Posts Tagged ‘rule 23(c)(4)’

Along with my colleague, Jacqueline Matthews, I recently authored a commentary on the possible changes to the rule on issue classes, Rule 23(c)(4), Federal Rules of Civil Procedure, that were proposed recently in a report issued by the Rule 23 Subcommittee.  Our commentary was among several articles on the Subcommittee’s proposals published by the ABA Section of Litigation’s Class Actions and Derivative Suits Committee (CADS), all of which I strongly recommend.  Please visit the link below to see our article, and if you aren’t already a CADS member, you should strongly consider becoming one.



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This article is about defending against class certification based on illogical, circular arguments in support of an oversimplified “one-size-fits all” legal theory based on an amalgam of facts that don’t describe any one class member’s actual experience.  (In other words, many defense lawyers would say, it’s about what you face in all class actions.)  Most class action defense lawyers are aware of numerous procedural devices that can be used challenge–and keep challenging–class certification, from the moment the case is filed until after the verdict is rendered.  A well-versed defense lawyer can also see all the fallacies in the plaintiff’s argument and the manageability nightmare posed by the prospect of trying the would-be class claims from the vary first reading of the complaint.  Armed with this knowledge, the defense lawyer knows the science of how to challenge certification.  But there is also an art to defending class actions, and part of the art is in knowing whether to challenge class certification at each available opportunity.  Of course, because this is about the art and not the science, there is no single answer to this question, but below I have tried to sketch out some of the possible considerations in making the decision to use various different procedural devices at different phases of the litigation. 

Motion to “Strike” Class Allegations

A motion to “strike” class allegations can refer to any preemptive motion challenging the viability of the case as a class certification even before a motion for class certification is filed.  One consideration in deciding whether to file a motion to strike class allegations is the standard of review that will be applied by the court.  Depending on the jurisdiction, how the motion is raised, and the predilections of the judge, a motion to strike class allegations may be reviewed under a variety of standards ranging from the “rigorous analysis” standard applicable to class certification motions, the “well-pleaded complaint” rule applicable to FRCP 12(b)(6) motions, or the “immaterial, impertinent, or scandalous” standard applicable to a motion under FRCP 12(f).  

As a practical matter, it is important to consider whether the record is sufficiently developed to permit a decision that class treatment is inappropriate.  Although failure on a motion to strike class allegations does not foreclose the ability to challenge certification in later proceedings, filing the motion too early in the case can backfire.  An undeveloped record can help the plaintiffs because it allows them to rely on supposition or speculation about what the common facts and legal issues might be.  If the judge denies the motion to strike class allegations because the issue is not sufficiently developed, he or she may then develop a preconception that class certification is appropriate.  For that reason, it is sometimes better to keep one’s powder dry and wait until class certification except in cases where the barriers to certification are obvious from the face of the complaint itself.  A motion to strike class allegations can be useful, however, when a plaintiff drags his feet in seeking class certification.

Response to a motion for class certification 

There are not many situations in which a class action defendant will not want to object to the motion for class certification when it is filed.  However, there are few strategies short of a complete objection that might be appropriate in certain cases.  One is to consent to class treatment on limited issues.  Issue certification, although not often applied in practice, is expressly permitted under FRCP 23(c)(4) (“When appropriate, an action may be brought or maintained as a class action with respect to particular issues.”).  This strategy may be useful when there are certain common threshold legal or factual questions that, if resolved in the defendant’s favor, can end the litigation short of a full trial on the merits.  Certification of issues can allow the defendant to obtain a collateral estoppel effect of a favorable decision on those issues, as to the entire class.  FRCP 23(c)(4) can also be a useful tool to combat a common plaintiff’s strategy in which the plaintiff relies on a few legal or factual issues that are indisputably common in an attempt to justify class treatment of an entire claim that would require resolution of facts or issues that are clearly not common.

Motion to reconsider class certification

Many of the considerations in deciding to move to reconsider a class certification order are the same as in moving to reconsider any other trial court order.  However, class certification orders are inherently preliminary and subject to change.  Given the court’s on-going obligation to assess the appropriateness of certification, the court should at least theoretically give the motion more thoughtful reconsideration than it might other motions.  Arguments that go beyond a mere claim of unfairness to the defendant in having to defend against class claims, such as the argument that the certification order will lead to manageability problems, may have a greater likelihood of success than a run-of-the-mill motion to reconsider.  Other factors to consider in deciding whether to move to reconsider a class certification order may include:

1) What are the prospects for appeal?  Will moving to reconsider simply give the judge a chance to correct any obvious errors in the class certification analysis but still reach the same outcome?

2) Is the judge someone who is ever apt to reconsider his or her orders?  A big part of the strategy at this phase or any other phase is to know the judge’s tendencies and disposition as well as possible.  Some judges will deny motions to reconsider out of hand.  Some will give every motion careful consideration regardless of how many times the same issue comes before them.  (I have had judges who seemingly reversed course multiple times on the same issue in the same case).  Still other judges are so unpredictable that every motion seems like a roll of the dice. 

