[749] Ben Barnow (argued), Attorney, Barnow & Associates, P.C., Chicago, IL, Joseph D. Daley, Attorney, Robbins Geller Rudman & Dowd, San Diego, CA, Burton H. Finkelstein, Attorney, Finkelstein, Thompson & Lewis, Washington, DC, for Sarah Bertanowski, Eric Botsch, Kim A. Cosgrove, Samantha Ford.

Ronald Y. Rothstein (argued), Attorney, Winston & Strawn LLP, Chicago, IL, for Spin Master, Inc., Moose Enterprise Pty Ltd., Spin Master Ltd., Target Corporation.

James W. Ozog, Attorney, Wiedner & McAuliffe, Chicago, IL, for Wal-Mart Stores, Incorporated, Toys "R" Us, Incorporated.

Before EASTERBROOK, Chief Judge, and ROVNER and SYKES, Circuit Judges.

EASTERBROOK, Chief Judge.

Moose Enterprises made, Spin Master distributed, and many retailers sold, Aqua Dots, a toy consisting of small, brightly colored beads that can be fused into designs when sprayed with water. Moose Enterprises contracted production of Aqua Dots to JSSY Ltd., a Chinese company, which substituted 1,4 butanediol for the specified adhesive, 1,5 pentanediol. While the substitute adhesive is chemically similar to 1,5 pentanediol, it came with a drawback. When ingested, 1,4 butanediol metabolizes into gamma-hydroxybutyric acid (GHB), which can induce nausea, dizziness, drowsiness, agitation, depressed breathing, amnesia, unconsciousness, and death. Although [750] the directions told users to spray the beads with water and stick them together, it was inevitable given the age of the intended audience and the beads' resemblance to candy (see the image below) that some would be eaten. Children who swallowed a large quantity of the beads became sick. At least two fell into comas.

After learning of the problem, Spin Master recalled all Aqua Dots products. The recall notice instructed consumers to take Aqua Dots products away from children and to contact Spin Master to exchange them for (non-defective) replacement kits or a comparably priced toy. Alternatively consumers could return their toys to retailers. The recall notice did not mention refunds, but money-back requests were honored. Consumers returned roughly 600,000 of the more than one million defective Aqua Dots kits that had been sold. Another three million kits were pulled from the distribution channel before sale. Retailers gave customers refunds as agents for the manufacturer. Spin Master generally gave customers replacement kits or other toys, although, when asked, it provided refunds. The episode was the end of the line for Aqua Dots — but the same product is available today under the name PixOs.

The plaintiffs, purchasers of Aqua Dots products whose children were not harmed and who did not ask for a refund, challenge the adequacy of the recall program. They sued Spin Master, Moose Enterprises, Target, Toys "R" Us, and Wal-Mart (collectively "Spin Master"). They rely on the Consumer Product Safety Act, 15 U.S.C. §§ 2051-89, express and implied warranties, and state consumer-protection statutes. The plaintiffs asked for a full refund under federal law plus punitive damages under state law. The Panel on Multidistrict Litigation transferred twelve suits to the Northern District of Illinois for pretrial proceedings. After the district court denied plaintiffs' motion to certify a class, see 270 F.R.D. 377 (N.D.Ill.2010), we authorized an interlocutory appeal under Fed.R.Civ.P. 23(f).

Before addressing the question of certification, we must consider Spin Master's argument that there is no case or controversy because plaintiffs lack standing to sue. The requirements for standing, laid out in Lujan v. Defenders of Wildlife, 504 U.S. 555, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992), are injury, causation, and redressability. Spin Master contends that the plaintiffs do not have standing [751] because none of the plaintiffs (or their children) was injured by swallowing the beads. This means that members of the class did not suffer physical injury, but it does not mean that they were uninjured. The plaintiffs' loss is financial: they paid more for the toys than they would have, had they known of the risks the beads posed to children. A financial injury creates standing. See, e.g., Clinton v. New York, 524 U.S. 417, 432, 118 S.Ct. 2091, 141 L.Ed.2d 393 (1998); Bryant v. Yellen, 447 U.S. 352, 366-67, 100 S.Ct. 2232, 65 L.Ed.2d 184 (1980); Selevan v. New York Thruway Authority, 584 F.3d 82, 89 (2d Cir.2009) (standing requirements satisfied by an increase in highway tolls).

The district court's opinion denying class certification principally discussed Rule 23(b)(3), which says that certification is proper only if (among other things) "a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." The district court framed the question as "whether a defendant administered refund program may be found superior to a class action within the meaning of Rule 23(b)(3)". 270 F.R.D. at 381. The court recognized that a recall is not a form of "adjudication" but decided that what it called a "policy approach" is superior to following the Rule's text. The court concluded that consumers would be better off returning their products for refund or replacement than pursuing litigation, which the court thought would just require the class members to bear attorneys' fees in order to obtain a remedy that is theirs for the asking already. The district court observed that the recall was widely publicized. The record shows that more than 600,000 consumers returned Aqua Dots kits, and that more than 500,000 of these 600,000 received refunds. The plaintiffs could have had refunds — and still can have them today. The district court concluded that the substantial costs of the legal process make a suit inferior to a recall as a means to set things right.

It is hard to quarrel with the district court's objective. The lower the transactions costs of dealing with a defective product, the better. The transactions costs of a class action include not only lawyers' fees but also giving notice under Rule 23(c)(2)(B). Notice may well cost more, per kit, than the kits' retail price — and could be ineffectual at any price, since most purchases were anonymous. The court can't send each buyer a letter. Notice would be by publication, yet the recall was widely publicized. Why bear these costs a second time? The Consumer Products Safety Commission has not expressed dissatisfaction with the recall campaign or its results, and the record does not contain any evidence of injury to children after the recall was announced. Spin Master believes that most of the 400,000 kits not returned in the recall were used before the recall began and that few, if any, defective kits remain in consumers' hands. Consumers whose children used their kits are not members of the proposed class, so a public notice of a class action could be expensive yet pointless.

Still, a district court's conclusion that it has a better idea does not justify disregarding the text of Rule 23. Policy about class actions has been made by the Supreme Court through the mechanism of the Rules Enabling Act, 28 U.S.C. §§ 2071-77. A district court is no more entitled to depart from Rule 23 than it would be to depart from one of the Supreme Court's decisions after deeming the Court's doctrine counterproductive. Rule 23 establishes a national policy for the Judicial Branch; individual district judges are not free to prefer their own policies. The Court made this point twice in its most recent Term. See Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___, 131 S.Ct. [752] 2541, 180 L.Ed.2d 374 (2011); Erica P. John Fund, Inc. v. Halliburton Co., ___ U.S. ___, 131 S.Ct. 2179, 180 L.Ed.2d 24 (2011). See also, e.g., Schleicher v. Wendt, 618 F.3d 679, 685-86 (7th Cir.2010); Amalgamated Workers Union of Virgin Islands v. Hess Oil Virgin Islands Corp., 478 F.2d 540 (3d Cir.1973) (rejecting an argument that "policy" justifies departing from the normal meaning of the word "adjudication" in Rule 23(b)(3)).

It is not as if the Supreme Court and other participants in the rulemaking process (the Judicial Conference, the Standing Committee on Rules of Practice and Procedure, and the Advisory Committee on Civil Rules) used the word "adjudication" loosely to mean all ways to redress injuries. The third circuit observed in Hess Oil that the advisory committee's notes demonstrate that Rule 23(b)(3) was drafted with the legal understanding of "adjudication" in mind: the subsection poses the question whether a single suit would handle the dispute better than multiple suits. 478 F.2d at 543. A recall campaign is not a form of "adjudication" under the committee note.

Although the district court's rationale is mistaken, it does not follow that the court's decision is wrong. Other parts of Rule 23 give a district judge ample authority to decide whether a class action is the best way to resolve a given dispute. Instead of departing from the text of Rule 23(b)(3), the district court should have relied on the text of Rule 23(a)(4), which says that a court may certify a class action only if "the representative parties will fairly and adequately protect the interests of the class." Plaintiffs want relief that duplicates a remedy that most buyers already have received, and that remains available to all members of the putative class. A representative who proposes that high transaction costs (notice and attorneys' fees) be incurred at the class members' expense to obtain a refund that already is on offer is not adequately protecting the class members' interests. See Thorogood v. Sears, Roebuck & Co., 627 F.3d 289, 293-94 (7th Cir.2010) (discussing a variety of ways that class actions may not protect the interests of the class). The judge cited the wrong subsection of Rule 23; so did Spin Master. But defendants did not forfeit their arguments; they made the essential contentions. No harm was done by the mis-citation. See Elder v. Holloway, 510 U.S. 510, 114 S.Ct. 1019, 127 L.Ed.2d 344 (1994) (a court of appeals is entitled to apply the controlling law even if the litigants failed to cite the best authority).

