EvidenceProf Blog

Editor: Colin Miller
Univ. of South Carolina School of Law

Saturday, September 8, 2012

Class Act: Eastern District Of New York Finds Rule Against Hearsay Applies At Class Certification Stage

Outside the Second Circuit, courts are split as to how stringently to apply the rules of evidence at the class certification stage. See, e.g., Serrano v. Cintas Corp., Civ Nos. 04–40132, 06–12311, 2009 WL 910702, at *3 (E.D.Mich. Mar.31, 2009) (declining to strike declarations in connection with motion to certify, despite admissibility challenges; holding that it was appropriate to consider all evidence at the class certification stage, while deferring admissibility determinations); Lewis v. First Am. Title Ins. Co., 265 F.R.D. 536, 552–53 (D.Idaho 2010) (noting split, but deciding that, for class certification purposes, court would not strictly apply evidentiary rules). Lujan v. Cabana Management, Inc., 2012 WL 3062017 (E.D.N.Y. 2012).

So, how did the Eastern District of New York rule in Lujan?

In Lujan,

Plaintiff Gerardo Valdez Lujan...and several "opt-in" plaintiffs...br[ought] [a] lawsuit against defendants Cabana Management, Inc....and Glenn Frechter...to recover minimum wage and overtime payments allegedly due to Lujan and other current and former employees of defendants, who operate three New York City-area restaurants.

The plaintiffs subsequently moved for class certification pursuant to Federal Rule of Civil Procedure 23. In support of this motion, the plaintiffs submitted declarations that contained some inadmissible hearsay. The question for the Eastern District of New York was thus whether and to what extent the Federal Rules of Evidence apply at the class certification stage, which is what prompted the block quote that led this post.

And, according to the Eastern District of New York,

after reviewing Second Circuit case law addressing the evidentiary standards applicable to Rule 23 motions, this Court is of the opinion that the Second Circuit would require that such declarations be admissible (i.e., based on personal knowledge and either non-hearsay or information subject to hearsay exceptions).

Specifically, the court noted that

In 2008, the Second Circuit considered what factual finding was required on a Rule 23 motion in the context of a securities fraud putative class action. See In re Salomon Analyst Metromedia Litig., 544 F.3d 474 (2d Cir.2008). Addressing a 2004 district court opinion that had held that on a class certification motion, the plaintiffs had to make a "prima facie" showing of a particular securities fraud element by "admissible evidence," the Second Circuit rejected the "prima facie" standard but, by its silence, implicitly accepted the admissibility requirement. See id. at 486 n. 9 (discussing DeMarco v. Lehman Bros., Inc., 222 F.R.D. 243, 246–47 & n. 9 (S.D.N.Y.2004)). Furthermore, in the In re IPO case discussed above, the Second Circuit analogized the evidentiary showing under Rule 23 to "any other threshold prerequisite for continuing a lawsuit." In re IPO, 471 F.3d at 42. Significantly, in determining a threshold issue, such as jurisdiction, courts may not rely on inadmissible hearsay. See Commercial Union Ins. Co. v. Blue Water Yacht Club Ass'n, 239 F.Supp.2d 316, 319 (E.D.N.Y.2003) (citing Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir.1986)).

I agree with this analysis as well as the court's citation to Wal-Mart Stores, Inc. v. Dukes, in which the Supreme Court noted that "[t]he District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings" and the responded, "We doubt that is so...." While this was dicta and dealt with the applicability of Federal Rule of Evidence 702 at the class certification stage, I certainly think that it lends strong inferential support to Federal Rule of Evidence 802 applying at the class certification stage.



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