Grigg v. Michigan National Bank

274 N.W.2d 752, 405 Mich. 148, 1979 Mich. LEXIS 431

• Court: Michigan Supreme Court
• Decided: January 17, 1979
• Docket: 59308, (Calendar No. 5)
• Status: Published

Opinions

Coleman, C.J.

On June 3, 1971 Sarah Grigg commenced this action in circuit court on behalf of herself and other Michigan BankAmericard holders who had incurred finance charges on accounts between June 3, 1969 and the date of filing. The substantive merits of plaintiff’s complaint have not been decided, so are not at issue. The sole question is whether the requirements of initiating a class action under Michigan statutes and court rules have been met. There is little Michigan precedential guidance as to such requirements, so it is understandable that attorneys and courts have presented a confusing combination of Federal and state law for analysis.

I. Case History

The plaintiff alleged that the defendant, a national bank doing business in Michigan, had levied finance charges higher than permitted by Michigan law. She alleged this violated 12 USC 85,¹ which generally prohibits a national bank from charging interest rates higher than the rates permitted by the laws of the state in which the bank is lócated. She asked the circuit court to enjoin the defendant permanently from charging such rates and to award her and the other affected BankAmericard holders the monetary damages authorized by 12 USC 86.² She also asked for an award of costs and reasonable attorney fees.

After the defendant filed an answer denying the allegations in the plaintiff’s complaint, the plaintiff moved for summary judgment on the merits and for an order requiring the defendant to notify other potentially aggrieved BankAmericard holders of the pendency of the action. The defendant responded with a cross motion for summary judgment on the merits and a brief in opposition to the plaintiff’s motion to require notice. In this brief, the defendant argued that it should not have to issue notice unless it had first been found liable on the merits. The defendant also filed a motion for summary judgment claiming that as a matter of law, 12 USC 85, 86 did not permit a plaintiff to sue on behalf of other individuals to recover the statutorily authorized damages.

While these motions were pending, the defendant stopped using the billing practices of which the plaintiff complained. This effectively mooted the plaintiff’s request for injunctive relief.

The circuit court decided to rule only on the defendant’s motion for summary judgment concerning the propriety of a representative lawsuit under 12 USC 85, 86. The court ruled that these statutes did not permit a plaintiff to sue in a representative capacity.

The plaintiff appealed and the Court of Appeals reversed in an unpublished per curiam opinion. Docket No 15,891 (June 22, 1973). The defendant appealed but this Court denied leave to appeal. 390 Mich 810 (1973). The United States Supreme Court denied the defendant’s application for a writ of certiorari. 419 US 840 (1974).

Upon return to circuit court, the plaintiff argued that the motions for summary judgment on the merits previously filed by the parties should be decided first. Then, if the defendant were found liable, the questions relating to the maintenance of a representative action could be decided. The defendant, on the other hand, argued that the merits should not be decided unless the court determined that the action could proceed on a representative basis.

The court chose to follow the defendant’s format and after further briefing and hearings ruled that the action would not be allowed to proceed on a representative basis because:

"1. There’s no common question of fact as to each member of the class and an analysis of the case reveals there could be different questions of law involved as to each member.

"2. The rights here are severable as each member of the class’s claim is different.

"3. For this Court to handle this case as a class action is totally unmanageable.

"4. It is not a superior method of litigating claims in this case. What the Court would be doing is trying thousands of small claim cases. In essence numerous mini trials within the class action itself.

"5. The plaintiff does not fairly or adequately represent the class in this case.

"6. Plaintiff in her deposition said that she wouldn’t pay the cost of notices to all members of the class estimated around $86,000 to over $100,000. She contemplated said notices to be mailed by and at the cost of the defendant.

"7. To require the defendant to send notices would be a horrendous and possibly annihilating punishment and most unjust.” (Opinion of the circuit court, May 30, 1975.)

The court also ruled that the plaintiffs individual claim for damages, which, it was said, only amounted to around $200, including interest from 1969, did not satisfy the amount-in-controversy requirement for circuit court jurisdiction. The court gave the plaintiff the option of having the case transferred to district court or having it dismissed altogether. The plaintiff elected not to proceed individually in district court and the case was therefore dismissed.

The plaintiff appealed but the Court of Appeals affirmed. 72 Mich App 358; 249 NW2d 701 (1976). Using a mixture of state and Federal law and procedure, the panel concluded that the plaintiff could not sue on behalf of the other potentially aggrieved BankAmericard holders because she was unwilling to pay for notice to the other holders, she was a secretary for some of the attorneys handling her case, and the case was unmanageable as a representative action and therefore not a superior method of litigating the individual claims. The panel also concluded that although the substantive merits of the case could have been decided first, the ultimate unmanageability of the case on a representative basis made it unnecessary to do so.

We remand to the trial court for further proceedings consistent with this opinion.

II. Facts

Although the substantive merits of the plaintiffs complaint are not involved in this appeal, some understanding of the defendant’s credit card operation and the billing practices that the plaintiff claims were illegal is necessary in order to analyze the procedural question presented.

A. Systems of Billing

The purchase of goods or services with a BankAmericard is a three-party transaction. The customer using the card receives the purchased items from a merchant. The merchant then sells the account receivable generated by the purchase to the defendant at a discount. The defendant then bills the cardholder for the full amount of the debt. In this case the cardholder’s first contract with BankAmericard provided for a finance charge of 1.5 percent per month (18 percent annually) on the unpaid balance. The subsequent contract was for .0493 percent per day.

Because the number of cardholders is very large, it is not economically feasible to bill them all on the same day. Therefore, the defendant divides the cardholders into smaller, more manageable groups and bills each group on a different day of the month. For example, group one might be billed on the first day of every month, group two on the second, etc. This day is called the billing date.

If the billing date for a particular group happens to fall on a Sunday or a holiday in a given month, the group is billed on the immediately preceding work day. The billing date for each group is the last day of that group’s billing cycle. The number of days in a group’s billing cycle will vary depending on the billing date, the number of days in the month or months spanned by the billing cycle and whether the billing date falls on a Sunday or a holiday.

During the time period pertinent to this appeal, the defendant’s BankAmericard holders were divided into 20 separate billing groups.

