Creating Complications: Notice Requirements for Resolving Putative Class Actions

February 23, 2018Articles New York Law Journal

On Dec. 12, 2017, the New York Court of Appeals issued a seminal decision that will change the landscape of class action litigation. In Desrosiers v. Perry Ellis Menswear, Nos. 121 and 122, 2017 WL 6327106 (N.Y. Dec. 12, 2017,) the Court of Appeals held that under CPLR §908, upon the dismissal, discontinuance or settlement of any class or putative class action, notice must be given to class members in such manner as the court dictates. This means that even if a class is not certified, the parties must inform class or putative class members that the case has been resolved. Not only is this likely to confuse individuals who might not know about the litigation nor be bound by its results, but it also will allow unscrupulous plaintiffs’ attorney to solicit potential clients and tax already precious judicial resources.


Desrosiers arose from two separate cases concerning CPLR §908, which states that “[a] class action shall not be dismissed, discontinued or compromised without the approval of the court [and that] [n]otice of the proposed dismissal, discontinuance or compromise shall be given to all members of the class in such manner as the court directs.” The main issue in both cases was whether CPLR §908 applies only to cases that have been certified as a class action or if it also applied to putative class actions where a court has not made the determination of whether the case is appropriate for class action status.

In the first case, Desrosiers v. Perry Ellis Menswear, plaintiff worked for defendant as an unpaid intern. See id. at *1. The plaintiff commenced a class action lawsuit against the defendant alleging that he and other similarly situated individuals were owed minimum wages. See id. One month after the case was filed, Perry Ellis sent an offer of compromise to plaintiff, which was accepted. See id. During the pendency of the case, plaintiff never moved to certify any proposed class. See id. A few months later, Perry Ellis moved to dismiss the complaint, which plaintiff did not oppose. Instead, plaintiff cross-moved to send notice to proposed class members about the case’s resolution pursuant to CPLR 908. The Supreme Court dismissed the case and denied plaintiff’s motion. See id. Plaintiff appealed to the Appellate Division.

Following its 1982 decision in Avena v. Ford Motor Co.,85 A.D.2d 149 (1st Dep’t 1982), the First Department reversed. The First Department held in Avena that CPLR §908 requires notice to be given to class members when a class action is settled even if the class was never certified. See id. at 151. Accordingly, in Desrosiers, the First Department followed its prior holding in Avena and noted that CPLR §908 notice to putative class members is “particularly important under the present circumstances, where the limitations period could run on putative class members’ cases following discontinuance of the individual plaintiff’s action.” Desrosiers v. Perry Ellis Menswear, 139 A.D.3d, 473, 474 (1st Dep’t 2016).

In the second case, Vasquez v. National Securities, the plaintiff alleged that he and others similarly situated were not properly paid minimum wages and overtime by defendant. See Desrosiers, 2017 WL 6327106, *1. Before plaintiff moved for class certification, National Securities made a settlement offer of plaintiff’s individual claims, which plaintiff accepted. See id. Again, the defendant moved to dismiss the lawsuit and plaintiff cross-moved to send notice to putative class members under CPLR §908.

The Supreme Court granted both motions. See Vasquez v. National Sec., 48 Misc.3d 597, 601, 9 N.Y.S.3d 836 (Sup. Ct., N.Y. Cty. 2015). National Securities appealed and the First Department, relying on its decision in Avena, upheld the Supreme Court’s order. See Vasquez v. National Sec., 139 A.D.3d 503 (1st Dep’t 2016). The Desrosiers and Vazquez cases were then consolidated by the Court of Appeals for review.

The Court of Appeals’ Decision

In Desrosiers, the Court of Appeals held that the notice provisions of CPLR §908 apply to both certified and putative class actions. See Desrosiers, 2017 WL 6327106, *2. In reaching this conclusion, the Court of Appeals relied on three arguments. First, the court held that the language of CPLR §908 was ambiguous as to whether it applied to putative class actions or only certified class actions. See id. However, the court noted that the language of CPLR §908 uses the term “class action” rather than “maintained as a class action,” which is used elsewhere in CPLR article 9. See id. Furthermore, the legislature did not limit CPLR §908’s notice provisions to only those individuals who are members of “a certified class” or “all members of the class who would be bound” by the resolution of the action. In addition, when the legislature enacted CPLR §908, various groups recommended that the notice provision of CPLR §908 apply only to certified class action, which the legislature appeared to have rejected. See id. at *2-*3. Thus, the court found that the legislature intended for CPLR §908 to apply to both certified and putative class actions.

