Class Action Defense News, Developments and Commentary

Class Action Lawsuit Defense

Home | Class Action Lawsuit Defense

Plaintiffs repeatedly, and sometimes successfully, urge class certification after painting a pretty picture of liability with little or no attention whatsoever to the details of the actual evidence that both sides will present at trial.  However, the Colorado Supreme Court recently issued four cases on the same day that asked both parties: where’s the evidence?

Here are our four takeaways from the following four cases:
<ul>
	<li><a href="http://www.courts.state.co.us/Courts/Supreme_Court/opinions/2009/09SC668.pdf">Jackson v. Unocal Corp.</a>, 262 P.3d 874 (Colo. 2011)</li>
	<li><a href="http://www.courts.state.co.us/Courts/Supreme_Court/opinions/2010/10SC214.pdf">BP America Production Co. v. Patterson</a>, 263 P.3d 103 (Colo. 2011)</li>
	<li><a href="http://www.courts.state.co.us/Courts/Supreme_Court/opinions/2009/09SC1080.pdf">Garcia v. Medved Chevrolet Inc.</a>, 263 P.3d 92 (Colo. 2011)</li>
	<li><a href="http://www.courts.state.co.us/Courts/Supreme_Court/opinions/2010/10SC77.pdf">State Farm Mut. Auto. Ins. Co. v. Reyher</a>, 266 P.3d 383 (Colo. 2011)</li>
</ul>
1.  As opposed to the federal rule, the burden of proof for class certification on the plaintiff is not by a preponderance of the evidence. Jackson, 262 P.3d at 881. In Colorado, Rule 23 is a case management tool where neither rule nor case law imposes a specific level of proof.

2.  Trial courts cannot blindly accept broad allegations or general legal theories in deciding whether class certification is appropriate. Reyher, 266 P.3d at 388-89. Instead, it must conduct a rigorous analysis, which is a “fact-driven, pragmatic inquiry” to assess “what shape the trial will take, and whether the proof at trial will be susceptible to class-wide adjudication.”  Jackson, 262 P.3d at 881-82; see also Garcia, 263 P.3d at 98; Patterson, 263 P.3d at 109.  This inquiry will necessarily include merits-based evidence. Jackson, 262 P.3d at 885, 887.  Colorado law is thus consistent with federal law.

3.  A plaintiff alleging fraud-based class claims must prove each element of fraud, including materiality, reliance, causation, injury, and damages, for each member of the class as a matter of fact. And, while a plaintiff may be able to prove some of these elements by circumstantial evidence, there are no legal presumptions available to the plaintiff. Garcia, 263 P.3d at 100; Patterson, 263 P.3d at 110.

4.  Adjudication of the class question does not end with what the plaintiff presents. In class actions alleging fraud, the court must also consider the evidence that the defendant would present in response to plaintiff’s evidence to determine whether the issue is susceptible to common adjudication at trial. Garcia, 263 P.3d at 94, 100; Patterson, 263 P.3d at 111, 113.

Thus, while Colorado law differs from federal law in some respects, importantly, Colorado and federal law are consistent with respect to the rigorous analysis a court must apply in determining class certification, including an analysis of how issues will be presented at trial.

Colorado Supreme Court Asks: Where’s the Beef?