History and Purpose of Class Actions

Like much of American civil law, class actions can be traced to the English chancery court system. Prior to the use of class actions, the English courts required that any person, whether plaintiff or defendant, who had a material interest in a case be made a named party in the litigation so that a judgment in the case would be binding on him or her. This process was called joinder, because the parties were joined to the litigation. Joinder was required in these cases regardless of the number of people who might be involved. In many cases, this practice was extremely cumbersome. Cases could not be filed if it was impossible to locate all potentially interested parties. In a case in which there were many parties, all of whom could be located, the case would become unmanageable with so many people directly involved in the litigation.

In the 17th century the English courts established a "bill of peace" that allowed one representative of a group to bring or defend an action on behalf of the entire group. The bill of peace was allowed when there were too many interested persons to be joined in one lawsuit, all the members had a material interest in the issues, and a named representative could sufficiently protect the interests of the absent group members. If these three requirements were met, the judgment of the court would be binding on all members of the represented group, including those who did not personally appear before the court.

The concept of class representation was adopted and developed on a case-by-case basis in the United States. In 1853, the United States Supreme Court reiterated that, for the sake of both justice and convenience, courts should allow a representative to sue or be sued on behalf of all those who were similarly situated, with the resulting judgment binding all members of the group. In 1938, in an effort to provide more uniformity in the conduct of these cases, the Supreme Court adopted Federal Rule of Civil Procedure 23 to govern class action litigation. Many commentators believe the adoption of Rule 23 reflected developments in society at the time. Industrial developments were advancing faster than safety issues, resulting in large numbers of individuals suffering similar injuries. These individuals often lacked the resources, knowledge, or experience to sue individually. Class action litigation was perceived as a way to address these problems. Class actions in state courts developed as an alternative to class actions in the federal system. The Supreme Court discouraged class actions in federal court unless they involved a question of federal law, which made federal courts less accessible for parties. To compensate, the Supreme Court ruled that state courts could handle all types of class action litigation, even if not all class members resided in the particular state. As was the case in the federal system, class actions in state courts initially developed on a case-by-case basis. Gradually, however, states began to adopt rules to govern the litigation. In 1941, Texas substantially adopted the Federal Rule. The Texas statute was revised in 1977 to reflect changes in the Federal Rule.

There are a number of traditional justifications for allowing class action litigation. These include:

• Promoting efficient use of the courts by having one large lawsuit instead of numerous small cases
• Ensuring that persons who are similarly situated receive similar treatment
• Protecting the interests of all class members by ensuring that all injured parties receive compensation (with individual lawsuits, those who sue early may recover at the expense of those who sue later)
• Encouraging private attorneys to prosecute actions that further the enforcement of laws and discourage socially unacceptable conduct