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Presenting a live 90-minute webinar with interactive Q&A
Rule 23(c)(4) Issue Certification: Reconciling
the Conflict With Rule 23(b)(3)'s
Predominance Requirement
Obtaining or Defeating Certification in Light of Differing Circuit Court Standards
1pm Eastern
12pm Central | 11am Mountain
10am Pacific
Today’s faculty features:
Rebecca S. Bjork, Senior Counsel, Seyfarth Shaw, Washington, D.C.
Russell Jackson, Founder, Jackson Advocates, St. Louis
Andrew J. Trask, Counsel, McGuire Woods, London, England
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What they are, how
they’re used
Russell Jackson
[email protected]
August 2016
What is an “issues class”?
• A means of certifying common issues for class
treatment while severing non-common issues,
which either will be dealt with in a later phase
of the trial or in subsequent individual actions.
• Certifying an “issues class” means certifying
something less than the entire claim for class
• The issues adjudicated in the class proceeding
have collateral estoppel effect in subsequent
phases or individual proceedings.
The 1966 Advisory Committee
Created Them
• In creating Rule 23, the 1966 Advisory Committee
came up with innovations to facilitate the
expanded use of class actions in areas of civil
rights, employment, and consumer protection
• Rule 23(b)(3) for the first time created monetary
relief classes that did not arise out of the same
• Rule 23(c)(4)(A) allowed courts to carve out
particular issues for certification.
The original 23(c)(4) set forth how
issues classes were to be used
• “When appropriate (A) an action may be brought or maintained
as a class action with respect to particular issues, . . . and the
provisions of this rule shall then be construed and applied
• The Committee rejected language that would have added, after
“particular issues,” the phrase “such as the issue of liability.”
• The rule allows certification of issues or defenses less than
liability as a whole.
• The current issues class rule, 23(c)(4), was the result of the
2003 rules amendments that were stylistic and not intended to
change the meaning of the rules.
Issues classes were intended to facilitate
certification where individual issues
• The Committee Notes make it plain that the rule
could be used to carve out common issues for class
treatment even if the claim as a whole would not
satisfy Rule 23(b)(3)’s predominance requirement:
• “In a fraud or similar case the action may retain
its ‘class’ character only through the
adjudication of liability to the class; the
members of the class may thereafter be
required to come in individually and prove the
amounts of their respective claims.”
Issues classes were intended to facilitate
certification where individual issues
• See also Manual for Complex Litigation sec. 21.24
(4th ed. 2004) (“[T]his provision may enable a court
to achieve the economies of class action treatment
for a portion of a case, the rest of which may
either not qualify under Rule 23(a) or may be
unmanageable as a class action.”).
• Indeed, as one commentator has noted, “requiring
predominance as to the cause of action as a whole
when a plaintiff seeks to have a class certified only
with respect to particular issues might render Rule
23(c)(4) superfluous, violating a fundamental
canon of statutory interpretation.” Newberg on
Class Actions sec. 4:91 (5th ed. 2012).
Courts commonly use issues classes, even
where they don’t cite Rule 23(c)(4)
• “Although Rule 23(c)(4) receives extended
discussion in relatively few cases, it is
applied sub silentio to almost all
certifications. It is the rare case that
every issue from liability to damages is
appropriately the subject of class
• McLaughlin on Class Actions sec. 4:43.
Practical Limitations on Issues
• Often used to separate liability from damages.
• Can separate big defenses (e.g., government
contractor defense, preemption) that apply across all
• However, certification is “never appropriate” where it
separates “closely related factual or legal issues . .
.that would not resolve any class member’s claims and
leave a great deal for follow-on proceedings.”
McLaughlin on Class Actions sec. 4.43.
The 3rd Circuit adopted factors from the
ALI’s Principles of Aggregate Litigation
“[T]he type of claim(s) and issues 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 choiceof-law questions it may present and whether
substantive law separates the common 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 3rd Circuit adopted factors from the
ALI’s Principles of Aggregate Litigation
“. . . 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 of relief to any
claimant as a practical matter determines the
claims of others; and the kind of evidence
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).”
Gates v. Rohm & Haas Co., 655 F.3d 255, 273 (3rd Cir. 2011).
The Civil Rules Advisory Committee Says
Issues Classes are Widely Accepted
• “[T]here has seemed to be a split in the circuits about
whether [issues classes] can only be allowed if (b)(3)
predominance is established. At a point in time, it
appeared that the Fifth and Second Circuits were at
odds on this subject. But recent reports suggest that
all the circuits are coming into relative agreement that
in appropriate cases Rule 23(c)(4) can be used even
though full Rule 23(b)(3) certification is not possible
due to the predominance requirement.”
Rule 23 Subcommittee Report to the Civil Rules
Advisory Committee (Apr. 9-10, 2015) at 39.
Issues Classes are Widely Used
• “[I]t appears that use of issues classes has
become widespread.”
Id. at 41.
• See also Claire E. Bourque, Comment: Liability
Only, Please—Hold the Damages: The Supreme
Court’s New Order for Class Certification, 22
Geo. Mason L. Rev. 695 (Spring 2015); Laura J.
Hines, The Unruly Class Action, 82 Geo. Wash.
L. Rev. 718 (May 2014).
There is no explicit conflict
among the Circuits.
• Many circuits – especially the 7th Circuit – have held or
suggested that issues classes are appropriate even
where the claim as a whole would not satisfy Rule 23.
