Class Action Litigation in Oregon: A Concise Summary
ORCP 32, governs procedures and elements required for class certification in the State of Oregon. First, for certification to be appropriate, the court must find the elements of Rule 32(A) have been met. These provisions are as follows:
- (A)(1) The class is so numerous that joinder of all members is impracticable;
- (A)(2) There are questions of law or fact common to the class;
- (A)(3) The claims or defenses of the representative parties are typical of the claims or defenses of the class;
- (A)(4) The representative parties will fairly and adequately protect the interests of the class; and
- (A)(5) In an action for damages, the representative parties have complied with the prelitigation notice provisions of section H of this rule.
After the court determines the criteria of ORCP 32(A) are met. The court will then determine whether the class action process is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to this finding are set forth in ORCP 32 (B). Some discussion of each essential element follows:
ORCP 32 A(1) Numerosity
The issue is to determine whether the number of class members is so great that "as a matter of efficient judicial administration it is impracticable to have the multiple parties all before the court." Newman v. Tualatin Dev. Co., 287 Or 47, 49 (1979).
ORCP 32 A(2) Commonality
This element requires only that there be "a common issue of law or fact," Blackie v. Barrack, 524 F2d 891, 904 (9th Cir 1975), cert denied, 429 US 816 (1976). In construing the term "commonality" under the federal rules, which is essentially identical to the Oregon rule on this element, federal courts have stated that Rule 23 does not require that every question of law or fact be common to every class member. See Haywood v Barnes, 109 F.R.D. 568, 577 (EDNC 1986); Port Auth. Police Benevolent Ass'n, Inc. v Port Auth. of New York and New Jersey, 698 F.2d 150 (2d Cir 1983) As stated in Central Wesleyan College v W.R. Grace & Co., 143 F.R.D. 628, 636 (DSC 1992), affd, 6 F3d 177 (4th Cir 1993): "This subsection [23(a)(2 does not require that all, or even most, issues be common, nor that common issues predominate, but only that common issues exist." See also Holsey v Armour & Co., 743 F.2d 199, 216-217 (4th Cir 1984), cert denied, 470 U.S. 1028 (1985).
Federal courts have also held that the presence of a common nucleus of operative facts among class members mitigates toward class certification. The focus of the commonality requirement in a plaintiff class action must be on whether the fact to be proved is common to all members of the class, not whether it is common to all defendants. See Central Wesleyan College v W.R. Grace & Co., 143 F.R.D. 628, 636 (DSC 1992), affd 6 F3d 177 (4th Cir 1993); see also, Johns v DeLeonardis, 145 F.R.D. 480, 483 (ND Ill 1993) (In granting certification the court stated, "Here there can be no doubt that a common core of operative facts gave rise to common legal questions in the plaintiffs' claims"). The "commonality" requirement of Rule 23(a)(2) is generally satisfied where the plaintiff shows the existence of a "common nucleus of operative facts." Jaroslawics v Safety Kleen Corp., 151 F.R.D. 324, 327 (ND Ill 1993).
ORCP 32 A(3) TypiClass Action Litigationty
" Newman v. Tualatin Dev. Co., 287 Or 47 at 50, holds that ORCP 32 A(3) is satisfied if the named plaintiffs' claim "arises from the same event or practice or course of conduct that gives rise to the claims of members [of the class] and * * * [is] based on the same legal theory." This test is designed to insure "that the named representative's interests are aligned with those of the class so that "a named plaintiff who vigorously pursues his or her own interests will necessarily advance the interests of the class.
In Derenco, Inc. v. Benj. Franklin Federal Savings & Loan Association, 281 Or 533, 568-569, 577 P2d 477, cert denied, 439 US 1051 (1978), the Supreme Court held that where "the underlying basis for the claims are the same," the named plaintiff can represent persons who signed different loan documents. Here all class members assert a fraud claim based upon First USA's standard practice or course of conduct of soliciting credit card accounts for specified fixed rates while concealing its policy of repricing accounts. The litigation of this case to date provides concrete evidence that representive's pursuit of the fraud claim necessarily advances the interests of the class.
ORCP 32 A(4) Adequacy of Representation
Two criteria must be met to satisfy ORCP 32 A(4). Looking to analogous federal law, courts have held the adequacy standard is met if: (1) the named plaintiff has interests common with, and not antagonistic to, those of absent class members; and (2) the plaintiff's attorney is qualified, experienced and generally able to conduct the litigation. Sosna v Iowa, 419 U.S. 393, 403, 95 S.Ct 553, 42 L.Ed 2d 532 (1975) Generally, the adequacy of plaintiffs' counsel will be presumed in the absence of evidence to the contrary. Adequacy of representation does not require the named representatives have unique ability or complete understanding of the legal issues. See South Carolina Nat Bank v Stone, 139 F.R.D. 325, 329 (DSC 1991); McGlothlin v Connors, 142 F.R.D. 626, 634 (WD Va 1992).
