Court Opinion

ID: 9384609
Source: CourtListenerOpinion
Date Created: 2023-04-04 15:00:33.222073+00
Date Added: 2024-06-11T17:17:55.103890
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 15, 2022                Decided April 4, 2023

                         No. 22-8001

 IN RE: VALERIE R. WHITE, INDIVIDUALLY AND ON BEHALF OF
          ALL OTHERS SIMILARLY SITUATED, ET AL.,
                       PETITIONERS

      On Petition for Permission to Appeal Pursuant to
           Federal Rule of Civil Procedure 23(f)
                    (No. 1:16-cv-00856)

     Stephen R. Bruce argued the cause and filed the briefs for
petitioners.

     Jonathan K. Youngwood argued the cause and filed the
brief for respondents.

    Before: SRINIVASAN, Chief Judge, MILLETT, Circuit
Judge, and EDWARDS, Senior Circuit Judge.

    Opinion for the Court filed by Circuit Judge MILLETT.

     MILLETT, Circuit Judge: Valerie White, Eva Juneau, and
Peter Betancourt sought class certification to pursue various
claims against the Hilton Hotels Retirement Plan (“Hilton
Plan”) for what they say are unlawfully denied vested
retirement benefits. The district court ultimately denied
certification on the ground that the plaintiffs had proposed an
                                2
“impermissibly ‘fail-safe’” class—that is, a class definition for
which membership can only be ascertained through “a
determination of the merits of the case,” In re Rodriguez, 695
F.3d 360, 369–370 (5th Cir. 2012). See White v. Hilton Hotels
Ret. Plan, No. 16-00856, 2022 WL 1050570, at *4 (D.D.C.
March 22, 2022) (hereinafter “White II”). For example, a class
defined as “those shareholders whom Company X defrauded”
would be fail safe. If the named plaintiffs prevail on the merits
by showing fraud, then the class is populated by all those with
meritorious claims; if the named plaintiffs fail to prove fraud,
there will be no class members to be bound by the adverse
judgment.

     White now seeks permission under Federal Rule of Civil
Procedure 23(f) to appeal the district court’s decision denying
certification of a class. Finding this case an appropriate one for
interlocutory review under Rule 23(f), we hold that the district
court erred in enforcing an extra-textual limitation on class
actions when faithful enforcement of Rule 23’s specified terms
and criteria for class actions would ensure the proper definition
of a class early in the litigation that will be bound by a final
judgment in the case.

                                I

                                A

     Federal Rule of Civil Procedure 23 governs class action
litigation in the federal courts. Rule 23(a) sets out four
threshold requirements that all proposed class actions must
meet: numerosity, commonality, typicality, and adequacy of
representation. See FED. R. CIV. P. 23(a); Amchem Prods., Inc.
v. Windsor, 521 U.S. 591, 613 (1997).
                               3
     After passing that threshold, the proponents of a class must
also show that the class qualifies as one of the three permitted
types of class actions specified in Rule 23(b). See FED. R. CIV.
P. 23(b)(1)–(3). A class can proceed under Rule 23(b)(1) if
“prosecuting separate actions by or against individual class
members” would cause confusion or in some way be
impracticable. See FED. R. CIV. P. 23(b)(1). A Rule 23(b)(2)
class is one that seeks declaratory or injunctive relief where
“the party opposing the class has acted or refused to act on
grounds that apply generally to the class.” FED. R. CIV. P.
23(b)(2). Lastly, a Rule 23(b)(3) class is authorized where “the
court finds that the 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.” FED. R. CIV. P. 23(b)(3). This case concerns a
request for certification under Rule 23(b)(2) as White seeks
injunctive relief directing Hilton to vest and to recognize the
putative class members’ benefits. See Am. Compl. at 40–42.

     Rule 23(c) provides that the decision to certify a class
“must” be resolved “[a]t an early practicable time after a person
sues or is sued as a class representative[.]” FED. R. CIV. P.
23(c)(1)(A). The order certifying a class “must define the
class,” as well as its claims, issues, or defenses. FED. R. CIV.
P. 23(c)(1)(B). The Rule also requires that notice be given to
all members of a (b)(3) class and allows the court to direct
notice to members of (b)(1) and (b)(2) classes. FED. R. CIV. P.
23(c)(2).

    Rule 23(d) and (e) govern the litigation, settlement, and
dismissal of a class action. See FED. R. CIV. P. 23(d), (e). And
Rule 23(f) governs when and how parties can obtain review of
“an order granting or denying class-action certification[.]”
FED. R. CIV. P. 23(f).
                               4

                               B

     Valerie White is a former Hilton employee who alleges
that Hilton wrongfully denied her vested retirement benefits.
Specifically, White argues that both the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. ch. 18
§ 1001 et seq., and court rulings in related litigation required
Hilton to apply an “hours of service” standard to her
“fractional” (partial) years of service rendered before 1976,
which Hilton refused to do. See J.A. 41–46. This, White
maintains, led Hilton to undercount her years of service with
the company so that she fell just below the ten-year work period
needed for retirement benefits to vest.