• The 5th Circuit long ago had rejected this approach in a
products liability case (Castano). But more recently, it
accepted the notion of issues classes without debate.
• For a breakdown of circuit approaches, see Jenna C.
Smith, Comment, “Carving at the Joints”: Using Issue
Classes to Reframe Consumer Class Actions, 88 Wash.
L. Rev. 1187, 1188 (2013); In re Motor Fuel
Temperature Sales Practices Litig., 292 F.R.D. 652, 66465 (D. Kan. 2013).
Recent Decisions Certifying Issues
Mitchell v. LVNV Funding, LLC, 2016 WL 299044 (N.D.
Ind. Jan. 25, 2016) (certifying the issue of liability for
violation of Fair Debt Collection Practices Act, holding
that issues of the amount and proximate causation of
damages can be addressed in subsequent phase of
Gentry v. Floyd County, 313 F.R.D. 72 (S.D. Ind. 2016)
(Rule 23(c)(4) allowed court to certify liability issues for
classwide trial, while reserving individual damages and
defenses to later individual hearings), modified, 2016
WL 4088748 (S.D. Ind. 2016).
Recent Decisions Certifying Issues
Moodie v. Kiawah Island Inn Co., 309 F.R.D. 370 (D.S.C.
2015) (Rule 23(c)(4) allowed class members to present
classwide claims against employer on liability issues,
while reserving damages for proof in individual
Jacob v. Duane Reade, Inc., 2016 WL 3221148 (S.D.N.Y.
Jun. 9, 2016) (denying motion for reconsideration of
class certification of liability issues in NY Labor Law
class action).
Recent Decisions Certifying Issues
Good v. American Water Works Co., 310 F.R.D. 274
(S.D.W.Va. 2015) (in suit over contamination of
community’s water supply, certifying class for issues of
Smith v. Family Video Movie Club, 311 F.R.D. 469 (N.D.
Ill. 2015) (plaintiffs may use issues class to sever
individual damages issues in class alleging employer
systematically failed to pay for time spent making bank
Recent Decisions Certifying Issues
Cunningham v. Multnomah County, 2015 WL 274187 (D.
Or. Jan. 20, 2015) (“The heart of this action is whether
or not the . . . strip search procedure is constitutional .
. . By certifying an issue class over everything but
consent and damages, this action will still be able to
take full advantages of the efficiencies class actions are
designed to promote while avoiding” the individual
Beley v. City of Chicago, 2015 WL 8153377 (N.D. Ill.
Dec. 7, 2015) (certifying challenge to city’s refusal to
register homeless sex offenders, noting individual
damages can be dealt with using Rule 23(c)(4).
Recent Decisions Certifying Issues
• Cruz v. TMI Hospitality, Inc., 2015 WL 6671334 (D.
Minn. Oct. 30, 2015) (certifying employment case
on liability issues, and leaving individual damages
issues for later phase of case).
• In re Steel Antitrust Litig., 2015 WL 5304629 (N.D.
Ill. Sept. 9, 2015) (certifying issue of conspiracy
for classwide treatment, but reserving issues of
impact and individual damages for subsequent
How is Rule 23(c)(4) being
strategically used?
• Recent Supreme Court authority has been viewed
by some as restricting the traditional use of class
• Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011)
(articulating a new commonality standard and holding
that a divisible remedy like compensatory damages (or
“back pay”) should not be available in a mandatory
23(b)(2) employment discrimination class)
• Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) (in an
antitrust action, reversing class certification because the
trial court – to avoid reaching the merits – did not dissect
the plaintiffs’ expert’s methodology, and holding that
plaintiffs had failed to demonstrate that damages could
be established on a classwide basis)
How is Rule 23(c)(4) being
strategically used?
• See, e.g., Robert Rachal, Page Griffin, Madeline
Chimento Rea, Labor and Employment and ERISA
Class Actions After Wal-Mart and Comcast: A
Defense Perspective, ABA J. of Labor & Empl. L.
319, 338-41(Winter 2014).
How is Rule 23(c)(4) being
strategically used?
• To be clear, Comcast did NOT hold that damages in a
Rule 23(b)(3) class must be provable on a classwide
basis to meet the predominance requirement:
• All parties and the trial court simply had
accepted that the damages model needed to
establish damages across the class.
• Justice Scalia, who wrote the majority opinion,
did not say he was changing the predominance
requirement, and the issue had not been briefed
before the Court.
How is Rule 23(c)(4) being
strategically used?
• In Justice Scalia’s prior opinions he has relied
on the Advisory Committee notes to give
effect to the Committee’s intent. Here, the
notes expressly allow issues classes to sever
damages for individual determination.
• Nowhere did the opinion disavow the long line
of cases holding that just because damages
must be established individually does not
mean that a class cannot be certified under
Rule 23(b)(3).
How is Rule 23(c)(4) being
strategically used?
• To be clear, Comcast did NOT hold that damages in a
Rule 23(b)(3) class must be provable on a classwide
basis to meet the predominance requirement:
• See Roach v. T.L. Cannon Corp., 778 F.3d 401, (2d
Cir. 2015) (“Comcast, then, did not hold that a
class cannot be certified under Rule 23(b)(3)
simply because damages cannot be measured on a
classwide basis. . . . The Supreme Court did not
foreclose the possibility of class certification
under Rule 23(b)(3) in cases involving
individualized damages calculations.”).
How is Rule 23(c)(4) being
strategically used?
