In an opinion issued earlier today, the Texas Supreme Court has ruled that a trial court abused its discretion when it failed to hold a Rule 42 hearing to certify new class claims in an oil and gas royalty underpayment class action. TCJL filed an amicus brief in the case, Phillips Petroleum Company v. Yarbrough (No. 12-0199), urging the Court to reverse the court of appeals’ decision denial of Phillips’ writ of mandamus seeking to compel the trial court to conduct a Rule 42 certification hearing.
Specifically, TCJL argued that recent court of appeals’ decisions in cases involving class certification under Rule 42 have allowed plaintiff’s to amend the fundamental characteristics of the class subsequent to Rule 42 pre-certification scrutiny upon motion to the trial court, diluting the strict certification review standards laid down by the SCOT in Sw. Ref. Co. v. Bernal, 22 S.W.3d 425 (Tex. 2000) and avoiding a mandatory interlocutory appeal of class certification determinations. If those opinions, including the one in the Phillips case, were allowed to stand, they would undermine the effectiveness of important fairness-driven reforms that the SCOT (through amendments to Rule 42) and the Texas Legislature (through various amendments) made in 2003. If this case was returned to the trial court with the defects the court of appeals’ errors have produced, it would have the undesirable effect of returning to the uncertainty and multiplicity of proceedings that are contrary to the purposes of class representative litigation.
In an opinion by Justice Lehrmann, the SCOT unanimously held that if a trial court’s order to allow the class representative to amend a petition to include new class claims modifies the class in such a way as to raise significant concerns about whether certification remains proper, such an order changes the fundamental nature of the class and is subject to interlocutory appeal under §51.014(a)(3), CPRC. The Court remanded the case to the trial court with instructions to conduct a rigorous Rule 42 analysis to determine whether certification remains appropriate. The trial court’s order pursuant to that analysis will be appealable under §51.014 to assure compliance with the Bernal standards.
TCJL strongly supports the SCOT’s decision in this case and applauds the Court for reinforcing both its own rules and the Legislature’s explicit public policy that trial courts only certify a class action when the requisite standards of typicality and predominance are met. TCJL further applauds the Court for making it clear that it will rigorously enforce the 2003 legislative reforms that called for an interlocutory appeal to protect defendants against inappropriate class action certification.