From June to October of 1969, the defendant did not impose a finance charge on purchases made with a BankAmericard if the cardholder paid for the purchases in full within 25 days of the cardholder’s billing date. Thus, for example, if a cardholder purchased $200 of goods or services in June, had a billing date of July 1 and paid the defendant $200 by July 26, no finance charge would be imposed. If, however, the purchases were not paid for in full within 25 days, the defendant would impose a finance charge. The finance charge was calculated by multiplying the amount not paid by 1.5 percent. Thus, in the above example, if the cardholder only paid $40 by July 26, the August 1 bill would include: (1) the $160 in principal still owed for the June purchases, and (2) a finance charge of $2.40 (1.5% X $160). If the cardholder had purchased another $100 of goods or services during July, this would also be included in the August 1 bill but without any finance charge. If the cardholder paid the total amount of the August 1 bill by August 26, no further finance charge would be imposed. If the full amount was not paid, another finance charge would be imposed on the amount remaining unpaid.

It was possible that the amount remaining unpaid upon which a finance charge would be imposed could include all or part of the previous month’s finance charge. However, because the defendant applied partial payments first to unpaid finance charges and then to principal, a cardholder would not have a finance charge imposed on the previous month’s finance charge unless the amount paid by the cardholder on the current bill was less than the amount owed for previous finance charges. In the example above, the cardholder would not have a finance charge imposed on the previous finance charge unless the cardholder paid less than $2.40 on the August 1 bill.

In October of 1969 the defendant modified its method of computing finance charges. If a bill was not paid in full within 25 days of the billing date, the defendant would compute the finance charge by multiplying the sum of the actual daily balances in the cardholder’s account during the billing cycle by .0493 percent.

In a 28-day billing cycle, a .0493 percent daily rate amounted to a cyclical rate of 1.3804 percent (.0493% X 28). In a 29-day billing cycle, it amounted to a 1.4297 percent cyclical rate. In a 30-day billing cycle, it amounted to a 1.4790 percent cyclical rate. In a 31-day billing cycle, it amounted to a 1.5283 percent cyclical rate. On a yearly basis, it amounted to a rate of 17.9945 percent.

B. Complaint

The plaintiffs complaint contained three distinct theories of recovery. The first theory was based on the fact that prior to August 20, 1969 (the effective date of the Banking Code of 1969, specifically, MCL 487.491; MSA 23.710[191]),³ no Michigan statute specifically established a 1.5 percent finance charge rate on credit card accounts. In this vacuum, the bank relied upon the Retail Installment Sales Act, MCL 445.862(c); MSA 19.416(112)(c)⁴ (not in excess of 1.7 percent per month), studied the rate charged in surrounding states, and set the finance charge on unpaid balances at 1.5 percent. It was the same rate charged by similar institutions around the country and in Michigan. The plaintiff, however, contended that during this period the defendant’s credit card operation should have been governed by MCL 438.31; MSA 19.15(1),⁵ the general Michigan law on ordinary interest rates, which set a ceiling of 5 percent per year or 7 percent per year if the loan agreement was in writing. Therefore, the plaintiff claimed that the parties’ contract for a 1.5 percent per month finance charge on the outstanding balance (18 percent per year) from June 3, 1969 to August 20, 1969 violated Michigan law.

The plaintiffs second theory of recovery was based on the defendant’s use of the .0493 percent daily rate to compute finance charges after October of 1969. The plaintiff claimed that the cyclical rate of 1.5283 percent during those months when there was a 31-day billing cycle violated MCL 487.491; MSA 23.710(191), which limits the finance charge on credit card accounts to "1.5% of the unpaid balance per month”, even though the total annual charge was less than the permissible 18 percent and the rate in 28-, 29- or 30-day billing cycles was less than the permissible 1.5 percent.

The plaintiffs third theory of recovery was based on the defendant’s practice of adding unpaid finance charges into the principal amount due and thereafter imposing a finance charge on the whole sum (although crediting payments first to any outstanding finance charge).

III. GCR 1963, 208

Whether the plaintiff can sue the defendant in a Michigan circuit court on behalf of herself and the other potentially aggrieved BankAmericard holders is a procedural question of state law governed by GCR 1963, 208. In analyzing this procedure, it is important to note that GCR 208 is different from its counterpart in the Federal courts, Federal Rule of Civil Procedure 23.⁶ Although there are some similarities between GCR 208 and the present Federal rule, the differences are substantial. Care should be taken not to confuse them. See generally, 7 Wright & Miller, Federal Practice and Procedure: Civil, §§ 1752-1753, and 1 Newberg, On Class Actions, §§ 1004-1008, 1216.

The plaintiff contends that GCR 1963, 208.1(3) permits her to sue the defendant on behalf of the other BankAmericard holders. It provides:

"If persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly insure the adequate representation of all may on behalf of all sue or be sued when the character of the right sought to be enforced for or against the class is

* * *

"(3) several, and there is a common question of law or fact affecting the several rights and a common relief is sought.”

This section of the rule sets forth seven separate requirements which must be satisfied in order for an action to proceed on a representative basis. In essence, the requirements are:

1. There must be an identifiable class;

2. The number of persons in the class must be so large that it would be impracticable to bring them all before the court;

3. The person or persons seeking to represent the class must be members thereof;

4. The interests of the class must be adequately represented;

5. The right or rights sought to be enforced must be several;

6. There must be a common question of law or fact affecting the several rights, and

7. A common relief must be sought.

See generally 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), Ch 20, pp 601-602.

A. Identifiable Class

The first clause of GCR 1963, 208.1(3) gives rise to the requirement that the group of persons whom the plaintiff seeks to represent must be identifiable. If the membership of the group is so amorphous that it cannot be definitely ascertained, then there is no "class” and the case cannot proceed on a representative basis.

It is not necessary that each member of the group be named in the complaint. It is sufficient if the members can ultimately be identified. As stated by Honigman & Hawkins, supra, p 602:

"The members of the class need not be specifically named, but they must be described adequately according to their common interests, in order to show that there really are other persons similarly situated and to permit identification of qualifying members of the class when the judgment is invoked for or against them.”

The fact that the membership of the group may change during the course of the litigation does not render the group unidentifiablé.⁷ If the members of the group can be identified at the time of judgment, the requirement that the group be identifiable is satisfied.

Whether a sufficiently identifiable group exists is a question of fact which must be decided on a case by case basis.

In the case at bar the plaintiff’s complaint described the group that she seeks to represent as "all other customers of Michigan National Bank who have incurred interest charges pursuant to their use of [the bank’s] credit cards * * * within the two years-prior to the institution of this lawsuit”.

