This opinion is uncorrected and subject to revision before
publication in the New York Reports.
-----------------------------------------------------------------
No. 121
Geoffrey Desrosiers, &c.,
            Respondents,
        v.
Perry Ellis Menswear, LLC,
et al.,
            Appellants.
--------------------------
No. 122
Christopher Vasquez, &c.,
            Respondent,
        v.
National Securities Corporation,
            Appellant,
Mark Goldwasser,
            Defendant.
Case No. 121:
          Frank H. Henry, for appellants.
          LaDonna M. Lusher, for respondents.

Case No. 122:
          Daniel J. Buzzetta, for appellant.
          LaDonna M. Lusher, for respondent.

FAHEY, J.:
          CPLR 908 provides that "[a] class action shall not be
dismissed, discontinued, or compromised without the approval of
the court," and that "[n]otice of the proposed dismissal,
discontinuance, or compromise shall be given to all members of
the class in such manner as the court directs."   On this appeal,


                              - 1 -
                               - 2 -                     Nos. 121-122

we must determine whether CPLR 908 applies only to certified
class actions, or also to class actions that are settled or
dismissed before the class has been certified.      We conclude that
CPLR 908 applies in the pre-certification context.      As a result,
notice to putative class members of a proposed dismissal,
discontinuance, or compromise must be given.
                                  I.
           Plaintiff Geoffrey Desrosiers worked as an unpaid
intern for Perry Ellis Menswear, LLC in 2012.      In February 2015,
he commenced a class action against defendants Perry Ellis
Menswear and an affiliated entity (collectively, Perry Ellis),
alleging that Perry Ellis improperly classified employees as
interns.   He sought wages on behalf of himself and similarly-
situated individuals.
           In March 2015, Perry Ellis sent an offer of compromise
to Desrosiers, which he accepted.      On May 18, 2015, Perry Ellis
moved to dismiss the complaint.    By that date, the time within
which Desrosiers was required to move for class certification
pursuant to CPLR 902 had expired.      Desrosiers did not oppose
dismissal of the complaint, but he filed a cross motion seeking
leave to provide notice of the proposed dismissal to putative
class members pursuant to CPLR 908.      Perry Ellis opposed the
cross motion, arguing that notice to putative class members was
inappropriate because Desrosiers had not moved for class
certification within the required time.      Supreme Court dismissed


                               - 2 -
                                - 3 -                  Nos. 121-122

the complaint but denied the cross motion to provide notice to
putative class members.
          On appeal, the Appellate Division reversed the order
insofar as appealed from by Desrosiers (Desrosiers v Perry Ellis
Menswear, LLC, 139 AD3d 473 [1st Dept 2016]).   The court
concluded that CPLR 908 "is not rendered inoperable simply
because the time for the individual plaintiff to move for class
certification has expired," and that notice to putative class
members is "particularly important under the present
circumstances, where the limitations period could run on the
putative class members' cases following discontinuance of the
individual plaintiff's action" (id. at 474).
          Plaintiff Christopher Vasquez was employed by defendant
National Securities Corporation (NSC) as a financial products
salesperson in 2007 and 2008.   In June 2014, he filed a class
action against NSC on behalf of himself and all similarly-
situated individuals who worked for NSC after June 2008.    Vasquez
alleged that the compensation paid by NSC fell below the required
minimum wage, and he sought wage and overtime compensation for
himself and similarly-situated individuals.
          The parties agreed to postpone a motion for class
certification in order to complete pre-certification discovery.
In February 2015, before Vasquez had moved for class
certification, NSC made a settlement offer, which Vasquez
accepted the following month.   NSC thereafter moved to dismiss


                                - 3 -
                               - 4 -                  Nos. 121-122

the complaint.   Vasquez cross-moved to provide notice of the
proposed dismissal to putative class members pursuant to CPLR
908.   NSC opposed the cross motion, asserting that CPLR 908
applies only to certified class actions.
           Supreme Court granted the cross motion to provide
notice to putative class members and granted NSC's motion to
dismiss the complaint, but directed that the action would not be
marked disposed until after notice had been issued (Vasquez v
National Sec. Corp., 48 Misc 3d 597, 601 [Sup Ct, NY County
2015]).   On appeal, the Appellate Division affirmed (Vasquez v
National Sec. Corp., 139 AD3d 503 [1st Dept 2016]).   Adhering to
its 1982 decision in Avena v Ford Motor Co. (85 AD2d 149 [1st
Dept 1982]), the First Department reasoned that "[t]he
legislature, presumably aware of the law as stated in Avena, has
not amended CPLR 908" (Vasquez, 139 AD3d at 503).
           In each case, the Appellate Division granted the
defendant leave to appeal to this Court, certifying the question
whether its order was properly made.   We now affirm in both
cases.
                               II.
           "In matters of statutory interpretation, our primary
consideration is to discern and give effect to the Legislature's
intention" (Matter of Albany Law School v New York State Off. of
Mental Retardation & Dev. Disabilities, 19 NY3d 106, 120 [2012]).
"The statutory text is the clearest indicator of legislative


