Bill Heard Chevrolet Company ("Heard") and Mayflower National Life Insurance Company ("Mayflower") appeal from the trial court's order conditionally certifying two classes of plaintiffs as to certain claims in an action pending in the Russell Circuit Court. Because we conclude that the trial court failed to perform the rigorous analysis required in certifying a class and failed to allow Heard and Mayflower an adequate opportunity to present any evidence in opposition to the proposed conditional certification order, we reverse and remand with instructions.
Background and Facts
James E. Thomas sued Heard; one of its employees, Bill Bratton; and a number of fictitiously named defendants, stating several claims arising from Thomas's purchase of a 1985 Cadillac Deville automobile from Heard. Thomas subsequently added Dorothy L. Dixon as a plaintiff
On June 17, 1998, the plaintiffs filed their "Second Recasted and Amended Complaint." That complaint includes 18 counts. The majority of those counts (14) state claims on behalf of Thomas and Dixon only, but 4 of the counts, counts 15 through 18, state claims on behalf of putative classes. The plaintiffs filed a motion for class certification and requested a hearing on the motion.
The trial court conducted two hearings at which the plaintiffs' motion for class certification was discussed. At the first hearing, held on July 21, 1998, the issue of class certification was only briefly addressed. No evidence in support of class certification was offered at that hearing. At the conclusion of the hearing, the trial court instructed the parties to file briefs in support of their respective positions regarding the class-certification motion.
On December 14, 1998, the trial court conducted another abbreviated hearing on issues related to the motion for class certification. The only substantive issue directly relevant to a class action under Ala. R. Civ. P. 23(a) discussed at this hearing was the issue of numerosity. Counsel for the plaintiffs orally argued the issue but presented no evidence in support of the motion to certify a class. However, shortly after this hearing, on December 21, 1998, the trial court entered an order granting the plaintiffs' motion for class certification. The trial court amended that order on May 17, 1999, after another hearing.
Heard and Mayflower sought relief from the trial court's December 21, 1998, and May 17, 1999, orders granting class certification. They filed in this Court petitions
771 So.2d at 462.
The trial court vacated its orders and the parties then discussed the status of class certification at another hearing held on September 1, 2000. The record before this court indicates that at this hearing, the plaintiffs' counsel submitted to the trial court a nine-page proposed order; that order purported to grant the plaintiffs' motion for class certification. The record reflects that the following exchange occurred at the September 1, 2000, hearing:
It is significant to note that plaintiffs' counsel never filed the submission of proof requested of it. Nor did the trial court schedule any further conferences or hearings on the class-certification issue. Rather, on November 16, 2000, the trial judge entered an order certifying the class; that order was a verbatim copy of the order proposed by the plaintiffs' counsel.
Heard and Mayflower appeal, pursuant to § 6-5-642, Ala.Code 1975, arguing that the trial court abused its discretion in entering
Standard of Review/Guiding Principles
In Atlanta Casualty Co. v. Russell, 798 So.2d 664 (Ala.2001), this Court observed:
798 So.2d at 666. See also Mitchell v. H & R Block, Inc., 783 So.2d 812, 815 (Ala.2000) ("The question whether to certify a class is in the sound discretion of the trial court, and, so long as the trial court considers the correct criteria in making its determination, we review its ruling only to determine whether the trial court abused its discretion.").
In Ex parte Green Tree Financial Corp., 684 So.2d 1302, 1307 (Ala.1996), this Court stated:
(Citations omitted.) "[C]lass actions may not be approved lightly and ... the determination of whether the prerequisites of Rule 23 have been satisfied requires a `rigorous analysis.'" Ex parte Citicorp Acceptance Co., 715 So.2d 199, 203 (Ala. 1997); see also § 6-5-641, Ala.Code 1975. The plaintiff must offer sufficient evidence of the Rule 23 criteria; this evidence must be referenced in the trial court's order before class certification is proper. See Ex parte Water Works & Sewer Bd. of the City of Birmingham, 738 So.2d 783, 787 (Ala.1998).
Based on our review of the record, we conclude that the order conditionally certifying two classes in this action does not meet the rigorous-analysis requirements set forth above for two reasons. First, the nine-page order in which the trial court conditionally granted class certification was entered without the benefit of a formal evidentiary hearing and without allowing the defendants an adequate opportunity to contest the proposed class-certification order. As noted above, plaintiffs' counsel was instructed at the hearing on September 1, 2000, to file a submission of proof in support of the plaintiffs' motion for class certification and in support of the plaintiffs' proposed order certifying the class. Although the trial court did not explicitly address the issue, we presume that if the plaintiffs' counsel had offered any evidence in support of their proposed class-certification order, Heard and Mayflower would have been, or should have
However, plaintiffs' counsel did not file the requested submission of proof and, despite the fact that the plaintiffs had requested a hearing on their class-certification motion, the trial court did not hold an evidentiary hearing and the plaintiffs never came forward with substantive evidence in support of their motion for class certification. See § 6-5-641(d), Ala.Code 1975 ("The court shall, upon motion of any party, hold a full evidentiary hearing on class certification."). Thus, before the entry of the conditional class-certification order, Heard and Mayflower were not allowed a formal opportunity to rebut whatever evidence the plaintiffs presented in support of their motion and proposed class-certification order. For this reason, we conclude that the trial court could not have conducted a "rigorous analysis" of the evidence to determine whether the Rule 23 prerequisites were met, because it did not allow the defendants an adequate opportunity to oppose the plaintiffs' proposed certification order.