This group is sufficiently identifiable, although with great difficulty as to individuals. The defendant possesses account records for each of its credit card customers, if only in microfilm form. These records are said to contain the information necessary to identify the members of the group, excepting perhaps 10% on which names and last known addresses are not available for miscellaneous reasons.

B. Number of Persons

In excess of 750,000 persons were holders of the defendant’s credit cards at one time or another during the time period framed by the plaintiffs complaint. These persons are potential members of the group that the plaintiff seeks to represent. The defendant has estimated that approximately one-third of these persons never incurred finance charges in connection with their use of the defendant’s credit cards because they always paid their bills in full within the allowable 25 days of their billing date. If this estimate is correct, approximately 500,000 cardholders did incur some finance charges. Although it is not clear at this point in the litigation (for reasons that will be delineated below) precisely how many of these 500,000 cardholders might ultimately be included in the class, the number could be sufficiently large to satisfy this requirement. Whether a class action would promote the convenient administration of justice remains to be ascertained.

C. Membership in Class

The rule states that "such of them [referring to the 'persons constituting a class’], one or more, * * * may * * * sue” on behalf of all. This language requires that a person seeking to represent the class must be a member thereof.⁸

The plaintiff became a holder of one of the defendant’s credit cards in 1967 and continued to be a holder through June of 1971 when this action was commenced. Allegedly she incurred finance charges pursuant to each of the billing practices claimed to be illegal and so is a member of the class.

D. Adequate Representation

The requirement that the class must be adequately represented is an attempt to insure that the rights of the absent class members will be protected.⁹ The court’s role in assessing the adequacy of the representation will vary from case to case depending upon the extent to which the rights of the absent class members will be affected if the case is allowed to proceed on a representative basis. If, for example, the final judgment would bind all members of the class or bind all members who do not affirmatively indicate that they wish to be excluded from the class (commonly referred to as "opting out”), then the court would have to focus discrete attention upon the adequacy of notice and of representation. If, on the other hand, the judgment will bind only those members of the class who decide and affirmatively indicate that they wish to be included in the class and to be represented by the class representative and the chosen attorneys (commonly referred to as "opting in”), then there is less reason for such finely drawn surrogate protection by the court as Federal cases mandate. Those not affirmatively "opting in” are not bound by any judgment.

Michigan’s first court rule governing representative actions, Court Rule No 16 (1945) was adopted in 1945.¹⁰ Previously, a judgment in the limited types of representative actions permitted by Michigan case law (common rights were required) was binding on all members of the class.¹¹

Rule 16 broadened the range of cases in which Michigan courts could entertain class actions.¹² However, neither Rule 16 nor the original version of FR Civ P 23 spelled out what the binding effect of a judgment would be in a representative action in which the rights involved were not common but several and distinct in nature, the only connection between the class members being a common question of law or fact. The drafters of the Federal rule believed that the binding effect of judgments was a matter of substantive law beyond the scope of their undertaking and therefore did not include this subject in the body of their rule. See 3B Moore’s Federal Practice, Appendix to Chapter 23, ¶ 23.11[1], p 23-2801.

Although the rules themselves were silent on the subject of binding effect, it was clear to the principal drafter of the Federal rule, Professor James Moore, that the judgment in a several rights/common question class action only bound those members of the class who chose to opt in.¹³ As such, the common question "class action” was not really a class action at all, in the traditional sense. It was instead a liberal permissive joinder device — an invitation to other similarly situated individuals to join an action and be represented by the class representative.¹⁴ Although many commentators and a few courts challenged this interpretation, it soon became the general rule.¹⁵ This anomaly — a so-called class action that did not necessarily bind all members of the class — came to be known as a "spurious” class action.

Honigman & Hawkins, supra, 605-606, says this about the binding effect of the judgment in a spurious class action:

"The standard formulation is that * * * the judgment in a 'spurious’ class action (sub-rule 208.1[3]) is binding only upon the persons actually named and served as parties. Barron & Holtzoff, Federal Practice and Procedure, § 572.

"According to this formulation, * * * a spurious class action is nothing more than a permissive joinder device or 'an action inviting joinder’. Ibid. Blume, American Civil Procedure, 1955, pp 357-358. Many commentators have urged that it should make no difference which type of class action is involved, so long as the requirements of the rule are met and adequate representation has been assured. According to this view, the judgment in all class actions would be binding, in personam, upon all the members of the class. Barron & Holtzoff, Federal Practice and Procedure, § 572. It is doubtful that this view could prevail as to * * * spurious class actions unless the members of the class had at least received notice of the action, if not formal service of process. * * *

"Implicit support may be found for this conclusion in sub-rule 208.5, which provides that a true class action can be dismissed or compromised only after notice has been given to all members of the class, whereas such notice is optional as a condition precedent to dismissal or compromise of a * * * spurious class action. The apparent reason for this distinction is an assumption that the disposition of the true class action would be binding upon the absentee members of the class, so that they are entitled to notice, whereas the final disposition in a * * * spurious class action will not be binding, in personam, so that notice is discretionary.”

In Paley v Coca Cola Co, 389 Mich 583; 209 NW2d 232 (1973), the opinion written by Justice Swainson and joined by Justice Brennan and this writer echoed the "standard formulation”:

"The type of class action involved in this case, the so-called spurious action (see GCR 1963, 208.1[3]) is actually a form of permissive joinder of parties.” Id., 607.

The other opinion, written by Justice Williams and joined by Chief Justice T. M. Kavanagh and Justice T. G. Kavanagh, did not discuss this subject, but it is clear that Justices Williams and T. G. Kavanagh would have agreed that the spurious action is a permissive joinder device. In Northview Construction Co v St Clair Shores, 395 Mich 497; 236 NW2d 396 (1975), the per curiam opinion signed by those two justices and by Justice Levin stated:

"An action commenced under the authority of GCR 1963, 208.1(3) is commonly known as a 'spurious’ class action. When the number of parties holding similar claims against a defendant is so large that it would be impracticable to bring each claim individually before the court, GCR 1963, 208.1(3) functions as a permissive joinder device. Paley v Coca Cola Co, 389 Mich 583, 607; 209 NW2d 232 (1973) (Opinion of Swainson, J.). It allows at least one named plaintiif to represent the class before the court and to litigate the issues common to the claims against the defendant.” Id., 508.

Although on rehearing, the dissent in Northview became the controlling opinion, 399 Mich 184; 249 NW2d 290 (1976), there was no disagreement with the conclusion that the spurious class action was "a form of permissive joinder of parties”. Paley, supra, 607.