Plaintiffs want punitive as well as compensatory damages. The punitive-damages claims depend on state law. This creates problems under Rule 23(b)(3)(D), which requires judges to consider "the likely difficulty in managing a class action." Different states may have different ideas about whether a product's distributor should pay punitive damages for a problem caused by a foreign supplier's unauthorized substitution. We held in In re Bridgestone/Firestone, Inc., Tires Products Liability Litigation, 288 F.3d 1012 (7th Cir.2002), that a nationwide consumer class was not manageable, and thus could not be certified, when it would depend on multiple states' laws. See also Wal-Mart, 131 S.Ct. at 2551-52.

There would be serious problems of management apart from the variability of state law. As we have mentioned already, individual notice would be impossible, which would make it hard for class members to opt out. No one knows who bought the kits. No one knows who used them without problems; this would make it difficult if not impossible to determine who would be entitled to a remedy. The per-buyer costs of identifying the class members and giving notice would exceed [753] the price of the toys (or any reasonable multiple of that price), leaving nothing to be distributed. The principal effect of class certification, as the district court recognized, would be to induce the defendants to pay the class's lawyers enough to make them go away; effectual relief for consumers is unlikely.

Even if the subclasses proposed by the plaintiffs could address variance across state consumer protection laws, it would be very difficult to determine which consumers were in each subclass. The problems with the plaintiffs' proposed subclasses are explored in detail in the district court's opinion; it is unnecessary to repeat that discussion. See 270 F.R.D. at 385-87.

AFFIRMED

[1] Judge Flaum did not participate in the consideration of this petition.

[303] Matthew R. Ford, Esq., Christopher D. Landgraff, Esq., Rebecca Weinstein Bacon, Esq., [argued], Bartlit, Beck, Herman, Palenchar & Scott, Chicago, IL, for Appellants.

Caroline F. Bartlett, Esq., James E. Cecchi, Esq., Lindsey H. Taylor, Esq., Carella, Byrne, Cecchi, Olstein, Brody & Agnello, Roseland, NJ, Joe R. Whatley, Jr., Esq., [argued], Whatley, Drake & Kallas, New York, NY, for Appellee.

John Beisner, Esq., Skaden, Arps, Slate, Meagher & Flom, Washington, DC, for Amicus Curiae.

Before: SCIRICA, SMITH and CHAGARES, Circuit Judges.

OPINION OF THE COURT

SCIRICA, Circuit Judge.

In this Fed.R.Civ.P. 23(f) appeal, Bayer Corporation and Bayer Healthcare contest the certification of a class of consumers who purchased Bayer's One-A-Day WeightSmart diet supplement in Florida. The sole issue on appeal is whether the class members are ascertainable. While this interlocutory appeal was pending, we decided Marcus v. BMW of North America, LLC, in which we held "[i]f class members are impossible to identify without extensive [304] and individualized fact-finding or `mini-trials,' then a class action is inappropriate." 687 F.3d 583, 593 (3d Cir.2012). We explained that if class members cannot be ascertained from a defendant's records, there must be "a reliable, administratively feasible alternative," but we cautioned "against approving a method that would amount to no more than ascertaining by potential class members' say so." Id. at 594. In light of Marcus, we will vacate the class certification order and remand.

I.

Gabriel Carrera brings this class action against Bayer Corporation and Bayer Healthcare, LLC ("Bayer"), claiming that Bayer falsely and deceptively advertised its product One-A-Day WeightSmart. WeightSmart was promoted as a multivitamin and dietary supplement that had metabolism-enhancing effects. The recommended daily dose was one tablet and prices ranged from about $8.99 for fifty tablets to about $16.99 for one hundred tablets. Bayer sold WeightSmart in retail stores, such as CVS, until January 2007. Bayer did not sell it directly to consumers. Carrera alleges Bayer falsely claimed that WeightSmart enhanced metabolism by its inclusion of epigallocatechin gallate, a green tea extract.

Carrera initially sought to certify a nationwide class under Fed.R.Civ.P. 23(b)(3) bringing a claim under the New Jersey Consumer Fraud Act, as Bayer's headquarters is in New Jersey. The court denied certification, concluding that New Jersey law did not apply to out-of-state customers. This order is not before us on appeal.

Carrera then moved to certify a Rule 23(b)(3) class of Florida consumers under the Florida Deceptive and Unfair Trade Practices Act. One of Bayer's challenges to certification, and the issue on this appeal, is whether the class members are ascertainable. In this case, there is no dispute that class members are unlikely to have documentary proof of purchase, such as packaging or receipts. And Bayer has no list of purchasers because, as noted, it did not sell WeightSmart directly to consumers.

Carrera advanced two ways to ascertain the class: first, by retailer records of online sales and sales made with store loyalty or rewards cards; second, by affidavits of class members, attesting they purchased WeightSmart and stating the amount they purchased. Bayer challenged this latter method on the ground that memories of putative class members will be unreliable. Bayer argued that, in Carrera's own deposition testimony, he failed to remember when he purchased WeightSmart and that he confused it with WeightSmart Advanced and other generic or similar products (none of which are part of this litigation). In response, Carrera produced a declaration of James Prutsman, who works for a company that verifies and processes class settlement claims, in which Prutsman stated there are ways to verify the types of affidavits at issue here and screen out fraudulent claims.

The court certified the class, defined as all persons who purchased WeightSmart in Florida.^[1] It characterized the issue of ascertainability as one of manageability, stating "`speculative problems with case management'" are insufficient to prevent class certification. Carrera v. Bayer Corp., Civ. A. No. 08-4716, 2011 WL 5878376, at *4 [305] (D.N.J. Nov. 22, 2011) (quoting Klay v. Humana, Inc., 382 F.3d 1241, 1272-73 (11th Cir.2004)). The court concluded Carrera had satisfied his burden, noting "that the claims involved will be relatively small and Plaintiff points to methods to verify claims." Id. Bayer appealed. It contends Carrera has failed to demonstrate the class is ascertainable because there is no evidence that any retailer records show who purchased WeightSmart. Bayer also argues that the use of unverifiable affidavits to ascertain class members fails to comply with Rule 23 and violates its rights under the due process clause.

II.

The District Court had jurisdiction under 28 U.S.C. § 1332(d). We have jurisdiction under 28 U.S.C. § 1292(e) and Fed.R.Civ.P. 23(f). "We review a class certification order for abuse of discretion, which occurs if the district court's decision rests upon a clearly erroneous finding of fact, an errant conclusion of law or an improper application of law to fact." In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 312 (3d Cir.2008) (quotation omitted). "Whether an incorrect legal standard has been used is an issue of law to be reviewed de novo." Id. (quotation omitted).

III.

In Marcus, we explained the concept of ascertainability at length for the first time. 687 F.3d at 592-95. The claim in Marcus was that Bridgestone run-flat tires ("RFTs") were defective because they were highly susceptible to flats; could only be replaced, not repaired; and were highly priced. Id. at 588. The district court certified a Rule 23(b)(3) class consisting of "any and all current and former owners and lessees of 2006, 2007, 2008, and 2009 BMW vehicles equipped with run-flat tires manufactured by Bridgestone ... and sold or leased in New Jersey whose Tires have gone flat and been replaced." Id. at 590 (quotation and alterations omitted). The defendants appealed, and we vacated the order certifying the class.

Before turning to the explicit requirements of Rule 23 in Marcus, we addressed two "preliminary matters": first, whether the class was clearly defined, and second, "whether the class must be (and, if so, is in fact) objectively ascertainable." Id. at 591. We concluded the class was not clearly defined. At the least, the definition of the class was broader than intended and did not define the claims, issues, or defenses to be treated on a class-wide basis. Id. at 592. Accordingly, we remanded the case for clarification of the class definition.

We then addressed ascertainability. We began by stating, "[m]any courts and commentators have recognized that an essential prerequisite of a class action, at least with respect to actions under Rule 23(b)(3), is that the class must be currently and readily ascertainable based on objective criteria." Id. at 592-93 (citing cases). "If class members are impossible to identify without extensive and individualized fact-finding or `mini-trials,' then a class action is inappropriate." Id. at 593. We noted, "[s]ome courts have held that where nothing in company databases shows or could show whether individuals should be included in the proposed class, the class definition fails." Id. (citing cases).

We then explained the

ascertainability requirement serves several important objectives. First, it eliminates serious administrative burdens that are incongruous with the efficiencies expected in a class action by insisting on the easy identification of class members. Second, it protects absent class members by facilitating the best [306] notice practicable under Rule 23(c)(2) in a Rule 23(b)(3) action. Third, it protects defendants by ensuring that those persons who will be bound by the final judgment are clearly identifiable.

Id. (citations and quotations omitted).

