PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

______

No. 11-8079

______

JOHN RODRIGUEZ; JENNIFER WORTHINGTON;

BOBBY CROUTHER; JESUS CONCHAS;

ROSE MARIA CONCHAS; LUIS RAMOS;

JOANN RAMOS, on behalf of themselves

and all others similarly situated,

Petitioners

v.

NATIONAL CITY BANK;

NATIONAL CITY CORP.;

THE PNC FINANCIAL SERVICES GROUP, INC.;

DOES 1-10, INCLUSIVE

______

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 2-08-cv-02059)

District Judge: Honorable Eduardo C. Robreno

______

Argued November 13, 2012

Before: SCIRICA, FISHER and JORDAN, Circuit Judges.
2

(Opinion Filed: August 12, 2013)

______

Edward W. Ciolko

Joseph H. Meltzer

Donna S. Moffa

Peter A. Muhic (ARGUED)

Amanda R. Trask

Kessler, Topaz, Meltzer & Check

280 King of Prussia Road

Radnor, PA 19087

Kevin M. Costello

Roddy Klein & Ryan

727 Atlantic Avenue, Second Floor

Boston, MA 02111

Andrew S. Friedman

Wendy J. Harrison

Bonnett, Fairbourn, Friedman & Balint

2325 East Camelback Road, Suite 300

Phoenix, AZ 85016

Jeffrey L. Taren

Kinoy Taren & Geraghty

224 South Michigan Avenue, #300

Chicago, IL 60604

Counsel for Petitioners
3

Sarah R. Breitlander

Hinshaw & Culbertson

222 North LaSalle Street, Suite 300

Chicago, IL 60601

Martin C. Bryce, Jr.

Ballard Spahr

1735 Market Street, 51st Floor

Philadelphia, PA 19103

Diane M. Kehl

Chad A. Schiefelbein

Vedder Price

222 North LaSalle Street, Suite 2600

Chicago, IL 60601

Counsel for Respondents,

National City Bank and

National City Corp.

David H. Pittinsky (ARGUED)

Ballard Spahr

1735 Market Street, 51st Floor

Philadelphia, PA 19103

Counsel for Respondents,

National City Bank,

National City Corp., and

The PNC Financial Services

Group, Inc.

______

OPINION OF THE COURT

______
4

JORDAN, Circuit Judge.

In this mortgage loan discrimination case, a putative 

class of minority borrowers seeks permission under Rule 

23(f) of the Federal Rules of Civil Procedure to appeal the 

denial of final approval by the United States District Court for 

the Eastern District of Pennsylvania of the parties’ proposed 

settlement and certification of the settlement class. We will 

grant the petition for permission to appeal and, for the reasons 

that follow, will affirm the order of the District Court. 

I. Background

Named plaintiffs John Rodriguez, Jennifer 

Worthington, Bobby Crouther, Jesus Conchas, and Rosa 

Maria Conchas (collectively, “Plaintiffs”) are AfricanAmerican and Hispanic borrowers who obtained mortgage 

loans from Defendant National City Bank in 2006 or 2007. 

On May 1, 2008, they filed a class action complaint against 

National City Bank and its parent company, National City 

Corporation (collectively, “National City”),1

 1 On October 24, 2008, The PNC Financial Services 

Group, Inc. (“PNC”), acquired National City, and Plaintiffs 

subsequently filed a second amended complaint that added 

PNC as a defendant, as successor-in-interest to National City. 

alleging that 

National City had an established pattern or practice of racial 

discrimination in the financing of residential home purchases, 

in violation of the Fair Housing Act, 42 U.S.C. § 3605, and 

the Equal Credit Opportunity Act, 15 U.S.C. § 1691. 

Specifically, Plaintiffs asserted that National City issued them 

loans pursuant to a “Discretionary Pricing Policy” that 
5

allowed individual brokers and loan officers to add a 

subjective surcharge of additional points, fees, and credit 

costs to an otherwise objective, risk-based financing rate. 

According to Plaintiffs, as a result of that policy, minority 

applicants for home mortgage loans were “charged a 

disproportionately greater amount in non-risk-related charges 

than similarly-situated Caucasian persons.” (J.A. at 117.) In 

other words, the policy allegedly produced a discriminatory 

disparate impact. 

After the District Court denied National City’s motion 

to dismiss,2

 2 More precisely, the District Court granted National 

City’s motion to strike from the complaint certain paragraphs 

that would have “require[d] Defendants to undertake 

substantial investigation before filing a responsive pleading” 

(J.A. at 149), but denied the motion “to the extent that it 

[sought] to dismiss Plaintiffs’ amended complaint in whole or 

in part” (id. at 150). 

the parties engaged in extensive discovery.

National City provided Plaintiffs with data on each of the 

more than two million loans it issued from 2001 to 2008. 

That data included, among other things, the annual percentage 

rate, the term of the loan, the interest rate, the prepayment 

terms, the origination fee, and the amortization type, as well 

as information about the borrower, including income,

ethnicity, race, and debt-to-income ratio. While discovery 

was still proceeding, the parties met to explore the possibility 

of a negotiated settlement. Plaintiffs presented National City 

with preliminary statistical analyses of the loan data they had 

received. Although those analyses were shared confidentially

and are thus not in the record, the parties agree that they 
6

included regression analyses of National City’s loan data.3

 

Plaintiffs say that those regression analyses revealed that, 

overall, “Blacks and Hispanics paid more for their loans than 

similarly situated Caucasians (a ‘disparate impact’) that 

amounted to damages ... of at least $350 and up to $1,100 per 

loan.” (Petitioners’ Opening Br. at 5.) Plaintiffs further 

contend that, because they controlled for “all objective credit 

and risk factors impacting loan pricing” (Id. at 12), those 

analyses prove that National City’s Discretionary Pricing 

Policy produced the disparate impact. 

