and did not address how the exemptions to the statutory prohibitions weight in thecertification analysis.” Id. at *2. The defendant filed an interlocutory appeal of thecertification decision, arguing that “the district court erred when it founds that commonissues predominated over individual ones without addressing the effect of the ERISA’sstatutory exemptions on liability classwide and without making any factual findings as tothe similarities of the loans.” Id. at *1.The Second Circuit agreed with the defendant. Focusing on the Rule 23(b)(3)requirement that questions of law or fact common to the putative class predominateover questions affecting individuals, the Second Circuit held that the district court failedto make the requisite findings to support its determination. The Second Circuit notedthat predominance is not a quantitative inquiry but a qualitative one “that entails carefulscrutiny of the nature and significance of a case’s common and individual issues.” Id. at*4. Here, because one of the potentially applicable ERISA exemptions for thechallenged transactions required a focus on the conduct of fiduciaries in determiningloan program pricing, the facts needed for determining how each of the 8,000 plans didso were necessarily individualized. In this respect, the Second Circuit noted that thedistrict court limited its analysis to stating that this question “is not quite as easy” toresolve with common proof. Id. at *5. As to the other possible exemption the defendantraised, the Second Circuit opined that “the district court’s decision gives us no indicationthat the court factored it into its predominance analysis at all.” Id.The Second Circuit explained that the fact that the exemption-related issues may haveoverlapped with merits inquiries did “not absolve [the] district court from addressingthem at the certification stage when such determinations bear on assessing a Rule 23requirement.” Id. at *5. The district court’s failure to analyze these issues meant that itdid not engage with the defendant’s evidence, and the district court “cannot simply takethe plaintiff’s word that no material differences exist.” For these reasons, the SecondCircuit vacated the class certification decision and remanded the case. Id. at *6.G.Rulings Denying Class CertificationDraney, et al. v. Westco Chemicals, Inc., 2022 U.S. Dist. LEXIS 143130 (C.D. Cal. Aug.10, 2022), is one of the few decisions outright denying class certification in 2022, anddid so despite the fact that the parties jointly moved for class certification as part of ajointly proposed class settlement. In so doing, the parties sought certification of amandatory, non-opt-out class under Rule 23(b)(1), under which certification isappropriate only where prosecuting separate actions would risk “inconsistent or varyingadjudications with respect to individual class members that would establish incompatiblestandards of conduct for the party opposing the class” or “adjudications with respect toindividual class members that . . . would be dispositive of the interests of the othermembers not parties to the individual adjudications or would substantially impair orimpeded their ability to protect their interests.” Id. at *6 (citing Fed. R. Civ. P. 23(b)(1)(A)and 23(b)(1)(B)).The plaintiffs argued that Rule 23(b)(1) certification of a mandatory class wasappropriate because damages were sought “in a representative capacity on behalf of203© Duane Morris LLP 2023Duane Morris Class Action Review – 2023
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