On April 24, 2014, in Stockwell v. City and County of San Francisco, the US Court of Appeals for the Ninth Circuit held that on a Federal Rule of Civil Procedure (FRCP) 23(f) appeal from a class certification decision, special force applies to the principle that merits issues may only be considered to the extent necessary to determine whether the FRCP 23 prerequisites have been satisfied (No. 12-15070, (9th Cir. Apr. 24, 2014)).

The plaintiffs were San Francisco police officers over the age of 40 who performed well enough on an examination given in 1998 to qualify for promotions. However, in 2005, the Chief of Police announced a change in the promotion policy, which made the officers who passed the 1998 examination ineligible for promotion. The plaintiffs alleged that the City's new policy, abandoning the 1998 exam as a basis for promotions, constituted disparate impact discrimination in violation of the Age Discrimination in Employment Act (ADEA) and California's Fair Employment and Housing Act (FEHA). The plaintiffs moved for class certification under FRCP 23(b)(3).

The US District Court for the Northern District of California denied class certification because it found that the plaintiffs did not show that members of the putative class shared common questions of law or fact as required by FRCP 23(a)(2). The district court declined to decide whether the putative class satisfied FRCP 23(b)(3). The plaintiffs appealed under FRCP 23(f), which authorizes discretionary review of an interlocutory order granting or denying class certification.

The Ninth Circuit reversed the district court's decision. The court emphasized that in determining whether common questions exist under FRCP 23(a)(2), it is improper to inquire whether plaintiffs will actually prevail on the ultimate claim. While merits issues may at times be considered at the certification state, those questions may be considered only to the extent that they are relevant to determining whether the FRCP 23 prerequisites for class certification are satisfied (Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 133 S. Ct. 1184 (2013)). The Ninth Circuit went on to hold that this principle "has special force at the appellate level" because:

The court held that the district court abused its discretion in denying class certification. The lower court erred by evaluating merits questions, rather than focusing on whether the questions presented, meritorious or not, were common to members of the putative class. The court concluded that the plaintiffs identified a single, well-enunciated, uniform policy that allegedly generated the disparate impact of which they complained. Since each member of the class was on the 1998 promotion list and each suffered the effects of its elimination, whatever those effects might have been, the claims would rise and fall together (see Amgen, 133 S. Ct. at 1195-96).

In addition, because this was a disparate impact claim, the plaintiffs produced a statistical study purportedly showing the disproportionate adverse impact. The lower court and the City critiqued the study, but the Ninth Circuit noted that any failings of the study would affect each class member's claims uniformly. The court could recognize that there was a common question of disparate impact without approving of the statistical showing as adequate to make out the merits case. The defects identified in the study may well exist, but would go to the merits of the case.

Finally, the court concluded that given the interlocutory nature of the appeal, and its consequent limitation to class certification factors only, it would not consider merits questions even as an alternative ground for affirmance.

Class action counsel in the Ninth Circuit should be aware that when appealing a class certification decision under FRCP 23(f), the Ninth Circuit will strictly adhere to the rule that merits issues unrelated to determining whether a class certification is appropriate will not be considered.