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In what may be considered a breakwater against the recent wave of refusals by California courts to certify class actions in cases asserting product liability claims, [FOOTNOTE 1]the California Supreme Court recently ruled that consideration of the merits has no place in a class certification analysis. Rule 23 of the Federal Rules of Civil Procedure governs when a federal court may certify a class. Rule 23(a) provides: One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. Rule 23(c) directs that “[a]s soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained.” The U.S. Supreme Court held, in Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974), that under the Federal Rules, a court is not allowed to consider the merits of the case when ruling on class certification. [FOOTNOTE 2] Most states have adopted rules similar to Federal Rule 23 governing class actions, and many have copied the federal rule verbatim. California’s rule concerning class actions is modeled after Federal Rule 23. [FOOTNOTE 3]On June 26, in Linder v. Thrifty Oil Co., 97 Cal. Rptr. 2d 179 (Cal. 2000), the Supreme Court of California issued a ruling specifically addressing the necessity or propriety of an inquiry into the legal merits of class claims during the certification process. California Code of Civil Procedure � 382 is silent on the issue. LINDER V. THRIFTY OIL CO. Rochelle Linder brought suit alleging that Thrifty Oil had violated California law by charging credit card customers more for gas than customers paying cash. She also alleged that Thrifty used a credit card form that required a telephone number, in violation of California law. Linder sought certification of the case as a class action with two plaintiff classes. The trial court denied Linder’s certification motion in its entirety, but its stated reasons were limited to the proposed surcharge class. The court of appeal affirmed the trial court’s decision, noting that “as a matter of law, Linder cannot prevail on her surcharge claim.” Id.at 185. The case was appealed to the California Supreme Court, which reversed the court of appeal’s decision, finding that it was based on improper criteria. It then remanded the case to the trial court for a ruling on class certification consistent with the court’s opinion. The California Supreme Court found that the court of appeal had incorrectly considered the merits of the case in deciding that Linder’s class should not be certified. The court noted that federal cases decided under Rule 23 of the Federal Rules of Civil Procedure have held that consideration of the merits is inappropriate when deciding whether a case should be allowed to proceed as a class action. The court concluded, “Like the [federal courts], we view the question of certification as essentially a procedural one that does not ask whether an action is legally or factually meritorious.” Id.at 187. Likewise, the court observed that its “holding [was] consistent with the weight of authority in�a significant number of [other] states.” Id. at 190. The court also weighed policy considerations in reaching its conclusion. It recognized that “the important interests of fairness and efficiency sometimes may be served better when class causes of action are screened for legal sufficiency before the matter of certification is decided.” Id.at 187. The court, however, concluded that meritless suits are better dismissed through formal pleadings or motions that “afford[ ] proper notice and employ[ ] clear standards.” Id.at 188. “Were [the court] to condone merit-based challenges as part and parcel of the certification process, similar procedural protection would be necessary to ensure that an otherwise certifiable class is not unfairly denied the opportunity to proceed on legitimate claims.” Id. Furthermore, delving into the merits might require substantial discovery that would not be necessary so early in the trial process. Finally, the court noted that Linderdid not “involve potentially ruinous liability” that would “create insurmountable pressure on the defendants to settle” if the class were certified. Id. at 189. TRENDS IN STATE CLASS ACTION LAW Twenty-five states [FOOTNOTE 4]have followed the case law under Federal Rule 23 and the Linderdecision by holding that a court should not consider the merits of a claim when deciding whether or not to certify a class. At least 20 states have not considered the issue. [FOOTNOTE 5](An appendix analyzing case law state by state is associated with this article.) Two states, Illinois and New York, hold that the court may look at the merits of the claim. Although Illinois and New York courts consider the merits of the claim when ruling on class certification, they do not allow a rigorous examination of the merits. The court determines only whether the claim is frivolous or essentially a scam. These courts believe that judicial efficiency is best served by weeding out obviously meritless claims at the first opportunity. Illinois case law on the subject is scarce. New York, however, has looked at the merits of claims for several years. One of the reasons that New York courts may be more willing to allow consideration of the merits at the time of class certification is that they only allow consideration of the merits by separate claim or motion before a ruling on class certification in narrow circumstances. See O’Hara v. Del Bello, 47 N.Y.2d 363 (1979). Since Eisenand its progeny have withstood criticism and the argument that merits are in fact considered despite Eisen, [FOOTNOTE 6]it appears that any direct attack on the merits of a purported class (except perhaps in Illinois and New York, as discussed above), will be a losing proposition. An argument that has had some success in opposing a mass tort class certification is that a class action is not the superior means for adjudicating claims arising from an alleged defective product because the class is manageable. A further available argument is that the litigation as currently postured is premature. Settlements in the mass tort arena are often discussed prior to any substantial experience with actual trials and decisions in individual cases. As the Federal Rules of Civil Procedure Advisory Committee stated:
The need to wait until a class of claims has become “mature” seems to apply peculiarly to claims that involve highly uncertain facts that may come to be better understood over time.� Pre-maturity class certification runs the risk of mistaken decision, whether for or against the class. This risk may be translated in the settlement terms that reflect the uncertainty by exacting far too much from the defendant or according far too little to the plaintiffs.

