Jury Trial Disparities Between Class Actions and Shareholder Derivative Actions in State Courts

59 Pages Posted: 23 Jan 2020 Last revised: 26 Jan 2020

See all articles by Ann M. Scarlett

Ann M. Scarlett

Saint Louis University - School of Law

Abstract

Class actions and shareholder derivative lawsuits are both forms of representative litigation that historically had to be brought in the equity courts to be decided by a judge, rather than in the common-law courts to be decided by a jury. In 1938, the federal courts merged law and equity by passing the Federal Rules of Civil Procedure, which allowed both legal and equitable claims to be heard within the same civil action. After law and equity merged, the Supreme Court interpreted the Seventh Amendment’s preservation of the right to jury trial as including not just actions recognized at common law, but also actions requiring resolution of legal rights. Thus, class and shareholder derivative actions brought in federal courts possess a right to jury trial for any legal claims.

Like the federal courts, almost all states have now merged law and equity. However, because the Seventh Amendment does not apply to the states, the right to jury trial in class and shareholder derivative actions varies among states. While a few states appear to deny any right to jury trial in both actions based on their historically equitable nature, some states now likely permit jury trials in both actions. The remaining states appear to recognize a jury trial right in class actions, but not in derivative actions. Unfortunately, most states have not clearly decided the right to jury trial for such actions. This Article surveys the states’ treatment of the right to jury trial in these two forms of representative litigation. It argues that no basis exists for state courts to treat derivative actions differently from class actions as to the right to jury trial, and advocates that states should grant the right to jury trial to both actions.

Suggested Citation

Scarlett, Ann M., Jury Trial Disparities Between Class Actions and Shareholder Derivative Actions in State Courts. Oklahoma Law Review, Vol. 72, No. 283, 2019, Saint Louis U. Legal Studies Research Paper No. 2019-12, Available at SSRN: https://ssrn.com/abstract=3523369

Ann M. Scarlett (Contact Author)

Saint Louis University - School of Law ( email )

100 N. Tucker Blvd.
St. Louis, MO 63101
United States

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