                               - 4 -
                               - 5 -                  Nos. 121-122

intent and courts should construe unambiguous language to give
effect to its plain meaning" (Matter of DaimlerChrysler Corp. v
Spitzer, 7 NY3d 653, 660 [2006]; see Majewski v Broadalbin-Perth
Cent. School Dist., 91 NY2d 577, 583 [1998]).
          The text of CPLR 908 is ambiguous with respect to this
issue.   Defendants argue that the statute's reference to a "class
action" means a "certified class action," but the legislature did
not use those words, or a phrase such as "maintained as a class
action," which appears in CPLR 905 and 909.   Plaintiffs assert
that an action is a "class action" within the meaning of the
statute from the moment the complaint containing class
allegations is filed, but the statutory text does not make that
clear.
          Similarly, the statute's instruction that notice of a
proposed dismissal, discontinuance, or compromise must be
provided to "all members of the class" is inconclusive.
Defendants contend that there are no "members of the class" until
class certification is granted pursuant to CPLR 902 and the class
is defined pursuant to CPLR 903.   Yet the legislature did not
state that notice should be provided to "all members of the
certified class," or "all members of the class who would be
bound" by the proposed termination, or some other phrase that
would have made the legislature's intent clear.   In the context
of these ambiguities, we turn to other principles of statutory
interpretation and sources beyond the statutory text itself to


                               - 5 -
                               - 6 -                  Nos. 121-122

discern the intent of the legislature (see Albany Law School, 19
NY3d at 120; Matter of Shannon, 25 NY3d 345, 351 [2015]).
          CPLR article 9 was enacted in 1975, replacing former
CPLR 1005.   The Governor's Approval Memorandum stated that the
legislation would "enable individuals injured by the same pattern
of conduct by another to pool their resources and collectively
seek relief" where their individual damages "may not be
sufficient to justify the costs of litigation" (Governor's
Approval Mem, Bill Jacket, L 1975, ch 207, 1975 NY Legis Ann at
426, 1975 McKinney's Session Laws of NY at 1748).   With respect
to CPLR 908, which the legislature has not amended since it was
originally enacted in 1975, the State Consumer Protection Board
observed that the purpose of that statute "is to safeguard the
class against a 'quickie' settlement that primarily benefits the
named plaintiff or his or her attorney, without substantially
aiding the class" (Mem from State Consumer Protection Board, May
29, 1975 at 7, Bill Jacket, L 1975, ch 207).
          The New York State Bar Association's Banking Law,
Business Law, and CPLR Committees, which opposed the bill,
recommended that CPLR 908 be amended such that its notice
provisions would apply only to certified class actions (see
Letter from NY State Bar Association Banking Law, Business Law,
and CPLR Committees, at 5, Bill Jacket, L 1975, ch 207).    Those
committees "agree[d] that any settlement or withdrawal of an
action commenced as a class action should be subject to court


                               - 6 -
                               - 7 -                    Nos. 121-122

approval," but expressed the view that "if the dismissal,
discontinuance or compromise is effected prior to the
determination that a class action is proper, the court should be
permitted to dispense with notice to class members" (id.).
          In addition, CPLR article 9 was "modeled on similar
federal law," specifically, Federal Rules of Civil Procedure rule
23 (Governor's Approval Mem, L 1975, ch 207; see Siegel, NY Prac
§ 139 at 247 [5th ed 2011]).   At the time, rule 23 (e) was
virtually indistinguishable from the current text of CPLR 908; it
provided that "[a] class action shall not be dismissed or
compromised without the approval of the court, and notice of the
proposed dismissal or compromise shall be given to all members of
the class in such manner as the court directs" (former Fed Rules
Civ Pro rule 23 [e]).
          The majority of federal circuit courts of appeal to
address the issue concluded that the prior version of rule 23 (e)
also applied in the pre-certification context, but that notice to
putative class members before certification was discretionary,
after consideration of factors such as potential collusion and
the publicity the class action had received (see e.g. Doe v
Lexington-Fayette Urban County Govt., 407 F3d 755, 761-763 [6th
Cir 2005], cert denied 546 US 1094 [2006]; Crawford v F. Hoffman-
La Roche Ltd., 267 F3d 760, 764-765 [8th Cir 2001]; Diaz v Trust
Territory of Pac. Is., 876 F2d 1401, 1408-1409 [9th Cir 1989];
Glidden v Chromalloy Am. Corp., 808 F2d 621, 626-628 [7th Cir


