CLASS CERTIFICATION in the U.S. COURTS OF APPEALS

“Mindful that there were few Supreme Court class certification decisions in our earlier studies, and that they may not provide an accurate picture of class action jurisprudence (let alone class action activity) over time, we launched a project to fill a larger part of the empirical vacuum.”

STEPHEN B. BURBANK, David Berger Professor for the Administration of Justice, Emeritus

In their new paper, “Class Certification in the U.S. Courts of Appeals: A Longitudinal Study,” published in Law & Contemporary Problems, Burbank and Sean Farhang of the University of California, Berkeley, continue their prior work tracing the counterrevolution against private enforcement of federal law, led first by the Reagan administration and then by conservative activists, business groups, and the Republican party.

In this groundbreaking study, the authors fill more of the empirical vacuum regarding class actions in the federal courts by analyzing and testing both prior empirical scholarship and commonly asserted claims, finding significant variation over time in appeal outcomes and greater ideological polarity among judges.

“Mindful that there were few Supreme Court class certification decisions in our earlier studies, and that they may not provide an accurate picture of class action jurisprudence (let alone class action activity) over time, we launched a project to fill a larger part of the empirical vacuum,” they write.

The Existing Literature: Data and Claims

The authors begin with a literature review that identifies the scholarship and common assumptions surrounding Rule 23(f), the Class Action Fairness Act of 2005 (CAFA), and final-judgment appeals involving Rule 23(b)(3). They note that most systematically collected data have focused on Rule 23(f), which went into effect in 1998, with much speculation on its influence.

“Many predicted at the time it was being debated, and asserted after it was promulgated . . . that it would (or did) disproportionately benefit defendants,” they write of the challenges to the rule’s facially neutral classification. “Although the published studies of experience under Rule 23(f) vary in many respects, until recently they appeared largely to confirm such predictions and assertions.”

Regarding CAFA, they discuss a study conducted shortly after its enactment by the Federal Judicial Center that found “a dramatic increase in the number of diversity class actions filed as original proceedings in the federal courts in the post-CAFA period.” The authors write that “perhaps assuming that this documented increase would translate into a similar increase in the courts of appeals, a number of scholars have claimed that the volume of class certification appeals increased after CAFA.” However, they do not find any empirical data to support this.

To conclude their literature review, they note that most existing studies “ignore final-judgment appeals, perhaps regarding them as trivial in number.” Yet, as final-judgment appeals constitute roughly half of all appeals between 2002 and 2017, they write that “their absence from existing studies significantly limits the inferences that can be drawn from them.”

Longitudinal Patterns in Certification Decisions

The authors created a comprehensive data set of 1,344 published and unpublished class certification decisions in the United States Courts of Appeals. The published decisions include all published panel decisions addressing whether a class should be certified from 1966 (when the modern Rule 23 became effective) through 2017. The unpublished panel decisions are collected from 2002 through 2017.

They find that both published and unpublished decisions grew sharply following Rule23(f), with interlocutory appeals constituting “14% of published decisions prior to 2000 and 57% of them from 2000–2017” and about 30% of non-published decisions from 2002–2017. Yet, while interlocutory appeals account for the greatest amount of growth, final-judgment interlocutory appeals were roughly balanced during the 2002–2017 period.

The authors find a similar spike in the number of decisions in cases seeking certification of state claims only after CAFA was passed in 2005. Since they could not reliably code claims in federal court under CAFA, they instead review cases seeking certification of state claims only. They discover that prior to CAFA’s passage in 2005, the majority of published decisions on certification were in cases seeking certification of federal claims only, while cases seeking certification of state claims only grew threefold following 2005. Additionally, “in published and unpublished decisions in 2002–2017, certification decisions on state law-only classes grew more strongly, increasing fivefold and becoming as frequent as certification decisions on classes asserting only federal claims,” they write.

The authors then examine “whether the growth in availability of interlocutory review had a disproportionate impact on the proportion of appeals addressing (b)(2) versus (b)(3) classes.” It has been claimed that final-judgment appeals in (b)(3) were rare based on the assumption that, until Rule 23(f), parties would opt to settle instead of pursue further litigation if a district court certification decision involved damages classes under (b)(3). “If this dynamic were at play,” they write, “we would expect to see that (b)(3) classes are more likely to appear in appeals under interlocutory versus final-judgment review.”

Instead, the authors find that final-judgment appeals of certification decisions with respect to (b)(3) classes accounted for 33% of the decisions, with defendants bringing 40% of those appeals. “This casts doubt on the notion that parties are rarely willing to litigate through to final judgment once a district court has certified or declined to certify a [damages] class,” they write.

The authors further probe interlocutory appeals in relation to the decisions in Wal-Mart Stores v. Dukes and Comcast v. Behrend Noting that “prior to Wal-Mart, interlocutory appeals were far more frequently used to reverse grants of certification than to reverse denials,” they find the trend reverses after Wal-Mart, “and by 2017 reversal rates were comparable for grants and denials of certification by district courts.” They find a similar trend for final-judgment appeals.

Lastly, the authors explore the probability of a pro-certification outcome in cases with Democratic- versus Republican-majority panels for decisions published from 1970–2017. The gap between such panels narrowed from the mid-1970s to late 1990s, but then widened around the same time Rule 23(f) went into effect. They find that this widening gap corresponds with their previous research, which concluded that, since the mid- to late-1990s, “there was a growing focus in the Republican Party on restricting opportunities and incentives for private civil actions in general, and class actions in particular,” “Supreme Court justices became more polarized along ideological lines in their voting on Rule 23 issues,” Republican legislators introduced more anti-class action bills, and conservative activists boosted efforts to curtail class actions.

Yet, surprisingly, the gap between Democratic- versus Republican-majority panels began to close somewhat from 2011 to 2017, “when in the posture of making law, both Democratic- and Republican- majority panels were at their highest probability of procertification outcomes in the forty-eight years covered by the data.” They add that this occurred during an era when “both Wal-Mart and Comcast were governing law.” Still, even while both parties grew more pro-certification, Democratic- and Republican-majority panels remained polarized.

The authors conclude by writing that, “this temporal pattern of polarization is similar to what we found in earlier work on the Supreme Court in private enforcement cases in general, and in Federal Rules cases in particular. In the statistical models, we observe that party has a larger effect in interlocutory appeals (the gap between Democratic and Republican-majority panels is larger). Thus, the growing number of interlocutory appeals under Rule 23(f) in the 2000s contributed to the polarization we document. In this sense, one consequence of Rule 23(f) was to inject more ideology into class certification on the U.S. Courts of Appeals.”