Ex Parte Equity Nat. Life Ins. Co.
Ex Parte Equity Nat. Life Ins. Co.
Opinion of the Court
Equity National Life Insurance Company, Life Investors Insurance Company of America, Aegon Insurance Group, and Beth Croney, the defendants in an action pending in the Choctaw Circuit Court, petition for a writ of mandamus directing the trial court to vacate its February 27, 1997, order conditionally certifying a statewide class of plaintiffs. We hold that the conditional class certification order failed to comply with the prerequisites of Rule 23, Ala. R. Civ, P.; therefore, we grant the petition.
On October 1, 1996, after the case had been removed to a federal district court and subsequently remanded to the state court, *Page 194 the Coodys, without providing notice to the defendants, and despite the fact that their original complaint had alleged only a statewide class, moved for conditional certification of a nationwide class. On the same day, the trial court, without notice to the defendants and without benefit of a hearing, granted the Coodys' motion. The order did not explain why certification was proper, but simply stated that "good cause" had been shown. At this point in the litigation, discovery had been limited to the issues of removal and proper joinder.
After receiving a copy of the Coodys' motion and the trial court's order granting the conditional class certification, the defendants filed a "motion to reconsider" that order; the trial court conducted a hearing on January 7, 1997, to discuss the motion. At this hearing, the defendants argued that they had been prejudiced by the trial court's certification of a nationwide class of plaintiffs without any notice or opportunity for argument. The Coodys responded with the argument that the trial court had merely followed the conditional certification procedure provided by Ex parteVoyager Guar. Ins. Co.,
On February 27, 1997, the trial court modified its October 1, 1996, order by reducing the conditional class from a nationwide class to a class of Alabama purchasers of insurance policies from the defendant insurers. However, the trial court reaffirmed the substance of its earlier conditional certification and also held that the January 7, 1997, hearing cured any prejudice the defendants might have suffered as a result of the October 1, 1996, order. Finally, the trial court explained that it was issuing only a conditional class certification order, under the authority of Ex parte VoyagerGuar. Ins. Co., supra, and that, upon a final hearing of the class certification issues, the proponent of the class would have the burden of proving compliance with the requirements of Rule 23.
The defendants challenge the February 27, 1997, conditional class certification order. We limit our discussion to the propriety of that order.
At the outset, we note that the Coodys rely on the opinion of the Court of Civil Appeals in Ex parte Voyager Guar. Ins. Co., supra, to support the trial court's actions. That case is not binding upon this Court. See Ex parte Citicorp Acceptance Co.,
The United States Supreme Court, applying Rule
It is apparent that the trial court's conditional class certification order does not adequately demonstrate that the trial court conducted the rigorous analysis required by Rule 23, Ala. R. Civ. P. Although the trial court identified each of the four prerequisites of Rule 23(a) and purported to find that these prerequisites had been satisfied, identifying the prerequisites of Rule 23(a) is only the first step toward issuing a proper class certification order. The trial court did not explain in detail how the proponents of the class certification had satisfied each of the prerequisites of Rule 23. In fact, to support its February 27, 1997, certification order, the trial court stated only that it had considered the allegations of the complaint. Specifically, the trial court stated that before it had issued the original conditional class certification order, it had considered
"the allegations of the Complaint regarding numerosity of members of the class, commonality of law or facts to the class, adequacy of class representatives to protect the class, that the representatives' claims are typical of those of the class, the experience of counsel for the Plaintiffs' class and the requirements of Ala. R. Civ. P. 23(b)."
The trial court then stated that "[u]pon reconsideration of factors stated above, and the arguments of counsel at hearing on January 7, 1997, [it was affirming] its conditional class certification."
These conclusory statements, of course, do not satisfy the trial court's obligation to explain in detail, in the class certification order itself, how the proponents of the class have proved the prerequisites of Rule 23. In addition, the trial court issued its conditional class certification order based solely on the pleadings and without benefit of an evidentiary hearing. Because due process rights of the parties are implicated by the certification process, the proponent of the class must make a "full evidentiary demonstration" of each prerequisite under Rule 23. See Falcon,
This does not necessarily mean that a full evidentiary hearing is required in every case. See, e.g., In re AmericanMedical Systems, Inc.,
Requiring that a conditional class certification order be based upon evidentiary underpinnings would be desirable for a variety of reasons. For example, such a certification order would show the amount of work done by the plaintiff to substantiate the need for class certification and would assist in appellate review of cases in which there was an issue whether another action involving the same subject matter might be abated by the class action. Obviously, the trial court's February 27, 1997, conditional class certification order was not based on such an evidentiary underpinning, but was based exclusively on the allegations presented in the Coodys' complaint and, presumably, on the motion for class certification.4
For the reasons discussed above, we hold that the trial court abused its discretion in conditionally certifying the class. Consequently, we grant the mandamus petition and direct the trial court to withdraw its order conditionally certifying the statewide class.
WRIT GRANTED.
HOOPER, C.J., and HOUSTON and SEE, JJ., concur.
ALMON, SHORES, and COOK, JJ., concur in the result.
KENNEDY, J., dissents.
Concurring Opinion
See Ex parte First National Bank of Jasper,
ALMON and SHORES, JJ., concur.
Dissenting Opinion
I dissent. See my opinion concurring specially in Ex parteFirst National Bank of Jasper,
Reference
- Full Case Name
- Ex Parte Equity National Life Insurance Company (Re Claudy J. Coody and Mary F. Coody v. Equity National Life Insurance Company).
- Cited By
- 19 cases
- Status
- Published