We set forth why the "proposed class action raise[d] serious ascertainability issues." Id. Defendant BMW explained that it could not determine by its records which vehicles fit the definition of the class because it did not keep records of which cars got fitted with Bridgestone RFTs, because some customers may have changed tires (of which BWM had no record), and because BMW would not have known which customers experienced flat tires. Id. at 593-94. We stated that if plaintiff were to attempt to re-certify a class on remand, the court "must resolve the critical issue of whether the defendants' records can ascertain class members and, if not, whether there is a reliable, administratively feasible alternative." Id. at 594. We cautioned "against approving a method that would amount to no more than ascertaining by potential class members' say so. For example, simply having potential class members submit affidavits that their Bridgestone RFTs have gone flat and been replaced may not be proper or just." Id. (quotation omitted). "Forcing BMW and Bridgestone to accept as true absent persons' declarations that they are members of the class, without further indicia of reliability, would have serious due process implications." Id.

IV.

A.

"A party seeking class certification must affirmatively demonstrate his compliance with" Rule 23. Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011). "Class certification is proper only `if the trial court is satisfied, after a rigorous analysis, that the prerequisites' of Rule 23 are met." Hydrogen Peroxide, 552 F.3d at 309 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)). "Frequently that `rigorous analysis' will entail some overlap with the merits of the plaintiff's underlying claim. That cannot be helped. `[T]he class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'" Dukes, 131 S.Ct. at 2551-52 (alteration in original) (quoting Falcon, 457 U.S. at 160, 102 S.Ct. 2364). "Factual determinations necessary to make Rule 23 findings must be made by a preponderance of the evidence." Hydrogen Peroxide, 552 F.3d at 320.

These same standards apply to the question of ascertainability. Class ascertainability is "an essential prerequisite of a class action, at least with respect to actions under Rule 23(b)(3)." Marcus, 687 F.3d at 592-93. "[T]here is `no reason to doubt'" that the "rigorous analysis" requirement "`applies with equal force to all Rule 23 requirements.'" Hydrogen Peroxide, 552 F.3d at 309 n. 5 (quoting In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24, 33 n. 3 (2d Cir.2006)). Accordingly, a plaintiff must show, by a preponderance of the evidence, that the class is "currently and readily ascertainable based on objective criteria," Marcus, 687 F.3d at 593, and a trial court must undertake a rigorous analysis of the evidence to determine if the standard is met.

"A party's assurance to the court that it intends or plans to meet the requirements [of Rule 23] is insufficient." Hydrogen Peroxide, 552 F.3d at 318. A plaintiff may not merely propose a method of ascertaining a class without any evidentiary support that the method will be successful. [307] "`A critical need'" of the trial court at certification "`is to determine how the case will be tried,'" id. at 319 (quoting Fed.R.Civ.P. 23 advisory committee's note, 2003 Amendments), including how the class is to be ascertained.

B.

Ascertainability mandates a rigorous approach at the outset because of the key roles it plays as part of a Rule 23(b)(3) class action lawsuit. First, at the commencement of a class action, ascertainability and a clear class definition allow potential class members to identify themselves for purposes of opting out of a class. Second, it ensures that a defendant's rights are protected by the class action mechanism. Third, it ensures that the parties can identify class members in a manner consistent with the efficiencies of a class action.

"`[T]he class-action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every [class member] to be litigated in an economical fashion under Rule 23.'" Falcon, 457 U.S. at 155, 102 S.Ct. 2364 (second alteration in original) (quoting Califano v. Yamasaki, 442 U.S. 682, 701, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979)). If a class cannot be ascertained in an economical and "administratively feasible" manner, Marcus, 687 F.3d at 594, significant benefits of a class action are lost. See id. at 593 (explaining ascertainability "eliminates serious administrative burdens that are incongruous with the efficiencies expected in a class action" (quotation omitted)). Accordingly, a trial court should ensure that class members can be identified "without extensive and individualized fact-finding or `mini-trials,'" id., a determination which must be made at the class certification stage.

In this case, the ascertainability question is whether each class member purchased WeightSmart in Florida. If this were an individual claim, a plaintiff would have to prove at trial he purchased WeightSmart. A defendant in a class action has a due process right to raise individual challenges and defenses to claims, and a class action cannot be certified in a way that eviscerates this right or masks individual issues. See McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 231-32 (2d Cir. 2008) (rejecting a "fluid recovery" method of determining individual damages, in which aggregate damages would be based on estimates of the number of defrauded class members and their average loss), abrogated on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008); see also Dukes, 131 S.Ct. at 2561 (rejecting a method of class certification in which a sample set of class members would be used to extrapolate average damages). A defendant has a similar, if not the same, due process right to challenge the proof used to demonstrate class membership as it does to challenge the elements of a plaintiff's claim. See Marcus, 687 F.3d at 594 ("Forcing BMW and Bridgestone to accept as true absent persons' declarations that they are members of the class, without further indicia of reliability, would have serious due process implications."). Ascertainability provides due process by requiring that a defendant be able to test the reliability of the evidence submitted to prove class membership.

The method of determining whether someone is in the class must be "administratively feasible." Id. A plaintiff does not satisfy the ascertainability requirement if individualized fact-finding or mini-trials will be required to prove class membership. Id. at 593. "Administrative feasibility means that identifying class members [308] is a manageable process that does not require much, if any, individual factual inquiry." William B. Rubenstein & Alba Conte, Newberg on Class Actions § 3:3 (5th ed.2011); see also Bakalar v. Vavra, 237 F.R.D. 59, 64 (S.D.N.Y.2006) ("Class membership must be readily identifiable such that a court can determine who is in the class and bound by its ruling without engaging in numerous fact-intensive inquiries.").

The type of challenge to the reliability of evidence that is required will vary based on the nature of the evidence. For example, if Carrera produces retailer records that purport to list purchasers of WeightSmart, Bayer can challenge the reliability of those records, perhaps by deposing a corporate record-keeper.^[2] In sum, to satisfy ascertainability as it relates to proof of class membership, the plaintiff must demonstrate his purported method for ascertaining class members is reliable and administratively feasible, and permits a defendant to challenge the evidence used to prove class membership.

V.

Carrera contends the class is ascertainable. He points to two types of evidence that can be used to determine who is a class member. First, he argues the class can use records from retailers, which purportedly track customers who make purchases online or who use loyalty cards. Second, he proposes using affidavits of class members attesting to their purchases of WeightSmart. We conclude that, based on the evidence produced below, neither method satisfies Carrera's burden to show the class is ascertainable.

A.

Carrera argues he will be able to show class membership using retailer's records of sales made with loyalty cards, e.g., CVS ExtraCare cards,^[3] and records of online sales. Carrera points to a Federal Trade Commission (FTC) settlement with CVS regarding the sale of a supplement that was falsely advertised as boosting immune systems. The supplement was sold only at CVS. The FTC stated in its press release regarding the settlement that "[p]urchasers will be identified through the CVS ExtraCare card program and sales on cvs.com." A1089.

Bayer contends there is no evidence that any other retailer of WeightSmart has membership cards, that the FTC case is inapposite as it was a stipulated settlement in a non-Rule 23 context,^[4] in which some of the money paid might go to class members but did not have to, and that it is speculative whether CVS or any other retailer's records will reveal customers who purchased WeightSmart.

The evidence put forth by Carrera is insufficient to show that retailer records in this case can be used to identify class members. Depending on the facts of a case, retailer records may be a perfectly acceptable method of proving class membership. [309] But there is no evidence that a single purchaser of WeightSmart could be identified using records of customer membership cards or records of online sales. There is no evidence that retailers even have records for the relevant period. The FTC's press release does not support a finding that these records can determine class membership on the facts of this case. Moreover, we have no evidence the FTC's method was successful.

B.

Carrera also contends the class is ascertainable using affidavits of class members. He advances three arguments. First, due to the low value of the claims, class members will be unlikely to submit fraudulent affidavits. Second, because Bayer's total liability will not depend on the reliability of the affidavits, the ascertainability requirement should be relaxed. Finally, a screening method such as the one described in the Prutsman Declaration will ensure any unreliable affidavits are identified and disregarded.

1.

Because the claims are of low value, Carrera argues it is less likely someone would fabricate a claim. He concedes it is unlikely customers would have retained a receipt, but asserts this is irrelevant to possible falsification. He contrasts the claims at issue here to those in Marcus, which involved more money and more complicated issues of fact as to whether an individual was a class member.

This argument fails because it does not address a core concern of ascertainability: that a defendant must be able to challenge class membership. This is especially true where the named plaintiff's deposition testimony suggested that individuals will have difficulty accurately recalling their purchases of WeightSmart.^[5]Cf. In re Phenylpropanolamine (PPA) Prods. Liab. Litig., 214 F.R.D. 614, 618-19 (W.D.Wa.2003) (concluding affidavits could not be used to ascertain a class because the named plaintiffs had difficulty remembering the products they bought that contained PPA).

2.

