Seyfarth Synopsis: Seyfarth Shaw submitted comments and oral testimony to the Federal Advisory Committee on Civil Rules regarding needed reform and guidance to Rule 23, the rule that governs class action litigation in federal courts. While the proposed amendments address important issues, our workplace class action group proposed four additional areas for consideration that are not currently addressed by the pending proposed rule amendments.

Rule 23 Changes

As some employers may be aware, changes are coming to Rule 23 class action requirements. What exactly those changes will be, and when those changes will go into effect, however, are still to be determined.

The Advisory Committee on Civil Rules (the “Committee”) for the Federal Courts, which is responsible for recommending amendments to Rule 23, has been contemplating possible changes for years now — we previously blogged about the potential changes here. The Committee recently proposed specific rule changes that address important issues such as settlement class procedures and electronic notice to class members.

Various parties and groups submitted written comments to the Committee, including academics, worker and consumer advocacy groups, and corporate groups.

Seyfarth’s written submission is here. Seyfarth’s comments were prepared by the team of Thomas Ahlering, Kate Birenbaum, Matthew Gagnon, Gerald L. Maatman, Jr., Hilary Massey, Jennifer Riley, Tiffany Tran, Julie Yap, and Kevin Young.

Seyfarth’s submission identified four additional areas that remain in need of reform and guidance to address the practical difficulties regularly encountered in class action litigation

Testimony To The Committee

The Committee also selected 11 individuals to testify before the Committee.

The Committee selected Gerald L. Maatman, Jr. (“Jerry”) co-chair of our class action defense group, to testify. Jerry gave testimony to the Committee on February 16. Seyfath was the only law firm representing employers to be selected to testify.

Other individuals who testified included Theodore Frank of the Competitive Enterprise Institute; Eric Issacson, of the Issacson Law Office; Peter Martin of State Farm Mutual Insurance Co.; Patrick Paul of Snell & Wilmer; Timothy Pratt of Boston Scientific Corp.; Michael Pennington of Bradley, Arant, Boult & Cummings; Professor Judith Resnik of Yale Law School; Richard Simmons of Analytics LLC; Ariana Tadler of Milberg LLP; and Steven Weisbrot of Angeion Group.

Consistent with Seyfarth’s written submission, Jerry testified that class action litigation would be aided by an express requirement that a party seeking class certification must submit a viable trial plan. This change makes sense from both a legal and practical perspective as it would help prevent unmanageable class actions from proceeding past the class certification stage to trial. Indeed, this amendment conforms to the California Supreme Court’s decision in Duran v. U.S. Bank National Association, 59 Cal.4th 1 (2014), which requires adequately developed trial plans at the class certification stage.

Jerry also advocated for a revision to Rule 23(f) to allow for an immediate right to appeal orders to certify, modify, or decertify a class. Jerry testified that an amendment to the current approach would ensure meaningful review of and guidance regarding class certification.

In addition, Jerry suggested that the Committee revisit the standards relating to class certification in the context of a settlement. This would amend Rule 23 to acknowledge and address the unique and practical considerations and impacts of certification in the two very different contexts of actual litigation versus settlement.

Finally, Jerry recommended that the Committee provide additional, specific guidance regarding Rule 26’s “proportionality” requirement and its application to pre-certification class discovery. Jerry shared Seyfarth’s collective experience in representing employers who face requests for discovery on class lists, contact information, and other information about potential class members. Rule 26 requires that discovery be “proportional to the needs of the case,” which directly affects pre-certification class discovery. Nonetheless, federal courts have taken varying approaches to resolving these discovery disputes. Jerry advocated the position that the Committee’s further guidance is needed to ensure a standard approach that fully considers the burden class discovery places on employers.

Implications For Employers

The Rule 23 amendments will have a significant impact on class action litigation and far-reaching consequences for employers.

Stay tuned for more updates regarding the proposed Rule 23 amendments as we continue to monitor developments on this important issue.