C.r.c.p. 23
C.r.c.p. 23
Annotation Law reviews. For article, "Pleadings, Rules 7 to 25 ", see 28 Dicta 368 (1951). For article, "Standing to Sue in Colorado: A State of Disorder", see 60 Den. L.J. 421 (1983). For article, "Approval of a Class Action Settlement Under C.R.C.P. 23(e) ", see 31 Colo. Law. 71 (May 2002). For article, "Class Action Certification Under C.R.C.P. 23: Procedural and Evidentiary Considerations", see 39 Colo. Law. 29 (June 2010). Courts must liberally construe this rule because its policy favors maintaining class actions. When evaluating whether this rule's requirements are met, courts must generally accept as true the allegations supporting certification and must not base determination on whether the class will ultimately succeed in establishing each element necessary to prove its claim. Farmers Ins. Exch. v. Benzing, 206 P.3d 812 (Colo. 2009). A designation of an action as a class action does not make it so when the facts show otherwise. Associated Master Barbers, Local 115 v. Journeyman Barbers, Local 205, 132 Colo. 52, 285 P.2d 599 (1955). Failure to meet the mandatory requirements of section (a) is grounds for denial. Borwick v. Bober, 34 Colo. App. 423, 529 P.2d 1351 (1974). Failure to qualify under one of the subsections of section (b) is grounds for denial. Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo. App. 2005). Determination of whether requirements met within discretion of trial court. The determination of whether an action does or does not meet the requirements of a class action is within the discretion of the trial court. Borwick v. Bober, 34 Colo. App. 423, 529 P.2d 1351 (1974); State v. Buckley Powder Co., 945 P.2d 841 (Colo. 1997); Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo. App. 2005); State Farm Mut. Auto. Ins. Co. v. Reyher, 266 P.3d 383 (Colo. 2011). Need for class certification under section (b)(3) is permissible, but not dispositive, when common questions of law or fact predominate. State v. Buckley Powder Co., 945 P.2d 841 (Colo. 1997). The decision of whether to certify a class action lies within the discretion of the trial court and will not be disturbed unless the decision is clearly erroneous and an abuse of discretion. Friends of Cham. Music v. City & County of Denver, 696 P.2d 309 (Colo. 1985); Villa Sierra Condo. v. Field Corp., 787 P.2d 661 (Colo. App. 1990); Rosenthal v. Dean Witter Reynolds, Inc., 883 P.2d 522 (Colo. App. 1994); State Farm Mut. Auto. Ins. Co. v. Reyher, 266 P.3d 383 (Colo. 2011). Where trial court conducts rigorous analysis of the evidence in making its class certification decision, the trial court did not abuse its discretion in making its decision. State Farm Mut. Auto. Ins. Co. v. Reyher, 266 P.3d 383 (Colo. 2011). A trial court's determination whether the action should be accorded class treatment may not be set aside, unless that determination constitutes "clear error". Berco Res., Inc. v. Louisiana Land & Exploration Co., 805 P.2d 1132 (Colo. App. 1990); Robinson v. Lynmar Racquet Club, Inc., 851 P.2d 274 (Colo. App. 1993). Because a trial court's decision to decertify a class is equivalent to a decision to deny class certification in the first instance, whether to decertify the class also lies within the trial court's discretion. Benzing v. Farmers Ins. Exch., 179 P.3d 103 (Colo. App. 2007), rev'd on other grounds, 206 P.3d 812 (Colo. 2009). Prior partial certifications are not determinative. The court is not required to certify a class for claims that had been previously certified in a partial settlement context against other settling defendants. Toothman v. Freeborn & Peters, 80 P.3d 804 (Colo. App. 2002). Trial court may act sua sponte to create subclasses. Toothman v. Freeborn & Peters, 80 P.3d 804 (Colo. App. 2002). Trial court is given broad discretion regarding whether to certify a class action under this rule and that decision will not be disturbed unless clearly erroneous and an abuse of discretion. Trial court determination that plaintiffs failed to demonstrate typicality is clearly not erroneous. Ammons v. Am. Family Mut. Ins. Co., 897 P.2d 860 (Colo. App. 1995); Buckley Powder Co. v. State, 924 P.2d 1133 (Colo. App. 1996), aff'd in part and rev'd in part on other grounds, 945 P.2d 841 (Colo. 