Carrera also argues ascertainability is less important in this case because Bayer's total liability will be determined at trial, and will not increase or decrease based on the affidavits submitted. As noted, this is an action under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), Fla. Stat. § 501.201 et seq. "[A] consumer claim for damages under FDUTPA has three elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages." Rollins, Inc. v. Butland, 951 So.2d 860, 869 (Fla.Dist.Ct. App.2006). There is no requirement of actual reliance on the deceptive act. See Fitzpatrick v. Gen. Mills, Inc., 635 F.3d 1279, 1282-83 (11th Cir.2011) (citing Davis v. Powertel, Inc., 776 So.2d 971, 973 (Fla. Dist.Ct.App.2000)). "[T]he question is not whether the plaintiff actually relied on the alleged deceptive trade practice, but whether the practice was likely to deceive a consumer acting reasonably in the same circumstances." Davis, 776 So.2d at 974.

Contending liability under the FDUTPA is not based on individual issues, Carrera argues that he can prove at trial that Bayer owes a refund for every purchase of WeightSmart.^[6] Since Bayer's records [310] show it sold approximately $14 million worth of WeightSmart in Florida, Carrera asserts Bayer's liability will be determined at trial to be $14 million — no more, no less. As a result, affidavits attesting to class membership will only be used to determine to whom to pay the refund, and in what amount.

Under no circumstances, Carrera assures us, will Bayer pay any amount other than $14 million, even if a significant number of inaccurate claims are submitted and paid out. For example, if claims are made for more than $14 million, and inaccurate or false claims cannot be screened out, claimants will simply receive less than they are entitled to. And if too few claims are made, Carrera asserts the excess funds will not be returned to Bayer but will go to an unclaimed property fund. Carrera contrasts this situation with Marcus. In Marcus, there was no evidence of the total number of RFTs allegedly purchased in violation of the consumer protection laws. Accordingly, each claim submitted would have increased the amount of money the defendants would have had to pay. As a result, the defendants had a more substantial interest in screening out false claims. Because Bayer's total liability cannot be so affected by unreliable affidavits, Carrera argues Bayer lacks an interest in challenging class membership.

Under Carrera's view, if fraudulent or inaccurate claims are paid out, the only harm is to other class members. But ascertainability protects absent class members as well as defendants, Marcus, 687 F.3d at 593, so Carrera's focus on Bayer alone is misplaced. It is unfair to absent class members if there is a significant likelihood their recovery will be diluted by fraudulent or inaccurate claims. In this case, as we discuss, there is the possibility that Carrera's proposed method for ascertaining the class via affidavits will dilute the recovery of true class members.

Bayer too has an interest in ensuring it pays only legitimate claims. If fraudulent or inaccurate claims materially reduce true class members' relief, these class members could argue the named plaintiff did not adequately represent them because he proceeded with the understanding that absent members may get less than full relief^[7] When class members are not adequately represented by the named plaintiff, they are not bound by the judgment. See Hansberry v. Lee, 311 U.S. 32, 42, 61 S.Ct. 115, 85 L.Ed. 22 (1940) (explaining that due process requires the interests of absent class members to be adequately represented for them to be bound by the judgment). They could then bring a new action against Bayer and, perhaps, apply the principles of issue preclusion to prevent Bayer from re-litigating whether it is liable under the FDUTPA. Bayer has a substantial interest in ensuring this does not happen. Accordingly, we reject Carrera's argument that the level of proof for ascertainability should be relaxed because Bayer's ultimate liability will not be based on the affidavits.

3.

Finally, Carrera argues that a screening method such as the one described in the Prutsman Declaration will ensure that Bayer pays claims based only on reliable affidavits. In his declaration, James Prutsman states that he works at [311] Rust Consulting, Inc., a firm that has administered class settlements for nearly 25 years. A992. He explains that Rust "employs numerous methods to detect claims that are submitted fraudulently." A995. "For example, the firm runs programmatic audits to identify duplicate claims, outliers, and other situations. In addition, Rust has successfully utilized fraud prevention techniques where by [sic] the claim form offers claim options that do not reflect valid product descriptions, prices paid, geographic locations or combinations of such factors." Id. "By providing claims options such as a very high pill count or significantly higher purchase price in this case, fraudulent claim filers would naturally be inclined to select options that they believe would increase their claim value. As such, techniques such as these can be used to effectively [eliminate] fraudulent claims." Id.

Bayer maintains the Prutsman Declaration is insufficient to satisfy the reliability standard because it only addresses methods for allocating payment to a settlement class. This fact is important, according to Bayer, because there are different standards for approving a settlement class than for certifying a litigation class, and because Prutsman does not opine that his method would satisfy the standard for class certification. Bayer also argues that just because some defendants have agreed to use such techniques in administering a class settlement, it does not mean that it is sufficiently reliable.

The Prutsman Declaration does not show the affidavits will be reliable.^[8] Nor does it propose a model for screening claims that is specific to this case. And even if Prutsman produced a model that is specific to this case, we doubt whether it could satisfy the ascertainability requirement. At this stage in the litigation, the district court will not actually see the model in action. Rather, it will just be told how the model will operate with the plaintiff's assurances it will be effective. Such assurances that a party "intends or plans to meet the requirements" are insufficient to satisfy Rule 23. Hydrogen Peroxide, 552 F.3d at 318; see also Comcast Corp. v. Behrend, ___ U.S. ___, 133 S.Ct. 1426, 1434, 185 L.Ed.2d 515 (2013) (rejecting contention that Rule 23 is satisfied by an assurance that the plaintiffs can produce a damages model capable of measuring damages caused by a specific theory of antitrust impact). Carrera has suggested no way to determine the reliability of such a model. For example, even if a model screens out a significant number of claims, say 25%, there is probably no way to know if the true number of fraudulent or inaccurate claims was actually 5% or 50%.^[9]

As Marcus was decided after the trial court certified the class, Carrera should have another opportunity to satisfy the ascertainability requirement. Accordingly, we will afford Carrera the opportunity to submit a screening model specific to this case and prove how the model will be reliable and how it would allow Bayer to challenge the affidavits. Mere assurances [312] that a model can screen out unreliable affidavits will be insufficient.^[10]

VI.

For the foregoing reasons, we will vacate the District Court's order certifying the class action and remand for further proceedings consistent with this opinion. Because Marcus was decided after the court's certification of the class, Carrera should be allowed to conduct further, limited discovery on the issue of ascertainability and afforded another opportunity to satisfy the ascertainability requirement.

[1] The class definition does not include a class period. Bayer sold WeightSmart from December 2003 through January 2007.

[2] Although some evidence used to satisfy ascertainability, such as corporate records, will actually identify class members at the certification stage, ascertainability only requires the plaintiff to show that class members can be identified.

[3] ExtraCare cards are membership cards that offer customers discounts. A1091.

[4] Settlement classes raise different certification issues than litigation classes. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). Accordingly, we question whether the FTC's proposals for identifying purchasers, made as part of a settlement (and a non-class action settlement at that), bear any relevance to the issue of ascertainability in this case.

[5] As mentioned, in his deposition testimony, Carrera was unable to remember when he purchased WeightSmart and confused WeightSmart with other products that are not part of this litigation.

[6] Bayer argues that if it is liable, its liability will be limited to refunding the premium consumers paid for WeightSmart based on its metabolism-enhancing claims. For purposes of this appeal, it makes no difference whether customers would be entitled to a full refund or merely a refund of this premium.

[7] We express no opinion on whether absent class members would be successful in arguing they were not adequately represented on this ground.

[8] Based on this conclusion, we do not need to reach Bayer's argument that the District Court erred by considering the Prutsman Declaration, which was produced with Carrera's reply brief in support of its motion for class certification. Accordingly, we will deny Bayer's motion to supplement the appellate record, which relates solely to this issue.

[9] Carrera's ability to meet the ascertainability requirement using a screening model is further in doubt due to his inability to clearly remember his purchases of WeightSmart, although the District Court did not determine whether his testimony was reliable. It would appear that the less reliable a class member's memory is, the more reliable any screening method would have to be.

[10] Bayer also argues that because the statute of limitations will bar some claims, the class cannot be ascertained. Because the class is defined as all purchasers of WeightSmart in Florida, whether an individual's claim is barred by the statute of limitations is not an aspect of ascertainability in this case.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

[148] Thompson Powers argued the cause for petitioner. With him on the briefs were Mark B. Goodwin and E. Russell Nunnally.

[149] Frank P. Hernandez argued the cause for respondent. With him on the brief was John E. Collins.^[1]

Jack Greenberg, James M. Nabrit III, Barry L. Goldstein, Vilma S. Martinez, and Morris J. Baller filed a brief for the NAACP Legal Defense and Educational Fund, Inc., et al., as amici curiae urging affirmance.

Solicitor General Lee, Assistant Attorney General Reynolds, Jessica Dunsay Silver, Mark L. Gross, and Harold Levy filed a brief for the United States as amicus curiae.

