Class actions are like butterflies; they must undergo a metamorphosis before they fly. The transformation occurs when a court grants class certification. At that instant, what had started out as an individual lawsuit emerges as its own entity, with a number of legal consequences flowing from the change. Among them, plaintiff’s counsel becomes class counsel, representing and owing fiduciary duties to the entire class; the court also becomes a fiduciary, charged with its own responsibility for protecting absent class members (including, importantly, the duty to scrutinize proposed class settlements); and class members become represented parties, which triggers the ethical rules that limit or prohibit defense counsel from communicating with them.
The situation before class certification is different. Because the class does not yet exist, most courts recognize that the fiduciary duties of plaintiff’s counsel and the court to putative class members do not kick in (or, at least, not fully), and defense counsel is generally free to communicate directly with putative class members (subject to other ethical restrictions prohibiting fraud and coercion). For that reason, would-be class actions pending in federal court are often settled as individual cases between private parties without the need for judicial oversight. A recent decision of the Massachusetts Supreme Judicial Court, however, serves as an important reminder that state class action practice does not always fall in lockstep with its federal counterpart.
In Kingara v. Secure Home Health Care Inc., decided on March 28th, the Massachusetts Supreme Judicial Court answered two questions arising from an unusual and unfortunate circumstance, namely, the death of the sole named plaintiff prior to class certification. The first question had to do with the authority of plaintiff’s counsel to act on behalf of the putative class after the named plaintiff’s death, and the second had to do with the power of the trial court to notify putative class members of the plaintiff’s passing.
The answer to the first question was straightforward. The specific question posed was “[w]hether a deceased plaintiff’s attorney has the authority to act on the deceased plaintiff’s behalf prior to class certification, and before any motion to certify a class had been filed, and without motion by the plaintiff’s legal representative to substitute as a party to the putative class action.” The question arose because plaintiff’s counsel had filed a motion in the trial court for an order to notify putative class members of the plaintiff’s death and invite them to join the action, to require defendants to identify putative class members, and to extend the tracking order deadlines in the case. The trial court granted the motion, and on interlocutory review, the SJC reversed and remanded.
Recognizing the distinction between a putative class action’s status pre-certification and post-certification, the Court chose not to lay down a blanket rule but rather to rely on the specific facts the case presented. It held that plaintiff’s counsel was “in no position to act on behalf of anyone whose interests are implicated in the putative class action,” observing that counsel “has not filed for class certification, has failed to locate the deceased plaintiff’s personal representative, and has failed to identify any other potential members of the putative class who could serve as class representative.” The Court also held that counsel could not rely on their role as an officer of the court because that “would allow the attorney to utilize the courts as an instrument of client solicitation.”
The Court’s holding that counsel had no authority to act on behalf of putative class members led to the second question, “whether the Superior Court ha[s] the power to order, sua sponte, notice to the putative class members under Mass. R. Civ. P. 23 (d).” The Court answer this question in the affirmative. Specifically, “a trial judge has the power to order notice to putative class members pursuant to rule 23 (d) if those putative class members would otherwise face significant prejudice.” Here, the Court discounted the significance of the pre-certification status of the case, citing one of its own precedents from 1975 (Wolf v. Comm’r of Pub. Welfare, 367 Mass. 293, 298 (1975)), and relying on the language of two subsections of Mass. R. Civ. P. 23 (Rule 23 (c), which provides that “[a] class action shall not be dismissed or compromised without the approval of the court,” and Rule 23 (d), which grants courts broad discretion to order notice to the class). It also held that courts may order notice sua sponte, because Rule 23 (d), unlike other rules, “does not refer to any necessary request for relief.”
The only limitation the Court recognized on the trial court’s discretion to order notice to putative absent class members is the need to find “significant prejudice” if notice does not issue. The example of “significant prejudice” provided in a footnote involves putative class members who rely on the tolling of a statute of limitations while a case is pending and who therefore would be prejudiced if they were not informed that a dismissal or other termination of the case had started the clock running again on their individual claims. Noting that it would be “an abuse of discretion for the [trial] court to issue notice to putative class members without finding that those members face significant prejudice,” but providing no additional guidance concerning what might satisfy the “significant prejudice” standard, the Court remanded the case for further proceedings.
