Below, Chicago partner Michael R. Phillips shares his thoughts on a petition for certiorari that could have a big impact on the evidentiary standards applied to plaintiffs pursuing class certification.

A major California grower has asked the Supreme Court to resolve a circuit split by holding that evidence used to support class certification must be admissible.  The U.S. Court of Appeals for the Ninth Circuit is currently one of only two federal courts of appeal that allow class certification to be based on evidence that would not satisfy the standards for admissibility at trial.  A uniform rule requiring class certification evidence to be admissible would place another hurdle for class action plaintiffs and prevent their use of hearsay, unauthenticated documents, attorney declarations and other inadmissible evidence to obtain class certification.

The petition for certiorari, filed by California-based lettuce grower Taylor Farms Pacific, Inc. in the case of Peña v. Taylor Farms, asks the Supreme Court to clarify its holding in Comcast Corp. v. Behrend that Rule 23 must be “satisf[ied] through evidentiary proof.”  The Supreme Court in Comcast had certified the question of whether evidence presented at the class certification stage need be admissible but specifically reserved that question in its opinion.  As a result, the Eighth and Ninth Circuits have continued to hold that class certification evidence need not be admissible while the Second, Third, Fifth, Seventh and D.C. Circuits have imposed a more rigorous admissibility standard.

Consequently, class action defendants continue to be confronted with “evidence” at the class certification stage that could not be presented at trial.  In the Peña case, Taylor Farms is defending itself against claims that it and several temporary agencies failed to pay workers for meal and rest breaks in violation of California law.  At the class certification stage, the plaintiffs presented Exhibit 17, a 9000‑page spreadsheet that contained plaintiffs’ analysis of Taylor Farms’ timekeeping records and purportedly showed a pattern and practice of Taylor Farms failing to pay for rest and meal breaks.  Exhibit 17 was prepared by plaintiffs’ counsel, not by an expert, and omitted much of the data on which the analysis was allegedly based.

Accordingly, Taylor Farms objected to the use of Exhibit 17 to establish the elements of Rule 23.  Taylor Farms pointed out that the spreadsheet, in addition to being prejudicially vague and confusing, was not based on personal knowledge, was improper lay opinion from plaintiffs’ counsel and was not proper summary evidence because plaintiffs had not produced the underlying data.  Taylor Farms also noted that Exhibit 17 appeared to be an effort to avoid the expert disclosure process and the Daubert standard of admissibility that applies to expert opinion.

The District Court, however, overruled these objections, holding that “evidence presented in support of class certification need not be admissible at trial” and that “documents may be authenticated by a review of their contents if they appear to be sufficiently genuine.”  The District Court then certified a class on the meal and rest break violations based in part on Exhibit 17.  Taylor Farms successfully petitioned for interlocutory appeal to the Ninth Circuit but the Court of Appeals affirmed the District Court in a brief order.

Taylor Farms’ petition for certiorari notes that the Ninth Circuit is in the minority of federal appeals courts in not applying the Rules of Evidence at the class certification stage.  Taylor Farms contends that, had those standards been applied, Exhibit 17 would have been excluded and the plaintiffs would have been unable to satisfy the predominance and superiority requirements of Rule 23.  While acknowledging that Comcast left the question undecided, Taylor Farms argues that Comcast and an earlier Supreme Court ruling “all but hold that class certification evidence must be admissible” and that “the evidentiary standard should be uniform nationwide.”  Taylor Farms also points out that the contrary views of the Eighth and Ninth Circuits are based upon language from the Supreme Court’s 1974 decision in Eisen v. Carlisle & Jacquelin, which the Supreme Court has since regarded as dicta.

As employers and other businesses who have defended class actions know, the granting of class certification is often tantamount to victory for plaintiffs, as it frequently leaves defendants with a choice between settlement and enormous potential exposure and litigation expense.  In that sense, requiring plaintiffs to establish the basis for class certification by admissible evidence is almost as important as requiring admissible evidence at trial.  Thus, if the Supreme Court agrees that “evidentiary proof” means admissible evidence, it will help to limit class certification to appropriate cases and prevent its use as a tool to extort large settlements from employers and other corporate defendants.