JUSTICE STEVENS delivered the opinion of the Court.

The question presented is whether respondent Falcon, who complained that petitioner did not promote him because he is a Mexican-American, was properly permitted to maintain a class action on behalf of Mexican-American applicants for employment whom petitioner did not hire.

I

In 1969 petitioner initiated a special recruitment and training program for minorities. Through that program, respondent Falcon was hired in July 1969 as a groundman, and within a year he was twice promoted, first to lineman and then to lineman-in-charge. He subsequently refused a promotion to installer-repairman. In October 1972 he applied for the job of field inspector; his application was denied even though the promotion was granted several white employees with less seniority.

Falcon thereupon filed a charge with the Equal Employment Opportunity Commission stating his belief that he had been passed over for promotion because of his national origin and that petitioner's promotion policy operated against Mexican-Americans as a class. Falcon v. General Telephone Co. of Southwest, 626 F. 2d 369, 372, n. 2 (CA5 1980). In due [150] course he received a right-to-sue letter from the Commission and, in April 1975, he commenced this action under Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U. S. C. § 2000e et seq. (1976 ed. and Supp. IV), in the United States District Court for the Northern District of Texas. His complaint alleged that petitioner maintained "a policy, practice, custom, or usage of: (a) discriminating against [Mexican-Americans] because of national origin and with respect to compensation, terms, conditions, and privileges of employment, and (b) . . . subjecting [Mexican-Americans] to continuous employment discrimination."^[2] Respondent claimed that as a result of this policy whites with less qualification and experience and lower evaluation scores than respondent had been promoted more rapidly. The complaint contained no factual allegations concerning petitioner's hiring practices.

Respondent brought the action "on his own behalf and on behalf of other persons similarly situated, pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure."^[3] The class [151] identified in the complaint was "composed of Mexican-American persons who are employed, or who might be employed, by GENERAL TELEPHONE COMPANY at its place of business located in Irving, Texas, who have been and who continue to be or might be adversely affected by the practices complained of herein."^[4]

After responding to petitioner's written interrogatories,^[5] respondent filed a memorandum in favor of certification of "the class of all hourly Mexican American employees who have been employed, are employed, or may in the future be employed and all those Mexican Americans who have applied or would have applied for employment had the Defendant not practiced racial discrimination in its employment practices." App. 46-47. His position was supported by the ruling of the [152] United States Court of Appeals for the Fifth Circuit in Johnson v. Georgia Highway Express, Inc., 417 F. 2d 1122 (1969), that any victim of racial discrimination in employment may maintain an "across the board" attack on all unequal employment practices alleged to have been committed by the employer pursuant to a policy of racial discrimination. Without conducting an evidentiary hearing, the District Court certified a class including Mexican-American employees and Mexican-American applicants for employment who had not been hired.^[6]

Following trial of the liability issues, the District Court entered separate findings of fact and conclusions of law with respect first to respondent and then to the class. The District Court found that petitioner had not discriminated against respondent in hiring, but that it did discriminate against him in its promotion practices. App. to Pet. for Cert. 35a, 37a. The court reached converse conclusions about the class, finding no discrimination in promotion practices, but concluding that petitioner had discriminated against Mexican-Americans at its Irving facility in its hiring practices. Id., at 39a-40a.^[7]

After various post-trial proceedings, the District Court ordered petitioner to furnish respondent with a list of all Mexican-Americans who had applied for employment at the Irving [153] facility during the period between January 1, 1973, and October 18, 1976. Respondent was then ordered to give notice to those persons advising them that they might be entitled to some form of recovery. Evidence was taken concerning the applicants who responded to the notice, and backpay was ultimately awarded to 13 persons, in addition to respondent Falcon. The total recovery by respondent and the entire class amounted to $67,925.49, plus costs and interest.^[8]

Both parties appealed. The Court of Appeals rejected respondent's contention that the class should have encompassed all of petitioner's operations in Texas, New Mexico, Oklahoma, and Arkansas.^[9] On the other hand, the court also rejected petitioner's argument that the class had been defined too broadly. For, under the Fifth Circuit's across-the-board rule, it is permissible for "an employee complaining of one employment practice to represent another complaining of another practice, if the plaintiff and the members of the class suffer from essentially the same injury. In this case, all of the claims are based on discrimination because of national origin." 626 F. 2d, at 375.^[10] The court relied on Payne v. [154] Travenol Laboratories, Inc., 565 F. 2d 895 (1978), cert. denied, 439 U. S. 835, in which the Fifth Circuit stated:

"Plaintiffs' action is an `across the board' attack on unequal employment practices alleged to have been committed by Travenol pursuant to a policy of racial discrimination. As parties who have allegedly been aggrieved by some of those discriminatory practices, plaintiffs have demonstrated a sufficient nexus to enable them to represent other class members suffering from different practices motivated by the same policies." 565 F. 2d, at 900, quoted in 626 F. 2d, at 375.

On the merits, the Court of Appeals upheld respondent's claim of disparate treatment in promotion,^[11] but held that the District Court's findings relating to disparate impact in hiring were insufficient to support recovery on behalf of the class.^[12] [155] After this Court decided Texas Dept. of Community Affairs v. Burdine, 450 U. S. 248, we vacated the judgment of the Court of Appeals and directed further consideration in the light of that opinion. General Telephone Co. of Southwest v. Falcon, 450 U. S. 1036. The Fifth Circuit thereupon vacated the portion of its opinion addressing respondent's promotion claim but reinstated the portions of its opinion approving the District Court's class certification. 647 F. 2d 633 (1981). With the merits of both respondent's promotion claim and the class hiring claims remaining open for reconsideration in the District Court on remand, we granted certiorari to decide whether the class action was properly maintained on behalf of both employees who were denied promotion and applicants who were denied employment.

II

The class-action device was designed as "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Califano v. Yamasaki, 442 U. S. 682, 700-701. Class relief is "peculiarly appropriate" when the "issues involved are common to the class as a whole" and when they "turn on questions of law applicable in the same manner to each member of the class." Id., at 701. For in such cases, "the class-action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every [class member] to be litigated in an economical fashion under Rule 23." Ibid.

Title VII of the Civil Rights Act of 1964, as amended, authorizes the Equal Employment Opportunity Commission to sue in its own name to secure relief for individuals aggrieved [156] by discriminatory practices forbidden by the Act. See 42 U. S. C. § 2000e-5(f)(1). In exercising this enforcement power, the Commission may seek relief for groups of employees or applicants for employment without complying with the strictures of Rule 23. General Telephone Co. of Northwest v. EEOC, 446 U. S. 318. Title VII, however, contains no special authorization for class suits maintained by private parties. An individual litigant seeking to maintain a class action under Title VII must meet "the prerequisites of numerosity, commonality, typicality, and adequacy of representation" specified in Rule 23(a). Id., at 330. These requirements effectively "limit the class claims to those fairly encompassed by the named plaintiff's claims." Ibid.

We have repeatedly held that "a class representative must be part of the class and `possess the same interest and suffer the same injury' as the class members." East Texas Motor Freight System, Inc. v. Rodriguez, 431 U. S. 395, 403 (quoting Schlesinger v. Reservists Committee to Stop the War, 418 U. S. 208, 216). In East Texas Motor Freight, a Title VII action brought by three Mexican-American city drivers, the Fifth Circuit certified a class consisting of the trucking company's black and Mexican-American city drivers allegedly denied on racial or ethnic grounds transfers to more desirable line-driver jobs. We held that the Court of Appeals had "plainly erred in declaring a class action." 431 U. S., at 403. Because at the time the class was certified it was clear that the named plaintiffs were not qualified for line-driver positions, "they could have suffered no injury as a result of the allegedly discriminatory practices, and they were, therefore, simply not eligible to represent a class of persons who did allegedly suffer injury." Id., at 403-404.

Our holding in East Texas Motor Freight was limited; we noted that "a different case would be presented if the District Court had certified a class and only later had it appeared that the named plaintiffs were not class members or were otherwise inappropriate class representatives." Id., at 406, n. 12. [157] We also recognized the theory behind the Fifth Circuit's across-the-board rule, noting our awareness "that suits alleging racial or ethnic discrimination are often by their very nature class suits, involving classwide wrongs," and that "[c]ommon questions of law or fact are typically present." Id., at 405. In the same breath, however, we reiterated that "careful attention to the requirements of Fed. Rule Civ. Proc. 23 remains nonetheless indispensable" and that the "mere fact that a complaint alleges racial or ethnic discrimination does not in itself ensure that the party who has brought the lawsuit will be an adequate representative of those who may have been the real victims of that discrimination." Id., at 405-406.