3) Are there clear logical, legal, or factual errors in the court’s analysis that might be outcome-determinative?  By “clear” error here, I’m not referring to any particular standard of appellate review.  I mean, as a practical matter, is the error clear enough that a judge is likely to admit it herself.

 4) Might further development of the factual record improve the likelihood of success later?  You may note that this is a recurring theme.  See the section below on motions to de-certify.

Rule 23(f) appeal 

Whether interlocutory appeal is available at all in state court class actions will vary from state to state.  These days, Rule 23(f) will apply to allow discretionary interlocutory appeal in most federal class actions, although the standards for accepting discretionary appeal differ from circuit to circuit.

When it is available, interlocutory appeal of a class certification order is never mandatory, so there are still a few factors to consider before deciding to appeal.  Many are the same as those discussed above with respect to motions to reconsdier.  In particular, the defendant should consider whether the odds of decertification by the trial judge after the case is more developed might be greater than the odds of successfully appealing the initial order.  If so, it might be better to wait, since an unfavorable ruling by the appellate court will only serve to solidify the class certification order in the judge’s mind and further embolden class counsel.

Motion requiring class counsel to submit a trial plan

A trial plan is a document that may describe, among other things, the the claims and theories of liability, the witnesses and evidence that will be used to prove those claims, and how the presentation of evidence on behalf of the class will proceed.  For a defendant, it can be a useful tool in bringing to light practical manageability problems in adjudicating the claims on a classwide basis.  In some states, a trial plan is a requirement, but it most courts, it is simply something that a judge may order in his or her discretion as part of his or her inherent authority over management of the case.  However, in jurisdictions in which there is no express rule or precedent, it may be difficult to educate a judge about what a trial plan is or why it may be useful in ensuring that the case is manageable as a class action for trial.  Therefore, a defendant has two hurdles to overcome in getting the judge to order a trial plan; 1) explain what a trial plan is, why it is different than a scheduling or trial management order, and why it might be useful; and 2) then convincing the judge to exercise his or her discretion to order one.

Motion to decertify

A motion to decertify can be a powerful weapon if timed properly.  The court has the power and obligation to continue to reassess certification, and as trial approaches, the rubber starts to meet the road.  The plaintiffs’ theories have to solidify, and the factual record is complete.  Now that trial is approaching, presumably the plaintiffs have had to settle on one or more legal theories, and the factual record is finally developed.  It should be much easier at this point to articulate the fallacies in the plaintiff’s theories, and give specific examples showing why the trial is either going to be unmanageable or unfair to the defendant.

The big factor in filing a motion to decertify is timing.  The case has to be developed enough to convince the judge that it isn’t what the plaintiffs promised in the original class certification, but not so close to trial that the case has reached the point of no return in the judge’s mind.

The success or failure of a motion to decertify will also depend to some extent on the law of the jurisdiction on what types of changed facts or other circumstances are necessary to justify the motion.  In Colorado, the Supreme Court’s recent decision in Farmers Ins. Exchange v. Benzing, 206 P.3d 812 (Colo. 2009) addresses this issue.

“Halftime” motion at trial

For many practitioners, the idea of challenging certification at trial may be more of an academic discussion than anything, since it is so rare for a class action to reach the trial phase.  However, in the few cases that have reached the trial phase, it will finally be time for the plaintiffs to put their money where their mouths were at the certification phase and actually prove their claims by common evidence.  It may be that when the evidence is finally introduced, it only proves the individual class representatives’ claims, or is so general that it doesn’t prove one or more elements of the claims of anyone.  The same arguments that supported denial of class certification should now have come into clear focus, and there is no longer any room for debate about what the evidence “might” show in order to justify class treatment.  Thus, on issues of typicality, commonality, and predominance, where the judge may have given the plaintiffs the benefit of the doubt at the certification phase, after the evidence is presented, the judge may now be bound to conclude that these elements of class certification are not in fact satisfied.

However, there are a number of strategic reasons why a defendant would not want to file a halftime motion challenging the appropriateness of the class certification order, including a) the jury appears favorable to the defendant; or b) the plaintiffs’ presentation of their case-in-chief was weak.  These considerations may especially be important if there is a possibility of individual litigation if the class is decertified.  Instead of formally challenging certification at this phase, a better strategy may simply be to seek a judgment as a matter of law that the class failed to prove its claims because it did not prove them by common evidence.  In this way, the defendant may get a binding judgment precluding all future litigation on the issue rather than simply an end to the litigation at hand.

Post-trial motions and appeal of an adverse verdict in favor of a certified class

Thankfully, I’ve never been faced with this situation, so I can only offer this obvious guidance: You should probably challenge the certification order if you get this far!

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