The Ninth Circuit recently addressed an issue that tends to arise frequently in class certification motion practice: how trial courts should apply the predominance requirement where appellate decisions have said that the need to calculate individualized damages generally is not sufficient on its own to defeat class certification, but some putative class members likely have no damages. On these types of issues, plaintiffs often try to characterize defendants’ arguments in opposition to class certification as raising mere “damages issues” that can be addressed individually at the end of a class case, and defendants often respond that the issues they raise go to liability, not merely damages, and in any event the damages trials would be too complicated and impractical. The Ninth Circuit recently clarified that if determining liability requires highly individualized inquiries, a class should not be certified, and any individualized damages trials would have to be feasible.

In Bowerman v. Field Asset Services, Inc., Nos. 18-16303, 18-17275, — F.4th –, 2022 WL 2433971 (9th Cir. July 5, 2022), the plaintiffs contracted with the defendant to perform preservation services on properties being foreclosed on. They claimed that they should have been classified as employees rather than independent contractors under California law, and therefore should have been paid overtime and reimbursed for business expenses. The district court certified a class, decided certain issues on partial summary judgment in favor of the class, and left for a later damages trial whether a class member worked overtime (and to what extent) and whether the class member was entitled to reimbursement for business expenses (and the amount thereof).

The Ninth Circuit reversed the class certification order. It explained that “We need not decide whether common evidence can prove that [defendant] has a uniform policy of misclassifying its vendors” because “[defendant’s] liability to any class member for failing to pay them overtime wages or to reimburse their business expenses would require highly individualized inquiries on whether that particular class member ever worked overtime or ever incurred any ‘necessary’ business expenses.” (Emphasis in original.) The plaintiffs had “mischaracterize[d] an issue of individualized liability as an issue of individualized damages.” (Emphasis in original.) The Ninth Circuit explained that if the question involves the existence of damages, that is a liability issue, not a damages issue.

The Ninth Circuit also concluded that, under its interpretation of the Supreme Court’s decision in Comcast Corp. v. Behrend, 569 U.S. 27 (2013), the plaintiffs had failed to demonstrate that damages were “capable of measurement on a classwide basis” because they could not “show that the whole class suffered damages traceable to their alleged misclassification as independent contractors,” even if the amounts of those damages would need to be proven individually. In addition, determining damages would require “excessive difficulty” because there was little documentary evidence, and “using the individual testimony of self-interested class members to calculate the overtime hours they worked and the business expenses they incurred isn’t easy.” In a bellwether trial conducted by the district court, eight trial days had been required to determine damages for a sample of only eleven class members.

This decision helpfully clarifies the perennial debate between what constitutes a “damages” issue versus a “liability” issue. As I’ve often written on this blog, it can be helpful to think about the class certification analysis by analyzing how the named plaintiffs’ or putative class members’ claims would be tried in an ordinary individual case, and what evidence the defendant would be entitled to introduce. Here, the bellwether trial helped the Ninth Circuit determine that this case could not be litigated on a class basis.

I used to say that denials of class certification on numerosity grounds were rare and that usually it was futile to oppose class certification on that ground. That’s becoming less true as some circuits, including the Third Circuit, have adopted a stricter approach to how plaintiffs must establish numerosity. If Plaintiffs are using an estimate of the number of class members, the estimate may have to be closely tailored to the precise parameters of the proposed class to pass muster. Following these recent decisions, defendants should carefully evaluate whether to contest numerosity.

Allen v. Ollie’s Bargain Outlet, Inc., No. 21-2121, — F.4th –, 2022 WL 2284654 (3d Cir. June 24, 2022) is a putative nationwide class action under the Americans with Disabilities Act (ADA), alleging that Ollie’s, an operator of retail stores, had a practice of placing merchandise and other items in aisles, obstructing access for wheelchair users. The district court certified a class, but the Third Circuit, after accepting an interlocutory appeal, vacated the class certification order on numerosity and commonality grounds.

Plaintiffs attempted to establish numerosity in three ways: (1) using a national survey of persons with mobility disabilities, along with census data to estimate regional numbers; (2) having someone record on video 16 customers using wheelchairs during a seven-day period at two of the defendant’s stores where the plaintiffs shopped; and (3) submitting written complaints received by the defendant from 12 customers. The Third Circuit found all of these approaches insufficient.

