Court Opinion

ID: 813029
Source: CourtListenerOpinion
Date Created: 2012-12-04 15:50:21+00
Date Added: 2024-06-11T18:00:46.928310
License: Public Domain

In the

United States Court of Appeals
              For the Seventh Circuit

No. 12-2216

P HYLLIS JOHNSON, et al.,
    on behalf of themselves and
    all others similarly situated,
                                            Plaintiffs-Appellees,
                               v.

M ERITER H EALTH S ERVICES
    E MPLOYEE R ETIREMENT P LAN and
    M ERITER H EALTH S ERVICES, INC.,
                                      Defendants-Appellants.

             Appeal from the United States District Court
                for the Western District of Wisconsin.
      No. 3:10-cv-00426-wmc—William M. Conley, Chief Judge.

   A RGUED O CTOBER 24, 2012—D ECIDED D ECEMBER 4, 2012

  Before P OSNER, W OOD , and T INDER, Circuit Judges.
  P OSNER, Circuit Judge. The district court certified this
ERISA suit as a class action, and we granted the petition
of the defendants (the plan and its administrator,
which we’ll refer to jointly as Meriter) to appeal the
2                                                No. 12-2216

certification. Fed. R. Civ. P. 23(f). The original plaintiff
in whose name the suit was filed was dismissed as a
plaintiff on the ground that she was not an adequate
class representative, Fed. R. Civ. P. 23(a)(4), because of
defenses against her that are inapplicable to other
members of the class. Yet remarkably, though she was
dismissed before the petition to appeal was filed, the
briefs continue to list her as a plaintiff—indeed as the
only plaintiff. So we have substituted one of the other
named plaintiffs. The briefs also manage to avoid de-
scribing Meriter’s plan, forcing us to dig deep into
the record to discover what the parties are quarreling
over. This is a recurrent problem: specialized lawyers’
failing to appreciate generalist judges’ often limited under-
standing of esoteric financial instruments. See Chicago
Truck Drivers, Helpers & Warehouse Workers Union (In-
dependent) Pension Fund v. CPC Logistics, Inc., No. 11-3034,
2012 WL 3554446, at *3-6 (7th Cir. Aug. 20, 2012).
  The class consists of more than 4000 participants in
the Meriter pension plan who allegedly were not
credited with all the benefits to which the plan entitled
them. Some of the class members received benefits
(claimed to be inadequate) 23 years ago. Some are
current, the rest former, participants in the plan. And
the plan has been amended a number of times over the
last 23 years. As a result of all this variation in the situa-
tion of individual class members, their claims have
been divided into 10 groups, each of which the district
court has certified as a separate subclass having a dif-
ferent class representative. Each subclass was certified
under Fed. R. Civ. P. 23(b)(2), which authorizes class
No. 12-2216                                               3

action treatment if the defendant “has acted or refused
to act on grounds that apply generally to the class, so
that final injunctive relief or corresponding declaratory
relief is appropriate respecting the class as a whole.”
Each subclass seeks a declaration of the rights of its
members under the plan and an injunction directing
that the plan’s records be reformed to reflect those
rights. Meriter challenges the propriety of certification
of the subclasses under section (b)(2) of the class
action rule.
  The plan is a defined benefit plan, which as the
name implies specifies the pension benefits to which a
participant is entitled, rather than a defined contribu-
tion plan, in which the pension benefit is a fully funded
retirement account of the participant. Meriter’s plan
resembles a type of defined benefit plan known as a
cash balance plan. See Berger v. Xerox Corp. Retirement
Income Guarantee Plan, 338 F.3d 755, 757-58 (7th Cir. 2003).
The plan entitles the participant, upon reaching normal
retirement age (65), to receive a pension benefit that he
can take either as an annuity (annual payment until
death, with nothing left over for heirs) or in a lump sum
of equivalent value. The amount of the benefit is based
on a specified percentage of the employee’s salary each
year (called the yearly accrual) plus annual interest
(called the index rate) on that amount. Meriter calculates
the lump sum by multiplying the yearly annuity pay-
ment to which the participant would be entitled by 8
(called the lump sum factor).
  Each year Meriter reports to every participant the
total amount of benefits that the participant has accrued
       4                                                      No. 12-2216

       to date. It calculates those benefits by multiplying the
       yearly accruals with which the participant has already
       been credited, plus the accumulated interest on those
       accruals, by the lump sum factor, to yield what it calls the
       participant’s “cash balance.” That is equal to the lump
       sum pension benefit that the participant would receive
       if he quit immediately but was treated as if he were of
       normal retirement age and therefore not entitled to
       receive any further yearly accruals or interest.
         All this is rather dense; an example may clarify.
       Suppose an employee begins working for the company in
       1987 at age 50, at an annual salary of $50,000. Assume a
       fixed index rate of 4 percent and that the yearly accrual is
       three-fourths of one percent of his salary, or $375. Thus:

                                           Prior
                                          Accrued
            Prior          Growth                                        Total
                                          Benefits
           Accrued         at Index         Plus          Yearly        Accrued
Year       Benefits    x     Rate     =   Interest    +   Accrual   =   Benefits
1987         $0        x    104%      =      $0       +    $375     =    $375
1988         $375      x    104%      =     $390      +    $375     =     $765
1989         $765      x    104%      =   $795.60     +    $375     =   $1,170.60
1990       $1,170.60   x    104%      =   $1,217.42   +    $375     =   $1,592.42
1991       $1,592.42   x    104%      =   $1,656.12   +    $375     =   $2,031.12
1992       $2,031.12   x    104%      =   $2,112.36   +    $375     =   $2,487.36
1993       $2,487.36   x    104%      =   $2,586.85   +    $375     =   $2,961.85
1994       $2,961.85   x    104%      =   $3,080.32   +    $375     =   $3,455.32
1995       $3,455.32   x    104%      =   $3,593.53   +    $375     =   $3,968.53
1996       $3,968.53   x    104%      =   $4,127.27   +    $375     =   $4,502.27
No. 12-2216                                              5

At age 60 the employee will have accrued benefits of
$4,502.27 and so will have a cash balance of $36,018.16
(8 x $4,502.27). If he quits then, he will receive no
further yearly accruals but his retirement benefits will
continue to grow at the annual index rate of 4 percent,
giving him a cash balance at age 65 of $43,821.60
($36,018.16 x 1.04 5 ). That will be his lump sum retire-
ment benefit if he chooses the lump sum in preference
to an annuity.
   At age 65 that benefit is equal to the cash balance. But
until Meriter attempted to amend the plan in 2003 (as we
discuss below), an early retiree who preferred a lump
sum to an annuity received the cash balance as of
the date of his early retirement. If the employee in our
numerical example retired at 60, he could have chosen
to receive a lump sum then of $36,018.16, while as men-
tioned earlier if he quit at 60 but waited to take his re-
tirement benefit until he was 65 he would stop receiving
yearly accruals (0.75% of his salary) but continue to
receive interest at the index rate and so at 65 he would
receive $43,821.60.
  But ERISA requires that an early retiree receive the
“actuarial equivalent” of the pension benefits to which
he would be entitled at normal retirement age. That
would be the lump sum pension benefit (if the retiree
prefers that to an annuity) that the plan participant
would receive at age 65, discounted to present value to
reflect the fact that a dollar received today is worth
more than a dollar received in the future because if re-
ceived today it can be invested and immediately begin
6                                               No. 12-2216

growing. See 29 U.S.C. § 1054(c)(3); Berger v. Xerox Corp.
Retirement Income Guarantee Plan, supra, 338 F.3d at
758-59, 761. In our example of a 60-year-old employee
who has a current cash balance of $36,018, his benefits
would be projected forward at the 4 percent index rate
to grow to $43,821 at the normal retirement age of 65
but then discounted to present value at the discount
(interest) rate prescribed by ERISA.
  The interplay between future indexing and dis-
counting is called a “whipsaw” because it involves
looking forward to the value at normal retirement age
and then backward to the present and thus resembles
the action of a two-person saw (a “whipsaw”). ERISA
fixes the discount rate using a complicated formula
based on bond interest rates. See 26 U.S.C. §§ 417(e)(3)(C),
430(h)(2)(C)-(D); cf. Berger v. Xerox Corp. Retirement
Income Guarantee Plan, supra, 338 F.3d at 759. If the index
rate exceeds the discount rate, the present value of the
retirement-age lump sum pension benefit will exceed
the current cash balance, because the retirement benefit
will grow at a faster rate through interest accrual than
it shrinks through discounting. For example, at a
discount rate of 2 percent, the 60-year old employee in our
example would receive $39,690 (= $43,821 / 1.02 5 ) upon
quitting rather than just $36,018.16. A further complica-
tion, which we can ignore however, is the discounting
required when the early retiree chooses an annuity
rather than a lump sum. The earlier the annuity begins,
the longer it will be received, and to adjust, the amount
of the annuity is reduced.
No. 12-2216                                             7