                               - 7 -
                               - 8 -                  Nos. 121-122

1986]).1   Conversely, the United States Court of Appeals for the
Fourth Circuit concluded that the prior version of the rule
mandated notice to class members only in certified class actions
(see Shelton v Pargo, Inc., 582 F2d 1298, 1314-1316 [4th Cir
1978]).2   Thus, faced with virtually identical language in the
former version of Federal Rule of Civil Procedure rule 23 (e),
most federal circuit courts of appeal to consider the issue
concluded that rule 23 (e) applied even before a class had been
certified.3

     1
       Although these federal courts held that notice to putative
class members before certification was discretionary under the
former version of rule 23 (e), the parties do not ask us to read
discretion into CPLR 908, nor could we based on the text of that
statute. CPLR 908 states that notice "shall" be provided, but
that the manner of notice will be "as the court directs." The
only question on this appeal is whether mandatory notice is
required only after certification or also before certification.
For similar reasons, we reject plaintiffs' contention that the
Appellate Division ordered notice in an exercise of its
discretion, and therefore that its orders are reviewable by this
Court only for an abuse of discretion as a matter of law. These
appeals present an issue of law.
     2
       The Fourth Circuit shared the concern that pre-
certification settlements between the named plaintiff and the
defendant might involve collusion. The circuit court instructed
district courts to examine proposed settlements for collusion or
prejudice to absent putative class members and, if such collusion
or prejudice existed, to hold a certification hearing and give
notice to members of the class in the event that certification
was granted (see Shelton, 582 F2d at 1315-1316).
     3
       Other circuit courts of appeal did not directly address
this issue before the 2003 amendment to rule 23 (e) (see e.g.
Rice v Ford Motor Co., 88 F3d 914, 919 n 8 [11th Cir 1996] ["In
this Circuit, the applicability of Rule 23(e) to proposed classes
prior to their certification is an open question"]). Many
federal district courts also considered this issue (see generally

                               - 8 -
                               - 9 -                  Nos. 121-122

          In New York, the only appellate-level decision to
address this issue as it pertains to CPLR 908 (other than the two
decisions on appeal here) is Avena v Ford Motor Co. (85 AD2d 149
[1st Dept 1982]).   In that case, the named plaintiffs settled
with the defendant before class certification, and the settlement
was without prejudice to putative class members (see id. at 151).
The trial court refused to approve the settlement without first
providing notice to the putative class members (see id.).    The
Appellate Division affirmed that determination, concluding that
CPLR 908 applied to settlements reached before certification.
The First Department reasoned that the "potential for abuse by
private settlement at this stage is . . . obvious and recognized"
(id. at 152), and that the named plaintiffs had a fiduciary
obligation to disclose relevant facts to putative class members
(see id. at 153, 156).
          This Court has never overruled Avena or addressed this
particular issue, and no other department of the Appellate
Division has expressed a contrary view.   Consequently, for 35
years Avena has been New York's sole appellate judicial
interpretation of whether notice to putative class members before
certification is required by CPLR 908.
          Generally, "we have often been reluctant to ascribe



Annotation, Notice of Proposed Dismissal or Compromise of Class
Action to Absent Putative Class Members in Uncertified Class
Action Under Rule 23 (e) of Federal Rules of Civil Procedure, 68
ALR Fed 290).

                               - 9 -
                              - 10 -                  Nos. 121-122

persuasive significance to legislative inaction" (Boreali v
Axelrod, 71 NY2d 1, 13 [1987]; see Clark v Cuomo, 66 NY2d 185,
190-191 [1985]).   We have distinguished, however, "instances in
which the legislative inactivity has continued in the face of a
prevailing statutory construction" (Brooklyn Union Gas Co. v New
York State Human Rights Appeal Bd., 41 NY2d 84, 90 [1976]).
Thus, "[w]hen the Legislature, with presumed knowledge of the
judicial construction of a statute, forgoes specific invitations
and requests to amend its provisions to effect a different
result, we have construed that to be some manifestation of
legislative approbation of the judicial interpretation, albeit of
the lower courts" (Matter of Alonzo M. v New York City Dept. of
Probation, 72 NY2d 662, 667 [1988]).   Stated another way, "it is
a recognized principle that where a statute has been interpreted
by the courts, the continued use of the same language by the
Legislature subsequent to the judicial interpretation is
indicative that the legislative intent has been correctly
ascertained" (Matter of Knight-Ridder Broadcasting v Greenberg,
70 NY2d 151, 157 [1987]).   "The underlying concern, of course, is
that public policy determined by the Legislature is not to be
altered by a court by reason of its notion of what the public
policy ought to be" (id. at 158).
          Granted, the persuasive significance of legislative
inaction in this context carries more weight where the
legislature has amended the statute after the judicial


