Earlier this year, the Ninth Circuit issued a decision in Sali v. Corona Regional Medical Center, 889 F.3d 623 (9th Cir. 2018), holding that because the class certification order is “preliminary” and can be entered at an early stage of the litigation, a motion for class certification need not be supported by admissible evidence.  The previous blog post addressing this opinion can be accessed here.  Since then, a petition for panel rehearing and rehearing en banc in this case were denied. 

Notably, five Ninth Circuit judges dissented from the denial of rehearing en banc.  Sali v. Corona Regional Medical Center, 907 F.3d 1185 (2018).  The dissent expressed “regret” that the Ninth Circuit decided not to rehear the case en banc because it “could have corrected our own errors.  Rather than do that, we have established a rule that undermines the purpose of the class certification proceeding.”

The dissent explained: “We have been instructed by the Court that facts necessary to establish the elements of a class cannot simply be those that meet a pleading standard.  But the panel has reduced the requirements of class certification below even a pleading standard.  It has accepted that undisputedly inadmissible evidence of plaintiffs’ paralegal—not even that of an attorney who is subject to certain pleading standards—that the plaintiffs have damages typical of the class ought to be certified.

This doesn’t pass the straight-face test.”

The dissent further explained that “it is no surprise” that the panel’s conclusion that expert opinion testimony need not be admissible at the class certification stage is contrary to Ninth Circuit precedent, decisions of the majority of other circuits, and clear guidance from the U.S. Supreme Court.

The dissent observed that six circuits have held in published or unpublished decisions that expert testimony must be admissible to be considered at the class certification stage.  The Second, Third, Fifth, and Seventh Circuits have issued published opinions supporting this conclusion, and the Sixth and Eleventh Circuit have issued unpublished opinions on this issue.  Meanwhile, the Ninth Circuit sided with the Eighth Circuit—the only circuit to come out the other way (and the dissent argues even the Eighth Circuit created “a more stringent evidentiary standard” than the one applied by the Ninth Circuit panel).

The dissent also explained that the guidance from the U.S. Supreme Court “heavily favors” the circuit majority rule, highlighting two Supreme Court decisions relevant to this issue.  In Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 342 (2011), the Court emphasized that “Rule 23 does not set forth a merely pleading standard” but rather requires the moving part to “affirmatively demonstrate his compliance with the rule” and “doubt[ed]” the idea that “Daubert [does] not apply to expert testimony at the certification stage of class-action proceedings.”  Id. at 350, 354.  Similarly, in Comcast Corporation v. Behrend, 569 U.S. 27 (2013), the Supreme Court held that “satisfy[ing] through evidentiary proof at least one of the provisions of Rule 23(b)” is a prerequisite to class certification.

In conclusion, the dissent characterized the panel’s decision as involving “a question of exceptional importance” that “is plainly wrong.”  

It is currently unclear whether Corona Regional Medical Center will petition for a writ of certiorari, the deadline of which is the end of January 2019.

Interestingly, a California Court of Appeal was faced with this issue earlier this year and came to the same conclusion as the majority of circuit courts—that expert opinion testimony must be admissible at the class certification stage.  Apple Inc. v. Superior Court, 19 Cal. App. 5th 1101, 1106 (2018), review denied (May 16, 2018).  Specifically, the court concluded that “[a] trial court may consider only admissible expert opinion evidence on class certification, and there is only one standard for admissibility of expert opinion evidence in California.”  The court observed that the reason for such a limitation was “obvious”—“A trial court cannot make an informed or reliable determination on the basis of inadmissible expert opinion evidence.  And certifying a proposed class based on inadmissible expert opinion evidence would merely lead to its exclusion at trial, imperiling continued certification of the class and wasting the time and resources of the parties and the court.”  Id. at 1117.  This decision represents a crucial—and very significant—difference for litigating class actions in California versus federal courts.