The NAM joined with the U.S. Chamber of Commerce and the American Chemistry Council in an amicus brief urging the Michigan Supreme Court to reverse a class certification order in a pollution case. Michigan courts should look behind conclusory allegations in the initial pleadings in a case, and rigorously analyze the claims, defenses, relevant facts and applicable substantive law when deciding whether a case should be certified as a class action.
Lax certification standards lead to unwarranted litigation and abusive legal practices. This case includes a sizeable record demonstrating that individualized issues of fact predominate, but the lower court did not consider it. Certifying a class in such circumstances can reduce individual class members’ recoveries while increasing class counsel’s fees, can fuel forum shopping in class-action friendly state courts, and will increase class action litigation to the detriment of consumers, the economy and workforce, and the legal system.
Some state courts have not adopted the rigorous standards for certification that federal courts use. Our brief underscored the need for Michigan to reject loose certification procedures, in part to prevent the judicial blackmail that comes from the tremendous pressure on a defendant to settle a suit that has been certified, regardless of the case’s merit. Improper certifications also unfairly increase the likelihood that a defendant will be found liable and the size of any damages that may result. They give plaintiffs’ lawyers the power to call the shots in the litigation, rather than the clients they represent, and generate large and sometimes abusive fees.
On November 5, 2008, the Michigan Supreme Court agreed to hear this appeal. The NAM and other groups filed an amicus brief 2/17/2009 arguing that the trial court's approach was too "laissez faire," and we repeated our concerns about excessive and unwarranted litigation and abusive legal practices from improper class action certifications.
On July 31, 2009, the court reversed the trial court's certification of the class, and remanded the case for further consideration using state, not federal, rules. It placed the burden on the plaintiff to provide information sufficient to establish all the requirements for certification, and if the pleadings do not have sufficient evidence, the court may look to additional information to determine whether certification is proper. This ruling is beneficial to the extent it puts the burden on plaintiffs to prove that their case truly deserves to be handled as a large class action.