In the past century, businesses have come to operate on a national and often global level. In the past century, the United States has seen an enormous nationalization and even globalization of business. As a result, the actions of a single company increasingly have the potential to affect people far beyond the boundaries of that company's home state. When one or a few companies injure large numbers of consumers across the country, aggregate litigation (namely the class action lawsuit) becomes an especially attractive remedy. Aggregating claims allows plaintiffs to save time and money and may also enable them to present a more compelling case by showing the extent of damages a defendant allegedly caused.
Though some of this litigation arises under federal law, many of the underlying claims are governed by state law. Therefore, before a court can aggregate the claims and allow plaintiffs to proceed as a nationwide class, it must decide which state's law will apply to the claims. This decision frequently creates a classic "choice-of-law problem."
Rule 23 of the Federal Rules of Civil Procedure authorizes class actions as a form of aggregate litigation. For certification under Rule 23(b)(3), plaintiffs must show that "questions of law or fact common to the members of the class predominate over any questions affecting only individual members" and that the class action device will provide a superior method of adjudication. Rule 23(b)(3) lists a number of factors that the court should consider in making the certification decision, including "the difficulties likely to be encountered in the management of a class action." A court will not likely certify a class action that encompasses too many variations in either law or fact because the class will not meet the predominance requirement or the manageability standard.
Allison M. Gruenwald,
Rethinking Place of Business as Choice of Law in Class Action Lawsuits,
58 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol58/iss6/11