Opinion ID: 1314093
Heading Depth: 2
Heading Rank: 1

Heading: Standard of Review and Class Certification Requirements

Text: In reviewing a district court's decision regarding class certification, we generally apply the abuse of discretion standard. Heerwagen v. Clear Channel Commc'ns, 435 F.3d 219, 225 (2d Cir.2006). When reviewing a grant of class certification, we accord the district court noticeably more deference than when we review a denial of class certification. Id. To the extent that a ruling on a Rule 23 requirement is supported by a finding of fact, that finding is reviewed under the clearly erroneous standard; to the extent the ruling involves an issue of law, such as the allocation of the burden of proof, our review is de novo; and to the extent the ruling involves an application of law to fact, our review is for abuse of discretion. In re IPO, 471 F.3d at 40-41. Thus, as an application of law to fact, we apply the abuse of discretion standard both to the district judge's ultimate conclusion on the class certification motion and to the judge's subsidiary rulings that each of the Rule 23 requirements have been met. Id. The only question raised by this appeal is whether the district court properly determined that the Rule 23(b)(3) predominance requirement was met. The Rule 23(b)(3) predominance requirement tests whether a proposed class is sufficiently cohesive to warrant adjudication by representation. Heerwagen, 435 F.3d at 226 (quotation marks omitted). To meet the requirement, a plaintiff must show that those issues in the proposed action that are subject to generalized proof outweigh those issues that are subject to individualized proof. Id. In this case, the question of whether the predominance requirement is met largely turns on whether and how the Basic fraud-on-the-market presumption applies to suits against research analysts. We first address whether we should adopt a bright-line rule that bars application of the Basic presumption to a suit alleging misrepresentations by research analysts. Concluding that we should not, we next consider whether plaintiffs must make a heightened showing in a suit against research analysts to warrant the presumption. Concluding that they need not, we next consider whether remand is required to provide defendants the opportunity to rebut the presumption prior to class certification. We conclude that it is.