“One Way” Or Another: Bad Reyes Saga Continues With One-Way Intervention Challenge to Court’s Certification Ruling

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While I never take pleasure in another’s misfortune, I am a tad giddy watching the machinations in the Bad Reyes case play out.

First, the Court granted, in part, the Plaintiff’s summary judgment motion concluding that the 2003 and 2008 FCC Predictive Dialer Rulings remained good law and granting partial summary judgment to the Plaintiff on the ATDS issue on that basis.

Next, the Court denied certification of an interlocutory appeal finding that there was no substantial doubt on the question since all district court opinions in the Eleventh Circuit agreed on the issue–which was a questionable decision at the time but became downright comical after a Northern District of Georgia court (within the Eleventh Circuit) subsequently found that ACA Int’l “clearly” invalidated the 2003 and 2008 orders, contrary to Bad Reyes’ pronouncement.

Then, the Court certified the case as a class action in a decision altering the pleaded class definition to certify a code class similar to Lavigne. See Reyes v. BCA Fin. Servs., No. 16-24077-CIV, 2018 U.S. Dist. LEXIS 106449 (S.D. Fla. June 26, 2018).

And now the really fun part. Because the Court elected to rule on the Plaintiff’s certification motion (which was properly filed before the MSJ) after first ruling on Plaintiff’s summary judgment motion (which was properly filed after the certification ruling) the Court appears to have violated the decades-old rule against one-way intervention. (More on that below). BCA’s lawyers have now quite cleverly filed a motion asking the Court to reconsider the certification ruling on that basis. The motion can be found here.

BCA may be on to something. The one-way intervention doctrine dates back to the U.S. Supreme Court holding in Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 547, 94 S.Ct. 756, 763, 38 L.Ed.2d 713 (1974).  There the Court held, inter alia, that substantive merits issues cannot be addressed in dispositive fashion in a putative class action before certification issues are decided. Otherwise class members can benefit from awaiting the outcome of the dispositive motion–losing nothing if the class representative’s position is rejected and then leaping to join the class if the dispositive motion is decided in their favor. That would be unfair and, as the Supreme Court pointed out in Am. Pipe, the amended rules do not allow for such nonsense:

A recurrent source of abuse under the former Rule lay in the potential that members of the claimed class could in some situations await developments in the trial or even final judgment on the merits in order to determine whether participation would be favorable to their interests. If the evidence at the trial made their prospective position as actual class members appear weak, or if a judgment precluded the possibility of a favorable determination, such putative members of the class who chose not to intervene or join as parties would not be bound by the judgment. This situation—the potential for so-called ‘one-way intervention’—aroused considerable criticism upon the ground that it was unfair to allow members of a class to benefit from a favorable judgment without subjecting themselves to the binding effect of an unfavorable one. The 1966 amendments were designed, in part, specifically to mend this perceived defect in the former Rule and to assure that members of the class would be identified before trial on the merits and would be bound by all subsequent orders and judgments.

Am. Pipe & Constr. Co. v. Utah, 414 U.S. at 547.

As a result, class action practitioners know well to never file a dispositive motion pre-certification–at least not one that effects the claims of the class as a whole. Putative class counsel will not file such motions because doing so likely waives their clients’ right to subsequently seek certification. Defendant’s counsel will not do so because filing such a motion would likely be deemed a waiver of the rule against one-way intervention (i.e. an invitation to the Court to rule on the substantive issue pre-certification).

Owing to the relative sophistication of class action practitioners in this space, therefore, there have been relatively few one-way intervention rulings testing the “Thou shalt not grant summary judgment pre-certification in a putative class action” commandment. Bad Reyes, however, represents a pristine example of the rare phenomena of a pre-certification dispositive order of classwide impact.  Thus TCPAland produces yet another extremely rare and anomalous legal quandary that will impact federal procedural law as a whole. Oh what fun it is to live on the cutting edge.

So does the one-way intervention rule bar certification in Reyes? We’re going to find out shortly. One way or another.

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