103 Iowa L. Rev. 1811 (2018)

Download PDF

Abstract

Certifying a class is the first and most important step in bringing a claim as a class action. For certain plaintiffs, especially those suing on the basis of a contract like royalty owners of oil and gas leases, the class action is the only practical means of bringing a claim against the oil and gas production companies. In the past few years, the Supreme Court has raised the standard for Rule 23 class certification requirements. Over the same timeframe, circuits like the Fifth Circuit have reversed numerous orders certifying classes. Royalty owners are especially susceptible to unfavorable review because a reviewing court can point to minute differences within leases as the reason why the class fails to satisfy Rule 23. Rather than focus on the requirements of Rule 23, this Note examines the relationship between the circuit and district courts and the standard of review that should govern the circuit courts' review of a certification order. There is a consensus that the abuse-of-discretion standard applies to review of certification orders, but the ambiguous definition of abuse of discretion has allowed circuit courts free reign when reviewing classes. To maintain the class action as a managerial tool for the district court, this Note proposes two solutions. First, the Note explains that codifying the abuse-of-discretion standard in Rule 23 will prevent circuit courts from circumventing the standard and push circuit courts to treat abuse of discretion as an independent standard. Second, the Note argues that each issue within the certification order falls somewhere along the abuse-of-discretion spectrum, and the Note provides examples from royalty litigation to illustrate how the spectrum should operate. These steps remedy the current imbalance of power between circuit and district courts regarding the decision to certify a class.