We also note that the nine-page order conditionally granting class certification was drafted, not by the trial judge, but by counsel for the plaintiffs. While this fact, standing alone, does not compel the conclusion that the trial court did not conduct a rigorous analysis of the evidence presented in support of class certification, we strongly discourage this practice in the context of class-certification orders. We note that § 6-5-641(e) and Rule 23, Ala. R. Civ. P., impose upon the trial judge the duty to conduct a rigorous analysis, and we hold that this duty is nondelegable, even in the case of a conditional certification. See Ex parte Water Works & Sewer Bd. of the City of Birmingham, 738 So.2d at 788.
However, even assuming that the trial court reviewed, in great detail, the proposed order drafted by plaintiffs' counsel, and that the trial court found sufficient evidentiary support for every assertion contained in that proposed order, and that the court decided not to change a single word of that lengthy proposed order, we again note the lack of any opportunity for Heard and Mayflower to present their evidence in opposition to the assertions contained in that proposed order. Such a one-sided analysis of the issues raised by a class-certification motion cannot qualify as the "rigorous analysis" required by § 6-5-641 and Rule 23, Ala. R. Civ. P.
The November 16, 2000, conditional certification order fails to meet the rigorous-analysis requirements of § 6-5-641 and Rule 23 for the additional reason that the order fails to identify the elements of the four claims being certified for class treatment and fails to discuss in a cogent manner how those elements bear upon the criteria set forth in Rule 23.
Mann v. GTE Mobilnet of Birmingham Inc., 730 So.2d 150, 152 (Ala.1999), quoting Castano v. American Tobacco Co., 84 F.3d 734, 744 (5th Cir.1996). See also Ex parte Green Tree Fin. Corp., 723 So.2d 6, 9 (Ala.1998) ("In determining whether the questions of law or fact common to the class members predominate over those questions that affect only individual class members, the court must initially identify the substantive law applicable to the case and identify the proof that will be necessary to establish the claim."). The mandate to identify the "substantive law applicable to the case" requires more than a
For example, in the trial court's conditional class-certification order, the issue of commonality is addressed by merely restating, in the most general manner, the allegations made by the individual plaintiffs and those made by the class. The trial court concluded that, because those allegations are the same, the "commonality element has been met." The order contains no discussion of the elements of the four claims to be certified, which of those elements are disputed, if any, which factual elements will be at issue in this case, and how those questions of law and fact might impact on a class action. Additionally, while the order purports to certify for class treatment fraud and suppression claims, it wholly fails to identify any of the issues attendant to such a difficult undertaking. See Ex parte Government Employees Ins. Co., 729 So.2d 299 (Ala.1999); Ex parte Green Tree Fin. Corp., supra; Ex parte Household Retail Servs., Inc., 744 So.2d 871 (Ala.1999). The review in this case falls short of that required under the rigorous-analysis standard.
For these reasons, we conclude that the trial court's conditional certification order of November 16, 2000, fails to meet the rigorous-analysis requirements § 6-5-641 and Ala. R. Civ. P. 23. We direct the trial court to vacate its conditional class-certification order of November 16, 2000, and we remand this case with instructions for the trial court to schedule a formal evidentiary hearing in conformity with § 6-5-641, Ala. Code 1975. The issues to be addressed at that hearing, through the presentation of evidence and legal argument, include the "claims, defenses, relevant facts and applicable substantive law" of each claim the plaintiffs seek to have certified for class treatment and how they relate to the relevant criteria of Ala. R. Civ. P. 23. Because of the age of this action and the number of times this case has been before this Court, we encourage the trial court to require the parties to present at this hearing any and all substantive evidence and arguments to be considered in support of, or in opposition to, class certification.
Finally, we note that this Court has previously cited the class-certification order issued in Duncan v. Tennessee, 84 F.R.D. 21 (M.D.Tenn.1979), as an excellent example of a trial court's application of the relevant criteria in approving or denying class certification. See Rowan v. First Bank of Boaz, 476 So.2d 44 (Ala.1985), cited with approval in Mitchell v. H & R Block, Inc., 783 So.2d 812, 817 (Ala.2000); American Bankers Life Assurance Co. v. Mercury Fin. Corp., 715 So.2d 186 (Ala. 1997). We encourage the trial court, in drafting its class-certification order, to adopt an approach and organization similar to those the district court used in Duncan v. Tennessee. However, it should be noted that the order in Duncan addressed the issue whether to certify a single claim. Where a trial court, as here, must determine whether to certify multiple claims, it may be appropriate, for clarity, to address the "claims, defenses, relevant facts, and substantive law" applicable to each claim separately.
REVERSED AND REMANDED WITH INSTRUCTIONS.
MOORE, C.J., concurs in the result.