A grant of class certification is a key milestone in a case’s history that can significantly change the dynamics and economics of the case. But it is not set in stone. Certification decisions are “inherently tentative” and subject to modification “until final judgment.” In cases in which new circumstances show that certification is no longer appropriate, or never was appropriate, defendants can file a motion to decertify the class, explaining why the requirements of Federal Rule of Civil Procedure 23 are not met. Although decertification is not an everyday occurrence, courts have decertified classes when presented with significant new facts or law showing that certification is not appropriate. Defense counsel can increase the likelihood of a successful decertification motion by carefully considering the timing of the motion and highlighting materially changed circumstances, such as an expert’s damages model that does not live up to the promises made during class certification briefing and relied on in the grant of certification.
The basis for decertification motions comes from Rule 23 itself: “An order that grants or denies class certification may be altered or amended before final judgment.” The advisory committee notes on the 1966 amendment to Rule 23 further clarified that “[a] determination once made can be altered or amended before the decision on the merits if, upon fuller development of the facts, the original determination appears unsound.”
The Supreme Court embraced the propriety of decertification motions in General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 160 (1982), in which the Court described certification orders as “inherently tentative,” particularly before notice has been sent to class members, and affirmed that a judge “remains free to modify [a certification order] in the light of subsequent developments in the litigation.” The Court described the “flexibility” to modify certification orders as “enhanc[ing] the usefulness of the class-action device.” Id.
Falcon spoke in permissive terms, but subsequent cases have confirmed that judges have an ongoing duty to reassess compliance with Rule 23 and decertify cases that are no longer suitable for class treatment. Some courts require defendants to make an initial showing of changed circumstances to support a decertification motion, but the ultimate burden of demonstrating that Rule 23 is satisfied lies with the plaintiffs.
Although decertification motions have been legally recognized for over half a century, they have become more common in recent years. The number of federal court orders deciding or otherwise referencing decertification motions has increased significantly since 2000, with a slight decline over the last several years since 2016, according to a recent presentation at the Northern District of California Federal Bar Association’s Class Action Symposium, in San Francisco, California, on November 16, 2022, based on search term hits from Westlaw (“motion /5 decertif!”). This same presentation suggested that the Ninth Circuit had the highest number of orders referencing decertification motions, and, within the Ninth Circuit, the Northern District of California had the most such orders.
Exact numbers are difficult to determine on a systematic basis, though. Our review of the 73 cases within the Ninth Circuit for the year 2022 that contain these search term hits revealed that only 16 were actually orders ruling on a decertification motion (excluding orders dealing exclusively with collective actions under the Fair Labor Standards Act). Of these, 11 denied the motion, 4 granted the motion in full or in part, and 1 initially granted the motion but later vacated that decision and denied the motion.
The same presentation at the Federal Bar Association Symposium included the results of an informal poll of 12 judges from the district that indicated that half the judges thought decertification motions were increasing, 75 percent had presided over a decertification motion, and 67 percent had granted such a motion. The judges provided a variety of reasons for their decisions to grant decertification, including practical problems associated with trying the case as a class action that became clear as the case progressed, changing case law, lack of standing by the class representative, and the failure of plaintiffs to live up to expert predictions about a viable class-wide damages model.
As is reflected in the comments of these judges, a motion for decertification can be based on any “subsequent development[] in the litigation” that shows that any of the requirements of Rule 23 are no longer met. Falcon, 457 U.S. at 160. “There is no exhaustive list of developments that could lead a court to exercise its broad discretion to decertify a class. . . . [A]nything that shows that a Rule 23 requirement is no longer satisfied can support decertification.” 1 McLaughlin on Class Actions § 3:6 (19th ed. 2022).
It is important to identify materially changed circumstances that warrant a fresh Rule 23 analysis when moving for decertification. A decertification motion that appears to simply reargue the court’s certification order is not likely to be persuasive. See, e.g., McCurley v. Royal Seas Cruises, Inc., 2022 WL 4793454, at *2 (S.D. Cal. Sept. 30, 2022) (finding a decertification motion “merely rehashing arguments already considered and rejected by the Court is a waste of judicial resources”).
One changed circumstance that can warrant decertification is a material change in the law that shows that class certification is no longer appropriate. For example, in True Health Chiropractic Inc. v. McKesson Corp., 2021 WL 4818945, at *1 (N.D. Cal. Oct. 15, 2021), the court originally certified a class of fax recipients for claims of a violation of the Telephone Consumer Protection Act (TCPA). However, a Federal Communications Commission decision issued after the court’s certification decision changed the requirements for TCPA liability. Id. As a result of this change in law, the court decertified the class, finding that individual inquiries were required to prove a core element of liability under the new standard, thus defeating predominance. Id. at *3.
