Local Rule LR 23.1: CLASS ACTIONS
N.D. Ga. — Civil rule
LR 23.1 CLASS ACTIONS
(A) Complaint, Counterclaims, Crossclaims
(1) Caption. For all class actions the complaint shall bear next to the style of the case the designation "Complaint - Class Action."
(2) Class Action Allegations. Under a separate heading titled "Class Action Allegations", the complaint shall provide the following information:
(a) The section of Fed. R. Civ. P. 23 which is claimed to authorize maintenance of suit by class action.
(b) The size (or approximate size) and definition of the alleged class.
(c) The basis of the named plaintiff's or plaintiffs' claim to be an adequate representative of the class or, if defendants, the basis of the named defendant's or defendants' claim to be an adequate representative of the class.
(d) The alleged questions of law and fact which are common among members of the class.
(e) The allegations necessary to satisfy the criteria of section (b)(1) or (b)(2) of Fed. R. Civ. P. 23 or to support the findings required by section (b)(3) of Fed. R. Civ. P. 23.
(f) For actions requiring a jurisdictional amount, the basis for determination of that amount.
The foregoing provisions shall apply, with appropriate adaptions, to any counterclaim or crossclaim alleged to be brought for or against a class.
(B) Class Certification. The plaintiff shall move within ninety (90) days after the complaint is filed for a determination under Fed. R. Civ. P. 23(c)(1) as to whether the suit may be maintained as a class action. Notwithstanding the foregoing, in any class action brought pursuant to the Private Securities Litigation Reform Act of 1995, or a class action in which one or more defendants have filed a motion to dismiss pursuant to Fed. R. Civ. P. 12 in lieu of an answer to the complaint, or a class action in which one or more parties file a motion for coordination and/or consolidation of multiple actions before the Judicial Panel on Multidistrict Litigation, the plaintiff shall move for a determination under Fed. R. Civ. P. 23(c)(1) within thirty (30) days after all defendants have filed an answer to the complaint. The Court may extend the time upon a showing of good cause.
(C) Communications with Actual or Putative Class Members.
(1) Purpose. The administration of justice often requires that limited restrictions be placed on counsel and parties in cases in which class certification is sought or has been granted. In class actions where a putative class member is permitted to elect not to participate in the class action, there is an inherent risk that a class member's decision may, in the absence of Court regulation of communications regarding the class action, not be based on a complete and balanced presentation of the relevant facts. Special management of class actions is often necessary to protect the interests of both formal parties and absent class members.
(2) Restrictions on Communications. When class certification is sought in a case, all parties and/or their counsel are required to confer jointly to determine whether proper management of the case or the interests of putative class members require the entry of an order limiting either the parties or counsel in communications with putative class members. The conference shall occur as soon as practicable, but in no event later than twenty-one (21) days after the complaint is served. Within fourteen (14) days after the conference, counsel shall submit to the Court a joint statement of their collective or individual views as to whether an order should be entered limiting communications. If counsel agree no order is necessary, they shall so state in their report to the Court. If counsel agree that an order limiting communications should be entered, they shall submit the proposed content of such order and the grounds justifying entry of same. If counsel cannot agree whether an order should be entered or what the content of such an order should be, they shall report this to the Court and either submit stipulated facts for the Court's consideration or request a hearing to present evidence on the issue. Based on the record before the Court, an order limiting communications may be entered upon a finding that a failure to so limit communications would likely result in imminent and irreparable injury to one of the parties. Except as set forth in LR 23.1(C)(4)(a), neither the parties nor their counsel shall initiate communications with putative class members regarding the substance of the lawsuit until counsel presents the required report to the Court and any necessary order is entered pursuant to the report.
(3) Restrictions Applicable to All Class Actions. In all cases where class certification is sought or granted, the following shall apply:
(a) All parties and counsel are forbidden to solicit fees and expenses or agreements to pay fees and expenses from prospective or actual class members who are not formal parties or who do not plan to become formal parties.
(b) All parties and counsel are forbidden to communicate with prospective or actual class members in a way which tends to misrepresent the status, purpose, and effects of the action or of any actual or potential Court orders therein, which may create impressions tending without cause to reflect adversely on any party, any counsel, the Court, or the administration of justice.
