PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ROBERT B. LIENHART, et al.; DINAH J. 

LIENHART; MICHAEL SMITH; JOLEEN

SMITH; DAVID P. ADAMS; PAMELA M.

ADAMS; BENJAMIN BRASWELL;

BARBARA W. BRASWELL,  No. 00-908 Respondents,

v.

DRYVIT SYSTEMS, INCORPORATED,

Petitioner. 

Appeal from the United States District Court

for the Eastern District of North Carolina, at Raleigh.

W. Earl Britt, Senior District Judge.

(CA-99-470-5-BR)

Argued: February 27, 2001

Decided: June 26, 2001

Before WIDENER, WILKINS, and WILLIAMS, Circuit Judges.

Petition for review granted and class certification order vacated by

published opinion. Judge Williams wrote the opinion, in which Judge

Widener and Judge Wilkins joined. 

COUNSEL

ARGUED: Hada deVarona Haulsee, WOMBLE, CARLYLE, SANDRIDGE & RICE, P.L.L.C., Winston-Salem, North Carolina, for
Petitioner. Gary Walker Jackson, MICHAELS, JACKSON & OETTINGER, Raleigh, North Carolina, for Respondents. ON PLEADINGS: W. Andrew Copenhaver, F. Bruce Williams, Charles L.

Becker, WOMBLE, CARLYLE, SANDRIDGE & RICE, P.L.L.C.,

Winston-Salem, North Carolina, for Petitioner. Joel R. Rhine, Wilmington, North Carolina; Daniel K. Bryson, LEWIS & ROBERTS,

P.L.L.C., Raleigh, North Carolina, for Respondents. 

OPINION

WILLIAMS, Circuit Judge: 

Dryvit Systems, Inc. petitions for review, pursuant to Federal Rule

of Civil Procedure 23(f), of the district court’s certification of a plaintiff class of homeowners who allege that Dryvit’s stucco siding product, "Fastrak System 4000" (Fastrak), was negligently designed and

that Dryvit failed to warn purchasers of the product’s alleged defects.

This Circuit has not yet had occasion to articulate the standard governing our consideration of petitions under Rule 23(f). We adopt a

five-factor "sliding scale" test to guide the consideration of such petitions, grant the petition, and hold that certification of this class is

inappropriate at this time because it is likely that individual issues

necessary to adjudicate Dryvit’s liability will predominate over class

issues in a manner inconsistent with the dictates of Federal Rule of

Civil Procedure 23(b)(3). We thus grant Dryvit’s petition for review

and vacate the district court’s class certification order.

I.

A.

Fastrak is a stucco siding product that is installed on the exterior

of a building in order to provide a water-resistant shield that protects

the building from weather. Fastrak consists of several component

parts: (a) a sheathing comprised of Georgia-Pacific Corporation’s

"Dens-Glass Gold" product; (b) Dryvit non-cementatious base coat

(NCB); (c) reinforcing mesh; and (d) Dryvit finish coat. Dryvit sells

the various components of the system to independent distributors and

2 LIENHART v. DRYVIT SYSTEMS
provides instructions and specifications to applicators, who buy the

components from various suppliers and produce the final product.

Applicators are usually hired by general contractors to install Fastrak

on the exterior of a new building; responsibility for installing Fastrak

and integrating it with other building components, such as windows,

doors, flashing, and the roof is shared between applicators, general

contractors, and subcontractors. Dryvit asserts that Fastrak can fail for

various reasons related to the conduct of third parties, such as applicator error, use of incorrect materials, or improperly sealing Fastrak to

other components of a building, such as windows or the roof. 

Fastrak’s design is based upon the premise that a properly facesealed barrier can prevent the intrusion of water behind the siding

product, eliminating the need for drainage between the siding and the

wall of a structure. The plaintiff class argues that a face-sealed barrier

of this sort cannot be installed correctly in the field and will inevitably

lack water resistance and ability to resist applied loads.

B.