On the basis of the foregoing, we conclude that the judgment in a spurious class action binds only those similarly situated individuals who affirmatively indicate to the court their desire to be included in the class (to "opt in”). This insures maximum protection of the rights of the absent class members in the cases where they need it most — cases in which the rights involved are not common but several and distinct in nature and in which the only connection between the members is a common question of law or fact.

As noted in part III C, above, the plaintiff purports to be a member of the class which she seeks to represent with respect to all three of the claims contained in her complaint. The case has been pursued through the circuit court, the Court of Appeals, this Court, the United States Supreme Court, back to the circuit court, back to the Court of Appeals and finally back to this Court. In addition, when offered the opportunity of either having her individual case transferred to district court or having it dismissed altogether along with the rest of the class, she elected dismissal, thereby enabling her to challenge the circuit court’s ruling that the case could not proceed on a representative basis.

The Court of Appeals recognized that there is little question as to whether this plaintiff "will vigorously pursue the rights of the class through qualified counsel”.¹⁶ As that Court stated: "Defendant does not challenge the adequacy of plaintiff’s counsel nor the plaintiff’s spirit”.¹⁷ Nevertheless, the Court of Appeals ruled that the plaintiff had not satisfied the requirement of adequate representation because: (1) she was not willing to pay the cost of sending personal first-class mail notice to each of the other BankAmericard holders, and (2) because she was employed as a secretary for some of the attorneys handling her case. (The attorneys also represented her husband in a similar class action regarding finance charges on delinquent revolving accounts with Robinson Furniture Company and represented her brother-in-law in two other credit card actions. The attorneys filed a total of seven such suits in Wayne County around the same time.)

1. Notice

The Court of Appeals panel believed that the plaintiffs willingness to pay for notice was relevant to the requirement of adequate representation because they concluded that the Due Process Clause of the Federal Constitution and a recent United States Supreme Court decision interpreting the amended version of FR Civ P 23 required the plaintiff to issue and pay for individual first-class mail notice before the case could proceed on a representative basis. The Court of Appeals based this conclusion on three Federal cases: Mullane v Central Hanover Bank & Trust Co, 339 US 306; 70 S Ct 652; 94 L Ed 865 (1950), Schroeder v New York, 371 US 208; 83 S Ct 279; 9 L Ed 2d 255 (1962) and Eisen v Carlisle & Jacquelin, 417 US 156; 94 S Ct 2140; 40 L Ed 2d 732 (1974).

In Mullane, a state court decree entered pursuant to a state accounting statute terminated all the rights of certain beneficiaries against the trustee of a trust fund. The United States Supreme Court indicated its understanding of the binding effect of the decree as follows:

"The effect of this decree, as held below, is to settle 'all questions respecting the management of the common fund.’ We understand that every right which beneficiaries would otherwise have against the trust company, either as trustee of the common fund or as trustee of any individual trust, for improper management of the common trust fund during the period covered by the accounting is sealed and wholly terminated by the decree.” Id., 311.

On these facts, the Court held that notice by publication to the beneficiaries was insufficient to satisfy the requirements of the Due Process Clause. The Court said:

"An elementary and fundamental requirement of due process in any proceeding which is to be accorded ñnality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.

* * *

"Exceptions in the name of necessity do not sweep away the rule that within the limits of practicability notice must be such as is reasonably calculated to reach interested parties. Where the names and postoffice addresses of those affected by a proceeding are at hand, the reasons disappear for resort to means less likely than the mails to apprise them of its pendency.” (Emphasis added.) Id., 314-318.

In Schroeder, an individual plaintiff had been deprived of certain water rights by the defendant pursuant to administrative proceedings without having been personally notified by mail of the pendency of the proceedings. The United States Supreme Court again held that notice by publication was insufficient:

"The general rule that emerges from the Mullane case is that notice by publication is not enough with respect to a person whose name and address are known or very easily ascertainable and whose legally protected interests are directly affected by the proceedings in question. ” (Emphasis added.) Schroeder, supra, 212-213.

The Court did not discuss class actions at all.

In Eisen, the plaintiff attempted to maintain a class action pursuant to the amended version of FR Civ P 23. The amended version differs substantially from its predecessor (and GCR 208) in that it specifically states that the judgment in all types of class actions is binding on all members of the class who do not request exclusion and that notice "shall” be given to all class members.¹⁸ This was one of the most important changes made in the Federal rule. The majority in Eisen said this about notice:

"Rule 23(c)(2) provides that, in any class action maintained under subdivision (b)(3), each class member shall be advised that he has the right to exclude himself from the action on request or to enter an appearance through counsel, and further that the judgment, whether favorable or not, will bind all class members not requesting exclusion. To this end, the court is required to direct to class members 'the best notice practicable under the circumstances, including individual notice to all members who can be identiñed through reasonable effort. ’ We think the import of this language is unmistakable. Individual notice must be sent to all class members whose names and addresses may be ascertained through reasonable effort.

"As the Advisory Committee's Note explained, the Rule was intended to insure that the judgment, whether favorable or not, would bind all class members who did not request exclusion from the suit. 28 USC App, pp 7765-7768. Accordingly, each class member who can be identiñed through reasonable effort must be notified that he may request exclusion from the action and thereby preserve his opportunity to press his claim separately or that he may remain in the class and perhaps participate in the management of the action.” (Footnotes omitted. Emphasis added.) Eisen, supra, 173-176.

These three cases stand for the proposition that when a judgment will bind a given individual (when those not opting out are included in the judgment), the best notice practicable under the circumstances is required, including personal service by mail if the individual’s name and address are known or are easily ascertainable. They cannot fairly be read to hold that the Due Process Clause of the Federal Constitution or the original version of FR Civ P 23 and analogous state rules require that notice must also be sent to persons not affected by the judgment. All three cases involved binding judgments and none of them involved an application of the original version of FR Civ P 23 upon which GCR 208 is patterned.

Mullane, Schroeder and Eisen are, therefore, inapposite and not precedent for Michigan procedural requirements in which only those opting in are bound by the court’s judgment.

The words used in GCR 208 clearly indicate that in Michigan notice is not mandatory in spurious class actions. GCR 208.4 states:

"The court * * * may order that notice be given, in such manner as it may direct * * * .” (Emphasis added.)