Although changes in the law can provide a basis for decertification, counsel should resist the urge to file a motion to decertify any time a potentially supportive new case comes out. A decertification motion based on a change in the law is most likely to be successful when it is based on a distinct change or development that directly affects the court’s analysis of the propriety of class certification.
An even more common basis for decertification is the discovery of new facts that undermine the appropriateness of certification. Because Rule 23 requires that class certification be decided “[a]t an early practicable time,” discovery is often incomplete at the time class certification is granted; certification may be granted based on the plaintiff’s theories or representations about what the plaintiff believes the evidence will show or based on partial evidence that appears to indicate that certification is appropriate. Once discovery is complete, the full evidence may not support certification, in which case a decertification motion is appropriate.
New facts showing the failure of any of the requirements for class certification can warrant decertification. For example, in Cassese v. Washington Mutual, Inc., 711 F. Supp. 2d 261, 271 (E.D.N.Y. 2010), the court decertified the class when it came to light that only the named plaintiffs had exhausted their administrative remedies and therefore the court did not have jurisdiction over any of the other putative class members’ claims, defeating numerosity.
Courts have also decertified classes when class counsel’s conduct showed they were inadequate, such as in Dillon v. Clackamas County, 2019 WL 6709545, at *1–3 (D. Or. Aug. 6, 2019), where class counsel repeatedly missed court deadlines and made a multitude of mistakes in providing class notice. Likewise, classes can be decertified when new evidence shows that the class representative is inadequate or atypical, such as in Kaplan v. Pomerantz, 132 F.R.D. 504, 510 (N.D. Ill. 1990), in which the named plaintiff was found to have lied during his deposition.
Classes also have been decertified based on new evidence showing a lack of common questions, such as in Anderson v. Boeing Co., 2006 WL 2990383, at *4 (N.D. Okla. Oct. 18, 2006), in which the court found that statistical evidence presented after discovery was complete showed “pockets of disparate impact”—not “class-wide disparate impact or disparate treatment.”
In addition, courts have decertified Rule 23(b)(3) classes on the basis of new evidence showing that a class action trial would be unmanageable and therefore the superiority requirement was not met. For example, in Lewis v. First American Insurance Co., 2017 WL 3269381, at *7 (D. Idaho Aug. 1, 2017), the court initially granted class certification, finding that the defendant’s claims of difficulties in ascertaining class members were not plausible, but subsequently granted decertification when new evidence confirmed the defendant’s claims.
A further way that new evidence can warrant decertification is when it destroys predominance, such as when a plaintiff or plaintiff’s expert describes a potentially viable model for calculating damages at the class certification stage, but then, after certification is granted, the expert presents a model that is insufficient to calculate damages on a class-wide basis. A number of cases have granted decertification on this basis since the Supreme Court’s decision in Comcast Corp. v. Behrend, 569 U.S. 27, 35 (2013), which held that a class-wide damages model must “measure only those damages attributable to” the alleged wrong. For example, in Brazil v. Dole Packaged Foods, LLC, 2014 WL 5794873, at *11–13 (N.D. Cal. Nov. 6, 2014), the district court initially granted certification based on the plaintiff’s expert’s claim that he would develop a damages model that controlled for relevant variables to determine a price premium attributable to Dole’s challenged “All Natural Fruit” labels. However, once the expert served his report, the court found that the damages model did not sufficiently control for other variables, and the court therefore decertified the class. Id.
In some cases, the Rule 23 problem that arises may be similar or identical to a problem identified by the defendants at the class certification stage. But counsel should not simply rehash their prior arguments opposing class certification. A decertification motion that points to instances where the plaintiffs or their experts did not live up to claims made at the class certification stage or that shows that facts that have come out in discovery don’t match the court’s expectations at the time it granted class certification is much more likely to be successful.
A decertification motion can be brought at any time “before final judgment,” including after a merits determination at summary judgment or even trial. But in most cases, it is advisable to file a decertification motion as soon as the materially changed circumstances supporting the motion and their effect on class certification become clear. In addition to making the defendant’s claims of changed circumstances more persuasive, this may also avoid the potential procedural complications created when decertification is granted after a merits determination—which raises questions of who is bound by that determination—or after class notice has been distributed—which raises the question of whether notice of decertification is required. However, courts may look upon repetitive motions for decertification unfavorably, so if counsel anticipates that future case developments will strengthen the motion or add new bases for decertification, it is worth considering waiting to file the motion until the evidence is stronger.
In the right circumstances, decertification motions can be an important tool for defense counsel. In any case in which class certification has been granted, defense counsel should keep the possibility of such a motion in mind and continuously evaluate the case as it progresses for materially changed circumstances that might warrant decertification.