As to the survey and census data, the court found it speculative to extrapolate data from a nationwide survey to the plaintiffs’ region, and “[e]ven if that extrapolation is accurate … we would still be left with no basis to determine what portion of those one hundred wheelchair-bound residents of Monaca are customers of Ollie’s, let alone what portion have suffered a common ADA injury.” As to the video recording, while the Third Circuit found that more probative, it was still insufficient. The court emphasized that some people who use wheelchairs are not “disabled” under the ADA. And the video recordings did not establish that the wheelchair users encountered an ADA violation, i.e., the alleged obstructions in aisles.  The customer complaints were also insufficient because, assuming they were admissible, one of them was actually a compliment about how accessible one of the stores was for a wheelchair user, and the remaining eleven were too few to demonstrate numerosity.

The Third Circuit also found that commonality was lacking, finding the case analogous to Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). The court reasoned that the only evidence of inaccessible aisles was limited to Pennsylvania, and there was no evidence to support a nationwide practice that could justify certifying a nationwide class. The Third Circuit also concluded that the evidence did not support commonality with respect to a proposed class broadly encompassing all kinds of “access barriers.”  However, the Third Circuit left open the possibility that the district court could certify a narrower class on remand.

The majority did not address an evidentiary issue regarding whether the Federal Rules of Evidence apply to class certification decisions, and thus whether the customer complaints were admissible. Judge Porter, however, wrote a thorough concurring opinion highlighting a circuit split on that issue and concluding that under Federal Rule of Evidence 1101 (probably not one you’ve read recently, and which several circuits apparently had overlooked), the rules of evidence apply in full to class certification proceedings (except that Federal Rule of Civil Procedure 43(c) allows courts deciding motions to accept affidavits or declarations in lieu of live testimony). Judge Porter’s concurring opinion is well worth reading and citing if you are faced with attempts to use hearsay or other inadmissible evidence to certify a class.

A recent Sixth Circuit case addressed an issue that tends to arise frequently in various types of class actions, such as property insurance and environmental cases: whether property valuation issues are appropriate for class treatment. The answer here was “no,” and the opinion could be useful to defendants in other contexts.

Tarrify Properties, Inc. v. Cuyahoga County, — F.4th –, 2022 WL 2128816 (6th Cir. June 14, 2022) involved a constitutional challenge to a tax foreclosure procedure in Ohio that allowed a county to place foreclosed properties into a “land bank” without allowing the property owner to receive any excess equity. The plaintiff filed a putative class action challenging this foreclosure procedure under takings clauses in the federal and state constitutions. The district court denied class certification, and the Sixth Circuit affirmed.

The proposed class was defined as owners of relevant tax-foreclosed properties who had excess equity at the time of the foreclosure. That was likely the only viable way to define the proposed class because if there was no excess equity, the property owner would have no claim. But this posed what the Sixth Circuit concluded was an insurmountable problem for ascertainability (identifying the class members) and predominance. Class members could not be identified without determining the fair market value of their property at the relevant time, and experts on both sides agreed that this would depend on many factors. And if the defendants’ expert was correct, the named plaintiff had no excess equity, presenting an adequacy of representation problem as well.

The plaintiff argued that this problem could be overcome by relying on the properties’ assessment values, or on the basis that the county was bound by the value it had used for foreclosure purposes under collateral estoppel or judicial estoppel. The Sixth Circuit rejected these arguments, explaining that, although the assessment values were a “default valuation,” they were not “unrebuttable” or a “conclusive answer.” The assessments were up to six years old, and in any event could be challenged in the litigation. As to estoppel, the county board had not made findings on the fair market value of properties in its foreclosure order.

The plaintiff also suggested that the valuation issues could be resolved by a special master, subclasses or through a new “mass appraisal” for litigation purposes. The Sixth Circuit rejected those options as well because they would still require “mini-trials over each property’s value.”

This decision seems helpful to defendants faced with class actions in other contexts where the claims involve property values, such as property insurance cases, and cases alleging that an environmental nuisance such as an odor or dust from a facility has impacted property values in the area.

The Fifth Circuit recently addressed the scope of appellate jurisdiction under the Class Action Fairness Act (CAFA). CAFA allows federal courts of appeals to hear, on a discretionary basis, appeals from “an order of a district court granting or denying a motion to remand a class action.” 28 U.S.C. § 1453(c)(1). The Fifth Circuit has held, contrary to some other circuits (such as the Seventh Circuit), that on such an appeal it can only consider whether federal jurisdiction exists under CAFA, not any other basis for the district court’s order. The Fifth Circuit recently maintained the same position notwithstanding a recent Supreme Court decision reaching a different outcome under an analogous statute.

