# United States Court of Appeals **for the Fifth Circuit**

____________ No. 22-50368

____________ Heriberto Chavez; Evangelina Escarcega, as the legal representative of her son Jose Escarcega; Jorge Moreno, Plaintiffs—Appellees ,

versus Plan Benefit Services, Inc.; Fringe Insurance Benefits, Incorporated; Fringe Benefit Group, Defendants—Appellants

.

______________________________ Appeal from the United States District Court for the Western District of Texas USDC No. 1:17-CV-659

______________________________ Before Wiener, Stewart, and Engelhardt, Circuit Judges

. Carl E. Stewart , Circuit Judge : Heriberto Chavez, Evangelina Esca rcega (representing her son, Jose Escarcega), and Jorge Moreno (collectiv ely “Plaintiffs”) seek to represent a class in a lawsuit against Plan Benefi t Services, Fringe Insurance Benefits, and Fringe Benefit Group (colle ctively “FBG”) for the alleged mismanagement of funds that Plaintiffs contributed to benefit plans through their employers. Because Plai ntiffs have standing to sue and the district court did not abuse its discretion in the Rule 23 certification analysis, the district United States Court of Appeals Fifth Circuit 

### FILED July 15, 2024 Lyle W. Cayce Clerk Case: 22-50368 Document: 107-1 Page: 1 Date Filed: 07/15/2024No. 22-50368

2 court’s order is AFFIRMED in part and REVERSED in part. The order is AFFIRMED insofar as it granted class ce rtification under Rule 23 (b)(3) and REVERSED insofar as it granted clas s certification under Rule 23(b)(1). Additionally, this matter is REMANDED for further proceedings consistent with this opinion. I. Background A. FBG’s Alleged Mismanagement of the CERT & CPT Trusts FBG helps employers design an d administer employee benefit programs that offer retirement and health and welfare benefits to their employees. In accordance with FBG’s pl an, employers disburse benefits to their employees through two trusts : (1) the Contractors and Employee Retirement Trust (“CERT”), which cove rs retirement plans; and (2) the Contractors Plan Trust (“ CPT”), which covers health and welfare benefits. Each employer signs either a separate retainer agreement or an adoption agreement as part of their enrollment in a plan. FBG serves as “Master Plan Sponsor” and “Recordkeeper” for both CERT and CPT.
The contracts that FBG enters with employers also include a “Master Trust Agreement” granting FBG greate r control over the CERT and CPT trusts. For example, the Master Trust Agreement allows FBG to determine the fees deducted from CERT and allo ws it to direct “banks and other entities holding Trust funds to pay those fees, including to FBG itself.” As to CPT specifically, the Master Trust Agreement authorizes FBG to “calculate and deduct its own fees from employer contributions before remitting premium payments to the carriers.” FBG markets CERT and CPT to non-union employers seeking to compete for government contracts. To qualify for the contracts, employers must pay their employees prevailing wa ges—that is, the wages and benefits paid to the majority of similarly situated laborers in the area at the time. In Case: 22-50368 Document: 107-1 Page: 2 Date Filed: 07/15/2024No. 22-50368

3 assisting employers with offering benefits under the prevailing wage laws, FBG offers plans with a combination of administrative and variable fees. For example, each employer pays an identical, fixed administrative feeof $200, nondiscriminatory testing fee of $400, and indirect percentagebased fees totaling 1.15% of the company’s assets in the trust. Variable fees are assessed based on the company’s se lections with FBG and the company’s total size and structure. So, a company that offers its employees a 401(k) may be assessed different fees than an other company that offers a moneypurchase plan. “These structures are called Tiered 1-4, Graded 25, and Graded 50.” While employers can choo se a “‘tiered’ or ‘graded’ plan, [FBG] determines where the employer falls within [each] categorization scheme[.]” Plaintiffs were employees of the Training, Rehabilitation & Development Institute, Inc. (“TRDI ”). TRDI contracted with FBG for various services. It was re quired to provide wage an d fringe benefits to its employees in an amount calculated by the applicable prevailing wage determination. It provided retiremen t plans under CERT and health and welfare plans under CPT. The agreemen t governing CERT, CPT, and TRDI allotted various “powers and responsib ilities” to FBG. For example, FBG had the power to: (1) enter contracts im posing fees and ot her charges on the trusts and the plans; (2) instruct an y insurance company with respect to investment or disbursement of investment funds on behalf of the Trustee; (3) require the Trustee to make disbur sements for FBG’s own fees in any amount that it directed; and (4) appoint and remove the Trustee. Chavez participated in CPT, me aning that TRDI paid monthly contributions to CPT on his behalf, from which FBG dedu cted fees. TRDI contributed a certain amount of money to a fringe benefit account in Chavez’s name for every hour that he wo rked, in accordance with federal and Case: 22-50368 Document: 107-1 Page: 3 Date Filed: 07/15/2024No. 22-50368

4 state laws. This fringe benefit acco unt was used to help pay Chavez’s premiums incurred through his enroll ment in health and welfare plans provided by TRDI. TRDI also paid a premium of $570.58 a month into CPT for these benefits to cover his insuranc e. At least ten percent of the premium amount was paid to FBG. These fees were taken from Chavez’s individual health and welfare account. He contends that the “account was depleted more than it otherwise would have been if the fees had been reasonable.” He also avers that the unreasonable fees are wholly responsible for “no amount ever [being] contributed [to his] retirement account.” Escarcega and Moreno participated in both CERT and CPT. Like Chavez, TRDI made contributions to th e fringe benefit accounts based on the number of hours that Escarcega and Moreno worked. Under each plan, FBG’s fees for plan administration se rvices were subtracted from their individual accounts. They allege that FBG “deducted fees totaling more than 10% of these payments for their own compensation before remitting the remainder to” their medical insurance pr oviders. Escarcega was also enrolled in a “limited medical plan” with Stan dard Security Life (“SSL”) through CPT. He claims that “FBG deducted compen sation for itself . . . for ancillary insurance premiums and fees of more th an 17% of these payments, remitting the remaining amount as premiums to SSL.” B. Procedural History In July 2017, Plaintiffs sued FBG for mismanaging their employee benefit plans by collecting excessive fees in violation of the Employee Retirement Income Security Act (“ERISA”). See 29 U.S.C. § 1001 et seq

. Specifically, Plaintiffs asserted that FB G charged different rates for identical services and charged an excessive base fee. FBG moved to dismiss Plaintiffs’ claims. The district court granted FB G’s motion but gave Plaintiffs the opportunity to amend their complaint. Plaintiffs’ amended complaint alleged Case: 22-50368 Document: 107-1 Page: 4 Date Filed: 07/15/2024No. 22-50368

