The Growing Split Over Issue Class Certification as an End Run Around Predominance of Common Issues

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The Growing Split Over Issue Class Certification as an End Runaround Predominance of Common IssuesLast week the Sixth Circuit took a big step to extend its reputation as one of the most class-friendly circuits in the country. In Martin v. Behr Dayton Thermal Prods. LLC, Judge Jane Stranch, writing for a unanimous panel, concluded that although a toxic tort class action involving the “risk of vapor intrusion” into homes in a single neighborhood as a result of two separate plumes of groundwater contamination could not be certified as a class action in its entirety, some issues in the case still could be certified as “issue classes” under Rule 23(c)(4). The contamination did not affect drinking water, and the vapors were not shown to have invaded every home.

The trial court correctly concluded that certification of the pollution claims failed because individual issues predominated under Rule 23(b)(2), even for a liability only class, because of the individualized issues of injury in fact and causation. But remarkably, the trial court found that seven issues of law and fact could still be certified under Rule 23(c)(4):

Issue 1: Each Defendant’s role in creating the contamination within their respective Plumes, including their historical operations, disposal practices, and chemical usage;

Issue 2: Whether or not it was foreseeable to Chrysler and Aramark that their improper handling and disposal of TCE and/or PCE could cause the Behr-DTP and Aramark Plumes, respectively, and subsequent injuries;

Issue 3: Whether Chrysler, Behr, and/or Aramark engaged in abnormally dangerous activities for which they are strictly liable;

Issue 4: Whether contamination from the Chrysler-Behr Facility underlies the Chrysler-Behr and Chrysler-Behr-Aramark Class Areas;

Issue 5: Whether contamination from the Aramark Facility underlies the Chrysler-Behr-Aramark Class Area;

Issue 6: Whether Chrysler and/or Aramark’s contamination, and all three Defendants’ inaction, caused class members to incur the potential for vapor intrusion; and

Issue 7: Whether Defendants negligently failed to investigate and remediate the contamination at and flowing from their respective Facilities.

More remarkably still, the Sixth Circuit affirmed. Never mind that joinder of all class members was hardly impractical as is required by the numerosity provision of Rule 23(a), since all class members occupied homes in a single neighborhood and it was those homes that were the subject of the action. Never mind that some of these issues, such as issues 1, 4 and 5, facially reveal that they apply, if at all, to only one of the plumes or part of the neighborhood and therefore to only some of the class, and as a result make it fairly certain the others are not truly class-wide issues either. The goal was issue class certification, and issue class certification was the single-minded focus of the Sixth Circuit’s opinion.

This kind of adventuresome application of 23(c)(4) is the subject of a festering three-way circuit split. The Fifth Circuit in the famous case of Castano v. American Tobacco said that a “district court cannot manufacture predominance through nimble use of subdivision (c)(4),” and that common issues may be severed for class trial on common issues only if the entire cause of action is first certifiable under some provision of Rule 23(b), which for damages class actions generally means Rule 23(b)(3), inclusive of its predominance requirement. This view, supported by the Eleventh Circuit, fits nicely within the structure of Rule 23. Rule 23 states that a class action may be certified “only if” Rule 23(a)’s requirements of commonality of proof, numerosity and impracticability of joiner of class members, adequacy of representation, and typicality of claims are all met, “and” the proposed class claims then meet one of the three requirements of Rule 23(b), which, again, for damages class actions requires a showing that common issues predominate over individual ones. Rule 23(c), which talks about collateral and housekeeping matters such as the need for the judgement to identify class members and the need for notice and opt out in 23(b)(3) class actions, also goes on to say in 23(c)(4) that “[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues.” But 23(c)(4) creates no new, alternative, or independent criteria for determining whether class certification can be granted. Those criteria are found exclusively in 23(a) and (b). Nothing in 23(c)(4) discusses any exception to the predominance requirement for damage causes of action.  The official commentary to 23(c)(4) likewise dovetails with this view, giving as its lone example the certification of a damages class action for purposes of determination of liability only, while leaving damages to individual litigation.

Interestingly, both the trial court and the Sixth Circuit agreed that a liability-only class could not be certified in Martin v. Behr precisely because the predominance requirement still applied and defeated class certification even as to the issue of liability. Despite this, they went on to conclude that once you carve liability down further into the discrete issues involved, some of those issues can then be certified because the predominance inquiry is then magically limited to the issue certified. Nowhere in the current language of Rule 23 will you find any textual support for that proposition.

In fact, this extraordinarily class-friendly approach creates a host of other inconsistencies with the language of Rule 23. For example, if injury in fact and causation are too individualized to certify a class for the pollution claim, then exactly whose claims are the plaintiffs’ claims typical of? How do we determine who actually is properly in the class to begin with if we are talking about an issue divorced from a ripe claim? Do ripeness and standing doctrines suddenly disappear too as long as you are certifying less than an entire claim? Is the court manufacturing a way to render an advisory opinion that Article III otherwise bars? If we are talking about issues and not claims, how do we determine if there is a right of opt out? Is there a requirement of notice to the class—mandatory for 23(b)(3) damage classes but not for 23(b)(2) injunctive relief classes?  Under the Sixth Circuit’s approach, a court has to make all this up as it goes along, because Rule 23(c)(4) contains none of the answers. Nor does it solve the problems inherent in having a few discrete factual issues decided by a class jury and everything else decided by different juries in individual follow-on cases, despite the facial prohibition of that in the Reexamination Clause of the Seventh Amendment’s right to jury trial. And how does a decision on issues divorced from claims allow a trial court to enter a judgment as contemplated by Rule 23, much less a final judgment subject to appeal? How would Rule 23(e)’s standards for approval of a class action settlement apply to attempted settlement of such an issue class?

Despite these and other problems, the Second, Fourth, Seventh, and Ninth Circuits have also adopted this “slice the case up until only common issues are left” approach to issue class certification. Two other circuits, the Third and the Eighth, apply a different but still fuzzy and free-ranging superiority-like analysis as a test for issue certification. But there is only one way that purported class adjudication of superficially-common but artificially-excised issues such as these can produce any meaningful degree of “efficiency”– by increasing the pressure on the defendant to settle. The purpose of Rule 23, however, is to provide an efficient alternative to individual litigation for the actual resolution of the overall claim, not to increase the already oppressive pressure on class defendants to settle because of the heavy defense costs and risk of adverse publicity that already come with defending class actions. This use of issue classes effectively means that pressure can be exerted even for otherwise uncertifiable claims simply by divorcing discrete, allegedly common issues from the claims to which they may relate.

It is time for the U.S. Supreme Court to resolve this split. Rule 23(c)(4) as presently worded is too thin a reed to support these kinds of make-it-up-as-you-go semi-certifications. The rule-makers also need to step up to the plate. The very purpose of the rules of civil procedure is to create uniform, easily understood rules that not only read the same way in every court, but are applied the same way in every court. The rule-makers’ oft-repeated approach of letting ambiguities “percolate” among the circuits before attempting to promulgate a clear rule is the exact opposite of what they should be doing. The Rules of Civil Procedure should never be so vague as to force or encourage courts to guess at what was intended, much less to make it up as they go along. At the very least, when a rule is finally promulgated, its text should not leave nearly this much to debate.