e-Journal Summary

e-Journal Number : 43403
Opinion Date : 07/31/2009
e-Journal Date : 08/05/2009
Court : Michigan Supreme Court
Case Name : Henry v. Dow Chem. Co.
Practice Area(s) : Litigation
Judge(s) : Weaver, Kelly, Cavanagh, and Hathaway; Concurring in part, Dissenting in part – Young, Jr., Corrigan, and Markman; Concurring in the opinion of Young, Jr. – Corrigan and Markman; Concurrence – Kelly; Writing a separate opinion as to participation in the case – Weaver; Separate concurrence - Young, Jr.
Full PDF Opinion
Issues:

Motion for class certification; The standard of review for class certification decisions; Whether the federal "rigorous analysis" requirement applies to state class actions; The proper analysis a court must conduct when determining whether the prerequisites for class certification have been met; MCR 3.501(A)(1) and (A)(2); Haliw v. Sterling Heights; General Tel. Co. of the SW v. Falcon; Herald Co. v. Eastern MI Univ. Bd. of Regents; Eisen v. Carlisle & Jacquelin; Gulf Oil Co. v. Bernard; Whether this particular class of plaintiffs was properly certified by the trial court

Summary

In an issue of first impression the court held the federal "rigorous analysis" requirement for class actions does not necessarily bind state courts and the plain language of MCR 3.501(A) provided sufficient guidance for class certification decisions in Michigan. The party seeking class certification is required to provide the certifying court with information sufficient to establish each prerequisite for class certification in MCR 3.501(A)(1) is satisfied. Because the trial court potentially used an evaluative framework inconsistent with the court's interpretation of the rule and articulation of the proper analysis for class certification, the court remanded the case to the trial court to clarify its reasoning for ruling MCR 3.501(A)(1)(c) and (d) were met. The case arose from allegations defendant-Dow Chemical negligently released dioxin from its Midland plant into the Tittabawassee River. The representative plaintiffs alleged they, along with the proposed class members, had incurred property damage caused by the dioxin contamination. Plaintiffs' claims were based on theories of negligence and nuisance. Noting it had not formally established the standard of review for class certification decisions, the court did so here, finding it proper to review the trial court's factual findings for clear error and the decisions within the trial court's discretion for abuse of discretion. The parties disputed whether the federal "rigorous analysis" requirement for class certification also applies to state class actions and whether class certification was appropriate in this case. The court agreed with Dow a certifying court may not simply "rubber stamp" a party's allegations the class certification prerequisites are met. However, given MCR 3.501(A)(1) expressly conditions a class action on satisfaction of the prerequisites, a party seeking class certification is required to provide the certifying court with information sufficient to establish each prerequisite for class certification in MCR 3.501(A)(1). "A court may base its decision on the pleadings alone only if the pleadings set forth sufficient information to satisfy the court that each prerequisite is in fact met." It is not sufficient for a certifying court to simply accept a party's assertion the prerequisites are met. When it is necessary to look beyond a party's assertions in order to assess whether the prerequisites for class certification are met, a court "should avoid making determinations on the merits of the underlying claims at the class certification stage of the proceedings." The trial court's statement it must "accept the allegations of the plaintiff in support of the motion as true" was potentially inconsistent with the standard the court adopted because it could be read to require courts to accept as true plaintiffs' bare assertions the class certification prerequisites are met. It was not clear whether the trial court's understanding of the prerequisites of MCR 3.501(A)(1) was consistent with the proper analysis. For MCR 3.501(A)(1)(c) and (d), the trial court's analysis on the record was insufficient to meet the proper analysis announced by the court.

Justices Young, Jr., Corrigan, and Markman joined in parts II and III(A) of the majority opinion. However, while the majority determined only the trial court's analysis of MCR 3.501(A)(1)(c) and (d) was insufficient and required further explanation, the partially concurring and partially dissenting justices believed "the trial court's decision was wholly affected by its application of an incorrect standard," would vacate the class certification in its entirety, and remand for a completely new ruling on the motion. The justices would not disturb the Court of Appeals majority's decision the proposed class may not be certified on the issue of damages but would vacate class certification in its entirety because the trial court did not make an independent determination finding the prerequisites of class certification were met.

Justices Corrigan and Markman agreed with Justice Young Jr.'s opinion in full, but wrote separately to discuss additional issues raised by the appeal they believed the trial court should consider on remand before again certifying a class in this case. They believed the proposed class was too broad and thus, untenable.

Justice Kelly fully agreed with and signed the majority opinion, but wrote for the sole purpose of responding to Justice Young Jr.'s comments regarding the majority's respect for the doctrine of stare decisis.

Justice Weaver wrote separately regarding the issue of her participation in the case after she learned she owned shares of Dow Chemical. After she became aware she had recently inherited the shares, she asked the Clerk of the Court to notify the parties to the case. Both parties responded they had no objection to her continued participation in the case. She stated she brought this issue to the public's attention as another example of why the court "needs fair, clear, written rules for disqualification concerning the participation or nonparticipation of Michigan Supreme Court justices."

Justice Young wrote separately to respond to Justice Weaver's separate concurrence believing it would appear from Justice Weaver's separate opinion he opposed the communication of her late-discovered ownership interest in one of the parties. He stated what he challenged "was the inadequacy of her disclosure to the parties concerning the nature of her ownership of stock in Dow Chemical." He continued to question Justice Weaver's participation in this case, stating he believed "any ownership interest in a party precludes a judge's participation."

Full PDF Opinion