Opinion ID: 2521456
Heading Depth: 2
Heading Rank: 1

Heading: Claim Preclusion, Due Process, and Class Actions

Text: The district court applied the traditional doctrine of claim preclusion to determine that the Petitioners' claims for damages were barred. However, the inquiry to determine the preclusive effect of class actions is broader than that prescribed by the traditional claim preclusion doctrine. See Phillips Petroleum v. Shutts, 472 U.S. 797, 811-12, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985); In re Gen. Am. Life Ins. Co. Sales Practices Litig., 357 F.3d 800, 804 (8th Cir.2004); see also Hiser v. Franklin, 94 F.3d 1287, 1293 (9th Cir.1996) (doctrine of claim preclusion must be applied carefully to class actions). Under the conventional doctrine, claim preclusion bars claims that could have been brought, as well as those that actually were brought, as part of the prior litigation. Cruz v. Benine, 984 P.2d 1173, 1176 (Colo.1999). Yet with respect to class actions, due process, as well as the requirements of claim preclusion, must be satisfied before a class action can bind class members to a class judgment. Gen. Am. Life Ins., 357 F.3d at 804; see also Hiser, 94 F.3d at 1293. Courts have determined that before class members can be bound to class judgments, due process requires that class members must be adequately represented and, in some circumstances, given notice that their individual claims may be lost. Richards v. Jefferson County, Ala., 517 U.S. 793, 799, 116 S.Ct. 1761, 135 L.Ed.2d 76 (1996); Shutts, 472 U.S. at 811-12, 105 S.Ct. 2965; see also Mullane v. Cent. Hanover Bank Trust Co., 339 U.S. 306, 314-15, 70 S.Ct. 652, 94 L.Ed. 865 (1950) (notice requirement); Hansberry v. Lee, 311 U.S. 32, 42-43, 61 S.Ct. 115, 85 L.Ed. 22 (1940) (adequate representation requirement). However, due process requirements vary depending on the type of relief sought. See Colt Indus. Shareholder Litig. v. Colt Indus. Inc., 77 N.Y.2d 185, 565 N.Y.S.2d 755, 566 N.E.2d 1160, 1165-67 (1991). Courts have explained that in class actions for injunctive relief, due process may only require adequate representation because of the nature of the relief requested. Id. at 1166; see also Richards, 517 U.S. at 801, 116 S.Ct. 1761. In contrast, when monetary damages are sought on behalf of the class, due process requires both adequate representation and notice to class members because of the property right at stake. Shutts, 472 U.S. at 811-12, 105 S.Ct. 2965. Courts have generally held that in class actions for injunctive relief, due process is satisfied when class members are adequately represented. [7] 5 Moore's Federal Practice § 23.43[6][a] (Matthew Bender 3d ed.2004); see, e.g., Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 165 (2d Cir.2001); Johnson v. Gen. Motors Corp., 598 F.2d 432, 437 (5th Cir.1979); see also Richards, 517 U.S. at 801, 116 S.Ct. 1761 (acknowledging that precedent might leave open the possibility that adequate representation might satisfy due process if class members' interests were sufficiently protected); but see Shutts, 472 U.S. at 811-12, 105 S.Ct. 2965 (describing importance of notice to ensure due process). Courts have reasoned that because of the nature of injunctive relief, the class members' interests are sufficiently protected through adequate representation alone. First, courts have explained that when injunctive relief is sought to remedy a group harm, a presumption of cohesion and unity exists between class members and their representatives so that adequate representation will protect all class members' interests. Robinson, 267 F.3d at 165. Additionally, courts have reasoned that because classes seeking injunctive relief attempt to bind defendants to a certain course of conduct, trial courts carefully fashion remedies that adequately account for the interests of both the class and the defendants. Colt, 565 N.Y.S.2d 755, 566 N.E.2d at 1166. For these reasons, courts have held that adequate representation will satisfy due process in class actions for injunctive relief. In contrast, minimal due process requires both notice and adequate representation in class claims for monetary damages. Shutts, 472 U.S. at 811-12, 105 S.Ct. 2965. In class actions for damages, the presumption of class homogeneity and cohesion falters because the degree of compensable injury often varies among class members. Robinson, 267 F.3d at 165. Additionally, absent class members must be free to independently pursue their own claims if they determine that participation in the suit would not protect their individual interests. Id. at 166. Therefore, courts have required that class members be given notice reasonably calculated ... to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Shutts, 472 U.S. at 812, 105 S.Ct. 2965 (quoting Mullane, 339 U.S. at 314-15, 70 S.Ct. 652). Moreover, the notice must allow the plaintiff to request exclusion from the litigation. Id. (citing the opt out requirement). In this case, the district court ended its inquiry to determine the preclusive effect of the Kilbourne litigation once it concluded that the elements of claim preclusion had been met. It did not further ask whether due process had been satisfied. We next explain that because Rule 23 embodies due process requirements, the district court can determine the preclusive effect of the Kilbourne action by looking to the provision of C.R.C.P. 23 under which the class was certified.