We cannot disagree with the proposition underlying the across-the-board rule — that racial discrimination is by definition class discrimination.^[13] But the allegation that such discrimination has occurred neither determines whether a class action may be maintained in accordance with Rule 23 nor defines the class that may be certified. Conceptually, there is a wide gap between (a) an individual's claim that he has been denied a promotion on discriminatory grounds, and his otherwise unsupported allegation that the company has a policy of discrimination, and (b) the existence of a class of persons who have suffered the same injury as that individual, such that the individual's claim and the class claims will share common questions of law or fact and that the individual's claim will be typical of the class claims.^[14] For respondent to [158] bridge that gap, he must prove much more than the validity of his own claim. Even though evidence that he was passed over for promotion when several less deserving whites were advanced may support the conclusion that respondent was denied the promotion because of his national origin, such evidence would not necessarily justify the additional inferences (1) that this discriminatory treatment is typical of petitioner's promotion practices, (2) that petitioner's promotion practices are motivated by a policy of ethnic discrimination that pervades petitioner's Irving division, or (3) that this policy of ethnic discrimination is reflected in petitioner's other employment practices, such as hiring, in the same way it is manifested in the promotion practices. These additional inferences demonstrate the tenuous character of any presumption that the class claims are "fairly encompassed" within respondent's claim.

Respondent's complaint provided an insufficient basis for concluding that the adjudication of his claim of discrimination in promotion would require the decision of any common question concerning the failure of petitioner to hire more Mexican-Americans. Without any specific presentation identifying the questions of law or fact that were common to the claims of respondent and of the members of the class he sought to represent,^[15] it was error for the District Court to presume that respondent's claim was typical of other claims [159] against petitioner by Mexican-American employees and applicants. If one allegation of specific discriminatory treatment were sufficient to support an across-the-board attack, every Title VII case would be a potential companywide class action. We find nothing in the statute to indicate that Congress intended to authorize such a wholesale expansion of class-action litigation.^[16]

The trial of this class action followed a predictable course. Instead of raising common questions of law or fact, respondent's evidentiary approaches to the individual and class claims were entirely different. He attempted to sustain his individual claim by proving intentional discrimination. He tried to prove the class claims through statistical evidence of disparate impact. Ironically, the District Court rejected the class claim of promotion discrimination, which conceptually might have borne a closer typicality and commonality relationship with respondent's individual claim, but sustained the class claim of hiring discrimination. As the District Court's bifurcated findings on liability demonstrate, the individual and class claims might as well have been tried separately. It is clear that the maintenance of respondent's action as a class action did not advance "the efficiency and economy of litigation which is a principal purpose of the procedure." American Pipe & Construction Co. v. Utah, 414 U. S. 538, 553.

[160] We do not, of course, judge the propriety of a class certification by hindsight. The District Court's error in this case, and the error inherent in the across-the-board rule, is the failure to evaluate carefully the legitimacy of the named plaintiff's plea that he is a proper class representative under Rule 23(a). As we noted in Coopers & Lybrand v. Livesay, 437 U. S. 463, "the class determination generally involves considerations that are `enmeshed in the factual and legal issues comprising the plaintiff's cause of action.' " Id., at 469 (quoting Mercantile Nat. Bank v. Langdeau, 371 U. S. 555, 558). Sometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim, and sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question. Even after a certification order is entered, the judge remains free to modify it in the light of subsequent developments in the litigation.^[17] For such an order, particularly during the period before any notice is sent to members of the class, "is inherently tentative." 437 U. S., at 469, n. 11. This flexibility enhances the usefulness of the class-action device; actual, not presumed, conformance with Rule 23(a) remains, however, indispensable.

III

The need to carefully apply the requirements of Rule 23(a) to Title VII class actions was noticed by a member of the Fifth Circuit panel that announced the across-the-board rule. In a specially concurring opinion in Johnson v. Georgia Highway Express, Inc., 417 F. 2d, at 1125-1127, Judge Godbold emphasized the need for "more precise pleadings," id., at [161] 1125, for "without reasonable specificity the court cannot define the class, cannot determine whether the representation is adequate, and the employer does not know how to defend," id., at 1126. He termed as "most significant" the potential unfairness to the class members bound by the judgment if the framing of the class is overbroad. Ibid. And he pointed out the error of the "tacit assumption" underlying the across-the-board rule that "all will be well for surely the plaintiff will win and manna will fall on all members of the class." Id., at 1127. With the same concerns in mind, we reiterate today that a Title VII class action, like any other class action, may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.

The judgment of the Court of Appeals affirming the certification order is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

CHIEF JUSTICE BURGER, concurring in part and dissenting in part.

I agree with the Court's decision insofar as it states the general principles which apply in determining whether a class should be certified in this case under Rule 23. However, in my view it is not necessary to remand for further proceedings since it is entirely clear on this record that no class should have been certified in this case. I would simply reverse the Court of Appeals and remand with instructions to dismiss the class claim.

As the Court notes, the purpose of Rule 23 is to promote judicial economy by allowing for litigation of common questions of law and fact at one time. Califano v. Yamasaki, 442 U. S. 682, 701 (1979). We have stressed that strict attention to the requirements of Rule 23 is indispensable in employment discrimination cases. East Texas Motor Freight System, [162] Inc. v. Rodriguez, 431 U. S. 395, 405-406 (1977). This means that class claims are limited to those " `fairly encompassed by the named plaintiff's claims.' " Ante, at 156, quoting General Telephone Co. of Northwest v. EEOC, 446 U. S. 318, 330 (1980).

Respondent claims that he was not promoted to a job as field inspector because he is a Mexican-American. To be successful in his claim, which he advances under the "disparate treatment" theory, he must convince a court that those who were promoted were promoted not because they were better qualified than he was, but, instead, that he was not promoted for discriminatory reasons. The success of this claim depends on evaluation of the comparative qualifications of the applicants for promotion to field inspector and on analysis of the credibility of the reasons for the promotion decisions provided by those who made the decisions. Respondent's class claim on behalf of unsuccessful applicants for jobs with petitioner, in contrast, is advanced under the "adverse impact" theory. Its success depends on an analysis of statistics concerning petitioner's hiring patterns.^[18]

The record in this case clearly shows that there are no common questions of law or fact between respondent's claim and the class claim; the only commonality is that respondent is a Mexican-American and he seeks to represent a class of Mexican-Americans. See ante, at 153, and n. 9. We have repeatedly held that the bare fact that a plaintiff alleges racial or ethnic discrimination is not enough to justify class certification. Ante, at 157; East Texas Motor Freight, supra, at 405-406. Accordingly, the class should not have been certified.

[163] Moreover, while a judge's decision to certify a class is not normally to be evaluated by hindsight, ante, at 160, since the judge cannot know what the evidence will show, there is no reason for us at this stage of these lengthy judicial proceedings not to proceed in light of the evidence actually presented. The Court properly concludes that the Court of Appeals and the District Court failed to consider the requirements of Rule 23. In determining whether to reverse and remand or to simply reverse, we can and should look at the evidence. The record shows that there is no support for the class claim. Respondent's own statistics show that 7.7% of those hired by petitioner between 1972 and 1976 were Mexican-American while the relevant labor force was 5.2% Mexican-American. Falcon v. General Telephone Company of Southwest, 626 F. 2d 369, 372, 381, n. 16 (1980). Petitioner's unchallenged evidence shows that it hired Mexican-Americans in numbers greater than their percentage of the labor force even though Mexican-Americans applied for jobs with petitioner in numbers smaller than their percentage of the labor force. Id., at 373, n. 4. This negates any claim of Falcon as a class representative.

Like so many Title VII cases, this case has already gone on for years, draining judicial resources as well as resources of the litigants. Rather than promoting judicial economy, the "across-the-board" class action has promoted multiplication of claims and endless litigation. Since it is clear that the class claim brought on behalf of unsuccessful applicants for jobs with petitioner cannot succeed, I would simply reverse and remand with instructions to dismiss the class claim.

[1] Briefs of amici curiae urging reversal were filed by Robert E. Williams, Douglas S. McDowell, and Daniel R. Levinson for the Equal Employment Advisory Council; and by Wayne S. Bishop, Richard K. Walker, and Donald W. Anderson for Republicbank Dallas.

[2]App. 14. In paragraph VI of the complaint, respondent alleged:

"The Defendant has established an employment, transfer, promotional, and seniority system, the design, intent, and purpose of which is to continue and preserve, and which has the effect of continuing and preserving, the Defendant's policy, practice, custom and usage of limiting the employment, transfer, and promotional opportunities of Mexican-American employees of the company because of national origin." Id., at 15.

[3] Id.,at 13. Rule 23 provides, in part:

"(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

"(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:

.....

"(2) 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 . . . ."