GCR 208.5 states:

"A class action shall not be dismissed or compromised without the approval of the court. If the right sought to be enforced is one defined in sub-rule 208.1(1) [true class action], notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs. If the right is one defined in paragraph * * * (3) of sub-rule 208.1 [spurious class action], notice shall be given only if the court requires it. ” (Emphasis added.)

This language stands in sharp contrast to the amended version of FR Civ P 23, which states:

"[T]he court shall direct to the members of the class the best notice practicable under the circumstances * * * ”. (Emphasis added.)

On the basis of the foregoing, the Court of Appeals incorrectly concluded that notice to the absent class members in accordance with Eisen, supra, is required as a prerequisite to the maintenance of a spurious class action in Michigan. There has been no specific judicial determination of a "manner” of notice in this case, although the trial court seems to have believed itself bound by the Federal court rule and resultant Federal case law.

The court was correct, however, in determining that costs of any notice must be borne by the plaintiff.

2. Propriety of Class Representative

The Court of Appeals panel also ruled that the plaintiff was not an adequate representative of the class because her státus as a secretary for some of the attorneys handling her case gave rise to an "appearance of solicitation and conflict of interest”. 72 Mich App 358, 373. Neither the circuit court nor the Court of Appeals specifically found that there had been any solicitation or that any actual conflict of interest existed.

The Court of Appeals was correct in assuming that the relationship between a class representative and the attorney or attorneys handling the case can be a relevant consideration in assessing the requirement of adequate representation. If that relationship would impair the representation of the absent class members, it can be the basis for a ruling that the requirement of adequate representation has not been met.

The plaintiff began working as a legal secretary in 1956 for the law firm handling her present case. She is now retired. During her deposition she was repeatedly asked whether she or her attorneys initiated the idea of suing the defendant individually or on a representative basis, and repeatedly she answered that it was she who approached her attorneys and not vice versa. She also stated in response to the defendant’s questions that she had never been offered any bonus, percentage of recovery or any other monetary consideration for bringing this lawsuit.

The Court of Appeals panel placed reliance on the fact that the attorneys handling the plaintiff’s case were also handling other class actions involving other plaintiffs and defendants in which credit card operations were being challenged and the plaintiff was aware of this fact before she approached her attorneys.¹⁹ The panel seemed particularly concerned with the fact that a case very similar to the plaintiff’s case was filed by her attorneys at the same time her case was filed. The panel said:

"We agree with counsel for the defendant that it is highly unusual that two separate banks were violating the interest laws in the same manner and that both plaintiffs would take their complaint to the same lawyer.” Id., 372.

These facts would justify a searching examination of the relationship between the plaintiff and her attorneys and if such examination revealed that this relationship would interfere with her representation of the class, the class portion of the suit could be dismissed. In addition to the option of dismissal, on remand the trial court may wish to consider GCR 208.4, which states, inter alia:

"The court at any stage of an action under sub-rules 208.1 or 208.2 may require such security and impose such terms as shall fairly and adequately protect the interests of the class or association in whose behalf the action is brought * * * ”. (Emphasis added.)

The Committee Notes to this section indicate that it was designed to empower trial judges to deal with "suspicious” or "vexatious” class actions. See Honigman & Hawkins, supra, 601.

E. Nature of Rights

The requirement that the right or rights sought to be enforced must be several in nature has not been contested in this case. Each of the potential members of the class may have a separate and distinct cause of action against the defendant. There is no common fund or obligation involved.²⁰

F. Common Questions

In order for a case to proceed on a representative basis under GCR 208.1(3), there must be "a common question of law or fact affecting the several rights” of the class members. The plaintiff contends that the following questions of law are common to the class, there being no common question of fact alleged:

1. Whether it was lawful for the defendant to charge interest on its credit card accounts at the rate of 1.5 percent per month prior to the effective date of MCL 487.491; MSA 23.710(191);

2. Whether Michigan law permitted the defendant to charge a daily rate of interest that resulted in a cyclical rate of 1.5283 percent in the 31rday billing cycles, under 1.5 percent in other cycles and less than the 18 percent permitted annually;

3. Whether Michigan law permitted the defendant to add unpaid finance charges into the principal amount due and thereafter impose a finance charge on the whole sum, although applying any payment first to the unpaid finance charges.

These questions are common to the members of the class defined by the plaintiff’s complaint. The answers to them will affect the members’ individual (several) rights of recovery in the same manner — either the members will be entitled to seek recovery subject to any defenses defendant might have, or they will not be — and they can all be answered without reference to the member’s individual account records or to any other individual differences between the class members. See, generally, 3B Moore’s Federal Practice, ¶ 23.10[5], pp 23-2701 et seq. and 7 Wright & Miller, supra, § 1763.

Although the answers to these questions alone will not be sufficient to settle the entire controversy, there is no requirement in the rule that all questions necessary for ultimate resolution be common to the members of the class — there need only be "a common question of law or fact” to satisfy this portion of the rule. However, such matters as diversity of defenses, counterclaims, etc. may bear upon determination of whether this class action would promote the convenient administration of justice.

G. Common Relief

The plaintiff has requested the same relief for herself and for all of the other members of the class — the statutory damages prescribed by 12 USC 85, 86. Although each account may be based upon different cycles, dates of entry, sums to be computed, etc., double the finance charges imposed is the relief sought for all qualifying class members during the two-year period in question.²¹

IV. Convenient Administration of Justice

This Court has recognized that there is one further requirement that must be met in order for a case to proceed on a representative basis. Most often this requirement has been referred to under the rubric of "the convenient administration of justice”. Essentially the requirement is an outgrowth of the equitable heritage of class actions and the realization that there are practical limitations on the judiciary’s capability to resolve disputes.

A. Michigan Cases

The "convenient administration of justice” requirement was first applied by the Court in Young v Thendara, Inc, 328 Mich 42; 43 NW2d 58 (1950). The plaintiffs were attempting to sue the defendant on behalf of themselves and all other lot owners in a subdivision. The purpose of the suit was to establish the lot owners’ rights to use certain easements. The merits of each lot owner’s right to use the easements depended upon the terms of the lot owner’s deed and his or her source of title. This Court said:

"The diversity of sources from which titles to lots have been acquired by all other possible lot owners, the doubt as to the title of their grantors at the time their respective rights accrued, shows the impracticability of considering all owners of lots in the subdivision as a class for the purpose of decreeing their individual rights, in the case at bar.” Id., 48.

