The Class Action
Chronicle
The Class Action
Chronicle
This is the inaugural edition of The Class Action Chronicle, a quarterly public ation that will provide analysis of
recent class action trends, along with a summar y of class certification and Class Ac tion Fairness Act rulings
issued during each quarter. Our publication is designed to keep both prac titioners and clients up-to -date on
class action developments in antitrust, mass tort s/products liability, consumer fraud and other areas of law.
The Fall 2013 edition highlights the U.S. Court of A ppeals for the Seventh Circuit’s recent — and troubling —
approval of issues classes as a means to facilitate class certi fication in cases where the requirements of Rule 23
are not met.
ISSUES CLASSES: THE L ATEST ASSAULT ON RULE 23(B)(3)
“Issues classes” are cases in which one or more common issues
are certified for class treatment while other, individualized questions
are left to be decided later in separate trials. Issues class prop os-
als have been generally rejected by federal courts as improper
attempts to end run Rule 23(b)(3)’s predominance requirement,
but the U.S. Court of Appe als for the Seventh Circuit has recently
embraced the concept, potentially opening the do or to a slew
of class actions that otherwise would not be cer tifiable.
The genesis of “issues classes” is Federal Rule of Civil Procedure
23(c)(4), which provides that “[w]hen appropriate, an action may
be brought or maintained as a class action with respect to
Particular issues.” Plaintiffs’ attorneys have seized on this
language, arguing that it permits court s to identify particular
questions that are common to a proposed class — such as
whether a product has a design defect — and order a classwide
trial that would resolve only those inquiries. This would allow
courts to authorize class actions even where the plaintiffs’ claims
involve highly individualized questions that cannot possibly be
answered in a classwide setting based on common evidenc e.
Historically, courts have been skeptical of issues classes on the
ground that they are inconsistent with Rule 23(b)(3)’s requirement that
“questions of law or fact common to class members predominate
over any questions affecting only individual members.” Accordingly,
some courts — including the U.S. Co urt of Appeals for the Fifth
Circuit — have held that Rule 23(c)(4) is a mere “housekeeping rule”
that may only be applied if predominance is first s atisfied as to the
entire cause of action. Castano v. Am. Tobacco Co., 84 F.3d 734,
745 n.21 (5th Cir. 1996). As the Fifth Circuit explained in Castano,
“[r]eading Rule 23(c)(4) as allowing a court to sever issues … would
eviscerate the predominance requirement of Rule 23(b)(3); the
result would be automatic certification in ever y case where there
is a common issue, a result that could not have been intended.”
(continued on next page)
CONTENTS
ISSUES CL ASSES: THE L ATEST
ASSAULT ON RULE 23( B)(3) 1
CLASS CER TIFICATION DECISIONS
Decision Granting Moti on to Strike ..........3
Decisions Denying Motions to Strike ........ 3
Decisions Rejecting/De nying Class
Certification .......................... 4
Decisions Permitting/Granting Class
Certification ......................... 11
Decisions Granting Dec ertification of
Classes ............................. 16
Decision Denying Dec ertification of Class ... 17
CLASS AC TION FAIRNESS ACT DECISION S
Decisions Denying Moti ons to Remand/
Reversing Remand Orders ..............17
Decisions Granting Moti on to Remand ......21
CAFA Settlement Ruling ................. 25
CONTRIBU TORS 26
4 Times Square | New York, NY 10036
Fall 20 13
The Class Ac tion Chronicle | 2
Consistent with this view, district courts across the
country have rejected attempts to certif y issues classes,
finding that classwide resolution of only a single issue
would be grossly inefficient. See, e.g., City of St.
Petersburg v. Total Containment, Inc., 265 F.R.D. 630,
646 (S.D. Fla. 2010) (rejecting the plaintif f’s proposal for
an issues-only class u nder Rule 23(c)(4); “many other
courts have emphatically rejected attempts to use the
(c)(4) process for certifying indi vidual issues as a means
for achieving an end run around the (b)(3) predominance
requirement” (internal quotation marks and citation omit-
ted)); In re Genetically Modified Rice Litig., 251 F.R.D.
