Rule 23(c)(4) Issue Certification: Reconciling the ...media.straffordpub.com/products/rule-23-c-4-issue-certification...Rule 23(c)(4) Issue Certification: Reconciling the Conflict

Rule 23(c)(4) Issue Certification:

Reconciling the Conflict With

Rule 23(b)(3)'s Predominance Requirement Obtaining or Defeating Certification in Light of Differing Circuit Court Standards

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WEDNESDAY, MARCH 5, 2014

Presenting a live 90-minute webinar with interactive Q&A

Russell Jackson, Founder, Jackson Advocates, St. Louis

Rebecca S. Bjork, Senior Counsel, Seyfarth Shaw, Washington, D.C.

Andrew J. Trask, Counsel, McGuire Woods, London, England

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FOR LIVE EVENT ONLY

ISSUES CLASSES: What they are, how

they’re used

Russell Jackson

[email protected]

What is an “issues class”?

• A means of certifying common issues for class treatment while severing non-common issues, which either will be dealt with in a later phase of the trial or in subsequent individual actions.

• Certifying an “issues class” means certifying something less than the entire claim for class adjudication.

• The issues adjudicated in the class proceeding have collateral estoppel effect in subsequent phases or individual proceedings.

6

The 1966 Advisory Committee Created Them

• In creating Rule 23, the 1966 Advisory Committee came up with innovations to facilitate the expanded use of class actions in areas of civil rights, employment, and consumer protection litigation.

• Rule 23(b)(3) for the first time created monetary relief classes that did not arise out of the same transaction.

• Rule 23(c)(4)(A) allowed courts to carve out particular issues for certification.

7

The original 23(c)(4) set forth how issues classes were to be used

• “When appropriate (A) an action may be brought or maintained as a class action with respect to particular issues, . . . and the provisions of this rule shall then be construed and applied accordingly.”

• The Committee rejected language that would have added, after “particular issues,” the phrase “such as the issue of liability.”

• The rule allows certification of issues or defenses less than liability as a whole.

• The current issues class rule, 23(c)(4), was the result of the 2003 rules amendments that were stylistic and not intended to change the meaning of the rules.

8

Issues classes were intended to facilitate certification where individual issues existed

• The Committee Notes make it plain that the rule could be used to carve out common issues for class treatment even if the claim as a whole would not satisfy Rule 23(b)(3)’s predominance requirement:

• “In a fraud or similar case the action may retain its ‘class’ character only through the adjudication of liability to the class; the members of the class may thereafter be required to come in individually and prove the amounts of their respective claims.”

9

Issues classes were intended to facilitate certification where individual issues existed

• See also Manual for Complex Litigation sec. 21.24 (4th ed. 2004) (“[T]his provision may enable a court to achieve the economies of class action treatment for a portion of a case, the rest of which may either not qualify under Rule 23(a) or may be unmanageable as a class action.”).

• Indeed, as one commentator has noted, “requiring predominance as to the cause of action as a whole when a plaintiff seeks to have a class certified only with respect to particular issues might render Rule 23(c)(4) superfluous, violating a fundamental canon of statutory interpretation.” Newberg on Class Actions sec. 4:91 (5th ed. 2012).

10

Courts commonly use issues classes, even where they don’t cite Rule 23(c)(4)

• “Although Rule 23(c)(4) receives extended discussion in relatively few cases, it is applied sub silentio to almost all certifications. It is the rare case that every issue from liability to damages is appropriately the subject of class treatment.”

• McLaughlin on Class Actions sec. 4:43.

11

Practical Limitations on Issues Classes

• Often used to separate liability from damages.

• Can separate big defenses (e.g., government contractor defense, preemption) that apply across all claims.

• However, certification is “never appropriate” where it separates “closely related factual or legal issues . . .that would not resolve any class member’s claims and leave a great deal for follow-on proceedings.” McLaughlin on Class Actions sec. 4.43.

