Complex Litigation -- Class Certification

Abstract

Commentary and analysis on the Third Circuit’s decision in In re Hydrogen Peroxide Antitrust Litig., 2008 WL 5411562 (3d Cir. Dec. 30, 2008). In what may be the most influential decision relating to class certification since the U.S. Supreme Court decided Amchem Prods. Inc. v. Windsor, 521 U.S. 591 (1997), the Third Circuit Court of Appeals issued a sweeping opinion articulating standards of proof at class certification that are likely to have a tremendous impact on all future class litigation.

The Hydrogen Peroxide decision carries significant weight because Chief Judge Anthony Scirica authored the opinion. Scirica served as the chairman of the Standing Committee on Rules of Practice and Procedure, on the Advisory Committee on Civil Rules, and chairman of the Judicial Conference Working Group on Mass Torts. In 2008, Chief Justice John G. Roberts Jr. named Scirica as chairman of the Executive Committee of the Judicial Conference. Over his lengthy career, Scirica has been extensively involved with reform of Fed. R. Civ. P. 23.

Since 1982, federal courts routinely recite that class certification is proper only "if the trial court is satisfied, after a rigorous analysis, that the prerequisites" of Rule 23 are met. General Tel. Co. of S.W. v. Falcon, 457 U.S. 147 (1982). In Hydrogen Peroxide, Judge Scirica insightfully notes that class certification jurisprudence provides courts with little guidance on the proper standard of proof in implementing this rigorous analysis language. Hence, the Third Circuit has now stepped into this breach and articulated standards of proof district courts should apply at class certification.

The Third Circuit has clarified three key aspects of certification procedure that heighten judicial obligations. First, a district court must make findings that all Rule 23 requirements are met, and may not certify a class action based merely upon a "threshold showing" by the party seeking certification. A class action proponent must demonstrate that all class certification requirements are satisfied by a preponderance of the evidence. Second, a district court must resolve all factual or legal disputes relevant to certification, even if that determination overlaps with merits questions intertwined with the underlying claims. Third, a district court must consider and resolve all conflicting expert testimony. The Court’s opinion, at some length, discusses these standards for class certification, including the gatekeeping function of Daubert hearings and the court’s role in conducting such inquiries.

Keywords: In re Hydrogen Peroxide Antitrust Litigation, Rule 23, class certification, class certification standards, rigorous analysis, Daubert hearings, Judge Anthony Scirica, Gen. Tele. Co. v. Falcon