On July 25, 1999, plaintiff Robert E. Lienhart and others (collectively "Lienhart") filed a complaint in the Superior Court for Wake

County, North Carolina against defendant Dryvit, for themselves and

on behalf of a class comprised of all entities in North Carolina whose

buildings were constructed after January 1, 1992 using Fastrak. Lienhart alleged that Dryvit had committed negligence, gross negligence,

negligent misrepresentation, fraud, and unfair and deceptive trade

practices. Lienhart alleged that Fastrak caused damage to their structures by "trapping" water within each structure’s walls. On July 22,

1999, Dryvit removed this action to the United States District Court

for the Eastern District of North Carolina based on diversity of citizenship. On December 18, 2000, the district court certified the proposed class. Certification was limited to the issues of (1) whether

Dryvit’s product was defectively designed; and (2) whether Dryvit

had breached a duty to warn homeowners of the hazards inherent in

the use of its product. 

Dryvit timely filed a Petition for Review pursuant to Rule 23(f)

with this Court.1

1On December 28, Dryvit filed a petition seeking Rule 23(f) review of

the district court’s certification order; an amended petition was filed with

LIENHART v. DRYVIT SYSTEMS 3
II.

A.

This Circuit has not yet had occasion to consider the standards for

granting a petition to appeal class certification under Federal Rule of

Civil Procedure 23(f), a new provision added in 1998 to Rule 23, the

rule governing class actions. 

Rule 23(f) provides:

A court of appeals may in its discretion permit an appeal

from an order of a district court granting or denying class

action certification under this rule if application is made to

it within ten days after entry of the order. An appeal does

not stay proceedings in the district court unless the district

judge or the court of appeals so orders. 

Fed. R. Civ. P. 23(f). 

The advisory committee note to Rule 23(f) states that "the court of

appeals is given unfettered discretion whether to permit" a Rule 23(f)

appeal, "akin to the discretion exercised by the Supreme Court in acting on a petition for certiorari." Fed. R. Civ. P. 23(f) advisory committee note. Noting that "[t]he courts of appeals will develop

standards for granting review that reflect the changing areas of uncertainty in class litigation," the advisory committee note states that

Lienhart’s consent on January 3, the date Dryvit asserts the petition was

due under a correct reading of the time limits contained in the Federal

Rules of Civil Procedure and Federal Rules of Appellate Procedure. Dryvit notes that because Federal Rule of Appellate Procedure 5(a)(2) states

that the time for filing a petition is governed by the statute or rule authorizing the petition, and Rule 23(f) appeals are authorized by the Federal

Rules of Civil Procedure, Federal Rule of Civil Procedure 6(a), which

mandates the exclusion of weekends from time computations, governs

the time period for filing a Rule 23(f) petition. This conclusion, which

has been adopted by the Seventh Circuit, is correct. See Blair v. Equifax

Check Serv., Inc., 181 F.3d 832, 837 (7th Cir. 1999). 

4 LIENHART v. DRYVIT SYSTEMS
"[p]ermission to appeal may be granted or denied on the basis of any

consideration that the court of appeals finds persuasive." Id. The note

discusses three circumstances in which such review may be especially

appropriate: where an order denying certification effectively ends the

litigation because the individual claims are uneconomical to litigate,

so that no review will in practice be available from a final judgment;

where an order granting certification effectively ends the litigation

because it produces irresistible pressure on the defendant to settle; and

"when the certification decision turns on a novel or unsettled question

of law." Id.

The first federal court of appeals decision addressing the standards

for granting a Rule 23(f) petition was the Seventh Circuit’s opinion

in Blair v. Equifax Check Serv., Inc., 181 F.3d 832 (7th Cir. 1999).

The Seventh Circuit noted that in light of the discretionary nature of

Rule 23(f), it would be inappropriate to adopt a bright-line approach

which would unduly constrain the court’s discretion. Id. at 834. However, the court discussed and elaborated upon some circumstances

which may justify the grant of a Rule 23(f) petition. First, the court

stated that "when denial of class status seems likely to be fatal, and

when the plaintiff has a solid argument in opposition to the district

court’s decision," review is warranted. Id. In this area, however, the

Seventh Circuit cautioned that courts entertaining such "death knell"

Rule 23(f) claims must be "wary lest the mind hear a bell that is not

tolling," noting that even where individual claims would ordinarily be

too small to litigate individually, law firms with substantial resources

may pursue an individual claim to final judgment in the hope of winning a favorable ruling on class certification on appeal from final

judgment. Id. Second, the court stated that review may be appropriate

where a grant of class certification creates irresistible pressure on the

defendant to settle, especially where the plaintiff’s probability of success on the merits is slight. Id. Noting that "some plaintiffs or even

some district judges may be tempted to use the class device to wring

settlements from defendants whose legal positions are justified but

unpopular," the court suggested that the "interaction of procedure

with the merits justifies an earlier appellate look."2Id. Third, the

2This position is in line with the Seventh Circuit’s controversial position in In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293 (7th Cir. 1995),

