Rule 23.Class actions

Rule 23 lets a lawsuit represent an entire group of people instead of requiring every one of them to sue or be sued individually. Section A sets four prerequisites before any class action can go forward: the group has to be too large for joining everyone as an individual party to be practical; the case has to raise questions of law or fact common to the whole group; the representative's own claims or defenses have to be typical of the group's; and the representative has to be capable of protecting the group's interests without a conflict between the representative and the class.

Meeting those four prerequisites isn't enough on its own — Section B requires the case to also fit one of three categories. The first covers situations where letting people sue separately would risk contradictory rulings: either rulings that would leave the opposing party bound by incompatible standards of conduct, or rulings that would effectively decide the rights of class members who weren't part of that particular suit. The second covers cases where the opposing party has acted, or refused to act, on grounds that apply to the whole group, making an injunction or a declaratory judgment covering the entire class the appropriate remedy. The third — the type most people picture when they hear "class action" — asks whether the questions common to the class outweigh the questions specific to individual members, and whether resolving everything as one class action beats the alternatives. For that third category, the rule lists what the court weighs: how much individual class members want to control their own case, how much related litigation already exists, whether it makes sense to concentrate all the claims in one court, and how hard the class action would be to manage.

Section C walks through how a class action gets certified and resolved. The court decides as soon as practical whether to let the case proceed as a class action, and that decision can be revisited before the case is decided on the merits. For the third type of class action described above, class members get the best notice the court can practically arrange, including direct notice to anyone who can be identified without unreasonable effort. That notice has to tell each member three things: that they can opt out by a stated date, that staying in means the judgment binds them whether it favors the class or not, and that they can have their own lawyer enter an appearance even while remaining part of the class. The judgment itself has to describe who the class members are, and for the common-question type, it also has to identify who received notice and didn't opt out. Courts also have flexibility to certify a class on just some issues in a case, or to split a class into subclasses that each get treated as their own class.

Section D gives the court broad, ongoing management authority over how a class action unfolds — controlling how evidence and argument are presented, ordering additional notice to protect class members at various points in the case, placing conditions on the representative parties, and requiring amendments to the pleadings when representation issues need to be addressed. These orders can be combined with the court's pretrial scheduling authority and changed as the case develops. The rule also entitles attorneys to reasonable fees and expenses out of any fund recovered for the class, with the court dividing that award among the attorneys involved if more than one represented the class.

Section E requires court approval, plus notice to the class, before a class action can be dismissed or settled — a safeguard against a settlement or dismissal that benefits the named plaintiffs or their lawyers without the rest of the class knowing or having a say.

Section F addresses money left over once a class settlement or judgment has been paid out, commonly called residual funds — whatever remains after covering approved claims, expenses, litigation costs, and attorney's fees. Not every settlement produces residual funds, and the rule doesn't force one to. But when a settlement or judgment does set up a claims process and money is left after that process runs its course, the rule requires that at least half of it go to the Indiana Bar Foundation to support statewide access-to-justice work. The court can direct the remainder of any leftover funds to the Bar Foundation as well, or to another organization connected to the purpose of the underlying case or the interests of the class members. This funding requirement has no real counterpart in the federal class action rule, which leaves the disposition of unclaimed settlement money to case law rather than rule text.