     Eva Juneau is a former Hilton employee who spent some
of her employment years at what Hilton terms a “non-
participating” Hilton property, which is an affiliated business
where employment does not count toward a Hilton retirement
plan. Juneau only qualifies for vested retirement benefits if
Hilton counts service at its non-participating properties, which
Juneau argues Hilton is bound to do by both ERISA and
precedent.

     Peter Betancourt is the son of Pedro Betancourt, who
worked for Hilton for more than 30 years, but died without ever
receiving retirement benefits from the company. This is
because Hilton only recognized that it owed Pedro Betancourt
retirement benefits when it was forced to review its records as
part of a separate class action lawsuit against it. By that time,
both Pedro and his wife, Peter Betancourt’s mother, had
passed. Still, when Peter Betancourt pursued a vesting claim
on behalf of his late father, Hilton denied it because Peter was
neither a beneficiary nor the surviving spouse of a beneficiary.
Peter Betancourt asserts that denial violated ERISA.
                                  5

    White, Juneau, and Betancourt (collectively, “White”)
brought this putative class action under ERISA challenging
Hilton’s denials of retirement benefits to themselves and
others who suffered denials on the same bases.1

     In September 2018, the district court summarily denied
without prejudice White’s initial motion to certify a class
action pending its disposition of White’s motion to amend the
complaint because any amendment could affect the contours of
a class certification order. Order at 2–3, White v. Hilton Hotels
Ret. Plan, No. 16-00856 (D.D.C. Sept. 28, 2018). The district
court ultimately denied the motion to amend, but it granted
White’s request for leave to file a renewed motion for
certification.

     White then filed a renewed motion for class certification
under Federal Rule of Civil Procedure 23(b)(2). White defined
the proposed class as:

     [A]ny and all persons who:

     (a) Are former or current employees of Hilton Worldwide,
     Inc. or Hilton Hotels Corp., or the surviving spouses or
     beneficiaries of former Hilton employees;

     (b) Submitted a claim for vested retirement benefits from
     Hilton under the claim procedures ordered by the District
     Court and the Court of Appeals in Kifafi, et al., v. Hilton
     Hotels Retirement Plan, et al., C.A. 98-1517; and

1
  The claims are related to, but legally distinct from, those litigated
in a separate class action over which the district court had previously
maintained jurisdiction for seventeen years, ending in 2015. See
generally Kifafi v. Hilton Hotels Ret. Plan, No. 98-1517 (D.D.C.).
                               6

    (c) Have vested rights to retirement benefits that have been
    denied by the Hilton Defendants’:

         (1) [u]se of “fractional” years of vesting service under
         an “elapsed time” method to count periods of
         employment before 1976 with no resolution of
         whether the fractions constitute a “year of service”
         under ERISA;

         (2) [r]efusal to count “non-participating” service for
         vesting purposes notwithstanding that the service was
         with the “employer” under ERISA § 3(5), that the
         Hilton Defendants counted service at the same
         “Hilton Properties” in Kifafi and represented to this
         Court and the D.C. Circuit in Kifafi that Hilton had
         counted “non-participating” service with Hilton for
         vesting, and that the “records requested and received
         from Defendants do not identify any non-participating
         property that is also not a Related Company”; and

         (3) [d]enial of retroactive/back retirement benefit
         payments to heirs and estates on the sole basis that the
         claimants are “not the surviving spouse” of deceased
         vested participants.

Proposed Order on Class Certification, White v. Hilton Hotels
Ret. Plan, No. 16-00856 (D.D.C. Jan. 31, 2020).

     The district court declined to certify that class, but
expressly did so without prejudice to a renewed motion to
certify. The chief flaw identified by the district court was that
the class definition was “impermissibly ‘fail-safe[.]’” White v.
Hilton Hotels Ret. Plan, No. 16-00856, 2020 WL 5946066, at
*3 (D.D.C. Oct. 7, 2020) (hereinafter “White I”). In particular,
                                7
the court objected to language that defined the class as those
individuals who “have vested rights to retirement benefits that
have been denied,” given that whether retirement rights had
vested was an issue to be resolved in the case. Id.

     The district court afforded White a “final opportunity to
renew [the] motion for class certification” in a manner that
would cure the fail-safe problem in the class definition. White
I, 2020 WL 5946066, at *1. The court also discussed
“additional impediments to class certification it [had] identified
at [that] stage of the litigation” for White to address, including
commonality issues with one subclass and typicality issues
with another. Id. at *1, *5–8.

