{"id":460,"date":"2023-04-27T10:40:07","date_gmt":"2023-04-27T14:40:07","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=460"},"modified":"2023-04-27T10:40:07","modified_gmt":"2023-04-27T14:40:07","slug":"texas-supreme-court-reaffirms-rigorous-and-searching-judicial-analysis-of-plaintiffs-claims-required-prior-to-class-certification","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2023\/04\/27\/texas-supreme-court-reaffirms-rigorous-and-searching-judicial-analysis-of-plaintiffs-claims-required-prior-to-class-certification\/","title":{"rendered":"Texas Supreme Court Reaffirms \u201cRigorous and Searching Judicial Analysis of Plaintiffs\u2019 Claims\u201d Required Prior to Class Certification"},"content":{"rendered":"

\"\"<\/a>By Gerald L. Maatman, Jr. and Emilee Crowther<\/p>\n

Duane Morris Takeaways<\/em>: <\/strong>In American Campus Communities, Inc. v. Berry, No. 21-0874 (Tex. Apr. 21, 2023), the Texas Supreme Court unanimously reversed<\/a> the trial court\u2019s class certification order and disposed of the appeal on the grounds Plaintiffs\u2019 claims were facially defective.\u00a0 In rendering its decision, the Texas Supreme Court emphasized that both district and appellate courts, to comply with Texas Rule of Civil Procedure 42 (\u201cRule 42\u201d), must examine the substantive law underlying Plaintiffs\u2019 claims prior to granting or affirming class certification.\u00a0 The Texas Supreme Court\u2019s decision in this case ultimately serves as a roadmap for trial and appellate courts \u2013 as well as counsel for defendants \u2013 to ensure a meaningful and rigorous analysis of \u201cthe claims, defenses, relevant facts, and applicable substantive law\u201d underlying Plaintiff\u2019s claims prior to granting class certification under Rule 42<\/em>.<\/p>\n

Case Background<\/strong><\/p>\n

American Campus Communities, Inc. and its related companies (\u201cACC\u201d) own and manage student housing properties throughout the United States.\u00a0 Plaintiffs, four former tenants of ACC\u2019s properties in Texas, filed suit against ACC alleging it omitted language from its leases required under Section 92.056(g) of the Texas Property Code, and requested the trial court to certify a class of 65,000 former ACC tenants whose leases did not include the required language.<\/p>\n

In addition to opposing the class certification, ACC moved for summary judgment on Plaintiffs claims. It contended that the Property Code does not create strict liability for an omission of the required statutory language.\u00a0 The district court denied ACC\u2019s summary judgment and granted Plaintiff\u2019s motion for class certification.\u00a0 The court of appeals affirmed a modified version of the trial court\u2019s order, and authorized class-wide litigation on Plaintiffs asserted statutory strict liability claim regarding the omitted lease term.\u00a0 Neither the district court nor the court of appeals analyzed the substantive law governing Plaintiffs\u2019 proposed class claims.<\/p>\n

The Texas Supreme Court\u2019s Decision<\/strong><\/p>\n

On further appeal, the Texas Supreme Court spent the majority of its opinion addressing the obligation of a district trial and appellate court to conduct a meaningful and rigorous analysis of \u201cthe claims, defenses, and applicable substantive law<\/em>\u201d underlying a Plaintiff\u2019s claims prior to granting class certification under Texas Rule 42.\u00a0 Id<\/em>. at 6-7 (quoting Sw. Refin Co. v. Bernal<\/em>, 22 S.W.3d 425, 435 (Tex. 2000) (emphasis original)). The Supreme Court held that the failure of the district court and appellate court to analyze the applicable substantive law underlying Plaintiffs claims prior to class certification was error and \u201can example of the \u2018certify now and worry later\u2019 approach to class certification.\u201d Id<\/em>. at 10 (citing Bernal<\/em>, 22 S.W.3d at 435 and BMG Direct Mktg., Inc. v. Peake<\/em>, 178 S.W.3d 763, 778 (Tex. 2005)). \u00a0For courts to comply with their obligations under Rule 42, they must rigorously scrutinize the legal underpinnings of the alleged class claims prior to class certification.<\/p>\n

This rigorous analysis, the Supreme Court held, is required even when it is entangled with the merits, as a \u201ccourt\u2019s duty under Rule 42 to conduct a meaningful analysis of the proposed claims . . . is more fundamental than . . . avoiding premature resolution of the merits.\u201d\u00a0 Id<\/em>. at 15. \u00a0While the Supreme Court made clear that a court should not decide the merits of the case in a class certification analysis, it must still understand the law governing the Plaintiffs claims and \u201cgauge the claim\u2019s suitability for class resolution on the basis of that understanding.\u201d Id<\/em>. at 14.<\/p>\n

Due to the failure of the district court and appellate court to analyze the governing law at the class certification stage, the Supreme Court analyzed the substantive law at issue in the case, and ultimately held that class certification was improperly granted as \u201ca proper understanding of the substantive law applicable to the proposed class claims indicates that no such claims exist.\u201d Id<\/em>. at 19.<\/p>\n

Implications For Employers<\/strong><\/p>\n

The Texas Supreme Court\u2019s decision in American Campus Communities, Inc.<\/em> teaches various lessons.\u00a0 It serves as a reminder that class certification on claims that are not supported by underlying substantive law is legally invalid.\u00a0 For Defendants, it underscores the importance of analyzing the merits of claims at the beginning of the lawsuit, and of moving for a summary judgment on the merits of the underlying claims before class certification.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr. and Emilee Crowther Duane Morris Takeaways: In American Campus Communities, Inc. v. Berry, No. 21-0874 (Tex. Apr. 21, 2023), the Texas Supreme Court unanimously reversed the trial court\u2019s class certification order and disposed of the appeal on the grounds Plaintiffs\u2019 claims were facially defective.\u00a0 In rendering its decision, the Texas … <\/p>\n

Continue reading “Texas Supreme Court Reaffirms \u201cRigorous and Searching Judicial Analysis of Plaintiffs\u2019 Claims\u201d Required Prior to Class Certification”<\/span><\/a><\/p>\n","protected":false},"author":583,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[],"ppma_author":[30],"class_list":["post-460","post","type-post","status-publish","format-standard","hentry","category-class-certification-motions"],"authors":[{"term_id":30,"user_id":583,"is_guest":0,"slug":"classactiondefense","display_name":"Class Action Defense","avatar_url":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-content\/uploads\/sites\/56\/2020\/10\/dmlogo.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/460","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/users\/583"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/comments?post=460"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/posts\/460\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/media?parent=460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/categories?post=460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/tags?post=460"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/classactiondefense\/wp-json\/wp\/v2\/ppma_author?post=460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}