5 that FBG “accepted excessive fees, ha ndpicked providers to maximize its profits, controlled disbursements from the trusts for its own benefit, and unlawfully procured indirect compensation.” Chavez v. Plan Benefit Servs. , 957 F.3d 542, 544 (5th Ci r. 2020). FBG moved to dismiss again for failure to state a claim under 21 U.S.C. §§ 1106(b) and § 1109(a) and lack of standing, which the district court denied. Thereafter, Plaintiffs filed a motionfor class certification. They sought to represent a class of “all pa rticipants in and beneficiaries of employee benefit plans that provide be nefits through CE RT and CPT, . . . from six years before the filing of this action [July 6, 2011] until the time of trial.” The district court encountered a question of first impression: whether Plaintiffs had standing to sue FBG on behalf of unnamed class members from different contribution plans. It requeste d additional briefing on the issue and ultimately ruled that Plaintiffs had cons titutional and statutory standing to sue FBG in a class-action context. On constitutional standing, the district court explained that Plaintiffs had demons trated injury in fact, traceability, and redressability. Notably, it held that the class context was appropriate because “both the named and unnamed pl aintiffs . . . are participants ‘of plans that provide employee benefits through CPT or CERT.’” It concluded that commonality was sufficient to allow class certification at this stage. As for statutory standing, the distri ct court relied on a Sixth Circuit
case, Fallick v. Nationwide Mutual Insurance Company , to hold that Plaintiffs’ only burden at this stage was assuring the court of their own standing to sue FBG. 162 F.3d 410, 424 (6th Cir. 1998). Specifically, it cited Fallick for the proposition that “the st anding-related provisio ns of ERISA were not intended to limit a claimant ’s right to proceed under Rule 23 on behalf of all individuals affected by the [fiduciary’s ] challenged conduct, regardless of the representative’s lack of participatio n in all the ERISA governed plans involved.” Id. at 410; Fed. R. Civ. P. 23. It reasoned that a deeper inquiry Case: 22-50368 Document: 107-1 Page: 5 Date Filed: 07/15/2024No. 22-50368

6 into the appropriateness of Plaintiffs as class representatives was reserved for the Rule 23 analysis, not constitutional or statutory standing. It held in Plaintiffs’ favor and certified a Rule 23(b)(1)(B) class of 90,000 employees. Chavez v. Plan Benefit Servs., Inc ., No. 1:17-CV-659-SS, 2018 WL 3016925, at *7–8 (W.D. Tex. June 15, 2018). FBG appealed, and a panel of th is court vacated and remanded, holding that the district court failed to engage in the “rigorous analysis” necessary for certifying a class action under Rule 23. See Chavez , 957 F.3d at 544. On remand, Plaintiffs amended thei r motion for class certification, and the case was reassigned. The partie s then presented oral argument and submitted supplemental briefing on standing. Upon consideration, the district court certified the following two classes: (1) All participants and be neficiaries of plans that provide employee benefits through CPT—other than [FBG’s] officers, directors, or relatives— from July 6, 2011, until trial; and (2) All participants and be neficiaries of plans that provide employee benefits through CERT—other than (a) participants and be neficiaries of custom plans, and (b) [FBG’s] officers, directors, or relatives—from August 31, 2014, until trial. As of February 2021, the class included “224,995 participants and 2,994 plans in CERT as well as 68,066 part icipants and 350 plans in CPT.” FBG then filed the instant appeal, ur ging this court to determine that Plaintiffs lack standing to represent th e class and reverse the district court’s decision that Rules 23(b)(1)(B) and (b)(3) are proper vehicles for class certification. According to FBG, cert ification was improp er, and we should remand for proceedings on only Plaintiffs’ claims. Case: 22-50368 Document: 107-1 Page: 6 Date Filed: 07/15/2024No. 22-50368

7 II. Standard of Review “Standing is a question of law that we review de novo.” N. Cypress Med. Ctr. Operating Co., Ltd. v. Cigna Healthcare , 781 F.3d 182, 191 (5th Cir. 2015) (citation and emphasis omitted). We review “all facts expressly or impliedly found by the district court” for clear error. Rivera v. Wyeth–Ayerst Labs. , 283 F.3d 315, 319 (5th Cir. 2002).
We review class certification decisions for abuse of discretion. See Allison v. Citgo Petroleum Corp. , 151 F.3d 402, 408 (5th Cir. 1998) (citation omitted). “Implicit in this deferent ial standard is a recognition of the essentially factual basis of the certificat ion inquiry and of the district court’s inherent power to manage an d control pending litigation.” Id. (citation omitted). “We review de novo, however, whether the district court applied the correct legal standards in determ ining whether to certify the class.” Flecha v. Medicredit, Inc. , 946 F.3d 762, 766 (5th Cir. 2020) (emphasis, quotations, and citations omitted).
III. Discussion Preliminarily, we address FBG’s characterization of Plaintiffs’ theory on appeal. FBG asserts that Plaintiffs have insisted that their lawsuit is only, or at least primarily, about excessive fees that they and the unnamed class members were subjected to by FBG. But that depiction of Plaintiffs’ theory fails to capture the entire breadth of their argument. Plaintiffs have always sought to ma ke this case about FBG’s general practices in upholding their duties as fiduciaries of the CERT and CPT trusts. Indeed, their complaint focuses on the “Master Trust Agreement” and “Adoption Agreement” as the mecha nisms through which FBG was able to charge the excessive fees to the vari ous employees that participated in their plans. Furthermore, they have always sought to bring this action on behalf of members of the trust, not just emplo yees who were allegedly charged Case: 22-50368 Document: 107-1 Page: 7 Date Filed: 07/15/2024No. 22-50368

8 excessive fees. As Plaintiffs explain, the harm not only derives from FBG’s charging of excessive fees but also from the financial harm that FBG allegedly caused to the CERT and CPT trusts. We disagree with FBG that this case is only about the payment of excessive fees. The more apt characte rization is detailed in Plaintiffs’ complaint, which explains that this case is also about FBG’s alleged mismanagement of the trusts that theycompel each employee to pay into through contracts with their employers. Likewise, the class that the district court eventually certified further refl ects this understanding of Plaintiffs’ theory. With that said, we press on to FBG’s standing argument. A. Standing FBG asserts that the district court erroneously determined that Plaintiffs had standing to challenge fees that they were never subjected to, in plans that they never participated in, relating to services that they never received, from employers for whom they never worked. It avers that the district court skipped these justiciability concerns by following incorrect and nonbinding out-of-circuit precedent, which resulted in an inappropriate focus on class certifiability despite clear standing issues. More specifically, FBG contends that class action lawsuits cannot be used to aggregate claims of participants in plans in wh ich they have no stake. In response, Plaintiffs insist that th e district court simply recognized that FBG’s concerns were best addre ssed during the Rule 23 analysis and correctly relied on the Sixth Circuit’s analysis in Fallick to conclude that Plaintiffs have standing. 162 F.3d at 424. We agree with Plaintiffs on this issue. Federal courts have a continuing ob ligation to address jurisdictional defects. See Lewis v. Hunt, 492 F.3d 565, 568 (5th Cir. 2007). Constitutional standing is one such consideration. The doctrine requires a plaintiff to Case: 22-50368 Document: 107-1 Page: 8 Date Filed: 07/15/2024No. 22-50368

9 demonstrate “(1) that he or she suffered an injury in fact that is concrete, particularized, and actual or imminent, (2) that the injury was caused by the defendant, and (3) that the injury would likely be redressed by the requested judicial relief.” Thole v. U.S. Bank N.A , 140 S. Ct. 1615, 1618 (2020) (citing Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–561 (1992)). The concreteness and particularity of Plaintiffs’ injuries are especially relevant in this case. Th e Supreme Court has explained that a concrete injury is one that is “real, and not abstract.” Spokeo, Inc. v. Robins , 578 U.S. 330, 340 (2016) (quotations omitted) (explaining that for an injury to be concrete, it “must actually exist”). And for an injury to be particularized, it must “affect the plaintiff in a pe rsonal and individual way.” Id. at 339 (quotations and citation omitted). “The party invoking federal juri sdiction bears the burden of establishing these elements.” Lujan , 504 U.S. at 561. Plaintiffs carry this burden throughout the litigation proceedings. See id. (“Since [standing is not a] mere pleading requirement[] but rather an indispensable part of the plaintiff’s case, each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e. , with the manner and degree of evidence required at th e successive stages of the litigation.”). The Supreme Court has repeatedly ex plained that “Article III does not give federal courts the power to order relief to any uninjured plaintiff, class action or not.” TransUnion LLC v. Ramirez , 141 S. Ct. 2190, 2208 (2021) (citing Tyson Foods, Inc. v. Bouaphakeo , 577 U.S. 442, 466 (2016) (Roberts, C.J., concurring)). The Co urt has also cautioned us against dispensing standing “in gr oss” in a class-action co ntext—instead instructing us to ensure that plaintiffs “demonstra te standing for each claim that they press and for each form of relief that they seek[.]” Id. (citation omitted). Case: 22-50368 Document: 107-1 Page: 9 Date Filed: 07/15/2024No. 22-50368

