PUBLIC HEARING ON

PROPOSED AMENDMENTS TO THE

FEDERAL RULES OF CIVIL PROCEDURE

JUDICIAL CONFERENCE

ADVISORY COMMITTEE ON CIVIL RULES

Thurgood Marshall Federal Judiciary Building

Washington, D.C.

November 3, 2016
List of Confirmed Witnesses for the

Public Hearing on Proposed Amendments to the

Federal Rules of Civil Procedure

Judicial Conference 

Advisory Committee on Civil Rules

Thurgood Marshall Federal Judiciary Building

Washington, D.C.

November 3, 2016 – 9:00 A.M.

Witness Name Organization Testimony

1. Sai No written 

testimony 

submitted

2. Jeffrey A. Holmstrand DRI: The Voice of the Defense Bar Tab 1

3. Mark P. Chalos Lieff, Cabraser, Heimann & Bernstein No written 

testimony 

submitted

4. John H. Beisner Skadden Arps No written 

testimony 

submitted

5. Alan B. Morrison George Washington University Law School Tab 2

6. John Parker Sweeney DRI: The Voice of the Defense Bar Tab 1

7. Stuart Rossman National Consumer Law Center and

National Association of Consumer Advocates

Tab 3

8. Brent Johnson Committee to Support Antitrust Laws 

(COSAL)

Tab 4

9. Mary Massaron Plunkett Cooney No written 

testimony 

submitted

10. Brian Wolfman Georgetown University Law Center Tab 5

11. Hassan Zavareei Tycko & Zavareei Tab 6
Tab 1

Written Testimony of

Jeffrey A. Holmstrand and 

John Parker Sweeney, on behalf of

DRI: The Voice of the Defense Bar
COMMENT

to the

RULE 23 SUBCOMMITTEE,

ADVISORY COMMITTEE ON CIVIL RULES

September 10, 2015

DRI: The Voice of the Defense Bar
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ORGANIZATIONAL OVERVIEW

DRI – The Voice of the Defense Bar is pleased to provide the following comments to the Advisory 

Committee on Civil Rules’ Rule 23 Subcommittee. For more than 50 years, DRI has been the voice 

of the defense bar, advocating for 22,000 defense attorneys and corporate counsel members and 

defending the integrity of the judiciary and the civil justice system. A thought leader, DRI provides 

world-class legal education, deep expertise for policymakers, legal resources and networking 

opportunities to facilitate career and law firm growth.

In a Word

Our members defend businesses in civil suits. If a company or corporation is ever the target of such 

a suit, there is a great likelihood that one of our member attorneys will be representing them. Their 

expertise and advocacy is the best defense against a potentially ruinous, and many times frivolous, 

lawsuit.

Focus

DRI focuses on six primary areas.

• Justice: DRI strives to improve the civil justice system.

• Judicial Balance: DRI acts as a counterpoint to the plaintiffs’ bar to seek balance in the 

minds of all participants in the judicial system and in all areas of dispute resolution. 

• Education: DRI provides outstanding educational opportunities to improve the skills of the 

defense lawyer. 

• Law Practice Administration: DRI assists its members in dealing with the economic realities 

of the defense practice in an increasingly competitive legal marketplace.

• Professionalism and Ethics: DRI urges members to practice ethically and responsibly, 

keeping in mind the lawyer’s responsibilities that go beyond the interest of the client to the 

good of society as a whole.

• Expertise: DRI acts as an expert resource on legal and judicial issues for the media, 

policymakers and the general public.

Services

Seminars/Webinars: Drawing upon leading expertise in various areas of substantive law, DRI 

provides numerous outstanding Continuing Legal Education seminars and webinars each year and 

makes materials from previous years’ seminars available to its membership.

Publications: DRI produces the leading professional defense bar publications, including our flagship 

monthly journal For The Defense, In-House Defense Quarterly, and others.

Amicus Briefs: DRI regularly files amicus briefs in federal and state courts on such landmark cases 

as Dukes v. Wal-Mart; Erica John Fund v. Halliburton, Glazer v. Whirlpool, Comcast. v. Behrend, Greenwood v. 

CompuCredit Corp and others to provide guidance to the courts and advocacy on issues vital to the 

defense bar and its clients.
DRI – The Voice of the Defense Bar Page 4 of 28

Testimony: DRI provides expert testimony before legislative bodies and regulators on judicial 

reform and other issues of concern to the defense bar.

Studies: DRI provides in-depth monographs and white papers of various issues critical to the legal 

profession, on topics such as jury duty, judicial funding, and judicial independence.

Center for Law and Public Policy 

The Center for Law and Public Policy was created by DRI to provide thoughtful and expert analysis 

and commentary on issues of great import to the defense bar, the judiciary, the legal profession, and 

the country. The Center operates through three committees: Issues and Advocacy, Amicus, and 

External Policy Groups.

Because our judicial system is an adversarial system embodied in a plaintiff bar and a defense bar, 

each voice has a unique perspective. Therefore, both voices need to be heard on critical issues 

affecting DRI individual and corporate members, the civil justice system and judicial reform. DRI 

performs that function for the defense bar through its Center for Law and Public Policy.

The DRI National Poll on the Civil Justice System

DRI conducts the only annual national poll focused exclusively on the civil justice system. The poll 

surveys public opinion on such issues as trust in the judicial system, class action, potential juror bias, 

and judicial funding. All of DRI’s polls have been accepted by the Roper Center at the University of 

Connecticut, a poll repository used for scholarly research. 
DRI – The Voice of the Defense Bar Page 5 of 28

Table of Contents

I. DRI Proposal to Address “No Injury” Classes................................................................................7

II. DRI Proposal to Address Ascertainability.........................................................................................8

III. DRI Proposal to Provide for Automatic Right to Appeal of Class Certification Decisions....11

IV. DRI Proposal to Address “Shady Grove”.......................................................................................15

V. DRI Comment on Subcommittee’s Conceptual Sketch of RULE 23(B)(4) – Settlement 

Class Certification Without Predominance .....................................................................................17

VI. DRI Comment on the Subcommittee’s Conceptual Sketch Relating to Cy Pres........................21

VII. DRI Comment on Subcommittee’s Conceptual Sketch on Objectors .......................................24

VIII. DRI Comment on Subcommittee’s Conceptual Sketch on Issue Certification.........................26
DRI – The Voice of the Defense Bar Page 6 of 28

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DRI – The Voice of the Defense Bar Page 7 of 28

I. DRI Proposal to Address “No Injury” Classes

The testimony of DRI on the issue of “No Injury” Classes submitted to the House Judiciary 

Committee was summarized orally for the Rule 23 Subcommittee at the DRI Class Actions Seminar

held July 23-24, Washington, D.C. The written statement of testimony is attached, along with a list 

of DRI amicus briefs submitted in class actions and a summary of the issues in those cases. At the 

DRI Class Action Seminar, the Rule 23 Subcommittee requested DRI to submit proposed language 

changes to Rule 23(b)(3) that would address DRI’s concerns on this issue. Proposed language 

amending Rule 23(b)(3) follows:

(3) the court finds that each class representative and each proposed class member suffered 

actual injury of the same type; that the existence, type and extent of each class member’s 

injury, as well as the amount of monetary relief due each class member, can be accurately 

determined for each class member on the basis of classwide proof, without depriving the 

defendant of the ability to prove any fact or defense that defendant would be entitled to prove 

as to any class member if that class member’s claims were adjudicated in an individual trial; that

questions of law or fact common to class members predominate over any questions affecting 

only individual members, and that a class action is superior to other available methods for fairly 

and efficiently adjudicating the controversy. The matters pertinent to these findings of

predominance and superiority include:

(A) the class members’ interests in individually controlling the prosecution or defense 

of separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by 

or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the 

particular forum; and

(D) the likely difficulties in managing a class action.

In order to have standing, plaintiffs must have suffered an “injury in fact.” Yet, defendants today 

face suits brought by plaintiffs who admit they have not been harmed on behalf of a proposed class 

of similarly unharmed individuals. Under current law, consumers who have suffered no harm and 

may in fact, be very happy with their purchases, can still participate in a class action suit and receive 

damage awards if the plaintiff side prevails. To participate in a class action, individuals need only 

show there was a potential for harm. 

This practice artificially inflates the size of certified classes, sometimes to millions of participants. 

When statutory damage provisions are combined with the aggregate power of the class action 

device, defendants can face significant and potentially ruinous exposure for conduct that harmed no 

one. Permitting aggregated actions by unharmed individuals places enormous pressure on 

defendants to settle claims that would be valueless if tried on an individual basis. 

The DRI National Poll on the Civil Justice System that showed that 78 percent of Americans would 

support a law requiring a showing of actual harm rather than potential harm in order for an 

individual to participate in a class action suit: Large majorities support this reform across 12 

demographic categories, including men, women, Republicans (86%), Democrats (71%), Liberals 

(73%), and Conservatives (85%).
DRI – The Voice of the Defense Bar Page 8 of 28

Large majorities of the American public find it makes little sense to pay damages to people who 

have suffered no harm. They support reform. It’s just common sense to them ... and should be to 

us.

II. DRI Proposal to Address Ascertainability

DRI proposes that Rule 23(a)(1) be changed to read as follows: 

the class is so numerous that joinder of all members is impracticable; the members 

of the class are objectively identifiable by reliable and feasible means without 

individual testimony from putative class members and without substantial 

administrative burden, and as so identified are sufficiently numerous that joinder of 

all class members is impractical;

This approach recognizes that inefficiencies and the necessity for highly individualized proof are 

precisely what class actions are meant to avoid, and if even identifying the class members devolves 

into a highly individualized or inefficient inquiry, then the objectives of the class action device 

cannot be achieved.

Recent decisions of the Sixth and Seventh Circuits have created a clear need for the ascertainability 

issue to be addressed. The case of Mullins v. Direct Digital, LLC 1 creates an acknowledged split 

between the Seventh Circuit, since joined by the Sixth Circuit,2 and the Third and Eleventh Circuits, 

among others, as to the existence and proper application of the ascertainability requirement under 

the current version of Rule 23. How this split is ultimately resolved may one day resolve the 

question of the proper interpretation of the text of the current rule, but that begs the real question: 

What should be the ascertainability prerequisites to class certification? The very fact that there is a 

debate about whether and to what extent this requirement already implicitly exists demonstrates that 

the Subcommittee should address the issue explicitly.

The Subcommittee should adopt an express ascertainability requirement that ends the debate, and 

one that recognizes that the various subsections of Rule 23(a), Rule 23(b), and Rule 23(c) are not 

mere standalone silos, but integrated parts of an procedural mechanism designed to ensure that class 

treatment is reserved for those cases in which individualized inquiry is unnecessary. 

The case for an ascertainability requirement is clear. Class actions that bog down in individualized 

inquiries and adjudications necessary to determine class membership are no less inefficient than class 

actions that bog down in individual inquiries and adjudications necessary to determine liability. 

Defendants’ due process interests and the Rules Enabling Act both require that the defendant have a 

full and fair opportunity to litigate individual issues pertaining to both. For these reasons, even in the 

absence of any express provision in Rule 23, most courts already consider ascertainability is an 

“essential” prerequisite for a class action,3 and treat it as a threshold inquiry for class certification.4

 1 Mullins v. Direct Digital, No. 15-1776 (7th Cir. July 28, 2015). 2 Rikos v. Procter & Gamble, No. 14-4088 (6th Cir. Aug. 20, 2015). 3 Marcus, 687 F.3d at 592-93. 4 EQT Prod. Co. v. Adair, 764 F.3d 347, 358 (4th Cir. 2014) (“We have repeatedly recognized that Rule 23 contains an 

implicit threshold requirement that the members of a proposed class be ‘readily identifiable.’”); In re Fosamax Prods. Liab. 

Litig., 248 F.R.D. 389, 395 (S.D.N.Y. 2008) (“Rule 23 contains the additional, implicit requirement that an ascertainable
DRI – The Voice of the Defense Bar Page 9 of 28

Even the leading treatise on civil procedure addresses the question before it begins its discussion of 

the express requirements of Rule 23(a).5

The Fourth Circuit has expressed what could be the explicit rule in its simplest form: “However 

phrased, the requirement is the same. A class cannot be certified unless a court can readily identify 

the class members in reference to objective criteria.”26 There is compelling evidence that this rule 

has sound footing in the overall rationale of Rule 23. Whatever their other differences, until the 

recent Sixth and Seventh Circuit decisions almost all courts had agreed that the ascertainability 

inquiry requires the court to find: (1) that it can determine whether someone is in the class using 

objective criteria;6 and (2) that there is some reliable and administratively feasible method for 

determining whether putative class members are members of the class as defined.7 The disagreement 

of the Seventh and Sixth Circuit is largely based on the absence of explicit language in the Rule itself, 

not on the soundness of the policy that an explicit ascertainability rule would reflect.

An explicit objective ascertainability rule would also reduce the problem of one-way intervention, 

also sometimes referred to as the “fail-safe” or “merits-based” class. In a fail-safe class, until the 

verdict, there is no way to tell whether the class has thousands of members or none at all. If the 

plaintiffs prove their case, then the class is populated and bound. If they do not, then the class has a 

population of zero; it never existed, which means the defendant’s “victory” is hollow because no 

absent class member is bound by the defense judgment.8 Most courts already refuse to certify 

classes with fail-safe class definitions.9 An explicit rule requiring that the class be readily and 

objectively identifiable at the time of certification prevents this unfair abuse of the class action 

device.

The concept of “ready ascertainability” focuses on administrative feasibility. The Third, Fourth, and 

Eleventh Circuits have held that, in showing that identifying class members is feasible, the plaintiffs 

must provide evidence of an actual method of objectively identifying class members in an 

 class exists and has been properly defined.”).

5See 7A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 1760 at 142–47 (3d ed. 2005) 

(“Further, the class must not be defined so broadly that it encompasses individuals who have little connection with the 

claim being litigated; rather it must be restricted to individuals who are raising the same claims or defenses as the 

representative. The class definition also cannot be too amorphous.”) (Internal footnotes omitted). 6 EQT Prod. Co., 764 F.3d at 358 (“However phrased, the requirement is the same. A class cannot be certified unless a 

court can readily identify the class members in reference to objective criteria.”).

7 See Byrd v. Aaron’s, Inc., 784 F.3d 154, 163 (3d Cir. 2015). 8 Randleman v. Fidelity Nat. Title Ins. Co., 646 F. 3d 347, 352 (6th Cir. 2011) (“The class the district court initially certified 

was flawed in that it only included those who are ‘entitled to relief.’ This is an improper fail-safe class that shields the 

putative class members from receiving an adverse judgment. Either the class members win or, by virtue of losing, they 

are not in the class and, therefore, not bound by the judgment.”); Adashunas v. Negley, 626 F.2d 600, 604 (7th Cir. 1980)

(“The new class definition, if allowed, would result in a ‘fail-safe’ class, a class which would be bound only by a judgment 

favorable to plaintiffs but not by an adverse judgment.”); Xavier v. Philip Morris USA, Inc., 787 F. Supp. 2d 1075, 1089 

(N.D. Cal 2011) (“Ascertainability is needed for properly enforcing the preclusive effect of final judgment. The class 

definition must be clear in its applicability so that it will be clear later on whose rights are merged into the judgment, that 

is, who gets the benefit of any relief and who gets the burden of any loss.”); see also Erin L. Geller, The Fail-Safe Class as an 

Independent Bar to Class Certification, 81 FORDHAM L. REV. 2769, 2803–04 (2013) (arguing that allowing fail-safe classes 

revives one-way intervention). 9 See, e.g., In re Nexium Antitrust Litig., 777 F.3d 9, 22 (1st Cir. 2015) (noting “the inappropriateness of certifying what is 

known as a ‘fail-safe class’–a class defined in terms of the legal injury”). The Fifth Circuit is the lone exception to this 

rule: it has held that the presence of a fail-safe class definition does not preclude certification. In re Rodriguez, 695 F.3d 

360, 370 (5th Cir. 2012) (“our precedent rejects the fail-safe class prohibition”).
DRI – The Voice of the Defense Bar Page 10 of 28

administratively feasible way, such as through existing corporate records.10 The Sixth and Seventh 

Circuits, however, have very recently held that ascertainability merely requires that the class be 

identifiable at some point in the litigation, even if the identification procedure is expensive, 

burdensome, or requires self-identification or individualized inquiries.11 Similarly, some federal 

district courts in California have also rejected the Third Circuit’s approach.12

If the plaintiffs cannot define their class without reference to the merits, or if they do not have any 

feasible way of identifying class members for purposes of sending notice in advance of litigation, the 

class should not be certified. Class actions are not the goal, and they should not be the rule. They 

are the “exception” to the normal due process expectation “that litigation is conducted by and on 

behalf of the individual named parties only.”13, and make sense when they can efficiently achieve 

collective adjudication. There is no reason that inefficiencies in the class identification process 

should militate any less against class certification than inefficiencies in the adjudication of liability.

“Administrative burden” does not mean that any evidentiary inquiry into identifiability would 

necessarily defeat certification.14 But it does mean that any individual or third party inquiries 

necessary to establish membership in the class should be tolerated only if they inject minimal 

inefficiency into the class adjudication process. If the inquiry requires separate analysis for each and 

every class member, vast numbers of affidavits or third party subpoenas, or checking multiple 

records and deciding multiple legal issues for large segments of the class, the burden is too great.15 

Nor is self-identification an appropriate short-cut to ascertainability. Given both the potential 

discovery burdens and the due process concerns associated with self-identification (through, say, 

affidavits) without affording the defendant a right of cross-examination, and the inefficiencies of 

allowing such cross-examination, courts have generally held that self-identification imposes too large 

 10 Carrera v. Bayer Corp., 727 F.3d 300, 308–09 (3d Cir. 2013) (class not ascertainable where it would rely on purchase 

receipts that were likely not retained); EQT Prod. Co., 764 F.3d at 357 (plaintiff “must present evidence that the putative 

class complies with Rule 23”); Karhu v. Vital Pharms., Inc., 2015 U.S. App. LEXIS 9576, *6-7 (11th Cir. Jun. 9, 2015) (“A 

plaintiff cannot establish ascertainability simply by asserting that class members can be identified using the defendant's 

records; the plaintiff must also establish that the records are in fact useful for identification purposes, and that 

identification will be administratively feasible.”); EQT Prod. Co., 764 F.3d at 359 (“As the record in this case highlights, 

numerous heirship, intestacy, and title-defect issues plague many of the potential class members' claims to the gas estate. 

In our view, these complications pose a significant administrative barrier to ascertaining the ownership classes.”).

11 Mullins v. Direct Digital, LLC, No. 15-1776 (7th Cir. Jul. 28, 2015) (slip op.) (“Nothing in Rule 23 mentions or implies 

this heightened requirement under Rule 23(b)(3), which has the effect of skewing the balance that district courts must 

strike when deciding whether to certify classes”); Rikos v. Procter & Gamble Co., No. 14-4088 (6th Cir. Aug. 20, 2015) slip 

op. at 33 (“We see no reason to follow Carrera, particularly given the strong criticism it has attracted from other 

courts.”).

12 In re ConAgra Foods, Inc., 2015 U.S. Dist. LEXIS 24971, *93 (C.D. Cal. Feb. 23, 2015) (rejecting administrative burden 

argument because it would “effectively prohibit class actions involving low priced consumer goods—the very type of 

claims that would not be filed individually—thereby upending the policy at the very core of the class action 

mechanism.”) (Internal quotation omitted); see also Randolph, 303 F.R.D. at 686 (noting “[c]ertain California district courts 

have vehemently rejected Carrera”). 13 Wal-Mart Stores v. Dukes, 131 S. Ct. 2541, 2550 (2011). 14 Bowerman v. Field Asset Servs., Inc., 2015 U.S. Dist. LEXIS 37988, *22 (N.D. Cal. Mar. 24, 2015) (“That the class may 

have to be ascertained through a combination of evidentiary sources does not necessarily mean that ascertaining it is 

administratively infeasible.”).

15 EQT Prod. Co., 764 F.3d at 359 (“As the record in this case highlights, numerous heirship, intestacy, and title-defect 

issues plague many of the potential class members' claims to the gas estate. In our view, these complications pose a 

significant administrative barrier to ascertaining the ownership classes.”).
DRI – The Voice of the Defense Bar Page 11 of 28

a burden to justify certifying a class.16 Similarly, offloading the administrative burden to third parties 

through the creative use of the subpoena power should not be an acceptable substitute.17

Finally, a strong ascertainability requirement would also indirectly reduce the need to resort to cy pres 

remedies, another problem the Subcommittee is examining. The so-called need for cy pres relief most 

often arises when the parties cannot readily identify the members of the class. Were Rule 23 to 

explicitly require that a court find it is possible to readily and objectively identify class members, the 

need for this controversial form of relief would diminish, as would the problems and abuses 

associated with it.18 

III. DRI Proposal to Provide for Automatic Right to Appeal of Class Certification 

Decisions

Decisions on class certification motions should be subject to immediate and 

mandatory appellate review.

DRI proposes that Rule 23(f) be amended to provide for mandatory appellate review of certification 

decisions. “[W]hen a trial court commits an error of law that has an outsized impact, the availability 

of immediate appellate review should not depend on the subjective value judgments of a single 

appellate panel deciding a petition for discretionary review.” Andrew S. Pollis, The Need for NonDiscretionary Interlocutory Appellate Review in Multidistrict Litigation, 79 Fordham L. Rev. 1643, 1662 

(2011). Although we are sensitive to the workload of our federal appellate judges, we believe that 

the practical effect of the current discretionary appellate review regime effectively deprives parties of 

appellate review of what is generally considered the seminal decision in class action litigation. DRI 

proposes amending that Rule to provide as follows:

(f) APPEALS. A party may obtain interlocutory appellate review of an order court of 

appeals may permit an appeal from an order granting or denying class-action 

certification under this rule, provided that a timely notice of appeal of such order is if 

a petition for permission to appeal is filed with the circuit clerk within 14 days after 

the order is entered in accordance with Federal Rules of Appellate Procedure 3 and 

4. An appeal does not stay proceedings in the district court unless the district judge 

or the court of appeals so orders.

