Committee Reports

Proposed amendments to Article 9 of the Civil Practice Law and Rules to reform and modernize the administration of class actions in NYS courts

SUMMARY

The State Courts of Superior Jurisdiction Committee, Council on Judicial Administration and Litigation Committee, led by a joint Working Group, have proposed five amendments to Article 9 of the Civil Practice Law and Rules to reform and modernize the administration of class actions in New York’s courts. In 1975, New York enacted its current Article 9 for class actions, but the statute has not been materially changed since. In 2003, significant changes were made to Rule 23 of the Federal Rules of Civil Procedure. The report recommends that some of the changes to federal law be considered for Article 9 and states that amendments are “appropriate to improve the administration of class actions and to continue to restore New York to a leadership role in commercial litigation.”

RECOMMENDATIONS (listed here in the order in which changes would be made to Article 9):

  • CPLR 901(b) precludes class certification for actions demanding a statutory penalty or minimum measure of recovery. The rule is unique among class action statutes and was not part of the bill as originally drafted. As discussed in Part II(B) below, the U.S. Supreme Court has concluded that CPLR 901(b) does not govern actions in federal courts, a decision that has encouraged forum shopping and the diversion of cases to federal courts. Recent state court decisions discussed in Part II(C) also have led to confusion over (i) what constitutes a penalty, and (ii) whether it can be waived to permit class certification. To discourage forum shopping and to provide for greater certainty in administration of the law, this Report recommends the removal of the present CPLR 901(b).
  • A common law doctrine pre-dating the enactment of Article 9 disfavors class actions against governmental entities. This judicially-developed rule has been slowly eroded over the past fifteen years, and exceptions have made it confusing and inconsistent in application. Part III of this Report recommends a new CPLR 901(b) to formally rescind the rule (and in lieu of the current CPLR 901(b)).
  • CPLR 902 presently requires that a motion for class certification is to be made within sixty days after a responsive pleading. This 60-day rule also was not part of the original proposal for CPLR 902. The rule does not reflect the complexity of contemporary class action practice, where substantial discovery is often necessary on the feasibility and suitability of class certification. In addition, the 60-day rule often results in a pro forma motion, depriving the court of a substantive supporting brief. Part IV of this Report recommends adoption of the language from Fed. R. Civ. P. 23(c)(1)(A), stating that motions shall be made “at an early practicable time . . . .”
  • Article 9 addresses the adequacy of class counsel only indirectly, as implicit in the CPLR 901(a)(4) prerequisite to certification that “the representative parties will fairly and adequately protect the interests of the class.” Federal studies recognized the inadequacy of this language (appearing in Fed. R. Civ. P. 23(a)(4)), and in 2003 a new Rule 23(g) was adopted that specified factors to be considered in appointing class counsel. Part V of this Report proposes a new CPLR 902(b)(2) to provide comparable guidance.
  • The current CPLR 908 provides that a class action is not to be dismissed, discontinued or compromised without judicial approval and notice to the class, even before certification. Class notice imposes substantial and often unnecessary expenses; this Report recommends a more flexible notice provision, requiring notice only where class members would be bound or where the court concludes that notice is necessary to protect the interests of the members of the class. While the 2003 amendments removed from the federal rule the requirement of judicial approval of pre-certification settlements, Part VI of this Report recommends retaining the longstanding New York rule requiring such approval.

OUTCOME

Bill introduced as A.9573 (AM Weinstein)(NYS 2016) | Click here for the latest report and bill information