The death knell of issue certification and why that matters after Wal-Mart v. Dukes.

AuthorSpektor, Andrey


The Supreme Court has become increasingly attuned to the reality of modern civil litigation that sees litigants spending a fortune to "try" cases that almost never go to trial.' By most accounts, well over ninety percent of civil cases settle or are otherwise resolved without trial, (2) curtailing a process that still costs companies billions of dollars a year and consumes a growing share of their revenues. (3) At every milestone in the life of a case--from complaint to judgment (or more realistically, from investigation to appeal)--costs escalate exponentially, putting pressure on defendants to settle. A denial of a motion to dismiss, for instance, cranks up discovery and, as a result, the billable-hour meter. (4)

Few litigation milestones are as significant as class action certification. Indeed, the very Rules that permit class treatment recognize that a certification order "may force a defendant to settle rather than incur the costs of defending a class action and run the risk of potentially ruinous liability." (5) This concern, and the related worry that a denial of certification can, as a practical matter, spell the end of litigation for plaintiffs, have earned certification orders the ominous "death knell" ascription, as well as a separate provision for challenging them through interlocutory appeals. (6)

It is not surprising then that the Supreme Court has taken a special interest in issues surrounding class certification. After tightening up the pleading standard in the antitrust context--noting that "the threat of discovery expense" can push some defendants to "settle even anemic cases" (7)--and after it confirmed that the standard applies in all other civil cases, (8) it turned to class actions. This article explores the Court's recent jurisprudence in the class action area.

The Court started off its quest in earnest in the much-publicized Wal-Mart Stores, Inc. v. Dukes (9) litigation, producing an opinion that was instantly dubbed a watershed moment in class action jurisprudence. (10) Five Justices agreed that not a single Rule 23(a)(2) (11) common question united a class of 1.5 million Wal-Mart employees challenging the corporate culture of a company that, according to them, discriminated against women. Dukes has not left the mark that most had envisioned. The class was just too big, the challenged policies too discretionary, and the case too unusual for it to control the outcome of other national class actions, where more concrete policies or transgressions tic class members together. But Dukes is hardly inconsequential. By limiting questions that quality as common, it has--depending on whom you ask--refined or poisoned the Rule 23(b)(3) (12) predominance inquiry, which weighs common questions against individual ones to decide whether class action treatment is justified. Quite simply, after Dukes, class plaintiffs have fewer common questions to take to the (b)(3) bank.

This has been less problematic for resourceful class counsel who utilize "issue certification" to isolate common elements of class claims while leaving individual parts for individual adjudications. Courts have generally sanctioned this controversial interpretation of Rule 23(c)(4). (13) In fact, most have completely brushed aside individualized questions related to damages when certifying Rule 23(b)(3) class actions, finding common issues to predominate individual ones despite the frequent need for independent hearings to assess particular injury. Other courts, employing more innovative uses of issue certification, have even severed elements pertaining to liability, such as causation, for individual trials.

A 2013 high court decision, Comcast Corp. v. Behrend, (14) might have put an end to issue certification, and to paraphrase our Vice-President, that's a big darn deal. Again, the Court has chosen an antitrust action to make an important pronouncement. The proponents of class treatment in Comcast, Justice Scalia wrote for a 5-4 majority, failed to show that damages from the alleged antitrust violation were susceptible to classwide proof. (15)

The significance of Comcast has, and will continue to be, debated. Some will interpret Comcast as requiring classwide proof of damages in every (b)(3) class. It is difficult to square that reading with another class-action decision from the same term, Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, (16) where the Court rejected the notion that a plaintiff seeking class certification must "prove that each 'elemen[t] of [her] claim [is] susceptible to classwide proof.'" (17) But the dissent's view of Comcast, which purports to limit the majority decision for "this day and case only," (18) is no more persuasive; it too has, in effect been rejected, by the Court's subsequent vacaturs of decisions that minimized damage-related determinations. More likely, Comcast has added injury to the predominance inquiry, requiring courts to weigh individual issues across entire class claims--liability and damages--in deciding whether (b)(3) class treatment is appropriate. This has the effect of disarming class plaintiffs by taking away their most potent weapon against Dukes--issue certification.

