Bifurcated Discovery in Class Litigation: Navigating the Blurred Lines Before and After Certification Evaluating "Merits Discovery" vs. "Class Discovery," Addressing Damages Issues, Preparing Defendants for Depositions When Bifurcation is Permitted Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. WEDNESDAY, JUNE 11, 2014 Presenting a live 90-minute webinar with interactive Q&A Jennifer L. Liu, Outten & Golden, New York Katherine Murray, Of Counsel, Paul Hastings, Los Angeles
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Bifurcated Discovery in Class Litigation: Navigating the Blurred Lines Before and After Certification Evaluating "Merits Discovery" vs. "Class Discovery," Addressing Damages Issues, Preparing Defendants for Depositions When Bifurcation is Permitted
Class Actions Can Be a Force of Good • Class actions are procedural devices that allow similarly-situated claims to be tried together.
• As described by various courts:
• “[T]he class-action devise saves the resources of both the courts and the parties by permitting an issue potentially affecting every [class member] to be litigated in an economical fashion.” Gen. Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 155 (1982).
• “The class action is a procedural device intended to advance judicial economy by trying claims together that lend themselves to collective treatment.” Blaz v. Belfer, 368 F.3d 501, 508 (5th Cir. 2004).
• “The class action is an ingenious device for economizing on the expense of litigation and enabling small claims to be litigated.” Thorogood v. Sears, Roebuck and Co., 547 F.3d 742, 744 (7th Cir. 2008).
• “Class action litigation is a procedural mechanism designed to join multiple parties with similar or identical claims, so that they may seek redress in an efficient and expeditious manner.” Cummings v. Connell, 402 F.3d 936, 944 (9th Cir. 2005).
• “The class action is a useful jurisprudential tool which places special responsibilities on the court and counsel.” Bradford v. Sears, Roebuck and Co., 673 F.2d 792, 797 (5th Cir. 1982).
• “The class action is an ingenious procedural innovation that enables persons who have suffered a wrongful injury, but are too numerous for joinder of their claims alleging the same wrong committed by the same defendant or defendants to be feasible, to obtain relief as a group, a class as it is called. The device is especially important when each claim is too small to justify the expense of a separate suit, so that without a class action there would be no relief, however meritorious the claims.” Eubank v. Pella Corp., --- F.R.D. ----, 2014 WL 2444388, at *1 (7th Cir. 2014) (Posner, J.).
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But They Can Also Be Subject to Abuse
• Because class action lawsuits present opportunities for abuse, “a district court has both the
duty and the broad authority to exercise control over a class action and to enter appropriate
orders governing the conduct of counsel and parties.” Gulf Oil Co. v. Bernard, 452 U.S. 89 ,
100 (1981).
• “[I]t bears repeating that ‘[c]lass action are unique creatures with enormous potential for good
and evil.’” Besinga v. United States, 923 F.2d 133, 135 (9th Cir. 1991).
• “Neither the judges on this panel nor other federal judges so far as we are aware have
denied that the class action is a worthwhile device, and indeed is indispensable for the
litigation of many meritorious claims. But like many other good things it is subject to abuse.”
Thorogood v. Sears, Roebuck and Co., 627 F.3d 289, 294-95 (7th Cir. 2010).
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Discovery in Class Action Lawsuits
• Time consuming
• Labor intensive
• Expensive
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One Solution: Bifurcated Discovery
• What does it mean to bifurcate discovery?
• Separate discovery of class certification issues from
discovery of merits issues.
• Conduct only discovery of class certification issues until a
class is certified.
• Defendants often want bifurcated discovery; plaintiffs
generally do not.
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Basis for Seeking Bifurcated Discovery
• The Federal Rules of Civil Procedure do not explicitly provide for bifurcated discovery.
• But see Fed. R. Civ. P. 26(c)(1): A court may, “for good cause,” limit the scope of
discovery or control its sequence to “protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense.”
• The 2003 Advisory Committee Notes to Rule 23 recognize that bifurcation “is
appropriate to conduct controlled discovery . . . limited to those aspects relevant to
making the certification decision on an informed basis.”
• It is the burden of the party resisting discovery (i.e., proposing bifurcation) to show
that good cause exists to limit discovery.
o New England Carpenters Health and Welfare Fund v. Abbott Labs., No. 12 Civ. 1662, 2013 WL
690613 (N.D. Ill. Feb. 20, 2013)
o Hines v. Overstock, Com, Inc., No. 09 Civ. 991, 2010 WL 2775921 (E.D.N.Y. July 13, 2010)
(“[D]efendant bears the burden of establishing ‘good cause” for [bifurcated discovery].”)
o Exemar v. Urban League of Greater Miami, Inc., (S.D. Fla. June 26, 2008) (“Bifurcation is the
exception rather than the rule. [] The burden rests with the moving party to show that bifurcation is
necessary.”).
