In Ahmad v. Old Republic National Title Insurance Company, --- F.3d ---, 2012 WL 3264560, *8 (5th Cir. Aug. 13, 2012), the Fifth Circuit Court of Appeals reversed a Texas federal court’s grant of class certification because none of Plaintiff’s proposed questions of common fact or law were common to the class and, therefore, could not predominate at trial. Plaintiffs sought class certification of a group of Texas homeowners claiming the Old Republic National Title Insurance Co. routinely denied the putative plaintiffs a title insurance premium discount required under Texas law. The Texas federal court granted class certification the same day that the Fifth Circuit issued a decision in Benavides v. Chicago Title Insurance, Co., 636 F.3d 699 (5th Cir. 2011), in which the Fifth Circuit denied class certification in a similar lawsuit over the same commonality issues.

The Ahmad Court affirmed its decision in Benavides. The Court recognized the challenge title insurance companies have in determining whether a particular borrower, seeking to refinance their home, was issued a title insurance policy within seven years of the date of the new policy. The insurance company's ad hoc policy involved looking at circumstantial evidence in each borrower’s file to determine whether there was a pre-existing policy.

The Ahmads argued that class certification was appropriate because a set of three “proxy indicators” sufficiently identified that a policy had been previously issued, thus entitling the borrower to the mandatory discount. However, the Court found that the question of common fact, “what evidence is sufficient to qualify a borrower for the [mandatory] credit?” did not invite a “yes” or “no” answer as required by Rule 23. Rather, a fact finder would necessarily engage in a file-by-file review in determining whether the mandatory credit applied. Because the issues were not capable of class-wide determination by class-wide proof, the common questions identified by the Ahmads were not common to the class and could not predominate at trial.