In Stewart v. Entergy Corporation, No. 22-30177, — F.4th –, 2022 WL 1711659 (5th Cir. May 27, 2022), the defendant argued that in a CAFA appeal, the court of appeals could consider an additional ground for federal jurisdiction (bankruptcy jurisdiction), relying on BP P.L.C. v. Mayor of Baltimore, 141 S. Ct. 1532 (2021). In BP P.L.C., the Supreme Court addressed 28 U.S.C. § 1447(d), which permits appellate review of a remand “order” if the removal was under Section 1442 (applicable to suits against federal officers or agencies) or Section 1443 (applicable to certain federal civil rights claims). The Supreme Court held that under the plain text of Section 1447(d), the entire “order” is appealable, not merely the part of it that addresses Section 1442 or 1443. The Court has reached the same result under Section 1292(b), which allows interlocutory appeals from an “order” certified by the district court as involving a “controlling question of law” on which there is a “substantial ground for difference of opinion.” Under that statute, the Court previously held that the entire order is appealable, not merely the question(s) identified.

In Stewart, the Fifth Circuit concluded that B.P. P.L.C. had not “unequivocally overruled our precedent or established a law inconsistent with it,” and thus the panel was bound by prior circuit precedent limiting CAFA appeals to CAFA issues. The Fifth Circuit also reasoned that CAFA’s requirement that petitions for permission to appeal be filed within 10 days, and that appeals be decided within 60 days of permission to appeal being granted, would make it difficult, as a practical matter, to decide appeals involving multiple issues. The Fifth Circuit also noted that appeals are discretionary under CAFA, unlike under the statute construed by the Supreme Court in B.P. P.L.C.

I have doubts about whether Stewart will hold up if reviewed en banc or if this issue reaches the Supreme Court. Distinguishing CAFA from other statutes that allow appeals from an “order” is difficult. Although not addressed in Stewart, Section 1453(c)(1) allows appeals from remand orders in a “class action”; it does not exclude bases other than CAFA for jurisdiction in a class action. Given that CAFA appeals are discretionary, a court of appeals might have discretion to limit the issues to be addressed in an order granting leave to appeal, as the Supreme Court does sometimes when granting certiorari. It may not be easy for defendants to obtain interlocutory appellate review of issues unrelated to CAFA jurisdiction in a class action, but it seems a stretch to conclude that CAFA makes that impossible.

A recent Sixth Circuit decision caught my eye because it addressed an important issue on which I have not seen any other appellate decisions (and none were cited in the opinion). The plaintiff argued that the Class Action Fairness Act (CAFA) should be interpreted as overriding the Federal Arbitration Act (FAA), effectively precluding the enforcement of class action waiver provisions in consumer contracts. The Sixth Circuit rejected the argument, finding no clear congressional intent to displace the FAA.

In Adell v. Cellco Partnership, No. 21-3570, 2022 WL 1487765 (6th Cir. May 11, 2022), the plaintiff brought a putative class action involving a Verizon Wireless mobile phone contract, claiming that a monthly administrative charge of about $1 was not permitted by the contract. The defendant filed a motion to compel arbitration, which the district court granted. The arbitrator ruled for the defendant, the district court confirmed the award, and the plaintiff appealed.

The plaintiff argued that “CAFA guaranteed her right to federal adjudication of her claim,” asserting support for this position in the statutorily-expressed purpose of CAFA and its legislative history. She also argued that Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), which held that the National Labor Relations Act did not displace the FAA in the employment context, supported her position.

The Sixth Circuit rejected the argument, noting that courts construing two statutes should give effect to both when possible. Construing one statute as displacing another is generally appropriate only if there is “clear and manifest congressional intention” to do so. The Sixth Circuit explained that “CAFA undoubtedly discusses class actions, but it neither mentions arbitration nor offers the ‘clear and manifest congressional intention’ signaling FAA displacement.” While CAFA’s “findings and purposes” “express the importance of class action lawsuits … [t]hese are not clear statements displacing the FAA.” The court also found no support for the plaintiff’s position in CAFA’s legislative history.

