*1 405 Mich 148 BANK NATIONAL v MICHIGAN GRIGG 5). (Calendar 7, Argued No. March
Docket No. 59308. Decided 17, January 1979. of herself and other Grigg brought on behalf an action Sarah incurred certain Michigan who had holders BankAmericard Michigan enjoin charges 1969 and 1971 to between finance permitted higher charging than interest from National Bank damages Federal bank- under to recover double statute and J., Court, Hughes, Ingham Street ing Sam law. The Circuit ground summary judgment the defendant on granted for plaintiff permit banking to sue did not law Federal capacity. representative damages The Court in a double O’Hara, JJ., P.J., Quinn, in an Appeals, and Bronson opinion, for a unpublished per reversed and remanded curiam requirements plaintiff had met the determination whether 15891). (Docket The circuit initiating No. class action for court, Kallman, J., plain- remand, that the found James T. on proceed of the named as a tiff could not [1] [2] [4] [5, [3] [6] [8, [11] [12, 13, [9] [10] [14] [19] [17] [21] [20] [16] Statute Time within 597] 59 Am Jur 59 Am Jur 15] 59 Am Jur 59 Am Jur 59 Am Jur 7 Am Jur 59 Am Jur 45 Am Jur 59 Am Jur 59 Am Jur 59 Am Jur 59 Am Jur 59 Am Jur 1306. Am Jur 59 Am Jur 18] Am Jur denying 59 Am Jur 2d, Parties 81. 2d, Parties 90. 2d, 2d, 2d, § 2d, 2d, Attorneys at Law which 2d, 2d, 2d, 2d, Parties 53. § 2d, 2d, 2d, References 2d, Parties § 2d, Parties 57.§ Parties §§ Parties §§ defense Parties 63.§ Parties § Interest and Parties § Parties §§ Parties § Parties §§ Parties 91.§ right 2d, § Parties 47.§ 67. to intervene for Points 58, 75. 86. 143. usury 55, 56. 51, 73. Usury 62. §§ corporation. 235, 238, § in Headnotes 264. be exercised. 242. 63 ALR2d 924. 37 ALR2d National Bank plaintiffs damages and that the own claim for less was than controversy required jurisdic- the amount in for circuit court proceed tion. The elected not to in district court and complaint Allen, P.J., Appeals, was dismissed. The Court of *2 Holbrook, (Docket Jr., JJ., Papp, and D. E. and E. H. affirmed 25038). appeals. No. Plaintiff Held: group persons plaintiff represent 1. The of whom a to seeks judgment. in a class action must be identifiable at the time of membership may change during The fact that the of the class litigation group the does not render the unidentifiable. In the group instant case the describes the as "all other Michigan customers of National Bank who have incurred inter- charges” years est within the two before this was action filed. possesses The defendant account records for each of its credit identify group, except card holders which the members of the perhaps for which names and 10% last known addresses are Therefore, group not available for miscellaneous reasons. this sufficiently action, although great identifiable for a class with difficulty as to individuals. 750,000 people 2. Over held the defendant’s credit cards at during two-year period. one time or another the The defendant approximately estimates that one-third of the cardholders charges agreements never incurred finance under their with they always paid the defendant because their bills in full days "billing within 25 of their date”. The of number these 500,000 might ultimately cardholders who be included in the (excluding corporate cardholders, class per- and business purchased stores, sons whose accounts were from for retail example) sufficiently large satisfy requirement could be to the persons large that the number of in the class must be so that it impracticable bring would be to them all before the court. person seeking represent 3. A a class in a class action plaintiff alleges must be a member of the class. The that she June, through was a cardholder from 1967 1971 and that she charges complained billing incurred finance for each of the practices, and so is a member of the class. requirement adequately represented 4. The that the class be attempt rights is an to insure that of the absent class (an protected. spurious members will be The class action action rights several, in which the of the class are members being question connection between them of law common fact) permissive joinder parties. judg- is a form of of the only similarly persons ment binds those situated who affirma- tively indicate to the court their desire be included in the in”). ("opt protection rights class This insures maximum 405 Mich most, they need in the cases where absent class members of the only the members connection between cases in which fact, question there is less law or a common class is surrogate protection by finely the courts reason for drawn determining the ade- any rights class members of absent if, representation quacy plaintiffs of the class than members of the example, would bind all the final they affirmatively wish to be indicate that class who do out”). ("opt the class from excluded (e.g., given person when judgment will bind a 5. When a are included in "opting Federal class action out” of a those not practicable under the circum- judgment), the best notice personal by required, including mail if the service stances is easily-ascertainable. person’s are known or name and address However, require be sent to that notice must also does not Michigan by judgment. is not persons In notice not affected prerequisite spurious mandatory as a main- class actions action, opting only bound taining in are because those clearly Michigan judgment. rules indicate court spurious actions. The costs of mandatory is not notice however, orders, must be borne which the court notice *3 plaintiff. the representative relationship and an a class 6. The between finding handling the basis for a attorney class action can be the adequate representation requirement has not been that the of relationship impair representation the of the met if that would plaintiff instant case once in the class members. The absent represents secretary legal firm for the law which worked as a attorneys to plaintiff asked her before she her. The knew representing attorneys represent were also her that the same challenged plaintiffs other bank in class actions which other attorneys operations. filed another class card The same credit very These facts at the same time. action similar to this one relationship searching be- justify examination of the would plaintiff attorneys, and if the examination and her tween the representa- relationship interfere with revealed that the would class, be dis- portion could of the suit tion of the class dismissal, option on remand to the of missed. In addition post requiring plaintiff to trial court wish to consider security protect the interests of class. to the complaint questions of law common 7. The raises three recovery rights in the same class which affect the members’ reference without which can all be answered manner and differen- individual or to other individual account records (1) Was it lawful between the members: ces National Bank charge percent per defendant to 1.5 month on its credit card specifi- accounts before the effective date of the statute which (2) cally Michigan permit allowed this rate? Did law the defend- charge daily cyclical ant to rate of interest that resulted in a percent 31-day billing cycle, rate of 1.5283 in a under 1.5 percent cycles, percent permitted in other and less than the 18 (3) annually? Michigan permit Did law the defendant to add unpaid charges principal finance into the amount due and impose charge sum, although thereafter a finance on the whole applying any payment unpaid charges? first to the finance requirement promote that a class action must "the justice” outgrowth convenient administration of is an of the equitable heritage of class actions and the realization that practical judiciary’s there capability are limitations on the disputes. practical resolve A court must take into account the problems proceed that will arise if the case is allowed to on a representative major practical problems basis. Two arise if will proceed this case is allowed to as a class action and the ultimately prevails problem on the merits. The first is the identification actually of the BankAmericard holders who are recovery. computation entitled to some The second is the exactly money, any, how much if each such cardholder would receive, including computation be entitled to of counter- alleged 20,000 approximately claims on accounts. Assuming manually that the accounts must be reviewed proofs identity that other of class members would be required, necessary process it is still not a conclusion that the extremely only would be burdensome. The accounts that would persons have to be examined are the accounts of those who opt persons chose to affirmatively join in. The who did not only would not be involved in the If a small case. number in, opt cardholders should the burden would be much less than might described the defendant. There not even be enough light problems to constitute a viable class in pursuing the case on a This basis. would be a judge. way knowing decision for the There trial is no now many might opt given how opportunity. cardholders in if It in, opt cannot be said that no matter cardholders how.few *4 practical identifying burden of the cardholders entitled to relief great proceed would be so representa- the case cannot on a tive basis. computing damages depend The burden of individual would upon many those, opted many how cardholders in and how of if any, eligible. point way would be found At this there is no of knowing great might how this burden be. It is also not known 405 Mich against any of the would or 'counterclaims if there be defenses persons might opt to in. who choose prevent ways of action device are to abuse the class 9. There members, precluding of the some of that do not involve all class sue, proceeding may legitimately to from on whom wish First, depending upon representative the number of basis. in, opt may legitimate the the court dismiss class members who Second, by any portion suit. the court is not bound of the representative plaintiff agreement into the fee entered between personal except contingent attorneys, her fee her as to and contract. allowing practical in this case to The burdens involved may plaintiff proceed representative preclude the on a basis basis, judgment suing representative on but the cannot
from existing The of the record. intelligently on the basis be made the Appeals and case is is reversed decision the Court following to court with the instructions: remanded the circuit (1) plaintiff, may expense, she at her issue such notice as directs; or as court wishes the (2) period within court set a time which shall reasonable case; opt in to be in the must in order included class members (3) expired period by the has time set court After the argument necessary by briefing is deemed the such as after court, allowing question the the court shall rule on the whether promote proceed on a basis will case to principles justice, light in of the convenient administration plaintiff Supreme opinion Court’s and whether discussed adequate representative class. of the is an Coleman, addendum, replied points an to Chief Justice Levin’s dissent: made Justice 1) to the 1966 revision of The official committee notes of the Rules and the comments Federal of Civil Procedure Moore, rule, principal indicate that of the old Professor drafter permitting the merits is the after a on intervention exception, not the rule. 2) opinion majority in the that if members The statement group judgment, the be identified at the time of can identifiable, changing group to the situation referred class, changes especially death. those caused disagreed part with the an- but Justice Levin concurred in administration of convenient nouncement of doctrine justice, suggestion court wish trial on remand the post security, requiring the authori- to consider require be sent and to the that notices zation trial court *5 Grigg Michigan National Bank opt in, set a time within which class members must and the requirement permitting that the trial court then rule whether proceed promote the case to on a basis will justice. convenient administration of Court, discussing justification 1. The without whether there is requiring sending opt for of notices and that class members liability, in before a determination of decides that such an order be entered and all but directs that it be This done. governed by language case is in the General Court Rules taken proposed from the old Federal rule and a amendment to it. rule, generally applied Under that as it was construed and in practice, the case was determined on the merits before absent opportunity class opt members were notified of their in. The requires new Federal rule that notice be sent to each class provides opts member and specified that unless he out date, binding will be on him. adopts 2. The Court restrictive features based on both the incorporates new and old Federal rules. It the new rule’s requirement (but liability notice before a determination of opt-out provision) judge not its and authorizes the to bar absent opting class members from in after there has been a determina- This, effect, liability. precludes tion of the maintenance of class actions where small claimants are involved establish- ing an additional obstacle to the maintenance of a class action. claimant, claim, The however small the amount of his must take affirmative action to be included the case before it is decided whether it will be maintained as a class action. concept justice 3. The of the convenient administration of has adopted been under the court rules as an alternative basis for joinder question of actions if there not a common of law or fact, precedent permissive not as joinder. a condition phrase justice” appear "convenient administration of does not in the class action rule. The Court has failed to demonstrate the correct construction of the court rules authorizes ground dismissal of a class action on the that its maintenance justice would not serve the convenient administration of or that manageable. it authority is not That to dismiss should be finding inadequate representation exercised based on a general rather judicial than on considerations of convenient administration. appropriateness requiring security was not raised at injected by trial level and should not be the Court on appeal. adopt concepts 5. If the Court wishes to in the revised govern litigation
Federal rule to future conduct of this 405 Mich competing orderly way, study after of the do so an should bar, considerations, pro- appropriate notice to the bench comment, rule, opportunity mulgation of a revised is revised this case Until rule consideration alternatives. concepts with the heretofore be decided in accordance should events, required developed. members not be In all should of the opt until the conclusion in unless that is deferred liability phase litigation. *6 inadequacy litigation of other cases illustrate 6. This and Actions Act/ present The Class class rule. Uniform action Federal incorporates of the new of the features Rule a number preclusive, appears making to be a and avoids them rule but plaintiffs’ approach and defendants’ from both more balanced problems courts points which confront state of view to the rules. The the old or Federal class actions than either new proposed published Class Rule should be as a Uniform Actions to a view rule for comment bench and bar with court adoption rule. of a revised class action (1976) App 358; re- reversed and 72 Mich 249 NW2d manded.
