Court Opinion

ID: 9756501
Source: CourtListenerOpinion
Date Created: 2023-08-28 21:31:08.758222+00
Date Added: 2024-06-11T07:28:23.941013
License: Public Domain

Justice EID,
dissenting.
Today the majority holds that the question of whether the plaintiff has produced sufficient evidence to meet the requirements of class certification is purely a discretionary matter for the trial court to decide. In my view, the majority's standardless approach makes class certification in Colorado essentially unreviewable by appellate courts and raises serious procedural due process concerns. I respectfully dissent.
This case requires us to determine what amount of evidence class proponents must put forth to meet the requirements of Rule 28. The majority declines to answer that question, however, and instead concludes that "trial courts have significant discretion to find whether the evidence proffered by the class advocate satisfied each C.R.C.P. 23 requirement." Maj. op. at 881. In other words, there is no "specific burden of proof" to be met. Id. at 881 (declining to "impos[e] a specific burden of proof on the trial court's certification decision"); id. at 882 ("[IJeaving class certification to the discretion of the trial court without requiring a specific burden of proof"). Instead, the discretionary burden of proof is apparently met when the trial court says it is. Id. at 882 ("A trial court must conduct a rigorous analysis of the evidence and find to its satisfaction that each C.R.C.P. 23 requirement is established") (emphasis added).
The majority's error is to confuse a trial court's discretion with the plaintiff's burden *891of proof. Discretion is, by definition, not a burden of proof. Discretion is what a trial court exercises in choosing from available options; it is, by definition, a dynamic concept. A burden of proof, by contrast, is a static, legal concept that is applicable to all cases in a particular category. By confusing the two, the majority defines the burden of proof as an ever-moving target of trial court discretion. In some cases, perhaps a plaintiff need only produce a scintilla of evidence; in others, a preponderance might be required; in still others, clear and convincing evidence. By adopting a regime of total evidentiary discretion, the majority makes it virtually impossible for plaintiffs and defendants to evaluate and present their case.
To compound this error, the majority repeatedly emphasizes how vast and subjective the trial court's discretion truly is. The majority begins by referencing the trial court's "significant discretion to find whether the evidence proffered by the class advocate satisfies each C.R.C.P. 28 requirement." Id. at 881; see also id. (trial court has "broad discretion to ... determine whether each of the class certification requirements is met"). The majority then stresses the subjective nature of that discretion, describing the trial court's task as "determin[ing] to its satisfaction whether the class advocate has satisfied" the requirements of Rule 28. Id. at 884 (emphasis added); see, eg., id. at 877, 882, 884 (same).1
After today's discretionary burden is put into place, class certification decisions will essentially be unreviewable in Colorado. In the majority's regime, the only person who needs to be "satisfied" is the trial judge; there is no objective standard of proof that a class proponent must produce. Therefore, there is very little for an appellate court to examine on review: if the trial court is "satisfied" when it enters an order certifying the class, the amount of proof produced to meet the trial court's discretion is, by definition, sufficient. One wonders what the purpose is of permitting interlocutory appeal of class action certification orders if there is nothing to review. See C.R.C.P. 23(F); § 18-20-901, C.R.S. (2011).
The discretionary burden regime adopted by the majority today is, in my view, contrary to Colorado law. The majority relies primarily on Farmers Insurance Exchange v. Benzing, 206 P.3d 812 (Colo.2009), in which we stated that a trial court's decision to certify a class is reviewed under an abuse of discretion standard. The fact that a decision to certify a class is reviewed for an abuse of discretion, however, does not translate into a regime under which every aspect of a class action case is discretionary. As several courts have explained, given the fact-intensive nature of the inquiry, a decision to certify a class is subject to abuse of diseretion review. - However, whether the trial court has applied the correct legal standard-including the proper burden of proof-is an issue that is reviewed de novo. See, e.9., Teamsters Local 445 Freight Div. Pension Fund v. Bombardier, 546 F.8d 196, 201-03 (24 Cir.2008) (noting that "[wle review for abuse of discretion the district court's denial of class certification.... We review de novo any issues of law underlying the Rule 23 ruling, including the question of whether the district court applied the correct standard of proof"); Fener v. Operating Eng'rs Constr. Indus. & Misc. Pension Fund (Local 66), 579 F.3d 401, 406-07 (5th Cir.2009) (same); In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 320 (8d Cir.2009) (same). To put it differently, a trial court automatically abuses its considerable discretion if it applies the incorrect burden of proof, as occurred in this case.