                              - 10 -
                              - 11 -                  Nos. 121-122

interpretation but its amendments "do not alter the judicial
interpretation" (id. at 157), or when the judicial interpretation
stems from a decision of this Court or "unanimous judgment of the
intermediate appellate courts" (Anheuser-Busch, Inc. v Abrams, 71
NY2d 327, 334 [1988]).   Nevertheless, the fact that the
legislature has not amended CPLR 908 in the decades since
Avena has been decided is particularly persuasive evidence that
the court correctly interpreted the legislature's intent as it
existed when CPLR 908 was enacted in light of developments
occurring in the years after Avena was decided.
          Specifically, in 2003, Federal Rules of Civil Procedure
rule 23 (e) was amended to clarify that the district court must
approve any settlement, voluntary dismissal, or compromise
involving a "certified class," and that the court must provide
notice of such to "all class members who would be bound" by the
proposal (Fed Rules Civ Pro rule 23 [e]).   Thus, under the
current federal rule, mandatory approval and notice of a proposed
settlement is now required only for certified classes.
          That same year, the New York City Bar Association's
Council on Judicial Administration recommended several changes to
CPLR article 9, including amendments to CPLR 908.   The Council
opined that, unlike the updated federal rule, CPLR 908 should
continue to require judicial approval of settlement at the pre-
certification stage, but that notice to putative class members
before certification should be discretionary, not mandatory, and


                              - 11 -
                             - 12 -                    Nos. 121-122

should be provided when necessary to protect members of the
putative class (see New York City Bar Association, Council on
Judicial Administration, State Class Actions: Three Proposed
Amendments to Article 9 of the Civil Practice Law and Rules, 58
Rec of Assn of Bar of City of NY at 316 [2003], available at
http://www.nycbar.org/pdf/report/Art9.draft.082703.MWord.pdf
[last accessed Dec. 7, 2017]).   Various committees of the City
Bar made the same recommendation in 2015 (see New York City Bar
Association, State Courts of Superior Jurisdiction Committee,
Council on Judicial Administration, and Litigation Committee,
Proposed Amendments to Article 9 of the Civil Practice Law and
Rules to Reform and Modernize the Administration of Class Actions
in NYS Courts, Nov. 5, 2015, available at
http://www2.nycbar.org/pdf/report/uploads/20072985-ClassActionsPr
oposedAmendsArt9CPLRJudicialAdminLitigationStateCourtsReportFINAL
11515.pdf [last accessed Dec. 7, 2017]).    Notwithstanding these
repeated proposals, and the legislature's awareness of this issue
(see 2016 NY Assembly Bill A9573; cf. Roberts v Tishman Speyer
Props., L.P., 13 NY3d 270, 287 [2009]), the legislature has left
CPLR 908 untouched from its original version as enacted in 1975.
          Thus, despite criticisms of the Avena decision (see
e.g. Joseph M. McLaughlin, 1982 Supp Practice Commentaries,
McKinney's Cons Laws of NY, Book 7B, CPLR 908 [1976 ed], 2005
Cumulative Pocket Part at 248-249), the 2003 amendment of the
federal rule upon which CPLR 908 was modeled to address this


                             - 12 -
                             - 13 -                   Nos. 121-122

situation, and specific and repeated calls to the legislature to
amend the statute, the legislature has not amended CPLR 908,
either to state that Avena was not a correct interpretation of
its original intent or to express its revised, present intent.
Under these circumstances, and in light of the legislative
history discussed above, we conclude that the legislature's
refusal to amend CPLR 908 in the decades since Avena was decided
indicates that the Avena decision correctly ascertained the
legislature's intent (see Alonzo M., 72 NY2d at 667; Knight-
Ridder, 70 NY2d at 157).
          Any practical difficulties and policy concerns that may
arise from Avena's interpretation of CPLR 908 are best addressed
by the legislature (see Knight-Ridder, 70 NY2d at 158),
especially considering that there are also policy reasons in
favor of applying CPLR 908 in the pre-certification context, such
as ensuring that the settlement between the named plaintiff and
the defendant is free from collusion and that absent putative
class members will not be prejudiced (see Avena, 85 AD2d at 152-
155; see also Diaz, 876 F2d at 1409; Glidden, 808 F2d at 627;
Vincent C. Alexander, Practice Commentaries, McKinneys Cons Laws
of NY, Book 7B, CPLR 908, at 224-225).   The balancing of these
concerns is for the legislature, not this Court, to resolve.
          Accordingly, in both Desrosiers and Vasquez, the orders
of the Appellate Division should be affirmed, with costs, and the
certified questions answered in the affirmative.


                             - 13 -
Desrosiers, &c. v Perry Ellis Menswear, LLC, et al.;
Vasquez, &c. National Securities Corporation, et al.