LIENHART v. DRYVIT SYSTEMS 5
Seventh Circuit held that whether hearing an appeal would help to

"facilitate the development of the law" by clearing up a significant

unresolved issue also is relevant. Id. at 835. The court reasoned that

one of the purposes of Rule 23(f) was to promote the development of

case law regarding certain fundamental class action issues which tend

to be under-litigated because so many class actions are settled or otherwise resolved in ways that preclude eventual appellate consideration

of procedural issues. The court noted that when the basis for granting

review is to contribute to the development of the law, "it is less

important to show that the district judge’s decision is shaky," as affirmances as well as reversals may serve to illuminate important questions. Id. Thus, the court granted the Rule 23(f) petition before it to

resolve issues related to the propriety of multiple, overlapping, concurrently litigated class actions, but it ultimately affirmed the district

court’s certification order. Id. at 838-39. 

The First Circuit, in Waste Management Holdings, Inc. v. Mowbray, 208 F.3d 288 (1st Cir. 2000), adopted several variations on the

Seventh Circuit’s approach in Blair. The court noted that it "ordinarily will grant leave to appeal when a Rule 23(f) application falls into

one of the three [Blair] categories," but noted its ongoing discretion

in this area. Id. at 294. The court also restricted the third Blair category to those instances in which "an appeal will permit the resolution

of an unsettled legal issue that is important to the particular litigation

as well as important in itself and likely to escape effective review if

left hanging until the end of the case." Id. The stated rationale for this

additional restriction was that otherwise it would be too easy for creative lawyers to argue that their case involves a "fundamental" issue,

undermining the objective of making Rule 23(f) review "the exception, not the rule." Id.

that a preliminary examination of the merits of the underlying claims

should be viewed as relevant to the appropriateness of class certification.

But see Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1232 (9th Cir.

1996) (noting authority for the proposition that the merits are irrelevant

to class certification). While we do not view the merits of the underlying

claims as relevant to the appropriateness of certification, the merits may

on occasion inform the Court’s exercise of discretion to grant early

review of certification under Rule 23(f). 

6 LIENHART v. DRYVIT SYSTEMS
In Prado-Steiman v. Bush, 221 F.3d 1266 (11th Cir. 2000), the

Eleventh Circuit further elaborated upon Rule 23(f) standards. Noting

that given the volume of class action litigation in the district courts,

routine interlocutory appellate review of class certifications "is simply

not practicable," the court announced several guideposts to be used in

evaluating Rule 23(f) petitions. Id. at 1273-77. Recognizing that Rule

23(f) was explicitly promulgated to replace the use of mandamus in

reviewing manifestly erroneous class certifications, the court stated

that it would be inappropriate to review such petitions under standards

as stringent as those which govern mandamus. Id. at 1275 n.10.

Accordingly, the court set forth five factors that are relevant to the

appropriateness of granting a Rule 23(f) petition: (1) whether the certification ruling is likely dispositive of the litigation; (2) whether the

district court’s certification decision contains a substantial weakness;

(3) whether the appeal will permit the resolution of an unsettled legal

question of general importance; (4) the nature and status of the litigation before the district court (such as the presence of outstanding dispositive motions and the status of discovery); and (5) the likelihood

that future events will make appellate review more or less appropriate. Id. at 1274-76. 

In explaining the second factor, "substantial weakness in the class

certification," the Eleventh Circuit noted that "interlocutory review

may be appropriate when it promises to spare the parties and the district court the expense and burden of litigating the matter to final

judgment only to have it inevitably reversed . . . on an appeal." Id. at

1274-75. The Eleventh Circuit held that this factor is to be viewed "on

a sliding scale" with the other factors, such that the stronger the case

that class certification was a clear abuse of discretion, the weaker a

showing is needed on the other factors to gain review. Id. at 1274-75.

As to the third factor, the court noted that the impact of the questions

at issue to related actions involving the same or similarly-situated parties is an appropriate part of the inquiry relative to this prong. Id. at

1275. The Eleventh Circuit explained its fifth factor, the "likelihood

that future events may make appellate review more or less appropriate," by reference to issues such as the prospect of imminent settlement negotiations or the status of an action as the first-litigated of a

number of similar claims. Id.

