Alabama's Class Action Statute Turns 20: a Defense Retrospective
| Publication year | 2020 |
| Pages | 0064 |
This year marks the 20th anniversary of Alabama's class action reform statute, 1999 Ala. Laws 329-32 (S.B. 72), now known as Alabama Code §§ 6-5-640 to -42. The law was passed in response Alabama's tumultuous reign as the class action mecca for the plaintiffs' bar in the 1990s. During that time, mere allegations of predominance and superiority were often accepted to satisfy Rule 23 of the Alabama Rules of Civil Procedure on the theory that hearings and evidence were not necessary prerequisites to class certification. See, e.g., Ex parte First Nat'l Bank of Jasper, 717 So. 2d 342 (Ala. 1997).
Compounding the resulting in terrorem effect of class certification on the defendant, only plaintiffs got to appeal adverse class certification decisions as of right, so defendants' only hope of reversal of class certification before final judgment depended upon the Alabama Supreme Court granting a writ of mandamusan extraordinary remedy. Butler v. Audio/Video Affiliates, Inc. 611 So. 2d 330, 331 n.1 (Ala. 1992).
Worse, Alabama was the home of the "drive-by" class certification. Trial courts presented with class action complaints were routinely convinced that it was necessary to conditionally certify the class action at the outset to protect the court's jurisdiction and exclude any other courts presented with similar claims. See, e.g., Ex parte Voyager Guar. Ins. Co., 669 So. 2d 198 (Ala. Civ. App. 1996) (holding that the defendant was not entitled to writ of mandamus ordering trial court to vacate conditional order of class certification issued 19 days after service of complaint and before any defendant had entered appearance); Ex parte State Mut. Ins. Co., 715 So. 2d 207 (Ala. 1997) (explaining that, in class actions, a trial court should consider protecting its jurisdiction in deciding whether to enjoin competing action).
In fact, in those days, one of the authors of this article had a case in which the class was certified the day before the complaint was filed. In some state trial courts, a plaintiffs' attorney could get a class conditionally certified the same day he filed the complaint simply by walking the complaint and a proposed order up to the judge. See Victor E. Schwartz, Mark A. Behrens, & Leah Lorber, Federal Courts Should Decide Interstate Class Actions: A Call for Federal Class Action Diversity Jurisdiction Reform, 37 HARV. J. ON LEGIS. 483, 494, 499-501 (2000); see also Mitchell v. H & R Block, 783 So. 2d 812, 818 (Ala. 2000) (Hooper, C.J., dissenting) (describing the practice of "drive-by" certification). Sometimes the plaintiffs' lawyer forgot to stop by the clerk's office to file the complaint on the way up to see the judge, and had to remedy the oversight the next day.
For lawyers, the '90s were in some ways the golden age of practicing law in Alabama. For defense lawyers, the opportunities for employment were high, the intellectual challenges were great, and there was a premium for creative lawyers who could find a way to make lemonade out of the lemons. For the plaintiffs' bar, the opportunities to achieve class certification and the multimillion dollar settlement pressure that class certification often brought were never greater.
But for businesses, the '90s were difficult, and Alabama's class action landscape was a big reason why. And when corporate America finally had enough and banded together to do something about it, they convinced Alabama's electorate that the judicial climate in Alabama was a job-killer. All of a sudden tort reform came to the South. And with it came Alabama's class action statute.
The Primary Changes Imposed by Alabama's Class Action Statute
In 1999, the Alabama Legislature significantly reformed the way class actions are conducted in state courts. Alabama Code §§ 6-5-641 and 6-5-642 eliminated many of the abuses that previously characterized the class certification process.
First, the legislature prohibited trial courts from certifying a class before the defendant had a chance to respond to the complaint and conduct discovery on class certification issues. § 6-5-641(b). Trial courts are now required to confer with the parties, set a discovery schedule, and allow at least 90 days of class discovery before holding a hearing on class certification, with merits discovery generally postponed until after certification upon request of a party. Id. The parties now have the right to a full hearing to present evidence in support of or in opposition to class certification. § 6-5-641(d). And trial courts, after performing a rigorous analysis of Rule 23's requirements, are now required to put their reasons for certifying or declining to certify a class in writing, addressing all the Rule 23 factors and evidence relevant to each. § 6-5-641(e).
Perhaps more importantly, defendants are no longer required to overcome the high bar of mandamus review to reverse a class certification decision. Both sides now have the benefit of appeal as of right from class certification orders, to be exercised within 42 days of an order certifying or declining to certify a class. § 6-5-642. And if a party chooses not to appeal, or unsuccessfully appeals, on an interlocutory basis, the party can revisit the issue on appeal from final judgment. Id. All trial court proceedings are automatically stayed during the pendency of an interlocutory appeal of a class certification decision. Id.
The Statute as Applied
Almost right away, the Alabama Supreme Court made clear it intended to enforce these reforms strictly.
In an early decision enforcing the statute, the court held the trial court must conduct a "formal evidentiary hearing" on class certification. Bill Heard Chevrolet v. Thomas, 819 So. 2d 34, 40 (Ala. 2001). The plaintiff bears the burden of offering "sufficient evidence of the Rule 23 criteria," and the defendant must be given "an opportunity to offer evidence in opposition." Id. at 40-41. The evidence must also "be referenced in the trial court's order" for class certification to be proper. Id. at 40.
To remove all doubt on the scope of the hearing mandated by § 6-5-641(d), the court has held, "[t]he issues to be addressed at that hearing, through the presentation of evidence and legal argument, include the "claims, defenses, relevant facts and applicable substantive law" of each claim the plaintiffs seek to have certified for class treatment and how they relate to the relevant criteria of Ala. R. Civ. P. 23." Id. at 42 (citations omitted).
If the trial court fails to hold the required hearing or certifies the class before the deadline for defendant's offer of proof, the supreme court will often reverse the trial court. See id.; Disch v. Hicks, 900 So. 2d 399, 406 (Ala. 2004); Gen. Motors Acceptance Corp. v. City of Red Bay, 825 So. 2d 746, 749 (Ala. 2002). And if the plaintiff changes the class definition after the hearing, the trial court must convene a new hearing on the revised class. Baldwin Mut. Ins. v. Edwards, 63 So. 3d 1268, 1271-72 (Ala. 2010).
The supreme court also demands a "rigorous analysis" of Rule 23's elements, consistent with the statute. The rigorous analysis required has a dual nature that looks beyond the pleadings. On one hand, the trial court must understand "the claims, defenses, relevant facts, and applicable substantive law" presented by the complaint and answer. Bill Heard, 819 So. 2d at 41 (citations omitted). On the other hand, the trial court must analyze how the legal "elements" of those claims and defenses "bear upon the criteria set forth in Rule 23." Id. Putting the two halves together, "[i]t is only by specifically discussing the elements of each claim [and defense] in the context of the Rule 23 criteria that the trial court may...
To continue reading
Request your trial