12

The 3rd Circuit adopted factors identified in the ALI’s Principles of Aggregate Litigation

• “[T]he type of claim(s) and issues in question; the overall complexity of the case; the efficiencies to be gained by granting partial certification in light of realistic procedural alternatives; the substantive law underlying the claim(s), including any choice-of-law questions it may present and whether substantive law separates the common issue(s) from other issues concerning liability or remedy; the impact partial certification will have on the constitutional and statutory rights of both the class members and the defendant(s); the potential preclusive effect or lack thereof that resolution of the proposed issue class will have; the repercussions certification of an issue(s) class will have on the effectiveness and fairness of resolution of remaining issues; the impact individual proceedings may have upon one another, including whether remedies are indivisible such that granting or not granting of relief to any claimant as a practical matter determines the claims of others; and the kind of evidence presented on the remaining issues, including the risk subsequent triers of fact will need to reexamine evidence and findings from resolution of the common issue(s).” Gates v. Rohm & Haas Co., 655 F.3d 255, 273 (3rd Cir. 2011).

13

The 5th Circuit long ago rejected issues classes, but many others suggest acceptance.

• Many circuits – especially the 7th Circuit – have held or suggested that issues classes are appropriate even where the claim as a whole would not satisfy Rule 23.

• The 5th Circuit long ago flatly rejected this approach in a products liability case (Castano).

• For a recent breakdown of circuit approaches, see Jenna C. Smith, Comment, “Carving at the Joints”: Using Issue Classes to Reframe Consumer Class Actions, 88 Wash. L. Rev. 1187, 1188 (2013); In re Motor Fuel Temperature Sales Practices Litig., 292 F.R.D. 652, 664-65 (D. Kan. 2013).

14

How is Rule 23(c)(4) being strategically used?

• Recent Supreme Court authority has been viewed by some as restricting the traditional use of class actions.

• Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (articulating a new commonality standard and holding that a divisible remedy like compensatory damages (or “back pay”) should not be available in a mandatory 23(b)(2) employment discrimination class)

• Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) (in an antitrust action, reversing class certification because the trial court – to avoid reaching the merits – did not dissect the plaintiffs’ expert’s methodology, and holding that plaintiffs had failed to demonstrate that damages could be established on a classwide basis)

15


• To be clear, Comcast did NOT hold that damages in a Rule 23(b)(3) class must be provable on a classwide basis to meet the predominance requirement:

• All parties and the trial court simply had accepted that the damages model needed to establish damages across the class.

• Justice Scalia, who wrote the majority opinion, did not say he was changing the predominance requirement, and the issue had not been briefed before the Court.

• In Justice Scalia’s prior opinions he has relied on the Advisory Committee notes to give effect to the Committee’s intent. Here, the notes expressly allow issues classes to sever damages for individual determination.

• Nowhere did the opinion disavow the long line of cases holding that just because damages must be established individually does not mean that a class cannot be certified under Rule 23(b)(3).

16


• Nevertheless, to address concerns raised in the wake of cases like Dukes and Comcast, class counsel are using issues classes:

• to sever damages from injunctive and declaratory relief in

Rule 23(b)(2) employment discrimination claims. See, e.g., McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482 (7th Cir. 2012), cert. denied, 133 S. Ct. 338 (2012).

• to adjudicate common issues of defectiveness and breach of warranty in consumer products claims, while severing individual issues of damages for subsequent proceedings. See, e.g., Butler v. Sears, Roebuck & Co., 2013 WL 4478200 (7th Cir.), cert. denied (U.S. Feb. 24, 2014); In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig., 722 F.3d 838 (6th Cir. 2013), cert. denied (U.S. Feb. 24, 2014).

17


• Justifications for use of the issues class rule include: • The need to compensate those cheated in small amounts that

would never be litigated individually.

• Deterring companies from engaging in schemes to defraud large numbers of people in small amounts.

• The need to prevent discrimination and compensate its victims.

