May 23, 2019 Articles

A Circuit Split Arises over the Admissibility of Evidence on Class Certification

The Ninth Circuit broke from its sister courts in concluding that evidence considered on a motion for class certification need not be admissible evidence.

By Fred Burnside and Lauren Rainwater

A circuit split has emerged on the issue whether a party must submit admissible evidence in support of class certification.  In Sali v. Corona Regional Medical Center, 909 F.3d 996 (9th Cir. 2018), the Ninth Circuit broke from its sister courts in concluding that evidence considered on a motion for class certification need not be admissible evidence.  Id. at 1004-05.

Summary of the Sali Decision

In Sali, registered nurses brought a putative class action against their former employer alleging that, during their employment, they and other nurses were subject to a number of policies and practices that violated California’s wage and hour laws. Id. at 1000–1001. Based on these claims, the plaintiffs moved to certify seven classes. Id.

To satisfy Rule 23(a)’s typicality requirement, the plaintiffs submitted the declaration of Javier Ruiz—a paralegal employed by the plaintiffs’ law firm—which purported to show the damages suffered by the named plaintiffs. Id. at 1003. Ruiz had reviewed the named plaintiffs’ time records and concluded that the plaintiffs were not fully compensated under the defendants’ rounded-time pay policy. Id.

The district court found the Ruiz declaration inadmissible for three reasons. First, Ruiz lacked personal knowledge of the data in the spreadsheets and, thus, could not authenticate the data. Id. Second, Ruiz offered opinion testimony, which was improper unless he qualified as an expert witness. Third, Ruiz lacked the qualifications necessary for the conclusions he reached to be admissible as expert testimony. Because the Ruiz declaration was inadmissible, the district court did not consider it and denied class certification in part due to the plaintiffs’ failure to demonstrate that their injuries were typical of the proposed class. Id.

On appeal, the Ninth Circuit reversed, concluding that the district court abused its discretion by limiting its Rule 23 analysis to admissible evidence, holding that “[i]nadmissibility alone is not a proper basis to reject evidence submitted in support of class certification.” Id. at 1004. The Ninth Circuit reasoned that, because a class certification order is “preliminary” and entered at an early stage of the litigation, but subject to change later, the motion need not be supported by admissible evidence. Id. at 1004–5.

The Sali court qualified its holding, however, noting that “the district court need not dispense with the standards of admissibility entirely.” Id. at 1005. Instead, the Ninth Circuit directed that “an inquiry into the evidence’s ultimate admissibility should go to the weight that evidence is given at the class certification stage.” Id.

Post-Sali, defendants in the Ninth Circuit may no longer defeat class certification solely by attacking the admissibility of the evidence proffered by the plaintiffs. Instead, admissibility is a factor to be considered by a district court when assessing the persuasiveness of evidence presented on a class certification motion. As a result, post-Sali, district courts in the Ninth Circuit have rejected admissibility arguments on class certification. See McCurley v. Royal Seas Cruises, Inc., No. 17-CV-00986-BAS-AGS, 2019 WL 1383804, at *5 (S.D. Cal. Mar. 27, 2019) (summarily rejecting plaintiffs’ evidentiary objections as to defendants’ declarations and declining to disregard the opinion of plaintiffs’ expert on the basis of admissibility); Brown v. DirecTV, LLC, No. CV 13-1170 DMG (EX), 2019 WL 1434669, at *12 (C.D. Cal. Mar. 29, 2019) (declining to rule on the admissibility of evidence considered for the purpose of class certification); Bennett v. LLC, No. CV-16-03908-PHX-ROS, 2019 WL 1552911, at *1 n.2 (D. Ariz. Apr. 8, 2019) (same); Mays v. Wal-Mart Stores, Inc., No. CV 18-02318-AB (KKX), 2019 WL 1395912, at *5 n.7 (C.D. Cal. Feb. 20, 2019) (same).

The Circuit Split

As the Ninth Circuit itself acknowledged, its decision in Sali puts it at odds with the Third, Fifth, and Seventh Circuits.

The Fifth Circuit has held that admissible evidence is required to support class certification. See Unger v. Amedisys Inc., 401 F.3d 316, 319 (5th Cir. 2005) (holding that the court’s “findings must be based on adequate admissible evidence to justify class certification”). And the Third and Seventh Circuits have both required admissible expert testimony at the class certification stage. See In re Blood Reagents Antitrust Litig., 783 F.3d 183, 187 (3d Cir. 2015) (“We join certain of our sister courts to hold that a plaintiff cannot rely on challenged expert testimony, when critical to class certification, to demonstrate conformity with Rule 23 unless the plaintiff also demonstrates, and the trial court finds, that the expert testimony satisfies the standard set out in Daubert.”); Am. Honda Motor Co. v. Allen, 600 F.3d 813, 817 (7th Cir. 2010) (vacating the district court’s class certification order because it “fail[ed] to [resolve clearly] the issue of . . .  admissibility before certifying the class” and the expert testimony in question failed to satisfy Daubert).

By contrast, the Eighth Circuit, like the Ninth, employs a more relaxed evidentiary standard on class certification. See In re Zurn Pex Plumbing Prod. Liab. Litig., 644 F.3d 604, 613 (8th Cir. 2011). In Zurn, the Eighth Circuit focused on the “tentative, preliminary, and limited” nature of class certification as justification for not requiring an “exhaustive and conclusive Daubert inquiry” at the class certification stage. Id. (quotations omitted). Instead, the Eighth Circuit approved the district court’s “focused Daubert analysis which scrutinized the reliability of the expert testimony in light of the criteria for class certification and the current state of the evidence.” Id. at 614.

Going Forward

Continued appellate efforts in the Sali case itself initially presented a promising mechanism to resolve the circuit split. Following the Ninth Circuit’s initial decision in Sali, the defendant employers filed a petition for rehearing and rehearing en banc, contending that the panel’s opinion conflicted with Ninth Circuit and Supreme Court precedent and created irreconcilable conflicts with other circuit courts. In response, the plaintiffs contended that the Ninth Circuit’s opinion did not conflict with other circuits’ opinions, characterizing the other circuits’ opinions as limited to the admissibility of expert opinions. The Ninth Circuit denied the petition for a panel rehearing and the petition for rehearing en banc.

But Judge Bea, joined by four other judges, wrote a passionate dissent, arguing that the decision in Sali undermines the purpose of class certification proceedings and is contrary to Ninth Circuit precedent, as well as decisions in other circuits and clear Supreme Court guidance. See Sali v. Corona Reg’l Med. Ctr., 907 F.3d 1185, 1185 (9th Cir. 2018) (Bea, J., dissenting).

On the heels of this passionate dissent, on April 1, 2019, the defendants filed a petition for a writ of certiorari with the U.S. Supreme Court, highlighting the circuit split and asking the Supreme Court to address the issue of whether class certification evidence must meet the standards of admissibility set forth in the Federal Rules. After the defendants filed the petition, however, the parties reached a settlement, which the district court preliminarily approved on April 15, 2019, and the defendants dismissed their petition three days later. So the circuit split remains unresolved.

Fred Burnside is a partner and cochair of the Class Action Defense Group at Davis Wright Tremaine LLP. Lauren Rainwater is counsel at Davis Wright Tremaine LLP.

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