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Class Action Lawsuits - The Number of Members in a Class Action

March 7, 2022

California

,

United States of America

Issue

How many plaintiffs are required in order to meet the numerosity requirement for certification of a class action?

Conclusion

Cal. Code Civ. Proc. § 382 provides that a lawsuit may join multiple parties when the parties are sufficiently numerous and it is impracticable to bring each lawsuit individually.

The requirement in Cal. Code Civ. Proc. § 382 that there be many parties to a class action is indefinite and has been construed liberally. No set number is required as a matter of law. The analysis is very fact-specific. (Hendershot v. Ready to Roll Transp., Inc., Rose v. City of Hayward)

The ultimate issue is whether the class is too large to make joinder practicable, meaning that there would be difficulty or inconvenience of joining all members of the class. In determining whether there is sufficient numerosity, the court may consider the size of the class, the nature of the action, the size of the individual claims, the inconvenience of trying individual suits, and any other factor relevant to the practicability of joining the putative class members. (Hendershot v. Ready to Roll Transp., Inc.)

The availability of class action litigation arises out of issues of equity and the objective of "redressing small wrongs" that otherwise might go unredressed by requiring multiple lawsuits from parties who cannot be assumed to belong to a group of economically powerful parties who are able and willing to take care of their own interests through individual lawsuits. (Rose v. City of Hayward)

In Hendershot v. Ready to Roll Transp., Inc., the California Court of Appeal for the Second District found that the lower court's analysis was incomplete when the lower court found insufficient numerosity. There, the lower court did not look further into the numerosity question once it found that 44 of the 53 undisputed putative class members had settled their claims or agreed to arbitrate their claims against the defendant. Thus, the Court of Appeal found that nine class members could be sufficient for numerosity purposes and that more analysis was needed beyond the simple number of individuals in the putative class.

Law

Cal. Code Civ. Proc. § 382 provides that a lawsuit may join multiple parties when the parties are sufficiently numerous and it is impracticable to bring each lawsuit individually:

If the consent of any one who should have been joined as plaintiff cannot be obtained, he may be made a defendant, the reason thereof being stated in the complaint; and when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.

In Brinker Rest. Corp. v. Superior Court of San Diego Cnty., 53 Cal.4th 1004, 139 Cal.Rptr.3d 315 (Cal. 2012), the California Supreme Court outlined the elements for a class action case brought under Cal. Code Civ. Proc. § 382. Those elements are: (1) the existence of an ascertainable and sufficiently numerous class; (2) a well-defined community of interest; and, (3) substantial benefits from certification that render proceeding as a class superior to the alternatives (at 1021):

Originally creatures of equity, class actions have been statutorily embraced by the Legislature whenever “the question [in a case] is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court....” (Code Civ. Proc., § 382; see Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069 1078, 56 Cal.Rptr.3d 861, 155 P.3d 268; City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 458, 115 Cal.Rptr. 797, 525 P.2d 701.) Drawing on the language of Code of Civil Procedure section 382 and federal precedent, we have articulated clear requirements for the certification of a class. The party advocating class treatment must demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives. (Code Civ. Proc., § 382; Fireside Bank, at p. 1089, 56 Cal.Rptr.3d 861, 155 P.3d 268; Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435, 97 Cal.Rptr.2d 179, 2 P.3d 27; City of San Jose, at p. 459, 115 Cal.Rptr. 797, 525 P.2d 701.) “In turn, the ‘community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.’ ” (Fireside Bank, at p. 1089, 56 Cal.Rptr.3d 861, 155 P.3d 268, quoting Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470, 174 Cal.Rptr. 515, 629 P.2d 23.)

In Rose v. City of Hayward, 179 Cal.Rptr. 287, 126 Cal.App.3d 926 (Cal. App. 1981), the California Supreme Court held that a putative class of 42 individuals was sufficiently numerous for the purposes of class certification. The Court explained that the requirement in Cal. Code Civ. Proc. § 382 that there be "many" parties to a class action is indefinite and has been construed liberally. No set number is required as a matter of law (at 934):