In Bajorek v Kurtz, 335 Mich 58; 55 NW2d 727 (1952), the plaintiffs were residential home owners in a certain section of Detroit. The defendant was a manufacturer of cement and related concrete products. The plaintiffs wanted to sue the defendant in one action and recover individual damages caused to their respective homes by the defendant’s operations. They argued that MCL 608.1; MSA 27.591 permitted them all to join in a single action. That statute permitted joinder when "sufficient grounds * * * appear for uniting the causes of action in order to promote the convenient administration of justice”. This Court ruled that the plaintiffs could not join together in one action:

"No claim is here made that the causes of action asserted by plaintiffs are joint. Rather, it is argued that to permit such joinder would 'promote the convenient administration of justice’. It will be noted that under the specific language of the statute 'sufficient grounds’ must appear in order to warrant the joinder of causes of action for the reason here urged. We think it must be said that grounds of such character are not present in the case at bar. We have a situation presented in which a number of persons assert that they have been injured severally in their property rights because of improper and unlawful acts on the part of defendants. It cannot be said with certainty that the same issues will be presented in all of the 25 cases alleged in the declaration and covered by the bill of particulars. Proofs may show damage in some cases but not in others, and defenses may exist against the rights of certain plaintiffs that are not available against other plaintiffs.” Id., 64.

Although Bajorek was based on a statute, this Court subsequently quoted from and referred to Bajorek in a case involving a class action under Rule 16 and ruled that in such a case "the same rule of law would apply”. Palmer Park Theater Co v Highland Park, 362 Mich 326, 344; 106 NW2d 845 (1961).

In Hardware Dealers Mutual Insurance Co v R H Hidey, Inc, 349 Mich 490; 84 NW2d 795 (1957), the Court shed some light on the meaning of the phrase "convenient administration of justice”:

"It must be capable of being said that the doing of justice as between the parties will be in some way favorably affected if the action in question is permitted.

"The language of the statute may not be construed as contemplating merely the expediting of the work of the court.” Id., 514.

The Court went on to deny joinder in part because "it does not appear that any one of these plaintiffs would have been prejudiced had it, or he, brought a separate suit for the recovery of damages claimed”. Id., 514. The Court added:

"We are concerned here with causes of action resulting, as it is claimed, from the invasion of property rights of a number of parties. It may not be said that the same questions will arise in each case. The averments of the declaration indicate that the conduct of the contractor claimed to have been wrongful in character extended over a period of 4 months. We may not assume that all of the abutting properties involved were injured simultaneously by defendant’s improper methods of operating. In some instances the question may arise whether the property claimed to have been damaged was actually abutting property within the meaning of the contractual obligations involved. Under the situation presented the statute does not permit joining the causes of action claimed to have arisen because of the contractor’s wrongful operations in the performance of its contract.” Id., 515.

In Freeman v State-Wide Carpet Distributors, Inc, 365 Mich 313; 112 NW2d 439 (1961), several hundred plaintiffs were attempting to sue the defendants for damages and other relief based on theories of fraudulent misrepresentation. The plaintiffs contended that either MCL 608.1; MSA 27.591 or Rule 16 permitted them to join together in one action. This Court rejected both of these contentions and again denied joinder:

"There is no claim here that plaintiffs assert a joint cause of action. It is claimed that the statute permits joinder of multiple causes of action even if not joint where the 'convenient administration of justice’ would thereby be promoted. A similar claim was made in the recent case of Hardware Dealers Mutual Insurance Co v RH Hidey, Inc, 349 Mich 490, 507, 516, in which separate causes of action asserted by a number of plaintiffs were included in 1 suit. A majority of this Court held that the convenient administration of justice would not be served by permitting joinder in the circumstances disclosed by that record. Both opinions for affirmance relied upon the fact that different questions of law and fact would be involved in the various claims or in defense thereto. Significantly, the dissenting opinion similarly acknowledged (p 506) that 'a complete or substantial disparity of issues of either law or fact and a complete or substantial disparity of defenses available against proposed joint plaintiffs would indeed affect the decision as to whether or not joinder promoted the convenient administration of justice’.

"In the case at bar the bill of complaint embraces separate causes of action arising out of several hundred transactions apparently occurring over a period of many months and perhaps several years. Presumably some of the misrepresentations alleged therein were made to some plaintiffs and not to others and some plaintiffs reasonably may have relied on them and others may not. It is evident that the circumstances of the execution of the purchase contracts and the promissory notes varied considerably so that some plaintiffs may have grounds for rescission not available to others. In short, the very substantial disparity of issues of law and facts between the multiple plaintiffs’ claims would render any judicial proceeding in which all were sought to by adjudicated simultaneously, incomprehensible to the litigants, their counsel and the chancellor as well.

"The same disparity of issues compels our ruling that this cannot be considered a class action under Court Rule No 16 (1945).

"The rule requires that, where the right sought to be enforced in a class action is not joint or common, or secondary, but there are involved instead several rights (as there are here), the object of the action must be adjudication of claims affecting specific property or there must be 'a common question of law or fact affecting the several rights and a common relief must be sought. Plaintiffs suggest that there is a common question of law relating to defendant bank’s status as a holder in due course and that a common question of fact exists because some or all of the plaintiffs relied upon certain television advertising used by the defendants and defendants otherwise followed a uniform pattern of conduct in their dealings with plaintiffs. Although the bank’s status as a holder of various promissory notes may be involved in each of the plaintiffs’ claims and although each plaintiff was subjected to the same advertising or other uniform pattern of conduct, the defendants’ liability to each plaintiff will depend upon speciñc facts which, by the nature of these transactions, cannot be common to all plaintiffs or to any substantial number of them.” (Emphasis added.) Id., 319-321.

The principle which emerges from these cases is that when a court is faced with the question of whether a particular lawsuit can proceed on a representative basis, it must take into account the practical problems that will arise if the case is allowed to proceed on a representative basis.

B. Case at Bar

Two major practical problems will arise if this case is allowed to proceed on a representative basis and the plaintiff ultimately prevails on the merits. The first problem involves the identification of the BankAmericard holders who are actually entitled to some recovery. The second involves the computation of exactly how much money, if any, each and every such cardholder would be entitled to receive, including the computation of alleged counterclaims on approximately 20,000 accounts.