Nos. 121 & 122




STEIN, J.(dissenting):
           The majority finds ambiguity in CPLR 908 where none
exists and, in my view, places undue weight on the First
Department's holding in Avena v Ford Motor Co. (85 AD2d 149 [1st
Dept 1982]).   Even a cursory reading of the analysis in Avena
reveals that it is not grounded in the unambiguous statutory
text.   We are not bound by the result in that case or by
subsequent legislative inaction, and the passage of time does not
alter that conclusion.   Instead, it is within the province of
this Court of last resort to interpret the statute as a matter of
law, guided by our principles of statutory interpretation.
           In that regard, the requirement in CPLR 908 that notice
be provided "to all members of the class" is expressly limited to
a "class action."   In each of the actions here, plaintiffs did
not comply with the requirements under article 9 of the CPLR that
are necessary to transform the purported class action into an
actual class action, with members of a class bound by the
disposition of the litigation.    Thus, there is no class action
here, and no basis under the statutory scheme to mandate CPLR 908
notice to putative members of an undefined class that an
individual claim -- of which they had received no prior notice


                                 - 1 -
                               - 2 -                  Nos. 121 & 122

and in which they had taken no part -- is being settled, but the
settlement is not binding on them.     For these reasons, I
respectfully dissent.
                                -I-
          "It is fundamental that a court, in interpreting a
statute, should attempt to effectuate the intent of the
Legislature, and where the statutory language is clear and
unambiguous, the court should . . . give effect to the plain
meaning of the words used" (Patrolmen's Benevolent Assn. of City
of N.Y. v City of New York, 41 NY2d 205, 208 [1976]).     Therefore,
"the starting point in any case of interpretation must always be
the language itself" (Majewski v Broadalbin-Perth Cent. School
Dist., 91 NY2d 577, 583 [1998]), considering the various
statutory sections together with reference to each other (see
Matter of New York County Lawyers' Assn. v Bloomberg, 19 NY3d
712, 721 [2012]).   We are also guided by the principle that
"resort must be had to the natural signification of the words
employed, and if they have a definite meaning, which involves no
absurdity or contradiction, there is no room for construction and
courts have no right to add to or take away from that meaning"
(Majewski, 91 NY2d at 583 [internal quotation marks and citation
omitted]).
          Article 9 of the CPLR begins with CPLR 901, which
specifies the prerequisites that must be satisfied for one or
more members of a designated class to sue or be sued as


                               - 2 -
                               - 3 -                  Nos. 121 & 122

representative parties on behalf of the other members of that
class.   CPLR 902 requires the plaintiff "in an action brought as
a class action" to "move for an order to determine whether it is
to be so maintained" within 60 days after expiration of the time
in which a defendant must serve responsive pleadings.
Thereafter, "[t]he action may be maintained as a class action
only if the court finds that the prerequisites under section 901
have been satisfied" (CPLR 902).   In determining whether the
action "may proceed as a class action," the court must consider
certain factors, including the interests of the members of the
purported class, the impracticability or inefficiency of
proceeding separately, any pending litigation, the desirability
of concentrating the litigation, and class action management
difficulties that may arise (see CPLR 902 [1]-[5]).    If the court
allows the action to proceed as a class action, the order
"permitting [the] class action" must describe the class (CPLR
903; see also CPLR 907).
          Once the prerequisites of sections 901 and 902 have
been met, reasonable notice of the commencement of the class
action must be given to the certified class "in such manner as
the court directs," except in the case of class actions brought
primarily for equitable relief, in which case, the court has
discretion to determine whether notice is necessary and
appropriate (CPL 904 [a], [b]; see also Vincent C. Alexander,
Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR


                               - 3 -
                                - 4 -                Nos. 121 & 122

904).   Any judgment in a class action must describe the class,
and such a judgment is binding only upon "those whom the court
finds to be members of the class" (CPLR 905; see also CPLR 909).
           CPLR 908 -- the provision at issue here -- prescribes
that a "class action shall not be dismissed, discontinued, or
compromised without the approval of the court.   Notice of the
proposed dismissal, discontinuance, or compromise shall be given
to all members of the class in such manner as the court directs."
The question before us is whether this provision requires notice
to putative class members if the action is settled or dismissed
prior to class certification.   In my view, it does not.
           CPLR 908 must be considered in the context of the
statutory scheme set forth in the entirety of article 9.
Inasmuch as "[an] action may be maintained as a class action only
if the court finds that the prerequisites under section 901 have
been satisfied" upon a motion brought within the specified time
period pursuant to CPLR 902 (emphasis added), it follows that a
purported class action is not actually "a class action" until so
adjudicated by the court; concomitantly, prior to class
certification, there are no "members of the class" to whom notice
could be provided.   Thus, there is no statutory basis for
applying the CPLR 908 notice requirement when, as here, the
litigation is resolved during the pre-certification phase without
prejudice to the rights of putative class members.
           There is nothing talismanic about styling a complaint