A major thrust of respondents' argument centers on alleged alternatives to a class action, including joinder and intervention. Once again, we are unconvinced by respondents' argument. The requirement of Code of Civil Procedure section 382 that there be "many" parties to a class action suit is indefinite and has been construed liberally. Where a question is of common interest to "many" persons, an action may be maintained as a class action even where the parties are numerous and it is in fact practicable to join them all. (Renken v. Compton City School Dist. (1962) 207 Cal.App.2d 106, 113, 24 Cal.Rptr. 347.) No set number is required as a matter of law for

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the maintenance of a class action. (Hebbard v. Colgrove (1972) 28 Cal.App.3d 1017 1030, 105 Cal.Rptr. 172.) Thus, our Supreme Court has upheld a class representing the ten beneficiaries of a trust in an action for removal of the trustees. (See Bowles v. Superior Court (1955) 44 Cal.2d 574, 283 P.2d 704.) Similarly, in Hebbard, a class action on behalf of a minimum of 28 beneficiaries of a trust alleging improper conduct by trustees was not inappropriate on the theory that the class was too small. (See also, Collins v. Rocha (1972) 7 Cal.3d 232, 102 Cal.Rptr. 1, 497 P.2d 225, upholding a class action filed by 9 named plaintiffs on behalf of 35 others.) The class of 42 retirees in the present is quantitatively sufficient for a class action.

The Court also stressed that the availability of class action litigation arises out of issues of equity and the objective of "redressing small wrongs" that otherwise might go unredressed by requiring multiple lawsuits from parties who cannot be assumed to belong to a group of economically powerful parties who are able and willing to take care of their own interests through individual lawsuits. Specifically, the Court pointed to the fact that the amount of money each individual plaintiff sought was disproportionately small in comparison to the costs of litigation as material (at 934-935):

Numbers alone do not compel our decision. Considerations of equity as well counsel us toward a decision in favor of certification. The right to file a class action originates in equity, with the objective of redressing small wrongs that otherwise might go unredressed. (Bauman v. Islay Investments (1975) 45 Cal.App.3d 797, 802, 119 Cal.Rptr. 681.) The alternatives of multiple litigation (joinder, intervention, consolidation, the test case) often do not sufficiently vindicate legal rights because these devices " 'presuppose "a group of economically powerful parties who are obviously able and willing to take care of their own interests individually through individual suits. " ' " (Vasquez v. Superior Court, supra, 4 Cal.3d 800, 808, 94 Cal.Rptr. 796, 484 P.2d 964.) Respondents suggest that appellants represent[126 Cal.App.3d 935] a group of economically powerful parties, able and willing to take care of their interests. They contend that at least one class member, and possibly more, might gain up to $3,700, a sum which respondents' find to be sufficient incentive for litigation on an individual basis. We disagree. Even were respondents to convince us that all class members stood to realize a substantial gain, we remain unconvinced that class action certification should be denied. The possibility of a potential recovery for each class member larger than a nominal sum does not in itself militate against the maintenance of such an action. (Collins v. Rocha, supra, 7 Cal.3d 232, 238, 102 Cal.Rptr. 1, 497 P.2d 225.) To hold otherwise would impose upon any reasonable man's sense of justice. A brief review of the facts of the case reveals a history of three and a half years of protracted litigation. Attorney's fees for that period alone would devour a substantial portion on individual litigant's potential recovery of $3,700. We see no basis in law or equity for making a sacrificial lamb of Rose or any other individual class member on behalf of the other 41 class members. The course respondents suggest may effectively discourage the issue from being adjudicated. We cannot permit such an inequity when the very purpose of class actions is to open a practical avenue of redress to litigants who would otherwise find no effective recourse for the vindication of their legal rights.

In Hendershot v. Ready to Roll Transp., Inc., 228 Cal.App.4th 1213, 175 Cal.Rptr.3d 917 (Cal. App. 2014), the California Court of Appeal for the Second District echoed that there is no bright-line number to establish numerosity for the purposes of determining whether a case may be properly brought as a class action and that this analysis is very fact-specific. The Court explained that the ultimate issue is whether the class is too large to make joinder practicable, meaning that there would be difficulty or inconvenience of joining all members of the class. In determining whether there is sufficient numerosity, the court may consider the size of the class, the nature of the action, the size of the individual claims, the inconvenience of trying individual suits, and any other factor relevant to the practicability of joining the putative class members (at 1222):

The parties dispute the trial court's finding that the proposed class was not sufficiently numerous. To be certified, a class must be “numerous” in size such that “it is impracticable to bring them all before the court.” (Code of Civ. Proc., § 382.) “The requirement of Code of Civil Procedure section 382 that there be ‘many’ parties to a class action suit is indefinite and has been construed liberally.... No set number is required as a matter of law for the maintenance of a class action. [Citation.] Thus, our Supreme Court has upheld a class representing the 10 beneficiaries of a trust in an action for removal of the trustees. [Citation.]” (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 934, 179 Cal.Rptr. 287.)

