antitrust class action litigation, and “will pursue with vigor the legal claims of the class.”  Kirkpatrick v. J.C. Bradford & Co., 827 F.2d at 727.

     [1]/  Rule 23(b)(1) authorizes class action treatment where separate actions would “create a risk of inconsistent or varying adjudications” that would “establish incompatible standards of conduct” for the party opposing the class, or where separate adjudications would “as a practical matter be dispositive of the interests of the others” in the class who are not parties to that adjudication.  Antitrust class action plaintiffs rarely rely on this third basis.

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