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The One in Which Sonia Sotomayor Reverses Herself

This is a tale of two class actions filed in one court, the 2nd U.S. Circuit Court of Appeals. In the first, Judge Sonia Sotomayor wrote the opinion that set a new standard for class certification. In the second, she joined the three-judge panel that expressly disavowed her first decision.

The first case, decided in 2001, was In re Visa Check/Mastermoney Antitrust Litigation. It was an antitrust case that sought certification of a class action on behalf of merchants against Visa and MasterCard. The trial court certified the class under Rule 23 of the Federal Rules of Civil Procedure and the credit card companies appealed.

The main issue on appeal was whether the report of the plaintiffs' expert was sufficient to support class certification. The defendants said the report was flawed and they objected to its use. Writing for the two-judge majority of the three-judge panel, Sotomayor affirmed the certification, holding that the standard of expert testimony for certification of a class is less than on the merits of a case. The testimony should be admitted, she said, as long as it is not "fatally flawed."

The district court correctly noted that its function at the class certification stage was not to determine whether plaintiffs had stated a cause of action or whether they would prevail on the merits, but rather whether they had shown, based on methodology that was not fatally flawed, that the requirements of Rule 23 were met.

Five years later, the 2nd Circuit again faced the question of the correct standard to apply in certifying a class action. This time, it was a securities case, In re Initial Public Offering Securities Litigation. Sotomayor did not write the opinion this time, but participated as a member of the three-judge panel.

Finding that conflicting decisions within the 2nd Circuit had left the Rule 23 standard unsettled there, the opinion conducted an in-depth review of case law on the issue, including Sotomayor's Visa Check case. The panel concluded that the Visa Check standard was too lenient and it expressly disavowed it.

We … disavow the suggestion in Visa Check that an expert's testimony may establish a component of a Rule 23 requirement simply by being not fatally flawed. A district judge is to assess all of the relevant evidence admitted at the class certification stage and determine whether each Rule 23 requirement has been met, just as the judge would resolve a dispute about any other threshold prerequisite for continuing a lawsuit.

It is unusual for a court to so clearly disavow its own earlier opinion. More commonly, a court would find a way to step gingerly around it by distinguishing it in some way. Even more unusual here is that one of the three judges who disavowed that earlier decision is the very judge who wrote it. These two cases are among those I discuss in an article, "Sotomayor's Top Five Rulings on Experts."

Posted by Robert J. Ambrogi on June 17, 2009 at 11:19 AM | Permalink | Comments (1)


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