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 Escarcega (representing her son, Jose 

Escarcega), and Jorge Moreno (collectively “Plaintiffs”) seek to represent a 

class in a lawsuit against Plan Benefit Services, Fringe Insurance Benefits, 

and Fringe Benefit Group (collectively “FBG”) for the alleged 

mismanagement of funds that Plaintiffs contributed to benefit plans through 

their employers. Because Plaintiffs 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 

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2 

court’s order is AFFIRMED in part and REVERSED in part. The order 

is AFFIRMED insofar as it granted class certification under Rule 23 (b)(3) 

and REVERSED insofar as it granted class 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 and administer employee benefit 

programs that offer retirement and health and welfare benefits to their 

employees. In accordance with FBG’s plan, employers disburse benefits to 

their employees through two trusts: (1) the Contractors and Employee 

Retirement Trust (“CERT”), which covers 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 greater control over the CERT and CPT 

trusts. For example, the Master Trust Agreement allows FBG to determine 

the fees deducted from CERT and allows 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 wages—that is, the wages and benefits 

paid to the majority of similarly situated laborers in the area at the time. In 

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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 fee 

of $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 selections 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 another company that offers a moneypurchase plan. “These structures are called Tiered 1-4, Graded 25, and 

Graded 50.” While employers can choose 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 required to provide wage and fringe benefits to its 

employees in an amount calculated by the applicable prevailing wage 

determination. It provided retirement plans under CERT and health and 

welfare plans under CPT. The agreement governing CERT, CPT, and TRDI 

allotted various “powers and responsibilities” to FBG. For example, FBG 

had the power to: (1) enter contracts imposing fees and other charges on the 

trusts and the plans; (2) instruct any insurance company with respect to 

investment or disbursement of investment funds on behalf of the Trustee; (3) 

require the Trustee to make disbursements for FBG’s own fees in any 

amount that it directed; and (4) appoint and remove the Trustee. 

Chavez participated in CPT, meaning that TRDI paid monthly 

contributions to CPT on his behalf, from which FBG deducted fees. TRDI 

contributed a certain amount of money to a fringe benefit account in 

Chavez’s name for every hour that he worked, in accordance with federal and 

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state laws. This fringe benefit account was used to help pay Chavez’s 

premiums incurred through his enrollment 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 insurance. 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 the fringe benefit accounts based on 

the number of hours that Escarcega and Moreno worked. Under each plan, 

FBG’s fees for plan administration services 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 providers. Escarcega was also enrolled 

in a “limited medical plan” with Standard Security Life (“SSL”) through 

CPT. He claims that “FBG deducted compensation for itself . . . for ancillary 

insurance premiums and fees of more than 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 FBG charged different rates for identical 

services and charged an excessive base fee. FBG moved to dismiss Plaintiffs’ 

claims. The district court granted FBG’s motion but gave Plaintiffs the 

opportunity to amend their complaint. Plaintiffs’ amended complaint alleged 

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that FBG “accepted excessive fees, handpicked 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 Cir. 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 motion for class certification. They 

sought to represent a class of “all participants in and beneficiaries of 

employee benefit plans that provide benefits through CERT 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 requested additional briefing on the issue and 

ultimately ruled that Plaintiffs had constitutional and statutory standing to 

sue FBG in a class-action context. On constitutional standing, the district 

court explained that Plaintiffs had demonstrated injury in fact, traceability, 

and redressability. Notably, it held that the class context was appropriate 

because “both the named and unnamed plaintiffs . . . 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 district 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 standing-related provisions 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 participation in all the ERISA governed plans 

involved.” Id. at 410; Fed. R. Civ. P. 23. It reasoned that a deeper inquiry 

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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 this 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 their motion for class certification, and 

the case was reassigned. The parties then presented oral argument and 

submitted supplemental briefing on standing. 

Upon consideration, the district court certified the following two 

classes: 

(1) All participants and beneficiaries 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 beneficiaries of plans that 

provide employee benefits through CERT—other 

than (a) participants and beneficiaries 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 participants and 350 plans in CPT.” 

