Saturday, October 17, 2009

Justice Kennedy Issues Opinion Relating To Constitutionality Of Class Certification Hearing

The Supreme Court denied certiorari in DTD Enterprises, Inc. v. Wells (08-1407) this week.  It was an interlocutory appeal and also impacted by a bankruptcy stay.  However, Justice Kennedy, joined by Chief Justice Roberts and Justice Sotomayor, gave the lower courts some guidance that "It seems advisable, however, to note that the peti-tion for certiorari does implicate issues of constitutional significance."  The opinion stated:
The trial court certified the class and ordered petitioner to bear all the costs of class notification, on thesole ground (or so it appears) that petitioner could affordto pay and respondent could not.

To the extent that New Jersey law allows a trial court to impose the onerous costs of class notification on a defendant simply because of the relative wealth of the defendant and without any consideration of the underlying merits of the suit, a serious due process question is raised. Where a court has concluded that a plaintiff lacks the means to pay for class certification, the defendant has little hope of recovering its expenditures later if the suitproves meritless; therefore, the court’s order requiring thedefendant to pay for the notification “finally destroy[s] a property interest.” Logan v. Zimmerman Brush Co., 455 U. S. 422, 433-34 (1982). The Due Process Clause requires a “‘hearing appropriate to the nature of the case.’” Boddie v. Connecticut, 401 U. S. 371, 378 (1971). And there is considerable force to the argument that a hearing in whichthe trial court does not consider the underlying merits ofthe class-action suit is not consistent with due processbecause it is not sufficient, or appropriate, to protect the property interest at stake.


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