Court Opinion

ID: 6941960
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:07:45.429364+00
Date Added: 2024-06-11T16:07:43.876490
License: Public Domain

BARKETT, Circuit Judge,
concurring in part and dissenting in part:
I agree with the majority’s determination that the district court properly found standing, adequacy of representation, and typicality of claims under Rule 23(a). I also agree with the conclusion that the district court abused its discretion in determining that the Harper class action was maintainable under Rule 23(b)(3). I disagree, however, with the determination that the district court abused its discretion in determining that the Andrews class action is maintainable under Rule 23(b)(3). I therefore dissent from the reversal of the district court’s certification of the Andrews class.
Rule 23(b)(3) provides that a class action is maintainable if “the court finds that the *1026questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” Fed.R.Civ.P. 23(b)(3). In making these findings, the trial court considers, in pertinent part, “the desirability or undesirability of concentrating the litigation of the claims in the particular forum” and “the difficulties likely to be encountered in the management of a class action.” Id.
As the majority notes, determining the manageability of a class action is committed to the discretion of the district court “because that court generally has a greater familiarity and expertise with the practical and primarily factual problems of administering a lawsuit than does a court of appeals.” Central Wesleyan College v. W.R. Grace & Co., 6 F.3d 177, 185 (4th Cir.1993) (quotation omitted). In my view, the district court’s conclusion, following a six-day evidentiary hearing, that the Andrews class action was manageable because common questions of fact and law predominate over individual legal and factual issues that might arise, does not constitute an abuse of discretion.
The majority’s abuse-of-diseretion finding is based primarily on its conclusion that the district court “underestimated the management difficulties that would persist as these suits proceed as class actions.” Maj.Op. at 3580. According to the majority, management would be difficult because the district court would have to resolve “an unmanageable variety of individual legal and factual issues,” id., that would predominate over the common questions of fact and law.1 According to the majority, three primary issues are present: determining whether each individual relied on deceptive conduct; determining the legality and “deceptiveness” of each of the various 900-number schemes; and interpreting and applying the gambling laws of all fifty states.2 As explained below, I believe that these issues would not predominate so as to render the action unmanageable; and even if they did, the district court could always decertify the class or address them through the other mechanisms provided by Rules 23(c)(1) and 23(c)(4).
As to the mail- and wire-fraud-based RICO claims, issues of individual reliance do not generally preclude Rule 23(b)(3) certification, particularly in cases where a common course of deceptive conduct is alleged. In Kirkpatrick v. J.C. Bradford & Co., 827 F.2d 718 (11th Cir.1987), for example, the district court declined to certify a securities-fraud class action after determining that questions of individual investors’ reliance on misrepresentations predominated over the common questions. Upon review, we noted that although plaintiffs were required to show that they each relied upon defendants’ misrepresentation, they alleged a common course of misrepresentation. Id. at 724. Under these circumstances, we held that “the mere presence of the factual issue of individual reliance could not render the claims unsuitable for class treatment.” Id. at 724-25; see also In re Data Access Systems Securities Litigation, 103 F.R.D. 130, 139 (D.N.J.1984); Gelb v. American Tel. & Tel. Co., 150 F.R.D. 76, 77-78 (S.D.N.Y.1993). In this case, the district court found that individual reliance on any misrepresentation would be obvious and easy to prove because “the 900-numbers are not listed in any public telephone directory and are not otherwise in general circulation, so it may be reasonably assumed that the caller learned of the game ... and decided to call, at least in part, from the [defendant’s] *1027promotional materials or from another person who learned of the enterprise through those promotional materials.”