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But what is a “merits” issue and
what is a “class” issue? • At its most basic level, a “class” issue is one which relates to one of the requirements of class
certification under Federal Rule of Civil Procedure 23.
• To certify a class, the court must find that all Rule 23(a) requirements and at least one Rule 23(b) requirement is met:
o Rule 23(a): A party seeking class certification must demonstrate that: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
o Rule 23(b)(1) applies where either (a) class certification is warranted to protect the defendant from inconsistent obligations vis-à-vis other class members, or (b) where, in practical effect, resolving one class member’s claims would impede or impair other class members from protecting their interests.
o Rule 23(b)(2) applies where “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole[.]”
o Rule 23(b)(3) applies where “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for adjudicating the controversy.”
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Rule 23(a) • Numerosity:
o “[T]he burden is upon plaintiffs seeking to represent a class to establish that the class is so
numerous as to make joinder impracticable.” Trevizo v. Adams, 455 F.3d 1155, 1162 (10th
Cir. 2006).
o "A party seeking class certification must affirmatively demonstrate his compliance with the
Rule - that is, he must be prepared to prove that there are in fact sufficiently numerous
parties . . . .” Wal-Mart v. Dukes, 131 S. Ct. 2541, 2551 (2011).
• Commonality:
o Rule 23(a)(2) requires that “there are questions of law or fact common to the class[.]”
o “[T]he Wal-Mart decision has heightened the standards for establishing commonality under
Rule 23(a)(2) . . . the commonality test is no longer met when the proposed class merely
establishes that ʻthere is at least one issue whose resolution will affect all or a significant
number of the putative class members’ . . . Rather, Rule 23(a)(2) requires that all of the class
member’s claims depend on a common issue of law or fact whose resolution ʻwill resolve an
issue that is central to the validity of each one of the [class member’s] claims in one stroke.’”
M.D. ex rel. Stukenberg v. Perry, 675 F.3d 832, 840-41 (5th Cir. 2012).
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Rule 23(a) • Typicality
o Rule 23(a)(3) - looks at whether “the claims or defenses of the representative
parties are typical of the claims or defenses of the class[.]”
• “‘The purpose of the typicality requirement is to assure that the interest of the
named representative aligns with the interests of the class.’” Wolin v. Jaguar
Land Rover N. Am., LLC, 617 F.3d 1168, 1171 (9th Cir. 2010).
• “Typicality . . . derives its independent legal significance from its ability to ‘screen
out class actions in which the legal or factual position of the representatives is
markedly different from that of other members of the class even though common
issues of law or fact are present.’” Marcus v. BMW of N. Am., LLC, 687 F.3d
583, 598 (3d Cir. 2012).
• “The premise of the typicality requirement is simply stated: as goes the claim of
the named plaintiff, so goes the claims of the class.” Sprague v Gen. Motors
Corp., 133 F.3d 388, 399 (6th Cir. 1998).
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Rule 23(a) • Adequacy
• Rule 23(a)(4) looks at whether “the representative will fairly and adequately
represent the interests of the class.”
• Adequacy is twofold: the proposed class representative must have an interest in
vigorously pursuing the claims of the class, and must have no interests
antagonistic to the interests of other class members.” Denney v. Deutsche Bank
AG, 443 F.3d 253, 258 (2d Cir. 2006).
• “To determine whether the representation meets this standard, we ask two
questions: (1) Do the representative plaintiffs and their counsel have any
conflicts of interest with other class members, and (2) will the representative
plaintiffs and their counsel prosecute the action vigorously on behalf of the
• “A readily ascertainable class is ʻcrucial to the plaintiffs’ claims of . . . numerosity, typicality,
and commonality.’” Barasich v. Shell Pipeline Co., LP, 2008 WL 6468611, at *4 (E.D. La.
June 19, 2008).
• Carrera v. Bayer Corp., 727 F.3d 300, 307 (3d Cir. 2013) (“[a]scertainability provides due
process by requiring that a defendant be able to test the reliability of the evidence submitted
to prove class membership.”).
• “[P]recise, objective, and presently ascertainable.” O’Connor v. Boeing N. Am., Inc., 184
F.R.D. 311, 319 (C.D. Cal. 1998).
• But all class members need not be known when Plaintiff seeks certification:
• “Class members need be ascertained prior to certification, but must be ascertainable at some
point in the future.” Vandervort v. Balboa Capital Corp., 2012 WL 5248420, at *2 (C.D. Cal.
