The Other Major Class Action Case This Term:
Smith v. Bayer

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Along with Dukes v. Wal-Mart and AT&T v. Concepcion, class action practitioners are closely watching another key case during this term of the United States Supreme Court: Smith v. Bayer, 593 F.3d 716 (8th Cir.), cert. granted, 131 S. Ct. 61 (U.S. Sept. 28, 2010) (No. 09-1205), in which the Court will decide whether federal courts have the authority to enjoin state class actions. Specifically, the justices are considering whether the denial of class certification in a federal district court can be res judicata as to a class action in state court making the same substantive allegations, with a different named plaintiff.

Smith v. Bayer arises from respondent Bayer’s distribution of Baycol, a prescription cholesterol drug that gave rise to multi-district proceedings, including McCollins v. Bayer Corp., in which a West Virginia resident who had taken Baycol moved to certify a class under West Virginia’s consumer protection law. Certification was denied because individual questions predominated. Thereafter, a different named plaintiff (now the Smith v. Bayer class representative) moved for certification in West Virginia state court, asserting the same theory of liability as had been denied certification in McCollins v. Bayer. However, the McCollins court issued an injunction, holding that the attempted certification in West Virginia state court fell within the re-litigation exception to the Anti-Injunction Act. The court reasoned that the proposed class was identical to that in McCollins, West Virginia’s class certification rules are identical to Rule 23, and petitioners’ interests had been adequately represented in McCollins. The Eighth Circuit affirmed and the Supreme Court granted certiorari.

The petitioners argue that a federal court’s denial of class certification cannot collaterally estop a state class action, irrespective of whether the theory of liability is substantively identical and the basis for the denial of class certification was not unique to the prior named plaintiff. In turn, Bayer argues that there is no due process violation, as the petitioners can still bring individual actions, and are simply precluded from re-litigating the identical class certification issue.

The parties’ Supreme Court briefs are available here: Brief for Petitioners, Brief for Respondent, Supplemental Brief of Respondent, and Petitioners’ Reply Brief.