“The ultimate issue in evaluating this factor is whether the class is too large to make joinder practicable....” 5 (Celano v. Marriott Intern., Inc. (N.D.Cal.2007) 242 F.R.D. 544, 549.) “ ‘[I]mpracticality’ does not mean ‘impossibility,’ but only the difficulty or inconvenience of joining all members of the class. [Citation.]” (Harris v. Palm Springs Alpine Estates, Inc. (9th Cir.1964) 329 F.2d 909, 913–914.) “The numerosity requirement requires examination of the specific facts of each case and imposes no absolute limitations.” (General Telephone Co. v. EEOC (1980) 446 U.S. 318, 330, 100 S.Ct. 1698, 64 L.Ed.2d 319.) “In addition to the size of the class, the court may also consider the nature of the action, the size of the individual claims, the inconvenience of trying individual suits, and any other factor relevant to the practicability of joining all the putative class members.” (Paxton v. Union Nat. Bank (8th Cir.1982) 688 F.2d 552, 559–560.)

On the facts of the case, the Court found that the lower court's analysis was incomplete when the lower court found insufficient numerosity. There, the lower court did not look further into the numerosity question once it found that 44 of the 53 undisputed putative class members had settled their claims or agreed to arbitrate their claims against the defendant. Thus, the Court found that nine class members could be sufficient for numerosity purposes and that more analysis was needed beyond the simple number of individuals in the putative class (at 1222-1224):

Here, the second amended complaint defined the proposed class as “[a]ll non-exempt, chauffeur employees who worked ‘on-call time’ without compensation, who are or who have been employed by DEFENDANT[ ] in the State of California at any time during the four years prior to the date of the filing of this action.” There was no dispute that 53 individuals fell within the class description. The trial court found only that the class was not sufficiently numerous because 44 of those individuals had settled their claims or agreed to arbitrate their claims against the defendant. The trial court's bare conclusion that the remaining nine class members did not constitute a sufficiently numerous class without any analysis as to the “ultimate issue ... [of] whether the class is too large to make joinder practicable” was

[228 Cal.App.4th 1223]

incomplete. (Celano v. Marriott Intern., Inc., supra, 242 F.R.D. at p. 549.) There is no set number required to maintain a class action, and the statutory test is whether a class is so numerous that “it is impracticable to bring them all before the court.” (Code of Civ. Proc., § 382.)

Furthermore, in finding that only nine individuals could be part of the class, the court improperly ruled on the merits of the defendant's affirmative defenses. Normally, the merits of a case are not considered in deciding class certification. (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 439–440, 97 Cal.Rptr.2d 179, 2 P.3d 27 (Linder).) However, the trial court may consider “the case's merits” when considerations of “ ‘how various claims and defenses relate and may affect the course of the litigation’ ... ‘overlap the case's merits.’ [Citation.]” 6 (Brinker, supra, 53 Cal.4th at p. 1024, 139 Cal.Rptr.3d 315, 273 P.3d 513.) “[A]ny ‘peek’ a court takes into the merits at the certification stage must ‘be limited to those aspects of the merits that affect the decisions essential’ to class certification. [Citation.]” (Ibid.)

Here, the court essentially ruled that the defendant's affirmative defenses based on the releases and arbitration agreements had merit, and thereby determined that the majority of putative class members could not assert claims against the defendant in this action. However, consideration of those defenses did not “overlap” with the numerosity analysis, which was limited to how many individuals fell within the class definition and whether their joinder was impracticable. (Brinker, supra, 53 Cal.4th at p. 1024, 139 Cal.Rptr.3d 315, 273 P.3d 513.)

