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United States of America v. the City of New York

July 8, 2011

UNITED STATES OF AMERICA,
v.
THE CITY OF NEW YORK, DEFENDANT.



The opinion of the court was delivered by: Nicholas G. Garaufis, United States District Judge.

MEMORANDUM & ORDER

In this Order the court addresses the effect of the Supreme Court's recent decision in Wal-Mart Stores, Inc. v. Dukes, No. 10-277, 2011 WL 2437013, at *1 (U.S. June 20, 2011). Applying Wal-Mart, the court denies the City's motion to decertify the liability-phase class; denies Plaintiff-Intervenors' motion for summary judgment as to compensatory damages for non-economic losses; and under Federal Rule of Civil Procedure 23(b)(3), certifies the non-hire and delayed-hire victim subclasses as to common remedial-phase issues.

I.BACKGROUND

In the court's June 6, 2011 First Remedial Phase Class Certification Order (First Remedial Cert. Order (Docket Entry # 640) at 48), the court granted in part and denied in part Plaintiff-Intervenors' motion for continued remedial-phase certification of the class of black victims of the City's discrimination that the court had conditionally certified at the beginning of the remedial phase of the litigation.*fn1 In that Order, the court certified non-economic loss and injunctive relief subclasses, each comprised of black non-hire and delayed-hire victims of the City's discrimination. (Id. at 25.) The court appointed the Individual Intervenors-Marcus Haywood ("Haywood"), Roger Gregg ("Gregg"), and Candido Nunez ("Nunez")-as representatives of the non-economic loss subclass, and the Vulcan Society as representative of the injunctive relief subclass. (Id. at 28-29.)

With respect to issues of make-whole relief, including backpay and benefits, priority hiring, and retroactive seniority, the court denied Plaintiff-Intervenors' motion for certification of a single class represented by the Vulcan Society, but permitted Plaintiff-Intervenors to move for certification of non-hire victim and delayed-hire victim subclasses as to issues of make-whole relief as long as they were represented by individual subclass members. (Id. at 12-18, 18 n.7.) Subsequent to the court's Order, Plaintiff-Intervenors sought permission to move for certification of non-hire victim and delayed-hire victim subclasses that included those groups' claims for compensatory damages for non-economic losses. (Int. Mot. for Clarification (Docket Entry # 641) at 1.) The court granted this request on June 10, 2011, and Plaintiff-Intervenors moved for certification of the non-hire and delayed-hire victim subclasses on June 13, 2011. (Int. Mot. for Subclass Cert. (Docket Entry # 643).)

Individual Intervenors Gregg and Haywood, and non-party Kevin Walker ("Walker") (collectively, the "Non-Hire Representatives"), seek to represent the non-hire victim subclass as to issues of backpay and benefits, retroactive seniority, priority hiring, and compensatory damages for non-economic losses. (Int. Subclass Cert. Mem. (Docket Entry # 643-1) at 3-4.)

Specifically, Gregg, Haywood, and Walker seek class treatment of the determination of aggregate classwide backpay and benefits (exclusive of individual issues relating to mitigation), the amount and applicability of retroactive seniority, the number of priority hiring slots, and the issues identified by the court in the First Remedial Phase Class Certification Order that are common to all black victims' claims to compensatory damages for non-economic losses. (Id. at 2; see First Remedial Cert. Order at 33 (certifying non-economic loss subclass as to two common issues).) The Non-Hire Representatives propose that the non-hire victim subclass be defined to "include all black firefighter applicants who sat for either Written Exam 7029 or Written Exam 2043 and were not hired as firefighters from the eligibility lists created from the administration of either of those exams." (Int. Subclass Cert. Mem. at 2.) They further propose that Levy Ratner, P.C. ("Levy Ratner") be appointed as counsel to the non-hire victim subclass. (Id. at 4.)

Individual Intervenor Nunez, and non-party Kevin Simpkins ("Simpkins") (collectively, the "Delayed-Hire Representatives"),*fn2 seek to represent the delayed-hire victim subclass with respect to the same issues described above. Unlike the Non-Hire Representatives, the Delayed-Hire Representatives do not seek to represent the members of their subclass with respect to issues relating to priority hiring relief. (Id. at 2-4.) Nunez and Simpkins propose that the delayed-hire victim subclass be defined to "include all black firefighters who were hired from the eligibility lists created through the use of either Written Exam 7029 or Written Exam 2043, except those who were hired in the first Academy classes hired from those eligibility lists." (Id. at 2.) They further propose that the Center for Constitutional Rights ("CCR") be appointed as counsel to the delayed-hire victim subclass. (Id. at 4.)

