Class Actions in the Federal Circuit

The United States Court of Appeals for the Federal Circuit is headquartered in Washington, D.C. The court was created by Congress with passage of the Federal Courts Improvement Act of 1982, which merged the United States Court of Customs and Patent Appeals and the appellate division of the United States Court of Claims, making the judges of the former courts into circuit judges. The court sits primarily in Washington, D.C. but also sits from time to time in locations other than Washington, and its judges can and do sit by designation on the bench of other courts of appeals and federal district courts. The Federal Circuit may have a total of 12 active circuit judges sitting at any given time. As with other Article III federal judges, the Federal Circuit Judges are nominated by the President, must be confirmed by the Senate, and serve lifetime appointments subject to the standard of “good behavior.” The Federal Circuit is unique among the courts of appeals as it is the only court that has its jurisdiction based wholly upon subject matter rather than geographic location. The Federal Circuit has jurisdiction generally as specified in 28 U.S.C. § 1295. Subject to its jurisdictional grant, the Federal Circuit Court hears certain appeals from all of the United States District Courts, appeals from certain administrative agencies, and appeals arising under certain statutes. The court hears appeals from the following United States tribunals: The Court of Federal Claims; the Court of Appeals for Veterans Claims; the Trademark Trial and Appeal Board; the Patent Trial and Appeal Board; the Boards of Contract Appeals for the Armed Services, Civilians and the Postal Service; the Merit Systems Protection Board; the International Trade Commission; and the Court of International Trade. In addition, the Federal Circuit Court hears appeals from the United States District Courts on matters related to patents. The Federal Circuit has added to class action precedent in several important ways. First, many class action appeals in the Federal Circuit address the sustainability of a class action under Rule 23 of the Rules for the Court of Federal Claims (RCFC) which mirrors Rule 23 of the Federal Rules of Civil Procedure (FRCP) but also differs in several significant ways, most significantly in the lack of any mandatory class action options and the absence of an opt-out class under the RCFC Rule 23. RCFC Rule 23 provides: (a) Prerequisites. One or more members of a class may sue 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. (b) Class Actions Maintainable. A class action may be maintained if RCFC 23(a) is satisfied and if ... (2) the United States has acted or refused to act on grounds generally applicable to the class; and (3) the court finds that the 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 include: (A) the class members' interests in individually controlling the prosecution of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by class members; ... and (D) the likely difficulties in managing a class action. The United States Court of Federal Claim and the Federal Circuit have held that RCFC Rule 23 differs from FRCP Rule 23 in two important respects: “(1) [RCFC 23] has been modified to reflect the court's jurisdiction, in particular, the narrow circumstances in which the court will afford declaratory or injunctive relief, and (2) it allows only ‘opt-in,’ but not ‘opt-out,’ class actions.” Rasmuson v. United States, 91 Fed. Cl. 204, 210 (2010) (quoting King v. United States, 84 Fed. Cl. 120, 122 n.2 (2008)). The criteria set forth in RCFC Rule 23(a) and (b) can be grouped into five categories: (i) numerosity—a class so large that joinder is impracticable; (ii) commonality—in terms of the presence of common questions of law or fact, the predominance of those questions, and the treatment received by the class members at the hands of the United States; (iii) typicality—that the named parties' claims are typical of the class; (iv) adequacy—relating to fair representation; and (v) superiority—that a class action is the fairest and most efficient way to resolve a given set of controversies. The predominance inquiry of FRCP Rule 23(b)(3) has been incorporated into the commonality inquiry under RCFC Rule 23(a) even though stated as a separate requirement under RCFC Rule 23(b). The same is true regarding the superiority requirement which, although included in RCFC Rule 23(b), has been included in the five element analysis employed by the Federal Court of Claim and Federal Circuit when analyzing class actions filed under RCFC Rule 23. RCFC Rule 23 borrows, nearly verbatim, the FRCP Rule 23 language but the criteria from FRCP Rule 23 have been modified to reflect the Court of Claims’ focus on awarding damages rather than issuing injunctive or declaratory relief. Quinault Allottee Ass’n & Individual Allottees v. United States, 453 F.2d 1272 (Ct. Cl. 1972). In reviewing class action precedent from the Federal Circuit, this Chapter will address primarily precedent involving RCFC Rule 23. The Federal Circuit does periodically review class action cases involving patent litigation and other topics that flow from the United States District Courts to the Federal Circuit based on the subject matter of the appeal. However, the bulk of the class action case law from the Federal Circuit involves cases filed in the Federal Court of Claims thus RCFC Rule 23 plays a prominent role in the Federal Circuit’s class action jurisprudence. Also, the subject matters involved in Federal Circuit class action case review are limited, focused primarily on wage and hour cases from the VA Board of Appeals, Tucker Act cases involving takings of real property under the “Rails to Trails” Act and other federal statutes involving the taking of real and personal property, and cases involving the law related to Indian tribes. The following discussion describes key principles practitioners can glean from class action decisions of the Federal Circuit and its trial level tribunals.