The Bitter And Sweet Of The Wal-Mart/Comcast/Halliburton Triumvirate: More Grounds For Defeating Class Certification, But More Exposure To Discovery

Corporate litigants are still celebrating recent United States Supreme Court victories by defendants in high-profile class-action cases. As they should. After all, the trio of cases, Wal-Mart Stores, Inc. v. Dukes, Comcast Corp. v. Behrend, and Halliburton Co. v. Erica P. John Fund, Inc., mark a fundamental change in class litigation. Following these decisions, lower courts must now engage in a "rigorous analysis" of the prerequisites for class certification—an analysis that frequently "will entail some overlap with the merits of the plaintiff's underlying claim." Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). Going forward, corporate defendants opposing class certification have a number of new arrows in their litigation quiver to defeat class certification. Yet with these victories comes the threat of additional costs by way of discovery. With merits considerations now fair game at the certification stage, so too may be class discovery. Historically, class defendants have successfully bifurcated merits discovery from class discovery, cabining their discovery exposure at the class stage. Going forward, however, courts may well give plaintiffs wider berth at the class discovery stage, given the significance that merits issues now play in the certification analysis. This Commentary discusses how federal district courts have approached discovery in the wake of Wal-Mart, Comcast, and Halliburton. To date, most courts confronting class discovery issues have expanded the scope of plaintiffs' precertification discovery to include merits-based inquiries. But not all courts have followed suit, with some still limiting the scope of discovery in meaningful ways, and others shifting the financial burden of discovery. And still other courts have seized upon more active case management plans to streamline class discovery dramatically. Class-action defendants should pay heed to this developing class-action discovery landscape.

Background

In 2011, the Supreme Court raised the bar for plaintiffs seeking class certification by requiring lower courts to conduct a "rigorous analysis" to determine whether the prerequisites for certification are met. Wal-Mart, 131 S. Ct. at 2551 (reversing the grant of class certification due to a lack of commonality under Fed. R. Civ. P. 23(a)(2)). This "rigorous analysis," the Court explained, often will "entail some overlap with the merits of the plaintiff's underlying claim." Id. In the words of the Court, a merits-entwined inquiry for purposes of class certification "cannot be helped." Id. at 2551-52 (collecting cases). Two years later, the Supreme Court doubled-down on its "rigorous analysis" requirement for class certification, applying the teachings of Wal-Mart to prospective Rule 23(b)(3) classes as well. See Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013) (reversing the grant of class certification due to a lack of predominance under Fed. R. Civ. P. 23(b)(3)). In Comcast, the Court criticized the lower court's "refus[al] to entertain arguments against respondents' damages model that bore on the propriety of class certification, simply because those arguments would also be pertinent to the merits determination." Id. at 1432-33. Rather, the Court's precedents "flatly" require a determination that Rule 23 is satisfied, "even when that requires inquiry into the merits of the claim." Id. at 1433. The third installment in the Supreme Court's class-action trilogy came in 2014 in Halliburton Co. v. Erica P. John Fund, Inc...