No April Fools: U.S. Supreme Court Suggests That the Lower Courts Stop Joking Around With Class Action Certification


On April 1, 2013, the U.S. Supreme Court granted certiorari, and then summarily vacated, the Sixth Circuit Court of Appeals’ decision to certify a class composed of purchasers of Whirlpool washing machines (Whirlpool v. Glazer, No. 12-322).  The Supreme Court instructed the Sixth Circuit to reconsider its certification decision in light of the March 27, 2013, decision in Comcast Corp. v. Behrend (No. 11-864).  In so ruling, the Court suggests that the district courts are obliged to conduct an inquiry into the merits to determine whether class certification is appropriate.

Class actions are a much maligned mechanism for aggregating numerous claims against a single defendant.  Class actions allow individual plaintiffs with claims too small to bring on an individual basis to bundle their claims, often resulting in huge exposure for product manufacturers and potentially leading to “blackmail settlements.”  Perhaps in an effort to obviate the dangers associated with class actions, the trial court must conduct a “rigorous analysis” and determine that the requirements of Federal Rule of Civil Procedure 23 are met before certifying any class.

Rule 23(a) requires that a party seeking class certification demonstrate that the proposed class is so large that individual claims would be impractical, that there are questions of law or fact common to the class (commonality), that the class representatives’ claims are typical of the class as a whole, and the class is adequately represented by counsel.  In addition, a party seeking to certify a class must demonstrate that the class action is maintainable under Rule 23(b).  Plaintiffs may comply with Rule 23(b) by demonstrating that common questions of law or fact predominate over questions affecting the individual class members.  Since the Supreme Court decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ---, ---, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011), courts have struggled with whether it is appropriate to inquire into the merits of the proposed class action in conducting the “rigorous analysis” necessary for class certification.

In the recent Comcast decision, the Supreme Court reversed the Third Circuit Court of Appeals’ decision to certify a class of cable television customers in an antitrust action.  The Court found that the plaintiffs could not prove that common questions of law or fact predominated over questions affecting individual class members.  In holding that the class was improperly certified, the Court chastised the Third Circuit for failing to consider arguments relating to the plaintiffs’ claimed damages “simply because those arguments would also be pertinent to the merits determination.”  Comcast, at *5.

The Sixth Circuit acted in accord with the Third Circuit when it certified a class consisting of purchasers of certain Whirlpool washing machines.  The Whirlpool plaintiffs allege various product liability claims against the product manufacturer arising out of the growth of mold and mildew in the machines.  Notably, most of class members’ claims were based only on the potential for growth of mold and mildew.  Whirlpool opposed class action on the basis that the vast majority of purchasers had not experienced any mold or mildew growth in their washing machines.  Moreover, Whirlpool argued that customers’ laundry practices are so varied that the class members could not present a common liability question.  The Sixth Circuit refused to consider the merits of the plaintiffs’ claims in reaching its decision, and ratified the class.

In light of the Comcast decision, the Supreme Court vacated the Sixth Circuit’s decision and remanded the Whirlpool litigation.  The Supreme Court specifically directed the Sixth Circuit to reconsider its certification decision under the auspices of Comcast, and in doing so commanded the Sixth Circuit to conduct a rigorous analysis under Rule 23 even though the analysis necessarily requires an inquiry into the merits of plaintiffs’ claims.  The Whirlpool decision is significant because the Supreme Court has expressed in no uncertain terms that overbroad class actions should not be maintained, and the decision allows the lower courts to inquire into the merits of a proposed class action when making certification decisions.  This inquiry may prevent some frivolous class action litigation from proceeding against product manufacturers, therefore lessening the likelihood of blackmail settlements.

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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