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March 28, 2019 by Susana Cruz HodgeDownload PDF

Fed. R. Civ. P. 23(c)(4) Issue Certification Remains a Viable Option for PlaintiffsSusana  Cruz Hodge

This month, for at least the fourth time¹, the Supreme Court declined to resolve an alleged circuit split over the proper application of Fed. R. Civ. P. 23(c)(4). See Martin v. Behr Dayton Thermal Products LLC, 896 F.3d 405 (6th Cir. 2018), cert. denied, 18-472, 2019 WL 1231762 (U.S. Mar. 18, 2019). While we will never know what drove the Supreme Court’s decision to pass on this case, the deciding factor was likely the non-existence of the claimed circuit split (among other good reasons discussed below).

Behr was a class action brought on behalf of about 540 homeowners residing in the McCook Field neighborhood, a low-income area surrounding a Superfund site in in Dayton, Ohio. Plaintiffs alleged that their properties had been contaminated by carcinogens emanating from industrial facilities owned by defendant Behr. The district court denied Rule 23(b)(3) liability-only class certification, finding individual questions relating to injury-in-fact and causation predominated over common issues. However, the court certified seven issues pursuant to Rule 23(c)(4), leaving only injury, causation, and damages to be resolved individually. The issues certified concerned inter alia Behr’s role in creating the contamination, foreseeability, and Behr’s failure to inspect and remediate.

In response to Behr’s Rule 23(f) appeal, the Court of Appeals for the Sixth Circuit declined to review the district court’s denial of Rule 23(b)(3) class certification. However, the Court agreed to consider whether the district court erred in certifying an issue class without finding that common questions of law or fact predominated over individual issues as to the entire cause of action. Essentially, the Court of Appeals agreed to review the hotly debated issue of the interplay between predominance and Rule 23(c)(4) issue certification. The Court ultimately affirmed, and Behr’s petition for en banc review was subsequently denied.

The Court of Appeals found that certification of an issue class is proper where common questions predominate within certain issues and superiority is satisfied. In other words, the Court reaffirmed that Rule 23(c)(4) issue certification does not require a finding that common questions predominate for the cause of action as a whole. Behr, 896 F.3d at 413.

The Supreme Court rightly denied certiorari. First, there is no Circuit split with respect to the application of Rule 23(c)(4). See In re Nassau Cty. Strip Search Cases, 461 F.3d 219, 227 (2d Cir. 2006) (permitting issue certification “regardless of whether the claim as a whole satisfies Rule 23(b)(3)’s predominance requirement”); Gates v. Rohm & Haas Co., 655 F.3d 255, 273 (3d Cir. 2011) (recognizing issue certification and outlining factors to be considered in evaluating application of Rule 23(c)(4)); Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 439–45 (4th Cir. 2003) (holding that courts may employ Rule 23(c)(4) to certify a class as to one claim even though all of the plaintiffs’ claims, taken together, do not satisfy the predominance requirement); Pella Corp. v. Saltzman, 606 F.3d 391, 394 (7th Cir. 2010) (“A district court has the discretion to split a case by certifying a class for some issues, but not others, or by certifying a class for liability alone where damages or causation may require individualized assessments.”); 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)[ ] and proceed with class treatment of these particular issues.”). The Sixth Circuit has now affirmatively joined this overwhelming majority.

Second, both the Judicial Conference Committee on Rules of Practice and Procedure and its Advisory Committee on Civil Rules have recognized the absence of a Circuit split, concluded that Rule 23(c)(4) did not require any modification, and rejected a proposal to add “except when certifying under Rule 23(c)(4)” to Rule 23(b)(3). (See the Committees’ discussions regarding Rule 23(c)(4) here, and respondents’ brief filed in Behr for a robust analysis of same.).

Third, Rule 23(c)(4) unambiguously instructs courts to certify issues “[w]hen appropriate,” thereby bestowing on courts broad discretion to certify “particular issues.” If predominance must be satisfied for an entire cause of action, then Rule 23(c)(4) lacks purpose. Such an interpretation violates “the basic interpretive canon[]” prohibiting a rule or statute to be construed in such a manner that causes another provision to “be inoperative or superfluous,” and is therefore untenable. Corley v. United States, 556 U.S. 303, 314 (2009).

Fourth, as the Sixth Circuit found, Rule 23(b)’s superiority requirement “functions as a backstop against inefficient use of Rule 23(c)(4).” Behr, 896 F.3d at 413. Superiority “ensures that courts will not rely on issue certification where there exist only minor or insignificant common questions, but instead where the common questions render issue certification the superior method of resolution.” Id.

Finally, the majority view on Rule 23(c)(4) makes sense and furthers the purpose of Rule 23. Since I primarily focus on class actions involving product defects, I can attest to the fact that the typical causes of action raised in product liability cases are complex, and they sometimes raise individualized issues. However, at the heart of every single one of these cases are key inquiries such as whether the product contains a defect, whether defendant had knowledge of the defect, and whether the misrepresentations or omissions relating to the defect were material and caused class members to pay a premium. It is universally accepted that those inquiries (and many others) can be answered using common evidence in the form of expert testimony and defendant’s own documents. Gathering this evidence involves retaining liability and damages experts, hiring outside vendors that can host and maintain the millions of pages defendants produce, employing adequate staff to review and analyze the documents, and filing and defending against Daubert and other pre-trial motions related to this evidence.

To take on this endeavor on an individual basis is simply cost-prohibitive even when the individual damages amount to many thousands of dollars. Few, if any, attorneys are willing to try these issues individually over and over again (which is what defendants bank on), but even if one were to foolishly do so, it would clog already full-to-the-brim dockets and amount to a very poor and inefficient use of the judiciary’s precious time.

There simply is no justification whatsoever for not employing the mechanism envisioned by the drafters of Rule 23(c)(4) in these types of cases. Armed with resolutions on these key (and other) common issues, perhaps then consumers can engage in a fair fight over the individual issues defendants are so quick to hang their hat on. I believe this notion of fairness drove the Behr decision, as evidenced by its concern that without issue certification, the class members “might not otherwise be able to pursue their claims,” Behr, 896 F.3d at 416, and the Court’s stated “expectation that [this case] be moved expeditiously toward resolution” on remand, id. at 417.
¹See Healthplan Servs., Inc. v. Gunnells, No. 03-1282; Pella Corp. v. Saltzman, No. 10-355; Merrill Lynch, Pierce, Fenner & Smith, Inc. v. McReynolds, No. 12-113.