10 FBG raises important questions ab out the order and depth in which this court grapples with constitutional standing and the Rule 23 inquiry. There is a split on this very questi on that exists across the circuits. See Standing to litigate what? The relati onship between the class representatives’ claims and those of absent class members , 1 William B. Rubenstein, Newberg and Rubenstein on Class Actions § 2:6 (6th ed.) (identifying a circuit split on whethe r a “class representative may seek to litigate harms not precisely analogous to the ones she suffered but harms that were nonetheless suffered by other class members”) [hereinafter, “ Newberg on Class Actions ”]. The split stems from the noti on that “[t]here cannot be a disjuncture between the harm that the plaintiff suffered and the relief that she seeks.” Id. While relatively tame in individu al cases, the disjuncture issue becomes increasingly complex as courts begin to aggregate claims for class consideration. Id. Newberg on Class Actions explains that appellate courts have resolved the disjuncture issue using two methods: (1) Some courts, “having determined that the class representa tive has standing to pursue her own claims, move on from the standing in quiry and approach the disjuncture as an issue of class certification”; or (2) Ot her courts “simply find that the class representative lacks standing to purs ue the class members’ claims because she did not suffer their injuries[.]” Id. For the purposes of our analysis herein, the first approach will be referred to as the class certification approach, while the latter is the standing approach. While the Supreme Court has yet to declare which approach is correct, its standing jurisprudence pr ovides guidance as we weigh the potential options. We examine each re spective approach and conclude that, in this case, we may proceed to Rule 23 under either theory. Case: 22-50368 Document: 107-1 Page: 10 Date Filed: 07/15/2024No. 22-50368

11 1. The Class Certification Approach The Supreme Court first grappled with the disjuncture issue in Sosna v. Iowa , 419 U.S. 393 (1975). There, a wi fe brought a class action suit challenging the constitutionality of an Io wa state law that required individuals seeking a divorce to have been a reside nt of the state for at least one year preceding the filing of the divorce petition. Id. In upholding the constitutionality of Iowa’s law, the Court stated thata “named plaintiff in a class action must show that the threat of injury . . . is ‘real and immediate,’ not ‘conjectural’ or ‘hypothetical.’” Id. at 403. It continued that the named plaintiff “must be a member of the class which he or she seeks to represent at the time the class action is ce rtified by the district court.” Id.
The Sosna court reasoned that its “concl usion [did] not automatically establish that appellant [was ] entitled to litigate the interests of the class she [sought] to represent.” Id. But it explained that “the focus of examination” nonetheless shifted “from the elements of justiciability to the ability of the named representative to ‘fairly and adequately protect the interests of the class.’” Id. (quoting Fed. R. Civ. P. 23(a)). This conclusion evinces the Court’s understanding that the Articl e III standing analysis, as with any justiciability inquiry, must precede any questions of class certifiability under Rule 23. The Supreme Court later applied the same reasoning from Sosnain General Telephone Company of Southwest v. Falcon , 457 U.S. 147, 157–60 (1982). There, the named plaintiff, a Mexican-American employee, was passed over for a promotion and brough t a class-action suit against his employer for alleged discrimination in both the hiring and promoting of minority employees. Id. at 150. While the Court acknowledged that the named plaintiff established standing to represent a class comprised of other minorities passed over for promotions , it declined to allow him to represent Case: 22-50368 Document: 107-1 Page: 11 Date Filed: 07/15/2024No. 22-50368

12 persons that were never hired beca use of an allegedly discriminatory applicationprocess. Id. at 157–60. Notably, the Co urt came to its conclusion in the Rule 23(a) commonality analys is—not during the constitutional or statutory standing inquiries. Id. At the circuit-court level, the cla ss certification appr oach was followed by the Sixth Circuit in Fallick and has gained traction in the First, Third, and Ninth Circuits. 1 See 162 F.3d at 424; see also In re Asacol Antitrust Litig. , 907 F.3d 42, 49 (1st Cir. 2018) (“Nothin g . . . suggests that the claims of the named plaintiffs must in all respects be identical to the claims of each class member. Requiring that . . . to establish standing would confuse the requirements of Article III and Rule 23.” (internal quotations and citations omitted)); Boley v. Universal Health Servs., Inc. , 36 F.4th 124, 133 (3d Cir. 2022) (explaining that named plaint iffs established standing and that defendants’ “concerns regarding the re presentation of absent class members might implicate class certification ordamages but are distinct from the requirements of Article III”); B.K. by next friend Tinsley v. Snyder, 922 F.3d 957, 967 (9th Cir. 2019), cert. denied, 140 S. Ct. 2509 (2020) (“As we have previously explained, once the named plaintiff demonstrates her individual standing to bring a claim, the standinginquiry is concluded, and the court

_____________________

1 We further note the class certification approach’s prominence in the district courts of most circuits, including our own. See, e.g. , In re RadioShack Corp. ERISA Litigation , 547 F. Supp. 2d 606, 611 (N.D. Tex. 2008) (holding that the named plaintiff established individual standing and stating that whether he could represent the other ERISA class members “should be left fo r later determination under Rule 23”); see also Molock v. Whole Foods Market, Inc. , 297 F. Supp. 3d 114, 130 (D.D.C. 2018), aff’d on other grounds , 952 F.3d 293 (D.C. Cir. 2020) (rejecti ng defendants’ standing argument that “Plaintiffs cannot pursue claims on behalf of putative class members from states in which Plaintiffs do not reside or suffered no injury” because “such considerations are appropriately resolved at the class certificatio n stage, which is designed precisely to address concerns about the relationship between the cl ass representative and the class” (internal quotations and citations omitted)). Case: 22-50368 Document: 107-1 Page: 12 Date Filed: 07/15/2024No. 22-50368

13 proceeds to consider whether the Rule 23(a) prerequisites for class certification have been met. Any issues regarding the relationship between the class representative and the passive class members— such as dissimilarity in injuries suffered —are relevant only to class ce rtification, not to standing.” (emphasis added) (internal quotatio n marks and citations omitted)). 2. The Standing Approach
Less than a decade after Sosna , the Supreme Court encountered the disjuncture issue again in Blum v. Yaretsky , a Medicaid case involving a Fourteenth Amendment challenge to certain nursing homes’ unilateral decisions to transfer patients to facilities with lesser or higher levels of care than the patients already had without any administrative hearings for their desires to be heard. 457 U.S. 991 (1 982). The Court’s analysis primarily focused on standing, as it explained that: It is not enough that the conduct of which the plaintiff complains will injure someone. The complaining party must also show that he is within the class of persons who will be concretely affe cted. Nor does a plaintiff who has been subject to injurious conduct of one kind possess by virtue of that injury the necessary stake in litigating conduct of another kind, although similar, to which he has not been subject. Id. at 999 (emphasis in original) (citing Moose Lodge No. 107 v. Irvis , 407 U.S. 163, 166–67 (1972)). In concluding th at the plaintiffs lacked standing, the Court explained that “the conditions under which such tr ansfers [to higher levels of care] occur are sufficiently di fferent from those [that] respondents do have standing to challenge that an y judicial assessment of their procedural adequacy would be wholly gratuitous and advisory.” Id. at 1001. The Court’s attention in Blum clearly centered on the “kind” of injury and whether that injury placed the potential representa tive “within the class of persons who will be concretely affected.” Id. at 999. Case: 22-50368 Document: 107-1 Page: 13 Date Filed: 07/15/2024No. 22-50368

