Court Adds Teeth to 'Rigorous Analysis' Requirement for Class Certification

In the past few months, the 3rd U.S. Circuit Court of Appeals in In re Hydrogen Peroxide Antitrust Litigation significantly expanded the federal district court’s role at the class certification stage. For quite some time, the U.S. Supreme Court has required that district courts do a “rigorous analysis” to determine whether plaintiffs can meet procedural requirements before certifying a case as a class action. But the extent of this analysis has often been tempered and confused by the Supreme Court’s even earlier admonition to avoid a preliminary inquiry into the merits of a suit when determining whether to certify a class. The 3rd Circuit in Hydrogen Peroxide confirmed and decided that the “rigorous analysis” should, indeed, be rigorous, even if that analysis overlaps with the merits.

More specifically, the 3rd Circuit clarified three key aspects of the class certification procedure: “[T]he decision to certify a class calls for findings by the court, not merely a ‘threshold showing’ by a party, that each requirement of Rule 23 is met.” Factual determinations supporting these findings must be made by a preponderance of the evidence; “[T]he court must resolve all factual or legal disputes relevant to class certification, even if they overlap with the merits — including disputes touching on elements of the cause of action”; and “[T]he court’s obligation to consider all relevant evidence and arguments extends to expert testimony, whether offered by a party seeking class certification or by a party opposing it.” Although this was an antitrust case, the court’s decision applies to non-antitrust class certification decisions as well.