Authority for this change exists under 28 U.S.C. § 1292(e). DRI believes this change will have a 

number of beneficial effects for all parties, as well as leading to a more efficient judicial system.

DISCUSSION

The class certification decision is generally considered the seminal event in class litigation. Jurists 

have long recognized the coercive effect of a district court’s decision to certify a class on a 

 16 Marcus, 687 F.3d at 594; Karhu, 2015 U.S. App. LEXIS 9576 at *8-9; Jenkins, 2015 U.S. Dist. LEXIS 22241 at *15. 17 Randolph, 303 F.R.D. at 690 (rejecting suggestion that plaintiffs could subpoena third-party retailers to determine 

purchasers of cooking oil); In re Clorox Consumer Litig., 301 F.R.D. 436, 440 (N.D. Cal. 2014) (“In a consumer class 

action, like this one, where Plaintiffs intend to rely on retailer records, Plaintiffs must produce sufficient evidence to 

show that such records can be used to identify class members."”).

18 See generally Martin H. Redish, et al., Cy Pres Relief & the Pathologies of the Modern Class Action: A Normative and Empirical 

Analysis, 62 FLA. L. REV. 617, 623 (2010).
DRI – The Voice of the Defense Bar Page 12 of 28

defendant’s decision to settle the case rather than risk a bet-the-company trial. See, Charles Silver, 

“We’re Scared To Death”: Class Certification and Blackmail, 78 New York University Law Review 1357 

(1978). Indeed, the Advisory Committee for the 1998 Amendments to the Federal Rules of Civil 

Procedure which added Rule 23(f)’s discretionary appellate review provision noted that:

[S]everal concerns justify expansion of present opportunities to appeal. An order 

denying certification may confront the plaintiff with a situation in which the only 

sure path to appellate review is by proceeding to final judgment on the merits of an 

individual claim that, standing alone, is far smaller than the costs of litigation. An 

order granting certification, on the other hand, may force a defendant to settle rather 

than incur the costs of defending a class action and run the risk of potentially 

ruinous liability.

These concerns – which affect all parties to the case – can only be addressed if the parties actually 

obtain appellate review. As we will discuss, placing certification appeals under the permissive 

appellate procedure as opposed to the appeal as of right procedure has effectively foreclosed that 

review in too many circumstances.

A petition for a discretionary appeal of a certification decision must be filed within 14 days of the 

order from which review is sought, F.R.Civ.P. 23(f), with the contents of it as set by Rule 4(b) of the 

Federal Rules of Appellate Procedure. In contrast, an appeal as of right need only be noticed within 

30 days, F.R.App.P. 4(a), which allows the party seeking appellate relief significantly more breathing 

space to review and prepare the appropriate challenge to the district court’s certification decision.

In addition, whereas a mandatory appeal allows for full consideration of the questions presented, 

there are varying standards as to whether a circuit court will even grant permission. The Manual for 

Complex Litigation states that a “rough consensus” has emerged which limits interlocutory review 

of class certification decisions to situations where one or more of the following factors are evident: 

“(1) the certification order represents the death knell of the litigation for either the plaintiffs (who 

may not be able to proceed without certification) or defendant (who may be compelled to settle after 

certification; (2) the certification decision shows a substantial weakness, amounting to an abuse of 

discretion; or (3) an interlocutory appeal will resolve an unsettled legal issue that is central to the case 

and intrinsically import to other cases but is otherwise likely to escape review.” David E. Herr, 

Manual for Complex Litigation (4th), § 21.28 at 314 (2005). 

While those factors are definitely an improvement over no right to appeal, a recent study conducted 

by Skadden Arps on behalf of the Institute for Legal Reform looked at Rule 23(f) filings from 

October of 2006 through December of 2013. See, Rule 23(f) Review of Certification Declining; 

Certification Disfavored on Appeal, Study Says, Class Action Litigation Report (BNA May 2, 2014) with the 

underlying data found at http://www.skadden.com/newsletters/OUTCOMES_TABLE.pdf ,

19 (last 

accessed September 8, 2015). That study found that less than one quarter of petitions for 

interlocutory review under Rule 23(f) have been granted. 

 19 See Summary Tables of 23(f) on the following page. 
DRI – The Voice of the Defense Bar Page 13 of 28

Appendix A

Appendix B
DRI – The Voice of the Defense Bar Page 14 of 28

Of those petitions, review was granted in 24.8% of defendant petitions and 20.5% of plaintiff 

petitions. In contrast, an earlier study found that overall 36% of Rule 23(f) petitions were granted 

from December 1, 1998 through October 30, 2006, with 45% of defendant petitions and 22% of 

plaintiff petitions being granted. Barry Sullivan and Amy Kobelski Trueblood, Rule 23(f): 

A Note on Law and Discretion in the Courts of Appeals, 246 F.R.D. 277 (2008). In other words, the 

Courts of Appeals are becoming less receptive to interlocutory class certification review.

The study further showed that, as of its closing date, the overwhelming majority of granted petitions 

resulted in the reversal of a decision to certify a class (55 reversed, 24 affirmed at least in part) while 

the majority of class certification denials were affirmed (30 affirmed, 20 reversed). The study also 

showed great variation among the Circuits in the grant ranged from 5.4% in the First Circuit (only 2 

grants out of 37 decisions on a Rule 23(f) petition) to 46.4% in the Fifth Circuit (13 grants out of 28

decisions of a Rule 23(f) petition).

DRI believes that these numbers suggest that – at least from the defendant’s perspective – the 

promise that Rule 23(f) would reduce settlement pressure has not been met because the bulk of class 

certification decisions evade interlocutory review requiring the defendant to try a case involving a 

certified class to verdict in order to obtain review. We further believe that appellate review of class 

certifications decision is important precisely because of the burdens a certification decision can place 

on a defendant. See, Richard A. Nagareda, Class Certification In The Age Of Aggregate Proof, 84 

N.Y.U.L.Rev. 97, 104 (2009) (highlighting the considerable room for “appellate oversight of class 

certification determinations, with the appellate courts cast in their familiar role of de novo 

reviewers...”). But as the 1998 Advisory Committee noted, the burdens placed on parties by an 

erroneous certification decision cut both ways. 

As a result, we believe that Rule 23(f) should be amended to provide for mandatory appellate review 

of class certification decisions as described above. This proposal will:

(1) Ensure that what is often the most important legal determination in the case 

will not escape appellate review because of the pressure to settle. Rule 23 is, 

after all, a procedural device and a defendant’s right to seek review of the 

procedural decision to certify a class should not be effectively eliminated by 

requiring a trial to final judgment in order have an erroneous certification 

decision reviewed.

(2) Ensure that the settlements that do occur are not mispriced as a result of 

uncertainty over the soundness of the district court’s decision. See, Pollis at 

1673-74.

(3) Avoid any uncertainty over the availability of Supreme Court review of 

certification decisions such as those raised by the denial of a discretionary 

appeals as discussed in Dart Cherokee Basin Operating Company, LLC v. Owens,

135 S.Ct. 547 (2014).
DRI – The Voice of the Defense Bar Page 15 of 28

IV. DRI Proposal to Address “Shady Grove”

Section IV. addresses the issues created by the Supreme Court’s decision in Shady Grove Orthopedic 

Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393 (2010).

BACKGROUND

In Shady Grove Orthopedics Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393, 397 (2010), Shady 

Grove, a medical provider, brought a class action suit against Allstate for its refusal to pay interest 

on overdue benefits. Shady Grove alleged that it had treated Sonia E. Galvez for injuries she 

suffered in an automobile accident, and as partial payment for the care, Galvez had assigned Shady 

Grove her rights to insurance benefits under a policy issued in New York by Allstate. Id. Shady 

Grove tendered a claim for the assigned benefits to Allstate. Id. Under New York law, Allstate had 

30 days to pay the claim or deny it. Id. According to Shady Grove, Allstate’s payment on the claim 

was untimely and it refused to pay the statutory interest that accrued on the overdue benefits. Id.

Shady Grove filed a diversity suit in the Eastern District of New York to recover the unpaid 

statutory interest. Id. The District Court dismissed the suit, however, for lack of jurisdiction, 

reasoning that N.Y. Civ. Prac. Law Ann. § 901(b), which precludes a suit to recover a “penalty” 

from proceeding as a class action, applies in diversity suits in federal court, despite Federal Rule of 

Civil Procedure 23. Id. The District Court found that the statutory interest owed by Allstate was a 

“penalty” under New York law and thus the class action was prohibited by § 901(b). Id. And, 

because Shady Grove’s individual claim fell short of the amount in controversy requirement, the 

District Court held that subject matter jurisdiction was lacking and the case should be remanded to 

state court. Id. The Second Circuit affirmed, holding that § 901(b) was substantive within the 

meaning of Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), and thus must be applied by a federal court 

sitting in diversity. Id. at 398.

The Supreme Court, in a plurality opinion,20 reversed the decision of the Second Circuit, holding 

that § 901(b) does not preclude a federal district court sitting in diversity from entertaining a class 

action under Rule 23. Id. at 416. A majority of the Court held that if Rule 23 answers the question 

in dispute, it governs unless it exceeds its statutory authorization or Congress’s rulemaking power. 

Id. at 398. The Court found that Rule 23(b) answered the question in dispute – whether Shady 

Grove’s suit may proceed as a class action – because it stated that “[a] class action may be 

maintained” if certain conditions are met. Id. Because § 901(b) attempted to answer the same 

question, in stating that Shady Grove’s suit “may not be maintained as a class action” because of the 

relief it seeks, the Court held that § 901(b) cannot apply in diversity suits unless Rule 23 is ultra vires. 

Id. at 399.

 20 Only Parts I and II-A of Justice Scalia's opinion reflect the views of a five-person majority. Part I describes the case 

and the basic question presented, see id. at 397-98, while Part II-A concludes that Rule 23 answered the “question in 

dispute” – whether a class action may be maintained in the case before it. Id. at 398-406. Justice Ginsburg wrote the 

dissenting opinion, in which three justices joined. Id. at 437-459.
DRI – The Voice of the Defense Bar Page 16 of 28

ANALYSIS

A. The Problem Created by the Court’s Decision in Shady Grove.

The problem created by the Supreme Court’s decision in Shady Grove was acknowledged by the 

Court itself – namely, that the holding “keep[s] the federal-court door open to class actions that 

cannot proceed in state court” and therefore “will produce forum shopping.” Shady Grove, 559 U.S. 

at 415. The holding of Shady Grove is particularly problematic because it provides no policy reason 

for treating class actions removed to federal court differently on a substantive basis than those that 

are not. As Justice Stevens noted in his concurring opinion, Justice Scalia’s broad finding that Rule 

23 “unambiguously authorizes any plaintiffs, in any federal civil proceeding, to maintain a class action 

if the Rules’ prerequisites are met”21 goes too far, allowing a federal procedural rule to “displace a 

state law that is procedural in the ordinary use of the term but is so intertwined with a state right or 

remedy that it functions to define the scope of the state-created right.” Shady Grove, 559 U.S. at 423. 

In that instance, Justice Stevens wrote, the federal procedural rule “cannot govern.” Id. Simply put, 

“[i]f a district court follows Justice Scalia's approach, then the decision to remove a putative class 

action to federal court would result in the loss of the very grounds – a state law prohibiting class 

certification – that would otherwise defeat class certification in state court.” Martin A. Stern & 

Taylor E. Brett, Removal of Class Actions: What Danger Lurks in Shady Grove, 82 Def. Couns. J. 161, 162 

(April 2015).22

B. The Reasoning Behind the Proposed Change to Rule 23.

Justice Scalia’s own language suggests a necessary change to Rule 23 to resolve the issue posed by 

Shady Grove:

Allstate asserts that Rule 23 neither explicitly nor implicitly empowers a federal court 

“to certify a class in each and every case” where the Rule’s criteria are met. But that 

is exactly what Rule 23 does: It says that if the prescribed preconditions are satisfied 

“[a] class action may be maintained”-- not “a class action may be permitted.” Courts 

do not maintain actions; litigants do. The discretion suggested by Rule 23’s “may” is 

discretion residing in the plaintiff: He may bring his claim in a class action if he 

wishes. And like the rest of the Federal Rules of Civil Procedure, Rule 23 

automatically applies “in all civil actions and proceedings in the United States district 

courts.” Shady Grove, 559 U.S. at 399-400.

 21 Shady Grove, 559 U.S. at 406. 22 Moreover, the Shady Grove decision appears to be in tension with a long line of cases holding that whether to certify a 

class is within the discretion of the court. See, e.g., Califano v. Yamasaki, 442 U.S. 682, 703 (1979) (“The certification of a 

nationwide class, like most issues arising under Rule 23, is committed in the first instance to the discretion of the district 

court. On the facts of this case, we cannot conclude that the District Court . . . abused that discretion . . . .”); Prof’l 

Firefighters Assn. of Omaha, Local 385 v. Zalewski, 678 F.3d 640, 645 (8th Cir. 2012) (“The district court is accorded broad 

discretion to decide whether certification is appropriate, and we will reverse only for abuse of that discretion.”); In re 

Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig., 678 F.3d 409, 416 (6th Cir. 2012) (“The district court has broad 

discretion to decide whether to certify a class . . . . We review class certification for an abuse of discretion.” (Citation

omitted)); In re Monumental Life Ins. Co., 365 F.3d 408, 414 (5th Cir. 2004); Armstrong v. Davis, 275 F.3d 849, 871 n.28 (9th 

Cir. 2001) (noting the norm that the district court has “broad discretion” to certify class); Hartman v. Duffy, 19 F.3d 1459, 

1471 (D.C. Cir. 1994). See also William Hubbard, Optimal Class Size, Dukes, and the Funny Thing About Shady Grove, 62 

DePaul L. Rev. 693, 707-09 (Spring 2013).
DRI – The Voice of the Defense Bar Page 17 of 28

In other words, Justice Scalia’s interpretation of Rule 23’s mandatory application hinges on the 

language in Rule 23(b) that vests discretion with the plaintiff rather than the Court. If the language 

is revised to vest discretion with the Court, then Rule 23 no longer acts as “categorical rule entitling 

a plaintiff whose suit meets the specified criteria to pursue his claim as a class action,”23 and there is 

no direct conflict between the federal rule and state statutes that limit a plaintiff’s ability to 

“maintain” a class action.

Moreover, a further change to Rule 23 that would prohibit the certification of class actions where 

the underlying state statute on which the plaintiff bases its claims specifically disallows aggregate 

relief would alleviate forum shopping and related concerns that flow from the disparate treatment of 

such cases that are removed to federal court. Such an amendment would follow Justice Stevens’s 

opinion that state laws that limit a plaintiff's ability to bring a class action are not preempted by Rule 

23 if 1) the limiting provision is found within the text of a state statute that confers a substantive 

right and 2) applies only to cases brought under the statute.

PROPOSED CHANGES TO RULE 23 TO ADDRESS SHADY GROVE

Thus, to address the problems posed by the Court’s decision in Shady Grove, the following changes 

are suggested to Federal Rule of Civil Procedure 23:

(a) Prerequisites. One or more members of a class may sue or be sued as representative parties 

on behalf of all members 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; 

and

(5) the action is not brought under a state statute that (i) confers a substantive right; and 

(ii) prohibits recovery of class actions under the statute.

(b) TYPES OF CLASS ACTIONS. A class action may be maintained permitted if Rule 23(a) is 

satisfied and if: . . . .

V. DRI Comment on Subcommittee’s Conceptual Sketch of RULE 23(B)(4) –

Settlement Class Certification Without Predominance

The DRI opposes the proposed addition of the new category of certifiable class actions reflected in 

the proposed Rule 23(b)(4). While it might make cases easier to settle on a class action basis, that is 

not a valid goal of the rules of procedure where the case is not otherwise deserving of class 

treatment. There is no good policy reason for a rule providing that claims which are too 

individualized to be certified as a class for litigation purposes is nevertheless certifiable as a class for 

settlement purposes. Moreover, the risks and unintended consequences of such a change would be 

significant and highly undesirable. 

 23 Shady Grove, 559 U.S. at 398.
DRI – The Voice of the Defense Bar Page 18 of 28

By definition, what this proposal seeks to do is to enable the classwide settlement of cases in which 

individualized issues predominate, and foreclose consideration of those overriding individual 

differences in the settlement certification process. Such a rule, however, would present serious 

Constitutional concerns given the United States Supreme Court’s past indications that ignoring 

individual differences has Constitutional implications. See, e.g., Ortiz v. Fibreboard Corp., 527 U.S. 815, 

846 (1999) (quoting Martin v. Wilks, 490 U.S. 755, 762 (1989)); Wal-Mart Stores, Inc. v. Dukes, — U.S. 

—, 131 S. Ct. 2541, 2561 (2011); Hansberry v. Lee, 311 U.S. 32, 44-45 (1940); Coe v. Armour Fertilizer 

Works, 237 U.S. 413, 423 (1915); see also Philip Morris USA, Inc. v. Scott, — U.S. —, 131 S. Ct. 1, 3-4 

(2010) (Scalia, J., in chambers) (granting a stay of the judgment and noting that fraud claims required 

proof of individual reliance, which defendants were unable to contest because the trial court relied 

on representative proof). Due process must always underlie the procedures a court applies, even 

when a case travels under the “class action” banner. See Howard M. Downs, Federal Class Actions: 

Due Process by Adequacy of Representation (Identity of Claims) & the Impact of General Telephone v. Falcon, 54 

Ohio St. L.J. 607, 609 (1993). In due process terms, the class action device is “an exception to the 

usual rule that litigation is conducted by and on behalf of the individual named parties only.” Dukes, 

131 S. Ct. at 2550 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700–701 (1979)). Even as it 

already stands, Rule 23(b)(3) had been called the “most adventurous” departure from the normal 

due process rule of individual adjudication. Amchem Prods., Inc. v. Windsor, 521 U.S 591, 614-15 

(1997). Ignoring the potential conflict between further expansion of Rule 23(b)(3) and the Due 

Process limits on class treatment will also encourage similar adventurous experiments in state court, 

where the Due Process limits upon state class action procedures are already being litigated but are 

not yet fully developed. See, e.g., Petition for Certiorari in Wal-Mart Stores v. Braun, No. 14- 1124 in the 

Supreme Court of the United States. 

As the Supreme Court recently made clear in Dukes, the commonality requirement of Rule 23(a) 

requires proof that at least one key issue which drives the adjudication of the case is susceptible of a 

common answer. 131 S. Ct. at 2556. But the predominance requirement takes that a step further, 

requiring courts to assess whether individual or common issues would predominate in assessing and 

adjudicating the claims of every class member and the defenses asserted to those claims. 1 JOSEPH 

M. MCLAUGHLIN, MCLAUGHLIN ON CLASS ACTIONS: LAW & PRACTICE § 5:23 at 1263 (10th ed. 

2013). In so doing, predominance tests “whether proposed classes are sufficiently cohesive to 

warrant adjudication by representation.” Amchem Prods., Inc., 521 U.S. at 623. 

Therefore, the aim of the predominance requirement cannot be fulfilled by reliance on the 

commonality inquiry alone. They two are distinct inquires, with predominance being a critical test to 

determine whether the class is “sufficiently cohesive” to warrant class treatment at all. A class that is 

not “sufficiently cohesive” to warrant representative adjudication in the first place cannot logically 

be transformed by the handshake of the lawyers into one that is sufficiently cohesive to warrant 

representative adjudication for purposes of settlement. As the Supreme Court has observed, “it is 

not the mission of Rule 23(e) to assure the class cohesion that legitimizes representative action in the 

first place.” Amchem, 521 U.S. at 623; accord Ortiz, 527 U.S. at 858 (“A fairness hearing under 

subdivision (e) can no more swallow the preceding protective requirements of Rule 23 in a 

subdivision (b)(1)(B) action than in one under subdivision (b)(3).”).

If one assumes that the proposed change achieved its stated goal, and that the predominance of 

individual issues would then no longer be a concern in certifying settlement classes, then the logical 

result would be that virtually any claim could be pursued on a class basis. While the proposal 
DRI – The Voice of the Defense Bar Page 19 of 28

purports to maintain the “superiority” requirement for settlement classes, the proposed rule fails to 

articulate what “superiority” would mean once completely divorced from the traditional 

predominance inquiry. After all, from the narrow perspective of the convenience of the court and 

abstract efficiency, any class settlement is superior to the prospect of individual litigation by each 

member of the class. But if that alone is the effective meaning of superiority under this proposal—

and it seems it would have to be if the predominance of individual issues is expressly removed from 

the equation for purposes of settlement—then superiority effectively becomes a rubber stamp for 

settlement classes. It is indeed difficult to imagine any putative class action that could not be 

certified for settlement purposes if the predominance of individual issues is truly no longer a 

concern. Would common law fraud class actions now be certifiable for settlement purposes despite 

the necessity of proving individual reliance in litigated individual cases? What about nationwide 

personal injury class actions? Mental anguish claims? How does the proposal guarantee otherwise?

Similarly, substantial uncertainty would attend interpretation of Rule 23(a)’s adequacy and typicality 

requirements if an inquiry into the predominance of common issues is removed from the settlement 

certification analysis. The “safeguards provided by the Rule 23(a) and (b) class qualifying criteria ... 

are not impractical impediments—checks shorn of utility—in the settlement-class context,” rather 

these “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 Prods., 521 U.S. at 621. In what sense 

is a proposed representative adequate and his or her claims typical if each individual’s claim 

admittedly turns on predominantly individual and not common facts? In what sense is 

representation for purposes of settlement “adequate” if the representative would not have the power 

to assert the claims of absent class members in litigation, and the bargaining leverage that comes 

with the willingness and ability to use that power? Class judgments can be collaterally attacked for 

lack of adequate representation. See Hansberry, 311 U.S. at 45 (“a selection of representatives . . . 

whose substantial interests are not necessarily or even probably the same as those whom they are 

deemed to represent, does not afford that protection to absent parties which due process requires.”). 