[4]App. 13-14. The paragraph of the complaint in which respondent alleged conformance with the requirements of Rule 23 continued:

"There are common questions of law and fact affecting the rights of the members of this class who are, and who continue to be, limited, classified, and discriminated against in ways which deprive and/or tend to deprive them of equal employment opportunities and which otherwise adversely affect their status as employees because of national origin. These persons are so numerous that joinder of all members is impracticable. A common relief is sought. The interests of said class are adequately represented by Plaintiff. Defendant has acted or refused to act on grounds generally applicable to the Plaintiff." Id., at 14.

[5]Petitioner's Interrogatory No. 8 stated:

"Identify the common questions of law and fac[t] which affect the rights of the members of the purported class." Id., at 26.

Respondent answered that interrogatory as follows:

"The facts which affect the rights of the members of the class are the facts of their employment, the ways in which evaluations are made, the subjective rather than objective manner in which recommendations for raises and transfers and promotions are handled, and all of the facts surrounding the employment of Mexican-American persons by General Telephone Company. The questions of law specified in Interrogatory No. 8 call for a conclusion on the part of the Plaintiff." Id., at 34.

[6]The District Court's pretrial order of February 2, 1976, provided, in part:

"The case is to proceed as a class action and the Plaintiff is to represent the class. The class is to be made up of those employees who are employed and employees who have applied for employment in the Irving Division of the Defendant company, and no other division.

.....

"Plaintiff and Defendant are to hold further negotiations to see if there is a possibility of granting individual relief to the Plaintiff, MARIANO S. FALCON." App. to Pet. for Cert. 48a-49a.

The District Court denied subsequent motions to decertify the class both before and after the trial.

[7] The District Court ordered petitioner to accelerate its affirmative-action plan by taking specified steps to more actively recruit and promote Mexican-Americans at its Irving facility. See id., at 41a-45a.

[8] Respondent's individual recovery amounted to $1,040.33. A large share of the class award, $28,827.50, represented attorney's fees. Most of the remainder resulted from petitioner's practice of keeping all applications active for only 90 days; the District Court found that most of the applications had been properly rejected at the time they were considered, but that petitioner could not justify the refusal to extend employment to disappointed applicants after an interval of 90 days. See 463 F. Supp. 315 (1978).

[9] The Court of Appeals held that the District Court had not abused its discretion since each of petitioner's divisions conducted its own hiring and since management of the broader class would be much more difficult. Falcon v. General Telephone Co. of Southwest, 626 F. 2d 369, 376 (CA5 1980).

[10]The court continued:

"While similarities of sex, race or national origin claims are not dispositive in favor of finding that the prerequisites of Rule 23 have been met, they are an extremely important factor in the determination, that can outweigh the fact that the members of the plaintiff class may be complaining about somewhat different specific discriminatory practices. In addition here, the plaintiff showed more than an alliance based simply on the same type of discriminatory claim. He also showed a similarity of interests based on job location, job function and other considerations." Id., at 375-376 (citations omitted).

The court did not explain how job location, job function, and the unidentified other considerations were relevant to the Rule 23(a) determination.

[11] The District Court found that petitioner's proffered reasons for promoting the whites, rather than respondent, were insufficient and subjective. The Court of Appeals held that respondent had made out a prima facie case under the test set forth in McDonnell Douglas Corp. v. Green, 411 U. S. 792, 802, and that the District Court's conclusion that petitioner had not rebutted that prima facie case was not clearly erroneous. In so holding, the Court of Appeals relied on its earlier opinion in Burdine v. Texas Dept. of Community Affairs, 608 F. 2d 563 (1979). Our opinion in Burdinehad not yet been announced.

The Court of Appeals disposed of a number of other contentions raised by both parties, and reserved others pending the further proceedings before the District Court on remand. Among the latter issues was petitioner's objection to the District Court's theory for computing the class backpay awards. See n. 7, supra.

[12] The District Court's finding was based on statistical evidence comparing the number of Mexican-Americans in the company's employ, and the number hired in 1972 and 1973, with the percentage of Mexican-Americans in the Dallas-Fort Worth labor force. See App. to Pet. for Cert. 39a. Since recovery had been allowed for the years 1973 through 1976 based on statistical evidence pertaining to only a portion of that period, and since petitioner's evidence concerning the entire period suggested that there was no disparate impact, the Court of Appeals ordered further proceedings on the class hiring claims. 626 F. 2d, at 380-382.

[13] See Hall v. Werthan Bag Corp., 251 F. Supp. 184, 186 (MD Tenn. 1966).

[14] The commonality and typicality requirements of Rule 23(a) tend to merge. Both serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence. Those requirements therefore also tend to merge with the adequacy-of-representation requirement, although the latter requirement also raises concerns about the competency of class counsel and conflicts of interest. In this case, we need not address petitioner's argument that there is a conflict of interest between respondent and the class of rejected applicants because an enlargement of the pool of Mexican-American employees will decrease respondent's chances for promotion. See General Telephone Co. of Northwest v. EEOC, 446 U. S. 318, 331 ("In employment discrimination litigation, conflicts might arise, for example, between employees and applicants who were denied employment and who will, if granted relief, compete with employees for fringe benefits or seniority. Under Rule 23, the same plaintiff could not represent these classes"); see also East Texas Motor Freight System, Inc. v. Rodriguez, 431 U. S. 395, 404-405.

[15] See n. 4, supra.

[16] If petitioner used a biased testing procedure to evaluate both applicants for employment and incumbent employees, a class action on behalf of every applicant or employee who might have been prejudiced by the test clearly would satisfy the commonality and typicality requirements of Rule 23(a). Significant proof that an employer operated under a general policy of discrimination conceivably could justify a class of both applicants and employees if the discrimination manifested itself in hiring and promotion practices in the same general fashion, such as through entirely subjective decisionmaking processes. In this regard it is noteworthy that Title VII prohibits discriminatory employment practices, not an abstract policy of discrimination. The mere fact that an aggrieved private plaintiff is a member of an identifiable class of persons of the same race or national origin is insufficient to establish his standing to litigate on their behalf all possible claims of discrimination against a common employer.

[17] "As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional, and may be altered or amended before the decision on the merits." Fed. Rule Civ. Proc. 23(c)(1).

[18] There is no allegation that those who made the hiring decisions are the same persons who determined who was promoted to field inspector. Thus there is no claim that the same person or persons who made the challenged decisions were motivated by prejudice against Mexican-Americans, and that this prejudice manifested itself in both the hiring decisions and the decisions not to promote respondent.

[2546] Theodore B. Olson, Mark A. Perry, Amir C. Tayrani, Gibson, Dunn & Crutcher LLP, Washington, DC, Theodore J. Boutrous, Jr., Counsel of Record, Rachel S. Brass, Theane Evangelis Kapur, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, for Petitioner.

Joseph M. Sellers, Christine E. Webber, Jenny R. Yang, Kalpana Kotagal, Cohen Milstein Sellers & Toll PLLC, Washington, D.C., Brad Seligman, Jocelyn D. Larkin, The Impact Fund, Berkeley, CA, Steven Stemerman, Elizabeth A. Lawrence, Davis, Cowell & Bowe, LLP, San Francisco, CA, Arcelia Hurtado, Noreen Farell, Equal Rights Advocates, San Francisco, CA, Sheila Y. Thomas, Law Office of Sheila Thomas, Oakland, CA, Stephen Tinkler, The Tinkler Law Firm, Santa Fe, NM, Merit Bennett, The Bennett Firm, Santa Fe, NM, Debra Gardner, Baltimore, MD, Shauna Marshall, Hastings College of the Law, San Francisco, CA, for Respondents.

Theodore B. Olson, Mark A. Perry, Amir C. Tayrani, Gibson, Dunn & Crutcher LLP, Washington, D.C., Theodore J. Boutrous, Jr., Counsel of Record, Rachel S. Brass, Theane Evangelis Kapur, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, for Petitioner.

[2547] Justice SCALIA delivered the opinion of the Court.

We are presented with one of the most expansive class actions ever. The District Court and the Court of Appeals approved the certification of a class comprising about one and a half million plaintiffs, current and former female employees of petitioner Wal-Mart who allege that the discretion exercised by their local supervisors over pay and promotion matters violates Title VII by discriminating against women. In addition to injunctive and declaratory relief, the plaintiffs seek an award of backpay. We consider whether the certification of the plaintiff class was consistent with Federal Rules of Civil Procedure 23(a) and (b)(2).

I

A

Petitioner Wal-Mart is the Nation's largest private employer. It operates four types of retail stores throughout the country: Discount Stores, Supercenters, Neighborhood Markets, and Sam's Clubs. Those stores are divided into seven nationwide divisions, which in turn comprise 41 regions of 80 to 85 stores apiece. Each store has between 40 and 53 separate departments and 80 to 500 staff positions. In all, Wal-Mart operates approximately 3,400 stores and employs more than one million people.

