Neale v. Volvo Cars of North America, LLC , 794 F.3d 353 ( 2015 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 14-1540
_____________
JOANNE NEALE, Individually and on behalf of all
others similarly situated;
KERI HAY, Individually and on behalf of all others
similarly situated; DAVID TAFT; JEFFREY KRUGER;
KAREN COLLOPY; KELLY MCGARY;
SVEIN A. BERG; GREGORY P. BURNS
v.
VOLVO CARS OF NORTH AMERICA, LLC;
VOLVO CAR CORPORATION,
Appellants
_____________
On Appeal from the United States District Court
for the District of New Jersey
District Court No. 2-10-cv-04407
District Judge: The Honorable Dennis M. Cavanaugh
Argued: June 2, 2015
Before: SMITH, CHAGARES, and HARDIMAN,
Circuit Judges
(Filed: July 22, 2015)
Paul Daly, Esq.
Hardin, Kundla, McKeon & Poletto
673 Morris Avenue
P.O. Box 730
Springfield, NJ 07081
Peter W. Herzog, III, Esq. ARGUED
Wheeler Trigg O’Donnell
211 North Broadway
Suite 1200
St. Louis, MO 63102
Counsel for Appellants
David M. Freeman, Esq.
Eric D. Katz , Esq. ARGUED
David A. Mazie, Esq.
Matthew R. Mendelsohn
Mazie Slater, Katz & Freeman
103 Eisenhower Parkway
Suite 207
Roseland, NJ 07068
2
Benjamin F. Johns, Esq.
Joseph G. Sauder, Esq.
Matthew D. Schelkopf, Esq.
Chimicles & Tikellis
361 West Lancaster Avenue
One Haverford Centre
Haverford, PA 19041
Counsel for Appellees
Daniel I. Rubin, Esq.
Andrew R. Wolf, Esq.
Henry P. Wolf, Esq.
The Wolf Law Firm
1520 U.S. Highway 130
Suite 101
North Brunswick, NJ 08902
Counsel for Amicus Appellee
________________
OPINION
________________
SMITH, Circuit Judge.
This appeal involves a putative class action brought by
consumers from six states alleging that Appellants-
Defendants Volvo Cars of North America, LLC and Volvo
3
Car Corporation (collectively “Volvo”) sold certain vehicles
with defective sunroof drainage systems. Volvo challenges
the grant of class certification by the U.S. District Court for
the District of New Jersey. For the reasons that follow, we
will vacate the District Court’s order and remand for further
proceedings.
I.
Plaintiffs-Appellees Joanne Neale, Keri Hay, Kelly
McGary, Svein Berg, Gregory Burns, David Taft, Jeffrey
Kruger, and Karen Collopy (collectively “Plaintiffs”) filed
suit on behalf of themselves and a nationwide class of current
and former Volvo vehicle owners and lessees. Plaintiffs
allege that a uniform design defect exists in the sunroof
drainage systems in the following vehicles sold and leased to
consumers by Volvo: S40, S60, S80, and V70 (model years
2004 to present); XC90 (model years 2003 to present); and
V50 (model years 2005 to present) (the “Class Vehicles”).
On August 7, 2012, Plaintiffs proposed a nationwide
class consisting of “[a]ll persons or entities in the United
States who are current or former owners and/or lessees of a
Class Vehicle (the ‘Nationwide Class’).” Supplemental
Appendix (“SA”) 19; Joint Appendix (“JA”) 140. In the
alternative, Plaintiffs also proposed the following statewide
classes:
All persons or entities in Massachusetts who
are current or former owners and/or lessees of
a Class Vehicle (the “Massachusetts Class”).
4
All persons or entities in Florida who are
current or former owners and/or lessees of a
Class Vehicle (the “Florida Class”).
All persons or entities in Hawaii who are
current or former owners and/or lessees of a
Class Vehicle (the “Hawaii Class”).
All persons or entities in New Jersey who are
current or former owners and/or lessees of a
Class Vehicle (the “New Jersey Class”).
All persons or entities in California who are
current or former owners and/or lessees of a
Class Vehicle (the “California Class”).
All persons or entities in Maryland who are
current or former owners and/or lessees of a
Class Vehicle (the “Maryland Class”).
SA 20; see also JA 140–41 (Pls.’ Second Am. Compl. listing
all classes except for the Maryland Class). Volvo filed a brief
in opposition to the proposed classes and separate motions for
summary judgment against the individual class
representatives.
On March 26, 2013, the District Court denied
Plaintiffs’ motion to certify a nationwide class, granted
Plaintiffs’ motion to certify six statewide classes, and denied
Volvo’s motions for summary judgment. After the Supreme
Court’s decision in Comcast Corp. v. Behrend, 133 S. Ct.
1426 (2013), Volvo moved for reconsideration of the District
5
Court’s order granting class certification, which the District
Court also denied. Volvo filed this timely appeal.
II.
The District Court had jurisdiction over this case
pursuant to 28 U.S.C. §§ 1332(d)(2) and (d)(6) and
supplemental jurisdiction over the state law claims pursuant
to 28 U.S.C. § 1367.1 We have jurisdiction pursuant to 28
1
Plaintiffs asserted federal jurisdiction under the Class
Action Fairness Act of 2005 (“CAFA”). Pub. L. No. 109–2,
119 Stat. 4 (codified in scattered sections of 28 U.S.C.).
CAFA confers on district courts original jurisdiction where:
(1) the amount in controversy exceeds $5,000,000, as
aggregated across all individual claims; (2) there are
minimally diverse parties; and (3) the class consists of at least
100 or more members. 28 U.S.C. § 1332(d)(2), (5)(B), (6);
Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1348
(2013).
Although the parties do not dispute CAFA jurisdiction,
“[w]e must nevertheless satisfy ourselves that federal subject
matter jurisdiction exists in the first instance.” Kaufman v.
Allstate N.J. Ins. Co., 561 F.3d 144, 151 (3d Cir. 2009). “In
order to determine whether the CAFA jurisdictional
requirements are satisfied, a court evaluates allegations in the
complaint.” Judon v. Travelers Prop. Cas. Co. of Am., 773
F.3d 495, 500 (3d Cir. 2014). Plaintiffs contend that there
were over 100 class members because there were “tens of
thousands” of Class Vehicles sold in the United States. JA
6
107, 141–42, Second Am. Compl. ¶¶ 5, 127. As to the
amount in controversy, Plaintiffs allege that class members
“suffered economic damages including but not limited to
costly repairs, loss of vehicle use, substantial loss in value
and resale value of the vehicles, and other related damages,”
JA 148, ¶ 148, that they are seeking punitive damages and
attorney’s fees and costs, and that this exceeds $5,000,000.
Finally, because one plaintiff and one defendant are citizens
of different states, Plaintiffs contend that there is minimal
diversity. Volvo answered that the jurisdictional allegations
stated “a legal conclusion to which no response [was]
necessary,” but to the extent “a response is deemed required,
Volvo admits the allegations in this paragraph.” JA 170, Am.
Answer ¶ 5.
Because Volvo did not contest these jurisdictional
facts, we ask “whether it is clear to a legal certainty that the
plaintiff cannot recover the amount claimed.” Judon, 773
F.3d at 505. As in Frederico v. Home Depot, we have an idea
of each class representative’s damages but not the total
number of class members. 507 F.3d 188, 199 (3d Cir. 2007).
Using class representative Gregory Burns as an example, he
was charged $252.82 to repair his damaged vehicle. As a
citizen of New Jersey, he can seek punitive damages of up to
five times the compensatory damages, N.J. Stat. Ann.
§ 2A:15-5.14(b). Thus, an estimate of his total damages
amounts to $1,516.92. A median recovery range for
attorney’s fees is approximately 30 percent, which would be
$455.08 for Burns’ claim. Burns’ damages plus attorney’s
fees would equal $1,972. The $5,000,000 CAFA amount-in-
controversy requirement divided by $1,972 equals
7
U.S.C. § 1292(e) and Rule 23(f) of the Federal Rules of Civil
Procedure.
“We review a class certification order for abuse of
discretion, which occurs if the district court’s decision rests
upon a clearly erroneous finding of fact, an errant conclusion
of law or an improper application of law to fact.” Grandalski
v. Quest Diagnostics Inc., 767 F.3d 175, 179 (3d Cir. 2014)
(quoting Hayes v. Wal-Mart Stores, Inc., 725 F.3d 349, 354
(3d Cir. 2013)) (internal quotation marks omitted). We
review de novo a legal standard applied by a district court.
