Of all the potential reasons to deny certification under Rule 23(a) (numerosity, commonality, typicality, and adequacy of representation), probably the least commonly used is that of adequacy of representation. Even in those cases, the focus is more often on problems with the named plaintiff than with the attorney bringing the action. A recent Seventh Circuit decision reflects that certification can be denied based on conduct by the lawyers bringing the action and that at least some courts are attuned to the waste of time and money that may result from class action litigation.
In Gomez v. St. Vincent Health, Inc.pdf., Case No. 10-2379 (7th Cir., Aug. 15, 2011), the employer was a large Indiana hospital system with thousands of employees. Although the employer endeavored to comply with COBRA, including hiring third party administrators and conducting periodic audits, over a two-year period approximately 250 separated employees did not timely receive their COBRA notices. Three of the affected employees filed a putative class action in the Southern District of Indiana to assert COBRA violations as a result of the late or failed notice. Upon investigating the matter, the company realized the mistake, contacted the affected individuals and offered them various arrangements to reinstate their coverage if they desired. In the meantime, the plaintiffs were suffering their own problems in the lawsuit, including various discovery disputes, and were subject to orders to compel and to pay costs. The district court ultimately denied certification of the class for numerous reasons, including adequacy of representation, and granted summary judgment against the two named plaintiffs. Among other issues, the court found that the plaintiff’s attorney had not diligently pursued the case, had not properly conducted discovery, and had created an incomplete record for summary judgment. Justice, at this point, prevailed, as the employer took reasonable steps to correct its mistake and the court refused to permit the class to proceed due to the procedural abuses and missteps of plaintiff’s counsel.
Undaunted, the same attorney took the listing of names obtained in discovery of the first case, solicited new plaintiffs, and then filed a second putative class action. The action was filed in the same court, but assigned to a different judge. That judge, too, denied certification, but limited the grounds for the holding to adequacy of representation, based largely on the conduct that occurred in the first case. The court went on to award one of the individual plaintiffs less than $400 in damages, and dismissed the remaining claims for statutory damages.
The Seventh Circuit affirmed the district court’s decisions with respect to the damages issues, and then addressed the question of certification. It found that the district court had appropriately denied certification because of the attorney’s conduct in the first action as well as filing the second, nearly identical case without additional evidence. For an attorney to “lose” a class action due to his own conduct, and, worse, to have that conduct spelled out in a federal court of appeals had to be bad enough, but that wasn’t all. Throughout its opinion the court noted gaps (to put it politely) in the plaintiff’s counsel’s assertions, described him as having “misrepresented fundamental facts,” and quoted portions of his brief containing typographical errors and butchered English as additional proof of his inadequacy as class counsel. Ouch!
The Bottom Line: Some courts will deny certification when plaintiff’s counsel is viewed as having abused the discovery process and of misusing judicial resources.