Secondly, the majority emphasizes that Colorado favors the use of the class action as a procedural device. But again, favoring the use of class actions in appropriate ctreum-stances does not mean that class actions are appropriate in all cireamstances. In fact, in the very case upon which the majority relies *892most heavily, Benzing, we held that class certification was inappropriate because there was no class wide method to show that the defendant had caused the putative class members' injury. 206 P.8d at 820-23.
Perhaps in recognition of the standardless nature of the discretionary burden it adopts, the majority repeatedly states that the trial court must perform a "rigorous analysis" of the evidence presented in support of certification, relying upon language from General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2864, 72 L.Ed.2d 740 (1982). But it is not enough for a trial court to simply consider the evidence and exercise its discretion through a "rigorous analysis," as the majority seems to think. See, eg., maj. op. at 884. In other words, that "rigorous analysis" must lead to something-namely, a conclusion that a particular burden of proof has been met.
The trial court's opinion in this case perfectly illustrates this problem. The court began its analysis with the statement that "In determining whether to certify a class, the court must accept as true all allegations set forth in the complaint and avoid inguir-ing into the merits," citing Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974). Trial Ct. Order at 3 (emphasis added); see also id. at 7 (refusing to consider defendants' expert's critique of plaintiffs' expert's opinion because "[these are merits questions that are not appropriate for determination at this stage of the proceedings"); id. at 8. But in Wal-Mart Stores, Inc. v. Dukes (decided after the trial court issued its opinion in this case), the Supreme Court expressly disavowed the interpretation of Eisen adopted by the trial court, stating that "[flrequently [a] rigorous analysis will entail some overlap with the merits of the plaintiff's underlying claim. That cannot be helped," and that anything to the contrary in Eisen "is the purest dictum." 564 U.S. —, 131 S.Ct. 2541, 2551-52 & n. 6, 180 LEd.2d 374 (2011) (internal quotation marks omitted); see also maj. op. at 885 n. 12 (recognizing the Supreme Court's clarification of E%sen). - Additionally, the trial court cited Blackie v. Barrack, 524 F.2d 891, 901 (Oth Cir.1975), for the proposition that "the court must take the substantive allegations of the complaint as true." Trial Ct. Order at 8. But that statement in Blackie has been abrogated by Falcon's "rigorous analysis" requirement, and by the Ninth Circuit itself. See, eg., Tlhardt v. A.0. Smith Corp., 168 FRD. 613, 617 (S.D.Ohio 1996) (recognizing abrogation by Falcon ); Wang v. Chinese Daily News, Inc., 623 F.3d 748, 754 (Oth Cir.2010) (noting that Blackie's statement had been overruled by the Ninth Circuit in Dukes v. Wal-Mart Stores, Inc., 608 F.3d 571, 581 (9th Cir.2010) (en banc), in which the court "firmly rejected any suggestion that a district court, in deciding a class certification motion, may not look behind the pleadings to overlapping merits issues").2 Even the majority implicitly disagrees with the trial court's premise, stating that a trial court "may consider" the merits to the extent necessary to determine class certification. See maj. op. at 877, 885. Because the trial court plainly misunderstood the task at hand, the fact that it exercised its discretion in a particular way should be accorded no weight.
Despite the trial court's misapprehension of the inquiry, the majority affirms its conclusion on the ground that it conducted a "rigorous analysis." The court has thus turned the class certification inquiry into a purely procedural requirement. This is made clear by the fact that the majority relies on three factors to affirm the trial court's conclusion, including that the court: (1) held a two-day class certification hearing, in which it heard live testimony; (2) considered deposition testimony; and (8) included a detailed summary of expert opinions in its order, as well as "numerous citations to the record." Maj. op. at 888; see also id. at 878 (noting that the court considered "146 pages of briefs with fifty-four exhibits, affidavits *893from seven experts, portions of deposition transcripts from twelve witnesses, wind and sampling data, and numerous other documents. The court also held a two-day hearing on class certification with additional oral and written testimony, including fifty-three more exhibits"). "This analysis," the majority concludes, "satisfies the requirements of C.R.C.P. 23." Id. at 889 (emphasis added). In other words, as long as the trial court considers whether certification is appropriate, its certification decision will be upheld.
