Fiat lux: tracing a standard of review for class-certification orders.

AuthorKarnow, Curtis E. A.

And you may ask yourself Well... How did I get here? (**) I. INTRODUCTION: RULES AND REASONS

Trial judges are comforted by the usual standard of review, which is--in plain English--that their decisions are assumed to be right, if only in the sense that the appellant usually has the burden of showing otherwise. Doctrines of harmless error and others tend to focus on the result below and, if the record supports the result, urge affirmance. The record might be barren, it might reveal a trial judge's incorrect rationale, but if the result is otherwise supportable, the trial judge is usually affirmed. (1)

But there are a few situations in which appellate courts focus on the reasons provided and will reverse if the reasons do not support the result or the reasoning is wrong--even if the result has support in the record. I came across this in California state law, as I was having a look at the standards of review of decisions to certify (or not to certify) class actions. This is the class-certification standard, distinguished from the usual rule:

Under ordinary appellate review, we do not address the trial court's reasoning and consider only whether the result was correct.... But when denying class certification, the trial court must state its reasons, and we must review those reasons for correctness.... We may only consider the reasons stated by the trial court and must ignore any unexpressed reason that might support the ruling. (2) We might call this the Rule of Stated Reasons. (3) It will be the focus of this article, but we begin by looking at two other rules from which the Rule of Stated Reasons must be differentiated.

  1. Background: The Routine Rule

    We must distinguish a different rule, which applies generally, including in the certification context: "A certification order generally will not be disturbed unless (1) it is unsupported by substantial evidence, (2) it rests on improper criteria, or (3) it rests on erroneous legal assumptions." (4) This rule is ordinary. It is routine to reverse if there is no factual support for a decision or the trial judge gets the law wrong. It is not this Routine Rule I am interested in here, although as we will see later, some courts rely on the Routine Rule as if it necessarily justified the Rule of Stated Reasons. It does not, however, for one may have the former without the latter.

  2. Background: The Rule of Intendments

    There is a third rule of review, also seemingly routine, that we should also distinguish: "We must '[p]resum[e] in favor of the certification order... the existence of every fact the trial court could reasonably deduce from the record.'" (5) This third rule is part of the broader and usual standard, which, if one enjoyed the sound of old fashioned words, one might call the Rule of Intendments. (6) Under this broad rule, when the record is silent, the order is generally affirmed. (7) In the certification context, the more general, broader Rule of Intendments is not effective. If nothing "illuminates the court's thinking" on the reasons for the determination, the case is reversed and remanded. (8) The Rule of Intendments does not apply. (9)

  3. Our Primary Concern: The Rule of Stated Reasons

    What then, is this narrower Rule of Stated Reasons that applies in the certification context? It is not clear; but it may just mean that when a judge does explain himself or herself in a way that suggests reliance on facts, the appellate court will indulge the trial court ruling if there is any basis in the record to do so.

    I began by briefly outlining the various standards of review because the opinions that develop the Rule of Stated Reasons ultimately dissolve into the distant mists of the past, sometimes doing so by conflating the Rule of Stated Reasons with these other standards of review.

    The Rule of Stated Reasons is an oddity, and has been repeatedly called out as different from the usual approach. (10) Why, then, did it develop? No one knows. This article provides a guided tour to its genealogy, and shows that its origins are lost to us. It ends with some thoughts as to why, nevertheless, the Rule of Stated Reasons is as it is, and also considers its implications for the work of judges and lawyers.


      One might start almost anywhere in the last few years with a decision reviewing a certification or decertification order, and then trace the citations back through the ages, or through the decades anyway. Significantly, this is one of the few areas of law in which one sees only the citation or repetition of the rule, never a discussion of its rationale. Despite frequently introducing the Rule of Stated Reasons as an exception to the usual standard of review, no court has felt an obligation to explain it. This both makes it relatively simple to trace the rule, and leads to the ultimate frustration of never discovering at least an historical explanation for its development.