Opinion the Court of Group. — — Class Identifiable 1. Parties Action persons represent group in a whom a seeks to judgment; the at the time of class action must be identifiable change during membership the class fact that the (GCR 1963, litigation group does render the unidentifiable 208.1). Group Usury. — — — 2. Parties Class Action Identifiable charges complaint damages for for interest A double usurious represent had to who which seeks all customers of a bank charges by use of credit cards incurred interest their the bank’s sufficiently years filing within the two the action before represented possesses identifies the the bank class to be where records its credit which account for each of card customers percent identify group, perhaps except the members of the for for which names and last known are not available addresses 208.1). (GCR 1963, miscellaneous reasons — — 3. Parties Class Action Sufficient Number. 750,000 customers, cus- credit card The number out bank tomers, during charges two- who incurred certain interest period might ultimately year in a class be included who (exclud- charges damages for double for usurious action interest National Bank ing corporate cardholders, persons and business whose purchased by stores, accounts were the bank from retail example) sufficiently large could satisfy requirement persons represented that the number of in a class action must large unpracticable be so bring it would be them all (GCR 208.1). 1963, before the court — 4. Parties Class Action. person seeking represent A a class in a class action must be a (GCR 208.1). member thereof Judgment Spurious — — — — Class Action Effect Parties Joinder. judgment spurious action, in a only in which the connection between the members of the class is a common question fact, only similarly of law or binds those situated persons affirmatively who indicate to the court their desire to class; permissive be included in the the action is a form of (GCR joinder parties 1963, 208.1[3]). — — — 6. Notice Parties Class Action Due Process. process requires Due given person when a will bind a (when "opting those not out” of a Federal class action are judgment) practicable included in the the best notice under the circumstances, including personal per- service mail if the son’s easily ascertainable; name and address are known or *7 however, require this does that notice must also be sent to (US persons Const, XIV; not affected the Am FR 23). Civ P — Spurious 7. Notice Class Action. mandatory spurious Notice is not prerequi- class actions aas (GCR maintaining 1963, 208.1[3]). site to the action — — 8. Notice Class Action Costs. Costs of notice of a class action which the trial court orders (GCR 208.4). plaintiff 1963, must be borne the — — Representation. 9. Parties Adequate Class Action relationship representative attorney between a class and an handling finding the class action can be the basis for a that the requirement adequate representation of has not been met if relationship impair representation would of the absent (GCR 208.1). class members — Representation. — Adequate 10. Parties Class Action searching relationship A plaintiff examination of the between a Mich attorneys justified where the bringing is a class action and her firm, legal secretary plaintiff for the law as a once worked representing plain- attorneys plaintiff were other knew that the approached she them about in similar class actions when tiffs case, attorneys filed a similar class action at the her case; may, plaintiff’s if the trial court same time as impairs representation attorney-client relationship of ab- require members, dismiss the class action sent class post security protect of the class to the interests 208). (GCR 1963, represented — — Common 11. Parties Class Action Questions. questions requirement that all in the court rules There no be necessary resolution of a class action for the ultimate however, class; matters as such common to the members counterclaims, defenses, may upon diversity etc. bear promote the conve- action would whether a class determination 208.1). (GCR 1963, justice nient administration — — Administration 12. Parties Class Action Convenient Justice. promote the convenient administration A class action must proceed complying justice with the court rules to in addition to 208). (GCR 1963, representative basis on a — — Class Action Convenient Administration 13. Parties — Equity. Justice problems practical that will A take into account the court must proceed on a action if the case is allowed to arise a class representative basis. Damages. Usury Corporations — — Double acquired Corporations bank and other business entities employees their would not be entitled credit cards for charged damages double for usurious interest recover (12 450.1275; 86; MSA cards USC MCL use of those 21.200[275]). Attorney — — Fees. 15. Parties Class Action may prevented without action device Abuse of the class legiti- members, precluding some of whom all of the class basis; sue, mately proceeding from on a wish depending upon legitimate who class members the number of *8 action, affirmatively join the court wish to the class suit, portion bound court is not dismiss the class and the agreement by any the fee entered into between Michigan Grigg National Bank contingent personal attorneys, except fee his plaintiff his and contract. Attorney — — Fees. Class Action Parties 16. plaintiffs attorney fees to of reasonableness of an award upon depends primarily amount of time action in a class upon extent spent the nature and attorney on the case members; intervening upon the class of the benefit conferred judgment proceeds before payable of from the fee computation the class. for distribution to Dissenting Opinion Levin, J. — — Notice. Class Action 17. Parties must, they if at a time within which to class members of Notice required all, "opt before a class action should not be in” the liability may proceed of as a class to a determination case 208.1). (GCR1963, action — — Convenient Administration 18. Parties Class Action Justice. "opting required, the time for not be after A trial court should expired, has to rule to a class action in” of class members proceed permitting action will case to as a class whether (GCR 1963, justice promote the convenient administration 208.1). — Class Action. 19. Parties members, proper of the court under the construction Absent class "opt rules, may put into” a to an election whether not be liability; that con- until after a determination class action discourage from small claimants of the rule does not struction they judgment taking advantage could because of a favorable although they advantage judgment did not take of such a participate had been until after the intervene or 208.1). (GCR 1963, rendered Appeal — — — Bond. Error Class Action Parties post propriety requiring action to in a class security protect not be interests of the class should Supreme where it is injected on its own initiative Court appeal. an issue on — — Rules. 21. Parties Class Action Court concepts Incorporation jurisprudence this state of into the con- of Civil Procedure in the revised Federal Rule reñected all, actions, done in cerning at should be if it is to be done *9 405 Mich op Opinion the Court way orderly study competing an after considerations and alternatives, promulgation rule, appropriate of a revised court bar, opportunity notice to bench and and for comment and (FR 208.1). 23; 1963, consideration comments Civ P GCR George Kratchman and Ronald J. Prebenda for plaintiff. (by
Fraser, Trebilcock, Davis & Foster Everett R. Cavanaugh) Trebilcock and Michael E. for defend- ant. Grigg 3, C.J. On June 1971 Sarah Coleman, commenced this action circuit court on behalf of Michigan herself other BankAmericard hold- charges ers who had incurred finance on accounts filing. between June 1969 and the date of plaintiff’s complaint substantive merits of have not question decided, been so are not at issue. The sole requirements initiating is whether the a class Michigan action under statutes and court rules Michigan preceden- have been met. There is little guidance requirements, tial as to such so it attorneys understandable and courts have presented confusing combination of Federal and analysis. state law for History
I. Case plaintiff alleged defendant, a na- doing Michigan, tional bank business in had levied charges higher permitted by finance Michi- than gan alleged law. She 85,1 this violated 12 USC generally prohibits which a national bank from charging higher per- interest rates than the rates 1"Any take, receive, reserve, charge association on loan or made, notes, upon any exchange, discount dences of bills or other evi debt, State, interest at the rate allowed the laws of the * * * Territory, located, or District where the bank is .” National Bank Opinion op the Court
mitted the laws of the state in which the bank enjoin is lócated. She asked the circuit court to permanently charging from defendant such rates the other affected Bank- her and to award and Americard monetary damages autho- holders by 12 86.2 for an award rized USC She also asked attorney costs and reasonable fees. denying After the defendant filed an answer allegations plaintiff’s complaint, plain- in the summary
tiff moved for on the merits requiring notify for an order the defendant aggrieved potentially BankAmericard hold- other pendency of the action. The defendant ers of the responded summary judg- with a cross motion for opposition ment on the merits and a brief plaintiff’s to the require brief, In motion to notice. argued the defendant that should have found on notice unless it had first been liable issue the The defendant also filed a motion for merits. claiming summary judgment that as a matter of permit plaintiff 85, law, 12 86 did not a to sue USC the statu- on behalf of other individuals to recover damages. torily authorized pending, the defend- While these motions were stopped using billing practices ant of which plaintiff complained. effectively This mooted plaintiff’s request injunctive relief. only rule on the The circuit court decided to summary con- defendant’s motion for taking, receiving, reserving, charging "The or a rate of interest section, knowingly greater preceding than is allowed when done, note, bill, a interest which the shall be deemed forfeiture of the entire it, been or other evidence of debt carries with or which has agreed paid greater thereon. In rate of interest has to be case the paid, person by paid, legal repre been the may whom it has been or his sentatives, back, in an action in nature of an action recover debt, paid the associa twice the amount of the interest thus from Provided, taking receiving action is tion the same: That such years transaction commenced within two occurred.” from the time the usurious 405 Mich Opinion op the Court cerning propriety representative of a lawsuit 85, under 12 USC 86. The court ruled that these permit statutes did not to sue in a representative capacity. plaintiff appealed Appeals and the Court of unpublished per opinion. reversed in an Docket No curiam (June 1973). 15,891 The defendant appealed appeal. but this Court denied leave to (1973). Supreme
The court chose to follow the defendant’s format briefing hearings and after further ruled that proceed the action would not be allowed to on a *11 representative basis because:
"1. There’s no question common of fact as to each member of the class and analysis an of the case reveals there questions could be different of law involved as to each member. "2. rights The here are severable each as member of claim the class’s is different. "3. For this Court to handle this case as a class action is totally unmanageable. "4. superior It is litigating not a method of claims this case. What the doing trying Court would be thousands of small claim cases. In essence numerous
mini trials within the class action itself. Bank National Opinion of the Court fairly adequately repre- plaintiff
"5. does not The in this case. sent the class deposition said that she wouldn’t "6. Plaintiff her notices to all members of the class pay the cost of $100,000. $86,000 to over She contem- around estimated by and at the cost of plated said notices to be mailed defendant. would require "7. To the defendant to send notices annihilating punishment and possibly horrendous and court, May unjust.” (Opinion most of the circuit 1975.) plaintiffs also ruled that the individual The court damages, only said, which, it was claim for including $200, interest from amounted to around satisfy amount-in-controversy 1969, did not requirement jurisdiction. The for circuit court gave plaintiff option having
court having it case transferred to district court or altogether. plaintiff elected not to dismissed The proceed individually in district court and the case
was therefore dismissed. plaintiff appealed Appeals but the Court of (1976). App 358;
affirmed. Mich
could not sue on behalf of the other aggrieved BankAmericard holders she was because
unwilling pay holders, for notice to the other secretary attorneys
she was a some handling unmanageable case, her and the case was representative
as a action and therefore not a superior litigating method of the individual claims. panel although also concluded that the sub-
stantive decided merits of case could have been unmanageability
first, the case on the ultimate unnecessary made it to do basis so. *12 405 Mich Opinion of the Court pro- to the trial court for further remand
We opinion. consistent with this ceedings
II. Facts the Although plaintiffs the substantive merits of
complaint appeal, are not involved some oper- credit card understanding of the defendant’s the plaintiff ation and the billing practices necessary analyze claims order illegal were procedural question presented. the Billing Systems A. goods or services Bank- purchase with a three-party Americard is a transaction. The cus- using the card receives the items purchased tomer from a merchant. The merchant then sells the generated purchase
account receivable the the defendant at a discount. The defendant then for the full bills cardholder amount debt. In this case the cardholder’s first contract provided charge with BankAmericard for a finance (18 of 1.5 month on percent per percent annually) unpaid subsequent balance. The contract was for .0493 percent per day. large,
Because the number of cardholders is very economically is not them all on feasible bill Therefore, day. same the defendant divides smaller, cardholders into manageable groups more and bills each group day on a different example,
month. For on group might one be billed month, day first on the every group two second, etc. day billing This is called the date.