392, 400 ( E.D. Mo. 2008) (refusing to certif y issues class
because it would “lead to procedural diffi culties,” “would
not resolve any individual plaintiff’s claims,” and “would
do little if anything to increase the efficienc y of this
litigation”). In addition, issues trials are inherently unfair
to defendants because it is much easier for plaintiffs to
secure a classwide verdict when the jury does not he ar
the actual facts of the plaintiffs’ claims — which in many
cases will be highly relevant to the allegedly “common”
issues to be resolved. See, e.g., In re Paxil Litig., 212
F.R.D. 539, 547 (C.D. Cal. 20 03) (refusing to certify class
to resolve the purportedly “common” issue of general
causation because such a trial would unfairly rob the
defendant of the ability to present individualized “evidence
rebutting the existence or cause of” the plaintiffs’ alleged
illnesses). Courts have also expressed concern that class
treatment of a single issue when individual issues other-
wise predominate could violate the Seventh Amendment,
which bars a second jury from re -deciding issues resolved
by a first jury — as might be the case if the common tri al
phase were to be followed by individualized proceedings
on the remaining issues before different juries. See, e .g.,
In re ConAgra Peanut Butter Prods. Liab. Litig., 251 F.R.D.
689, 69 8-99 (N.D. Ga. 200 8) (rejecting request to certify
issues class to resolve common questions related to a
defendant’s “knowledge, conduct and duty,” with respect
to allegedly tainted peanut butter; the proposal would b e
inefficient and would also likely violate the defendant’s
Seventh Amendment rights against re- examination of
facts in light of the “risk that a second jury would have to
reconsider the liability issues decided by the fi rst jury”).
Despite this trend, the Seventh Circuit has recently
embraced Rule 23(c)(4) as a means to facilitate clas s
certification in cases where individualized issues would
otherwise predominate. In McReyno lds v. Merrill Lynch,
Pierce, Fenner & Smith, Inc., 672 F.3d 482, 491 (7th Cir.
2012 ), cert. denied, 133 S. Ct. 338 (2012), for example,
the Seventh Circuit found that class certification was
appropriate in an employment discrimination suit notwith -
standing the Supreme Court’s recent rejection of a very
similar proposed class action in Wal- Mart Stores, Inc. v.
Dukes, 131 S. Ct. 25 41 (2011). In so holding, Judge Richard
Posner — who wrote for the Seventh Circuit — concluded
that common questions related to whether Merrill Lynch’s
employment policies discriminated against African -
American financial advisers p resented “a pair of issues
that can most efficiently be determined on a clas s-wide
basis, consistent with” Rule 23(c)(4), regardless of whether
individualized issues existed. 672 F.3d at 491; see also Pella
Corp. v. Saltzman, 606 F.3d 391, 393 (7th Cir. 2010) (per
curiam ) (upholding class certifi cation with respect to one
“common issue” — “whether the windows suffer from a
single, inherent design defect leading to wood rot” — even
though causation would require individu alized inquiries).
Judge Posner advanced a similar position ver y recently in
Butler v. Sears, Roebuck & Co., Nos. 11-8029, 12-80 30,
2013 WL 4478200 ( 7th Cir. Aug. 22, 2013). There, the
Seventh Circuit held that a class of washing machine
purchasers alleging that their machines were prone to
develop mold and other problems was certifia ble even
though individualized inquiries would be necessar y to
determine whether each proposed class member expe -
rienced any problem with his or her washer and, if so,
the amount of his or her damages. According to Judge
Posner, the case could proceed as an issues class: “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 clas s members,
or homogeneous groups of class members, is per mit-
ted by Rule 23(c)(4) and will often be the sensible way
to proceed.” Specifically, the court found that “[t]here
is a single, central, common issue of liability: whether
the Sears washing machine was defective,” that could
be resolved on a classwide basis. In the cour t’s view,
all other, noncommon issues, including both injury and
damages, could be resolved separately in indiv idual trials.
More information on this case can be found on page 11.
The Seventh Circuit’s recent approval of issues classes
may prompt a new wave of efforts by the plaintiffs’ bar
to seek certification of classes that trad itionally have not
been allowed class treatment — and to push for “issues
trials.” This is troubling for class action defendants because
of the significant settlement pressure that comes hand in
hand with class certific ation. It is also concerning because
“The Seventh Circuit’s decision
may prompt a new wave of
efforts by the plaintiffs’ bar to
seek certification of classes that
traditionally have not been allowed
class treatment.”
(continued on next page)