                                - 4 -
                                - 5 -               Nos. 121 & 122

as a class action.   Indeed, any plaintiff may merely allege that
a claim is being brought "on behalf of all others similarly
situated."   However, under article 9 of the CPLR, the court, not
a would-be class representative, has the power to determine
whether an action "brought as a class action" may be maintained
as such, and may do so only upon a showing that the prerequisites
set forth in CPLR 901 have been satisfied (CPLR 902).1
Logically, the converse of that proposition must also be true --
i.e., if the court has not made an affirmative finding that the
CPLR 901 prerequisites have been met, the action may not be
maintained as a class action.   Here, the fact that plaintiffs did
not comply with CPLR 902 and did not obtain orders adjudicating


     1
       Contrary to the majority's reasoning, CPLR 908 is not
ambiguous because it uses the phrase "class action" instead of
"maintained as a class action." These phrases are used
interchangeably throughout CPLR article 9 to refer to an action
that has been adjudicated a class action by the court pursuant to
the mechanism set forth in CPLR 902. The phrase "class action"
is repeatedly used throughout article 9 in instances, like CPLR
908, where it is readily apparent that the intent of the
legislature is to refer to an actual "class action," not merely a
purported class action (see CPLR 903 ["(t)he order permitting a
class action shall describe the class"], 904 [certification
notice requirement referring to "class actions"], 907 [permitting
certain court orders in the "conduct of class actions"]). The
majority also posits that CPLR 908 is ambiguous because the
phrases "class action" and "all members of the class" do not also
include the word "certified." This reasoning is unsound.
Insofar as "[t]he language is certain and definite, intelligible
and has an unequivocal meaning" (People ex rel. New York Cent. &
Hudson Riv. R.R. Co. v Woodbury, 208 NY 421, 424 [1913]), within
the context of the statutory scheme (see Bloomberg, 19 NY3d at
721), there is no occasion to engage in "conjecture about or to
add to or to subtract from [the] words" used by the legislature
(McKinney's Statutes, § 76, cmt).

                                - 5 -
                                - 6 -                Nos. 121 & 122

their actions as class actions is fatal to their argument that
notice of their settlements to purported class members is
required.
            This Court's holding in O'Hara v Del Bello (47 NY2d 363
[1979]) is instructive.   In that case, the petitioner commenced a
proceeding on behalf of himself and others similarly situated who
were denied payment of authorized and approved travel vouchers by
their employer.   Supreme Court granted the petitioner summary
judgment, directing the respondents to pay all properly submitted
travel vouchers, including those to be submitted in the future.
This Court ultimately affirmed the award of summary judgment to
the petitioner, but modified the judgment to limit relief to only
the named petitioner.   We held that, "[i]nasmuch as there was a
failure to comply with the procedural and substantive provisions
of CPLR article 9 with respect to class action[s] . . . there
[was] no basis for granting relief other than to the individual
party who brought the proceeding" (O'Hara, 47 NY2d at 368).   The
Court reasoned that "[t]he explicit design of article 9 . . . is
that a determination [pursuant to CPLR 902] as to the
appropriateness of class action relief shall be promptly made at
the outset of the litigation" (id.).    The Court emphasized that:
     "To countenance making the determination as to the
     identity of the beneficiaries on whose behalf the
     litigation had been prosecuted or defended after its
     outcome is known would be to open the possibility both
     of conferring a gratuitous benefit on persons who have
     not been parties and were not at any time exposed to
     the risk of an adverse adjudication and further of
     substantially enlarging the liability of the loser

                                - 6 -
                                - 7 -                Nos. 121 & 122

     beyond anything contemplated during the contest and
     resolution of the issues on their merits"
(id. at 369).
            The majority now construes CPLR 908, contrary to its
plain language, to permit the results this Court cautioned
against in O'Hara.    Plaintiffs in both actions failed to make
timely CPLR 902 motions for an order to certify the class.
Instead, they accepted settlement offers, allowed the deadline
for certification to pass, and declined to oppose defendants'
motions to dismiss, but nonetheless subsequently asked the court
to direct notice to putative class members under CPLR 908.    As in
O'Hara, by virtue of plaintiffs' failure to comply with CPLR
article 9 -- and particularly CPLR 902 -- there is no basis to
impose the notice requirements of CPLR 908, which only apply to
class actions, not purported class actions.
            Directing such notice under these circumstances would
lack practical significance.    Indeed, the notice would
essentially inform putative class members that an individual
claim -- of which they received no prior notice -- was being
resolved by an agreement that was not binding on them.     Moreover,
as defendants point out, because no class had been certified
under CPLR 902, it is unclear to whom notice was purportedly
required.    Not only would this uncertainty create administrative
difficulties that would entail the expenditure of time and




