Adequacy Anaylsis Post

Adequacy
 FRCP 23(a)(4) “[S]erves to uncover conflicts of interest
between named parties and the class they seek to
represent.” Amchem Products v. Windsor, 521 U.S. 591 (1997).
 Standard Fire v. Knowles
 “[A] plaintiff who files a proposed class action cannot legally
bind members of the proposed class before the class is
certified. . . . Knowles lacked the authority to concede the
amount in controversy issue for the absent class members.”
 If the stipulation were to stand, “a court might find that
Knowles is an inadequate representative due to the
artificial cap he purports to impose on the class’ recovery.”
No Injury Cases Illustrate Conflict
 Small percentage of class with problem
 P seeks to certify a broad class regardless of whether
they have experienced the problem
 The “glue” that binds these groups together is the lowest
common denominator lost value claim.
 But to have lost value claim certified, P must be willing
to sacrifice the high value claims that may be available to
a more limited group of people.
What is the risk?
 “The rule against claim splitting requires a plaintiff to
assert all of its causes of action arising from a common
set of facts in one lawsuit. By spreading claims around
in multiple lawsuits in other courts or before other
judges, parties waste scarce judicial resources and
undermine the efficient and comprehensive
disposition of cases.” Katz v. Gerardi, 655 F.3d 1212 (10th
Cir. 2011).
Res Judicata Assessed Later
 The res judicata effect of the judgment in the
class action will not be determined by the court
certifying the class.
 It cannot be assured that abandoned class
members’ damages claims are preserved.
See, e.g. In re MTBE Products, 209 FRD 323 (SDNY 2002);
Thompson v. Am. Tobacco, 189 FRD 544 (D Minn 1999).
Moving Towards a Rule
 Weigh P’s injury theory against the rest of the class.
 P seeking the lowest common denominator risks waiving
potentially high value claims of absent class members.
 “A class representative’s decision to abandon certain claims
may be detrimental to absent class members for whom
those claims could be more lucrative or valuable, assuming
those class members do not opt out of the class.
Abandoning such claims, or claims ‘reasonably expected’ to
be raised by class members, could undermine the adequacy
of the named plaintiff’s representation of the class.”
Citizens Insurance v. Daccach, 217 SW3d 430 (TX 2007)
Claim Splitting in Action
 What happens when an overly broad class for limited
damages is certified? Whirlpool case:
 Diminished value/premium price across multiple
washer models
 Even if the jury found 19 of 20 washing models defective,
the jury must find for the defendant, and did find for the
defendant at trial.
 Defense verdict permanently binds the class members
who have the 19 defective models from pursuing a defect
claim.
See John Thomas, Defeating Class Certification in ‘All or Nothing’
Litigation, For the Defense, Nov. 2014, p. 80.