Complex Litigation: Inroads on "Eisen"

Abstract

Commentary and analysis of the so-called “Eisen” rule in the class certification process and the inroads made on the Eisen rule in Szabo v. Bridgeport Machinery Inc., 249 F.3d 672 (7th Cir. 2001). The Eisen rule, derived from Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974), has led to considerable confusion concerning the extent to which federal judges may consider the merits of the underlying litigation in evaluating whether to certify a proposed class action. A prevailing general gloss on the Eisen rule holds that judges are prohibited from considering the merits of the underlying litigation in assessing whether a class action is suitable for class certification. This article discusses the Seventh Circuit’s decision in Szabo, which called into question this interpretation of the Eisen rule. The court indicated courts may not accept the incontestable plaintiff’s allegations as true for the purpose of evaluating class certification, and that the standards for evaluating class certification motions are more similar to those under Fed. R. Civ. P. 12(b)(1) or 12(b)(2). The article also comments on the rigorous analysis standard for class certification set forth by the Supreme Court in General Telephone Co. of Southwest v. Falcon, 457 U.S. 147 (1982), and the numerous Seventh Circuit decisions that have adopted the Szabo rule, as well as other federal circuits that have followed or rejected the Szabo approach.