Brazilian CLASS ACTIONS - CURRENT STATE AND TRENDS

Publicado em 03 Dezembro 2014.

Introduction

Finding favorable environment, ideas pass on as viruses. This is the reason why this article may be of interest to foreign law students and researchers, since it exposes current ideas in Brazil about class actions, some of them already made into law, applied by courts or being in a bill of law. Some major topics were selected, so it is not a whole exposition about the subject.

1 – Public civil action and collective actions

The expression “public civil action” is generally used to mean any civil lawsuit brought by the Federal or State Public Prosecution, be it or not a class action; the expression “collective action” is used to mean a class action brought by another representative. We will refer to both as class actions.

2 –Protection of collective rights and collective protection of homogenous individual rights

 

There are individual actions and class actions. These are divided into two broad categories: those which envisage to protect diffuse rights and those which envisage to protect homogeneous individual rights.[1]

The distinction is important since, as shown by Zavascki, protection of collective rights and collective protection of individual rights must not be confused.

It is true that actions for the protection of diffuse rights as well as of individual rights can stem from the same events. One simple example is that of a hype, from which a class action requesting a prohibitory relief, as well as a class action and individual suits seeking damages in favor of those who were misled, can be brought. Another example is that of a class action to prohibit toxic exhalations, which does not block individual suit for damages or to abate the nuisance.

But it is necessary to point out that class actions related to diffuse rights are essentially different from class actions related to homogenous individual rights. The former aim the enforcement of Law, the latter the protection of individual rights.

There is no advantage in stating that the plaintiff is representing indeterminate people in a class action for the protection of the environment. So, if a lawsuit is brought to prohibit a forest burn, its goal is simply the enforcement of Law. It is neither a suit to adjudicate rights to determinate people nor to indeterminate people, but the exercise of a public task. The beneficiaries may not be the people, but the animals of the forest or the future generations.

Both the Government and the community have the duty to defend and preserve the environment for present and future generations (Brazilian Constitution, article n. 225). The institution of civil investigation and public civil suit for the protection of the environment and other diffuse and collective interests are institutional functions of the

Public Prosecution (Brazilian Constitution, art. 129, III). Therefore a class action for the protection of future generation is possible, perhaps damaging the present generation. Who is the owner of the right in a lawsuit to protect future generation? It is not the society, since the Constitution is clear: the society has the duty to preserve the environment. The personification of not yet existing beings it is not the best way to explain the issue. It is better to say that they are actions which do not envisage to protect subjective rights, but to enforce the Law.

In actions related to diffuse rights there is no representation simply because there are no representees. To explain them, it is not necessary to think of subjective rights. They are intended to enforce the Law.

There are cases in which it is possible to deny the existence of a group. This can be seen in an action filed by the Public Prosecution against São Leopoldo City to declare null and void a law authorizing the use of a green area to a residents association. [2] If there was a group, it would be at the passive side, constituted by the residents benefited by the permission, but they were not even given notice of the process.

The absence of a group was also made evident in the civil action promoted by the Public Prosecution to halt the construction of the condominium “Reserva do Lago” while a license had not been issued.

But we cannot say that there is no group in every case of diffuse rights. For example, the class action of the Public Prosecution against Maria Marques Isbarrola, upheld by the Court to limit the breeding of dogs in her house, an action really induced by her neighbors, who were interested in the limitation.

In actions related to homogeneous individual rights there is representation. The plaintiff or the defendant acts on behalf of the individual rights of the represented persons, who may be absent from the procedure and even prohibited to intervene. There is a group of determinate or indeterminate people. It is clearly a case of protection of individual rights.

The existence of homogenous individual rights is not enough to authorize a class action. The presence of factors recommending the joint protection, such as ease of access to Justice facilitation, procedural economy, equal treatment, legal security or difficulty to join multiple parties is also necessary.

As Pedro Lenza observes, the predominance of common over individual questions of law or facts and the superiority of the class action device is a prerequisite for suits concerning homogeneous individual rights.

If the sentence does not contribute to solving individual actions which need to be brought, the class action must not be accepted, for lack of interest in the collective device.

Assume a bus accident with many deaths and injuries. a class action to declare the conductor’s guilt and the transport company liability, in a system, as our own, of objective liability would not be useful. Nothing useful would come out from such sentence.

3 – STANDING

The Public Prosecution, besides authorized to bring a class action, has the power to institute a civil investigation, similar to the criminal inquiry which forgoes a criminal action. Imagined as forgoing a class action, it tends to become autonomous, ending by a compromise, not necessarily submitted to the judge.

4 – The plaintiff and the defendant

Most class actions are brought out by the Public Prosecution, possibly competing, in the future, with the Public Legal Defense .