Dryvit reads Prado-Steiman to suggest that a sufficient showing of

"substantial weakness," the third factor, alone can constitute grounds

LIENHART v. DRYVIT SYSTEMS 7
for granting a Rule 23(f) motion. Dryvit also embraces PradoSteiman’s somewhat more expansive list of factors capable of supporting a grant of a Rule 23(f) petition. Lienhart, on the other hand,

argues that Mowbray, with its emphasis on the importance of an

unsettled issue of law of general importance, substantially narrowed

the Blair approach, and contends that Prado-Steiman further limited

Mowbray’s approach. (Respondent’s Answer, at 16 (asserting that

"each successive Court of Appeals that has dealt with Fed. R. Civ. P.

23(f) has limited and narrowed the availability of such an appeal")).

We do not believe that Prado-Steiman limited Mowbray; to the

contrary, by adding the weakness of the district court’s certification

decision as an independent factor supporting review and noting that

the impact of a question raised in a Rule 23(f) petition on related litigation can favor review, the Prado-Steiman court broadened the

bases for a grant of review. See Prado-Steiman, 221 F.3d at 1275

(Rule 23(f) review may be appropriate to "spare the parties and the

district court the expense and burden of litigating the matter to final

judgment only to have it inevitably reversed"). In light of Rule 23(f)’s

purpose to eliminate the unduly restrictive review practices which

obtained when mandamus was the only available means to review a

class certification prior to final judgment in the absence of a district

court’s decision to voluntarily certify the issue for immediate review,

we do not believe the exceptionally stringent standards for review

urged by Lienhart are appropriate. Standards certainly must reflect the

limited capacity of appellate courts to consider interlocutory appeals,

as well as the institutional advantage possessed by district courts in

managing the course of litigation and the judicial diseconomy of permitting routine interlocutory appeals. Routine interlocutory review of

class certifications is simply not feasible as a practical matter. See id.

at 1273 (noting that "there are too many class actions filed each year

for federal appeals courts practicably to adjudicate class certification

decisions on an interlocutory basis as a matter of course"). However,

we must remain cognizant that Rule 23(f) was enacted by the

Supreme Court to permit such appeals, pursuant to an express grant

of authority by Congress to create appellate jurisdiction over nonfinal judgments. See 28 U.S.C.A. § 1292(e). In addition to addressing

"death knell" situations and promoting the resolution of legal questions of general importance, a careful and sparing use of Rule 23(f)

8 LIENHART v. DRYVIT SYSTEMS
may promote judicial economy by enabling the correction of certain

manifestly flawed class certifications prior to trial and final judgment.

Where a district court’s certification decision is manifestly erroneous and virtually certain to be reversed on appeal, the issues involved

need not be of general importance, nor must the certification decision

constitute a "death knell" for the litigation. Such a rule would waste,

rather than conserve, judicial resources, because self-evidently defective classes would proceed through trial to final judgment, only to

face certain decertification on appeal and a requirement that the process begin again from square one. The weakness of the district court’s

certification, viewed in terms of the likelihood of reversal under an

abuse of discretion standard, operates on a "sliding scale" in conjunction with the other factors enumerated by the Eleventh Circuit in

Prado-Steiman. In extreme cases, where decertification is a functional

certainty, the weakness of the certification order may alone suffice to

permit the Court of Appeals to grant review. Conversely, when the

weakness of the district court’s certification is less substantial (or

insubstantial), a commensurately stronger showing on the other factors is necessary to support review. We thus adopt the Eleventh Circuit’s five-factor Prado-Steiman test for judging the appropriateness

of granting a petition for review under Rule 23(f), and hold that the

"substantial weakness" prong operates on a sliding scale to determine

the strength of the necessary showing regarding the other PradoSteiman factors. See Prado-Steiman, 221 F.3d at 1274-76.

B.

