§6614 Y2k Actions as Class Actions

Summary

Allows Y2K product or service defect cases to be brought as class actions only if they meet the usual class-action rules under federal or state law and the court finds the alleged defect would be a material problem for most people in the class. If a class action is allowed, the court must send each class member a short, clear notice that says what the case is about, where it was filed, and how the lawyers will be paid (the hourly rate or the contingency percentage, plus an estimate of how much the lawyers would get if the full damages asked for were awarded). Federal district courts will normally hear Y2K class actions, except when: most class members and the main defendants are citizens of the same state and state law applies; the main defendants are states or state officials whom federal courts cannot order relief against; there are no punitive damages and the total amount at issue is less than $10,000,000; or the class has fewer than 100 people. A party claiming one of these exceptions must prove it. If a federal court only has the case because of this rule and the case fails the court’s class-action requirements, the court must dismiss it or, if the case was removed from state court, strike the class claims and send the case back. Plaintiffs may file an amended class action, and defendants may remove an amended federal class action. Time limits for claims stop running as allowed by federal law when a case is dismissed or sent back. Dismissal is without prejudice. This does not replace other civil procedure rules for class actions.