Class Actions - Thomas M. Byrne and Stacey Mcgavin Mohr

• Publication year: 2012

Class Actions

by Thomas M. Byrne* and Stacey McGavin Mohr**

The United States Supreme Court's landmark recalibration of class certification requirements in Wal-Mart Stores, Inc. v. Dukes,¹ together with its broad approbation of class action waivers in arbitration agreements in AT&T Mobility LLC v. Concepcion,² establishes 2011 as a watershed year in class action practice. During the year, the United States Court of Appeals for the Eleventh Circuit only began to deal with the ramifications of Dukes but addressed Concepcion's impact directly.

I. Enter Dukes

Dukes³ tightened the criteria for class certification in all would-be federal class actions while confining Rule 23(b)(2)⁴ class certification to cases in which essentially only declaratory or injunctive relief is sought. Justice Scalia's opinion for the Court, joined by four other Justices, invigorated the commonality requirement in Rule 23(a)(2)⁵ that is applicable to all three types offederal class actions. The Court held that the ritual recital of common questions that is a staple of virtually every class action complaint is insufficient to establish commonality.⁶ To

* Partner in the firm of Sutherland Asbill & Brennan LLP, Atlanta, Georgia. University of Notre Dame (A.B., cum laude, 1978; J.D., magna cum laude, 1981). Law clerk to the Hon. Robert A. Ainsworth, Jr. of the United States Court of Appeals for the Fifth Circuit and to the Hon. Morey L. Sear of the United States District Court for the Eastern District of Louisiana. Member, State Bar of Georgia.

** Associate in the firm of Sutherland Asbill & Brennan LLP, Atlanta, Georgia. Emory University (B.A., 2001), Duke University School of Law (J.D., magna cum laude, 2007). Law clerk to the Hon. Karen Nelson Moore of the United States Court of Appeals for the Sixth Circuit. Member, State Bar of Georgia.

1. 131 S. Ct. 2541 (2011).

2. 131 S. Ct. 1740 (2011).

3. 131 S. Ct. 2541 (2011).

4. Fed. R. Civ. P. 23(b)(2).

5. Fed. R. Civ. P. 23(a)(2).

6. Dukes, 131 S. Ct. at 2551.

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satisfy the rule, the common questions instead must have the capacity to have common answers.¹ In a key passage, the Court explained:

Reciting these questions is not sufficient to obtain class certification. Commonality requires the plaintiff to demonstrate that the class members "have suffered the same injury." This does not mean merely that they have all suffered a violation of the same provision of law. Title VII, for example, can be violated in many ways-by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company. Quite obviously, the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate-impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once. Their claims must depend upon a common contention-for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution-which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.⁸

The Court also held that class certification often involves inquiries into the merits, as the Eleventh Circuit and most federal circuits had gradually come to recognize over the last decade.⁹ In a footnote, the Court once and for all interred the argument, based on a quote from Eisen v. Carlisle & Jacquelin,¹⁰ that inquiry into the merits is prohibited when considering class certification.¹¹ "To the extent the quoted statement goes beyond the permissibility of a merits inquiry for any other pretrial purpose, it is the purest dictum and is contradicted by our other cases."¹² The fact that the requisite rigorous analysis of class certification requirements will often "entail some overlap with the merits of the plaintiff's underlying claim . . . cannot be helped."¹³

7. Id. Linking common questions with common answers is an element of the commonality assessment under Georgia law. Carnett's, Inc. v. Hammond, 279 Ga. 125, 129, 610 S.E.2d 529, 532 (2005).

8. Dukes, 131 S. Ct. at 2551 (internal citation omitted).

9. See, e.g., In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 316-20 (3d Cir. 2009); Teamsters Local 445 Freight Div. Pension Fund v. Bombardier, Inc., 546 F.3d 196, 202-03 (2d Cir. 2008); In re New Motor Vehicles Canadian Exp. Antitrust Litig., 522 F.3d 6, 26 (1st Cir. 2008); see generally Busby v. JRHBW Realty, Inc., 513 F.3d 1314 (11th Cir.

2008).

10. 417 U.S. 156 (1974).

