Class action challenging Texas foster-care system decertified by Fifth Circuit based on Supreme Court’s Wal-Mart Stores, Inc. v. Dukes decision

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by Eric Pearson

The Fifth Circuit’s opinion in M.D. v. Perry, 675 F.3d 832 (5th Cir. 2012) involves a putative class action against the state of Texas on behalf of children in the state’s long-term foster-care system. The lawsuit alleges that Texas has violated the constitutional rights of each of the approximately 12,000 children in the system due to various “systemic failures.” The crux of the suit is that various system-wide problems—such as a failure “to maintain a caseworker staff of sufficient size and capacity to perform the tasks critical to [the] safety, permanency, and well-being” of the purported class members—subject all of the children to a variety of harms. The plaintiffs sought declaratory and injunctive relief.

The Plaintiffs sought certification of a class under Federal Rule of Civil Procedure 23(b)(2), which requires a showing that “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.”

The Fifth Circuit vacated the class certification order after deciding the district court failed to conduct the “rigorous analysis” required by Federal Rule 23 and abused its discretion by certifying a class that lacked “cohesiveness” under Rule 23(b)(2). The Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) was issued after the district court granted class certification and is central to the Fifth Circuit’s opinion. In reversing the district court, the Fifth Circuit stated that “[a]lthough the district court’s analysis may have been a reasonable application of pre-Wal-Mart precedent, the Wal-Mart decision has heightened the standards for establishing commonality under Rule 23(a)(2), rendering the district court’s analysis insufficient.”

In Wal-Mart, the Supreme Court noted that “[c]ommonality requires the plaintiff to demonstrate that the class members ‘have suffered the same injury.’” After Wal-Mart, Rule 23(a)(2)’s commonality requirement demands more than the presentation of questions that are common to the class because “‘any competently crafted class complaint literally raises common questions.’” Further, the members of a proposed class do not establish that “their claims can productively be litigated at once” merely by alleging a violation of the same legal provision by the same defendant. Instead, the Wal-Mart Court held that the claims of every class member must “depend upon a common contention . . . . of such a nature that it is capable of classwide resolution—which means the determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”

Here, the district court had merely found that the plaintiffs’ various allegations of “systemic deficiencies” raised “common questions.” However, according to Wal-Mart, “[w]hat matters to class certification . . . is not the raising of common ‘questions’—even in droves—but, rather the capacity of a classwide proceedings to generate common answers apt to drive the resolution of the litigation.’”

Applying Wal-Mart to this case, the Fifth Circuit determined that the district court did not indicate how resolution of a common question of fact would decide an issue central to the claims of every potential class member at the same time. The district court did not analyze the elements and defenses for establishing any of the proposed class claims nor adequately explain how those claims depended on a common legal contention whose resolution would resolve an issue central to the validity of each individual’s claims “in one stroke.”

Further, Wal-Mart requires district courts to specifically delineate how a class proceeding would allow the court to resolve a discrete question of law that will answer a central issue to the validity of the claims. The district court also needed to explain its reasoning with specific reference to the claims, defenses, relevant facts, and applicable substantive law raised by the class claims to ensure that dissimilarities within the proposed class did not impede the generation of common answers. Given the “amorphousness” of the proposed class’s proffered common issues of fact and law in this case, the court of appeals held that the district court needed to be particularly precise when explaining how the class satisfied Rule 23.

The Fifth Circuit further found that the district court abused its discretion by finding that the proposed class could be certified under Rule 23(b)(2). Rule 23(b)(2) has been interpreted to create two requirements when a proposed class sought classwide injunctive relief: (1) the class members must have been harmed in essentially the same way; and (2) the injunctive relief sought must be specific. In Wal-Mart, the Supreme Court determined that Rule 23(b)(2) applied only when a single injunction or declaratory judgment would provide relief to each class member. In this case, the Plaintiffs sought at least twelve broad, class-wide injunctions.

Although some of the sub-claims could potentially be certified under Rule 23(b)(2), the Plaintiffs’ “super-claim” could not be certified because it included requests for relief that would only benefit some of the class. For example, the plaintiff sought “the creation of ‘expert panels to review the cases of all class members who have had more than four placements,’ or ‘expert panels to review the cases of all class members who have been in the PMC of the state for more than two years.’” The court took no position as to whether the district court should certify subclasses on remand.