Before Wal-Mart, Plaintiff-Intervenors contended that the two subclasses should be certified as mandatory subclasses under Rule 23(b)(2). (Id. at 6-7.) In the alternative, they argued that they also qualified for certification under Rule 23(b)(3). (Id. at 7-9.) After Plaintiff-Intervenors filed their motion for certification of the two subclasses the Supreme Court decided Wal-Mart, on June 20, 2011. The court ordered the parties to submit additional briefing addressing Wal-Mart's effect on the pending motions for certification of the two subclasses. (Supp. Br. Order of June 20, 2011.) The parties filed letters stating their views on Wal-Mart's effect on June 21, 2011. At the June 21, 2011 litigation management conference, the City and Plaintiff-Intervenors requested permission to submit additional briefing on Wal-Mart, and the court subsequently set a briefing schedule. (Scheduling Order (Docket Entry # 648).)

In their briefs Plaintiff-Intervenors concede that Wal-Mart precludes certification of the subclass plaintiffs' claims under Rule 23(b)(2), but argue that the subclasses satisfy the requirements of Rule 23(b)(3). (Int. Wal-Mart Mem. (Docket Entry # 647) at 2.) For its part, the City contends that Wal-Mart requires the court to decertify the liability-phase class originally certified under Rule 23(b)(2) in the court's May 11, 2009 Liability Phase Class Certification Order (see Liability Cert. Order (Docket Entry # 281)), and further argues that the subclasses fail Rule 23(b)(3)'s predominance and superiority requirements. (NYC Cert. Opp. (Docket Entry # 652) at 1.) The City also argues that under Wal-Mart, the aggregate amount of non-economic losses suffered by members of the subclasses is not susceptible to classwide proof. (NYC Non-economic Loss Cert. Opp. (Docket Entry # 645) at 3-4.)

II.CLASS CERTIFICATION

A.Legal Standard for Class Certification under Rule 23

1. Rule 23(a) Prerequisites "In determining whether class certification is appropriate, a district court must first ascertain whether the claims meet the preconditions of Rule 23(a) of numerosity, commonality, typicality, and adequacy." Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 201-02 (2d Cir. 2008) ("Bombardier"). "The numerosity requirement provides that the class must be 'so numerous that joinder of all members is impracticable.'" Brown v. Kelly, 609 F.3d 467, 475 (2d Cir. 2010) (quoting Fed. R. Civ. P. 23(a)(1)).

"The commonality requirement is met if there is a common question of law or fact shared by the class." Id. Questions are common to the class if the class members' claims depend upon a common contention-for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution-which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.

Wal-Mart, 2011 WL 2437013, at *7. Thus, the commonality analysis requires the court to determine (1) whether the class members' claims "will in fact depend on the answers to common questions," id. at *9, and (2) whether classwide proceedings have the capacity to "'generate common answers apt to drive the resolution of the litigation,'" id. at *7 (quoting Richard Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 132 (2009)); see also In re Nassau County Strip Search Cases, 461 F.3d 219, 227 (2d Cir. 2006) ("Strip Search Cases") ("[A]n issue is common to the class when it is susceptible to generalized, class-wide proof."). "[F]or purposes of Rule 23(a)(2) even a single common question will do." Id. at *11 (quotation marks and alterations omitted).

"Typicality requires that the claims or defenses of the class representatives be typical of the claims or defenses of the class members. This requirement 'is satisfied when each class member's claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant's liability.'" Brown, 609 F.3d at 475 (quoting Marisol A. v. Giuliani, 126 F.3d 372, 376 (2d Cir. 1997)). "The adequacy inquiry under Rule 23(a)(4) serves to uncover conflicts of interest between named parties and the class they seek to represent. A class representative must be part of the class and possess the same interest and suffer the same injury as the class members." Amchem Products, Inc. v. Windsor, 521 U.S. 591, 625-26 (1997) (quotations, citations, and alterations omitted). "The adequacy-of-representation requirement 'tend[s] to merge' with the commonality and typicality criteria of Rule 23(a), which 'serve as guideposts for determining whether . . . maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.'" Amchem, 521 U.S. at 626 n.20 (quoting General Telephone Co. of the Southwest v. Falcon, 457 U.S. 147, 157 n.13 (1982) ("Falcon")).