14 Fourteen years later, the Supreme Court grappled with the standing approach again in Lewis v. Casey , 518 U.S. 343, 346 (1996). There, the Court considered a class action brought by a group of Arizona inmates alleging a denial of their right of access to the courts. Id. The named plaintiff claimed that he was denied access to the co urts due to his illiteracy and further averred that the prison refused to provid e him with any servic es to assist him. Id. at 356. While the Court agreed that the named plaintiff likely had standing to sue, it declined to extend standing to others who were denied access to the courts for reasons other than illiteracy. Id. at 358 (refusing to provide standing to enter the class to “non-English speakers,” “prisoners in lockdown,” and the “inmate population at large”).
The Lewis court supported its cabiningof the named plaintiff’s standing by explaining that the “a ctual-injury requirement would hardly serve [its] purpose . . . if once a pl aintiff demonstrated harm from one particular inadequacy in governmen t administration, the court were authorized to remedy all inadequacies in that administration.” Id. at 357 (emphasis in original). It continued th at “[t]he remedy must of course be limited to the inadequacy that reduced th e injury in fact that the plaintiff has established . . . This is no less true with respect to class actions than with respect to other suits.” Id. Put simply, the Court refu sed to allow a plaintiff whose injury stemmed fromhis illiteracy represent those that had suffered the same injury for an entirelydifferent, unrelated reason. Id. Finally, the Supreme Court’s decision in Gratz v. Bollinger marked a further development in the standing approach. See 539 U.S. 244 (2003). That landmark case involved a class-action challenge to the University of Michigan’s (“UM”) race-based affirmat ive action policies in its admissions process. Id. at 252. The named plaintiff in th at case sought admittance to UM by transferring from another university. Id. Given the Court’s decision in Lewis , one might think that any class that he represented would be limited to Case: 22-50368 Document: 107-1 Page: 14 Date Filed: 07/15/2024No. 22-50368

15 other transfer students that alleged to have been harmed by UM’s race-based admissions policies. 518 U.S. at 357. The Court, however, allowed him to not only sue on behalf of transfer students but also prospective freshmen that alleged the same kind of harm. Gratz , 539 U.S. at 244. In rejecting the respondent’s challenge to the plaintiff’ s standing at the certification stage, the Court distinguished Gratz from Blum , holding that UM’s “use of race in undergraduate transfer admissions does not implicate a significantly different set of concerns than does its use of race in undergraduate freshman admissions.” Id. at 265 (emphasis added). 2 Several tests have emerged from the Supreme Court’s decision in Lewis , offering varied levels of strictness to the standing inquiry in the class context. The broadest interpretation comes from the Ninth Circuit, which has “interpreted the . . . requirements of the Lewis decision loosely, requiring only broad similarity of injury between the named plaintiffs and passive class members.” Newberg on Class Actions § 2:6 (citing Armstrong v. Davis , 275 F.3d 849, 867 (9th Cir. 2001) (“When determining what constitutes the same type of relief or the same kind of injury , we must be careful not to employ too narrow or technical an approach. Rath er, we must examine the questions realistically: we must reject the tempta tion to parse too finely, and consider instead the context of the inquiry.” (abrogated on other grounds)). Not every circuit, however, views Lewis and its progeny so liberally. The Second Circuit, for example, takes a stricter approach and has developed a two-part test for class standing. See, e.g. , Barrows v. Becerra , 24 F.4th 116,

_____________________

2 See Newberg on Class Actions § 2:6 (stating that the Cour t’s treatment of standing in Gratz “suggests that the disjuncture problem may be overcome by demonstrating a sufficient relationship between the named plaint iffs’ injury and the class’s such that no disjuncture exists and the former can litigate th e claims of the latter” (citation and footnote omitted)). Case: 22-50368 Document: 107-1 Page: 15 Date Filed: 07/15/2024No. 22-50368

16 129 (2d Cir. 2022). Its test requires a na med plaintiff to plau sibly allege “(1) that he personally has suffered some actu al injury as a result of the putatively illegal conduct of the defendant,” and “(2) that such conduct implicates the same set of concerns as the conduct alle ged to have caused injury to other members of the putative class by the same defendants.” Id. (internal quotations, citation, and footnote omitte d). It has explained that when this test “is satisfied, the named plaintiff’ s litigation incentives are sufficiently aligned with those of the absent class members[, such] that the named plaintiff may properly assert claims on their behalf.” Ret. Bd. of the Policemen’s Annuity & Ben. Fu nd of the City of Chicag o v. Bank of N.Y. Mellon , 775 F.3d 154, 161 (2d Cir. 2014). Notably, the Eleventh Circuit takes an approach akin to the Second Circuit. See Fox v. Ritz-Carlton Hotel Co., LLC, 977 F.3d 1039, 1046 (11th Cir. 2020) (“First, the class representative must satisfy the individual standing prerequisites of the case or controversy requirement. Second, the class representative must also be part of th e class and possess the same interest and suffer the same injury as the cla ss members.”) (internal quotation marks and citations omitted). In Fox , the Eleventh Circuit considered a putative class action against a restaurant ow ner under the Florida Deceptive and Unfair Trade Practice Act 3 for his alleged failure to provide adequate notice that there was an automatic gratuityor service charge added to each customer’s check. See id. at 1039.
While the Eleventh Circuit reversed and remanded due to the plaintiff’s failure to exhaust administra tive remedies, it made clear that he had “class representative standing.” Id. at 1047. Specifically, the court explained that the district court “con flate[d] the requirements of individual

_____________________

3 Fl. Stat. §§ 501.201 et seq. (2023). Case: 22-50368 Document: 107-1 Page: 16 Date Filed: 07/15/2024No. 22-50368

17 standing with those for a class representative.” Id. It continued that “class standing does not necessarily require that the class representative suffer injury at the same place and on the same day as the class members. Rather, [standing] requires that the named pl aintiff and class me mbers have the same interest and suffer the same injury.” Id. (internal citation and quotation omitted).
B. Angell Relevantly, a panel of th is court recently grappled with the disjuncture issue. Angell v. Geico Advantage Ins. Co. , 67 F.4th 727 (5th Cir. 2023). There, a group of plaintiffs (the “Angell Plaint iffs”) sought “to represent a class of insureds claiming that GEICO failed to fully compensate them for the total loss of their vehicles under their respective insurance policies.” Id. at 731. Geico challenged the Angell Plaintiffs’ standing, arguing that while each plaintiff had standing to “b ring a claim on his or her own[,] . . . the nature of each [] injury” failed to “extend to th e scope of the injury alleged under the class’s definition, making [them] unsuitable class representatives.” Id. at 733. In rejecting Geico’s argument, we re cognized that “[t]here has yet to be a bright line drawn between the issues of standing and class certification.” Id. (citing Gratz , 539 U.S. at 236 n.15). Rather than attempting to draw that line, the panel analyzed the Angell Plai ntiffs’ standing un der both the “more intensive standing approach” and “the more forgiving class certification approach.” Id. at 734 (internal quotations and citation omitted).
The Angell court held that the Angell Plaintiffs had standing to represent the class under the standing approach because their injuries and interests were “sufficiently aligned with those of the class.” Id. at 734–35 (examining whether the Angell Plainti ffs possessed “sufficiently analogous” injuries as the class they sought to represent). The court likewise held in their favor under the class certification approach because Geico already had Case: 22-50368 Document: 107-1 Page: 17 Date Filed: 07/15/2024No. 22-50368