    White then filed an amended motion to certify. That
motion edited the class definition to include individuals who:

    (a) Are former or current employees of Hilton Worldwide,
    Inc. or Hilton Hotels Corp., or the surviving spouses or
    beneficiaries of former Hilton employees;

    (b) Submitted a claim for vested retirement benefits from
    Hilton under the claim procedures ordered by the District
    Court and the Court of Appeals in Kifafi, et al. v. Hilton
    Hotels Retirement Plan, et al., C.A. 98-1517; and

    (c) Have been denied vested rights to retirement benefits
    that have been denied by the Hilton Defendants’:

         (1) [u]se of “fractional” years of vesting service under
         an “elapsed time” method to count periods of
         employment before 1976 with no resolution of
         whether fractions constitute a “year of service” under
         ERISA;
                               8
         (2) [r]efusal to count “non-participating” service for
         vesting purposes notwithstanding that the service was
         with the ‘employer’ under ERISA §3(5) a hotel
         property that Hilton operated under a
         management agreement, that the Hilton Defendants
         counted service at the same “Hilton Properties” in
         Kifafi and represented to this Court and the D.C.
         Circuit in Kifafi that Hilton had counted “non-
         participating” service with Hilton for vesting, and that
         the “records requested and received from Defendants
         [do] not identify any non-participating property that is
         also not a Related Company”; and

         (3) [d]enial of retroactive/back retirement benefit
         payments to heirs and estates on the sole basis that the
         claimants are “not the surviving spouse” of deceased
         vested participants.

White II, 2022 WL 1050570, at *2–3.

    The district court denied White’s motion to certify on the
ground that the proposed class definition remained
impermissibly fail-safe. White II, 2022 WL 1050570, at *4.
The court added that other Rule 23(a) “problems with the
second and third proposed subclasses” identified in the prior
order continued to trouble the class definition, but “the Court
need not reach them[.]” Id. at *6 n.5.

     Fourteen days after the denial of class certification, White
filed with this court a petition under Rule 23(f) for permission
to appeal the denial of class certification. The district court,
with the agreement of the parties, subsequently stayed its
proceedings pending resolution of the petition on the ground
that the question of “whether a fail-safe class definition is
permissible is likely an ‘unsettled and fundamental issue of law
                                9
relating to class actions’ for which the Court of Appeals might
be more inclined to grant appellate review.” Order at 2, White
v. Hilton Hotels Ret. Plan, No. 16-00856 (D.D.C. April 13,
2022) (quoting In re Lorazepam & Clorazepate Antitrust Litig.,
289 F.3d 98, 99–100 (D.C. Cir. 2002)).

                                II

     The district court had jurisdiction under 28 U.S.C. § 1331
and 29 U.S.C. § 1132(e)(1). We have jurisdiction to consider
this interlocutory appeal under 28 U.S.C. § 1292(e).

                               III

     At the outset, we must determine whether entertaining this
interlocutory appeal is an appropriate exercise of our discretion
under Federal Rule of Civil Procedure 23(f). After all, class
certification orders are not final judgments.             See 28
U.S.C. § 1291. Rather, both grants and denials of class
certification are interlocutory orders, the likes of which
appellate courts do not typically review prior to final judgment
in a case. Cf. id. § 1292; id. § 1292(e). Rule 23(f), however,
allows a party to file a petition for permission to appeal a class-
certification order “within 14 days after the order is entered[.]”
FED R. CIV. P. 23(f).

    Once a timely request for review is filed, the court of
appeals may exercise its discretion to hear the appeal “on the
basis of any consideration that the court of appeals finds
persuasive.” FED. R. CIV. P. 23(f) & advisory committee’s
note; see also 28 U.S.C. § 1292(e).

    This court adopted a framework for analyzing such
requests in In re Lorazepam & Clorazepate Antitrust Litig., 289
F.3d 98 (D.C. Cir. 2002). There, we emphasized that
                                 10
“interlocutory appeals are generally disfavored as ‘disruptive,
time[-]consuming, and expensive’ for both the parties and the
courts,” and expressed concern that an overly generous
approach could lead to “micromanagement of complex class
actions as they evolve in the district court and inhibition of the
district court’s willingness to revise the class certification for
fear of triggering another round of appellate review.” Id. at 105
(quoting Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d
288, 294 (1st Cir. 2000)).

     Given those concerns, this court ruled that Rule 23(f)
review will “ordinarily be appropriate” when: (1) “there is a
death-knell situation for either the plaintiff or defendant[,]” in
that the class-certification decision will effectively end the
party’s ability to litigate; (2) “the certification decision presents
an unsettled and fundamental issue of law relating to class
actions, important both to the specific litigation and generally,
that is likely to evade end-of-the-case review;” or (3) “the
district court’s class certification decision is manifestly
erroneous.” Lorazepam, 289 F.3d at 105. We stressed, though,
that those three categories only provide “guidance” and should
not be treated as “a rigid test,” since there may be “special
circumstances” in future cases that also militate in favor of or
against interlocutory review of a Rule 23(f) petition. Id. at
105–106.

     Because the Rule 23(f) appeal in this case was timely filed,
the question raised involves an important and recurring issue
of law, the issue will likely evade end-of-case review for all
practical purposes, and the circumstances taken as a whole
warrant interlocutory intervention, we grant the petition for
interlocutory review.