The four explicit requirements of Rule 23(a) imply a fifth: that the identities of the class members are reasonably ascertainable by reference to objective criteria. See In re Initial Public Offerings Secs. Litig., 471 F.3d 24, 44-45 (2d Cir. 2006) ("In re IPO") (quoting In re Methyl Tertiary Butyl Ether ("MTBE") Prods. Liability Litig., 209 F.R.D. 323, 337 (S.D.N.Y. 2002)).

2. Standards for Certification under Rule 23(b) "If [the Rule 23(a)] criteria are met, the district court must next determine whether the class can be maintained under any one of the three subdivisions of Rule 23(b)." McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 222 (2d Cir. 2008), partially abrogated on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008). The Second Circuit summarized the requirements for certification under Rule 23(b)(2) and (b)(3), the only provisions of Rule 23(b) applicable here, in Brown v. Kelly:

Under Rule 23(b)(2), class certification is appropriate if "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." Fed. R. Civ. P. 23(b)(2).

Under Rule 23(b)(3), class certification is appropriate if "the questions of law or fact common to class members predominate over any questions affecting only individual members, and . . . a class litigation is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3).

Brown, 609 F.3d at 476.

In Wal-Mart, the Supreme Court compared Rule 23(b)(2) to (b)(3), concluding that "the combination of individualized and classwide relief in a (b)(2) class is [] inconsistent with the structure of Rule 23(b)." Wal-Mart, 2011 WL 2437013, at *12. The Wal-Mart Court reasoned that a class certified under (b)(2) has "the most traditional justification[] for class treatment . . . that the relief sought must perforce affect the entire class at once." Id. A class certified under

(b)(3), by contrast, "allows class certification in a much wider set of circumstances but with greater procedural protections." Id.; see also Amchem, 521 U.S. at 615 ("Framed for situations in which 'class-action treatment is not as clearly called for' as it is in Rule 23(b)(1) and (b)(2) situations, Rule 23(b)(3) permits certification where class suit 'may nevertheless be convenient and desirable.'" (quoting Fed. R. Civ. P. 23 adv. comm. n. to 1966 amend.)). Thus, Wal-Mart held "that individualized monetary claims belong in Rule 23(b)(3)." 2011 WL 2437013, at *13.

"To qualify for certification under Rule 23(b)(3), a class must meet two requirements beyond the Rule 23(a) prerequisites: Common questions must 'predominate over any questions affecting only individual members'; and class resolution must be 'superior to other available methods for the fair and efficient adjudication of the controversy.'" Amchem, 521 U.S. at 615 (quoting Rule 23(b)(3)). "Rule 23(b)(3) includes a nonexhaustive list of factors pertinent to a court's close look at the predominance and superiority criteria." Id. at 615-16 (quotation marks omitted). Those factors are:

(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.

Fed. R. Civ. P. 23(b)(3).

"As a general matter, the 'Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation.'" Strip Search Cases, 461 F.3d at 225 (quoting In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d 124, 136 (2d Cir. 2001) ("In re Visa Check")).

"[E]conomies of time, effort, and expense" in fully resolving each plaintiff's claim will only be served, and the predominance requirement satisfied, if the plaintiffs can show that "some" of the [common] questions can be answered with respect to the members of the class as a whole "through generalized proof" and that those common issues are "more substantial" than individual ones.

Myers v. Hertz Corp., 624 F.3d 537, 549 (2d Cir. 2010) (internal citations omitted, quoting Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc., 502 F.3d 91, 104 (2d Cir. 2007) and Moore v. PaineWebber, Inc., 306 F.3d 1247, 1252 (2d Cir. 2002)).

In determining whether common issues will predominate overall, district courts are required to consider all factual or legal issues, including those conceded by the party opposing class certification or resolved earlier in the litigation. See Myers, 624 F.3d at 550 ("[T]he reason for this is that the predominance requirement requires a district court to consider all factual or legal issues, to determine whether the issues subject to generalized proof are more substantial than those subject to individual inquiry." (quotation marks and citation omitted)); Strip Search Cases, 461 F.3d at 227-29 (holding that district court abused its discretion in finding predominance requirement unsatisfied where defendants conceded "all the major liability issues" and asserted an affirmative defense requiring only de minimis individualized inquiry). Moreover, the Second Circuit has held that a class can be certified as to particular common issues under Rule 23(c)(4) in order "to single out issues for class treatment when the action as a whole does not satisfy Rule 23(b)(3)['s predominance requirement]." Strip Search Cases, 461

