Del. R. Ch. Ct. 23

As amended through June 13, 2024

Rule 23 - Class Actions

(a)Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:

(1) the class is so numerous that joinder of all members is impracticable;

(2) there are questions of law or fact common to the class;

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and

(4) the representative parties will fairly and adequately protect the interests of the class.

(aa)Affidavit from Representative Party.

(1) A person seeking to serve as a representative party must file an affidavit within 10 days after filing any of the following:

(A) a complaint;

(B) a motion to intervene; or

(C) a motion seeking appointment as a representative party.

(2) The affidavit must state that the person has not received, been promised, or been offered-and will not accept-any form of compensation, directly or indirectly, for serving as a representative party, except for:

(A) any damages or other relief that the Court may award the person as a class member;

(B) any fees, costs, or other payments that the Court expressly approves to be paid to or on behalf of the person; or

(C) reimbursement from the person's attorneys of actual and reasonable out-of-pocket expenditures incurred in prosecuting the action.

(b)Types of Class Actions. A class action may be maintained if Rule 23(a) is satisfied and if:

(1) prosecuting separate actions by or against individual class members would create a risk of:

(A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or

(B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests;

(2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate with respect to the class as a whole; or

(3) the Court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include:

(A) the class members' interests in individually controlling the prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.

(c)Certification Order; Notice; Judgment; Subclasses.

(1) Certification Order. A class action must be certified by order. The order must define the class and identify a representative party. The order may be altered or amended before final judgment.

(2) Notice.

(A) For (b)(1) or (b)(2) Classes. In any class action certified under Rule 23(b)(1) or (b)(2), the Court may direct appropriate notice to the class members.

(B) For (b)(3) Classes. In any class action certified under Rule 23(b)(3), the Court must direct to the class members the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice must advise each member:

(i) that the Court will exclude from the class any member who requests exclusion by a specified date;

(ii) of the binding effect of a judgment, whether favorable or not, on members who do not request exclusion; and

(iii) that a class member who does not request exclusion may enter an appearance through counsel if the member so desires.

(3)Judgment. Whether or not favorable to the class, the judgment must:

(A) in an action maintained as a class action under Rule 23(b)(1) or Rule 23(b)(2), include and describe those whom the Court finds to be class members; and

(B) in an action maintained as a class action under Rule 23(b)(3), include and specify or describe those to whom the Rule 23(c)(2) notice was directed, who have not requested exclusion, and whom the Court finds to be class members.

(4)Particular Issues. When appropriate, an action may be brought or maintained as a class action with respect to particular issues.

(5)Subclasses. When appropriate, a class may be divided into subclasses that are each treated as a class under this rule.

(d)Class Counsel.

(1)Duty of Class Counsel. Class counsel must fairly and adequately represent the interests of the class.

(2)Interim Counsel. The Court may designate interim counsel to act on behalf of a putative class before determining whether to certify the action as a class action. Interim counsel has the same duty as class counsel to fairly and adequately represent the interests of the class.

(3)Appointing Class Counsel. Unless a statute provides otherwise, the Court must appoint class counsel when certifying a class and may make further orders in connection with that appointment. If only one applicant seeks appointment and the applicant cannot provide adequate representation, then the Court may not certify the class.

(4)Disputed Appointments. The Court may resolve disputes over the appointment of class or interim counsel, including who can best represent the interests of the class.

(A) When selecting class or interim counsel, the Court may consider:

(i) counsel's competence and experience;

(ii) counsel's access to the resources necessary to represent the class;

(iii) the quality of the pleading;

(iv) counsel's performance in the litigation to date;

(v) the proposed leadership structure;

(vi) the relative economic stakes of the representative parties;

(vii) any conflicts between counsel or the representative parties and members of the class; and

(viii) any other matter pertinent to the ability of counsel or the representative party to fairly and adequately represent the interests of the class.

(B) The Court may:

(i) order any applicant to provide information on any subject pertinent to the application and to propose terms for attorney's fees and expenses; and

(ii) include in the appointing order provisions about the award of attorney's fees or expenses under Rule 23(g).

(e)Conducting the Action.

(1) In General. In conducting an action under this rule, the Court may issue orders that:

(A) determine the course of proceedings or prescribe measures to prevent undue repetition or complication in presenting evidence or argument;

(B) require-to protect class members and fairly conduct the action-giving notice to some or all class members of:

(i) any step in the action;

(ii) the proposed extent of the judgment; or

(iii) the members' opportunity to signify whether they consider the representation fair and adequate, to intervene and present claims or defenses, or otherwise to come into the action;

(C) impose conditions on the representative parties or on intervenors;

(D) require that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly; or

(E) deal with similar procedural matters.

(2)Amending and Combining Orders. An order under Rule 23(e)(1) may be altered or amended from time to time and may be combined with an order under Rule 16.

(f)Dismissal or Settlement.

(1)In General. Subject to Rule 15(a)(5), a class action may be dismissed or settled only if the Court approves the terms of the proposed dismissal or settlement.

(2)Required Submissions. The parties submitting the proposed dismissal or settlement must file:

(A) a further affidavit from each representative party that meets the requirements of Rule 23(aa)(2);

(B) if a dismissal, a proposed form of order stating the terms on which the action will be dismissed; and

(C) if a settlement, the definitive agreement governing the settlement.

