Posts Tagged ‘french collective action’

After years of debate, France has finally passed its first “class action” law. Act No. 2014-344 of 17 March 2014 (relatif à la Consommation) went into effect on March 18. Chapter One of the new law introduces a new collective action procedure to adjudicate claims arising out of anti-competitive behavior and certain other consumer protection claims. Like the group action laws of many other civil law countries in Europe, the new procedure is very different from consumer class actions as they are known in the United States and other common law countries. The law creates a simplified opt-in collective action procedure that can only be enforced by an approved consumer association, not by individual litigants.  However, it is a significant development for a jurisdiction that has long resisted implementing collective action procedures of any kind.

Here is a link to the google translation of the Act in English.

Thanks to friend of ClassActionBlawg Larissa Clare Pochmann da Silva for tipping us off to this new development.

For a more detailed summary of the various aspects of the new law, see this Lexology article authored by Jérôme Philippe, Maria Trabucchi, Stephane Benouville, Dimitri Lecat and Alexandra Szekely of Freshfields Bruckhaus Deringer LLP.

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In late July, I commented on a possible trend in courts allowing foreign investors to be included as class members in securities class actions filed in U.S. courts.  At the time, the primary decision allowing foreign investors to be included in an opt-out securities class was In re Vivendi Universal, S.A. Sec. Litig., 242 F.R.D. 76 (S.D.N.Y. 2007).  In Vivendi, the Court had allowed French, English, and Dutch investors to be included in the class after finding based on a preponderance of the evidence that the courts in those countries would recognize a U.S. class action judgment as preclusive as to absent class members.

In August of this year, Judge Victor Marrero of the same court addressed the issue of whether French investors could be included in a securities fraud class action against another French company, but reached a different result.  In re Alstom SA Securities Litigation, 03 Civ. 6595 (VM) (S.D.N.Y. Aug. 27, 2008).  Judge Marrero’s opinion cites Vivendi’s analysis extensively, but ultimately concludes that French courts would not give preclusive effect to the judgment of a United States court in an opt-out securities class action.  The reasons for the departure in Alstom are based on developments impacting the factual findings underlying the Vivendi court’s conclusion on how a French court would probably resolve the issue, as summed up in this footnote:

The Court notes that the Vivendi court concluded that a French court would not find that a United States opt-out class action would violate French public policy because, at least in part, there was at that time an “ongoing debate in legal and business sectors” regarding the possibility of French authorities adopting an opt-out framework. Vivendi, 242 F.R.D. at 101. Vivendi, however, was issued on May 21, 2007, which was prior to the issuance of the Ministry of Justice Letter, the Constitutional Council’s August 16, 2007 decision, and the Attali Commission’s final report in 2008, all of which expressly rejected opt-out mechanisms of class actions as contrary to French Constitutional principles.

Alstom, slip op. at 47 n.11. 

A full copy of the Alstom opinion is available here, thanks to AmLaw Daily.

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