CALIFORNIA CLASS ACTION AND IMPACT LITIGATION: Brinker, Dukes and Beyond

Brad Seligman

Impact Fund

June, 2012

Presentation Overview

Class Action Basics

Federal versus California Class Actions

Good Old Days Are Here Again!

Avoiding Federal Court

Do You Really Need A Class Action?

What is your goal?

Alternatives: government and private defendants

Maybe you have no choice

Dark Side of Class Actions

What a class gets you

Class Action Basics

Federal Rule 23 and California CCP 382 and Cal. Rules of Court 3.760 et seq.

Numerosity

Commonality

Typicality

Adequacy

Injunctive and damages actions

Rule 23(b)(2) & (3)

Life After Wal-Mart: Federal Court

Role of Merits

Commonality

Damages Actions

More bad News: Concepcion v. AT&T

Life In the Scalia-Mart Universe

Only policy challenged is decentralized discretion

Policy against discrimination

Thousands of decision-makers, a multitude of jobs, variety of regional policies that all differed, 1.5 million class members

Injunctive Relief and back pay sought

Role of Merits at Class Cert

The Old Eisen Rule

Merits may “necessarily overlap”

No ruling on merits per se but how is “significant proof of policy of discrimination” different from liability standard?

No more bifurcated discovery?

Wal-Mart: Rule 23(a) Commonality Standard

Common Question Insufficient —Need Common Answers

Common contention capable of class wide resolution

Resolves an issue “central to the validity of each one of the claims in one stroke.”

“Glue”

Glue Examples

Express Policy

Small Group Of Decision-Makers

Automatic/Computer-Based

Significant Proof of a general policy of discrimination

How Much Glue?

Not entire claim(s)—just central issue

Compare 23(c)(4) and (b)(3)

Limiting scope of case to emphasize common issues

Not Enough

Glue?

“Significant Proof “ of General Policy of Discrimination

In absence of Express Policy: Alternative Route To Commonality

What Is “Significant” Proof? Statistics, anecdotes, social science

Limited to excessively discretionary decision-making?

JUST HOW BAD IS DUKES?

Or will judges take cue from Supreme Court evidence hostility to class actions?

OR

Concepcion v. AT&T

Confine it to its facts? Just very large

national challenges to decentralized discretionary

decision-making?

Distinguishing Wal-Mart Commonality

Non-intent cases

Narrower scope

Common policies

Injunctive relief only cases

The New (b)(2) Rule

Advisory Note and Old Rule

New Rule—Indivisible Injunctive Only?

Maybe Incidental Damages?

Punitive Damages? Costco

No “Trial By Formula”

9th Circuit Hilao approach

Substantive Title VII right to individual defense

Limited to class member damages?

Other statistical approaches?

Does Defendant Have a Due Process Right to Challenge Each Class Member’s Claim?

California Class Action Law Much Better Than Federal

Public policy in favor of class actions

Unique historical evolution: the 19 year gap

Similar language but different meaning: commonality

Best of Times in California

Commonality

Merits

Procedural advantages

Sav-On Drug Stores v. Superior Court 34 Cal. 4th 319 (2004)

Class Action Public Policy

Liberal Reading of Predominance

Endorsement of pattern & practice theory

Damages Differences discounted

Mandate to be Procedurally Innovative

What is Predominance of Common Issues?

Not the federal Rule 23(b)(3) standard

Comparative analysis: common issues vs. individual issues

Comparative Analysis: class case vs. individual cases

Individual damages or liability issues no bar

Brinker v. Superior Court (2012)

Ignores Wal-Mart

Re-affirms California commonality comparative approach

Common means either common policy or practice or common method of proof

Ignores court of appeal holding that commonality absent if individual issues had to be resolved for each class member

California’s No Merits Rule

Linder v.Thrifty Stores (2000) endorses Eisen

Brinker affirms: no premature determination of merits unless “essential” to class certification

Assume validity of plaintiffs’ theory of recovery: only issue is whether it is amenable to class proof.

Role of Macro Proof

Sav-On and Brinker Concurrence

Statistics, sampling, surveys, other expert analysis

Pattern or practice burden

Waiting in Wings: Duran

Procedural Advantages of California Class Actions

Notice costs may be shifted to defense

Double standard on appeal

Injunctive relief before class cert (CCP § 527)

CCP § 384—cy pres

Avoiding Federal Court: The Basics

Federal Question Jurisdiction

Diversity Jurisdiction

CAFA

Should I Ever File in Federal Court?

CAFA or Federal Claims

Bad local court

Venue selection

A good judge trumps all

Plead California claims

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