This article begins by examining the effect of Dukes, detailing in Section I how the Court's pronouncement has been felt most acutely by class plaintiffs seeking to certify Rule 23(b)(3) classes. (19) Section II explains why that is significant in light of the Court's most recent cases and orders. (20) It profiles Comcast's unusual trip through the appellate process and offers two competing interpretations of the Court's opinion around which distinct camps at the lower court level have already coalesced. Neither camp, however, the Section argues, understands the disagreement between the majority and dissenting views in Comcast or the Court's other 2013 decision and orders. Section III concludes that when read in context, Comcast guts the controversial lower court practice of certifying discrete issues for class treatment. (21) That matters because after Dukes, trying common issues has been the class counsel's most reliable tool navigating hostile Rule 23(b)(3) terrain.


    Wal-Mart v. Dukes has not had the effect that most predicted. By asking how a discretionary employment policy will be adjudicated for 1.5 million class members, it elevated a hitherto minimal inquiry of common class questions into a forward-looking test about common answers. This has not been the blow to non-damage (22) that commentators and the Dukes dissent predicted for employment litigation. Most employment policies have some uniform element to which class counsel can tie their case; most courts have not asked for more. But Dukes matters: it has influenced the more important Rule 23(b)(3) predominance requirement by limiting the type of common questions that count towards this "rigorous" inquiry.

    Although every putative class action must first satisfy Rule 23(a) (23) prerequisites (by showing numcrosity, commonality, typicality, and adequacy of representation), class counsel will usually focus on Rule 23(b) when developing their case because those elements have traditionally posed the higher hurdle. To convince a trial court that class treatment is appropriate, plaintiffs must show that they either seek to avoid inconsistent rulings, (24) are pressing for common injunctive relief, (25) or present common questions that "predominate" over individual ones and make class actions superior to other available methods "for fairly and efficiently adjudicating the controversy." (26) It is the last provision that plaintiffs generally use to seek damages on behalf of a class and is the focus of this article. (27) To be sure, some courts have awarded class-wide damages if they are "incidental" to injunctive relief. But even that practice has been put in doubt by Dukes where all nine Justices agreed that a (b)(2) certification did not permit plaintiffs to seek backpay--relief that lower courts had commonly assumed to be "incidental" to injunctions of discriminatory policies. (28)

    In Dukes, female Wal-Mart employees brought a discrimination case against the company alleging that local managers around the nation favored men in pay and promotion decisions. (29) It was undisputed that the decisions were entirely discretionary; the only "policies" that the plaintiffs could identify were the company's delegation of discretion to local managers and a general corporate culture that purportedly engendered bias against women. (30) Despite the limited overlap in the grievances of the purported class members, most judges before Dukes would likely have sided with the two lower courts that Dukes reversed, finding at least one common question, like whether providing '"[managers discretion over pay is] an unlawful employment practice[.]"' (31) But the majority wanted more--it required a uniform practice that would have compelled managers to discriminate. (32) The adjudication of that practice could, unlike plaintiffs' other allegations, be resolved on a classwide basis. (33)

    The principle criticism of Dukes is that it injected Rule 23(b)(3) predominance-like questions into the (a)(2) (34) commonality inquiry. Justice Ginsburg, writing for the dissent, lamented that the majority completely morphed the former into the latter, with unfortunate consequences for future (b)(1) and (b)(2) classes: "The Court's emphasis on differences between class members mimics the Rule 23(b)(3) inquiry into whether common questions 'predominate' over individual issues. And by asking whether the individual differences 'impede' common adjudication, ... the Court duplicates 23(b)(3)'s questions whether a 'class action is superior' to other modes of adjudication." (35) Commentators have, for the large part, echoed this criticism. (36)

    As it turns out, however, it is (b)(3) classes that have felt...

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