After participating in two days of mediation, the 

parties arrived at a proposed settlement agreement. Under its

terms, the class would include “[a]ll African-American and 

Hispanic persons who obtained a Mortgage Loan” from 

National City, its affiliates, or its successor-in-interest, PNC,

from January 1, 2004, through the date of the settlement’s 

preliminary approval. (J.A. at 250.) National City did not 

concede any wrongdoing, but it agreed to pay $7,000,000 for 

the benefit of the settlement class in exchange for a release of 

claims. Specifically, the agreement provided a service award 

of $7,500 to each of the named plaintiffs, $200 to each class 

payee, $75,000 to two organizations that would provide 

counseling and other services to the settlement class, and 

$2,100,000 in attorneys’ fees. The agreement also included a 

provision barring either party from attempting to void the 

agreement, except in the event of an appeal. 

 3 Plaintiffs describe a regression analysis as “a 

statistical tool which determines the relationship between a 

variable to be studied and one or more potentially explanatory 

variables.” (Petitioners’ Opening Br. at 4 n.3.) 
7

On July 21, 2010, the District Court granted 

preliminary approval of the settlement and preliminarily 

certified the proposed class under Federal Rule of Civil 

Procedure 23(b)(3). Notice was then sent to the more than 

153,000 members of the putative class. In response to that 

notice, six people objected to the proposed agreement, 66 

opted out of the settlement, and 24,631 sought to take part in 

it by submitting claim forms. On December 9, 2010, 

Plaintiffs filed an unopposed motion requesting final approval 

of the settlement agreement, final certification of the 

settlement class, and attorneys’ fees. In January 2011, after 

holding an initial fairness hearing, the District Court ordered 

additional briefing regarding certain aspects of the settlement 

agreement. Before the Court reached a final determination in 

light of that briefing, the Supreme Court issued its now wellknown opinion in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 

2541 (2011). The District Court ordered another round of 

supplemental briefing, this time asking the parties to discuss 

the impact of Dukes on class certification. In that briefing, 

both parties continued to support class certification, as they 

had promised in their settlement agreement. 

The District Court, however, read Dukes as preventing 

certification, and, on September 8, 2011, it issued an order to 

that effect, denying at the same time Plaintiffs’ motion for 

final settlement approval. In its memorandum opinion, the 

Court held that the settlement class failed to meet Rule 
8

23(a)’s commonality and typicality requirements.

4

 4 As more fully described herein, infra Part III.B, 

“commonality” demands that the members of a prospective 

class share at least one question of fact or law common to 

their claims. Baby Neal v. Casey, 43 F.3d 48, 56 (3d Cir. 

1994). The “typicality” requirement instructs courts “to 

assess whether the class representatives themselves present 

[the] common issues of law and fact that justify class 

treatment ... .” Eisenberg v. Gagnon, 766 F.2d 770, 786 (3d 

Cir. 1985). As the District Court rightly noted, see 

Rodriguez, 277 F.R.D. at 154 n.5, we have said that the 

commonality and typicality requirements “tend to merge,” 

such that if commonality is not satisfied, typicality is likely 

not satisfied for the same reason. In re Cmty. Bank of N. Va., 

418 F.3d 277, 300 (3d Cir. 2005) (quoting Baby Neal, 43 F.3d 

at 56) (internal quotation marks omitted). 

It 

explained that Dukes had clarified the standard for 

establishing commonality, and that, under that standard, 

“Plaintiffs would likely have to show the disparate impact and 

analysis for each loan officer or at a minimum each group of 

loan officers working for a specific supervisor” in order to 

demonstrate commonality. Rodriguez v. Nat’l City Bank, 277 

F.R.D. 148, 155 (E.D. Pa. 2011). The regression analyses’ 

demonstration of an overall race-based disparity was

inadequate, the Court said, because, even if the analyses

“remove[d] all credit related reasoning, there may be noncredit related reasoning that individual loan officers 

contemplated that is not based on race.” Id. Accordingly, the 

Court decided that Plaintiffs had “fail[ed] to show that the 

class could be certified,” and it denied their motion. Id. This 

timely appeal followed.
9

II. Jurisdiction and Standard of Review

The District Court had jurisdiction under 28 U.S.C. 

§ 1331. The matter is before us on Plaintiffs’ petition for 

leave to appeal, filed in accordance with Rule 23(f) of the 

Federal Rules of Civil Procedure, which allows us to “permit 

an appeal from an order granting or denying class-action 

certification ... if a petition for permission to appeal is filed 

with the circuit clerk within 14 days after the order is 

entered.” 

We have “very broad discretion in deciding whether to 

grant permission to pursue a Rule 23(f) appeal.” Gutierrez v. 

Johnson & Johnson, 523 F.3d 187, 192 (3d Cir. 2008); see 

also Fed. R. Civ. P. 23(f) advisory committee’s note (“Appeal 

from an order granting or denying class certification is 

permitted in the sole discretion of the court of appeals.”). In 

Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 

F.3d 154 (3d Cir. 2001), we identified several circumstances 

in which appellate review is appropriate, including: (1) “when 

denial of certification effectively terminates the litigation 

because the value of each plaintiff’s claim is outweighed by 

the costs of stand-alone litigation”; (2) when class 

certification risks placing “inordinate ... pressure on 

defendants to settle”; (3) “when an appeal implicates novel or 

unsettled questions of law”; (4) when the district court’s class 

certification determination was erroneous; and (5) when the 

appeal might “facilitate development of the law on class 

certification.” Id. at 164-65. By contrast, review is 

discouraged when the natural course of litigation will provide 

the moving party with an adequate remedy, or when the 

certification decision was routine and easily resolved. Id. 
10

Permitting this appeal facilitates the development of 

the law on class certification by allowing us to consider the 

nature of the commonality inquiry in light of the Supreme 

Court’s important instruction in Dukes. We therefore will 

grant Plaintiffs’ petition and exercise our jurisdiction pursuant 

to Rule 23(f) and 28 U.S.C. § 1292(e). 