F.3d at 227. 3. Burden of Proof "[A] district judge may certify a class only after making determinations that each of the Rule 23 requirements has been met" and "only if the judge resolves factual disputes relevant to each Rule 23 requirement and finds that whatever underlying facts are relevant to a particular Rule 23 requirement have been established." In re IPO, 471 F.3d at 41. The court must make these findings by a preponderance of the evidence. Bombardier, 546 F.3d at 202. Where factual questions underlying a Rule 23 requirement overlap with merits questions, the court is obligated to decide them, but "a district judge should not assess any aspect of the merits unrelated to a Rule 23 requirement." In re IPO, 471 F.3d at 41; see also Wal-Mart, 2011 WL 2437013, at *7 ("[C]ertification is proper only if 'the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.' Frequently that 'rigorous analysis' will entail some overlap with the merits of the plaintiff's underlying claim. That cannot be helped." (quoting Falcon, 457 U.S. at 160-61) (internal citations omitted)).

B.Motion to Decertify the Liability-Phase Class Certified under Rule 23(b)(2)

Before Wal-Mart, the Second Circuit's opinion in Robinson v. Metro-North Commuter Railroad Co., 267 F.3d 147 (2d Cir. 2001), governed the application of Rule 23(b)(2) to employment discrimination class actions in this Circuit. While all parties now agree that Wal-Mart precludes remedial-phase certification of the two subclasses as to the victims' claims for backpay and compensatory damages under (b)(2), the City goes further, arguing that Wal-Mart requires the court to decertify the class certified under (b)(2) in the liability phase. (See NYC Cert. Opp. at 1-2.) The City argues that the court's May 11, 2009 Liability Phase Class Certification Order was inconsistent with Rule 23(b) because it improperly certified a plaintiff class seeking non-incidental monetary relief under (b)(2). (Id.)

On reconsideration after Wal-Mart, the court concludes that its decision to certify the question of the City's liability for disparate impact and pattern-or-practice disparate treatment violations under Rule 23(b)(2) was consistent with Wal-Mart and controlling Second Circuit precedent, and denies the City's motion to decertify the liability-phase class.

1. The Court's Liability Phase Class Certification Order

In the court's September 5, 2007 Bifurcation Order, the court followed the Second Circuit's guidance in Robinson, 267 F.3d at 168, and bifurcated the litigation into liability and, if necessary, remedial phases pursuant to Federal Rule of Civil Procedure 42(b). (Bifurcation Order (Docket Entry # 47) at 3-4.) In the court's May 11, 2009 Liability Phase Class Certification Order, the court certified a class of

[a]ll black firefighters or firefighter applicants who sat for either Written Exam 7029 or Written Exam 2043 and were harmed by one or more of the following employment practices: (1) Defendants' use of Written Exam 7029 as a pass/fail screening device with a cutoff score of 84.705; (2) Defendants' rank-order processing of applicants who passed Written Exam 7029; (3) Defendants' use of Written Exam 2043 as a pass/fail screening device with a cutoff score of 70.00; and (4) Defendants' rank-order processing of applicants who passed Written Exam 2043. (Liability Cert. Order at 33-34.) The class was certified to litigate only "the liability phase of the disparate treatment and disparate impact claims asserted by the Intervenors." (Id. at 34.)

As the court noted in its analysis of Rule 23(a)(2)'s commonality requirement, the liability phase presented four common questions that were relevant to the class's disparate impact and pattern-or-practice disparate treatment claims: whether Defendants' uses of Written Examination 7029 and Written Examination 2043 had a disparate impact upon black applicants for the position of entry-level firefighter; whether Defendants' uses of those examinations were job related to the position in question and consistent with business necessity; whether alternative practices that satisfy the asserted business necessity without disparate effect are available; and whether Defendants engaged in a pattern or practice amounting to intentional discrimination. (Id. at 28-29.) The court stated that Plaintiff-Intervenors' request for non-incidental monetary relief could potentially raise individual questions and due process concerns, but noted that those concerns would not arise, if at all, until the remedial phase of the litigation. (Id. at 32-33.) The court quoted Robinson's observation that "'for those stages of this case where the interests of the class members are essentially identical (i.e., the liability phase of the pattern-or-practice suit and the class-wide phases of the disparate impact claim), the due process rights of absent class members are ensured by adequate class representation alone.'" (Id. at 33 (quoting Robinson, 267

F.3d at 167 n.10).) Consequently, the court certified the liability-phase class under Rule 23(b)(2), and stated its intent to reconsider class certification if the litigation proceeded beyond the liability phase. (Id. at 33-34.)

