The Device: A history and a possible future for class actions - Part 1: The early years
In this series, we will explore the history and motivations behind the class action in the United States. In Part I, we trace the class action’s origins up to the first iteration of Rule 23, and discuss Rule 23’s purpose and the challenges of early class action litigation.
Introduction
Two hundred years ago, William West promised some land to his creditors as payments against any debts he still owed after his death; West also left his estate to his heirs.[1] West’s heirs filed suit against the creditor Randall, arguing that they had a superior claim to the West estate; Randall pointed out that not all of West’s heirs were made parties to the suit, and so the case should be dismissed. Justice Story reasoned that it was simpler and more efficient to permit a representative to advocate for the whole. The case did not have years of discovery, no expert testimony, and the opinion was a few paragraphs long. That case is West v. Randall, the very first American class action, created for the purpose of simplifying and economizing litigation for the judge and for the parties.
More recently in 2011, a class of 1.6 million employees alleging a pattern of discrimination were denied class certification by the United States Supreme Court. Why? Their more than one hundred affidavits alleging a common form of discrimination were deemed insufficient to establish that everyone in the class alleged the same harm.[2] Two years later, thousands of cable subscribers alleging an antitrust violation were denied class certification too. Why? Their in-depth expert testimony and report did not specifically attribute its conclusions to the antitrust theory on which certification was initially granted.[3]
And in 2016, thousands of plant workers suing their employer for not paying them for the time it took to wear necessary protective equipment win class certification. Why? Armed with representative evidence, expert testimony, and a defendant that did not challenge either, the Supreme Court affirmed certification and acknowledged that sometimes representative evidence may suffice.[4]
These are the premises of Dukes, Behrend, and Tyson Foods. Justice Story, advocating for simplicity in West, would scarcely recognize the complex analysis in Dukes. But both are essentially the same procedure. Why then are modern class actions so complicated? Have class actions strayed from their original intent and purpose?
These questions are not merely academic exercises. Class actions have increased in number and complexity. More than 10,000 class action suits were filed in 2023, and more than 2,400 were filed as of May 2024.[5] In 2023, 451 motions for class certification were filed.[6] These filings come with expenses—in 2020, class action spending was estimated to be $2.9 billion, twice as much as all other litigation spending.
Class actions are also dauntingly complicated, requiring years of discovery, dismissal briefing, expert reports, all solely to achieve certification.[7] Justice Ginsburg remarked that class actions were becoming “ever more adventuresome.”[8] A journalist once questioned whether class actions are “too sprawling to deliver old-fashioned justice.”[9]
In the hopes that looking back may provide insight on how best to move forward, we start answering these questions by examining class action history.
A tradition that predates the nation’s founding
Class actions may seem distinctly American, but their roots are not. Scholars have identified royal English writs from as early as the year 1125, authorizing people with common interests to engage in ‘group litigation.’[10]
The goal, even back then, was to create a procedure that could make litigation simpler and faster for large groups of people who essentially had the same grievance. One early example of a judicially created class occurred in 1309: England granted Sir Otes Grandison control of the recently conquered Channel Islands, and demanded that island residents pay their taxes in French, not local, currency. Overnight, residents’ bills tripled. One resident, Jordan Discart, sued on behalf of himself and all similarly situated. The court was unsure what to make of this ‘class,’ but recognized the alternative was an avalanche of individual tax suits. To avoid that, the court decided that “all that are in like case with [Discart] are bidden to appear…either in person or by someone representing them all.”[11]
Discart first recognized what we now take for granted—that large groups should be permitted to collectively litigate common claims, as this is often the most simple and efficient approach. By the 17th century, England formalized group litigation and set up the Court of Chancery to handle such cases in equity.[12] The court did not use formal rules of procedure, but issued proto-certification orders called “Bills of Peace.”[13]
The younger years of the American class action
In 1820, despite being unable to “conceive of a modern function or a coherent theory for representative litigation,”[14] Justice Story nevertheless permitted a plaintiff to sue on behalf of a class who had a common interest in the estate of a deceased general, because it was efficient and simpler to do so.[15] West opened the gates for class actions in American courts. The idea that groups with common interests or claims can proceed together with a single representative quickly took hold, as courts sought to economize on time and resources. By the early 20th century, nearly every type of case could, and did, become a class action.[16] Even when injuries might be individualized, one court reasoned that “as the acts of the defendant … were a common injury to all the complainants, there was such a common interest…as to authorize them to join in one bill, even though the injury which each sustained [was separate and distinct.].”[17]
A class action could only achieve the simplicity for which it was designed if all class members could be accounted for by the class ruling, and if defendants could be assured that all claims against them could be resolved in one litigation. This was the thinking that spurred group litigation in England and Justice Story’s importation of class actions into American jurisprudence. But in 1842, when the Supreme Court promulgated the first rules of civil procedure—the Federal Equity Rules—Equity Rule 48 provided that class rulings would not be binding on absent class members.[18]
In 1912, another opportunity arose to codify class actions in a manner that would properly advance the dual goals of simplicity and efficiency. When the Equity Rules were overhauled, Equity Rule 48 became Equity Rule 38, and read:
“When the question is one of common or general interest to many persons constituting a class so numerous as to make it impracticable to bring them all before the court, one or more may sue or defend for the whole.”[19]
While Equity Rule 38 did not exempt absent class members from class rulings, it did not bind them either. In fact, the rule was silent on the issue altogether. Rather than bring clarity, Equity Rule 38 threw class action litigation into disarray.