If billing group happens date for a particular month, to fall given on a or a in a Sunday holiday the group preceding is billed on the immediately work day. group for each is the billing date *13 Michigan Grigg 163 Bank National Opinion of the Court billing The number group’s cycle. of that day
last billing depend- in will group’s cycle vary a days of date, in the days the the number of ing billing on billing cycle the spanned by month or months on or a Sunday the date falls billing whether holiday. pertinent appeal, to this
During period the time di- holders were the defendant’s BankAmericard billing groups. separate into 20 vided 1969, the defendant did From of June to October made charge purchases finance on impose not paid if the for cardholder with a BankAmericard full 25 of the card days the in within purchases Thus, example, if a card billing date. for holder’s or services goods of purchased holder $200 June, paid 1 and the billing July had a date of 26, charge no finance July by
defendant $200 however, If, purchases the were imposed. would be 25 the defendant days, in full within paid charge charge. The finance impose would a finance paid the amount not multiplying calculated by was Thus, if the example, 1.5 the above percent. 26, 1 August the paid by July only cardholder $40 (1) still bill would include: $160 principal and (2) a finance purchases, the June owed for (1.5% $160). If the cardholder charge of $2.40 X goods or services purchased had another $100 included in during this would also be July, If charge. 1 finance August bill but without the Au paid the cardholder the total amount charge August 1 no further finance gust bill paid, was not imposed. If the full amount would be on charge imposed finance would be another unpaid. remaining amount un- remaining the amount possible It was im- charge would be a finance paid upon which the previous posed part could include all Mich Opinion Court However, charge. the de- finance because month’s unpaid applied partial payments first fendant a cardholder charges principal, and then to finance charge imposed on the not have a finance would unless charge month’s finance previous on the current bill paid by amount the cardholder previous owed for was less than amount above, example In the card- charges. finance charge imposed not have a finance holder would previous charge on the finance unless card- August than on the bill. paid holder less $2.40 modified In October of 1969 the defendant its If charges. finance a bill was computing method *14 date, billing in 25 of the paid days full within compute charge the defendant would the finance daily the sum of the actual bal- by multiplying during ances in cardholder’s account the bill- .0493 ing cycle by percent. In billing percent a a .0493 28-day cycle, daily rate to a rate 1.3804 cyclical percent amounted 28). (.0493% In billing cycle, a it 29-day X amounted 1.4297 rate. In a percent cyclical to a it 1.4790
30-day billing cycle, per- amounted to a In billing cent rate. a cyclical 31-day cycle, amounted to a 1.5283 rate. percent cyclical On basis, yearly it amounted to a rate of 17.9945 percent. Complaint B. plaintiffs complaint contained three distinct theories of recovery. The first was based on theory (the
the fact prior August 20, 1969 effective Banking date of the specifically, Code of 487.491; MCL 23.710[191]),3 Michigan MSA no stat charges "Banks collect as follows: interest and on loans "(a) arrange- any pursuant existing On loan made to an credit card agreement existing prior whereby ment or other to such loan National Bank Opinion of the Court finance 1.5 percent specifically
ute established In this vac card accounts. charge rate on credit Installment uum, the Retail upon the bank relied 19.416(112)(c) (not Act, 445.862(c); MSA MCL Sales month), studied per 1.7 percent in excess of states, and set surrounding charged rate 1.5 percent. at unpaid balances charge finance on similar institu charged by rate It was the same Michigan. country tions around however, during pe contended that plaintiff, operation card should defendant’s credit riod the 19.15(1),5 438.31; MSA MCL governed by have been interest ordinary law on Michigan the general or 7 rates, ceiling percent per year of 5 which set a was agreement if the loan per year percent Therefore, claimed that writing. per 1.5 month percent for a parties’ contract draft, agrees pay pays or the borrow- honors the borrower’s bank obligation, obligations, purchases or advances the borrower’s er’s money finance time on the basis of the borrower, the loan and in which to or for the account of the computed charges precomputed from time to are not but are balances, interest, charges unpaid in a unpaid per of the balance combined amount of not to exceed 1.5% month.” for, provide charge agreement may "A and the seller retail may law, then, notwithstanding provisions other holder receive, privilege charge, of price for the collect and a time differential thereunder, exceeding paying in an amount not in installments price unpaid per month. The time differential balance 1.7% unpaid *15 computed amounts under this subsection shall be on all month, not be calendar thereunder month which need from to * * * months, regular periods; .” or other 5 upon money $5.00 $100.00 "The interest of shall be at the rate of sum, year, greater for a or less for longer the and at the same rate for a time, except be lawful for or shorter that in all cases it shall writing any parties stipulate payment rate of to interest, apply exceeding per not to annum. This act shall 7% note, any of indebtedness rate of interest on issued interest of which commission bond or other evidence corporation, person, any the issue and rate of association or public expressly by the service have authorized been commerce, department of or the securities bureau of the States, state, regulated by any or of the United or is other law of this charged apply any price which nor shall it time differential added.) upon (Emphasis goods sales or services on credit.” 148 405 Mich 166 Opinion of the Court (18 outstanding per- balance on the charge finance 20, 3, to August June 1969 per cent from year) law. Michigan 1969 violated recovery was plaintiffs theory The second .0493 percent based on the defendant’s use of the charges after Octo- compute rate to finance daily cyclical 1969. claimed that plaintiff ber of those months when percent during rate of 1.5283 MCL billing there violated 31-day cycle was 23.710(191), the finance 487.491; MSA which limits charge on credit card accounts "1.5% month”, though even the total unpaid per balance 18 charge permissible annual was less than the 28-, billing 29- or percent 30-day rate 1.5 permissible percent. than the cycles was less was plaintiffs theory recovery third practice adding unpaid on the defendant’s based charges principal finance into the amount due and charge on the whole imposing thereafter a finance (although crediting sum first payments outstanding charge). finance 1963,
III. GCR can sue the defendant in a Whether and the Michigan circuit court on behalf of herself aggrieved BankAmericard hold- potentially other procedural question governed ers is a of state law 1963, In procedure, GCR 208. analyzing 208 is different important is to note that GCR courts, from its Federal counterpart the Federal there are Although Rule of Civil Procedure 23.6 pres- some 208 and the similarities between GCR rule, ent Federal are substantial. differences Care them. See should be taken not to confuse patterned original P GCR of FR after the version Civ promulgated in 1938 to reflect and has not been amended sweeping changes in the made Federal rule in *16 167 National Bank Opinion of the Court Miller, Wright 7 & Federal Practice and
generally, Civil, 1752-1753, 1 Newberg, On Procedure: §§ Actions, 1004-1008, 1216. Class §§ 208.1(3) 1963, contends that GCR her to the defendant on behalf of the permits sue It provides: other BankAmericard holders. persons constituting "If a class are so numerous as to bring impracticable make it court, to them all before the them, more, fairly or such of one as will insure adequate representation of all on behalf of all right sought to be enforced for or against the class is the character sue or be sued when * * *
"(3) several, question and there is a common of law or affecting rights fact sought.” the several and a common relief is of the rule forth seven separate This section sets requirements which must be satisfied order for an on a In proceed action basis.
essence, requirements are: class;
1. There must be an identifiable 2. persons The number of in the class must be so large bring them impracticable would be court;
all before the 3. The person persons seeking represent or thereof; the class must be members 4. The adequately interests the class must be represented;
5. right enforced must rights sought to be several; 6. There must of law or question be a common affecting fact rights, several A sought. common relief must be Hawkins, Michigan generally Honigman See & (2d ed), 601-602. pp Court Rules Annotated Ch Mich op Opinion the Court A. Identifiable Class *17 208.1(3) 1963,
The first gives clause of GCR rise to the requirement group persons that
whom represent seeks to must be
identifiable. If the membership group is so
amorphous ascertained, it cannot be definitely then there is no "class” and the case cannot
proceed on a representative basis.
It is not necessary that each member of the group be named It complaint. is sufficient if
the members can ultimately be identified. As Hawkins,
stated by Honigman & supra, p 602: "The members specifically of the class need not be named, they but must be adequately described accord- ing interests, to their common in order to show that really persons there permit are similarly other situated and to qualifying identification of members of the class when the against is invoked for or them.” The fact that membership group change during the course of litigation does not
render the group unidentifiablé.7 If the members of the group can be identified at the time judg-
ment, the requirement group be identifia- ble is satisfied.
Whether a sufficiently identifiable group exists is question of fact which must be decided on a case by case basis.
In the case at bar plaintiff’s complaint de- scribed the group that she represent seeks to as
"all other customers of Michigan National Bank who have incurred interest charges pursuant * * * their use of credit cards within [the bank’s] 7 Bank, Trustee, Savings See American State American v State Savings Bank, 78, 85-86; (1939), v 288 Mich and Detroit 652 NW (1924). Railway, Detroit United 369-370; 226 Mich NW Michigan Grigg Bank National Opinion op the Court years-prior of this law- to the institution
the two suit”. identifiable, although group sufficiently
This The defend- great as individuals. difficulty with for each of its credit account records possesses ant customers, in microfilm form. These only if card contain the information neces- are said to records except- group, the members of the identify sary and last known on which names ing perhaps 10% for miscellaneous rea- are not available addresses sons. of Persons B. Number 750,000 holders of the persons In were excess time or another cards at one defendant’s credit *18 plaintiffs the period the time framed during members of persons potential These are complaint. represent. to The that the seeks group plaintiff the one- approximately estimated that defendant has never incurred finance persons third of these in with their use of defend- charges connection their always paid ant’s credit cards because they of their days bills in full within the allowable correct, billing approxi- date. If this estimate 500,000 finance cardholders did incur some mately point it is not clear at this charges. Although (for that be delineated litigation reasons will below) 500,000 card- how of these precisely many class, might
holders included ultimately be large satisfy to sufficiently the number could be would requirement. Whether a class action promote justice the convenient administration remains to ascertained. Membership
C. in Class [referring The that "such of them rule states 405 Mich Opinion op the Court constituting 'persons more, or class’], one * * * * * * may This lan- all. sue” on behalf of seeking represent person guage requires that a thereof.8 must be a member the class holder of one of the became continued to in 1967 and credit cards defendant’s through this action June of 1971 when a holder be was Allegedly she incurred finance commenced. billing practices charges pursuant each of the illegal of the and so is a member to be claimed class. Adequate Representation D. requirement ade- the class must be attempt represented quately is an to insure rights will be the absent class members assessing protected.9 the ade- The court’s role vary representation quacy case to will from depending upon the extent to which the case rights affected class members will be
of the absent representa- proceed on a if allowed to the case is example, judgment If, final tive basis. all of the class bind would bind all members affirmatively indicate that do members who (commonly they the class wish to be excluded from out”), "opting then the court would referred to as upon adequacy attention have to focus discrete representation. If, the other on of notice and only hand, those members will bind *19 affirmatively indicate of the class decide and who they and to in the class wish to be included representative represented by and the class "opting (commonly attorneys referred to as chosen 8 (1958). 550, 554; Dipboye Acchione, 611 v 351 Mich 88 NW2d See 9 Bank, Acchione, Savings supra; Dipboye American State Bank, See v Trustee, supra; Savings v Detroit Detroit v American State 1963, supra; Railway, and GCR 208.4. United 171 v National Bank op Opinion the Court
in”), finely such then there is less reason for surrogate protection by the court as Federal
drawn affirmatively "opting in” mandate. Those not cases by any judgment. not bound are Michigan’s governing representa first court rule (1945) adopted actions, 16 Rule No was tive Court Previously, judgment a in the limited in 1945.10 types permitted by representative actions Michi (common rights required) gan law were was case binding on all members the class. range Rule 16 broadened the of cases which Michigan class actions.12 courts could entertain original
However, neither Rule 16 nor the
version
spelled
binding
FR Civ P 23
out what the
effect
of a
would be
action
rights
in which the
involved were
common but
only
nature,
and distinct in
connection
several
being
ques-
common
between the class members
tion of law or fact. The drafters of the Federal rule
binding
judgments was a
believed that the
effect of
(1945),
1963, 208,
patterned
Court Rule No 16
like GCR
was
after
original
FR
P
version of
Civ 23.
