Cite as: 527 U. S. 815 (1999)
Opinion of the Court
Burnham, 197 F. 2d 973 (CA2), cert. denied, 344 U. S. 875 (1952), as illustrative of this tradition. In Dickinson, investors hoping to save a failing company had contributed some $600,000, which had been misused until nothing was left but a pool of secret profits on a fraction of the original investment. In a class action, the District Court took charge of this fund, subjecting it to a constructive trust for division among subscribers who demonstrated their claims, in amounts proportional to each class member's percentage of all substantiated claims. 197 F. 2d, at 978.15 The Second
Circuit approved the class action and the distribution of the entire pool to claimants, noting that "[a]lthough none of the contributors has been paid in full, no one . . . now asserts or suggests that they should have full recovery . . . as on an ordinary tort liability for conspiracy and defrauding. The court's power of disposition over the fund was therefore ab-ants. See, e. g., City & County of San Francisco v. Market Street R. Co., 95 Cal. App. 2d 648, 213 P. 2d 780 (1950). The rationale in such cases for representative plaintiffs suing on behalf of all similarly situated potential parties was that benefits arising from the action necessarily inured to the class as a whole. Another type of fund case involved the adjudication of the rights of all participants in a fund in which the participants had common rights. See, e. g., Hartford Life Ins. Co. v. IBS, 237 U. S. 662 (1915); Supreme Council of Royal Arcanum v. Green, 237 U. S. 531 (1915); Hartford Life Ins. Co. v. Barber, 245 U. S. 146 (1917); see also Smith v. Swormstedt, 16 How. 288 (1854). In such cases, regardless of the size of any individual claimant's stake, the adjudication would determine the operating rules governing the fund for all participants. This category is more analogous in modern practice to class actions seeking structural injunctions and is not at issue in this case.
15 The District Court in Dickinson, as was the usual practice in such cases, distributed the limited fund only after notice had been given to all class members, allowing them to come into the suit, prove their claim, and share in the recovery. See 197 F. 2d, at 978; see also Adv. Comm. Notes 697 (describing limited fund class actions as involving an "action by or against representative members to settle the validity of the claims as a whole, or in groups, followed by separate proof of the amount of each valid claim and proportionate distribution of the fund").
835Page: Index Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
Last modified: October 4, 2007