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1.3.2 Legislation, Court Decisions, and Corporate Practices Contribute to Limiting the Opportunities for Successful Consumer Class Actions

A class action is an exception to the general rule that litigation is conducted by and on behalf of individual named parties only.25 Due to the fact that individuals who may be bound by a class action judgment are not named parties, the Supreme Court has fairly characterized class actions as a “nontraditional” form of litigation.26

As discussed in § 1.2, supra, because class actions present the threat of substantial liability, there have been successful efforts by industry to pass protective legislation at the federal and state level and to make the hurdles to class certification ever higher. Although procedural safeguards have always been in place to protect the rights of absentee class members who may be affected by a class proceeding, in recent years scrutiny of class actions has intensified. This has spawned a number of changes to both Rule 23, which governs class proceedings in federal court, and various sections of the United States Code addressing jurisdiction, removal, venue, and so forth.27 Additional barriers include class action bans in statutes, enforcement of contractual mandatory arbitration provisions and class actions waivers in consumer contracts, and the trend in case law of increasing the level of inquiry into the merits that is required at the class certification stage. Many of these issues are discussed below, in the context of claim selection.28


  • 25 {25} Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 131 S. Ct. 2541, 2550, 180 L. Ed. 2d 34 (2011); Califano v. Yamasaki, 442 U.S. 682, 700–701, 99 S. Ct. 2545, 61 L. Ed. 2d 176 (1979); Hansberry v. Lee, 311 U.S. 32, 61 S. Ct. 115, 85 L. Ed. 2d 22 (1940). See also Int’l Shoe Co. v. Washington, 362 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945).

  • 26 {26} U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 402, 100 S. Ct. 1202, 1212, 63 L. Ed. 2d 479 (1980).

  • 27 {27} See generally 28 U.S.C. §§ 1332, 1335, 1453, 1603, 1711, notes to 28 U.S.C.A. §§ 1332, 2071, 2074.

  • 28 {28} See § 1.7, infra.