FBG then filed the instant appeal, urging this court to determine that 

Plaintiffs lack standing to represent the 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, certification was improper, and we should 

remand for proceedings on only Plaintiffs’ claims.

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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 deferential standard is a recognition of the 

essentially factual basis of the certification inquiry and of the district court’s 

inherent power to manage and control pending litigation.” Id. (citation 

omitted). “We review de novo, however, whether the district court applied 

the correct legal standards in determining 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 make 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 mechanisms through which FBG was able 

to charge the excessive fees to the various employees that participated in their 

plans. Furthermore, they have always sought to bring this action on behalf of 

members of the trust, not just employees who were allegedly charged 

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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 characterization is detailed in Plaintiffs’ 

complaint, which explains that this case is also about FBG’s alleged 

mismanagement of the trusts that they compel each employee to pay into 

through contracts with their employers. Likewise, the class that the district 

court eventually certified further reflects 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 which they have no stake. 

In response, Plaintiffs insist that the district court simply recognized 

that FBG’s concerns were best addressed 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 obligation 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 

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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. The 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 personal and individual way.” Id. at 339 (quotations 

and citation omitted). 

“The party invoking federal jurisdiction 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 the successive stages of the litigation.”). 

The Supreme Court has repeatedly explained 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 Court has also cautioned us against 

dispensing standing “in gross” in a class-action context—instead instructing 

us to ensure that plaintiffs “demonstrate standing for each claim that they 

press and for each form of relief that they seek[.]” Id. (citation omitted). 

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FBG raises important questions about the order and depth in which 

this court grapples with constitutional standing and the Rule 23 inquiry. 

There is a split on this very question that exists across the circuits. 

See Standing to litigate what? The relationship 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 whether 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 notion 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 individual 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 representative has standing to pursue her own 

claims, move on from the standing inquiry and approach the disjuncture as 

an issue of class certification”; or (2) Other courts “simply find that the class 

representative lacks standing to pursue 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 provides guidance as we weigh the 

potential options. We examine each respective approach and conclude that, 

in this case, we may proceed to Rule 23 under either theory. 

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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 wife brought a class action suit 

challenging the constitutionality of an Iowa state law that required individuals 

seeking a divorce to have been a resident 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 that a “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 certified by the district court.” Id. 

The Sosna court reasoned that its “conclusion [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 Article 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 Sosna in 

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 brought 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 

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persons that were never hired because of an allegedly discriminatory 

application process. Id. at 157–60. Notably, the Court came to its conclusion 

in the Rule 23(a) commonality analysis—not during the constitutional or 

statutory standing inquiries. Id. 

At the circuit-court level, the class certification approach 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) (“Nothing . . . 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 plaintiffs established standing and that 

defendants’ “concerns regarding the representation of absent class members 

might implicate class certification or damages 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 standing inquiry 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 for 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) (rejecting 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 certification stage, which is designed precisely to address 

concerns about the relationship between the class representative and the class” (internal 

quotations and citations omitted)). 

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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 certification, not to standing.” 

(emphasis added) (internal quotation 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 (1982). 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 affected. 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 that the plaintiffs lacked standing, the 

Court explained that “the conditions under which such transfers [to higher 

levels of care] occur are sufficiently different from those [that] respondents 

do have standing to challenge that any 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 representative “within the class of persons who 

will be concretely affected.” Id. at 999. 

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 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 courts due to his illiteracy and further 

averred that the prison refused to provide him with any services 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 cabining of the named plaintiff’s 

standing by explaining that the “actual-injury requirement would hardly 

serve [its] purpose . . . if once a plaintiff demonstrated harm from one 

particular inadequacy in government administration, the court were 

authorized to remedy all inadequacies in that administration.” Id. at 357 

(emphasis in original). It continued that “[t]he remedy must of course be 

limited to the inadequacy that reduced the 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 refused to allow a plaintiff 

whose injury stemmed from his illiteracy represent those that had suffered 

the same injury for an entirely different, 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 affirmative action policies in its admissions 

process. Id. at 252. The named plaintiff in that 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 

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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. Rather, we must examine the questions 

realistically: we must reject the temptation 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 Court’s treatment of standing 

in Gratz “suggests that the disjuncture problem may be overcome by demonstrating a 

sufficient relationship between the named plaintiffs’ injury and the class’s such that no 

disjuncture exists and the former can litigate the claims of the latter” (citation and footnote 

omitted)). 

