Class action practice is a high-stakes game, with the court’s class certification order often a "lethal force" that, regardless of the merits of the lawsuit, "bestows extraordinary leverage" upon plaintiffs and places substantial pressure on defendants to settle. (See Oscar Private Equity Investments v. Allegiance Telecom Inc .) Notwithstanding the power of the class certification decision, however, the federal courts, including those in the 3rd Circuit, have historically construed Rule 23 of the Federal Rules of Civil Procedure liberally in plaintiffs’ favor. Further, as a result of the U.S. Supreme Court’s admonition against merits-based inquiries in its 1974 decision in Eisen v. Carlisle & Jacquelin , district courts have, until recently, resisted an in-depth review of the plaintiffs’ claims and the likely evidence to be introduced at trial at the class certification stage, concluding that plaintiffs need only make "some showing" that the requirements for class certification are satisfied.

This trend began to shift several years ago following Congress’ enactment of the Class Action Fairness Act of 2005, or CAFA, which significantly expanded federal jurisdiction over class actions, in large part to limit perceived abuses of the class action mechanism at the state level. In the post-CAFA world, the federal appellate courts have begun to chart a change in direction from the Eisen years, requiring something more than a mere threshold showing that each of the Rule 23 elements is satisfied for class certification to be granted. Indeed, in the past several years, the 2nd U.S. Circuit Court of Appeals and 5th Circuit have announced new standards for district courts to follow in making class certification decisions, requiring a critical evaluation of all of the relevant evidence at the class certification stage, and the resolution of any relevant factual disputes to determine whether each of the Rule 23 requirements is met. (See, e.g., Oscar Private Equity Investments v. Allegiance Telecom Inc. and In re Public Offering Securities Litig. )

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]