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INTERNATIONAL LAW PARMA UNIVERSITY International Business and Development International Markets and Organizations Law Prof. Gabriele Catalini.

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Presentation on theme: "INTERNATIONAL LAW PARMA UNIVERSITY International Business and Development International Markets and Organizations Law Prof. Gabriele Catalini."— Presentation transcript:

1 INTERNATIONAL LAW PARMA UNIVERSITY International Business and Development International Markets and Organizations Law Prof. Gabriele Catalini

2 CLASS ACTION: U.S. AND ITALY APPROACHES International markets and organisations law Prof. Gabriele Catalini

3 DEFINITION In law, a class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued.

4 HYSTORY Medieval Europe: England 1125: record of a few individuals' representing a large group of people in legal suits. First Suit: 1309 a Discart vs. Otes case. Rule 48: 1833: U.S. law first introduced group litigation Rule 38: allowed absent parties to be represented as members of the prosecuting class. Rule 23: Rule 38 became Rule 23 and "opt out was introduced Private Securities Litigation Reform Act of 1995: new rules in securities class action lawsuit. Class Action Fairness Act of 2005: expansion of federal jurisdiction over many large class- action lawsuits in the United States.

5 U.S. FEDERAL CLASS ACTIONS Class action lawsuits may be brought in federal court if the claim arises under Federal Rules of Civil Procedure Rule 23 and 28 U.S.C.A. § 1332 (d) It is also possible to bring class action lawsuits under state law Typically, federal courts are thought to be more favorable for defendants and state courts more favorable for plaintiffs.

6 CANT CHARACTERISTICS 1 Numerosity - the class must be so large as to make individual suits impractical 2 Commonality - there must be legal or factual claims in common 3 Typicality - the claims or defenses must be typical of the plaintiffs or defendants 4 Adequacy of Representation - the representative parties must adequately protect the interests of the class 5. common issues opposed to individual fact-specific conflicts between class members and the defendants 6. class action, instead of individual litigation, is a superior vehicle for resolution of the disputes at hand

7 STATE CLASS ACTIONS Since 1938, many states have adopted rules similar to the FRCP However, some states have civil procedure systems which deviate from the federal rules Some states, do not provide for any class actions, while others, limit the types of claims that may be brought as class actions.

8 How does a Class Action suit work? Step 1: drafting a complaint filing it in court "serving" on the defendants Step 2: defendants answer or challenge the complaint Step 3: a period of "discovery" takes place

9 How does a Class Action suit work? Step 4: the plaintiff files motion to certify a class action. the defendants will file objections to certification. the Court will have a hearing. If plaintiffs win, the case will be certified. Step 5: Notice about members rights and deadlines for "opting out" Step 6: Trial or Settlement


11 EUROPE'S ATTITUDE FOR THE CLASS ACTION The European Consumer Commissioner: The old continent will never go down [the American class action] road with its toxic cocktail of contingency fees, punitive damages, and pretrial discovery.

12 HISTORY 1970 - the first Italian debate took place 2010, January 1st - the new consumer class action law became effective Italian consumer associations announced they would launch class actions for some 450,000 small Italian investors who claim they have been cheated by banks who sold them Argentinian bonds

13 Other «participants» of class action

14 THE TERMS The Italian law has no retroactive effect, The Class Action Act allows claims based on torts occurring after August 15, 2009

15 FIRST RESULTS In less than a year, six significant class action lawsuits have been filed against both Italian and foreign defendants, making Italys number of class action lawsuits high in comparison to other countries with recently introduced class action laws. At least two of the cases seek extremely high damages, totaling 6.25 billion together (and some numbers suggest that damages sought could exceed 10 billion).

16 FEATURES The class action law is the first law in Italy to provide for monetary damages in a class action, as previous laws only allowed for injunctions, marking extraordinary change in the Italian litigation system. These lawsuits are limited to four types of cases: contracts, product liability, anti-competitive (anti-trust) practices, and unfair commercial practices.

17 THE DIFFERENCE FROM THE US LAW The law differs from the U.S. Federal Rule of Civil Procedure 23: in a number of areas, e.g., more restrictive class certification process; an opt-in basis; no discovery; absence of punitive damages.

18 NEGATIVE TRENDS Consumer associations are proactively looking for class action opportunities and are advertising to attract and recruit potential plaintiffs. But they are not actual plaintiffs. So it is not clear: HOW and AT WHAT RATE the consumer associations will be compensated for their class action work; HOW and HOW MUCH they will pay the consumers; Do the consumer associations will advocate the specific interests of the class of plaintiffs they represent, or will pursue their own interests and/or the interests of their members as a whole?

19 WHO MAY FILE? Entities that can act on behalf of the plaintiff: Consumer association or committee with nationwide presence Consumer/Investor groups (registered with the Italian Ministry of Productive Activities) Promoters vis a vis Plaintiff

20 The proceeding 1° Stage: Admissibility The class action is deemed inadmissible if : The claim is unfounded There is conflict of interest The rights infriged upon are not homogenous The lead plaintif is unable to adequately represent the interest of the class

21 1° Stage: Admissibility The lead plaintiff must be a consumer The lead plaintiff must have an interest in the suit The phase ends with a court decision

22 Publicity and opt-ins Public dissemination of the admissibility finding A deadline for opting in is settled Members must affirmatively opt in to the class Decision on liability and damages can not be changed after the opting in.

23 2° Stage: Liability and Damages Liability and damages are determined The court specifies: Damage amount Uniformly applicable criterion for each individual claim No provision for punitive damages

24 Final considerations Italian consumer association vis a vis US plaintiff law firms Italian consumer association have the possibility to shape the law Whats next?


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