Oct. 28, 2012).
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Whether something is a “merits” issue
or a “class” issue is not entirely clear
• Courts have recognized that “the distinction between merits-based
discovery and class-related discovery is often blurry, if not spurious.” In
re Plastics Additives Antitrust Litig., 2004 WL 2743591, at *3 (E.D. Pa.
Nov. 29, 2004)
• “The lines between ‘merits discovery’ and ‘certification discovery’ are
sufficiently blurred as to make any distinction based on these terms
meaningless.” Waterbury Hosp. v. U.S. Foodservice, Inc., 2007 U.S.
Dist. LEXIS 7320 , at *9 (D. Conn Feb. 1, 2007)
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Recent Jurisprudence Has Blurred the Lines
Between Class and Merits Discovery
• The Old View: Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177, 185 (1974):
o We find nothing in either the language or history of Rule 23 that gives a court any
authority to conduct a preliminary inquiry into the merits of a suit in order to
determine whether it may be maintained as a class action.
• In re Initial Public Offering Securities Litigation, 471 F. 3d 24 (2d Cir. 2006):
o (1) [A] district judge may certify a class only after making determinations that
each of the Rule 23 requirements has been met; (2) such determinations can be
made only if the judge resolves factual disputes relevant to each Rule 23
requirement and finds that whatever underlying facts are relevant to a particular
Rule 23 requirement have been established and is persuaded to rule, based on
the relevant facts and the applicable legal standard, that the requirement is met;
(3) the obligation to make such determinations is not lessened by overlap
between a Rule 23 requirement and a merits issue, even a merits issue that is
identical with a Rule 23 requirement; (4) in making such determinations, a district
judge should not assess any aspect of the merits unrelated to a Rule 23
requirement . . . .
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The Supreme Court Has Not Helped To
Clarify These Issues
• Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011):
A court may certify a class only if it “is satisfied, after a rigorous analysis” of the relevant facts and issues, that each requirement of Rule 23 has been satisfied. “Frequently that rigorous analysis will entail some overlap with the merits of the plaintiff's underlying claim.”
• Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013):
Repeatedly, we have emphasized that it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question, and that certification is proper only if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied. Such an analysis will frequently entail overlap with the merits of the plaintiff's underlying claim. That is so because the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action.
• Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 133 S. Ct. 1184 (2013):
Although we have cautioned that a court’s class-certification analysis must be “rigorous” and may “entail some overlap with the merits of the plaintiff's underlying claim” . . . Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage. Merits questions may be considered to the extent--but only to the extent--that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied”
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Whether something is a “merits” or a “class”
issue will depend on the case • False Advertising Class Actions:
o Product efficacy, testing and safety issues are usually considered to be “merits.”
o “All natural” cases – whether products/ingredients are “all natural” or “100% natural” are typically merits questions.
• Cases brought under state statutes: o Company’s policies regarding compliance with statute could be both “class” and
• Employment Discrimination Class Actions: o See, e.g., Chen-Oster v. Goldman, Sachs & Co., 285 F.R.D. 294 (S.D.N.Y. 2012)
(granting discovery of statistical data relevant to both class and merits)
• Wage and Hour Class Actions o See, e.g., Paulino v. Dollar General Corp., No. 12 Civ. 75, 2013 WL 1773892
(N.D.W.V. Apr. 25, 2013) (granting discovery of class list, and personnel and payroll records); Ho v. Ernst & Young, LLP, No. 05 Civ. 4867, 2007 WL 1394007(N.D. Cal. May 9, 2007) (granting discovery of time and activity records).
• But most of the time, you’ll know it when you see it.
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What about damages issues?
• Until recently, damages issues were not addressed at the class certification
stage.
• Enter Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013):
o Reversed class certification in an antitrust case, concluding that
Plaintiffs’ expert had not shown how damages and liability could be
shown on a class-wide basis where damages model accounted for four
possible theories of antitrust injury, when district court had limited case
to single theory of antitrust impact.
o Courts should examine the proposed damages methodology at the
certification stage to ensure that it is consistent with the classwide
theory of liability and capable of measurement on a classwide basis.
o Establishes that “[c]alculations need not be exact, but at the class-
certification stage (as at trial), any model supporting a plaintiff's
damages case must be consistent with its liability case.”133 S. Ct. at
1433.
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Comcast’s impact on class
discovery
• Comcast has been interpreted as “reiterat[ing] a fundamental focus of the Rule 23 analysis: The damages must be capable of determination by tracing the damages to the plaintiff’s theory of liability. So long as the damages can be determined and attributed to a plaintiff’s theory of liability, damage calculations for individual class members do not defeat certification.” Lindell v. Synthes USA, No. 11-02053, 2014 WL 841738, at *14 (E.D. Cal. Mar. 4, 2014).
