Admissibility of Evidence at Class Certification After Sali v. Corona Reg’l Med. Ctr.: Know the Difference Between Federal and State Court

Class action practitioners routinely toggle between federal and state court under familiar, and often similar, procedural guidelines. The case law governing evidence at class certification, however, is different in federal than in state court. The Ninth Circuit and California Court of Appeal recently issued contrasting decisions on the trial judge’s discretion when considering evidence on a class certification motion. Compare Sali v. Corona Reg’l Med. Ctr., 909 F.3d 996 (9th Cir. 2018), as amended Nov. 27, 2018 with Apple Inc. v. Sup. Ct., 19 Cal.App.5th 1101 (2018). This article discusses the difference, how district courts have applied Sali, and how it affects your approach to certification in federal and state court.

Admissibility of evidence at class certification after Sali

In Sali—a case the author briefed and argued—the Ninth Circuit addressed the issue of whether evidence (not just expert testimony) on class certification must be admissible to be considered. The Ninth Circuit held no: “At th[e] [class certification] stage, a district court may not decline to consider evidence solely on the basis that the evidence is inadmissible at trial.” Sali, 909 F.3d at 1003. “[A] district court’s class certification order, while important, is also preliminary: ‘An order that grants or denies class certification may be altered or amended before final judgment.’” Id. at 1004 (emphasis added) (citing Fed. R. Civ. P. 23(c)(1)(C); Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 n.11 (1978); In re Zurn Pex Plumbing Prod. Liab. Litig., 644 F.3d 604, 613 (8th Cir. 2011)). “Applying the formal strictures of trial to such an early stage of litigation makes little common sense. Because a class certification decision ‘is far from a conclusive judgment on the merits of the case, it is ‘of necessity … not accompanied by the traditional rules and procedure applicable to civil trials.’” Id. at 1004 (citing Zurn Pex, 644 F.3d at 613). Also, the Ninth Circuit aptly noted that “the evidence needed to prove a class’s case often lies in a defendant’s possession and may be obtained only through discovery. Limiting class-certification-stage proof to admissible evidence risks terminating actions before a putative class may gather crucial admissible evidence. And transforming a preliminary stage into an evidentiary shooting match inhibits an early determination of the best manner to conduct the action.” Id. At the class certification stage, a plaintiff seeking certification need only demonstrate—”through evidentiary proof”—that the prerequisites of Rule 23 have been satisfied. Id. at 1003-04. “Although [the Ninth Circuit did] not squarely address[] the nature of the ‘evidentiary proof’ a plaintiff must submit in support of class certification, [the Ninth Circuit] h[e]ld that such proof need not be admissible evidence.” Id. at 1004.

The Ninth Circuit’s ruling makes common sense. Class certification is not a dispositive proceeding such as a trial or a motion for summary judgment. We do not determine at the class certification stage who is right, who is wrong, or how much in damages is owed. To the contrary, the simple question at class certification is a procedural one: What is the best method to resolve the action efficiently and effectively? “[T]he ‘manner and degree of evidence required’ at the preliminary class certification stage [should] not [be] the same as ‘at the successive stages of the litigation’—i.e., at trial.” Id. at 1006. The evidence at class certification and at trial serve two different purposes and therefore should be assessed under different evidentiary standards. It is at the time of trial that a higher evidentiary burden of proof is required because the trier of fact must decide the merits of plaintiffs’ claims and defendants’ defenses. Also, by the time a case reaches trial, all the parties have an opportunity to conduct full discovery on their respective claims and defenses. On the other hand, the evidence is not fully developed at the class certification stage. That is why “greater evidentiary freedom” is necessary. Id. at 1005. Limiting class-action evidence to only admissible evidence risks terminating actions before crucial evidence can be gathered. Id. at 1004. Expert witnesses and other worthy evidence, relevant to both the merits and class certification, may be excluded or tarnished prematurely on an incomplete record. “By relying on formalistic evidentiary objections, [a] district court [may] unnecessarily exclude[] proof that tend[s] to support class certification.” Id. at 1006. And by excluding “evidence that likely could have been presented in an admissible form at trial,” “[t]hat narrow approach tells us nothing about” whether Rule 23’s requirements have been met. Id. Thus, in federal court, while “[t]he court may consider whether the plaintiff’s proof is, or will likely lead to, admissible evidence[,] … admissibility [alone] must not be dispositive.” Id.