• To address concerns raised in the wake of
cases like Dukes and Comcast, class counsel
are using issues classes:
• to adjudicate liability under strict liability
statutes, leaving issues of proximate
causation and actual damages for
subsequent proceedings. See McMahon v.
LVNV Funding, LLC, 807 F.3d 872 (7th Cir.
How is Rule 23(c)(4) being
strategically used?
• to certify liability issues in food
contamination cases, while severing
individual causation and damages issues
regarding necessary doctor visits,
vaccinations, and other out-of-pocket
costs. See Peterson v. Costco Wholesale
Co., 312 F.R.D. 565 (C.D. Cal. Jan. 25,
How is Rule 23(c)(4) being
strategically used?
• to sever damages from injunctive and
declaratory relief in Rule 23(b)(2)
employment discrimination claims. See,
e.g., McReynolds v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 672 F.3d 482 (7th
Cir. 2012), cert. denied, 133 S. Ct. 338
How is Rule 23(c)(4) being
strategically used?
• To sever some causes of action for class
treatment, while preserving other causes
of action for individual adjudication. See
Barnes v. Airline Pilots Ass’n, Int’l, 310
F.R.D. 551 (N.D. Ill. 2015) (in pilots’ case
against a union that allegedly failed to
adequately represent them, certifying the
issues of whether the union owed a duty
to the pilots and, if so, whether it
breached that duty, while severing for
individual treatment issues of reliance
and damages).
How is Rule 23(c)(4) being
strategically used?
• to adjudicate common issues of defectiveness
and breach of warranty in consumer products
claims, while severing individual issues of
damages for subsequent proceedings. See,
e.g., Butler v. Sears, Roebuck & Co., 2013 WL
4478200 (7th Cir.), cert. denied (U.S. Feb. 24,
2014); In re Whirlpool Corp. Front-Loading
Washer Prods. Liab. Litig., 722 F.3d 838 (6th
Cir. 2013), cert. denied (U.S. Feb. 24, 2014).
How is Rule 23(c)(4) being
strategically used?
• to certify a class for a breach of
contract claim, while not certifying
causes of action for unjust enrichment,
fraud, and promissory estoppel. Walney
v. SWEPI LP, 2015 WL 5333541 (W.D. Pa.
Sept. 14, 2015) (oil and gas leases).
How is Rule 23(c)(4) being
strategically used?
• Justifications for use of the issues class rule include:
• The need to compensate those cheated in small amounts
that would never be litigated individually.
• Deterring companies from engaging in schemes to defraud
large numbers of people in small amounts.
• The need to prevent discrimination and compensate its
• The need to inform class members of their right to
compensation for a violation of their constitutional rights.
See, e.g., In re Nassau County Strip Search Cases, 461 F.3d
219 (2d Cir. 2006) (“Absent class certification and its
attendant class-wide notice procedures, most of these
individuals . . . likely never will know that defendants
violated their clearly-established constitutional rights, and
thus never will be able to vindicate those rights.”)
Butler v. Sears, Roebuck & Co.
• “It would drive a stake through the heart of the class
action device, in cases in which damages were
sought rather than an injunction or declaratory
judgment, to require that every member of the class
have identical damages. If the issues of liability are
genuinely common issues, and the damages of
individual class members can be readily determined
in individual hearings, in settlement negotiations, or
by creation of subclasses, the fact that damages are
not identical across all class members should not
preclude class certification. Otherwise defendants
would be able to escape liability for tortious harms
of enormous aggregate magnitude but so widely
distributed as not to be remediable in individual
Strategic use of issues classes
means being prepared for the
7th Amendment challenge
• The 7th Amendment provides:
• “In suits at common law, where the value in
controversy shall exceed twenty dollars, the
right of trial by jury shall be preserved, and no
fact tried by a jury, shall be otherwise
reexamined in any court of the United States,
than according to the rules of common law.”
(Emphasis added.)
Strategically handling the
7th Amendment
• 1. The reexamination clause was designed not only to
protect against courts subsequently disregarding a jury’s
prior findings, but it also was designed to avoid having an
appellate court (such as the federal Supreme Court)
empanel a jury to make factual findings on appeal, as was
common in some states in the late 18th Century. Richard
Nagareda et al., The Law of Class Actions and Other
Aggregate Litigation 246 (2d ed. 2013).
• 2. The reexamination clause speaks of facts being
reexamined by a jury, not evidence. So long as your trial
plan requires the second jury to give appropriate
preclusive effect to well-defined facts on the first jury’s
special verdict form, you should avoid 7th Amendment
Strategically handling the
7th Amendment
• 3. Carve at the joint. Segregate common issues,
paying attention to elements of causes of action. For
example, if the class jury finds the product is
“defective” and thereby “breached the language of the
express warranty,” the determinations on those
elements should have issue-preclusive effect. If, at a
later individual proceeding, evidence used before the
first jury is necessary to prove a different element to
the second jury (e.g., causation of damages), there’s
nothing in the 7th Amendment that prevents the second
jury from hearing that evidence, so long as the second
jury gives full effect prior jury’s verdict. A separate
element of a cause of action is not the same “fact” as
another element; if they were, there would be no need
for separate elements.
Strategically handling the
7th Amendment
• The Seventh Circuit recognizes that the
reexamination clause’s “prohibition is not against
having two juries review the same evidence, but
rather against having two juries decide the same
essential issues.” Houseman v. U.S. Aviation
Underwriters, 171 F.3d 1117, 1128 (7th Cir. 1999).