(4) Class Actions Under the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 ("Reform Act") provides for a notice to be published following the commencement of a securities class action. 15 U.S.C. §§ 78u-4(a)(3)(A)(i), 77z-1(a)(3)(A)(i). The Court finds that certain practices in Reform Act class actions have the potential to harm the interests of class members and/or defendants and can interfere with the orderly administration of justice. For example, the Court finds that numerous notices of the same litigation have been released, thereby creating the potential for confusion for potential class members and potential damage to the interests of shareholders and businesses. The Court finds further that the measures adopted herein are reasonably necessary to protect the interests of class members, realize the goals of the Reform Act, and balance the rights of those who wish to prosecute a Reform Act class action or communicate about it.
(a) Notice of the Reform Act Class Action.
(i) Contents of the Notice. Consistent with the provisions of 15 U.S.C. §§ 78u-4(a)(3)(A)(i), 77z-1(a)(3)(A)(i), following the filing of any Reform Act class action in this District, each law firm on a complaint may choose to publish a notice. Such notice shall have as its headline "Notice of Filing Securities Class Action Against [Defendant or Defendants]" and shall provide the following information as required by the Reform Act:
(1) the pendency of the action; (2) the claims asserted therein; (3) the purported class period; (4) that, not later than sixty (60) days after the date on which the first notice is published, any member of the purported class may move the Court to serve as lead plaintiff of the purported class; and (5) contact information for the law firm issuing the notice, including the name of a contact person who is designated to discuss the lawsuit with putative class members, an address, a telephone number, and a website and e-mail address, if applicable. However, the notice shall not contain a promotional statement for any law firm.
(ii) Type of Publication. The one notice pursuant to subsection (i) shall be published in a widely circulated national business-oriented publication or wire service.
(iii) Only One Notice Per Law Firm. Unless otherwise ordered by the Court, there shall be only one notice per law firm regardless of the number of complaints filed in this Court arising out of the same or similar set of facts or circumstances. No attorney seeking to represent the putative class shall initiate any other communication with putative class members unless approved in advance by the Court. Such Court approval will be granted if the communication is deemed by this Court to be reasonably necessary to achieve the purposes of the Reform Act. This rule does not affect the rights or obligations of defendants to give notice of the pendency of the suit, nor does it preclude counsel for either party from contacting class members whom they believe to be fact witnesses or with whom they have an attorney-client relationship.
(b) Motion for Appointment of Lead Plaintiff. Pursuant to 15 U.S.C. §§ 78u-4(a)(3)(B)(i) and (v), 77z-1(a)(3)(B)(i) and (v), the Court shall consider any motion for appointment of lead plaintiff and lead plaintiff's counsel in a Reform Act class action within ninety (90) days after the date on which the first Notice is published pursuant to 15 U.S.C. §§ 78u-4(a)(3)(A)(i), 77z-1(a)(3)(A)(i), and this rule or as soon thereafter as practicable. Consistent with the purpose and terms of the Reform Act, in considering and ruling upon such a motion as to appointment of lead plaintiff and lead counsel, the Court will consider, among other relevant factors, the following:
(i) the proposed lead plaintiff's financial loss, recognizing that the presumption that the person with the largest financial interest in the relief sought is the most adequate lead plaintiff is rebuttable;
(ii) whether the proposed lead plaintiff's counsel has complied with the Local Rules of this Court;
(iii) whether the proposed lead plaintiff's counsel promotes the efficient conduct of the litigation; and
(iv) the relevant experience of the proposed lead plaintiff's counsel.
(c) Certification of Proposed Lead Counsel. Any law firm seeking to be appointed lead counsel pursuant to the Reform Act, 15 U.S.C. §§ 78u-4(a)(3)(B)(v), 77z-1(a)(3)(B)(v), shall submit with its motion papers a sworn certification stating that with regard to the case at bar, such law firm:
(i) has issued or caused to be issued no more than one notice to putative class members (except as authorized by LR 23.1(C)(4)(a)(iii));
(ii) has complied with the Local Rules of this Court; and
(iii) has complied with applicable State Bar of Georgia ethical rules.
(5) Ethical and Other Obligations Not Affected. The obligations and prohibitions of the foregoing rule are not exclusive. All other ethical, legal, and equitable obligations to which counsel and/or parties are subject are not affected by this rule.