Although these defenses may overlap with the determination of whether the class representatives here can adequately represent members who have signed releases and arbitration agreements, or whether those representatives' claims and defenses are typical of those of the class, the trial court did not address these matters. (See, e.g., Melong v. Micronesian Claims Commission (D.C.Cir.1980) 643 F.2d 10, 13[“[W]hether those proposed class members who have executed releases with [the defendant] may be included within the plaintiffs' proposed classes ... is not a novel [issue]; it has been addressed often by courts in a variety of cases involving proposed class actions. In each instance, the court considering the

[228 Cal.App.4th 1224]

question has concluded that proposed class members who have executed releases can not [sic] be represented by individuals who have not executed a release.”].)

Furthermore, as the Supreme Court explained in Linder, “[w]hen the substantive theories and claims of a proposed class suit are alleged to be without legal or factual merit, the interests of fairness and efficiency are furthered when the contention is resolved in the context of a formal pleading (demurrer) or motion (judgment on the pleadings, summary judgment, or summary adjudication) that affords proper notice and employs clear standards. Were we to condone merit-based challenges as part and parcel of the certification process, similar procedural protections would be necessary to ensure that an otherwise certifiable class is not unfairly denied the opportunity to proceed on legitimate claims.” 7 (Linder, supra, 23 Cal.4th at pp. 440–441, 97 Cal.Rptr.2d 179, 2 P.3d 27; see, e.g., Chindarah v. Pick Up Stix, Inc. (2009) 171 Cal.App.4th 796, 90 Cal.Rptr.3d 175 [employer cross-claimed against employees who joined class action after signing settlement agreements, and the court properly granted summary judgment on these claims for the employer].) Accordingly, here, the defendant's contention that its defenses disposed of the putative class's claims was improperly resolved as part of the trial court's numerosity analysis.8

The California Supreme Court specified in Linder v. Thrifty Oil Co., 2 P.3d 27, 23 Cal.4th 429, 97 Cal.Rptr.2d 179 (Cal. 2000) that, generally speaking, a class action is appropriate when numerous parties suffer an injury of insufficient size to warrant individual action and when denial of class relief would result in an unjust advantage to the wrongdoer (at 434-435):

Courts long have acknowledged the importance of class actions as a means to prevent a failure of justice in our judicial system. (See City of San Jose v. Superior Court, (1974) 12 Cal.3d 447, 458, 115 Cal.Rptr. 797, 525 P.2d 701 (City of San Jose); Door v. Yellow Cab Co. (1967) 67 Cal.2d 695, 703-704, 63 Cal.Rptr. 724, 433 P.2d 732.) "`By establishing a technique whereby the claims of many individuals can be resolved at the same time, the class suit both eliminates the possibility of repetitious litigation and provides small claimants with a method of obtaining redress...."' (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 469, 174 Cal.Rptr. 515, 629 P.2d 23.) Generally, a class suit is appropriate "when numerous parties suffer injury of insufficient size to warrant individual action and when denial of class relief would result in unjust advantage to the wrongdoer." (Blue Chip Stamps u. Superior Court (1976) 18 Cal.3d 381, 385, 134 Cal.Rptr. 393, 556 P.2d 755 (Blue Chip Stamps); see Vasquez v. Superior Court (1971) 4 Cal.3d 800, 808, 94 Cal.Rptr. 796, 484 P.2d 964 (Vasquez).) But because group action also has the potential to create injustice, trial courts are required to "`carefully weigh respective benefits and burdens and to allow

[97 Cal.Rptr.2d 184]

maintenance of the class action only where substantial benefits accrue both to litigants and the courts.'" (Blue Chip Stamps, supra, 18 Cal.3d at p. 385, 134 Cal.Rptr. 393, 556 P.2d 755, quoting City of San Jose, supra, 12 Cal.3d at p. 459, 115 Cal.Rptr. 797, 525 P.2d 701.)
Section 382 of the Code of Civil Procedure authorizes class suits in California when "the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court." To obtain certification, a party must establish the existence of both an ascertainable class and a well-defined community of interest among the class members. (Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 470, 174 Cal.Rptr. 515, 629 P.2d 23; Vasquez, supra, 4 Cal.3d at p. 809, 94 Cal.Rptr. 796, 484 P.2d 964.) The community of interest requirement involves three factors: "(1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class." (Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 470, 174 Cal. Rptr. 515, 629 P.2d 23.) Other relevant considerations include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing. (See Blue Chip Stamps, supra, 18 Cal.3d at pp. 386-387, 134 Cal.Rptr. 393, 556 P.2d 755.)