Carrera v. Bayer Corp., 727 F.3d 300, 305 (3d Cir. 2013).
III.
Volvo argues on appeal that: (1) putative members of
the class have not suffered an injury and therefore lack
Article III standing; (2) the District Court failed to identify
the class claims and defenses in its certification order; (3) the
District Court erred in its analysis of the Rule 23(b)(3)
predominance requirement; and (4) the Supreme Court’s
decision in Comcast Corp. v. Behrend means that Plaintiffs
approximately 2,536 class members. Because 2,536 is well
under the number of Class Vehicles identified in the Second
Amended Complaint (“tens of thousands”), we are satisfied
that the “legal certainty test is met: as it does not appear to a
legal certainty that [Plaintiffs] cannot recover the
jurisdictional amount, the case need not be remanded and we
may proceed to the substantive merits of this appeal.” See
Frederico, 507 F.3d at 199.
8
must have class-wide proof of damages in order for the class
to be certified. We address each issue in turn.
A.
Volvo argues that all putative class members must
have Article III standing. We begin with this argument
because “[w]e have ‘an obligation to assure ourselves’ of
litigants’ standing under Article III.” DaimlerChrysler Corp.
v. Cuno, 547 U.S. 332, 340 (2006) (quoting Friends of the
Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S.
167, 180 (2000)); see also In re Deepwater Horizon, 739 F.3d
790, 798 (5th Cir. 2014). We exercise plenary review over a
threshold question of law, such as that presented by an Article
III standing challenge. McNair v. Synapse Grp. Inc., 672
F.3d 213, 222 n.9 (3d Cir. 2012).
1.
Article III governs constitutional standing and limits
our jurisdiction to actual “cases or controversies.” U.S.
Const. art. III, § 2. Article III requires a plaintiff to
demonstrate “(1) an ‘injury in fact,’ (2) a sufficient ‘causal
connection between the injury and the conduct complained
of,’ and (3) a ‘likel[ihood]’ that the injury ‘will be redressed
by a favorable decision.’” Susan B. Anthony List v. Driehaus,
134 S. Ct. 2334, 2341 (2014) (alterations in original) (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1991)).
Constitutional standing ensures that litigants are truly adverse
to one another and are not merely “suitors in the courts of the
United States.” Valley Forge Christian Coll. v. Ams. United
for Separation of Church and State, Inc., 454 U.S. 464, 476
9
(1982); Warth v. Seldin, 422 U.S. 490, 498 (1975) (“In
essence the question of standing is whether the litigant is
entitled to have the court decide the merits of the dispute or of
particular issues.”). “The law of Article III standing, which is
built on separation-of-powers principles, serves to prevent the
judicial process from being used to usurp the powers of the
political branches.” Clapper v. Amnesty Int’l USA, 133 S. Ct.
1138, 1146 (2013); see also William A. Fletcher, The
Structure of Standing, 98 Yale L.J. 221, 222 (1988)
(explaining that a concrete dispute “informs the court of the
consequences of its decisions” and prevents “the anti-
majoritarian federal judiciary from usurping the policy-
making functions of the popularly elected branches”).
The case before us concerns the injury-in-fact
requirement. The requisite injury-in-fact is an “invasion of a
legally protected interest.” Lujan, 504 U.S. at 560. That
injury must be “particularized,” id., and “concrete in both a
qualitative and temporal sense,” Whitmore v. Arkansas, 495
U.S. 149, 155 (1990). That injury must also be “actual or
imminent, not conjectural or hypothetical.” Lujan, 504 U.S.
at 560 (quoting Whitmore, 495 U.S. at 155) (internal
quotation marks omitted). A risk of future injury may support
standing if the threatened harm is “certainly impending,” or
there is a “‘substantial risk’” that the harm will occur.
Clapper, 133 S. Ct. at 1148, 1150 n.5 (quoting Monsanto Co.
v. Geertson Seed Farms, 561 U.S. 139, 153 (2010)).
Standing requires that the party seeking to invoke
federal jurisdiction “demonstrate standing for each claim he
seeks to press.” DaimlerChrysler, 547 U.S. at 352. Thus, we
do not exercise jurisdiction over one claim simply because it
10
arose “from the same ‘nucleus of operative fact’” as another
claim. Id. Accordingly,
[S]tanding is not a “mere pleading
requiremen[t] but rather an indispensable part of
the plaintiff’s case, each element must be
supported in the same way as any other matter
on which the plaintiff bears the burden of proof,
i.e., with the manner and degree of evidence
required at the successive stages of the
litigation.”
Ala. Legis. Black Caucus v. Alabama, 135 S. Ct. 1257, 1276
(2015) (alteration in original) (quoting Lujan, 504 U.S. at
561).
In the context of a class action, Article III must be
satisfied “by at least one named plaintiff.” McNair, 672 F.3d
at 223; see also O’Shea v. Littleton, 414 U.S. 488, 494 (1974)
(“[I]f none of the named plaintiffs purporting to represent a
class establishes the requisite of a case or controversy with
the defendants, none may seek relief on behalf of himself or
any other member of the class.”). The Supreme Court has yet
to comment on what Article III requires of putative, unnamed
class members during a Rule 23 motion for class
certification.2
2
The Supreme Court granted the petition for certiorari
in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, 2015 WL
1278593, at *1 (U.S. June 8, 2015). The second question
presented is: “Whether a class action may be certified or
11
In Amchem Products, Inc. v. Windsor, the Supreme
Court declined to address the argument that asbestos
exposure-only class members had no standing to pursue their
class claims and instead began its analysis with Rule 23. 521
U.S. 591, 612–13 (1997). The Supreme Court agreed with
our analysis that the settlement class’s standing issues
“‘would not exist but for the [class-action] certification’” and
that those issues were dispositive “because their resolution
[was] logically antecedent to the existence of any Article III
issues.” Id. at 612 (first alteration in original) (quoting
Georgine v. Amchem Prods., Inc., 83 F.3d 610, 623 (3d Cir.
1996)); see also Ortiz v. Fibreboard Corp., 527 U.S. 815, 831
(1999) (reasoning that the question of whether certification of
a settlement class under Rule 23(b)(1)(B) on a limited fund
rationale presented, as in Amchem, an issue of “statutory
standing” that “should be treated first”).
Yet considerations under Rule 23 are themselves
procedural rules, and thus rarely can be antecedent to the
question of whether a federal court has jurisdiction to hear a
claim at all. See 28 U.S.C. § 2072(a), (b) (authorizing the
Supreme Court to prescribe “general rules of practice and
procedure,” but providing that those rules “shall not abridge,
maintained under Rule 23(b)(3), or a collective action
certified or maintained under the Fair Labor Standards Act,
when the class contains hundreds of members who were not
injured and have no legal right to any damages.” Pet. for
Writ of Cert, Tyson Foods, Inc. v. Bouaphakeo, 2015 WL
1285369, at *i (Mar. 19, 2015). The Supreme Court may,
therefore, answer this question during its October 2015 term.
12
enlarge or modify any substantive right”); Fed. R. Civ. P. 82
(stating that the Federal Rules of Civil Procedure “do not
extend or limit the jurisdiction of the district courts”); 1
William B. Rubenstein, Newberg on Class Actions § 1:1 (5th
ed. 2012) (“Rule 23 is, therefore, fundamentally a procedural
device: it cannot ordinarily be construed to extend or limit the
jurisdiction and venue of federal courts.”). What is more, the
Supreme Court has recently explained that “statutory
standing” is “misleading, since ‘the absence of a valid (as
opposed to arguable) cause of action does not implicate
subject-matter jurisdiction.’” Lexmark Int’l, Inc. v. Static
Control Components, Inc., 134 S. Ct. 1377, 1387 n.4 (2014)
(quoting Verizon Md. Inc. v. Pub. Serv. Comm’n of Md., 535
U.S. 635, 642–43 (2002)). Because a federal court has a
“bedrock obligation to examine both [its] own subject matter
jurisdiction and that of the district courts,” Pub. Interest
Research Grp. of N.J., Inc. v. Magnesium Elektron, Inc., 123
F.3d 111, 117 & n.5 (3d Cir. 1997), it is improper to “resolve
contested questions of law when its jurisdiction is in doubt.”
Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 101
(1998).
