(Reuters) - The 6th U.S. Circuit Court of Appeals ruled Monday (2018 WL 3421711) that hundreds of Ohio homeowners with groundwater contamination claims against Chevron, Aramark, Behr America and Behr Dayton can litigate as a class to determine seven key issues in the case, including each defendant’s responsibility for the alleged contamination.
That may sound straightforward. Appellate courts have long allowed so-called liability class actions, in which a single proceeding tests class members’ theory of defense’s wrongdoing, with subsequent individual damages hearings if plaintiffs win. You may recall, for instance, the notorious “moldy washer” cases from a few years back, in which both the 6th and 7th Circuits certified liability classes despite defense arguments that consumer claims were too varied to meet class action requirements. (Whirlpool, in an ironic twist, went on to win the liability trial in Ohio!)
But the 6th Circuit’s ruling Monday is not just another affirmation of a liability class. In fact, as the appellate panel – Judges Ronald Gilman, John Rogers and Jane Stranch – pointed out, the trial judge in the Behr case specifically rejected certification of a liability class. The trial judge found the proposed class could not meet the class action predominance requirement spelled out in Rule 23(b)(3) of the Federal Rules of Civil Procedure. Under that rule, as you surely know, class actions can only be certified when “questions of law or fact common to class members predominate over any questions affecting only individual members.”
Instead, the 6th Circuit upheld limited class certification in the Behr case under a different Rule 23 provision, 23(c)(4). (I apologize for the gobbledygook but it is, alas, unavoidable.) The “limited issues” clause says that “when appropriate, an action may be brought or maintained as a class action with respect to particular issues.”
The 6th Circuit said it was joining the 2nd, 4th, 7th and 9th Circuits to hold courts can certify classwide resolution of certain common issues even in cases in which the entire class action can’t be certified because it does not meet the predominance requirement. The key question, the Behr court said, is whether the predominance requirement completely trumps the limited issue provision – or whether that provision allows courts to consider predominance on an issue-by-issue basis. The 6th Circuit said it was adopting the “broad view” articulated by its sister circuits.
“The broad view retains the predominance factor, but instructs courts to engage in the predominance inquiry after identifying issues suitable for class treatment,” wrote Judge Stranch in Monday’s opinion. “Accordingly, the broad view does not risk undermining the predominance requirement.”
The 6th Circuit decision undoubtedly empowers class action plaintiffs, said Ned Miltenberg of the National Legal Scholars Law Firm, who argued for the homeowners at the 6th Circuit. It bolsters the prevailing appellate wisdom that under 23(c)(4), class plaintiffs can obtain classwide resolution of common issues – including all-important liability questions – when they’d otherwise be tripped up by the predominance requirement in 23(b)(3).
“Predominance remains a factor, but not decisive,” said Miltenberg.
The 6th Circuit arguably weakened the predominance inquiry more in the Behr case than other appellate courts have in previous decisions allowing certification of limited issues. In the Behr defendants’ opening appellate brief, Thompson Coburn argued that even circuits that have taken a broad approach to limited issue certification have not allowed certification under 23(c)(4) after rejecting a liability class under 23(b)(3). Yet that’s what happened in this case. Defendants called the outcome an “evisceration” of the predominance requirement.
“Allowing a court to refine the certifiable issues more narrowly and more narrowly until predominance can be manufactured upends the balance between efficiency and fairness which stands at the heart of the predominance requirement and the class-action procedure as a whole,” defendants said.
Will the 6th Circuit ruling hold up? As defendants pointed out in their brief and the 6th Circuit noted in its opinion, not every appellate court agrees with the “broad view” of considering predominance on an issue-by-issue basis when classes seek certification under 23(c)(4). In a footnote in 1996’s Castano v. American Tobacco (84 F.3d 734), the 5th Circuit said the limited issue clause doesn’t allow class plaintiffs to sidestep the predominance requirement. “A district court cannot manufacture predominance through the nimble use of subdivision (c)(4),” the Castano court said. “The proper interpretation of the interaction between subdivisions (b)(3) and (c)(4) is that a cause of action, as a whole, must satisfy the predominance requirement of (b)(3) and that (c)(4) is a housekeeping rule that allows courts to sever the common issues for a class trial.”
The 11th Circuit has offered “tenuous” support for the 5th Circuit’s interpretation of the interaction between the two Rule 23 provisions, the 6th Circuit said. But it said Castano seems more and more like an outlier. Its “issue-class footnote has not been adopted by any other circuit,” the 6th Circuit said, “and subsequent caselaw from within the 5th Circuit itself indicates that any potency the narrow view once held there has dwindled.”
The plaintiffs in the Behr case argued in their brief to the 6th Circuit that Laura Hines, the leading scholar on issues of class certification – a former defense attorney who was on the winning side in the Castano case and remains a proponent of the 5th Circuit’s reasoning – nevertheless concluded in a 2014 paper that the Castano court stands alone. In 2015, the brief said, the Federal Advisory Committee on Civil Rules said there was no need to address tension between Rule 23’s predominance requirement and provision permitting issues certification because “the various circuits seem to be in accord about the propriety of such treatment.”
Circuit by circuit, plaintiffs are winning the right to seek classwide resolution of critical questions through the limited issue provision. If four justices of the Supreme Court are worried about that, even a sliver of division among the appellate courts would justify taking up the issue. That’s got to be a bit worrisome for plaintiffs, especially with President Trump’s new Supreme Court nominee, D.C. Circuit Judge Brett Kavanaugh, waiting for confirmation hearings.
I emailed Ed Cohen of Thompson Coburn, who argued at the 6th Circuit for Behr defendants, for comment but didn’t hear back.
The views expressed in this article are not those of Reuters News.