Ninth Circuit Holds On 23(f) Appeal That District Court Abused Its Discretion By Weighing The Merits In Denying Certification

After granting the plaintiffs’ Rule 23(f) petition, the Ninth Circuit reversed a denial of class certification, finding that the district court had improperly weighed the merits of the plaintiffs’ Rule 23(a)(2) commonality evidence. The plaintiffs’ complaint alleged that the defendant’s criteria for promoting police officers to investigative positions created a disparate impact on those candidates over the age of 40, which violated California’s Fair Employment and Housing Act (“FEHA”) and other laws. The plaintiffs sought certification of their FEHA claims and submitted a statistical study purporting to show the alleged age discrimination. The defendant argued that the plaintiffs’ evidence suffered from several deficiencies, including the failure to perform a regression analysis considering innocuous explanations for the alleged disparate impact. The district court agreed with the defendant and denied class certification, prompting the plaintiffs’ interlocutory appeal.

Citing Wal-Mart and Amgen, the Ninth Circuit explained that: (1) to satisfy Rule 23(a)(2)’s commonality requirement the plaintiffs needed to show only one significant question of law or fact common to the putative class; (2) while some overlap between the merits and the commonality determination is often inevitable in the necessary rigorous analysis, it is improper for a court to consider whether the plaintiffs will ultimately prevail on the merits of the common issue; and (3) the common issue need only be capable of resolution on a class wide basis, regardless of whether that resolution favors the putative class.

With those principles guiding its analysis, the Ninth Circuit held that the district court abused its discretion in denying certification based on the purported issues plaguing the plaintiffs’ commonality evidence. In particular, the court stated that “whatever the failings of the class’s statistical analysis, they affect every class member’s claims uniformly” and whether the effects of defendant’s selection criteria “amount to a disparate impact on account of age ... will be so for all class members or for none; [the plaintiffs’] claims rise and fall together.” The court further explained that, while the attacks on the plaintiffs’ evidence “may prove pertinent to the merits of the case, and possibly to whether common issues predominate under Rule 23(b)(3), ... they do not eliminate the significant common question” of whether the defendant’s promotion criteria created a disparate impact on the class. Thus, the Ninth Circuit held that it was improper for the district court to weigh the merits of the plaintiffs’ evidence in performing its commonality analysis, rather than simply determining whether that evidence presented a significant issue common to the class.

Stockwell v. City & Cnty. of San Francisco, No. 12-15070, slip op. (9th Cir. Apr. 24, 2014).

 

Topics:  Amgen, Appeals, Class Action, Class Certification, Corporate Counsel, FEHA, Rule 23(b)(3), Rule 23(f), Wal-Mart

Published In: Civil Procedure Updates, Civil Rights Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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