Issues regarding the use of statistical evidence at trial of a class action were recently addressed by the California Court of Appeal, First Appellate District, in Duran v. U.S. Bank Nat’l Ass’n, 2012 Cal. App. LEXIS 107 (Cal. Ct. App. Feb. 6, 2012).  The court concludes that the trial of an employment class action (seeking unpaid overtime) through the use of statistical evidence, where the court refused to allow the defendant to put on evidence of defenses to individual claims (such as that particular employees qualified as exempt), was not only contrary to California’s class action standards but a violation of due process.  The appellate court found the error here sufficiently egregious that it decertified the class and did not send the case back for another trial.  The court discussed Wal-Mart v. Dukes at some length, finding that “[t]he same type of ‘Trial by Formula’ that the U.S. Supreme Court disapproved of in Wal-Mart is essentially what occurred in this case.”  Id. at *102.  In Wal-Mart, the Supreme Court disapproved of a proposed trial plan  whereby a sample set of class members’ claims for backpay would be tried, and the result extrapolated to the entire class.  The Supreme Court concluded, unanimously, that “[a] class cannot be certified on the premise that Wal-Mart will not be entitled to litigate its statutory defenses to individual claims.”  

A recent article by Judy Greenwald in Business Insurance suggests that this decision will have broad implications for class actions in California and beyond: 

The ruling by an appellate court in California that dismisses a class action wage-and-hour lawsuit by bank employees is expected to lead to a dramatic reduction in the number of class actions filed in the state and could be highly influential nationally, observers say.

The Business Insurance article may be going a bit too far.  In my view, this decision is certainly important, but I don’t think it’s a surprising result that a defendant should be entitled to put on its defenses, and I don’t think it means the end of class actions (and after all, this is only one intermediate appellate court in one jurisdiction). 

What I think this decision means is that courts need to pay more attention to defenses in deciding class certification, and defendants should highlight defenses prominently in opposing certification.  Here is a key part of the opinion:

Class action lawsuits are intended to conserve judicial resources and to avoid unnecessarily repetitive litigation. Efficiencies must be maintained, sometimes resulting in imperfect results. A certain amount of variability can be tolerated. However, the trial management plan followed here prevented USB [the defendant] from submitting any relevant evidence in its defense as to 239 class members out of a total class of 260 plaintiffs. Whether the trial court would have given credence to such evidence is beside the point. A trial in which one side is almost completely prevented from making its case does not comport with standards of due process.

Id. at *114-15.

If plaintiffs think that defendants are conjuring up meritless defenses to defeat class certification, they can move to strike them or seek summary judgment on them.  But if a defense is valid and a defendant would be entitled to put on evidence in support of it in an individual trial, under this decision (and Wal-Mart), the defendant must have the right to put on its defense, in some reasonable manner, in a class action trial.  The California Court of Appeal made clear that they did not see their decision as making it impossible to try this kind of class action, nor was the court saying that statistical methods could never be used, but such a trial would have to be conducted in a manner that adequately protected the defendant’s rights to present individual defenses.  Because this is a due process requirement, it is not something the trial court has any discretion over.

I also found interesting that the parties and the court agreed here that, while a ruling on class certification is reviewed for abuse of discretion, the court “review[ed] de novo the legal issue of whether a trial plan violated a party’s right to due process.”  Id. at *74.  That by itself is an important reason to make due process arguments in opposing class certification, and in motion practice relating to how a class action trial will be conducted.

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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.