      Tables 1 and 2 in the Appendix walk the reader through scores of cases, starting with two recent cases and following them back in what might be termed the main sequence. That work is checked, as shown in Table 3, by using a number of other recent cases as starting points to retrace the same steps. In all of these tracings, we see that the citation chain usually touches down first on hinder v. Thrifty Oil Co. (11) and then, most significantly, proceeds through hinder to Clothesrigger, Inc. v. GTE Corp. (12)

      For cases decided after 2000, hinder is probably the single most cited case in support of the Rule of Stated Reasons, with eight of the cases in what this article treats as the main sequence citing it directly. In a single paragraph, the California Supreme Court in hinder recites a series of standards that it means to apply, and explains their intended effect:

      Because trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, they are afforded great discretion in granting or denying certification. The denial of certification to an entire class is an appealable order..., but in the absence of other error, a trial court ruling supported by substantial evidence generally will not be disturbed "unless (1) improper criteria were used... ; or (2) erroneous legal assumptions were made... "....Under this standard, an order based upon improper criteria or incorrect assumptions calls for reversal '"even though there may be substantial evidence to support the court's order.'"...Accordingly, we must examine the trial court's reasons for denying class certification. "Any valid pertinent reason stated will be sufficient to uphold the order." (13) From this statement, we must extract the rules. First, note the premise of deferral to the trial judge, especially because of the practical aspect of the certification order. The initial use of the word "because" suggests, accurately, that this reason explains the rules that are about to be recited. (14) Next, we see that the certification order is appealable; then we see the Routine Rule that looks to substantial evidence and a lack of legal error. (15) But then Linder seems to say that the next rule recited--our focus, the Rule of Stated Reasons--is either equivalent to the Routine Rule or is explained or justified by it.

      We have already seen above that such an equivalence is false, and it is not at all obvious that the Routine Rule justifies or explains the Rule of Stated Reasons. Linder's citation to Richmond v. Dart Industries, Inc. (16) gives it away: Richmond only recites the Routine Rule, not the Rule of Stated Reasons, making it a dead end in the search for the origin of the latter. Occidental Land, Inc. v. Superior Court (17) and Fletcher v. Security Pacific National Bank, (18) the cases on which Richmond relies, are also dead ends. And we need not look far for cases in which the Routine Rule patently applies without any suggestion that a failure to state reasons is fatal: An appellate court might well insist on substantial evidence but still indulge the lower court with the Rule of Intendments. (19) Indeed, the standard of review that insists on substantial evidence but nevertheless so indulges the trial court uses rules that are "natural and logical corollar[ies]" of each other; the tests actually go hand in hand. (20) At least as of Linder, then, we have no explanation for the quite distinct Rule of Stated Reasons.

      So where can we turn after Linder? We follow its clues. It relies on Caro (21) which as Linder notes, relies on Clothesrigger, (22) and National Solar. (23) There is no more to say about National Solar, because it just relies on Richmond, a dead end, and on Clothesrigger.

      We have come then to Clothesrigger, the 1987 decision directly relied on by not only Linder, but also four other cases in the main sequence, and many other cases as well. The decision in Clothesrigger is the decisive moment in the development of the Rule of Stated Reasons.

      Clothesrigger discusses standards of review twice. The first time, it recites the Rule of Stated Reasons, analogizing to

      non-statutory situations [that] involve issues where the appellate focus is on the means used by the trial court. The right result is an inadequate substitute for an incorrect process. Thus the appellate scrutiny should be on the reasons expressed by the trial court in the context of counsel's arguments not merely whether the trial court reached a result which can be justified by implication. (24) In this connection Clothesrigger has a single, lonely citation to a treatise on procedure. (25) A few lines later, Clothesrigger recites a different standard: Richmond's Routine Rule. (26) And indeed the result in Clothesrigger probably stems from the application of this last standard, the Richmond rule, because the court first tries to figure out what the trial judge probably meant and, second, criticizes what he did say. (27) It does not appear that the trial judge's result could have been rescued...

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