  One subclass is complaining about failure to whipsaw.
Another is complaining about the index rate. From 1987
through 2002, Meriter’s plan fixed the index rate at 4
percent, but it was the company’s practice to calculate
the plan participants’ cash balances by using the higher
of 4 percent or three-fourths of the pension plan’s rate
of return on its assets the previous year. The second
method produced a higher than 4 percent interest rate
(for example, 7.5 percent if in the previous year the
plan had earned a 10 percent rate of return) in 9 of the
15 years between 1987 and 2002. The plaintiffs argue,
and Meriter denies, that this “practice” amended the
plan, entitling early retirees who chose to receive a
lump retirement benefit to have the benefit of the higher
index rate when applicable. If so, the district court will
need to determine when the practice became firmly
enough established to entitle these class members to the
higher index rate and whether all members should be
entitled to the same rate or whether the rate should
vary with the member’s beginning and ending dates of
employment and hence with the plan’s rate of return
in the years in which he was employed. See Thompson v.
Retirement Plan for Employees of S.C. Johnson & Son,
Inc., No. 07-cv-1047-JPS, 2012 WL 2504013 (E.D. Wis.
June 28, 2012).
  In 2003, Meriter changed the index rate from 4 percent
or three-fourths of Meriter’s rate of return the preceding
year, whichever was higher, to a Treasury Bond rate
(more precisely, the “annual yield on 10-year Treasury
Constant Maturities that is in effect for the Novem-
ber 30th preceding the Plan Year”) or 4 percent, whichever
8                                               No. 12-2216

was higher. Currently that Treasury rate is below 2 per-
cent. Because under the previous method of calculating the
index rate the rate was more often than not higher than
4 percent and now it is unlikely to exceed 4 percent,
several of the subclasses complain that the amended
index rate is actually a “cutback”—an amendment, which
ERISA forbids, 29 U.S.C. § 1054(g), that reduces an
accrued retirement benefit. Alternatively they argue
that even if it wasn’t a cutback, still they are entitled to
the previous index rate because the amendment was
invalid, not having been adopted by Meriter’s board
of directors.
  There are also complaints about what is called “wear
away.” The vested benefits of plan participants as of
2003 were sacrosanct; that’s what “vested” means. But
as amended that year the plan did not credit future
benefits to a participant until they exceeded his vested
benefits under the previous plan. One subclass com-
plains that such wear-away amounts to requiring plan
participants to re-earn benefits they had earned already.
See, e.g., Tomlinson v. El Paso Corp., 653 F.3d 1281, 1284
(10th Cir. 2011); Sunder v. U.S. Bancorp Pension Plan,
586 F.3d 593, 600-01 (8th Cir. 2009).
  Each subclass complains about several features of
the Meriter plan, the complaints overlap, and some sub-
classes were created just because of the different dates
at which employees participated in the plan, the
different claims of early retirees versus those who
retired at 65, and the different forms of pension
benefit (lump sum versus annuity). Trying to determine
No. 12-2216                                                9

which subclasses make which claims is dizzying, but as
long as each subclass is homogeneous, in the sense that
every member of the subclass wants the same relief, and
each subclass otherwise satisfies the requirements for
certifying a class, so that each could be the plaintiff class
in a separate class action, there is no objection to com-
bining them in a single class action. Indeed that’s the
superior approach because an understanding of the
entire plan, and of its evolution over the 23-year com-
plaint period, provides essential background for under-
standing the claims of the members of all the subclasses.
  But Meriter argues that because the subclasses make
so many different claims, the class action does not satisfy
the requirement of Rule 23(b)(2) that the defendant
have “acted . . . on grounds that apply generally to the
class.” The requirement applies to subclasses, however,
rather than to the class action out of which the
subclasses have been carved. “[T]he fact that a class is
overbroad and should be divided into subclasses is not
in itself a reason for refusing to certify the case as a
class action.” Culver v. City of Milwaukee, 277 F.3d 908, 912
(7th Cir. 2002). One can if one wants think of this class
action as actually 10 separate class actions and apply
the standard in Rule 23(b)(2) to each of them—and
each of them satisfies the standard.
   Meriter’s further argument that class members who
are no longer participants in the plan are not entitled
to declaratory or injunctive relief because such relief
is forward looking and they want retrospective re-
lief—that is, money—is silly. Those class members who
10                                             No. 12-2216

