Fireside Bank v. Superior Court

A largely settled feature of state and federal procedure is that trial courts in class action proceedings should decide whether a class is proper and, if so, order class notice before ruling on the substantive merits of the action. (See Green v. Obledo (1981) 29 Cal.3d 126, 146 [ 172 Cal.Rptr. 206 , 624 P.2d 256 ] (Green); Fed. Rules Civ.Proc., rule 23(c)(1)(A), 28 U.S.C.; Hickey v. Duffy (7th Cir. 1987) 827 F.2d 234, 237 .) The virtue of this sequence is that it promotes judicial efficiency, by postponing merits rulings until such time as all parties may be bound, and fairness, by ensuring that parties bear equally the benefits and burdens of favorable and unfavorable merits rulings. The rule stands as a barrier against the problem of “one-way intervention,” whereby not-yet-bound absent plaintiffs may elect to stay in a class after favorable merits rulings but opt out after unfavorable ones.

Here, over class defendant Fireside Bank’s objections and to class representative Sandra Gonzalez’s surprise, the trial court ruled on the substantive merits concurrently with deciding that a class could be certified and before class notice had gone out. The Court of Appeal denied…