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Can a potted plant be an adequate class representative? Some class action attorneys believe so, suggesting that all that is necessary to certify a class is the assistance of experienced class counsel. In this view, if the class also has a living, breathing class representative, that’s nice, but not necessary. What, then, does “adequacy of representation” in a class action require? The adequacy requirement for class certification is found in Rule 23(a)(4) of the Federal Rules of Civil Procedure, which states that a class may be maintained only if, among other threshold requirements, “the representative parties will fairly and adequately protect the interests of the class.” Because all absent class members (except those who opt out of Rule 23(b)(3) actions) are bound by a class judgment, “the adequacy of representation issue is now of critical importance in all class actions and the court is under an obligation to pay careful attention to the Rule 23(a)(4) prerequisite in every case.” See7A Charles A. Wright, Arthur R. Miller and Mary K. Kane, Federal Practice and Procedure � 1765 (2d ed. 1986). THE HIGH COURT REVIVES ATTENTION TO ADEQUACY The 1966 amendment to the class action rule revitalized the importance of the threshold adequacy requirement. However, for many years federal courts felt that there was no need to conduct an extensive inquiry into the fairness of representation. If courts had standards for assessing adequacy, many did not apply these standards rigorously. Indeed, counsel and the courts frequently assumed the adequacy requirement by the counsel’s conclusory recitation of the rule. The U.S. Supreme Court refocused attention on the central importance of the adequacy requirement in its two recent decisions invalidating class action settlements, Amchem Products Inc. v. Windsor, 521 U.S. 597 (1997) and Ortiz v. Fibreboard Corp., 527 U.S. 815, 119 S. Ct. 2295 (1999). In these cases, the Supreme Court held that the adequacy requirement was not satisfied because of the presence of intra-class conflicts of interests among class claimants. Without speaking to other standards for adequacy, the court found that the existence of such conflicts undermined the adequacy of representation by the class representative. In ordinary litigation, courts do not determine whether the attorneys and parties are in some fashion “adequate.” This adequacy requirement is unique to class litigation and is grounded in due process concerns that are peculiar to such litigation. Thus, if absent class members are to be bound to a judgment, “basic notions of fairness and justice demand that the representation they receive be adequate.” 7A Wright, Miller & Kane, Federal Practice, id. Class counsel and the class representative are viewed as fiduciaries acting on behalf of people who are absent from the litigation, and courts are particularly concerned that the class representatives not compromise the interests of absent class members. In both Amchemand Ortiz, the Supreme Court endorsed the view that the adequacy requirement encompasses two separate inquiries: the adequacy of class counsel and the adequacy of the class representative. Regarding the class representative, the court held that “adequacy inquiry under Rule 23(a)(4) serves to uncover conflicts of interest between named parties and the class they seek to represent.” The court, however, did not address the adequacy requirement for class counsel in either case, other than to indicate that the adequacy-of-representation inquiry is also is concerned with the “competency and conflicts of class counsel.” For the most part, in absence of standards for adequacy from the Supreme Court, the lower federal courts have articulated their own standards for adequacy, which differ across the federal system. In addition, state courts also have developed their own highly individualized standards for determining adequacy. Whatever standards the courts apply, what constitutes adequate representation is a question of fact that depends on the circumstances of each case. 7A Wright, Miller & Kane, Federal Practice, id. Perhaps the major doctrinal disagreement concerns whether the adequacy requirement necessitates independent findings of adequacy for the class counsel and the class representative. Some federal and state courts hold that as long as the class is represented by competent and conflict-free attorneys, the independent adequacy of the class representative is of little, if no, concern. The majority of federal and state courts, however, require independent findings of adequacy. And some states, such as Texas, have competing appellate authority on the standards for adequacy, essentially endorsing both views. VIGOR A KEY FACTOR IN ADEQUACY OF CLASS COUNSEL When a court assesses the adequacy of representation, the court will consider the quality and experience of the attorneys for the class. Class counsel must be “qualified, experienced, and generally able to conduct the proposed litigation.” Various courts have formulated this as requiring that class counsel must be willing and able to prosecute the action vigorously. Generally, class counsel must have personal integrity, experience as a class action litigator, experience in the field in which the lawsuit is brought, no conflicts with the interests of class members and financial resources to support class litigation. Class counsel are able to demonstrate their adequacy in various ways. Some counsel attach affidavits to their class certification materials, setting forth their experience and financial resources, and attesting to their competence. Some attorneys include their law firm r�sum�, or a list of class actions in which the attorneys have served as class counsel. Other counsel rely on the court’s familiarity with the attorneys’ prior class action experience. Some courts assess competency by the attorneys’ pleadings and filings, as well as by their diligence in seeking class certification and discovery. Parties opposing class certification may challenge the adequacy of class counsel, although such challenges are infrequent and difficult