Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-15-01138/USCOURTS-ca10-15-01138-0/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 

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UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

_________________________________

ROBERT RIVERA; STEPHEN LOWE; 

FRANK TACKMANN; KENNETH 

MILHEM; JOSEPH STOCKWELL,

 Plaintiffs - Appellees,

v.

DAVID K. DOWNES; MATTHEW P. 

FINK; PHILLIP A. GRIFFITHS; MARY 

F. MILLER; JOEL W. MOTLEY; 

RUSSELL S. REYNOLDS, JR.; JOSPEH 

M. WIKLER; PETER I. WOLD; 

OPPENHEIMER CALIFORNIA 

MUNICIPAL FUND; CLAYTON K. 

YEUTTER; KENNETH A. RANDALL; 

ROBERT G. GALLI; BRIAN F. 

WRUBLE,

 Defendants - Appellants.

–––––––––––––––––––––––––––––––––––

STEPHEN LOWE; KENNETH MILHEM; 

ROBERT RIVERA; JOSEPH 

STOCKWELL; FRANK TACKMANN, 

 Plaintiffs - Appellees,

v.

SCOTT S. COTTIER; RONALD H. 

FIELDING; DANIEL G. LOUGHRAN; 

MASSACHUSETTS MUTUAL LIFE 

INSURANCE COMPANY; 

OPPENHEIMERFUNDS, INC; JOHN V. 

MURPHY; OPPENHEIMERFUNDS 

DISTRIBUTOR, INC.; BRIAN W. 

No. 15-1138

(D.C. No. 1:09-MD-02063-JLK-KMT)

(D. Colo.)

No. 15-1139

(D.C. No. 1:09-MD-02063-JLK-KMT)

(D. Colo.)

FILED

United States Court of Appeals

Tenth Circuit

May 12, 2015

Elisabeth A. Shumaker

Clerk of Court

Appellate Case: 15-1138 Document: 01019429670 Date Filed: 05/12/2015 Page: 1 
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WIXTED; TROY E. WILLIS, 

 Defendants - Appellants.

_________________________________

ORDER

_________________________________

Before HARTZ, GORSUCH, and MATHESON, Circuit Judges.

_________________________________

PER CURIAM.

Defendants appeal from the district court’s order certifying a class of shareholders 

in the Oppenheimer California Municipal Fund (the “Fund”), which is represented by 

Plaintiff-Appellee Joseph Stockwell. The plaintiffs seek to recover damages for alleged 

false or misleading representations made in the Fund’s registration statement regarding 

the level of risk associated with the Fund’s investments. In July 2012, the plaintiffs 

moved to certify under Federal Rule of Civil Procedure 23(a) and 23(b)(3) a class of 

individuals and entities who acquired shares of the Fund between September 27, 2006 

and November 28, 2008. On March 2, 2015, the district court entered a two-sentence 

text-only minute order granting the plaintiffs’ motion for class certification. The 

defendants filed in this court two petitions for permission to appeal pursuant to Federal 

Rule of Appellate Procedure 5 and Federal Rule of Civil Procedure 23(f), which were 

granted. We therefore have jurisdiction pursuant to 28 U.S.C. § 1292(e). Without 

requiring additional briefing or argument from the parties, we vacate the district court’s 

class certification order and remand for additional proceedings consistent with this order.

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Precedent from the Supreme Court and this court unmistakably requires the 

district court to conduct a “rigorous analysis” when making a class certification decision. 

See Wal–Mart Stores, Inc. v. Dukes, -- U.S. --, 131 S.Ct. 2541, 2551-52 (2011) (Rule 

23(a)); Comcast Corp. v. Behrend, -- U.S. --, 133 S. Ct. 1426, 1432 (2013) (Rule 23(b));

Vallario v. Vandehey, 554 F.3d 1259, 1265 (10th Cir. 2009); Shook I at 968 (citing Gen. 

Tel. Co. of the S.W. v. Falcon, 457 U.S. 147, 161 (1982)). “Repeatedly, we have 

emphasized that it may be necessary for the court to probe behind the pleadings before 

coming to rest on the certification question and that certification is proper only if the trial 

court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23[] have been 

satisfied.” Comcast, 133 S. Ct. at 1432 (internal quotations and citations omitted). “Rule 

23(a) requires an analysis of four elements that are preconditions to class certification: 

numerosity, commonality, typicality, and adequacy of the named parties to represent the 

class.” Shook I at 968. “The court must then look to the category of class action under 

Rule 23(b) for additional prerequisites involving certification of a class.” Id. Class actions 

are the exception to the rule that litigation is ordinarily pursued only by individually 

named parties, so the requirements of Rule 23 are “heavily scrutinized and strictly 

enforced.” CGC Holding Co. v. Broad and Cassel, 773 F.3d 1076, 1086 (10th Cir. 2014). 

“‘[A]ctual, not presumed, conformance with [Rule 23] remains . . . indispensable.’” Id.

(quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982)) (alterations in 

original).

The district court’s class certification order at issue here did not analyze either the 

Rule 23(a) or 23(b) factors. The district court did not address the grounds on which the 

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plaintiffs sought class certification or whether they “affirmatively demonstrated” 

compliance with Rule 23’s requirements, as they are required to do. Wal-Mart, 131 S. Ct. 

at 2252; Comcast, 133 S. Ct. at 1432. Further, the district court’s order generically 

dismissed arguments made by the defendants in opposition to the motion seeking class 

certification and concluded without discussion that their objections “have either been 

mooted by subsequent rulings on Defendants’ motions to dismiss and for partial summary 

judgment, and are otherwise rejected.” (Dist. Ct. Case No. 09-MD-2063, Docket No. 540, 

Order 3/2/15.)

The district court may have thoroughly analyzed the parties’ arguments for and 

against class certification and placed those arguments in context with the proceedings that 

occurred before and after the class certification motion was fully briefed. But without a 

detailed description in the order granting class certification of the district court’s analysis

under Rule 23 and specific reference to arguments made in pleadings or decisions entered 

in other orders, we have no way to know what the analysis was or to determine whether 

the court abused its discretion in conducting the analysis. Cf. OCI Wyo., L.P. v. 

PacifiCorp, 479 F.3d 1199, 1204 (10th Cir. 2007) (“too little detail frustrates meaningful 

appellate review by requiring the parties and this court to guess at why the district court 

reached its conclusion”). We therefore conclude that the district court erred because it 

provided inadequate analysis of the Rule 23 factors.

Additionally, after the district court entered its class certification order, the 

Supreme Court issued its decision in Omnicare, Inc. v. Laborers Dist. Council Constr. 

Indus. Pension Fund, -- U.S. --, 135 S. Ct. 1318 (2015). Omnicare addressed the standard 

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for determining whether an issuer’s statements are misleading for purposes of § 11 of the 

Securities Act. The district court did not have the benefit of the Omnicare decision before 

granting class certification. While we do not express an opinion on whether Omnicare

applies in this particular case, the district court should consider the decision when

reviewing the plaintiffs’ motion for class certification anew.

In conclusion, by this per curiam order, the district court’s order granting class 

certification is VACATED and the matter is REMANDED to the district court for further 

proceedings consistent with this order.

A copy of this order shall stand as and for the mandate of this court.

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