The Supreme Court has candidly recognized the
tension in its standing precedent: “We need not mince words
when we say that the concept of ‘Art. III standing’ has not
been defined with complete consistency in all of the various
cases decided by this Court.” Valley Forge Christian Coll.,
454 U.S. at 475. One could say that Amchem stands for the
proposition that when a federal court would deny a class
certification motion, that court need not reach the question of
jurisdiction. See 521 U.S. at 612–13. Yet that logic could
13
result in a federal court, in many cases, reaching Rule 23
questions before assuring itself of jurisdiction. Even more
problematic for this application of Amchem is the extensive
discussion in Steel Co. v. Citizens for a Better Environment
that read cases that “ha[d] diluted the absolute purity of the
rule that Article III jurisdiction is always an antecedent
question” in a very limited manner. 523 U.S. at 101. The
Supreme Court reasoned that “[f]or a court to pronounce upon
the meaning or the constitutionality of a state or federal law
when it has no jurisdiction to do so is, by very definition, for
a court to act ultra vires.” Id. at 101–02. And because
determining the answer to a Rule 23 certification motion
involves “rigorous analysis” that may overlap with merits-
based questions, Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct.
2541, 2551–52 (2011), a federal court’s analysis will rarely
be an obvious, foregone conclusion. Indeed, Amchem
cautioned that “[i]f certification issues were genuinely in
doubt . . . the jurisdictional issues would loom larger.” 521
U.S. at 613 n.15.
In this case, certification issues are genuinely in doubt.
And because we will remand this matter to the District Court
as described herein, that court may well be presented with the
very same arguments regarding standing. For these reasons,
we address Volvo’s standing argument.
2.
In In re Prudential Insurance Co. America Sales
Practice Litigation Agent Actions, we addressed the
applicability of Article III to a putative class. The case
involved a settlement class alleging improper sales and
14
marketing practices by the life insurer Prudential. 148 F.3d
283, 290–92 (3d Cir. 1998). We held that once Article III
standing “is determined vis-a-vis the named parties . . . there
remains no further separate class standing requirement in the
constitutional sense.” Id. at 306–07 (quoting 1 William B.
Rubenstein, Newberg on Class Actions § 2.05 (3d ed. 1992))
(citing In re Prudential Ins. Co. of Am. Sales Practices Litig.,
962 F. Supp. 450, 505–06 (D.N.J. 1997) and Allee v.
Medrano, 416 U.S. 802, 828 (1974)).3 We further explained
that “absentee class members are not required to make a
3
The latest version of Newberg on Class Actions
provides that “[a] class action can be maintained by one class
representative with proper standing,” and cites to Rule 23(a)
as authority. 2 William B. Rubenstein, Newberg on Class
Actions § 2:8 (5th ed. 2012); id. § 2:1 (“Once threshold
individual standing by the class representative is met, a
proper party to raise a particular issue is before the court;
there is no further, separate ‘class action standing’
requirement.”); see also 5 Jerold S. Solovy et al., Moore’s
Federal Practice - Civil § 23.63 (3d ed. 1997) (“The named
plaintiff in a class action must meet all the jurisdictional
requirements to bring an individual suit asserting the same
claims, including standing.”); 1 McLaughlin on Class Actions
§ 4:28 (11th ed. 2014) (“In the class action context, including
cases seeking prospective injunctive relief, as an Article III
justiciability matter only the named plaintiff must
demonstrate standing to assert the claims (including injury in
fact), not the absent class members. Individual class
members do not need to submit evidence of personal
standing.” (footnotes omitted)).
15
similar showing, because once the named parties have
demonstrated they are properly before the court, ‘the issue
[becomes] one of compliance with the provisions of Rule 23,
not one of Article III standing.’” Id. at 307 (alteration in
original) (quoting Goodman v. Lukens Steel Co., 777 F.2d
113, 122 (3d Cir. 1985), aff’d, 482 U.S. 656 (1987)); see also
Hayes, 725 F.3d at 361 & n.11–12 (explaining that at the
class certification stage when a named plaintiff’s Article III
standing is in question, a district court must determine
whether that named plaintiff “falls within the amended class
definition and sustained an injury”). Because In re
Prudential involved a settlement class, we did not have
occasion expressly to address whether unnamed class
members in a litigation class must have Article III standing.4
4
Volvo also asks us to treat the certification of a
settlement class in In re Prudential as distinguishable from
that of a litigation class. Nothing in In re Prudential,
however, limited its reach to that of absent settlement class
members. See 148 F.3d at 306–07. Nor has our application
of In re Prudential been limited solely to settlement classes.
See McCray v. Fidelity Nat’l Title Ins. Co., 682 F.3d 229, 243
& n.13 (3d Cir. 2012) (“In the context of class actions, Article
III standing ‘is determined vis-a-vis the named parties.’”
(quoting In re Prudential, 148 F.3d at 306)). Indeed,
Rule 23’s rigors are not relaxed as to a settlement class; we
simply do not weigh issues of trial management as they are
irrelevant in such a situation. Sullivan v. DB Investments, Inc.
(Sullivan II), 667 F.3d 273, 303 (3d Cir. 2011) (en banc)
(“[A] district court ‘[c]onfronted with a request for
settlement-only class certification’ need not inquire whether
16
We now squarely hold that unnamed, putative class
members need not establish Article III standing. Instead, the
“cases or controversies” requirement is satisfied so long as a
class representative has standing, whether in the context of a
settlement or litigation class. This rule is compelled by In re
Prudential and buttressed by a historical review of
representative actions.
It is well-established that “history and tradition offer a
meaningful guide to the types of cases that Article III
empowers federal courts to consider.” Sprint Commc’ns Co.,
L.P. v. APCC Servs., Inc., 554 U.S. 269, 274 (2008).
“[G]roup litigation has a remarkably deep history” dating
back to medieval times. Stephen C. Yeazell, The Past and
Future of Defendant and Settlement Classes in Collective
Litigation, 39 Ariz. L. Rev. 687, 687 (1997); Stephen C.
Yeazell, From Medieval Group Litigation to the Modern
Class Action 21 (1987) (explaining that representative group
litigation in medieval times was attributable to “societ[ies]
pervasively organized in groups,” such as “villages, parishes,
[and] guilds”). As societies evolved, so did the characteristics
and treatment of group litigation. One example is the English
Chancery practice of the “necessary parties” rule of the
seventeenth and eighteenth centuries, which “required that
any person with an interest in the object of a suit be joined as
the case ‘would present intractable management problems.’”
(second alteration in original) (quoting Amchem, 521 U.S.
at 620)). Given that standing is a threshold jurisdictional
question, there is no reason to alter its application for a
litigation class.
17
a party.” Geoffrey C. Hazard, Jr. et al., An Historical
Analysis of the Binding Effect of Class Suits, 146 U. Pa. L.
Rev. 1849, 1858 (1998). The necessary parties rule had
several exceptions, including the “impossibility exception,”
which covered “situations in which interested parties were so
numerous that it was practically impossible to join them all.”
Id. at 1860; see also Ortiz, 527 U.S. at 832–33. The
impossibility exception permitted representative suits, such as
“bills of peace involving a common benefit to or burden upon
the members of the group, . . . cases involving a group having
creditor claims against a debtor or legatee claims against an
estate, and cases involving unincorporated associations.”
Hazard, Jr. et al., 146 U. Pa. L. Rev. at 1861; see also W. S.
Holdsworth, The History of the Treatment of Choses in Action
by the Common Law, 33 Harv. L. Rev. 997, 1003 (1920)
(discussing the gradual and partial allowance of personal
rights of action to be asserted by representatives). Such
representative actions, including the most widely-recognized
bill of peace, were post-medieval developments in the long
history of representative litigation. Yeazell, From Medieval
Group Litigation to the Modern Class Action, at 24–25.
The history of representative actions under English law
and how they crossed the pond to nineteenth-century America
is marked by complexity. Yeazell, From Medieval Group
Litigation to the Modern Class Action, at 213–37. Scholars
mostly agree that representative actions under the law of this
country can be traced back at least as far as Justice Joseph
Story’s Commentaries on Equity Pleadings. Id. at 216–20;
Hazard, Jr. et al., 146 U. Pa. L. Rev. at 1878 (citing Joseph
Story, Commentaries on Equity Pleadings, §§ 94–97, at 93–
18
98 (2d ed. 1840)). In Smith v. Swormstedt, the Supreme
Court recognized an exception discussed by Justice Story to
the well-established rule that litigation is typically conducted
on behalf of named parties. Smith v. Swormstedt, 57 U.S. (16
How.) 288, 298 (1853). The Court explained:
[W]here the parties interested are numerous,
and the suit is for an object common to them all,
some of the body may maintain a bill on behalf
of themselves and of the others; and a bill may
also be maintained against a portion of a
numerous body of defendants, representing a
common interest.