1997). However, no review of the validity of the certification of a class is necessary where all reasonable steps to provide the "best notice practicable" to members of the class as required by section (c)(2) have not been taken, resulting in the decertification of the class. Friends of Cham. Music v. City & County of Denver, 696 P.2d 309 (Colo. 1985). Trial court abused discretion in certifying plaintiff's class as appropriate where no detailed findings were made which would have delineated the class or subclass with respect to each issue, especially in light of the large class and wide range of issues presented. Goebel v. Colo. Dept. of Insts., 764 P.2d 785 (Colo. 1988). Trial court abused discretion in certifying two classes because it failed to rigorously analyze or even take into account defendant's evidence, offered to rebut class-wide inferences of causation, that the causation and amount of any damages to plaintiffs could only be determined by independent examination of each plaintiff's purchase transaction. Garcia v. Medved Chevrolet, Inc., 263 P.3d 92 (Colo. 2011). Where the trial court failed to recognize its obligation to provide damages due to its misreading of the McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, Dept. of Business Regulation of Florida, 496 U.S. 18 (1990), decision, the trial court must reconsider its reliance on that decision as a justification for denying class certification. State v. Buckley Powder Co., 945 P.2d 841 (Colo. 1997). Source of determination of maintainability of class action. Where the complaint lacks sufficient factual material upon which to make a decision as to whether a class action is to be maintained, the trial court may consider affidavits and exhibits, but, absent a timely request to provide the court with further information in the form of affidavits, discovery, or evidence, the trial court may determine this issue based upon allegations of the complaint alone. Levine v. Empire Sav. & Loan Ass'n, 40 Colo. App. 285, 579 P.2d 642 (1977), aff'd, 197 Colo. 293, 592 P.2d 410 (1979). The determination of an action's class status may require more than a review of the pleadings; its resolution may well demand consideration of the nature of the evidence that will be presented. Thus, it is generally better practice for a trial court to hold an evidentiary hearing upon the question of class certification. Villa Sierra Condo. v. Field Corp., 787 P.2d 661 (Colo. App. 1990); Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo. App. 2005). A trial court must rigorously analyze the evidence presented and determine that each requirement of this rule is met in order to certify a class. A trial court may consider factual or legal disputes, including expert disputes, to the extent necessary to determine whether the requirements have been met, but may not resolve factual or legal disputes to screen out or prejudge the merits of the case. Jackson v. Unocal Corp., 262 P.3d 874 (Colo. 2011); Maxwell v. United Servs. Auto. Ass'n, 2014 COA 2, __ P.3d __. There is often an overlap between the class certification decision and the merits of the case, particularly in the context of the predominance inquiry under section (b)(3). Jackson v. Unocal Corp., 262 P.3d 874 (Colo. 2011); Maxwell v. United Servs. Auto. Ass'n, 2014 COA 2, __ P.3d __. The trial court is precluded only from resolving a factual or legal dispute that goes solely to the merits of the case, while considering the issues to the extent necessary to satisfy itself that the requirements of this rule have been met. Maxwell v. United Servs. Auto. Ass'n, 2014 COA 2, __ P.3d __. Focus is whether the proof presented at trial will be predominantly common to the class or primarily individualized. Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo. App. 2005). Class representatives need only establish a nexus between their claims or defenses and the common questions of fact or law that unite the case. Members of class may have varying damages amounts and still establish the typicality requirement. Devora v. Strodtman, 2012 COA 87, 282 P.3d 528. Existence of a common nucleus of operative fact is the standard used by many courts. Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo. App. 2005). Where plaintiff alleged misconduct by insurer in charging higher premiums than stated in policy, the fact that the insurer used at least seven different types of policies, with varying statements of the amounts and payment schedules for premiums, precluded class certification. Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo. App. 2005). Early determination of feasibility of class action is preferred so that ample notice may be given to members of the class to appear in the action, seek exclusion from the class, or object to the representation by the plaintiffs, and, so that, if certification is properly denied, applicable statutes of limitations will not have run. Levine v. Empire Sav. & Loan Ass'n, 40 Colo. App. 285, 579 P.2d 642 (1977), aff'd, 197 Colo. 293, 592 P.2d 410 (1979). Actual size of defined class is significant factor in the determination that the class is sufficiently large to render joinder impracticable and mere speculation as to size is insufficient. Kniffin v. Colo. W. Dev. Co., 622 P.2d 586 (Colo. App. 1980). Sections (c) and (d) grant to a trial court substantial discretion to create subclasses with respect to separate issues or to enter other orders designed to manage the litigation. Thus, to the extent that a fraud claim alleged by plaintiffs could be asserted only by those condominium unit owners to whom a specific representation was made, the court, after receipt of evidence upon the matter, could either refuse class action treatment with respect to that claim or create a separate class for its assertion, depending upon the nature of any alleged representation and the number of present unit owners to whom it was allegedly made. Villa Sierra Condo. v. Field Corp., 787 P.2d 661 (Colo. App. 1990). Creation of smaller class or of subclasses is an option if the original definition of a class is too broad; however, the burden is on the plaintiff not the court to suggest these alternatives. Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo. App. 2005). In a class action under this rule where the interests sought to be represented are not in full harmony with the plaintiff, he cannot maintain a class action in their behalf. Associated Master Barbers, Local 115 v. Journeyman Barbers, Local 205, 132 Colo. 52, 285 P.2d 599 (1955); Darnall v. City of Englewood, 740 P.2d 536 (Colo. App. 1987); Robinson v. Lynmar Racquet Club, Inc., 851 P.2d 274 (Colo. App. 1993). Very nature of "habeas corpus" forfends class actions. Although "habeas corpus" is a civil proceeding, this rule of civil procedure, providing for class actions, does not apply; the very nature of "habeas corpus" proceedings forfends class actions. Riley v. City & County of Denver, 137 Colo. 312, 324 P.2d 790 (1958). Under this rule, in order to qualify persons as members of a class, there must be some status or relationship in common between them which arises out of circumstances other than that of conducting business under a common name as an unincorporated association. Thomas v. Dunne, 131 Colo. 20, 279 P.2d 427 (1955). Class properly confined to geographical parameters originally pleaded. Goebel v. Colo. Dept. of Insts., 830 P.2d 1036 (Colo. 1992). Members who make up an unincorporated association do not, by the bare fact of common membership, constitute a "class" within the meaning of this rule. Thomas v. Dunne, 131 Colo. 20, 279 P.2d 427 (1955). A voluntary condominium association has standing and may maintain an action on behalf of its members if: (1) Its members would otherwise have standing to sue in their own right; (2) the interests sought to be protected are germane to the association's purpose; and (3) neither the claim asserted nor the relief requested requires the participation of individual members in the litigation. Villa Sierra Condo. v. Field Corp., 787 P.2d 661 (Colo. App. 1990). As to the third part of the test, while an association may generally obtain declaratory or injunctive relief without joining its members, any litigation designed to obtain damages on their behalf would normally require the member's presence. Villa Sierra Condo. v. Field Corp., 787 P.2d 661 (Colo. App. 1990). Class action may be maintained by an association of public employees seeking declaratory judgment pertaining to longevity pay