Also known as:Fed. R. Civ. P. 23 · Rule 23 · FRCP 23 · Federal Rules of Civil Procedure 23 · class action rule
Written by attorneys — see sources below.
A procedural rule promulgated under the Rules Enabling Act that establishes the prerequisites and procedures for maintaining a class action in federal court. The rule requires satisfaction of numerosity, commonality, typicality, and adequacy before certification and further mandates that one of the categories in subdivision (b) be met.
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How its tested
Common Examples
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Typicality and Adequacy in Pharmacy Rebates
Fairview Manufacturing and other independent pharmacies sued Meridian Labs in federal court under diversity jurisdiction seeking statutory interest on late rebate payments. The named plaintiff purchased the same rebate contracts and suffered identical delays as absent class members. The court found the representative's claims typical of the class and determined that the plaintiff and counsel would fairly protect class interests, allowing certification under Rule 23(b)(1)(A) to avoid inconsistent adjudications.
State Ban Displaced in Interest Claims
Francois Fortier filed a diversity class action against Foster Forge seeking statutory interest on delayed payments. A state statute barred class treatment for such interest-only claims. The federal court applied Rule 23 to assess certification because the rule regulates procedure without altering substantive rights to interest.
Fatima Flores sued Fairfield Bank in federal court under diversity jurisdiction for delayed interest credits on deposits. A state statute prohibited class actions for interest disputes. The court applied Rule 23 to decide certification rather than the state restriction because the federal rule directly addressed the procedural question.
Hanna v. Plumer380 U.S. 460 (1965)
On February 6, 1963, petitioner, a citizen of Ohio, filed her complaint in the District Court for the District of Massachusetts, claiming damages in excess of $10,000 for personal injuries resulting from an automobile accident in South Carolina, allegedly caused by the negligence of one Louise Plumer Osgood, a Massachusetts citizen deceased at the time of the filing of the complaint. Respondent, Mrs. Osgood's executor and also a Massachusetts citizen, was named as defendant.
On February 8, service was made by leaving copies of the summons and the complaint with respondent's wife at his residence, concededly in compliance with Rule 4 (d) (1). Respondent filed his answer on February 26, alleging, inter alia, that the action could not be maintained because it had been brought contrary to and in violation of the provisions of Massachusetts General Laws Chapter 197, Section 9.
On October 17, 1963, the District Court granted respondent's motion for summary judgment. On appeal, the Court of Appeals for the First Circuit affirmed. The Supreme Court granted certiorari because of the threat to the goal of uniformity of federal procedure posed by the decision below.
Frederick Ferguson filed a class action challenging a state residency requirement for divorce. By the time the case reached the Supreme Court the named plaintiff's individual claim had become moot. The Court held that the class action could proceed because the controversy remained live for absent class members.
Sosna v. Iowa419 U.S. 393 (1975)
Carol Sosna married Michael Sosna on September 5, 1964, in Michigan. They lived together in New York between October 1967 and August 1971, after which they separated but continued to reside there. In August 1972 Sosna moved to Iowa with her three children. The following month she petitioned the District Court of Jackson County, Iowa, for dissolution of her marriage.
Michael Sosna was personally served when he visited Iowa and made a special appearance to contest jurisdiction. The Iowa court dismissed the petition for lack of jurisdiction under Iowa Code § 598.6 because Sosna had not resided in the state for one year preceding the filing.
Instead of appealing, Sosna filed a complaint in the United States District Court for the Northern District of Iowa seeking injunctive and declaratory relief on constitutional grounds. A three-judge court was convened pursuant to 28 U.S.C. §§ 2281 and 2284. While the federal action was pending, the Iowa Supreme Court decided In re Marriage of Williams, 217 N.W.2d 202 (1974), and upheld the statute's constitutionality. The three-judge court upheld the residency requirement. This Court noted probable jurisdiction. During the appeal Sosna obtained a divorce in New York, though custody and support issues remained unresolved from the Iowa proceeding. She returned to Iowa to prosecute the appeal.
Sosna sought class certification under Fed. R. Civ. P. 23 to represent Iowa residents who had lived in the state less than one year and wished to initiate divorce actions but were barred by the residency requirement. The parties stipulated that numerous people were similarly situated, joinder was impracticable, her claims were representative, and she would adequately protect class interests. The district court approved the stipulation in a pretrial order.
Freya Freeman and other investors sued Basic Inc. alleging misleading public statements about a merger. Individual proof of reliance would have overwhelmed common issues. The Court applied a rebuttable presumption of reliance under the fraud-on-the-market theory to satisfy predominance and permit class treatment.