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129 (2d Cir. 2022). Its test requires a named plaintiff to plausibly allege “(1) 

that he personally has 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 concerns as the conduct alleged to have caused injury to other 

members of the putative class by the same defendants.” Id. (internal 

quotations, citation, and footnote omitted). 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. Fund of the City of Chicago 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 the class and possess the same interest 

and suffer the same injury as the class members.”) (internal quotation marks 

and citations omitted). In Fox, the Eleventh Circuit considered a putative 

class action against a restaurant owner under the Florida Deceptive and 

Unfair Trade Practice Act3

 for his alleged failure to provide adequate notice 

that there was an automatic gratuity or 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 administrative remedies, it made clear that he 

had “class representative standing.” Id. at 1047. Specifically, the court 

explained that the district court “conflate[d] the requirements of individual 

_____________________ 

3 Fl. Stat. §§ 501.201 et seq. (2023). 

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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 plaintiff and class members have the same 

interest and suffer the same injury.” Id. (internal citation and quotation 

omitted). 

B. Angell

Relevantly, a panel of this 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 Plaintiffs”) 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 “bring a claim on his or her own[,] . . . the nature of 

each [] injury” failed to “extend to the scope of the injury alleged under the 

class’s definition, making [them] unsuitable class representatives.” Id. at 733. 

In rejecting Geico’s argument, we recognized 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 Plaintiffs’ standing under 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 Plaintiffs 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 

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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 endeavor 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 approach because we have determined that 

Plaintiffs have standing under both theories. 67 F.4th at 734–36.

C. Neither Approach Bars Plaintiffs from Rule 23 Consideration 

 1. The Class Certification Approach 

 The class certification approach provides a direct route to the Rule 23 

inquiry. As a reminder, the approach requires 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 excessive compensation to itself from other 

service providers to the plans. Assuming they can establish their standing to 

sue, we then proceed to the Rule 23 analysis to determine 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 successfully 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 hiring itself to perform services paid 

with funds from the CERT and CPT trusts, effectively devaluing the trusts 

and retirement benefits that Plaintiffs otherwise would have accrued with 

their employer. Second, they have established that their injury is traceable to 

FBG’s conduct by providing evidence of FBG’s direct control over the 

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CERT and CPT trusts and the underlying contractual agreement with their 

employer. Finally, their injury is redressable in this court by awarding 

monetary damages or other relief.4

 Any further analysis on the 

appropriateness of appointing Plaintiffs 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 that it 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 set 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 Plaintiffs 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 record, they have not alleged a narrow 

injury. Plaintiffs claim that FBG “impos[ed] sky-high administrative 

costs, . . . enrich[ing] [itself] at the expense of the Trusts’ participating 

employee benefit plans and the employees who receive their retirement and 

healthcare benefits through those plans.” FBG does not contend that the 

_____________________ 

4

 To be clear, FBG does not argue that Plaintiffs 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. 

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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 employers, 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’ favor. Simply put, Plaintiffs’ claim 

that FBG mismanaged the trust to their 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 nothing 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 class members: the return of trust funds 

that each plaintiff would otherwise have been entitled to if FBG had not 

violated ERISA. Furthermore, at no stage in this litigation, has FBG argued 

that there are different concerns across the class. 

 c. The Second & Eleventh Circuit Tests 

 Under the Second Circuit’s test, we examine whether Plaintiffs have 

established “(1) that [they] personally [] 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 concerns 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 completed 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 

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set of concerns” as Plaintiffs’ injury. Barrows, 24 F.4th at 129. As we have 

already explained, Plaintiffs’ claim and FBG’s conduct wholly implicate the 

same concerns with respect to each member 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 Plaintiffs “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 them of some portion of the benefits that 

they were entitled to. Again, that these injuries were the result of different 

agreements with different employers does not alter that the harm occurred 

directly from FBG’s misconduct pertaining to the trusts that it required 

participation in through the incorporation of certain provisions in each 

contract. 

