In April, the Supreme Court reiterated the well-settled rule that class certification cannot follow a substantial determination on the merits. In Fireside Bank v. Superior Court (Gonzalez) (2006) 40 Cal.4th 1069, the court held that a trial court never depart from the preferred practice of deciding whether to certify a class action before adjudicating any class claims on the merits. Generally, this rule comes up only when plaintiffs win some preliminary ruling, like a judgment on the pleadings, or summary adjudication, and they then move to certify the class, given the class a notice that tells them that they might as well join, since they already won.
Ortiz v. Lyon Management Group, Inc. presents the opposite. Here, a defendant won a summary judgment motion, then decided to file its own motion to certify the class. The trial court denied the motion.
DEFENDANT’S TO CERTIFY CLASS – DENIED The issues presented in this Motion are of first impression to this Court. Although novel, they can be resolved on the basis of one legal principle, waiver. Neither Defendant or Plaintiff has cited any case where a Defendant was allowed to bring a motion for class certification after there had been a final adjudication of the merits of the case. Defendant’s citation of the Frazier and Lowry cases is not helpful, as both of those cases involved a class that was certified prior to the adjudication of the merits. The case of Colwell Co. v. Superior Court (1975) 50 Cal.App.3rd 32 and Civil Service Employees Insurance Company v. Superior Court (1978) 33 Cal.3rd 362 are controlling here. They hold that a defendant who fails to object to the adjudication of the merits of the Plaintiff’s claim prior to the class certification mechanism being fully implemented, waives the right to object and cannot thereafter seek a judgment which is binding on the absent class members. By bringing its Motion for Summary Judgment to determine liability prior to the determination of class certification, Defendant waived its right to have a judgment binding on absent class members.
The case is now on appeal. The appellant is, amazingly enough, the defendant. The plaintiff filed a cross-appeal challenging the summary judgment. Oral argument is tomorrow, Friday, June 22, 2007 at 9:00 a.m. at the Fourth District Court of Appeal in Santa Ana. Justices O’Leary, Fybel and Ikola will hear the matter. We want to see it, but we will be late, or might miss it completely.