18 conceded that the Angell Plaintiffs established standing, and that was all that this more forgiving approach required. Id. at 734. With both tests satisfied, the panel conducted the Rule 23 inquiry. Id. at 736–41.
While the Angell court’s application of the two competing approaches has no dispositive effect on the ultimate result in this case, it still provides a useful analytical framework as we endeav or to grapple with an identical issue in the instant case. Just as the panel did in Angell, we decline to adopt either the class certification or standing appr oach because we have determined that Plaintiffs have standing under boththeories. 67 F.4th at 734–36. C. Neither Approach Bars Plainti ffs from Rule 23 Consideration 1. The Class Certification Approach The class certification approach prov ides a direct route to the Rule 23 inquiry. As a reminder, the approach requ ires Plaintiffs to first establish their standing to sue FBG for allegedly: (1) hiring itself to perform services to Plaintiffs’ insurance plans; (2) paying itself excessive compensation out of plan assets; and (3) arranging for excessi ve compensation to itself from other service providers to the plans. Assumingthey can establish their standing to sue, we then proceed to th e Rule 23 analysis to de termine whether Plaintiffs can adequately and fairly represent the entire group’s interests. See Sosna , 419 U.S. at 403; Falcon , 457 U.S. 157–60. Plaintiffs may proceed as class representatives only after succe ssfully clearing both hurdles. Here, Plaintiffs have established their standing to sue FBG. First, they have demonstrated injury in fact by alleging that FBG abused its authority under the Master Trust Agreement by hiri ng itself to perform services paid with funds from the CERT and CPT trus ts, effectively devaluing the trusts and retirement benefits that Plainti ffs otherwise would have accrued with their employer. Second, they have establis hed that their injury is traceable to FBG’s conduct by providin g evidence of FBG’s di rect control over the Case: 22-50368 Document: 107-1 Page: 18 Date Filed: 07/15/2024No. 22-50368

19 CERT and CPT trusts and the underlying contractual agreement with their employer. Finally, their injury is redr essable in this court by awarding monetary damages or other relief. 4 Any further analysis on the appropriateness of appointing Plainti ffs as the class representatives under this approach would occur during the Rule 23 inquiry. Consequently, we move on to an analysis under the standing approach. 2. The Standing Approach The standing approach offers three different avenues for evaluating Plaintiffs’ Article III standing: (1) the Lewis test, requiring us to consider whether Plaintiffs’ harm is so unique thatit warrants an isolated remedy that would be inappropriate if extended to other class members, see 518 U.S. at 358; (2) the Gratz test, which requires us to evaluate if Plaintiffs’ injury implicates “a significantly different se t of concerns” from the other potential class members, see 539 U.S. at 265; or (3) the Second or Eleventh Circuit tests for class representative standing, which are hybrid versions of the Lewis and Gratz tests. See supra . We address each in turn.

a. Lewis
Under Lewis , we analyze whether Plainti ffs alleged a harm that is unique to them, such that it would be unsuitable to permit other nonrelated harms in the same lawsuit. On this re cord, they have not alleged a narrow injury. Plaintiffs claim that FBG “i mpos[ed] sky-high administrative costs, . . . enrich[ing] [itself] at th e expense of the Trusts’ participating employee benefit plans and the employees who receive their retirement and healthcare benefits through those pl ans.” FBG does not contend that the

_____________________

4 To be clear, FBG does not argue that Pl aintiffs lack standing to proceed outside of the class context. Rather, its suit seeks to reverse the district court’s class certification because it alleges that Plaintiffs lack standing to represent the other class members. Case: 22-50368 Document: 107-1 Page: 19 Date Filed: 07/15/2024No. 22-50368

20 other class members seek or require a different remedy, nor does it assert that the injury is unique to Plaintiffs. Instead, it merely insists that because Plaintiffs had different plans and employe rs, they lack standing to challenge the same general practices that each member of the class was subjected to. This theory is unsupported by Lewis

. b. Gratz
The Gratz test is also in Plaintiffs’ favo r. Simply put, Plaintiffs’ claim that FBG mismanaged the trust to th eir detriment “does not implicate a significantly different set of concerns than does” FBG’s mismanagement of the trust for the unnamed class members. 539 U.S. at 265. That there is an abundance of employers and plans does no thing to shift the calculus of that conclusion either. Ultimately, Plaintiffs have undeniably suffered the same kind of loss as the unnamed class members because of FBG’s alleged misconduct. Id. Put another way, the set of concerns here are identical between Plaintiffs and the unnamed cla ss members: the return of trust funds that each plaintiff would otherwise have been entitled to if FBG had not violated ERISA. Furthermore, at no st age in this litigation, has FBG argued that there are different concerns across the class.
c. The Second & Elev enth Circuit Tests Under the Second Circuit’s test, we examine whether Plaintiffs have established “(1) that [they] persona lly [] suffered some actual injury as a result of the putatively illegal conduct of the defendant,” and “(2) that such conduct implicates the same set of conc erns as the conduct alleged to have caused injury to other members of the putative class by the same defendants.” Barrows , 24 F.4th at 129. The first prong is a traditional standing analysis, which we have already complete d in Plaintiffs’ favor. See supra Part III.C.2.a. And the second prong is nothing more than the Gratz test, calling for us to consider whether FBG’s conduct “implicates the same Case: 22-50368 Document: 107-1 Page: 20 Date Filed: 07/15/2024No. 22-50368

21 set of concerns” as Plaintiffs’ injury. Barrows , 24 F.4th at 129. As we have already explained, Plaintiffs’ claim an d FBG’s conduct wholly implicate the same concerns with respect to each memb er of the class that Plaintiffs seek to represent. See supra Part III.C.2.b. The Eleventh Circuit’s method yields the same result. That test requires us to consider whether Plai ntiffs “and [the other] class members have the same interest and suffer[ed] the same injury.” Fox , 977 F.3d at 1047. Plaintiffs and the other class members undoubtedly have the same interest: the return of trust funds or any other vindication of their financial harm. The two also share the same injury: FBG’ s mismanagement of trust funds and charging of excessive fees deprived th em of some portion of the benefits that they were entitled to. Again, that thes e injuries were the result of different agreements with different employers do es not alter that the harm occurred directly from FBG’s misconduct pertaini ng to the trusts that it required participation in through the incorpor ation of certain provisions in each
contract. Despite FBG’s arguments to the co ntrary, there is no support for a conclusion that Plaintiffs lack constituti onal standing to pursue this claim on behalf of other similarly situated pl aintiffs allegedly harmed by FBG’s mismanagement of the CERT and CPT trusts, charging of excessive fees placed into those trusts, and se lf-dealing in violation of ERISA. Having analyzed Plaintiffs’ standi ng under each possible methodology in the Supreme Court and Fifth Circuit’s jurisprudence, we are satisfied that they have established their standing to sue FBG under Article III. Whether the district court appropriately dete rmined that they are proper class Case: 22-50368 Document: 107-1 Page: 21 Date Filed: 07/15/2024No. 22-50368