The elimination of the predominance tests for certification of settlement classes risks the unintended 

effect of fostering more collateral attacks on class settlements because it would effectively and 

inevitably foster representation of absent class members by persons whose claims are predominately 

the same as theirs

The 23(b)(4) proposal would in fact create unavoidable perverse incentives on the part of counsel 

for both sides. Plaintiffs’ counsel would now have undeniable incentives, and indeed implicit 

permission in Rule 23 itself, to file otherwise uncertifiable class action complaints with the intent 

and purpose of using the cost and risks of defending them to force a class settlement. This problem 

already exists to a significant extent under the current version of Rule 23, and has been called the 

“blackmail effect” of class litigation. See, e.g., AT&T Mobility LLC v. Concepcion, — U.S. —, 131 S. 

Ct. 1740, 1752 (2011) (citing Kohen v. Pac. Inv. Mgmt. Co. LLC, 571 F.3d 672, 677-78 (7th Cir. 2009)); 

In re Rhone-Poulenc Rorer, 51 F.3d 1293, 1299-1300 (5th Cir. 1995). The 23(b)(4) proposal would make 

that problem much worse. The federal courts would surely see substantial increases in class action 

filings, since by definition it would then be entirely permissible to file suit with the aim and purpose 

of achieving settlement certification even for an otherwise uncertifiable class. These otherwise 

admittedly illegitimate class actions would then very frequently result in class settlements simply 

because it would very often be cheaper for defendants to settle these cases than litigate them. 

Indeed, once these cases are filed, both plaintiff’s counsel and defense counsel would have clear 

incentives to disregard individualized variations and differences in favor of a deal that, in the 
DRI – The Voice of the Defense Bar Page 20 of 28

absence of Rule 23(b)(4), would surely have been deemed a collusive settlement. After all, Plaintiffs’ 

counsel in these cases would have little to bargain with in negotiating settlement of these cases, since 

the defendant would face no real threat of classwide liability in litigation. See, e.g. Amchem Prods., 521 

U.S. at621 (“if a fairness inquiry under Rule 23(e) controlled certification, eclipsing Rule 23(a) and 

(b), and permitting class designation [for settlement purposes] despite the impossibility of litigation, 

both class counsel and court would be disarmed. Class counsel confined to settlement negotiations 

could not use the threat of litigation to press for a better offer...”). 

Indeed, if 23(b)(4) became law, it is not hard to imagine that the very fact that the class is not 

certifiable for litigation would become a popular reason for the plaintiffs’ counsel to propose, and 

for the court to approve, a classwide settlement for mere pennies on the dollar. Cf. City of Detroit v. 

Grinell Corp., 495 F.2d 448, 463 (2d Cir. 1974) (risk that class certification could not be maintained 

through trial endorsed as a factor favoring approval of class settlement), abrogated on other grounds by 

Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir.2000). In these and other ways, the adequate 

representation of absent class members that is critical to due process is inevitably undermined by 

creating an easy path to settlement certification even where individual issues admittedly predominate 

and claims are therefore predominately dissimilar. This approach stands the concept of due process 

on its head.

Placing the burden entirely on the court to ensure the protection of absent class members merely by 

reviewing the fairness of the settlement’s terms is hardly an answer to these problems. The 

certification of the class and the fairness of a settlement are separate inquiries. In the absence of 

properly incentivized adversarial advocacy, courts cannot be expected to be fully informed of the 

important variations in individual claims that may affect both inquiries. The Rule 23(b)(4) proposal 

largely serves as a disincentive to such advocacy.

There is another problem with the proposal. If the rule were adopted as proposed, it is unclear 

whether a class certified on this basis would automatically be vacated if the settlement which 

generated it were disapproved or failed to become effective, or whether a court could deem the 

parties estopped to challenge certification once they have supported it under the proposed new rule 

23(b)(4). Cf. Carnegie v. Household, Inc., 376 F.3d 656, 660 (7th Cir. 2004) (Posner, J.) (holding that 

parties who had stipulated that Rule 23(a) factors were met for purposes of settlement were judicially 

estopped to deny that the class met those same Rule 23(a) requirements for purposes of litigation 

after the settlement fell through). This problem would need to be explicitly addressed if any form of 

the 23(b)(4) proposal were adopted.

If the new settlement certification provision were applied to (b)(1) and (b)(2) as well as (b)(3), a 

possibility alluded to but not fully developed in the draft comments to the proposed rule, then all of 

the foregoing problems are only compounded, and still other new problems and uncertainties would 

be created. 

The abstract efficiency of settling numerous claims at once is simply not a reason in and of itself to 

certify a class where the underlying issues, claims and damages are predominantly individualized and 

varying rather than common. In terms of ensuring that the rights of absent class members are fairly 

represented in proceedings brought by a self-selected class representative, the fees and classwide 

release that would make such settlement certifications financially attractive to both would-be class 

counsel and the defendant are hardly a substitute for the identity of interests that the predominance 

requirement assures. The 23(b)(4) proposal would inevitably be perceived as placing the interests of 
DRI – The Voice of the Defense Bar Page 21 of 28

class action lawyers ahead of the true interests of individual class members, exacerbating the already 

widespread perception that class settlements primarily benefit lawyers at the expense of clients. See, 

e.g., Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518, 524 (1st Cir. 1991) (expressing “fear that class 

actions will prove less beneficial to class members than to their attorneys, [which] has been often 

voiced by concerned courts and periodically bolstered by empirical studies”). The DRI’s national 

poll data confirms the breadth and persistence of the public’s narrow view of class actions. The DRI 

National Poll on the Civil Justice System. It undermines the credibility of the class action device and the 

class action bar to have a rule that effectively says on its face that classes which are not cohesive, not 

susceptible of common proof on the predominating issues, and therefore admittedly uncertifiable 

for purposes of litigation, can nevertheless be a candidate for certification as a settlement class so 

long as the opposing lawyers agree to settle it on a class basis. 

Nor is this the right cure for the problem that some courts see judicial estoppel consequences to the 

defendant from proposing a class settlement if the class settlement fails. See, e.g., Carnegie v Household 

International, Inc., 376 F. 3d 656 (7th Cir. 2004). Incentivizing the filing of class actions in which 

individual issues predominate risks causes more harm than good, and would not prevent a risk of 

judicial estoppel as to the elements of Rule 23(a) – a problem which Carnegie itself demonstrates. In 

any event, judicial estoppel from a failed class settlement does not seem to be a concept many courts 

have embraced. Traditionally, judicial estoppel applies only when the party asserting the position has 

in fact prevailed in arguing the prior position and would gain unfair advantage by contradicting it. 

See, e.g., Zedner v. U.S., 547 U.S. 489, 503-06 (2006); New Hampshire v. Maine, 532 U.S. 742, 749-51 

(2001). The notion of “temporary advantage” from a failed settlement, the concept embraced by the 

Carnegie court as sufficient to trigger the doctrine, seems a distinct stretch of the concept, and one 

not widely followed. Moreover, the concept typically applies to inconsistent positions of fact, not 

inconsistent positions involving propositions of law. Lowery v. Stovall, 92. F. 3d 219, 224 (4th Cir. 

1996) (citing Tenneco Chemicals, Inc. v. William T. Burnett & Co., Inc., 691 F.2d 658 (4th Cir. 1982). 

“Predominance” is largely a conclusion of law, deriving from legal analysis of the elements of the 

claims and defenses at issue. 

A better cure for this problem would be language in the Rule simply saying that in the event a 

proposed class settlement is not approved, filings in support of or against a class settlement shall not 

be considered by the Court in determining a subsequent contested motion for class certification in 

that or any other case. That would resonate with the prohibitions on the use of settlement-related 

offers and settlement-related statements found Federal Rule of Civil Procedure 68(b) and Federal 

Rule of Evidence 408(a) and the policies supporting those Rules. See FED. R. CIV. P. 68(b) & 

advisory committee notes to 1946 amendment; FED. R. EVID. 408 & advisory committee notes. 

Alternatively, defendants can avoid the judicial estoppel risk by simply not taking a position on the 

Rule 23(a) and (b) factors at all for purposes of settlement, and allowing plaintiffs’ counsel to argue 

those issues, and Rule 23 could easily be modified to expressly authorize this approach. 

VI. DRI Comment on the Subcommittee’s Conceptual Sketch Relating to Cy Pres

The Subcommittee has proposed adopting § 3.07 the ALI Principles regarding cy pres as an 

amendment to Rule 23(e). In particular, this proposal would permit a court to approve a proposal 

that includes a cy pres remedy, even if such a remedy could not be ordered in a contested case. The 

proposal also provides the criteria a court should consider in determining whether a cy pres award is 

appropriate. The Subcommittee stated at a recent conference that its reasoning, at least in part, for 

proposing such changes is to maximize compensation to class members rather than third parties. 
DRI – The Voice of the Defense Bar Page 22 of 28

DRI agrees with the principle that settlement funds should be directed to class members and third 

parties, but submits that the proposed change is unnecessary and may actually do more harm to the 

stated goal than good. The change is unnecessary because courts already do consider the criteria 

listed in the proposed amendment to Rule 23(e), see e.g., In re BankAmerica Corp. Sec. Litig., 775 F.3d 

1060, 1063-64 (8th Cir. 2015) (discussing application of the American Law Institute’s standards for 

cy pres awards); In re Pharm. Indus. Average Wholesale Price Litig., 588 F.3d 24, 35 (1st Cir. 2009) 

(similar), and there is an entire industry of objectors ready and willing to ensure that courts consider 

such factors. 

If a court finds that a settlement’s notice plan and claims process are appropriate, and the amount of 

the settlement fund is “fair, adequate, and reasonable,” then there should be no residue in a 

settlement fund, or no problem with it reverting to the defendant. DRI appreciates that the 

Subcommittee’s September 2015 comments recognize this. The Subcommittee has proposed 

bracketed text that would suggest that reversion is an alternative to cy pres. 

The Subcommittee appears concerned in connection with that sketch that defendants would press 

for unduly exacting claims processing procedures. But there are at least three mechanisms in place 

to deter such conduct. First, plaintiffs’ counsel have not only an interest but a duty to ensure that 

the claims processing procedures are fair. Second, the judge has a duty and obligation to look at the 

same. Third, objectors often focus on the claims processing procedures. And finally, defendants 

who have decided to settle want the settlement to be approved, so they are likely to want the claims 

procedures to be fair so that the settlement is approved. 

While the Subcommittee focuses on concerns about what defendants do, little attention is paid to 

plaintiffs’ conduct. As the Subcommittee’s conceptual sketch regarding notice recognized, notice 

methods have changed. Dutiful plaintiffs’ counsel nowadays are often monitoring notice and claims 

returns to maximize claims. The good counsel are looking, in real time, at which electronic notice 

methods are maximizing claims returns and directing notice administrators to spend more of the 

funds on those sources rather than on ones not delivering results. Incentivizing plaintiffs to actually 

get the notice plan right and be vigilant about trying to achieve a healthy claims rate is a better 

method to maximize payments to class members than codifying a procedure for giving the money to 

a third party. The Subcommittee could augment the committee notes to the notice provisions to 

suggest that courts look at plaintiffs’ counsel’s diligence in conducting the notice program in 

analyzing fees to be awarded.

Similarly, if courts assessed plaintiffs’ counsel’s fees in terms of how much of the funds were 

distributed to class members – rather than how much was diverted to cy pres – this too may provide 

better incentives for plaintiffs’ counsel to direct funds to class members. Such incentives could be 

reinforced by including language in Rule 23 that would exclude cy pres payments from attorneys’ fee 

calculations. Judges are increasingly finding that attorneys’ fees should be awarded based on the 

amount of benefit to the class members, see Eubank v. Pella Corp., 753 F.3d 718 (7th Cir. 2014); 

Redman v. RadioShack Corp., 768 F.3d 622 (7th Cir. 2014); Pearson v. NBTY, Inc., 722 F.3d 778 (7th Cir.

2015), and because cy pres awards do not benefit the class members, plaintiffs’ attorneys should not 
DRI – The Voice of the Defense Bar Page 23 of 28

be compensated for directing fees to cy pres recipients. Such a change would be consistent with 

where the case law is trending.24 

Amending Rule 23 to codify the propriety of cy pres also may be counterproductive because the 

reality is that with these changes, plaintiffs’ counsel will say that cy pres is now blessed by the Federal 

Rules, so it should be a component of every settlement. This could provide plaintiffs more leverage 

in settlement than they would have in litigation, which does not appear to be (nor should it be) the 

Subcommittee’s goal. Parties need the flexibility to determine if cy pres is appropriate for each 

particular case. If plaintiffs’ case is weak and few claims are expected because, for example, people 

did not feel harmed by the defendant’s conduct, there is no reason the settlement should not reflect 

that reality and plaintiffs compensated accordingly.

Moreover, in DRI’s experience, there is no reason to presume that “individual distributions are not 

viable for sums of less than $100,” as the conceptual sketch originally stated. Many cases involve 

less than $100 where individual distributions are viable, as the Subcommittee recognized with its 

example of bank fees that are less than $100 and the bank could easily identify those account 

holders. But even if distributions are difficult, that reflects a problem with the named plaintiff’s 

ability to prove ascertainability, which suggests that the case is worth less than it would be if class 

members were ascertainable, and justifies a lower recovery, lower payment by defendants, less or no 

cy pres, and a lower attorneys’ fee award – none of which the proposed sketch addresses. Moreover, 

if it is impractical to distribute a settlement of a few dollars each to lots of class members, does that 

suggest that class treatment is really not superior to individual litigation after all? Those situations 

may be better left to regulatory enforcement actions. Class actions are not regulatory enforcement 

actions, and self-appointed, financially interested, roving private class counsel should not be able to 

extract the equivalent of a regulatory fine simply by leveraging the defense costs of class litigation 

into a cy pres settlement.

We also are concerned with the Subcommittee’s suggestion that distributions to class members who 

submitted improper claims should be topped up before cy pres distributions are made. This is 

problematic for several reasons, but primarily because of the lack of specificity. The only type of 

claims that the Subcommittee suggests should be topped up are untimely claims. The reality is that 

the parties often decide to pay untimely or otherwise improper claims to avoid having to disturb the 

court or risk objections on such issues. Without more specificity, the Subcommittee’s change 

suggests that the parties may be required to pay claims where the claims administrator has 

determined that the claimant is not entitled to relief. Parties often build fraud-prevention into their 

claims process, and they need the flexibility to determine whether a claim is fraudulent and should 

 24 Congress did the same thing in CAFA when it required that attorneys’ fee awards be calculated based on the amount 

of coupons redeemed, i.e., the actual benefit to the class, not the face value of the coupons issued. The same should be 

true with respect to non-coupon class action settlements. We assume the amount of money that is “fair, adequate, and 

reasonable” is the amount that plaintiffs’ counsel and the defendant agree upon, but it is entirely possible in this day and 

age when everyone is inundated with class action settlement notices that people are simply choosing not to make claims 

because they do not believe they were injured, they like the product about which the lawsuit was brought, or simply do 

not want to bother making a claim even if the process is very easy. Again, if we assume that notice and the claims 

process are adequate, as we must if a settlement is to be approved, there is no reason to think any remainder is excessive 

and should be redistributed (which may result in a windfall to class members). It may be that the plaintiff simply did not 

have a strong case, in which case it is fair and reasonable to revert the remainder back to the defendant. A reverter, 

which then would not be counted in plaintiffs’ counsel’s fees, provides incentives to plaintiffs to only bring claims where 

class members have actually been harmed and will take advantage of opportunity for compensation. 
DRI – The Voice of the Defense Bar Page 24 of 28

not be paid. Is the Subcommittee suggesting such claims should still be paid? In addition, the 

Subcommittee does not address how much topping up is necessary, and in fact suggests that 

claimants should be paid more even if they already have been paid “in full.” DRI does not 

understand why the federal rules would support giving class members more than was bargained for. 

Many settlement agreements already include provisions for additional pro rata distributions if the 

fund is under claimed, so is the Subcommittee blessing those provisions or requiring more than that 

to which the parties agreed?25 

The Subcommittee has reported that “[m]uch concern has been expressed in several quarters about 

questionable use of cy pres provisions, and the courts’ role in approving those arrangements under 

Rule 23.” But the Subcommittee’s proposals do not address the questionable role of judges and 

objectors in influencing the recipient or amount of the cy pres award. For example, the 

Subcommittee may be interested in a website located at www.ohiolawyersgiveback.org, which 

appears to be run by a law firm that promotes the use of cy pres in class action settlements and 

actually encourages charities to apply to be cy pres recipients. In DRI’s experience, the law firm then 

goes out and objects to settlements in order to get that charity a piece of the settlement funds. 

Although the conceptual sketch would restrict cy pres recipients to those whose interests “reasonably 

approximate” those being pursued by the class, that does nothing to prevent judges or objectors 

from directing the residue to their pet charities. For their part, judges have been known to “suggest” 

that cy pres funds be donated to local bar foundations or other charitable organizations to which the 

judge belongs or presides over, and often this is not done on the record. Given that the judge is 

approving or rejecting the settlement, the parties often feel coerced into making the donation the 

judge “suggests.” 

DRI is not opposed to cy pres; its members routinely use it and like having the option of using it to 

settle cases. Our members need the flexibility to determine when it is appropriate, however, and we 

are concerned that having the concept engrafted into the Federal Rules as proposed would put 

defendants in a weaker bargaining position that they would be without it. 

VII. DRI Comment on Subcommittee’s Conceptual Sketch on Objectors

The Subcommittee has sketched out two possible amendments to Rule 23 related to class action 

settlement objectors. First, the Subcommittee has raised for discussion changes to Rule 23(e)(5) that 

would require an objector seeking to withdraw an objection to not only obtain court approval to 

withdraw (which is already required by the current rule), but also file a statement identifying any 

“agreement made in connection with the withdrawal.” Second, the Subcommittee has proposed 

language regarding sanctions of objectors if objections are made for improper purposes. In doing 

so, it has proffered two possible options: (a) language added to 23(e)(5) to make objections subject 

to Rule 11; or (b) language added to the effect that a court may impose sanctions “if the court finds 

that an objector has made objections that are insubstantial [and/or] not reasonably advanced for the 

purpose of rejecting or improving the settlement.”

 25 What does the Subcommittee mean in the bracketed text of page 16 of the September comments when it says “As an 

alternative, or additionally, a court may designate residual funds to pay class members who submitted claims late or 

otherwise out of compliance with the claim processing requirements established under the settlement.” Is this 

suggesting that courts rewrite settlement agreements? They have no authority to do so.
DRI – The Voice of the Defense Bar Page 25 of 28

As an initial note, we completely agree with the Subcommittee’s expressed concern that, while some 

settlement objectors serve a useful purpose (the Subcommittee calls them “good” objectors), others 

hold up the settlement in the hopes of extracting money from the settling parties, and serve no 

purpose in improving the settlement (the Subcommittee calls these objectors “bad” objectors). The 

expressed intention of proposed Rule 23 changes related to objectors is to create a disincentive for

the “bad” objectors. While it is definitely true that many objectors are often motivated more by 

money than by any improvement in recovery for the class, and that “professional objectors” are 

using Rule 23 as a source of income rather than a method of good legal reform, it does not appear 

that the changes proposed would necessarily serve the purpose of diminishing or eradicating their 

practices.

First, in our experience, it appears that Courts are already well-equipped to know who is a “good” 

objector and who is a “bad” objector. The Parties often spend significant time educating the judge 

on the history of the objectors, and can tell from briefing and oral argument what purpose they are 

serving, if any. Moreover, no objector is completely “good” or completely “bad.” Most will be 

mixed – i.e., they are bringing legitimate objections and seeking improvements to a settlement, but 

their motivation at the end of the day is monetary only. It seems overly simplistic to put objectors 

into “good” and “bad” categories, without also leaving room for the nuanced considerations (already 

in use by Courts) to determine how much weight to give objections.

Second, it does not necessarily follow that requiring notification of side agreements before an 

objector can withdraw will actually lead to less objectors. Rule 23(e)(5) already requires court 

approval to withdraw objections made at the district court level. This seems too late. Why not 

require court approval to make an objection? If we believe that most objections are worthless, why 

would we make it more difficult to withdraw, rather than more difficult to object in the first place? 

Moreover, it is questionable whether Rule 23(e)(5) (adopted in 2003), requiring court approval for 

withdrawal of an objection, actually decreased the number of “hold up” objectors (e.g., professional 

objectors) simply seeking money, which was its intended purpose? It would seem that adding 

barriers to withdrawal of an objection may not serve the purpose of reducing objections in the first 

place – it may just lead to less withdrawals, which is not the desired benefit.

Third, the idea of sanctions, while seemingly helpful for dissuading objectors with less than pure 

motives, seems rife with difficulty. Sometimes an objector does not have a full record (e.g., if parts 

of the record are under seal) and may not have a full record unless and until he files an objection. 

An objector may not be able to say he is complying with Rule 11 when he does not have a full 

record of the facts. Moreover, a court already has authority to impose sanctions under 28 USC 

§1927; extra authority is not needed to impose sanctions against objectors.

Finally, every settlement can always be “better” or more beneficial to class members – it is a product 

of compromise. An objector will typically be able to put forth some argument that appears to have 

a purpose of improving the settlement (i.e., publication notice that reaches 85 instead of 75 percent; 

longer claims period; simpler claim form). It may very well be that any changes making life more 

difficult for objectors are a good thing, as viewed from the defense side of the bar, but we would ask 

that the Committee first consider whether previous amendments restricting withdrawal of objections 

have actually led to less objectors. Also, the Committee should consider whether there are other 

methods that could be used to separate out the “good” objectors from the “bad” objectors, perhaps 

by expressly allowing for discovery into the objectors’ litigation history. 
DRI – The Voice of the Defense Bar Page 26 of 28

VIII. DRI Comment on Subcommittee’s Conceptual Sketch on Issue Certification

Even in the usual course, “the vast majority of certified class actions settle, most soon after 

certification.” Robert G. Bone & David S. Evans, Class Certification and the Substantive Merits, 51 Duke 

L.J. 1251, 1291-1291 (2002) (“[E]mpirical studies...confirm what most class action lawyers know to 

be true[.]”); see also Nagareda, supra, at 99 (“With vanishingly rare exception, class certification [leads 

to] settlement, not full-fledged testing of the plaintiffs’ case by trial.”); Thomas E. Willging & 

Shannon R. Wheatman, Attorney Choice of Forum in Class Action Litigation: What Difference Does It Make?, 

81 Notre Dame L. Rev. 591, 647 (2006) (“[A]lmost all certified class actions settle.”). Indeed, a 2005 

study conducted by the Federal Judicial Center found that roughly 90% of the suits under review 

that were fi led as class actions settled after certification. Barbara J. Rothstein & Thomas E. Willging, 

Federal Judicial Center, Managing Class Action Litigation: A Pocket Guide for Judges 6 (2005). This is 

because class actions place defendants in the untenable position of betting the company on the 

outcome of a trial. Defendants, unwilling to roll the dice, are placed under intense pressure to settle, 

even if an adverse judgment seems “improbable.” See Thorogood v. Sears, Roebuck and Co., 547 F.3d 

742, 745 (7th Cir. 2008); Matter of Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1298 (7th Cir. 1995). See 

also Barry F. McNiel, et. al., Mass Torts and Class Actions: Facing Increased Scrutiny, 167 F.R.D. 483, 489-

90 (updated 8/5/96). Fear of negative publicity is also a motivating factor to settle even weak class 

claims. L. Elizabeth Chamblee, Unsettling Efficiency: When Non-Class Aggregation of Mass Torts Creates 

Second-Class Settlements, 65 La. L. Rev. 157, 222 (Fall 2004).