Second, the court reviewed Federal Rule of Civil Procedure (FRCP) 23 upon which CPLR article 9 was modeled. See id. at *2-3. At the time CPLR §908 was enacted, FRCP 23(e) stated “[a] class action shall not be dismissed or compromised without approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.” Former Fed. R. Civ. P. 23(e). According to the court, prior to the 2003 amendments to FRCP 23, the majority of Federal Courts of Appeals held that FRCP 23(e) applied to both putative class actions and certified class actions. See Desrosiers, 2017 WL 6327106, *3. Because the former FRCP 23(e) and CPLR §908 are virtually identical and a majority of courts held that the old version of FRCP 23(e) applied pre-certification, the court held that CPLR §908 also applies pre-certification. See id.

Third, the court relied on the First Department’s decision in Avena. The court stated that Avena was the only appellate-level decision to address the issue of whether CPLR §908 applies pre-certification. See id. at *4. The court noted that Avena was issued 35 years ago and the legislature never amended CPLR §908 or otherwise expressed its disapproval of Avena,which “’is indicative that the legislative intent has been correctly ascertained.’” See id. (quoting Matter of Knight-Ridder Broadcasting v. Greenberg, 70 N.Y.2d 151, 157 (1987)). Accordingly, the court held that CPLR §908 applies to both putative and certified class actions cases.


Desrosiers will have far-reaching implications for New York class action litigation. Indeed, the ramifications are likely to be three-fold. First, New York is likely to see an increase in class action litigation filed in state court. Desrosiers provides an incentive for plaintiffs’ attorneys to file their cases as class actions regardless of their merits. Upon resolution, plaintiffs’ attorneys can move to send notice to the putative class, which, in effect, provides them with free advertising and court-endorsed solicitation. While ethical rules, cost of sending such notices, and the threat of sanctions may dissuade some members of the plaintiffs’ bar from pursuing this route, certainly a subset of the plaintiff’s bar will seek to expand their practices by filing such actions.

Second, Desrosierswill require greater judicial resources to administer CPLR §908’s notice requirements. Prior to Desrosiers, courts only got involved in reviewing, approving, and endorsing notice to class members once a class was certified or settled on a class-wide basis. Now, courts will have to get involved in reviewing and approving notices whenever a class action complaint is filed and resolved in some manner (whether through dismissal, discontinuance, settlement or otherwise). In fact, it is not difficult to anticipate that courts will have to render opinions on a multitude of CPLR §908 notice issues. For example, if a putative class action complaint is filed and the defendant successfully moves to dismiss the complaint under CPLR §3211, what would notice to the putative class under CPLR §908 look like? Defendants will likely want the notice to be short and contain limited information. On the other hand, plaintiff’s counsel would want the notice to contain detailed information about the complaint’s allegations in the hope that putative class members will contact counsel.

Further, there will be arguments over who is part of the putative class required to receive the notice. How does the court define a putative class member when the court has not certified a class? What information must be provided in the notice order? Who bears the costs of producing the class list, which in consumer class action may be very costly to create? The courts will have to get involved in such minutia further taxing already precious judicial resources.

Third, Desrosiers may make settlements of class actions more difficult. Indeed, under Desrosiers, notice must be sent upon the disposition of any putative class action. Therefore, defendants may want to wait until after the court rules on plaintiff’s motion for class certification before engaging in settlement discussions. If the plaintiff loses the motion, the defendant knows that it can resolve the allegations without having to send notice. Further, if it settles or compromises the case before a determination of a class certification motion, the defendant will likely have to inform all putative class members about the settlement increasing the likelihood of copycat cases. Thus, there is an incentive for defendant to delay settlement negotiations until the court rules on plaintiff’s class certification motion, which wastes resources of both the parties and the court.


Desrosiers is an important decision that will significantly impact class action litigators. Indeed, it might be years before attorneys are fully aware of all of the ramifications of Desrosiers and its requirement that parties send notice to putative class members whenever a putative class action is dismissed, discontinued or compromised. Nevertheless, unless the legislature amends CPLR §908 to conform to the current version of FRCP 23(e), it is almost certain that Desrosiers will increase the number of class actions filed in the New York State court system and will drain precious judicial resources.

Reprinted with permission from the February 23 issue of the New York Law Journal. (c) 2018 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.