Legal Memorandum: Class Actions – Prior Notice of Voluntary Dismissal

Issue: Under the Federal Rules of Civil Procedure, in a proposed class action in which a class has not been certified, must the potential members of the proposed class be notified of a voluntary dismissal by the representative plaintiffs?

This question has not been fully decided by the federal courts.  Fed. R. Civ. P. 23(e) requires that the members of a class be notified prior to a settlement or voluntary dismissal.  See Diaz v. Trust Territory of Pacific Islands, 876 F.2d 1401 (9^th Cir. 1989).  It appears that a majority of the federal circuits have determined that Rule 23(e) applies even before a class has been certified.  Id.  The Diaz case contains an informative discussion of the federal cases which have considered this issue, which the Fifth Circuit does not appear to have directly addressed.  However, in an opinion which was later superseded on other grounds, the Fifth Circuit stated that “[a] complaint that contains class action allegations is presumed to be a proper class suit between the time it is filed and the district court determines whether it satisfies the requirements of Rule 23.”    McArthur v. Southern Airways, Inc., 556 F.2d 298 (5^th Cir. 1977), superseded on other grounds by 569 F.2d 276 (5^th Cir. 1978), which was subsequently overruled by W.B. Coke v. General Adjustment Bureau, Inc., 640 F.3d 584 (5^th Cir. 1981).

Recently, however, there appears to be some recognition that not all putative class actions require notice prior to a voluntary dismissal.  In Rice v. Ford Motor Co., 88 F.3d 914 (11^th Cir. 1996), the Eleventh Circuit Court of Appeals denied a Rule 59(e) motion brought by the defendant Ford […]