3. How Do the United States Deal with Mass Harm Situations?

This chapter examines the US class action asking how the US deal with mass harm situations. The US apply class actions to offer redress for mass harm. The chapter starts with the definition of a US class action. In the US three types of class action under Rule 23 FRCP are known: the anti-prejudice or mandatory class action (Rule 23 FRCP(b)(1)), the injunctive and declaratory class action (Rule 23 FRCP(b)(2)) and the common question class action (Rule 23 FRCP(b)(3)). The latter is the most common class action in the US and has internationally become a synonym for US class actions. Terminology like ‘class’, ‘absent class member’, ‘lead plaintiff’, ‘certification’, ‘notice’ and ‘settlement’ is explained and assessed. US class actions are with an exception in US federal labour law (§ 216(b) FLSA) litigated under an opt-out system, where absent class members are represented exclusively by a lead plaintiff. Opt-out means that the absent class members’ positive act is required in order not to be engaged in litigation and be bound by the decision in the lawsuit. The main regulatory effect in class action litigation in the US is finality erga omnes (or to be exact ultra partes). The major element in US class action litigation is certification. Certification is another name for the admission of the ideological or collective plaintiff to stand as a party in a class action representing the absent class members (res in iudicium deducta). Certification is closely linked to the notice by which the lead plaintiff under the courts supervision informs the represented absent class members that a class action is pending and that they can opt-out if they so wish. When certified, most US class actions get settled. The settlement must be approved by the judge in a consent decree. Absent class members have the right to object to settlement and opt-out if they so wish. Once it becomes final, the settlement is binding on all class members. Seen from a European point of view, a US class action is embedded in the following framework: Managerial judges; entrepreneurial lawyers; funding by contingency fees charged by law firms in eventu of a successful conclusion of class action litigation; absence of cost shifting for lead plaintiffs and class members (no obligation to pay the legal fees of the opposing party) and notice pleading.