                                 A
                               11
    White’s petition for review was timely. The district court
entered its order denying class certification with prejudice on
March 22, 2022, and White filed the petition for review on
April 5, 2022, squarely within the fourteen-day time limit set
by Rule 23(f).

     To be sure, the district court had entered two earlier orders
denying class certification without prejudice. See Order at 3,
White v. Hilton Hotels Ret. Plan, No. 16-00856 (D.D.C. Sept.
28, 2018); White I, 2020 WL 5946066. But the district court
was explicit in those orders that it had not yet conclusively
resolved the class certification question. The first order simply
recognized that a ruling on class certification would put the cart
before the horse as the court had not yet ruled on a pending
motion to amend the complaint. Order at 2–3, White v. Hilton
Hotels Ret. Plan, No. 16-00856 (D.D.C. Sept. 28, 2018).

    The second order came as part of an ongoing dialogue
between the district court and White over potential problems
with the class definition. The district court denied certification
without prejudice as part of an express invitation to reformulate
the class definition in a way that would address the court’s
concerns. White I, 2020 WL 5946066, at *5.

     In both instances, the district court made clear that it was
not yet done deciding the class certification question, and that
it wished to afford White a fair opportunity to formulate a class
definition that could pass Rule 23 muster. Nothing in Rule
23(f)’s time limit suggests it was meant to intrude prematurely
on the district court’s judgment about how best to manage the
progress of the case and to ensure that the Rules are
administered “to secure the just, speedy, and inexpensive
determination” of the action, FED. R. CIV. P. 1.
                                12
     Hilton nonetheless argues that the petition was untimely.
It reasons that the final March 22 order denying certification
left “class action status unchanged from what was determined
by [the] prior order” of October 7, 2020, and that “[a] later
order that does not change the status quo will not revive the
[fourteen]-day time limit.” Hilton Br. 17–19 (citing In re DC
Water & Sewer Auth., 561 F.3d 494, 496 (D.C. Cir. 2009)); see
generally Strange on Behalf of Strange v. Islamic Republic of
Iran, Interest Section, 964 F.3d 1190, 1196–1197, 1202 (D.C.
Cir. 2020) (for a 28 U.S.C. § 1292 interlocutory appeal, district
court’s rote recertification for appeal, without any substantive
change in the order issued, did not restart the statutory deadline
for seeking permission to appeal).

     But the status quo did change between the October 2020
and March 2022 orders. The district court had not decided in
its October order that a class could not be certified or that the
problems with White’s proposed class definition could not be
cured. It ruled in that order only that the definition of the class
needed to be adjusted and some other concerns addressed
before a class could be certified. In the district court’s words,
the order afforded White “a final opportunity to renew [the]
motion for class certification.” White I, 2020 WL 5946066, at
*1. So no definitive decision on class certification was made
until the final order on March 22, 2022. That is a material
difference.

     Even more to the point, White changed the class definition
after the October 2020 order. It was that new class definition
that the district court considered and rejected for the first time
in the March 2022 order of which White seeks review. And in
denying that motion for class certification, the district court
significantly changed the litigation status quo by definitively
ending the prospect of class action status. In short, what
matters is that, prior to the March 2022 order, the district court
                               13
had not yet made up its mind whether a proper class could be
certified in the case. In the March 2022 order, it confronted a
new proposed class definition and, in rejecting it, the court
closed the door on class certification.

     Nothing in DC Water says otherwise. In DC Water, there
was only one order ruling on class certification. See 561 F.3d
at 496. The defendant then moved for reconsideration, which
the district court denied six months later. About seven months
after the denial of the motion for reconsideration, the defendant
filed a “Motion to Clarify the Relevant Class Members for
Notice Purposes.” Id. at 495. The district court summarily
denied this last motion, and that is the decision for which the
defendant sought Rule 23(f) review. We held that the
petition—that came seventeen months after class certification
was granted and sought review only of a denial of
clarification—was out of bounds. The district court’s decision
did not restart the Rule 23(f) clock for the straightforward
reason that it was not “an order granting or denying class action
certification[.]” Id. at 496. The problem for the DC Water
petitioner, in other words, was that it sought to use an order
other than one granting or denying class certification to re-up
the Rule 23(f) time period.

     In this case, by contrast, the March 2022 order was
indisputably a denial of class certification within the plain
meaning of Rule 23(f). So it started the fourteen-day clock for
filing a Rule 23(f) petition. And White filed her petition with
this court before the buzzer went off.

     Reading Rule 23 as Hilton proposes—to require an
interlocutory appeal before the district court is even done
wrestling with an issue—would make little sense. The
disruption occasioned by interlocutory appeals would increase
tenfold were parties obligated to petition for review from every
                               14
non-prejudicial and expressly non-conclusive ruling on class
certification issued by the district court, out of fear of losing
the chance to appeal later the one ruling that actually resolves
the matter. Hilton nowhere explains how requiring White to
have sought review of both the October 2020 order and the final
order of March 2022 would promote the district court’s
sensible management of litigation or this court’s efficient
handling of interlocutory appeals.