We review a district court’s decision to approve or 

reject a class action settlement agreement for abuse of 

discretion. Newton, 259 F.3d at 165; see also In re Hydrogen 

Peroxide Antitrust Litig., 552 F.3d 305, 310 (3d Cir. 2008) 

(“The trial court, well-positioned to decide which facts and 

legal arguments are most important to each Rule 23 

requirement, possesses broad discretion to control 

proceedings and frame issues for consideration under Rule 

23.”) A district court abuses its discretion if its decision 

“rests upon a clearly erroneous finding of fact, an errant 

conclusion of law or an improper application of law to fact.” 

Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 590 (3d Cir. 

2012) (internal quotation marks omitted). “Whether an 

incorrect legal standard has been used is an issue of law to be 

reviewed de novo.” Id. (internal quotation marks omitted).

III. Discussion

Plaintiffs argue that the District Court abused its 

discretion in two ways: it contravened the “limited role” a 

court should occupy when deciding whether to certify a 

settlement class, and it based its commonality determination 

on an erroneous application of Dukes. National City, now 

free under the terms of the settlement agreement to object to 
11

class certification,5 contends that the Court occupied its 

prescribed role and reached the correct result under Dukes. 

We address those competing arguments in turn and conclude 

that the scope of the District Court’s inquiry was fully 

consistent with Dukes, as well as with our own precedent and 

Rule 23, and that the Court rightly concluded that the putative 

class lacks commonality. 

A. Certification of a Settlement Class

Federal Rule of Civil Procedure 23(a) requires that the 

members of a proposed class share a common question of law 

or fact. Fed. R. Civ. P. 23(a)(2). That commonality 

requirement is, along with numerosity, typicality, and 

adequacy of representation, one of Rule 23(a)’s four 

“threshold requirements” for class certification, Amchem 

Prods., Inc. v. Windsor, 521 U.S. 591, 613 (1997), which are 

intended to “limit the class claims to those fairly 

encompassed by the named plaintiff’s claims,” Dukes, 131 S. 

Ct. at 2550 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 

147, 156 (1982)) (internal quotation marks omitted).6

 5 The settlement agreement provides that, “[i]n the 

event any court disapproves or sets aside this Settlement 

Agreement” and the “Parties do not agree jointly to appeal 

such ruling,” the parties are released from their obligations 

under the agreement. (J.A. at 265.)

 

6 Specifically, Rule 23(a) provides that:

[o]ne or more members of a class may sue or be 

sued as representative parties on behalf of all 

members only if:
12

Although they apply to all putative classes, those 

requirements are of “vital importance” in the settlement 

context because they protect absent class members “by 

blocking unwarranted or overbroad class definitions.”

Amchem, 521 U.S. at 620. For that reason, the Supreme 

Court held in Amchem that, although certain Rule 23 

considerations, such as “whether the case, if tried, would 

present intractable management problems,” are not applicable 

in the settlement class context, the Rule’s other requirements 

“demand undiluted, even heightened, attention” when class 

action representatives are seeking certification for the purpose 

of settlement. Id. at 620. Thus, in addition to determining 

whether a proposed settlement is “fair, reasonable, and 

adequate,” Fed. R. Civ. P. 23(e), district courts must ensure 

that each of Rule 23(a)’s requirements, including 

commonality, is satisfied before certifying a class and 

 

(1) the class is so numerous that joinder 

of all members is impracticable;

(2) there are questions of law or fact 

common to the class;

(3) the claims or defenses of the 

representative parties are typical of the claims 

or defenses of the class; and

(4) the representative parties will fairly 

and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a).
13

approving a class settlement agreement.7 See Sullivan v. DB 

Invs., Inc., 667 F.3d 273, 296 (3d Cir. 2011) (en banc) 

(“[B]efore approving a class settlement agreement, a district 

court first must determine that the requirements for class 

certification under Rule 23(a) and (b) are met.” (internal 

quotation marks omitted)); In re Cmty. Bank of N. Va., 418 

F.3d 277, 300 (3d Cir. 2005) (“[R]egardless of whether a 

district court certifies a class for trial or for settlement, it must 

first find that the class satisfies all the requirements of Rule 

23.”). 

Plaintiffs agree that the requirements of Rule 23(a) 

remain intact in the settlement context, but they maintain that, 

“when a settlement class ... is presented for consideration,” 

those requirements “operate in tandem with a strong 

presumption in favor of voluntary settlement agreements.” 

(Petitioners’ Opening Br. at 25-26.) They say the District 

 7 Parties seeking certification must also show that “the 

action is maintainable under Rule 23(b)(1), (2), or (3).” In re 

Warfarin Sodium Antitrust Litig., 391 F.3d 516, 527 (3d Cir. 

2004). Plaintiffs here brought their case under both Rule 

23(b)(2) and Rule 23(b)(3), and the District Court 

preliminarily certified the class pursuant to Rule 23(b)(3). 

Rule 23(b)(3) imposes two additional requirements: (1) 

common questions must “predominate over any questions 

affecting only individual members” and (2) class resolution 

must be “superior to other available methods for fairly and 

efficiently adjudicating the controversy.” Fed. R. Civ. P. 