• But Comcast does not mean that precertification discovery into damages issues is fair game. Defendants should draw a distinction between actual computation of damages and a plaintiff’s ability to compute damages on a classwide basis.
• As the Ninth Circuit has explained, Comcast holds that, under rigorous analysis, "plaintiffs must be able to show that their damages stemmed from the defendant’s actions that created the legal liability.” Leyva v. Medline Indus., Inc., 716 F.3d 510, 514 (9th Cir. 2013).
• Thus, at the class certification stage, courts must examine Plaintiffs’ damages models, the relationship of those models to Plaintiffs’ legal theories, and whether damages can be calculated on a classwide basis. However, plaintiffs do not need to actually calculate or reveal the amount of each individual's damages at class certification.
• Therefore, discovery of actual damages issues prior to class certification remains premature, even under Comcast.
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Class Certification: Timing
• Must be brought as soon as practicable.
• Federal Rule of Civil Procedure 23(c)(1)(A): A court must determine whether to certify a class action “at an early practicable time after a person sues.” Fed. R. Civ. P. 23(c)(1)(A).
o Note the change in the 2003 amendments from “as soon as practicable” to “at an early practicable time.”
• Some courts specify actual deadlines: o Middle Dist. of Tennessee Local Rule 23.01(b) - absent court order, a motion for
class certification is to be filed within 60 days of the filing of the Complaint.
o Central Dist. Of Cal. Local Rule 23-3, Middle Dist. Fla. Local Rule 4.04(b), E. Dist. PA. Local Rule 23.1(c) - requires plaintiffs to move for class certification within 90 days of the initiation of their case.
o Western Dist. of NY Local Rule 23(d) – plaintiff must seek class certiifcation within 120 days of filing the Complaint
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Arguments to Make When
Seeking Bifurcated Discovery
• Manual for Complex Litigation suggests that the prime
considerations in whether bifurcation is efficient and fair include whether merits-based discovery is sufficiently intermingled with class-based discovery and whether the litigation is likely to continue absent class certification.
• When ruling on motions to bifurcate class certification and merits discovery, courts consider : o (1) expediency - whether bifurcated discovery will aid the court in making a timely
determination on the class certification motion;
o (2) economy - the potential impact that a grant or denial of certification would have upon the pending litigation and whether the definition of the class would help determine the limits of discovery on the merits;
o (3) severability - whether class certification and merits issues are closely enmeshed.
Harris v. comScore, Inc., No. 11 CV 5807, 2012 WL 686709, at *3 (N.D. Ill. Mar. 2, 2012); accord Reid v. Unilever U.S., Inc., No. 12 C 06058, 2013 WL 4050194, at *31 (N.D. Ill. Aug. 7, 2013).
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Arguments to Make When
Seeking Bifurcated Discovery
• Expediency:
o Where merits discovery is likely to delay the filing of the class certification motion
o Manual for Complex Litigation (Fourth), § 21.14: “Discovery relevant only to the merits delays the certification decision and may ultimately be unnecessary.”
o Lake v. Unilever U.S., Inc., 964 F. Supp. 2d 893 (N.D. Ill. 2013) (granting bifurcation in a case alleging damage from a hair care product where issues of numerosity, commonality, and typicality required extensive discovery prior to discovery on the merits and, therefore, “proceeding with merits discovery may delay the parties' submission of their briefs on the class certification issue”)
o Harris v. comScore, Inc., 2012 WL 686709, at *3 (N.D. Ill. Mar. 2, 2012) (granting bifurcation largely because proceeding with merits discovery “which may well involve the review of millions of documents not directly relevant to the issues of class certification, may delay the parties’ submission of supplemental briefing on the class certification issue”)
o Better to make this argument before plaintiff files his/her motion for class certification and before the parties have agreed to a briefing schedule.
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Arguments to Make When
Seeking Bifurcated Discovery
• Economy
o Bifurcation is more economical where denial of class certification will effectively
end the litigation.
Harris v. comScore, Inc., 2012 WL 686709, at *4 (N.D. Ill Mar. 2, 2012)
(finding that “the limited statutory damages available to Plaintiffs [in a
consumer fraud case] are likely an insufficient motivation to litigate in the
absence of class certification”)
o However, this is not a strong argument if Plaintiff insists that he/she will proceed
with litigation even if class certification is denied. (i.e., where plaintiff is alleging
significant losses)
• See Manual for Complex Litigation § 21.14, at 256 (bifurcation not
appropriate if litigation likely to proceed without certification).