Similarly, the majority places too much emphasis on the number of different schemes involved, identifying this issue as the biggest one confounding class certification. As an initial matter, I emphasize again that the district judge had the benefit of a six-day hearing on the merits of certifying the class, and, given the thoroughness of that hearing, I am hesitant to substitute our judgment for his on such a fact-based inquiry. But even upon my independent review of the schemes at issue here, I find that the similarities far outweigh the differences. Generally, the schemes offer a chance to win a prize— $20,000, $15,000, a Chevrolet Blazer — in exchange for dialing, and being billed for, the 900 number. Though the prizes and the charges vary (the schemes charge varying amounts by the minute; others charge a flat fee for the call), the schemes generally involve one or more prizes distributed by chance to persons who have paid for a chance to win such a prize.3 The schemes also generally include a free option, in which individuals may also have an opportunity to win the prize by mailing in an entry without incurring the 900-number charges. Thus, while it is true that different media are employed, including cable television, direct mail and magazine advertisements, different typefaces and layouts and graphics are used, different prizes are offered, and different charges billed, these details are not particularly relevant in determining whether the schemes themselves are legal or illegal under state gambling laws. All that is involved in that determination is whether prizes are distributed by chance to persons who have paid for a chance to win, and what effect the free option has on the overall scheme in a particular state.
Moreover, that the district court may have to examine the anti-gambling laws of numerous states in addressing plaintiffs’ gambling-based RICO claims is not a reason to find the class unmanageable at this time. To begin with, the possibility that the district court will have to apply the laws of numerous states is just that — a possibility. As the majority recognizes, if the gambling schemes are illegal under the law of Nebraska, Wesfc-Interactive’s home state, then the schemes’ illegality need not be examined under the laws of any other state. And even if the anti-gambling laws of other states must be examined, these individual examinations, as the district court found, would share many common questions; nor would the individual state legal issues predominate over the many other common questions in the ease. The commonality and manageability of the state-law gambling issues is confirmed by the form opinion letters used by game operators to convince AT & T that the games were “legal”: The letters analyze the gambling and lottery laws of all fifty states in less than twelve pages. Thus, even if different state laws apply, the application of those laws would not necessarily render the litigation unmanageable.4
Even if the litigation does become unmanageable, due to individual questions of reliance, the particularities of the games, or the need to apply numerous anti-gambling laws, the district court could employ a variety of mechanisms to mitigate the unmanageability. As the court noted, the use of special masters and computer programs may be used to facilitate an efficient resolution of certain types of issues. And pursuant to Rules 23(e)(1) and 23(c)(4), a district court can modify a certification order by employing subclasses or de-certifying class treatment of certain issues. Indeed, “courts have certified nationwide ... class actions, which also include myriad individual factual and legal issues, relying on the capacity for a court to decertify or redefine the class subsequently if the case should become unmanageable.” See In re General Motors Corp. Pick-Up Truck Fuel Tank, 55 F.3d 768, 815 (3d Cir.1995).
*1028In short, I believe the majority does not give sufficient deference to the sound judgment of the district court which, as noted earlier, “generally has a greater familiarity and expertise with the practical and primarily factual problems of administering a lawsuit than does a court of appeals,” W.R. Grace & Co., 6 F.3d at 185. I also believe the majority gives insufficient weight to the Rule 23 post-certification mechanisms designed for use when manageability problems arise, thus risking the foreclosure of relief to plaintiffs whose clauhs, for all practical purposes, can be raised only by way of a class action. Accordingly, I respectfully dissent.

. As to the Andrews class, the district court found that a multitude of common issues would predominate over any issues requiring individual determination. These common issues include the creation and operation of the 900-number gambling schemes; the terms of the billing services agreements; the 900-number guidelines; the defendants' knowing participation in the operation of the schemes; and the applicability of RICO and the Communications Act.

. Although the majority does not identify damages as an individualized inquiry as to the Andrews class, I note that "[wjhile the court may have to take aim at the individual amounts charged each class member for the purposes of damage calculations, such a determination should not preclude class certification when common issues which determine liability predominate.” Ettinger v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 122 F.R.D. 177, 182 (E.D.Pa.1988).

. A few schemes fall outside these generalities. For example, a few schemes appear to offer coupons to everyone who calls.

. This case is thus distinct from Castano v. American Tobacco Co., 84 F.3d 734, 741-45 (5th Cir.1996), in which the district court failed to adequately consider how variations in state law would effect commonality and manageability.