11. Dukes, 131 S. Ct. at 2552 n.6 (quoting Eisen, 417 U.S. at 177).

12. Id.

13. Id. at 2551.

2012] CLASS ACTIONS 1185

The Court also held, unanimously, that claims for monetary reliefmay not be certified under Rule 23(b)(2) if "each class member would be entitled to an individualized award of monetary damages."¹⁴ The Court not only rejected the plaintiffs' argument that (b)(2) certification was appropriate because their claims for backpay did not "predominate" over their claims for injunctive and declaratory relief, but also spurned the suggestion that the relative "predominance" of various forms of relief was the relevant question at all.¹⁵ The critical question, according to the Court, is whether relief sought in a (b)(2) action is "individual-ized."¹⁶ The Court left open the possibility that monetary relief that was not "individualized" might be available to a (b)(2) class.¹⁷

Dukes is probably the Court's most significant class action decision since the inception of the modern class action. The Court s searching commonality analysis will likely recenter the focus of class certification arguments from Rule 23(b)¹⁸ to Rule 23(a).¹⁹ The Court's analysis, moreover, was more rigorous than the analysis of Rule 23(b)(3) s "predominance" and "superiority" criteria found in many cases for money damages.²⁰ Consequently, many pre-Dukes cases will now be of questionable precedential utility. The Court s deep dive into the merits to determine whether there were any bona fide common issues is groundbreaking and will likely have wide ramifications beyond employment cases for years to come.

The degree of scrutiny to which expert testimony should be subjected at the class certification stage remains unsettled after Dukes, though the Supreme Court rather pointedly suggested that a full Daubert²¹-style evaluation is required.²² The Court s skepticism is in accord with the United States Court of Appeals for the Seventh Circuit opinion in

14. Id. at 2557.

15. Id.

16. Id. (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 132 (2009)).

17. See id.

18. Fed. R. Civ. P. 23(b).

19. Fed. R. Civ. P. 23(a).

20. The Eleventh Circuit s most recent detailed treatment of the superiority and predominance analysis, which resembles in many respects the Dukes commonality analysis, came in Sacred Heart Health Sys., Inc. v. Humana Military Healthcare Serv., Inc., 601 F.3d 1159 (11th Cir. 2010), which was discussed in last year's survey. See Thomas M. Byrne & Stacey McGavin Mohr, Class Actions, Eleventh Circuit Survey, 62 Mercer L. Rev. 1107,

1107-12 (2011).

21. Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993).

22. Dukes, 131 S. Ct. at 2553-54 ("The District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. We doubt that is so . . . .") (citation omitted).

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American Honda Motor Co. v. Allen,²³ which held that if an expert's report is critical to class certification, then the district court must rule on any Daubert challenge to the expert's qualifications or testimony prior to ruling on class certification.²⁴ The Eleventh Circuit turned to the issue in Sher v. Raytheon Co.²⁵ and agreed with Allen in an unpublished 2011 opinion.²⁶ Sher was an environmental contamination case in which the district court certified a class of affected property own-ers.²⁷ The Eleventh Circuit reversed, holding that the district court erred by insufficiently evaluating the conflicting expert opinions presented at the class certification stage.²⁸ The district court had acknowledged, but left unresolved, the conflicting expert testimony on determination of aggregate diminution-in-value damages, but the Eleventh Circuit held that "a district court must make the necessary factual and legal inquiries and decide all relevant contested issues prior to certification."²⁹ The court of appeals chided the district court for having "side-stepped" the "[t]ough questions" on opinion evidence.³⁰ The court remanded the case for further proceedings without opining on the propriety of class certification.³¹

The expert testimony issue is now the subject of a split among the circuits. The United States Courts of Appeals for the Eighth and Third Circuits have held that a complete Daubert inquiry is not required at the class certification stage,³² at odds with the Seventh and Eleventh Circuits. The Eighth Circuit's opinion is the subject of a pending petition for a writ of certiorari,³³ which will test whether the Supreme Court is ready to return so soon after Dukes to the rudiments of class certification procedure.

23. 600 F.3d 813 (7th Cir. 2010).

24. Id. at 817.

25. 419 F. App'x 887 (11th Cir. 2011). The court accepted the appeal under Federal Rule of Civil Procedure 23(f).

26. See 11th Cir. R. 36-2 ("Unpublished opinions are not considered binding precedent, but they may be cited as persuasive authority.").

27. 419 F. App'x at 889.

28. Id. at 890-91.

29. Id. at 891.

30. Id. (internal quotation marks omitted).

31. Id.

32. In re Zurn Pex Plumbing Prods. Liab. Litig., 644 F.3d 604, 613 (8th Cir. 2011), petition for cert. filed, 80 U.S.L.W. 3378 (U.S. Dec. 15, 2011) (No. 11-740); Behrend v.

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