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Arguments to Make When
Seeking Bifurcated Discovery
• Severability
o Where there will be substantial overlap between merits and class certification
issues, bifurcation may not be warranted as it will not create efficiencies.
o Dukes, 131 S. Ct. at 2551-52: The class certification analysis “will entail some
overlap with the merits of the plaintiff's underlying claim. That cannot be helped.
The class determination generally involves considerations that are en-meshed in
the factual and legal issues comprising the plaintiff's cause of action."
o Camilotes v. Resurrection Health Care Corp., 286 F.R.D. 339, 345 (N.D. Ill.
2012): “Because the class determination generally involves considerations that
are enmeshed in the factual and legal issues comprising the plaintiff's cause of
action, the court's rigorous analysis frequently entails some overlap with the
merits of the plaintiff's underlying claim.").
o Manual For Complex Litigation (Fourth) § 11.213: Concurrent discovery is more
efficient when bifurcation “would result in significant duplication of effort and
expense to the parties.”
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Arguments To Make When Opposing
Bifurcated Discovery
• Too Much Overlap Between Class and Merits
Discovery
• Delay
• Duplication
• Satellite Litigation
• Fairness
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Overlap • New England Carpenters Health & Welfare Fund v. Abbott Labs., No. 12 Civ. 1662, 2013 WL
690613 (N.D. Ill. Feb. 20, 2013) (“Courts increasingly find that class certification and merits issues overlap.”)
• Kastroll v. Wynn Resorts, Ltd., 2011 U.S. Dist. LEXIS 120124, at *7-8 (D. Nev. Oct. 17, 2011) (“[I]t is impossible to draw a bright line [between class and merits discovery], as ‘discovery can certainly be relevant to both class certification issues and to the merits.’”)
• In re Community Bank of N. Va. Mortg. Lending Practices Litig., 2011 U.S. Dist. LEXIS 107366, at *24 (W.D. Pa. Sept. 20, 2011) (“In formulating the plan for discovery the parties are advised that, in light of [Dukes], this court’s class certification analysis may entail a preliminary inquiry into the merits. [] (stating that “frequently [the Rule 23] ‘rigorous analysis’ will entail some overlap with the merits of the plaintiff’s underlying claim ...”). Accordingly, discovery will not be bifurcated.”)
• In re Rail Freight Fuel Surcharge Antitrust Litig., 258 F.R.D. 167, 173 (D.D.C. 2009) (“Courts must consider the degree to which the certification evidence is ‘closely intertwined’ with, and indistinguishable from, the merits evidence in determining whether bifurcation is appropriate.”)
• In re Plastics Additives Antitrust Litig., No. 03 Civ. 2038, 2004 WL 2743591 (E.D. Pa. Nov. 29, 2004) (“[C]lass certification discovery in this litigation is not ‘easily’ differentiated from ‘merits’ discovery.”) (“[T]he distinction between merits-based discovery and class-related discovery is often blurry, if not spurious.”)
• 3 Newberg on Class Action § 9:44 (4th Ed. 2006) (“Discovery relating to “class issues” is not always distinguishable from other discovery. Moreover, the key question in class certification is often the similarity or dissimilarity of the claims of the representative parties to those of the class members -- an inquiry that may require some discovery on the “merits” and development of the basic issues.”)
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Delay • In re Rail Freight Fuel Surcharge Antitrust Litig., 258
F.R.D. 167, 173 (D.D.C. 2009) (denying bifurcation where it “would delay the proceedings and ultimately, the resolution of the case”)
• In re Plastics Additives Antitrust Litig., No. 03-2038, 2004 U.S. Dist. LEXIS 23989 (E.D. Pa. Nov. 29, 2004) (“[B]ifurcation would further delay the resolution of the litigation. . . .”)
• In re Hamilton Bancorp, Inc. Sec. Litig., No. 01 Civ. 156, 2002 WL 463314, at *1 (S.D. Fla. Jan. 14, 2002) (bifurcation may increase the costs of litigation by “protracting the completion of discovery”)
(E.D.N.Y. July 13, 2010) (“[C]ourts in this and other circuits have recognized that where discovery relating to class issues overlaps substantially with merits discovery, bifurcation will result in duplication of efforts and needless line-drawing disputes.”)
• In re Rail Freight Fuel Surcharge Antitrust Litig., 258 F.R.D. 167, 173 (D.D.C. 2009) (“Concurrent discovery is more efficient when bifurcation ‘ would result in significant duplication of effort and expense to the parties.”)
