California Code of Civil Procedure 382: Certification and Settlement

California Code of Civil Procedure Section 382 is a single-sentence statute that authorizes class actions in California state courts, allowing one or more people to sue on behalf of a larger group when the affected individuals are too numerous to bring before the court individually. The statute itself provides almost no operational detail. The substance of how a California class action actually works comes from decades of case law and from the California Rules of Court (Rules 3.760 through 3.771), which govern certification, notice, settlement approval, and fees.

What the Statute Actually Says

The full operative language reads: “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.”¹ That is the entire authorization. Everything else — who qualifies as a class, how notice must be handled, how settlements are approved, how attorneys get paid — comes from court-made rules and judicial decisions built on top of that sentence.

A companion provision, CCP 382.4, requires attorneys to disclose any connection to a non-party who is set to receive settlement funds, so the court can evaluate whether the arrangement raises the appearance of impropriety.² That matters most in cy pres distributions, discussed below.

Getting a Class Certified

Certification is the single most consequential moment in a class action. If the court denies it, the case effectively stops functioning as a group proceeding. California courts require the plaintiff to show two things: an ascertainable class, and a well-defined community of interest among its members.

The community of interest requirement has three parts. Common questions of law or fact must predominate over questions that would need individual treatment. The named plaintiff’s claims must be typical of the class. And the named plaintiff and their attorney must be able to represent the entire class adequately. On top of those elements, the court weighs whether a class proceeding provides substantial benefits over individual lawsuits, including whether the case will be manageable and whether class members can actually be notified.

A motion to certify runs on a fixed calendar. It must be served at least 34 calendar days before the hearing, the supporting brief is capped at 20 pages, and any opposition is due at least 20 days before the hearing. Evidence goes in through declarations rather than live testimony, so the written record does the work.³

Filing the Case

A class action starts the same way any other unlimited civil case does: the named plaintiff files a complaint in California Superior Court. Because these cases involve aggregate claims well above $35,000, they fall into the unlimited civil category. The initial filing fee is $435 as of 2026. Some counties, including Riverside, San Bernardino, and San Francisco, add a local surcharge for courthouse construction.⁴

The complaint has to identify the proposed class, describe the common questions that tie the claims together, and explain why individual lawsuits would be impractical. Merits proof isn’t required at the pleading stage, but a vague class definition is one of the fastest ways to lose the later certification fight.

Notice to Class Members

Once a class is certified, the court decides whether notice is necessary and, if so, in what form.⁵ California does not automatically require direct individual notice to every class member. The court has discretion.

When individual notification is prohibitively expensive, when individual stakes are small, or when reaching everyone directly isn’t possible, the court can approve alternatives: newspaper publication, internet advertising, or distribution through a trade association or public interest group. The notice content is subject to court approval and must include a brief explanation of the case, a deadline for requesting exclusion, a statement that the judgment binds anyone who does not opt out, and a note that class members may appear through their own attorney.⁵

Cost allocation is not preset. The party seeking certification submits a proposal on who should pay and estimates the expense. The court makes the final call, and it can order the parties to share the cost.⁵ In practice, the plaintiff often fronts the initial cost.

The Class Representative’s Job

The named plaintiff carries a heavier load than most people expect. This isn’t a matter of lending a name to a caption. The representative has to stay involved through what can be years of litigation, sit for depositions, respond to written discovery, and communicate regularly with class counsel about strategy.

Adequacy is the term courts use when evaluating the representative. The person’s claims must be typical of the class, and they can’t have conflicts of interest that would compromise the group. A side deal with the defendant, or an unusual factual situation that makes the representative’s stake different from everyone else’s, will sink certification. Courts look hard at this because class members who don’t opt out are bound by the outcome, win or lose.

Incentive Awards

Named plaintiffs sometimes receive a separate payment, called a service or incentive award, on top of what the class recovers. It compensates the representative for time, effort, and personal exposure. Courts evaluate the award based on actual contributions to the case, including hours spent, financial risk, and whether the settlement drew objections. Awards vary widely, and courts have grown skeptical of large payments that could look like the representative was bought off to sign off on a weak deal.

Challenging or Undoing Certification

In California state court, an order granting or denying class certification is not directly appealable. The losing side has to seek a writ of mandate from the Court of Appeal, asking the higher court to order the trial judge to change course. Writ review is discretionary, so the appellate court can simply decline to hear the petition.

Decertification is also on the table after a class has been certified. Any party can move to decertify if circumstances shift, for example, if new evidence shows that individual issues actually predominate, or that the representative is no longer adequate. The same procedural framework applies: 34 days’ notice, 20-page brief limit, evidence by declaration.³

Court Approval of Settlements

Most California class actions resolve by settlement, and no settlement takes effect without court approval. The process runs in two stages.

At preliminary approval, the court reviews the proposed terms to decide whether they fall within the range of possible approval and whether sending notice to the class is worthwhile. If the court agrees, class members receive settlement notice and get a window to object or opt out. The notice explains the basic terms, the objection deadline, and the consequences of doing nothing.

The final fairness hearing is where the court decides whether the settlement is fair, adequate, and reasonable, and whether it treats class members equitably relative to each other.⁶ The judge weighs the strength of the claims, the risks of continued litigation, the amount offered against the potential trial recovery, and whether the distribution plan makes sense. Attorney fees are examined separately. If the court approves, it enters judgment and retains jurisdiction to enforce the terms.⁷

Once judgment is entered approving a settlement, the case cannot later be dismissed. And dismissing an entire class action at any earlier stage also requires court approval, along with a declaration disclosing whether any consideration was exchanged for the dismissal.⁸ That rule exists to prevent quiet sellouts of absent class members.

