Foreign language translations play an important role in cross-border securities and debt litigation. When foreign investors are involved in a class action against a U.S. company, Rule 23(b)(3) comes into play.
In order to have a class certified one must satisfy two general steps, both governed by Rule 23 of the Federal Rules of Civil Procedure. In general, Rule 23 allows a class when:
- 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.
Next, the Court turns to Rule 23(b) and decides whether the class is maintainable to one of its subsections. Accordingly, a court has to find “that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.”
This is often referred to as an “opt-out” clause, as Rule 23(c)(2) mandates members of a class certified under Rule 23(b)(3) be given an opportunity to “request exclusion” from the class. It is this Rule 23(c)(2) requirement that raises the issue of foreign language translations. In order to show Rule 23(c)(2) is satisfied, and thus the class can be certified under Rule 23(b)(3), the foreign investor must not only be asked in their own language, but proof of this asking and the response must be provided to the court. To do this, a foreign language translation is essential.
See In Re Vivendi Universal, S.A. Securities Litigation. 02 Civ. 5571 (U.S. Dist. Ct. S. Dist. New York)