23(b)(3). Because of its Rule 23(a) determination, the 

District Court in its final review of the proposed settlement 

did not reach the issue of whether those Rule 23(b) 

requirements were satisfied. 
14

Court disregarded that presumption and “undermin[ed] the 

well-established policy interest in promoting settlements” (id.

at 28), by “delving into the merits of Class Members’ claims” 

(id. at 24) and “speculat[ing] regarding evidence not on the 

record” (id. at 28). They argue that the Court should have 

occupied a more “limited” role in conducting its Rule 23 

inquiry – one that respected the bargain the parties had struck 

in reaching a negotiated settlement. 

Laying particular emphasis on Sullivan v. DB 

Investments, Inc., 667 F.3d 273 (3d Cir. 2011) (en banc), and 

Ehrheart v. Verizon Wireless, 609 F.3d 590 (3d Cir. 2010), 

Plaintiffs correctly assert that we have, on several occasions,

articulated a policy preference favoring voluntary settlement

in class actions. Sullivan instructed that assessing whether 

individual class members have viable claims is inappropriate 

in the context of reviewing a proposed settlement class

because such an inquiry would “seriously undermine” our 

strong preference for settlement agreements. 667 F.3d at 311; 

see id. at 305 (explaining that “[a]n analysis into the legal 

viability of asserted claims is properly considered through a 

motion to dismiss ... or summary judgment ... , not as part of 

a Rule 23 certification process”). In Ehrheart, we refused to 

vacate a settlement despite an intervening change in the law 

that eliminated the plaintiffs’ underlying cause of action. 609 

F.3d at 595-96. We concluded that the settlement agreement 

was a binding contract, and that permitting a party to “back 

out of an agreement at any time before court approval” would 

render the settlement process “meaningless.” Id. at 594. 

Thus, we held the parties to their bargain, upholding our 

“strong judicial policy in favor of class action settlement.” 

Id. at 595.
15

But while that policy is indeed strong, it cannot alter

the strictures of Rule 23. The Supreme Court explained in 

Amchem that courts must be “mindful that the Rule as now 

composed sets the requirements they are bound to enforce,” 

as the Federal Rules of Civil Procedure may be amended only 

through the “extensive deliberative process” Congress 

prescribed. 521 U.S. at 620. Rule 23 has been amended to 

provide for settlement classes, but solely to add the additional 

hurdle of Rule 23(e), which mandates that the reviewing court 

find the settlement to be “fair, reasonable, and adequate.” 

Fed. R. Civ. P. 23(e)(2). That amendment “was designed to 

function as an additional requirement, not a superseding

direction” respecting the class-qualifying criteria of Rule 

23(a) and (b). Amchem, 521 U.S. at 621. The “dominant 

concern” of Rule 23 – that “a proposed class has sufficient 

unity so that absent members can fairly be bound by decisions 

of class representatives” – “persists when settlement, rather 

than trial, is proposed.” Id. Therefore, whether class action 

representatives are seeking certification for the purpose of 

settlement or with the intent to litigate, the members of the 

proposed class must meet the threshold requirements of Rule 

23(a), and our policy preference for voluntary settlement 

cannot and does not alter that demand. 

In Sullivan and Ehrheart, we recognized the constant 

applicability of Rule 23. We said in Sullivan that, although 

settlement is clearly favored, “global settlements may 

nevertheless be rejected for failing to meet the requirements 

of Rule 23.” 667 F.3d at 311 n.40. In Ehrheart too we

acknowledged that district courts have a responsibility to 

review settlements, and we reversed the district court not for 

any Rule 23 determination but for granting judgment on the 

pleadings after the parties had entered into a binding contract. 
16

609 F.3d at 593 (describing the district court’s role and 

explaining that the court in that case “never considered 

whether to approve the settlement”). In neither case did we 

excuse a failure to establish commonality, nor did we bar the 

district court from exercising its independent judgment in 

deciding whether the Rule 23 requirements were met. See In 

re Cmty. Bank of N. Va., 418 F.3d at 301 (requiring that a 

district court “exercise[] independent judgment” in the Rule 

23 determination).

Furthermore, neither case lessened the burden required 

to demonstrate that putative class members share a common 

question of law or fact. As we have repeatedly stated, the 

Rule 23(a) requirements are “not mere pleading rules.” 

Marcus, 687 F.3d at 591 (quoting In re Hydrogen Peroxide, 

552 F.3d at 316) (internal quotation marks omitted). Rather, 

at the threshold, “[t]he party seeking certification bears the 

burden of establishing each element of Rule 23 by a 

preponderance of the evidence,” which requires 

demonstrating “actual, not presumed, conformance” with the 

Rule. Id. (alterations and internal quotation marks omitted). 

The district court “must conduct a ‘rigorous analysis’ of the 

evidence and arguments put forth,” id. (quoting In re 

Hydrogen Peroxide, 552 F.3d at 316), a task that sometimes 

involves “a preliminary inquiry into the merits” of the 

plaintiffs’ claims to ensure they can be “properly resolved as 

a class action,” Newton, 259 F.3d at 168; see also Dukes, 131 

S. Ct. at 2551 (“Frequently that rigorous analysis will entail 

some overlap with the merits of the plaintiff’s underlying 

claim.” (internal quotation marks omitted)). 