The elimination of predominance to pave an easier path to issue certification would lead to even 

more “blackmail settlements.” Rhone, supra at 1298, citing Henry J. Friendly, Federal Jurisdiction: A 

General View 120 (1973). There is no compelling policy for a change that would allow abusive class 

actions to progress more easily to certification – and legally unwarranted settlement. The enhanced 

leverage of an easier path to certification of some sort would inevitably trigger the filing of many 

more “strike suits” brought by opportunistic plaintiffs’ attorneys to obtain “the defendants’ cost 

savings from avoiding the litigation, distraction, and reputation costs of responding to the plaintiffs’ 

complaint” rather than the true worth of the claim. James Bohn & Stephen Choi, Fraud in the NewIssues Market: Empirical Evidence on Securities Class Actions, 144 U. Pa. L. Rev. 903, 970 (1996). The 

strain this places on the individuals and businesses that DRI’s members are regularly called on to 

defend cannot be overstated. Even without this easier path to certification, class actions can sound 

the death knell for new companies and those suffering under today’s current economic climate. 

Bradley J. Bondi, Facilitating Economic Recovery and Sustainable Growth Through Reform the Securities ClassAction System: Exploring Arbitration as an Alternative to Litigation, 33 Harv. J.L. & Pub. Pol’y 607, 612 

(Spring 2010). But the removal of the predominance requirement from the issue class certification 

equation gives even more power in upfront settlement discussions to plaintiffs whose claims might 

require individualized causation and remedy determinations. “Such leverage can essentially force 

corporate defendants to pay ransom...” S. Rep. No. 109-15, 17 20-21 (2005), reprinted in 2005 

U.S.C.C.A.N. 3, 21; Michael B. Barnett, The Plaintiffs’ Bar Cannot Enforce the Laws: Individual Reliance 

Issues Prevent Consumer Protection Classes in the Eighth Circuit, 75 Mo. L. Rev. 207, 208 (Winter 2010). 

And the ripple effects of these exorbitant settlements will be felt throughout the economy. The costs 

of settlements are, at least partially, inevitably passed on to consumers in some form or another. 

Removal of superiority and manageability issues from the issue certification equation in addition to 

eliminating the predominance requirement would only exacerbate these problems.

But there will be additional victims, too, if issue classes may be certified under Rule 23(c)(4) 

regardless of Rule 23(b). This approach will place a robust strain on the courts and judges called on 
DRI – The Voice of the Defense Bar Page 27 of 28

to adjudicate these “issue” class claims. It is well-understood that class action litigation consumes 

more judicial resources than individual litigation. In fact, one study found that class actions consume 

almost five times more judicial time and resources than non-class civil actions. Thomas E. Willging, 

et. al., Empirical Study of Class Actions in Four 13 Federal District Courts, 7, 11, 23 (1996). It becomes even 

more problematic for the bench to carry out proceedings when adjudication of a class suit involves 

both class and individual trials. The class action mechanism should not be used in situations where 

proper adjudication of the claim will require individualized proofs and trial; these claims are better 

brought as individual suits.

DRI submits that the concept of issue classes should be eliminated from Rule 23 altogether. 

Alternatively, the rule should be amended to at least make it explicit that all of rule 23(b)’s existing 

requirements apply with full force to issue classes. Reaffirming the notion that class actions are 

limited to situations where common classwide claims can be resolved through a single trial will go a 

long way in preserving the district and appellate courts’ limited judicial resources. Rule 23(b) 

provides the key component of the balance of when class treatment is preferable over individual 

actions. The issue certification concept, especially if predominance and/or superiority and 

manageability concepts are removed from the equation, disrupts this careful balance by allowing a 

class unable to fit within one of the types set forth in Rule 23(b) to proceed as an “issue” class even 

though final resolution of the claims will require individualized proofs and trials. 

The need for issue class certification is hardly apparent. Where claims are predominantly individual 

but involve common issues, the doctrine of non-mutual offensive collateral estoppel already 

provides an avenue whereby resourceful litigants and judges can, where it is fair to the defendant to 

do so, avoid the need for that issue to be determined over and over as to the same defendant. See, 

e.g., Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322 (1979).

In the final analysis, courts are in the business of resolving claims, not issues. Adjudicating issues 

but not claims on a classwide basis also presents serious Seventh Amendment concerns See In re 

Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1303 (7th Cir. 1995). It may also present due process 

concerns. The United States Supreme Court has repeatedly observed that Rule 23(b)(3) is the “most 

adventuresome” of Rule 23’s experiments with the due process norm of an individual’s right to his 

own day in court. See, e.g., Amchem Prods. Inc. v Windsor, 521 U.S. 591, 614 (1997). Removing its 

predominance, superiority and manageability components for an issue class certification is more 

adventuresome by far. The due process risk is even greater under the Subcommittee’s sketch 

proposals to the extent a right of opt out is not explicitly mandated for issue classes. Having class 

members bound by res judicata to an adverse determination of an issue critical to their individual 

claims without a right of opt out would almost certainly offend due process when the claims at stake 

do not turn on predominantly common issues to begin with.

If the concept of issue certification remains in any form, then an appeal as of right should lie from 

any order granting such certification for the reasons outlined in Section III above. Indeed, given the 

increased settlement leverage and reduced overall efficiency inherent in an easier path to issue class 

certification, the need for an appeal of right would be even more acute if any version of the 

Subcommittee’s issue certification proposals were adopted.
DRI – The Voice of the Defense Bar Page 28 of 28

CONCLUSION

DRI is grateful for the opportunity to submit these comments to the Subcommittee, and wishes to express its sincere 

appreciation for the active participation of several members of the Subcommittee in the recent “town hall meeting” at 

the 2015 DRI Class Actions Seminar in Washington D.C. We stand ready to respond to any follow-up questions 

the Subcommittee may have.

John Parker Sweeney, President of DRI – Voice of the Defense Bar

Testimony Before 

Subcommittee on the Constitution and Civil Justice

The U.S. House of Representatives 

February 27, 2015

“The State of Class Actions Ten Years After the Enactment of 

the Class Action Fairness Act”
1

John Parker Sweeney, President of DRI – Voice of the Defense Bar

Testimony Before The

U.S. House of Representatives Subcommittee on the Constitution and Civil Justice

February 27, 2015

“The State of Class Actions Ten Years After the Enactment of the Class Action Fairness Act”

Good morning, Mr. Chairman, Mr. Cohen, and members of the subcommittee. I am John 

Parker Sweeney, president of DRI – The Voice of the Defense Bar. I will summarize my 

statement and ask that my full statement be included in the record. 

I want to first thank the subcommittee for allowing us to appear here today. With 22,000 

members, DRI is the largest association of lawyers defending American businesses – large and 

small – in court. Over the past four years, we have submitted 23 amicus briefs to the Supreme 

Court in cases involving class actions. We also conduct the nation’s only annual national opinion 

poll devoted exclusively to the civil justice system. 

I would also like to express our appreciation for the time and skill that went into the 

enactment of the Class Action Fairness Act of 2005. This legislation brought increased fairness

and efficiency to the civil justice system. The importance of CAFA is highlighted by the 

Supreme Court’s significant decisions over the past ten years in the areas of class and collective 

actions. 

Representative actions such as class actions and collective actions are exceptions “to the 

usual rule that litigation is conducted by and on behalf of the individual named parties only.” 

Califano v. Yamasaki, 442 U.S. 682, 700-701 (1979). Exceptional litigation can create 

exceptional problems and calls for exceptional treatment and the enactment of CAFA helped 

address some of the exceptional problems inherent in aggregate litigation. As with most 

important legislation, the passage of time and the accrual of practical experience reveal 
2

opportunities that would make the law more effective, as well as address the vulnerabilities that 

threaten its purposes. 

Although there are a number of areas of concern to DRI’s members, we would like to 

highlight today three areas we believe merit further study and reform: 

1) No-injury class actions;

2) The use of the cy pres doctrine to increase the cost of class action settlements; and

3) Continued issues with removal of class actions to federal court.

Each of these areas presents unique challenges and each impacts the very concerns that led to the 

enactment of CAFA in the first place. We believe CAFA’s reforms have worked and our 

discussion here is intended to highlight issues that warrant further review.

I. NO-INJURY CLASS ACTIONS

Article III standing is an “irreducible constitutional minimum,” Lujan v. 

Defenders of Wildlife, 504 U.S. 555, 560 (1992), and an individual lacks standing unless he has 

been affected “in a personal and individual way.” Id. at 560 n.1. A plaintiff cannot rely on any 

injury others may have suffered to satisfy this requirement. See Warth v. Seldin, 422 U.S. 490, 

501 (1975) (“[T]he plaintiff . . . must allege a distinct and palpable injury to himself . . . .”). In 

other words, the plaintiff must have suffered an “injury in fact.” 

Yet defendants today face abstract claims that threaten to undermine the civil justice 

system: suits brought by plaintiffs who admittedly have not been harmed on behalf of a 

proposed class of similarly unharmed individuals. In these no-injury class actions, plaintiffs ask 

the courts to ignore the requirement of harm, often by seeking to recover some fixed amount or 

range of statutory damages without any showing of an injury. 
3

Much of our concern over “no-injury” classes involve suits brought under state law, such 

as deceptive trade practices or consumer protection statutes that provide for a measure of 

damages untethered to any actual harm sustained by a person. With respect to such “statutory 

damages,” one commentator has explained:

Several states provide that private litigants may recover statutory damages, 

which are the greater of actual damages or an amount ranging from $25 in 

Massachusetts to $2,000 in Utah. State laws allow plaintiffs to receive the 

statutory minimum without proving actual damages. Nebraska law allows the 

court, in its discretion, to increase the award ‘to an amount which bears a 

reasonable relation to the actual damages’ up to $1,000 when ‘damages are not 

susceptible of measurement by ordinary pecuniary standards.’

Victor E. Schwartz & Cary Silverman, Common-Sense Construction of Consumer Protection 

Acts, 54 Kan. L. Rev. 1, 22-23 (October, 2005). 

Federal statutes also contain statutory damages provisions. For example, the Fair and 

Accurate Transaction Act of 2003 ("FACTA") requires retailers to truncate credit card 

information on electronically printed receipts given to customers. 15 U.S.C. § 1681c(g). A part 

of the Fair Credit Reporting Act, ("FCRA"), 15 U.S.C. §§ 1681 et seq., FACTA incorporates the 

statutory damages provision of the FCRA, which can range from $100 to $1,000 per violation. 

15 U.S.C. § 1681n. Copyright law also contains statutory damages provisions. 17 U.S.C. § 

504(c), as does the Fair Debt Collections Practices Act. 15 U.S.C. § 1692k(a)(2) (providing for 

statutory damages but limiting amount recoverable in class actions to $500,000 or 1% of the 

violator’s net worth). The Telephone Consumer Protection Act also provides for statutory 

damages in lieu of actual damages for violations of its provisions. 47 U.S.C. §§ 227(b)(3) and 

277(c)(5). 

Our experience with statutory damages class actions under both state and federal law is 

that while few if any of the putative class members have suffered any actual harm, the sheer 
4

number of potential class members creates significant exposure to the defendant. Two 

justifications typically advanced for statutory damage awards are: (1) the actual damages 

sustained for a particular violation are difficult to measure or prove and statutory damages 

provide some measure of compensation to the plaintiff; and (2) to punish a defendant and to 

deter others from committing similar acts in the future. See, Ben Sheffner, Due Process Limits 

on Statutory Civil Damages, Washington Legal Foundation Legal Backgrounder, Vol. 25, No. 27 

at 1 - 2 (August 6, 2010) (discussing proffered justifications for statutory damages in copyright 

cases). As noted below, when the plaintiff and the putative class have admittedly suffered no 

harm, there is nothing compensatory about such awards.

When these statutory damage provisions are combined with the aggregate power of the 

class action device, however, defendants can face significant and potentially ruinous exposure 

for conduct that admittedly harmed no one. See e.g., In re Trans Union Corp. Privacy Litig., 211 

F.R.D. 328, 350 (N.D. Ill. 2002) (denying certification of a nationwide statutory damages class 

because while “certification should not be denied solely because of the possible financial impact 

it would have on a defendant, consideration of the financial impact is proper when based on the 

disproportionality of a damage award that has little relation to the harm actually suffered by the 

class, and on the due process concerns attended upon such an impact”). In fact, a recent 

certiorari petition identified 19 lawsuits (14 of them putative class actions) involving alleged 

technical violations of ten different federal statutes where the plaintiff suffered no economic or 

other harm. Petition For A Writ of Certiorari, at 9 – 12, First National Bank of Wahoo v. 

Charvat, (No. 13-679). The Court denied that petition and while it had previously granted 

certiorari in a case raising a similar issue, it ultimately dismissed that writ as improvidently 

granted. First American Financial Corp. v. Edwards, 132 S.Ct. 2536, 2537 (2012).
5

In a typical case, the plaintiff contends the defendant committed wide-spread technical 

violations of some statute. She admits that she and the class she seeks to represent sustained no 

economic or other actual harm as a result of the violation. She then seeks to have the court award 

aggregate damages based on some formulaic calculation drawn from a range of penalties 

recoverable under the statute allegedly violated. In other cases, the claims are brought by state 

attorneys general under a parens patrie theory. The relief sought in many class actions or in 

parens patrie actions brought by state attorneys general is based not on the actual harm suffered 

by any individual person, but rather on some legislatively-defined statutory damage amount set 

for each violation. Under this scenario, even an unwitting defendant can face catastrophic 

liability for inadvertent and technical violations when sued in a class action or state AG action. 

Although some statutes, such as the Truth in Lending Act – recognize the gross unfairness of 

imposing a statutory damages penalty where aggregate treatment is sought – most statutes do not 

contain such language and a number of courts have refused to consider the unfairness of the 

relief sought in making their certification decision. 

These cases implicate Article III standing requirements – both for the putative class 

representatives and for the absent class members. They also implicate broad policy concerns 

over the appropriateness of using the civil justice system to punish defendants for what are at 

most technical violations. And punishment it is. Because the class members are by definition 

unharmed, there is nothing compensatory about the process. Permitting aggregated actions by 

unharmed individuals places enormous pressure on defendants to settle claims that would 

valueless if tried on an individual basis. With little or no interest on the part of absent class 

members in participating in these settlements, they implicate the same concerns the 109th
6

Congress had with coupon settlements that it attempted to address with CAFA. We believe this 

is an area in need of further study and reform. 

Congress passed the Rules Enabling Act, 28 U.S.C. § 2072, to prevent the use of 

procedural rules to abridge or enlarge substantive rights. Permitting suits on behalf of unharmed 

absent class members who lack Article III standing (as several courts have held) contravenes this 

important Congressional mandate. Likewise, because some courts permit aggregation while 

others do not – despite the fact that the same statutory provisions and same procedural rules are 

at issue – the current environment is utterly and unnecessarily unpredictable for our members 

and our clients. In addition, permitting litigation by and on behalf of unharmed parties impairs 

the ability of the civil justice system to efficiently adjudicate the claims more properly before it. 

As an organization devoted to improving the civil justice system, we believe a hard look at 

addressing the problem of no injury class actions is warranted.

And we are not alone in this belief. 

For the past three years, we have conducted the DRI National Opinion Poll on the Civil 

Justice System. We’ve asked class action questions on each of our polls. On the question of 

“harm” in our 2013 poll, 68% said they would require plaintiffs to show actual harm, rather than 

potential harm, to join a class action. 

This year, we took it a step further. We asked if the respondent would support a law

requiring a person to show that they were actually harmed by a company’s products, services, or 

policies rather than just showing the potential for harm. Seventy-eight percent would support 

such a law; just 19% would oppose it. Large majorities supporting this reform occur across 11 

demographic categories. Men, women, Republicans (86%), Democrats (71%), Liberals (73%), 
7

Conservatives (85%). We believe these results further support a probing examination of the 

question of permitting no-injury class actions to proceed.

II. THE INCREASING USE OF CY PRES PAYMENTS IN CLASS ACTIONS

As Judge Posner recently noted, “Cy pres (properly cy près comme possible, an AngloFrench term meaning "as near as possible") is the name of the doctrine that permits a benefit to 

be given other than to the intended beneficiary or for the intended purpose because changed 

circumstances make it impossible to carry out the benefactor's intent. A familiar example is that 

when polio was cured, the March of Dimes, a foundation that had been established in the 1930s 

at the behest of President Roosevelt to fight polio, was permitted to redirect its resources to 

improving the health of mothers and babies.” Pearson v. NBTY, Inc., 772 F.3d 778, 784 (7th Cir. 

2014). Over the last decade, courts have increasingly used the cy pres doctrine to disperse 

settlement or judgment funds that remain unclaimed after attempted distribution to class 

members. That practice is coming under growing criticism. See, e.g., Jennifer Johnston, 

Comment, Cy Pres Comme Possible to Anything is Possible: How Cy Pres Creates Improper 

Incentives in Class Action Settlements, 9 J.L. Econ. & Pol'y 277 (2013); Sam Yospe, Note, Cy 

Pres Distributions in Class Action Settlements, 2009 Colum. Bus. L. Rev. 1014. We believe that 

criticism is worth considering.

In some instances, settlements made for the ostensible benefit of class members go 

entirely to cy pres recipients because it is infeasible or otherwise difficult to provide benefits 

directly to class members. Attorneys’ fees are often calculated on the gross amount of class 

settlement. The availability of cy pres awards skews the entire process by increasing the size of 

settlement (and potentially class counsel’s fees) while providing no direct benefit to the class 

members on whose behalf the suit was purportedly brought and whose rights are impacted by the 
8

action. This ad hoc and unlegislated expansion of the class action device calls for specific 

reform to prohibit or strictly limit its use. Reforms here could be addressed through more 

rigorous application of the existing civil procedure rules, by the adoption of more explicit rules, 

and by the enactment of statute specifically addressing it.

III. CONTINUED ISSUES WITH REMOVAL OF CLASS ACTIONS 

As the Supreme Court recently noted, “Congress enacted CAFA in order to “amend the 

procedures that apply to consideration of interstate class actions” in part because “certain 

requirements of federal diversity jurisdiction had functioned to keep cases of national importance 

in state courts rather than federal courts.” Mississippi ex rel. Hood v. AU Optronics Corp., 571 

U.S., 134 S.Ct. 736, 739 (2014) (internal citations and quotations omitted). Even with CAFA, 

we have seen continued concerns with issues related to the amount in controversy requirements 

and inconsistent treatment of them by districts and appellate courts both with respect to class 

actions and to traditional diversity claims. Congress attempted to address this issue somewhat 

with the Federal Courts Jurisdiction and Venue Clarification Act of 2011, Public Law 112-63, 

which added 28 U.S.C. § 1446(c)(2)(B), which provides that removal is proper if the district 

court finds, “by the preponderance of the evidence, that the amount in controversy exceeds the 

amount specified in section 1332(a) [$5,000,000].” But what evidence is required to allow the 

district court to make that finding, and when that evidence must be submitted, is the subject of 

on-going dispute.

The Supreme Court recently addressed a portion of these concerns in its recent decision 

in Dart Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547 (Dec. 15, 2014). There, it 

rejected a presumption against removal in CAFA cases and held that a defendant is not required 

to provide evidence as to the amount in controversy at the time of removal. In that case, the 
9

evidence was essentially undisputed that the amount in controversy exceeded $5,000,000. 

Although the defendant asserted such in its notice of removal, the district court held it could not 

consider post-removal evidentiary submissions supporting that assertion and remanded the case. 

A divided Tenth Circuit refused to consider the defendant’s appeal. The Court granted the 

defendant’s certiorari petition to consider a split between the Tenth Circuit and between five and 

seven other courts of appeal on the question and the majority agreed the defendant was not 

required to attach evidence at the time of removal.

Nonetheless, we still comprehend two concerns about the current treatment of the amount 

in controversy requirement in class action cases. First, we question whether imposing a 

$5,000,000 amount in controversy requirement over class actions makes sense when, to use the 

language of the Senate Judiciary Committee’s report on CAFA, “a citizen can bring a ‘federal 

case’ by claiming $75,001 in damages for a simple slip-and-fall case against a party from another 

state.” Senate Report No. 14, 109 Cong., 1st Sess., at 11 (2005). We believe that the Committee 

should consider whether putative interstate class actions involving minimally diverse parties 

should be subject to the same jurisdictional minimum as traditional diversity claims. This 

threshold would eliminate a considerable amount of procedural wrangling at the removal stage 

and place class action defendants on equal footing with other out-of-state defendants sued in 

state court.

