In a title insurance class action, the Fifth Circuit recently illustrated one method of applying the Supreme Court’s decision in Wal-Mart v. Dukes:  Analyze separately each question that the named plaintiffs propose as a  common question of law or fact.  Determine whether it is actually a proper question that a judge would decide as a matter of law, or a jury (or judge, if no jury is demanded) would decide at trial as a matter of fact.  Then determine whether each question is in fact a common question under Dukes, i.e., whether its truth or falsity will resolve an issue central to the validity of every putative class member’s claim.  Also determine whether the question presupposes the resolution of a prior question that is not a proper common question.  This type of question-by-question analysis places the burden on the plaintiffs to demonstrate how they can prove a case on a class-wide basis, and can be a useful framework for the parties and the court to analyze class certification issues.

Ahmad v. Old Republic National Title Insurance Company, No. 11-10695, 2012 U.S. App. LEXIS 16901 (5th Cir. Aug. 13, 2012) was one of numerous class actions recently brought against title insurers claiming that they have purportedly overcharged homeowners for title insurance policies purchased in connection with refinancing a home.  (For more on developments in these cases, see the Title Insurance page of my blog.)  The Fifth Circuit reversed a decision from the Northern District of Texas granting class certification.  The court found that the outcome was largely controlled by its decision last year in Benavides v. Chicago Title Ins. Co., 636 F.3d 669 (5th Cir. 2011).  Under the Texas Department of Insurance’s rate rules, a detailed individualized analysis of every file would be required to determine whether a discount should have been applied, and therefore common issues would not predominate.

What I found most interesting about the Ahmad decision was how the Fifth Circuit went about analyzing the class certification issues.  It quoted all eleven proposed common questions of law and fact as alleged by the plaintiffs.  The court then focused on the questions that the district court had found to be common questions, and determined that none of them were proper common questions because: (1) a proposed common question of fact could not be answered yes or no; (2) the question as formulated could not be presented to a jury at trial; (3) the question could not be answered based on common evidence but rather would require a file-by-file review; and/or (4) a question presupposed the resolution of another question, which was not a common question.

The Fifth Circuit’s analytical methodology in Ahmad may be useful to lower courts in deciding  class certification issues, and to parties in briefing them.  Of course, once common questions are identified (if any), the next step, where a Rule 23(b)(3) class is being proposed, is to determine whether those common questions predominate over individual questions.  A similar analysis might be constructed for that part of the analysis, with the defendant identifying each of the individual questions and the court assessing whether each proposed individual question is a proper individual question of law or fact, and then whether the common questions or the individual questions predominate.