Opinion ID: 1688626
Heading Depth: 1
Heading Rank: 1

Heading: Conditional Certification

Text: The place to begin our analysis of this aspect of the case is with the Rule itself and an examination of the language on which Odom relies. Rule 23(c)(1) provides that [a]n order ... may be conditional. (Emphasis added.) Furthermore, Rule 23(d) provides that in class actions the court may make appropriate orders: (1) determining the course of proceedings or prescribing measures to prevent undue repetition or complication in the presentation of evidence or argument; ... (3) imposing conditions on the representative parties or on intervenors;... [or] (5) dealing with similar procedural matters. It is well settled that these provisions authorize trial courts to certify conditional or temporary classes under certain conditions. For example, a conditional class may properly be certified to operate as long as no potential conflicts materialize, provided common issues alleged are borne out by discovery, provided the case remains manageable, provided suitable notice can be given, or the like. 2 Newberg on Class Actions § 7.33 (3d ed.1992). Other examples are those cases in which defendants ... stipulate or determine not to oppose class certifications. Id. § 7.10 (emphasis added) (footnotes omitted). Perhaps the most familiar example of this latter type is the certification of conditional or temporary classes for settlement purposes. When the court has not yet entered a formal order determining that the action may be maintained as a class action, the parties may stipulate that it be maintained as a class action for the purpose of settlement only. Id. § 11.27, at 11-40 (footnote omitted). In these circumstances, courts often accommodate the parties by establishing temporary classes for settlement purposes in connection with the sending of notices to class members under Rule 23(e). Id. The certification of a temporary settlement class [may be viewed] as nothing more than a tentative assumption indulged in by the court to facilitate the amicable resolution of the litigation, rather than as some sort of conditional class ruling under Rule 23 criteria. Id. at p. 11-50 (emphasis added). Newberg continues: The actual class ruling is deferred in these circumstances until after hearing on the settlement approval, following notice to the class. At that time, the court in fact applies the class action requirements to determine whether the action should be maintained as a class action and whether the class settlement should be approved. Viewed in this light, a court ruling creating a temporary settlement class at the request of the parties is not a formal class ruling. The court has not yet applied Rule 23 criteriaeither in a strict or a lax fashionso that the contention that use of this device undermines the proper application of class actions tests appears to miss the mark. Id. (emphasis added) (footnote omitted). Temporary settlement classes bear two significant characteristics. First, they are entered upon the agreement of the defendant. Second, they promote the strong policy favoring settlements. See id. at 11-44; In re Chicken Antitrust Litig. American Poultry, 669 F.2d 228, 238 (5th Cir.1982); In re PaineWebber Limited Partnerships Litig., 171 F.R.D. 104 (S.D.N.Y.), aff'd, 117 F.3d 721 (2d Cir.1997). Thus, as observed by In re General Motors Corp. Pick-Up Truck Fuel Tank Products Liability Litig., 55 F.3d 768 (3d Cir.), cert. denied sub nom. General Motors Corp. v. French, 516 U.S. 824, 116 S.Ct. 88, 133 L.Ed.2d 45 (1995), modified on other grounds, Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997): [N]otwithstanding that there is an absence of clear textual authorization for settlement classes, many courts have indulged the stipulations of parties by establishing temporary classes for settlement purposes only. See, e.g., Mars Steel v. Continental Illinois Nat'l Bk. & Trust, 834 F.2d 677 (7th Cir.1987); Weinberger v. Kendrick, 698 F.2d 61 (2d Cir.1982), cert. denied, 464 U.S. 818, 104 S.Ct. 77, 78 L.Ed.2d 89 (1983); In re A.H. Robins Co., 880 F.2d 709, 738-39 (4th Cir.1989); In re Dennis Greenman Sec. Litig., 829 F.2d 1539, 1543 (11th Cir., 1978[1987]); Plummer v. Chemical Bank, 668 F.2d 654 (2d Cir.1982); In re Beef Industry Antitrust Litig., 607 F.2d 167, 173 (5th Cir.1979); Malchman v. Davis, 706 F.2d 426, 433-34 (2d Cir.1983); In re Taxable Mun. Bond Sec. Litig., [MDL-863, E.D. La., Nov. 15, 1994]; In re Silicone Gel Breast Implant Prod. Liab. Litig., [CV-92-P-10000-S., N.D. Ala., Sept. 1, 1994]; In re First Commodity Corp. of Boston, 119 F.R.D. 301, 306-08 (D.Mass.1987); In re Bendectin, 102 F.R.D. 239, 240 (S.D.Oh.1984), rev'd on other grounds, 749 F.2d 300 (6th Cir.1984); In re Mid-Atlantic Toyota Antitrust Litig., 564 F.Supp. 1379, 1388-90 (D.Md. 1983); In re Chicken Antitrust Litig., 560 F.Supp. 957, 960 (N.D.Ga.1980). 55 F.3d at 786. Class certifications of the type involved in this case, however, are patently and fundamentally different from temporary settlement-class certifications. Here, certification was contested, rather than consensual; the order was entered without any analysis of the prerequisites of Rule 23(a) and (b); and the order was entered without notice to the defendant and without an opportunity for the defendant to be heard. The scope of the trial court's duty to address these prerequisites was the subject of General Telephone Co. of the Southwest v. Falcon, 457 U.S. 147, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). In that case, the Supreme Court ordered the decertification of a class that had been certified based on allegations in the pleadings. Id. at 160-61, 102 S.Ct. at 2372. The issue defined by the Court was whether ... Falcon, who complained that [his employer, General Telephone Company of the Southwest (`GTC')] did not promote him