In the last decades, the Public Prosecution grew in size and importance. It was an institution that was languishing, in the criminal area chasing the poor and, merely issuing opinions, not decisions, in the civil area. Intelligently, their members went in search of new assignments, among them, that of bringing out class actions. In some districts, where they occupied, as a favor, one room in the forum, today they occupy his their own building, with civil servants and computers. The Public Legal Defense is following the same steps. Sure, such organizations require big amounts of public money.

The initiative of the Public Prosecution regarding class actions related to diffuse rights is justified, because essentially they envisage the enforcement of Law.

But, regarding individual rights, the Constitution limits its initiative to those that are not negotiable. Nevertheless, there are numerous actions brought by the Public Prosecution, related to negotiable property rights, accepted under the allegation of their “social importance”.

Now there are also class actions being brought by the Public Legal Defense, narrowing the niches for private lawyers.

Step by step we move in this area toward a socialist system with collective solutions drawn by state offices.

Brazil has not adopted the adequate representative system. The law indicates those who can bring out a class action, namely:[3]

I – the Public Prosecution;

II – the Public Legal Defense;

III – The Union, the States, the Federal District and the municipalities;

IV – Organs of the direct and the indirect Administration;

V- The association that, concurrently:

a) has been created at least one year earlier;

b) has, among its goals, the protection of the environment, the consumer, the economic order, the free competition, or to the artistic, esthetic, historic, tourist and landscaped property.

Another feature of Brazilian Law is that, in class actions related to diffuse rights the Public Administration is usually either the defendant or co-defendant. Then, the Judiciary branch of the State replaces the Administration, therefore confirming the thesis of Chiovenda that jurisdiction means substitution. The Judiciary acts because the Administration failed to act or allegedly did not act properly. So, the members of the Public Prosecution and the judges, who are not elected, control, check and supervise the administrators elected by the people. They do it, in the name of the Constitution.

5 – Interlocutory injunctions

In Brazil, interlocutory injunctions may be issued in class actions as well in individual suits, not only to guarantee, but also to bring forward the result of the process, though pro tempore , as based on verisimilitude reasoning. Sometimes, they are granted before the service of the process and even sua sponte, which generates serious problems concerning the liability of the plaintiff, if the case is dismissed on the merits.

6 - Enforcement

One benchmark of modern individual and class actions is the preference by the specific execution, instead of the former system of converting obligations into damages.

The specific execution of obligations of doing, not doing and giving something is increasingly done by astreintes, that is, by the imposition of fines per period of failure. There is a trend to employ this method even in cases of money payments, with the substitution of levy by coercive enforcement.

Prison is not admitted as a means to enforce judicial decisions. However, some authors advocate its employment, saying that it does not violate the Constitution, which only prohibits prison for debts. This would mean the adoption in Brazil of the contempt of court American system.

The disregard of legal entity is possible in order to determine liability of pools of companies, directors, managing partners and administrators.

7 – Actions related to diffuse wrights

The class action related to diffuse rights was built focused on the environment, which was until then a matter subjected only to the Administrative branch of the government. The Judiciary began to deal with the matter, but its administrative nature remained. We can say that class actions related to diffuse rights are a subjct of courts only because fo the dialectical form of the procedure. The plaintiff, generally the Public Prosecution is not acting as a representative of anybody, but exercises a civil office. 

Sometimes the goal is to enforce a previous law, sometimes the creation of a new one.

Consider this case: The Saint Paul’s State Public Prosecution sponsored a bill to be sent to the National Congress compelling the cell phone carriers to install jamming systems in prisons. But he did not do only that. He announced the set up of a civil inquiry against four companies as well as Embratel, pressing them to install, at their own expenses, cell phone jamming systems in prisons. The civil inquiry was based on the social responsibility principle. If the requirement was not fulfilled, he would bring a class action, demanding a preliminary injunction with the imposition of daily fines. “Contracts cannot be above the public interest”, said the Public Prosecution.[4] The court agreed and ordered the National Telecomunications Agency and the cell phone carriers to block the antenna signals near the indicated prisons, within 48 hours. [5]

The Constitution says that “no one shall be obliged to do or refrain from doing something except by virtue of law” (art. 5, II). We have to add “or by virtue of a judicial decision”, what is proved by the above precedent.

Sometimes, the sentence has the nature of an administrative act.

Consider this case: A judge of the local town of Carazinho ordered the Federal Road Police to enforce the judicial authorization given to some vehicles to break through a blockade installed by rural producers, using force, if necessary. If no, said the judge, the Labor Unions that she mentioned will be liable and they will have to pay a daily fine of R$ 30,000. She explained that the order was issued as a preliminary injunction, under request of the Public Prosecution, to prevent the blockade.