• In re Plastics Additives Antitrust Litig., No. 03-2038, 2004 U.S. Dist. LEXIS 23989 (E.D. Pa. Nov. 29, 2004) (“[T]here is no reason to believe that denial of class certification will terminate this litigation.”)
• Manual for Complex Litigation § 11.213 at 40 (“[D]iscovery may proceed concurrently if bifurcating class discovery from merits discovery would result in significant duplication of effort and expense to the parties.”
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Satellite Litigation • Terry v. Cook County Dep’t of Corr., No. 09 C 3093, 2010 U.S. Dist.
LEXIS 68623, at *8 (N.D. Ill. July 8, 2010) (“[T]here are already discovery disputes brewing. If the Court were to grant the bifurcation motion, the need for the parties to separate [discovery] may further complicate rather than simplify these proceedings.”)
• In re Rail Freight Fuel Surcharge Antitrust Litig., 258 F.R.D. 167, 173 (D.D.C. 2009) (“If bifurcated, this Court would likely have to resolve various needless disputes that would arise concerning the classification of each document as ‘merits’ or ‘certification’ discovery.”)
• Trading Techs. Int’l v. eSpeed, Inc., 431 F. Supp. 2d 834, 840 (N.D. Ill. 2006) (holding that “bifurcation . . . lead[s] to additional discovery disputes that actually add time and energy to a litigation”).
• In re Hamilton Bancorp, Inc. Sec. Litig., No. 01 Civ. 156, 2002 WL 463314, at *1 (S.D. Fla. Jan. 14, 2002) (bifurcation may increase the costs of litigation with “endless disputes over what is ‘merit’ versus ‘class’ discovery”)
illustrates the need to develop the record fully before a class motion is considered.”)
(“[B]ecause of the ‘rigorous analysis’ required by Dukes, courts are reluctant to
bifurcate class-related discovery from discovery on the merits.”)
• In re Zurn Pex Prods. Liab. Litig., 644 F.R.D. F.3d 604, 612-13 (8th Cir. Jul. 6, 2011)
(“While there is little doubt that bifurcated discovery may increase efficiency in a
complex case such as this, it also means there may be gaps in the available
evidence.”)
• Bell v. Lockheed Martin Corp., 270 F.R.D. 186 (D.N.J. 2010) (“[G]iven Plaintiff's
burden at the class certification stage of producing evidence in support of the merits
to the extent there is overlap with the requirements of Rule 23, the Court shall deny
without prejudice Defendant's motion to bifurcate discovery.”)
• In re Rail Freight Fuel Surcharge Antitrust Litig., 258 F.R.D. 167, 173 (D.D.C. 2009)
(“[T]he whole purpose of discovery is to find not only those documents that
defendants wish for plaintiffs to see but all documents that pertain to the certification
issue that plaintiffs believe will advance their position.”)
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Why Defendants May Not
Want Bifurcation • Plaintiffs may use Defendants’ request for bifurcation
against them on class certification, when Defendants
challenge Plaintiffs’ evidence or experts:
o In re Zurn Pex Plumbing Prods. Liab. Litig., 644 F.3d 604, 613 (8th Cir. 2011):
It was after all [Defendant] which sought bifurcated discovery which resulted in a
limited record at the class certification stage, preventing the kind of full and
conclusive Daubert inquiry [Defendant] later requested. While there is little doubt
that bifurcated discovery may increase efficiency in a complex case such as this,
it also means there may be gaps in the available evidence. Expert opinions may
have to adapt as such gaps are filled by merits discovery, and the district court
will be able to reexamine its evidentiary rulings.
• There are also scenarios in which Plaintiffs might want
bifurcation
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As A General Rule “Allowing some merits discovery during the
precertification period is generally more appropriate
for cases that are large and likely to continue even if
not certified. On the other hand, in cases that is
unlikely to continue if not certified, discovery into
aspects of the merits unrelated to certification delays
the certification decision and can create extraordinary
and unnecessary expense and burden.”
–Manual for Complex Litigation (4th) § 21.14 (2006).
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Discovery From Absent Class
Members: Are They Parties? • Absent class members are considered “parties for some purposes and
not for others.” Devlin v. Scardelletti, 536 U.S. 1 (2002). o Absent class members are parties in the sense that the filing of an action on behalf of the class tolls a
statute of limitations against them. See Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974).
