Facts
- Bosnian victims sued Radovan Karadžić, alleging genocide and related atrocities (including murder, rape, torture, and arbitrary detention) committed by forces under his command in Bosnia-Herzegovina.
- The litigation proceeded through related actions that the court treated together for class issues.
- In 1997, the court certified a mandatory “limited fund” class under Federal Rule of Civil Procedure 23(b)(1)(B), covering persons injured by specified abuses inflicted by Bosnian-Serb forces under Karadžić’s control from April 1992 onward.
- A subgroup of plaintiffs (the Kadic plaintiffs) initially did not oppose certification but later sought to withdraw from the mandatory class and moved to decertify it or, alternatively, to create subclasses.
- The defendant ceased participating through counsel and failed to comply with discovery obligations relevant to his assets.
- After the Supreme Court’s decision in Ortiz v. Fibreboard Corp. tightened requirements for limited-fund classes, the court revisited whether the certified mandatory class could be maintained.
- The Doe plaintiffs sought approval of a class notice plan under Rule 23(d)(2) while the decertification motion was pending.
Issues
- Whether a mandatory limited-fund class under Rule 23(b)(1)(B) could remain certified without concrete, Ortiz-required evidence establishing the existence and upper limit of a limited fund.
- Whether the defendant’s nonparticipation and discovery noncompliance could justify relaxing Ortiz’s evidentiary requirements or support a Rule 37 sanction deeming a limited fund established.
- Whether the class should be decertified (or restructured into subclasses) and, if decertified, what effect that would have on the pending request for class notice.
Decision
- The court granted the Kadic plaintiffs’ motion to decertify the mandatory class.
- The court held that the record lacked sufficient evidence to make the required judicial findings that the defendant’s assets constituted a limited fund inadequate to satisfy potential judgments.
- The court rejected the argument that the defendant’s nonparticipation permitted bypassing Ortiz’s evidentiary demands.
- The court declined to use Rule 37 sanctions to establish a limited fund as a substitute for the factual predicate required by Rule 23(b)(1)(B).
- The motion to approve class notice was denied as moot because no class remained certified.
Legal Principles
- Rule 23(b)(1)(B) limited-fund certification requires specific evidence of fund limitation and an independent judicial finding of the fund’s upper limit and insufficiency relative to aggregate claims.
- Generalized assumptions or speculation about a defendant’s resources are insufficient to bind absent claimants in a mandatory limited-fund class.
- A defendant’s litigation nonparticipation does not eliminate the court’s obligation to satisfy constitutional and structural safeguards embedded in the limited-fund doctrine.
- Rule 37 discovery sanctions, even if severe, cannot be used to manufacture the factual basis for mandatory limited-fund treatment absent reliable proof of the defendant’s assets and their accessibility.
Conclusion
The court decertified the previously certified mandatory limited-fund class because plaintiffs could not provide the concrete, post-Ortiz evidentiary showing needed to establish a genuine limited fund, and the defendant’s discovery misconduct could not be used to create that predicate by sanction; the proposed notice plan was therefore moot.