• The need to inform class members of their right to compensation for a violation of their constitutional rights. See, e.g., In re Nassau County Strip Search Cases, 461 F.3d 219 (2d Cir. 2006) (“Absent class certification and its attendant class-wide notice procedures, most of these individuals . . . likely never will know that defendants violated their clearly-established constitutional rights, and thus never will be able to vindicate those rights.”)

18

Butler v. Sears, Roebuck & Co.

• “It would drive a stake through the heart of the class action device, in cases in which damages were sought rather than an injunction or declaratory judgment, to require that every member of the class have identical damages. If the issues of liability are genuinely common issues, and the damages of individual class members can be readily determined in individual hearings, in settlement negotiations, or by creation of subclasses, the fact that damages are not identical across all class members should not preclude class certification. Otherwise defendants would be able to escape liability for tortious harms of enormous aggregate magnitude but so widely distributed as not to be remediable in individual suits.”

19

Strategic use of issues classes means being prepared for the 7th Amendment challenge

• The 7th Amendment provides:

• “In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of common law.” (Emphasis added.)

20

Strategically handling the 7th Amendment

• 1. The reexamination clause was designed not only to protect against courts subsequently disregarding a jury’s prior findings, but it also was designed to avoid having an appellate court (such as the federal Supreme Court) empanel a jury to make factual findings on appeal, as was common in some states in the late 18th Century. Richard Nagareda et al., The Law of Class Actions and Other Aggregate Litigation 246 (2d ed. 2013).

• 2. The reexamination clause speaks of facts being reexamined by a jury, not evidence. So long as your trial plan requires the second jury to give appropriate preclusive effect to well-defined facts on the first jury’s special verdict form, you should avoid 7th Amendment problems.

21


• 3. Carve at the joint. Segregate the common issues, paying attention to the elements of the causes of action. If, for example, the class jury finds the product is “defective” and thereby “breached the language of the express warranty,” those elements are FACTS that should have issue-preclusive effect. If, at a later individual proceeding, evidence used before the first jury may be necessary to prove a different element to the second jury (e.g., that the breach caused an individual’s damages), there’s nothing in the 7th Amendment that prevents the second jury from hearing that evidence, so long as it gives full effect to the FACTS found by the prior jury. There’s a strong argument that a separate element of a cause of action cannot be the same “fact” as another element; if they were, there would be no need for separate elements.

22


• The Seventh Circuit recognizes that the reexamination clause’s “prohibition is not against having two juries review the same evidence, but rather against having two juries decide the same essential issues.” Houseman v. U.S. Aviation Underwriters, 171 F.3d 1117, 1128 (7th Cir. 1999).

• See also Robert H. Klonoff, The Decline of Class Actions, 90 Wash. Univ. L. Rev. 729, 815 (2013) (“The focus should be solely on whether successive juries are deciding the same issues, not on whether they are merely hearing overlapping evidence.”).

23


• “[T]he Seventh Amendment does not seem to pose a significant obstacle to the use of issue classes, even in the mass tort context, so long as courts are careful to certify only those issues for class treatment that are sufficiently separable from individual issues so that ‘trial of [them] alone may be had without injustice.’ This may be readily accomplished through the myriad case management tools at trial courts’ disposal.”

• Newberg on Class Actions sec. 4:92 (5th ed. 2012).

24

Case Law

Interpreting Rule

23(c)(4)

Rebecca S. Bjork – Senior Counsel, Labor &

Employment Department - Complex

Discrimination Litigation Practice Group

[email protected]

16879477v1

©2014 Seyfarth Shaw LLP

Leading Secondary Sources’ Commentary

On Rule 23(c)(4)

• Manual For Complex Litigation (Fourth) summarizes the

use of Rule 23(c)(4) in light of the rest of Rule 23: • The Rule “permits a class to be certified for specific issues or

elements of claims raised in the litigation.”

