Can plaintiffs spring a class action on defendants in the late stages of a case? The Seventh Circuit recently answered no in Ali v. City of Chicago, 34 F.4th 594 (7th Cir. 2022), rejecting so-called stealth class actions and reaffirming a seemingly obvious rule: a class action “must be brought as a class action.”
Plaintiff Khalid Ali moved to certify a class at the close of fact discovery, but there was one problem: his complaint did not include any class allegations. For that reason, the district court struck the motion. Ali petitioned the Seventh Circuit to review the decision under Rule 23(f), but the petition was denied. Ali then moved for leave to amend his complaint to include class allegations. But the district court denied that motion as well, reasoning that the proposed amendment “came too late in the case.” Shortly after that, Ali settled his individual claim and voluntarily dismissed the case.
Then came Glenn Miller, a member of the proposed class that Ali tried to certify. Miller moved to intervene so that he could appeal the decision to strike the motion for class certification. (Why not file a new class action complaint? The statute of limitations period had expired.) The district court denied the motion as untimely. On appeal, Miller argued that a motion to intervene for purposes of appealing an adverse class decision is always timely if filed before the appeal deadline, as Miller did here. It makes no difference that Ali’s case had not been brought as a class action, Miller argued, because “nothing in the Federal Rules of Civil Procedure requires that a complaint include class allegations.”
The Seventh Circuit affirmed the denial of Miller’s motion to intervene. The panel rejected the argument that a plaintiff can “spring stealth class actions on defendants late in a case,” without including class allegations in the complaint. “That is not how the Federal Rules of Civil Procedure work.” Courts cannot decide whether to certify a class “at an early practicable time,” as Rule 23 requires, if plaintiffs are allowed to “keep [their] class-action intentions hidden.” Because there were no class allegations in Ali’s complaint, Miller had no reasonable basis for waiting so long to file his motion to intervene. He could not have been reasonably relying on any named class representative to protect his interests, the panel reasoned, “because [Ali’s] case was not proceeding as a class action.”
This decision is not a surprise, but it is a welcome one. It reaffirms that plaintiffs cannot pursue class actions in stealth, only to surprise unsuspecting defendants in the late stages of litigation; they must disclose their class-action intentions at the outset.