Front-Loading, Avoidance, and Other Features of the Recent Supreme Court Class Action Jurisprudence

Abstract

From 2010 through 2014, the Supreme Court issued thirteen class action decisions. With no new class action decisions on the immediate horizon, this article takes stock of what these decisions mean for federal class practice. These cases include some very good news for plaintiffs. Indeed, federal class practice survived two existential threats. Shady Grove saved Federal Rule 23 from ready evisceration by state legislatures and Halliburton II spared federal securities class practice by retaining the fraud-on-the-market presumption. And plaintiffs got other good news in securities cases and from precedent permitting serial relitigation of class certification.But there is more on the defendants’ ledger. In four principal ways, recent case law does not augur well for plaintiffs. First, in Wal-Mart, the Court restricted the recovery of money in Rule 23(b)(2) classes. Second, in the same case, it increased the showing required for satisfaction of the commonality requirement under Rule 23(a)(2). Third, there is a clear trend toward “front-loading” class litigation – that is, the need to do more and prove more in the early stages of the case. The Court has made clear that certification does not raise a question of pleading, but must be based upon “conclusive proof.” The fact that the evidence overlaps with the substantive merits of the dispute is irrelevant. Fourth, and most consequentially, the Court has countenanced the wholesale avoidance of dispute resolution by upholding contractual “waivers” of the right to seek group vindication of rights. Such provisions are commonly found in conjunction with arbitration clauses. Successful melding of arbitration clauses with class “waivers” means that many claims (particularly negative-value claims) will never be asserted.