• MCL § 21.24 (Federal Judicial Ctr. 2004)

• Its use is “appropriate only if it permits fair presentation of the claims

and defenses and materially advances the disposition of the litigation

as a whole.”

• MCL § 21.311 (Federal Judicial Ctr. 2004)

• Newberg On Class Actions describes its impact:

• A court’s power under Rule 23(c)(4) “has the capability of

automatically satisfying the predominance test of Rule 23(b)(3). . . .” • Newberg On Class Actions § 4:23 (West Group 2002)

26


Leading Secondary Sources’ Commentary

On Rule 23(c)(4)

• The American Law Institute explains where the Rule is

properly invoked: • “Substantive law defines the relationships among legal and factual

issues – sometimes intertwining them and sometimes separating them

cleanly so as to create a ‘joint’ at which aggregate treatment may

carve.”

• Principles Of The Law Of Aggregate Litigation § 2.02 cmt. a (Am. Law Inst. 2010).

• Noting the “significant limitation that the court should consider whether

substantive law cleanly separates the common issue from remedial

questions and from other issues concerning liability. Class-action

treatment of a common issue would not materially advance the

resolution of related claims when that common issue remains

intertwined under applicable substantive law with other issues that are

not common, including individualized defenses.”

• Principles Of The Law Of Aggregate Litigation § 2.03 cmt. b.

27


Early Use Of Issue Certification In

Products Liability Cases

• Cent. Wesleyan Coll. v. W.R. Grace & Co., 6 F.3d 177, 184 (4th Cir.

1993) (class conditionally certified for eight common issues in

school asbestos case, including Ds’ knowledge of health risks,

foreseeability of dislodging fibers with maintenance, adequacy of

warnings, among others);

• Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 472-73 (5th Cir.

1986) (class action to adjudicate “state of the art” defense in

products liability class action);

• But see Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th

Cir. 1996) (reversing class certification in drug case; it “is . . . silent

as to any reason why common issues predominate over individual

issues certified under Rule 23(c)(4)(A)” and no class trial plan was

presented).

28


Division Amongst Circuit Courts Regarding

Relationship Between Rule 23(b)(3) Predominance

Requirement And Rule 23(c)(4) Issue Certification

• The circuits differ on how they have treated issue

certification in light of the predominance requirement of

Rule 23(b)(3).

29


Fifth Circuit: Castano v. Am. Tobacco

• In the Fifth Circuit, for example, Rule 23(c)(4) is

considered a “housekeeping” mechanism available to

the district court, but one that cannot circumvent the

need for the plaintiffs’ “cause of action, as a whole,” to

satisfy the predominance requirement of Rule 23(b)(3).

• As that court colorfully explained, “a district court cannot

manufacture predominance through the nimble use of

subdivision (c)(4).”

• Castano v. Am. Tobacco, 84 F.3d 734, 745 n.21 (5th Cir. 1996).

30


Second Circuit: In re Nassau Cnty. Strip

Search Cases

• The Second Circuit disagrees with the Fifth Circuit.

• In the Second Circuit, “courts may use subsection (c)(4)

to single out issues for class treatment when the action

as a whole does not satisfy Rule 23(b)(3).”

• In re Nassau Cnty. Strip Search Cases, 461 F.3d 219, 226 (2d Cir.

2006)

31


Ninth Circuit: Valentino v. Carter-

Wallace, Inc.

• The Ninth Circuit has stated a rule consistent with the

Second.

• See generally Valentino v. Carter-Wallace, Inc., 97 F.3d 1227,

1234 (9th Cir. 1996) (“Even if the common questions do not

predominate over the individual questions so that class

certification of the entire action is warranted, Rule 23 authorizes

the district court in appropriate cases to isolate the common

issues under Rule 23(c)(4)(A) and proceed with class treatment of

these particular issues.”).

• Note this court did find, however, that the district court’s

certification order was deficient in failing to fully analyze the

predominance issue or explain how the issues certified could be

tried on a class basis.