At the time certification is sought, the representative plaintiffs in should be able to demonstrate their willingness to support the class and further the class claims. Typically, this may be proven by: (1) Theirui responded to interrogatories; (2) having responded to requests for production; (3) and having voluntarily submitted themselves to deposition. Further, there should be no showing of any inability of the named plaintiffs to make decisions required to protect the class. All of the named plaintiffs should be familiar with the practices challenged.
THE SUPERIORITY OF A CLASS ACTION
After demonstrating that the elements of ORCP 32 A, have been met, plaintiffs should address ORCP 32 B, which concerns the finding that a class proceeding be "superior to other available methods for the fair and efficient adjudication of the controversy." The matters pertinent to the finding of superiority include:
- B(1) The extent to which the prosecution of separate actions by or against individual members of the class creates a risk of:
- B(1)(a) Inconsistent of varying adjudications with respect to members of the class which would establish incompatible standards of conduct for the party opposing the class; or
- B(1)(b) Adjudications with respect to members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests;
- B(2) The extent to which the relief sought would take the form of injunctive relief or corresponding declaratory relief with respect to the class as a whole;
- B(3) The extent to which questions of law or fact common to members of the class predominate over any questions affecting only individual members;
- B(4) The interest of members of the class in individually controlling the prosecution or defense of separate actions;
- B(5) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class;
- B(6) The desirability or undesirability of concentrating the litigation of the claims in the particular forum;
- B(7) The difficulties likely to be encountered in the management of a class action that will be eliminated or significantly reduced if the controversy is adjudicated by other available means; and
- B(8) Whether or not the claims of individual class members are insufficient in the amounts or interests involved, in view of the complexities of the issues and the expenses of the litigation, to afford significant relief to members of the class.
A brief discussion of each of these elements of consideration follows:
ORCP 32 B(1) and B(2)
Contrary rulings by different courts can create a situation where a party may be ordered to engage in irreconcilable conduct. See Nat'l. Treasury Employees Union v Reagan, 509 F. Supp 1337 (DDC 1981). If a situation should arise in which different results in separate actions would result in the opposing parties' inability to pursue a clear course of conduct, certification under Rule 23(b)(1)(A) may be appropriate. United Brotherhood of Carpenters and Joiners of America Local 899 v Phoenix Associates, Inc., 152 FRD 518, 523 (SD W Va 1994). For example, if a risk exists that a court in a separate forum could grant a motion to compel arbitration, while other courts enjoin arbitration of class claims, irreconcilable conduct could be ordered. Thus, in the absence of a court applying a uniform rule of law, a foreign court granting a motion to compel arbitration in a class claim could result in a ruling inconsistent with a different court granting relief for certain named individuals. The application of injunctive relief should be uniform among the class.
Additionally, because of the potentially "onerous effect of multiple [juries awarding] punitive damages on a defendant," the Oregon Supreme Court has commended "class actions, in appropriate cases" as a mechanism "for unitary consideration of such damages." State ex rel Young v. Crookham, 290 Or 61, 72, 618 P2d 1268 (1980). This approach not only protects the defendant from punishment in multiple cases for the same acts, but also protects "claimants with comparable actual damages [from] receiving substantially unequal punitive damages." Barefield v. Chevron, U.S.A., Inc., 12 Fed R Serv 3d 1232, ---- (ND Cal 1988)
ORCP 32 B(3)
ORCP 32 B(3) concerns the extent to which "questions of law or fact common to members of the class predominate over any questions affecting only individual members." Not all issues must be common, only a significant issue that would advance the litigation.
The Oregon Supreme Court has recognized the applicability of these principles even under the more restrictive definition of predominance contained in a prior version of ORCP 32 B(3). In Newman, supra, one of the claims alleged was for breach of express warranty, which requires proof of reliance. The Supreme Court on the facts of that case, where "the alleged express warranty is such a small part of the item purchased and the representation is interspersed with many other descriptive statements," upheld the denial of class certification. Id. at 54.
