The Advisory Committee should clarify the role of issue certification, by reinforcing that issue certification is only appropriate when a class is otherwise certifiable under Rule 23.
One of the Advisory Committee’s “front burner” issues is whether to clarify Rule 23(c)(4), establishing either that it (1) only applies when the rest of Rule 23 has been met, or (2) is an alternative route to certification for plaintiffs willing to narrow the scope of their case. As the Subcommittee Report describes the current state of issue certification:
Rule 23(c)(4) says that “[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues.” But Rule 23(b)(3) authorizes class certification under its provisions only when the court finds that common questions predominate and a class action is superior to other available methods for adjudicating the dispute. Arguably, these two provisions are not entirely in synch. Is predominance to be required only with regard to the issues specified, or must the entire case present predominant common questions? Why would plaintiffs be satisfied with limited certification if they could have full certification? Can they achieve predominance simply by dumping individual issues off the table?
Perhaps the existence of such questions explains the longstanding division in the courts about whether 23(c)(4) can be used in cases in which 23(b)(3) cannot be satisfied. At least some courts seem to think that is not permissible. But a different interpretation of the current rule might be that — at least with regard to manageability — Rule 23(c)(4) offers a technique that facilitates certification under Rule 23(b)(3). In any event, it is clear that there is a division among the courts about how the current rule should be interpreted, and that it has existed for some time. It is also reasonably clear that in some courts issue certification is quite popular. It may be that a reconciliation of these two parts of the current rule is possible, perhaps by recognizing in 23(b)(3) that its requirements are subject to the alternative and more limited certification authority in 23(c)(4). It is also possible that 23(c)(4) might be amended to elaborate on when use of issue certification is “appropriate.” It is unnerving to have such a blatant division in the circuits about what the rules permit.
(Emphases added.) There are two reasons for this “blatant division.” The first is that, despite the drafters’ express belief that Rule 23(c)(4) was “obvious[ly]” just clarifying the process of certification under the first two sections of the Rule, its language is ambiguous enough to create confusion about where it fits into the certification scheme.
The second reason is that the stakes involved in establishing the proper role of issue certification are quite high. The question of how to interpret Rule 23(c)(4) is really a question of whether Rule 23(b)(3) has any teeth whatsoever. Even some of the courts that have allowed 23(c)(4) certification have explicitly recognized that it should only apply in limited circumstances (such as when the plaintiffs seek injunctive relief instead of monetary damages).
Professor Laura Hines has identified a strong argument—based in the structure and legislative history of Rule 23—that issue certification is only appropriate if the class is otherwise certifiable under Rule 23(a) and (b). (In fact, Rule 23(c)(4) was originally intended—as the late Benjamin Kaplan wrote—to make a “perfectly obvious point” about how the certification process would work under Rules 23(a) and (b).) And as the Supreme Court pointed out in Wal-Mart Stores, Inc. v. Dukes, Rule 23(b)(3) exists to ensure due process for class members seeking monetary damages: in other words, a monetary damages class is only appropriate when common issues predominate and the class action is superior to other methods of deciding the dispute. An “issues class” for monetary damages lacks those overall protections.
That structural argument is buttressed by sound judicial policy. When the entire class has been certified, it is possible to tell which claims are being tried, and what preclusive effect they will have, win or lose. Once a court begins carving up a class in order to make it certifiable, these questions become much murkier, undermining the original purpose of Rule 23.
If the Advisory Committee is going to allow issue certification even when Rule 23 has not otherwise been satisfied, it will need to think through all of the various effects of that decision in other parts of the Rule. Does an issues class have different notice requirements than a Rule 23(b)(3) class? (For example, does the class member need notice that she will be responsible for her own damages trial?) Is an issues class verdict a “judgment” under Rule 23(c)(3)? How are class attorneys to be compensated for prosecuting an issues class? Can one settle a Rule 23(c)(4) class without running afoul of the Court’s directions in Amchem and Ortiz?
Deciding the proper scope of of an issues class–like defining the proper scope of Rule 23(c)(4)–cannot be done effectively in a vacuum. Which is, of course, is what the structuralists have been arguing all along.