32


Third Circuit: Gates v. Rohm & Haas

• The Third Circuit does not side with either of these

positions, but rather has adopted a multi-factor

balancing test.

• See Gates v. Rohm & Haas, 655 F.3d 255, 272 (3d Cir. 2011).

33


Sixth Circuit: Olden v. LaFarge Corp.

• The Sixth Circuit has approved the use of issues classes

to bifurcate class trials into liability phases and damages

phases.

• See Olden v. LaFarge Corp., 383 F.3d 495, 509 (6th Cir. 2004).

34


Fourth Circuit: Gunnells v. Healthplan

Servs., Inc.

• The Fourth Circuit has acknowledge the split in

approaches and has stated, “we have no need to enter

that fray” yet explained that the “theory” of the rule is that

efficiency can be achieved by adjudicating certain

common issues “even though other issues in the case

may have to be litigated separately by each class

member.”

• Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 441 (4th Cir.

2003)

35


Eighth Circuit: In re St. Jude Medical, Inc.

• The Eighth Circuit likewise has not taken a position.

• See In re St. Jude Medical, Inc., 522 F.3d 836, 841 (8th Cir. 2008)

36


Butler v. Sears Roebuck & Co., And

Related Cases

• The Supreme Court last week declined to take up three

cases where the Sixth, Seventh, and Ninth Circuits

certified classes where liability issues were certified

despite the need for individualized damages hearings.

• Butler v. Sears Roebuck & Co., 727 F.3d 796 (7th Cir. 2013);

• In re Whirlpool Corp. Front-Loading Washer Products Liability

Litigation, 722 F.3d 838 (6th Cir. 2013) (“Glazer v. Whirlpool”);

• Cobb v. BSH Home Appliances Corp., No. No. 13-cv-80000, 2013

U.S. App. LEXIS 7023 (9th Cir. Apr. 1, 2013).

37


Butler v. Sears Roebuck & Co., And

Related Cases

• The Seventh Circuit invoked Rule 23(c)(4) and rejected the

defendant’s argument that that common issues did not predominate

because individual inquiries would be needed to determine whether

any particular class member’s machine grew mold or experienced

control unit failure.

• “a class action limited to determining liability on a class-wide basis,

with separate hearings to determine—if liability is established—the

damages of individual class members, or homogeneous groups of

class members, is permitted by Rule 23(c)(4) and will often be the

sensible way to proceed.”

• Butler, 727 F.3d at 800.

38


Contours Of Courts’ Application Of Rule

23(c)(4) Since Wal-Mart v. Dukes

• Recent developments in class action law have served to

make issue certification a more attractive option for

named plaintiffs seeking to advance to the class

certification phase of their cases.

39


McReynolds v. Merrill Lynch, Pierce,

Fenner & Smith, Inc.

• McReynolds v. Merrill Lynch, Pierce, Fenner & Smith,

Inc., 672 F.3d 482 (7th Cir. 2012) is a primary example.

• Plaintiff represented a class of 700 current and former

African-American financial advisors.

• He alleged Merrill Lynch had two company-wide policies

that discriminated against the putative class:

• a “teaming” policy, which allowed brokers in individual locations to

decide with whom to partner (e.g., “little fraternities,” 672 F.3d at

489);

• an “account distribution” policy which established a competition-

type process for dividing up accounts of former employees

amongst remaining brokers.

40




• There, the Seventh Circuit reversed a decision denying

class certification, holding that issue certification is

appropriate to determine: (1) whether those policies had

a disparate impact on African American financial

advisors; and (2) if so, whether they are nonetheless

justified by business necessity.

• McReynolds, 672 F.3d at 489 (“whether . . . [the teaming policy]

causes racial discrimination and whether it nonetheless is justified

by business necessity are issues common to the entire class and

therefore appropriate for class-wide determination”).

41




• Plaintiff sought injunctive relief under Rule 23(b)(2) only,

not money damages.