22 representatives now depends on whet her Plaintiffs satisfy the Rule 23 thresholds for such a status. 5 D. Rule 23 Analysis
The district court conducted a th orough analysis of Rules 23(a), (b)(1), and (b)(3). It concluded that Pl aintiffs satisfied all of Rule 23(a)’s adequacy-of-representation requirements and further demonstrated that this case can be certified under either Rule 23(b)(1) or (b)(3). FBG asserts no challenge to the district co urt’s Rule 23(a) analysis. 6 Instead, it focuses on the district court’s Rule 23(b)(1) and (b)(3) determinations. 7It avers that the district court abused its discretion by: (1) failing to account for the wide variety of plans included in the class and (2) sanctioning hundreds of minitrials because of the indivi dualized nature of the cl ass claims. We agree that the requirements for class certificatio n under Rule 23(b)(3) have been met, but hold that mandatory class status under Rule 23(b)(1) is inappropriate because this is primarily an action for damages and it is not evident that individual adjudications would substa ntially impair the interests of members not parties to the individual adjudications. See Fed. R. Civ. P. 23(b)(1).

_____________________

5 Statutory standing is a key requirement fo r Plaintiffs as well. The district court held that Plaintiffs had statutory standing. On appeal, FBG’s primary brief does not contest the district court’s determination on this issue, so it is not presently before this court. See United States v. Fernandez , 48 F.4th 406, 412 (5th Cir. 2022) (“[F]ailure adequately to brief an issue on appeal constitutes waiver of that argument.” (internal quotation and citation omitted)).

6 While FBG seemingly takes issue with the district court’s Rule 23(a) commonality analysis, its stated concerns are lim ited to its argument that the district court wholly relied on its commonality determinati ons to satisfy Rule 23(b)(3) predominance.

7As a reminder, we review the district co urt’s class certification under a deferential abuse-of-discretion standard. See Allison , 151 F.3d at 408. Case: 22-50368 Document: 107-1 Page: 22 Date Filed: 07/15/2024No. 22-50368

23 1. Rule 23(b)(1)(B)
The district court determined that Plaintiffs had met their burden to certify a class under Rule 23(b)(1)(B). Rule 23(b)(1)(B) prevents the prejudicing of parties after the initial su it when subsequent suits involve the same subject matter. See Fed. R. Civ. P. 23(b)(1)(B). Specifically, it stops one party from collecting damages atthe expense of other parties and protects later parties from being boun d by the judgment of a case in which their interests were not adequately represented. See id. (preventing separate actions where there is a “risk of . . . ad judications with respect to individual class members that, as a prac tical matter, would be disp ositive of the interests of the other members not parties to the individual adjudi cations or would substantially impair or impede their ability to protect their interests”).
FBG asserts that the “district cour t’s analysis completely fails to account for the central fact that this pr oposed class involves vastly different plans and fees.” It also contends that the district court incorrectly assumed that an accounting for Plaintiffs’ clai m would be dispositive in any way for any other plan members. The district co urt certified a mand atory class under Rule 23(b)(1) on the basis that damage s should not be gr anted in multiple actions and that defendants might be su bjected to incompatible standards by separate adjudications. The districtcourt weighed the differences and similarities among the plans and dete rmined that they were sufficiently similar such that deciding Plaintiffs’ ca se as an individual action would have unwanted or impermissible effects on similarly situated employees that contributed to the CERT and CPT tr usts through different employers. Moreover, it recognized that “prosecuting separate actions could substantially impair the putative clas s members’ ability to protect their interests because Plaintiffs are alleging two claims central to all class members.” Namely, whether FBG is or is not a fiduciary, and, if so, whether it breached its duties in that role. Case: 22-50368 Document: 107-1 Page: 23 Date Filed: 07/15/2024No. 22-50368

24 However, the ability of individual class members to opt out and pursue separate remedies should be preserved despite the claim for damages in the class complaint. A large part of the mone tary relief that Plaintiffs seek stems from their desire to disgorge FBG of ill-gotten profits, thus restoring assets to the CERT and CPT trusts. In Langbecker v. Electronic Data Systems Corp. , we held that “[t]he focus on moneta ry damages would set this case apart from the examples of cla ssic Rule 23(b)(1) class acti ons, which are based on situations ‘in which different results in separate actions would impair the opposing party’s ability to pursue a uniform course of conduct.’” 476 F.3d 299, 318 (5th Cir. 2007) (quoting 7A Charles Alan Wright & Arthur R. Miller , Federal Practice and Procedure § 1773, at 16 (2005 ed.)). Although the district court weig hed numerous other factors in certifying the class under Rule 23(b)(1 )(B), such as: (1) whether prosecuting these actions separately would be “‘di spositive’ of the interests of other class members,” (2) the possibility of a due proc ess violation agai nst FBG, (3) the degree of prejudice FBG could potentially suffer through a Rule 23(b)(1)(B) class certification, and (4) whether Plaintiffs’ requested monetary and equitable relief was possible through a Rule 23(b)(1)(B) class, the class claims are primarily for damages and the vari ed amounts each cl ass member may be owed. The inclusion of claims for injunc tive and declaratory relief does not change the nature of this action. Rule 23(b)(3) certification, which permits class members to opt out, is the approp riate vehicle for such class actions. The Supreme Court has cautioned ag ainst certification under Rule 23(b)(1)(B). See Ortiz v. Fibreboard Corp. , 527 U.S. 815, 845–48 (1999) (overviewing the many concerns that follow mandatory opt-ins associated with class certification under Rule 23(b)(1)(B)). Certification under Rule 23(b)(1) is improper here because this is primarily an action for damages and it is not evident that individual adj udications would substantially impair the Case: 22-50368 Document: 107-1 Page: 24 Date Filed: 07/15/2024No. 22-50368

25 interests of members not parties to the individual adjudications. See Fed. R. Civ. P. 23(b)(1). In recognition of the Court’s warning, we analyze the district court’s Rule 23(b)(3) determination. 2. Rule 23(b)(3)
The district court also held thatRule 23(b)(3) was another potential vehicle for certifying Plaintiffs’ class because of the common questions of law and fact as to whether FBG owed fidu ciary duties to the Plaintiffs and the other class members by virtue of their role in managing the CERT and CPT trusts. It further explained that this question percolated throughout the entirety of the claim as it involved whether that duty was breached. We examine its analysis and hold that the district court did not abuse its discretion. Class certification under Rule 23(b)(3) requires Plaintiffs to demonstrate that “questions of law or fact common to class members predominate over any questions affectin g only individual members, and that a class action is superior to other ava ilable methods for fairly and efficiently adjudicating the controversy.” See Fed. R. Civ. P. 23(b)(3). From this rule, courts have reduced the analysis to two inquiries: predominance and superiority. Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 626–29 (5th Cir. 1999). FBG does not contest the district court’s determination on superiority, so our discussi on focuses on predominance. “In order to ‘predominate,’ common issues must constitute a significant part of the individual cases.” Id. at 626.
We have further clarified that th e predominance analysis “entails identifying the substantive issues thatwill control the outcome, assessing which issues will predominate, and then determining whether the issues are common to the class, a pr ocess that ultimately pr events the class from degenerating into a series of individual trials.” Bell Atl. Corp. v. AT&T Corp. , Case: 22-50368 Document: 107-1 Page: 25 Date Filed: 07/15/2024No. 22-50368

