Second District Creates Division in Authority on Whether Denial of Certification May Have Collateral Estoppel Effect: Bridgeford v. Pacific Health Corp.

On January 18, 2012, the Second District (Division Three) issued an opinion “holding that the unnamed putative members of a class that was never certified cannot be bound by collateral estoppel.” See Bridgeford v. Pacific Health Corp., __ Cal.App.4th __ (2012).  The Court’s opinion adopts the U.S. Supreme Court’s analysis in Smith v. Bayer Corporation, 131 S.Ct. 2368 (2011), which I discussed previously in a post found here.  As the Bridgeford Court’s opinion acknowledges, the decision creates a split among various Courts of Appeal on this issue (including within the Second District itself):

California courts have held or suggested that the denial of class certification can establish collateral estoppel against absent putative class members on issues that were actually decided in connection with the denial. (Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223, 1236; Bufil v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193, 1202-1203 (Bufil); see also Johnson v. GlaxoSmithKline, Inc. (2008) 166 Cal.App.4th 1497, 1510-1513 & fn. 8 (Johnson) [assuming the point while expressing reservations].) Alvarez stated that the principles of collateral estoppel ensure that the absent putative class members‟ interests were adequately represented in the prior proceeding. (Alvarez, supra, at p. 1236.) We conclude to the contrary that if no class was certified by the court in the prior proceeding, the interests of absent putative class members were not represented in the prior proceeding and the requirements for collateral estoppel cannot be established….

See Slip Opinion, at 11.