• Id. at 484, 491.

• The Court of Appeals still found that issue certification

was appropriate, even though “[o]bviously a single

proceeding, while it might result in an injunction, could

not resolve class members’ claims. Each class member

would have to prove that his compensation had been

adversely affected by one or both of the practices and if

so what loss he sustained--and remember that the class

has 700 members.”

• Id. at 490-91.

42




• In an unusual move, the Seventh Circuit in McReynolds

itself ordered certification of the issue of whether the

challenged practices were unlawful, instead of

remanding to the district court the question of whether

that should be done in light of the evidentiary record and

the Seventh Circuit’s instructions.

• See McReynolds, 672 F.3d at 492 (“We have trouble seeing the

downside of the limited class action treatment that we think would

be appropriate in this case”).

43




• As for money damages (e.g., backpay awards,

compensatory damages, punitive damages), in “the next

stage of the litigation, should the class-wide issue be resolved

in favor of the plaintiffs,” “the stakes in each of the plaintiffs’

claims are great enough to make individual suits feasible”

because financial advisors each earn more than $100,000.

• Id. at 492.

• But in those suits, at least, the question of whether Title VII

has been violated by Merrill Lynch will be settled through

preclusion and will not need to be “determined anew in each

case.”

• Id.

44


United States & The Vulcan Society v.

The City of New York

• Developments in the Second Circuit are interesting to follow in light of its history of case law favoring the use of the class certification mechanism. • United States & The Vulcan Society v. The City of New York, 276

F.R.D. 22 (E.D.N.Y. 2011) is a prime example.

45




• The court revisited its certification of a class action for

the liability phase of a suit challenging hiring tests used

to select entry-level firefighters for the city. The

Department of Justice and a group of intervenors

contend those tests have a disparate impact on African-

American and Hispanic applicants.

• Id. at 28 (noting that in 2009, the court had certified a liability-

phase class under Fed. R. Civ. P. 23(b)(2)).

46




• After the Supreme Court’s ruling in Wal-Mart, the city

moved for decertification, arguing that decision

unequivocally precluded certification of a class under

that rule for remedies that included backpay and benefits

and compensatory damages.

• Id. at 27-28.

• While the plaintiff-intervenors conceded that the class

could no longer be certified under that rule, they argued

instead that it met the requirements of Rule 23(b)(3).

• Id. at 28.

47




• Acknowledging the significance of that ruling, the court explained that “[a]fter Wal-Mart, it is clear that claims for neither backpay nor compensatory damages may be certified for class treatment under Rule 23(b)(2), at least where those claims are more than wholly incidental to the injunctive relief sought by the class.” • Id. at 33.

48




• However, the court then relied on Rule 23(c)(4) to

conclude that its initial order bifurcating the case into a

“liability phase” and a “remedial phase” under Rule

42(b), coupled with the fact that the “Second Circuit has

consistently endorsed a broad reading of Rule 23(c)(4),”

meant that the certification order should stand.

• Id. at 31, 33,

• The court explained, “[i]ssue certification of bifurcated

liability-phase questions is fully consistent with Wal-

Mart’s careful attention to the distinct procedural

protections attending (b)(2) and (b)(3) classes.”

• Id. at 34.

49




• Because Rule 23(b)(2) classes arise where an injunction

provides indivisible relief to all class members at once,

and because in a disparate impact case, “[t]he initial

classwide phases of a disparate impact claim similarly

focus on the defendant’s employment actions vis-à-vis

the protected group as a whole[,]” the bifurcated class

certification order entered for liability purposes was not

affected by Wal-Mart.

• Id.

50




• The court then decided that its liability phase class certification order under Rule 23(b)(2) and 23(c)(4) survives Wal-Mart. • Id.

• The court concluded, “even where class plaintiffs file a complaint seeking non-incidental individual monetary relief, the classwide liability questions raised by their disparate impact and pattern-or-practice disparate treatment claims are properly certified under Rule 23(b)(2) and (c)(4).” • City of New York, 276 F.R.D. at 35.

