[Federal Register Volume 61, Number 157 (Tuesday, August 13, 1996)]
[Rules and Regulations]
[Pages 41963-41964]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20415]
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LEGAL SERVICES CORPORATION
45 CFR Part 1617
Class Actions
AGENCY: Legal Services Corporation.
ACTION: Interim rule with request for comments.
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SUMMARY: This interim rule completely revises the Legal Services
Corporation's (``Corporation'' or ``LSC'') regulation concerning class
actions. The revisions are intended to implement a restriction
contained in the Corporation's FY 1996 appropriations act which
prohibits the involvement of LSC recipients in class actions. Although
this rule is effective upon publication, the Corporation solicits
public comment on the interim rule in anticipation of adoption of a
final rule at a later time.
DATES: The interim rule is effective on August 13, 1996. Comments must
be submitted on or before September 12, 1996.
ADDRESSES: Comments should be submitted to the Office of the General
Counsel, Legal Services Corporation, 750 First St, NE, 11th Floor,
Washington, DC 20002-4250.
FOR FURTHER INFORMATION CONTACT: Victor M. Fortuno, General Counsel,
(202) 336-8910.
SUPPLEMENTARY INFORMATION: On May 19, 1996, the Operations and
Regulations Committee (``Committee'') of the LSC Board of Directors'
(``Board'') requested LSC staff to prepare an interim rule to implement
Section 504(a)(7), a restriction in the Corporation's FY 1996
appropriations act, Public Law 104-134, 110 Stat. 1321 (1996), which
prohibits involvement of LSC recipients in class actions. The Committee
held public hearings on staff proposals on July 8 and 19, and the Board
adopted this interim rule on July 20 for publication in the Federal
Register.
The Committee recommended and the Board agreed to publish this rule
as an interim rule. An interim rule is necessary in order to provide
prompt and critically necessary guidance to LSC recipients on
legislation which is already effective and which carries strong
penalties for noncompliance. Because of the great need for guidance on
how to comply with substantially revised legislative requirements,
prior notice and public comment are impracticable, unnecessary, and
contrary to the public interest. See 5 U.S.C. 553(b)(3)(B) and
553(d)(3). Accordingly, this interim rule is effective upon
publication.
However, the Corporation also solicits public comment on the
interim rule for review and consideration by the Committee. After
receipt of written public comment, the Committee intends to hold public
hearings to discuss the written comments and to hear oral comments. It
is anticipated that a final rule will be issued which will supersede
this interim rule.
Part 1617 is completely revised by this interim rule. Generally,
this interim rule prohibits any recipient involvement in class actions.
The prior regulation, which had not been revised since 1976, had
allowed recipients to provide assistance in class actions as long as
certain procedural requirements were met. No such involvement is
allowed under this new rule.
A section-by-section discussion of this interim rule is provided
below.
Section 1617.1 Purpose
The purpose of this rule is to prohibit involvement by LSC
recipients in class actions.
Section 1617.2 Definitions
The definition of ``class action'' is revised to include only the
nature of a class action. The prior definition also reached the issue
of types of involvement in a class action, including involvement in
various stages of a class action. Those issues are now included in the
definition of ``initiating or participating in a class action.''
The definition of ``class action'' defers to widely accepted
Federal and local court rules and statutory definitions. Thus, a class
action for the purposes of this part is a ``class action'' pursuant to
Rule 23 of the Federal Rules of Civil Procedure or the comparable State
statute or rule of civil procedure
[[Page 41964]]
governing the action in the court where it is filed.
``Initiating or participating in any class action'' is defined to
clarify that all types of involvement are prohibited at various stages
of a class action prior to an order granting relief. Recipients may not
initiate a class action or participate in one initiated by others,
either at the trial or appellate level. Nor may recipients continue
involvement in a case already begun that is later certified or
otherwise determined by the court, sua sponte or on a motion by a
party, to be a class action. In addition, recipients may not act as
amicus curiae or co-counsel in a class action or intervene in a class
action on behalf of individual clients who seek to withdraw from,
intervene in, opt out of, modify, or challenge the adequacy of the
representation of a class. Finally, recipients may not represent
defendants in a class action.
Certain situations are not within the definition and are thus not
prohibited by this rule. For example, recipients may advise clients
about the pendency of a class action or its effect on the client and
what the client would need to do to benefit from the case. Other
actions related to a class action are also not included, but only
because they involve actions taken after liability, if any, has been
determined and an order of relief has been entered. Accordingly,
recipients may be involved in non-adversarial monitoring of an order
granting relief or representation of an individual client seeking the
benefit of the order, provided that any such involvement is only on
behalf of an individual client and does not involve representation of
an entire class. In addition, if the class action resumes its
adversarial nature for any reason, recipients would need to attempt
withdrawal in order to avoid participating in a class action.
Finally, a class action would not include other forms of action,
even if they result in relief that benefits numbers of clients or
resolves issues that affect others in addition to the client, provided
that the case is not also a class action as defined by this rule. For
example, this rule does not apply to mandamus or to injunctive or
declaratory relief actions, unless such actions are filed or certified
as class actions.
The Committee especially seeks comments from recipients factually
describing other situations which recipients consider to be outside the
prohibition on initiating or participating in a class action that
should be described in the language of the rule itself.
Section 1617.3 Prohibition
This section prohibits LSC recipients from initiating or
participating in any class action.
Section 1617.4 Recipient Policies and Procedures
This section requires recipients to adopt written policies and
procedures to guide the recipient's staff in ensuring compliance with
this rule.
List of Subjects in 45 CFR Part 1617
Grant Programs--law, Legal services.
For reasons set out in the preamble, LSC revises 45 CFR part 1617
to read as follows:
PART 1617--CLASS ACTIONS
Sec.
1617.1 Purpose.
1617.2 Definitions.
1617.3 Prohibition.
1617.4 Recipient policies and procedures.
Authority: 29 U.S.C. 2996e(d)(5); 110 Stat. 1321 (1996).
Sec. 1617.1 Purpose.
This part is intended to ensure that LSC recipients do not initiate
or participate in class actions.
Sec. 1617.2 Definitions.
(a) Class action means a lawsuit filed as, or otherwise declared by
the court having jurisdiction over the case to be, a class action
pursuant to Rule 23 of the Federal Rules of Civil Procedure or the
comparable State statute or rule of civil procedure applicable in the
court in which the action is filed.
(b) Initiating or participating in any class action means any
involvement at any stage of a class action prior to an order granting
relief, including acting as amicus curiae, co-counsel or providing
legal assistance to an individual client who seeks to withdraw from,
intervene in, opt out of, modify, or challenge the adequacy of the
representation of a class. It does not include non-adversarial
monitoring of an order granting relief or individual representation of
a client seeking to obtain the benefit of relief ordered by the court.
Sec. 1617.3 Prohibition.
Recipients are prohibited from initiating or participating in any
class action.
Sec. 1617.4 Recipient policies and procedures.
Each recipient shall adopt written policies and procedures to guide
its staff in complying with this part.
Dated: August 6, 1996.
Victor M. Fortuno,
General Counsel.
[FR Doc. 96-20415 Filed 8-12-96; 8:45 am]
BILLING CODE 7050-01-P