From time to time the U.S. Supreme Court has rendered decisions that have a profound impact on the viability of state court class actions, including those brought pursuant to Article 9 of the CPLR. The Court’s March 31 ruling in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Company1 is no exception.
In fact, the Court has encouraged the expanded use of state court class action procedures, especially for consumer class actions based on the common law and/or state statutory law as an alternative to bringing such actions in federal court [Snyder v. Harris,2 limiting federal diversity jurisdiction; Zahn v. International Paper Company,3 individual class members must meet jurisdictional amount; Eisen v. Carlisle & Jacqueline,4 plaintiff must pay costs of notice; Phillips Petroleum Co. v. Shutts,5 state courts have nationwide jurisdiction in opt-out class actions; and Matsushita Electric Industrial Co. Ltd. v. Epstein,6 state courts have power to approve settlement of nationwide class actions that release claims that could only have been brought in federal court]. As a consequence many states enacted progressive class action statutes in the 1970s and 1980s many of which track FRCP 23 with some exceptions.7
