Wednesday, June 23, 2010
The lawsuit was originally certified as a class action with 74 class members who alleged violations of the Credit Repair Organizations Act. So many class members opted out of the class, however, that only 20 class members remained by the time of settlement.
The district court chose not to decertify the class, partially because each claimant, whose damages were only around $600 would create docket-clogging negative expected value individual actions.
The Ninth Circuit upheld this result, holding that although numerosity typically requires at least 40 class members, small classes are a permissible rarity, especially in a situation where class litigation had advanced to the settlement stage.