• See also Robert H. Klonoff, The Decline of Class
Actions, 90 Wash. Univ. L. Rev. 729, 815 (2013) (“The
focus should be solely on whether successive juries
are deciding the same issues, not on whether they
are merely hearing overlapping evidence.”).
Strategically handling the
7th Amendment
• “[T]he Seventh Amendment does not seem to pose
a significant obstacle to the use of issue classes,
even in the mass tort context, so long as courts
are careful to certify only those issues for class
treatment that are sufficiently separable from
individual issues so that ‘trial of [them] alone may
be had without injustice.’ This may be readily
accomplished through the myriad case
management tools at trial courts’ disposal.”
• Newberg on Class Actions sec. 4:92 (5th ed. 2012).
Strategically handling the
7th Amendment
• For further analysis of the 7th Amendment
issue, see D. McNamara, B. Boghossian, L.
Aminpour, Reexamining the Seventh
Amendment Argument Against Issue
Certification, 34 Pace L. Rev. 1041 (Summer
Practical Advice on Issues Classes
• 1. Plead it early – courts are rejecting Hail
• 2. Know how it affects ascertainability.
• 3. Know who will be bound.
• 4. Know what law applies to your issues.
• 5. Have a trial plan.
• 6. Know the types of cases where issues
classes are less likely to fly.
Practical Advice on Issues Classes
• See In re NCAA Student Athlete Concussion Injury
Litigation, 314 F.R.D. 580, 597 (N.D. Ill. 2016) (in
dicta, discussing why 23(c)(4) personal injury class
could not be certified on issues of whether NCAA
owed duty, the nature of the duty, and whether it
was breached).
• See Roc v. NCAA, 2016 WL 1270087 (S.D. Ind. Mar. 31,
2016) (issues class failed because class was not
ascertainable and the class definition was
Practical Advice on Issues Classes
• See Gonzalez v. Owens Corning, 2016 WL 1252988
(W.D. Pa. Mar. 30, 2016) (denying issues class
certification, highlighting choice of law problems).
• See Taison Communications, Inc. v. Ubiquiti Networks,
Inc., 308 F.R.D. 830 (N.D. Cal. 2015) (same).
• See Haley v. Kolbe & Kolbe Millwork, Co., 2015 WL
9255571 (W.D. Wis. 2015) (giving plaintiffs a chance to
renew motion with proof that issues class could be
tried with classwide proof and apply all necessary
states’ laws, while reserving individual damage issues
for later phase).
Case Law
Interpreting Rule
Rebecca S. Bjork – Senior Counsel, Labor &
Employment Department - Complex
Discrimination Litigation Practice Group
[email protected]
Seyfarth Shaw LLP
“Seyfarth Shaw” refers to Seyfarth Shaw LLP (an Illinois limited liability partnership).
©2016 Seyfarth Shaw LLP. All rights reserved.
Leading Secondary Sources’ Commentary
On Rule 23(c)(4)
• Manual For Complex Litigation (Fourth) summarizes the
use of Rule 23(c)(4) in light of the rest of Rule 23:
• The Rule “permits a class to be certified for specific issues or
elements of claims raised in the litigation.”
• MCL § 21.24 (Federal Judicial Ctr. 2004)
• Its use is “appropriate only if it permits fair presentation of the claims
and defenses and materially advances the disposition of the litigation
as a whole.”
• MCL § 21.311 (Federal Judicial Ctr. 2004)
• Newberg On Class Actions describes its impact:
• A court’s power under Rule 23(c)(4) “has the capability of
automatically satisfying the predominance test of Rule 23(b)(3). . . .”
Newberg On Class Actions § 4:23 (West Group 2002)
©2016 Seyfarth Shaw LLP
Leading Secondary Sources’ Commentary
On Rule 23(c)(4)
• The American Law Institute explains where the Rule is
properly invoked:
• “Substantive law defines the relationships among legal and factual
issues – sometimes intertwining them and sometimes separating them
cleanly so as to create a ‘joint’ at which aggregate treatment may
• Principles Of The Law Of Aggregate Litigation § 2.02 cmt. a (Am. Law Inst. 2010).
• Noting the “significant limitation that the court should consider whether
substantive law cleanly separates the common issue from remedial
questions and from other issues concerning liability. Class-action
treatment of a common issue would not materially advance the
resolution of related claims when that common issue remains
intertwined under applicable substantive law with other issues that are
not common, including individualized defenses.”
• Principles Of The Law Of Aggregate Litigation § 2.03 cmt. b.
©2016 Seyfarth Shaw LLP
Early Use Of Issue Certification In
Products Liability Cases
• Cent. Wesleyan Coll. v. W.R. Grace & Co., 6 F.3d 177, 184 (4th Cir.
1993) (class conditionally certified for eight common issues in
school asbestos case, including Ds’ knowledge of health risks,
foreseeability of dislodging fibers with maintenance, adequacy of
warnings, among others);
• Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 472-73 (5th Cir.
1986) (class action to adjudicate “state of the art” defense in
products liability class action);
• But see Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th
Cir. 1996) (reversing class certification in drug case; it “is . . . silent
as to any reason why common issues predominate over individual
issues certified under Rule 23(c)(4)(A)” and no class trial plan was
©2016 Seyfarth Shaw LLP
Division Amongst Circuit Courts Regarding
Relationship Between Rule 23(b)(3) Predominance
Requirement And Rule 23(c)(4) Issue Certification
• The circuits differ on how they have treated issue
certification in light of the predominance requirement of
Rule 23(b)(3).