Even the Supreme Court issued inconsistent rulings as to absent class members. In 1921, officers of an Indiana association sought to reorganize to prevent insolvency—members outside Indiana filed a class action on behalf of all members to enjoin the officers from accessing society funds.[20] The court ruled in their favor, finding a “common and indivisible interest.” Unhappy with the decision, society members within Indiana filed an identical suit, arguing that they were not bound by the prior class ruling. The Supreme Court ruled that the prior ruling did in fact bind the entire class, regardless of where they resided.[21] But just 17 years later in Brusselback, the Supreme Court held that a group of Ohio shareholders were not bound by the result of an Illinois shareholder class action.[22]
By the early 20th century in the United States, the class action device was a necessary tool of simplification: class actions were not simply matters of “indulgence,” but rather of “convenience,” designed to streamline group litigation even if individuals could sue by themselves.[23] Courts found class actions preferable to having “a hundred [claimants] separately ask in separate suits to make cease what as a cause is common to all.”[24]
But if the purpose of a class action was to avoid hundreds of individual suits over the same claim, and to permit resolution of an issue in one case, then Equity Rule 38’s failure to account for absent class members runs counter to that purpose. To make matters worse, federal civil procedure rules were still confined to equitable cases, and damages actions that could be simplified via class representation were left out. Without reform, courts remained “slow to recognize” a class action in common law even though they accepted class actions in equity.[25]
In 1934, federal procedure again needed an overhaul. To empower scholars and judges to do just that, Congress passed the Rules Enabling Act authorizing the Supreme Court to draft rules of procedure for all cases.[26]
Rule 23’s search for simplicity
Under the Rules Enabling Act, the Supreme Court convened an Advisory Committee to draft federal rules. The Committee sought to balance competing interests in protecting due process rights and streamlining civil procedure. Rules were intended to be “informative” [27]; thus while “brevity and simplicity” were the “most vital necessities,” the Committee understood that the rules “have got to cover the ground so that [lawyers] only have to look in one book to find out what the procedural law is.”[28]
The Advisory Committee grappled once again with how far the federal rules could go towards simplifying litigation, including class actions. Vocal advocates such as Charles E. Clark urged a more tentative approach, reminding that these were “rules of procedure only, not rules which would cause changes in substantive rights.”[29] The Committee decided that the Federal Rules should generally be “quite conservative,” with the option to “go just as far as we can, in order to liberalize the procedure and get a result that will do quick and accurate justice.”[30]
The Committee applied that principle to merge equity and damages claims under one body of federal procedure, greatly simplifying litigation across the board. But for class actions, the Committee did not go far enough.