     Think about it: Had White appealed after the first order
denying certification, there would have been no reasoning by
the district court for us to review and any ruling would have
been hopelessly premature. Had White appealed after the
second certification order, the district court’s constructive
efforts to work through the difficult class-certification
questions and to fully consider the possible class definitions
would have been derailed. Neither the text of Rule 23 nor logic
supports requiring the filing of petitions for review before the
district court finishes its class-certification decisionmaking.

                                B

     Timeliness is necessary for White to be eligible for
interlocutory review, but it is not sufficient. This circuit also
requires those seeking interlocutory review to demonstrate a
“persuasive” reason for appellate intervention at this early
juncture. Lorazepam, 289 F.3d at 102 (quoting FED R. CIV. P.
23(f) advisory committee’s note). White has done so.

     Turning to Lorazepam’s traditional factors, White’s
petition falls squarely within the second category of generally
appropriate interlocutory petitions: Whether the district court
properly adopted a rule against fail-safe classes is an unsettled,
recurring, and “fundamental issue of law relating to class
actions, important both to the specific litigation and generally,
                               15
and one that is likely to evade end-of-the-case review.”
Lorazepam, 289 F.3d at 105.

     To start, the question whether Rule 23 prohibits fail-safe
classes is a fundamental issue of law relating to class actions.
In this case, the district court relied solely on the fail-safe
character of the class definition to deny the motion to certify.
See White II, 2022 WL 1050570, at *4 (“[T]he Court concludes
that Plaintiffs’ proposed class remains impermissibly ‘fail-
safe,’ as presently defined. This precludes certification.”). So
unquestionably, the existence of a fail-safe rule is important to
the fate of this “specific litigation,” Lorazepam, 289 F.3d at
105.

     And no less so to class action litigation in general. While
this court has not yet considered the question, nine other federal
courts of appeals have issued varying opinions about such class
definitions, demonstrating that the relevance of a class’s fail-
safe character is an important, recurring, and unsettled question
of class action law. See, e.g., In re Nexium Antitrust Litig., 777
F.3d 9, 22 (1st Cir. 2015) (endorsing a rule against fail-safe
classes); Byrd v. Aaron’s Inc., 784 F.3d 154, 167 (3d Cir. 2015)
(same); EQT Prod. Co. v. Adair, 764 F.3d 347, 360 n.9 (4th
Cir. 2014) (instructing district court to consider possibility of
anti-fail-safe rule on remand); Rodriguez, 695 F.3d at 369–370
(rejecting rule against fail-safe classes); Young v. Nationwide
Mut. Ins. Co., 693 F.3d 532, 538 (6th Cir. 2012) (endorsing rule
against fail-safe classes, but rejecting defendant’s proposed
application); Messner v. Northshore Univ. HealthSystem, 669
F.3d 802, 825 (7th Cir. 2012) (recognizing fail-safe problem,
but noting it can and often should be resolved by refining class
definition, not denying certification); Orduno v. Pietrzak, 932
F.3d 710, 716–717 (8th Cir. 2019) (endorsing rule against fail-
safe classes as independent bar to class certification); Ruiz
Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1138 n.7 (9th
                                16
Cir. 2016) (recognizing fail-safe problem as other side of coin
to over-inclusiveness in class definition); Cordoba v.
DIRECTV, LLC, 942 F.3d 1259, 1277 (11th Cir. 2019) (same).

     Our district courts appear to be divided on the issue as
well. Compare White II, 2022 WL 1050570, at *4, with
Ramirez v. United States Immigr. & Customs Enf’t, 338 F.
Supp. 3d 1, 49 (D.D.C. 2018) (“[I]t is not clear why Defendants
might be harmed or at all disadvantaged by Plaintiffs’ reliance
on a fail-safe class definition[.]”), and Afghan & Iraqi Allies
Under Serious Threat Because of Their Faithful Service to the
United States v. Pompeo, 334 F.R.D. 449, 464 (D.D.C. 2020)
(rejecting defendant’s fail-safe argument as strain of implied
ascertainability requirement that this circuit has never
addressed). Perhaps that is why the district court in this case
expressed the view that the fail-safe issue is the kind of
fundamental question of class action law that it would be
appropriate and helpful for this court to address. See Order at
3, White v. Hilton Hotels Ret. Plan, No. 16-00856 (D.D.C.
April 13, 2022).

     In addition, the fail-safe question is likely to evade end-of-
the-case review.

     To start, if the case is required to go forward as an
individual action and the named plaintiffs prevail, they will
have little incentive to bear the risk and expense of appealing
the class certification denial. Especially since—even if they
win on the merits and even if they also then win an appeal of
the class certification decision—they would face the risk that
the district court would find that their already-resolved claims
are not typical of the other putative class members’ or that they
can no longer fairly and adequately represent the class given
their different procedural posture. See FED. R. CIV. P. 23(a)(3)
and (4). After all, neither party here has argued that the merits
                                 17
litigation would leave some distinct category of class claims
unresolved, nor does the complaint suggest such a distinction.
Cf. Richards v. Delta Air Lines, Inc., 453 F.3d 525, 529 (D.C.
Cir. 2006) (settlement agreement preserved “Plaintiff’s class
claim” distinct from its resolution of her “individual claims”).