Federal district court orders remanding cases to state court are generally not appealable, as provided by 28 U.S.C. § 1447(d). One exception to this is that the Class Action Fairness Act (CAFA) allows a court of appeals, in its discretion, to accept an appeal from an order granting or denying a motion to remand a putative class action. 28 U.S.C. § 1453(c). The courts of appeals can decline to hear an appeal under § 1453(c), and they are selective about hearing these appeals, particularly because if they accept one, they have to rule within 60 days (subject to an extension of time if either agreed by the parties or limited to ten days). A recent Eleventh Circuit decision pointed out, however, that there are narrow circumstances where a party can appeal as of right from a remand order in a putative class action — where the order is based on CAFA’s “local controversy” or “home state” exception.

In Simring v. Greensky, LLC, — F.4th –, 2022 WL 894206 (11th Cir. Mar. 28, 2022), the district court remanded a putative class action based on the “local controversy” exception, which provides that a district court shall decline jurisdiction where more than two-thirds of the members of all proposed classes are citizens of the state where suit is filed and certain other requirements are satisfied (there is at least one in-state defendant from which significant relief is sought and whose contact forms a significant basis for the claims alleged, the principal injuries were incurred in that state, and no other class action asserting the same or similar factual allegations against any of the defendant has been brought within the last three years). 28 U.S.C. § 1332(d)(4). In Simring, the district court interpreted the complaint as limiting the proposed class to Florida citizens, and because the other requirements for the “local controversy” exception applied, remanded the case to state court.

The Eleventh Circuit held that the district court’s decision was appealable as of right because “CAFA’s local controversy exception does not implicate subject matter jurisdiction” and thus 28 U.S.C. § 1447(c) and (d), which generally prohibit appeals of remand orders, were not applicable. Rather, “the local controversy exception is ‘akin’ to abstention,” a basis for remand that is appealable, “because it requires courts to decline jurisdiction that otherwise exists.”

The Eleventh Circuit went on to reverse the district court’s order because the class definition was not limited to Florida citizens, despite the fact that other allegations in the complaint indicated that suit was being brought “on behalf of all other Floridians similarly situated.” The plaintiff had the burden of proof on the applicability of the local controversy exception, and did not present any evidence of the citizenship of the putative class members.

The key point here for class action practitioners is that there are circumstances where a remand order is appealable as of right under CAFA. Where that is the case, you would not want to file a petition for permission to appeal, which could be denied for any number of reasons. This decision is also significant in emphasizing that the definition of the class, rather than other allegations in the complaint, may control the analysis of whether the local controversy (or home state) exception applies.

A recent Seventh Circuit decision makes an important point about how the principle that a court generally need not resolve the merits to decide class certification is bilateral – it applies to both affirmative claims and defenses. The plaintiff argued that the district court erred in denying class certification because there was one key defense that was central to the case, and the defendant had not established that it had a viable defense to even a single class member’s claim. But that made no difference because the evidence showed that the process for resolving the defense would require individualized adjudication.

Gorss Motels, Inc. v. Brigadoon Fitness, Inc., No. 21-1358, — F.4th –, 2022 WL 872639 (7th Cir. Mar. 24, 2022), was brought under the Telephone Consumer Protection Act (TCPA), seeking to hold the defendant liable for sending unsolicited advertisements by fax. (One would think these cases would come to an end given that fax machines seem like ancient technology that is hardly ever used today. But these cases live on.) The key issue here, as in many TCPA cases, was consent—whether class members had provided prior express permission for the ads. The defendant or relevant third parties from which it obtained the fax numbers had different agreements with the class members who received the faxes, and some fax numbers were obtained through personal contact. The district court denied class certification because common issues of law or fact would not predominate over individual issues with respect to this key defense at the heart of the case.

On appeal, the plaintiff argued primarily that the defendant had failed to establish consent by even a single class member, pointing to a district court opinion in another case that had focused on whether there was permission given for the fax advertisements by a “significant percentage” of the class. The Seventh Circuit rejected that argument, explaining that “it is not the final merits of the permission inquiry that matter for Rule 23(b)(3) purposes; it is the method of determining the answer and not the answer itself that drives the predominance consideration.” Moreover, “[t]his analysis applies not only to the elements that plaintiffs must prove but also to affirmative defenses like prior express permission.” Regardless of whether the defendant could establish the merits of its defense, the district court reasonably concluded that it could not be resolved with “generalized proof.”