©2016 Seyfarth Shaw LLP
Fifth Circuit: Castano v. Am. Tobacco
• In the Fifth Circuit, for example, Rule 23(c)(4) is
considered a “housekeeping” mechanism available to
the district court, but one that cannot circumvent the
need for the plaintiffs’ “cause of action, as a whole,” to
satisfy the predominance requirement of Rule 23(b)(3).
• As that court colorfully explained, “a district court cannot
manufacture predominance through the nimble use of
subdivision (c)(4).”
• Castano v. Am. Tobacco, 84 F.3d 734, 745 n.21 (5th Cir. 1996).
©2016 Seyfarth Shaw LLP
Second Circuit: In re Nassau Cnty. Strip
Search Cases
• The Second Circuit disagrees with the Fifth Circuit.
• In the Second Circuit, “courts may use subsection (c)(4)
to single out issues for class treatment when the action
as a whole does not satisfy Rule 23(b)(3).”
• In re Nassau Cnty. Strip Search Cases, 461 F.3d 219, 226 (2d Cir.
©2016 Seyfarth Shaw LLP
Ninth Circuit: Valentino v. CarterWallace, Inc.
• The Ninth Circuit has stated a rule consistent with the
• See generally Valentino v. Carter-Wallace, Inc., 97 F.3d 1227,
1234 (9th Cir. 1996) (“Even if the common questions do not
predominate over the individual questions so that class
certification of the entire action is warranted, Rule 23 authorizes
the district court in appropriate cases to isolate the common
issues under Rule 23(c)(4)(A) and proceed with class treatment of
these particular issues.”).
• Note this court did find, however, that the district court’s
certification order was deficient in failing to fully analyze the
predominance issue or explain how the issues certified could be
tried on a class basis.
©2016 Seyfarth Shaw LLP
Ninth Circuit: Valentino v. CarterWallace, Inc.
• The Ninth Circuit has recently reiterated this view:
• “If individuals who signed class action waivers are excluded from
the "Meal Break" and "Wage Statement" subclasses, then these
subclasses, along with the "No-Signed-Waiver" subclass, would
satisfy Federal Rules of Civil Procedure 23(a)(1)—(4). We need not
decide whether these subclasses, as modified, would satisfy
the predominance requirement of Rule 23(b)(3).”
Avilez v. Pinkerton Gov't Servs., 596 Fed. Appx. 579 (9th Cir. Cal.
• But see Stockwell v. City & County of San Francisco, 2015 U.S. Dist.
LEXIS 61577, * 26-27 (N.D. Cal. May 8, 2015) (denying issue certification
where plaintiffs sought a “liability-only class under 23(b)(3), rather than a
liability and injunctive relief class under 23(b)(2)”)
©2016 Seyfarth Shaw LLP
Third Circuit: Gates v. Rohm & Haas
• The Third Circuit does not side with either of these
positions, but rather has adopted a multi-factor
balancing test.
• See Gates v. Rohm & Haas, 655 F.3d 255, 272 (3d Cir. 2011).
• district courts should consider, among other factors, the type of
claim(s) and issue(s); complexity of the case; efficiencies to be
gained in light of realistic procedural alternatives; substantive law
including choice-of-law and carving at the joint; constitutional and
statutory rights of class members and defendant(s); preclusion or
lack thereof; fairness; the risk subsequent triers of fact will need to
reexamine evidence and findings from resolution of the common
©2016 Seyfarth Shaw LLP
Sixth Circuit: Olden v. LaFarge Corp.
• The Sixth Circuit has approved the use of issues classes
to bifurcate class trials into liability phases and damages
• See Olden v. LaFarge Corp., 383 F.3d 495, 509 (6th Cir. 2004).
©2016 Seyfarth Shaw LLP
Fourth Circuit: Gunnells v. Healthplan
Servs., Inc.
• The Fourth Circuit has acknowledge the split in
approaches and has stated, “we have no need to enter
that fray” yet explained that the “theory” of the rule is that
efficiency can be achieved by adjudicating certain
common issues “even though other issues in the case
may have to be litigated separately by each class
• Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 441 (4th Cir.
©2016 Seyfarth Shaw LLP
Eighth Circuit: In re St. Jude Medical, Inc.
• The Eighth Circuit likewise has not taken a position.
• See In re St. Jude Medical, Inc., 522 F.3d 836, 841 (8th Cir. 2008)
©2016 Seyfarth Shaw LLP
Butler v. Sears Roebuck & Co., And
Related Cases
• The Supreme Court declined to take up three cases
where the Sixth, Seventh, and Ninth Circuits certified
classes where liability issues were certified despite the
need for individualized damages hearings.
• Butler v. Sears Roebuck & Co., 727 F.3d 796 (7th Cir. 2013);
• In re Whirlpool Corp. Front-Loading Washer Products Liability
Litigation, 722 F.3d 838 (6th Cir. 2013) (“Glazer v. Whirlpool”);
• Cobb v. BSH Home Appliances Corp., No. No. 13-cv-80000, 2013
U.S. App. LEXIS 7023 (9th Cir. Apr. 1, 2013).
©2016 Seyfarth Shaw LLP
Butler v. Sears Roebuck & Co., And
Related Cases
• The Seventh Circuit invoked Rule 23(c)(4) and rejected the
defendant’s argument that that common issues did not predominate
because individual inquiries would be needed to determine whether
any particular class member’s machine grew mold or experienced
control unit failure.