because he is a Mexican-American, was properly permitted to maintain a class action on behalf of Mexican-American applicants for employment whom [GTC] did not hire. Id. at 149, 102 S.Ct. at 2366 (emphasis added). In the complaint, Falcon sought to represent `Mexican-American persons who are employed, or who might be employed, by [GTC] ..., who have been and who continue to be or might be adversely affected by the practices complained of herein.' Id. at 151, 102 S.Ct. at 2367. As to the Rule 23 prerequisites of commonality, numerosity, typicality, and adequacy of representation, the complaint alleged: There are common questions of law and fact affecting the rights of the members of this class who are, and who continue to be, limited, classified, and discriminated against in ways which deprive and/or tend to deprive them of equal employment opportunities and which otherwise adversely affect their status as employees because of national origin. These persons are so numerous that joinder of all members is impracticable. A common relief is sought. The interests of said class are adequately represented by Plaintiff. Defendant has acted or refused to act on grounds generally applicable to the Plaintiff. 457 U.S. at 151, n. 3, 102 S.Ct. at 2367, n. 3 (emphasis added). The complaint contained no factual allegations concerning [GTC's] hiring practices. Id. at 150, 102 S.Ct. at 2367 (emphasis added). However, based on these allegations of compliance with Rule 23, the trial court certified a class composed not only of individuals who were employed by GTC, as was Falcon, but also of individuals who, unlike Falcon, had unsuccessfully applied for employment. 457 U.S. at 152, n. 5, 102 S.Ct. at 2367, n. 5 (emphasis added). Holding that Falcon's allegations of compliance with Rule 23 were insufficient to support the certification of a class composed of unsuccessful job applicants, the Court stated: [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 [GTC] to hire more Mexican-Americans. Without any specific presentation identifying the questions of law or fact that were common to the claims of [Falcon] and of the members of the class he sought to represent, it was error for the District Court to presume that [his] claim was typical of other claims against [GTC] by Mexican-American employees and applicants.... .... ... The District Court's error in this case ... is the failure to evaluate carefully the legitimacy of the named plaintiff's plea that he is a proper class representative under Rule 23(a).... Sometimes 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.... ... With the same concerns in mind, we reiterate today that a Title VII [Civil Rights Act of 1964, 42 U.S.C. § 2000 et seq.] 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. 457 U.S. at 158-61, 102 S.Ct. at 2371-73 (emphasis added). Falcon does not hold, nor do we, that a precertification evidentiary hearing is required in every caseor even in most cases. As Falcon explained, the issues [may be] plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim. Id. at 160, 102 S.Ct. at 2372. Falcon also does not prohibit temporary or conditional settlement-class certifications. [1] In fact, most of the cases cited above as upholding that practice were decided after Falcon. However, as we also observed above, this case is fundamentally different, that is, in this case the certification was entered without notice to, or stipulation by, the Bank. What Falcon does mean, however, is that compliance with Rule 23 criteria ... cannot be presumed without analysis. Newberg, § 7.18, at pp. 7-65, 7-66. In other words, the trial court cannot simply rel[y] on the `imagination' of [the putative representative's] counsel to provide solutions to Rule 23 problems. In re Hotel Telephone Charges, 500 F.2d 86, 90 (9th Cir.1974). The court in each case must conduct its own analysis. Cf. Ex parte Green Tree Financial Corp., 684 So.2d 1302 (Ala.1996) (mandamus issued to decertify a class because the proponent failed to provide sufficient evidence of Rule 23 criteria); Ex parte Exide Corp., 678 So.2d 773 (Ala.1996) (same); Ex parte Blue Cross & Blue Shield of Alabama, 582 So.2d 469 (Ala.1991) (same). The Bank contends that the ex parte certification order entered in this case essentially shifted the burdenwhich rests on the proponent of class certification, Rowan v. First Bank of Boaz, 476 So.2d 44, 46 (Ala.1985), to prove compliance with Rule 23to the Bank to demonstrate that the class should be de certified. We agree that practically, as well as theoretically, certification has changed the posture of this case and the positions of the respective parties. In this connection, the Bank argues that such certifications ... restrict defendants' rights to contact and obtain information from putative class members, [through] informal discovery. Petition for Writ of Mandamus, at 13. More fundamentally, the Bank is severely prejudiced by the class certification because, it continues, the certification changes the Bank's relationship with thousands of its customers.... Id. at 13-14. Also, we judicially know that, as a practical matter, once an order has been entered, to the subject of that order attaches the intangible process of inertia, that is, something set in motion tends to stay in motion until something stops it. See Webster's New International Dictionary of the English Language, Unabridged, Inertia, 1272 (2d ed.1953). At this time, we need not, and do not, determine whether ex parte certifications are invalid per se. We state only that such certifications will not satisfy the requirements of Rule 23, unless the proponent demonstrates a compelling reason for such a certification. Odom has not demonstrated such a reason in this case. On the contrary, as we shall discuss in Part II, there is no valid reason in this case for an order of this sort.