The Fifth Circuit Court of Appeals has reversed a class certification ruling because the putative class members, which are governmental entities, may not join the class without undertaking certain steps to obtain representation by private counsel and thus, in effect, opt into the class. Ackal v. Centennial Beauregard Cellular L.L.C., No. 12-30084 (5th Cir., decided October 26, 2012). The issue arose in a case alleging that cellular phone companies overcharge their customers by rounding up partial-minute telephone calls to the next full minute. Filed in 2001 in state court, the case made its way to federal court and now involves a putative class of governmental entities that contracted with the defendants for cellular telephone service.

The court first discussed case law and advisory committee notes to Federal Rule of Civil Procedure 23 to support its holding that Rule 23 does not authorize an “opt in” class. Then the court addressed the limited circumstances under which most of the governmental entities certified as class members by the lower court are able to be represented by private counsel “as prescribed by this class action.” Louisiana Revised Statute section 42:263 requires local governing bodies to demonstrate “real necessity” for private representation as reflected “by a resolution thereof stating fully the reasons for the action and the compensation to be paid.” That resolution then requires the attorney general’s approval and publication in an official journal.

The plaintiffs argued that these requirements were simply procedural and could be addressed after class certification. The court disagreed. The law does not, according to the court, suggest “that private representation of entities subject to the statute may be undertaken while the entities pursue satisfaction of the statute’s requirements.” In fact, the court observed, “the default position of each class member is that it is not in the class until it successfully completes a series of actions required by law for it to participate in the suit. Requiring such affirmative acts from putative class members before they may actually participate in a Rule 23 action is contrary to the express provisions of Rule 23(c)(2)(B).”