90 N.E.3d 1262
Court for the Trial of Impeach...2017Background
- Two putative class actions (Desrosiers v. Perry Ellis; Vasquez v. National Sec. Corp.) were settled and dismissed before plaintiffs moved for class certification under CPLR 902.
- Plaintiffs sought court-directed notice to putative class members of the proposed dismissals/compromises under CPLR 908; defendants argued CPLR 908 applies only to certified classes.
- Lower courts split: First Department followed Avena and required notice; other courts and defendants argued the statute’s language limits CPLR 908 to actual (certified) class actions.
- CPLR 908 (1975) requires court approval and that notice of a proposed dismissal/discontinuance/compromise be given to "all members of the class" in manner the court directs.
- The Court analyzed statutory text, legislative history, federal analog Rule 23(e) (pre-2003 and post-2003 amendments), prior appellate construction (Avena), and principles about legislative inaction.
- The Court affirmed the Appellate Division: CPLR 908 applies in the pre-certification context, so notice to putative class members is required before dismissal/disposition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does CPLR 908 require notice when a putative class action is settled/dismissed before certification? | Desrosiers/Vasquez: Yes — a complaint alleging class claims makes the suit a "class action" for purposes of CPLR 908 and triggers mandatory notice to putative members. | Perry Ellis/NSC: No — "class action" in CPLR 908 refers only to an action actually adjudicated/certified as a class; absent certification there are no "members of the class." | Held: CPLR 908 applies pre-certification; notice must be given to putative class members before dismissal/disposition. |
Key Cases Cited
- Avena v. Ford Motor Co., 85 A.D.2d 149 (1st Dept. 1982) (held CPLR 908 applies to settlements before certification; protects putative class from "quickie" settlements)
- O'Hara v. Del Bello, 47 N.Y.2d 363 (1979) (held failure to follow CPLR article 9 precludes class-wide relief; emphasizes early certification requirement)
- Shelton v. Pargo, Inc., 582 F.2d 1298 (4th Cir. 1978) (construed Rule 23(e) to require notice only for certified classes)
- Doe v. Lexington-Fayette Urban County Govt., 407 F.3d 755 (6th Cir. 2005) (held pre-certification notice discretionary; courts may consider collusion and publicity)
- Glidden v. Chromalloy Am. Corp., 808 F.2d 621 (7th Cir. 1986) (pre-certification notice discretionary under former Rule 23(e))
- Diaz v. Trust Territory of Pac. Is., 876 F.2d 1401 (9th Cir. 1989) (adopted majority federal approach that pre-certification notice is discretionary)
- Anheuser-Busch, Inc. v. Abrams, 71 N.Y.2d 327 (1988) (discussed weight to be given legislative inaction after judicial construction)
- Matter of Alonzo M. v. New York City Dept. of Probation, 72 N.Y.2d 662 (1988) (explains when legislative inaction can indicate approval of judicial interpretation)