11See,
example,
Typographical
v
International
Union Macomb
(1943).
562;
County, 306 Mich
notice "Implicit support may be found for this conclusion in 208.5, provides sub-rule which that a true class action compromised only can be or dismissed after notice has class, given been to all members of the whereas such optional precedent notice is as a condition to dismissal * * * compromise spurious of a class action. The apparent assumption reason for this distinction is an disposition that of the true class action would be binding upon class, the absentee members so that notice, they are entitled disposition to whereas the final * * * spurious binding, in a class action will not personam, so that discretionary.” notice is
In Co, 583; v Coca Cola 389 Paley Mich 209 (1973), NW2d 232 opinion written Justice by Swainson and by Justice Brennan joined and this writer echoed the "standard formulation”: type case, "The of class action involved this 208.1[3]) the so- (see spurious 1963,
called
action
GCR
is actu-
ally
Id.,
a form permissive joinder
parties.”
607.
The other opinion, written
Justice Williams
Kavanagh
joined
and
T.
by Chief Justice
M.
and
174 op Opinion the Court Kavanagh, T. not discuss this sub did Justice G. Williams and but is clear that Justices ject, Kavanagh spuri agreed would have T. G. device. North In permissive joinder ous action is a Shores, Co v St Construction Clair view Mich 395 (1975), opinion curiam 497; per NW2d Justice Levin justices two signed by those stated: authority commenced of GCR "An under the action 208.1(3)
1963, 'spurious’ class commonly as a known holding parties number similar action. When the large against it would be claims a defendant is so bring individually each before impracticable claim 208.1(3) court, permissive functions as a GCR Co, 583, 607; Paley v Coca Cola Mich joinder device. J.). (1973) Swainson, It (Opinion 209 NW2d represent plaintiif at one named allows least litigate the issues common class before the court Id., against the to the claims defendant.” *22 Northview in Although rehearing, the dissent on 184; controlling opinion, Mich became the (1976), disagreement there no with was NW2d class was spurious the conclusion that action Paley, parties”. form of of permissive joinder "a supra, foregoing,
On the of the we conclude basis spurious only in a class action binds those situated who affirma- similarly individuals to be
tively indicate to the their desire court in”). (to insures "opt included in the class This of absent protection rights maximum of the it in the need they class members cases where in involved are rights most —cases which the and in nature and common but several distinct which the connection members only between a common question law or fact. Grigg Michigan National Bank Opinion of the Court C, above,
As noted in III part plaintiff pur- to be a ports member of the class which she seeks to represent respect with to all three of the claims
contained complaint. her The case has been pursued through court, the circuit the Court of Appeals, Court, this the United States Supreme
Court, back court, to the circuit back to the Court
of Appeals and back to In finally this Court. addi- tion, when offered the opportunity either having
her individual case transferred to district court or
having altogether dismissed along with the rest class, dismissal, she elected thereby ena- bling her to challenge the circuit court’s ruling the case could not proceed on a representative
basis.
The Court of Appeals recognized that there is question little as to whether plaintiff "will pursue vigorously rights of the class through qualified counsel”.16 As that Court stated: "Defend-
ant does not challenge the adequacy plaintiff’s
counsel nor the plaintiff’s spirit”.17 Nevertheless, the Court Appeals ruled that had
not satisfied requirement adequate represen- (1) tation because: she was not willing to pay the cost of sending personal first-class mail notice to
each of (2) the other holders, BankAmericard because she was employed as a secretary for some (The
of the attorneys handling her case. attorneys also represented her husband in a similar
action regarding charges finance delinquent on
revolving accounts with Robinson Furniture Com- pany represented her brother-in-law two
other credit card actions. The attorneys filed a *23 total of seven such suits in Wayne County around time.)
the same 16 App 358, 72 Mich 368. 17Ibid. 405 Mich op Opinion the Court 1. Notice that the believed panel Appeals
The Court
was rele-
for notice
pay
willingness
plaintiffs
representa-
of adequate
requirement
vant
to the
Due Process
the
concluded
they
tion because
recent
and a
Constitution
Federal
of the
Clause
interpreting
Court decision
Supreme
United States
required
P 23
of FR Civ
amended version
first-class
for individual
pay
to issue and
on a
proceed
mail
the case could
notice before
based
Appeals
The Court
basis.
Mullane v
cases:
three Federal
conclusion on
Co, 339 US
306; 70
Trust
Bank &
Hanover
Central
v New
Schroeder
(1950),
652;
"Exceptions necessity in the name of sweep do not away the rule that within the of practicability limits
notice must be reasonably such as is calculated to reach parties.
interested postoffice Where names and ad- proceeding hand, dresses of those affected by a the reasons are at disappear for resort likely to means less (Em- apprise than the mails to them of its pendency.” added.) Id., 314-318. phasis Schroeder, In an individual had been deprived of rights certain water by the defendant pursuant to administrative proceedings without
having been personally notified mail of
pendency of the proceedings. The United States
Supreme Court again held that notice by publica- tion was insufficient: general emerges
"The rule that from the Mullane case is that by publication enough notice is not with respect person to a whose name and address are known very legally protected ascertainable and whose easily directly interests are affected proceedings in ” question. added.) Schroeder, supra, 212-213. (Emphasis The Court did not discuss class actions at all. Eisen,
In the plaintiff attempted to maintain class pursuant action to the amended version of FR P Civ 23. The amended version differs substan- (and 208) from
tially predecessor its GCR in that specifically all states types on all members of the class binding actions is
who do not exclusion request and that notice 405 Mich Opinion op the Court given This was members.18 to all class "shall” changes important made of the most one majority this about in Eisen said rule. The Federal notice: 23(c)(2) that, main- class action provides "Rule (b)(3), shall each class member subdivision tained under from right to exclude himself he has the be advised that *25 appearance an request or to enter on the action through whether counsel, judgment, further that the and not, will bind all class members favorable or end, is To this the court requesting exclusion. not notice members 'the best required to direct to class circumstances, including individ- the practicable under through can identiñed ual notice to all members who ’ language import think the of this reasonable effort. We all notice must be sent to is unmistakable. class members ascertained Individual may be and addresses whose names
through reasonable effort. explained, the Advisory Note "As the Committee's judgment, that the intended to insure Rule was not, members or would bind all class whether favorable from the suit. USC request who did not exclusion c(2) 23, c(3), P and which version of FR Civ §§ See the amended states: (b)(3), “(2) any the under subdivision In class action maintained practica- the of the class the best notice court shall direct to members circumstances, including to all mem- ble under the bers who can be identified individual notice through The notice shall reasonable effort. (A) him from the advise each member that class the court will exclude (B) date; requests specified judgment, by whether if the he so not, request exclu- all members who do not favorable or sion; desires, will include (C) request may, if he not exclusion and member who does appearance through his counsel. enter an "(3) judgment under as a class action in an action maintained class, (b)(1) (b)(2), shall to the subdivision include and or whether or not favorable the members of those whom the court finds to be in an action maintained as a class describe judgment action under class. The class, (b)(3), shall include subdivision whether or not favorable to the provided specify in subdivi- and sion or describe those to whom the notice exclusion, (c)(2) directed, requested was and who have not whom the court finds to be members of the class.” P 23 Advisory FR Civ see the Committee Notes to Amended Also (1966). reported at 39 FRD 98-99 National Bank Opinion of the Court pp App, 7765-7768. Accordingly, each member who through can be identiñed effort reasonable must be may request notified that he exclusion from the action thereby preserve opportunity press and separately his his claim he in remain class and perhaps management participate of the action.” (Footnotes added.) Eisen, Emphasis supra, omitted. 173- proposition These three cases stand for the when given will bind a individual
(when opting those not out are included in the judgment), best practicable notice under required, including personal
circumstances ser- vice mail if the name individual’s and address
are known or are easily ascertainable. can- They be read to fairly hold that Due Process
Clause of Federal Constitution or the original analogous version of FR P 23 Civ state rules require that notice must sent persons also be
not affected judgment. All three cases in- volved binding judgments and none of them in-
volved application an original version of FR *26 P upon
Civ patterned. which GCR 208 is Mullane, are, therefore, Schroeder and Eisen inapposite not precedent Michigan proce-
dural requirements in only opting which those in are bound the court’s by judgment.
The words in clearly used GCR 208 indicate that in Michigan is in mandatory spurious notice
class actions. 208.4 GCR states: * * * "The given, court in order that notice be * * *
such added.) it may (Emphasis manner as .” direct GCR 208.5 states:
"A compromised class action shall not be or dismissed 405 Mich Opinion of the Court sought right If the approval the court. without 208.1(1) in is one defined sub-rule [true be enforced compromise action], proposed dismissal notice of in such given of the class to all members shall right is one defined If the manner as the court directs. in action], * * * (3) [spurious class 208.1 paragraph of sub-rule requires court given only if the notice shall be ” added.) (Emphasis it. sharp language to the contrast stands This FR Civ P which states: version of amended the class to the members of court shall direct "[T]he under the circumstances practicable notice the best * * * added.) (Emphasis ”. foregoing, the Court of the basis of On Appeals incorrectly notice to the concluded that Eisen, in accordance with class members
absent prerequisite supra, required to the mainte- as a Michigan. spurious class action nance of There has been specific judicial determination no although case, of notice of a "manner” itself bound seems to have believed trial court Federal case court rule and resultant the Federal law. determining correct, however, in
The court was notice must be borne that costs plaintiff. Representative Propriety of Class Appeals panel ruled that
The Court of also adequate representative was not an secretary for some as a class because her státus gave handling attorneys to an rise her case "appearance of inter- and conflict of solicitation App 358, the circuit Mich 373. Neither est”. 72 *27 specifically Appeals found nor the Court of court National Bank Opinion of the Court that there had been any solicitation or that
actual conflict of interest existed.
The Court of Appeals was correct in assuming that the relationship between a representa-
tive and the or attorney attorneys handling the
case can be a relevant consideration in assessing requirement of adequate representation. If that relationship impair would representation members,
of the absent class it can be the basis for ruling requirement adequate repre- sentation has not been met. plaintiff began working as a legal secretary
in 1956 for the firm law her handling present case.
She is now retired. During deposition her she was repeatedly asked whether or she her attorneys
initiated the idea of suing the defendant individu- basis, or on a
ally and repeatedly she answered that it was approached she who her
attorneys and not vice versa. She also stated in response to the defendant’s questions that she had bonus,
never been offered any percentage of recov- ery any other monetary consideration for bring- ing this lawsuit.