have not yet quit or retired from Meriter are seeking
forward-looking relief as distinct from damages. They
are not yet entitled to any pension benefits, and are
seeking declaratory and injunctive relief in order to
increase their future entitlement to those benefits. More-
over, a declaration is a permissible prelude to a claim
for damages, that is, to monetary relief for a concrete
harm already suffered. See Berger v. Xerox Corp. Retirement
Income Guarantee Plan, supra, 338 F.3d at 763-64. Those
class members who are no longer participants in the
plan, because they have quit or retired (and so are benefi-
ciaries rather than participants), seek reformation of the
Meriter plan as a basis for claiming additional pension
benefits. Those benefits would not be damages. They
would be the automatic consequence of a judicial order
revising the Meriter plan to make it more favorable
to participants.
  Meriter argues that Wal-Mart Stores, Inc. v. Dukes, 131
S. Ct. 2541 (2011), precludes a Rule 23(b)(2) class action
in which monetary as well as declaratory or injunctive
relief is sought. Wal-Mart was a class action by current
and former employees complaining that the company’s
practice of delegating employment decisions to its local
managers enabled those managers to discriminate
against women employees in violation of Title VII. The
suit sought backpay for the class members as well
as declaratory and injunctive relief. The objection to
certification was that no company-wide policy was being
challenged. The only relevant corporate policies were
a policy forbidding sex discrimination and the policy of
delegating employment decisions to local managers. The
No. 12-2216                                                    11

first could not violate Title VII and the second was a
necessity because Wal-Mart has more than a million
employees. If local managers discriminated against em-
ployees on a forbidden ground, the employer would be
liable for their unlawful conduct, by virtue of the
doctrine of respondeat superior. But the existence of
discrimination would have to be proved case by case, on
the basis of evidence (including the identity of supervisors)
specific to each class member; and likewise the remedy
would have to be determined on the basis of evidence
specific to each class member. Missing, therefore, was
“commonality” (community of interest among class
members), a prerequisite for class certification. Fed. R.
Civ. P. 23(a)(2).
  Those are not problems in this case. But the Court
expressed doubt whether the class in a (b)(2) class action
can ever seek damages, saying: “Our opinion in Ticor
Title Ins. Co. v. Brown, 511 U. S. 117, 121 (1994) (per
curiam) expressed serious doubt about whether claims
for monetary relief may be certified under [(b)(2)]. We
now hold that they may not, at least where (as here) the
monetary relief is not incidental to the injunctive or declaratory
relief.” 131 S. Ct. at 2557. The passage we have italicized
is a significant qualification, and it is repeated on the
same page of the Court’s opinion and elsewhere. See id.
at 2560.
  Meriter points to the statement in Wal-Mart that
“Rule 23(b)(2) applies only when a single injunction
or declaratory judgment would provide relief to
each member of the class. [1] It does not authorize class
12                                              No. 12-2216

certification when each individual class member would
be entitled to a different injunction or declaratory
judgment against the defendant. [2] Similarly, it does not
authorize class certification when each class member
would be entitled to an individualized award of monetary
damages.” 131 S. Ct. at 2557 (emphasis in original).
  Limitation [1] is inapplicable to a subclass all of whose
members have the same claim, so that there is no basis
for granting different declaratory or injunctive relief to
different members. And that is this case, though with
two exceptions. First, some of the plan participants
may have discovered Meriter’s alleged violation of
ERISA before others did; and because “an ERISA claim
accrues when the plaintiff knows or should know of
conduct that interferes with the plaintiff’s ERISA
rights,” Thompson v. Retirement Plan for Employees of S.C.
Johnson & Son, Inc., 651 F.3d 600, 604 (7th Cir. 2011), those
earlier discoverers cannot reach back as far in claiming
benefits wrongfully denied them without running afoul
of the statute of limitations. But it may be that
Meriter’s statute of limitations defense applies to all
plan participants equally because the defense is based
on communications made simultaneously to all partici-
pants, see, e.g., id. at 605, such as a summary plan de-
scription, rather than on communications to or informa-
tion otherwise available to only some participants. If
the former is true, there will no individualized deter-
minations; and as Meriter has failed to identify any com-
munications to individual plan participants, the dis-
trict judge can’t be faulted for having concluded that
the statute of limitations defense could be resolved on
a classwide basis.
No. 12-2216                                               13