Remedies and How Money Reaches Class Members

Successful class actions produce monetary damages, injunctive relief that forces the defendant to change a practice going forward, declaratory judgments that establish legal rights without ordering specific action, or some combination.

Distributing money is harder than it sounds. A settlement administrator sends payments to class members who file valid claims, but not everyone files. When direct distribution of the remainder isn’t feasible, courts may approve a cy pres distribution, sending leftover funds to a nonprofit whose mission aligns with the interests of the class. Courts scrutinize the recipient closely: the organization should advance the same policies underlying the claims, have a track record, and serve the geographic area where class members are concentrated. Any prior relationship between class counsel and the proposed recipient must be disclosed.²

Attorney Fees

Class action attorneys almost always work on contingency and get paid only if the class recovers. The court approves the fee structure.

The most common approach is the percentage-of-the-fund method, with awards typically falling in the 20 to 30 percent range. Larger recoveries sometimes carry lower percentages. Courts often cross-check the percentage against the lodestar method, which multiplies attorney hours by a reasonable hourly rate, to confirm the fee is proportionate to the work performed.

Every dollar in fees is a dollar not going to class members. That is why courts examine fee requests independently at the final approval hearing, even when no one objects. The court acts as a fiduciary for absent class members who may not be paying attention.

Removal to Federal Court Under CAFA

A case filed under CCP 382 does not necessarily stay in state court. The federal Class Action Fairness Act lets defendants remove many California class actions to federal court. CAFA gives federal courts jurisdiction over any class action where the aggregate amount in controversy exceeds $5 million, the proposed class has at least 100 members, and at least one class member is a citizen of a different state than at least one defendant. The $5 million threshold combines every class member’s claims.⁹

Removal under CAFA is easier than ordinary removal. Any single defendant can remove without the other defendants’ consent, and the standard one-year removal deadline does not apply.¹⁰ A state-court case can end up in federal court years into the litigation if CAFA’s requirements are satisfied.

CAFA has narrow exceptions. It does not apply to cases where the primary defendants are state governments, and it does not apply to proposed classes smaller than 100 members.⁹ Securities cases and internal corporate governance disputes are also excluded.¹⁰ Once a case is in federal court, Federal Rule 23 governs, and a party can petition the circuit court for permission to appeal a certification order within 14 days.¹¹

PAGA as an Alternative for Employment Claims

California’s Private Attorneys General Act offers a different path for employees alleging labor violations. A PAGA claim does not require class certification. An individual employee can file a representative action on behalf of all aggrieved employees and the State of California, bypassing the entire certification fight.

The tradeoff matters. Under PAGA, 75 percent of any penalty recovery goes to the state and only 25 percent reaches the aggrieved employees. The statute of limitations is one year, compared with the four-year window available for many California class action claims. PAGA recoveries are limited to civil penalties, while class actions can pursue actual damages, liquidated damages, and statutory penalties.

Many California employment cases are filed as both a class action and a PAGA claim, with the class action seeking damages and the PAGA claim targeting penalties on parallel tracks. The dual filing has become standard because PAGA claims are harder for defendants to push into individual arbitration than traditional class claims.

Tolling for Absent Class Members

Filing a class action suspends the statute of limitations for all putative class members under the American Pipe tolling doctrine. Class members don’t need to file their own lawsuits to protect their claims while the class action is pending. If the court later denies certification or a member opts out, the individual deadline picks up where it left off rather than having already run.

California follows the doctrine but limits it. A plaintiff cannot stack successive class actions to keep the clock tolled indefinitely. If a first class action ends without certification and a second class action raises similar claims, the limitations period does not toll again during the second case for individual opt-out claims. Unlimited stacking would defeat the efficiency rationale that justifies tolling in the first place.

Tax Treatment of What You Receive

How a class action payment is taxed depends on the nature of the underlying claim. Damages received for personal physical injuries or physical sickness are excluded from gross income under federal law.¹² Nearly everything else is taxable.

That category is broad. Settlements for employment discrimination, emotional distress not tied to a physical injury, defamation, consumer fraud, and breach of contract are taxable as ordinary income. Punitive damages are taxable regardless of the underlying claim, with a narrow exception for wrongful death cases in states where punitive damages are the only remedy available.¹³ Lost wages recovered through a class action are taxable even if the underlying claim involves a physical injury, unless those lost wages flowed directly from the physical harm itself.

Settlement administrators typically issue Form 1099 for taxable payments. When attorney fees come out of the settlement, the IRS requires separate reporting to both the attorney and the plaintiff, so a class member may receive a 1099 showing the gross settlement amount including the attorney’s share.¹³ That catches people off guard every tax season. If you receive a class action payment, confirm whether it stems from a physical injury claim before assuming any part of it is tax-free.

1
California Legislative Information. California Code CCP 382
2
California Legislative Information. California Code CCP 382-4
3
Judicial Branch of California. Rule 3.764 – Motion to Certify or Decertify a Class or Amend or Modify a Certification Order
4
Judicial Branch of California. Statewide Civil Fee Schedule Effective January 1, 2026
5
Judicial Branch of California. Rule 3.766 – Notice to Class Members
6
Federal Judicial Center. California Guidelines for Motions for Preliminary and Final Approval of Class Settlement
7
Judicial Branch of California. Rule 3.769 – Settlement of Class Actions
8
Judicial Branch of California. Rule 3.770 – Dismissal of Class Actions
9
Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs
10
Office of the Law Revision Counsel. 28 USC 1453 – Removal of Class Actions
11
Legal Information Institute. Federal Rules of Civil Procedure Rule 23 – Class Actions
12
Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness
13
Internal Revenue Service. Tax Implications of Settlements and Judgments