The UCL Practitioner
Tuesday, September 20, 2005
New class action decision: Shapell Industries v. Superior Court
In Shappell Industries, Inc. v. Superior Court, ___ Cal.App.4th ___ (Sept. 19, 2005), the Court of Appeal (Second Appellate District, Division Four) addressed an interesting and somewhat abstract question. What happens to a putative class action when the claims of the sole named class representative are voluntarily dismissed without prejudice? Does a case still exist? The Court of Appeal concluded that it does:
[The fact that the named class representative] dismiss[ed] himself as an individual party to the action meant that there was no named representative plaintiff of the putative class. But in our view the putative class remained extant, awaiting proper amendment of the complaint to add a new representative plaintiff. A dismissal by only some of the plaintiffs means the court is not divested of subject matter jurisdiction and the suit continues. .... California courts recognize and preserve the rights of absent class members, even before the issue of certification has beeen determined.
(Slip op. at 8-9.) Until class certification is denied, "[t]he alleged putative class members are the parties interested in prosecuting the action, such that an actual, justiciable controversy exists, pending amendment to add a named representative plaintiff." (Slip op. at 11.) The Court concluded:
The trial court did not err in permitting [the new plaintiff] to amend the complaint, where [he] came forward promptly as the proposed representative plaintiff, and where no attempt was made to state a new cause of action against [the defendant], but rather the intent was to substitute an unsuitable representative plaintiff for an apparently suitable one.
(Slip op. at 12-13.) This decision could have ramifications for Prop. 64 litigation in which leave to amend is sought to add an affected class representative. I also wonder what happens if the trial court finds the case suitable for class treatment in every respect except the typicality or adequacy of the particular class representative. Shouldn't leave to amend to substitute a new class representative be granted there as well? Cf., e.g., Lazar v. Hertz Corp., 143 Cal.App.3d 128, 144 (1983) (conditionally granting class certification to permit substitution of a suitable class representative).
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