Sixth Circuit Weighs In On Issue Certification

We’ve commented before in this space about the ongoing debate concerning the relationship between the predominance requirement of Rule 23(b)(3) and “issue certification” under Rule 23(c)(4). Yesterday, the Sixth Circuit weighed in on the subject. See Martin v. Behr Dayton Thermal Prods., No. 17-3663 (6th Cir. July 16, 2018). The case related to a “Superfund site” comprising a “low income area” of some 540 proprieties outside of Dayton, Ohio. Typical of the languid track of most class action actions, the Sixth Circuit addressed the district court’s decision on an interlocutory appeal 10 years after the case was filed. The lower court concluded that Ohio law regarding injury-in-fact and causation meant that Plaintiffs could not meet Rule 23(b)(3)’s predominance requirement. But the court rejected treating predominance as a threshold requirement and certified seven different liability issues for class treatment. The lower court elided arguments about “back end” individual issues, stating in its opinion that it would “establish procedures by which the remaining individualized issues concerning fact-of-injury, proximate causation, and extent of damages can be resolved.”

The Sixth Circuit acknowledged that “other circuits have disagreed about how Rule 23(b)(3)’s requirements interact with Rule 23(c)(4).” Under one view, described as the so-called “broad view,” the predominance and superiority prongs are examined after common issues have been identified for class treatment under Rule 23(c)(4). Under this view, Rule 23(c)(4) permits certification even where predominance “has not been satisfied for the cause of action as a whole.” Notably, the Sixth Circuit, citing the Fourth Circuit’s decision in Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 439-45 (4th Cir. 2003),  concludes the Fourth Circuit has adopted this “broad view,” something that Judge Dever, at least, has found to be “unclear.” See Farrar-Dairy v. Miller, No. 5:06-CV-160-D (E.D.N.C. 2008). Under the “narrow view,” predominance must instead be satisfied for the cause of action as a whole.

Prior to the Martin decision, the Sixth Circuit had not weighed in on the interplay between 23(b)(3) and 23(c)(4). The Martin panel found more convincing the “broad view,” which it viewed as giving meaning to the free-standing statement contained in Rule 23(c)(4). The Sixth Circuit expressly noted that the “superiority” inquiry mandated by the Rule “functions as a backstop against inefficient use of Rule 23(c)(4),” which was exactly the point made by Judge Joseph Anderson, in an opinion we analyzed here. The Sixth Circuit found that “a requirement that predominance must first be satisfied for the entire cause of action would undercut the purpose of Rule 23(c)(4) and nullify its intended benefits.” Applying this “broad view” of Rule 23(c)(4), the Sixth Circuit held that each of the liability issues identified by the district court could be “resolved with common proof” and the requisite “individualized inquiries” encompassed in those inquiries did not “outweigh common questions.” The Court acknowledged that the resolution of the certified issues would not resolve the question of Defendants’ liability either with respect to the class or even any individual class member, but it was enough for the Court that this resolution would “go a long way toward doing so.” One wonders what Justice Scalia might think of this view, given his observation in Walmart Stores, Inc. v. Duke, that Rule 23(a) requires a “common contention . . . of such a nature that . . . determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”

The Sixth Circuit finally confronted Defendants’ arguments regarding the effect of the district court’s rulings on their Seventh Amendment right to trial by jury. But the panel punted – noting that “because the district court has yet to select and implement a procedure for resolving Plaintiffs’ claims, no Reexamination Clause problems exist at this time.”

In an ironic send-off, given the lapse of ten years since the filing of the case, the Sixth Circuit returned the case to the lower court “with the expectation that it be moved expeditiously toward resolution.” As with most certified class actions, that “resolution” likely means a settlement. Stay tuned.