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Class Action Countermeasures Discussions of the Strategic Considerations Involved In Class Action Defense

Framing the Certification Opposition – Ross v. RBS Citizens NA

Posted in Certification

Today’s case is a perfect illustration of the difference between tactics and strategy, or, more accurately, between litigation strategy and litigation grand strategy. As you may remember, a tactic is a plan to accomplish a specific short-term goal within a larger conflict. (A defendant may have the strategy of defeating certification to minimize litigation risk; one tactic will be to file a motion to strike class allegations.) A strategy (win this case by defeating certification) should also fit into a grand strategy (keep the defendant safe from meritless lawsuits by making sure courts enforce Rule 23 properly) that can include a number of larger moves, including planning for appeals and even lobbying for legislative change.

Last Thursday, the Seventh Circuit decided an appeal in Ross v. RBS Citizens, N.A. that represents a tactical (and even strategic) loss for the specific defendant, but was still a grand strategic win for defendants.

Ross was a wage-and-hour case, asserting claims under the Fair Labor Standards Act and the Illinois Minimum Wage Law.) The plaintiffs alleged that RBS had denied them overtime pay. The lower court certified the class, and RBS appealed.

Interestingly, RBS appealed solely on the grounds that the Court had not followed Rule 23(c)(1)(B), which requires a court to issue

An order that certifies a class action must define the class and the class claims, issues, or defenses, and must appoint class counsel under Rule 23(g).

In this case, RBS argued, the court had not adequately defined the class. (A side issue that came up during the appeal was whether the lower court had properly found commonality, since the Supreme Court arguably changed the standard in its Dukes opinion.)

To "define" a thing or concept is "to state precisely or determinately [its boundaries]; to specify" or "[t]o frame or give a precise description" of a thing. Oxford English Dictionary (2d ed. 1989). According to the Rule, those things to be defined in a certification order include the "class and the class claims, issues, or defenses. . . ." Fed. R. Civ. P. 23(c)(1)(B) (emphasis added). The above elements occur in a conjunctive, undifferentiated list, indicating that the requirement to "define" the "class claims, issues or defenses" is identical to the requirement to define the "class" itself within a given certification order. Id. Furthermore, the use of the definite article "the" before "class claims, issues, or defenses" connotes comprehensiveness and specificity, rather than illustrative or partial treatment, in defining those aspects of class action certification.

(Second emphasis added, quoting Wachtel v. Guardian Life Ins. Co. (3d Cir. 2006).)  Based on that reasoning, the Seventh Circuit held

that the appropriate substantive inquiry for Rule 23(c)(1)(B) is "whether the precise parameters defining the class and a complete list of the claims, issues, or defenses to be treated on a class basis are readily discernible from the text either of the certification order itself or of an incorporated memorandum opinion."

In this case, the Seventh Circuit found that the lower court had in fact met that burden. While it admitted "there might be some room for the district court to have drafted a clearer certification order," it found the order clear enough. (An important side note is that it made this finding in part by relying on the old common-law maxim of expressio unius est exclusion alterius: the lower court’s list of issues to be tried on a class basis was complete and exclusive; everything else was an individual issue.) But the opinion offers an important tool for defendants at the same time. Frequently, lower courts certify cases because they have not thought through how the claims will actually be tried, and may therefore elide important individualized defenses to claims. But Rule 23(c)(1)(B) requires them to address each of these issues in turn, a requirement that should cut down on incorrect certifications.

So the end result of the individual case is that the defendants here lost. But, at the same time, the Seventh Circuit, joining the First and the Third, gave defense counsel an important tool to make sure that the lower court is considering all of the issues before it. What’s the lesson defense counsel can take away from this? Tactically, it makes sense to remind courts that they must come up with an order that contains a clear statement of how they will treat all of the classwide claims, issues, and defenses. On a larger scale, it always makes sense to keep the court to the text of Rule 23; in the long run, that will continue to cut down on flawed certification orders.