Rule 23(b)(1) is the forgotten stepchild in Rule 23 jurisprudence. Rule 23(b)(3) gets attention because it’s where the money is. Rule 23(b)(2) is essential to civil rights groups seeking injunctions, and drew attention from plaintiffs’ lawyers seeking an end-run around what they viewed as Rule 23(b)(3)’s more stringent requirements. But case law on Rule 23(b)(1)(A) (which allows class actions to prohibit inconsistent adjudications) and (b)(1)(2) has been notably sparse.

Which is why many lawyers might not have caught one of the strange developments in the wake of the Supreme Court’s ruling in Dukes. As Dean Robert Klonoff–author of, among other things, Class Actions & Other Multiparty Litigation in a Nutshell–points out in his new article Class Actions for Monetary Relief Under Rule 23(b)(1)(A) and (b)(1)(B): Does Due Process Require Notice and Opt-Out Rights?:

In Phillips Petroleum Co. v. Shutts, the Supreme Court stated that in a class action “wholly or predominantly for money judgments[,]” a court must afford class members notice and an opportunity to opt out. In both Ortiz v. Fibreboard Corp., and Wal-Mart Stores, Inc. v. Dukes, the Court reaffirmed the Shutts language. While the language in those cases can be characterized as dictum, these decisions raise difficult issues about whether (b)(1) actions require notice and opt-out rights as a matter of due process when significant monetary relief is sought.

(Emphasis added.)  As Dean Klonoff rightly points out, Rule 23(b)(1)(A) is compatible with monetary damages (although some courts have ruled that it is not appropriate under those circumstances), and Rule 23(b)(1)(B) "limited fund" class actions specifically contemplate monetary damages.  But Rule 23(b)(1) classes require only "reasonable notice," and do not allow opt outs.  So how do these fit in with the Supreme Court’s jurisprudence?

Dean Klonoff’s article traces Rule 23(b)(1) classes from its adoption in 1966 through the Supreme Court’s decision in Ortiz and the implications of its ruling in Dukes. His conclusion:

Reasonable notice sufficiently protects the class members’ due process rights, and allowing opt outs would defeat the very purpose of a (b)(1) class and impede the rights of the defendant and unnamed class members.

This is the kind of question that class action academics should be asking. Most practitioners are more concerned with winning the immediate case for their clients than in checking whether the doctrine regulating the most obscure kinds of class actions stays consistent over time. While I can’t say for certain whether I agree with Dean Klonoff’s conclusions (primarily because I haven’t done the research), I’m certainly glad he’s addressing the topic.

[Disclaimers: Dean Klonoff wrote a nice blurb for the Class Action Playbook []; he also alerted me to the existence of his article.]

Tags: "Robert Klonoff" "Rule 23(b)(1)" notice Dukes