The Court of Appeals panel placed reliance on the fact that the attorneys handling plaintiff’s
case were also handling other class actions involv-
ing plaintiffs other and defendants in which credit operations
card were being challenged and the plaintiff was aware of this fact ap- before she
proached her attorneys.19 The panel seemed partic-
ularly concerned with the fact that a very case
similar to the plaintiff’s case was her filed
attorneys at the same time her case was filed. The panel said: agree
"We with counsel for the defendant 72 Mich App 371-372. *28 405 Mich Opinion op the Court violating were separate banks unusual that two highly both and that in the same manner interest laws same law- complaint to the would take their plaintiffs Id., yer.” 372. searching justify examina- facts would These plaintiff relationship and between tion of attorneys revealed if such examination her relationship interfere with her would portion representation class, of the the class of the option In addition to the dismissed. suit could be may trial wish to dismissal, remand the court on states, 208.4, inter alia: GCR which consider stage under sub-rules of an action "The court at impose security and may require such 208.1 or 208.2 adequately protect the in whose behalf the fairly and terms as shall such interests of action is the class or association * * * added.) brought (Emphasis ”. indicate that Notes to this section Committee empower judges designed to deal trial it was "suspicious” See class actions. with or "vexatious” Honigman supra, Hawkins, & Rights E. Nature of rights sought right requirement that the has not in nature to be enforced must be several potential been contested in this case. Each of separate have a members against the defendant. distinct cause of action obligation involved.20 fund or There is no common County, Compare Typographical Union v Macomb International Bank, Trustee, supra; Savings State v American American State Co, Bank, supra. Savings supra; R and Detroit v Detroit United National Bank Opinion of the Court Questions F. Common proceed representa- In order for a case to on a 208.1(3), tive basis under GCR there must be "a question affecting common of law or fact the sev- rights” eral class members. The following questions contends of law are being class, common to the question there no common alleged: of fact 1. Whether it was lawful for the defendant *29 charge interest on its credit card accounts at the percent per prior
rate of 1.5 month to the effective 23.710(191); 487.491; date of MCL MSA Michigan permitted 2. Whether law the defend- charge daily ant to in a rate of that interest resulted cyclical percent 31rday rate of 1.5283 in the billing cycles, percent cycles under 1.5 in other percent permitted annually;
and less than the 18 Michigan permitted 3. Whether law the defend- unpaid charges princi- ant to add finance into the pal impose amount due and thereafter a finance
charge although applying any sum, on the whole
payment unpaid charges. first to the finance questions
These are common to the of members plaintiff’s complaint. the class defined answers to them will affect the members’ individ- (several) rights recovery
ual of in the same man- ner —either the members will be entitled to seek
recovery subject any might defenses defendant they they have, or will be—and can all be answered without reference the member’s indi- vidual account records other individual gener- See, differences between the class members. ally, pp Practice, 3B ¶ 23.10[5], Moore’s Federal 23- seq. Wright supra, Miller, § et and 7 &
Although questions the answers alone to these will not be sufficient to settle the contro- entire Mich Opinion of the Court requirement versy, that all no rule there is necessary questions com- for ultimate resolution be only of need mon to the members the class—there satisfy question fact” to of law or "a common portion However, such matters as rule. may diversity counterclaims, defenses, etc. bear of upon this class action determination whether promote administration would the convenient justice.
G. Common Relief requested the same relief has for all the other members herself and statutory damages prescribed by 12 class—the Although 85, 86. be based each account USC entry, upon cycles, to be dates of sums different charges imposed computed, etc., the finance double sought qualifying mem- for all is the relief period question.21 during two-year bers IV. Justice Administration Convenient recognized one This Court there is has requirement met in order for further must be proceed Most case to on a basis. *30 requirement to under often has been referred of the rubric "the administration of convenient justice”. Essentially requirement out- is an
growth equitable heritage of class actions practical realization
and the tions on the putes. that limita- there are judiciary’s capability to dis- resolve Michigan A. Cases justice” of re- The "convenient administration 21 Practice, pp See, supra, 23.10[6], generally, 3B Moore’s ¶[ Federal 23-2721, Miller, seq., Wright supra, pp 536-537. et 7 & § v 185 National Bank Opinion of the Court quirement applied Young was first the Court (1950). Thendara, Inc, 42; 328 Mich NW2d plaintiffs attempting were to sue the defend- on ant behalf of themselves and all other lot owners in a purpose subdivision. The of the suit
was to the lot rights establish owners’ use
certain easements. The merits of each lot owner’s
right depended upon to use the easements terms of the lot owner’s deed and his or her source
of title. This Court said: diversity "The of sources from which titles to lots owners, acquired by possible all lot have been other grantors as to the title of their at the time their doubt accrued, respective rights impracticability shows considering all owners of lots in the subdivision as a purpose decreeing class for the their individual Id., rights, in the case at bar.” Kurtz, 58; In Bajorek v 335 Mich NW2d (1952), plaintiffs were residential home owners in a certain section of Detroit. The defendant was
a manufacturer concrete of cement and related
products. plaintiffs wanted to sue the defend- damages
ant in one action and recover individual respective caused to their the defend- homes 608.1; ant’s operations. argued that MCL They permitted single MSA 27.591 them in a join all to action. That statute "suffi- permitted joinder when * * * grounds uniting cient the causes appear promote action order the convenient ad-
ministration justice”. This Court ruled
plaintiffs join together could not in one action:
"No claim is here made that the causes of action Rather, by plaintiffs argued joint. asserted are it is permit joinder 'promote such would the convenient justice’. administration It noted that under will be *31 405 Mich 148 Opinion of the Court specific language grounds’ of the statute 'sufficient appear joinder in must of action for the reason here order to warrant of causes
urged. think it We must grounds present said that such in character are not presented case at bar. We have a situation in which persons they injured
a number of assert that have been severally property rights improper in their because part on unlawful acts of defendants. It cannot certainty be said with the same issues will be presented in alleged all of the 25 cases in declara- particulars. tion and may covered the bill of Proofs others, damage show defenses in some cases in but may against rights plain- exist of certain Id., tiffs that against plaintiffs.” are not available other
64. Bajorek was based on a
Although statute, Court subsequently quoted from and referred to Bajorek involving a case action under
Rule
and ruled that
in such a case "the same
Palmer Park
rule of law would
Theater Co
apply”.
Park,
v Highland
344;
362 Mich
106 NW2d
(1961).
In Hardware Dealers Mutual
Insurance Co v
Inc,
R H Hidey,
490;
349 Mich
"it does not appear plaintiffs one of these he, would it, brought have been prejudiced had National Bank op Opinion the Court *32 damages for of separate recovery a suit Id., The Court added: claimed”. 514. of action result- are concerned here with causes "We claimed, property of ing, as it from the invasion may It not be said that rights parties. of a of number questions in each case. The aver- the same will arise of indicate that the conduct ments of the declaration wrongful in charac- the contractor claimed to have been 4 not period ter extended a of months. We over abutting properties involved were that assume all improper meth- injured simultaneously by defendant’s question may operating. ods of In some instances to have been dam- property arise whether aged claimed actually abutting property was within mean- ing obligations Under the of the contractual involved. presented permit joining
situation the causes of action claimed to have arisen because the the statute does
of performance wrongful operations in the contractor’s Id.,
of its contract.” Carpet Distributors, In Freeman v State-Wide Inc, (1961), 313; 439 several Mich NW2d
hundred to sue the plaintiffs attempting were
defendants for relief based on damages other theories of misrepresentation. fraudulent 608.1; MSA
plaintiffs contended that either MCL 27.591 permitted together or Rule 16 them to join
in one these action. This Court both of rejected
contentions again joinder: denied plaintiffs joint "There is no a claim here that assert permits cause of action. It is claimed that the statute joinder joint multiple if not causes of action even justice’ where the would 'convenient administration thereby promoted. in the A similar claim was made recent case Co v of Hardware Dealers Mutual Insurance Inc, 490, 507, 516, Hidey, RH in which 349 Mich separate number of causes of action asserted plaintiffs majority were in 1 A of this included suit. justice Court held that the convenient administration 405 Mich Opinion Court would not by permitting joinder be served in the cir-
cumstances disclosed opinions record. Both upon affirmance relied questions the fact that different of law and fact would be involved the various claims or in defense thereto. Significantly, dissenting opin- 506) ion similarly acknowledged (p complete 'a or substantial disparity of issues of either law or fact and complete disparity substantial of defenses available against proposed joint plaintiffs would indeed affect the decision as to joinder promoted whether or not
convenient justice’. administration of "In the case at bar complaint the bill of embraces separate arising causes of action out of several hundred apparently transactions many occurring period over a perhaps months and years. several Presumably *33 some misrepresentations alleged therein were made plaintiffs plaintiffs to some and not to others and some
reasonably may have relied on them and may others not. It is evident that the circumstances of the purchase execution of promis- the contracts and the sory notes considerably plaintiffs varied so that some may grounds have for rescission not available to others. short, In very the disparity substantial of issues of law and facts between multiple plaintiffs’ claims would any judicial render proceeding sought in which all were by adjudicated to simultaneously, incomprehensible to litigants, their counsel and the chancellor as well. disparity "The same compels ruling of issues our that this cannot be considered a class action under Court (1945). Rule 16No requires that, "The rule sought right where the to be enforced in common, a class joint action is not or or secondary, but rights there are involved instead several (as here), there are object of the action must be adjudication of affecting specific property claims or there question must be 'a common fact affect- law or ing the rights several and a common relief must be sought. suggest Plaintiffs ques- there is a common tion of relating law to defendant as a bank’s status holder in due course fact exists question and that a common plaintiffs
because some or all of the relied Bank National Opinion of the Court advertising used defend- upon certain television pat- uniform defendants otherwise followed a ants dealings plaintiffs. Al- conduct in their tern of with promis- holder though the bank’s status as a of various plaintiffs’ involved in each of the sory notes to although plaintiff subjected each was claims conduct, advertising pattern uniform or other same plaintiff depend each liability defendants’ to will which, these speciñc by the nature of trans- upon facts actions, plaintiffs to all cannot be common added.) Id., (Emphasis number of them.” substantial 319-321. cases emerges which from these principle with the question a court is faced that when on particular proceed lawsuit can a whether basis, it must take into account representative will if the case is problems arise practical basis. proceed representative on a allowed at Bar B. Case arise if practical problems will major Two on proceed allowed to case is on the prevails and the ultimately basis the identifica- problem The first involves merits. who are actu- tion of the BankAmericard holders involves recovery. entitled some The second ally if computation exactly money, how much would be each and such cardholder any, every *34 receive, including computation to entitled 20,000 ac- alleged approximately counterclaims on counts. 750,000 earlier, were persons
As noted over credit cards at one time holders of defendant’s period time framed during or another complaint. persons Not all of these plaintiff’s from the damages would to recover be entitled defendant, approxi- According to the defendant. Mich Opinion op the Court one-third, 250,000, mately roughly these persons never charges. incurred interest These
persons addition, would not be entitled to relief. In
corporations and other business entities that ac-
quired credit cards for their would not employees 450.78; be entitled to recovery. See MCL MSA 21.78 (repealed by 1972 PA now MCL 450.1275; 21.200[275]) 438.61; and MCL MSA MSA
19.15(71). Also, it appears persons that whose credit purchased card accounts were by the de- (estimated 165,- fendant from retail stores at over 000) would also not be entitled to at recovery, least respect with charges interest incurred before purchased. the accounts were The defendant contends that it or the circuit 750,000 court would have to examine each of the BankAmericard accounts determine which card- holders would entitled be to recover and that this
process would be extremely burdensome and exa-
cerbated the unsatisfactory nature of the ac- count defendant, records. According to the
records that time are on microfilm and must be examined manually. are not They amenable to the use of computers or other modern processing data
systems. There also is the probability proofs
in addition to the records would required.