• Generally, absent class members are not considered “parties” for purposes of discovery o In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liability Litig., 134 F.3d 133, 141 (3d Cir. 1998)
(holding that putative “class members are not parties” and so cannot be bound by a court's ruling when “there is no class pending”).
o In re Worlds of Wonder Securities Litig., 1992 WL 330411 (N.D. Cal. July 9, 1992) (“Absent class members are not parties and separate discovery of individual class members not representatives is normally not permitted”)
o Guenther v. Sedco, Inc., 1998 U.S. Dist. LEXIS 19901 (S.D.N.Y Dec. 22, 1998) (“Absent class members are not parties for discovery purposes under Rules 33 and 34. . . . As a result, a strong showing is typically required before discovery of absent class members is compelled.”
• But there are exceptions: o Brennan v. Midwestern United Life Ins. Co., 450 F.2d 999 (7th Cir. 1971)(“If discovery from the absent
member is necessary or helpful to the proper presentation and correct adjudication of the principal suit, we see no reason why it should not be allowed so long as adequate precautionary measures are taken to insure that the absent member is not misled or confused”).
o Dellums v. Powell, 566 F.2d 167, 187 (D.C. Cir. 1977) (finding absent class member discovery appropriate if “relevant to the decision of common questions [,] tendered in good faith [,] not unduly burdensome, and when the information is not available from the representative parties”).
35
Absent Class Members:
Are They Represented By Plaintiff’s Counsel?
• General Rule: Prior to class certification stage, there is no attorney-client
relationship or privilege between putativ)e class members and plaintiff’s counsel. o Garrett v. Metro. Life Ins. Co., No. 95CIV2406 PKL, 1996 WL 325725 (S.D.N.Y. June 12, 1996)(“before class
certification, the putative class members are not ‘represented’ by the class counsel.)
o In re Cmty. Bank of N. Va., 418 F.3d 277, 313 (3d Cir. 2005) (“[C]ourts have recognized that class counsel do not possess a traditional attorney-client relationship with absent class members.”)
o In re McKesson HBOC, Inc. Sec. Litig., 126 F. Supp. 2d 1239, 1245-46 (N.D. Cal. 2000) (“While lead counsel owes a generalized duty to unnamed class members, the existence of such a fiduciary duty does not create an inviolate attorney-client relationship with each and every member of the putative class.”)
o 2 Joseph M. McLaughlin, McLaughlin on Class Actions § 11:1 (9th ed. 2012) (“The majority rule is that while named plaintiffs are clients of class counsel precertification, absent class members are not represented parties prior to class certification.”).
• But, putative class members are “represented persons” for purposes of ethical restraints on a lawyer’s contact with parties known to be represented o Gates v. Rohm and Haas Co., No. 06 Civ. 1743, 2006 WL 3420591, at *2 n.2 (E.D. Pa. Nov. 22, 2006) (“As
parties to the action, putative class members are afforded the protections contained in Rule 4.2 of the Rules of Professional Conduct.”); see also Dondore v. NGK Metals Corp., 152 F. Supp. 2d 662, 666 (E.D. Pa. 2001)
o Kleiner v. First Nat’l Bank of Atlanta, 751 F.2d 1192, 1206-07 (11th Cir. 1985) (suggesting that defense counsel had an ethical duty to refrain from discussing the litigation with putative class members prior to certification)
o 5 Newberg on Class Actions, 4th Ed. (2010) § 15.14 (noting that some courts have recognized “the constructive attorney-client relationship that exists between counsel for class representatives and the members of the class”)
36
Parties’ Communications
With Absent Class Members
• Parties should be careful when communicating with putative class members.
• District courts have the duty and broad discretion to limit communications between parties and putative class members in the class action context o Rule 23(d)(1) : “the court may issue orders that: . . . (C) impose conditions on the
representative parties or on intervenors . . . [and] (E) deal with simple procedural matters.”
o EEOC v. Morgan Stanley & Co., 206 F. Supp. 2d 559, 562 (S.D.N.Y. 2002) (“Courts have found the danger of . . . coercion between employers and employees sufficient to warrant the imposition of restrictions regarding communication between defendants and potential class members.”)
• However, district courts must exercise restraint before restricting communications between parties and potential class members o Gulf Oil Co. v. Bernard, 452 U.S. 89, 100 (1981)
o “An order limiting communications between parties and potential class members should be based on a clear record and specific findings that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties.” )
o “Such a weighing—identifying the potential abuses being addressed—should result in a carefully drawn order that limits speech as little as possible, consistent with the rights of the parties under the circumstances.”
37
Formal Discovery From Absent Class Members
• Discovery from absent class members is ordinarily not
permitted. o Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 810 (1985) (generally speaking, “an
absent class-action plaintiff is not required to do anything.”)
