For Your Information:
February 19, 2002
FTC Urges Greater Scrutiny of Class Action Attorney Fees and of Coupon Settlements andIncreased Competition in Selection of Class Counsel
The Federal Trade Commission today filed comments with the Judicial Conference's Committee on Rules of Practice andProcedure concerning proposed amendments to Rule 23 of the Federal Rules of Civil Procedure, governing class actionlitigation. The proposed amendments would affect the form and content of notices to class members, the review ofclass actionsettlements, the procedures for appointment of class counsel, and the calculation of class action attorney fees. The FTCcomments focus particularly on issues that may arise when a class action follows or parallels a prior lawsuit or enforcementaction by a government agency, and seek to ensure that the interests of injured consumers and potential class members willbe fully protected by the Federal Rules.Overall, the comments state, the FTC supports the proposed amendments to Rule 23 because they will help protect theinterests of injured consumers who are potential class members. The Commission believes, however, that Rule 23 could bestrengthened further by:Including a provision in the Rule that would require the parties to a class action to: (i) notify the Court of relatedactions by government agencies, to the extent those notices are not required by other rules, and (ii) notifygovernment agencies involved in actions or investigations of the related private class action; andAmending the Committee Note to Rule 23 to recommend that courts: (i) take into account the existence of relatedactions conducted by the government when calculating awards of attorney fees,and (ii) make specific findings aboutthe value of coupon settlements.The FTC believes these additions would assist both government agencies and the courts in ensuring that consumers achievethe fairest possible settlements and relief. In addition, the Commission believes that two of the existing amendmentssignificantly would benefit consumersby: 1) fostering competition in the appointment of class counsel; and 2) requiring thatnotice to class members be provided in plain, easily understood language. Indeed, the Commission recommends that theformer amendment, promoting competition in the appointment of class counsel, be moved from the Committee Note to the textof the Rule.The Commission vote authorizing the filing of the comments was 5-0. The comments represent the views of the Federal TradeCommission.
Copies
of the document mentioned in this release are available from the FTC's Web site athttp://www.ftc.govand also fromthe FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. Call toll-free:1-877-FTC-HELP.
Media Contact::
Mitchell J. Katz
Office of Public Affairs
202-326-2161
Staff Contact:
R. Ted Cruz
Office of Policy Planning
202-326-3683(FTC File No. V020008)
Federal Trade Commission
Protecting America's Consumers
Federal Trade Commission Provides Comments on Proposed Amendmentsto Federal Rule of Civil Procedure 23 Governing Class Action Lawsuits
Page 1of 2Rule 23 of the Federal Rules of Civil Procedure6/26/2009http://www.ftc.gov/opa/2002/02/rule23.shtm
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