The second issue we believe warrants study goes directly to the courts’ treatment of the 

amount in controversy requirement and the inappropriate burdens some have placed on class 

action defendants seeking to remove cases to federal court. In particular, we believe a hard look 

at what “evidence” is required in order for a removing defendant to establish the requisite 

amount in controversy under 28 U.S.C. § 1446(c)(2)(B). We believe the approach taken by the 
10

United States Court of Appeals for the Seventh Circuit in Back Doctors Ltd. v. Metropolitan 

Property and Casualty Insurance Company, 637 F.3d 827 (7th Cir. 2011) properly balances the 

amount in controversy issues and invite the Committee to consider whether the essence of its 

holding should be incorporated into unambiguous statutory language applicable to all diversity 

removals. 

In Back Doctors, Ltd., the court attempted to lay down a fairly simple test for determining 

whether a class action defendant had met the amount in controversy requirement. It began by 

noting that the Supreme Court had long-ago held that when a plaintiff initiates an action in 

federal court (and thus is the proponent of federal jurisdiction), its allegations regarding the 

amount in controversy must be accepted unless it is impossible for it to recover the jurisdictional 

minimum. 637 F.3d at 829 (citing St. Paul Mercury Indemnity Company v. Red Cab Co., 303 

U.S. 283 (1938)). The Seventh Circuit held, consistent with 28 U.S.C. § 1446(c)(2)(B), that the 

same rule applied where a removing defendant (as the proponent of federal jurisdiction), made 

allegations regarding the amount in controversy in the notice of removal. 637 F.3d at 830. The 

defendant alleged that the compensatory damages exceeded $2,900,000 and that a potential 

punitive award in light of nature of the claims was sufficient to push the amount in controversy 

above $5,000,000. The plaintiff countered by pointing out that it had not sought punitive 

damages on behalf of itself or the putative class and without the possibility of a “speculative” 

punitive award, the amount in controversy could not be met.

The court recognized that while jurisdictional facts must be alleged and, if challenged, 

proven by a preponderance of the evidence, that does not require the defendant to show it was

more likely than not the plaintiff class would recover in excess of the jurisdictional amount. Id. 

at 829. It then identified what it considered to be jurisdictional facts:
11

The legal standard was established by the Supreme Court in St. Paul 

Mercury: unless recovery of an amount exceeding the jurisdictional minimum is 

legally impossible, the case belongs in federal court. Only jurisdictional facts, 

such as which state issued a party's certificate of incorporation, or where a 

corporation's headquarters are located, need be established by a preponderance of 

the evidence.

Back Doctors Ltd., 637 F.3d at 830. Because the defendant in that case could show that the 

compensatory damages sought exceeded $2,900,000 and because the plaintiff could not show 

that punitive damages were legally impossible to recover under state law, the court reversed the 

district court’s remand order and directed it to consider the case on the merits. Id. at 831. We 

believe this approach would best balance the federalism concerns inherent in diversity removals 

while allowing the courts to devote their resources to issues other than fights over jurisdiction.

Now, if I may, Mr. Chairman, let me spend a few minutes on the DRI National Public 

Opinion Poll on the Civil Justice System. Often time in discussing these issues we forget about 

the American people, to whom the civil justice system really belongs. And that’s why we created 

the DRI Poll. 

As an advocacy group, we know that the integrity of our data has to be impeccable. 

That’s why we selected Gary Langer of Langer Research Associates (NY) as our pollster. Langer 

is the former head of polling for ABC News and a former board member of the American 

Association of Public Opinion Researchers which sets the standards for the industry. All of our 

polls have been accepted by the Roper Center at the University of Connecticut, a premier 

repository that makes methodologically sound polls available to researchers. Summary results of 

all of our polls are available on our web site at www.dri.org. 

We’ve asked class action questions on each of our polls. Let me highlight some of the 

data that we’ve obtained. We found that 38 percent of all adult Americans say they’ve been 

invited to join a class action suit. Six in 10 of them declined. That means a total of 15 percent of 
12

all adults report having participated in a class action suit, the equivalent of nearly 37 million 

adults. And while 68 percent feel their participation was worthwhile, nearly three-quarters of 

those who won an award say it was “insignificant.”

Basic attitudes on class actions are mixed. Fifty percent of Americans think most of these 

lawsuits as justified; 38 percent see them as unjustified, with the rest unsure. Ideology is a key 

factor: Liberals are 27 percentage points more apt than strong conservatives to see class-action 

suits as justified, 61 vs. 34 percent, as are Democrats over Republicans, 57 vs. 44 percent.

Yet there’s substantial bipartisan and cross-ideological consensus on two questions – the 

preference that a class-action plaintiff should show actual harm and opposition to opt-out 

enrollment. Regardless of partisan and ideological preferences, two-thirds or more agree on 

these.

I mentioned earlier that 78% of Americans would support a law requiring a showing of 

actual harm in order for an individual to participate in a class action law suit. On another class 

action issue, 85% of Americans say class action lawyers should be required to obtain permission 

from individuals before enrolling them as plaintiffs. 

Mr. Chairman, large majorities of the American public find it makes no sense to pay 

damages to people who have suffered no harm. They find it makes no sense to represent people 

in a lawsuit without asking their permission. 

The public supports reform. It’s just common sense to them...and should be to us.
13

Feb. 27, 2015

Briefing Paper: Public Attitudes on Class-Action Litigation

Prepared for testimony of DRI-The Voice of the Defense Bar before the U.S. House 

Subcommittee on the Constitution and Civil Justice

Independent public opinion polling sponsored by DRI-The Voice of the Defense Bar since 2012 

has found broad public support for significant reforms in the handling of class-action lawsuits, 

including opposition to opt-out enrollment and support for changes in who can join such suits.

These surveys also have demonstrated the vast reach of this type of litigation – 38 percent of all 

adult Americans say they’ve been invited to join a class action suit – as well as mixed feelings 

about their utility. While 54 percent think class actions often enable people to hold companies 

responsible, 62 percent say they often force companies that have done no wrong to pay damages.

Further, just half think most class action lawsuits that are filed are justified. 

The random-sample telephone surveys have been conducted for DRI by the nonpartisan survey 

research firm Langer Research Associates, with rigorous methodology; neutral, balanced 

questions; and independent data analysis. The company, which polls for ABC News, Bloomberg 

and others, is a charter member of the Transparency Initiative of the American Association for 

Public Opinion Research and subscribes to its Code of Professional Ethics and Practices.

This memo summarizes some key findings from the research to date. Full results are available at 

DRI’s website, http://www.dri.org, including analyses, full questionnaires, topline results and 

methodological details. Raw datasets from these surveys have been deposited with the nonprofit 

Roper Center for Public Opinion Research at the University of Connecticut for unfettered 

secondary analysis.

Among the findings:

 Just 26 percent of Americans say that showing the potential for harm should be adequate 

to join a class-action lawsuit. Sixty-eight percent instead say plaintiffs should be 

permitted to join a class only if they can show they’ve actually been harmed.

The question: Do you think people should be allowed to join class-action lawsuits as 

plaintiffs only if they can show that they’ve been harmed by a company’s products or 

actions, or is it enough for them to show the potential for harm, regardless of whether 

they’ve actually been harmed? 
14

 A vast 85 percent say class-action lawyers should be required to obtain permission from 

individuals before enrolling them as plaintiffs. Just 10 percent support the current 

practice allowing lawyers to include individuals whom they believe are eligible without 

getting their permission first, then providing them the opportunity to opt-out later. 

The question: Lawyers who file class-action suits often include people who they think are 

eligible to be plaintiffs without first getting their permission. People who don’t want to 

participate can drop out later. Do you think lawyers should or should not be required to 

get permission from people before including them as plaintiffs in class-action lawsuits? 

It’s probable that few Americans are closely following these issues; as such their expressed 

attitudes most likely reflect underlying world views, for example favoring personal precepts of 

fairness, individualism and self-determination. While additional information and argumentation 

could influence public views, the DRI survey’s baseline measurements provide valuable insight

into public preferences on these relatively little-studied issues.

Most broadly, basic attitudes on class actions are mixed. Fifty percent of Americans see most of 

these lawsuits as justified; 38 percent see them as unjustified, with the rest unsure. Ideology is a 

key factor: Liberals are 27 percentage points more apt than strong conservatives to see classaction suits as justified, 61 vs. 34 percent, as are Democrats over Republicans, 57 vs. 44 percent.

Yet there’s substantial bipartisan and cross-ideological consensus on the preference that a classaction plaintiff should show actual harm and on opposition to opt-out enrollment. Across partisan 

and ideological groups, two-thirds or more agree on the former, eight in 10 or more on the latter.

As noted, 38 percent say they’ve been invited to join a class action; six in 10 of them declined. 

That leaves a total of 15 percent of all adults who report having participated in a class action suit, 

the equivalent of nearly 37 million adults. As many say they joined “to send a message” as to 

win an award. And indeed while 68 percent feel their participation was worthwhile, nearly threequarters of those who won an award say it was “insignificant.”

Selected results follow. Full results are available at http://www.dri.org.

Respectfully submitted,

Gary Langer, president

Langer Research Associates

New York, N.Y.

2012:

12. Have you yourself ever been invited to participate in a class action lawsuit, or 

not?

 Yes No No opinion

8/19/12 38 62 *
15

13. (IF INVITED TO PARTICIPATE) Have your ever participated in a class action lawsuit, 

or not?

 Yes No No opinion

8/19/12 39 61 1

12/13 NET:

 --------------- Invited --------------- Never been No

 NET Participated Never participated invited opinion

8/19/12 38 15 23 62 *

15. (IF EVER PARTICIPATED) Did you participate mainly to (win damages), to (send a 

message to the company involved) or some other reason?

 Win damages Send a message Other reason No opinion

8/19/12 43 45 10 1

16. (IF EVER PARTICIPATED) Did you receive an award, or not?

 Yes No No opinion

8/19/12 70 28 2

17. (IF EVER PARTICIPATED AND RECEIVED AN AWARD) Would you describe that award as 

substantial, modest or insignificant?

 Substantial Modest Insignificant No opinion

8/19/12 8 19 73 *

18. (IF EVER PARTICIPATED) Do you think your participating in this suit was 

worthwhile, or not worth the trouble?

 Worthwhile Not worth trouble No opinion

8/19/12 68 27 5

2013:

8. In class-action lawsuits, a group of people known as plaintiffs sue a company for 

what they see as a faulty product, bad service or an unfair policy. Do you think most 

class-action lawsuits filed in this country are justified or unjustified? 

 Justified Unjustified No opinion

10/6/13 50 38 13 

9. Do you think people should be allowed to join class-action lawsuits as plaintiffs 

only if they can show that they’ve been harmed by a company’s products or actions, or 

is it enough for them to show the potential for harm, regardless of whether they’ve 

actually been harmed? 

 Show harm Show potential for harm No opinion

10/6/13 68 26 6

Compare to (2014): 4. Would you support or oppose a law saying that in order to join a 

class action lawsuit a person has to show that he or she has been actually harmed by a 

company’s products, services or policies, rather than just showing the potential for 

harm?
16

 Support Oppose No opinion

9/21/14 78 19 4

10. Lawyers who file class-action suits often include people who they think are 

eligible to be plaintiffs without first getting their permission. People who don’t 

want to participate can drop out later. Do you think lawyers should or should not be 

required to get permission from people before including them as plaintiffs in classaction lawsuits?

 Should be required Should not be required No opinion

10/6/13 85 10 5

Selected Charts
17
Tab 2

Written Testimony of

Alan B. Morrison

George Washington University Law School
October 10, 2016

COMMENTS OF ALAN B. MORRISON

GEORGE WASHINGTON UNIVERSITY LAW SCHOOL

PROPOSED CHANGES TO CIVIL RULE 23

Committee Members:

I am submitting these comments on the proposals to amend FRCP Rule 23. I support 

most of the proposed changes, but have some concerns about others. I also have several 

additions to the comments.

I currently teach civil procedure and constitutional law at George Washington University 

Law School. For most of my career, I was the director of the Public Citizen Litigation Group, 

where I was involved in scores of class actions in the federal courts, mainly as counsel on behalf 

of objecting class members or as amicus supporting objections by others. When I first began 

representing objectors, federal judges were decidedly uninterested in hearing from objectors at 

all, and there were many procedural and practical barriers to their making meaningful objections. 

I am happy to say that these proposals continue the trend that has improved the situation

considerably over the years.

1

Additional Information Upfront

Rule 23(e)(1)(A) would require the parties to submit sufficient information to enable the 

judge to determine whether notice of a proposed settlement should be sent to the class. This 

change would be a positive development that would aid both district judges and class members. 

 1 Alan B. Morrison, Improving the Class Action Settlement Process: Little Things Mean a Lot, 79 

George Washington Law Review 428 (2011).
2

One of the major impediments to class members making intelligent evaluations of a settlement, 

which in this context includes certification of the class for settlement, is that in far too many 

cases, the evidence that the settling parties intend to offer to support the settlement is not filed or 

otherwise made available until after class members must object or opt out. For example, in the 

NFL Concussion class action, class counsel and the defendants submitted over 1000 pages of 

affidavits and documents to support the settlement a month after objections were due and only 

seven days before the scheduled fairness hearing. They also submitted several hundred pages of 

legal memoranda at that time. Although the general outlines of the legal arguments in support of 

the settlement are usually made in a memorandum of law when the parties ask the court to issue 

notice, those arguments are inevitably general and hence difficult to evaluate, absent the factual 

support for them, which typically comes much later. As the comments to this proposed change 

make clear, all of the material to be submitted in support of the settlement and class certification 

should “ordinarily” be submitted prior to approval of the notice (p. 221). This is a very 

important and positive change. I suggest that the comments make clear that the submission 

should be in time to give the court and other interested persons a reasonable opportunity to 

review those materials and the settlement proposal to ensure that the decision to send the notice 

is an informed one.

There is one question on these submissions and that relates to attorneys’ fees. It is 

common practice today for class counsel to include in the notice to the class the maximum 

amount of the fees that they will seek, and the position of the defendant on that request. In a 

number of cases (and I have no data on the proportion or significance of the cases), class counsel 

asks the judge to postpone consideration of the fee request until the judge approves the class 

certification and the settlement, which is what happened in the NFL case. Some objectors there 
3

argued that the judge was required by Rule 23(e) to decide the fee request when she approved the 

settlement. I do not believe that is required by current law or that it would desirable to impose an 

inflexible rule to that effect. 

There is a half-way position that I do support: class counsel should be required, no later 

than a reasonable time, e.g., 21 days, before any objections and opt outs are due, to file a fee 

application that explains the basis on which fees will be sought. Fee applications are often quite 

lengthy, and there is no reason why a judge or counsel for absent class members would need to 

see the application before deciding on notice. But when the issue is the reasonableness of the 

settlement, the amount of fees sought, and what work class counsel performed to obtain that 

result, may sometimes suggest an imbalance that casts doubt on the fairness of the settlement in 

ways that the terms alone do not. Comparing the proposed relief to the requested fees (including 

the effort that went into obtaining it) can be particularly revealing when all or a substantial part 

of the proposed relief is an injunction, whose value is often difficult to determine. For these 

reasons, I urge the committee to add a requirement that fee applications must be submitted a 

reasonable time before objections and opt outs are due. At a minimum the fee application should

state the maximum fee to be sought, over what time the fees will be paid, out of what fund, and 

from whom the fee is to be paid. The comments should also clarify whether the discussion of 

attorneys’ fees in proposed Rule 23(e)(2)(C)(iii) requires the judge to decide the fee request 

when the settlement is approved or whether that decision can be postponed. The proposed 

change also supports the current desirable practice under which the payment of fees can, at least 

in part, be postponed until the actual results of delivering benefits to the class is known. The 

timing of payment, however, is a separate matter from when the approval should take place.
4

I have one other suggestion for the comments to this provision. It is a truism that a 

district judge asked to approve notice of a settlement often has no one to point out its 

weaknesses. Experienced judges can catch some problems, but especially in cases in which the 

judge has not been heavily involved before a settlement is reached, the judge may not be aware 

of the impact of the settlement on absent class members. In short, just as they do at the fairness 

hearing, judges need someone besides the parties to point out problems in the settlement, the 

notice, and/or the proposed schedule for the Rule 23(e) hearing. My views on the benefits of 

bringing in outsiders at an early stage were shaped by the efforts on Judge Sam Pointer who did 

that in the silicone gel breast implant settlement. He held a series of informal meetings with 

interested persons and made drafts of the official notice and of a more understandable set of 

questions and answers for class members available for debate and suggestions. As I recall, there 

were a number of matters that were clarified and lesser problems eliminated before the notice 

was sent, which is by far the best time to deal with those issues. To be sure, the settlement 

collapsed because of the large number of opt outs and the many claimants who filed for 

damages, but by the time of the Rule 23(e) hearing, the court was able to focus on the objections 

that went to the heart of the settlement and not on peripheral issues.2

In the past, when I have suggested that judges should seek outside assistance at the prenotice stage, one response has been that there is no way, short of giving notice to the entire class,

to obtain such assistance. That is not a valid objection for several reasons. First, many class 

settlements arise out of MDL proceedings in which there are many other lawyers besides lead or 

 2 Other examples of cases in which preliminary proceedings involving persons besides counsel 

for the settling parties are described in Brian Wolfman and Alan B. Morrison, Representing the

Unrepresented in Class Actions, 71 NYU Law Rev. 439, 480-485 (1996). Those pages also 

contain additional suggestions for how outside parties can be used effectively at the pre-notice 

stage. 
5

class counsel who are able to advise the court of potential problems with the notice and/or the 

settlement. The court simply has to send out an electronic announcement seeking comments, 

with or without holding an informal hearing, and the advice will coming pouring in. Second, 

many if not most class settlements today establish a website where a notice could be placed. It 

may be that no one will be interested, but the ease of providing such notice on the website and 

the benefits of broader early participation are worth the modest effort. Indeed, in corporate 

reorganizations under Chapter 11 of the Bankruptcy Code, including those such as the many 

asbestos cases and that of Dow Corning where tort claimants were a major reason for the 

proceeding, there is a comparable and inclusive process by which the plan and the notice to 

claimants are fully vetted in advance before notice is sent to all the claimants. Third, 28 U.S.C. §

1715(b) requires defendants in class actions in federal court to provide the notice of the 

settlement (and supporting documents specified therein) to the appropriate Federal and State 

officials no later than ten days after a proposed settlement is filed. Congress has, in effect, made 

them interested persons to proposed class settlements, which would include participation at this 

phase of the proceedings. 

Other Concerns & Suggestions

Notice under Rule 23(c) currently applies to classes that have been certified for all 

purposes. The proposal would extend the best notice practicable requirement in Rule 

23(c)(2)(B), which now applies only to (b)(3) certified classes, to class settlements under (b)(3). 

But settlements also occur in (b)(1) and (b)(2) classes. Because these class members will also be 

bound by the settlement (and may not even have an opt-out right), they should receive 

comparable notice. For example, suppose a company seeks to settle an employment 

discrimination case relating to its seniority practices by agreeing to make significant prospective 
6

changes that are supposed to benefit the entire class in an equitable manner. Class members 

should also receive the best practicable notice of that settlement because it will affect their rights

at least as much as (and perhaps much more than) (b)(3) class members who have only modest 

claims for monetary damages. That members of (b)(2) classes have no right to opt out is an 

additional reason for ensuring that they have proper notice so that they can be heard on the 

proposal, not a reason for avoiding any meaningful notice. My view is that due process requires 

some notice in non-opt-out cases, but the committee need only agree that such notice is 

desirable, not that it is constitutionally mandated. In this connection, I note that Rule 23(e)(1)

currently requires notice in a reasonable manner for all settlements under Rule 23(e), and there is 

no reason to cut back on this requirement in the amendment to Rule 23(c)(2)(B). This change 

can be accomplished by simply deleting “under Rule 23(b)(3)” in line 12 on page 211.

I have two suggestions regarding the proposed changes to Rule 23(e)(1)(B). The 

committee wisely rejects the practice of treating the notice as a preliminary approval. However,

the language in this proposed amendment – “if giving notice is justified by the parties showing 

that the court will likely be able to approve” the class certification and the settlement – seems to 

keep, if not strengthen, the notion that the court will be giving preliminary approval to class 

certification and the substance of the settlement. The emphasized words, in particular, are very 

troubling. 

I propose instead that Rule 23(e)(1)(B) be amended to read as follows: “Before holding a 

hearing under Rule 23(e) on whether to approve a proposed class certification and settlement, 

the court must (i) find that there is a sufficient possibility that the proposal will warrant 

approval, and, if so, (ii) direct notice in a reasonable manner to all class members who would be 
7

bound by the proposal.” (new language in italics). If adopted, subparagraphs (B)(i) and (B)(ii) 

would be deleted.

If this change to Rule 23(e)(1)(B) is adopted, I suggest that the comments to that Rule be 

amended to include the following explanation: 

“New Rule 23(e)(1)(B) clarifies the duties of the court in deciding to direct notice to 

absent class members. First, the court must ensure that the settling parties have provided the 

factual material to the court that will be used to support the motion for class certification and 

approval of the settlement. Second, the court must ensure that all such materials, along with the 

settlement documents, are reasonably available to absent class members so that they can raise 

concerns to the court before notice is sent to the class. Third, the court must review the 

settlement and the supporting materials, taking into account any comments from absent class 

members and others, for any obvious problems that would preclude either class certification or 

approval of the settlement, with particular focus on subparagraphs (A) [adequate representation] 

and (D) [equitable treatment among class members]. 

“Fourth, the court should consider objections to specific provisions of the settlement of 

the kind that are more easily remedied before notice is given. For example, the court could ask 

the parties to simplify the claim form or eliminate the need for one entirely by crediting the class 

member’s recovery directly to that person’s account. Last, the court must review any proposed 

schedule to ensure that class members are provided a reasonable opportunity to submit 

objections or opt out after any additional submissions are made by the settling parties, including 

class counsel’s fee application (even if the court does not propose to hear the merits of the fee 

application at the time of the settlement hearing). The phrase “there is a sufficient possibility that 

the proposal will warrant approval,” is intended to reflect the concept that the court has 
8

concluded that there are no obvious flaws in the settlement and that there is a reasonable 

possibility, based on the information currently available, that the class could be certified for 

settlement purposes and that the settlement could be approved. It is not the equivalent of 

preliminary approval.”

