## Facts

- Multiple proposed class actions alleged that sellers of “industrial life insurance” policies charged African-American policyholders higher premiums than similarly situated white policyholders and concealed the practice.
- The actions involved small face-amount policies sold and serviced through agent-based practices over many years.
- The cases were consolidated for pretrial proceedings in federal court, and plaintiffs sought certification of broad, multi-state classes to pursue race-based premium claims under Federal Rule of Civil Procedure 23.
- The district court denied certification of the proposed broad classes, reasoning that individualized issues and state-law variation defeated predominance and manageability.
- Plaintiffs obtained interlocutory review under Rule 23(f), and the appeals were consolidated in the Fifth Circuit.

## Issues

1. Whether the district court abused its discretion in concluding that Rule 23(a) and Rule 23(b)(3) were not satisfied for the proposed multi-state damages classes.
2. Whether differences in state law and individualized issues (including reliance, causation, and damages) defeated predominance, superiority, and manageability for nationwide or multi-state classes.
3. Whether the district court was required to consider narrower class definitions or Rule 23(c)(4) issue certification before rejecting class treatment.

## Decision

- The Fifth Circuit affirmed in part the denial of certification of the proposed broad nationwide or multi-state damages classes.
- The court vacated in part and remanded, holding that the district court did not adequately consider narrower class configurations or issue-based certification that might satisfy Rule 23.
- The court applied abuse-of-discretion review to the certification decision, with legal questions reviewed de novo.

## Legal Principles

- Rule 23(b)(3) predominance does not require that all issues be common; common issues must predominate over individualized issues.
- Nationwide or multi-state damages classes face substantial obstacles where choice-of-law and material differences in state substantive law affect predominance, superiority, and manageability.
- A district court may abuse its discretion by rejecting certification solely because plaintiffs propose an overbroad class, without assessing whether narrower classes or Rule 23(c)(4) issue classes could be certified.
- Evidence of centralized corporate policies can supply common issues suitable for class treatment, even if individualized damages issues may require later proceedings.

## Conclusion

The Fifth Circuit largely agreed that sweeping multi-state damages classes were not certifiable given individualized issues and state-law variation, but it required the district court to reconsider certification by evaluating narrower class definitions or issue certification that could permit class treatment consistent with Rule 23.


In re Monumental Life Ins. Co., 365 F.3d 408 (5th Cir. 2004)