On the other hand, the California Supreme Court found in Blue Chip Stamps v. Superior Court, 134 Cal.Rptr. 393, 18 Cal.3d 381, 556 P.2d 755 (Cal. 1976) that, where the recovery sought by the individuals was so small, and where the cost of distribution of that recovery would be too costly, the purported class member is unlikely to receive any appreciable benefit. As a result, the action becomes unmanageable, and without substantial benefit to class members. In addition, the court reasoned that a lawsuit does not warrant group action for damages when the members will not recover and when a simpler remedy such as mandate is available. As a result, the Court held that certification of the class was improper (at 385-387):

The class action has been held appropriate when numerous parties suffer injury of insufficient size to warrant individual action and when denial of class relief would result in unjust advantage to the wrongdoer. (Collins v. Rocha, supra, 7 Cal.3d 232, 237, 102 Cal.Rptr. 1, 497 P.2d 225 et seq.; Vasquez v. Superior [18 Cal.3d 386] Court, supra, 4 Cal.3d 800, 807, 94 Cal.Rptr. 796, 484 P.2d 964; Daar v. Yellow Cab Co., supra, 67 Cal.2d 695, 715, 63 Cal.Rptr. 724, 433 P.2d 732.) A factor in determining feasibility of the group approach is the probability each member will come forward ultimately, identify himself and prove his separate claim to a portion of the total recovery. (Daar v. Yellow Cab Co., supra, 67 Cal.2d 695, 706, 713, 63 Cal.Rptr. 724, 433 P.2d 732.)

However, when potential recovery to the individual is small and when substantial time and expense would be consumed in distribution, the purported class member is unlikely to receive any appreciable benefit. The damage action being unmanageable and without substantial benefit to class members, it must then be dismissed. (In re Hotel Telephone Charges (9th Cir. 1974) 500 F.2d 86, 91--92 (potential recovery of $6 per class member); Devidian v. Automotive Service Dealers Assn. (1973) 35 Cal.App.3d 978, 986, 111 Cal.Rptr. 228 (most claims $10 or less); Stilson v. Reader's Digest Assn., Inc. (1972) 28 Cal.App.3d 270, 273--274, 104 Cal.Rptr. 581 (millions of class members entitled to nominal damages).) And, when the individual's interests are no longer served by group action, the principal--if not the sole--beneficiary then becomes the class action attorney. To allow this is 'to sacrifice the goal for the going,' burdening if not abusing our crowded courts with actions lacking proper purpose. (See City of San Jose v. Superior Court, supra, 12 Cal.3d 447, 462, 115 Cal.Rptr. 797, 807, 525 P.2d 701, 711.)

While termination of a defendant's alleged wrongdoing is a factor to be considered (Daar v. Yellow Cab Co., supra, 67 Cal.2d 695, 715, 63 Cal.Rptr. 724, 433 P.2d

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[556 P.2d 759] 722), it does not warrant group action for damage when the members will not recover damage, and when a simpler remedy such as mandate is available. Moreover, when as here, the assertedly wrongful practice has ended long before the action is filed, its requested termination is a rather empty prayer.

Here, in proposing methods of recovery to the class, the lawyers suggest payment of claims either by cash upon informal presentation or by 'fluid recovery,' repayment of excess tax collections by reducing future charges. However, the proof of claim requirement established by Daar v. Yellow Cab Co., supra, 67 Cal.2d 695, 706, 713, 63 Cal.Rptr. 724, 433 P.2d 722, must be followed before a claimant may recover damages, particularly when departure will result in recovery by others than those who paid. Similarly, 'fluid recovery' in the instant case provides no correlation between those who paid excess tax and those who might reap the benefit of a future reduction in redemption price. Those who left California after redeeming their stamps and those who have died will hardly benefit; further, the [18 Cal.3d 387] great reduction in the stamp business indicates that those still redeeming stamps represent no more than a fraction of those who paid the excess tax. In contrast, any excess reimbursement benefited a larger class, the citizenry of California which includes the purported class. Balancing fairness, should not any overcharge remain in the public treasury?

This is an improper class action and the trial court abused its discretion in certifying it as one. 4

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