ORCP 32 B(4)
ORCP 32 B(4) requires this Court to consider "[t]he interests of members of the class in individually controlling the prosecution or defense of separate actions." The economics of most consumer litigation are such that no rational consumer (or lawyer) would want to pursue an individual claim. In circumstances where "the claim of each class member is tiny relative to the expense of litigation," "the rationale for the [class action] procedure is most compelling." In re Rhone-Poulenc Rorer Inc., 51 F3d 1293, 1299 (7th Cir 1995). See also Amchem Products, supra, 138 L Ed 2d at 708-709 (dominant purpose of federal class action rule is to vindicate "the rights of groups of people who individually would be without effective strength to bring their opponents into court at all"). When individual lawsuits may not be practical due to economic or other concerns, certification is favored to provide those people a remedy otherwise inaccessible. Cf. South Carolina Nat Bank v Stone, 139 FRD 325, 335 (DSC) (Absence of individual suits indicates putative class will not receive the protection they need unless case is certified). When class members are in a poor position to obtain legal redress because they are ill-informed or because such relief is disportionately expensive, certification is also favored. Gordon v Forsyth County Hosp. Auth., Inc., 409 F. Supp 708, 717 (MDNC 1976).
ORCP 32 B(5)
ORCP 32 B(5) focuses on "[t]he extent and nature of any litigation concerning the controversy already commenced by or against members of the class." This element involves a fact specific analysis of the circumstances regarding the particular class asserted.
ORCP 32 B(6)
ORCP 32 B(6) requires the Court to consider "[t]he desirability or undesirability of concentrating the litigation of the claims in the particular forum." In Alsea Veneer, Inc. v. State, 117 Or App 42, 55, aff'd in relevant part, 318 Or 33, 41 (1993), the Court of Appeals held this factor compels examination whether "[a] single adjudication * * * is preferable to piecemeal litigation and potentially inconsistent awards." The reasons given supra at 15 - 16 in discussing the B(1) factor apply equally here.
Once the determination is made that it is desirable to concentrate the litigation in some forum, the question becomes whether this particular forum is the right one. As Judge Kantor explained in Shea v. Chicago Pneumatic Tool Co, Multnomah county Circuit Court No. 9509-06261, Findings of Fact, Conclusions of Law and Order Regarding Class Certification (July 30, 1996) at 17: "Multnomah County [Portland] remains the county of choice for complex litigation in Oregon. * * * There is no better place for these claims to be resolved, by class action or otherwise, so consideration of this matter weighs in favor of class certification."
ORCP 32 B(7)
ORCP 32 B(7) requires this Court to examine "[t]he difficulties likely to be encountered in the management of a class action that will be eliminated or significantly reduced if the controversy is adjudicated by other available means." This factor requires a court to consider whether any other method of adjudication would permit a more efficient resolution of the entire controversy. If, however, "a single administration is undoubtedly less difficult than would be the management of the claims of each [class member] separately," then this factor "weighs in favor of certification." Alsea Veneer, supra, 117 Or App at 55. Usually, it is obvious that a single adjudication is far preferable to thousands, of individual lawsuits brought in courts in Oregon and possibly elsewhere.
ORCP 32 B(8)
Alsea Veneer, supra, 117 Or App at 55, holds that ORCP 32 B(8) can be the most significant factor in evaluating the superiority of class litigation in a case where each plaintiff has a relatively small damage claim. ORCP 32 B(8) requires the court to determine "[w]hether or not the claims of individual class members are insufficient in the amounts or interests involved, in view of the complexities of the issues and the expenses of the litigation, to afford significant relief to the members of the class."
In Alsea Veneer, the trial court declined to certify a class. 117 Or App at 49. The proposed class representatives then took their individual claims to trial, where three plaintiffs recovered damages totalling $355. Id. at 50. The Court of Appeals held the limited recovery illustrated that "the claims of the individual class members are not likely to be adequate to cover the costs of litigation." Id. at 55. This fact, together with the size of the potential class damages, constituted "one of the most persuasive reasons for certification." Id.
This principle is widely accepted. As the United States Supreme Court explained in an opinion written by former Chief Justice Burger:
"The aggregation of individual claims in the context of a classwide suit is an evolutionary response to the existence of injuries unremedied by the regulatory action of government. Where it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages, aggrieved persons may be without any effective redress unless they may employ the class-action device." Deposit Guaranty National Bank v. Roper, 445 US 326, 339 (1980).
The foregoing discussion establishes that each of the ORCP 32 B must be considered and addressed by counsel seeking certification of a class. If a showing is made that the elements of 32A are met and the elements of 32B mitigate toward certification it should follow that a class action is superior to other available methods for the fair and efficient adjudication of this controversy. Certification of a proposed plaintiff class is far more efficient than other possible methods of adjudicating a controversy involving a large number of claims.