Could issue-class certification soon be headed to the Supreme Court? In late December, a D.C. medical transportation company defending a wage and hour class action asked our nation’s highest court to take another look at a D.C. Circuit opinion weighing in on an issue-class certification order. Here, paying homage to our October 2021 post on issue-class certification, we zoom in on the D.C. Circuit’s application of Rule 23(b)(3)’s predominance requirement—which most likely won’t be headed to the Supreme Court—and touch on the circuit court’s application of Rule 23(a)(2)’s commonality requirement—which, if the defendant gets its way, might.

We begin our journey with a review of the facts, detour through the district court’s findings, take the scenic route through the D.C. Circuit’s opinion with some analysis on the interplay of issue-class certification with doctrines like one-way intervention, and arrive at our destination: the pending writ of certiorari. Buckle up. Let’s go.

Non-emergency medical drivers seek unpaid wages on a class-wide basis

The case is Harris v. Med. Transportation Mgmt., Inc., 77 F.4th 746 (D.C. Cir. 2023), which involves non-emergency medical transportations services made available by the Washington, D.C. government. 

To help Medicaid recipients make it to appointments and provide other non-emergency medical transportation needs, Washington, D.C. contracted with Medical Transportation Management, Inc., or “MTM.” MTM in turn enlisted dozens of subcontractors, which then retained drivers to get the patients to and from care.

In July 2017, a pair of those drivers brought a putative class action and Fair Labor Standards Act collective action against MTM. The drivers claimed they routinely worked long hours—sometimes from 5 a.m. to 8 p.m. However, because they were paid a flat fee for their services, their earnings fell below minimum wage, “living wage rates,” and also omitted overtime wages.

A D.C. district court rejected class certification in 2020, finding the drivers’ claims failed to satisfy Rule 23(b)(3)’s “predominance” requirement. The court determined that individualized proof for the alleged wage violations would overwhelm common issues presented for the class.

District court rejects outright class certification, but then certifies two issue classes

With class certification on life support, the drivers believed they might find just what the doctor ordered a few paragraphs deeper in Rule 23: Issue-class certification.  

Under Rule 23(c)(4), “[w]hen appropriate,” a federal court may allow an action to be “brought or maintained with respect to particular issues.” As discussed in one of our first Best in Class blog posts, most circuits embrace a “broad” view of Rule 23(c)(4), where common liability issues may be certified if the issues themselves satisfy Rule 23(a)’s prerequisites and Rule 23(b)(3)’s predominance and superiority requirements are met for that issue. On the other hand, the Fifth Circuit has adopted a narrow view, where issue-class certification is virtually never appropriate unless all liability issues are resolved.

In its 2020 opinion, the district court left issue-class certification in the waiting room, noting that none of the parties had briefed its “legal complexities.” The drivers then sought class certification on the issues of whether MTM was a joint employer with the subcontractors, whether MTM was a general contractor opening itself to strict liability under D.C. law for subcontractor wage and hour violations, plus two other issues regarding the applicable wage rates and whether drivers should be compensated travel time. 

After the parties prepped issue-class certification for treatment, the district court placed it on the operating table. It noted with shaky hands that neither the Supreme Court nor the D.C. Circuit had weighed in on issue classes. While it found some indications in other D.C. district court opinions that D.C. might follow the narrow view, it reasoned that the broad view was the better approach.  According to the district court, the broad view prevented rendering Rule 23(c)(4) “superfluous” and better comported with the rule’s plain language by allowing issue-class certification “[w]hen appropriate.”  In addition, the court reasoned that Rule 23(b)(3)’s superiority requirement would serve as a check to prevent certification of insignificant issues.

The district court certified classes on the joint employer and general contractor issues, while rejecting the other two issues as inappropriate for issue-class certification. It found that determining whether MTM was an employer or general contractor would materially advance the litigation because, if not, MTM would have no liability and the litigation would be over.  Plus, the district court reasoned, the drivers would rely on common evidence like service agreements, training manuals, and corporate testimony in their attempt to establish that MTM was a joint employer or general contractor. 

MTM asks for a second opinion, and the D.C. Circuit says not so fast

MTM asked the D.C. Circuit for a second opinion on the district court’s issue-class diagnosis, and the court of appeals found a fatal flaw:  while providing an excellent survey on the topic of issue-class certification, the district court never actually analyzed predominance for the issues certified.  The D.C. Circuit also failed entirely to address superiority and to identify an appropriate form of notice to the issue classes.

D.C. Circuit sends the case back with a prescription

The D.C. Circuit sent the case back with a prescription for success the next time around, identifying three ways the district court should remedy its analysis on remand.

First, the D.C. Circuit drove home that the predominance requirement applies within the issue class itself.  It emphasized that an “[i]ssue class cannot consist of a single common question that predominates as to itself.”  Rather, to certify a class on the issues of MTM’s joint-employer and general-contractor status, the district court had to determine that common issues predominated within those two issues. 