                                - 7 -
                              - 8 -                Nos. 121 & 122

resources by both the court and the parties,2 the ultimate
purpose of the notice appears, at most, to be to allow
plaintiffs' counsel to identify more clients at the expense of
the court and defendants.3


     2
       Although plaintiffs minimize the significance of this
burden, mandating notice of pre-certification dismissals requires
that the court and the parties attempt to define both the group
of individuals to whom notice should be provided in the absence
of a defined class, as well as the content of that notice, all
concerning the resolution of individual claims that do not bind
the notice recipients in any way. While, in some cases, it may
be easy to identify the putative class members, in others, it may
be difficult and time-consuming, as well as expensive, to
identify and provide notice to them.
     3
       Any claimed virtue of plaintiffs' position that notice is
required to protect putative class members is a distraction. If
plaintiffs desired to obtain relief on behalf of the putative
class members, they could have followed the proper procedure to
certify the class. Instead, they settled their individual
claims. Moreover, while it could reasonably be argued that
mandating notice here amounts to no more than solicitation on
behalf of plaintiffs' counsel, it is worth noting that directing
notice prior to certification could, under some circumstances,
actually inure to the detriment of a plaintiff's attorney. For
example, a plaintiff's attorney could quickly conclude that a
putative class action has little merit, and would not wish to
bear the cost of notifying putative class members in a class that
could not, for instance, be certified due to lack of typicality
or predominance. Therefore, knowing that the majority's rule may
impose the costs of notice even if no class is ever certified
(see CPLR 904 [d] [presumptively placing the costs of notice on
the plaintiff]), members of the plaintiffs' bar may be less
likely to commence some class actions in the first place.
Relatedly, the majority's rule may also discourage settlement.
If a plaintiff's attorney determines that there are deficiencies
with either the named plaintiff's claim or the class claim, or
both, the attorney would have an incentive to litigate and lose
the class certification motion rather than to stipulate to a
dismissal, because the stipulation of dismissal would require
notice, whereas (presumably, although the majority is unclear
about this), no notice would be required in the event that the

                              - 8 -
                               - 9 -                Nos. 121 & 122

                               -II-
          In concluding that CPLR 908 should be applied to
actions that were never adjudicated to be class actions, the
majority places great weight on the fact that lower courts have
been bound to follow Avena (85 AD2d 149 [1st Dept 1982]) because
this Court has not yet overruled that case, and no other
Appellate Division Department has had the occasion to express a
contrary view.   However, the interpretation of the plain language
of CPLR 908 is now squarely before us, and inaction on the part
of other appellate courts -- or the legislature -- in the wake of
Avena is no hindrance to our adherence to the statutory text.
          In my view, the First Department's decision in Avena
was flawed and continued reliance on it is misguided.   It is
evident, simply from the manner in which the First Department
framed its inquiry, that the court departed from the statutory
text, contrary to longstanding fundamental rules of construction
(see Majewski, 91 NY2d at 583).   Instead of starting with the
text of CPLR 908 itself -- which by its plain terms applies only
to "class actions" -- the Avena court began its analysis by
inquiring whether an action that merely "purports to be a class
action" should nevertheless "be deemed 'a class action'" to which
CPLR 908 would apply (Avena, 85 AD2d at 152 [emphasis added]).
Further, noting that the defendant in Avena did not dispute the
applicability of CPLR 908, the First Department broadly stated,


court denied class certification.

                               - 9 -
                              - 10 -                Nos. 121 & 122

without citation, that "[t]he fiduciary obligations of the named
plaintiffs in instituting . . . [a class] action are generally
recognized and not disputed" (85 AD2d at 152 [emphasis added]).
It was solely on this basis that the First Department concluded
"that CPLR 908 should apply to even a without prejudice (to the
class) settlement and discontinuance of a purported class action
before certification or denial of certification" (id.).
           However, it is questionable whether a would-be class
representative has fiduciary responsibilities in the pre-
certification stage in light of the absence of the would-be
representative's authority to bind putative class members (see
CPLR 905; cf. Standard Fire Ins. Co. v Knowles, 568 US 588, 593
[2013]).   Because there is no res judicata impact upon putative
class members (see Rodden v Axelrod, 79 AD2d 29, 32 [3d Dept
1981]), their ability to bring their own claims is unimpaired and
they are, therefore, not impacted by the resolution of the named
plaintiff's individual claim.4   Under these circumstances, it is
difficult to understand why the Avena court would invoke
fiduciary considerations in the pre-certification context and
hold that CPLR 908 should apply to even a settlement that is
without prejudice to the putative class.   While the majority


     4
       To the extent the Avena court expressed concern about the
prospect of disingenuous plaintiffs using a frivolous class
action claim as leverage in settlement negotiations, it bears
noting that there are other mechanisms in place to prevent such
abuse, including, of course, early certification (as required
under article 9 of the CPLR) and sanctions.