defendant estimates this identification process (4,955 would take many years of labor man-years) complete. Assuming that the accounts must be reviewed manually and that proofs other required, would be is still not a necessary conclusion that
process would be extremely burdensome. The only
accounts that would have to be examined are the accounts of persons those in. opt who chose to
persons who did not affirmatively join would be involved in the case. If only small number *35 Michigan Grigg National Bank Opinion op the Court opt in, would be should the burden
cardholders defendant. than that described the much less enough might constitute a even be There problems pursuing light the of viable class representative This basis. would be case on a point judge. in the many trial At this for the decision knowing way case, how we have no given might opt opportunity. in if cardholders say matter cardhold- cannot that no how few We opt practical identifying in, burden ers great relief would be so cardholders entitled to proceed case cannot on basis. problem major practical concerns
The second damages. computation Because of individual history is each BankAmericard holder’s account respect purchases, payments and different with charge incurred, it of finance would be amount necessary individually in the accounts to examine damages order to determine the exact amount of due, alleges any. addition, if In the defendant approximately 20,000 it would have counter-claims involving and that members of the preclude any
other factors could reduce or ery. recov- again The defendant contends that and/or manually the circuit court would have to examine compute 750,000 each of accounts illegal charged amount of this interest and that complete. many years would take more labor Again, necessarily correct. defendant is not only accounts that would to be examined have if the bank were would the accounts liable persons opt only in,
those but who not chose to recovery. eligible who also were identified as damages computing The burden of individual opted depend upon many would how cardholders many any, those, in and if be found how would Mich op Opinion the Court At is no of our eligible. point way there knowing great might how this burden be. We also *36 if
do not know there would be defenses or counter- might claims of who against persons the choose to in. opt expressed
Concern has been over the possibility prosecuted this lawsuit was instituted and as more for the of purpose generating class action large legal plaintiff’s attorneys fees for the than purpose vindicating rights
for the the of the true, other class members. This be but there may prevent are other abuse of the class action ways precluding device that do not involve all of the members, class some of whom may legitimately sue, representative wish to from on a proceeding First, depending upon legiti basis. the number of in, mate opt may class members who court Second, dismiss the class the suit. portion of agreement court is not bound fee entered by any into representative plaintiff between the and her her
attorneys, excepting personal contingent as to fee contract. See Bond v Ann Arbor School Dis
trict, (1970), 705; 383 Mich NW2d where this Court remanded a class action to cir
cuit court for and an award of entry judgment
attorney fees "as shall be set forth in itemized [an] * * * statement approved circuit added). judge” (emphasis in the case plaintiff at bar has of "reasona only requested an award ble” the fees attorney fees. Reasonableness depend
would of time primarily upon the amount spent upon on the case and attorneys nature upon and extent of the conferred benefit fee,
the intervening plus Such a members. costs, would from the payable proceeds judgment prior to computation for distribution.
V. Conclusion foregoing, On the basis of the we conclude National Bank Opinion of the Court practical allowing burdens involved in this to proceed case on a basis preclude suing from on a representa- basis,
tive but these be intelli- judgments cannot existing made on the basis of the gently record. primary insufficiencies have arisen from a fatal, partial, but upon reliance the amended ver- sion FR P 23 Civ and those Federal cases based
upon the necessity affording process due
absent class members who would be aby bound if
court’s did not ex- they affirmatively out) clude (opt litigation. themselves from the Personal possible service when or "the notice best
practicable under required circumstances”
under that rule.
Because claim does not for Federal qualify *37 jurisdiction, is in brought Michigan a court and subject
is to state and of procedure law rules applicable spurious to class Michi- actions. Under gan procedure, law persons and who do in)
affirmatively join (opt litigation are not bound. They represented are not in or by touched suit, so their process due are not affect- rights
ed.
We therefore reverse the Court of and Appeals remand the case to the circuit court with the following instructions: plaintiff, expense, at her such may issue as
notice she directs;22 wishes or as the court 2. The court shall period set a reasonable time within which class in order opt members must
to case; be included in the
3. After the time period set the court has expired and briefing argument after such as is
[22] See GCR 1963, 208.4. Mich op Opinion the Court necessary by court, court shall deemed allowing question the case rule on the of whether promote proceed basis will on a light justice, in the convenient administration the opinion principles in this Court’s discussed adequate representative an whether the class.. jurisdiction.
This no Court retains Moody, Ryan, Kavanagh, Williams, and Blair Coleman, C.J. Jr., JJ., concurred with part J., no the decision of took Fitzgerald, this case.
Addendum "the Coleman, view C.J. The dissent asserts accepted by
ultimately in- courts” was that most a on the could occur after tervention merits. The official committee notes FR P those inti- revision of mately Civ written rules, involved with offers somewhat picture: different 'spurious’ "Hitherto, as in a few actions conducted designed to extend nominally and thus actions intervening only parties before deter- and others held or intimated liability, mination of class members decision on the courts have might permitted to intervene after interests, to their merits favorable for them- order to secure the benefits of decision selves, although be unaffected they presumably would added.) (Emphasis by an unfavorable decision.”1 principal FR Moore, the drafter of old Professor *38 23,PCiv offers a similar assessment: * * * that mem- to the "Some courts subscribed view after permitted of to intervene bers the class would be to their inter- adjudication on the merits favorable an for ests, of the decision in to order secure benefits Practice, p 1 3B 23-31. Moore’s Federal National Bank Dissenting by Opinion Levin, J. themselves, although they by would not be affected an (Emphasis changed; unfavorable decision.”2 footnotes omitted.)
Professor Moore’s of this of one- analysis theory way illuminating: intervention ”It is theory submitted that this If the was erroneous. judicata against decision was res not those parties, it only should have run to the benefit of those who had intervened before a trial on the merits. Other-
wise other of might members the class have remained parties issues, on the sidelines while litigated being decision, with no risk of bound an unfavorable
and then have in advantage come to take of a favorable omitted.) ruling.”3 (Emphasis added; footnotes
Footnote 1 quotes of dissent major- from the ity opinion. quotation pertinent omits a foot- (footnote 7). from opinion note the majority cited in missing cases explain footnote class, changing situation especially where the changes are caused the death of an original
class member and the devolution that member’s to interests others. Levin, J. (concurring part; in dissenting part). in I concur in I through Parts III of the Court’s
opinion, except III B III sentences Part F referring to "the convenient administration justice” D(2) and the III suggestion Part
"on remand the trial court to may wish consider” requiring post security.
1 dissent from the III excepted sentences Part IV, and from Part announcing a doctrine conve- nient administration I justice. also dissent from
Part V which authorizes the trial to require court
that, before proceed the case determina-
2 Id., Appendix Chapter 23, p 23-2854. 3 Id., p 23-2917. *39 Mich Dissenting Opinion Levin, J. given liability action, notice be to of as a class tion they must, aof time within which class members opt requires in, that, time after the all, if at and opting expired, rule the trial court then in has for proceed permitting to as a class case whether promote administration the convenient action will of justice.
I not in terms direct the While this Court does give require plaintiff notice, it to to
trial court ought given to so that a be indicates that notice permitting made can be whether determination the the convenient administration promote proceed "will to as a action case justice, light in of of opinion principles in this and Court’s discussed adequate representative plaintiff is whether an
the class”.
Manifestly, a it is intended that such determina- "[the] made case is allowed tion will be proceed” before expected action, and it as a class is give the trial court will direct "shall set a reasonable notice and that court period opt time class members must within which in the order to be included case”. such order be Court decides that an entered all but that it be done without directs requir-
discussing ing justification whether there is giving members notice and that class opt liability. in before a determination of
A incorpo- 1963, 208, rule, The class action GCR language original Federal class rates the 23) (FR proposed
action rule Civ amend- P adopted. While ment that rule which was never National Bank Dissenting Opinion by Levin, J. authority, was division there some the view ultimately accepted by that, courts most was class, there an where plaintiffs identifiable unnamed liability, will, after determination permitted "to intervene and share *40 representatives, by
obtained
their
insofar as each
prove
membership
able to
is
damages”.1
both
the class and
1
561,
(CA 10,
Corp Nisley,
Union
300
Carbide & Carbon
v
F2d
588
1961).
(CA
Detroit,
138,
Similarly,
6, 1968);
see Foster v
405 F2d
146
(CA
Guaranty
York,
2, 1944);
York v
Trust Co of New
143 F2d 503
(CA
Corp,
2, 1965),
Escott v Barchris Construction
340 F2d 731
cert
Hall,
(1965);
sub nom
Co v
den
Drexel &
B today adopts The Court restrictive features on
based both the and old rules; new Federal it incorporates requirement the new rule’s of notice3 (but liability opt- before a determination not its provision), judge out and authorizes the to bar opting pursuant in, absent class members from to rule, the old after there has been a determination liability. advisory committee on the revised Federal "specifically rejected requiring rule the notion of opt-into absent class members the action to preferring opt secure its benefits”.4 The reason for opt out it was that "assures that small protect claimants who would be unable to their rights through separate advantage suits can take in the class action without participating”.5 actually burden of any apparent recognition Court, without may doing preclude is, effect, what the maintenance of class actions where small involved, chooses,
claimants are without discus- sion, to establish this additional obstacle to the claimant,
maintenance of a class action. The how- ever small claim, the amount of his must hereafter
take affirmative action to be included in the case before it is decided whether it be maintained as a class action.6 sure,
To be rule, the old Federal rule prescribe The Court given does not the form of the notice to be on remand, apparently publication which can be by because those who opt judgment. do not in are not bound 4 Wright Miller, supra, p 7A & § 5Id. *42 6 (see Professor Vestal states one of the reasons the uniform act (as rule) Appendix) adopts opt Part V and instead of knowledge did new Federal out opt points in was that "all evidence to a substantial lack of part on the of the members of the class of the conse- 148 Mich by Dissenting Opinion Levin, J. not, it, It did how- on an rule. opt-in modeled taking from ad- ever, discourage small claimants because, as con- of a vantage judgment favorable advantage could take applied, they strued and although they such a did intervene judgment judgment until after had been participate opt in and rendered. It is the combination barring intervention after favorable discourage claimants. which will small
II provides rule for considera The revised Federal this Court concepts
tion of similar to those which court enunciates without revision of the today .7 rule concepts that those became The Court asserts of our under "the rubric of part jurisprudence by many quences are participation. The made class members decisions understanding on an of the alternatives offered. It not based say would preted be reasonable to that inaction should be inter- seem to willingness participate as a in an action which will be (1977). Vestal, Actions, Uniform Class 63 ABA J beneficial”. opt-out problem opt-in He versus faced adds: "This same —was — early York class action act. An New the draftsmen the new New provided proposal York could limit the class to those that the court in, opting opting out. In Canada the provision only is a for but the final version there proposed Investigation Act Amendments Combines Id., year provide p opting also out.” sought provides FR P 23 to maintain Revised Civ that where it is ground "questions common to class action on the of law or fact predominate questions affecting the members of the class over members”, only individual the court must find "that a class action is superior tion of the should consider management adjudica to other available efficient methods for fair and reaching controversy” and that in that decision the court likely in the “the difficulties to be encountered requires of a soon class action”. The rule also "[a]s brought practicable as an action as a after the commencement of action, it is to be so class maintained”. The old Federal rule and rule mon question predominate. the court shall determine order whether 208.1(3) require a com question that the common of law or fact but do not mandate Compare in the 2 and 3 of the Uniform Class Actions Act/Rule §§ Appendix. attached *43 v National 201 Bank Dissenting by Opinion Levin, J.
convenient administration of justice’ The Court Young Thendara, Bajorek v cases, refers to five Michigan Inc, 42; v 328 Mich 43 (1950); NW2d 58
Kurtz, 335 Hard 58; Mich 55 (1952); NW2d 727 Hidey,
ware Dealers Mutual
Inc,
Ins Co v R H
349
(1957)
490;
J.); Palmer
Mich
84
(Carr,
NW2d 795
Highland
Park Theater
Park,
Co v
326;
362 Mich
and Freeman v State-Wide
106
(1961);
NW2d 845
Carpet Distributors, Inc,
313;
365 Mich
112 NW2d
(1961).8
case,
In the
by
Court,
instant
in contrast with the cases cited
it has
fact.
question
been determined that
there is a common
of law or
Thendara, Inc,
Young
42, 48;
In
(1950),
v
328 Mich
cided under new Federal rule which we all Further, agree point.11 are not if there were rule, point cases in decided under old Federal would, counsel I expect, defendant’s have relied on them; our own limited research failed to disclose
any such case.12
The Court has failed to demonstrate that the old rule, 1963, 208, Federal incorporated into GCR as heretofore construed authorized a judge to dismiss
a class action on the ground that its maintenance would not serve convenient administration justice.
