1.9.5 Counsel’s Relationship with the Class Representative
A clear retainer agreement and good communication with the class representative before and during the lawsuit are essential, in order to avoid challenges to adequacy (of both the class representative and class counsel), to make sure the class representative is prepared for depositions and other steps in the litigation, and to satisfy class counsel’s ethical obligation to the class representative as a client.
After identifying a case as a potential class action, discuss with the client the possibility of bringing the suit on behalf of a class. Spend sufficient time explaining the class device and the duties of the class representative so that the client understands the implications of bringing a class action instead of an individual one. Even an unsophisticated client can usually understand that a class action may be appropriate when a business has injured a group of people in the same general manner. On the client’s first office visit or as soon thereafter as possible, counsel should discuss each of the following issues with the class representative:
- • Advise the client whether or not counsel would be willing to undertake the case on an individual basis and, if so, on what terms.205
- • Explain any negative aspects of filing the client’s case as a class. If it is likely that a particular class action might take longer than an individual action206 or that the plaintiff might have to be present in court at trial, the possibilities should be explained to the client. The need for appearances for depositions and for court approval of any settlement should be explained. On the other hand, if the case is successful, it may be possible for the class representative to obtain compensation for the time and effort incurred in acting as the representative.207 In discussing the prospect of any class representative incentive award, it is critical that plaintiff’s counsel ensures that the client understands that any such award is: (1) not guaranteed; (2) not a payment from class counsel to the representative; (3) subject to court approval; and (4) only available in the event the litigation is successful.
- • The specter of class liability may tempt the defendant to try to buy off the named plaintiff.208 Make sure the class representative is willing to decline such offers and understands that counsel will suggest declining them, in the interests of pursuing relief for the class.
- • Once the court “certifies” the case to proceed as a class action, it must be settled on a classwide basis and the clients may not settle for themselves as individuals without court approval. If they attempt to do so, that fact may be used against them in a determination whether they are fit to represent the class and may potentially breach the fiduciary duties they have to the class.
- • The class representative should understand who the lawyers are and the role each lawyer will assume in the litigation, particularly if co-counsel are involved. Well prior to the class representative’s deposition, the named plaintiff should be introduced to all counsel involved and meet with them. Usually, state ethics rules will require client approval of any firms that are subsequently hired or at least of any agreement regarding the sharing of fees.209
- • Remind the class representative that counsel should be informed of any changes in address or phone number and any absence the named plaintiff may have from the local address.
- • Instruct the clients and the clients’ family members not to communicate with the defendant or the defendant’s attorneys. If the defendant or the defendant’s attorney calls, tell the clients to say only that the clients have been instructed by their own lawyer not to talk about the case and that the clients will advise their lawyer about the call immediately.
It is a good idea to provide the client with a written summary of these points, either as part of the retainer or in a letter.
Make sure the client understands the role and obligations of a class representative, and answer any questions the client has. Have the client formally authorize the attorney to file the case as a class action and agree to serve as a class representative. This is best done by having the client sign an authorization or retainer agreement which addresses the following points:
- (1) The client is authorizing the attorney to file a class action if the attorney’s investigation discloses that a class action is appropriate.
- (2) If, after conducting an investigation into the underlying facts, the attorney concludes that litigation is not warranted, the attorney has a right to cancel the agreement and withdraw from representation. (This provision must give due regard to avoiding any prejudice to the client resulting from the delay caused by investigation and the statute of limitations.)
- (3) Costs (court filing and service costs, deposition costs, expert fees, and the costs of sending the class notice) will be advanced. If applicable, the clients may be ultimately liable for all or for a pro rata share of these costs in the event that the defendant wins the case.210
- (4) If the client is contributing toward fees or expenses, this should be clearly stated. If the client’s contribution is to be paid in the future, the consequences of nonpayment should be stated.
- (5) The attorney will seek an award of fees to be paid by the defendant or from the class recovery if the suit is successful in obtaining either a judgment or settlement. It may be desirable to provide that the client agrees not to waive attorney fees as a condition for settlement and to specify that the client assigns any rights to recover attorney fees to the attorney, as consideration for being represented.211 It may also be advisable to specify the maximum amount of fees—either as a percentage of the recovery or relative to the attorneys’ lodestar—that the attorneys will seek at the conclusion of class litigation. If different provisions will apply in the event of an individual resolution, those provisions should be set forth in writing.
