What Is FRCP Rule 23? A Reference Guide
Congress established the Federal Rules of Civil Procedure (FRCP) in 1937 to unify the highly fragmented American court system. Prior to this, different jurisdictions were using different rules, which made it difficult to achieve any level of consistency.
To solve this problem, the FRCP established clear guidelines and operational procedures for all US district courts. It remains the go-to model for district court policy and many state and local courts.
The FRCP is broken up into a series of rules that govern different aspects of the law. FRCP Rule 23 contains three parts: the main Rule 23, Rule 23.1, and Rule 23.2. Keep reading to learn the nuances between these rules.
FRCP Rule 23: Class Actions
FRCP Rule 23 offers guidance for filing class-action suits. If you or someone you know has been affected by such and such, this is a rule you’ll want to pay attention to.
Rule 23 (a) states that “one or more members of a class may sue or be sued as representative parties on behalf of all members.” This can only happen if the class is so large that it’s impossible to bring all members together. What’s more, there also have to be questions of law or fact shared by all members of the class.
Further, the claims or defenses of the representative parties have to be “typical of the claims or defenses of the class.” The representative parties also must protect the interests of the class.
FRCP Rule 23 (b): Types of Class Actions
Section (b) says a class action may get maintained if Rule 23 (a) gets satisfied. It also outlines terms for maintaining a class-action suit.
FRCP Rule 23 (c): Certification of Order
This section sets a certification order for class-action suits. The court must certify the action as a class action shortly after the suit gets filed. Additionally, the class action must define the class and the class claims, issues, or defenses and appoint class counsel.
Further, it’s possible to alter or amend an order that grants or denies class certification.
Section (c) also outlines the protocol for ordering notice, judgment, particular issues, and subclasses.
FRCP Rule 23 (d): Conducting the Action
The court may issue orders that determine the course of proceedings. They may also prescribe measures to prevent complications when presenting evidence or arguments.
The court may also require you to give notice to some or all class members of any step in the judgment, the proposed extent of the judgment, or the member’s opportunity to intervene and present claims or defenses.
In addition, the court may require amending pleadings to eliminate allegations about the representation of absent parties.
FRCP Rule 23 (e): Settlement, Voluntary Dismissal, or Compromise
This section states that courts may settle, voluntarily dismiss, or compromise claims with their approval under Rule 23 section (e). Accordingly, section (e) also sets procedures for a proposed settlement, dismissal, or compromise.
FRCP Rule 23 (f): Appeals
This section says a court of appeals can permit an appeal from an order granting or denying class-action certification. However, this does not apply to orders from under Rule 23 (e)(1).
FRCP Rule 23 (g): Class Counsel
Under Rule 23 (g), a court that certifies a class has to appoint a class counsel. Then, the court must consider the work the legal counsel has done in investigating potential claims in the action.
The court must also consider the counsel’s experience in handling class actions or complex litigation. Additional factors include the counsel’s knowledge of the applicable law and how that counsel plans to represent the class.
FRCP Rule 23 (h): Attorney’s Fees
The court can award reasonable attorney’s fees and nontaxable costs authorized by law or by the parties’ agreement.
FRCP Rule 23.1: Derivative Actions
FRCP Rule 23.1 establishes the protocol for a derivative suit. Generally speaking, this is a type of lawsuit a shareholder files on behalf of a corporation against another party.
The rule applies when one or more shareholders or members of an unincorporated association “bring a derivative action to enforce a right that the corporation or association may properly assert but is failing to enforce.”
Depending on the court’s decision, the derivative action may not get maintained. This may occur if the plaintiff doesn’t fairly and adequately represent the interests of shareholders or other impacted members.
FRCP Rule 23.1(b): Pleading Requirements
This section says the complaint must get verified and allege that the plaintiff was a shareholder or member at the time of the disputed transaction.
Part (2) stipulates the action is not a collusive one.
Part (3) explains that the complaint must state “any effort by the plaintiff to obtain the desired action from the directors or comparable authority…shareholders, or members.” The complaint must also state the reasons for not obtaining the action or not making an effort to do so.
FRCP Rule 23.1 (c): Settlement, Dismissal, and Compromise
This section says the court may settle, dismiss, or compromise a derivative action with its approval.
What’s more, “notice of a proposed settlement, voluntary dismissal, or compromise must be given to shareholders or members in the manner that the court orders.”
FRCP Rule 23.2: Actions Relating to Unincorporated Associations
FRCP Rule 23.2 applies to an action filed by or against members of an unincorporated association as a class. It involves naming certain members as representatives or parties.
The action may only get maintained if it appears those parties will protect the interest of the association and its members.
Further, the court may issue orders in line with Rule 23 (d), and the procedure for settlement, dismissal, or compromise has to correspond with Rule 23 (e).
Class-Action Lawsuits and eDiscovery
Class-action lawsuits often deal with large volumes of electronically stored information (ESI). The process of collecting, managing, organizing, securing, storing, and presenting ESI in court is known as eDiscovery.
This process is similar to legal discovery. In both cases, legal teams meet before going to trial to request and exchange information. It’s a way of ensuring a fast, efficient, and fair trial.
The eDiscovery process moves very quickly. Plaintiffs and defense teams typically have to produce evidence under tight deadlines. Failure to produce evidence on time typically results in court sanctions and penalties. It could also lead to court losses.
Without the right platform in place, this can present quite the problem. Imagine that a massive organization needs to produce two years’ worth of financial documentation. In such a scenario, they would legally need to collect and present all of that information. If it’s resting in various repositories, this becomes a much taller task, requiring more money and more human resources.
How Venio Helps With eDiscovery
To streamline eDiscovery, many law firms and legal teams are turning to cloud-based eDiscovery platforms like Venio Cloud, which offers end-to-end eDiscovery management. Using a platform like Venio, legal teams can migrate away from manual spreadsheet-based data management systems.
Venio Cloud is a centralized platform for automated data processing and AI-powered eDiscovery review. Quite simply, Venio Cloud makes eDiscovery and class action suit management fast, easy, secure, and affordable. It also frees eDiscovery professionals to focus on higher-level tasks, sparing them from laborious and time-consuming data entry work. Not only does this help them get more done, it also encourages them to stick around with your organization. What’s not to like?
For more information on how Venio Cloud can revolutionize the way your company handles eDiscovery, request a free demo today.
This post was written by Justin Reynolds. Justin is a freelance writer who enjoys telling stories about how technology, science, and creativity can help workers be more productive. In his spare time, he likes seeing or playing live music, hiking, and traveling