Advisory Committee minutes reveal that Members were aware of the need for a simple and efficient class action procedure. One Member was a former judge who had presided over a case involving 400 plaintiffs with property damage claims after a fire in Minnesota—adjudicating these claims one-by-one would have taken “more than 900 months to complete,” even though the facts, claims, and defendant were all common. The Committee Member explained that he “had to bring all the litigants together as a class” or “you [would] have stricken down the system of courts.”[31]
But the Advisory Committee still left Equity Rule 38’s key question - whether to bind absent class members - unanswered, considering it “beyond their functions” to decide. The Committee’s draft instead codified what courts had already been doing for years: evaluating class actions based on three categories.[32] The resulting Rule 23, read in part:
A. Representation. If persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued when the character of the right sought to be enforced for or against the class:
-
- joint, or common, or secondary in the sense that an owner of a primary right refuses to enforce that right and a member of the class thereby becomes entitled to enforce it; or
- several, and the object of the action is the adjudication of claims which do or may affect specific property involved in the action; or
- several, and there is a common question of law or fact affecting the several rights and a common relief is sought.[33]
These categories reflected longstanding thinking at the time that classes should be defined with respect to the relationships among class members. Professor James Moore labeled the categories in the 1938 Rule 23 as “true,” “hybrid,” or “spurious” classes respectively.[34] A 23(a)(1) true class was one where joinder was mandatory but impractical. A hybrid class, under 23(a)(2), was one where class members had separate rights but all of their claims were tied to a particular property or fund. Finally, the spurious class under 23(a)(3), was in Moore’s opinion a fiction created to join those with no prior relationships but a common interest or claim.
Courts had ample precedent supporting certification of true and hybrid classes in equity, but there was little precedent for a spurious class, which appeared to cover damages cases.[35] Likewise courts were increasingly comfortable binding absent class members in true and hybrid class actions, but not in spurious class actions.[36]
Rule 23 achieved some clarity but exacerbated two areas of confusion. First, the persistent silence on absent class members in spurious class actions led to a litigation oddity called one-way intervention. Absent class members had to “intervene” to either sue on the same claim if they did not like the result of the class ruling, or to avail of a ruling’s benefit if it was favorable.[37] So even if a class action purported to represent all those aggrieved, defendants could not expect true closure from that suit, nor could an absent class member take advantage of a favorable ruling without intervention.
The confusion led to judicial frustration. One court assumed in its ruling that absent class members were bound by a judgment even though the court was adjudicating a ‘spurious’ class action under Rule 23(a)(3).[38] A different court did the exact opposite.[39] Another court expressed skepticism that spurious classes should receive class treatment at all.[40] Among state courts, some accepted Rule 23’s categories of classes, while other courts rejected spurious classes altogether.[41]
Second, courts struggled to fit a class action into the Rule 23 categories.[42] In Matlaw Corp., the Seventh Circuit grappled with how to categorize the class before it, when the category itself was dispositive of subject matter jurisdiction. [43] And in one particularly outlandish example: a district court found a class to be “true”; on appeal, the Third Circuit reversed, calling the action “spurious”; on certiorari, the Supreme Court reversed and remanded without opining on which category of Rule 23(a) applied.[44] On remand, the district court this time categorized the action as “hybrid.” When the case was appealed for a second time, the Third Circuit concluded that “names are not important”[45]!
Judges and scholars began to realize that while Rule 23 did make some gains in simplifying class actions—such as bringing damages actions into the fold—it missed an opportunity to simplify key areas of confusion. A frustrated judge opined that Rule 23’s “terminology shocks the aesthetic sense and the succession of adjectives before the noun shows the poverty of imagination in choice of terms characteristic of the legal profession.”[46] Professor Chafee suggested that “Rule 23(a) would be greatly improved, in my opinion, if all the provisions establishing the tripartite division of class suits were dropped out.”[47]
The Supreme Court understood that class action procedure would need to address the question of what happens to absent class members in spurious classes. In Hansberry, a class of plaintiffs sought to prevent the defendants from violating a covenant restricting the renting of certain land in Chicago.[48] The Supreme Court held that a prior Illinois state court ruling in favor of a similar class of plaintiffs was not binding on this class, because the Illinois class representatives did not adequately represent the interests at issue in Hansberry. While the case was decided on grounds of adequacy, the Supreme Court suggested that procedures could be developed to bind absent class members if that procedure also “insure[s] the protection of the interests of absent parties.”[49] Courts took heed of that suggestion in subsequent cases.[50]
Without addressing the outstanding questions regarding absent class members and the three categories of classes, Rule 23 fell short of its promise of simplicity and efficiency.
