Third Circuit Takes Broad View Of Rule 23(c)(4) Issue-Class Certification

• Published date: 14 October 2021
• Subject Matter: Litigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation
• Law Firm: Schnader Harrison Segal & Lewis LLP
• Author: Mr Ira Neil Richards and Layal A. Issa

In its recent decision in Russell et al. v. Educational Commission for Foreign Medical Graduates, the U.S. Court of Appeals for the Third Circuit examined the crucial subject of issue-class certification under Rule 23(c)(4). The Rule states, "When appropriate, an action may be brought or maintained as a class action with respect to particular issues." How courts apply this Rule is important to both plaintiffs and defendants in class action litigation because it may provide an avenue for class treatment of particular elements of claims without the burden of showing that the entire claim meets the requirements of Rule 23(a) and (b).

In Russell, the Third Circuit considered how to apply Rule 23(c)(4) when a district court is asked to certify a particular part of a claim for class treatment, rather than certifying the entire claim for class treatment. In vacating the District Court's decision, the Third Circuit took the "broad" view of Rule 23(c)(4), finding that issues do not have to be dispositive of liability to be certified. The Third Circuit presented a two-question framework for district courts to follow going forward when they are determining whether to certify an issue class. Courts should ask: (1) can the issues be certified, and (2) should they be certified?

BACKGROUND

The case before the Third Circuit involved claims against the Educational Commission for Foreign Medical Graduates ("Commission"). The Commission's main function is to certify graduates of foreign medical schools for placement in U.S. residency programs, using a variety of criteria including testing. The named Plaintiffs received medical treatment from a doctor certified by the Commission who was later charged with using a fake identity to obtain his medical license. They sued the Commission on behalf of themselves and others similarly situated. The Plaintiffs alleged negligent infliction of emotional distress arising out of the Commission's certification of the doctor.

The District Court certified only the duty and breach elements of Plaintiffs' claims under Rule 23(c)(4), rather than certifying their full claims for class treatment under Rule 23(b)(3).¹ The Commission filed a Rule 26(f) petition for review by the Third Circuit, seeking to overturn the District Court's decision to certify the issue class.

THIRD CIRCUIT DECISION

The Third Circuit vacated the District Court's issue-class certification and remanded the case for further proceedings. The Third Circuit applied a two-step...