Id. There was no mention of Article III, § 2—the Supreme
Court focused on the propriety of the representative action
itself and not whether there was truly a controversy (in the
constitutional sense) between the feuding northern and
southern wings of the Methodist Episcopal Church. Id. at 303
(“The legal and equitable rights and liabilities of all being
before the court by representation, . . . there can be very little
danger but that the interest of all will be properly protected
and maintained.”).
Before the enactment of Rule 23 in 1937, federal
courts were not consistent in their application of the equity
rules governing representative actions. See Equity Rule 38
(1912); Equity Rule 48 (1842); Smith, 57 U.S. (16 How.)
at 298 (failing to reference and contradicting the then-
governing Equity Rule 48); Trustees v. Greenough, 105 U.S.
527, 533 (1881) (making no reference to the basis for a
representative suit but recognizing the ability of a plaintiff to
19
utilize a common fund to pay attorney’s fees); Hazard, Jr. et
al., 146 U. Pa. L. Rev. at 1902–10 (summarizing cases);
Yeazell, From Medieval Group Litigation to the Modern
Class Action, at 219 (The legitimacy of representative actions
“could scarcely be questioned once an authority so eminent as
Story had recognized it, though his confusion was reflected in
the cases.”). Yet during this time period it was never
suggested that putative class members were required to have
standing or that representative actions could not present a
proper case or controversy.
In 1937, the Supreme Court promulgated the first
version of Rule 23 along with the Federal Rules of Civil
Procedure, which took effect in 1938. See John G. Harkins,
Jr., Federal Rule 23—The Early Years, 39 Ariz. L. Rev. 705,
705–09 (1997). Rule 23 was drastically revised in 1966.
Although the 1938 version of Rule 23 was meant to
“encourage more frequent use of class actions,” Charles A.
Wright, Class Actions, 47 F.R.D. 169, 170 (1970), in 1966 the
Advisory Committee reworked Rule 23 and “sought to
catalogue in ‘functional’ terms ‘those recurrent life patterns
which call for mass litigation through representative parties,’”
Ortiz, 527 U.S. at 833 (quoting Benjamin Kaplan, A Prefatory
Note, 10 B.C. Indus. & Com. L. Rev. 497, 497 (1969)).
A review of the foregoing history reveals that the class
action device treats individuals falling within a class
definition as members of a group rather than as legally
distinct persons. Sosna v. Iowa, 419 U.S. 393, 399 (1975)
(reasoning that the “class of unnamed persons described in
the certification acquired a legal status separate from the
interest asserted by the [plaintiff]” (emphasis added)); see
20
also Hazard, Jr. et al., 146 U. Pa. L. Rev. at 1852–53
(analyzing the group treatment of members of a class as it
relates to the doctrine of res judicata). Indeed, in In re
Prudential we reasoned that the Supreme Court’s decision in
Allee v. Medrano was instructive in providing that “standing
must be personal to and satisfied by ‘those who seek to
invoke the power of federal courts.’” In re Prudential, 148
F.3d at 306 (citing to Allee, 416 U.S. at 828 (quoting O’Shea,
414 U.S. at 493)).
Herein lies the key: a class action is a representative
action brought by a named plaintiff or plaintiffs. Named
plaintiffs are the individuals who seek to invoke the court’s
jurisdiction and they are held accountable for satisfying
jurisdiction. See Ortiz, 527 U.S. at 832. Thus, a class action
is permissible so long as at least one named plaintiff has
standing. See Horne v. Flores, 557 U.S. 433, 446 & n.2
(2009); Arlington Heights v. Metro. Hous. Dev. Corp., 429
U.S. 252, 264 & n.9 (1977) (“[W]e have at least one
individual plaintiff who has demonstrated standing . . . .
Because of the presence of this plaintiff, we need not consider
whether the other individual and corporate plaintiffs have
standing to maintain the suit.”); Simon v. E. Ky. Welfare
Rights Org., 426 U.S. 26, 40 n.20 (1976) (class action does
not eliminate a class representative’s burden of establishing
standing). Requiring individual standing of all class members
would eviscerate the representative nature of the class action.
It would also fail to recognize that the certified class is treated
as a legally distinct entity even though the outcome of such an
action is binding on the class. See Fed. R. Civ. P. 23(c)(3).
21
What Volvo asks of this Court is arguably in conflict
with Supreme Court precedent permitting a representative
action to persist despite a named plaintiff’s claim becoming
moot after certification. In the context of the doctrine of
mootness, the Supreme Court has already recognized the
representative nature of the class. For example in Sosna v.
Iowa, the Supreme Court held a class action is not dismissed
as moot if the named plaintiff had a live controversy when the
suit was filed, a properly certified class action was pending,
and there are members of the class whose claims are not
moot. 419 U.S. at 399, 402–03. The Court did not require
that all members have live claims and, instead, focused on
there needing to be a “controversy” between at least “a
named defendant and a member of the class.” Id. at 402; see
also Franks v. Bowman Transp. Co., 424 U.S. 747, 755
(1976) (a properly certified class action “‘clearly presented’
the District Court and the Court of Appeals ‘with a case or
controversy in every sense contemplated by Art. III of the
Constitution’” (quoting Sosna, 419 U.S. at 398)); Holmes v.
Pension Plan of Bethlehem Steel Corp., 213 F.3d 124, 135
(3d Cir. 2000) (“So long as a class representative has a live
claim at the time he moves for class certification, neither a
pending motion nor a certified class action need be dismissed
if his individual claim subsequently becomes moot.”).
The Supreme Court has also permitted representative
standing of sorts in a variety of other contexts. Horne, 557
U.S. at 446 (“Because the superintendent clearly has standing
to challenge the lower courts’ decisions, we need not consider
whether the Legislators also have standing to do so.”);
Rumsfeld v. Forum for Academic & Institutional Rights, Inc.,
22
547 U.S. 47, 52 n.2 (2006) (declining to decide whether the
individually named plaintiffs had standing because “the
presence of one party with standing is sufficient to satisfy
Article III’s case-or-controversy requirement”). A
particularly apt example of this includes associational
standing, whereby an organization may assert the rights of its
members, provided: “(a) its members would otherwise have
standing to sue in their own right; (b) the interests it seeks to
protect are germane to the organization’s purpose; and
(c) neither the claim asserted nor the relief requested requires
the participation of individual members in the lawsuit.” Hunt
v. Wa. State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977).
As to the first prong of the organizational standing test, the
Supreme Court in Hunt required only that “some Washington
apple growers” had suffered injuries. Id. (emphasis added);
see also Laidlaw, 528 U.S. at 181–83 (reasoning that
affidavits from some organization members were sufficient to
establish that the association’s “members would otherwise
have standing to sue in their own right”). The clear import of
that requirement is that in the associational standing context,
the test ensures there is an actual case and controversy
without inquiring into the standing of every member of an
organization. Along this same line, the Supreme Court
openly recognizes the ability of a State to bring suit in a
parens patriae action. See Alfred L. Snapp & Son, Inc. v.
Puerto Rico, 458 U.S. 592, 607 (1982) (permitting a State to
bring suit on behalf of its citizens where the State expresses a
quasi-sovereign interest). The focus in a parens patriae
action is on the State, “independent of the benefits that might
accrue to any particular individual.” Id. at 608.
23
Volvo urges this Court to adopt the approach taken by
some of our sister courts that require all class members to
possess standing. The Second and Eighth Circuits
purportedly require absent class members to have Article III
standing. The Ninth and D.C. Circuits potentially do too. We
are not persuaded.
In Denney v. Deutsche Bank AG, 443 F.3d 253 (2d Cir.
2006), the Second Circuit affirmed the district court’s
certification of a Rule 23(b)(3) class in a suit against
professional tax advisors for improper and fraudulent tax
counseling. Id. at 259. Two class objectors challenged
certification on the grounds that the class contained members
who had not yet been assessed tax penalties and therefore
lacked Article III or statutory standing. Id. As to the
standing challenge, the Court explained that “[w]e do not
require that each member of a class submit evidence of
personal standing. At the same time, no class may be
certified that contains members lacking Article III standing.
The class must therefore be defined in such a way that anyone
within it would have standing.” Id. at 263–64 (citations
omitted). The Second Circuit has not expanded upon this
declaration.
