FRCP Rule 23()(3) and the “Superiority” Requirement
In class action cases, Rule 23(b)(3) of the Federal Rules of Civil Procedure (FRCP) requires courts to determine whether “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” This “superiority” requirement is intended to ensure that a class action would achieve economies of time, effort, and expense. But it frequently fails to serve this purpose, as courts have interpreted it to prevent them from considering refunds, warranties, private claim resolution, and consent judgments.
LCJ advocates for improving the process of judicial evaluation of class actions by expressly allowing federal courts to consider whether the class action device is superior when there are non-litigation solutions that could fairly and efficiently compensate putative class plaintiffs.
Rule 23(b)(3)’s current “superiority” language leads some federal courts reluctantly to certify class actions that may delay or reduce class member redress when other available non-judicial methods for resolving disputes are superior. Some courts presiding over class actions have held that because Rule 23(b)(3) speaks of other methods of “adjudicating,” the rule prohibits judges from considering remedies already available to putative class action members outside of litigation.
Still other courts have sought to “work around” this problem by addressing the “superiority” question through use of Rule 23(a)(4)’s “adequacy” requirement. Courts in these cases have invoked Rule 23(a)(4) to find that a class representative is inadequate to protect the putative class members’ interests when there are non-litigation remedies equal to or better than what the lawsuit can deliver.
In response to the constraints on judges caused by the current “adjudication” language, at least one court has raised a “call to the rule makers” to address the problem. LCJ’s superiority proposal seeks to respond to this call by expressly allowing judicial consideration of “remedies otherwise available to putative class members” under Rule 23(b)(3).
LCJ advocates for improving the process of judicial evaluation of class actions by expressly allowing federal courts to consider whether the class action device is superior when there are non-litigation solutions that could fairly and efficiently compensate putative class plaintiffs.
Rule 23(b)(3)’s current “superiority” language leads some federal courts reluctantly to certify class actions that may delay or reduce class member redress when other available non-judicial methods for resolving disputes are superior. Some courts presiding over class actions have held that because Rule 23(b)(3) speaks of other methods of “adjudicating,” the rule prohibits judges from considering remedies already available to putative class action members outside of litigation.
Still other courts have sought to “work around” this problem by addressing the “superiority” question through use of Rule 23(a)(4)’s “adequacy” requirement. Courts in these cases have invoked Rule 23(a)(4) to find that a class representative is inadequate to protect the putative class members’ interests when there are non-litigation remedies equal to or better than what the lawsuit can deliver.
In response to the constraints on judges caused by the current “adjudication” language, at least one court has raised a “call to the rule makers” to address the problem. LCJ’s superiority proposal seeks to respond to this call by expressly allowing judicial consideration of “remedies otherwise available to putative class members” under Rule 23(b)(3).
Improving the Process of Evaluating Class Actions
Class actions allow federal courts to consolidate similar lawsuits into one collective action to improve efficiency and uniformity of decisions. Over time they have become a significant portion of the federal docket. Unfortunately, they have also grown into vehicles for costly and often lengthy lawsuits seeking judicial remedies regardless of whether there are non-judicial options for resolving claims.
In some cases, these class actions unnecessarily end up compensating lawyers while providing de minimus recovery for putative plaintiffs. The frequent inadequacy of federal class action settlements in consumer fraud actions is well documented, with low settlement amounts paid to consumers and often low median participation rates. The Federal Trade Commission has documented similar low claims rates in consumer actions involving privacy, defective product, debt collection and banking practices.
Class actions allow federal courts to consolidate similar lawsuits into one collective action to improve efficiency and uniformity of decisions. Over time they have become a significant portion of the federal docket. Unfortunately, they have also grown into vehicles for costly and often lengthy lawsuits seeking judicial remedies regardless of whether there are non-judicial options for resolving claims.
In some cases, these class actions unnecessarily end up compensating lawyers while providing de minimus recovery for putative plaintiffs. The frequent inadequacy of federal class action settlements in consumer fraud actions is well documented, with low settlement amounts paid to consumers and often low median participation rates. The Federal Trade Commission has documented similar low claims rates in consumer actions involving privacy, defective product, debt collection and banking practices.
Improving the Superiority Requirement by Allowing Consideration of Non-Litigation Solutions
Lawyers for Civil Justice is asking the Federal Advisory Committee on Civil Rules to amend Rule 23(b)(3) to allow courts to consider whether putative class members already have access to more efficient and economical redress through non-judicial remedies that may be equal or better than the remedy that a class action can provide. LCJ is advocating for an amendment to the Rule that would allow courts to consider all “other available methods”—whether in or out of court—when determining whether a proposed class action is the “superior” remedy.
LCJ’s proposal for amending Rule 23(b)(3)’s “superiority” requirement would encourage courts to understand whether more efficient remedies are available to class members than class action litigation.
There are multiple benefits from this proposal:
LCJ’s Rules Suggestion would help judges meet their duty to protect the class, avoid needless drain on judicial resources, and incentivize defendants to provide full and timely relief to consumers.
Lawyers for Civil Justice is asking the Federal Advisory Committee on Civil Rules to amend Rule 23(b)(3) to allow courts to consider whether putative class members already have access to more efficient and economical redress through non-judicial remedies that may be equal or better than the remedy that a class action can provide. LCJ is advocating for an amendment to the Rule that would allow courts to consider all “other available methods”—whether in or out of court—when determining whether a proposed class action is the “superior” remedy.
LCJ’s proposal for amending Rule 23(b)(3)’s “superiority” requirement would encourage courts to understand whether more efficient remedies are available to class members than class action litigation.
There are multiple benefits from this proposal:
- Promotes judicial efficiency by expressly allowing courts to consider remedies that are better than class actions.
- Encourages companies to offer effective remedial efforts when there is an issue to address.
- Speeds access to remedies for consumers in lieu of lengthy and costly litigation.
- Prevents courts from certifying class actions when other available methods for resolving disputes are more complete and superior.
LCJ’s Rules Suggestion would help judges meet their duty to protect the class, avoid needless drain on judicial resources, and incentivize defendants to provide full and timely relief to consumers.
Supporting Materials
- Read LCJ’s proposal to improve the definition of superiority in Rule 23(b)(3) – including LCJ’s “Suggestion for Rule 23 Superiority Amendment – filed September 2, 2022, with the Federal Advisory Committee on Civil Rules. (Link)