Second, as the above suggestion indicates, subparagraphs (B)(i) and (ii) are not 

necessary. If they are nonetheless retained, I urge the committee to reverse their order for two 

reasons. Logically, class certification always proceeds settlement; if the class cannot be 

certified, even for settlement purposes, the quality of the settlement is irrelevant. Second, putting 

settlement before certification could re-enforce a tendency that I have observed in some judges to 

conclude that a settlement is fair in the aggregate (class counsel obtained a large dollar recovery) 

and then give short shrift to the issues of fairness among class members – whether they concern 

unequal distribution of class benefits (see proposed Rule 23(e)(2)(D)) or broader structural 

conflicts within the class -- which is the essence of the certification requirements in Rules

23(a)(2), (3), & (4). This is not simply a matter of style, but of being sure that the cart is not put 

before the horse and that class members receive the protections to which they are entitled under 

Rule 23(a). 

Rule 23(e)(2), line 45 page 213, adds the phrase “under Rule 23(c)(3)” which seems 

unnecessary and is possibly confusing. That Rule makes judgments binding for all Rule 23 

classes, albeit with somewhat different requirements. If this phrase is being added for emphasis, 

it may actually confuse many readers who may think it refers only to classes under Rule 

23(b)(3), which is not correct. The phrase should be deleted.

Rule 23(e)(2)(A) requires the court to consider whether the class representatives and 

class counsel “have” adequately represented the class. That is fine as far as it goes, but the work 
9

of both the class representatives and their counsel is not over if the court approves the settlement 

because implementation is vital to ensuring that class members actually receive their benefits. I 

would add, after “have,” the phrase, “and will continue to,” and change “represented” to

“represent” as a matter of grammar.

In the comment to paragraphs (C) & (D), Rule 23(e)(2), second full paragraph on page 

227, the reporting back of claims experience is supported there on the basis that it may be useful 

in assessing the reasonableness of the attorneys’ fee award. I would also add to the comments 

the observation that claims experience in one case may be useful to judges in future similar cases 

in deciding whether to approve a settlement. That experience may also be useful in broader 

assessments of Rule 23, not tied to a particular class action, which would support a general rule 

requiring reporting of actual claims results in all class actions.

I do not have any objection to the addition to Rule 23(e)(5)(A) which requires objectors 

to state the basis of their objection as well providing other information. The committee has made 

it clear that the process of objecting should not be burdensome, but in the NFL Concussion case, 

the parties required that all objections be personally signed by the class members and not just 

their lawyers, who in that case had filed complaints on their behalf that were part of the MDL 

proceeding that led to the class settlement. Aside from the fact that the signature requirement is 

inconsistent with 28 U.S.C. § 1654 allowing parties to appear through their attorneys,

3 the 

requirement was burdensome when a lawyer had more than one or two clients who lived around 

the country. As a result, some objections were filed on behalf of fewer than all of the lawyer’s 

 3 “In all courts of the United States the parties may plead and conduct their own cases personally 

or by counsel as, by the rules of such courts, respectively, are permitted to manage and conduct 

causes therein.”
10

clients, which cut down the objection rate. That enabled class counsel to say that “only” this 

lesser number had objected and to argue that the class viewed the settlement favorably. I urge 

the committee to include a comment disapproving the practice of requiring class members who 

are represented by counsel to sign an objection.

In the second paragraph of the comments to Rule 23(e)(5)(B) (page 229), the committee

correctly observes that class counsel may believe that avoiding delay is worth the price of paying 

off objectors. In my experience, that incentive is not limited to the plaintiffs’ side; defendants 

want peace, they do not want to spend more money defending a settlement on appeal, and they 

do not want the risk of having a settlement overturned. In at least one case, I believe that the 

payment on appeal was made by the defendant, although objectors were denied discovery to 

determine who made a payment and how much was paid. In addition, defendants may, at least 

subconsciously, agree to a larger fee for class counsel, in the anticipation of counsel having to 

buy off objectors to eliminate an appeal. I suggest adding something along these lines at the end 

of that paragraph: “In some cases, defendants have similar incentives to pay off objectors.”

I strongly support the proposed addition of Rule 23(e)(5)(B) which would prohibit the 

payment to objectors and /or their counsel absent court approval. Requiring court approval will 

eliminate the practice of buying off objectors who have the leverage of an appeal, but who have 

done nothing to justify a payment. A similar situation may arise when a case is filed as a class 

action, and a settlement is reached with the defendant before a motion for class certification has 

been filed. Under the current version of Rule 23(e), court approval is not required to dismiss the 

case, which makes it possible for putative class counsel to use the leverage of the class 

allegations to obtain an unjustified payment for counsel and, to a lesser extent, the named 

plaintiffs. I support extending the approach in Rule 23(e)(5)(B) to pre-certification settlements 
11

with payments to named plaintiffs and/or their counsel, although I recognize that it may be 

somewhat late in the process to make such an addition, which might not fit easily into Rule 

23(e)(5)(B).
Tab 3

Written Testimony of

Stuart Rossman, on behalf of

National Consumer Law Center and

National Association of Consumer Advocates
1 

COMMENTS TO THE ADVISORY COMMITTEE ON CIVIL RULES 

RE: PROPOSED AMENDMENTS TO FEDERAL RULES OF 

CIVIL PROCEDURE RULE 23 

On Behalf of 

NATIONAL CONSUMER LAW CENTER, INC. AND NATIONAL ASSOCIATION OF 

CONSUMER ADVOCATES 

November 3, 2016 

The National Consumer Law Center (“NCLC”) and the National Association of 

Consumer Advocates (“NACA”) are pleased to submit comments to certain of the proposed 

amendments to Federal Rules of Civil Procedure Rule 23. 

The members of NACA are private and public sector attorneys, legal services attorneys 

and law professors whose primary practice or areas of specialty involve the protection and 

representation of consumers. NACA’s mission is to promote justice for all consumers by 

maintaining a forum for information sharing among consumer advocates across the country and 

to serve as a voice for its members, as well as consumers, in the ongoing struggle to curb unfair 

and abusive business practices. 

NCLC is a national research and advocacy organization focusing on the legal needs of 

low-income, financially distressed and elderly consumers. NCLC is a nationally recognized 

expert on consumer credit issues and it has drawn on this expertise to provide information, legal 

research, policy analyses, and market insight to Congress and state legislatures, administrative 

agencies, and courts for over 47 years. A major focus of NCLC’s work has been to increase 

public awareness of, and to promote protections against, unfair and deceptive practices 

perpetrated against low-income and elderly consumers. NCLC publishes a twenty-volume 
2 

Consumer Credit and Sales Legal Practice Series, including, inter alia, Consumer Class Actions 

(9th ed. 2016). 

In the mid-1990’s, responding to criticism of consumer class actions, NACA decided to 

seek and publish a consensus on ethical and effective class action practices. Starting with an 

initial draft, and incorporating suggestions and comments from many sources, NACA adopted its 

“Standards and Guidelines for Litigating and Settling Consumer Class Actions” in 1997. See 

176 F.R.D. 375 (1997)(“Guidelines”). 

The Guidelines have proven helpful to lawyers and courts alike. Through the years, a 

significant number of courts have referred with approval to the Guidelines, including Boyle v, 

Giral, 820 A.2d 561, 569 fn. 8 (D.C.C.A. 2003); Braud v. Transport Service Co. of Illinois, 2010 

WL 3283398, at * 14 (E.D. La. Aug. 17, 2010); Figueroa v. Sharper Image Corp., 517 F. Supp. 

2d 1292, 1308 (S.D. Fla. 2007); Henderson v. Eaton, 2002 WL 31415728, at *6 (E.D. La. Oct. 

25, 2002); In re Compact Disc Minimum Advertised Price Antitrust Litigation, 216 F.R.D. 197, 

204 (D. Me. 2003); In re Educational Testing Service Praxis Principles of Learning and 

Teaching, Grades 7-12 Litigation, 447 F. Supp. 2d 612, 634 (E.D. La. Aug. 31, 2006); In re 

Mexico Money Transfer Litigation (Western Union and Valuta), 164 F. Supp. 2d 1002, 1028-

1030 (N.D. Il. Dec. 22, 2000); In re Prudential Ins. Co. America Sales Practice Litigation Agent 

Actions, 278 F.3d 175, 194 fn. 1 (3rd Cir. 2002); Milkman v. American Travellers Life Ins. Co., 

2002 WL 778272, at *7-9 (Pa. Com. Pl. Apr. 1, 2002); Moody v. Sears, 2007 WL 2582193, at *5 

(N.C. Super. May 7, 2007); State v. Homeside Lending, Inc., 826 A.2d 997, 1009-1011 (Vt. 

2003); and Wilson v. DirectBuy, Inc., 2011 WL 2050537, at *6 (D. Conn. May 16, 2011). 

The Guidelines have formed the basis of expert testimony, both in support of class action 

settlements and in support of objections to bad settlements. Most important, perhaps, they 
3 

achieved their primary goal of setting the standard for litigating and settling consumer class 

actions. Many of the Guidelines have been embraced and adopted by courts, and their principles 

were reflected in the 2004 changes to Federal Rule of Civil Procedure 23. 

In 2006, to reflect both the adoption of these changes to Rule 23, as well as the quickly 

changing landscape of class action litigation, NACA revised the Guidelines. See 255 F.R.D. 215 

(2006). This Second Edition addressed new issues, including specific problems with the class 

action device in predatory home lending litigation, the exponential growth of forced arbitration, 

and the use of offers of judgment under Federal Rule 68 and state counterparts to forestall class 

actions. 

On May 13, 2014, in an effort to keep the Guidelines current and relevant, NACA issued 

the Third Edition of the Guidelines. See 299 F.R.D. 160 (2014). The Third Edition thoroughly 

updates the law in order to continue to offer assistance and guidance to lawyers and courts as a 

standard of practice that encourages only the most ethical and thoughtful of consumer class 

actions. 

NCLC and NACA appreciate the opportunity that the Civil Rules Advisory Committee 

and its Rule 23 Subcommittee have given us to participate throughout your deliberative process 

and to contribute to the consideration of potential amendments to Rule 23. Previously we 

submitted comments and suggestions to the Committee and the Subcommittee on April 1, 2015, 

when you initially were considering proposals for possible revisions to Rule 23. Subsequently, 

on September 4, 2015 we submitted responses to certain of the conceptual sketches set forth by 

the Rule 23 Committee in its Introductory Materials for its Mini-Conference on Rule 23 Issues 

held on September 11, 2015. This opportunity has permitted us to respond, from our perspective 
4 

and given our experiences, to some of the most critical challenges facing class action 

practitioners and the courts today. 

The additional comments we set forth below seek to combine the ethical considerations 

of the NACA Guidelines with the functional approach adopted by the ALI Principles of the Law 

of Aggregate Litigation. It is our hope and intention that the proposed amendments as ultimately 

promulgated and adopted will help maintain class actions as a vital component of American 

jurisprudence in order to preserve and enforce the rights of consumers while improving the 

efficiency, effectiveness and fairness of the class action procedure in our federal court system. 

I. NACA’S AND NCLC’S PROPOSED CHANGE TO THE TIME FOR ISSUANCE 

OF A CERTIFICATION ORDER – RULE 23(c)(1)(A) AND ITS COMMITTEE 

NOTES.1

Ignoring the United States Supreme Court’s mandate that courts must conduct a “rigorous 

analysis” of class certification, a number of courts have adopted the practice of considering, and 

sometimes denying, class certification based solely on the complaint via the vehicle of a motion 

to strike. In order to eliminate this practice, which NACA and NCLC believe has no support in 

the text of the Federal Rules, does not allow for proper class certification analysis as now 

required by Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011) and its progeny, and 

makes the class certification decision an inherently subjective one based on individual judges’ 

predilections, NACA and NCLC propose an amendment to Rule 23(c)(1)(A). 

A. NACA and NCLC propose changing Rule 23(c)(1)(A) as follows: 

(c) CERTIFICATION ORDER; NOTICE TO CLASS MEMBERS; JUDGMENT; ISSUES CLASSES;

SUBCLASSES.

 

1

 NACA’s and NCLC’s Proposed Change to the Time for Issuance of a Certification Order-Rule 

23(c)(1)(A) and its Committee notes originally was presented to the Civil Rules Advisory Committee and its Rule 

23 Committee in our April 1, 2015, Comments. The proposal did not appear as one of the Subcommittee’s

subsequent conceptual “sketches” and was not included as part of the proposed amendments to Rule 23 drafted by 

the Subcommittee and currently under consideration. The comment is presented here again for reconsideration by 

the Civil Rules Advisory Committee as a potential improvement to the proposed amendments to Rule 23. 
5 

(1) Certification Order.

(A) Time to Issue. At an early practicable time after a person sues or is sued as a class 

representative, the court must determine by order whether to certify the action as a class 

action. The determination should not be based solely on the complaint, but rather on class 

certification briefing and evidence submitted after a reasonable time for discovery. 

B. NACA and NCLC propose the following revision to the Committee Notes to the 

2003 amendments to Subdivision (c), Paragraph (1): 

 

In the second paragraph, the first sentence should be changed from “Time may be needed 

to gather information necessary to make the certification decision,” to “Time must be granted to 

gather the information necessary to inform the certification analysis and decision.” (emphasis 

added). 

C. NACA’s and NCLC’s reasons for proposing the changes: 

A motion to strike class allegations at the pleadings stage finds little if any textual basis 

in the Federal Rules of Civil Procedure. Rule 12(f), which permits a “motion to strike” for 

“redundant,” “impertinent” or “scandalous” matters, says nothing about purportedly unwinnable 

class allegations. Yet, many defendants misuse this rule to ask courts to preemptively preclude 

class actions from the outset. That some courts frequently “strike” class action allegations only 

emboldens defendants to try this tactic. As a counterpart to this approach, and as a means of 

avoiding the obvious problems with a Rule 12(f) motion, defendants also file motions under Rule 

23(c)(1)(A) or Rule 23(d)(1)(D) at the pleading stage. Some even invoke a court’s inherent 

power to strike, thus avoiding the Rules entirely. None of these vehicles are directed at evidence 

or proof. All require a plaintiff to plead Rule 23 elements with heightened particularity and 

predict the evidence that normally would shape the class certification decision. 
6 

Numerous district courts have denied class certification on the pleadings, and been 

affirmed, without any “rigorous analysis” of the proofs to be forthcoming from future discovery.2

 

Yet, the Supreme Court requires the class determination to come after a rigorous analysis of the 

proofs. Wal-Mart Stores, Inc., 131 S. Ct. at 2551. The Supreme Court has held that it: 

may be necessary for the court to probe behind the pleadings before coming to 

rest on the certification question,’ and that certification is proper only if ‘the trial 

court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) 

have been satisfied.’... Such an analysis will frequently entail “overlap with the 

merits of the plaintiff's underlying claim.” That is so because the “’class 

determination generally involves considerations that are enmeshed in the factual 

and legal issues comprising the plaintiff's cause of action.’ ... 

Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013) (emphasis added).3

 

The courts that strike class action allegations cite in support Gen. Tel. Co. of S.W. v. 

Falcon, 457 U.S. 147, 160 (1982), because it states that sometimes it is “plain enough from the 

pleadings to determine whether the interests of the absent parties are fairly encompassed within 

the named plaintiff's claims.” Id. However, that statement (which really only addresses 

typicality and adequacy) does not support denying class certification at the pleading stage, 

because Falcon involved a class certification decision issued after evidence had been collected 

and presented, and it admonished district courts to conduct a rigorous analysis of Rule 23 rather 

than presuming compliance with Rule 23 based upon the allegations of the complaint. Thus, 

 

2

See, e.g., Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 949 (6th Cir. 2011); Kennedy v. 

Unumprovident Corp., 50 F. App’x 354, 355 (9th Cir. 2002); Ross-Randolph v. Allstate Ins. Co., 2001 WL 

36042162, at *4 (D. Md. May 11, 2001); Hill v. Wells Fargo Bank, N.A., 946 F. Supp. 2d 817, 832 (N.D. Ill. 2013); 

Alqaq v. CitiMortgage, Inc., 2014 WL 1689685, at *4–6 (N.D. Ill. Apr. 29, 2014).

3

 Allowing Plaintiffs time to develop their classwide proofs makes sense: “the class definition put forth in the 

complaint is often a working definition—one that will serve to identify relevant inquiries in pre-certification 

discovery.” Moore v. Walter Coke, Inc., 294 F.R.D. 620, 627 (N.D. Ala. 2013) (citing 7AA Charles Alan Wright, 

Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1785.4 at n.1 (3d ed. 2009)); see also, e.g., 

Glazer v. Chase Home Fin. LLC, 2014 U.S. Dist. LEXIS 39297, 15 (N.D. Ohio Mar. 25, 2014); Chaney v. Crystal 

Beach Capital, LLC, 2011 WL 17639, at *2 (M.D. Fla. Jan. 4, 2011); Motisola Malikha Abdallah v. Coca–Cola Co., 

1999 WL 527835 (N.D. Ga. July 16, 1999). The class definition might get “tweaked as the pre-certification 

discovery process sheds light on the contours of the potential class.” Moore, 294 F.R.D. at 627. 
7 

striking class action allegations without a rigorous analysis via negative presumptions actually 

spins Falcon off its axis. 

Before 2003, Rule 23(c)(1)(A) required that the determination as to whether to certify a 

class be made “as soon as practicable after commencement of an action.” Effective December 1, 

2003, this language was amended to require instead that “the court must – at an early 

practicable time – determine by order to certify the action as a class action.” Fed. R. Civ. P. 

23(c)(1)(A) (emphasis added). According to the Committee Notes, the “as soon as practicable” 

language was changed because class certification decision-making at the pleadings stage did not 

reflect prevailing practice and because “[t]ime may be needed to gather information necessary to 

make the certification decision.” Advisory Committee Notes to 2003 Amendments. 

In other words, Rule 23(c) was amended expressly to forestall class action decisionmaking until after the parties have conducted discovery. See id. (noting that it might make sense 

for a court to rule on dismissal or summary judgment as to the individual plaintiffs without 

certification and without binding the class that might have been certified.). Unfortunately, courts 

frequently ignore the Committee Notes on this issue and strike class action allegations at the 

pleading stage. 

Rule 23(d)(1)(D) permits orders that “require that the pleadings be amended to eliminate 

allegations about representation of absent persons and that the action proceed accordingly.” Fed. 

R. Civ. P. 23(d)(1)(D). But this provision expressly concerns the “conduct” of a class action 

after a class has been certified under Rule 23, because it is prefaced by the general phrase: “In 

conducting an action under this rule, the court may issue orders that: . . . (D).” Id. Considered in 

its actual context, subpart (D) merely allows a court to exclude opt-outs, bar uncooperative optins, decertify an existing class, or otherwise cabin an already certified class to precise persons so 
8 

all the parties will know who will be bound by a final judgment. By its own terms, Rule 

23(d)(1)(D) has no application to a pre-certification decision. It cannot, and should not, 

authorize a motion to strike class allegations at the pleadings stage. 

II. NOTICE 

NCLC and NACA endorse the proposed amendments to Subdivision (c)(2) of Rule 23 in 

order to reflect the changing realities of communication modes in the 21st Century. Rather than 

limiting the means of giving “the best notice practicable” to class members, courts should have 

the ability to exercise discretion to select the most appropriate means of giving notice in a case 

based on the specific facts and circumstances presented. 

We particularly appreciate the Committee Note’s recognition of the fact that a significant 

portion of class members in certain cases may have limited or no access to email or the Internet 

and that, therefore, the courts and counsel should focus on the means of notice most likely to be 

effective in the case before the court. As consumer advocates who represent low income and 

elderly consumers who disproportionately do not engage in social media and are less likely to 

have regular access to email or the Internet, we can confirm the Committee Note’s assessment 

and applaud its sensitivity and understanding. 

NCLC and NACA also wish to support the Committee Note’s admonition that in 

determining whether the proposed means of giving notice is appropriate, the court should give 

careful attention to the content and the format of the notice and, if notice is given under Rule 

23(e)(1) as well as Rule 23(c)(2)(B), any claim form class members must submit to obtain relief. 

No matter how effective a system is in providing access to notice to class members, the notice 

received is only as good as the comprehension of the message it delivers. As noted by the 

Committee Note, “the ultimate goal of giving notice is to enable class members to make 
9 

informed decisions about whether to opt out or, in instances where a proposed settlement is 

involved, to object or make claims.” Therefore, “the form of notice should be tailored to the 

class members’ anticipated understanding and capabilities.”(Emphasis added). 

In this vein, NCLC and NACA would like to propose three additional improvements to 

the Committee Notes expressly addressing concerns we have regarding the form and content of 

notices. 

First, for publication or posting on websites, practitioners increasingly have been turning 

to more simplified forms of summary notice that state, in plain terms and using easier-to-read 

graphic fonts and presentation, the nature of the case, who is in the class, what relief is sought, 

and, for settlement notices, the relief available and the availability of opting out or objecting. 

One advantage of this approach is that these bolder, more widely published, and possibly smaller 

notices permit a broader reach. Such “summary notices” also usually provide telephone, website, 

and physical addresses from which fuller notices—containing all the information required by 

Rule 23(c)(2)(B) as well as additional detail—can be obtained. 

 Full notices now often have a summary at the outset of the most salient points (e.g., who 

is in the class, what relief is sought or being provided by settlement, how claims can be made, 

who counsel is or what fees they might be requesting, and how counsel can be contacted), with 

the full details of the settlement (including, for example, who is excluded, what are the verbatim 

terms of the release, etc.) set forth below. 

 NCLC and NACA support simplified, plain language disclosure of the salient aspects of a 

class, including the settlement terms. If anything, the use of a summary notice should be pressed 

for as a means to ensure wider, not more limited, dissemination. While such determinations 

invariably depend on the nature of the case, as well as the size and make-up of the class, NCLC 
10 

and NACA believe summary notices can be valuable and should be encouraged, provided that 

they offer enough information to be meaningful. 

Certainly, an easy way to obtain a full notice (e.g., a website address) must be provided. 

