Duke Class Action Settlement Conference
July 23-24, 2015
Short Statement by Andrew J. Trask
Concerning Prior Experience in a Class Action Case
In Allred v. Recontrust, Case No. 13-cv13-cv-1124-BSJ (D. Utah), the
named plaintiffs filed a case that, from the pleadings on, clearly relied heavily
on individualized inquiries. The named plaintiffs sought to invalidate a number
of foreclosures enacted by ReconTrust, arguing that they were illegal nonjudicial foreclosures. The case, like many financial services class actions,
presented an alluring, superficially common issue: was there a non-judicial
foreclosure?
As it turns out, determining whether any class member was injured, and
therefore entitled to damages, would require individualized inquiries into the
nature of each foreclosure. The presence of a non-judicial foreclosure was, if
true, possibly a technical violation of the law. It did not, however, fulfill the
injury requirement under the law the plaintiffs invoked. And, in fact, the same
counsel had previously filed a case with similar allegations, where the District
of Utah had denied certification. As discovery progressed, it became clear that
plaintiffs had no colorable argument for certification of a full class under either
Rule 23(b)(2) or 23(b)(3).
As a result, when moving for certification, the plaintiffs invoked, for the
first time, Rule 23(c)(4) “In anticipation of the Defendant arguing that
individual questions relating to damages defeat predominance in the case, the
Plaintiffs at this juncture seek a determination of single issue under Rule
23(c)(4).” (Mot. For Class Certification, Dkt. #44 at 13.) That single issue was
a liability-related question (was a non-judicial foreclosure lawful?), but it was
not, by itself, dispositive of the action. (Specifically, if the answer were “no,”
there were still other circumstances the plaintiffs would have to prove to
invalidate the foreclosure. If the answer were yes, some of those other
individualized factors might still come into play.) The plaintiffs offered no plan
as to how that issue would be tried. They also did not explain how they would
notify the proposed class of the issue-only trial or its rights.
We spent significant time our opposition briefing explaining why, even if
that issue could be tried on a common basis, it would not translate into any
ruling that would materially advance the litigation. We are currently awaiting a
ruling on class certification.
This is not an isolated case. I have now seen a number of class
certification motions in which plaintiffs have invoked certification under Rule
23(c)(4) as a fallback position when they have a weak case for certification. (I
am not alone. Courts have begun to note proposals for issue certification that
are used as attempts to salvage uncertifiable classes. See, e.g., Werdebaugh v. Blue
Diamond Growers, 2014 U.S. Dist. LEXIS 173789, 49 n.9 (N.D. Cal. Dec. 15,
2014) (decertifying class; rejecting request for issue certification); Lexington v.
Pharmaxia Corp. Solutia, Inc., 2015 U.S. Dist. LEXIS 36814 (D. Mass. Mar. 24,
2015) (denying amendment to change class proposal issue certification
proposal; amendment was untimely and futile).) From this and other
experiences with briefing class certification since Dukes and Comcast came
down, I can confidently say that, were Rule 23 to be amended to allow 23(c)(4)
certification where individual issues predominated in a Rule 23(b)(3) analysis,
this method of fallback briefing would become common, and would prolong
the disposition of cases where class treatment was clearly not feasible.