As noted earlier, over 750,000 persons were holders of the defendant’s credit cards at one time or another during the time period framed by the plaintiff’s complaint. Not all of these persons would be entitled to recover damages from the defendant. According to the defendant, approximately one-third, or roughly 250,000, of these persons never incurred interest charges. These persons would not be entitled to relief. In addition, corporations and other business entities that acquired credit cards for their employees would not be entitled to recovery. See MCL 450.78; MSA 21.78 (repealed by 1972 PA 284, now MCL 450.1275; MSA 21.200[275]) and MCL 438.61; MSA 19.15(71). Also, it appears that the persons whose credit card accounts were purchased by the defendant from retail stores (estimated at over 165,-000) would also not be entitled to recovery, at least with respect to interest charges incurred before the accounts were purchased.

The defendant contends that it or the circuit court would have to examine each of the 750,000 BankAmericard accounts to determine which cardholders would be entitled to recover and that this process would be extremely burdensome and exacerbated by the unsatisfactory nature of the account records. According to the defendant, the records of that time are on microfilm and must be examined manually. They are not amenable to the use of computers or other modern data processing systems. There also is the probability that proofs in addition to the records would be required. The defendant estimates that this identification process would take many years (4,955 man-years) of labor to complete.

Assuming that the accounts must be reviewed manually and that other proofs would be required, it is still not a necessary conclusion that this process would be extremely burdensome. The only accounts that would have to be examined are the accounts of those persons who chose to opt in. The persons who did not affirmatively join would not be involved in the case. If only a small number of cardholders should opt in, the burden would be much less than that described by the defendant. There might not even be enough to constitute a viable class in light of problems in pursuing the case on a representative basis. This would be a decision for the trial judge. At this point in the case, we have no way of knowing how many cardholders might opt in if given the opportunity. We cannot say that no matter how few cardholders opt in, the practical burden of identifying the cardholders entitled to relief would be so great that the case cannot proceed on a representative basis.

The second major practical problem concerns the computation of individual damages. Because each BankAmericard holder’s account history is different with respect to purchases, payments and amount of finance charge incurred, it would be necessary to examine the accounts individually in order to determine the exact amount of damages due, if any. In addition, the defendant alleges that it would have approximately 20,000 counter-claims involving members of the plaintiff class and that other factors could reduce or preclude any recovery. The defendant again contends that it and/or the circuit court would have to examine manually each of the 750,000 accounts and compute the amount of illegal interest charged and that this would take many more years of labor to complete.

Again, the defendant is not necessarily correct. The only accounts that would have to be examined if the bank were liable would be the accounts of those persons who not only chose to opt in, but who also were identified as eligible for recovery. The burden of computing individual damages would depend upon how many cardholders opted in and how many of those, if any, would be found eligible. At this point there is no way of our knowing how great this burden might be. We also do not know if there would be defenses or counterclaims against any of the persons who might choose to opt in.

Concern has been expressed over the possibility that this lawsuit was instituted and prosecuted as a class action more for the purpose of generating large legal fees for the plaintiff’s attorneys than for the purpose of vindicating the rights of the other class members. This may be true, but there are other ways to prevent abuse of the class action device that do not involve precluding all of the class members, some of whom may legitimately wish to sue, from proceeding on a representative basis. First, depending upon the number of legitimate class members who opt in, the court may dismiss the class portion of the suit. Second, the court is not bound by any fee agreement entered into between the representative plaintiff and her attorneys, excepting as to her personal contingent fee contract. See Bond v Ann Arbor School District, 383 Mich 693, 705; 178 NW2d 484 (1970), where this Court remanded a class action to circuit court for entry of judgment and an award of attorney fees "as shall be set forth in [an] itemized statement * * * and approved by the circuit judge” (emphasis added). The plaintiff in the case at bar has only requested an award of "reasonable” attorney fees. Reasonableness of the fees would depend primarily upon the amount of time the attorneys spent on the case and upon the nature and extent of the benefit conferred upon the intervening class members. Such a fee, plus costs, would be payable from the proceeds of the judgment prior to computation for distribution.

V. Conclusion

On the basis of the foregoing, we conclude that the practical burdens involved in allowing this case to proceed on a representative basis may preclude the plaintiff from suing on a representative basis, but these judgments cannot be intelligently made on the basis of the existing record.

The primary insufficiencies have arisen from a partial, but fatal, reliance upon the amended version of FR Civ P 23 and those Federal cases based upon the necessity of affording due process for absent class members who would be bound by a court’s judgment if they did not affirmatively exclude themselves (opt out) from the litigation. Personal service when possible or "the best notice practicable under the circumstances” is required under that rule.

Because this claim does not qualify for Federal jurisdiction, it is brought in a Michigan court and is subject to state law and rules of procedure applicable to spurious class actions. Under Michigan law and procedure, persons who do not affirmatively join (opt in) the litigation are not bound. They are not represented in or touched by the suit, so their due process rights are not affected.

We therefore reverse the Court of Appeals and remand the case to the circuit court with the following instructions:

1. The plaintiff, at her expense, may issue such notice as she wishes or as the court directs;²²

2. The court shall set a reasonable time period within which class members must opt in in order to be included in the case;

3. After the time period set by the court has expired and after such briefing and argument as is deemed necessary by the court, the court shall rule on the question of whether allowing the case to proceed on a representative basis will promote the convenient administration of justice, in light of the principles discussed in this Court’s opinion and whether plaintiff is an adequate representative of the class..

This Court retains no jurisdiction.

Kavanagh, Williams, Ryan, and Blair Moody, Jr., JJ., concurred with Coleman, C.J. Fitzgerald, J., took no part in the decision of this case.

Addendum

The dissent asserts that "the view ultimately accepted by most courts” was that intervention could occur after a judgment on the merits. The official committee notes to the 1966 revision of FR Civ P 23, written by those intimately involved with the rules, offers a somewhat different picture:

"Hitherto, in a few actions conducted as 'spurious’ class actions and thus nominally designed to extend only to parties and others intervening before the determination of liability, courts have held or intimated that class members might be permitted to intervene after a decision on the merits favorable to their interests, in order to secure the benefits of the decision for themselves, although they would presumably be unaffected by an unfavorable decision.”¹ (Emphasis added.)

Professor Moore, the principal drafter of old FR Civ P 23, offers a similar assessment:

"Some courts * * * subscribed to the view that members of the class would be permitted to intervene after an adjudication on the merits favorable to their interests, in order to secure the benefits of the decision for themselves, although they would not be affected by an unfavorable decision.”² (Emphasis changed; footnotes omitted.)

