New class action rule would make settlement much easier.

The Judicial Conference of the United States is seeking public comment on a proposed rule that would allow judges to certify class actions for settlement even when the same class would not be certified for trial.

The conference decided to publish a revised Rule 23 for comment despite opposition expressed by nearly 150 law professors and legal analysts, who warned that the proposed rule would invite collusion between plaintiffs' lawyers and defendants and could harm injured people and consumers.

In a June letter to the chair of the conference's Committee on Rules of Practice and Procedure, then-ATLA President Pamela Anagnos Liapakis recommended that the proposed Rule 23 should be returned to a judicial advisory panel for further study. She suggested this because the rule "does not adequately protect the constitutional right of jury trial for future claimants, and it makes no provision for those who do not presently recognize the nature or origin (and sometimes even the fact) of their injuries to exclude themselves from the effect of class action adjudication."

Consideration of the proposed rule has exposed deep divisions among lawyers and judges about class actions, which have been used in recent years to consolidate and resolve thousands of cases dealing with asbestos, breast implants, and other allegedly faulty products.

Proponents argue that class action litigation offers the only practical means to obtain compensation for misdeeds that cause relatively small injuries to large numbers of people. Also, class actions are seen as an effective way to focus (and pay for) the expertise that is needed to win cases against powerful defendants, such as large pharmaceutical and manufacturing companies.

Critics argue that class actions are vulnerable to settlement deals that leave class members having serious injuries or substantial damages with neither adequate compensation nor a way to further pursue their legitimate claims. Class actions, they say, jeopardize the future claims of people who have been exposed to hazardous products but have not yet recognized an injury.

Because of these concerns, judges require class actions to meet certain criteria before they are certified to proceed to trial. But some of the certification criteria may be unnecessary when litigants are prepared to settle, according to an advisory panel note that was submitted with the revised Rule 23: "Choice-of-law difficulties, for example, may . . . defeat any class certification, if claims are to be litigated. Settlement can be reached, however, on terms that surmount such difficulties."

The advisory committee noted the advantages of settlement over adversary litigation: "[S]ettlement may prove far superior to litigation in devising comprehensive solutions to large-scale problems.... Important benefits may be provided for those who, knowing of the class settlement and the opportunity to opt out, prefer to participate in the class judgment and avoid the costs of individual litigation."

The committee also recognized that "settlement classes also pose special risks." The court's obligation to review and then approve a class settlement "must surmount the information difficulties that arise when the major adversaries join forces as proponents of their settlement agreement."

According to a Judicial Conference spokesman, publication will be made by announcement in the Federal Register about September 1, and comments on the rule will be due six months after the publication date.

Copies of the proposed class action rule are available from the Committee on Rules of Practice and Procedure, Judicial Conference of the United States, Administrative Office of the U.S. Courts, One Columbus Circle, N.E., Washington, DC 20544; [phone]; fax [phone].