Clarification of Rule 23(g): Adequacy of Class Counsel and Limits on Preclusion Based on Counsel’s Conduct

Introduction

Robertson v. Trinity Packaging Corp. was decided on April 17, 2025 by the United States Court of Appeals for the Second Circuit. Plaintiffs–Claude Robertson and John Szalasny–sought final approval of a class‐action settlement under the Fair Labor Standards Act (FLSA) and New York Labor Law. The district court denied approval not because of the fairness of the settlement itself but because it concluded that Plaintiffs’ counsel were inadequate class representatives based on the lawyers’ conduct in a separate case, Bonura v. Uhl Ventures LLC. The Second Circuit granted interlocutory review under Federal Rule of Civil Procedure 23(f) and vacated the district court’s order, remanding for a proper adequacy analysis under Rule 23(g) and rejecting the district court’s reliance on collateral estoppel.

Summary of the Judgment

The Second Circuit held that:

1. The district court abused its discretion by failing to apply the four Rule 23(g)(1)(A) factors in assessing counsel’s adequacy and instead relying solely on purported misconduct in the Bonura case.
2. Issue preclusion (collateral estoppel) could not block Plaintiffs from challenging the district court’s characterization of their counsel’s conduct in Bonura, since the Bonura decision did not “necessarily decide” the issue against the same parties or in privity, nor was there a full and fair opportunity on that point.
3. Even assuming counsel’s initial conduct in Bonura was improper, their subsequent negotiation of a class‐wide settlement there—approved by the district court—demonstrates their adequacy here.

Accordingly, the Second Circuit vacated the denial of settlement approval and remanded for reconsideration under the proper Rule 23(g) framework and the other criteria for settlement fairness under Rule 23(e).

Analysis

Precedents Cited

• In re American International Group, Inc. Securities Litigation, 689 F.3d 229 (2d Cir. 2012) – defined abuse‐of‐discretion review for class certification and Rule 23 determinations.
• Gallego v. Northland Group, Inc., 814 F.3d 123 (2d Cir. 2016) and Elisa W. v. City of New York, 82 F.4th 115 (2d Cir. 2023) – addressed the standard of review for orders denying class certification.
• Reliable Money Order, Inc. v. McKnight Sales Co., 704 F.3d 489 (7th Cir. 2013) – held that unethical conduct by class counsel may raise “serious doubt” about adequacy even if not prejudicial to the class itself.
• Eisen v. Carlisle & Jacquelin, 391 F.2d 555 (2d Cir. 1968) – established adequacy of representation as a prerequisite to settlement approval and class certification.
• Buechel v. Bain, 97 N.Y.2d 295 (2001) – set New York‐law requirements for issue preclusion: identity of issue, actually litigated, full and fair opportunity, and mutuality/privity.
• Schick v. Berg, 430 F.3d 112 (2d Cir. 2005) – clarified that attorney‐client duties to unnamed class members do not extend beyond refraining from prejudice until class certification.

Legal Reasoning

The court’s reasoning unfolded in three key steps:

1. Proper Application of Rule 23(g): Rule 23(g)(1)(A) directs courts to assess class counsel’s work on the case, experience with similar litigation, knowledge of applicable law, and the resources they will bring to bear. The district court ignored these mandatory factors and instead rested its entire analysis on misconduct in an unrelated case.
2. Rejection of Collateral Estoppel: To bind a party under issue preclusion, the prior judgment must have actually and necessarily decided the same issue, against the same party or one in privity, after a full and fair opportunity to litigate. Here, the Bonura magistrate’s Report and Recommendation did not sanction counsel or resolve their ethical adequacy; the lawyers were not “parties” in Bonura; and they never had occasion to litigate this precise question, having negotiated an amended settlement instead.
3. Context‐Sensitive Assessment of Counsel Conduct: Even accepting a narrow finding of initial impropriety in Bonura, counsel cured the magistrate’s concerns by renegotiating a class‐wide deal with an adjusted fee award, which the district court ultimately approved. That approval itself is strong evidence of adequacy and good faith.

Impact

Robertson clarifies and reinforces several important principles in class‐action practice:

• District courts must apply the specific Rule 23(g)(1)(A) factors when evaluating counsel adequacy rather than relying on extraneous misconduct alone.
• Collateral estoppel cannot be used to preclude a class from contesting allegations about its counsel’s conduct in separate proceedings unless all preclusion elements are strictly met.
• Counsel’s ability to correct course—by addressing judicial concerns and obtaining settlement approval elsewhere—bears directly on their adequacy and should be weighed in the class‐action settlement analysis.

Lower courts in the Second Circuit (and beyond) will look to Robertson when objections to class counsel rest on alleged flaws in unrelated matters. Robertson urges a holistic, case‐specific inquiry into counsel’s qualifications, track record, and response to judicial feedback.

Complex Concepts Simplified

Rule 23(e)(2)(A) “Fair, Reasonable, Adequate”:

The provision governing approval of class‐action settlements. Courts must ensure that class counsel and representatives will protect class interests and that the deal is substantively fair.

Rule 23(g)(1)(A) Factors:

Mandatory criteria for appointing or approving class counsel: (i) work done to date, (ii) experience with class/complex litigation, (iii) knowledge of the law, and (iv) resources available.

Abuse of Discretion Review:

A deferential standard under which an appellate court will reverse only if the district court’s decision was arbitrary, irrational, or based on an erroneous view of the law.

Issue Preclusion (Collateral Estoppel):

A doctrine barring re‐litigation of an issue already decided when the same issue was necessarily determined in a prior action between the same parties (or in privity) after a fair opportunity to litigate.

Interlocutory Review under Rule 23(f):

A limited right to appeal class‐certification (or settlement‐approval) decisions before final judgment, reserved for exceptional circumstances.

Conclusion

Robertson v. Trinity Packaging Corp. reaffirms that adequacy of class counsel must be grounded in the deliberate application of Rule 23(g)’s enumerated factors, not a reflexive reliance on unrelated allegations of misconduct. It underscores that collateral estoppel is not a shortcut to deny settlement approval unless all prerequisites are met, and it highlights that counsel’s subsequent conduct—particularly their responsiveness to court concerns—can vindicate their fitness to represent a class. This decision will guide district courts to undertake a structured, principled analysis of counsel adequacy and protect the due‐process rights of both named and unnamed class members.