Significant post-Sali district court and Ninth Circuit opinions to date

Since the decision was filed in May 2018 (and as amended in November 2018), several district courts have relied on Sali to overrule objections based on inadmissibility. The first district court to address Sali is Hamilton v. TBC Corp., 328 F.R.D. 359 (C.D. Cal. 2018) (a class action involving allegedly defective tires prone to tread separation). In Hamilton, defendants filed motions to strike plaintiff’s expert opinions offered in support of class certification because, according to defendants, “neither expert used reliable methodology and their opinions [we]re not analytically sound.” Id. at 373. “Keeping in mind the Ninth Circuit’s admonition [in Sali] that district courts should not limit its certification analysis to [p]laintiffs’ evidence and that ‘shaky’ but admissible evidence should be attacked through cross-examination, contrary evidence, and application of the burden of proof, the [district] [c]ourt decline[d] to strike [the expert opinions] at” the class certification stage. Id. at 373. The district court in Hamilton also noted that “the Ninth Circuit has warned that courts should not ‘transform[] a preliminary stage into an evidentiary shooting match ….’” Id. at 374 (quoting Sali, 909 F.3d at 1004). “The fact that [plaintiff’s expert opinion] may rely on assumptions that ultimately may be proven false on the merits does not automatically render her methodology and conclusions unreliable.” Id. While not all classes were certified, the district court did certify Colorado and Florida classes under those states’ consumer protection statutes. Id. at 392-93.

The second district court case is Mays v. Wal-Mart Stores, Inc., Case No. CV 18-02318-AB (KKx), 2019 WL1395912 (C.D. Cal. Feb. 20, 2019) (a class action involving an employer’s failure to include accurate information under California’s wage statement requirements). In Mays, the district court overruled defendant’s objections to plaintiff’s declaration. Id. at *5 fn.7. The district court held that “[e]ven if the declaration itself is not admissible at trial, information from her declaration could be brought out in admissible form at trial.” Id. (citing Sali, 909 F.3d at 1004-05 [holding that at the class certification stage “[t]he court’s consideration should not be limited to only admissible evidence.”]). “Accordingly, the [district] [c]ourt f[ound] [p]laintiff ha[d] presented sufficient evidence, at least at th[e] [class certification] stage, that suggests she was subject to and suffered injury from the same alleged violation of [California’s Labor Code] section 226(a)(8) as other class members.” Id. at *6. As a result, the district court certified a California wage statement class. Id. at *17.

The third district court case is McCurley, et al. v. Royal Seas Cruises, Inc., Case No. 17-cv-00986-BAS-AGS, 2019 WL 1383804 (S.D. Cal. Mar. 27, 2019) (a class action involving the federal Telephone Consumer Protection Act (TCPA)). This case is a good example of how Sali cuts both ways. In McCurley, plaintiffs filed evidentiary objections to declarations submitted by defendant to support its opposition to plaintiffs’ motion for class certification, and defendant moved to exclude plaintiffs’ expert opinions under Federal Rule of Evidence (FRE) 702. Relying on Sali, the district court overruled each parties’ objections. Id. at **5-10. “Formalistic evidentiary objections which might have merit at a successive stage of the litigation, such as a motion for summary judgment or trial, make little sense at the class certification stage.” Id. at *5 (citing Sali, 909 F.3d at 1004–06). The district court in McCurley noted that it “is not limited to considering only admissible evidence in evaluating whether Rule 23’s requirements are met.” Id. at *5 (quoting Sali, at 1005). “[I]t is an abuse of discretion to decline to consider evidence offered in support of class certification ‘solely on the basis of inadmissibility,’ including inadmissibility based on Rule 702.” Id. at *6 (citing Sali, at 1006). “A [district] court’s evaluation of ‘admissibility must not be dispositive,’ but rather it ‘should go to the weight that evidence is given at the class certification stage’ because a district court is ultimately tasked with ‘analyz[ing] the ‘persuasiveness of the evidence presented’ at the Rule 23 stage.’” Id. While some of the objections may have had merit, the district court in McCurley largely overruled the objections and considered “the weight and persuasiveness of [the] testimony offered in relation to Rule 23’s requirements.” Id. at **5-10.