Summary notices can either be summaries at the beginning of a “full” notice (as where notice has 

been provided by direct mail) or two-tiered notices—summary notices combined with available 

full-form notices. Summaries or summary notices should be considered if doing so can broaden 

the reach of the notice by permitting more widespread dissemination. A practitioner using a 

summary notice, however, must ensure that the physical size of the notice remains noticeable 

enough to catch the attention of class members. When used, the most salient items of information 

that should be set forth include: 

 • A clear statement explaining how to tell whether a consumer is a class member. 

• The total amount of relief to be granted the class, stated in dollars where the payment is 

in cash or credit to an account, and the nature and form of the individual relief each class 

member could obtain. 

• How further information can be obtained. More than one means (e.g., phone, fax, email, 

websites, and mail) of obtaining information should be provided. 

 • Options available to class members including at least opting out and objecting. 

 • What the class member would release by not opting-out from the settlement. 

Second, NCLC and NACA recommend, where appropriate, that counsel consider 

soliciting the advice of readability experts (often found at local universities) to recommend 

simplified ways of expressing the relevant concepts. Even though this may be cost-prohibitive or 

unnecessary in many cases, it is a matter worth considering, particularly if the parties have 

reached an impasse on the notice’s wording or where a defendant is insisting upon legalistic or 
11 

technical wording. At the very least, readability of the notice should be checked using a word 

processor. Most word processing programs today have a tool that allows the grade level of a 

document to be checked. Although this is an imprecise measure, it can give class counsel a 

general understanding of their writing’s complexity. 

Third, NCLC and NACA recommend considering non-English notice publication, in 

addition to English notices, where a substantial portion of the class may not be fluent in English. 

If much or most of the class does not speak English, then the notice must be in the other 

language. 

III. OBJECTORS

NCLC and NACA also endorse the proposed amendment of Subdivision (e)(5)(A) and 

(B) of Rule 23 relating to Objectors. Although objectionable class action settlements do exist, 

they are in the significant minority. By protecting the interests of the absent class members, 

valid objections to bad settlements play an important role in class action practice. Lawyers who 

learn of a bad settlement (whether through publicity, independently, or because they have a 

competing class action) may appropriately represent their clients in filing an objection to the 

settlement. Their goal can be to improve the terms of the settlement or to convince the court to 

reject the settlement entirely. 

Objections can serve many good purposes, but there are objections filed by lawyers who 

are not sincerely invested in improving a settlement and whose only interest lies in improving 

their own bank balances. The proposed amendments to Subdivision (e)(5)(A) and (B) of Rule 23 

address the issue of these improper objections by providing that any class member may object to 

a proposed settlement, voluntary dismissal, or compromise that requires court approval, but such 

an objection must state whether it only applies to the objector, to a specific subset of the class, or
12 

to the entire class, and also must state with specificity the grounds for objection. Such an 

objection may be withdrawn, but only with the court’s approval if it involves a payment or other 

consideration to an objector or objector’s counsel. These rule changes are intended to prevent 

objectors and their counsel from merely filing boiler plate objections, collecting fees, and 

disappearing. 

In most instances, objectors who add real value to a settlement should be paid on a 

lodestar basis with a multiplier. NCLC and NACA propose that the Committee Note for 

Subdivision (e)(5)(B) expressly should indicate, however, that the source of these fees generally 

should be either the defendant or class counsel. As one court noted, “the cash fund available to 

the class members should not be reduced by the award of attorney fees to the objectors’ counsel 

and that the benefits to the class, both monetary and non-monetary, should not be reduced in any 

fashion. In keeping with this conclusion, the attorney fees awarded to objectors are to be paid by 

Class Counsel and [the defendant] as they may agree, but without diminution in the value 

afforded to the class.” Shaw v. Toshiba America Information Systems, Inc., 91 F. Supp. 2d 942, 

974 (E.D. Tex. 2000); see also Great Neck Capital Appreciation Inv. P’ship, L.P. v. 

PricewaterhouseCoopers, L.L.P., 212 F.R.D. 400, 417 (E.D. Wis. 2002) (following Shaw). As a 

corollary, an objector who is no more than a greenmailer should receive nothing at all. 

IV. CY PRES 

In its November 5-6, 2015, Report the Rule 23 Subcommittee indicated that it had 

determined that the issue of cy pres awards would be taken off the agenda for the present Rule 

reform efforts. The Subcommittee noted that Section 3.07 of the ALI Principles of Aggregate 

Litigation addresses the issues of how cy pres awards should be handled in cases and that courts 

are increasingly referring to the ALI formulation in addressing these issues. The Subcommittee 
13 

concluded that a rule amendment would not be likely to improve the handling of these issues, 

and that it could raise the risk of undesirable side effects. 

However, the proposed Committee Note to amended Subdivision (e)(1) does make the 

general observation that because some settlement funds are frequently left unclaimed, it is often 

important for a settlement agreement to address the use of those funds. The Note then goes on to 

recommend that “[m]any courts have found guidance on this subject in § 3.07 of the American 

Law Institute, Principles of Aggregate Litigation (2010).” 

 Overall, NCLC and NACA support the approach taken by the Committee in its note. 

NCLC and NACA agree that ALI Principles of Aggregate Litigation §3.07 should be used as a 

model for best practices in cy pres awards and that courts should be encouraged to use cy pres 

awards in circumstances where direct distributions to class members are not viable or feasible. 

Further discussion and guidance on how to properly handle cy pres awards in cases within the 

contours of § 3.07 may be found in the NACA Standards and Guidelines for Litigating and 

Settling Consumer Class Actions, 3rd ed., Guideline 7, Cy Pres Award, 299 F.R.D. 160, 191-200 

(2014). 
Tab 4

Written Testimony of

Brent Johnson, on behalf of

Committee to Support Antitrust Laws

(COSAL)
October 24, 2016 

Via E-Mail and Regular Mail 

Rebecca A. Womeldorf 

Secretary, Committee on Rules of Practice and Procedure of the Judicial Conference of the 

United States 

Thurgood Marshall Federal Judiciary Building 

One Columbus Circle NE 

Suite 7-240 

Washington, DC 20544 

 Re: Comments by COSAL on Potential Amendments to the Federal Rule of 

 Civil Procedure 23 

To the Members of the Advisory Committee on Civil Rules and the Rule 23 Subcommittee: 

The Committee to Support the Antitrust Laws (COSAL) submits these comments to 

generally express its support for the majority of the proposed amendments and highlight one 

potential area of concern and suggested revision with regards to a new provision, Rule 

23(e)(2)(C)(ii). 

COSAL was established in 1986 to promote and support the enactment, preservation and 

enforcement of a strong body of antitrust laws in the United States. COSAL members are law 

firms based throughout the country that represent individuals and businesses that have been 

harmed by violations of the antitrust laws. COSAL closely monitors and comments on 

congressional and administrative activity with respect to antitrust policy and plays a leadership 

role in building support for the antitrust laws. 
October 24, 2016 

COSAL Letter 

Page 2 

2

Brent Johnson and Emmy Levens of Cohen Milstein Sellers & Toll PLLC, whose 

practice focuses on antitrust class actions, prepared these comments on behalf of COSAL. They 

are based on our members’ extensive experience bringing antitrust class action lawsuits under 

Rule 23 of the Federal Rules of Civil Procedure. Mr. Johnson will appear before the Committee 

on November 3. We respectfully request that you consider these views as you consider revisions 

to Rule 23. 

In general, COSAL believes that many of the proposed amendments to Rule 23 are 

positive – either codifying the existing case law or clarifying prior ambiguity. We are 

concerned, however, that one suggested change regarding the approval of settlements could be 

misconstrued in a manner that undermines the Rules Committee’s purported purpose for the 

change. 

Specifically, the current language proposed for inclusion under Rule 23(e)(2)(C)(ii) 

requires courts to take into account, “the effectiveness of the proposed method of distributing 

relief to the class, including the method of processing class-member claims, if required” in 

deciding whether to approve a settlement. We believe that some courts could mistakenly 

interpret the inclusion of such a factor and the word “effectiveness” to mean that there are 

categorically ineffective methods of distributing relief to classes. Such courts may then impose a 

heightened standard for identifying class members, processing claims, and distributing settlement 

proceeds that, for certain groups of cases, no method of distributing relief could meet. Such a 

standard could lead to the rejection of settlements for the sole reason of not meeting it. 

In other words, the language could be misconstrued as imposing a heightened 

“ascertainability” standard, a topic the Rule 23 Subcommittee specifically decided was not 

appropriate to address in these proposals. Indeed, ascertainability is an issue that has divided 

circuit courts1

 and that may be best left to resolution by the Supreme Court. While we do not 

believe that such an interpretation of the proposed language is correct or the one that most courts 

would employ, we are mindful that the current ascertainability requirements imposed by some 

courts for the certification of classes also have little to no basis in the current plain language of 

Rule 23.2

To avoid this potential issue, we suggest that Rule 23(e)(2)(C)(ii) be changed to provide 

that, in considering whether to approve a class settlement under Rule 23(c)(3), courts consider 

 1 See, e.g., Mullins v. Direct Digital, LLC, 795 F.3d 654, 663 (7th Cir. 2015) (holding that 

Rule 23 does not require a heightened “ascertainability” standard for identifying class members); 

Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013) (requiring that plaintiffs demonstrate an 

“administratively feasible” method for identifying class members for class certification). 

2 Brent W. Johnson & Emmy L. Levens, Heightened Ascertainability Requirement 

Disregards Rule 23’s Plain Language, ANTITRUST, Vol. 30, No. 2, at 68-73 (Spring 2016). 
October 24, 2016 

COSAL Letter 

Page 2 

3

whether: “(ii) the proposed method of distributing relief to the class, including the method of 

processing class-member claims, if required, is the best method that is practicable under the 

circumstances.” (emphasis on new language). 

This alternative language mirrors the language in Rule 23(c)(2)(B) relating to notice. 

Courts have ably applied this language to ensure that notice is effectively disseminated to class 

members; adopting similar language here provides a ready benchmark for courts in applying the 

new language. Moreover, we believe this suggested language more appropriately balances the 

concerns outlined in the comments to the proposed amendments – ensuring that the claims 

processing method deters unjustified claims but stopping shy of imposing a standard that could 

be used to preclude settlements entirely by itself. Additionally, this proposal eliminates any 

confusion as to whether the proposed language should be read to impose any type of 

“ascertainability” requirement in approving a class settlement. 

Thank you for considering our views. 

 Sincerely, 

 /s/ Pamela Gilbert 

Pamela Gilbert 

 Cuneo Gilbert & LaDuca 

 President, Committee to Support the Antitrust Laws 

 4725 Wisconsin Ave. NW, #200 

 Washington, DC 20016 

 (202) 789-3960 

 pamelag@cuneolaw.com

/s/ Brent W. Johnson 

Brent W. Johnson 

Cohen Milstein Sellers & Toll PLLC 

Member, Committee to Support the Antitrust Laws 

1100 New York Ave. NW 

Suite 500 

Washington, DC 20005 

(202) 408-4600 

bjohnson@cohenmilstein.com

 
Tab 5

Written Testimony of

Brian Wolfman

Georgetown University Law Center
 12

.
─

─ 


November 23, 1999

Hon. Anthony J. Scirica

Chair, Standing Committee on Rules

 of Practice and Procedure

United States Courthouse

601 Market Street

Philadelphia PA 19106

Hon. Paul V. Niemeyer

Chair, Advisory Committee on Civil Rules

United States Courthouse

101 West Lombard Street

Baltimore, MD 21201

Re: Proposed Amendment to Rule 23(e) Concerning Disclosure and Approval of

Side-Settlements

Dear Judges Scirica and Niemeyer:

I am writing to you in your respective capacities as Chairs of the Standing Committee

on Rules of Practice and Procedure and the Advisory Committee on Civil Rules to request

consideration of an amendment to Fed. R. Civ. P. 23. Originally, I sent this proposal to

Judge Edward Becker because of a prior discussion we had had on the topic. He in turn

suggested that I send the material to you because of your Committee roles.

Attached to this letter is a suggested amendment to Rule 23(e), which would require

that all "side-settlements," including their attorney's fee components, be disclosed and

approved by the district court. The effect of such a change would be generally to prevent

settling class counsel and settling defendants from "buying out" objectors on terms different

from those offered to the class as a whole. The proposal would apply to all settlements

whether they were struck while the case was before the district court or pending on appeal.
Hon. Paul V. Niemeyer

Hon. Anthony J. Scirica

November 23, 1999

Page 2

The remainder of this letter sets forth examples of the problems addressed by the Rule

change and the need for such a change.

I.

In our experience, the practice of paying objectors to go away, without disclosure and

approval, has become commonplace. Although we are aware of many such cases, consider

the following four examples in large nationwide cases:

1. After announcement of the General Motor Pick-up class action coupon

settlement in the federal MDL proceeding, counsel for GM contacted

plaintiffs' counsel in a competing class action pending in state court. GM

counsel was aware that this plaintiffs' counsel's clients would likely be

objectors to the MDL settlement. GM counsel suggested that objecting

plaintiffs' counsel might file an amended complaint that would allow removal

of the state court class action to federal court, presumably so that it could be

consolidated with the MDL proceedings. GM counsel further suggested that

thereafter the settling parties might arrange payment of objecting counsel's fees

— but not one penny of additional relief for counsel's clients or for the class

as a whole — in exchange for dropping his clients' objections. Our

understanding is that the plaintiffs' counsel did not accept the offer.

2. In the AcroMed bone screw "limited fund" settlement, In re Orthopedic

Bone Screw Prod. Liab. Litig., 176 F.R.D. 158 (E.D. Pa. 1997), the district

court's approval was very much in doubt. For one thing, the settling parties'

assertions as to the value of the fund likely understated its true value by several

fold. The settlement, moreover, released concededly solvent non-parties,

against whom a large number of class members had significant claims.

Finally, the settlement suffered from all the problems later condemned by the

Supreme Court in Ortiz v. Fibreboard.

At least three groups of objectors — one that had taken an appeal and two

others that were contemplating an appeal — were simply paid significant sums

of money to drop their objections, i.e., they received a different and better deal

than the other absent class members. The non-objecting class members'

recoveries were limited by the class action settlement, which the district court

approved on a express finding that there was a "limited fund" and that the

defendant had nothing more to give. This "buy out" took place in complete

secrecy, without disclosure to the court or the class members.

3. In another "limited fund" personal-injury settlement approved earlier this

year, now pending on appeal in a federal circuit court, certain objectors now
Hon. Paul V. Niemeyer

Hon. Anthony J. Scirica

November 23, 1999

Page 3

appear to be seeking a settlement that would involve cash payments without

any disclosure or approval by the court, in exchange for dismissal of their

appeals. The participants to the settlement recognize that this route is probably

the only way to obtain a final judgment, and thus a lucrative private settlement,

because the class settlement appears doomed by Ortiz.

4. Finally, in the John Hancock insurance fraud settlement, we represented a

class member challenging what appeared to be a substantial cash payment to

objectors and their counsel to drop their appeal on the merits, without any

disclosure to the plaintiff class members, who received a decidedly different

(and probably far less lucrative) deal. The First Circuit rejected our client's

challenge, leaving no doubt that, in its view, secret side-settlements were

permissible even if the settling class members were able to use an appeal as

leverage to exact a better deal than the deal provided the rest of the class.

Duhaime v. John Hancock Mut. Life Ins. Co., 183 F.3d 1 (1st Cir. 1999).

In each of these proposed or consummated side-deals, despite the Rule 23(e)

requirements that class settlements be scrutinized openly and that the court approve all parts

of them, the settling parties and objectors proceeded secretly. Indeed, in the John Hancock

case, even after we got wind of the deal, the settling parties refused disclosure of these sidedeals on the ground that only an overall class settlement, not settlement of the individual

claims of members of the settlement class, are subject to Rule 23(e). And, since the First

Circuit agreed with that analysis, we believe that the best approach now is to amend the Rule,

although we may litigate the issue elsewhere if the circumstances warrant it.

In our view, the structure and purpose of Rule 23 demand that side-settlements be

disclosed and approved by the district court. Whether one characterizes these side payments

as "bribes" by the settling parties or "extortion" by objectors, or some combination of the

two, something should be done to put an end to this conduct for at least four reasons.

First, permitting unregulated side-agreements subverts the Rule's structure regarding

class membership. The Rule expressly permits only one method of exclusion from the class

— opting out in (b)(3) class actions. An opt-out must be exercised individually, and because
Hon. Paul V. Niemeyer

Hon. Anthony J. Scirica

November 23, 1999

Page 4

it does not give a class member the ability to defeat the class action, it does not empower the

class member to "hold up" an entire settlement. In short, it perverts the Rule to allow

objectors, in effect, a "super opt out" that provides them enormous leverage to game the class

action process for their own personal gain.

Second, allowing side-deals to go unchecked runs headlong into one of the chief

purposes of the class action and of the Rule 23(e) approval requirement — to assure that

similarly-situated class members are treated alike. In this regard, a district court considering

whether to approve a side-deal should ask this basic question: "Is there a good reason that

this one group of class members should get a different [usually better] deal from all the other

class members?" Because the courts already conduct something akin to this inquiry when

they decide whether additional payments should be made to class representatives, this

question is not foreign to the class action process. And the district courts in Georgine and

Ortiz asked essentially the same question when they considered whether the side-deals for

class counsel's individual clients were appropriate in light of the decidedly different class

settlement. Generally speaking, we believe that it will be quite difficult for settling

individual class members to justify disparate treatment, and thus the amendment we propose

is likely to drastically curtail, if not eliminate, these side-deals.

Third, we are concerned not only about the existence of unfair side-deals, but in who

obtains them — lawyers and their clients who know how to game the system. The class

action often serves as the means for ordinary citizens, without individual representation, to

achieve justice. It is intolerable for the mass of pro se litigants (i.e., the absent class

members, whether or not they object) to get one deal, while a small group of objectors with

lawyers who understand the dynamics of the current system get another (presumably better)
Hon. Paul V. Niemeyer

Hon. Anthony J. Scirica

November 23, 1999

Page 5

deal.

Finally, a Rule 23(e) disclosure-and-approval requirement will improve the Rule 23

objections process. This process is critical in helping to assure the fairness of class action

settlements and in shaping the law on topics ranging from class certification, to opt-out

rights, to the intended breadth of Rule 23(b)(1)(B), etc. We believe that more must be done

by the courts and the rulemakers to facilitate the objectors' role under Rule 23(e). See

Wolfman & Morrison, Representing the Unrepresented in Class Actions Seeking Monetary

Relief, 70 N.Y.U. L. Rev. 439 (1996) (suggesting Rule changes to improve fairness hearing

procedures and to accommodate needs of objectors). Our proposal to require approval of

side-settlements will improve the overall Rule 23(e) process, which is intended to assure that

the courts approve the good, and reject the bad, by weeding out objections with little merit,

and encouraging serious objections that may give the court pause or lead to meaningful

amendments to a proposed settlement. In this regard, we note that attorneys for objecting

class members whose work benefits the class as a whole should be entitled to a courtapproved fee. See generally Duhaime v. John Hancock Mut. Life Ins. Co., 2 F. Supp.2d 175

(D. Mass. 1998). 

II.

Our proposal also would formalize the current requirement that courts approve all

attorney's fees and costs in class actions. Although courts almost always approve fees and

costs, in recent years settling class counsel have argued that, when fees and costs are agreed

to as part of a settlement, particularly when structured to appear to be separate from the relief

accorded to the plaintiff class, they should be given little or no scrutiny. See, e.g., In re

General Motors, 33 F.3d 768, 819-20 (3d Cir. 1995) (discussing and rejecting this approach);
Hon. Paul V. Niemeyer

Hon. Anthony J. Scirica

November 23, 1999

Page 6

Zucker v. Occidental Petroleum Corp., 1999 U.S. App. Lexis 25824 (9th Cir. Oct. 19, 1999)

(same).

Moreover, the proposed amendment would require disclosure and approval of all feesharing arrangements among counsel. The Second Circuit requires as much, see In re Agent

Orange Prod. Liab. Litig., 818 F.2d 216, 225 (2d Cir. 1987), but the Sixth Circuit has

rejected disclosure except in limited circumstances. Bowling v. Pfizer, Inc., 102 F.3d 777,

780-81 & n.3 (6th Cir. 1996); see also Adv. Comm. Notes to Fed. R. Civ. P. 54(d)(2) (court

has discretion to demand disclosure, noting that one court's local rules requires disclosure).

At an October 1998 class action conference of judges, academic, and practitioners sponsored

by NYU law school, a prominent plaintiffs' class action lawyer candidly acknowledged that

counsel fees are sometimes deliberately inflated so that he (as lead counsel) has sufficient

funds to pay attorneys that are, in his view, undeserving hangers-on. We have watched this

occur ourselves, and challenged the practice in Bowling, supra, because it operates to the

potential detriment of class members. Without full scrutiny of fee sharing arrangements, it

is more difficult to determine whether fees are bloated by payments to lawyers whose

contribution does not warrant their allocated share. Thus, secrecy increases the likelihood

that some of the money that the defendant was willing to give up goes to undeserving

lawyers, rather than their clients. Disclosure and approval are the most direct and appropriate

antidotes to this problem.

Moreover, we agree with Judge Weinstein that disclosure and approval of fee-sharing

arrangements is important, almost for its own sake, to maintain the integrity of the class

action device:

Because class attorneys have special fiduciary obligations to the class, and
Hon. Paul V. Niemeyer

Hon. Anthony J. Scirica

November 23, 1999

Page 7

because the court has a responsibility to protect the rights of the class, the class

and the court have a right to know about any agreements among counsel for

allocating fees payable from a class recovery. In view of the lack of a personal

relationship between most class members and the attorneys representing them

it is essential that this information be available through the court. Class actions

are public or quasi-public in nature. Rule 23 of the Federal Rules of Civil

Procedure serves in many respects as a "sunshine" law in its requirements of

notice to the class and public hearings. The public and press must have full

access to information about this kind of fee-sharing arrangement so that an

opportunity is afforded for comment and objection.

In re Agent Orange Prod. Liab. Litig., 611 F. Supp. 1452, 1462-63 (E.D.N.Y. 1985). Simply

put, in ordinary bi-polar litigation, we would not tolerate a situation where the client does not

know which of her lawyers are getting paid and how much. See Model Rules of Prof. Resp.

