New class certification decision: Conley v. PG&E
In Conley v. Pacific Gas & Electric Co., ___ Cal.App.4th ___ (July 21, 2005), the Court of Appeal addressed the narrow circumstances in which a trial court may consider the substantive merits of the plaintiff’s underlying claims at the class certification stage. The trial court had denied certification:

on the basis of American Suzuki Motor Corp. v. Superior Court (1995) 37 Cal.App.4th 1291, which held that “[f]or a class to be considered ascertainable [for the purposes of class certification], its members must have a plausible cause of action against the defendant. [Citation.]” (Id. at pp. 1294-1295.) The trial court’s order made clear that the holding in American Suzuki “requiring a viable cause of action is the only basis for denying class certification of the salary basis class.” (Italics added.)

Slip op. at 7. The Court of appeal agreed that “the holding in American Suzuki on which the trial court relied has been placed in serious question, if not overruled, by Linder’s holding that class certification generally should not be ‘conditioned upon a showing that class claims for relief are likely to prevail.’” Slip op. at 7 (quoting Linder v. Thrifty Oil Co., 23 Cal.4th 429, 443 (2000)).

Despite Linder, the Court of Appeal decided to address the merits of one legal question raised by the plaintiff's claims: “Class certification normally should not be decided on the basis of a perceived lack of merit in the claims asserted on behalf of the proposed class. In this case, however, appellants have invited us to address the merits of their claims.” Slip op. at 2. Linder, the Court observed, held that “there is ‘nothing to prevent a court from considering the legal sufficiency of claims when ruling on certification where both sides jointly request such action.'” Id. at 8 (quoting Linder, 23 Cal.4th at 443). Linder also “expressly declined to ‘foreclose the possibility that, in the exceptional case where the defense has no other reasonable pretrial means to challenge the merits of a claim to be asserted by a proposed class, the trial court may, after giving the parties notice and an opportunity to brief the merits question, refuse class certification because the claims lack merit as a matter of law.’” Id. (quoting Linder, 23 Cal.4th at 443). In this case, the “defense has no other reasonable pretrial means to challenge the merits” because its summary adjudication motion was denied based on the procedural technicality that it did not “completely dispose of a cause of action.” Id. at 8 & n.7 (quoting Code Civ. Proc. §437c(f)).

It is nice to see an appellate court recognize that the quoted language from American Suzuki has probably been overruled. Defendants frequently rely on that case, and it can be difficult to convince trial courts that it is inconsistent with Linder. On the other hand, I hope that this new decision does not become a means for defendants to circumvent Code of Civil Procedure section 437c(f), and seek summary adjudication of partial causes of action in the guise of opposing class certification. It sounds like this limited exception to the “no-merits” rule of class certification applies only when both parties “jointly request” that a particular merits question be decided. Wage Law has a nice summary of this opinion as well, focused more on the labor law issues it raises.
- posted by Kim Kralowec @ 5:50 AM