Legal commentators recognized that, with all respect to Professor Charles E. Clark, the Federal Rules were perhaps not simply rules of procedure. Professor Harkins posited: “Should the objective of rulemaking be the achievement of a neutral set of guides for the conduct of litigation or should the class action device be considered an instrument of public policy? …Should efficiency (economy) be considered as an independent objective?”[51]
After 1938, many scholars agreed that Rule 23 is an instrument of public policy, and efficiency is indeed a worthy independent objective. They advocated that Rule 23 be modified to eliminate its three class categories and that all absent class members be bound to class rulings.[52] In their opinion, binding absent class members would not buy “judicial efficiency at too high a price.”[53] One group of authors in 1948 explicitly called for Rule 23 to be re-drafted to prioritize simplicity and efficiency: “[a] redrafting of Rule 23, eliminating any reference to distinctions between types of class actions … would be of immeasurable help.”[54]
Conclusion
Class action history shows that the primary goal of the device is to simplify the work of litigants and judges. Class action rules were drafted with an intent to advance those goals, but early on they fell short in key areas. This history also reminds us that achieving simplicity can be very complicated, and efficiency can be very labor-intensive. Whether Rule 23 came closer to realizing its promise, and whether application of Rule 23 has held true to that promise, are questions for another day.
*Kartik Sameer Madiraju is an Associate in New York. Kelly Oduro assisted and is a J.D. Candidate at Georgetown University Law Center.
Footnotes
[1] West v. Randall, 29 F. Cas. 718, 721 (C.C.D.R.I. 1820) (Story, J.).
[2] Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011).
[3] Comcast Corp. v. Behrend, 569 U.S. 27 (2013).
[4] Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442 (2016).
[5] Jennifer Roman and Raija Horstman, Lessons on Challenging Class Plaintiffs’ Expert Testimony, Law360 (May 16, 2024), available at https://www.crowell.com/a/web/bgKHA56HSxt3aGJkm11VgJ/lessons-on-challenging-class-plaintiffs-expert-testimony.pdf.
[6] Gerald L. Maatman, Jr. and Jennifer A. Riley, DMCAR Trend #2 – The Likelihood of Class Certification in2 023 Remained Strong, Class Action Defense Blog (Jan. 16, 2024), available at DMCAR Trend #3 – The Likelihood Of Class Certification In 2023 Remained Strong – Class Action Defense (duanemorris.com)
[7] See supra note 5; Susan L. Saltzstein and Julie E. Cohen, Litigating Expert Testimony at the Class Certification Stage, Practical Law (October/November 2019), available at https://www.skadden.com/-/media/files/publications/2019/10/litigatingexperttestimonyattheclasscertificationst.pdf
[8] See Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (internal quotations omitted).
[9] Adam Liptak, When a Lawsuit Is Too Big, N.Y. Times (Apr. 2, 2011).
[10] Stephen C. Yeazell, “The Past and Future of Defendant and Settlement Classes in Collective Litigation,” 39 Ariz. L. Rev., 687, 690 (1997). Yeazell identified a case from the year 1199 in which, somewhat surprisingly, a group of defendants was grouped together in a suit by a single rector. Master Martin Rector of Barkway v. Parishioners of Nuthampstead, 95 Seld. Society 8 (No. 210) (1981, decision rendered ~1199).
[11] Discart v. Otes, 30 Seld. Society 137 (No. 158, P.C. 1309) (1914).
[12] Brown v. Vermuden, 1 Ch. Cas. 272, 22 Eng. Rep. 796 (1676). See How v. Tenants of Bromsgrove, 1 Vern. 22, 23 Eng. Rep. 277 (Ch. 1681).
[13] See Yeazell, supra note 10.
[14] See Class Actions, Charleston School of Law Library, available at https://charlestonlaw.libguides.com/c.php?g+1255231&p=9277567.
[15] West v. Randall, 29 F. Cas. 718, 723 (C.C.R.I. 1820).
[16] Grant v. Schmidt, 22 Minn. 1 (1875); Cloyes v. Middlebury Electric Co., 80 Vt. 109 (1907); Hawarden v. Youghiogheny & Leigh Coal Co., 111 Wis. 545 (1901) (permitting class suit by plaintiff against defendants’ alleged conspiracy to prevent plaintiffs from competing in coal dealing business, because “question as to the legality of this conspiracy is certainly one of common or general interest to all [plaintiffs].”); Hodges v. Nalty, 104 Wis. 464 (1899) (finding class of 75 subscribers were “united in interest” with respect to recovery of fees).
[17] Reid v. Gifford, Hopk. Ch. 416, 419-20 (N.Y. Chan. 1825).
[18] Developments in the Law – Multiparty Litigation in the Federal Courts, 71 Harv. L. Rev. 877, 928 (1958).
[19] See James Love Hopkins, The New Federal Equity Rules 231 (1930).
[20] Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356 (1921).
[21] Id. at 363-365.