A recent Seventh Circuit decision made two rulings on issues arising under the Class Action Fairness Act (CAFA) that defendants may find useful in other cases. First, potential punitive damages exceeding a single-digit ratio may be considered in determining whether the class claims satisfy the $5 million threshold if compensatory damages are small or where a statute provides for punitive damages. Second, the local controversy exception does not apply if another class action asserted the “same or similar factual allegations” against any defendant within the last three years, even if the claims in the prior suit were under a different state’s law and there is no overlap between putative class members.

In Schutte v. Ciox Health, LLC, No. 22-1087, 2022 WL 792258 (7th Cir. Mar. 16, 2022), the plaintiff alleged that the defendant improperly charged for copies of electronic medical records, in violation of a Wisconsin statute that the Wisconsin Court of Appeals held does not allow any such fees. The defendant removed the case under CAFA, the district court denied the plaintiff’s motion to remand, and the Seventh Circuit agreed to hear the plaintiff’s appeal from that order.

On the amount in controversy issue, the plaintiff argued that since her individual claim was for only $61, under Supreme Court precedent generally limiting punitive damages awards to a single-digit ratio, it was unlikely that the punitive damages per claim would reach the point where a class of several thousand class members would recover more than $5 million. Rejecting that argument, the Seventh Circuit explained that “a higher punitive damages ratio may be warranted in cases where compensatory damages are too low to provide meaningful deterrence,” and the statute expressly provides for up to $25,000 for a “knowing and willful” violation, which could be an obstacle to a due process challenge. In any event, “[w]hat matters is the amount ‘in controversy’—not the amount that plaintiffs are most likely to recover.” The court of appeals emphasized that “it is critical for courts to focus on the phrase ‘in controversy’ and to remember the difference between even highly unlikely results and truly impossible results, and to avoid prematurely trying the merits of the case in deciding jurisdiction.” The court’s holding on this issue will be useful to defendants because this is not an uncommon scenario in class actions – the potential individual damages are quite small but punitive damages are sought (or potentially available on the claims alleged).

The second issue focused on CAFA’s local controversy exception, which requires a district court to decline jurisdiction where over two-thirds of proposed class members are citizens of the state where suit was filed, at least one “significant” defendant (satisfying certain requirements) is a citizen of that state, the principal injuries or defendant’s conduct were in that state, and “during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons.” 28 U.S.C. § 1332(d)(4) (emphasis added). Most of the requirements for the local controversy exception apparently were satisfied here. The dispute was over whether there had been a class action brought against the defendant within the three-year period involving the “same or similar factual allegations” and “on behalf of the same or other persons.” The defendant pointed to a prior case filed in Montana alleging that it had improperly charged for electronic medical records under Montana law. The plaintiff argued that the Montana case was brought under a different state’s law and involved class members in a different state. Rejecting that argument, the Seventh Circuit emphasized that the statute requires only “the same or similar factual allegations,” not an overlapping legal theory. Moreover, “[i]f geographic differences could render two otherwise identical complaints dissimilar for CAFA’s purposes, then plaintiffs would be able to avoid federal jurisdiction by filing individual actions based on the same kind of misconduct in all fifty states.”

The plaintiff further argued that if the statutory language requiring that the prior suit be brought “on behalf of the same or other persons” did not require any overlap in the proposed classes, the quoted language would be superfluous because in the context of a class action, the second suit would always be brought on behalf of “the same or other persons.” Not so, said the Seventh Circuit, because statutes often have redundancies, and if CAFA had not included the language at issue, courts might wonder whether Congress intended that the proposed classes in the prior and subsequent cases must overlap. The court also pointed to indications that the intent of this three-year exception to the local controversy requirement was so that a series of class actions in multiple states (except for the first one) might be considered for a multidistrict litigation where appropriate.

Overall, the Seventh Circuit appeared to make clear that plaintiffs cannot evade federal jurisdiction under CAFA by bringing similar single-state cases for small individual amounts, if punitive damages are potentially recoverable such that the amount in controversy requirement is satisfied.

A recent Eleventh Circuit decision on the Class Action Fairness Act (CAFA) caught my eye. It involves the kind of question legislators (and their staffs) probably never think about when drafting a statute. Law professors dream up these types of questions when trying to find a way to puzzle their students on an exam. It’s of interest only to nerds of the law.