More theoretically, the D.C. Circuit explained that “the baseline for predominance is the resolution of all issues within a fair and administrable trial process.”  A class trial is fair and administrable if the claims and defenses of all class members are essentially the same, making it fair to both the class members and the defendant to have those claims resolved in a single proceeding.  Accordingly, on remand, the district court should address how dividing the litigation by creating a class solely on the issues of MTM’s joint-employer and general-contractor status “protects all parties’ interests in the full presentation of their claims and evidence.”

Second, the D.C. Circuit resuscitated the district court’s superiority analysis, instructing that, on remand, the district court must expressly address how creating an issue class was superior to other ways of handling the litigation.

The D.C. Circuit identified one concrete alternative to certifying an issue class: deciding the named plaintiffs’ pending motions for partial summary judgment on the issues of MTM’s status as a joint employer and general contractor. Without digging in on the details, the appellate court suggested that resolving this threshold liability issue on an individual basis may be superior to certifying the issue on a class-wide basis. 

Does this conflict with the policy against one-way intervention?  Generally, merits determinations before class certification are disfavored, because deciding the merits first allows putative class members to get the potential upside reward of a class action without risking the downsides. That is, deciding the merits before class certification allows putative class members to wait and see if there is a favorable merits ruling before they become parties to the case and thus bound by the judgment. If the merits ruling is unfavorable, putative class members can opt out and try again in their own individual actions on the merits question.

While one-way intervention may not be a problem if class certification is denied outright, fairness concerns may still loom—at least in jurisdictions where non-mutual offensive issue preclusion is allowed.  If the named plaintiffs got a favorable ruling on the joint-employer and general-contractor questions, other members of the proposed class may be able to use that determination preclusively against MTM in subsequent individual actions. Whereas, if MTM got a favorable ruling, it would not have preclusive effect against members of the proposed class, which never was certified, because those class members would not have had a full and fair opportunity to litigate that issue. Nonetheless, such a ruling may still have persuasive effect, and if affirmed on appeal, could become binding within the D.C. Circuit.

The D.C. Circuit did not address any of these issues, leaving any such considerations to the district court to sort through on remand.

Finally, because notice is required for issue-class actions, the D.C. Circuit instructed the district court to determine what form of class notice would be most practicable under the circumstances—assuming it concluded issue-class certification was still appropriate. The D.C. Circuit emphasized that due process required that the issue-class members be notified that the issues were being resolved, because the judgment on those issues would bind the absent class members. 

The D.C. Circuit noted, but did not otherwise address, MTM’s argument that it would be irreparably harmed by issuance of class notice that might have to be withdrawn later. Instead, the appellate court simply stated that class notice is required for all class actions, even issue classes. 

What might the Supreme Court consider?

In its cert petition, MTM skips over the D.C. Circuit’s application of Rule 23(b)’s requirements and the class-notice issue, and instead asks the Supreme Court to take another look at the court of appeals’ application of Rule 23(a)(2)’s commonality prerequisite. 

The D.C. Circuit noted, more or less in passing, that commonality was met for “at least two” questions of law or fact common to the class: whether MTM might be a “joint employer” or “general contractor.” However, MTM contends that, in so holding the D.C. Circuit drives a circuit split by finding commonality without sufficient evidence, joining the Ninth Circuit in allowing a looser definition of commonality in direct conflict with Supreme Court precedent.

MTM points to Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 3380 (2011), arguing that for commonality to be satisfied, a plaintiff must demonstrate the class members “have suffered the same injury,” with a potential violation of the same legal provision not being enough. Here, according to MTM, the D.C. Circuit followed a “deeply flawed and diluted” approach in finding commonality on “no evidence,” rather than requiring the “significant proof” required by Dukes.

Critical to MTM’s position are the “inherently individualized questions” that come with wage and hour disputes. That’s amplified in this case, where each of the dozens of subcontractors had its own wage and hour policies. According to MTM’s petition, plaintiff offered no evidence of any uniform policy and practice, and moreover such evidence would be impossible given MTM’s “complete lack of control” over the workday policies and payment process of some eighty subcontractors.

Will the case see the Supreme Court? As MTM notes in its petition, the Supreme Court recently denied a petition for a writ of certiorari on a Ninth Circuit wage and hour dispute but argues the issue has become more pressing with the D.C. Circuit now following the Ninth’s “lax application” of Rule 23(a)(2).

With nearly seven years come and gone since the drivers filed their original complaint (an ordeal which raises questions as to how issue-class certification could ever really be superior), the outlook for Harris v. MTM remains murky. It might proceed to the Supreme Court, with commonality on the agenda, or, if MTM’s writ is denied, the case may soon be headed for a re-determination of predominance at the trial court level. Whether the case proceeds above and below, we look forward to monitoring how these issues in issue-class certification continue to develop.

**Ellis & Winters’s Best in Class Blog covers developments in class actions in courts across the United States, focusing on insights for class-action defense.**