Ruling On Class-Action Standard Under Attack

By Robert Ambrogi Esq

A 9th U.S. Circuit ruling on the standard of expert evidence required to certify a class action – one that resulted in approval of the largest class action in history – has come under heavy criticism -- most recently from a lower federal court within that very circuit.

In the decision, Dukes v. Wal-Mart, the 9th Circuit upheld expert testimony presented in support of the certification despite challenges by the defendants. It held, by a 2-1 vote, that courts at the class-certification stage should neither apply the full Daubert "gatekeeper" standard nor evaluate the weight of evidence or the merits of a case.

The ruling is at odds with a 2006 2nd Circuit decision, In re Initial Public Offerings Sec. Litig., which held that the court, before certifying a class action, must make "definitive assessment" of the class requirements, even if it requires the court to consider the merits of the case.

The 9th Circuit's approach has caused concern among many practitioners that the circuit set the class-certification bar too low – and now the ruling has been criticized by a lower court within the circuit.

In the recent California Central District case, In re Live Concert Antitrust Litigation, U.S. District Judge Stephen V. Wilson issued a class-certification ruling in which he expressed his concern that the Dukes decision limits the judge's role so drastically that it could be interpreted to require class certification in nearly every case where it is requested.

"Under one reading of Dukes, the scope of the Court's analysis is so limited that certification is virtually inevitable," Judge Wilson wrote. "Review of a motion for class certification would be similar to review of a Rule 12(b)(6) motion because class certification would be granted so long as the Plaintiffs submitted expert testimony in support of each of the Rule 23 requirements."

After conducting a detailed review of the case law interpreting Rule 23 – the class-certification provision of the Federal Rules of Civil Procedure – and 2003 amendments to the rule, Judge Wilson concluded that it was the 2nd Circuit, not the 9th Circuit, that correctly applied the rule.

"If this Court were free to craft its own standard, it would follow the standard established by In re IPO Sec. Litig.," Wilson said. "The Court finds the reasoning of IPO persuasive and consistent with the views of nearly every other Circuit.

"However, for purposes of the MDL this Court is only bound by Ninth Circuit precedent," he continued. "A plain reading of Dukes … clearly demonstrates that the Ninth Circuit intended to prohibit district courts from weighing conflicting evidence when determining whether the Rule 23 requirements are satisfied."

Ironically, as Judge Wilson pointed out, the 9th Circuit in Dukes based its analysis in part on two 2nd Circuit cases overruled by that circuit's decision in IPO. Further, both the IPO court and Judge Wilson noted that the 2nd Circuit approach was consistent with that taken by most of the federal circuits.


Even though Judge Wilson expressed concern that Dukes could severely curtail the court's role in applying Rule 23, he decided that it "possibly permits a limited inquiry that still allows the Court – without too much probing – to examine Plaintiffs' Rule 23 showing."

In the case before him, seeking certification of a class of purchasers of rock-concert tickets, the judge decided to conduct this limited inquiry. After considering the expert testimony and other evidence, Judge Wilson decided to certify the class action, but not without concluding words of caution.

"When the Court is at liberty to conduct a full Daubert analysis, Defendants' arguments may very well carry the day," he wrote. "However, this order views the allegations, expert testimony, and evidence through the very narrow prism permitted by Dukes."

Clifton T. Hutchinson, a partner in the Dallas office of the law firm K&L Gates, points to the Supreme Court's 1996 decision, Amchem Products Inc. v. Windsor, as support for his belief that the 9th Circuit's standard is too loose.

In Amchem, the Supreme Court recognized that under the amendments to Rule 23, trial judges are to take a "close look" at the plaintiffs' claims and evidence before making a class certification decision, said Hutchinson, who writes the blog Science Evidence. The 9th Circuit's rejection of Daubert gatekeeping at certification "mistakenly conflates the essential admissibility inquiry with consideration of the merits."

"Proper Daubert screening does not reach the merits of a case, though a Daubert decision may have a conclusive result," Hutchinson explained. "If claimants attempt to use expert opinion to establish the Rule 23 requirements, the trial court must as an initial matter determine if the proffered evidence is relevant and reliable. If not, then plaintiffs have not met their burden even under the 'some showing' standard applied by the district court in In re IPO.”

"There is no need for, or even a rational way to define, a multi-tier form of Daubert inquiry," Hutchinson said. "Expert opinion either reliably 'fits' the case or it does not. The suggestion that a 'lesser' Daubert standard should apply in some instances is simply backsliding toward the 'let it all in' philosophy proscribed by the Daubert trilogy."

Further reading:

  • Dukes v. Wal-Mart, Inc., No. 04-16688 (9th Cir. 12/11/2007) (withdrawing and replacing 474 F.3d 1214).
  • In re Initial Public Offering Sec. Litig., 471 F.3d 23 (2d Cir.2006).
  • In re Live Concert Antitrust Litigation, 2007 WL 4291967 (C.D. Cal. 2007).


Robert Ambrogi Esq

We are proud to partner with an author of Bob’s caliber to provide exclusive articles for our legal clients and leading industry experts. Robert J. Ambrogi is a news media veteran and the only person ever to hold the top editorial positions at the two leading national U.S. legal newspapers, the National Law Journal and Lawyers Weekly USA. He is currently a Massachusetts lawyer who represents clients at the intersection of law, media and technology. He is also internationally known for his writing and blogging about the Internet and technology. Media and Technology Law Bob represents a range of businesses and individuals, concentrating in print and electronic media companies and the editorial, sales, marketing and technology professionals who work in them. He also counsels businesses and individuals in employment matters. Arbitration and Mediation An established professional in alternative dispute resolution, Bob has been an arbitrator since 1994, focusing on labor and employment and securities disputes. A mediator in a range of civil disputes, Bob completed the training required by Massachusetts law to protect confidentiality.

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