United States: House Passes Bill To Clamp Down On Class Actions

The U.S. House of Representatives passed H.R. 985, the "Fairness in Class Action Litigation Act," on March 9, 2017. The bill would add eight new sections to the "Consumer Class Action Bill of Rights," enacted as part of the Class Action Fairness Act of 2005, and potentially spells big changes for class action plaintiffs and defendants alike.


H.R. 985 would impose strict new requirements for motions for class certification and attorneys' fee applications. The likely effect would be to discourage the filing of small-claim, big-dollar class actions in federal court, particularly if the identity of each class member or the amount of each class member's alleged damages is difficult to ascertain. For other class actions, H.R. 985 may slow and intensify the pre-certification litigation process. Also, in the event of settlement, class notification campaigns may be more expensive to administer under H.R. 985, because the bill may financially incentivize class counsel to demand best-technology notice, rather than best "practicable" notice, to maximize settlement payouts to class members.

Injury allegations

H.R. 985 would prohibit class certification absent affirmative evidence that "each proposed class member" suffered the same "type" and "scope" of injury as the proposed class representative.

This standard may be impossible for plaintiffs' counsel to satisfy. Movants for class certification usually know very little about "each proposed class member" when they file the motion. Also, in most cases, the class members' injuries will vary in some way or degree. This may make it easy for the defendant to show impermissible variation by, say, obtaining declarations from willing putative class members attesting that he or she did not incur the "same type and scope" of injury as others. Depending on how courts interpret and apply this new strict standard, such declarations may be sufficient to successfully counter a plaintiff's motion for class certification.

For their part, plaintiffs' counsel may adapt to the new standard by making broader pre-certification discovery demands, like seeking the names of putative class members, their contact information and relevant work or purchase records. Such demands could trigger privacy concerns for a defendant, requiring permission from each customer or employee prior to releasing personal information. Plaintiffs' counsel may want this information to prove that the "same type and scope of injury" standard can be satisfied. If the defendant is compelled to comply, the attendant burdens and costs could be substantial.

Class member benefits

H.R. 985 would prohibit class certification unless the class is defined "with reference to objective criteria" and there is an affirmative showing of a "reliable and administratively feasible mechanism" to (a) identify class members and (b) allocate monetary relief to "a substantial majority."

This proposal, if adopted, would resolve a circuit split on whether a class may be certified if class members cannot be readily "ascertained." Whereas the First, Second, Third, Fourth, and Eleventh Circuit Courts of Appeal have adopted a restrictive "ascertainment" test espoused by H.R. 985, the Sixth, Seventh, Eighth and Ninth Circuits declined to do so. Under the more restrictive test, a class is per se uncertifiable if it would be difficult to identify class members without individualized fact-finding.

Attorneys' fees

H.R. 985 would expand upon the attorneys' fee rules for "coupon settlements" under 28 U.S.C. § 1712. The bill would require attorneys' fees to be calculated as a percentage of money actually paid to class members, rather than the total recovery obtained for class members. This restriction would have serious implications for class counsel because in cases where class members must affirmatively request payment, the difference between recovery obtained and recovery actually paid can be substantial.

Moreover, the traditional "lodestar" approach (i.e., calculating fees by multiplying actual hours worked by reasonable hourly rate) appears unavailable under H.R. 985. Also, any cy pres distribution for the class members' indirect benefit appears irrelevant. Only "payments directly distributed to and received by class members" are taken into account by H.R. 985. (emphasis added).

H.R. 985 additionally provides that "no attorneys' fees may be determined or paid ... until the distribution of any monetary recovery to class members has been completed." Under some settlements, it can take years to "complete" class member payouts. The waiting period will likely pose a significant financial obstacle for some class counsel.

For class action settlements, H.R. 985 may incentivize class counsel to demand the use of best-technology notification procedures to maximize pay-outs to class members and, thereby, the attorneys' fee award. Such procedures can be highly burdensome, expensive and duplicative. Today, only "best notice that is practicable under the circumstances" is required by FRCP 23(c)(2)(B). (emphasis added).


H.R. 985 would establish a right to appeal any grant or denial of a Rule 23 class certification motion. Today, pursuant to FRCP 23(f), parties must request permission to file an appeal. Unlike FRCP 23(f), H.R. 985 does not specify a time for initiating an appeal. Giving litigants an interlocutory right to appeal may slow cases and impose unknown burdens on appellate dockets.


If H.R. 985 becomes law, its provisions would apply to "any civil action pending" on the day of its enactment. As of this writing, the House passed the bill, 220-to-201, on March 9, 2017, with 14 Republican votes against it. Interestingly, some of the 14 Republicans who voted against H.R. 985 were formerly in private law practice. The Senate Judiciary Committee received the bill on March 13, 2017.

Whether H.R. 985 becomes law, or resurfaces with amendments, or, like the Class Action Fairness Act of 2005, triggers a prolonged wave of litigation over the meaning of its provisions, remains to be seen.

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.