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Sixth Circuit Nullifies Predominance Requirement

July 22, 2018

In the past 5-10 years, the Sixth Circuit Court of Appeals has become much friendlier to class actions, and on July 16 it took another step in that direction by joining those courts that have held that an “issue class” may be certified under Rule 23(c)(4) even though the case as a whole fails to satisfy Rule 23(b)(3)’s predominance standard. See Martin v. Behr Dayton Thermal Prods., LLC, 2018 U.S. App. LEXIS 19441 (July 16, 2018). This reading effectively nullifies the predominance requirement of Rule 23(b)(3) by ensuring that it is automatically satisfied in any case merely be selecting “common questions” and saying “issue class.” It has perplexed defense lawyers for years yet has now been adopted by several circuits. The three reasons for it given by the Sixth Circuit panel have all been argued before and still fare no better than they ever have—weak to say the least.

Avoiding Constructions Rendering Language Superfluous

Echoing other courts and commentators adopting the “broad approach” on this issue, the panel first said, “the broad approach respects each provision’s contribution to class determinations by maintaining Rule 23(b)(3)’s rigor without rendering Rule 23(c)(4) superfluous.” Id. at *13. This argument is well worn but still essentially stands reality on its head.

The “narrow approach,” applying Rule 23(b)(3) “first” does not render (c)(4) superfluous at all. Rule 23(c)(4) explicitly authorizes what is implicit in (b)(3) (and other subdivisions of (b)): that a class may sometimes be certified as to some but not all issues. If a court certifies a set of questions for class treatment, after finding that common questions predominate over individual ones, that certification order falls under (c)(4), whether or not it is explicitly cited. If (c)(4) were not there, the authority would have to be inferred.

Martin also states, “the broad view does not risk undermining the predominance requirement.” Id. But in fact the “broad approach” completely nullifies the predominance requirement. So long as there is one common question, and individual questions are excluded from the predominance analysis, then by definition common questions always predominate.

The Prior Language

The Martin panel said the “broad view” follows from the concluding clause of the pre-2007 version of (c)(4), which said, “and the provisions of this rule shall then be construed and applied accordingly.” Id. at *13-14. The panel read this clause as prescribing a sequential analysis, and as expressing the real intent of the present rule, because the 2007 amendments were designated as “stylistic” only. The panel also noted that the Advisory Committee has declined to amend the rule to reject the “sequential” interpretation, and that “the various circuits seem to be in accord” in adopting it. Id. There are no less than four problems with this argument.

First, as Professor Laura Hines has shown, the most faithful reading of the prior version of the rule is probably that the concluding clause only applied to what was then (c)(4)(B), which provided for subclasses, not to (c)(4)(A) and particular issues. Laura Hines, Challenging the Issue Class End-Run, 52 EMORY L. J. 709, 717-18 (2003). It was, after all, appended to (B).

Second, as she has also shown, the circuits in fact are not in accord on the “broad approach.” Laura Hines, Codifying the Issue Class Action, 16 NEV. L. J. 625, 628 (2016).

Third, that prior language didn’t necessarily imply the sequential analysis the “broad view” assumes. Just as “[w]hen appropriate” does not answer the question of when certification as to particular issues is appropriate, “then … accordingly” does not answer the question of what “accordingly” means. It is just as consistent with that language to apply Rule 23’s requirements as in any other case, and to understand (c)(4) to state explicitly what (b)(3) implies – when there are both common and individual questions, it is possible to certify a class for the common questions, if all the requirements are satisfied.

Fourth, the panel’s interpretive approach runs backwards. Taking at face value that the 2007 amendment was intended to be merely stylistic, that means the rule was revised to better state its intent, and we should understand the prior version in light of the current version, not the current in light of the prior.

The Superiority Backstop

Finally, the Martin panel said (b)(3)’s superiority requirement protects against “inefficient use of Rule 23(c)(4).” The major problem with this argument is that it contradicts the court’s own “broad view” approach. If the proper construction of (c)(4) is that particular issues are selected for class treatment, and “then” the rest of Rule 23 is applied, why is superiority different? Simply put, there is no logical or textual basis why the predominance standard should be applied solely to the “particular issues,” when superiority should be applied to the case as a whole. Defendants can at least be grateful that the court kept the superiority requirement in effect, but the right answer would have been to recognize that the predominance standard applies to the whole case, just like superiority and all the other requirements do.

Because the court in Martin failed to do that, defendants in the Sixth Circuit will have to ensure that courts give superiority and the requirements of 23(a) real teeth.

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