Important and immediate change to Oregon class action law

March 5, 2015 by

Oregon LegislatureOn March 4, 2015, Oregon significantly changed its class action law, Oregon Rule of Civil Procedure (“ORCP”) 32.

The legislature passed and the Governor signed House Bill 2700.  The bill changes Oregon class action procedure and requires that leftover or residual funds from class actions be paid 50% to an Oregon legal aid fund and 50% to another entity that relates to the subject of the class action or benefits class members.

Previously, Oregon law required an extensive claim form process that was typically an opt-in claims process.  It also required that class members be listed in the judgment, which made Oregon one of the only states in the country to require a listing of every class member in a public record and not just a general description of the class.  For those class members who did not affirmatively opt in or could not be located, their unclaimed damages were returned to the defendant.  The incongruous and unjust result was that a jury could determine a defendant caused $10 million in damages, but if only $1 million in class member claims were filed, $9 million was then returned to the defendant who broke the law.

Under the new ORCP 32, the judge has discretion, within constitutional limits, to create a process to compensate damaged class members to the extent practicable.  If class members cannot be located through practical efforts, any remaining unclaimed funds go to Oregon legal aid and an entity that relates to the action or class members (presumably a charitable entity that may benefit causes related to the case).  This is known as the “cy pres” doctrine and Oregon has now formally codified the doctrine.

House Bill 2700 had an emergency clause, so it is effective immediately.  The current printed versions of the Oregon Rules of Civil Procedure need to be updated with the new ORCP 32.  The bill also applies to any pending cases that have not reached final judgment, meaning the judgment is no longer subject to further appeal.  For the full text of the law, click here.

scott

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