Having adopted, with some elaboration, the five-factor PradoSteiman test for determining when to grant a Rule 23(f) petition, we

now apply this test to the Rule 23(f) petition before us. The grant of

oral argument in this case for the purpose of addressing the proper

Rule 23(f) standard — an issue of first impression in this Circuit —

has of necessity led to an extensive examination of the merits of class

certification. For the reasons set forth below, and after extensively

reviewing the merits of the district court’s certification, we conclude

that, on the current state of the factual record, the proposed class certification is manifestly erroneous and is certain to be vacated on appeal

from final judgment. Thus, under the sliding-scale approach we have

adopted, review is appropriate without regard to the other factors in

LIENHART v. DRYVIT SYSTEMS 9
order to avoid the judicial diseconomy entailed in allowing a class

certification which is clearly infirm to be litigated to final judgment

only to face vacatur on appeal. Therefore, we grant the petition for

review under Rule 23(f).3

C.

A district court "has broad discretion in deciding whether to certify

a class, but that discretion must be exercised within the framework of

Rule 23." In re American Med. Sys., Inc., 75 F.3d 1069, 1079 (6th

Cir. 1996). Actions such as this one, brought under Federal Rule of

Civil Procedure 23(b)(3), may be brought only if the numerosity,

commonality, typicality, representativeness, predominance, and superiority requirements of both Rule 23(a) and (b)(3) are met. Fed. R.

Civ. P. 23. The party seeking class certification bears the burden of

proof. Int’l Woodworkers of Am. v. Chesapeake Bay Plywood Corp.,

659 F.2d 1259, 1267 (4th Cir. 1981). 

In reviewing the Rule 23(a) requirements, we note that numerosity

requires that a class be so large that "joinder of all members is

impracticable." Fed. R. Civ. P. 23(a)(1). Commonality requires that

"there are questions of law or fact common to the class." Fed. R. Civ.

P. 23(a)(2). The common questions must be dispositive and overshadow other issues.4

Stott v. Haworth, 916 F.2d 134, 145 (4th Cir.

1990). Typicality requires that the claims of the named class represen3A court making the threshold determination of whether to grant Rule

23(f) review often will not delve as deeply into the merits of the certification as we do in this case. An approach stating that review is required

whenever a panel concludes, in the final analysis, that the certification

is defective would functionally mean the automatic grant of all Rule

23(f) petitions, since a reviewing court would have to fully resolve the

merits in order to determine whether to grant the petition. We leave the

decision as to the appropriate level of analytic depth at which to examine

potential defects in certification to the discretion of future panels. 

4

In a class action brought under Rule 23(b)(3), the "commonality"

requirement of Rule 23(a)(2) is "subsumed under, or superseded by, the

more stringent Rule 23(b)(3) requirement that questions common to the

class "predominate over" other questions. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 609 (1997). 

10 LIENHART v. DRYVIT SYSTEMS
tatives be typical of those of the class; "a class representative must be

part of the class and possess the same interest and suffer the same

injury as the class members." General Tel. Co. of Southwest v.

Falcon, 457 U.S. 147, 156 (1982) (internal quotation marks omitted).

Representativeness requires that the class representatives "will fairly

and adequately protect the interests of the class." Fed. R. Civ. P.

23(a)(4). We have stated that the final three requirements of Rule

23(a) "tend to merge, with commonality and typicality ‘serv[ing] as

guideposts for determining whether . . . maintenance of a class action

is economical and whether the named plaintiff’s claim and the class

claims are so interrelated that the interests of the class members will

be fairly and adequately protected in their absence.’" Broussard v.

Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 337 (4th Cir.

1998) (quoting Falcon, 457 U.S. at 157 n.13). 

In contrast to actions under Rule 23(b)(1) and (b)(2), Rule 23(b)(3)

actions are "[f]ramed for situations in which class-action treatment is

not clearly called for," but "may nevertheless be convenient and desirable." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615 (1997)

(internal quotation marks omitted). In addition to the four Rule 23(a)

requirements, Rule 23(b)(3) actions such as this one must meet two

requirements: predominance and superiority. Predominance requires

that "[common] questions of law or fact . . . predominate over any

questions affecting only individual members." Fed. R. Civ. P.

23(b)(3). The predominance inquiry "tests whether proposed classes

are sufficiently cohesive to warrant adjudication by representation."

Amchem, 521 U.S. at 623. Superiority requires that a class action be

"superior to other methods for the fair and efficient adjudication of

the controversy." Fed. R. Civ. P. 23(b)(3). 