Relying on Sullivan, Plaintiffs imply that a “rigorous 

analysis” is inappropriate in the context of a class action 
17

settlement. They note that Sullivan instructed courts not to 

delve into the underlying merits to determine if individual

claims are viable. See Sullivan, 667 F.3d at 306 (“[T]he 

merits inquiry is particularly unwarranted in the settlement 

context ... .”). Ehrheart made similar statements, 

emphasizing the “restricted, tightly focused role that Rule 23 

prescribes for district courts,” 609 F.3d at 593, and holding 

that the district court abused its discretion by rescinding the 

parties’ settlement agreement due to a change in the law that 

made plaintiffs’ claims nonviable, id. at 595-96. But while 

both decisions advised courts not to assess whether plaintiffs’ 

claims would be capable of succeeding if the case were to go 

to trial, neither limited the ability of district courts to consider 

the merits of a case when necessary for a Rule 23 

determination. In fact, Sullivan specifically explained that 

“an examination of the elements of plaintiffs’ claim is 

sometimes necessary, not in order to determine whether each 

class member states a valid claim, but instead to determine 

whether the requirements of Rule 23 ... are met.” 667 F.3d at 

306. Put more simply, our policy in favor of voluntary 

settlement does not alter the “rigorous analysis” needed to 

ensure that the Rule 23 requirements are satisfied. Dukes, 

131 S. Ct. at 2551; see also Sullivan, 667 F.3d at 335 (“The 

same analytical rigor is required for litigation and settlement 

certification ... .”) (Scirica, J., concurring). 

 Plaintiffs’ other arguments regarding the proper role of 

the district court in settlement certification are similarly 

unavailing. They take particular issue with the District 

Court’s alleged “conjecture” regarding evidence not in the 

record. (Petitioners’ Opening Br. at 34.) Noting that “the 

parties in this case agreed to a settlement before the record 

was as developed as it would have been in a fully contested 
18

motion on class certification” (id. at 29), they argue that the 

District Court should not have “quibble[d] with and 

concentrate[d] on the quantity of evidence at settlement” 

because “[s]uch considerations do not apply in a settlement 

class” (id. at 30). They contend that by “speculat[ing]” about 

nondiscriminatory explanations for individual loan officers’ 

decisions (id. at 28), the District Court improperly elevated 

the evidentiary showing needed for certification of a 

settlement class. 

That argument misunderstands the burden of proof 

required for class certification. It is not enough that the 

parties agreed to settle and believed that “a more fully 

developed record would show that there were questions of 

law and fact common to all Class Members.” (Id. at 29-30.) 

One cannot say, in effect, “we could show commonality, if 

we had to.” The short answer is, “you do have to.” See 

Marcus, 687 F.3d at 591 (holding that the party seeking class 

certification must demonstrate the putative class’s 

conformance with Rule 23). That burden is not onerous. It 

does, however, require an affirmative showing that the class 

members share a common question of law or fact. Sullivan, 

667 F.3d at 306. The mere possibility that evidence of 

commonality could have been produced does not satisfy that 

burden. Therefore, the District Court did not err by requiring 

actual evidence that the putative class satisfies the 

requirements of Rule 23(a). 

Plaintiffs further contend that the District Court erred 

by “fail[ing] to fulfill its fiduciary role” to protect the 

interests of the unnamed members of the class. (Petitioners’ 

Opening Br. at 26.) They argue that that role defines the 

scope of a district court’s responsibilities in certifying a 
19

settlement class, and they imply that the District Court here 

acted beyond the scope of those responsibilities by denying 

class certification. Both contentions are incorrect. Although 

we have indeed highlighted the district court’s role as a 

protector of absent members of the plaintiff class, see 

Sullivan, 667 F.3d at 319 (“[A] district court acts as a 

fiduciary for absent class members[.]” (internal quotation 

marks omitted)), our emphasis on that role has never been 

meant as a substitute for the requirements of Rule 23. Rule 

23(a) explicitly requires that a putative class possess 

commonality, and courts are bound to enforce that 

requirement regardless of whether it benefits plaintiffs or 

defendants. In any event, there is no indication that the 

District Court’s decision to decertify the class here failed to 

protect the interests of absent class members. When a class 

of plaintiffs does not share a common question of law or fact, 

it may well include individuals who did not actually 

experience the harm allegedly caused by the defendants. If 

that class is certified, those individuals will nonetheless 

partake in the recovery, which diminishes the relief for class 

members who actually were harmed. The Supreme Court

stated in Amchem that the Rule 23(a) requirements are of 

“vital importance” in the settlement context precisely because 

they are “designed to protect absentees by blocking 

unwarranted or overbroad class definitions.” 521 U.S. at 620

(emphasis added). Thus, denial of certification to a class that 

lacks commonality falls squarely within the district court’s 

prescribed role in considering the propriety of a settlement 

class. 

Finally, Plaintiffs argue that the parties entered into 

their agreement knowing that Dukes might alter the legal 

landscape, and the District Court should have respected their 
20

decision “to settle and achieve certainty” rather than gamble 

on what the Supreme Court would decide. (Petitioners’

Opening Br. at 33.) They again cite Ehrheart and Sullivan, 

this time for the proposition that the “choice to settle 

implicitly acknowledges calculated risks and, in the end, 

reflects deliberate decisions of both parties to opt for certainty 

in terminating their litigation.” (Id. (quoting Ehrheart, 609 

F.3d at 594) (internal quotation marks omitted).) See also 

Sullivan, 667 F.3d at 312 (“[A] district court’s certification of 

a settlement simply recognizes the parties’ deliberate decision 

to bind themselves according to mutually agreed-upon terms 

... .”). According to Plaintiffs, “[t]he District Court’s 

decision does ... injustice to the Parties’ bargain” by 

“render[ing] [the] settlement void, seemingly because the 

Parties had agreed to put a halt to this litigation before class, 

expert, factual and merits issues were fully litigated, an 

eventuality that the Parties consciously chose to avoid ... .”8

 8 To the extent that Plaintiffs are arguing that the 

District Court was wrong to even consider Dukes in its Rule 

23 review because it is a “change[] in the law after 

settlement,” see Ehrheart, 609 F.3d at 595, that argument 

lacks merit. Although the Supreme Court’s decision in Dukes

is an intervening and pointedly clear explication of the law, it 

did not announce any change in the test for determining 

commonality. It relied on existing precedent to emphasize 

the necessity of meeting the commonality standard under 

Rule 23(a). Dukes, 131 S. Ct. at 2556-57; id. at 2554 

(applying existing precedent to reach its conclusion). That 

standard – both before and after Dukes – requires that a 

putative class of plaintiffs share a common question of law or 

fact. Compare Baby Neal, 43 F.3d at 56 (“The commonality 

 

