Following Wal-Mart, I expect we will see more attempts by plaintiffs to try to certify issues classes under Rule 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.” Courts have disagreed about when issues classes may be certified under this provision. The Third Circuit recently addressed this in Gates v. Rohm & Haas Co., 2011 U.S. App. LEXIS 17756 (3d Cir. Aug. 25, 2011), and adopted the ALI’s recently-promulgated Principles of Aggregate Litigation on this point. I expect this decision will be quite helpful to insurers and other defendants in defending against attempts to certify issues classes under Rule 23(c)(4).
Gates was a mass tort case in which the plaintiffs alleged that chemical companies dumped wastewater containing a carcinogen into the ground near their homes. They sought certification of a class seeking medical monitoring and also an issues class seeking a determination of liability only, with damages to be determined separately in individual suits. Id. at *2-3.
With respect to the proposed issues class, the Third Circuit noted that there is a circuit split on the question of whether an issues class can be certified if there is a lack of predominance for the class as a whole (where certification is sought under Rule 23(b)(3)). Id. at *45-46. The court chose not to follow either side of the circuit split, but rather concluded that the ALI’s recently-adopted Principles of Aggregate Litigation provided the best guideline for district courts in deciding whether to certify an issues class:
In light of the adoption of the Final Draft of the Principles of Aggregate Litigation, when deciding whether or not to certify an issues class, the trial court should consider: the type of claim(s) and issue(s) 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 the substantive law separates the 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 relief to any claimant as a practical matter determines the claims of others; and the kind of evidence presented on the issue(s) certified and potentially 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).
Id. at *47-48 (citing Principles of the Law of Aggregate Litigation §§ 2.02-2.05 (2010)). The Third Circuit affirmed the denial of certification, focusing on the lack of severability between the common issue and the individual issues. Id. at *49.
The court also rejected certification of the proposed class seeking medical monitoring under Rule 23(b)(2), relying on the Supreme Court’s recent decision in Wal-Mart. The court rejected plaintiffs’ expert testimony concerning putative class members’ exposure to the chemical because it was based on “[a]verages or community-wide estimations [that] would not be probative of any individual’s claim because any one class member may have an exposure level well above or below the average.” Id. at *26.
With respect to issues classes, I expect the approach adopted by the Third Circuit here will be favorable for defendants in many circumstances, particularly in comparison to those circuits that have, in some circumstances, allowed certification of issues classes without a showing of predominance as to the case as a whole. As in Gates, a key issue in these cases is likely to be whether the individual issues are intertwined with or separable from the common issues sought to be litigated in the class action. In many insurance class actions where predominance is not satisfied, common issues are intertwined with individual issues.
I also recommend studying the ALI Principles of Aggregate Litigation. They are gaining traction with judges and we are likely to see them cropping up more and more in class certification opinions and other decisions on management of class actions.