• “a class action limited to determining liability on a class-wide basis,
with separate hearings to determine—if liability is established—the
damages of individual class members, or homogeneous groups of
class members, is permitted by Rule 23(c)(4) and will often be the
sensible way to proceed.”
• Butler, 727 F.3d at 800.
©2016 Seyfarth Shaw LLP
Contours Of Courts’ Application Of Rule
23(c)(4) Since Wal-Mart v. Dukes
• Recent developments in class action law have served to
make issue certification a more attractive option for
named plaintiffs seeking to advance to the class
certification phase of their cases.
©2016 Seyfarth Shaw LLP
McReynolds v. Merrill Lynch, Pierce,
Fenner & Smith, Inc.
• McReynolds v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 672 F.3d 482 (7th Cir. 2012) is a primary example.
• Plaintiff represented a class of 700 current and former
African-American financial advisors.
• He alleged Merrill Lynch had two company-wide policies
that discriminated against the putative class:
• a “teaming” policy, which allowed brokers in individual locations to
decide with whom to partner (e.g., “little fraternities,” 672 F.3d at
• an “account distribution” policy which established a competitiontype process for dividing up accounts of former employees
amongst remaining brokers.
©2016 Seyfarth Shaw LLP
McReynolds v. Merrill Lynch, Pierce,
Fenner & Smith, Inc.
• There, the Seventh Circuit reversed a decision denying
class certification, holding that issue certification is
appropriate to determine: (1) whether those policies had
a disparate impact on African American financial
advisors; and (2) if so, whether they are nonetheless
justified by business necessity.
• McReynolds, 672 F.3d at 489 (“whether . . . [the teaming policy]
causes racial discrimination and whether it nonetheless is justified
by business necessity are issues common to the entire class and
therefore appropriate for class-wide determination”).
©2016 Seyfarth Shaw LLP
McReynolds v. Merrill Lynch, Pierce,
Fenner & Smith, Inc.
• Plaintiff sought injunctive relief under Rule 23(b)(2) only,
not money damages.
• Id. at 484, 491.
• The Court of Appeals still found that issue certification
was appropriate, even though “[o]bviously a single
proceeding, while it might result in an injunction, could
not resolve class members’ claims. Each class member
would have to prove that his compensation had been
adversely affected by one or both of the practices and if
so what loss he sustained--and remember that the class
has 700 members.”
• Id. at 490-91.
©2016 Seyfarth Shaw LLP
McReynolds v. Merrill Lynch, Pierce,
Fenner & Smith, Inc.
• In an unusual move, the Seventh Circuit opined in favor
of certification of the issue of whether the challenged
practices were unlawful.
• See McReynolds, 672 F.3d at 492 (“We have trouble seeing the
downside of the limited class action treatment that we think would
be appropriate in this case”).
• On remand, the district court granted certification under
Rule 23(b)(2) & Rule 23(c)(4) “limited to determining the
issues of: (1) whether [the policies] have or had a
disparate impact … and (2) if so, the appropriateness of
any classwide final injunctive … relief”
• Order, 05-CV-6583 (ECF No. 534) (N.D. Ill. July 13, 2012).
©2016 Seyfarth Shaw LLP
McReynolds v. Merrill Lynch, Pierce,
Fenner & Smith, Inc.
• As for money damages (e.g., backpay awards,
compensatory damages, punitive damages), the appellate
court wrote that in “the next stage of the litigation, should the
class-wide issue be resolved in favor of the plaintiffs,” “the
stakes in each of the plaintiffs’ claims are great enough to
make individual suits feasible” because financial advisors
each earn more than $100,000.
• 672 F.3d at 492.
• But in those suits, at least, the question of whether Title VII
has been violated by Merrill Lynch will be settled through
preclusion and will not need to be “determined anew in each
• Id.
©2016 Seyfarth Shaw LLP
United States & The Vulcan Society v.
The City of New York
• Developments in the Second Circuit are interesting to
follow in light of its history of case law favoring the use of
the class certification mechanism.
• United States & The Vulcan Society v. The City of New York, 276
F.R.D. 22 (E.D.N.Y. 2011) is a prime example.
©2016 Seyfarth Shaw LLP
United States & The Vulcan Society v.
The City of New York
• The court revisited its certification of a class action for
the liability phase of a suit challenging hiring tests used
to select entry-level firefighters for the city. The
Department of Justice and a group of intervenors
contend those tests have a disparate impact on AfricanAmerican and Hispanic applicants.
• Id. at 28 (noting that in 2009, the court had certified a liabilityphase class under Fed. R. Civ. P. 23(b)(2)).
©2016 Seyfarth Shaw LLP
United States & The Vulcan Society v.
The City of New York
• After the Supreme Court’s ruling in Wal-Mart, the city
moved for decertification, arguing that decision
unequivocally precluded certification of a class under
that rule for remedies that included backpay and benefits
and compensatory damages.
• Id. at 27-28.
• While the plaintiff-intervenors conceded that the class
could no longer be certified under that rule, they argued
instead that it met the requirements of Rule 23(b)(3).
• Id. at 28.
©2016 Seyfarth Shaw LLP
United States & The Vulcan Society v.
The City of New York
• Acknowledging the significance of that ruling, the court
explained that “[a]fter Wal-Mart, it is clear that claims for
neither backpay nor compensatory damages may be
certified for class treatment under Rule 23(b)(2), at least
where those claims are more than wholly incidental to
the injunctive relief sought by the class.”
• Id. at 33.