(Petitioners’ Opening Br. at 35-36.)
21

Yet again, that argument fails because, as much as they 

might like to, parties cannot choose to avoid the judicial 

scrutiny demanded by Rule 23. Before approving the 

settlement of a class action, a district court must certify that 

the settlement comports with Rule 23 and is “fair, reasonable, 

and adequate.” Fed. R. Civ. P. 23(e). Nothing less will 

suffice. It is true that we have advised courts not to “intrude 

upon the parties’ bargain” after a settlement agreement is 

reached, Ehrheart, 609 F.3d at 593, but a denial of class 

certification does not constitute such an intrusion, as it is the 

result of a required inquiry that both parties had to have 

contemplated from the outset of their agreement. The parties 

in this case may well have considered in their bargaining that 

the Supreme Court had granted certiorari in Dukes, but that 

consideration does not insulate them from the District Court’s 

responsibilities under Rule 23. 

At base, Plaintiffs’ argument regarding the proper role 

of the District Court seems to be that the Court was required 

 

requirement will be satisfied if the named plaintiffs share at 

least one question of fact or law with the grievances of the 

prospective class.”), with Sullivan, 667 F.3d at 297 (“[A] 

proposed class must share a common question of law or fact 

... .”). Indeed, Dukes specifically stated that “for purposes of 

Rule 23(a)(2) even a single common question will do,” 131 S. 

Ct. at 2556 (alterations omitted) (internal quotation marks 

omitted), making clear that it did not alter the standard for 

assessing commonality. Ehrheart’s admonition that “changes 

in the law after settlement ... do not provide a legitimate basis 

for rescinding [a] settlement,” 609 F.3d at 595, therefore has 

no bearing on this case. 
22

to conduct its commonality review in a manner that did not 

upset the parties’ settlement agreement. Such a review, 

though, is no review at all. The Rule 23 inquiry is certainly 

not meant to discourage settlement, but it is more than a

rubber stamp, and thus it will sometimes result in the undoing 

of a settlement. The fact that it did so in this instance is 

therefore not in itself a basis for reversing the denial of class 

certification. The District Court stayed fully within its 

prescribed role and conducted the inquiry required of it by 

our precedent, by the Supreme Court, and by the Federal 

Rules of Civil Procedure.

B. The Commonality Determination

Because we conclude that the District Court properly 

fulfilled its prescribed role in conducting a Rule 23 review, 

we turn to the question of whether the Court rightly 

concluded that commonality is lacking in the class proposed 

in this case. A putative class satisfies Rule 23(a)’s 

commonality requirement if “the named plaintiffs share at 

least one question of fact or law with the grievances of the 

prospective class.” Baby Neal v. Casey, 43 F.3d 48, 56 (3d 

Cir. 1994). Again, that bar is not a high one. We have 

acknowledged commonality to be present even when not all 

plaintiffs suffered an actual injury, id., when plaintiffs did not 

bring identical claims, In re Prudential, 148 F.3d at 311, and, 

most dramatically, when some plaintiffs’ claims may not have 

been legally viable, Sullivan, 667 F.3d at 305-07. In reaching 

those conclusions, we explained that the focus of the 

commonality inquiry is not on the strength of each plaintiff’s 

claim, but instead is “on whether the defendant’s conduct was 

common as to all of the class members.” Id. at 299; see also 

In re Warfarin Sodium Antitrust Litig., 391 F.3d 516, 528 (3d 
23

Cir. 2004) (focusing the commonality inquiry on the 

defendant’s conduct, not “on the conduct of individual class 

members”); Newton, 259 F.3d at 183 (identifying common 

questions regarding the defendant’s conduct); Baby Neal, 43 

F.3d at 57 (considering whether the defendant “engag[ed] in a 

common course of conduct toward” the class members). In 

other words, there may be many legal and factual differences 

among the members of a class, as long as all were subjected 

to the same harmful conduct by the defendant. Baby Neal, 43 

F.3d at 56.

In Dukes, the Supreme Court explained how the 

commonality standard applies when the complained-of 

conduct is a discretionary corporate policy that allegedly has 

a discriminatory effect. The putative class in that case 

consisted of “all women employed at any Wal-Mart domestic 

retail store at any time since December 26, 1998, who have 

been or may be subjected to Wal-Mart’s challenged pay and 

management track promotions policies and practices.” 131 S. 

Ct. at 2549 (alteration and internal quotation marks omitted). 

That enormous class of about 1.5 million women alleged that 

Wal-Mart’s policy “allowing discretion by local supervisors 

over employment matters” produced a disparate 

discriminatory impact, evidenced by a statistical analysis of 
24

the company’s employment information.9

 Id. at 2547, 2554

(emphasis omitted). The Supreme Court concluded that that 

evidence was insufficient to establish commonality. While 

acknowledging that “giving discretion to lower-level 

supervisors can,” in some circumstances, “be the basis of 

Title VII liability under a disparate impact theory,” id. at 

2554, the Court quoted Watson v. Fort Worth Bank & Trust, 

487 U.S. 977, 994 (1988), to emphasize that such claims must 

do more than “merely prov[e] that the discretionary system 

has produced a racial or sexual disparity” – they must also 

identify “the specific employment practice that is 

challenged,” id. at 2555 (internal quotation marks omitted).

10

 9 The plaintiffs in Dukes also brought a disparate 

treatment claim, which alleged that Wal-Mart had a corporate 

culture of bias against women. Dukes, 131 S. Ct. at 2548. 