Significantly, the majority cites to no case in which a court has adopted a discretionary burden of proof. By contrast, numerous courts, both state and federal, have imposed a burden on class proponents to meet the certification requirements by a preponderance of the evidence.3 That is because the preponderance standard is simply an outgrowth of class certification requirements themselves. As the majority notes, Rule 23 requires the trial court to make certain "findings." Maj. op. at 881 (citing C.R.C.P. 23(b)(8), which mandates that the court "find[ ] that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include. ..."). The essence of making a "finding" is that the court is convineed that a particular proposition is true, and in the civil arena, that occurs when there is a preponderance of the evidence to support the proposition. § 18-25-127(1), C.R.S. (2011) (adopting a preponderance of the evidence standard in civil cases). As one court reasoned, the preponderance standard is required because "the plain text of Rule 23 requires the court to find ... the facts favoring class certification." Alaska Elec. Pension Fund v. Flow-serve, 572 F.3d 221, 228 (bth Cir.2009) (per curiam) (citation and internal quotation marks omitted). The trial court cannot "find" something simply by concluding, as the trial court did here, that the particular air-diffusion model supported by the class proponents was not "so flawed to be inad-miss[iJble." Trial Ct. Order at 7; see also maj. op. at 889. Rather, a finding is a conclusion, based on a complete examination (or "rigorous analysis") of the record, that a proposition has been established by a preponderance of the evidence. At bottom, the majority's discretionary burden of proof-which permits certification as long as a class proponent's proof is "not so flawed to be inadmissible"-is inconsistent with the "rigorous analysis" that the majority purports to require.
Lacking caselaw support, the majority rejects the preponderance standard on the ground that the Federal Rules of Civil Procedure were amended in 2003 to remove the language that class certification "may be conditional"-language that remains in the Colorado rule. Maj. op. at 8883-84. The majority seems to reason that because Colorado continues to permit certification on a conditional basis, a trial court is permitted to certify a class on a preliminary basis with minimal *894evidence, and may decertify the class at a later time if the preliminary basis is ultimately discredited. Maj. op. at 881. But the majority misreads the purpose of a "conditional certification" under our rules. As the Advisory Committee to the Federal Rules Committee made clear, "[the provision for conditional class certification [wals deleted [in the federal rules] to avoid the unintended suggestion, which some courts have adopted, that class certification may be granted on a tentative basis, even if it is unclear that the rule requirements are satisfied." Hydrogen Peroxide, 552 F.3d at 319 (citation to Advisory Committee Report omitted) (emphasis added). Here, the majority adopts-erroneously in my view-the "unintended suggestion" that a class may be certified on the basis of a model that is "not so flawed as to be inadmissible" because any critique of the model may, at a later time, demonstrate that the class should be decertified. Maj. op. at 889. I would hold, instead, that a trial court cannot certify a class unless it finds, after a "rigorous analysis" of all of the evidence before it-including the critique of the proposed model-that each of the Rule 23 requirements has been met by a preponderance of the evidence.4
Ultimately, the majority's opinion rests on its impression that, in contrast to Colorado, federal courts have adopted "a policy of limiting class actions." Maj. op. at 883; see also id. at 888 n. 7. What the majority refers to as a federal "policy," however, is simply the concern, grounded in procedural due process, that erroneously certified class actions may "create unwarranted pressure to settle nonmeritorious claims on the part of defendants." Newton v. Merrill Lynch, 259 F.3d 154, 162 (Bd Cir.2001); see maj. op. 883-84 (citing Hydrogen Peroxide, 552 F.3d at 310 (citing Newton )). This is a concern that informs our Rule 23 jurisprudence as well, See, eg., Jahn v. ORCR, Inc., 92 P.3d 984, 989 (Colo.2004) (noting that C.R.CP. 23 "incorporates the due process concerns underlying class actions"). Indeed, the risk of improperly granted or denied class certifications led to the interlocutory appellate review of such decisions under the federal rules, see Newton, 259 F.3d at 162, and our rules as well, see C.R.C.P. 23(f). By adopting an unreviewable discretionary burden of proof, the majority has essentially forfeited this important role for appellate review.