Moreover, Report Committee accompanying a proposed rule, amendment to the old Federal gist of which was 4 adopted as subdivision of GCR
1963, 208, states the authority there confer red must be exercised "based on inadequate repre
sentation, however, general rather than on consid
erations of convenient judicial administration.”13
Ill The appropriateness of requiring is not security
an issue on appeal and should
injected
not be
this Court on its own initiative.14
11
opinion
The memorandum
in Northview
St
Construction Co v
(On Rehearing),
184, 202;
Clair Shores
399 Mich
NW2d
(1976),
rule,
which
appears
cites a case decided under the new Federal
incorporate
signed
a limitation from the new Federal
I
rule.
opinion
acknowledge
apparent
error.
Kaplan, Continuing
See
Work of the Civil Committee: 1966
(I),
Amendments of the Federal Rules of
L
Civil Procedure
81 Harv
356, 390,
(1967), suggesting
Rev
fn 132
that the court has discretion
certifying a class where "the matter was
too diffuse to
handled as
cited, however,
power
a class action”. In the cases
of the court
pursuant
authority
was invoked
adequacy
to its
to determine the
representation.
13Excerpted
Practice,
23.01[5], p
in 3B Moore’s Federal
23-18. See
¶
supra.
fn 12
pertinently:
This Court states
"If,
hand,
on the
only
other
will bind
those members
*47
IV incorporate a need to into perceives Court concepts state reflected the of this jurisprudence all, If this is to be done at
the Federal rule. revised after orderly way study in an of it should done be alternatives, pro- competing the considerations rule, mulgation appropriate of a revised court bar, for comment opportunity notice to bench and and consideration of comments. future govern
A rule conduct revised could revised, however, rule litigation. Until the be in accordance with the this case should decided application of concepts developed in the heretofore the rule 208 as construed and old Federal rule and
applied practice. events,
In should not be re- all class members the liability in until the conclusion of quired opt litigation. phase of stated, I join For cannot reasons disposition. Court’s
V cases, This litigation and other some which state,
have reached the courts of this appellate ac inadequacy present illustrate our class tion rule. After decisions of the United States Court,15
Supreme
the National Conference
which
on
"se
Commissioners
Uniform State Laws said
they
affirmatively
of the
to be
class who decide and
indicate that
wish
represented by
included in the class and to be
the class
in’),
'opting
attorneys (commonly
then
chosen
referred to as
finely
surrogate protection by
there is
less reason for such
drawn
affirmatively 'opting
as
in’
court
Federal cases mandate. Those not
by any judgment.”
are not bound
Co,
291;
505;
Paper
Ed
94 S Ct
38 L
Zahn v International
US
156;
2140;
(1973);
Jacquelin,
2d 511
94 S Ct
Eisen v Carlisle &
417 US
(1974).
on the old or new Federal there was need statute or rule action which would provide a means by which class actions could (Cum
continue to be maintained. 12 ULA Supp, *48 1978) pp 11-12. (annexed
The Uniform Class Actions Act/Rule appendix) as incorporates hereto an a number rule, the features of the new Federal but avoids making time, preclusive. them At same it
seeks to meet more substantial to objections
the old new and Federal rules that been have by plaintiffs voiced and defendants. Allan D. Ves- tal, chairperson on the committee uniform
act/rule, Uniform Class Vestal, describes in Actions, 63 ABA J 837 (1977). Critical comments
by lawyer plaintiffs lawyer a and a for defend- 842). See, also, Comment,
ants follow (pp and Class Actions and the Uniform Class Actions Act: Structure, Function and Loyola Angeles Los (1978). L Rev 335 I do not suggest mean to uncriti- we should adopt does, a cally Uniform Class Rule. It Actions however, appear to be a more approach balanced
from both plaintiffs’ points and defendants’ of view problems
to the which confront state courts considering class than actions either the old. or
new Federal rules.
A Uniform clearly Actions Rule would Class better than the approach adopted by the Court
today introducing concepts new and terms 405 Mich Opinion Levin, J. Dissenting burdens”) into "practical ("practical problems”, or guidance bench without jurisprudence meaning of these and concepts regarding bar terms this context. bench bar I for comment publish would Rule as a proposed the Uniform Class Actions considering suggestions court rule with view rule adoption of a revised of bench and bar and 208. Class Rule
Uniform Actions of a Action. Class Section Commencement sue or be or class more members One in a on behalf of all parties as representative sued action if: (1) the so constituted class is so numerous or members, or other- joinder of all whether required permitted, impracticable; wise (2) fact common question there is a of law or the class. Section 2. of Class Action. Certiñcation
(a) court, as as Unless deferred soon class practicable after the commencement a deter- hearing action the court hold a and shall mine main- whether or not the action is be or certify
tained class and order as a action refuse to it certify a class action. as
(b) a class The court an action as may certify (1) action, requirements if finds that (2) satisfied, action Section 1 have been a class adju- for the fair and efficient permitted should National Bank Dissenting Opinion by Levin, J. (3) controversy, representa- of the dication tive and parties fairly adequately protect and will interests of the class.
(c) (1) appropriate, certify If the court an respect particular as a action class action with to a (2) certify issue, or a claim an action as class equi- relief, to obtain declaratory, or action one more forms of (3) monetary, table, or or divide a into class subclasses and treat each as a subclass class. Section Criteria Considered. (a) determining In whether the class action permitted adju- should be for the fair and efficient controversy, appropriately dication lim- as 2(c), ited under consider, Section the court shall give appropriate weight following to, other relevant factors:
(1) joint whether a or common interest exists among the class; members of
(2) prosecution separate whether the actions against by or individual members of the varying would create risk a of inconsistent or adjudications respect with members individual incompatible
of the class that would establish standards of conduct for party opposing class;
(3) adjudications respect whether with to individ- practical ual members of the class as matter dispositive would be interests other mem- parties adjudication bers not to the or substan- impair tially impede protect ability their interests; their (4) party opposing whether a the class has acted grounds generally applicable or refused to act on thereby making injunctive class, to the final relief *50 405 Mich Levin, J. Opinion Dissenting appropriate corresponding declaratory relief or respect whole; a class as to the with (5) questions of law or fact whether common affecting any questions predominate individ- over members; ual (6) adjudicating the means other whether impracticable ineffi- or are defenses claims and cient; (7) appro- the most offers action whether class adjudicating priate and de- the claims means of fenses;
(8) parties representative members whether individually control- interest a substantial have ling separate prosecution actions; or defense of the (9) a claim involves the class action whether subject action, a the of a has been that is or proceeding; government action, other (10) bring the class desirable to whether forum; in another action (11) management action of the class whether poses difficulties; unusual
(12) involved laws issues conflict of whether pose difficulties; and unusual
(13) mem- of individual class the claims whether or interests in the amounts are insufficient bers complexities issues involved, of the of the view signifi- litigation, expenses to afford of the of the class. cant relief to the members 2(b) (b) determining under Section In adequately representative parties fairly protect will class, court must interests find that:
(1) parties representative attorney for the represent class; adequately interests of will (2) parties not have do the class of interest in the maintenance conflict action; and National Bank Dissenting Opinion by Levin, J.
(3) representative parties or have can ac- quire adequate considering resources, financial 17,
Section to assure that the interests of the class will not be harmed. Section Order on Certiñcation. (a) The order of certification shall describe the (1) (2) sought, class and state: the relief whether respect particular the action is maintained with (3) issues, claims or whether subclasses have been created.
(b) certifying refusing certify The order or class action shall state the reasons for the court’s ruling findings and its on the facts listed in Sec- 3(a). tion
(c) certifying refusing certify An order or an appealable. action as a class action is (d) Refusal of certification does not terminate preclude being action, but does it from main- tained as a class action. Section 5. Amendment of Certiñcation Order.
(a) may The court amend the certification order any entry at time before on the (1) may merits. The amendment establish sub- (2) classes, any eliminate from the class member who certified, was included the class as (3) provide adjudication for an limited to certain (4) (5) change sought, issues, claims or make the relief or any appropriate change other in the order.
(b)
given pursu-
If notice of certification has been
may
ant to Section
the court
order notice of the
given
amendment of the certification to be
any
terms and to
members of the class the court
directs.
member appeala- party, order is the certification to amend appeal. if certifies for immediate ble the court over Multi-State Classes. Section 6. Jurisdiction (a) jurisdiction this state exercise A court of person of the class is a member over who being suing if: sued (1) jurisdiction exist exists or would a basis *52 person against the the under law of in a suit state; or (2) by member, the of residence of the class state (b), has made action law similar to subsection
class jurisdiction subject of the to the its residents of this state. courts (b) of a A of this state who is a member resident suing being is sub- or sued another state ject jurisdiction if of that state similar to the reciprocal jurisdiction class action law extends to this state. Section Notice of Action. (a) Following by order, certification, the court hearing, giving notice to after shall direct the of the class.
(b) notice, order on the certification based order, include: amendment of the shall
(1) including general description action, a of the sought, of the relief the and the names and addresses representative parties; (2) right a statement of the of a member National Bank Opinion by Dissenting Levin, J. class under Section to be excluded from by filing excluded, action an election to be in the a specified, by date; manner certain (3) description possible financial conse- class; on quences (4) general description of any counterclaim being against class, asserted or including relief sought;
(5) a statement the judgment, whether fa- not, or vorable will bind all members the class are action;. who not excluded from the (6) a statement any member the class may enter an appearance either personally
through counsel;
(7) an to which inquiries address may be di- rected; and
(8) other information the court deems appropri- ate.
(c) The prescribe order shall the manner notification to used and specify members of
the class to In be notified. determining the manner
and form of given, the notice to be the court shall class,
consider interests the relief re- quested, the cost of notifying the members of the
class, and possible prejudice to members who
do receive notice. (d) Each class, member of the representa- not a party, potential tive whose monetary recovery or *53 is liability estimated to exceed shall given be $100 personal or mailed notice if his identity and whereabouts can be ascertained by exercise of diligence.
reasonable (e) For of given members the class personal not (d), or mailed notice under subsection the court provide, minimum, shall as a a means of notice reasonably apprise calculated to the members of
the class of the pendency of the Techniques action. 405 Mich by Levin, J. Dissenting Opinion communication to assure effective
calculated the ac- concerning information commencement techniques The include may shall be used. tion notice, means of or mailed notification personal radio, television, public in or newspaper, posting trade, through un- places, other and distribution ion, interest, public appropriate groups. or other
(f) expense shall advance plaintiff is this section if there no counter- notice under If a counterclaim asserted claim asserted. court shall allocated expense of notice be as of justice. orders the interest steps taken (g) may The court order be expense minimize the notice. 8. Exclusion. Section (a) may to be plaintiff A of a class elect member (1) he repre- the action unless is a excluded from (2) the order contains sentative party, certification (2), (1), or finding paragraph under an affirmative (3) (3) 3(a), or under of Section a counterclaim the member or his pending against Section 11 is class or subclass.
