Rule 23 Requirements are “Heightened” for Proposed Class Settlements

In Rodriguez v. Nat’l City Bank, — F.3d —, 2013 WL 4046385 (3d Cir. Aug. 12, 2013), the Third Circuit refused to certify a proposed class for settlement purposes to amicably resolve mortgage discrimination claims because those claims failed to satisfy Rule 23 under the Supreme Court’s recent ruling in Dukes v. Wal-Mart. Rejecting plaintiffs’ contention that a lesser showing under Rule 23 should be required to accommodate settlements, the Court concluded that Rule 23’s requirements demand “heightened” attention in the context of proposed class action settlements, and that “sufficient unity” must be established to bind the absent class members to the decisions of the named plaintiffs. Thus, the general policy in favor of voluntary settlements did not trump the “rigorous analysis” required to certify a class. In so ruling, the Court followed prior Supreme Court precedent. Applying the commonality and typicality standards as articulated in Dukes, the court concluded that, just as in Dukes, where statistical analyses of individual store managers could not sustain claims of company-wide discrimination claims, so too plaintiffs’ claims that individual loan officers discriminated against certain groups of borrowers could not be certified for class treatment because there was no showing of a common practice and common harm.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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