  Second, plan participants may have had differing
expectations concerning the significance of Meriter’s
practice—for it was not written into the plan—of making
the index rate the higher of 4 percent or three-fourths of
the plan’s rate of return the previous year. Meriter
argues that if the practice created an entitlement, it did
so only for plan participants who believed that the
practice would continue, and only as of the date
they formed that belief. The district judge was under-
standably queasy about having to administer more
than 4000 different pension plans—different because
the higher index rate would kick in at a different date
for each participant. He was correct to rule that when
and if Meriter established that the entitlement differed
among participants, the relevant (b)(2) subclass could
be decertified. See Fed. R. Civ. P. 23(c)(1)(C); In re Zurn
Pex Plumbing Products Liability Litigation, 644 F.3d 604,
617 (8th Cir. 2011).
  Limitation [2] in the Wal-Mart opinion refers to “indi-
vidualized” awards of monetary damages, which we
understand to be awards based on evidence specific to
particular class members. Suppose in Wal-Mart the
class representative had been asking that every class
member be awarded $10,000 in backpay. That might be
fine for some or even most of the class members, but
what of a class member who thought she could prove
she should be awarded $50,000? Had she been notified
of the class action and of what the class representative
was seeking by way of relief, she might have opted out
and brought her own suit. But there is no requirement
of notice, or even of permitting opt outs, in a Rule 23(b)(2)
14                                               No. 12-2216

class action. Notice to class members may be required
by the district court. Fed. R. Civ. P. 23(c)(2)(A). But
unlike the case of a (b)(3) class action, see Fed. R. Civ.
P. 23(c)(2)(B), notice is not mandatory. And when it is
ordered, the purpose usually is to enable class members
to challenge the class representatives or otherwise inter-
vene in the suit, rather than to allow them to opt out.
See Fed. R. Civ. P. 23(d)(1)(B)(iii). Indeed, there is no
mention of opting out in the rule, although the case law
permits the judge to allow opt out. Jefferson v. Ingersoll
International Inc., 195 F.3d 894, 898 (7th Cir. 1999);
Williams v. Burlington Northern, Inc., 832 F.2d 100,
103 and n. 2 (7th Cir.1987); Eubanks v. Billington, 110 F.3d
87, 93-95 (D.C. Cir. 1997).
   In this case, however, all that the class is seeking, which
is to say all that the subclasses are seeking, at least
initially, is a reformation of the Meriter pension plan—a
declaration of the rights that the plan confers and an
injunction ordering Meriter to conform the text of the
plan to the declaration. If once that is done the award of
monetary relief will just be a matter of laying each class
member’s pension-related employment records along-
side the text of the reformed plan and computing
the employee’s entitlement by subtracting the benefit
already credited it to him from the benefit to which the
reformed plan document entitles him, the monetary
relief will truly be merely “incidental” to the declara-
tory and (if necessary) injunctive relief (necessary only
if Meriter ignores the declaration).
 This condition may not be satisfied in regard to all the
members of the class. Errors may be alleged in an em-
No. 12-2216                                                 15

ployee’s pension-related employment records and an
evidentiary hearing may be required to determine the
merits of the allegation. We cannot at this early stage in
the litigation estimate the number of claims that will
require a hearing or the average length of such a hear-
ing. But given the potential harm to individual class
members if the monetary relief to which each is entitled
is determined by averaging rather than by individual
determination, either the class members should be
notified of the class action and allowed to opt out (and
notice and opt out, we just said, are permitted in a (b)(2)
class action even though not required), or the class
should be bifurcated, much as a non-class action for
damages is often bifurcated, which is to say divided into
a trial on liability followed by a trial on damages if
liability is found.
   In the present case, bifurcation (called “divided certifica-
tion” in the class action context) would mean a (b)(2)
proceeding first, and if the plaintiffs obtain declaratory
relief a (b)(3) proceeding (where notice and the right to
opt out are mandatory) to follow. Lemon v. International
Union of Operating Engineers, Local No. 139, AFL-CIO, 216
F.3d 577, 581 (7th Cir. 2000); Jefferson v. Ingersoll Interna-
tional Inc., supra, 195 F.3d at 898; Gooch v. Life Investors
Ins. Co. of America, 672 F.3d 402, 427-28 (6th Cir. 2012);
Eubanks v. Billington, supra, 110 F.3d at 96. Once declara-
tory relief is ordered, all that is left is a determination
of monetary relief, and that is the type of proceeding
for which (b)(3) is designed.
 Divided certification might not be optimal if the issues
underlying the declaratory and damages claims over-
16                                              No. 12-2216

