8th Circuit’s Tough Stance On Class Actions

The Eighth Circuit Court of Appeals has reversed lower court rulings in two recent class action cases. In Powers v. Credit Management Services, Inc., it decertified four classes that a district court had approved, where plaintiffs were asserting claims under the Fair Debt Collection Practices Act. With this case, says a client alert from St. Louis-based law firm Lewis, Rice & Fingersh, the court “sets a boundary on the widespread use of class actions in FDCPA litigation.” In the second case, In re: BankAmerica Corporation Securities Litigation, the appeals court rejected a cy pres award (which distributes money to charitable organizations in lieu of class members), where two banks had been defendants and the district court had ordered an award to a legal services organization. “The Eighth Circuit’s holding in this case makes clear that the district courts’ duty to closely scrutinize class action litigation extends well past the class certification phase to the completion of the case,” write the attorneys from Lewis Rice.