2. The Second Circuit's Decision in Robinson

Understanding how Wal-Mart has changed the law of this Circuit-and how it has not- requires a brief comparison of Robinson's and Wal-Mart's holdings. In Robinson the Second Circuit decided an appeal from the district court's denial of a motion to certify, under Rule 23(b)(2), a class of African-American Metro-North employees who claimed that they were the victims of employment discrimination on the basis of their race in violation of Title VII of the Civil Rights Act of 1964. 267 F.3d at 155. The class challenged "Metro North's company-wide policy of delegating to department supervisors discretionary authority to make employment decisions related to discipline and promotion," and asserted both disparate impact and pattern-or-practice disparate treatment claims. Id. The class plaintiffs moved "for (b)(2) class certifications of both the pattern-or-practice disparate treatment claim and the disparate impact claim." Id. at 156. The district court denied certification of both the disparate impact and disparate treatment claims. Id. at 156-57.

With respect to the disparate impact claim the Second Circuit relied on well-established precedent permitting employment discrimination plaintiffs to recover backpay in (b)(2) class actions, stating "we think it plain that (b)(2) certification of disparate impact claims seeking both injunctive and equitable monetary relief remains appropriate." Id. at 169-70.*fn3 The Second Circuit, therefore, instructed the district court to certify the class's disparate impact claims under Rule 23(b)(2). Id. at 172.

With respect to the class plaintiffs' pattern-or-practice disparate treatment claims, including the class plaintiffs' request for compensatory damages, Robinson elaborated a new ad hoc balancing approach for district courts to use in determining whether damages or injunctive relief were the predominant form of relief sought by the plaintiff class. Id. at 155, 164. Robinson held that a district court could certify a claim seeking both injunctive and monetary relief under Rule 23(b)(2) if it found that the requested monetary relief did not predominate over the requested injunctive relief. Id. If, after using the ad hoc balancing approach, the district court determined that the pattern-or-practice disparate treatment claim could not be certified under Rule 23(b)(2) as a whole, Robinson held that the district court should still certify the liability phase of the pattern-or-practice claim for class treatment under Rule 23(b)(2) by using its authority to certify particular issues for class treatment under Rule 23(c)(4). Id. at 167-68. Robinson reasoned that the interests of the class members were "essentially identical" in the liability phase of a pattern-or-practice disparate treatment action, and in the classwide phase of a disparate impact action. Id. at 166-67 n.10. But the Second Circuit recognized that certifying a mandatory (b)(2) as to claims for non-incidental monetary relief posed a due-process risk. Id. Therefore, Robinson held that "any due process risk posed by (b)(2) class certification of a claim for nonincidental damages can be eliminated by the district court simply affording notice and opt out rights to absent class members for those portions of the proceedings where the presumption of class cohesion falters-i.e., the damages phase of the proceedings." Id. at 166.

To summarize, Robinson held in relevant part: (1) that a class seeking both classwide injunctive and individual backpay relief on a disparate impact claim should be certified for class treatment under (b)(2); (2) that a pattern-or-practice disparate treatment claim seeking compensatory damages in addition to equitable relief may be certified for class treatment under

(b)(2) if the monetary relief sought does not predominate over the injunctive relief sought;

(3) that even if the entire pattern-or-practice disparate treatment claim cannot be certified under

(b)(2), a district court should still certify the liability phase of the claim for class treatment under

(b)(2), and reconsider the propriety of continued (b)(2) certification if the case proceeds to the remedial phase; and (4) a district court may mitigate due process concerns implicated by using (b)(2) to decide questions of individual monetary relief in the remedial phase by affording notice to absent class members and giving them the right to opt-out of the (b)(2) class under Rule 23(c)(2).

3. The Supreme Court's Decision in Wal-Mart

In Wal-Mart the Supreme Court held that claims for monetary relief may not be certified under Rule 23(b)(2), "at least where (as here) the monetary relief is not incidental to the injunctive or declaratory relief. . . . [A]t a minimum, claims for individualized relief (like the backpay at issue here) do not satisfy the Rule."*fn4 2011 WL 2437013, at *12. In so holding, a unanimous Supreme Court reduced to rubble more than forty years of precedent in the Courts of Appeals, which had long held that backpay is recoverable in employment discrimination class actions certified under Rule 23(b)(2). See Robinson, 267 F.3d at 169 (collecting cases); see also Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (5th Cir. 1998).

