Class Actions & Derivative Suits »

Pick Me, Pick Me: Getting Appointed as Class Counsel

Class actions provide lawyers the opportunity to be involved in an often exciting, high profile case that can have an impact that reaches far beyond the dispute between the original plaintiff and the defendant. Young lawyers may, understandably, relish the idea of filing and prosecuting their first class action. But filing that cutting-edge class action does not ensure that an enterprising plaintiff’s lawyer will be appointed to represent the class. Below are several questions to consider regarding class counsel appointment as well as the role that defense counsel has in this critical process.

How Do I Get Appointed Class Counsel?
When you move for class certification, you also file a motion for appointment as class counsel under Federal Rule of Civil Procedure 23(g). Subsection 23(g) was added to the rule in 2003 to clarify the process and considerations relevant to the appointment of class counsel.

What Was the Process Before 2003?
District courts evaluated and appointed class counsel as part of the Rule 23(a)(4) analysis of class certification, i.e. whether the class representative would adequately and fairly represent the interests of the class. To a great extent, Rule 23(g) codifies the case law that evolved under Rule 23(a)(4) concerning the adequacy of class counsel, and those pre-2003 cases are still relevant authority.

Why Does the Court Have Anything to Do With It?
Class actions permit courts to adjudicate the rights of parties who are not themselves before the court. In order to ensure that the rights of these unnamed parties are fully protected, the district court actively supervises many aspects of a class action. Among the most important of these supervisory duties is to select counsel with the ability and motivation to do the best job possible for the class.

I’ve Investigated the Case—Shouldn’t I Be the One to Represent the Class?
The work you have done investigating and preparing the case is one important factor that the district court will consider. But, there are other considerations as well.

What Else Will the Court Be Looking For?
The court must also consider your prior experience in handling the particular type of claim and class actions generally, your knowledge of applicable law, and the resources that you can commit to the case.

Is That It?
No. The court has very broad discretion and may consider “any other matter pertinent to counsel’s ability to fairly and adequately represent the interests of the class.” That might include consideration of whether you have any conflicts of interest.

What Kind of Conflicts Might Raise a Concern?
If counsel is likely to favor existing clients or named plaintiffs over class members, that can represent a conflict of interest. Similarly, where a law firm represents a party in another matter who has interests adverse to the class, that circumstance may be grounds for finding a conflict of interest. Courts have also expressed concern about attorneys representing a class of which they themselves are members.

On the other hand, speculative or hypothetical conflicts of interest will not defeat a finding of adequacy. Similarly, courts typically reject the argument that a lawyer with a purported ideological motive has a conflict of interest.

Do I Have to Tell the Court What My Fees Will Be?
Rule 23(g)(1)(c) allows the court to order that you provide information about your fees. But, that’s not all. The court may “propose” terms for fees and costs and may include in its appointing order provisions about fees and costs. In some cases, courts have experimented with competitive bidding to select class counsel, with an eye to lowering the attorney fees that the class must pay its counsel.

How Do I Present the Information to the Court?
To support your application to be appointed class counsel, you submit a declaration that explains your qualifications, your experience, your investigation and work on the case to date, and your ability to finance the litigation.

Letters of Reference?
Overkill.

What if This Is My First Class Action?
If you want to be appointed class counsel, you should get co-counsel with class action experience to assure the court that the class will be well represented.

If There Are More Than One Set of Lawyers Competing, How Will the Court Decide?
Rule 23(g) requires that the court select “the applicant best able to represent the interests of the class”—not particularly illuminating. The Advisory Committee Notes direct that the court should “make a comparison of the strengths of the various applicants,” using the factors discussed above. The notes also suggest that an attorney’s “existing attorney client relationship with the proposed class representative” may also be an important consideration.

Can I File My Motion to Be Appointed as Soon as the Complaint Is on File?
Yes. The rule permits a district court to appoint “interim” class counsel for the period before the class is certified. Where motions or settlement discussions are likely to occur before certification, the court will want to ensure that the interests of the class are protected. Courts consider the same factors in appointing interim counsel as they do for appointing class counsel at the point of certification. Unless there are multiple counsel competing to be appointed counsel, courts will not necessarily appoint interim counsel.

Is the Defendant Likely to Oppose My Selection?
As noted above, if the defendant points out actual conflicts of interest, the court will seriously consider those in determining class counsel. In addition, defendants may highlight any information that suggests that the proposed class counsel has made misrepresentations to the court.

Should the Defendant Inform the Court of Its Preference?
If several firms are competing for appointment as class counsel and the defendant expresses a preference for one set of counsel over another, the court may be suspicious that the defendant is engaged in a “reverse auction.”

What’s a “Reverse Auction”?
A “reverse auction” refers to a circumstance where “the defendant in a series of class actions picks the most ineffectual class lawyers to negotiate a settlement with in the hope that the district court will approve a weak settlement that will preclude other claims against the defendant.” Since the interests of the class and the interest of the defendant are at odds, the views of the defendant about the selection of class counsel are unlikely to carry much weight.

What Practical Tips Can You Give?
Keep a detailed record of your efforts to investigate and develop the case. Make an honest assessment of your own experience and expertise and, if necessary, find co-counsel to bolster your team’s credentials. Be prepared to provide the court with a well-thought out plan for financing the case. Anticipate any arguments that might be made about potential conflicts of interest and take steps necessary to remove them. Most importantly, be sure that you do excellent legal work leading up to the class certification motion so that the court already has a positive impression of your abilities and your commitment to the case.

Keywords: Class actions, Federal Rules of Civil Procedure, Class Action Fairness Act, Rule 23(a)

Jocelyn D. Larkin is with the Impact Fund.

This article appears in the forthcoming Spring/Summer 2009 issue of CADS Report, from the Class Actions and Derivative Suits Committee.

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