                              - 10 -
                              - 11 -                 Nos. 121 & 122

glosses over whether it actually agrees with Avena, it adopts the
rule of that case, following the novel theory espoused by the
First Department, without question.    I would not acquiesce to the
reasoning in Avena; instead, I would interpret the statute before
us, which inexorably leads me to conclude that CPLR 908 notice is
not required prior to certification.
          Further, contrary to the majority's reasoning here, the
legislature's failure to amend CPLR 908 after Avena was decided
does not compel the conclusion that Avena correctly ascertained
the legislature's intent (see Matter of New York State Assn. of
Life Underwriters v New York State Banking Dept., 83 NY2d 353,
363 [1994]; see also People v Ocasio, 28 NY3d 178, 183 [2016]
[legislative "inaction is susceptible to varying
interpretations"]).5   Despite acknowledging that this case does
not present one of the scenarios in which legislative inaction
may nonetheless carry some significance (cf. Matter of Knight-

     5
       Similarly, the memorandum of the consumer protection board
and the bar association letter cited by the majority lack
persuasive force (see majority op at 6-7). To the extent the
memorandum indicates that the purpose of CPLR 908 is to safeguard
against a settlement benefitting only the named plaintiff or
plaintiff's counsel to the detriment of the class (see Mem from
State Consumer Protection Board, May 29, 1975 at 7, Bill Jacket,
L 1975, ch 207), this concern is implicated only when the
disposition would bind the class, i.e., after certification. For
its part, the bar association advanced its interpretation of CPLR
908 within the context of its advocacy for a discretionary notice
regime (see Letter from NY State Bar Association Banking Law,
Business Law, and CPLR Committees, at 5, Bill Jacket, L 1975, ch
207) ["the court should be permitted to dispense with notice to
class members"]). The legislature clearly rejected that
approach.

                              - 11 -
                              - 12 -                  Nos. 121 & 122

Ridder Broadcasting v Greenberg, 70 NY2d 151, 157 [1987];
Anheuser-Busch, Inc. v Abrams, 71 NY2d 327, 334 [1988]), the
majority relies on the length of time that has passed since Avena
was decided.   Although Avena may enjoy a distinguished patina
owing to the passage of time, the decision has not withstood any
meaningful consideration by other appellate courts.     To the
contrary, the case has been followed by only a handful of lower
courts (see e.g. Astill v Kumquat Properties, LLC, 2013 NY Slip
Op 32964[U] [Sup Ct, NY County 2013]; Diakonikolas v New Horizons
Worldwide, Inc., 2011 NY Slip Op 33098[U] [Sup Ct, NY County
2011]), which were bound to do so.     Moreover, as Supreme Court
observed here, the "wisdom" of the rule announced in Avena "has
been questioned by many, including the CPLR commentary."     Thus,
the existence of Avena is no bar to this Court adopting a more
reasoned approach based on the express language of CPLR 908.
          Finally, to the extent the majority relies on certain
federal cases construing the pre-2003 version of Rule 23 (e) of
the Federal Rules of Civil Procedure, each of those cases held
that notice to putative class members prior to certification was
discretionary, based on various considerations not included in
the rule itself (see Diaz v Trust Territory of Pacific Islands,
876 F2d 1401, 1408, 1411 [9th Cir 1989] [adopting the "majority
approach" and holding that "(n)otice to the class of pre-
certification dismissal is not . . . required in all
circumstances"]).   Those cases do not address the dispositive


                              - 12 -
                                  - 13 -                   Nos. 121 & 122

issue in this case, which is -- as the majority acknowledges --
whether notice is mandatory under CPLR 908.         Although there may
be policy considerations that support the discretionary rule
crafted by various federal courts -- which was ultimately
rejected by Congress (Fed Rules Civ Pro rule 23 [e]) -- our role
here is to interpret the plain language of CPLR 908.
            For the reasons stated herein, I would hold that the
plain language of CPLR 908, taken in context, does not require
notice to putative class members if the action is resolved prior
to class certification.
*   *   *     *   *   *   *   *     *      *   *   *   *   *   *   *     *
For Each Case: Order affirmed, with costs, and certified
question answered in the affirmative. Opinion by Judge Fahey.
Chief Judge DiFiore and Judges Rivera and Feinman concur. Judge
Stein dissents in an opinion, in which Judges Garcia and Wilson
concur.

Decided December 12, 2017




                                  - 13 -
