• New Class Certification Opinion From Judge Easterbrook Is a Tour de Force
  • July 29, 2014 | Author: Jordan Elias
  • Law Firm: Lieff, Cabraser, Heimann & Bernstein, LLP - San Francisco Office
  • "The greatest living American jurist isn't on the Supreme Court," replied Justice Cardozo when asked which of his colleagues on the court was the greatest. Cardozo was referring to Learned Hand, but his remark might apply today to another judge who has professed admiration for Hand: Frank Easterbrook of the Seventh Circuit Court of Appeals.

    Judge Easterbrook -- a jurist, like Hand, with a gift for crafting opinions that teach as well as decide, that cut through legal static to say more with fewer words -- turned his focus this month to one of the most contentious subjects in American jurisprudence: the standard for certifying a class under Federal Rule of Civil Procedure 23.

    Following the Supreme Court's recent decisions in Wal-Mart and Comcast overturning class certification orders against two of the nation's largest corporations (and, depending on whom you ask, exploiters of market power), the corporate defense bar has taken to arguing that federal judges risk reversal if they certify a class in pretty much any case.

    Judge Easterbrook, despite his pro-business reputation, is having none of that. His new IKO opinion reverses an order that had denied class certification on the grounds that a proposed class of purchasers of allegedly defective and fraudulently marketed roofing shingles had suffered disparate damages. (2014 U.S. App. LEXIS 12684.)

    It's one thing, Judge Easterbrook explained, to find that common questions do not predominate when, as in Wal-Mart, the practices directed toward the proposed class varied widely. It is something else entirely -- and legal error -- to deny certification merely because class members experienced different levels of harm, where their claims arise from the defendant's common conduct. In a Wal-Mart situation the "damages differ, to be sure, but only because the underlying conduct differs. In a suit alleging a defect common to all instances of a consumer product, however, the conduct does not differ." And Comcast simply holds that the proposed method for calculating the loss must track the alleged injury.

    There is a certain irony in Judge Easterbrook, joined by his fellow law-and-economics adherent on the Seventh Circuit, Richard Posner, coming to the rescue of consumer class actions in an era in which corporate interests are being exalted over human interests. While both judges have discussed how class certification can sometimes be unworkable (e.g., Judge Easterbrook in Bridgestone/Firestone, 288 F.3d 1012; Judge Posner in Rhone-Poulenc, 51 F.3d 1293), their more recent opinions recognize certification can sometimes serve salutary ends.

    Just as Judge Easterbrook clarified in IKO that the predominance analysis looks to the common aspects of the defendant's, not the plaintiffs', conduct, so did Judge Posner hold in the 2013 Butler case (727 F.3d at 800) that predominance is, in the end, a question of efficiency.

    Given the market-distorting, sometimes dangerous effects of unlawful business conduct, it should not be surprising that these two respected conservative jurists have acted to preserve the availability of a mass civil mechanism as a check against the mass corporate institutions of our time. Great thinkers never stop thinking, and learn from experience. The 2008 financial meltdown showed that our free markets aren't effectively self-regulating. The same checks-and-balances approach we use in our government applies to our economy, and litigation supplies one important check -- provided there is a viable mechanism to ensure cost-effective access to our system of justice.