(b) be of a class Any member entitled (a) files election excluded under subsection who an excluded, time to be in the manner notice, not in the is excluded specified from bound in the class action. (c) shall made a part elections record the action. (d) elect A of a member defendant to be excluded. Section of Action. Conduct (a) its own party The court on of a motion *54 Bank National by Dissenting Opinion Levin, J. may any appropriate motion make or amend order dealing including, the of the with conduct action (1) following: determining to, but not limited the proceedings prescribing or the course of measures prevent repetition complication in to presentation undue or the (2) argument; requir- of or evidence ing, protection of the of the the members class action,
or for the otherwise fair conduct of the (i) given any step directs, notice be as the court (ii) proposed judg- action, in the extent (iii) opportunity signify ment, or members they representation whether adequate, consider the fair and appearance present
to enter an participate defenses, claims or action; or otherwise in the (3) imposing representa- conditions on the (4) parties inviting tive attorney general question or intervenors; on participate respect with to the (5) adequacy representation; of class making any other order to assure that the class proceeds only adequate represen- action with (6) making any tation; and order to assure that the proceeds only repre- competent class action with by attorney sentation for the class. (b) representative party A class member not a may appear represented by separate and be coun-
sel. Discovery Against Section 10. Members. Class (a) Discovery applicable discovery under rules only against be used on order the court member of the class is not who party appeared. deciding or who has In discovery
whether should be the court allowed among consider, factors, shall timing other relevant request, subject matter to be representatives covered, whether of the class are Mich Levin, J. Dissenting Opinion covered, discovery subject on the to be seeking annoyance, will result discovery whether *55 or for expense or undue burden the oppression, the of class. member (b) par- against Discovery by or the appearing governed by those rules ties or to against party or a a dealing discovery by with civil action. Section 11. Counterclaims.
(a) a brought by A in action defendant an class the court any as a claim may plead counterclaim against plaintiff class the class. certifies as a action as court, plead a may On leave of the defendant a against a member counterclaim claim action a claim court certifies as a class class or the against a subclass.
(b) brought by in an action a Any counterclaim class asserted notice is plaintiff must be before given under Section 7.
(c) against money If is recovered judgment a for class, rendering a behalf a the court party on of award may distribution of or judgment stay any allocated to any judgment of of a portion execution the the against losing a member of class whom in for a pending has an action or out of state party long so stay for and continue the money, losing the pursues as the the class action party pending diligence. action with reasonable
(d) plead A defendant ás a counter- may class the claim claim of the class on behalf plain- as against court certifies a class action The court as action a certify tiff. a class of against a plaintiff counterclaim on behalf member of permit or counterclaim aby subclass a notice class. The court shall order that National Bank Dissenting Opinion Levin, J. class, subclass, counterclaim member the class be given the members of the as class directs, court in the interest of justice.
(e) A asserting member the class or a subclass counterclaim shall be treated as a member purpose of exclusion under 8.
Section (f) allow, The court’s refusal or the defend- plead, failure ant’s a claim as a counterclaim a class action does bar the defendant from
asserting subsequent the claim action. Compromise. Section Dismissal or (a) has Unless certification been refused under action, approval Section a class without *56 (1) court hearing, may the after not be dismissed (2) voluntarily, involuntarily dismissed without an (3) merits, the or adjudication compromised. on (b) If the court has certified the action under 2, hearing of proposed Section notice on the dis- or compromise given missal shall be to all mem- of the bers class a manner the court If directs. certification, court not the has ruled on notice hearing proposed on or compromise the dismissal be ordered the court by specify which shall persons to be
the notified and the manner which notice given.
(c) (b) given Notice in- under subsection shall a clude full disclosure of the reasons for the dis- to, or compromise including, missal but limited (1) any payments made or to be made in connec- (2) with tion the dismissal or the compromise, anticipated effect the dismissal or compromise (3) members,
on the
agreement
any
made
(4)
compromise,
connection with the dismissal or
description
and evaluation
alternatives
consid-
(1) or a class parties to the as 2, dismissal with or permit certified under Section compromise; or prejudice approve without (2) certified, permit dismissal to a class not as prejudice; without (3) dismissal; deny
(4) or disapprove compromise;
(5) protec- for the appropriate take other action in the interest of justice. tion of the class and (b) (e) given notice under subsection cost of dismissal, seeking or as paid by party shall be compromise, in case of a unless court agreed otherwise. hearing after orders Judgment on Class. Section Effect of 2 in In a class action certified under Section given notice has been under Section 7 or which claim or particular as to claim terms, on binding, according issue certified is to its member of the has not filed an class who 8. The judg- election exclusion under Section ment shall name or describe the members *57 class who are bound its terms. Section Costs. (a) and those parties Only individu- appeared members of the class who have National Bank Dissenting Opinion Levin, J. against ally for a are liable costs assessed class.
(b) apportion liability The court shall for against costs assessed a defendant class. (c) Expenses advanced under Section 7 of notice prevailing in favor of the are taxable as costs party. 15. Relief Section Afforded. (a) may any The court award form of relief consistent with the certification order to which the
party in whose favor is rendered is entitled including equitable, declaratory, monetary, or
other relief to individual members of the class or lump the class in a sum or installments. (b) Damages by minimum fixed measure of provided recovery by any may statute not be re- covered a class action. (c) judgment money, If a class is awarded a the distribution shall be determined as follows:
(1) parties expeditiously shall list as as possible identity all members of the class whose expending dispropor-
can be determined without recovery. tionate share of the (2) expense The reasonable of identification and paid, ap- distribution shall be with the court’s proval, from the funds to be distributed.
(3) may steps The court minimize order taken to expense of identification.
(4) supervise, grant The court shall or stay portion of, of of whole the execution
the funds to and the collection and distribution inter-
the members of the class as their ests warrant.
(5) The court shall determine what amount judg- payment the funds for the available *58 405 Mich Levin, J. Dissenting by Opinion ment cannot be distributed to members of the individually they because could not be identi- they
fied or located or because did not claim or prove right money apportioned to to them. The hearing amount,
court after shall distribute part, whole or to one or more states as property unclaimed or to the defendant. (6) determining any, amount, In if to be defendant, distributed to a state or to the the court (i) following any unjust shall consider the criteria: (ii) defendant; enrichment of the the willfulness or part lack of willfulness (iii) defendant; on the of the impact on the defendant of the relief (iv) granted; pendency of other claims of other (v) against any defendant; classes criminal (vi) imposed defendant; sanction on the by loss suffered class. (7) remedy court, in order to or alleviate any may impose done, harm conditions on the respecting money defendant the use of the distrib- uted to him.
(8) Any amount to be distributed to a state shall property be distributed as unclaimed state in which are located the last known addresses of members the class to whom distribution could not be made. If the last known addresses cannot be ascertained with reasonable
diligence, the court determine other means what
portion of the unidentified or unlocated members
of the class were residents of a state. A state shall portion receive that its distribution they residents would have received had been iden- entering tified and located. Before an order distrib- uting any part state, of the amount the court give
shall written notice of its intention to make general attorney distribution to the of the state of any person given the residence of under notice National Bank Dissenting Levin, J. Opinion attorney 7 or 12 and shall Section afford the general opportunity an for an move order re-
quiring payment to the state. Attorney’s Section 16. Fees. *59 (a) Attorney’s representing fees for a class are subject to control of the court.
(b) applicable provision If under an of law a defendant or defendant class is entitled to attor- ney’s plaintiff only representa- class,
fees from a parties tive and those members of the class who appeared individually have fees. If a are liable for those attorney’s is entitled to fees from apportion may class, a defendant the court the among fees the members class. (c) prevailing judgment If a class recovers a for money or other award that can be divided for the
purpose, may attorney’s the court order reasonable litigation expenses paid
fees and of the class to be recovery. from the (d) prevailing If the entitled to declara- tory equitable may relief, the court order the party pay
adverse attorney’s to the class its reasonable litigation expenses permitted
fees and if involving law similar cases a class or the court finds that the has an vindicated important public However, interest. if mone-
tary recovered, award is also the court allow attorney’s litigation expenses
reasonable only and fees portion to the extent that a reasonable defray that award is insufficient to the and fees expenses.
(e) determining attorney’s In the amount fees prevailing for a class the the court shall consider following factors:
(1) expended by attorney the time and effort 405 Mich Dissenting Opinion Levin, J. litigation, including nature, extent, and quality of the rendered; services
(2) upon results achieved and benefits conferred class; (3) magnitude, uniqueness complexity, litigation;
(4) contingent success; nature of (5) awarding attorney’s litiga- in cases fees and (d) expenses tion under subsection because of the important public vindication of an interest, impact against party economic on the whom the made; award is (6) appropriate criteria in the state’s Code of Responsibility. Professional Arrangements Attorney’s Section 17. Fees and Expenses.
(a) 2(a) *60 hearing any Before a under Section or at representative directs, other time the court parties attorney representative and the for the parties jointly sepa- shall court, file with the or (1) rately: showing any paid a statement amount promised by any person or them for the services rendered or to be rendered in connection with expenses litiga-
action or for the costs and (2) tion and the source of amounts; all of the copy any agreement, summary of written or a of
any agreement, representative oral between the parties attorney concerning and their financial (3)
arrangements copy any or fees and of written agreement, summary any agreement, or a oral by representative parties attorney or the any person
share these amounts with other than a regular regu- attorney member, associate, or an larly of counsel with his firm. law This statement National Bank by Dissenting Opinion Levin, J. if additional ar- supplemented promptly
shall be rangements are made.
(b) the costs and Upon a determination reasonably of the action cannot litigation expenses par- representative defrayed by and fairly sources, court by other available ties or solicitation authorize and control may order contributions for this expenditure voluntary and class, from members of the advances purpose both, others, to reim- subject or attorneys obtained any recovery from bursement order available funds so any class. The court to the applied pay- or advanced to be contributed party oppos- of a ment of costs taxed favor ing the class. Limitations. Section Statute of all of limitations is tolled for class The statute an action upon members the commencement a class action. The statute of limitations asserting against of a class: running resumes a member (1) exclusion; upon filing his an election of (2) certification, upon of an order of or of entry thereof, eliminating him from the an amendment class;
(3) upon as except parties, refusing entry an order under Section action; the action as a certify (4) an upon dismissal of the action without adjudication on the merits. Application Uniformity Section 19. Construction. *61 applied
This rule shall be construed general effectuate uniform the purpose its to make 405 Mich Opinion Levin, J. Dissenting among respect subject rule of this to the law with states enacting it. Title. 20. Short Section Class the "Uniform cited as This rule Actions Rule”. Repeal. Section parts following acts are re- acts pealed: Taking Effect. 22. Time of Section effect-- rule shall take This notes as a holder of various bank’s status * * * transactions, plaintiffs’ these the nature of claims in each of number plaintiffs substantial to all or cannot be common them.” Id., p 321. Bank National Dissenting Opinion Levin, J. causes of action "must be if joint”, there is defendant, "more than must be liability one defendants, asserted against all of the material grounds sufficient appear uniting must causes of action promote in order the conve- nient justice”. administration 1948 CL 608.1 (emphasis supplied). concept expressed in the statute has been 1963, 206,9 carried present forward into GCR per- mitting persons join plaintiffs one action as and the joinder one action of defendants where could action be so maintained "if otherwise appears their action presence will promote the convenient of justice”. administration This, however, not, under rule a condition if, precedent to such permissive joinder among factors, other question there is a common of law or fact. It is an alternative basis for if joinder there is no question common of law or fact. The phrase "the convenient justice” appears administration nowhere in class rule 208; action sole joinder (subdivision spurious criterion for a class action