A09573 Summary:

Amd §§901, 902, RR908 & 909, CPLR
Addresses prerequisites to a class action; an order allowing class action and appointing class counsel; the dismissal, discontinuance, compromise or settlement of a class action and attorneys' fees.
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A09573 Actions:

03/17/2016referred to judiciary
06/02/2016reported referred to codes
06/06/2016reported referred to rules
06/14/2016rules report cal.292
06/14/2016ordered to third reading rules cal.292
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A09573 Committee Votes:

JUDICIARY Chair:Weinstein DATE:06/02/2016AYE/NAY:16/4 Action: Favorable refer to committee Codes

CODES Chair:Lentol DATE:06/06/2016AYE/NAY:15/6 Action: Favorable refer to committee Rules

RULES Chair:Heastie DATE:06/14/2016AYE/NAY:27/0 Action: Favorable

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A09573 Floor Votes:

There are no votes for this bill in this legislative session.
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A09573 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Weinstein
  TITLE OF BILL: An act to amend the civil practice law and rules, in relation to class actions This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of his Advisory Committee on Civil Practice. Our Advisory Committee has reviewed and recommended we support, with modification, the proposal of the New York City Bar Association to more closely align New York law governing class actions in CPLR article 9 with the provisions of Rule 23 of the Federal Rules of Civil Procedure which were enacted in 2003. Earlier versions of the federal rule adopted innovations developed in New York's law. But the state procedures were last revised in 1975 and should be amended to reflect the significant improvements to the administration of class actions now available to litigants in federal courts but not in New York's courts. Accordingly, this measure would make the following amendments:   § 901(B) This measure would (1) eliminate the restriction on class actions involving a penalty or minimum recovery, and (2) add language expressly permitting class actions against governmental entities. First, under current law, where a statute imposes a penalty or minimum amount of recovery, New York law authorizes a class action only if the statute expressly permits a party to file such a lawsuit. This approach simply results in attempts to evade the § 901 restriction and prompts unnecessary litigation about the meaning of and possible waiver of many statutes' penalty or minimum recovery provisions. Equally important, the rule does not apply in federal courts in New York, which results in state-federal forum shopping. This measure would delete this language. Second, although state common law once limited class actions against governmental entities, the so-called "government operations rule," court decisions have eroded this rule. This measure would authorize class actions against governmental entities where all the prerequisites to class certification under § 901(a) are otherwise met.   § 902 This measure would (1) eliminate the fixed deadline to move for class certification, and (2) direct appointment of counsel in the class certification order. Current law requires that a party move for class certification within sixty days of the last responsive pleading. In some actions, whether certification of one or more classes is-appropriate under § 901(a) cannot be determined until after limited discovery. This measure would replace the current fixed sixty-day deadline, which sometimes results in pro forma certification motions, with a requirement that a party move at a practicable time. The amendment would improve the ability of the parties to craft and a court, where appropriate, to certify class defi- nitions. This new subdivision matches the language of Rule 23 (c)(1). Article 9 currently lacks substantive criteria and procedures for the selection of class counsel. The proposal would adopt (with appropriate cross-references within article 9) the language of federal Rule 23(g), which identifies explicit factors for a court to consider when assessing the ability of proposed counsel to represent the class(es), including counsel's experience, the resources for litigating the action, and know- ledge of the relevant area(s) of law. Additionally, this measure would require a court to appoint class counsel when it first certifies the class(es).   § 908 Section 908 would be amended to address two concerns in the context of prejudgment termination of an action. First, under current law, a class action may not be dismissed, discon- tinued, or compromised without both court approval and notice to the class or a prospective class where one has not been certified yet. However, notice can be burdensome and expensive without any correspond- ing benefit. This measure would eliminate the mandatory provision of notice and authorize a court to exercise its discretion to direct notice where appropriate to protect the interests of the class or putative class. The amended § 908 would track the comparable language of Rule 23(e), but would retain the existing requirement for judicial approval. Second, the section would be expanded to include settlement of an action.   § 909 This measure would amend the section governing attorney's fees to prevent any statutory conflict about the basis for a fee award and the standard that governs when the fees are to be paid by a defendant. First, the common law primarily authorized an award of fees when a plaintiff's efforts created a common fund, by agreement of the parties, or for bad faith by a defendant; statutes also authorized fee awards in certain types of actions. The proposed new language - "that are author- ized by law or by the parties' agreement" - would clarify that fees may be awarded as authorized by these traditional common law theories, stat- ute, and other bases in law. See Sponsor's Memo, L. 1975 c. 207. This language also appears in Rule 23(h). Second, the Legislature has authorized fee awards in actions for partic- ular types of claims or defendants. For example, in CPLR 8601(a), the Equal Access to Justice Act adopted in 1990, the Legislature authorized a court to award attorney's fees in actions against the State, but no fees may be awarded if the position of the State was "substantially justified" or where "special circumstances make an award of fees unjust." The proposed addition of the phrase "to the extent not otherwise limited by law" would direct that, where a specific statute authorizes a fee award to be paid by a defendant, the standards of that more specific statute govern eligibility for and the amount of any fee award, rather than the general fee provision of § 909. Compare Cobell v. Norton, 407 F. Supp. 2d 140, 148-89 (D.D.C. 2005) (analyzing fee award and substan- tial justification under federal EAJA in class action). Our Advisory Committee asks us to express its appreciation and gratitude to the State Courts of Superior Jurisdiction Committee, Council on Judi- cial Administration and Litigation Committee on Class Actions in the New York Courts of the New York City Bar Association for proposing this legislation. This measure, which would have no fiscal impact on the State, would take effect on the first day of January next succeeding the date on which it shall have become law.   LEGISLATIVE HISTORY: None. New proposal.
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A09573 Text:

                STATE OF NEW YORK
                   IN ASSEMBLY
                                     March 17, 2016
        Introduced  by  M. of A. WEINSTEIN -- (at request of the Office of Court
          Administration) -- read once and referred to the Committee on  Judici-
        AN  ACT  to amend the civil practice law and rules, in relation to class
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1. Subdivision b of section 901 of the civil practice law and
     2  rules, as added by chapter 207 of the laws of 1975, is amended  to  read
     3  as follows:
     4    b.  [Unless  a  statute  creating  or imposing a penalty, or a minimum
     5  measure of recovery specifically authorizes the recovery  thereof  in  a
     6  class  action,  an  action  to  recover a penalty, or minimum measure of
     7  recovery created or imposed by statute may not be maintained as a  class
     8  action] Once the other prerequisites under subdivision a of this section
     9  have  been  satisfied,  class  certification  shall not be considered an
    10  inferior method for fair and efficient adjudication on the grounds  that
    11  the action involves a governmental party or governmental operations.
    12    §  2.  Section  902 of the civil practice law and rules, as amended by
    13  chapter 474 of the laws of 1975, is amended to read as follows:
    14    § 902. Order allowing class action[. Within sixty days after the  time
    15  to  serve  a  responsive  pleading  has expired for all persons named as
    16  defendants in an action brought as a class action, the  plaintiff  shall
    17  move  for  an  order to determine whether it is to be so maintained] and
    18  appointing class counsel. a. At an early practicable time after a person
    19  sues or is sued as a class representative, the court must  determine  by
    20  order  whether  to  certify the action as a class action. An order under
    21  this section may be conditional, and may be altered  or  amended  before
    22  the decision on the merits on the court's own motion or on motion of the
    23  parties.  The  action  may  be  maintained as a class action only if the
    24  court finds that the prerequisites under section 901  have  been  satis-
    25  fied.  Among  the  matters which the court shall consider in determining
    26  whether the action may proceed as a class action are:
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 9573                             2
     1    1. the interest of members of the class  in  individually  controlling
     2  the prosecution or defense of separate actions;
     3    2.  the  impracticability  or inefficiency of prosecuting or defending
     4  separate actions;
     5    3. the extent and nature of any litigation concerning the  controversy
     6  already commenced by or against members of the class;
     7    4.  the desirability or undesirability of concentrating the litigation
     8  of the claim in the particular forum;
     9    5. the difficulties likely to be encountered in the  management  of  a
    10  class action.
    11    b.  Unless  a statute provides otherwise, the order permitting a class
    12  action shall appoint class counsel. In  appointing  class  counsel,  the
    13  court:
    14    1. shall consider:
    15    (i)  the  work counsel has done in identifying or investigating poten-
    16  tial claims in the action;
    17    (ii) counsel's experience in handling  class  actions,  other  complex
    18  litigation, and the types of claims asserted in the action;
    19    (iii) counsel's knowledge of the applicable law; and
    20    (iv) the resources that counsel will commit to representing the class;
    21    2.  may  consider  any  other matter pertinent to counsel's ability to
    22  fairly and adequately represent the interests of the class;
    23    3. may order potential class counsel to  provide  information  on  any
    24  subject pertinent to the appointment and to propose terms for attorney's
    25  fees and nontaxable costs;
    26    4.  may  include in the appointing order provisions about the award of
    27  attorney's fees or nontaxable costs under rule nine hundred nine of this
    28  article; and
    29    5. may make further orders in connection with the appointment.
    30    c. When one applicant seeks appointment as class  counsel,  the  court
    31  may  appoint  that  applicant  only  if  the applicant is adequate under
    32  subdivisions b and e of this section. If more than one  adequate  appli-
    33  cant  seeks  appointment, the court must appoint the best applicant able
    34  to represent the interests of the class.
    35    d. The court may designate interim counsel to act on behalf of a puta-
    36  tive class before determining whether to certify the action as  a  class
    37  action.
    38    e. Class counsel must fairly and adequately represent the interests of
    39  the class.
    40    § 3. Rule 908 of the civil practice law and rules, as added by chapter
    41  207 of the laws of 1975, is amended to read as follows:
    42    Rule  908.   Dismissal, discontinuance [or], compromise or settlement.
    43  A class action shall not be dismissed, discontinued,  [or]  compromised,
    44  or  settled  without the approval of the court.  [Notice of the proposed
    45  dismissal, discontinuance, or compromise shall be given to  all  members
    46  of  the class in such manner as the court directs.] The following proce-
    47  dures apply to  a  proposed  dismissal,  discontinuance,  compromise  or
    48  settlement:
    49    a.  In class actions other than those actions described in subdivision
    50  b of this rule, notice of the proposal need  not  be  given  unless  the
    51  court  finds  that  notice  is necessary to protect the interests of the
    52  represented parties.
    53    b. In all actions where a class has been certified and the action  was
    54  not  brought  primarily for injunctive or declaratory relief, reasonable
    55  notice of the proposal shall be  given  in  such  manner  as  the  court

