SB 1218 - This act amends Supreme Court Rule 52.08 relating to class actions. This act makes technical changes to mirror the Federal Rules of Civil Procedure. Further, the act provides that an order certifying a class action shall define the class and the class claims, issues, or defenses and shall appoint class counsel. An order that grants or denies class certification may be altered or amended before final judgment. Additionally, the order shall contain specific findings and conclusions to support the decision.
Notices to class members for certain class actions may be by United States mail, electronic means, or other appropriate means. Additionally, this act states that the notice shall clearly and concisely state in plain, easily understood language:
(1) The nature of the action;
(2) The definition of the class certified;
(3) The class claims, issues, and defenses;
(4) That a class member may enter an appearance through an attorney if the member so desires;
(5) That the court will exclude from the class any member who requests exclusion;
(6) The time and manner for requesting exclusion; and
(7) The binding effect of a class judgment on members.
Currently, the rule provides that a class action shall not be dismissed or compromised without the approval of the court and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs. This act repeals this provision and provides that the claims, issues, or defenses of a certified class, or a proposed class, may be settled, voluntary dismissed, or compromised only with the court's approval. Furthermore, this act states that the parties shall provide the court with information sufficient to enable it to determine whether to give notice of the proposal to the class and that the court shall direct notice in a reasonable manner to all class members who would be bound by the proposal if giving notice is justified by the parties' showing that the court will likely be able to approve the proposal and certify the class for purposes of judgment on the proposal.
If the proposal would bind class members, the court may approve it only after a hearing and only on finding that it is fair, reasonable, and adequate after considering whether:
(1) The class representatives and class counsel have adequately represented the class;
(2) The proposal was negotiated at arm's length;
(3) The relief provided for the class is adequate, taking into account the costs, risks, and delay of trial and appeal, the effectiveness of any proposed method of distributing relief to the class, the terms of any proposed award of attorney's fees, and any agreement required to be identified by the rule; and
(4) The proposal treats class members equitably relative to each other.
Additionally, this act requires the parties seeking approval to file a statement identifying any agreement made in connection with the proposal. If the class action was previously certified, the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so. Any class member may object to the proposal if it requires court approval and such objection shall state whether it applies only to the objector, to a specific subset of the class, or to the entire class, and specifically the grounds for the objection. Unless approved by the court after a hearing, no payment or other consideration shall be provided in connection with forgoing or withdrawing an objection, or forgoing, dismissing, or abandoning an appeal from a judgment approving the proposal.
Currently, an appellate court may permit an appeal from an order of a circuit court granting or denying class action certification if the petition is timely filed. This act modifies the provision to provide that an appellate court shall permit an appeal from an order of a circuit court granting or denying certain class action certification.
Unless a statute provides otherwise, this act provides that a court certifying a class shall appoint class counsel and in appointing such counsel, the court shall consider:
(1) The work that the counsel has done in identifying or investigating potential claims in the action;
(2) The counsel's experience in handling class actions, other complex litigation, and the types of claims asserted in the action;
(3) The counsel's knowledge of the applicable law; and
(4) The resources that counsel will commit to representing the class.
Additionally, the court may consider any other matter pertinent to counsel's ability to fairly and adequately represent the interests of the class and may order potential class counsel to provide information on any subject pertinent to the appointment and to propose terms for attorney's fees and nontaxable costs. Furthermore, the court may include in the appointing order provisions about the award of attorney's fees or nontaxable costs and may make any further orders in connection with the appointment.
If more than one adequate applicant seeks appointment as class counsel, the court shall appoint the applicant best able to represent the interests of the class. Additionally, this act provides that the court may designate interim counsel to act on behalf of a putative class before determining whether to certify the action as a class action. This act requires that class counsel fairly and adequately represent the interests of the class.
In a certified class action, the court may award reasonable attorney's fees and nontaxable costs that are authorized by law or by the parties' agreement. This act provides the following procedures for an award of fees and costs:
(1) A claim for an award shall be made by motion at a time the court sets and notice of the motion shall be served on all parties and, for motions by class counsel, directed to class members in a reasonable manner;
(2) A class member, or a party from whom payment is sought, may object to the motion;
(3) The court may hold a hearing and shall find the facts and state its legal conclusions; and
(4) The court may refer issues related to the amount of the award to a special master.
Finally, this act provides that the party seeking class certification has the burden of proving every requirement of this rule by a preponderance of the evidence. The court shall not err in favor of certification, but shall be satisfied, based on a rigorous analysis, that the requirements of this rule have been met. This rule shall not be satisfied in whole or in part based on allegations in the petition.
This act is similar to HB 2836 (2022).
KATIE O'BRIEN