 Despite FBG’s arguments to the contrary, there is no support for a 

conclusion that Plaintiffs lack constitutional standing to pursue this claim on 

behalf of other similarly situated plaintiffs allegedly harmed by FBG’s 

mismanagement of the CERT and CPT trusts, charging of excessive fees 

placed into those trusts, and self-dealing in violation of ERISA. 

Having analyzed Plaintiffs’ standing 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 determined that they are proper class 

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representatives now depends on whether Plaintiffs satisfy the Rule 23 

thresholds for such a status.5

D. Rule 23 Analysis 

 The district court conducted a thorough analysis of Rules 23(a), 

(b)(1), and (b)(3). It concluded that Plaintiffs 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 court’s Rule 23(a) analysis.6

 Instead, it focuses on 

the district court’s Rule 23(b)(1) and (b)(3) determinations.7

 It 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 individualized nature of the class claims. We agree that 

the requirements for class certification 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 substantially 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 for 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 limited to its argument that the district court 

wholly relied on its commonality determinations to satisfy Rule 23(b)(3) predominance. 

7

 As a reminder, we review the district court’s class certification under a deferential 

abuse-of-discretion standard. See Allison, 151 F.3d at 408. 

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 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 suit 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 at the expense of other parties and 

protects later parties from being bound 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 . . . adjudications with respect to individual 

class members that, as a practical matter, would be dispositive of the interests 

of the other members not parties to the individual adjudications or would 

substantially impair or impede their ability to protect their interests”). 

FBG asserts that the “district court’s analysis completely fails to 

account for the central fact that this proposed class involves vastly different 

plans and fees.” It also contends that the district court incorrectly assumed 

that an accounting for Plaintiffs’ claim would be dispositive in any way for 

any other plan members. The district court certified a mandatory class under 

Rule 23(b)(1) on the basis that damages should not be granted in multiple 

actions and that defendants might be subjected to incompatible standards by 

separate adjudications. The district court weighed the differences and 

similarities among the plans and determined that they were sufficiently 

similar such that deciding Plaintiffs’ case as an individual action would have 

unwanted or impermissible effects on similarly situated employees that 

contributed to the CERT and CPT trusts through different employers. 

Moreover, it recognized that “prosecuting separate actions could 

substantially impair the putative class 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. 

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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 monetary 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 monetary damages would set this case apart 

from the examples of classic Rule 23(b)(1) class actions, 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 weighed numerous other factors in 

certifying the class under Rule 23(b)(1)(B), such as: (1) whether prosecuting 

these actions separately would be “‘dispositive’ of the interests of other class 

members,” (2) the possibility of a due process violation against 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 varied amounts each class member may be 

owed. The inclusion of claims for injunctive 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 appropriate vehicle for such class actions. 

The Supreme Court has cautioned against 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 adjudications would substantially impair the 

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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 that Rule 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 fiduciary 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 affecting only individual members, and that 

a class action is superior to other available 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 discussion 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 the predominance analysis “entails 

identifying the substantive issues that will control the outcome, assessing 

which issues will predominate, and then determining whether the issues are 

common to the class, a process that ultimately prevents the class from 

degenerating into a series of individual trials.” Bell Atl. Corp. v. AT&T Corp., 

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339 F.3d 294, 302 (5th Cir. 2003) (quotation marks and citation omitted). 

Moreover, “[t]he predominance requirement of Rule 23(b)(3), though 

redolent of the commonality requirement of Rule 23(a), is ‘far more 

demanding’ because it ‘tests whether proposed classes are sufficiently 

cohesive to warrant adjudication 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) because 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 functional fiduciaries as to each of the 3,344 plans. 