     To be sure, we have held that a would-be class plaintiff
who settles claims retains an interest in appealing a denial of
class certification if an interest in spreading the costs of
litigation remains. Richards, 453 F.3d at 529; see United States
Parole Comm’n v. Geraghty, 445 U.S. 388, 404–407 (1980).
But that interest in shared expenses is a different consideration
from whether the already-successful plaintiff’s legal interests
in the merits of the case remain typical of the putative class
members’ unresolved legal claims to satisfy Federal Rule of
Civil Procedure 23(a)(3) and (4). See Geraghty, 445 U.S. at
407 (“We need not decide here whether Geraghty is a proper
representative for the purpose of representing the class on the
merits.”).

     Of course, it is not inconceivable that a hearty plaintiff
would assume the risk and successfully hurdle all of those
obstacles. But the question under Lorazepam is not whether
end-of-case review is impossible, only whether it is not
“likely[.]” 289 F.3d at 105.2

     For similar reasons, if the named plaintiffs lost their claims
on the merits in individual litigation, they would have to
possess the resources to continue litigating and also win the
merits question on appeal to have any prospect of having the
class certification question also reviewed. Otherwise, a merits

    2
       The defendant that has opposed class certification here surely
will not appeal the denial of class action certification either.
                               18
loss on appeal will make consideration of the class-certification
question academic. Nor could they viably choose to appeal just
the important and fundamental class-certification question
because, with the adverse merits ruling unchallenged, then the
law of the case or principles similar to collateral estoppel could
(again) make the typicality and adequacy-of-representation
factors daunting hurdles to their class action going forward, see
FED. R. CIV. P. 23(a)(3) and (4). Cf. Zenith Labs., Inc. v.
Carter-Wallace, Inc., 530 F.2d 508, 512 (3d Cir. 1976) (named
plaintiff could not adequately represent class because prior
litigation could be used as defense against named plaintiff’s
claims in way not true of class as a whole).

     Nor, even assuming a defendant could challenge the class
certification on appeal if liability is found, could we hold that
an issue is subject to meaningful end-of-case review when only
the defendant, and not the plaintiff, will be able to seek that
review later. To be sure, it might be possible for unnamed class
members to intervene and appeal the class-certification
question. See In re Brewer, 863 F.3d 861, 868 (D.C. Cir.
2017). But Hilton has made no argument that intervention by
absent class members is viable in this case. And even if there
were reason to think intervention might occur, the nature of the
fail-safe legal question at issue here is likely to evade
meaningful end-of-case review anyhow.

     The very character of the fail-safe legal question exists
most critically at the early class-certification stage of a case.
The crux of the fail-safe critique is that a proposed class
definition impermissibly depends on a determination on the
merits of the case, so that class membership cannot be
effectively identified and represented until the litigation ends.
For example, a class defined to include “all those discriminated
against illegally” relies critically on a merits determination to
set the contours of class membership. But at the class
                                19
certification stage, a determination on the merits is far down
the road, while the need to identify the class for procedural and
substantive purposes is immediate. See, e.g., FED. R. CIV. P.
23(c)(1)(B) and (2). In other words, the fail-safe concern is
that the class definition is hopelessly indeterminate at the time
the district court is required to resolve class action status and to
define class membership—“a[s] early [as] practicable” after
the proposed class action commences. FED. R. CIV. P.
23(c)(1)(A).

     But should a fail-safe class proceed to final judgment, the
merits will have been resolved. So the fail-safe concern—
however cogent at the class certification stage—becomes
muddied, or, at minimum, substantially diluted. If the problem
with fail-safe classes is that they rely on merits determinations
that are wholly unknown at class-certification time, that
problem abates by final judgment. At the very least, it would
be a different inquiry on appeal for this court to determine
whether the class definition “all those defrauded illegally” is
impermissibly fail-safe once a trial court has said whether fraud
occurred or not. The question will have shifted. We would be
in a strange posture indeed if forced to conclude a class
definition was hopelessly indeterminate at time a however
legible it has become at time b.

     That presumably is why eight of the nine other circuits to
have addressed the fail-safe issue—including the two circuits
whose approach to Rule 23(f) review we endorsed in
Lorazepam, 289 F.3d at 104–105—have done so on
interlocutory appeals from grants or denials of class
certification. See Nexium, 777 F.3d at 14; Byrd, 784 F.3d at
161; Rodriguez, 695 F.3d at 364; Young, 693 F.3d at 536;
Messner, 669 F.3d at 808; Ruiz Torres, 835 F.3d at 1132;
Cordoba, 942 F.3d at 1264; cf. EQT, 764 F.3d at 356–357
(granting 23(f) petition on basis that district court decision was
                                  20
manifestly erroneous); but see Orduno, 932 F.3d at 716–717
(court sua sponte raised potential fail-safe issue as reason
plaintiff’s predominance problems could not be solved when
reviewing class certification denial after trial on the merits).

