United States: A Not-So-Modest Proposal: Class Action Changes Could Have Big Impact

Last Updated: March 23 2017
Article by Ben V. Seessel, Christine A. Stoddard and Kristin A. Shepard

Like many things these days, the legal landscape is changing. One target is class action litigation. Some important new proposals have the potential to dramatically alter class actions in the near future. In particular, these changes would impact class certification and the settlement process.

Rule 23 Amendments

First, a spate of amendments may bring changes to Federal Rule of Civil Procedure 23. The comment period on the amendments closed on February 15th and the changes are expected to be adopted, with an effective date of December 1, 2018. Specifically, the amendments include a variety of changes regarding class settlement and notice. The new proposal's greatest impact would be on class settlement objectors, governed by Rule 23(e)(5). The proposed amendment seeks to prevent bad faith objections by requiring objectors to state the grounds for their objection with specificity. Objectors would also be required to state whether the objection applies only to themselves, to the whole class, or to a portion of the class. The amendment deletes the rule's current language requiring court approval for the withdrawal of an objection. Instead, the new rule would require approval for payment to an objector or his counsel in connection with either the withdrawal of an objection or the abandonment of an appeal of a judgment approving a settlement. These changes seek to prevent objectors from interfering with settlements merely to obtain a payoff.

Under the new proposal, Rule 23(c)(2)(B), which governs notice for 23(b)(3) classes, would allow for notice to be given not only via mail, but also electronic or other appropriate means. The new rule would also clarify that Rule 23(e)(1) notice to a proposed settlement class would trigger the opt-out period, in conformance with common practice. Additionally, Rule 23(e)(1) would be amended to require parties to give the court sufficient information to determine whether to order notice, and an amendment to Rule 23(f) would clarify that an order to send notice to the class is not appealable. The new amendments would also alter Rule 23(e)(2), which requires a court to determine whether a settlement is "fair, reasonable and adequate" before approval. The new rule would list factors for the court to consider in making this determination, including the adequacy of representation and relief, whether all class members are treated equitably, and if the settlement was the product of arm's length negotiations. Although meant to provide guidance to courts, the list would not eliminate the various approval factors courts have already developed for this purpose.

Fairness in Class Action Litigation Act

Meanwhile, a bill pending before Congress could result in even more sweeping reforms. The Fairness in Class Action Litigation Act ("FICALA"), H.R. 985, proposed by Rep. Bob Goodlatte (R-Va), seeks to "assure fair and prompt recoveries for class members and multidistrict litigation plaintiffs with legitimate claims" while also "diminish[ing] abuses in class action and mass tort litigation." To that end, the bill sets stricter requirements for class certification. For example, it requires a party seeking to certify a class for monetary relief to affirmatively demonstrate that each putative class member suffered the same type and scope of injury as the named plaintiff. It also restricts who can serve as class representatives, prohibiting such individuals from having familial, employment, or contractual relationships with class counsel and compelling disclosures about potential conflicts of interest in that regard. It also creates a heightened ascertainability standard by requiring that a class be defined with reference to objective criteria, and that the party seeking certification demonstrate that a reliable and feasible method exists both to identify class members and to distribute any monetary relief.

Additionally, FICALA places restrictions on the certification of issue classes and requires a mandatory stay of discovery pending motions to dismiss, transfer, or strike class allegations, unless "necessary to preserve evidence or to prevent undue prejudice." The bill also requires disclosure of third-party litigation funding agreements, and, importantly, gives parties a mandatory right to appeal class certification orders.

Like the Rule 23 changes, the bill also affects class settlements. In particular, it seeks to provide class members a meaningful amount of any judgment or settlement by limiting attorney's fees to a reasonable percentage of payments distributed to class members, not to exceed the total amount distributed to the class, as well as preventing attorneys from receiving fees before class members are paid. Under FICALA, information about the distribution of settlement funds must also be reported to the Federal Judicial Center and Director of the Administrative Office of the U.S. Courts. Finally, the bill incorporates various changes to the multidistrict litigation process.

Unsurprisingly, reaction to the bill has been mixed; though some, like the American Association for Justice, have claimed the bill rolls back consumer protection and civil rights, others such as the U.S. Chamber of Commerce have praised FICALA for its ability to protect both businesses and consumers from abusive lawsuits that result in increased prices and fewer jobs. Although the House passed the bill on March 9th, its fate in the Senate is uncertain. Republicans, most of whom support the bill, control the Senate 52-48, but the close split means the vote could swing either way. Indeed, a less expansive proposal by Rep. Goodlatte died in the Senate last year. If adopted as drafted, FICALA would usher in a wave of changes that could have a significant impact on class actions in the future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.