In In re Motor Fuel Temperature Sales Pracs. Litig., 2013 WL 1397125 (D. Kan. Apr. 5, 2013), the court certified a Rule 23(c)(4) “issue class” of plaintiffs asserting consumer protection claims with respect to liability issues only. The “issue class” strategy has gained popularity among plaintiffs since the Supreme Court decision in Wal-Mart v. Dukes (2011) and may see increased attention in the wake of Comcast v. Behrend last month. Both Dukes and Behrend imposed rigorous predominance requirements for class certification, and plaintiffs may view issue classes as a way to navigate around those decisions.
In re Motor Fuel involved allegations that the defendant misrepresented the price of gasoline by selling it without disclosing or adjusting for the effect of temperature on the energy content of the fuel. Plaintiffs sought an issue class certification as to liability issues under Rule 23(c)(4), which states that “[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues.” In certifying the liability issue class, the Motor Fuel court stated that “liability” issues would include all substantive elements of plaintiffs’ claims, including causation and injury, but not “questions of remedy” such as damages, injunctive relief, and restitution. The court noted that “[t]he possibility that individual issues may predominate the issue of damages . . . does not defeat class certification by making [the liability] aspect of the case unmanageable.” 2013 WL 1397125, at *18. By carving out the individualized questions of damages from their purported class, Plaintiffs were thus left with a more discrete class which the court found sufficiently cohesive to pass Rule 23 muster.
The Second, Seventh and Ninth Circuits have split with the Fifth Circuit on the interplay between the predominance requirements of Rule 23(b)(3) and the issue class provision of Rule 23(c)(4). The former have held that a court may use Rule 23(c)(4) to proceed with class treatment of the common issues even if certification of the entire action would be unwarranted due to the prevalence of individual issues in the action as a whole. The Fifth Circuit, on the other hand, has held that a “district court cannot manufacture predominance through the nimble use of subdivision (c)(4).” Castano v. Am. Tobacco Co., 84 F.3d 734, 745 n. 21 (5th Cir. 1996). This remains an important issue to watch as courts sort out the implications of Wal-Mart and Behrend.