lapped. As pointed out in Lemon and Jefferson, the
Seventh Amendment has been interpreted to entitle a
party in a divided-certification case to demand that the
damages claims be tried first, to a jury. See Beacon
Theatres, Inc. v. Westover, 359 U.S. 500 (1959); Dairy Queen,
Inc. v. Wood, 369 U.S. 469 (1962). In such a case the pre-
ferable alternative might be to stick with the (b)(2) certif-
ication but to require that the class members receive
notice and have an opportunity to opt out of the class.
But the parties have consented to a bench trial on all
issues, so there is no problem with having declaratory
relief determined by the judge even if his determination
would resolve issues that, were it not for that consent,
would by virtue of the Beacon Theatres rule be decided by
a jury instead.
  Should it appear that the calculation of monetary
relief will be mechanical, formulaic, a task not for a trier
of fact but for a computer program, so that there is no
need for notice and the concerns expressed in the Wal-
Mart opinion are thus not engaged, the district court
can award that relief without terminating the class action
and leaving the class members to their own devices and
also without converting this (b)(2) class action to a (b)(3)
class action. Randall v. Rolls Royce, Inc., 637 F.3d 818,
826 (7th Cir. 2011); Berger v. Xerox Corp. Retirement
Income Guarantee Plan, supra, 338 F.3d at 764; Allison v.
Citgo Petroleum Corp., 151 F.3d 402, 415 (5th Cir. 1998).
This is on the assumption that Wal-Mart left intact the
authority to provide purely incidental monetary relief in
a (b)(2) class action, as we think it did, though the
No. 12-2216                                              17

Ninth Circuit expressed doubt in Ellis v. Costco Wholesale
Corp., 657 F.3d 970, 986 (9th Cir. 2011).
  Meriter’s final argument is that the class cannot be
certified at all, even under (b)(3), because conflicts
among class members make it impossible for class
counsel to represent the entire class adequately, as re-
quired by Rule 23(a)(4). Conflicts between class members
are different from differences in class members’
entitlements, which we discussed earlier. Conflicts of
interest, as distinct from differences in entitlements,
create an issue of adequacy of representation by
requiring the class representative to choose between
competing class members.
  Meriter identifies two conflicts of interest. First, it
submitted expert evidence that some participants
would prefer a fixed index rate while others might
prefer a variable rate based on the date of retirement;
depending on when a participant retired, the variable
rate might be higher than the fixed rate, while for partici-
pants who had retired on a different date the fixed rate
might be higher. Second, there may be a conflict over
the date when the 2003 plan amendments became effec-
tive. The amended plan harmed some participants
by reducing the index rate but benefited others
by adopting a whipsaw, which the old plan had lacked.
Some class members would benefit by proving that
the 2003 amendments had never been adopted by
Meriter’s board of directors, while others might be
harmed (“might” because the plaintiffs argue that ERISA
requires Meriter to apply the whipsaw method even
under the old plan).
18                                            No. 12-2216

   The district judge found these conflicts of interest to
be too hypothetical to bar class certification. They’ve
been alleged, some evidence has been submitted, but
Meriter has not yet proved they’re real. Its contention
that some class members will be hurt by class treatment
rings hollow. It knows the names of all the class members
and could have found one—if there is one—who if in-
formed of the class action would express concern that
it might harm him. Meriter either didn’t look for such
a class member, which would be inexcusable, or it
looked but didn’t find one, which would probably
mean that there isn’t any such class member.
  And should the conflicts prove real despite our skepti-
cism, it may be possible to resolve them by dividing
some of the subclasses and appointing new class rep-
resentatives for the newly carved out subclasses. It is
premature to declare the alleged conflicts of interest
an insoluble bar to the class action. See Kohen v. Pacific
Investment Management Co. LLC, 571 F.3d 672, 680 (7th
Cir. 2009); Blackie v. Barrack, 524 F.2d 891, 909 (9th
Cir. 1975).
 The class certifications challenged by Meriter are
                                               A FFIRMED.

                          12-4-12