The Advisory Committee has signaled that the merits inquiry is a “back burner” issue for the next Rule 23 amendments.  Perhaps they should nudge it towards the front. 

 The role of the merits inquiry at certification is of vital interest to litigators, but less so to policymakers.  The Rules 23 Subcommittee, in the report from its October meeting, pointed out that, as far as it was concerned, the role of the merits inquiry did not rate a place on the “front burner.”

It’s clear why it came up, however.  Plaintiffs (and their advocates in academia) do not like the current state of the merits inquiry.  For a long time, plaintiffs (and courts that favored certification) relied on a misreading of the Supreme Court’s Eisen v. Carlisle & Jacqueline to blockade against either (1) inconvenient facts or (2) costly, time-consuming dives into certification-related issues.  Since the Supreme Court clarified the standard for merits inquiries in Wal-Mart Stores, Inc. v. Dukes, however, courts have engaged in increasingly closer scrutiny of the merits of plaintiffs’ claims as they try to discern how those claims will be tried.

It’s difficult to make a credible argument that courts should engage in less scrutiny during certification.  To do so would be to concede as truth one of several suspicions critics have of class actions.  Specifically, (1) that due process is simply not that important in class actions, or (2) that the class action really exists solely to leverage large settlements from corporate defendants.

It’s also difficult to envision a rules change that would make any difference in what the standard is.  As the Subcommittee puts it:

These developments place considerable stress on the prior notion that there is a useful dividing line between “class discovery” and “merits discovery.” They also may call for greater scrutiny of expert opinion evidence that is designed to show that all class members have been affected similarly by a common course of defendant conduct. Even a full-fledged Daubert evaluation of that proposed testimony may be necessary at the class-certification stage. At least in some circuits, it is said that when the party seeking certification and the party opposing it offer expert evidence, the court may have to choose between the contending expert views.

In terms of cost and effort, then, this relatively-recent development is clearly important.  And it appears to relate somewhat to rule changes that occurred in 2003.  But it is not clear what rule change would be appropriate to react to these developments, or that rule changes played a large role in bringing about the courts’ evolving attitude toward merits scrutiny in connection with certification.  And there is an argument that, even without something like a probability of success inquiry, there is a value to stricter scrutiny of the merits before cases are certified.

(Emphasis added.)  You won’t hear this blog argue against the value of stricter scrutiny of the merits of class actions, in no small part because so many of them fall apart once courts engage in rigorous inquiries.

But even if the Subcommittee is refraining change to the language of the Rule, and even if (by all indications) it is refraining for the right reasons, holding the debate is a good idea.  For one thing, there is a non-frivolous argument to be made that adding language about “rigorous analysis” that “probes beyond the pleadings” would help to cement the current understanding that appropriate merits inquiries are vital to striking the right balance at certification.  (They might, for example, cut down on the use of “no-injury” class actions by allowing the court to look at how many class members were actually injured under a given legal theory.)

Similarly, given the confusion about the appropriate level of scrutiny for certification, it’s clear some courts could use the reminder that they are not supposed to take the plaintiffs at their pleadings.

Most importantly, though, like with Rule 68, adopting language that reflects the Supreme Court’s “stringent” certification standard would actually assist the Subcommittee on its front-burner issues like appropriate class settlements.  Bad settlements occur when bad cases make it past the pleadings or past certification.  Tighten those gates, and there will be less need for vigilance at settlement.