1.5(b) & (e). In class actions, there is even more reason to require a full accounting and, of

course, court approval.

* * *

Thank you for your time and consideration.

Sincerely,

Brian Wolfman

cc: Hon. Edward R. Becker

Mr. Peter G. McCabe
PROPOSED AMENDED RULE 23(e)

(new language italicized)

(e) Dismissal or Compromise.

(1) In general. A class action shall not be dismissed or

compromised without the approval of the court, including all

payments for attorney's fees and costs and the allocation thereof

among counsel. Notice of the proposed dismissal or

compromise shall be given to all members of the class in such

manner as the court directs.

(2) Individual resolution. Any proposed dismissal or

compromise of the claims of an individual named or unnamed

member of the class who has not been excluded from the class

under subdivision (c)(2), including any proposal concerning

payment of attorney's fees or costs of such member, shall be

filed with the court and served upon any class member who has

entered an appearance. No such dismissal or compromise shall

be consummated without approval by the court. Such dismissal

or compromise shall be subject to approval of the court at any

time during the pendency of the action, including when it is

pending before the court of appeals or the Supreme Court of the

United States. 
Tab 6

Written Testimony of

Hassan Zavareei

Tycko & Zavareei
 WASHINGTON DC

1828 L Street, NW | Suite 1000

Washington, DC 20036

202.973.0900 

www.tzlegal.com

CALIFORNIA

483 Ninth Street | Suite 200

Oakland, CA 94607

510.254.6808

VIA ELECTRONIC MAIL

October 24, 2016 Our File No. 327-01

Advisory Committee on Civil Rules

Thurgood Marshall Building

Administrative Office of the United States Courts

One Columbus Circle NE

Washington, DC 20544

rebecca_womeldorf@ao.uscourts.gov

frances_skillman@ao.uscourts.gov

Re: November 3, 2016 Hearing on Proposed Amendments to the Federal Rules of Civil 

Procedure

To the Members of the Advisory Committee on Civil Rules:

I am writing in advance of next week’s hearing on the proposed amendments to Civil 

Rules 5, 23, 62, and 65.1. Based on my 21 years practicing law predominantly in the area of 

class actions, I have extensive experience with the contours of Rule 23, and I have had many 

productive discussions with my fellow practitioners particularly in recent years about the 

challenges presented in the areas of notice, settlements, and class objectors. Therefore, I submit 

to the Advisory Committee this written testimony regarding the proposed amendments to Rule 

23 in advance of my appearance at next week’s hearing. I believe that the proposed amendments 

are in large part a positive step, but I also offer my comments where I believe that both 

clarification and improvement is still possible, particularly in the area of objections to class 

action settlements.

First, I believe that the proposed changes to the rules regarding class notice are very 

productive and helpful. With respect to the proposed addition to subdivision 23(c)(2)(B), the 

first additional clause is very helpful in that in explicitly makes the rule applicable both in the 

contested class certification and the proposed settlement arenas. And the second additional 

sentence, which delineates certain means by which individual notice may be effected, is 

important largely due to its inclusion of electronic mail in addition to United States mail. It has 

been my experience in recent years that in scenarios where electronic mail information is reliably 

available for the class members, this is a notice method preferred by plaintiffs and defendants 

alike because of its efficiency and lower cost than postal mail. Although courts are growing 

more and more accustomed to ordering notice by electronic means,1 it is a positive step to codify 

the availability of this option, and I appreciate the Committee’s clarity.

 1 E.g., Hanlon v. Palace Entm’t Holdings, LLC, No. 11-987, 2012 WL 27461 at *6 (W.D. Pa. Jan. 3, 

2012) (approving notice consisting of email to defendant’s promotional database and publication in USA 

Today to be sufficient); Berkson v. Gogo LLC, 147 F. Supp. 3d 123, 154 (E.D.N.Y. 2015) (approving 
October 24, 2016

Page 2

With respect to the changes to subdivisions 23(e)(1)(A) and 23(e)(2), which speak to the 

information to be provided to courts in connection with a motion to preliminarily approve of a 

class settlement, I believe the additions to and new structure of the Rule is a positive step. 

Specifically, with respect to Rule 23(e)(2), I applaud the proposed change from simply requiring 

a finding that the settlement its “fair, reasonable, and adequate” to listing specific factors for 

courts to consider in order to make this finding. As the Committee is likely aware, Circuit courts 

have adopted sets of factors that they examine in order to examine a proposed settlement’s 

fairness, and although the factors that they examine resemble those proposed by the Committee, 

there are variations from circuit to circuit.2 By providing a certain set of factors, this proposal by 

the Committee will provide clarity to litigants and courts alike. The single change that I propose 

 

email-only notice); Kolinek v. Walgreen Co., 311 F.R.D. 483, 499 (N.D. Ill. 2015) (rejecting objector’s 

argument that email notice is insufficient); Noll v. eBay, Inc., 309 F.R.D. 593, 605 (N.D. Cal. 2015) 

(approving email notice with mailed notice to persons with emails returned as undeliverable); In re TD 

Ameritrade Account Holder Litig., No. C 07–2852 SBA, 2011 WL 4079226 at *10 (N.D. Cal. Sept. 13, 

2011) (approving email notice even where class members did not receive mailed notice “in cases where

the delivery via email failed,” as “there is no requirement that notice be perfect”); Lane v. Facebook, Inc., 

No. C 08-3845 RS, 2010 WL 9013059 at *2 (N.D. Cal. Mar. 17, 2010) (even though some e-mail filtered 

through a SPAM e-mail filter and not all class members saw it, the notice was adequate).

2 See, e.g., Reed v. Gen. Motors Corp., 703 F.2d 170, 172 (5th Cir. 1983) (“There are six focal facets: (1) 

the existence of fraud or collusion behind the settlement; (2) the complexity, expense, and likely duration 

of the litigation; (3) the stage of the proceedings and the amount of discovery completed; (4) the 

probability of plaintiffs' success on the merits; (5) the range of possible recovery; and (6) the opinions of 

the class counsel, class representatives, and absent class members.”); Girsh v. Jepson, 521 F.2d 153 (3d 

Cir. 1975) (“(1) the complexity, expense and likely duration of the litigation . . . ; (2) the reaction of the 

class to the settlement . . . ; (3) the stage of the proceedings and the amount of discovery completed . . . ; 

(4) the risks of establishing liability . . . ; (5) the risks of establishing damages . . . ; (6) the risks of 

maintaining the class action through the trial . . . ; (7) the ability of the defendants to withstand a greater

judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery . . . 

; [and] (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the 

attendant risks of litigation . . . .”); Saccoccio v. JP Morgan Chase Bank, N.A., 297 F.R.D. 683, 691 (S.D. 

Fla. 2014) (“The factors the Court should consider in determining whether a settlement is fair, adequate, 

and reasonable are ‘(1) the likelihood of success at trial; (2) the range of possible recovery; (3) the point 

on or below the range of possible recovery at which a settlement is fair, adequate and reasonable; (4) the 

complexity, expense and duration of litigation; (5) the substance and amount of opposition to the 

settlement; and (6) the stage of proceedings at which settlement was achieved.’”) (quoting Bennett v. 

Behring Corp., 737 F.2d 982, 986 (11th Cir. 1984)); In re Marsh ERISA Litig., 265 F.R.D. 128, 138 

(S.D.N.Y. 2010) (“(1) the complexity, expense and likely duration of the litigation; (2) the reaction of the 

class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the 

risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class 

action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of 

reasonableness of the settlement fund in light of the best possible recovery; and (9) the range of 

reasonableness of the settlement fund in light of all the attendant risks of litigation”) (quoting City of 

Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974)).
October 24, 2016

Page 3

is a minor clarification to subdivision 23(e)(2)(C)(ii), to change the first clause from “the 

effectiveness of the proposed method of distributing relief to the class” to “the effectiveness of 

the proposed method of distributing relief for the benefit of the class.” I believe that this 

phrasing is more accurate because in certain class actions, some relief such as injunctive relief or 

cy pres distributions are not distributed directly “to” the class members.

Finally, I write to discuss the Committee’s proposed amendments to subdivision 23(e)(5)

that address unique challenges facing class action practitioners now more than ever, in the area 

of class member objections. I completely agree with the Committee that many objections are 

brought in good faith and can both assist courts in evaluating proposed settlements, in addition to 

providing value to class members. However, the Committee is also correct to recognize that 

some class objectors and their attorneys are “seeking only personal gain” when they file 

objections and “have sought to extract tribute to withdraw their objections or dismiss appeals 

from judgments approving class settlements.” Many courts have recognized the phenomenon of 

the so-called “professional” or “serial” objector.3 And while I appreciate the Committee’s 

efforts to enact procedures that provide litigants tools when they encounter a bad faith objection, 

I believe both a clarification of and an addition to the proposed rules would be helpful.

With respect to proposed subdivisions 23(e)(5)(B) and 23(e)(5)(C), I believe some 

background is necessary. The proposal and Committee notes indicate that the Committee is 

acutely aware that bad faith objectors frequently seek payment from class counsel in exchange 

for dismissing or foregoing an appeal. In fact, it is my experience (and one echoed to me by 

many fellow practitioners) that counsel for objectors generally only seek such payment after the 

district court has finally approved a settlement, a notice of appeal has been filed, and the case has 

been docketed by the court of appeals. This would allow for the simple dismissal of an appeal 

before the court of appeals without having to notify the district court. I understand that proposed 

subdivision 23(e)(5)(B)(ii) seeks to involve the district court in this process even after the appeal 

 3 See, e.g., In re Cathode Ray Tube (CRT) Antitrust Litig., 281 F.R.D. 531, 533 n.3 (N.D. Cal. 2012)

(“[P]rofessional objectors can levy what is effectively a tax on class action settlements, a tax that has no 

benefit to anyone other than to the objectors. Literally nothing is gained from the cost: Settlements are not 

restructured and the class, on whose benefit the appeal is purportedly raised, gains nothing.”) (quoting In 

re Checking Account Overdraft Litigation, 830 F.Supp.2d 1330, 1361, n. 30 (S.D. Fla. 2011)); In re Royal 

Dutch/Shell Transp. Secs. Litig., No. 04-374 (JAP), 2008 WL 9447623, at *30 (D.N.J. Dec. 9, 2008)

(“[f]ederal courts are increasingly weary of professional objectors”) (quoting Varacallo v. Mass. Mut. Life 

Ins. Co., 226 F.R.D. 207, 240 (D.N.J. 2005)); Rossi v. Proctor & Gamble Co., No. 11–7238 (JLL), 2013 

WL 5523098, at *7 n.2 (D.N.J. Oct. 3, 2013) (“[P]rofessional objectors . . . bring objections, typically of a 

generic sort, that are lodged primarily for the purposes of delay and to extract (indeed, often, to extort)

payment to the objector's counsel to go away.”) (quoting In re Checking Account Overdraft Litig., No. 

09–md02036–JLK, Dkt. No. 1885–7 (S.D. Fla. Sept. 16, 2011)) (alteration in original); In re Initial Pub. 

Offering Sec. Litig., 728 F. Supp. 2d 289, 295 (S.D.N.Y. 2010) (“I concur with the numerous courts that 

have recognized that professional objectors undermine the administration of justice by disrupting 

settlement in the hopes of extorting a greater share of the settlement for themselves and their clients.”) 

(collecting cases).
October 24, 2016

Page 4

has been docketed. I believe this will cause some procedural confusion, as discussed below, but, 

more importantly, I believe that proposed subdivision 23(e)(5)(B) as a whole has some 

unintended consequences.

Proposed subdivision 23(e)(5)(B) purports to require district court approval whenever 

consideration is provided to counsel for an objector in exchange for withdrawing or otherwise 

foregoing an objection or appeal of settlement approval. I believe the intent of this subdivision is 

to dissuade the filing of bad faith objections altogether, on the rationale that, since bad faith 

objectors will not want to appraise district courts of their extortion-like tactics, they will not file 

a frivolous objection if the likely outcome is that they will not be paid (and, instead, they would 

have to actually litigate the frivolous objection all the way to the conclusion of an appeal that is 

unlikely to succeed). Unfortunately, professional objectors and their counsel, by the very nature 

of their business model, are unethical. As such, they file numerous frivolous objections without 

concern for whether they may be viewed negatively by the bench and bar. Indeed, professional 

objectors are frequently chastised by district courts and, despite this, are still paid off, and repeat 

their tactics in case after case.

Thus, my fear is that this subdivision actually will not dissuade the filing of bad faith 

objections, and, instead, professional objectors will continue to file such objections and seek 

payment in the manner they currently do. From there, class counsel will be left with the 

unenviable decision of either litigating a years-long appeal that results in class members not 

receiving compensation in the interim, or appearing before the district court to inform it that they 

have decided to pay an objector’s counsel to stand down. Although I am not advocating for class 

counsel to frequently pay counsel for a professional objector, it has been the experience of many 

of my colleagues that choosing to do this is often a reasonable decision to make in order for 

members of the class to receive compensation in a timely fashion, when confronted with a bad 

faith appeal. By imposing the “court approval” requirement, however, this decision would be 

effectively removed from a class counsel’s toolbox, as few class counsel would subject 

themselves to the public embarrassment of being on the record as having paid a professional 

objector. Therefore, the unintended consequence of this rule would be to significantly delay 

class members from receiving negotiated compensation.

I have a further concern with the portions of the proposed subdivisions (23(e)(5)(B)(ii) 

and 23(e)(5)(C)) that deal with appeals, namely that district court approval is required for 

dismissing or abandoning an appeal that has already been docketed by a circuit court. 

Specifically, proposed subdivision 23(e)(5)(C) indicates that once an appeal is pending, Rule 

62.1 dictates whether and how the district court may hear a motion, including, presumably, one

brought by an objector to voluntarily dismiss or abandon an appeal. But Rule 62.1 only provides 

for circumstances in which a district court can issue an “indicative ruling” during the pendency 

of an appeal, which, as the Committee recognized in 2009, is typically the procedure followed 

when a Rule 60(b) motion to vacate a judgment pending on appeal is filed. See Fed. R. Civ. P. 

62.1 Advisory Committee’s note (2009). At that time, the Committee also recognized that it 

“does not attempt to define the circumstances in which an appeal limits or defeats the district 
October 24, 2016

Page 5

court's authority to act in the face of a pending appeal.” Id. However, it seems to me that by 

requiring district court approval of attempts to dismiss a pending appeal in some circumstances, 

proposed subdivision 23(e)(5)(B)(ii) could be interpreted to improperly curtail the authority of 

appellate courts to control their own dockets, and directing courts and litigants to Rule 62.1 does 

not cure this. Indeed, as Rule 62.1 only allows for “indicative rulings” that inform appeals courts 

what the trial judge would do if the appeals court were to remand to the district court, what 

would happen if the appeals court elected not to remand? It stands to reason that this provision 

could prevent a frivolous appeal from being resolved efficiently, even if all parties favored the 

ourcome.

The Supreme Court has held that “the filing of a notice of appeal is an event of 

jurisdictional significance—it confers jurisdiction on the court of appeals and divests the district 

court of its control over those aspects of the case involved in the appeal.” Griggs v. Provident 

Consumer Disc. Co., 459 U.S. 56, 58 (1982) (emphasis added). Indeed, once an appeal has been 

filed, the trial court “may not finally adjudicate substantial rights directly involved in the 

appeal.” Newton v. Consol. Gas Co. of New York, 258 U.S. 165, 177 (1922). Several appellate 

courts, in interpreting Griggs, have listed the narrow kinds of action that district courts can take 

despite the pendency of an appeal:

• “We have recognized limited exceptions to the general rule that permit district courts to 

take subsequent action on matters that are collateral to the appeal, or to take action that 

aids the appellate process. As our case law amply demonstrates, however, these 

exceptions are confined to a narrow class of actions that promote judicial efficiency 

and facilitate the division of labor between trial and appellate courts.” Doe v. Pub. 

Citizen, 749 F.3d 246, 258 (4th Cir. 2014) (citations omitted) (emphasis added).

• “Exceptions to the rule in Griggs allow the district court to retain jurisdiction to issue 

orders staying, modifying, or granting injunctive relief, to review applications for 

attorney's fees, to direct the filing of supersedeas bonds, to correct clerical mistakes, and 

to issue orders affecting the record on appeal and the granting or vacating of bail.” Sheet 

Metal Workers' Int'l Ass'n Local 19 v. Herre Bros., 198 F.3d 391, 394 (3d Cir. 1999).

• “The qualification ‘involved in the appeal’ is essential—it is why the district court may 

award costs and attorneys’ fees after the losing side has filed an appeal on the merits, 

why the court may conduct proceedings looking toward permanent injunctive relief while 

an appeal about the grant or denial of a preliminary injunction is pending.” BradfordScott Data Corp. v. Physician Computer Network, Inc., 128 F.3d 504, 505 (7th Cir. 

1997).

• “The district court retains only the authority to act in aid of the appeal, to correct clerical 

mistakes or to aid in the execution of a judgment that has not been superseded.” 

Showtime/The Movie Channel, Inc. v. Covered Bridge Condo. Ass'n, Inc., 895 F.2d 711, 

713 (11th Cir. 1990).
October 24, 2016

Page 6

• “[O]nce a notice of appeal has been filed, a district court may take actions only ‘in aid of 

the appeal or to correct clerical errors.’” Int'l Ass'n of Machinists & Aerospace Workers, 

AFL-CIO v. E. Air Lines, Inc., 847 F.2d 1014, 1017 (2d Cir. 1988) (citation 

omitted), cert. denied, 451 U.S. 908, (1981).

In short, no matter the construct, there are very limited circumstances in which a trial court 

retains power after an appeal has been filed. In light of the statements made by the appeals 

courts interpreting Griggs, it stand to reason that requiring district court approval of a decision to 

voluntarily dismiss an appeal runs afoul of the mandate in Griggs that, once the appeal is filed, 

the appeals court has “control over those aspects of the case involved in the appeal.” 459 U.S. at 

58. Of course, it seems that there are few aspects of an appeal more central than a litigant’s 

decision not to pursue it. In fact, several appeals courts have also held that once the appeal has 

been filed, the district court has no power to dismiss an appeal:

• “Although a district court retains jurisdiction over issues that are ancillary to those under 

consideration in the appellate court, the district court cannot dismiss or strike a notice of 

appeal.” United States v. Real Prop. Located at 886 N. Hamilton St. Clair Cty., Marissa, 

Ill., 34 F. App'x 235, 237 (7th Cir. 2002) (citations omitted).

• “[T]he district court directed the defendants' notice of appeal to be dismissed. In so 

doing, the district court exceeded its authority, and this attempted ‘dismissal’ in no way 

affects our jurisdiction in this appeal.” Dickerson v. McClellan, 37 F.3d 251, 252 (6th 

Cir. 1994) (citation omitted).

• “[T]he district court in this case was without jurisdiction to dismiss this case and that its 

attempt to do so had no force or effect.” Showtime/The Movie Channel, Inc., 895 F.2d at

713.

• “A district court cannot dismiss an appeal, and it follows that it cannot condition an 

appeal on the appellant's prosecuting it vigorously in the court of appeals.” Sperow v. 

Melvin, 153 F.3d 780, 781 (7th Cir. 1998) (citations omitted).

• “The district court entered an order dismissing the notice of appeal. This it was without 

jurisdiction to do.” Camby v. Davis, 718 F.2d 198, 200 (4th Cir. 1983)

Although this is a slightly different circumstance, I find subdivision 23(e)(5)(B)(ii)’s 

requirement of district court involvement despite the pendency of an appeal to be both confusing

and contradictory to traditional notions of appellate jurisdiction.

4

Because of the procedural morass that subdivisions 23(e)(5)(B)(ii) and 23(e)(5)(C) could 

cause, I think that at a minimum that Committee should consider clarifying the proposed rules in 

order to explain exactly how these new provisions impact the traditional jurisdiction of courts of 

 4 It bears noting that the Advisory Committee on Appellate Rules has recently issued proposed rule 

changes, and none of them touch on the circumstances at issue here.
October 24, 2016

Page 7

appeals and district courts. However, since, as discussed above, I also believe that these 

proposed subdivisions are unlikely to either (1) dissuade the filing of bad faith objections or (2) 

dissuade bad faith objectors from seeking payment in exchange for withdrawing or otherwise 

foregoing an objection or appeal of settlement approval, I believe the Committee should consider 

rescinding proposed subdivisions 23(e)(5)(B) and 23(e)(5)(C) in their entirety and. Instead, I 

propose replacing them with a subdivision that might more effectively help to combat bad faith 

objections. The Committee should adopt language equipping parties to request that district 

courts make a finding that an objections has been brought in bad faith, such as the following, 

which I propose be included somewhere within Rule 23(e):

Request for Finding That Objection Was Filed in Bad Faith. At the request of 

any party to consider whether an objection has been filed in bad faith, the court 

may consider all surrounding facts and circumstances—including whether the 

objector complied with Rule 23(e)(5)(A), whether the objector complied with all 

noticed requirements for the submission of an objection, whether grounds for the 

objection have legal support, conduct by the objector or objector’s counsel in the 

instant case, and previous findings that the objector or objector’s counsel has 

pursued an objection in bad faith—and, if it deems it appropriate, make a finding

that an objection was brought in bad faith.

A finding, where appropriate, that a professional objector acted in “bad faith” would be helpful 

at the appellate level, because it would increase the likelihood that appellate courts could 

entertain a motion summary affirmance (or summary dismissal, or similar summary action). 

Such motions allow for frivolous appeals to be disposed at a procedurally early stage, which 

would result in class members being compensated in a matter of months rather than having to 

wait for a years-long appeal to be resolved. My firm successfully won summary affirmance 

against a professional objector in the Ninth Circuit in Dennings v. Clearwire Corp. (No. 13-

35038), which resolved a case efficiently and without having to consider paying off a 

professional objector. If the Committee enacted procedures that allowed for “bad faith 

objection” findings at the district court level, this could promote efficiency at the appellate level 

and allow class plaintiffs to not fall victim to the extortionate tactics of professional objectors, 

which seems to be the Committee’s desire.

Thank you very much for your consideration, and I look forward to appearing before the 

Advisory Committee next week.

Sincerely,

Hassan Zavareei