Opinion ID: 223077
Heading Depth: 3
Heading Rank: 4

Heading: Incompatible Standards of Conduct

Text: The district court also certified the action under Rule 23(b)(1)(A), so we briefly address this alternative ground. Rule 23(b)(1)(A) allows for class certification when prosecuting separate actions by or against individual class members would create a risk of ... inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class.... A class action is appropriate under this subsection when the party is obliged by law to treat the members of the class alike, for example when the class touches upon how a utility company interacts with its customers or how the government imposes a tax. See Amchem, 521 U.S. at 614, 117 S.Ct. 2231 (citation omitted). Certification is not appropriate simply because some plaintiffs may be successful in their suits against a defendant while others may not. In re Bendectin Prod. Liab. Litig., 749 F.2d 300, 305 (6th Cir.1984) (citations omitted); see also 7AA Wright, Miller, & Kane, supra, § 1773 (3d ed. 2010) (explaining that the rule requires more than a risk that separate judgments would oblige the opposing party to pay damages to some class members and not to others or to pay them different amounts). The district court's analysis does not explain how the class questions present the risk required under this subsection and instead, focuses again on the question of legality under state law. As the magistrate judge correctly recognized in rejecting Rule 23(b)(1)(A) certification, there is nothing to indicate that adjudication in separate actions would impair BCBSM's ability to pursue a uniform course of conduct. Because the threshold question of BCBSM's fiduciary status depends on the ASC and funding arrangements between each class member and BCBSM, there is no prospect that individual adjudications would subject BCBSM to conflicting affirmative duties. In other words, the fact that the district court found BCBSM liable to the Fund for a fiduciary breach, while another court might find BCBSM owes no duty to a different ASC client, does not create the risk required under this subsection. Furthermore, even if different courts reached different conclusions about the legality of the OTG subsidy, those decisions do not compel affirmative action by BCBSM and thus, would not impair its ability to pursue a uniform continuing course of conduct. Although the district court correctly identified the legal standard for a Rule 23(b)(1)(A) class, it abused its discretion by failing to explain how the proposed class creates the required risk of incompatible standards of conduct. Class certification was not appropriate under Rule 23(b)(1)(A).