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Yokoyama v. Midland National Bank (9th Cir. - Aug. 28, 2009)

By Shaun Martin

I like a fight as much as the next person. Really I do. But I'm not sure there's much there here.

This is a case where the district court denied class certification in a "deceptive marketing" case (here, involving annuities to seniors). Once I read that, I thought: This thing's gonna get affirmed. We give tons of deference to district courts in certification decisions, so the odds of reversal are pretty slim.

But the more I read about the facts, the more I thought: "Wait a minute. This is actually a perfect case for class certification. Plaintiffs may well have a shot." The allegedly deceptive material was all written -- in a brochure that was given to all of the members of the class. Moreover, the district court denied certification on the basis that each class member would have to demonstrate reliance, but that's not an accurate statement of the law of Hawai'i; instead, liability's based upon an objective test regarding whether the misstatement has a tendency to deceive. That's an issue common to the class, which means the thing should probably have been certified.

Which is essentially what the panel unanimously held, reversing and remanding the case back down to the district court.

So what's the fight about, you ask? Arguably, merely semantics. And indisputably about the appropriate standard of review.

Judge Schroeder writes the majority opinion. She says that while general class certification decisions are reviewed for abuse of discretion, the district court's alleged error of law in that decision is reviewed de novo. She spends a lot of time articulating and defending this principle, essentially saying that since a district court's legal error would be an error of law and hence a per se abuse of discretion, the review here is essentially de novo.

Judge Randy Smith, however, concurs, and takes serious issue with Judge Schroeder's articulation of the standard of review. He says, sure, errors of law constitute an abuse of discretion, but we still review the class certification decision for abuse of discretion rather than de novo. And, he says, if we wanted to do anything else, we'd have to take the case en banc. But, again, he agrees that the legal error here constituted an abuse of discretion that requires reversal.

Even after thinking about this for some time, I simply don't understand what all the fussin' and figtin' is about. It seems to me that we're just talking about different words here, not different concepts, and that both of these positions are substantively identical. And, at a minimum, that any differences are sufficiently marginal that there's not much reason to get especially snippy about an opposing view. (For a taste, even though Judge Schroeder reaches out to call Judge Smith her "respected dissenting colleague," he in return refers to her opinion as an "assault on Ninth Circuit precedent" and her legal analysis as "glib".)

It seems to me that both sides are really talking about the same thing. For Judge Smith, all As are Bs, and all Bs are Cs, and those are the steps you take. For Judge Schroeder, all As are Cs. Those articulations are indeed different. But they're also equivalent. Nothing rides on which approach you use. As, indeed, nothing rides on the differential analysis here, as everyone agrees that (1) we review legal errors de novo, and (2) legal errors constitute an abuse of discretion, and hence (3) where, as here, there's a legal error, we reverse and remand.

So, again, I like fights. I do. I just don't especially see a substantive one here.

Full post as published by California Appellate Report on August 28, 2009 (boomark / email).