[22] Christopher v. Brusselback, 302 U.S. 500, 504 (1938).
[23] William Blume, The “Common Questions” Principle in the Code Provision for Representative Suits, 30 Mich. L. Rev. 878 (1932).
[24] Greer v. Smith, 140 N.Y.S. 43 (App. Div. 1913).
[25] See supra note 23 at 901.
[26] 28 U.S.C. § 2071 et seq.
[27] James W. Moore, Federal Rules of Civil Procedure: Some Problems Raised by the Preliminary Draft, 25 Geo. L.J. 551, 571 (1937).
[28]See United States Supreme Court Advisory Rules Committee, Report of Proceedings of the First Meeting at 37-38 (June 20, 1935).
[29] John G. Harkins, Jr., Federal Rule 23 – The Early Years, 39 Ariz. L. Rev. 705, 708 (1997).
[30] See Report of Proceedings at 178.
[31] Id. at 498.
[32] Moore, supra note 27 at 571.
[33] See Fed. R. Civ. P. 23 (1940).
[34] 2 James W. Moore, Federal Practice 2283 (1938). These categories, and the text of Rule 23 describing them, are nearly identical to those posited some 70 years earlier by Justice Story. Story, Commentaries on Equity Pleadings 87 (8th ed. 1870).
[35] Harkins, Jr., supra note 29 at 707.
[36] See, e.g., Hartford Life Ins. Co v. Barber, 245 U.S. 146 (1917) (holding that Missouri plaintiff was bound by decision rendered in Connecticut state court class action regarding eligibility for life insurance payouts); see also Cauble, 255 U.S. at 356 (binding Indiana class to out-of-state class judgment). For further discussion on the binding of absentee class members, see Harry Kalven, Jr. and Maurice Rosenfield, The Contemporary Function of the Class Suit, 8 U. Chi. L. Rev. 684 (1941).
[37] Harkins, Jr., supra note 29 at 708.
[38] Weeks v. Bareco Oil Co., 125 F.2d 84 (7th Cir. 1941).
[39] Oppenheimer v. F.J. Young & Co., 144 F.2d 387, 390 (2d Cir. 1944).
[40] See, e.g., Farmers Co-Op. Oil Co. v. Socony-Vacuum Oil Co., Inc., 133 F.2d 101, 104-05 (8th Cir. 1942).
[41] See Joseph J. Simeone, Procedural Problems of Class Suits, 60 Mich. L. Rev. 905, 920 (1962).
[42] See, e.g., Deckert v. Independent Shares Corp., 27 F. Supp. 763 (E.D. Pa. 1939).
[43] Matlaw Corp. v. War Damage Corp., 164 F. 2d 281 (7th Cir. 1947). In Matlaw, the plaintiffs’ claims would only meet the jurisdictional amount in controversy if they could be aggregated as permitted by a “true” class action; if the class was deemed “spurious,” aggregation would be disallowed and the court would not have jurisdiction to take the case.
[44] See Deckert v. Independence Shares Corp., 27 F. Supp. 763 (E.D. Pa. 1939), rev’d, 108 F.2d 51 (3d Cir. 1939), rev’d, 311 U.S. 282 (1940).
[45] Id., opinion on remand, 39 F. Supp. 592 (E.D. Pa.), rev’d, 123 F.2d 979 (3d Cir. 1941).
[46] Pentland v. Dravo Corp., 152 F.2d 851, 852 (3d Cir. 1945).
[47] Zechariah Chafee, Jr., Some Problems of Equity 249 (1950); see also Kalven & Rosenfield, supra note 36 at 703, 707; Thomas J. Weithers, Amended Rule 23: A Defendant’s Point of View, 46 Colum. L. Rev. 818, 823 (1950).
[48] Hansberry v. Lee, 311 U.S. 32 (1940).
[49] Id. at 42.
[50] See, e.g., Waybright v. Columbia Mut. Life Ins. Co., 122 F.2d 245 (6th Cir. 1941); International Allied Printing Trades Ass’n v. Master Printers Union, 34 F. Supp. 178 (D.N.J. 1940).
[51] Harkins, Jr., supra note 29 at 709.
[52] See Simeone, supra note 41 at 948 (collecting articles); Kalven & Rosenfield, supra note 36 at 714.
[53] Id.
[54] A.J. Keeffe, S.M. Levy, & R.P. Donovan, Lee Defeats Ben Hur, 33 Cornell L. Q. 3 (Mar. 1948).