In Ruhlen v. Holiday Haven Homeowners, Inc., No. 21-90022, — F.4th –, 2022 WL 701622 (11th Cir. Mar. 9, 2022), the question was whether the trial court’s order remanding the case to state court “sua sponte” — Latin for “of its own volition” — could be appealed. Under CAFA, federal appeals courts can hear appeals, in their discretion, “from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed.” 28 U.S.C. § 1453(c)(1) (emphasis added). This case was removed to federal court based on both the inclusion of a federal statutory claim in the complaint and under CAFA. The federal claim was withdrawn in an amended complaint, and the district court then remanded the case sua sponte, concluding that the particular type of state law claim brought under a Florida rule of civil procedure allowing a mobile homeowners’ association to sue on behalf of homeowners was not a “class action” within the meaning of CAFA. The defendants asked the Eleventh Circuit to hear an appeal from the remand order.

The Eleventh Circuit, in a 2-1 decision, concluded it did not have jurisdiction to hear the appeal because there was no “motion to remand” filed in the district court. The majority concluded that the plain language of CAFA requires a “motion” made by a party and does not apply to a remand ordered by the court without a motion being filed. Although Black’s Law Dictionary and some court opinions refer to “sua sponte” as meaning “on its own motion,” the majority held that a “motion” requires a party’s request, and when the court acts sua sponte, “the court … does not actually ‘request[]’ anything of itself, nor does it grant or deny anyone else’s request.” The majority acknowledged that Congress may have intended otherwise, and that this was an “odd” result, but felt it was bound by the plain meaning of the text, citing Justice Scalia and Brian Garner’s book Reading Law: The Interpretation of Legal Texts. The majority suggested Congress would have to fix this if they intended otherwise.

Unless Congress fixes this or the Supreme Court takes the issue and reaches a different result, those defending class actions in the Eleventh Circuit better hope that if a jurisdictional issue arises, the plaintiff files a motion to remand. If the court questions its own jurisdiction, you might try suggesting that a briefing schedule be set on a motion to remand the plaintiff might wish to file. Otherwise you could have no chance to appeal.

Judge Rosenbaum dissented, finding the majority’s reading of CAFA “hypertechnical,” inconsistent with the surrounding statutory context and expressed Congressional purpose, and leading to an absurd result. “I can conceive of no logical reason,” she wrote, “why the same action should be exposed to two opposite results, depending on whether a party made a motion before the court issued its order.” Judge Rosenbaum identified a circuit split, citing a decision by the Ninth Circuit, holding that CAFA allowed an appeal of a sua sponte remand, and cases where the Seventh and Eighth Circuits had reviewed sua sponte remands without raising the jurisdictional issue.

Perhaps the Supreme Court will take this case, if a petition for certiorari is filed. It would not be heavy lifting for them. Assuming Judge Jackson is confirmed, this one could be a good candidate for her first opinion, which are traditionally “easy” ones that are of little interest to anyone other than lawyers in a particular practice area.


Last week the Fifth Circuit issued a short opinion that made an important point that does not arise often in class certification decisions. Class certification failed because the plaintiffs’ proposed theory of liability would benefit only some class members and disadvantage others, who would be overpaid if the plaintiffs’ theory were correct. For that reason alone, the plaintiffs could not adequately represent the class.

Prudhomme v. Government Employees Insurance Company, No. 21-30157, 2022 WL 510171 (5th Cir. Feb. 21, 2022) (per curiam) was similar to another case I recently wrote about—the plaintiffs claimed that their insurer undervalued their vehicles that were deemed total losses, in violation of Louisiana statutes. Sidestepping questions about commonality and predominance, which are usually the focus of class certification decisions, the Fifth Circuit affirmed the denial of class certification because the adequacy of representation requirement was not met. This was because “a portion of the proposed class members received payments above (that is, benefitted from) the allegedly unlawful valuation.” According to the district court opinion, an expert witness opined that approximately one-fifth of the class would have received less on the plaintiffs’ theory than they received from GEICO. While the plaintiffs argued that class members who were overpaid on their theory might still be entitled to some damages under Louisiana law, that would likely create a typicality problem. Class representatives cannot adequately represent a class if they offer “a theory of liability that disadvantages a portion of the class they allegedly represent.”

Look out for this type of issue the next time you are litigating a class action. It might be lurking in your case when you peel back the onion.