Purchasers and beneficiaries of a multi-employer health care plan brought claims growing out of the plan’s collapse. The U.S. Fourth Circuit Court of Appeals rejected the defendants’ argument that the necessity for individualized damage determinations should defeat certification. Of particular interest, however, is the Court’s discussion of Rule 23(c)(4). The Fifth Circuit, in cases such as Castano and Allison, had appeared to have squarely rejected the use of Rule 23(c)(4) as a way of certifying discreet issues for class treatment, even where the predominance and superiority requirements of Rule 23(b)(3) had not been satisfied. Initially, the court in Gunnells notes that “Rule 23 explicitly envisions class actions with individualized damage determinations,” citing the 1966 Advisory Committee Notes, which indicate that “Rule 23(c)(4) permits courts to certify a class with respect to particular issues and contemplates possible class adjudication of liability issues with ‘the members of the class… thereafter… required to come in an individually prove their respective claims.'” The court then remarked that “the dissent’s approach ? that a court first determine ‘that an action as a whole satisfies the predominance and superiority requirements’… simply ignores Rule 23(c)(4)’s express command.” Noting further that “several courts and a number of distinguished commentators have explicitly endorsed a broad issue-specific predominance analysis.” With respect to the Fifth Circuit decisions, the panel found that they do not require that “the action as a whole” – i.e. all causes of action against all parties – must satisfy the predominance requirement, but merely that “a cause of action, as a whole, must satisfy Rule 23(b)(3)’s predominance requirement” before Rule 23(c)(4) is available. Accordingly, conditional certification of the class was affirmed. Gunnells v. Healthplan Services Inc., 348 F.3d 417 (4th Cir. 2003), cert. denied, 124 S.Ct. 2837 (2004).
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