51




• But compensatory damages could not be determined on

a classwide basis as the intervenors argued, even

though some issues that would form the logical

predicate for making compensatory damages awards

would be common issues that can be certified (such as

the characteristics of a New York firefighter’s job).

• Id. at 45.

52




• The claims of two subclasses – the “non-hire victim” and

the “delayed-hire victim” subclasses – were certified

under Rule 23(b)(3) and (c)(4) because “[e]ven though

individual proceedings will be necessary to determine a

particular claimant’s eligibility to receive individual relief

and what relief is available,” along with whether they

mitigated their losses and the city’s actions caused

compensable noneconomic losses, the resolution of

those individual questions “is of relatively minimal

significance to the litigation as a whole.”

• Id. at 48, 49.

53


Daskalea v. Wash. Humane Soc’y

• Looking at other circuits, the pragmatic realities of how

class cases can be tried tend to drive courts’

determination of whether to certify issues classes. Some

courts have placed a burden on a plaintiff seeking to

use Rule 23(c)(4) to provide a specific proposal for how

the issue to be tried on a classwide basis can be

separated out from other issues.

• See, e.g., Daskalea v. Wash. Humane Soc’y, 275 F.R.D. 346, 369,

n.22 (D.D.C. 2011).

54


In re Bisphenol-A (BPA) Polycarbonate

Plastic Prods. Liab. Litig

• Others have analytically focused on what a jury verdict form would look like, as a mechanism for guiding the court’s determination of whether certifying an issues class would efficiently resolve enough of the litigation to justify certification.

• “[W]hat precise questions will the jury answer? Even if the jury finds a defendant had ‘knowledge’ of the scientific debate [over the safety of BPA], that in itself proves little. . . . Without more specificity, the verdict form becomes increasingly complex.” • See, e.g., In re Bisphenol-A (BPA) Polycarbonate Plastic Prods.

Liab. Litig., MDL No. 1967, Master Case No. 08-1967-MD-W-ODS, 2011 U.S. Dist. LEXIS 150015, at *29 (W.D. Mo. Dec. 22, 2011).

55


Compare Miri v. Dillon with Daskalea

• Depending on the facts, constitutional questions, in particular, have been found to be appropriate for issue certification.

• See, e.g., Miri v. Dillon, No. 11-CV-15248, 2013 U.S. Dist. LEXIS 68211, at * 31 (E.D. Mich. May 14, 2013) (“considering the nature of Plaintiffs’ and the putative class members’ identical Fourth Amendment claim, if Plaintiffs establish liability as to one class member, it will succeed in establishing liability as to all other class members”).

• But see Daskalea, 275 F.R.D at 361 (“the very heart of Plaintiffs’ claims” would vary from person to person, since deciding liability would require the court to analyze the private interest that was affected by the public action, and a wide range of alleged deprivations were alleged (some had their pets taken against their will, other pets were destroyed and others merely detained them, some were forced to undergo unwanted medical treatment, etc.).

56


For Further Information

• You can follow case law developments in all areas of

class action law ̶ and particularly as they apply to

employment class actions ̶ by visiting Seyfarth Shaw’s

Workplace Class Action Blog at:

www.workplaceclassaction.com

57

Best Practices

for Issue

Certification

Andrew Trask

McGuireWoods LLP

[email protected]

58

Raise it if you want it

Court has no obligation to

employ Rule 23(c)(4) sua

sponte.

U.S. Parole Comm'n v.

Geraghty, 445 U.S. 388, 408

(1980).

59

Issue certification not a “Hail

Mary” play

23(c)(4) certification not

appropriate if “if enormous

consequences ride on that

resolution.”

McReynolds v. Merrill Lynch,

Pierce, Fenner & Smith, Inc.,

672 F.3d 482, 491 (7th Cir.

2012).