The McCurley case is also important for another reason. Relying again on Sali, the district court rejected defendant’s request to refuse to consider evidence submitted by plaintiffs in their reply brief. Id. at *5 fn. 6. “A district court should not ‘rely[] on formalistic evidentiary objections,’ including objections that evidence is ‘new evidence’ submitted in reply’ to exclude evidence that may support class certification.” Id. (quoting Sali, 909 F.3d at 1006). The district court therefore refused to strike an expert report submitted by plaintiffs in their reply brief. Id. After weighing all the evidence submitted, the district court certified a “Rule 23(b)(3) TCPA class.” Id. at 30.

The fourth district court case is Brown v. DirecTV, LLC, 330 F.R.D. 260 (C.D. Cal. 2019) (a class action involving alleged violations of the TCPA). In Brown, defendant objected to plaintiff’s proposed method of identifying class members. Id. at 272. In response, the district court in Brown held that “[a]t this preliminary stage, [it] need not rule on whether the ‘wrong number’ notations are admissible evidence in order to consider that evidence for the purpose of class certification. The Ninth Circuit recently concluded that a district court is not constrained ‘to consider[] only admissible evidence in evaluating whether Rule 23’s requirements are met.’” Id. at 274 (quoting Sali, 909 F.3d at 1005). “As class certification decisions are generally made before the close of merits discovery, the court’s analysis is necessarily prospective and subject to change, and there is bound to be some evidentiary uncertainty.” Id. The defendant in Brown tried to cite authority from a different district to support “its assertion that admissibility of evidence is relevant to the predominance inquiry.” Id. at 274 fn. 11 (citing In re Asacol Antitrust Lit., 907 F.3d 42 (1st Cir. 2018)). But the district court rebuffed this attempt and stated it “is bound by Ninth Circuit, not First Circuit, authority, and the Sali court directly addresses the issue of potentially inadmissible evidence at the class certification stage.” Id. The district court granted plaintiffs’ motion and certified a nationwide TCPA class. Id. at 275.

The fifth district court case is Bennett v. GoDaddy.com LLC, No. CV-16-03908-PHX-ROS, 2019 WL 1552911 (D. Ariz. Apr. 8, 2019) (a class action involving alleged violations of the TCPA). In Bennett, the “[d]efendant also move[d] to exclude a report from [p]laintiff’s expert.” Id. at *13 fn. 12. “Because evidence need not be admissible at the class certification stage, [the district court held that] [d]efendant’s arguments regarding the admissibility of the expert’s report [we]re misplaced.” Id. “Neither the possibility that a plaintiff will be unable to prove his allegations, nor the possibility that the later course of the suit might unforeseeably prove the original decision to certify the class wrong, is a basis for declining to certify a class which apparently satisfies Rule 23.” Id. at *13 (quoting Sali, 909 F.3d at 1004-05). Like in Brown, the district court granted plaintiffs’ motion and certified a nationwide TCPA class. Id. at *14.

Finally, another panel from the Ninth Circuit in B.K. by next friend Tinsley v. Snyder cited Sali with approval and noted the difference between the degree of proof at class certification versus trial. 922 F.3d 957, 966-67 (9th Cir. 2019) (a class action involving alleged violations of the federal Constitution and Medicaid Act). While recognizing plaintiffs must establish each element of standing and class certification, the Ninth Circuit in B.K., in accord with Sali, stated that “[t]he manner and degree of evidence required at the preliminary class certification stage is not the same as at the successive stages of the litigation — i.e., at trial.” Id. at 967 (quoting Sali, 909 F.3d at 1006). “At this ‘tentative, preliminary, and limited’ stage we have held strictly admissible evidence is not required …, and we have indicated that plaintiffs can meet their evidentiary burden in part through allegations when the allegations are detailed and supported by additional materials[.]” Id. at 973-74 (quoting Sali, at 1004; citing also Parsons v. Ryan, 754 F.3d 657, 683 (9th Cir. 2014)). Finding that plaintiff had presented enough evidence, the Ninth Circuit in B.K. affirmed the district court’s ruling that the plaintiff had standing, affirmed certification of two classes, and remanded the third proposed class for reconsideration because it rested on a legal error. Id. at 967, 972-73, 976-978.

As is evident from above, the impact of Sali is reverberating throughout the district courts and spans the full spectrum of claims, from employment to non-employment class actions. District courts must now consider all evidence, even if inadmissible, and analyze its weight and persuasiveness at the class certification stage. But the same is not true in state court.