The Supreme Court's opinion in Wal-Mart abrogated three of the Second Circuit's holdings in Robinson. After Wal-Mart, it is clear that claims for neither backpay nor compensatory damages may be certified for class treatment under Rule 23(b)(2), at least where those claims are more than wholly incidental to the injunctive relief sought by the class. 2011 WL 2437013, at *12. Furthermore, Wal-Mart held that claims for individual monetary relief may only be certified for class treatment under Rule 23(b)(3) after the district court has made the requisite findings of predominance and superiority, and if the court provides absent class members with notice and opt-out rights. Id. at *13-15. Finally, Wal-Mart clarified that the structure of Rule 23(b) requires that claims for non-incidental monetary relief be certified for class treatment only if all of the (b)(3) requirements are satisfied-notice-and-opt-out rights alone are insufficient. Id. at *13.

4. Issue Certification under Rule 23(b)(2) and (c)(4) after Wal-Mart Robinson's holding requiring Rule 23(b)(2) certification of the liability phase of pattern-or-practice disparate treatment cases is, however, technically undisturbed by Wal-Mart, and remains the law in this Circuit. Wal-Mart interpreted only Rule 23(a)(2) and (b). The Supreme Court did not have occasion to decide whether a district court may order (b)(2) certification, under Rule 23(c)(4), of particular issues raised by disparate impact or pattern-or-practice disparate treatment claims that satisfy (b)(2)'s requirements. In Wal-Mart, the Court's conclusion that the class failed Rule 23(a)(2)'s commonality requirement foreclosed the certification of any class. See 2011 WL 2437013, at *11.

The Second Circuit has consistently endorsed a broad reading of Rule 23(c)(4). In Robinson, the Court of Appeals stated that "[d]istrict courts should take full advantage of this provision to certify separate issues in order to reduce the range of disputed issues in complex litigation and achieve judicial efficiencies." Robinson, 267 F.3d at 167 (quotation marks and alterations omitted). Robinson, held that (c)(4) may be used to certify those portions of a claim that satisfy (b)(2) even if the claim as a whole does not. 267 F.3d at 167-68. And, in Strip Search Cases, the Second Circuit held that (c)(4) may be used "to certify a class as to a specific issue where the entire claim does not satisfy Rule 23(b)(3)'s predominance requirement." 461 F.3d at 226. Strip Search Cases quoted the Advisory Committee Notes, observing that "the notes illustrate that a court may properly employ this technique to separate the issue of liability from damages." Id. (quoting Fed. R. Civ. P. 23(c)(4) adv. comm. n. to 1966 amend. ("For example, in a fraud or similar case the action may retain its 'class' character only through the adjudication of liability to the class; the members of the class may thereafter be required to come in individually and prove the amounts of their respective claims.")).

The Second Circuit's interpretation of Rule 23(c)(4) is consistent with Wal-Mart's interpretation of Rule 23(b). Wal-Mart's interpretation of Rule 23(b) turned on the Court's analysis of the structural differences between (b)(2) and (b)(3) classes. The Court noted that "[t]he key to the (b)(2) class is 'the indivisible nature of the injunctive or declaratory remedy warranted-the notion that the conduct is such that it can be enjoined or declared unlawful only as to all of the class members or as to none of them.'" Wal-Mart, 2011 WL 2437013, at *12 (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 98, 132 (2009)). The Court reasoned that (b)(2) does not provide the same procedural protections for absent class members that (b)(3) does because the members of a (b)(2) class share a unity of interest in the remedy that they would not if they sought monetary relief requiring individualized determinations of fact and law.

When a class seeks an indivisible injunction benefitting all its members at once, there is no reason to undertake a case-specific inquiry into whether class issues predominate or whether class action is a superior method of adjudicating the dispute. Predominance and superiority are self-evident. But with respect to each class member's individualized claim for money, that is not so-which is precisely why (b)(3) requires the judge to make findings about predominance and superiority before allowing the class.

Id. at *13. In light of the structure of Rule 23(b), the Wal-Mart Court concluded that it was "clear that individualized monetary claims belong in Rule 23(b)(3)." Id.

Issue certification of bifurcated liability-phase questions is fully consistent with Wal-Mart's careful attention to the distinct procedural ...


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