They attempted to demonstrate that culture of bias through a 

sociologist’s analysis, affidavits recounting individual 

plaintiffs’ experiences, and a regression analysis purporting to 

show gender-based disparities that “can be explained only by 

gender discrimination.” Id. at 2555 (internal quotation marks 

omitted). Plaintiffs here bring only a disparate impact claim, 

and they do not allege any intentional discrimination or 

“culture of bias” on the part of National City. (See 

Petitioners’ Opening Br. at 50 (“[T]his is a disparate impact 

case and not a disparate treatment case ... .”).) 

 

10 The plaintiffs in Dukes failed to do that, the 

Supreme Court said, because “Wal-Mart’s ‘policy’ of 

allowing discretion by local supervisors .... is just the 

opposite of a uniform employment practice that would 

provide the commonality needed for a class action.” Id. at 

2554. 
25

Moreover, to bring a case as a class action, the named 

plaintiffs must show that each class member was subjected to 

the specific challenged practice in roughly the same manner. 

Dukes, 131 S. Ct. at 2555-56. The Dukes plaintiffs were all

subjected to the discretion of their supervisors, but they had 

not demonstrated “a common mode of exercising discretion 

that pervades the entire company,” id. at 2554-55, such that 

the policy could be considered a “uniform employment 

practice” that all members of the putative class had 

experienced, id. at 2554. Rather, the Dukes plaintiffs 

encountered different managers making different types of 

employment decisions for different reasons, many of them 

likely nondiscriminatory in nature. They therefore had not 

been subjected to a common harm, and the proposed class 

lacked commonality. Id. at 2555.

This case bears a striking resemblance to Dukes. Here, 

the class proposed by the Plaintiffs consists of “[a]ll AfricanAmerican and Hispanic persons who obtained a Mortgage 

Loan” from National City between January 1, 2004 and the 

date the class was preliminarily certified. (J.A. at 250.) On 

behalf of those 153,000 class members, the named plaintiffs 

allege that National City’s “Discretionary Pricing Policy” had 

the effect of charging African-American and Hispanic 

borrowers “a disproportionately greater amount in non-riskrelated charges than similarly-situated Caucasian persons.” 

(J.A. at 102, 117.) More specifically, Plaintiffs argue that 

National City granted brokers and loan officers the discretion 

to increase or decrease loan prices after an objective 

determination of loan eligibility, which discretion produced 

an overall disparate discriminatory impact. Therefore, in 

order to demonstrate that they have suffered a common harm, 

the putative class here must show that National City’s grant 
26

of discretion to individual loan officers constitutes a “specific 

practice” that affected all the class members in the same 

general fashion. In other words, Plaintiffs must identify some 

“common mode” in which those brokers exercised their 

discretion. 131 S. Ct. at 2554.

Plaintiffs claim they have done so. They conducted 

regression analyses of National City’s loan data, which they 

say demonstrate the Discretionary Pricing Policy’s disparate 

impact even after controlling for legitimate factors affecting 

the price of loans.11 From what Plaintiffs characterize as “the 

objective nature of a loan pricing decision,” they argue that, 

by “eliminat[ing] all objective credit and risk factors 

impacting loan pricing,” they have shown that the only 

function the discretionary policy served was to produce a 

discriminatory effect. (Petitioners’ Opening Br. at 12.) 

Therefore, they say, the regression analyses show that the 

loan officers’ “common mode of exercising discretion,” 

Dukes, 131 S. Ct. at 2554, was discriminatory. 

But that conclusion is simply unsupported by the 

evidence. Even if Plaintiffs had succeeded in controlling for 

every objective credit-related variable – something no court 

could have reviewed because the analyses are not of record –

the regression analyses do not even purport to control for 

individual, subjective considerations. A loan officer may 

have set an individual borrower’s interest rate and fees based 

on any number of non-discriminatory reasons, such as 

whether the mortgage loans were intended to benefit other 

 11 Notably, those analyses were not included in the 

record before the District Court, although they were presented 

to National City during settlement negotiations. 
27

family members who were not borrowers, whether borrowers 

misrepresented their income or assets, whether borrowers 

were seeking or had previously been given favorable loan-tovalue terms not warranted by their credit status, whether the 

loans were part of a beneficial debt consolidation, or even 

concerns the loan officer may have had at the time for the 

financial institution irrespective of the borrower.

12 While 

those possibilities do not necessarily rebut the argument that 

the Discretionary Pricing Policy opened the door to biases 

that individual loan officers could have harbored, they do 

undermine the assertion that there was a common and 

unlawful mode by which the officers exercised their 

discretion. 

Even assuming, however, that Plaintiffs had succeeded 

in identifying a specific employment policy that could be 

sufficiently distinguished from the discretionary policy in 

Dukes, they still have not shown that it affected all class 

 12 Plaintiffs argue that contemplating such subjectiveyet-not-discriminatory reasons for individual loan pricing 

decisions involves impermissible “speculation and 

conjecture.” (Petitioners’ Opening Br. at 2.) Far more

speculative, we believe, are the Plaintiffs’ unsupported 

presumptions that a loan pricing determination is a purely 

objective matter and that an average racial disparity indicates 

that each minority borrower experienced National City’s 

policy in a discriminatory way. More to the point, though, 

the burden is on the Plaintiffs to establish the threshold Rule 

23(a) requirements. Marcus, 687 F.3d at 591; see also supra, 

Section III.A. If the District Court engaged in speculation, it 

is because the Plaintiffs failed to provide enough evidence to 

demonstrate commonality. 
28

members in all regions and bank branches in a common way. 