        A. 9573                             3
     1  directs  to  all  class members who would be bound by such resolution of
     2  the action.
     3    c. The content of the notice and the expenses of notification shall be
     4  governed  by  subdivisions  (c)  and (d) of section nine hundred four of
     5  this article.
     6    d. If the proposal would bind class members, the court may approve  it
     7  only  after  a  hearing  and on finding that it is fair, reasonable, and
     8  adequate.
     9    e. The parties seeking approval must file a statement identifying  any
    10  agreement made in connection with the proposal.
    11    f.  If  the  class  action was not brought primarily for injunctive or
    12  declaratory relief, the court may refuse to approve a dismissal, discon-
    13  tinuance, compromise, or settlement unless it affords a new  opportunity
    14  to  request exclusion from the class to individual class members who had
    15  an earlier opportunity to request exclusion but did not do so.
    16    g. Any class member may object to the proposal if  it  requires  court
    17  approval  under  this rule; the objection may be withdrawn only with the
    18  court's approval.
    19    § 4. Rule 909 of the civil practice law and rules, as amended by chap-
    20  ter 566 of the laws of 2011, is amended to read as follows:
    21    Rule 909. Attorneys' fees. If a judgment in an action maintained as  a
    22  class  action  is  rendered  in  favor  of  the  class, the court in its
    23  discretion may award attorneys' fees to the representatives of the class
    24  and/or to any other person that the court finds has acted to benefit the
    25  class based on the reasonable value of legal services  rendered  and  if
    26  justice  requires  and to the extent not otherwise limited by law, allow
    27  recovery of the amount awarded from the opponent of the class.
    28    § 5. This act shall take effect on the first of January next  succeed-
    29  ing the date on which it shall have become a law.
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