In support of that contention, it relies 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 be determined on a class-wide basis by 

looking at a master trust agreement giving [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 FBG’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, 579 (S.D. Tex. 2003). It 

explained that whether FBG owed a duty to Plaintiffs was a common question 

across the class. Moreover, it observed that whether that duty was breached 

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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 that 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 disagreed, 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 that court because it aptly recognized 

that trying this case separately would 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 FBG a fiduciary by incorporating the 

Master Trust Agreement. The predominant question from the production of 

the Master Trust Agreements is whether it operates as Plaintiffs assert. That 

question’s commonality unequivocally 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 bargained-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 fiduciary to the CERT and CPT trusts. But it cites no 

law persuading us that the district court abused its discretion in refusing it that opportunity. 

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b. FBG’s Due Process Rights 

FBG also argues that the district court’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 plan in every geographic area 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 defendant’s due process rights where there is 

“a common method for showing individual damages,” such as “a simple 

formula [that] could be applied to each class member’s employment 

records” because “that would be sufficient 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) (permitting consideration of a model to 

determine a liability if it “measure[s] only 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 precedent by acknowledging Plaintiffs’ plan 

to establish FBG’s liability using an arithmetic, formulaic method. So, FBG’s 

due process rights are sufficiently protected, and the “[d]ifferences in the 

amount of damages . . . among class 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 & 

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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 that it had seriously considered the 

administration of the trial. 

Because common questions predominate 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 available 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 issues for individual determination.” 

739 F.3d 790, 816 (5th Cir. 2014). As part 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 case also relies upon common proof.” 

However, the district court failed to sufficiently address concerns regarding 

the variability of individualized damages in the suit. Notably, “the 

predominance inquiry can still be satisfied 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 

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for adjudication of damages. Fed. R. Civ. P. 23(c)(5).10 Moreover, “Rule 

23(c)(4) explicitly recognizes the flexibility 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 class certification under Rule 23(b)(3). See

Comcast Corp., 569 U.S. at 42 (Ginsburg, J., dissenting); see also 2 W. 

Rubenstein, Newberg on Class Actions § 4:54, p. 205 (5th ed. 

2012) (explaining that ordinarily, “individual damage[s] calculations should 

not scuttle class certification 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 questions [would] affect all 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 determine if each class member’s account 

was personal,” we held that “the fact that some inquiry into the nature of 

each account will have to be made does 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 “adjudicate 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). 

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phase and then later adjudicate individualized 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 contrast 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 more rigorous analysis than the 

district court conducted.” See Chalmette Refin. 637 F.3d at 557. By failing to 

adequately analyze and determine whether 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 mass tort litigation when a district 

court performs a sufficiently “rigorous 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. 1996) (“The proper interpretation of the 

interaction between subdivisions (b)(3) and (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 determining liability on a class-wide basis, 

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with separate hearings to determine—if liability is established—the damages 

of individual class members, or homogeneous 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 rely on a manageable trial plan—including 

bifurcation [of issues] and/or subclasses—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 moving for class certification to have a 

full opportunity to present proposals for their preferred form of class 

treatment. Furthermore, some of the arguable distinctions, as alleged by 

FBG, in the various retirement and welfare benefit plans could be handled via 

certification of specific issues or subclasses. “The burden is on Plaintiffs to 

demonstrate to the district court how certain proposed subclasses would 

alleviate existing obstacles 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 obstacles 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 commonly and whether injury, causation, and 

actual damages should be resolved individually. In doing so, we note that the 

district court has a number of options at its disposal, each of which may or 

may not be appropriate depending on how the case develops. We express no 

view on the district court’s ultimate decision whether to divide this large, 

Case: 22-50368 Document: 107-1 Page: 32 Date Filed: 07/15/2024
No. 22-50368 

33 

complex litigation into smaller, more manageable pieces in light of today’s 

opinion, nor do we opine on the ultimate 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. Accordingly, 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