Opinion ID: 78615
Heading Depth: 3
Heading Rank: 1

Heading: Supreme Court Authority

Text: The Supreme Court has provided clear, if sometimes misunderstood, guidance on the issue of what standards a district court applies when deciding whether to certify a class. The leading case describing these standards is Falcon, where the plaintiff successfully certified a class of Mexican-Americans claiming racial discrimination. After a full trial on the merits, however, the district court's findings distinguishing the named representative's claims from those of the class called the propriety of continued class certification into question. [5] On appeal, the Supreme Court held that because of the district court's findings at trial, Falcon's complaint provided an insufficient basis for concluding that the adjudication of his claim of discrimination in promotion would require the decision of any common question concerning the failure of [General Telephone] to hire more Mexican-Americans. Id. at 158., 102 S.Ct. 2364 The Court described the implications of its holding, noting that [s]ometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim, and sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question. Id. at 160, 102 S.Ct. 2364. In either case, the Court held, a Title VII class action, like any other class action, may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied. Id. at 160, 102 S.Ct. 2364. In conducting this rigorous analysis, the Court explained that the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action. Id. at 160, 102 S.Ct. 2364(internal quotation marks omitted). Illustrating further, the Court approvingly cited Judge Godbold's concurring opinion in the Fifth Circuit case that had announced the across-the-board rule the Court was reviewing in Falcon. Judge Godbold's concurrence addressed the role of the district court in understanding the likely course of the litigation, and the Supreme Court praised his focus on the need for more precise pleadings. Id. at 160, 102 S.Ct. 2364(internal quotation marks omitted). The Court approved of his statement that `without reasonable specificity the court cannot define the class, cannot determine whether the representation is adequate, and the employer does not know how to defend.' Id. at 161, 102 S.Ct. 2364(quoting Johnson v. Ga. Highway Express, Inc., 417 F.2d 1122, 1126 (5th Cir.1969) (Godbold, J., specially concurring)). Falcon thus provides relatively straightforward guidance. When considering class certification under Rule 23, district courts are not only at liberty to, but must, perform a rigorous analysis to ensure that the prerequisites of Rule 23(a) have been satisfied. See id. at 160-61, 102 S.Ct. 2364. It does not mean that a district court must conduct a full-blown trial on the merits prior to certification. A district court's analysis will often, though not always, require looking behind the pleadings, even to issues overlapping with the merits of the underlying claims. See id. As we describe in more detail below, every circuit to have considered this issue, including our own previous decisions, has reached essentially the same conclusion: Falcon 's central command requires district courts to ensure that Rule 23 requirements are actually met, not simply presumed from the pleadings. We also agree with the Second Circuit's recent decision in Miles v. Merrill Lynch & Co. ( In re Initial Pub. Offerings Securities Litigation ) ( IPO ), which explained that, to the extent lower courts have evidenced confusion regarding the Rule 23 standard after Falcon, this confusion has existed because those courts have misread a Supreme Court statement made eight years before the Court handed down Falcon. See 471 F.3d 24, 33-34 (2d Cir.2006). Specifically, courts have misunderstood Eisen v. Carlisle & Jacquelin , in which 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 a suit in order to determine whether it may be maintained as a class action. 417 U.S. 156, 177, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974). This statement has led some courts to think that in determining whether any Rule 23 requirement is met, a judge may not consider any aspect of the merits.. . . IPO, 471 F.3d at 33. It has led other courts to think that a judge may not do so at least with respect to a prerequisite of Rule 23 that overlaps with an aspect of the merits of the case. Id. As the IPO court recognized, the distinguishing features of Falcon and Eisen are the purposes for which the certifying court is using the underlying factswhether to address a merits issue unnecessarily or to determine whether, for example, the plaintiffs have demonstrated questions of law or fact common to their proposed class. See IPO, 471 F.3d at 32-35. An easy way to understand this distinction is to analogize to a familiar dispute over the admissibility of alleged hearsay evidence. Offered for the truth of the matter asserted, an out-of-court statement by someone not testifying is, of course, inadmissible hearsay. However, that same evidence used to impeach a witness may be properly admitted. So, too, with inquiries into facts overlapping with merits issues in the Rule 23 context. It is whether courts are using the facts to probe the plaintiffs' claims of compliance with Rule 23, or to hear either parties' claims directed to stand-alone merits issues, that renders a court's use of the facts proper or improper. Courts have thus strayed from Falcon when they have myopically invoked Eisen to avoid considering facts properly relevant to the Rule 23 determination because the facts happen to be relevant to the later merits inquiry as well.