In Broussard, we addressed the predominance, commonality and

typicality difficulties that arise under Rule 23 when a myriad of plaintiffs attempt to consolidate legally and factually different claims via

the class action device. Addressing a class comprised of various franchisees who signed different contracts at different times and had different levels of compensable injury, relied on different alleged

misrepresentations, and based statute of limitations tolling arguments

on different facts, we held that "the class . . . was thus no more than

a hodgepodge of factually as well as legally different plaintiffs that

should not have been cobbled together for trial." Broussard, 155 F.3d

LIENHART v. DRYVIT SYSTEMS 11
at 343 (internal quotation marks omitted). Relevantly, we noted that

while the need for individualized proof of damages does not necessarily preclude class certification so long as common issues continue to

predominate over individual issues, it is impermissible to determine

damages on a classwide basis in order to facilitate class treatment of

a case when the governing law requires individualized proof of damages. Id. at 343. This Court has further held that the need for individualized proof of damages may defeat predominance where proof of

damages is essential to liability. Windham v. American Brands, 565

F.2d 59, 66 (4th Cir. 1977). 

Lienhart argues that proof of individual damages is unnecessary

because the theory of this case is that publicity surrounding problems

with the Fastrak product has caused "stigma damage" in the form of

a diminished market value for homes clad with Fastrak, independent

of whether these homes have in fact suffered any tangible damage. It

also appears, however, that the complaint alleges compensable damages deriving from the actual failure of Fastrak and resultant physical

damage to the homes of some plaintiff class members. The district

court suggested that damages subclasses might be necessary at a later

date. 

The district court placed great emphasis on the fact that Lienhart

does not assert claims against third parties or allege that the conduct

of third parties contributed to the failure of the Fastrak product. In the

district court’s view, this fact distinguished the instant case from that

in In re Stucco Litig., 175 F.R.D. 210 (E.D.N.C. 1997), in which the

need to assess the contribution of third-party contractors to the failure

of a different stucco siding product was held by the same district court

to destroy predominance and preclude class certification. Id. at 215.

The district court held that because Lienhart alleged claims only

against Dryvit, issues regarding the conduct of third parties could be

resolved in subsequent contribution and indemnity actions and thus

did not preclude class certification. 

The difficulty with this holding is that under North Carolina law,

the failure of a product user to follow express and adequate instructions or warnings absolutely precludes liability in a products liability

action. N.C. Gen. Stat. § 99B-4(1) (1999). Dryvit thus argues that the

alleged failure of applicators and contractors to follow its installation

12 LIENHART v. DRYVIT SYSTEMS
instructions does more than give rise to a subsequent contribution

claim; such failure, if proven, would entirely preclude Dryvit’s liability. As a result, Dryvit asserts, this case differs from In re Stucco only

in that the third-party conduct issues will arise by means of Dryvit’s

statutory affirmative defenses, rather than the plaintiff class’s direct

claims. 

N.C. Gen. Stat. § 99B-4(1) "merely codif[ies] the doctrine of contributory negligence." Champs Convenience Stores, Inc. v. United

Chem. Co., Inc., 406 S.E.2d 856, 860 (N.C. 1991); see also Lee v.

Crest Chem. Co., 583 F. Supp. 131 (M.D.N.C. 1984) (concluding that

§ 99B-4(1) codifies the doctrine of contributory negligence in products liability cases). In a closely analogous case to this one, the North

Carolina Court of Appeals has held that § 99B-4(1) bars liability on

the part of a manufacturer of a roofing system if a contractor improperly installed a roofing system, but only if the manufacturer has not

"contracted to instruct [the contractor] on installation procedures, and

. . . in fact assisted [the contractor] in the installation of the roof."

Westover Prods., Inc. v. Gateway Roofing Co., Inc., 380 S.E.2d 369,

374 (N.C. Ct. App. 1989). Thus, if Dryvit contracted to instruct third

parties and assisted those third parties in installing Fastrak, the third

parties’ failure to follow instructions cannot provide Dryvit with an

affirmative defense to liability under North Carolina law. If, on the

other hand, a given third party with whom Dryvit did not contract to

provide instruction on installation procedures and whom Dryvit did

not assist with installation failed to follow Dryvit’s instructions, and

this failure caused some of the damage suffered by a particular plaintiff, such failure would provide Dryvit with a complete defense to liability to that plaintiff under North Carolina law. Id.

