This report serves as a primer on class action law and analyzes areas that have been the focus of congressional discussions concerning class actions. A class action is a procedure by which a large group of entities—that is, a "class" —may challenge a defendant's allegedly unlawful conduct in a single lawsuit, rather than through numerous, separate suits initiated by individual plaintiffs. Under the modern version of the class action, a plaintiff (known as the "class representative," the "named representative," or the "named plaintiff") may sue the defendant not only on his own behalf, but also on behalf of other entities (the "class members") who are similarly situated to the class representative in order to resolve legal or factual questions that are common to the entire class. The Purpose of the Class Action Device

The Supreme Court has recognized that the class action device serves several purposes. However, as explained in greater detail below, a court's decision to not allow a particular lawsuit to proceed as a class action can effectively "sound the 'death knell' of the litigation on the part of the plaintiffs" because the individual plaintiff's claim will often be "too small to justify the expense of" prosecuting a non-class action lawsuit. Abusive and Costly Litigation

First, because a class action permits thousands or millions of class members to aggregate their claims, a defendant who opts to defend rather than settle a class action may face "potentially ruinous liability." For this reason, courts and commentators have expressed concern that plaintiffs' attorneys may not always act in the best interests of class members, particularly when negotiating a settlement with the defendant. A reference chart illustrating the prerequisites for class certification is available in the Appendix of this report. . . satisfies Rule 23(b)(1)(A)." Just as a final judgment entered in a certified class action that proceeds to trial generally binds the absent class members, a class action settlement typically binds absent class members who do not (or cannot) opt out of the class. Legislative Proposals for Changing Class Action Law

As the foregoing discussion illustrates, the Federal Rules of Civil Procedure and the federal courts interpreting those rules have attempted to balance the interests inherent in the class action device. Further, this section would forbid a federal court from granting class certification to any proposed class action in which the class representative is a "relative or employee of class counsel."
A class action is a procedure by which a large group of entities (known as a "class") may challenge a defendant's allegedly unlawful conduct in a single lawsuit, rather than through numerous, separate suits initiated by individual plaintiffs. In a class action, a plaintiff (known as the "class representative," the "named representative," or the "named plaintiff") may sue the defendant not only on his own behalf, but also on behalf of other entities (the "class members") who are similarly situated to the class representative in order to resolve any legal or factual questions that are common to the entire class.
Courts and commentators have recognized that class actions can serve several beneficial purposes, including economizing litigation and incentivizing plaintiffs to pursue socially desirable lawsuits. At the same time, however, class actions can occasionally subject defendants to costly or abusive litigation. Moreover, because the class members generally do not actively participate in a class action lawsuit, class actions pose a risk that the class representative and his counsel will not always act in accordance with the class members' best interests. In an attempt to balance the benefits of class actions against the risks to defendants and class members, Federal Rule of Civil Procedure 23 establishes a rigorous series of prerequisites that a federal class action must satisfy. For similar reasons, Rule 23 also subjects proposed class action settlements to the scrutiny of the federal courts.
This report serves as a primer on class action litigation in the federal courts. It begins by discussing the purpose of class actions, as well as the risks class actions may pose to defendants, class members, and society at large. The report also discusses the prerequisites that a class action must satisfy before a court may "certify" it—that is, before a federal court may allow a case to proceed as a class action. An Appendix to the report also contains a reference chart that graphically illustrates those prerequisites for class certification. The report then discusses Rule 23's restrictions on the parties' ability to settle a certified class action. The report concludes by identifying ways in which Congress could modify the legal framework governing class actions if it were so inclined, with a particular focus on a bill currently pending in the 115th Congress that would effectuate a variety of changes to the class action system.