The Eighth Circuit in Avritt v. Reliastar Life Insurance
Co. held that a California law that permitted a single injured
plaintiff to bring a class action on behalf of a group of
uninjured individuals was “inconsistent with the doctrine of
standing as applied by federal courts.” 615 F.3d 1023, 1034
(8th Cir. 2010). Yet the Court explained that “federal courts
‘do not require that each member of a class submit evidence
of personal standing.’” Id. (quoting Denney, 443 F.3d at
24
263–64). Reconciling this tension, the Court reasoned that
“[a] class ‘must therefore be defined in such a way that
anyone within it would have standing.’” Id. (emphasis added)
(quoting Denney, 443 F.3d at 264). More recently in
Halvorson v. Auto-Owners Insurance Co., the Court
referenced these same general principles and explained that
the lack of an individualized injury would impact
predominance and mean that “individual questions necessary
to determine breach of contract and bad faith” would include
“individual inquiries” that would “predominate over” whether
the defendant’s processes were reasonable. 718 F.3d 773,
779 (8th Cir. 2013). It is, thus, not clear to us whether the
Eighth Circuit’s standing analysis rests on Article III or Rule
23.
The D.C. Circuit has similarly discussed predominance
as requiring that plaintiffs “show that they can prove, through
common evidence, that all class members were in fact injured
by [an] alleged conspiracy.” In re Rail Freight Fuel
Surcharge Antitrust Litig., 725 F.3d 244, 252 (D.C. Cir.
2013) (emphasis added) (reasoning that “common evidence
[must] show all class members suffered some injury” but not
saying that this was required pursuant to Article III). And the
Ninth Circuit in Mazza v. American Honda Motor Co., Inc.
quoted the rule discussed in Denney. 666 F.3d 581, 594–95
(9th Cir. 2012). But it did so within the context of a
predominance challenge and without detailed discussion. Id.
Further, the Mazza court did not expressly overrule the Ninth
Circuit’s previous declaration that “our law keys on the
representative party, not all of the class members.” Stearns v.
Ticketmaster Corp., 655 F.3d 1013, 1020–21 (9th Cir. 2011)
25
(analyzing a defendant’s Article III injury-in-fact argument
while evaluating the district court’s predominance ruling).
We decline Volvo’s invitation to impose a requirement
that all class members possess standing. Class actions are
“exception[s] to the rule that litigation is usually conducted
by and on behalf of the individual named parties only.” Byrd
v. Aaron’s Inc., 784 F.3d 154, 163 (3d Cir. 2015) (quoting
Comcast, 133 S. Ct. at 1432) (internal quotation marks
omitted), as amended (Apr. 28, 2015). A Rule 23(b)(3) class
“is an ‘adventuresome innovation’ of the 1966 amendments”
to Rule 23, Wal-Mart, 131 S. Ct. at 2558 (quoting Amchem,
521 U.S. at 614), that allows named plaintiffs to bring suit
when the procedural protections of Rule 23 are satisfied. The
goal is to permit a class action that “would achieve economies
of time, effort, and expense, and promote uniformity of
decision as to persons similarly situated, without sacrificing
procedural fairness or bringing about other undesirable
results.” Rule 23(b)(3), 1966 Amendment advisory
committee note (emphasis added).
Before even getting to the point of class certification,
however, class representatives need to present a justiciable
claim. As we explained in Holmes v. Pension Plan of
Bethlehem Steel Corp., “a plaintiff who lacks the
personalized, redressable injury required for standing to assert
claims on his own behalf would also lack standing to assert
similar claims on behalf of a class.” 213 F.3d at 135; see also
Davis v. Fed. Election Comm’n, 554 U.S. 724, 734 (2008)
(“While the proof required to establish standing increases as
the suit proceeds, the standing inquiry remains focused on
whether the party invoking jurisdiction had the requisite stake
26
in the outcome when the suit was filed.” (emphasis added)
(citing Lujan, 504 U.S. at 561)). Combined with the Supreme
Court’s guidance on mootness as applied to a class, we know
that at all times during the course of a class action, there must
be a live “case or controversy” for Article III purposes. See
Sosna, 419 U.S. at 399, 402–03; Franks, 424 U.S. at 755.
Quite simply, requiring Article III standing of absent
class members is inconsistent with the nature of an action
under Rule 23.5 When a Rule 23(b)(3) class-action complaint
5
Similar reasoning has been used by our sister circuits
that have also concluded that unnamed class members need
not establish Article III standing. See, e.g., In re Nexium
Antitrust Litig., 777 F.3d 9, 25, 30–31 (1st Cir. 2015)
(concluding “that the presence of a de minimis number of
uninjured class members is permissible at class certification”
and would not defeat commonality or predominance);
Stearns, 655 F.3d at 1020–21 (“‘In a class action, standing is
satisfied if at least one named plaintiff meets the requirements
[of Article III]. . . . Thus, we consider only whether at least
one named plaintiff satisfies the standing requirements.’”
(quoting Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985
(9th Cir. 2007) (en banc))); DG ex rel. Stricklin v. Devaughn,
594 F.3d 1188, 1198 (10th Cir. 2010) (“Rule 23’s
certification requirements neither require all class members to
suffer harm or threat of immediate harm nor Named Plaintiffs
to prove class members have suffered such harm.”); Mims v.
Stewart Title Guar. Co., 590 F.3d 298, 308 (5th Cir. 2009)
(“Class certification is not precluded simply because a class
may include persons who have not been injured by the
defendant’s conduct.”).
27
is filed, the unnamed class members are generally unknown.
As the Seventh Circuit aptly explained:
[A] class will often include persons who have
not been injured by the defendant’s conduct;
indeed this is almost inevitable because at the
outset of the case many of the members of the
class may be unknown, or if they are known
still the facts bearing on their claims may be
unknown.
Kohen v. Pac. Inv. Mgmt. Co. LLC, 571 F.3d 672, 677 (7th
Cir. 2009). Only after discovery (which may be limited by a
district court at its discretion to issues related solely to class
certification), will the court have before it specific facts
bearing on the class and the relevant claims. Indeed, class
discovery may itself focus on named representatives such that
facts bearing on the Article III requirements for putative,
unnamed class members never come to light. And after class
certification, at least for a (b)(3) class, the class members
cannot be identified until the opt-out period pursuant to
Rule 23(c)(2)(B) has expired. In light of this, we do not
expect a plaintiff to be “able to identify all class members at
class certification.” Byrd, 784 F.3d at 163. Yet class
representatives must meet Article III standing requirements
the moment a complaint is filed. Lewis v. Casey, 518 U.S.
343, 358 (1996); Lujan, 504 U.S. at 561.
Volvo’s proposed requirement is likewise inconsistent
with a Rule 23(b)(2) action. For a Rule 23(b)(2) class,
“certification is appropriate even if the defendant’s action or
inaction ‘has taken effect or is threatened only as to one or a
28
few members of the class, provided it is based on grounds
which have general application to the class.’” Devaughn, 594
F.3d at 1201 (quoting Fed. R. Civ. P. 23(b)(2), 1966
Amendment advisory committee note). Technically
speaking, those (b)(2) class members may not have suffered a
legal injury and, at best, may only have standing in light of a
threatened future injury. See Clapper, 133 S. Ct. at 1148,
1150 n.5.
Additionally, a properly formulated Rule 23 class
should not raise standing issues. This point goes to the very
purpose of the class action device—to save “the resources of
both the courts and the parties by permitting an issue
potentially affecting every [class member] to be litigated in an
economical fashion under Rule 23.” Califano v. Yamasaki,
442 U.S. 682, 701 (1979). For those economies to work, it is
axiomatic that “a class representative must be part of the class
and possess the same interest and suffer the same injury as the
class members.” Gen. Tel. Co. of Sw. v. Falcon, 457 U.S.
147, 156 (1982) (quoting E. Tex. Motor Freight Sys. Inc. v.
Rodriguez, 431 U.S. 395, 403 (1977) (internal quotation
marks omitted)). These “interests” or “injuries” are tested by
the requirements of Rule 23. These separate requirements
establish the propriety of granting class-wide relief. See
Lewis, 518 U.S. at 395 (Souter, Ginsburg, Breyer, JJ.,
concurring in part, dissenting in part, and concurring in the
judgment) (“More specifically, the propriety of awarding
classwide relief (in this case, affecting the entire prison
system) does not require a demonstration that some or all of
the unnamed class could themselves satisfy the standing
requirements for named plaintiffs.”).
29
Volvo’s arguments related to the differences between
claims among the separate statewide classes, which confuse
distinct Rule 23 requirements, demonstrate that Volvo may
have legitimate Rule 23 challenges.6 Rather than shoehorn
these questions into an Article III analysis, we will continue
to employ Rule 23 to ensure that classes are properly
certified. In this case, certification requires the District Court
to determine what differing factual and legal circumstances
might mean for the class: Can the named plaintiffs adequately
represent the class if they owned or leased vehicles that did
not suffer water damage pursuant Fed. R. Civ. P. 23(a)(4)?