Doug Flutie, hero of BC fans everywhere

60

Issue Certification needs to be

surgical

Supposed to “carve at the joint.”


Fenner & Smith, Inc., 672 F.3d 482,

491 (7th Cir. 2012).

Issues require clear and specific

enumeration.

Fed. R. Civ. P. 23(c)(1)(B).

Gates v. Rohm and Haas Co., 655 F.

3d 255, 273 (3d Cir. 2011).

61

Explain effects of certified

issue clearly.

Test is whether the issue will

“materially advance” the

litigation.

In re Motor Fuel Temp. Sales Pracs.

Litig., 292 F.R.D. 652 (D. Kan. 2013)

(allowing 23(c)(4) certification where

certified issue would be dispositive of

litigation in either direction).

Courts want to make things

simpler by certifying an issue.


3d 255, 273 (3d Cir. 2011) (no 23(c)(4)

certification where underlying issues

were complex & intertwined).

62

Know your jurisdiction

2d, 4th, & 9th Circuits – allow

issue certification even where

certification otherwise

impossible.

In re Nassau Cty. Strip Search Cases,

461 F.3d 219, 223 (2d Cir. 2006) (issue

certification allowed even if certification

as a whole not possible).

Gunnells v. Healthplan Servs., Inc., 348

F.3d 417, 439 (4th Cir. 2003) (Rule

23(c)(4) applies before Rule 23(b)(3)).

Valentino v. Carter-Wallace, Inc., 97

F.3d 1227, 1234 (9th Cir. 1996)

(contemplates possibility of issue

certification).

63


10th Circuit – Issue certification

can be used to sidestep

damages problems.

Wallace B. Roderick Revocable Living

Trust v. XTO Energy, Inc., No.

1203176, 2013 U.S. App. LEXIS

13842, 2013 WL 3389469, at *6 (10th

Cir. July 9, 2013) (after Comcast, class

certification under Rule 23(c)(4)

remains one way "to preserve the class

action model in the face of

individualized damages").

64


7th Circuit – allows issue

certification for injunctive relief

where stakes are low/accuracy

is easy.


Fenner & Smith, Inc., 672 F.3d 482,

491 (7th Cir. 2012).

Stresses “limited” application.

65


3d Circuit – Uses ALI

PRINCIPLES.


3d 255, 273 (3d Cir. 2011) (declining to

certify issues class).

Rule of thumb: complex issues of

liability or causation unlikely to make

for good 23(c)(4) certification.

66


5th Circuit – issue certification

for housecleaning only.

Castano v. Am. Tobacco Co., 84 F.3d

734, 745 n.21 (5th Cir. 1996).

67

Remember the Constitution

Bifurcation for trial can get

messy.

7th Amendment – re-examination

clause

In re Rhone-Poulenc Rorer,

Inc., 51 F.3d 1293, 1303 (7th

Cir. 1995).

Rule of constitutional avoidance

Ortiz v. Fibreboard Corp., 527

U.S. 815, 832-33 (1999).

68

And the Rules Enabling Act

Can’t add substantive rights

Can’t deprive defendant of

legitimate defenses.

Professor Martin Redish

Primary proponent of REA arguments

69

For more, see

THE CLASS ACTION

PLAYBOOK, 2014 Edition.

Available from LexisNexis

Plaintiff-side commentary:

Jenna C. Smith, "Carving at the Joints":

Using Issue Classes to Reframe

Consumer Class Actions, 88 WASH. L.

REV. 1187 (2013).

Defense-side commentary:

Mark A. Perry, Issue Certification Under

Rule 23(c)(4): A Reappraisal, 62

DEPAUL L. REV. 733 (2013).

Continuing coverage at

www.classactioncountermeasures.com

70

Documents

Rule 23(c)(4) Issue Certification: Reconciling the ...media.straffordpub.com/products/rule-23-c-4-issue-certification...Rule 23(c)(4) Issue Certification: Reconciling the Conflict