• However, there are exceptions, especially when the putative class members have been identified as potential witnesses or have otherwise “injected” themselves into the litigation. o Antoninetti v. Chipotle, Inc., 2011 WL 2003292 (S.D. Cal. 2011) (discovery of class
members was appropriate where they were identified in disclosures and submitted declarations used to support a class certification motion)
o Mas v. Cumulus Media Inc., 2010 WL 4916402 (N.D. Cal. 2010) (absent class members identified in the plaintiff’s initial disclosures could be subject to discovery)
o Moreno v. Autozone, 2007 WL 2288165 (N.D. Cal. 2007) (discovery of absent class members is appropriate where they submitted declarations in support of the plaintiff's motion for class certification).
38
Formal Discovery From Absent Class
Members: Practical Considerations • There are pros and cons to conducting precertification
discovery of putative class members.
• As no attorney-client relationship exists, the communications with putative class members are not privileged and are discoverable.
• Putative class members could reveal helpful information for opposing class certification (e.g., commonality, typicality). o Algarin v. Maybelline, LLC, 2014 U.S. Dist. LEXIS 65173 (S.D. Cal. May 12, 2014):
“According to survey results, purchasers had a variety of duration expectations. Indeed, more purchasers expected the product to last less than 24 hours or had no specific duration expectations. . . . Moreover, given the persuasive evidence presented on consumer expectations, the varying factors that influence purchasing decision, and consumer satisfaction, the Court finds that Plaintiffs have also failed to demonstrate that the elements of materiality and reliance are subject to common proof.”
• Or the data could yield the opposite results.
39
Corporate Defendant Depositions
• Rule 30(b)(6) governs. Deposition notice must “describe with reasonable particularity the matters on which examination is requested.”
• Although Rule 30(b)(6) obligates the responding entity to provide a witness who can answer questions regarding the subject matter listed in the deposition notice, this does not mean that the deposition must be limited to these topics.
o Rule 30(b)(6) must be balanced against Rule 26(b)(1): “parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action . . .”
o “Limiting the scope of a 30(b)(6) deposition to what is noticed in the deposition subpoena frustrates the objectives of Rule 26(b)(1) whenever a deposing party seeks information relevant to the subject matter of the pending litigation that was not specified.” Detoy v. City & Cnty. of S.F., 196 F.R.D. 362, 366 (N.D. Cal. 2000)
o “If the examining party asks questions outside the scope of the matters described in the notice, the general deposition rules govern (i.e. Fed. R. Civ. P. 26(b)(1)), so that relevant questions may be asked and no special protection is conferred on a deponent by virtue of the fact that the deposition was noticed under 30(b)(6).” King v. Pratt & Whitney, a Div. of United Tech. Corp., 161 F.R.D. 475, 476 (S.D.Fla. 1995).
40
Corporate Defendant Depositions
• Questions and answers that exceed the scope of the 30(b)(6) deposition notice do not bind the corporation, but are merely treated as the answers of the individual deponent
o Falchenberg v. New York State Dep't of Educ., 567 F. Supp. 2d 513, 521 (S.D.N.Y. 2008) (questions and answers exceeding scope of Rule 30(b)(6) do not bind corporation, and if Rule 30(b)(6) deponent does not know answer to questions outside scope of matters described in notice “that is the examining party’s problem”).
o EEOC v. Caesars Entertainment, Inc., 237 F.R.D. 428, 432 (D. Nev. 2006) (if deponent does not know answer to questions outside scope of noticed issues, deponent may truthfully answer that he or she does not know, without consequence to entity).
• Defense counsel should make sure to prepare 30(b)(6) witnesses on other potential topics beyond those in the deposition notice.
o “I don’t know” is an appropriate response to questions that are beyond the scope.
• If examining attorney goes beyond the scope of the deposition notice, raise an objection, but allow the witness to testify. o 7-30 Moore’s Federal Practice - Civil § 30.25: “if a party has fears about the scope of the questioning,
instructing the witness not to answer is not a proper resolution of the problem. Rather, one court has suggested that counsel may note on the record which questions it believes are beyond the scope of the deposition notice, and that answers to questions beyond the scope of the notice are not intended as the answers of the designating party.”
• The best way to avoid disputes during the deposition is for counsel to meet and confer prior to the deposition to discuss the permissible scope of deposition topics. 41
Strategic Concerns –Depositions
• One versus two bites at the apple o Medlock v. Taco Bell Corp., No. 07 Civ. 1314, 2014 WL 2154437 (E.D. Cal. 2014)
(granting more than one deposition of named plaintiffs in case where discovery
was bifurcated, even where plaintiffs allowed merits questions in the first
deposition, because plaintiffs did not make clear that defendants could inquire
into any and all merits issues at the first deposition)
• Building a record for supporting or opposing class