increases. Colo. Ass'n of Pub. Employees v. Colo. Civil Serv. Comm'n, 31 Colo. App. 369, 505 P.2d 54 (1972). Burden of establishing that action should proceed as class action on party seeking. In any application to proceed as a class action, the burden of establishing that an action should proceed as a class action is on the party seeking to utilize the class action. Borwick v. Bober, 34 Colo. App. 423, 529 P.2d 1351 (1974); Levine v. Empire Sav. & Loan Ass'n, 40 Colo. App. 285, 579 P.2d 642 (1977), aff'd, 197 Colo. 293, 592 P.2d 410 (1979); Villa Sierra Condo. v. Field Corp., 787 P.2d 661 (Colo. App. 1990); Robinson v. Lynmar Racquet Club, Inc., 851 P.2d 274 (Colo. App. 1993); Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo. App. 2005). In class actions the courts have broad discretion to shape and administer judicial relief. Gorin v. Arizona Columbine Ranch, Inc., 34 Colo. App. 405, 527 P.2d 899 (1974). A party requesting class action certification has the burden of proving that all the requisites of this rule have been satisfied. Kniffin v. Colo. W. Dev. Co., 622 P.2d 586 (Colo. App. 1980). A class action advocate bears the burden of demonstrating that the claims being asserted may properly be accorded class action treatment. Before a plaintiff may have one or more of its claims treated as class claims it must initially demonstrate that the numerosity, commonality, typicality, and adequacy of representation requirements of section (a) are met. Berco Res., Inc. v. Louisiana Land & Exploration Co., 805 P.2d 1132 (Colo. App. 1990). Plaintiffs had the burden of demonstrating the propriety of a class action. However, if the plaintiffs make an initial demonstration that a class action is appropriate under section (b)(3), then defendants cannot rely only upon the general allegations of a pleading to argue that common issues do not predominate over individual ones. They must, at the least, describe in some detail the nature of the evidence that they intend to produce upon the issue, so that the court may render an informed judgment upon the predominance of common legal or factual issues over individual ones. Villa Sierra Condo. v. Field Corp., 787 P.2d 661 (Colo. App. 1990). A "predominant" issue need not be one that is determinative of a defendant's liability. Rather, when one or more of the central issues in the action are common to the class and can be said to predominate, the action is proper under section (b)(3), even though other matters will have to be tried separately. Thus, resolution of common issues need not guarantee a conclusive finding on liability. Villa Sierra Condo. v. Field Corp., 787 P.2d 661 (Colo. App. 1990). Individual issues regarding applicable statute of limitations do not necessarily defeat class certification. Named plaintiffs in a class action may demonstrate ignorance or reliance on a class-wide basis necessary to toll the statute of limitations using circumstantial evidence that is common to the class. Patterson v. BP Am. Prod. Co., 240 P.3d 456 (Colo. App. 2010), aff'd, 263 P.3d 103 (Colo. 2011). Ignorance and reliance elements of fraudulent concealment may be inferred from circumstantial evidence, enabling plaintiffs to establish a theory of fraudulent concealment on a class-wide basis with evidence common to the class. BP Am. Prod. Co. v. Patterson, 263 P.3d 103 (Colo. 2011); Maxwell v. United Servs. Auto. Ass'n, 2014 COA 2, __ P.3d __. Trial court failed to consider, in class certification issue, whether claims for damages were appropriate for class and if so whether notice to individual class members was required. Goebel v. Colo. Dept. of Insts., 764 P.2d 785 (Colo. 1988). Litigants should be afforded opportunity to present evidence as to whether class action is maintainable, which implies sufficient discovery; however, a plaintiff may not rely on the theory that discovery and an evidentiary hearing are a matter of right, without making a minimal showing as to the requirements of this rule. Levine v. Empire Sav. & Loan Ass'n, 197 Colo. 293, 592 P.2d 410 (1979). Once excluded from a class action, such excluded members are not to be included within any judgment of the court, whether adverse or favorable. Gorin v. Arizona Columbine Ranch, Inc., 34 Colo. App. 405, 527 P.2d 