Thus, if third parties contributed to the failure of Fastrak and Dryvit did not contract to provide instruction to these parties and assist

them in installing Fastrak, Dryvit’s claims regarding these parties are

not contribution and indemnity claims which may be addressed in a

second stage after this litigation, but are instead claims regarding

affirmative defenses which, if established, negate Dryvit’s liability ab

initio. Given this conclusion, even if all plaintiffs suffered some

"stigma" damage due to Fastrak’s reputation, two problems in certifying a class are apparent. 

LIENHART v. DRYVIT SYSTEMS 13
First, if this "stigma" damage coincides with damage from actual

failure of the Fastrak product or expected future failure, and if this

actual or expected failure is due in part to applicator or contractor failure to follow instructions, Dryvit cannot be held liable to plaintiffs for

whom this is true. The "stigma" injury attributable to a home being

clad with Fastrak per se is, in such a case, inseparable from the injury

attributable to a home being clad with improperly installed Fastrak

which, as a result of improper installation, either has failed or will fail

earlier or more severely than would otherwise be the case. Under the

law of contributory negligence, such negligence need not cause all of

the alleged injury; if contributory negligence causes any of a plaintiff’s injury, recovery is barred. See McGill v. French, 424 S.E.2d

108, 113 (N.C. 1993) (stating that to establish contributory negligence, "the defendant must show that the plaintiff’s injuries were

proximately caused by his own negligence," defined as "the injury

complained of"). Indeed, it is this principle that distinguishes contributory from comparative negligence. This principle cannot be avoided

by artificially segmenting the injury into "stigma" damage caused

entirely by Dryvit and other damage caused by applicators and contractors. Here, the "injury complained of," on the face of the complaint, appears to encompass both stigma damage and actual physical

damage caused by the failure of Fastrak in some installations. As a

result, defining the parameters of a class for whom Dryvit’s liability

can be determined based on classwide proof may require the district

court to probe deeply into the individualized details of applicator and

contractor behavior with respect to each Fastrak installation, because

Dryvit cannot be adjudged liable to class members whose injuries

were caused in part by applicators and contractors whom Dryvit neither contracted to train nor assisted. If such an individualized inquiry

is needed to determine the membership of a workable class, it is clear

that common issues do not predominate over individual issues as

required by Rule 23(b)(3). As in Windham v. American Brands, Inc.,

565 F.2d 59, 66 (4th Cir. 1977), individualized proof of damages —

in this case, individualized proof of damage causation — would be

essential to liability, destroying predominance. The functional equivalent of a full-blown trial on damages causation for each putative class

member would be required to determine to which individuals Dryvit

is liable as a result of the class suit’s result. We do not believe that

such a class can meet the prerequisites of Rule 23(b)(3). 

14 LIENHART v. DRYVIT SYSTEMS
Second, even for plaintiffs whose damage is wholly of the "stigma"

variety, the contributory negligence of applicators and contractors

may be a partial cause of any "stigma" attached to the Fastrak product. In other words, Fastrak’s market reputation may be poor in part

due to a tendency of applicators and contractors to install the product

in a manner incompatible with Dryvit’s instructions. While classwide

proof would appear to be possible on this issue, and thus, it does not

per se destroy predominance, the district court’s judgment that this

class action is feasible from a manageability standpoint depends in

part on the district court’s belief that it will be possible to avoid the

issues of applicator and contractor behavior entirely during the liability phase. Our conclusion regarding the application of N.C. Gen. Stat.

§ 99B-4 casts considerable doubt on this assumption. 

III.

We thus conclude that class certification in this case is not feasible

under Rule 23 if Dryvit did not contract with applicators and contractors to instruct these parties regarding the proper installation of

Fastrak and did not assist these parties in installing the product, and

therefore, N.C. Gen. Stat. § 99B-4 applies to bar Dryvit’s liability to

any class member whose injuries were caused in part by applicator

and contractor failure to follow instructions. The current state of the

record is not entirely clear regarding the details of Dryvit’s relationship with contractors and applicators, and thus, the propriety of the

district court’s class certification turns on a factual determination best

made by the district court in the first instance. As a result, we vacate

the district court’s class certification and remand with instructions to

reconsider the propriety of class certification in light of the fact that

if N.C. Gen. Stat. § 99B-4 applies on the facts of this case, it poses

major — and perhaps insuperable — obstacles to the feasibility of

certifying this proposed class. 

VACATED AND REMANDED WITH INSTRUCTIONS

LIENHART v. DRYVIT SYSTEMS 15