Are the claims of the representatives typical of the class
pursuant to Fed. R. Civ. P. 23(a)(3)? And do any relevant
distinctions affect the commonality and predominance
analyses pursuant to Fed. R. Civ. P. 23(a)(2) and (b)(3)? See
7AA Charles A. Wright et al., Fed. Prac. & Proc. Civ.
§ 1785.1 (3d ed. 2014) (“[T]he question whether [a class
representative] may be allowed to present claims on behalf of
others who have similar, but not identical, interests depends
6
Volvo’s standing argument dispatches a profusion of
class-action buzzwords including overbreadth, class
definition, commonality, ascertainability, as well as citation
to the injury-in-fact required to establish Article III standing,
the Rules Enabling Act’s dictate that federal rules may not
“abridge, enlarge or modify any substantive right,” 28 U.S.C.
§ 2072(b), and a defendant’s “due process right to raise
individual challenges and defenses to claims,” Carrera, 727
F.3d at 307. Volvo Br. 34–41. At oral argument, it became
apparent that Volvo was focused on the issue of standing.
30
not on standing, but on an assessment of typicality and
adequacy of representation.”).
Focusing on certification questions is not only
necessary to the rigorous analysis we demand in class
certification decisions, it is also buttressed by a close analysis
of the “circuit split” on this issue. Many courts are in fact
dealing with Article III standing questions within the confines
of Rule 23, which raises serious doubts as to whether they
really mean to impose Article III standing as separate and
distinct analyses in these cases. See In re Nexium Antitrust
Litig., 777 F.3d at 25, 30–31 (discussing uninjured class
members in terms of the class definition, ascertainability,
commonality, and predominance); In re Rail Freight Fuel
Surcharge Antitrust Litig., 725 F.3d at 252 (predominance);
Stearns, 655 F.3d at 1020–21 (predominance); Avritt, 615
F.3d at 1034 (class definition); Kohen, 571 F.3d at 677
(summarizing cases on class definition); Denney, 443 F.3d at
264 (class definition).
In sum, so long as a named class representative has
standing, a class action presents a valid “case or controversy”
under Article III.
B.
Although Volvo’s standing argument fails, we will
nevertheless remand. Volvo mentions in a footnote that the
District Court’s certification order “did not specifically
identify the claims certified, as required by Wachtel v.
Guardian Life Insurance Co. of America, 453 F.3d 179, 184
(3d Cir. 2006).” Volvo Br. 4 n.2. We agree that this is a
31
problem requiring remand. The District Court’s class
certification opinion rejected Plaintiffs’ proposal of a
nationwide class and the application of New Jersey law to all
Plaintiffs’ claims. And although the District Court directed
that “the law of the state of each subclass should be applied to
the subclass’s claims,” JA 77, the District Court did not
identify which claims would be subject to class treatment.
Volvo noted this lack of specificity and it assumed that the
District Court meant “to certify all claims alleged in the
[Second Amended Complaint] when it granted the alternative
motion to certify six statewide classes.” Volvo Br. 4 n.2.
Plaintiffs argue that the District Court was sufficiently
specific, citing to the District Court’s commonality analysis
(which also did not identify specific state-law claims subject
to class treatment), the District Court’s general reference to
disputes of fact that justified denying Volvo’s motions for
summary judgment, and the class certification order that
defined the classes and class representatives.
In Wachtel we held that “Rule 23(c)(1)(B) requires
district courts to include in class certification orders a clear
and complete summary of those claims, issues, or defenses
subject to class treatment.” 453 F.3d at 184. We rejected the
practice of issuing “memorandum opinions discussing the
allegations in the complaint, the facts of the case, and some
combination of the substantive requirements for class
certification found in Rule 23(a) and (b)” that then go on to
“treat the parameters of the class itself much more clearly and
deliberately than the class claims, issues, or defenses.” Id.
We stated that Rule 23(c) “requires more specific and more
deliberate treatment of the class issues, claims, and defenses
32
than the practice described above.” Id. at 185. Thus a class-
certification order or an incorporated opinion “must include
(1) a readily discernible, clear, and precise statement of the
parameters defining the class or classes to be certified, and
(2) a readily discernible, clear, and complete list of the
claims, issues or defenses to be treated on a class basis.” Id.
at 187–88.
Although a motion for class certification presents a
discretionary question for a district court, the court “must
clearly articulate its reasons, in part, so we can adequately
review the certification decision on appeal under Rule 23(f).”
Beck v. Maximus, Inc., 457 F.3d 291, 297 (3d Cir. 2006)
(remanding because of difficulty discerning the district
court’s analysis on typicality and adequacy). For example, in
Marcus v. BMW of North America, LLC, we rejected the
district court’s certification order and accompanying opinion
because although the opinion did address “Marcus’s claims
and the issues presented,” there was no “‘readily discernible,
clear, and complete list’” of the claims and issues subject to
class treatment. 687 F.3d 583, 592 (3d Cir. 2012) (quoting
Wachtel, 453 F.3d at 187). We are not required to comb
through the District Court’s opinion and layers of briefing in
order to “cobble together the various statements . . . and reach
a general inference as to some categories of issues that the
District Court believes are appropriate for class treatment.”
See Wachtel, 453 F.3d at 189.
Here Plaintiffs’ proposed classes and claims in the
Second Amended Complaint were different from those in the
motion for class certification. Plaintiffs also conceded at oral
argument that they intended for the Class Vehicles to include
33
only those which actually have a sunroof. This lack of
clarity, combined with the District Court’s failure to address
in detail or list the precise claims subject to class treatment,
means that we would be required to engage in some level of
guesswork were we to try to piece together the class claims.
We will not attempt to do so. We will vacate and remand to
the District Court so that it can provide a complete list of the
class claims, defenses and issues for each of the six statewide
classes in accordance with what Wachtel requires.
C.
Volvo disputes whether Plaintiffs satisfied
Rule 23(b)(3)’s predominance requirement. Volvo argues
that the District Court erred by certifying six statewide classes
without analyzing those classes’ claims and whether those
claims were subject to common proof. Although precise
analysis of the predominance question is “best conducted
with the benefit of a clear initial definition of the claims,
issues, and defenses to be treated on a class basis,” see
Wachtel, 453 F.3d at 181 n.1, the District Court erred in
making a fundamental assumption about predominance. That
assumption was that our decision in Sullivan v. DB
Investments, Inc. (Sullivan II) governed the outcome of this
case.
“[T]he party proposing class-action certification bears
the burden of affirmatively demonstrating by a preponderance
of the evidence her compliance with the requirements of
Rule 23.” Byrd, 784 F.3d at 163. A district court must
rigorously analyze the evidence used to establish class
certification in order to ensure compliance with Rule 23(a)
34
and at least one of the subsections of Rule 23(b). Comcast,
133 S. Ct. at 1432. This rigorous analysis may require a
district court to address, at least in part, the merits of a
plaintiff’s underlying claim because “class determination
generally involves considerations that are enmeshed in the
factual and legal issues comprising the plaintiff’s cause of
action.” Id. (quoting Wal-Mart, 131 S. Ct. at 2552) (internal
quotation marks omitted).
Before certifying a Rule 23(b)(3) class, a district court
must evaluate whether, inter alia, “questions of law or fact
common to class members predominate over any questions
affecting only individual members.” Fed. R. Civ. P. 23(b)(3).
This predominance test asks whether common issues of law
or fact in the case predominate over non-common,
individualized issues of law or fact. See Marcus, 687 F.3d at
604. Predominance “begins, of course, with the elements of
the underlying cause of action.” Erica P. John Fund, Inc. v.
Halliburton Co., 131 S. Ct. 2179, 2184 (2011); see also Wal-
Mart, 131 S. Ct. at 2552 (analyzing commonality in light of
the elements of the plaintiff’s Title VII discrimination
claims); Marcus, 687 F.3d at 600 (“To assess predominance,
a court at the certification stage must examine each element
of a legal claim ‘through the prism’ of Rule 23(b)(3).”
(quoting In re DVI, Inc. Sec. Litig., 639 F.3d 623, 630 (3d
Cir. 2011))); Malak v. BDO Seidman, LLP, 617 F.3d 743, 746
(3d Cir. 2010) (explaining that each element of a legal claim
is relevant to assessing predominance). That is “[b]ecause the
nature of the evidence that will suffice to resolve a question
determines whether the question is common or individual”
and that means that “a district court must formulate some
35
prediction as to how specific issues will play out.” In re
Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 311 (3d
Cir. 2008) (quoting Blades v. Monsanto Co., 400 F.3d 562,
566 (8th Cir. 2005) and In re New Motor Vehicles Canadian
Exp. Antitrust Litig., 522 F.3d 6, 20 (1st Cir. 2008)) (internal
quotation marks omitted), as amended (Jan. 16, 2009); see
also Amgen Inc. v. Conn. Ret. Plans and Trust Funds, 133 S.
