Our preview of the September term of the Illinois Supreme Court continues with Mashal v. City of Chicago [pdf], a case which presents interesting questions about the scope of Circuit Courts’ power to decertify a class.

Mashal involves the City of Chicago’s practice of issuing what were called “fly-by” traffic citations to taxi drivers – citations which were received by mail, rather than being personally served or placed on the offending vehicle. Plaintiff filed a putative class action seeking to outlaw the practice in 2000, and a class certification order was entered two years later. In 2005, the parties filed cross-motions for summary judgment: the plaintiff seeking an order finding that “fly by” citations violated the Vehicle Code and the Municipal Code, and the City seeking an order dismissing the plaintiff’s claims for failure to exhaust administrative remedies, among other things. The plaintiff’s motion for partial summary judgment was granted and the City’s motion was denied. The following year, the City successfully moved for partial summary judgment, lopping off all claims accruing before 1995 on statute of limitations grounds.

In 2007, the City moved to decertify the class, arguing that with resolution of the issue regarding whether “fly bys” were illegal, there were no common issues left in the case. The Circuit Court granted the motion to decertify.

Section 2-802 of the Illinois Code of Civil Procedure provides that a court may certify a class, may make the certification order conditional, and may amend the order at any time “before a decision on the merits.” 735 ILCS 5/2-802. But since the statute nowhere defines “decision on the merits,” we’re left with the potentially high-stakes question: when does the Court lose the power to decertify? After their class was decertified, the plaintiff sought an order authorizing an interlocutory appeal. The Circuit Court refused, but then the Illinois Supreme Court intervened, granting a supervisory order directing the Circuit Court to certify and the Appellate Court to decide questions about the scope of Section 2-802.

The dispute broke down along predictable lines. The plaintiffs sought an expansive definition, similar to the one used to bar motions to disqualify a judge: if the Court has granted or denied a motion that impacts the rights and duties of the parties at all, a “decision on the merits” has been made, and the power to decertify is lost. The defendants took the opposite tack, arguing that a “decision on the merits” should be interpreted in a way more akin to res judicata law – a complete resolution of plaintiff’s liability claim.

The Appellate Court sided with the defendants, concluding that since res judicata law and potential class decertification serve similar purposes, they should be defined in a similar way. The Court concluded that prohibiting decertification only after a complete determination of liability served the purposes of certification while promoting efficiency and economy of litigation. The Court then held that since the Circuit Court’s order finding “fly-by” citations unlawful did not entirely dispose of the liability issues – the trial court expressly reserved the issue of the number of “fly-by” tickets issued during the relevant period – the decertification order was permissible. The plaintiff responded that the denial of defendant’s summary judgment motion regarding its affirmative defenses had fully determined liability, but the Court held that the order had merely struck blanket defenses; the City remained free to defend the claims one by one.

Mashal should be an interesting argument. If the Supreme Court concludes that any decision impacting the merits at all ends the power to decertify, the cost of litigation is likely to rise, because defendants will have no way of disposing of cases which no longer satisfy the prerequisites for class actions. We expect a decision in Mashal in the next two to three months.

Mashal will be argued at the 9:00 am session of the Court on Thursday, September 20, 2012. Join us back here tomorrow for a preview of the argument in Ferguson v. Georges.