899 (1974). Generally, only a named class member may challenge settlement agreement. Absent intervention, an unnamed class member does not have standing to appeal the approval of a settlement agreement and plan of allocation. However, an unnamed class member who has not been permitted to intervene may also have standing to bring a direct appeal if a motion to intervene, which is then appealed, should have been granted. Higley v. Kidder, Peabody & Co., 920 P.2d 884 (Colo. App. 1996). Where certain plaintiffs in a 42 U.S.C. § 1983 class action are dismissed because they have no claims under § 1983, and such plaintiffs are not representatives of a class of persons who may have claims under § 1983 and remain in the action, they cannot represent the class on appeal. Casados v. City & County of Denver, 924 P.2d 1192 (Colo. App. 1996). Disallowance of discovery after dismissal. The trial court, after dismissing a class action, does not abuse its discretion in declining to allow discovery when that request is made for the first time in a motion for rehearing. Levine v. Empire Sav. & Loan Ass'n, 40 Colo. App. 285, 579 P.2d 642 (1977), aff'd, 197 Colo. 293, 592 P.2d 410 (1979). Where plaintiffs fail to request right to amend complaint for the purpose of demonstrating that their class action should be maintained, either prior to a trial court ruling on a motion to dismiss or in a motion for rehearing filed thereafter, they are precluded from raising that issue on appeal. Levine v. Empire Sav. & Loan Ass'n, 40 Colo. App. 285, 579 P.2d 642 (1977), aff'd, 197 Colo. 293, 592 P.2d 410 (1979). Trial court's approval of settlement for fundamental fairness must balance at least: The strength of the plaintiffs' case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed, and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement. Helen G. Bonfils Found. v. Denver Post Employees Stock Trust, 674 P.2d 997 (Colo. App. 1983). Extent of court's discretion in approving settlements summarized in Higley v. Kidder, Peabody & Co., 920 P.2d 884 (Colo. App. 1996). Same legal principles apply in appellate review of total settlement, as between defendants and the class as a whole, and of an agreement for allocation of the settlement proceeds among class members. Higley v. Kidder, Peabody & Co., 920 P.2d 884 (Colo. App. 1996). Settlement needs not benefit all class members equally. However, a court may refuse to approve a settlement when a disparity of benefits to be received among the class members evidences either substantive unfairness or inadequate representation. Higley v. Kidder, Peabody & Co., 920 P.2d 884 (Colo. App. 1996). Evaluation of a proposed settlement or allocation plan is a fact-specific inquiry. Higley v. Kidder, Peabody & Co., 920 P.2d 884 (Colo. App. 1996). No error in approval of settlement plan. Where the trial court considered all factors when weighing the fairness of a proposed settlement and, based upon all considerations, approved the settlement plan, there was no error. Helen G. Bonfils Found. v. Denver Post Employees Stock Trust, 674 P.2d 997 (Colo. App. 1983). Defendant required to assist plaintiff in sending notice of the class action to the members of the class. Although the costs of sending notices of a class action lawsuit to the members of the class usually are borne by the plaintiff, there are situations where the defendant is better able to perform the mailing and incur the associated costs. The district court did not abuse its discretion when it required the defendant to send the notices since the defendant makes periodic mailings to class members and such notices could be included at insubstantial expense to the defendant. Mountain States v. District Court, 778 P.2d 667 (Colo. 1989), cert. denied, 493 U. S. 893, 110 S. Ct. 519, 107 L. Ed. 2d 520 (1989). Four elements must be addressed prior to issuing a restraint on future communications during the pre-certification period. Several factors guide the trial court in considering the formulation of restrictions on future communication by a defendant to putative class members, including the: (1) Severity and likelihood of perceived harm; (2) precision with which the order is drawn; (3) availability of a less onerous alternative; and (4) duration