Ct. 1184, 1191–92 (2013) (beginning the Rule 23 analysis
with the elements of a private securities-fraud action under §
10(b) of the Securities Exchange Act of 1934).
“[T]he presence of individual questions does not per se
rule out a finding of predominance.” In re Prudential, 148
F.3d at 315. If issues common to the class overwhelm
individual issues, predominance should be satisfied. Amgen,
133 S. Ct. at 1196 (explaining that predominance involves a
qualitative assessment of common versus individualized
questions); Butler v. Sears, Roebuck and Co., 727 F.3d 796,
801 (7th Cir. 2013) (explaining that predominance is not
determined “simply by counting noses: that is, determining
whether there are more common issues or more individual
issues”). Further, predominance does not require that
common “questions will be answered, on the merits, in favor
of the class.” Amgen, 133 S. Ct. at 1191. “What the rule does
require is that common questions ‘predominate over any
questions affecting only individual [class] members.’” Id. at
1196 (alteration in original) (quoting Fed. R. Civ. P.
23(b)(3)).
The District Court’s predominance analysis relied on
Sullivan II for the proposition that “for consumer fraud
claims, the predominance inquiry focuses on whether the
36
defendant’s conduct was common to all class members,
which predominates over minor individual differences
between plaintiffs.” JA 83 (citing Sullivan II, 667 F.3d at
297–98). Because “[a]ll of the claims asserted by Plaintiffs in
the [Second Amended Complaint] are based upon defectively
designed sound traps contained in the sunroof drainage
systems in Class Vehicles designed and/or manufactured by
Defendants, and Defendant[s’] uniform omissions about the
same,” the District Court concluded that predominance was
satisfied. Id. In doing so, the District Court made no
distinction between the six statewide classes or the relevant
claims brought by those putative classes.7
7
The District Court also said the predominance
requirement was “readily met” “as discussed supra.” JA 83.
The only relevant previous discussion was the District
Court’s evaluation of commonality. The District Court stated
that the common questions included whether: (1) “the sunroof
drainage systems in the Class Vehicles are defective”;
(2) “Defendants knew of the defect but failed to disclose it to
the Class”; and (3) “the maintenance instructions were
inadequate and/or uniformly deficient.” JA 78. Rejecting
Volvo’s commonality challenge, the District Court stated that
the “issue is whether the design of the sunroof drainage
system was defective, not whether the existence of the alleged
defect resulted in a clogged drain tube causing water to spill
into the vehicle.” JA 79.
The District Court’s commonality analysis was of
limited import for the question of predominance. We have
previously noted that the Rule 23(b)(3) predominance
37
Volvo argues that the District Court’s reliance on
Sullivan II was in error because that decision involved a
settlement class. One cannot read Sullivan II as a wholesale
departure from precedent that requires a district court to
evaluate predominance in light of the claims asserted and
relevant evidence. See Rodriguez v. Nat’l City Bank, 726
F.3d 372, 379 (3d Cir. 2013) (Sullivan II did not “lessen[] the
burden required to demonstrate that putative class members
share a common question of law or fact.”). Indeed, Sullivan
II cited to In re Hydrogen Peroxide Antitrust Litigation for
the proposition that “an examination of the elements of
plaintiffs’ claim is sometimes necessary . . . to determine
whether the requirements of Rule 23—namely, that the
elements of the claim can be proved ‘through evidence
common to the class rather than individual to its members’—
are met.” 667 F.3d at 306 (emphasis added) (quoting
Hydrogen Peroxide, 552 F.3d at 311–12). Sullivan II thus
applied the Hydrogen Peroxide test to fit the circumstances of
that particular case. Id. at 302–04. In Sullivan II, looking at
the class claims was “particularly unwarranted in the
settlement context since a district court need not ‘envision the
form that a trial’ would take, nor consider ‘the available
evidence and the method or methods by which plaintiffs
propose to use the evidence to prove’ the disputed element at
requirement incorporates the Rule 23(a)(2) commonality
requirement. In re Warfarin Sodium Antitrust Litig., 391 F.3d
516, 528 (3d Cir. 2004). The inverse of this proposition, that
the commonality requirement satisfies predominance, is not
true because the “predominance criterion is far more
demanding.” Amchem, 521 U.S. at 624.
38
trial.” Id. (quoting Newton v. Merrill Lynch, Pierce, Fenner
& Smith, Inc., 259 F.3d 154, 167 (3d Cir. 2001) and
Hydrogen Peroxide, 552 F.3d at 312). Sullivan II is not
sufficiently analogous to the case at bar, nor did it obviate the
need to evaluate the claims and evidence asserted in order to
evaluate predominance for a litigation class.8 See
Halliburton, 131 S. Ct. at 2184; Hydrogen Peroxide, 552 F.3d
at 311. The District Court erred, therefore, by failing to
analyze predominance in the context of Plaintiffs’ actual
claims.
Plaintiffs make several arguments in support of the
District Court’s opinion, none of which are persuasive.
Plaintiffs first argue that the District Court considered over
1,000 pages of briefing on the motions for summary
judgment, and that therefore, the District Court must have
considered the individual elements of the various state-law
claims. Yet relying on such briefing alone hardly amounts to
the “rigorous consideration of all the evidence and arguments
offered by the parties” required by Rule 23. See Hydrogen
Peroxide, 552 F.3d at 321. Quite simply, what Plaintiffs ask
us to do is speculate as to what the District Court must have
8
Volvo also argues that even if Sullivan II applies to
Plaintiffs’ consumer fraud claims, the District Court ignored
the predominance inquiry for the common law fraud, breach
of implied warranty, breach of express warranty, and breach
of the implied covenant of good faith and fair dealing claims.
For the reasons explained above, Sullivan II does not obviate
the need for Plaintiffs to establish by a preponderance of the
evidence that the predominance requirement is satisfied.
39
intended. We cannot just assume the District Court
conducted the appropriate analysis under Rule 23. “Rigorous
analysis” requires more of the District Court than that, and we
would be abdicating our role as a reviewing court were we to
engage in the speculation Plaintiffs ask for.
Plaintiffs also argue that Volvo’s specific examples
related to the statewide classes do not defeat predominance.
Like the common law claims raised by the plaintiffs in
Marcus, 687 F.3d at 600–05, Plaintiffs assert class claims
based on breach of express warranty (Count 2), breach of the
implied warranty of merchantability (Count 3), and breach of
the duty of good faith and fair dealing (Count 5). In addition,
Plaintiffs assert claims based on the New Jersey Consumer
Fraud Act (“NJCFA”), as was the case in Marcus, 687 F.3d at
605–11, as well as state-specific consumer fraud claims under
Massachusetts, New Jersey, Florida, California, and Hawaii
law.
Volvo points to, as examples of why the District Court
erred in not evaluating the elements of each asserted claim,
the following potential predominance problems:
(1) individualized proof is needed to establish a causal
relationship between the unlawful conduct and ascertainable
loss as required under New Jersey and Massachusetts law;
(2) the California claims require a plaintiff to establish a duty
to disclose an alleged defect, proof of which would vary
based on whether a vehicle contained a yaw sensor and
whether such disclosure would be material; (3) the implied
warranty claims cannot satisfy predominance for reasons
similar to those we addressed in Marcus relating to causation;
(4) claims for a violation of an express warranty require that
40
the warranty be in place when a plaintiff experienced a water
leak, which is only established by individualized proof; and
(5) uniform evidence cannot be used to establish
predominance as to both new and used owners of Class
Vehicles because the applicable warranties between the
groups may vary.
Evaluating these arguments in the detail that is
required goes beyond what was briefed before the District
Court, beyond the District Court’s reasoning in its
certification opinion, and beyond the briefing the panel has
received from the parties. We will not engage in an analysis
of predominance in the first instance, and will therefore
remand these questions to the District Court. Consistent with
Marcus, 687 F.3d at 600–11, the District Court should
evaluate the relevant claims (grouping them where logical
and appropriate) and rule on the predominance question in
light of the claims asserted and the available evidence.9
9
In Marcus, a New Jersey class asserted four claims
against BMW and Bridgestone relating to the NJCFA, breach
of the implied warranty of merchantability, breach of
contract, and breach of the implied covenant of good faith and
fair dealing. 687 F.3d at 600. Like the trial court, we
analyzed Marcus’s common law claims together and noted
the shared elements between the claims. Id. at 600 & n.8.
