The Two-Step Certification Test

Certifying a Class Action

The Two-Step Certification Test

The class action is “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.”¹ To justify the departure, “a class representative must be part of the class and ‘possess the same interest and suffer the same injury’ as the class members.”² The departure has a cost, because the results of a class action generally bind the absent members, and procedural rules such as notice of the action and of any proposed settlement exist to give those absentees due process.³

Due process alone sets a low hurdle. Above it, Rule 23(a) and (b) build a screen that lets through only a select set of cases that satisfy society’s policy desires.⁴ The screen has two layers. Rule 23(a) allows one or more class members to sue as representative parties on behalf of all members only if its prerequisites are met, and Rule 23(b) allows a class action to be maintained only if Rule 23(a) is satisfied and the case also fits one of the listed types of class.⁵

Both layers serve a purpose beyond restriction. Efficiency and equity often require a mechanism that compels similarly situated claimants to come together in one proceeding and achieves finality beyond those who have already sued individually; representative litigation is one such mechanism, and bankruptcy is another.⁶ The present Rule is also a functional design. Dissatisfaction with an “arbitrary and conceptualistic tripartite division of class actions” led the Advisory Committee on Civil Rules to revise Rule 23 in 1966, and the amended Rule tries to decide in functional terms whether a class action is proper.⁷

Two questions organize what follows: what the proponent of a class must prove, and how closely the court must look; and how the two layers fit together.

The Proponent’s Burden

The party who wants the class must prove that every Rule 23 requirement is met; alleging it is not enough. Rule 23 “does not set forth a mere pleading standard,” Wal-Mart Stores, Inc. v. Dukes explained, so the proponent “must affirmatively demonstrate his compliance with the Rule—that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc.”⁸

Allegations cannot do this work. A class complaint can recite that common questions exist, and the recital reads the same whether the claims could be tried together or would splinter into hundreds of individual disputes. Only evidence tells the court which. Dukes drew on General Telephone Co. of Southwest v. Falcon, which recognized that “sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question,” and which insisted that “[A]ctual, not presumed, conformance with Rule 23(a) remains . . . indispensable.” Certification is proper only if the trial court is satisfied, “after a rigorous analysis,” that the prerequisites have been met.⁹

Courts accordingly give little weight to a complaint that merely echoes the words of the Rule: under Cole v. ASARCO, Inc., the judge need not blindly rely on conclusory allegations that parrot Rule 23. Courts also press the proponent for concrete answers about how the class action would actually work. In the Eisen litigation, the Court of Appeals noted that the difficulties of distributing any ultimate recovery to the class members would be formidable, though not necessarily insuperable, and directed the District Court to conduct “a further inquiry . . . in order to consider the mechanics involved in the administration of the present action.”¹⁰

A proponent who brings a record fares differently from one who brings a recital. In Edwards v. National Milk Producers Fed’n, the plaintiffs presented evidence that approximately 46 million people belonged to the class, and the court found that they had met their burden to show numerosity, adding that to hold otherwise “would turn class certification into a mini-trial.”¹¹ The recital of the Rule’s language leaves the court nothing to test; evidence of actual class membership gives it something to weigh.

The rigorous analysis cannot always keep clear of the merits, because commonality and predominance depend on what the claims are. Dukes observed that the analysis “[f]requently” entails “some overlap with the merits of the plaintiff’s underlying claim,” and that “[t]hat cannot be helped,” since the class determination “generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff’s cause of action.”¹² Eisen v. Carlisle & Jacquelin is sometimes mistakenly cited to the contrary, for its statement that nothing in Rule 23 gives a court “any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action.”¹³ Dukes answered that the Eisen judge had examined the merits not to decide certification but to shift the cost of class notice from the plaintiff to the defendants, and that to the extent the statement goes further it is “the purest dictum and is contradicted by our other cases.”¹⁴

The overlap has a ceiling, and Amgen Inc. v. Connecticut Retirement Plans & Trust Funds marks it. Rule 23 “grants courts no license to engage in free-ranging merits inquiries at the certification stage,” because the purpose of a certification ruling “is not to adjudicate the case; rather, it is to select the ‘metho[d]’ best suited to adjudication of the controversy ‘fairly and efficiently.’” Merits questions “may be considered to the extent—but only to the extent—that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied.”¹⁵

A safe statement of the rule is therefore narrow: the court may examine a merits question only when its answer bears on a Rule 23 requirement, and it may never use certification to decide which side will win.

The Two Gates in Order

Rule 23’s test is conjunctive. In Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., the Court read the Rule as saying that a class action may be maintained if two conditions are met: the suit must satisfy the criteria in subdivision (a), namely numerosity, commonality, typicality, and adequacy of representation, and it must also fit into one of the three categories in subdivision (b). By its terms, the Court added, this “creates a categorical rule entitling a plaintiff whose suit meets the specified criteria to pursue his claim as a class action.”¹⁷

The four Rule 23(a) prerequisites must be satisfied in every federal class action, and failure on any one of them is fatal to certification.¹⁸ Because the gates are sequential and each is required, passing one never rescues a class that fails the other. A class that fits a Rule 23(b) category perfectly still fails if it falls short on a Rule 23(a) prerequisite, and a class that satisfies all four prerequisites still fails if it fits no Rule 23(b) category.

Run the test in order, and run it against evidence rather than allegations:

The rest of this chapter follows those steps. The four Rule 23(a) prerequisites come first, each with its own test. The mandatory classes under Rule 23(b)(1) and (b)(2) come next, then the damages class under Rule 23(b)(3), which requires findings of predominance and superiority. The chapter closes with the certification order, which governs timing, appellate review, notice, opt-out rights, subclasses, and issue classes.