The rule of admissibility, for at least expert evidence, is different in state court

In Apple v. Superior Court—a case involving California’s consumer protection statutes—the Fourth District Court of Appeal addressed this narrow issue: “Does the [California] Supreme Court’s analysis of the admissibility of expert opinion evidence in Sargon Enterprises, Inc. v. USC (2012) 55 Cal.4th 747 … (Sargon) apply when a trial court considers a motion for class certification?” 19 Cal.App.5th 1101, 1106 (2018). The court of appeal in Apple “conclude[d] Sargon applies to expert opinion evidence submitted in connection with a motion for class certification.” Id.

In Apple, “[t]he trial court [had] granted plaintiffs’ motion for class certification[,] but expressly refused to apply Sargon to the declarations submitted by plaintiffs’ experts.” Id. at 1107. “The trial court believed it was not required to assess the soundness of the experts’ materials and methodologies at th[e] [class certification] stage …” Id. According to the court of appeal in Apple, “[t]hat belief was in error” and prejudicial to defendant. Id. As a result, the court of appeal vacated the trial court’s order granting plaintiffs’ motion for class certification and directed the trial court to reconsider the motion under Sargon. Id.

Under Sargon, a trial court may “exclude expert opinion testimony that is (1) based on matter of a type on which an expert may not reasonably rely, (2) based on reasons unsupported by the material on which the expert relies, or (3) speculative.” Id. at 1118 (quoting Sargon, 55 Cal.4th at 771-72). The silver lining in Apple is that the court of appeal held that a trial court’s application of Sargon in the class context is much more limited in scope “when compared with the inquiry at trial.” Id. at 1120. Specifically, the court of appeal in Apple held that “[a] [trial] court may find that it need not rule on the admissibility of certain expert opinion evidence offered in connection with class certification because it is irrelevant or unnecessary for its decision.” Id. “The [trial] court’s ability to disregard irrelevant or extraneous opinion evidence provides a certain flexibility not available during jury trials. But where, for example, expert opinion evidence provides the basis for a plaintiff’s arguments regarding numerosity, ascertainability, commonality, or superiority (or a defendant’s opposition thereto), a trial court must assess that evidence under Sargon.” Id.

The question left unanswered in Apple is whether non-expert evidence must meet the test of admissibility to be considered at the class certification stage. The Apple case was filed roughly four months before Sali. And while federal case law is not binding on California state courts, federal cases “are citable as persuasive, although not precedential, authority.” Martinez v. California Pizza Kitchen, Inc., 30 Cal.App.5th Supp. 14, 20 (2018) (quoting Pacific Shore Funding v. Lozo, 138 Cal.App.4th 1342, 1352 (2006)). Thus, for those practitioners who face objections to the admissibility of non-expert evidence in state court (such as testimony or evidence contained in plaintiffs’ or witnesses’ declarations), consider raising Sali and the principles and logic relied upon by the Ninth Circuit to convince the trial court to allow the evidence in for the limited purpose of determining whether the class certification elements have been met.

The main takeaways from this article

Be aware of the procedural difference between federal and state court. Know that in federal court admissibility alone is not a proper basis for a district court to refuse to consider relevant evidence at the class certification stage. Know that in state court expert evidence presented to support the elements of class certification must pass muster under Sargon. Whether the same holds true for non-expert evidence is up in there. But the reasoning and logic in Sali provides persuasive authority that admissibility alone should not be a bar, especially, when at the “preliminary class-certification stage,” the sole issue we are trying to answer is a procedural one: What is the best method to effectively and efficiently resolve the action, individually or on a class-wide basis? Sali, 909 F.3d at 1006. Limiting evidence “[b]y relying on formalistic evidentiary objections,” such as admissibility, will not help resolve that preliminary decision which “is far from a conclusive judgment on the merits of the case[.]” Id. at 1004, 1006.

By Jerusalem F. Beligan of Bisnar | Chase LLP
1301 Dove Street, Suite 120
Newport Beach, CA 92660
Tel.: (949) 752-2999
Email: jbeligan@bisnarchase.com

“[A]ttorney Jerusalem Beligan has extensive experience litigating class-action cases in state and federal court.” Sali, 909 F.3d at 1008.