Despite concluding that Marcus supplied sufficient evidence
to establish predominance as to a defect in the Bridgestone
run-flat tires, we concluded that the individualized evidence
required to prove proximate causation meant that the common
law claims could not be tried on a class-wide basis. Id. at
41
 D.
Volvo’s final argument is that the District Court erred
in denying the motion to reconsider the class certification
decision in light of Comcast. Because Comcast was
distinguishable and the “damages issue [in this case was]
605. We explained that Marcus’s damages allegations “beg
the question of what caused class members’ tires to go flat
and need replacement.” Id. at 604.
As to Marcus’s claim under the NJCFA, we noted that
the statute required a plaintiff to establish ascertainable loss.
Id. at 605–06. We explained that “ascertainable loss” based
on “the cost of replacing [a] tire” could not meet the
predominance requirement and went on to analyze loss based
on “the value of the product [a class member] expected to
purchase minus the value of the product they actually
purchased.” Id. at 606. We explained that under that theory
of “ascertainable loss,” a court could not apply a
“presumption of causation” without considering both “the
defendants’ course of conduct . . . [and] also that of the
plaintiffs.” Id. at 606–10. Specifically, we held that the
district court needed to have found “(1) that the alleged
defects were not knowable to a significant number of
potential class members before they purchased or leased their
BMWs, or (2) that, even if the defects were knowable, that
class members were nonetheless relatively uniform in their
decisionmaking.” Id. at 611. We directed the district court to
conduct this analysis in the first instance. Id.
42
much more straightforward,” JA 91, the District Court
declined to revisit its ruling, see id. at 90–92.
Comcast is inapposite to the case before us. Comcast
held that an antitrust litigation class could not be certified
because the plaintiffs’ damages model did not demonstrate
the theory of antitrust impact that the district court accepted
for class-action treatment. 133 S. Ct. at 1433. Because the
antitrust claim was so limited, the Supreme Court explained:
It follows that a model purporting to serve as
evidence of damages in this class action must
measure only those damages attributable to that
theory. If the model does not even attempt to
do that, it cannot possibly establish that
damages are susceptible of measurement across
the entire class for purposes of Rule 23(b)(3).
Calculations need not be exact, see Story
Parchment Co. v. Paterson Parchment Paper
Co., 282 U.S. 555, 563 (1931), but at the class-
certification stage (as at trial), any model
supporting a “plaintiff’s damages case must be
consistent with its liability case, particularly
with respect to the alleged anticompetitive
effect of the violation.” ABA Section of
Antitrust Law, Proving Antitrust Damages:
Legal and Economic Issues 57, 62 (2d ed.
2010); see, e.g., Image Tech. Servs. v. Eastman
Kodak Co., 125 F.3d 1195, 1224 [9th Cir.
1997]. And for purposes of Rule 23, courts
must conduct a “‘rigorous analysis’” to
43
determine whether that is so. Wal-Mart, [131 S.
Ct. at 2551–52].
Id. Comcast went on to analyze the evidence of damages
resulting from antitrust impact, and noted that the expert
testimony “assumed the validity of all four theories of
antitrust impact initially advanced by [the plaintiffs].” Id. at
1434. Because the evidence could not translate the relevant
“‘legal theory of the harmful event into an analysis of the
economic impact of that event,’” the Court determined that
common questions could not predominate over individual
ones. Id. at 1435 (quoting Federal Judicial Center, Reference
Manual on Scientific Evidence 432 (3d ed. 2011)).
Volvo relies on Comcast for the proposition that
Plaintiffs must show that “‘damages are susceptible of
measurement across the entire class for purposes of
Rule 23(b)(3).’” Volvo Br. 44 (quoting Comcast, 133 S.
Ct. at 1433). In so doing, Volvo selectively quotes from
Comcast as though the Court were creating a broad-based rule
applicable to Rule 23(b)(3). Yet the Supreme Court
specifically noted that it was not breaking any new ground by
stating at the beginning of its opinion: “This case thus turns
on the straightforward application of class-certification
principles.” Comcast, 133 S. Ct. at 1433. A close reading of
the text above makes it clear that the predominance analysis
was specific to the antitrust claim at issue. That is eminently
sensible. Every question of class certification will depend on
the nature of the claims and evidence presented by the
plaintiffs. What we know for sure is that whatever
“Comcast’s ramifications for antitrust damages models or
proving antitrust impact,” a trial court must “‘consider
44
carefully all relevant evidence and make a definitive
determination that the requirements of Rule 23 have been met
before certifying a class.’” In re Blood Reagents Antitrust
Litig., 783 F.3d 183, 186–87 (3d Cir. 2015) (quoting
Hydrogen Peroxide, 552 F.3d at 320).
Our reading of Comcast is consistent with decisions by
several of our sister courts.10 That is because “[r]ecognition
10
See, e.g., Roach v. T.L. Cannon Corp., 778 F.3d 401,
402 (2d Cir. 2015) (“We hold that Comcast does not mandate
that certification pursuant to Rule 23(b)(3) requires a finding
that damages are capable of measurement on a classwide
basis.”); In re Nexium Antitrust Litig., 777 F.3d at 23
(“Comcast did not require that plaintiffs show that all
members of the putative class had suffered injury at the class
certification stage—simply that at class certification, the
damages calculation must reflect the liability theory.”); In re
Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig.,
722 F.3d 838, 860 (6th Cir. 2013) (explaining that Comcast
did not impact the ability of a trial court to certify a liability
class and then later consider class damages under Fed. R. Civ.
P. 23(c)(4)), cert. denied sub nom. Whirlpool Corp. v. Glazer,
134 S. Ct. 1277 (2014); Butler, 727 F.3d at 800–01
(emphasizing that Comcast focused on “the requirement of
predominance and on its having to be satisfied by proof
presented at the class certification stage rather than deferred
to later stages of the litigation” (citing Comcast, 133 S. Ct. at
1432–33)); Wallace B. Roderick Revocable Living Trust v.
XTO Energy, Inc., 725 F.3d 1213, 1220 (10th Cir. 2013)
(vacating and remanding a district court’s certification
decision to more fully consider the predominance
45
that individual damages calculations do not preclude class
certification under Rule 23(b)(3) is well nigh universal.”
Comcast, 133 S. Ct. at 1437 (Ginsburg, J. & Breyer, J.,
dissenting) (citing 2 William B. Rubenstein, Newberg on
Class Actions § 4:54 (5th ed. 2012)). Had the District Court
ruled as Volvo requested, denying certification on that basis
requirement, but noting that even after Comcast “there are
ways to preserve the class action model in the face of
individualized damages”); Leyva v. Medline Indus. Inc., 716
F.3d 510, 514 (9th Cir. 2013) (interpreting Comcast as
requiring that “the plaintiffs must be able to show that their
damages stemmed from the defendant’s actions that created
the legal liability” and that rule is satisfied where “damages
will be calculated based on the wages each employee lost due
to Medline’s unlawful practices”).
The D.C. Circuit has interpreted Comcast as requiring
proof of class-wide damages in the context of an antitrust
class, explaining: “It is now indisputably the role of the
district court to scrutinize the evidence before granting
certification, even when doing so ‘requires inquiry into the
merits of the claim.’” In re Rail Freight Fuel Surcharge
Antitrust Litig., 725 F.3d at 253 (quoting Comcast, 133 S. Ct.
at 1433). The Court went on to summarize that the specific
proffered expert models were essential to the plaintiffs’
evidence of class-wide injury, concluding “[n]o damages
model, no predominance, no class certification.” Id. One
could read this analysis out of context as saying that all
classes require a damages model; however, like Comcast, the
analysis as to class-wide damages was specific to that
antitrust claim.
46
alone would have amounted to an abuse of discretion. See
Roach, 778 F.3d at 409. In sum, and as explained by the Fifth
Circuit, it is “a misreading of Comcast” to interpret it as
“preclud[ing] certification under Rule 23(b)(3) in any case
where the class members’ damages are not susceptible to a
formula for classwide measurement.” In re Deepwater
Horizon, 739 F.3d at 815 & n.104.
IV.
The difficult questions raised in this appeal are
resolved by a return to the basics of Rule 23. We will vacate
and remand the District Court’s class certification decision to
allow the District Court to define the class membership,
claims, and defenses, and so that it may rigorously analyze
predominance in the first instance.
47