©2016 Seyfarth Shaw LLP
United States & The Vulcan Society v.
The City of New York
• However, the court then relied on Rule 23(c)(4) to
conclude that its initial order bifurcating the case into a
“liability phase” and a “remedial phase” under Rule
42(b), coupled with the fact that the “Second Circuit has
consistently endorsed a broad reading of Rule 23(c)(4),”
meant that the certification order should stand.
• Id. at 31, 33,
• The court explained, “[i]ssue certification of bifurcated
liability-phase questions is fully consistent with WalMart’s careful attention to the distinct procedural
protections attending (b)(2) and (b)(3) classes.”
• Id. at 34.
©2016 Seyfarth Shaw LLP
United States & The Vulcan Society v.
The City of New York
• Because Rule 23(b)(2) classes arise where an injunction
provides indivisible relief to all class members at once,
and because in a disparate impact case, “[t]he initial
classwide phases of a disparate impact claim similarly
focus on the defendant’s employment actions vis-à-vis
the protected group as a whole[,]” the bifurcated class
certification order entered for liability purposes was not
affected by Wal-Mart.
• Id.
©2016 Seyfarth Shaw LLP
United States & The Vulcan Society v.
The City of New York
• The court then decided that its liability phase class
certification order under Rule 23(b)(2) and 23(c)(4)
survives Wal-Mart.
• Id.
• The court concluded, “even where class plaintiffs file a
complaint seeking non-incidental individual monetary
relief, the classwide liability questions raised by their
disparate impact and pattern-or-practice disparate
treatment claims are properly certified under Rule
23(b)(2) and (c)(4).”
• City of New York, 276 F.R.D. at 35.
©2016 Seyfarth Shaw LLP
United States & The Vulcan Society v.
The City of New York
• But compensatory damages could not be determined on
a classwide basis as the intervenors argued, even
though some issues that would form the logical
predicate for making compensatory damages awards
would be common issues that can be certified (such as
the characteristics of a New York firefighter’s job).
• Id. at 45.
©2016 Seyfarth Shaw LLP
United States & The Vulcan Society v.
The City of New York
• The claims of two subclasses – the “non-hire victim” and
the “delayed-hire victim” subclasses – were certified
under Rule 23(b)(3) and (c)(4) because “[e]ven though
individual proceedings will be necessary to determine a
particular claimant’s eligibility to receive individual relief
and what relief is available,” along with whether they
mitigated their losses and the city’s actions caused
compensable noneconomic losses, the resolution of
those individual questions “is of relatively minimal
significance to the litigation as a whole.”
• Id. at 48, 49.
©2016 Seyfarth Shaw LLP
Daskalea v. Wash. Humane Soc’y
• Looking at other circuits, the pragmatic realities of how
class cases can be tried tend to drive courts’
determination of whether to certify issues classes. Some
courts have placed a burden on a plaintiff seeking to
use Rule 23(c)(4) to provide a specific proposal for how
the issue to be tried on a classwide basis can be
separated out from other issues.
• See, e.g., Daskalea v. Wash. Humane Soc’y, 275 F.R.D. 346, 369,
n.22 (D.D.C. 2011).
©2016 Seyfarth Shaw LLP
In re Bisphenol-A (BPA) Polycarbonate
Plastic Prods. Liab. Litig
• Others have analytically focused on what a jury verdict form
would look like, as a mechanism for guiding the court’s
determination of whether certifying an issues class would
efficiently resolve enough of the litigation to justify
• “[W]hat precise questions will the jury answer? Even if the
jury finds a defendant had ‘knowledge’ of the scientific debate
[over the safety of BPA], that in itself proves little. . . . Without
more specificity, the verdict form becomes increasingly
• See, e.g., In re Bisphenol-A (BPA) Polycarbonate Plastic Prods. Liab.
Litig., MDL No. 1967, Master Case No. 08-1967-MD-W-ODS, 2011
U.S. Dist. LEXIS 150015, at *29 (W.D. Mo. Dec. 22, 2011).
©2016 Seyfarth Shaw LLP
Compare Miri v. Dillon with Daskalea
• Depending on the facts, constitutional questions, in particular,
have been found to be appropriate for issue certification.
• See, e.g., Miri v. Dillon, No. 11-CV-15248, 2013 U.S. Dist. LEXIS
68211, at * 31 (E.D. Mich. May 14, 2013) (“considering the nature of
Plaintiffs’ and the putative class members’ identical Fourth
Amendment claim, if Plaintiffs establish liability as to one class
member, it will succeed in establishing liability as to all other class
• But see Daskalea, 275 F.R.D at 361 (“the very heart of Plaintiffs’
claims” would vary from person to person, since deciding liability
would require the court to analyze the private interest that was
affected by the public action, and a wide range of alleged
deprivations were alleged (some had their pets taken against their
will, other pets were destroyed and others merely detained them,
some were forced to undergo unwanted medical treatment, etc.).
©2016 Seyfarth Shaw LLP
For Further Information
• You can follow case law developments in all areas of
class action law ̶ and particularly as they apply to
employment class actions ̶ by visiting Seyfarth Shaw’s
Workplace Class Action Blog at:
©2016 Seyfarth Shaw LLP
Best Practices
for Issue
Andrew Trask
McGuireWoods LLP
[email protected]
Raise it if you want it
Court has no obligation to
employ Rule 23(c)(4) sua
U.S. Parole Comm'n v.
