House Bill Seeks to Reform Class Action Litigation
Supreme Court Hears Oral Argument in Microsoft Corp. v. Baker

House of Representatives Passes Class Action Reform Measure

By Alexander M. Smith

Washington-dcUpdating our previous report on the introduction of proposed class action reform, on March 9, the U.S. House of Representatives passed H.R. 985, the Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017, by a margin of 220-201.  The current version of H.R. 985 includes, among other things, the following provisions: 

  • R. 985 bars federal courts from certifying “a class action seeking monetary relief for personal injury or economic loss unless the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.” 
  • Additionally, H.R. 985 bars certification of “a class action seeking monetary relief unless the class is defined with reference to objective criteria and the party seeking to maintain such a class action affirmatively demonstrates that there is a reliable and administratively feasible mechanism (a) for the court to determine whether putative class members fall within the class definition and (b) for distributing directly to a substantial majority of class members any monetary relief secured for the class.” 
  • R. 985 also bars federal courts from certifying a class action “with respect to particular issues pursuant to Rule 23(c)(4) of the Federal Rules of Civil Procedure unless the entirety of the cause of action from which the particular issues arise satisfies all of the class certification prerequisites of Rule 23(a) and Rule 23(b)(1), Rule 23(b)(2), or Rule 23(b)(3).”
  • R. 985 requires that, “[i]n any class action, all discovery and all other proceedings shall be stayed during the pendency of any motion to transfer, motion to dismiss, motion to strike class allegations, or other motion to dispose of the class allegations, unless the court finds upon the motion of any party that particularized discovery is necessary to preserve evidence or to prevent undue prejudice to that party.” 
  • R. 985 would require disclosure of third-party litigation funding for any class action.
  • Finally, H.R. 985 provides that “[a] court of appeals shall permit an appeal from an order granting or denying class-action certification under Rule 23 of the Federal Rules of Civil Procedure.” 

The bill also includes other provisions relating to joinder of parties in personal injury and wrongful death claims removed to federal court, as well provisions affecting multidistrict litigation procedure. 

On March 13, the bill was referred to the Senate Committee on the Judiciary.  We will continue to monitor this legislation.

Law360, the National Law Journal , and JD Supra have additional coverage.