With respect to the number of plaintiffs that must be included in a class action, the rule does not provide a specific number. Instead, the rule requires that the class be “so numerous that joinder of all members is impracticable.”
What Does Impracticability of Joinder Mean?
Impracticability of joinder means the court must be convinced that it would be unreasonable due to complexity for all plaintiffs with their own claims against the same defendant to separately bring their claims in a joint action. A class action allows instead for a single plaintiff to represent a whole class of plaintiffs in such situations.
Factors Considered for Impracticability of Joinder.
The real inquiry under Rule 23 is not the number of people affected, but whether joinder would be impractical. Under the rule, Plaintiffs need not show that joinder is impossible, but simply that the difficulty or inconvenience of joining all members of the class mitigate in favor of class treatment of their claims. While Courts have not provided a specific number for how many plaintiffs are needed to meet the numerosity requirement, they have instead looked at a number of factors to determine whether joinder of claims is impracticable. These factors include the ease of locating plaintiffs; the relative size and similarity of claims; geographical distance between plaintiffs; their financial resources and ability to institute individual actions; the amount of their individual claims; whether they have already joined other actions; judicial economy; and whether the claims are for injunctive relief or for damages. In addition, some courts have considered the fear of retaliation of class members bring an individual action as a factor in determining the numerosity requirement.
Courts have repeatedly held that repeated litigation of common issues in dozens of individual actions would be grossly inefficient, costly and a waste of judicial resources, and thus it is usually impractical to join 40 or more persons. In fact, Professor Newberg, the leading commentator on class actions, conducted a nationwide survey of court rulings on the numerosity issue concluding that any class consisting of 40 or more members should raise a presumption that joinder is impracticable.
As a result, courts have generally found numerosity where there is over 40 plaintiffs but been far less likely to find numerosity where there is less than 20 plaintiffs. In certain cases such as a securities class action involving a nationally traded security, the numerosity requirement is presumed to be satisfied.
Benefits of Aggregating Individual Claims
As the Supreme Court has explained, a “principal purpose” of class actions is to advance “the efficiency and economy of litigation.” A class action also enables large numbers of persons injured by a defendant’s unlawful conduct to obtain relief as a group when each class member’s individual claim is too small to justify the expense of a separate suit. Many times, when a defendant causes comparatively small injuries to a large number of people, no plaintiff alone has a sufficient financial incentive to bring an individual action because the costs of prosecuting the lawsuit would far exceed the maximum award the victim could recover. As the Supreme Court has explained, a class action resolves this “problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney*s) labor.”
For example, say a defendant injures a million consumers for $10.00 in damages each. If each plaintiff had to file their own lawsuit to recover the money he lost, few would take the trouble to do so because the costs of prosecuting the lawsuit would far exceed the maximum award each victim could recover. If, however, an individual plaintiff could bring a single class action lawsuit on behalf of everyone the defendant wronged to resolve the common questions, then the plaintiff could potentially aggregate each class member’s $10.00 loss, resulting in a potential $10 million recovery. That $10 million potential award would then make it economically rational for attorneys to expend time and resources to pursue the class’s claims. In this way, class actions compensate victims who might otherwise go uncompensated.
Additional resources provided by the author
Timothy L. Miles has dedicated his career to representing shareholders in complex class-action litigation. Whether serving as lead, co-lead, or liaison counsel, Mr. Miles has helped recover hundreds of millions of dollars for defrauded investors, shaped precedent-setting decisions, and delivered real corporate governance reforms. Judges and peers have repeatedly recognized Mr. Miles’ relentless advocacy for shareholders, as well as his unbendable ethical standards. For example, Mr. Miles is a member of the prestigious Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association, which is by invitation only and is “extended to those attorneys who exemplify superior qualifications, trial results, and leadership in their respective state based upon objective and uniformly applied criteria.” The National Trial Lawyers Association explained the significance of this honor: “With the selection of Timothy L. Miles by The National Trial Lawyers: Top 100, [Mr.] Miles has shown that he exemplifies superior qualifications, leadership skills, and trial results as a trial lawyer. The selection process for this elite honor is based on a multi-phase process which includes peer nominations combined with third party research.” Mr. Miles other recognitions include: • The AV® Preeminent™ Rating by Martindale-Hubble® in Securities Law, Litigation and Class Actions (2014-2018). The AV Rating is the highest possible rating given by LexisNexis Martindale-Hubbell Peer Review for a lawyer and is established on a peer-review basis. The AV Preeminent designation signifies that Mr. Miles has been rated by judges and fellow attorneys as having the highest possible rating for legal abilities and ethical standards. The rating is awarded to less than five percent of all attorneys across the United States, and is the highest rating offered by the Martindale-Hubbell Law Directory. • The AV® Preeminent™ Attorney – Judicial Edition, the Highest Possible Rating in Both Legal Ability & Ethical Standard Reflecting the confidential opinions of members of the Bar and Judiciary by Martindale-Hubble (2017-2018). • The Top-Rated Lawyer in Litigation™ for Ethical Standards and Legal Ability by Martindale-Hubble® (Feb. 2015). • Superb Rated Attorney, (10.0 out of 10), the Highest Rating Possible by Avvo. • Avvo Top Rated Lawyer 2017 & 2018 (Avvo). . • America’s Most Honored Professionals – Top 1% (2016-2018) (American Registry). Mr. Miles focuses his practice on securities fraud class actions, shareholder derivative actions, and corporate mergers and acquisitions class actions.