House Bill 856

AN ACT TO CREATE THE CLASS ACTION IMPROVEMENTS ACT; TO PROVIDE PREREQUISITES TO A CLASS ACTION SUIT; TO PROVIDE WHEN A CLASS ACTION IS MAINTAINABLE; TO PROVIDE FOR PROCEDURES FOR CLASS ACTION SUITS; TO PROVIDE FOR APPEALS; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The following act shall be known and may be cited as the "Class Action Improvements Act."

SECTION 2. (1) One or more members of a class of Mississippi residents may sue as representative parties on behalf of all members of the class only if (a) the class is so numerous that joinder of all members is impracticable, (b) there are questions of law or fact as to which the court or jury could reasonably reach conclusions or findings applicable to all class members, (c) the claims or defenses of the representative parties are typical of the claims or defenses of the class, (d) the representative parties will fairly and adequately protect the interests of the class, and (e) the class is defined so as to permit the identification of class members before any merits adjudications occur.

(2) An action may be maintained as a class action if the prerequisites of subsection (1) are satisfied, and in addition:

(a) The prosecution of separate actions by or against individual members of the class would create a risk of:

(i) Inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or

(ii) Adjudications with respect to individual members of the class which would, as a practical matter, be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or

(b) The party seeking to maintain the class action does not seek any monetary relief and the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or

(c) The court finds (i) that the questions of law or fact as to which the court or jury could reasonably reach conclusions or findings applicable to all class members predominate over any questions affecting only individual members, (ii) that the evidence likely to be admitted at trial regarding the elements of the claims for which certification is sought and of the defenses thereto is substantially the same as to all class members, and (iii) that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include the interest of members of the class in individually controlling the prosecution or defense of separate actions; the extent, nature and maturity of any litigation concerning the controversy already commenced by or against members of the class; whether it is probable that the amount which may be recovered by individual class members will be large enough in relation to the expense and effort of administering the action to justify maintaining the case as a class action; the desirability or undesirability of concentrating the litigation of the claims in the particular forum; the difficulties likely to be encountered in the management of a class action; and the extent to which the allegations at issue are subject to the jurisdiction of federal or state regulatory agencies.

(3) (a) When practicable after the commencement of an action brought as a class action, the court shall, after hearing, determine by order whether it is to be so maintained. An order under this subsection may be altered, amended or withdrawn at any time before the decision on the merits.

(b) If the court finds that the action should be maintained as a class action, it shall certify the action accordingly on the basis of a written decision setting forth all reasons why the action may be so maintained and describing all evidence in support of the determination.

(c) A court shall not certify that an action may be maintained as a class action unless, on the basis of a full record on the relevant issues, the proponents proffer clear and convincing evidence that the action complies with all requirements for such certification. Any doubt as to whether this burden has been met shall be resolved in favor of denying class certification. The court shall decertify a class action upon any showing that an action has ceased to satisfy the applicable prerequisites for maintaining the case as a class action.

(d) There shall be a rebuttable presumption against the maintenance of a class action as to claims for which class members would have to prove knowledge, reliance or causation on an individual basis.

(e) The determination that an action may be maintained as a class action shall not relieve any member of the class from the burden of proving all elements of the member's cause of action, including individual injury and the amount of damages.

(f) In any class action maintained under subsection (2)(c), the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall include:

(i) A general description of the action, including the relief sought, and the names of the representative parties;

(ii) A statement of the right of a member of the class to be excluded from the action by submitting an election to be excluded, including the manner and time for exercising the election;

(iii) A description of possible financial consequences for the class;

(iv) A general description of any counterclaim or notice of intent to assert a counterclaim by or against members of the class, including the relief sought;

(v) A statement that the judgment, whether favorable or not, will bind members of the class who are not excluded from the action;

(vi) A statement that any member of the class may intervene in the action and designate separate counsel;

(vii) The address of counsel to whom members of the proposed class may direct inquiries; and

(viii) Other information that the court deems appropriate.

(g) The plaintiff shall bear the expense of the notification required by the foregoing subsection. The court may require other parties to the litigation to cooperate in securing the names and addresses of the persons within the class for the purpose of providing individual notice, but any costs incurred by the party in providing such cooperation shall be paid initially by the party claiming the class action. Upon termination of the action, the court may allow as taxable costs all or part of the expenses incurred by the prevailing party.

(h) The judgment in an action maintained as a class action under subsection (2)(a) or (2)(b), whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action under subsection (2)(c), whether or not favorable to the class, shall include and specify or describe those to whom the notice provided in subsection (3)(b) was directed, and who have not requested exclusion, and whom the court finds to be members of the class.

(i) When appropriate, a class may be divided into subclasses and each subclass treated as a class, and the provisions of this rule shall then be construed and applied accordingly.

(4) In the conduct of actions to which this section applies, the court may make appropriate orders:

(a) Determining the course of proceedings or prescribing measures to prevent undue repetition or complication in the presentation of evidence or argument;

(b) Requiring, for the protection of members of the class or otherwise for the fair conduct of the action, that notice be given in such manner as the court may direct to some or all of the members of any step in the action, or of the proposed entry of judgment, or of the opportunity of members to signify whether they consider the representation fair and adequate, to intervene and present claims and defenses, or otherwise to come into the action;

(d) Requiring that the pleadings be amended to eliminate therefrom allegations as to representation of absent persons, and that the action proceed accordingly;

(e) Dealing with similar procedural matters.

(5) (a) A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.

(b) Before approving the dismissal or a compromise of an action that the court has determined may be maintained as a class action, the court shall hold a hearing to determine whether the terms of the proposed dismissal or compromise are fair, reasonable and adequate for the class. At such hearing, all parties to the action, including members of the class, shall be permitted an opportunity to be heard as the court may direct.

(6) Representative parties and intervenors are subject to discovery in the same manner as parties in other civil actions. Other class members are subject to discovery in the same manner as persons who are not parties, but may be required by the court to submit to discovery procedures applicable to the representative parties and intervenors.

(7) The Supreme Court shall hear appeals from orders of courts granting or denying class action certification under this section if a notice of appeal is filed within ten (10) days after entry of the order.

SECTION 3. This act shall take effect and be in force from and after July 1, 2002.