Basic Inc. v. Levinson485 U.S. [224], at 238 1988
Basic Incorporated was a publicly traded company primarily engaged in manufacturing chemical refractories for the steel industry. As early as 1965 or 1966 Combustion Engineering expressed interest in acquiring Basic but was deterred by antitrust concerns. In 1976 regulatory action removed the antitrust barrier and Combustion's strategic plan listed an objective to acquire Basic for thirty million dollars.
Beginning in September 1976 Combustion representatives met and spoke by telephone with Basic officers and directors about a possible merger. During 1977 and 1978 Basic issued three public statements denying that merger negotiations were under way. On December 18 1978 Basic asked the New York Stock Exchange to suspend trading in its shares and announced it had been approached by another company concerning a merger.
The next day Basic's board endorsed Combustion's offer of forty-six dollars per share. On December 20 1978 Basic publicly announced approval of Combustion's tender offer for all outstanding shares. Respondents are former Basic shareholders who sold their stock after Basic's October 21 1977 public statement and before the December 1978 trading suspension.
Respondents brought a class action against Basic and its directors alleging that the three statements violated section 10(b) and Rule 10b-5 by misleading the market and causing sales at artificially depressed prices. The District Court certified the class under a presumption of reliance but granted summary judgment for the defendants on the ground that any misstatements were immaterial. The Court of Appeals for the Sixth Circuit affirmed class certification reversed the summary judgment and remanded the case. The Supreme Court granted certiorari.
Fabian Flynn and other customers sued Exxon Mobil in a diversity class action for overcharges. Some class members' claims fell below the jurisdictional amount. The Court held that supplemental jurisdiction extended to those claims once the named plaintiff's claim satisfied the amount-in-controversy requirement.
Exxon Mobil Corp. v. Allapattah Services, Inc.545 U.S. 546, 558–59 (2005)
In 1991, about 10,000 Exxon dealers filed a class-action suit against the Exxon Corporation in the United States District Court for the Northern District of Florida. They alleged an intentional and systematic scheme by which they were overcharged for fuel purchased from Exxon. The plaintiffs invoked the District Court's diversity jurisdiction under 28 U.S.C. § 1332(a). Each dealer's claim was for slightly less than the $75,000 jurisdictional minimum. After a unanimous jury verdict in favor of the plaintiffs, the District Court certified the case for interlocutory review on the question of supplemental jurisdiction over class members who did not meet the jurisdictional minimum.
In a separate action, a 9-year-old girl sued Star-Kist in a diversity action in the United States District Court for the District of Puerto Rico. She sought damages for unusually severe injuries she received when she sliced her finger on a tuna can. Her family joined in the suit seeking damages for emotional distress and medical expenses. The District Court granted summary judgment to Star-Kist, finding that none of the plaintiffs met the minimum amount-in-controversy requirement.
The Court of Appeals for the Eleventh Circuit upheld the District Court's extension of supplemental jurisdiction to the class members who did not meet the amount requirement. The Court of Appeals for the First Circuit ruled that the injured girl, but not her family members, had made allegations of damages in the requisite amount. It further held that section 1367 authorizes supplemental jurisdiction only when the district court has original jurisdiction over the action. In a diversity case, original jurisdiction is lacking if one plaintiff fails to satisfy the amount-in-controversy requirement.
The Supreme Court granted certiorari to resolve the conflict among the Courts of Appeals. The cases were consolidated before the Supreme Court.
Does Rule 23 govern class certification in a diversity action when a state statute bars class treatment for the same claims?
Yes. When Rule 23 directly addresses whether an action may proceed as a class and is valid under the Rules Enabling Act, it controls over a conflicting state statute that merely limits the availability of the class device.
Supporting sources
What must a plaintiff show to satisfy the typicality and adequacy requirements under Rule 23(a)?
The claims or defenses of the representative parties must be typical of the class, and the representatives must fairly and adequately protect class interests without conflicts that would impair vigorous prosecution.
Supporting sources
When may a federal court decline to exercise supplemental jurisdiction in a class action containing both federal and state claims?
A court may decline supplemental jurisdiction when the state claims substantially predominate over the federal claims in scope, damages, or evidentiary demands, even if the class allegations share some common facts with the federal claim.
Supporting sources
Does Rule 23 permit certification when individual reliance issues would otherwise overwhelm common questions?
Yes. Courts may apply a rebuttable presumption of reliance, such as under the fraud-on-the-market theory, to satisfy predominance when common questions of falsity, materiality, and scienter predominate over individualized reliance issues.
Supporting sources
Federal Rule 23
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