26 339 F.3d 294, 302 (5th Cir. 2003) (q uotation marks and citation omitted). Moreover, “[t]he predominance re quirement of Rule 23(b)(3), though redolent of the commonality requir ement of Rule 23(a), is ‘far more demanding’ because it ‘tests whethe r proposed classes are sufficiently cohesive to warrant adjudica tion by representation.’” Gene & Gene LLC v. BioPay LLC, 541 F.3d 318, 326 (5th Cir. 2008) (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623–24 (1997)).
FBG contends that the district court abused its discretion by certifying the class under Rule 23(b)(3) beca use individualized issues of fee excessiveness predominate this dispute. It avers that the wide variety of different fees and plans will turn this case into a series of mini-trials. Specifically, it insists that there will need to be mini-trials on whether each of the FBG subsidiaries are func tional fiduciaries as to each of the 3,344 plans. In support of that contention, it relie s on the Tenth Circuit’s decision in Teets v. Great-West Life & Annuity Insurance Co. , 921 F.3d 1200 (10th Cir. 2019), cert. denied, 140 S. Ct. 554 (2019). It contends that Teets demonstrates how intricate the functional-fiduciary analysis is, so the district court erred in holding that “fiduciary status could bedetermined on a class-wide basis by looking at a master trust agreement gi ving [FBG] ‘authority over their own compensation.’” We examine each argument in turn. a. FBG’s Role as Fiduciary First, we examine the district court’ s conclusion that this case will not devolve into a series of mini-trials on FB G’s status as a fiduciary. The district court first examined that all the claims and defenses in the class involved “concepts of duty, breach, causation, and loss.” See In re Enron Corp. Secs., Derivative & ERISA Litig. , 284 F. Supp. 2d 511, 57 9 (S.D. Tex. 2003). It explained that whether FBG owed a dutyto Plaintiffs was a common question across the class. Moreover, it observed that whether that duty was breached Case: 22-50368 Document: 107-1 Page: 26 Date Filed: 07/15/2024No. 22-50368

27 was a similarly common question that was significant and likely dispositive over the entire class’s claims. In response, FBG maintains that those common questions fail to predominate the individualized inquiry into each plan th at will necessarily follow. It cites Teets for the proposition that “Plaintiffs must establish that [FBG was the] functional fiduciar[y] as to each challenged action in relation to each plan.” The district court disa greed, and so do we. Besides the fact that it was not bound by the Tenth Circuit’s decision in Teets , the district court went a different direction than th at court because it aptly recognized that trying this case separately wo uld inevitably lead to the redundant production of evidence that is common across the class. 8 For example, each plaintiff would certainly produce that plaintiff’s own contract, which expressly makes FB G a fiduciary by incorporating the Master Trust Agreement. The predominan t question from the production of the Master Trust Agreements is whether itoperates as Plaintiffs assert. That question’s commonality unequivo cally dominates any potential individualized inquiries that could arise thereafter. 9 The district court did not abuse its discretion.

_____________________

8 FBG’s other out-of-circuit authority is similarly unconvincing. For example, their reliance on the Eighth Circuit’s decision in McCaffree Financial Corp. v. Principal Life Insurance Company , 811 F.3d 998 (8th Cir. 2016) is unpersuasive and distinguishable from the instant case because it involved a bargai ned-for fee arrangement made by an employer without any attack of the actual management of the trust that held the excessive fees. Id.

9 FBG’s argument here appears to be that it is entitled to hundreds of thousands of opportunities to prove that it is not a fiduciaryto the CERT and CPT trusts. But it cites no law persuading us that the district court abused its discretion in refusing it that opportunity. Case: 22-50368 Document: 107-1 Page: 27 Date Filed: 07/15/2024No. 22-50368

28 b. FBG’s Due Process Rights FBG also argues that the districtcourt’s decision to consider Plaintiffs’ statistical evidence interferes with its constitutional right to due process by robbing it of its right “to defend against the alleged excessiveness of every fee paid by every pl an in every geographic ar ea on an individualized basis.” But the nonbinding authority it cites for this right contradicts its assertions. See Mullins v. Direct Digital, LLC, 795 F.3d 654, 670–71 (7th Cir. 2015) (rejecting a violation of a defendan t’s due process rights where there is “a common method for showing individu al damages,” such as “a simple formula [that] could be applied to each class member’s employment records” because “that would be su fficient for the predominance and superiority requirements to be met”) (quoting Newberg on Class Actions § 12:2)). The Seventh Circuit’s understanding of due process in Mullins aligns with the Supreme Court’s jurisprudence on damage calculations through formulae and statistical modeling in the class context. See Comcast Corp. v. Behrend, 569 U.S. 27, 35–37 (2013) (permi tting consideration of a model to determine a liability if it “measure[s] on ly those damages attributable to [the class’s] theory”); see also Tyson Foods , 577 U.S. at 454–55. In short, the district court did not violate this prec edent by acknowledging Plaintiffs’ plan to establish FBG’s liability using an ar ithmetic, formulaic method. So, FBG’s due process rights are sufficiently prot ected, and the “[d] ifferences in the amount of damages . . . among cl ass members are no bar to class certification.” 3. Rule 23(c) Particular Issues & Subclasses Although we affirm certification under Rules 23(a) and (b)(3), we now address the district court’s cursory Rule 23(c)(4)–5 analysis to provide guidance on remand. See United States v. Murillo–Lopez , 444 F.3d 337, 339 & Case: 22-50368 Document: 107-1 Page: 28 Date Filed: 07/15/2024No. 22-50368

29 n.5 (5th Cir. 2006). We agree with the district court that Plaintiffs have met their burden of demonstrating that common issues predominate over the significant individual issues in the case . However, in its certification order, the district court did not indicate th at it had seriously considered the administration of the trial. Because common questions predominat e the class, Rule 23(c)(4) and Rule 23(c)(5) are relevant here. See Smith v. Texaco, Inc. , 263 F.3d 394, 409 (5th Cir. 2001), opinion withdrawn, cause dismissed, 281 F.3d 477 (5th Cir. 2002) (internal citation omitted) (“ Therefore, the cause of action, as a whole, must satisfy rule 23(b)(3)’s predominance requirement. Once that requirement is met, rule 23(c)(4) is avai lable to sever the common issues for a class trial.”); Elson v. Black , 56 F.4th 1002, 1007 (5th Cir. 2023) (acknowledging that subclasses under Rule 23(c)(5)—though “necessary to preserve the possibility of proceeding as a class”—do not “relieve [Plaintiffs] of their duty to show each subclass independently satisfi[es] the Rule 23 requirements”).
In In re Deepwater Horizon , we concluded that “common and individual issues” can be divided and tried into “multi-phase trials under Rule 23(c)(4), which permits district courts to limit class treatment to ‘particular issues’ and reserve other i ssues for individual determination.” 739 F.3d 790, 816 (5th Cir. 2014). As pa rt of its 23(b)(3) analysis, the district court acknowledged that “the issues of causation and loss also support a finding of predominance” and “this ca se also relies upon common proof.” However, the district court failed to sufficiently address concerns regarding the variability of individualized da mages in the suit. Notably, “the predominance inquiry can still be sa tisfied under Rule 23(b)(3) if the proceedings are structured to establish ‘liability on a class- wide basis, with separate hearings to determine—if liability is established—the damages of individual class members.’” Id. at 817. A class may be divided into subclasses Case: 22-50368 Document: 107-1 Page: 29 Date Filed: 07/15/2024No. 22-50368

