Opinion ID: 808599
Heading Depth: 1
Heading Rank: 2

Heading: Class Definition

Text: Countrywide argues that the bankruptcy court adopted an improper class definition by certifying a so-called “fail-safe class.” A fail-safe class is a class whose membership can only be ascertained by a determination of the merits of the case because the class is defined in terms of the ultimate question of liability. Cf. Intratex Gas Co. v. Beeson, 22 S.W.3d 398, 404 (Tex. 2000) (describing the concept). “‘[T]he class definition precludes the possibility of an adverse judgment against class members; the class members either win or are not in the class.’” Wilborn I, 404 B.R. at 860 (citation omitted); see also Adashunas v. Negley, 626 F.2d 600, 603–04 (7th Cir.1980) (holding that a reasonably defined class of “children entitled to a public education who have learning disabilities and ‘who are not properly identified and/or who are not receiving’ special education” did not exist because the class was “so highly diverse and so difficult to identify that it is not adequately defined or nearly ascertainable” and the proposed class definition would result in a “fail-safe” class); Beeson, 22 S.W.3d at 403–05. Stated otherwise, the class definition is framed as a legal conclusion. Beeson, 22 S.W.3d at 404. Countrywide does not cite any case where we have rejected a class definition because it created a so-called fail-safe class. We rejected a rule 13 Case: 11-40056 Document: 00511988853 Page: 14 Date Filed: 09/14/2012 No. 11-40056 against fail-safe classes in Mullen v. Treasure Chest Casino, 186 F.3d 620 (5th Cir. 1999), and Forbush v. J.C. Penney Co., 994 F.2d 1101 (5th Cir. 1993), abrogated on other grounds by Dukes, 131 S. Ct 2541. The plaintiff in Forbush proposed that the court should define its class as, “employees ‘whose pension benefits have been, or will be, reduced or eliminated as a result of the overestimation of their Social Security benefits.’” 994 F.2d at 1105. The defendant argued that the class was not defined with sufficient specificity and was “hopelessly ‘circular,’ as the court must first determine whether an employee’s pension benefits were improperly reduced before that person may be said to be a member of the class.” Id. In response, we stated that, “[t]his argument is meritless and, if accepted, would preclude certification of just about any class of persons alleging injury from a particular action. These persons are linked by this common complaint, and the possibility that some may fail to prevail on their individual claims will not defeat class membership.” Id. In Mullen, the class was defined as, “all members of the crew of the M/V Treasure Chest Casino who have been stricken with occupational respiratory illness caused by or exacerbated by the defective ventilation system in place aboard the vessel.” 186 F.3d at 623. The defendant argued that, “any class must be capable of objective identification before it can be certified” and because membership in the class was contingent upon “ultimate issues of causation,” the defendant was “prejudiced by being forced to defend against claimants who may not end up being members of the class.” Id. at 624 n.1. Relying on Forbush, we rejected this argument, holding that, “because the class is similarly linked by a common complaint, the fact that the class is defined with reference to an ultimate issue of causation does not prevent certification.” Id. Because our precedent rejects the fail-safe class prohibition, we conclude that the bankruptcy court did not abuse its discretion when it defined the class in the present case. 14 Case: 11-40056 Document: 00511988853 Page: 15 Date Filed: 09/14/2012 No. 11-40056