Circuit Split Grows over Whether Evidence Supportive of Class Certification Must be Admissible

Tager_09181Featured Expert Contributor, Judicial Gatekeeping of Expert Evidence

By Evan M. Tager, a Partner in the Washington, DC office of Mayer Brown LLP, with Carl J. Summers, Counsel with Mayer Brown LLP.

The Supreme Court explained in Wal-Mart Stores, Inc. v. Dukes that “Rule 23 does not set forth a mere pleading standard.  A party seeking class certification must affirmatively demonstrate his compliance with the Rule—that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc.”  You would think that would mean that plaintiffs seeking class certification must support their motion with admissible evidence.  Indeed, in Dukes the Supreme Court observed that the district court had held that “Daubert did not apply to expert testimony at the certification stage of class-action proceedings” and commented: “We doubt that is so.”

Nevertheless, relying on a 1975 Ninth Circuit decision and a pre-Dukes decision of the Eighth Circuit, the Ninth Circuit recently held in Sali v. Corona Regional Medical Center that “[i]nadmissibility alone is not a proper basis to reject evidence submitted in support of class certification” and that a district court therefore abused its discretion by declining to consider a declaration “solely on the basis of inadmissibility.” 

Sali is an employment class action brought by nurses against the hospital that employed them.  The plaintiffs allege, inter alia, that they were denied wages and overtime due to them as a result of the hospital’s practice of rounding the time at which employees clocked in or out to the nearest quarter hour.  In support of their motion for class certification, the plaintiffs relied on a declaration of a paralegal employed by plaintiffs’ counsel.

The paralegal compared the named plaintiffs’ rounded times with their actual clock-in and clock-out times “using a random sampling of timesheets” and concluded that “on average over hundreds of shifts, [the hospital’s] rounded time policy undercounted [one plaintiff’s] clock-in and clock-out times by eight minutes per shift and [the other plaintiff’s] times by six minutes per shift.”

The district court excluded the declaration on the grounds that (i) the paralegal could not authenticate the data he relied upon; (ii) the declaration was improper opinion testimony; and (iii) the paralegal’s “manipulation and analysis of raw data to reach cumulative conclusions is the technical or specialized work of an expert witness” that he lacked the qualifications to provide.

The Ninth Circuit did not directly review these grounds for excluding the declaration.  Instead, it held that the district court committed an error of law by applying an admissibility screen to evidence adduced in support of the motion for class certification.  Like the Eighth Circuit decision on which it relied, the Ninth Circuit rested heavily on the bromide that class-certification orders are inherently “tentative” and can be revisited after the litigation has proceeded to more advanced stages.

Quoting the Eighth Circuit decision, it reasoned that “[a]pplying the formal strictures of trial to such an early stage of litigation makes little common sense.  Because a class certification decision “is far from a conclusive judgment on the merits of the case, it is ‘of necessity . . . not accompanied by the traditional rules and procedure applicable to civil trials.’”

Evidencing neither concern about the hydraulic pressure to settle created by an improvident grant of class certification or understanding of the practice of permitting class discovery in advance of the filing of a motion for class certification, the court stated that “the evidence needed to prove a class’s case often lies in a defendant’s possession and may be obtained only through discovery.  Limiting class-certification-stage proof to admissible evidence risks terminating actions before a putative class may gather crucial admissible evidence.”

As the Ninth Circuit acknowledged, its decision conflicts with decisions of the Third, Fifth, and Seventh Circuits.  The starkest conflict is with the Fifth Circuit.  Even before Dukes, that court held in Unger v. Amedisys Inc. that the findings on which an order granting class certification rest “must be made based on adequate admissible evidence.”  Post-Dukes, the Seventh Circuit held squarely in Messner v. Northshore University HealthSystem that expert opinions offered in support of a motion for class certification must be admissible under Daubert, and the Third Circuit reached the same holding in In re Blood Reagents Antitrust Litigation.

Unsurprisingly, given the importance of the issue and the acknowledged break with the decisions of three other Circuits, the hospital has indicated that it intends to file a petition for rehearing en banc.  That petition is due on June 18.  If the Ninth Circuit does not grant rehearing en banc and align itself with the Third, Fifth, and Seventh Circuits—not to mention the forceful dictum in Dukes—the case would seem to be an excellent candidate for Supreme Court review.

 

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