Another significant problem with the proposed class in Dukes

was that the statistical disparity was based on an average of 

national data that was not necessarily representative of 

regional or store disparities. The Court explained that “a 

regional pay disparity ... may be attributable to only a small 

set of Wal-Mart stores, and cannot by itself establish the 

uniform, store-by-store disparity upon which plaintiffs’ 

theory of commonality depends.” Id. at 2555. 

The proposed class in this case is also national, with 

153,000 plaintiffs who obtained loans at more than 1,400 

bank branches. As in Dukes, the application of the 

Discretionary Pricing Policy may have resulted in a disparity 

in some regions or branches but not at all in others. 

Accordingly, a very significant disparity in one branch or 

region could skew the average, producing results that indicate 

a national disparity, when the problem may be more 

localized. If the national disparity is not reflective of regional 

or even individual branch data, the putative class cannot show 

the policy affected each individual plaintiff in the same 

general fashion. 

Plaintiffs contend that they controlled for regional 

differences in their regression analyses, but they must show 

that the putative class meets the commonality requirement by 

a preponderance of the evidence. In re Hydrogen Peroxide, 

552 F.3d at 320. They did not introduce their data, regression 

analyses, or any other evidence to support a finding of 

commonality. Although Plaintiffs moved for class 

certification before the Supreme Court issued the Dukes

opinion, the District Court requested the parties to submit 

briefs on class certification in light of the guidance given in 
29

that decision, and still Plaintiffs did not give the District 

Court a factual foundation for a commonality finding in their 

favor.

13

Whether an appropriate foundation could be laid in a 

case like this is a question we leave for another day.14

 13 Had the District Court found commonality to be 

present, it might have been guilty of simply accepting the 

parties’ assertions at face value, which we have explicitly 

stated is improper in a final Rule 23 determination. In re 

Cmty. Bank of N. Va., 418 F.3d at 300 (reversing the district 

court because it simply adopted “a party’s proposed findings” 

without exercising its own independent judgment).

 We 

note, however, that, when faulting the Dukes plaintiffs for 

failing to account for regional differences that could 

undermine their claim of commonality, the Supreme Court 

went on to say: “There is another, more fundamental, respect 

in which respondents’ statistical proof fails. Even if it 

established (as it does not) a pay or promotion pattern that 

differs from the nationwide figures or the regional figures in 

all of Wal-Mart’s 3,400 stores, that would still not 

demonstrate that commonality of issue exists.” Dukes, 131 S. 

Ct. at 2555. The Court then explained why, emphasizing that, 

as we have already noted, Watson requires that “the plaintiff 

must begin by indentifying the specific employment practice 

14 We likewise do not attempt to sort out here how the 

issues discussed in Dukes may play out differently, if at all, in 

a disparate treatment case as opposed to a disparate impact 

case. As previously noted, see supra note 9, we are dealing 

here solely with the claim as the plaintiffs have chosen to

frame it.
30

that is challenged.” Id. (quoting Watson, 487 U.S. at 994) 

(internal quotation marks and alteration omitted). “Other than 

the bare existence of delegated discretion,” the Court 

observed, “respondents have identified no ‘specific 

employment practice’ – much less one that ties all their 1.5 

million claims together. Merely showing that Wal-Mart’s 

policy of discretion has produced an overall sex-based 

disparity does not suffice.” Id. at 2555-56.

Here, as in Dukes, the exercise of broad discretion by 

an untold number of unique decision-makers in the making of 

thousands upon thousands of individual decisions undermines 

the attempt to claim, on the basis of statistics alone, that the 

decisions are bound together by a common discriminatory 

mode.

15

 15 That is not to say that statistics could never be a 

viable element of proof of commonality in a disparate impact 

case. Indeed, several post-Dukes cases have relied on 

statistical analyses in their commonality determinations.

See, e.g., Floyd v. City of New York, 283 F.R.D. 153, 166-68 

(S.D.N.Y. 2012) (relying in part on statistical evidence that 

demonstrated racial disparities in the implementation of New 

York’s “stop and frisk” policy); Morrow v. Washington, 277 

F.R.D. 172, 193 (E.D. Tex. 2011) (concluding that “statistical 

evidence that the number of racial and ethnic minorities 

stopped in and around [the city] increased dramatically when 

the [challenged program] was implemented” helped 

demonstrate that the city’s program “operates as a ‘general 

policy of discrimination’”). 

 Plaintiffs therefore have not met their burden of 

demonstrating that the “defendant’s conduct was common as 

to all of the class members,” Sullivan, 667 F.3d at 299, and 
31

thus the District Court was correct to conclude that they do 

not share a common question of law or fact.16 

IV. Conclusion

Because the putative class lacks commonality, the 

District Court did not abuse its discretion by denying the 

Plaintiffs’ motion for final approval of the settlement and 

certification of the settlement class. Accordingly, we will 

affirm the Court’s order. 

 16 That conclusion is not, as Plaintiffs imply, the death 

knell for all disparate impact class actions. When a 

challenged policy affects class members in roughly the same 

manner, that class can likely establish commonality. In fact, 

Mt. Holly Garden’s Citizens in Action, Inc. v. Township of 

Mt. Holly, a case that Plaintiffs claim is effectively overruled 

by the District Court’s reading of Dukes, provides an example 

of a disparate impact case that could survive the commonality 

inquiry. 658 F.3d 375 (3d Cir. 2011). In that case, AfricanAmerican and Hispanic residents of a low-income 

neighborhood brought a lawsuit contending that the city’s 

proposed redevelopment plan had produced a disparate 

discriminatory impact. Id. at 377-81. The contested policy in 

that case is readily apparent, and it was applied to each 

resident in a common manner. Id. The Mt. Holly plaintiffs 

therefore shared a common question, and, although they 

chose not to bring their claims as a class action, Dukes would 

fully support a finding of commonality in cases like theirs.