30 for adjudication of damages. Fed. R. Civ. P. 23(c)(5). 10 Moreover, “Rule 23(c)(4) explicitly recognizes the flex ibility that courts need in class certification by allowing certification ‘with respect to particular issues.’” Bolin v. Sears, Roebuck & Co. , 231 F.3d 970, 976 (5th Cir. 2000); Fed. R. Civ. P. 23(c)(4). 11 And, recognizing the necessity for individual damages calculations does not preclude cla ss certification under Rule 23(b)(3). See Comcast Corp. , 569 U.S. at 42 (Ginsburg, J., dissenting); see also2 W. Rubenstein, Newberg on Class Actions § 4:54, p. 205 (5th ed. 2012) (explaining that ordinarily, “ind ividual damage[s] ca lculations should not scuttle class certificat ion under Rule 23(b)(3)”). Moreover, in Frey v. First National Bank Southwest, we delineated the primary questions with regard to the defendant’s liability and concluded that “[t]he answers to these qu estions [would] affect a ll class member’s claims.” 602 Fed. App’x. 164, 170 (5th Cir. 2015) (unpublished). Moreover, the Frey panel determined that “[t]hese common issues ‘constitute a significant part of the individual cases,” sufficient to meet the predominance requirement.” Id. (citing Jenkins v. Raymark Indus., Inc. , 782 F.2d 468, 472 (5th Cir. 1986)). In response to the defendant’s contentions that “the court must do an intensive individualized analysis to de termine if each class member’s account was personal,” we held that “the factthat some inquiry into the nature of each account will have to be made do es not render that issue predominant over the multiple common issues bearing on [defendant’s] liability.” Id. Furthermore, Chalmette Refining instructed district courts to consider rigorously how they plan to “adjudic ate common class issues in the first

_____________________

10 “When appropriate, a class may be divided into subclasses that are each treated as a class under this rule.” Fed. R. Civ. P. 23(c)(5).

11 “When appropriate, an action may be brought or maintained as a class action with respect to particular issues.” Fed. R. Civ. P. 23(c)(4). Case: 22-50368 Document: 107-1 Page: 30 Date Filed: 07/15/2024No. 22-50368

31 phase and then later adjudicate individu alized issues in other phases” of the multi-phase trial before the final decision is made to certify a class. In re Deepwater Horizon , 739 F.3d at 816. In Chalmette Refining, we admonished the district court because “[i]n stark co ntrast to the detailed trial plans in Watson and Turner, the district court simply concluded that ‘[t]he common liability issues can be tried in a single class action trial with any individual issues of damages reserved for individual treatment.’” Madison v. Chalmette Refin., L.L.C. , 637 F.3d 551, 556 (5th Cir. 2011) (citing Watson v. Shell Oil Co. , 979 F.2d 1014 (5th Cir. 1992) and Turner v. Murphy Oil USA, Inc. , 234 F.R.D. 597 (E.D. La. 2006)). “[O]ur precedent demands a far mo re rigorous analysis than the district court conducted.” See Chalmette Refin. 637 F.3d at 557. By failing to adequately analyze and determine whet her liability and damages should be bifurcated in certifying the class the district court abused its discretion. Correspondingly, as this court explained in Madison v. Chalmette Refining, L.L.C. , predominance may be ensured in ma ss tort litigation when a district court performs a sufficiently “rigorou s analysis” of the means by which common and individual issues will be divided and tried. Id. at 556; see also In re Deepwater Horizon , 739 F.3d at 816. Accordingly, we remand with instructions for the district court to consider whether severing liability from individual damage issues and trying them separately may be appropriate and would be in accord with this court’s previous caselaw and Rule 23(c)(4)–(5). See Castano v. Am. Tobacco Co. , 84 F.3d 734, 745–46 n.21 (5th Cir. 1 996) (“The proper interpretation of the interaction between subdivisions (b)(3) an d (c)(4) is that a cause of action, as a whole, must satisfy the predominance requirement of (b)(3) and that (c)(4) is a housekeeping rule . . . .”); see also In re Deepwater Horizon , 739 F.3d at 807 n.66 (quoting Butler v. Sears, Roebuck & Co. , 727 F.3d 796, 800 (7th Cir. 2013) “[A] class action limited to determin ing liability on a cl ass-wide basis, Case: 22-50368 Document: 107-1 Page: 31 Date Filed: 07/15/2024No. 22-50368

32 with separate hearings to determine— if liability is established—the damages of individual class members, or homo geneous groups of class members, is permitted by Rule 23(c)(4) and will often be the sensible way to proceed.”). “This court has likewise approved mass tort or mass accident class actions when the district court was able to relyon a manageable tr ial plan—including bifurcation [of issues] and/or su bclasses—proposed by counsel.” Steering Comm. v. Exxon Mobil Corp. , 461 F.3d 598, 603 (5th Cir. 2006) (citing Watson , 979 F.2d at 1017–18 & n.9). Aside from Plaintiffs’ request for CERT and CPT subclasses, the district court should allow the parties mo ving for class certif ication to have a full opportunity to present proposal s for their preferred form of class treatment. Furthermore, some of the arguable distinctions, as alleged by FBG, in the various retirement and welf are benefit plans could be handled via certification of specific issues or subcla sses. “The burden is on Plaintiffs to demonstrate to the district court howcertain proposed subclasses would alleviate existing obstac les to certification.” Elson , 56 F.4th at 1007–08 (citing Allison , 151 F.3d at 420 n.15; Spence v. Glock, Ges.m.b.H. , 227 F.3d 308, 313 (5th Cir. 2000)). Use of subclasses or bifurcation of issues, pursuant to rule 23(c)(4) or 23(c)(5), as a remedy for manageability obst acles is supported by caselaw. See In re Deepwater Horizon , 739 F.3d at 817 (citing In re Whirlpool Corp. Front-Loading Washer Products Liab. Litig. , 722 F.3d 838, 860 (6th Cir. 2013); Butler, 727 F.3d at 800; Leyva v. Medline Indus. Inc. , 716 F.3d 510, 514 (9th Cir. 2013)). On remand, the district court should consider whether liability and damages should be resolved commonlyand whether injury, causation, and actual damages should be resolved indi vidually. In doing so, we note that the district court has a number of options atits disposal, each of which may or may not be appropriate depending on ho w the case develops. We express no view on the district court’s ultimate de cision whether to divide this large, Case: 22-50368 Document: 107-1 Page: 32 Date Filed: 07/15/2024No. 22-50368

33 complex litigation into smaller, more manageable pieces in light of today’s opinion, nor do we opine on the ulti mate merits of the substantive claims. Because Plaintiffs have standing and certification is appropriate under Rule 23(b)(3), the district correctly determined that this litigation may proceed as a class-action lawsuit. A ccordingly, the class certification is modified to certification only under Rule 23(b)(3).
IV. Conclusion For the foregoing reasons, we AFFIRM the district court’s order in part and REVERSE in part

. The order granting class certification under Rule 23(b)(1) is REVERSED in part and granting certification under Rule 23(b)(3) is AFFIRMED in part. This matter is REMANDED for further proceedings consistent with this opinion. Case: 22-50368 Document: 107-1 Page: 33 Date Filed: 07/15/2024