to support if the class counsel are indeed experienced and financially able to prosecute the litigation vigorously. If the proposed class counsel lacks prior expertise in class litigation, this may form the basis for a challenge. Some courts authorize limited discovery to the party opposing class certification, to determine the class counsel’s experience, fee arrangements and ethical conduct. DOES CLASS COUNSEL HAVE A CONFLICT OF INTEREST? In addition, some defendants seek to demonstrate — through discovery of the law firm’s finances — that the class counsel cannot support extended litigation. However, inexperience and lack of resources may not defeat class counsel’s adequacy; this defect may be cured if class counsel align with, or the court appoints, additional, experienced counsel to represent the class. Perhaps the most important factor in assessing class counsel’s adequacy is ascertaining that counsel have no conflicts of interest with the proposed class members. Such disabling conflicts might exist, for example, if the class counsel is involved in multiple lawsuits for the named representative or against the same defendant. Such a situation might induce the class counsel to compromise the interests of some class members in one lawsuit, for the benefit of litigants in another suit. See, generally, 7A Wright, Miller & Kane, Federal Practice � 1769.1 (citing cases). Moreover, several federal courts have ruled that a class attorney may not serve as the class representative or be a member of the class; other courts have suggested that the class representative may not be “closely allied with or related to anyone who is in the law firm that is representing the class.” Id. At least one federal court has thought it dubious practice for an attorney to seek to be both class counsel and the class representative, suggesting that such practice is effectively soliciting business. Id. INDEPENDENT ‘STATURE AND INTERESTS’ CONSIDERED The general hornbook rule is that the adequacy of representation embraces both the competence of legal counsel and the independent “stature and interests of the named parties themselves.” 7A Wright, Miller & Kane, Federal Practice � 1766. Similar to the general principle governing adequate class counsel, “with regard to the necessary qualities for the named representative parties, the general standard is that the representatives must be of such a character as to assure the vigorous prosecution or defense of the action so that the members rights’ are certain to be protected.” Id. A minority of federal courts have suggested that this principle minimally requires that the named class representatives have no conflicts of interest with other class members. The Supreme Court in Amchemand Ortizaffirmed the general rule that “only a conflict that goes to the very subject matter of the litigation will defeat a party’s claim of representative status.” The larger number of federal courts, however, have construed the class representative’s adequacy requirement as more demanding in light of the representative’s fiduciary role in protecting the absent class members’ interests against possible self-dealing or overreaching by class counsel. In this view, the class representative may not cede over control of the litigation to the attorneys, but must take an active part in supervising the attorney’s prosecution of the action. Hence, courts take into account a number of factors — in addition to possible conflicts of interest — in evaluating the adequacy of the named class representatives. These factors are variously articulated, but they include the class representative’s (1) honesty, integrity, and affirmative personal qualities, (2) knowledge, understanding and belief in the asserted claims, (3) financial stake in the litigation, (4) knowledge and understanding of the representative’s financial obligations regarding the class litigation, including the representative’s financial resources, and (5) desire or lack of desire to pursue the class claims. 7A Wright, Miller & Kane, Federal Practice at �� 166-67. THE 6TH CIRCUIT’S EIGHT ADEQUACY FACTORS The 6th U.S. Circuit Court of Appeals, in shareholder derivative class litigation, has adopted a list of eight factors to assess adequacy. These factors are: (1) economic antagonism between the representative and the class, (2) the remedy sought by the plaintiff in the derivative litigation, (3) indications that the named plaintiff was not the driving force behind the litigation, (4) the plaintiff’s unfamiliarity with the litigation, (5) other litigation pending between the plaintiff and the defendants, (6) the relative magnitude of the plaintiff’s personal interests as compared to his or her interest in the derivative action itself, (7) the plaintiff’s vindictiveness toward defendants and (8) the degree of support the plaintiff was receiving from the shareholders he or she purports to represent. See Davis v. Comed Inc., 619 F.2d 588 (6th Cir. 1980). Some state courts similarly have enumerated factors to assess adequacy. In Texas, for example, in Forsyth v. Lake LBJ Investment Corp., 903 S.W.2d 146, 150 (Tex. App. Austin, 1995), a Texas appellate court indicated that these factors include: (1) adequacy of counsel, (2) potential conflicts of interest, (3) the personal integrity of the plaintiffs, (4) the representatives’ familiarity with the litigation and their belief in the legitimacy of the grievance, (5) whether the class is unmanageable based on geographical limitations and (6) whether the plaintiffs can afford to finance the class action. Id. A court may evaluate the class representative’s adequacy by varying means. The class representative may attest to adequacy by affidavit. Mostly common, however, is for the representative to provide deposition testimony and to testify at the class certification hearing. Courts then assess the evidentiary record, in determining the class representative’s adequacy. Linda Mullenix is the Ward Centennial Professor at the University of Texas School of Lawand the author of “State Class Actions: Practice and Procedure” (CCH 2000).

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