The Situation: The Sixth Circuit recently affirmed the certification of an issue class in a groundwater pollution case. The court endorsed a "broad" view of Rule 23(c)(4) under which common questions must predominate only within the issue being certified for class treatment, as opposed to within the entire case. Citing a circuit split on the standard for certifying an issue class, the defendants sought Supreme Court review.
The Result: The Supreme Court denied certiorari. This leaves intact the circuit split on and uncertainty around the proper standard for issue-class certification—specifically in toxic-tort cases.
Looking Ahead: Toxic-tort plaintiffs likely will seek to certify issue classes with increasing frequency. Defendants should be mindful of the conflicting case law on the certification standard as well as the potential implications of issue classes. _________________________________________________________________________
Typically, toxic-tort plaintiffs bringing federal class actions seek class certification for their claims under Rule 23(b)(3), which determines the defendant's liability for all class members. Rule 23(c)(4), however, also authorizes the certification of a class only "with respect to particular issues." To date, issue classes have not been widely sought in toxic-tort cases, largely because of the individualized issues implicated in determining causation of plaintiffs' injury and damages. The Sixth Circuit's recent ruling in Martin v. Behr Dayton Thermal Prod. LLC, 896 F.3d 405 (6th Cir. 2018), may change that. Endorsing a "broad" view of Rule 23(c)(4), Martin upheld an issue class covering the central components of liability (including general causation) while cleaving off individualized issues (such as specific causation) that otherwise precluded certification. The Sixth Circuit acknowledged that other courts have disagreed with this application of Rule 23(c)(4). The Supreme Court, however, recently declined to review the case. See No. 18-472, 2019 WL 1231762 (U.S. Mar. 18, 2019).
The plaintiffs in Martin are homeowners from Dayton, Ohio. Suing on behalf of the owners of more than 500 properties, they alleged that the defendants (Behr Dayton Thermal Products LLC, Behr America, Inc., Chrysler Motors LLC, and Aramark Uniform & Career Apparel, Inc.) contaminated two plumes of groundwater with carcinogenic chemicals and created a risk of vapor intrusion into their homes. The plaintiffs asserted property damage claims of strict products liability, negligence, nuisance, and trespass.
The district court declined to certify the claims for class treatment under Rule 23(b)(3), finding that the claims' common issues did not predominate over individual ones, because the injury-in-fact and causation elements would require individualized proof for each class member. But the district court carved out the following liability-related issues and held that they were suitable for class treatment under Rule 23(c)(4):
- Each defendant's role in creating the alleged contamination, including their historical operations, disposal practices, and chemical usage;
- Whether it was foreseeable to certain defendants that their improper handling and disposal of chemicals could cause the plumes and subsequent injuries;
- Whether certain defendants engaged in abnormally dangerous activities for which they are strictly liable;
- Whether contamination from particular facilities underlies the class areas;
- Whether the defendants' alleged contamination and subsequent inaction caused class members to incur the potential for vapor intrusion; and
- Whether the defendants negligently failed to investigate and remediate the alleged contamination.
These issues strike at the heart of liability, by addressing not only the defendants' alleged misconduct but also whether the chemicals at issue could generally cause the claimed injuries.
The Sixth Circuit affirmed the certification ruling. In doing so, the Sixth Circuit held that "Rule 23(c)(4) contemplates using issue certification … where common questions predominate within certain issues and where class treatment of those issues is the superior method of resolution"—thus opening the door to certification even when individual questions predominate for the actual causes of action. But the court acknowledged that "other circuits have disagreed about how Rule 23(b)(3)'s requirements [of predominance and superiority] interact with Rule 23(c)(4)."
In endorsing this "broad" view of issue classes, the Sixth Circuit stated that decisions from the Second, Fourth, Seventh, and Ninth Circuits "have supported this approach" of requiring only issue-specific predominance. But the court noted decisions from the Fifth and Eleventh Circuits that point toward a different, "narrow" view, under which predominance must be present for the entire cause of action (not just specific issues), so that plaintiffs cannot "manufacture predominance through nimble use of subdivision (c)(4)." Castano v. American Tobacco Company, 84 F.3d 734, 745 n. 21 (5th Cir. 1996). The Sixth Circuit further noted that the Third and Eighth Circuits have endorsed a third approach that calls for "a functional, superiority-like analysis." In rejecting these latter two approaches in favor of a broader embrace of issue classes, the Sixth Circuit reasoned that requiring predominance "for the entire cause of action would undercut the purpose of Rule 23(c)(4) and nullify its intended benefits." Invoking this circuit split, the defendants in Martin petitioned for certiorari, but the Supreme Court denied review. The Supreme Court has previously denied certiorari on this issue several times, most recently in 2012, but may take more interest in the issue if Rule 23(c)(4) is used more often.
Indeed, particularly after Martin, plaintiffs likely will seek Rule 23(c)(4) classes more often in toxic-tort litigation. Toxic-tort cases are often litigated as mass actions, where initial findings in one suit can potentially have preclusive effect in related lawsuits raising the same issues. But mass actions involve only plaintiffs who choose to file suit. Class actions, in contrast, can include all allegedly affected parties. And though individualized questions of injury and causation can frequently preclude claim-level certification for toxic-tort claims (as happened in Martin), plaintiffs guided by Martin may now seek issue classes to address issues striking at the heart of liability, gaining earlier leverage previously unavailable to them. Martin is the first appellate ruling to endorse this tactic in a toxic-tort case.
With an issue class, the individualized issues will, of course, still need to be resolved. (In Martin, the district court floated the possibility of using a special master for them.) But the potential for class-wide resolution of core issues is something plaintiffs are likely to leverage in settlement talks and elsewhere.
Three Key Takeaways
- After Martin, plaintiffs are likely to seek Rule 23(c)(4) issue classes more often in toxic-tort cases—which will give plaintiffs additional leverage in settlement negotiations.
- Defendants facing a motion to certify an issue class should argue for a narrow certification standard that requires claim-wide predominance, while also arguing that individualized inquiries predominate within the proposed issue. (For example, in a toxic-tort case, perhaps the class members' exposure varies by time or location.)
- Defendants facing a motion to certify an issue class also should emphasize the plaintiff's burden to articulate (i) the certifiable issues clearly, and (ii) how an issue class satisfies Rule 23(b)(3)'s superiority requirement, given the individualized issues that would remain.