- (6) The client agrees to cooperate by appearing at deposition and trial, providing documents upon request, and remaining in touch with counsel.
- (7) If the dispute involves a debt, the agreement should state whether the client is expected to continue paying and should also state that the client will not pay it off or make any payments other than regular payments without consulting counsel.
- (8) It is also prudent for the contract to recite that no special promises or representations for special treatment or preferential settlement terms have been made to the individual acting as a class representative. The agreement may state that, if a class is certified and relief is obtained for the class, counsel will petition the court to grant a service or incentive award to the client to compensate them for time spent in service to the class but that no promises are being made as to the availability or amount thereof—and that any such award is conditioned on court approval.212
- (9) To avoid a potential problem in the event counsel believes a proposed settlement is in the best interests of the class but the client disagrees, the agreement should note that one of the risks associated with common representation of multiple clients by a single lawyer or set of lawyers is that the clients may differ in their willingness to make or accept an offer of settlement, and the client accepts this potential conflict. The client should also acknowledge that they understand that class counsel’s obligations will include a duty of loyalty to the class as a whole and not just to the client. For that reason, the client should acknowledge that, if counsel believes a settlement offer is in the best interests of the class, and the client disagrees, counsel may have an obligation to present the settlement to the court for a determination if it should be approved despite the client’s opinion to the contrary.
A sample client retainer letter for a class action claim and a named plaintiff’s statement of duty to the class are contained in Appendix E, infra.
Thereafter, regularly write, email, and call the client regarding the progress of the case as papers are filed, rulings are made, or at three- or four-month intervals. It is usually a good idea to send the client copies of pleadings, memorandums, and deposition notices as they are filed to keep the client advised of the matter and to assure the client that the case is being pursued with diligence.
These types of communications are not only good general practice but also important for demonstrating that a client is an adequate representative of the class and counsel adequate to represent it. They will also prove important in any petition for a class representative incentive award, as they provide concrete examples of tasks the client undertook to stay apprised of the litigation for the benefit of the class.
205 A private attorney would not take a case in which the named plaintiff’s personal claim is only a few hundred dollars, except on a class basis. There is nothing wrong with informing a client that counsel will undertake the case only on a class basis, if this is in fact the case. Even for larger individual claims, a private attorney might have to charge a percentage contingency or retainer so large in relation to the size of the claim that non-class litigation would not be feasible.
206 This may not be the case if potential litigation costs give a defendant a much greater incentive to resolve a class action in a timely manner rather than an individual one.
207 See § 14.7.7, infra.
209 E.g., Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 188 F. Supp. 2d 115, 124 (D. Mass. 2002). This rule is inapplicable in some aspects of multidistrict litigation proceedings, such as when the court musters attorneys ordinarily unwilling to work together and orders them to do so.
210 Most states, and the ABA Model Rules of Professional Conduct, allow costs to be advanced by counsel and, if the named plaintiff cannot afford to repay costs, the attorneys may even assume ultimate responsibility for the costs if there is no recovery in the litigation. See, e.g., Brame v. Ray Bills Fin. Corp., 85 F.R.D. 568 (N.D.N.Y. 1979) (attorneys for nonprofit organization); Am. Bar Ass’n, Model Rules of Professional Conduct, Rule 1.8(e)(1) (2004), available at www.americanbar.org.
While the American Bar Association’s model rules are adopted widely, practitioners should be careful to ascertain whether rules of ethics in their state still require the named plaintiff to be ultimately responsible for costs. A number of federal courts have held that Rule 23 permits class counsel to advance fees and costs, irrespective of state law to the contrary. See § 10.3.4.4, infra.
211 If the defendant is notified of such an assignment, any attempt by the client to waive the attorney’s right to fees without the consent of the attorney is ineffective. Zeisler v. Neese, 24 F.3d 1000 (7th Cir. 1994).
212 Advocates are advised to review the decision in Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958–960 (9th Cir. 2009), in which the court found impermissible “incentive agreements” in counsel’s original retainer agreements with the class representatives. Counsel promised in these agreements to seek awards for class representatives in an amount proportional to the class recovery rather than the services provided to the class.