Lawyer Article
Appellate Victory Sets Standard for Future Class Action Decisions
May 5, 2006
The following article is a look back at an important appellate victory obtained by a Womble Carlyle lawyer. This case study is part of a larger group of case studies available on WCSR.com's Case Studies page.
Womble Carlyle Sandridge & Rice attorney Hada de Varona Haulsee won a major appellate victory for a manufacturing client involved in a class action suit. Haulsee’s June, 2001, argument in Lienhart v. Dryvit Systems Inc. also set the precedent for how class action appeals are handled in the U.S. Fourth Circuit and has been cited in similar cases across the nation.
AT ISSUE: The U.S. Court of Appeals for the Fourth Circuit rejected a damages claim against Dryvit Systems, Inc., a maker of exterior finish and insulation systems. In 1999, a group of homeowners sued the company, claiming Dryvit’s Fastrak stucco product damaged their homes. Company officials maintained that Fastrak worked properly, but contractors, who didn’t work for Dryvit, improperly installed their product.
BRIEF LEGAL HISTORY: Haulsee appealed the initial ruling under Rule 23 (f), which allows courts of appeals to review certain class action certification orders handed down from district courts. The rule went into effect in 1998 and Lienhart v. Dryvit Systems Inc. was the first Fourth Circuit case to test its parameters.
SUMMARY/DECISION: Based on previous court decisions in similar cases, Haulsee felt confident her client would win on appeal. The Fourth Circuit judges agreed that the District Court’s decision against Dryvit Systems was improper.
Appeals courts consider five factors in judging Rule 23 (f) petitions, one of which is whether or not the District Court’s decision contains a "substantial weakness". These factors are judged on a sliding scale. What Haulsee successfully argued was if the “substantial weakness” is a particularly strong factor, then the other four factors don’t have to be present at all. In other words, if the Appeals Court believes the District Court’s ruling is clearly erroneous, it needs no other reason to overturn that ruling in a Rule 23 (f) petition.
In this case, not only did the Court of Appeals allowed the appeal, the court also overturned the class action certification opinion on the grounds that it was clearly erroneous.
IMPLICATION: Lienhart v. Dryvit Systems, Inc. has been cited 34 times to date in appeals cases across the country. Most notably, both the Sixth Circuit and Ninth Circuit Courts of Appeals cited the decision in their standards-setting opinions that determined how those courts will interpret Rule 23 (f).
ABOUT THE ATTORNEY: Haulsee is a member in Womble Carlyle’s Winston-Salem office and has been with The Firm since 1981. She practices in the Product Liability Litigation group and recently co-authored Critical Terms in Criminal Proceedings in Spanish and English, a guide to assist lawyers with Spanish-speaking clients.
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