     Finally, we note that the Lorazepam scenarios are neither
rigid categories nor exhaustive of the situations for which Rule
23(f) review can be appropriate. See Lorazepam, 289 F.3d at
105; cf. In re Rail Freight Fuel Surcharge Antitrust Litig.-MDL
No. 1869, 725 F.3d 244, 250 (D.C. Cir. 2013) (“The
[Lorazepam] categories are mutually reinforcing, not
exclusive. * * * [T]he confluence of multiple rationales may
fortify our decision—the sort of ‘special circumstances’
contemplated by our case law.”); In re Veneman, 309 F.3d 789,
795 (D.C. Cir. 2002) (noting that a fundamental issue of law
unlikely to evade end-of-case review could nonetheless be
appropriate for 23(f) review in “special circumstances”).
Given the purely legal question presented for review, its high
likelihood of recurrence within the courts of this circuit, its
dispositive role in foreclosing a class action in this case, its
importance as a matter of class action law for this circuit going
forward, the severe and one-sided practical prohibitions on
end-of-case review, the shape-shifting that the legal question
would undergo by the conclusion of litigation, and the lack of
prejudice to the district court proceedings given the district
court’s decision—with the parties’ agreement—to stay the case
pending our review, we conclude that granting the petition is
warranted in the circumstances of this case.3

3
    Given our decision, we need not address White’s additional
arguments that the denial of class certification here also qualifies for
interlocutory review under the Lorazepam manifestly erroneous and
death-knell criteria. See 289 F.3d at 105.
                              21
                              IV

     We review class certification decisions for an abuse of
discretion. Califano v. Yamasaki, 442 U.S. 682, 703 (1979);
Garcia v. Johanns, 444 F.3d 625, 631 (D.C. Cir. 2006). A
material error of law is always an abuse of discretion. Koon v.
United States, 518 U.S. 81, 100 (1996) (“A district court by
definition abuses its discretion when it makes an error of
law.”).

     We hold that the court abused its discretion by denying the
amended class certification motion based on a stand-alone and
extra-textual rule against “fail-safe” classes, rather than
applying the factors prescribed by Federal Rule of Civil
Procedure 23(a). Rule 23 provides strong protection against
circular or indeterminate class definitions, which the district
court understandably sought to avoid.

                               A

     Rule 23(a) of the Federal Rules of Civil Procedure sets out
the indispensable “prerequisites” for class certification. FED.
R. CIV. P. 23(a). They are (1) numerosity, meaning that the
“class is so numerous that joinder of all members is
impracticable[,]” (2) commonality in that the “questions of law
or fact” at issue in the case are “common to the class[,]” (3)
typicality, which requires that the “claims or defenses of the
representative parties [be] typical of the claims or defenses of
the class[,]” and (4) adequacy in that the named representative
parties “will fairly and adequately protect the interests of the
class[.]” FED. R. CIV. P. 23(a). Even after the Rule 23(a)
requirements for certification are met, putative class members
must still show that their action is maintainable under one of
the class-action types identified in Rule 23(b). And Rule 23
expressly directs that the definition of a class be determined
                                22
and that its members be identified or identifiable early in the
litigation, not at its end. See FED. R. CIV. P. 23(c)(1)(A).

                                B

     Courts have identified two main problems with certifying
a so-called “fail-safe” class, the membership of which depends
on the merits. First, if membership in a class depends on a final
resolution of the merits, it is administratively difficult to
determine class membership early on. See Jamie S. v.
Milwaukee Pub. Schs., 668 F.3d 481, 492–497 (7th Cir. 2012).
Second, if the only members of fail-safe classes are those who
have viable claims on the merits, then class members either win
or, by virtue of losing, are defined out of the class, escaping the
bars of res judicata and collateral estoppel. See Young, 693
F.3d at 538. Heads they win; tails the defendant lose—at least,
that is the concern.

     To illustrate, for a class definition that encompasses “all
those whom Company X defrauded,” the “defrauded”
addendum makes the definition circular. That is, whether or
not certain actions constitute fraud, a tortious activity for which
Company X would be subject to liability, is just what the
litigation is meant to find out. As for res judicata effect, if a
defendant is found not to have defrauded anyone, then there
would be no class members at all. Every erstwhile class
member would, after the merits determination, become a
stranger to the case who would not be bound by that litigation
loss.