 An order to unblock public roads, illegally blockaded, is within the powers of the Administration, which proves that, in terms of diffuse rights, the judge exercises an activity that, in essence, is administrative and subject to criteria of convenience and opportunity.

The essentially administrative nature of such acts explains the growing extent of their powers. The plaintiff’s request is losing its characteristics of an action, exercised all over the procedure, gaining the characteristics of a simple petition : a will that having been declared authorizes judges  to act thereafter on their own.

The fact that the administrative nature of the judicial activity exercised in these actions is not yet recognized prevents or hinders the comprehension that the decision sometimes follows criteria of convenience and opportunity. Preserving a factory and its employees or to stopping the pollution it produces? What is the best decision?

The judicialization also created a problem not well solved, from the false premise, not expressed but implicit, that the sentence must necessarily produce claim preclusion.

But how can one assign immutability to a sentence stating the safety of a product if new studies show it is highly toxic and dangerous?

The bill of law n. 5.139/2009 tries to solve the problem with a revision action which may be brought within one year from the general knowledge of a newly-found technical evidence.

It would be better solved with the recognition that the so called diffused rights are related to continuative relations subject to the “rebus sic stantibus” principle.

What we said about diffuse rights does not apply to individual homogenous rights.

Nevertheless, doctrine and legislation tend to treat equally both kinds of actions, with potential disastrous results. However appropriate and legitimate the idea of public administration of the environment and other “diffuse rights” may be, public administration of individual rights, homogenous or not, implies the very negation of such rights. We have rights as our own, even if they do not seem convenient.

8 – Actions related to individual homogenous rights

In actions related to individual homogenous rights, the Judiciary exercises its traditional mission of solving conflicts of interest among persons, though collectively and in the absence of them all. In its place, a representative, who in the Brazilian system is appointed by law. In the current system, those who are represented can only benefit by the sentence, since the class action dismissed on the merits does not prevent individual actions.

This solution has been adopted due to the fear that a rule submitting individual rights to the collective claim preclusion could be declared unconstitutional, by violation of the access to justice principle.

The draft of law n. 5.139/2009 goes further, stating that individual suits will not be admitted, when regarding questions of law resolved through a class action. Therefore, questions of fact can be discussed again in individual suits.

This proposal seems to indicate that, as in the American system, the Brazilian system will come to the res judicata pro et contra, which is the only way to equally decide questions related to mass torts.

In accordance with the present legislation, the sentence issued in suits related to individual homogenous rights contains a generic condemnation. The individual values are to be established in individual suits, as well as the enforcement. But the jurisprudence tends to admit collective enforcement when possible. The draft of law 5.139/2009 follows this pathway.

Actions related to small amounts of money involving every customer, as those of some cents in phone bills deserve special attention. In such cases what actually happens is that few or even nobody require the enforcement. Therefore the representative is entitled to collect the total to a special fund.

Then, we may say that, essentially administrative though there are individual rights, the goal is to enforce the Law.

9 – Court costs

The defendant, if defeated, must pay all costs and attorney fees to the prevailing party. On the contrary, the plaintiff does not have to pay anything in advance, and, even if defeated, he does not have to pay any costs, unless in case of bad faith litigation.

10 - Conclusion

Though certain points of the Brazilian system of class actions may be criticized, it is accurate to state that they are a powerful means to enforce the law as well as to assure individual rights.



[1] To simplify the exposition we omit the category of actions that envisage the protection of collective rights in the strict sense.

[2] TJRGS, 3ª Câmara Cível, Apelação cível 70020552246, Nelson Monteiro Pacheco, relator, j. 4/6/2009

[3] Lei 7.347/85, art. 5º

[4] Valor Econômico newspaper, São Paulo, May 17th 2006. p. A7

[5] Correio do Povo newspaper, Porto Alegre, May 18th 2006

Conselho Editorial

Dr. Carlos Alberto Molinaro
(PUCRS)
Dra. Elaine Harzheim Macedo
(PUCRS)
Dr. Humberto Dalla Bernardina Pinho (UERJ/UNESA)
Dr. Sérgio Cruz Arenhart
(UFPR)
Dr. Daniel Mitidiero
(UFRGS)
Dr. Fredie Didier Júnior
(UFBA)
Dr. Lúcio Delfino
(UNIUBE)

 Dr. Antonio Gidi

(Syracuse University College of Law - EUA)

Dr. Darci Guimarães Ribeiro
(Unisinos)
Dr. Gilberto Sturmer
(PUCRS)
Dr. Marco Felix Jobim
(PUCRS)