Rule 23(c)(4) Issue Certification: Reconciling the Conflict With Rule 23(b)(3)'s Predominance Requirement

Description

Proposed class actions seeking monetary damages are often difficult to certify because common issues do not predominate over individualized issues as required by Rule 23(b)(3). Rule 23(c)(4) provides that "[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues."

Although Rule 23(c)(4) has been part of the rule since the landmark 1966 amendments, it was often overlooked until the Supreme Court's decision in Wal-Mart v. Dukes. Plaintiffs now routinely seek limited issue certification for purported common issues, such as liability, arguing that questions of injury, reliance, or causation should be left for individual cases. When approved, this approach increases defendants' exposure by permitting certification in some cases that would otherwise fail the Rule 23(b)(3) standards.

The federal circuits are now in a three-way split on how issue certification should be treated under Rule 23(b)(3)'s predominance requirement. While the Fifth Circuit has taken the textual view in Castano v. American Tobacco Co. that permits issue certification only if the class first qualifies under Rule 23(b)(3), the Ninth, Sixth, Second, and Seventh Circuits have adopted the opposite view that Rule 23(c)(4) certification does not require predominance. The Third Circuit has clarified and heightened the test in Russell v. Educ. Comm’n for Foreign Med. Graduates, 20-2128 (3d Cir. Sept. 24, 2021), but offers both sides plenty to consider. The remaining circuits are uncommitted, leaving the district courts to address the matter.

Listen as our panel of experienced class action litigators analyzes the varying circuit court positions on Rule 23(c)(4) issue classes and the implications of practitioners' decisions when pursuing or opposing class certification.