The first part of the Court’s decision is unsurprising. Because the only plaintiff had passed away and there was no certified class, counsel had no client and thus had no authority to act on anyone’s behalf. The situation might have been different had counsel been engaged to act on behalf of the deceased plaintiff’s legal representative, but that did not happen. And the Court was wise not to let counsel use the trial court as a vehicle for soliciting new clients.
The issue of the trial court’s authority to issue notice to members of an uncertified class may be a closer call. The “plain language” of Rule 23 (c) could support either outcome. Its requirement that a “class action” not be dismissed or compromised without court approval could just as easily be read as applying only to a case that had been certified, not to the individual lawsuit that had not yet been transformed into a class action through the critical act of certification. Rule 23 (d), on the other hand, which expressly grants trial courts authority to issue orders “at any stage of an action under this rule,” does appear to provide trial courts broad discretion even before a case is certified.
The Court’s reliance on Wolf v. Comm’r of Public Welfare, a case decided less than a year after Massachusetts’ version of Rule 23 took effect half a century ago, raises additional questions. That case concerned whether defendant’s payment to the named plaintiff of the money she had claimed prior to class certification rendered the entire case moot. It is closely analogous to more recent cases in which both state and federal courts have held that unaccepted offers of judgment that would have provided named plaintiffs with all of the individual relief they sought did not moot class claims, a topic we wrote about here. Its resemblance to a case in which the named plaintiff has passed away, leaving no legal representative to pick up the torch, is limited at best. (Indeed, the named plaintiff in Wolf also had passed away, but the Court had allowed a motion to substitute her oldest child who also had a legal interest in the outcome of the case.) The policy reasons that preclude allowing a defendant to use the offer-of-judgment mechanism to avoid class liability by “picking off” class representatives have little force to the situation presented in Kingara. Nevertheless, the Court in Wolf did say that the trial judge in that case “should have treated the suit as a class suit for the purposes of dismissal or compromise” even before class certification, and the Court’s quotation of that language in Kingara demonstrates that its concern for the interests of putative class members even before class certification has not diminished over time.
Indeed, Kingara does not represent the first time in recent memory that the SJC has applied Wolf to reject a mootness claim in a putative class action. In 2016, the Court relied on Wolf in a case seeking to enjoin allegedly unlawful prison conditions (the named plaintiffs had been released from the challenged confinement but other prisoners continued to experience them). That decision, too, implicates important issues of public policy, and could just as easily have been supported by the longstanding equitable principle that a claim for injunctive relief may not be dismissed as moot if dismissal would render the challenged conduct both capable of repetition and evading review. It need not have depended on an interpretation of Massachusetts Rule 23 that holds that class claims in a not-yet-certified case remain viable even if the named plaintiffs’ claims do not.
The “significant prejudice” standard may also prove problematic. The Court’s tolling example may well be the most obvious circumstance in which such prejudice might occur, but would there also need to be a showing that one or more putative class members actually knew about and relied on the pendency of the putative class action? And why solve that problem before knowing that it really is a problem? Couldn’t it also be addressed when, but only when, a putative class member files a complaint and is met with a motion to dismiss it as untimely? Perhaps more important, what other circumstances would support a finding of “significant prejudice,” and what types of proceedings are trial judges now required to undertake in order to make a “significant prejudice” determination? The Court’s decision does not limit the trial court’s authority to circumstances in which the named plaintiff has passed away, and the broad potential applicability of the ruling may well open the door to a host of litigation with potential unintended consequences.
Time will tell whether the SJC’s decision in Kingara will have a significant impact on other cases or will be viewed as applying narrowly to limited circumstances. What happens on remand, and how the decision is invoked in future cases, bears watching. In the meantime, Kingara’s broad interpretation of Rule 23 (c), combined with its invocation of the language from Wolf, underscores what for many will be the unwelcome notion that parties wishing to resolve a putative class action pending in Massachusetts state court by settling the individual claims of named plaintiffs before a class has been certified may well need court approval to do so. One hopes that the Court will find an occasion to clarify whether Wolf and Kingara do, and should, reach that far.
Written by former litigation partner, Donald R. Frederico.