of the order. Air Commc'n & Satellite Inc. v. EchoStar Satellite Corp., 38 P.3d 1246 (Colo. 2002). Applicability of statutes of limitation and repose under federal tolling doctrines. As long as a party seeking to act as a class representative does not commence a new, separate suit as class representative, but merely seeks to mintain the currently pending and timely filed action as a class action and act as class representative, a statute of repose that would otherwise constitute a defense as to that party, disqualifying the party as a class representative, does not apply. Rosenthal v. Dean Witter Reynolds, Inc., 883 P.2d 522 (Colo. App. 1994). The commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action. Once the statute of limitations has been tolled, it remains tolled for all members of the putative class until class certification is denied. State Farm Mut. Auto. Ins. Co. v. Boellstorff, 540 F.3d 1223 (10th Cir. 2008) (citing Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 94 S. Ct. 756, 38 L. Ed. 2d 713 (1974) and Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 103 S. Ct. 2392, 76 L. Ed. 2d 628 (1983)). Class actions for injunctive relief certified under section (b)(2) do not preclude individual actions for damages. Jahn ex rel. Jahn v. ORCR, Inc., 92 P.3d 984 (Colo. 2004). Due process, as well as the requirements of the claim preclusion doctrine, must be satisfied before a class action can bind class members for a class judgment. While courts have held that due process is satisfied in class actions for injunctive relief when class members are adequately represented, minimal due process requires both notice and adequate representation in class claims for monetary damages since there is a property right at stake. Jahn ex rel. Jahn v. ORCR, Inc., 92 P.3d 984 (Colo. 2004). Because section (b)(3) includes due process safeguards necessary to preclude class members from bringing individual suits for damages and section (b)(2) lacks such safeguards, section (b)(2) was not intended to certify actions that preclude individual suits for damages. Section (b)(2), which authorizes class actions for injunctive relief and lacks notice and other procedural requirements, reflects that due process may only require adequate representation to bind class members to judgments for injunctive relief. In contrast, section (b)(3), which governs class actions for damages and imposes specific notice requirements, embodies due process requirements necessary to bind class members to judgments for monetary relief. Jahn ex rel. Jahn v. ORCR, Inc., 92 P.3d 984 (Colo. 2004). Federal cases under Fed. R. Civ. P. 23 are persuasive because C.R.C.P. 23 is virtually identical to the federal rule. Goebel v. Dept. of Insts., 764 P.2d 785 (Colo. 1988); Rosenthal v. Dean Witter Reynolds, Inc., 883 P.2d 522 (Colo. App. 1994); Higley v. Kidder, Peabody & Co., 920 P.2d 884 (Colo. App. 1996); Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo. App. 2005). Failure strictly to comply with section (c)(3) does not preclude appellate review of the judgment. A failure of such compliance is merely a clerical defect correctable under C.R.C.P. 60(a). Any such defect does not toll the time for filing a notice of appeal. Goodwin v. Homeland Cent. Ins. Co., 172 P.3d 938 (Colo. App. 2007). Applied in City & County of Denver v. Gushurst, 120 Colo. 465, 210 P.2d 616 (1949); Mar-Lee Corp. v. Steele, 145 Colo. 447, 359 P.2d 364 (1961); Hoper v. City & County of Denver, 173 Colo. 390, 479 P.2d 967 (1971); Rodgers v. Atencio, 43 Colo. App. 268, 608 P.2d 813 (1979); City of Lakewood v. Colfax Unlimited Ass'n, 634 P.2d 52 (Colo. 1981); Cottrell v. City & County of Denver, 636 P.2d 703 (Colo. 1981); Ackmann v. Merchants Mtg. & Trust Corp., 645 P.2d 7 (Colo. 1982); In re Brandt v. Indus. Comm'n, 648 P.2d 676 (Colo. App. 1982); Ackmann v. Merchants Mtg. & Trust Corp., 659 P.2d 697 (Colo. App. 1982); Bancroft-Clover Water & San. Dist. v. Metro. Denver Sewage Disposal Dist. No. 1, 670 P.2d 428 (Colo. App. 1983); Elk River Assocs. v. Huskin, 691 P.2d 1148 (Colo. App. 1984); Jackson v. Unocal Corp., 262 P.3d 874 (Colo. 2011); Garcia v. Medved Chevrolet, Inc., 263 P.3d 92 (Colo. 2011); State Farm Mut. Auto. Ins. Co. v. Reyher, 266 P.3d 383 (Colo. 2011).