ADR CORNER
ADR CORNER
Class Action Mediation
JAMES B. BALDINGER
Class actions are complicated highstakes cases. They present unique legal, procedural, and practical challenges for litigators, and using an experienced class action mediator is essential to a successful resolution at mediation.
Class actions play a big role in our court system and commerce in general. In 2025, more than 13,000 class action lawsuits were filed in US federal courts alone. Analyses by several large national law firms found that the value of the ten largest class action settlements last year exceeded $ 70 billion, and that over 91 % of large US companies face class actions on a regular basis. Those figures have all grown steadily in the past 20 years, and the trend shows no sign of letting up.
What is a Class Action?
Class actions( also called collective, mass, or representative actions in some circumstances) are a form of litigation in which one or more class representative is permitted to sue or be sued on behalf of all those who are similarly situated. Class actions are an essential tool to address large multi-party disputes that would otherwise be difficult or impossible to manage as individual claims. Procedural rules in federal courts and all state courts( except Virginia and Mississippi) allow class actions and provide rules for how they are handled. Class actions usually provide for an award of prevailing plaintiff attorney’ s fees, which enables the filing of claims which might otherwise not be economically feasible to file on an individual basis. Not surprisingly, the availability of attorney’ s fees is often what drives the filing of class actions.
Class Certification
Before a case can proceed on a classwide basis, the class must be“ certified” by the court. Class certification typically requires four criteria to be met: numerosity, commonality, typicality, and adequacy of representation. Class certification is the most critical stage of a class action. If a class is certified, the potential recovery skyrockets. If class certification is denied, the value of the case is often not worthwhile for the plaintiff to pursue, or for the defendant to worry about. For the same reasons, class certification is key to mediation and settlement.
The Class Action Fairness Act
Class action settlements in federal courts are governed by the Class Action Fairness Act of 2005(“ CAFA”), which was enacted to protect against abusive settlements that provided large fees for plaintiff’ s counsel, sweeping res judicata protection for defendants, but little value to class members. CAFA sets strict requirements for class action settlements, particularly regarding awards of plaintiff’ s attorney’ s fees if the class members receive a coupon rather than a cash settlement payment.
CAFA also relaxes federal diversity jurisdiction and removal requirements for class actions, to ensure that most large class actions are adjudicated in federal court and subject to CAFA. In 2006, a year after CAFA was enacted, the Florida Legislature passed Florida Statute 768.734, which limits the filing of class actions in state court to claims by Florida residents, but still allows courts to certify class actions that include non-residents under certain circumstances. Settling parties sometimes seek to voluntarily dismiss a federal class action and refile in state court to avoid some of CAFA’ s restrictions.
Mediating Class Actions
Getting the named plaintiff and defendant to agree on the key terms of a settlement is often just the first step in a resolving a class action at mediation. Because the settlement can impact the rights of class members who are not present at mediation, the court will usually conduct a fairness hearing at which the settling parties urge the court to approve the settlement. Some class members( often named plaintiffs and their counsel from similar cases) may appear at the hearing and object to the settlement. An experienced class action mediator will help guide the parties in reaching a settlement that anticipates the court’ s requirements and attempts to head off potential objections. The mediator may be asked to confirm to the court that there was no collusion between the plaintiff and defendant at mediation and that the settlement was the product of arms-length negotiation.
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