(3)Notice. Notice of the proposed dismissal or settlement must be given to all class members in the manner directed by the Court.

(A)Dismissal Without Notice. But the Court may order dismissal without notice if the dismissal is to be without prejudice to the class or with prejudice to the plaintiff only.

(B)Information About Notice. The parties must provide the Court with information sufficient to rule on whether to require notice and in what form.

(C)Means of Notice. Notice may be given by any appropriate means approved by the Court, including first-class U.S. mail, email, or publication.

(D)Contents of Notice. Unless the Court orders otherwise, the notice of a proposed dismissal or settlement must clearly and concisely state, in plain, easily understood language:

(i) the location, date, and time of any hearing;

(ii) the nature of the action;

(iii) the definition of the class;

(iv) a summary of the claims, issues, defenses, and relief that the class action sought;

(v) a description of the terms of the proposed dismissal or settlement;

(vi) any award of attorney's fees or expenses, or any representative-party award, that will be sought if the proposed dismissal or settlement is approved;

(vii) instructions for objectors;

(viii) that additional information can be obtained by contacting class counsel;

(ix) how to contact class counsel; and

(x) not to contact the Court with questions about the terms of the proposed dismissal or settlement.

(4) Class-Member Objections.

(A)In General. Any class member may object to the proposed dismissal or settlement of a class action. The objection must state with specificity the grounds for and purpose of the objection and state whether it applies only to the objector, to a specific subset of the class, or to the entire class.

(B)Court Approval Required for Payment in Connection with an Objection. Unless approved by the Court after a hearing, no payment or other consideration may be provided in connection with:

(i) forgoing or withdrawing an objection; or

(ii) forgoing, dismissing, or abandoning an appeal from the judgment approving the proposed dismissal or settlement.

(C)Taking over Case After Providing Adequate Security. The Court may allow an objector to substitute as a representative party if:

(i) the objector satisfies the requirements for a representative party in Rule 23; and

(ii) if the proposed dismissal or settlement would provide relief to the class, the objector provides adequate security.

(5)Approval of the Proposal. If the proposed dismissal or settlement would bind class members, the Court may approve it only after a hearing and only on finding that it is reasonable after considering whether:

(A) the representative party and class counsel have adequately represented the class;

(B) adequate notice of the hearing was provided;

(C) the proposed dismissal or settlement was negotiated at arm's length; and

(D) the relief provided for the class falls within a range of reasonableness, taking into account:

(i) the strength of the claims;

(ii) the costs, risks, and delay of trial and appeal;

(iii) the scope of the release; and

(iv) any objections to the proposed dismissal or settlement.

(6) Disposition of Residual Settlement Funds.

(A) Any order approving a settlement under this rule that establishes a process for compensating class members must provide for the disbursement of residual settlement funds, if any.

(B) The Court may direct that residual settlement funds be redistributed to identified class members. But if redistribution is uneconomic, the Court may approve a transfer of the funds to the Combined Campaign for Justice or a similar organization.

(g)Attorney's Fees and Expenses; RepresentativeParty Awards.

(1) In a class action, the Court may award reasonable attorney's fees and expenses to class counsel.

(2) Any person from whom payment is sought may oppose the award, and any class member may object as provided in Rule 23(f)(4).

(3) Any counsel who will share in the award of attorney's fees and expenses must submit an affidavit documenting their fees and expenses.

(4) The Court may authorize class counsel to pay a reasonable award to a representative party out of any award of attorney's fees.

Del. R. Ch. Ct. 23

Amended September 25, 2023, effective 9/25/2023; amended May 31, 2024, effective 6/14/2024.

Comment to Revisions Effective as of September 23, 2023

In 2023, Rule 23 was revised to align its language in certain respects with Federal Rule of Civil Procedure 23 so that authorities interpreting the federal rule could be cited more easily as persuasive authority for the interpretation of Rule 23.

Except as noted, no substantive change in the interpretation of the rule was intended, and prior Delaware authorities interpreting the rule remain applicable. In particular, the revision deletes the last sentence of prior Rule 23(aa) as unnecessary and replaces the term "compromise" in prior Rule 23(f) with "settlement." No substantive change in interpretation was intended.

The revision makes the following changes to conform Rule 23 more closely to Federal Rule 23 and current practice:

The revision removes the requirement to certify a class "[a]s soon as practicable" as inconsistent with current practice. Consistent with the 2003 amendments to the federal rule, the revision does not provide for "conditional" certification orders.

Rule 23(d) addresses practice regarding class counsel; it is new and modeled on current practice.

Rule 23(f) addresses practice regarding dismissal and settlement; it is mostly new and modeled on the federal rule and current practice. Rules 23(f)(1), 23(f)(2)(A), and 23(f)(3)(A) are carryovers from the prior rule.

Rule 23(g) addresses attorney's fees; it is new and modeled on the federal rule and current practice.

Comment to Revisions Effective as of June 14, 2024

In 2024, Rule 23(f)(1) was amended after revisions to Rule 15. The revisions to Rule 15 had renumbered prior Rule 15(aaa) as Rule 15(a)(5). The amendment to Rule 23(f)(1) updated the cross reference.