Professor Moore’s analysis of this theory of one-way intervention is illuminating:

”It is submitted that this theory was erroneous. If the decision was not res judicata for or against those not parties, it should have run only to the benefit of those who had intervened before a trial on the merits. Otherwise other members of the class might have remained on the sidelines while the parties litigated the issues, with no risk of being bound by an unfavorable decision, and then have come in to take advantage of a favorable ruling.”³ (Emphasis added; footnotes omitted.)

Footnote 1 of the dissent quotes from the majority opinion. The quotation omits a pertinent footnote from the majority opinion (footnote 7). The cases cited in that missing footnote explain the situation of a changing class, especially where the changes are caused by the death of an original class member and the devolution of that member’s interests to others.

1 "Any association may take, receive, reserve, and charge on loan or discount made, or upon any notes, bills of exchange, or other evidences of debt, interest at the rate allowed by the laws of the State, Territory, or District where the bank is located, * * * .”

2 "The taking, receiving, reserving, or charging a rate of interest greater than is allowed by the preceding section, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the association taking or receiving the same: Provided, That such action is commenced within two years from the time the usurious transaction occurred.”

3 "Banks may collect interest and charges on loans as follows:

"(a) On any loan made pursuant to an existing credit card arrangement or other agreement existing prior to such loan whereby the bank honors the borrower’s draft, pays or agrees to pay the borrower’s obligations, purchases the borrower’s obligation, or advances money to or for the account of the borrower, and in which the loan finance charges are not precomputed but are computed from time to time on the basis of the unpaid balances, interest, and charges in a combined amount of not to exceed 1.5% of the unpaid balance per month.”

4 "A retail charge agreement may provide for, and the seller or holder may then, notwithstanding the provisions of any other law, charge, collect and receive, a time price differential for the privilege of paying in installments thereunder, in an amount not exceeding 1.7% of the unpaid balance per month. The time price differential under this subsection shall be computed on all amounts unpaid thereunder from month to month, which need not be calendar months, or other regular periods; * * * .”

5 "The interest of money shall be at the rate of $5.00 upon $100.00 for a year, and at the same rate for a greater or less sum, and for a longer or shorter time, except that in all cases it shall be lawful for the parties to stipulate in writing for the payment of any rate of interest, not exceeding 7% per annum. This act shall not apply to the rate of interest on any note, bond or other evidence of indebtedness issued by any corporation, association or person, the issue and rate of interest of which have been expressly authorized by the public service commission or the securities bureau of the department of commerce, or is regulated by any other law of this state, or of the United States, nor shall it apply to any time price differential which may be charged upon sales of goods or services on credit.” (Emphasis added.)

6 GCR 1963, 208 is patterned after the original version of FR Civ P 23 promulgated in 1938 and has not been amended to reflect the sweeping changes made in the Federal rule in 1966.

7 See American State Savings Bank, Trustee, v American State Savings Bank, 288 Mich 78, 85-86; 284 NW 652 (1939), and Detroit v Detroit United Railway, 226 Mich 354, 369-370; 197 NW 697 (1924).

8 See Dipboye v Acchione, 351 Mich 550, 554; 88 NW2d 611 (1958).

9 See Dipboye v Acchione, supra; American State Savings Bank, Trustee, v American State Savings Bank, supra; Detroit v Detroit United Railway, supra; and GCR 1963, 208.4.

10 Court Rule No 16 (1945), like GCR 1963, 208, was patterned after the original version of FR Civ P 23.

11 See, for example, International Typographical Union v Macomb County, 306 Mich 562; 11 NW2d 242 (1943). The common nature of the rights involved in such cases virtually guaranteed adequate representation and justified a broad binding effect. As the Court in the case above said in the course of holding that a previous class suit bound all members of the class:

"We quote from what we said in our opinion in American State Savings Bank, Trustee, v American State Savings Bank, 288 Mich 78, because we feel that what we said is applicable here:

"There was no issue that could be raised by petitioner in such circumstances that would not affect all other depositors or holders of certificates in the same way. One certificate holder could not have greater rights as to his claim than another, and what would have been a defense or answer to the bill for one would have been the same for another. Their rights and defenses were identical. Petitioner was a member of the class represented by the named defendants.’ ” Id., 576.

See, also, Saginaw v Consumers Power Co, 304 Mich 491; 8 NW2d 149 (1943).

12 See Dipboye v Acchione, supra, 554 and Honigman & Hawkins, supra, 605.

13 See 3B Moore’s Federal Practice, ¶ 23.11[3], pp 23-2851, et seq. See, also, Moore, Federal Rules of Civil Procedure: Some Problems Raised by the Preliminary Draft, 25 Georgetown L J 551, 571 (1937).

14 See 3B Moore’s Federal Practice, supra, ¶ 23.10[3], pp 23-2601, et seq.

15 See 7 Wright & Miller, supra, § 1752, p 525, 7A Wright & Miller, § 1789; Advisory Committee Notes to Amended FR Civ P 23, reported at 39 FRD 69, 98, 99 (1966); 1 Newberg, supra, § 1216, pp 316-318; Homburger, State Class Actions and the Federal Rule, 71 Columbia L Rev 609, 627-628 (1971).

16 72 Mich App 358, 368.

17 Ibid.

18 See the amended version of FR Civ P 23, §§ c(2) and c(3), which states:

“(2) In any class action maintained under subdivision (b)(3), the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall advise each member that (A) the court will exclude him from the class if he so requests by a specified date; (B) the judgment, whether favorable or not, will include all members who do not request exclusion; and (C) any member who does not request exclusion may, if he desires, enter an appearance through his counsel.

"(3) The judgment in an action maintained as a class action under subdivision (b)(1) or (b)(2), whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action under subdivision (b)(3), whether or not favorable to the class, shall include and specify or describe those to whom the notice provided in subdivision (c)(2) was directed, and who have not requested exclusion, and whom the court finds to be members of the class.”

Also see the Advisory Committee Notes to Amended FR Civ P 23 reported at 39 FRD 69, 98-99 (1966).

19 72 Mich App 358, 371-372.

20 Compare International Typographical Union v Macomb County, supra; American State Savings Bank, Trustee, v American State Savings Bank, supra; and Detroit v Detroit United R Co, supra.

21 See, generally, 3B Moore’s Federal Practice, supra, ¶[ 23.10[6], pp 23-2721, et seq., and 7 Wright & Miller, supra, § 1752, pp 536-537.

22 See GCR 1963, 208.4.

1 3B Moore’s Federal Practice, p 23-31.

2 Id., Appendix to Chapter 23, p 23-2854.

3 Id., p 23-2917.