INTERNATIONAL LAW

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

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

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.

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 classaction lawsuits in the United States.

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.

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

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.

How does a Class Action suit work?

Step 1:

Step 2:

drafting a complaint
filing it in court
"serving" on the defendants
defendants answer or
challenge the complaint

Step 3: a period of "discovery" takes place

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

CLASS ACTION IN ITALY

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.

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

Other participants of class action

THE TERMS

The Italian law has no retroactive

effect, The Class Action Act allows
claims based on torts occurring
after August 15, 2009

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).

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.

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.

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?

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

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

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

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.

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

Final considerations
Italian consumer association
plaintiff law firms

vis a vis US

Italian consumer association have the

possibility to shape the law
Whats next?