     Those concerns are understandable. In practice, though, a
fail-safe class definition is only truly troubling to the extent it
hides some concrete defect with the class. Rule 23 is a
carefully structured rule that, properly applied, already
addresses relevant defects in the class definition. And
                               23
enforcing the Rule’s written requirements is greatly preferred
to deploying a textually untethered and potentially disuniform
criterion, the contours of which can vary from case to case. Cf.
Jones v. Bock, 549 U.S. 199, 212–216 (2007) (“[C]ourts should
generally not depart from the usual practice under the Federal
Rules on the basis of perceived policy concerns[,]” id. at 212.).
Instead, courts should stick to Rule 23’s specified requirements
when making class certification decisions and, in doing so, will
likely find any “fail-safe” concerns assuaged.

     Start with Rule 23(a)’s prerequisites. The putative class
prosecuting the action—that is the class as defined at the
beginning of the case, FED. R. CIV. P. 23(c)(1)(A)—must be too
numerous for individualized litigation to be practicable. FED.
R. CIV. P. 23(a)(1). That numerosity must exist throughout the
litigation. Yet a class that could be defined to have zero
members if the plaintiffs lose is not numerous at all.

     Similarly, a circular class definition could reveal the lack
of a genuinely common issue of law or fact. See FED. R. CIV.
P. 23(a)(2). Plaintiffs may define a class as all those
discriminated against illegally because they are at a loss for a
more specific thread to tie claims together. But Rule 23 does
not allow for such a 30,000 foot view of commonality. See DL
v. District of Columbia, 713 F.3d 120, 126 (D.C. Cir. 2013)
(Proposed class definition spoke “too broadly” because it
“constitute[d] only an allegation that the class members ‘ha[d]
all suffered a violation of the same provision of law[.]’”
(quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350
(2011))).

     Typicality too should be a hard hill to climb if the named
plaintiffs might not be members of the class come final
judgment. See FED. R. CIV. P. 23(a)(3); see also Amchem
Prods Inc., 521 U.S. at 626 n.20 (the same applies to the
                                24
adequacy prerequisite—noting that the adequacy-of-
representation requirement tends to merge with the
commonality and typicality criteria of Rule 23(a)). So too for
Rule 23(b)(3)’s superiority requirement, since a class action
would fail to be a superior device for resolving a dispute if the
class would collapse should the plaintiffs lose on the merits.
See FED. R. CIV. P. 23(b)(3). Even more fatal to an
indeterminate class definition can be the requirement in Rule
23(c) that the district court ensure up front the “binding effect
of a class judgment on members[.]” FED. R. CIV. P.
23(c)(2)(B)(vii).4

     All that is to say that the protocol for determining if a class
definition is proper is to apply the terms of Rule 23 as written.
Doing so should eliminate most, if not all, genuinely fail-safe
class definitions.

      For those rare cases (if any) in which a truly “fail-safe”
class hurdles all of Rule 23’s requirements, then the problem
will in all likelihood be one of wording, not substance. After
all, a class of human beings cannot itself be circular. Only a
class definition attempting to describe them can. For example,
assume a class defined as “all workers of Company X
employed in its Washington, D.C. and New York City offices
between 2021 and 2023 who were unlawfully denied
promotion to clerical supervisor due to enforcement of the
Company X Skills Test.” The one word in that definition that
makes it fail safe is “unlawfully.” By deleting that, the
definition loses any fail-safe character and might otherwise
pass all of Rule 23’s requirements.

4
 The inability of a court to satisfy Rule 23(c)’s notice provisions
could also alert the court to a Rule-based problem with a class
definition.
                               25
     Or consider the class “all associates employed by Law
Firm Y from 2021 to 2023 who were denied their contractual
bonus because Law Firm Y refused to credit pro bono hours.”
While the parties may litigate on the merits whether the
associates had any contractual right to a bonus, any fail-safe
issues at the certification stage could be addressed by simply
rephrasing as a counterfactual—that is, “who would have
received their contractual bonus if Law Firm Y credited pro
bono hours.”

     The solution for cases like these is for the district court
either to work with counsel to eliminate the problem or for the
district court to simply define the class itself. Rule 23 charges
district courts ultimately with “defin[ing] the class.” FED. R.
CIV. P. 23(c)(1)(B). Using that tool, the “problem [of fail-safe
classes] can and often should be solved by refining the class
definition rather than by flatly denying class certification on
that basis.” Messner, 669 F.3d at 825. So rather than reject a
proposed class definition for a readily curable defect based on
an unwritten criterion, a district court should either define the
class itself or, perhaps most productively, simply suggest an
alternate class definition and allow the parties to object or
revise as needed.

     In summary, the textual requirements of Rule 23 are fully
capable of guarding against unwise uses of the class action
mechanism. So we reject a rule against “fail-safe” classes as a
freestanding bar to class certification ungrounded in Rule 23’s
prescribed criteria. Instead, district courts should rely on the
carefully calibrated requirements in Rule 23 to guide their class
certification decisions and the authority the Rule gives them to
deal with curable misarticulations of a proposed class
definition.
                               26
                               V

     The district court in this case bypassed Rule 23’s
requirements and based its denial of class certification entirely
on the class’s “fail-safe” character. For the foregoing reasons,
we reverse and remand for further proceedings consistent with
this opinion.

                                                    So ordered.