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Pitts v. American Security Insurance Co.
(North Carolina Supreme Court)
Certification of class actions
The NAM filed an amicus brief 3/4/02 urging the North Carolina Supreme Court to reverse an appeals court decision that threatens to make North Carolina a favorite jurisdiction for class action suits against manufacturers. We argue that the lower court failed to take into account important defenses and difficult damages questions before certifying the class. The initial decision to certify a class action is crucial in determining the outcome of such cases, since the certification decision, in the words of a federal appeals court, places "inordinate or hydraulic pressure on defendants to settle, avoiding the risk, however small, of potentially ruinous liability." The NAM continues to argue that judges must engage in a "rigorous analysis" of the underlying facts in a proposed class action, as well as questions relating to defenses and damages, before certifying a case as a class action.
On 10/4/2002, the North Carolina Supreme Court split 2-2, leaving the lower court decision intact but with no precedential value.
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