A recent decision by the D.C. Circuit provides a detailed analysis of how the circuit courts of appeal have applied the commonality standard articulated in Wal-Mart v. Dukes. The key point I see here is that not only do plaintiffs need to identify at least one common question, the answer to which is likely to drive resolution of the litigation, but where the common question is a question of law, there must be evidence that the alleged legal violation was committed in the same manner with respect to the entire class. Broadly-framed, vague common questions are unlikely to succeed, forcing plaintiffs to frame their cases more narrowly.

In DL v. District of Columbia, No. 11-7153, 2013 U.S. App. LEXIS 7375 (D.C. Cir. Apr. 12, 2013), the plaintiffs brought a putative class action alleging that the District of Columbia has systematically failed to properly identify preschool children in need of special education and provide services to them where required by the Individuals with Disabilities Act. The district court certified a class of children who were or may be eligible for such services and had not been identified. The district court framed the common question as whether the class members had received a “free appropriate public education,” finding that issue susceptible to classwide proof. Id. at *7-8, 13. After certifying the class, the district court found liability and imposed an injunction.

The D.C. Circuit vacated the certification of the class, and therefore also vacated the finding of liability and the injunction. Focusing on the issue of commonality and citing a number of opinions by other circuits applying Wal-Mart, which “changed the landscape,” the court of appeals explained that:

After Wal-Mart it is clear that defining the class by reference to the District’s pattern and practice of failing to provide FAPEs [free appropriate public educations] speaks too broadly because it constitutes only an allegation that the class members ‘have all suffered a violation of the same provision of law,’ which the Supreme Court has now instructed is insufficient to establish commonality given that the same provision of law ‘can be violated in many different ways.’ Wal-Mart, 131 S. Ct. at 2551. In the absence of identification of a policy or practice that affects all members of the class in the manner Wal-Mart requires, the district court’s analysis is not faithful to the Court’s interpretation of Rule 23(a) commonality.

. . . [T]he harms alleged to have been suffered by the plaintiffs here involve different policies and practices at different stages of the District’s Child Find and FAPE process; the district court identified no single or uniform policy or practice that bridges all their claims. . . . Wal-Mart instructs that holding that the District has violated the IDEA as to each class member is not enough to establish Rule 23(a) commonality, 131 S. Ct. at 2551, in the absence of a uniform policy or practice that affects all class members.

Id. at *18-24 (emphasis added). The court noted, however, that, the use of subclasses proposed by the plaintiffs (which had not been addressed by the district court) potentially could satisfy commonality, making clear that it did not believe that a class action on this type of issue could never be certified. This would require that there be a uniform policy or practice affecting all members of each subclass. Id. at *25. Judge Edwards’ concurring opinion noted that “[a]n illegal policy or practice affecting all class members would provide the ‘glue’ necessary to litigate otherwise individualized claims as a class.” Id. at *34 (Edwards, J., concurring).

So what does this mean for insurance class actions? The mere fact that an insurer has allegedly breached the same insurance contract or committed a statutory violation with respect to the putative class members should not be enough to establish commonality. Rather, where the claimed breaches of contract or statutory violations occurred in different manners with respect to different class members (or members of a subclass), plaintiffs are unlikely to obtain class certification. What class certification is likely to come down to, as I’ve said before, is a detailed examination of the facts of individual putative class members’ claims, with a focus on how those claims would be tried if they were tried as individual cases. Insurers should demonstrate that, even where mistakes may have been made on some individual claims or transactions, those mistakes were made for different reasons, and different defenses, based on different factual scenarios, would be presented at trial. The only way to demonstrate this is by an in-depth examination of individual claims and transactions. In light of this and other similar decisions, I also expect to see more attempts to certify subclasses, with more narrowly-framed common questions, as plaintiffs’ lawyers try to find a way around the obstacles that Wal-Mart and its lower court progeny impose. Smaller classes focusing on narrower common issues are likely to be the wave of the future.