In the end, the majority views class certification as just another "case-management decision" by the trial court, like deciding whether to permit an amendment to a pleading, or whether to stay or continue proceedings. Maj. op. at 881-82 & 882 n. 5 (referring to the "case-management nature of the class certification decision" and listing case-management decisions it finds to be analogous). But again the majority simply misunderstands the nature of the class certification decision. In considering whether to permit the amendment of a pleading, or whether to stay or continue proceedings, the trial court need not evaluate conflicting expert testimony. To put it somewhat differently, the trial court's evaluation of conflicting expert testimony in this case regarding the validity of another expert's air-diffusion model emphatically was not a case management decision. Rather, it was (or should have been) a decision as to whether the model demonstrates, by a preponderance of the evidence, that there is an identifiable class and that common issues predominate over individual issues in the class claims. After today, the decision is simply a matter of keeping the trial court satisfied. For the reasons stated above, I respectfully dissent from the majority's opinion.
*895I am authorized to state that Justice RICE joins in this dissent.

. The majority relies on language from General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 72 LEd.2d 740 (1982), which states that "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." (Emphasis added). As noted below, the majority's emphasis on the "satisfied" language to support its subjective burden gives little effect to the "rigorous analysis" requirement.

. The U.S. Supreme Court granted, vacated, and remanded the Wang case in light of Wal-Mart Stores, Inc. v. Dukes, 564 U.S. —, 131 S.Ct. 2541, 180 LEd.2d 374 (2011). Chinese Daily News, Inc. v. Wang, No. 10-1202, — U.S. —, 132 S.Ct. 74, 181 LEd.2d 1, 2011 WL 4529967, at "1 (Oct. 3, 2011). While this "accepted as true" language has appeared in our caselaw, it has been qualified. Benzing, 206 P.3d at 818 (stating that "a court must generally accept as true the allegations in support of certification") {emphasis added).

. - Federal circuit courts adopting the preponderance standard include: Teamsters Local 445 Freight Division Pension Fund v. Bombardier, 546 F.3d 196, 201 (2d Cir.2008); In res Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 320 (3d Cir.2009); Ferner v. Operating Eng'rs Constr. Indus. & Misc. Pension Fund (Local 66), 579 F.3d 401, 407 (5th Cir.2009). See also West v. Prudential Sees., Inc., 282 F.3d 935, 938 (7th Cir.2002) ("A district judge may not duck hard questions by observing that each side has some support, or that considerations relevant to class certification also may affect the decision on the merits. Tough questions must be faced and squarely decided, if necessary, by holding evidentiary hearings and choosing between competing perspectives."). The Tenth Circuit has imposed an even higher burden. See Reed v. Bowen, 849 F.2d 1307, 1309 (10th Cir.1988) (a party seeking class certification must show "under a strict burden of proof" that the Rule 23 requirements are met). Federal district courts adopting the preponderance standard include: In re HealthSouth Corp. Sec. Litig., 257 FRD. 260, 272 (N.D.Ala.2009); Reed v. Advocate Health Care, 268 FRD. 573, 578 (N.D.l.2009) In re Safety-Kleen Corp. Bondholders Litig., 2004 WL 3115870, at *2 (D.S.€C.2004); Iihardt v. A.0. Smith Corp., 168 FRD. 613, 617 (S.D.Ohio 1996); In re Puerto Rican Cabotage Antitrust Litig., 269 F.R.D. 125, 130 n. 4 & 139 (D.P.R.2010). State courts adopting the preponderance standard include: Warner v. Waste Mgmt., Inc., 36 Ohio St.3d 91, 521 N.E.2d 1091, 1098 n. 9 (1988); Whitaker v. 3M Co., 764 NW.2d 631, 638 (Minn.App.2009); Bourgeois v. A.P. Green Indus., Inc., 939 So.2d 478, 487 (La.App.2006).

. The majority also points to the fact that the Second and Third Circuits cited to the 2003 federal rule amendments as supporting a preponderance standard. Maj. op. at 883 n. 7 & 883 n. 8 (citing Hydrogen Peroxide, 552 F.3d at 318, and In re Initial Public Offerings Securities Litigation, 471 F.3d 24, 39 (2d Cir.2006)). Both cases, however, referenced the changes in the federal rules as support for the proposition that examination of the merits of the case may be necessary to determine whether certification is appropriate, Hydrogen Peroxide, 552 F.3d at 316-20; In re IPO, 471 F.3d at 38-42, a proposition, as noted above, that the majority and the United States Supreme Court have adopted. In addition, as one commentator has noted, the Second Circuit's reliance on the 2003 rule changes in In re IPO gave it a way "to disavow its own precedents counseling against the weighing of competing expert submissions," Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L.Rev. 97, 114 & n. 54 (2009).