Geraghty, 445 U.S. 388, 408
Issue certification not a “Hail
Mary” play
“Plaintiff has provided no
reason why bifurcation of liability and
damages would be appropriate in
the instant case, or why proceeding
on a class basis as to liability would
address the more fundamental
problem that
Plaintiff is apparently unable to
provide a measure of damages
limited to Plaintiff's liability case.”
Werdebaugh v. Blue Diamond
Growers, 2014 U.S. Dist. LEXIS
173789 (N.D. Cal. Dec. 15, 2014)
(denying certification after plaintiff
proposed Rule 23(c)(4) in reply
Doug Flutie, hero of BC fans everywhere
Issue Certification needs to be
Supposed to “carve at the joint.”
 McReynolds v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 672 F.3d 482,
491 (7th Cir. 2012).
Issues require clear and specific
 Fed. R. Civ. P. 23(c)(1)(B).
 Gates v. Rohm and Haas Co., 655 F.
3d 255, 273 (3d Cir. 2011).
Explain effects of certified
issue clearly.
Test is whether the issue will
“materially advance” the
 In re Motor Fuel Temp. Sales Pracs.
Litig., 292 F.R.D. 652 (D. Kan. 2013)
(allowing 23(c)(4) certification where
certified issue would be dispositive of
litigation in either direction).
Courts want to make things
simpler by certifying an issue.
 Gates v. Rohm and Haas Co., 655 F.
3d 255, 273 (3d Cir. 2011) (no 23(c)(4)
certification where underlying issues
were complex & intertwined).
Know what the jury
instructions will look like
Engle & Progeny
Engle v. Liggett Group, Inc., 945
So. 2d 1046 (Fla. 2006).
Brown v. R.J. Reynolds Tobacco
Co., 611 F.3d 1324-35 (11th Cir.
Graham v. R.J .Reynolds Tobacco
Co., 2015 U.S. App. LEXIS 5657
(11th Cir. Apr. 8, 2015).
In re Whirlpool (N.D. Ohio, 6th
Defendants – Frame as
Superiority Issue
“A trial court can sever and try
only certain issues on a class
basis under Rule 23(c) (4) (A).
The few issues that might be
tried on a class basis in this
case, balanced against issues
that must be tried individually,
indicate that the time saved by a
class action may be relatively
Abed v. AH Robins Co., 693 F.2d
847 (9th Cir. 1982).
Know your jurisdiction
2d, 4th, & 9th Circuits – allow
issue certification even where
certification otherwise
 In re Nassau Cty. Strip Search Cases,
461 F.3d 219, 223 (2d Cir. 2006) (issue
certification allowed even if certification
as a whole not possible).
Gunnells v. Healthplan Servs., Inc., 348
F.3d 417, 439 (4th Cir. 2003) (Rule
23(c)(4) applies before Rule 23(b)(3)).
Avilez v. Pinkerton Gov’t Servs.,
Inc., 2015 U.S. App. LEXIS 3657, (9th
Cir. Mar. 9, 2015) (remands for issue
certification to try liability)
Know your jurisdiction
7th and 10th Circuits – Issue
certification can be used to
sidestep damages problems.
Butler v. Sears, Roebuck & Co., 727 F.3d
796, 800-01 (7th Cir. 2013), ("a class
action limited to determining liability on a
class-wide basis, with separate hearings
to determine--if liability is established--the
damages of individual class members, or
homogeneous groups of class members,
is permitted by Rule 23(c)(4) and will often
be the sensible way to proceed”).
Wallace B. Roderick Revocable Living
Trust v. XTO Energy, Inc., 725 F.3d 1213,
1220 (10th Cir. 2013) (after Comcast,
class certification under Rule 23(c)(4)
remains one way "to preserve the class
action model in the face of individualized
Know your jurisdiction
3d Circuit – Uses ALI
Gates v. Rohm and Haas Co., 655 F.
3d 255, 273 (3d Cir. 2011) (declining to
certify issues class).
Rule of thumb: complex issues of
liability or causation unlikely to make
for good 23(c)(4) certification.
Know your jurisdiction
5th Circuit – issue certification
for housecleaning only.
Castano v. Am. Tobacco Co., 84 F.3d
734, 745 n.21 (5th Cir. 1996).
Think through the
What will notice look like?
Who gets notice?
How will it describe claims?
How will preclusion work?
Does it only apply to the
Is resolution of an issue a
“judgment” under Rule
Can there be an appeal?
Is this a “full and final
Remember the Constitution
Bifurcation for trial can get
7th Amendment – re-examination
In re Rhone-Poulenc Rorer,
Inc., 51 F.3d 1293, 1303 (7th
Cir. 1995).
Rule of constitutional avoidance
Ortiz v. Fibreboard Corp., 527
U.S. 815, 832-33 (1999).
And the Rules Enabling Act
Can’t add substantive rights
Can’t deprive defendant of
legitimate defenses.
Professor Martin Redish
Primary proponent of REA arguments
For more, see
Available from LexisNexis
Plaintiff-side commentary:
Jenna C. Smith, "Carving at the Joints": Using
Issue Classes to Reframe Consumer Class
Actions, 88 WASH. L. REV. 1187 (2013).
Joseph A. Seiner, The Issue Class, 56 B.C. L.
REV. 121 (2015).
Defense-side commentary:
Mark A. Perry, Issue Certification Under Rule
23(c)(4): A Reappraisal, 62 DEPAUL L. REV.
733 (2013).
Laura J. Hines, Codifying the Issue Class
Action, 16 NEV. L.J. 625 (2016).
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