1996 Advisory Comm. Draft, Note to Proposed Fed.R.Civ.Proc. 23(b)(3). Although the Linderdecision clearly eliminates an evaluation of the merits of the lawsuit as a class action criterion to be considered, it does not preclude a court from scrutinizing a proposed class cause of action to determine whether, assuming its merit, it is suitable for resolution on a classwide basis. An approach requesting the court to engage in an analysis of the superiority of the class action as the best vehicle for resolution should not be overlooked. While not directly addressing the merits, such an argument may result in requiring the courts to address each of the criteria of Federal Rule 23 with heightened scrutiny before rendering any decision on the certification of a class action. CERTIFICATION MAY STILL BE OPPOSED The opportunities for those opposing class certification to raise cogent, reasonable arguments opposing such certification still exist. Lindermerely requires the trial court to conduct a thorough analysis of each of the criteria of the statute governing class certification. Rather than viewing the Linderdecision as a “defeat” for the class action defense bar, it should be viewed and used to require a court to engage in an analysis of each criterion to determine whether a proposed class cause of action, assuming its merit, is suitable for resolution on a classwide basis. ::::FOOTNOTES:::: FN1 Kennedy v. Superior Court, 43 Cal. App. 4th 799 (1996) (court rejected certification of class consisting of persons exposed to latex gloves); Clausing v. San Francisco Unified School Dist., 221 Cal. App. 3d 1224 (1990); Valentino v. Carter-Wallace Inc., 97 F.3d 1127 (9th Cir. 1996) (court rejected conditional certification of class consisting of persons who used drug Felbatol); In re Northern Dist. of California, Dalkon Shield IUD Prods. Liab. Litig., 693 F.2d 847 (9th Cir. 1982), cert. denied, 459 U.S. 1171, 103 S.Ct. 817, 74 L.Ed.2d 1015 (1983). FN2As the Supreme Court stated:

We find nothing in either the language or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of that suit in order to determine whether it may be maintained as a class action. Indeed, such a procedure contravenes the Rule by allowing a representative plaintiff to secure the benefits of a class action without first satisfying the requirements for it. He is thereby allowed to obtain a determination on the merits of the claims advanced on behalf of the class without any assurance that a class action may be maintained.�Additionally, we might note that a preliminary determination of the merits may result in substantial prejudice to a defendant, since of necessity it is not accompanied by the traditional rules and procedures applicable to civil trials. The court’s tentative findings, made in absence of established safeguards, may color the subsequent proceedings and place an unfair burden on the defendant.

Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974). See also Miller v. Mackey International Inc., 452 F.2d 424 (5th Cir. 1971) (holding that a trial court could not consider the merits of a case when ruling on class certification). FN3 SeeCalifornia Code of Civil Procedure � 382. FN4Alabama, Arizona, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Maryland, Missouri, Nevada, New Jersey, North Dakota, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Texas and Washington. FN5Alaska, Colorado, Hawaii, Kansas, Kentucky, Maine, Massachusetts, Mississippi, Montana, Nebraska, New Mexico, Oregon, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, Wisconsin and Wyoming. Michigan and Minnesota have considered only whether a motion on the merits may be ruled on prior to ruling on class certification. FN6Barlett H. McGuire, “The Death Knoll for Eisen: Why the Class Action Analysis Should Include an Assessment of the Merits,” 168 F.R.D. 366, 380-81 (1996). Daniel J. Herling is a partner in the San Francisco office of Duane, Morris & Heckscher. Telephone: (415) 371-2200. Mr. Herling acknowledges the assistance of Julie Anderson, Scott Esterbrook and Katharine McCormick in the research for and preparation of this article and the appendix of state-by-state case law associated with this article.

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