Pay and promotion decisions at Wal-Mart are generally committed to local managers' broad discretion, which is exercised "in a largely subjective manner." 222 F.R.D. 137, 145 (N.D.Cal.2004). Local store managers may increase the wages of hourly employees (within limits) with only limited corporate oversight. As for salaried employees, such as store managers and their deputies, higher corporate authorities have discretion to set their pay within preestablished ranges.

Promotions work in a similar fashion. Wal-Mart permits store managers to apply their own subjective criteria when selecting candidates as "support managers," which is the first step on the path to management. Admission to Wal-Mart's management training program, however, does require that a candidate meet certain objective criteria, including an above-average performance rating, at least one year's tenure in the applicant's current position, and a willingness to relocate. But except for those requirements, regional and district managers have discretion to use their own judgment when selecting candidates for management training. Promotion to higher office—e.g., assistant manager, co-manager, or store manager—is similarly at the discretion of the employee's superiors after prescribed objective factors are satisfied.

B

The named plaintiffs in this lawsuit, representing the 1.5 million members of the certified class, are three current or former Wal-Mart employees who allege that the company discriminated against them on the basis of their sex by denying them equal pay or promotions, in violation of Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U.S.C. § 2000e-1 et seq.^[1]

Betty Dukes began working at a Pittsburgh, California, Wal-Mart in 1994. She started as a cashier, but later sought and [2548] received a promotion to customer service manager. After a series of disciplinary violations, however, Dukes was demoted back to cashier and then to greeter. Dukes concedes she violated company policy, but contends that the disciplinary actions were in fact retaliation for invoking internal complaint procedures and that male employees have not been disciplined for similar infractions. Dukes also claims two male greeters in the Pittsburgh store are paid more than she is.

Christine Kwapnoski has worked at Sam's Club stores in Missouri and California for most of her adult life. She has held a number of positions, including a supervisory position. She claims that a male manager yelled at her frequently and screamed at female employees, but not at men. The manager in question "told her to `doll up,' to wear some makeup, and to dress a little better." App. 1003a.

The final named plaintiff, Edith Arana, worked at a Wal-Mart store in Duarte, California, from 1995 to 2001. In 2000, she approached the store manager on more than one occasion about management training, but was brushed off. Arana concluded she was being denied opportunity for advancement because of her sex. She initiated internal complaint procedures, whereupon she was told to apply directly to the district manager if she thought her store manager was being unfair. Arana, however, decided against that and never applied for management training again. In 2001, she was fired for failure to comply with Wal-Mart's timekeeping policy.

These plaintiffs, respondents here, do not allege that Wal-Mart has any express corporate policy against the advancement of women. Rather, they claim that their local managers' discretion over pay and promotions is exercised disproportionately in favor of men, leading to an unlawful disparate impact on female employees, see 42 U.S.C. § 2000e-2(k). And, respondents say, because Wal-Mart is aware of this effect, its refusal to cabin its managers' authority amounts to disparate treatment, see § 2000e-2(a). Their complaint seeks injunctive and declaratory relief, punitive damages, and backpay. It does not ask for compensatory damages.

Importantly for our purposes, respondents claim that the discrimination to which they have been subjected is common to all Wal-Mart's female employees. The basic theory of their case is that a strong and uniform "corporate culture" permits bias against women to infect, perhaps subconsciously, the discretionary decisionmaking of each one of Wal-Mart's thousands of managers—thereby making every woman at the company the victim of one common discriminatory practice. Respondents therefore wish to litigate the Title VII claims of all female employees at Wal-Mart's stores in a nationwide class action.

C

Class certification is governed by Federal Rule of Civil Procedure 23. Under Rule 23(a), the party seeking certification must demonstrate, first, that:

"(1) the class is so numerous that joinder of all members is impracticable,

"(2) there are questions of law or fact common to the class,

"(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and

"(4) the representative parties will fairly and adequately protect the interests of the class" (paragraph breaks added).

Second, the proposed class must satisfy at least one of the three requirements listed in Rule 23(b). Respondents rely on Rule 23(b)(2), which applies when "the party opposing the class has acted or refused to [2549] act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole."^[2]

Invoking these provisions, respondents moved the District Court to certify a plaintiff class consisting of "`[a]ll women employed at any Wal-Mart domestic retail store at any time since December 26, 1998, who have been or may be subjected to Wal-Mart's challenged pay and management track promotions policies and practices.'" 222 F.R.D., at 141-142 (quoting Plaintiff's Motion for Class Certification in case No. 3:01-cv-02252-CRB (ND Cal.), Doc. 99, p. 37). As evidence that there were indeed "questions of law or fact common to" all the women of Wal-Mart, as Rule 23(a)(2) requires, respondents relied chiefly on three forms of proof: statistical evidence about pay and promotion disparities between men and women at the company, anecdotal reports of discrimination from about 120 of Wal-Mart's female employees, and the testimony of a sociologist, Dr. William Bielby, who conducted a "social framework analysis" of Wal-Mart's "culture" and personnel practices, and concluded that the company was "vulnerable" to gender discrimination. 603 F.3d 571, 601 (C.A.9 2010) (en banc).

Wal-Mart unsuccessfully moved to strike much of this evidence. It also offered its own countervailing statistical and other proof in an effort to defeat Rule 23(a)'s requirements of commonality, typicality, and adequate representation. Wal-Mart further contended that respondents' monetary claims for backpay could not be certified under Rule 23(b)(2), first because that Rule refers only to injunctive and declaratory relief, and second because the backpay claims could not be manageably tried as a class without depriving Wal-Mart of its right to present certain statutory defenses. With one limitation not relevant here, the District Court granted respondents' motion and certified their proposed class.^[3]

D

A divided en banc Court of Appeals substantially affirmed the District Court's certification order. 603 F.3d 571. The majority concluded that respondents' evidence of commonality was sufficient to "raise the common question whether Wal-Mart's female employees nationwide were subjected to a single set of corporate policies (not merely a number of independent discriminatory acts) that may have worked to unlawfully discriminate against them in violation of Title VII." Id., at 612 (emphasis deleted). It also agreed with the District Court that the named plaintiffs' claims were sufficiently typical of the class [2550] as a whole to satisfy Rule 23(a)(3), and that they could serve as adequate class representatives, see Rule 23(a)(4). Id., at 614-615. With respect to the Rule 23(b)(2) question, the Ninth Circuit held that respondents' backpay claims could be certified as part of a (b)(2) class because they did not "predominat[e]" over the requests for declaratory and injunctive relief, meaning they were not "superior in strength, influence, or authority" to the nonmonetary claims. Id., at 616 (internal quotation marks omitted).^[4]

Finally, the Court of Appeals determined that the action could be manageably tried as a class action because the District Court could adopt the approach the Ninth Circuit approved in Hilao v. Estate of Marcos, 103 F.3d 767, 782-787 (1996). There compensatory damages for some 9,541 class members were calculated by selecting 137 claims at random, referring those claims to a special master for valuation, and then extrapolating the validity and value of the untested claims from the sample set. See 603 F.3d, at 625-626. The Court of Appeals "s[aw] no reason why a similar procedure to that used in Hilao could not be employed in this case." Id., at 627. It would allow Wal-Mart "to present individual defenses in the randomly selected `sample cases,' thus revealing the approximate percentage of class members whose unequal pay or nonpromotion was due to something other than gender discrimination." Ibid., n. 56 (emphasis deleted).

We granted certiorari. 562 U.S. ___, 131 S.Ct. 795, 178 L.Ed.2d 530 (2010).

II

The class action is "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Califano v. Yamasaki, 442 U.S. 682, 700-701, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). In order to justify a departure from that rule, "a class representative must be part of the class and `possess the same interest and suffer the same injury' as the class members." East Tex. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403, 97 S.Ct. 1891, 52 L.Ed.2d 453 (1977) (quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 216, 94 S.Ct. 2925, 41 L.Ed.2d 706 (1974)). Rule 23(a) ensures that the named plaintiffs are appropriate representatives of the class whose claims they wish to litigate. The Rule's four requirements—numerosity, commonality, typicality, and adequate representation—"effectively `limit the class claims to those fairly encompassed by the named plaintiff's claims.'" General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 156, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982) (quoting General Telephone Co. of Northwest v. EEOC, 446 U.S. 318, 330, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980)).

A

The crux of this case is commonality—the rule requiring a plaintiff to show that "there are questions of law or fact [2551] common to the class." Rule 23(a)(2).^[5] That language is easy to misread, since "[a]ny competently crafted class complaint literally raises common `questions.'" Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U.L.Rev. 97, 131-132 (2009). For example: Do all of us plaintiffs indeed work for Wal-Mart? Do our managers have discretion over pay? Is that an unlawful employment practice? What remedies should we get? Reciting these questions is not sufficient to obtain class certification. Commonality requires the plaintiff to demonstrate that the class members "have suffered the same injury," Falcon, supra, at 157, 102 S.Ct. 2364. This does not mean merely that they have all suffered a violation of the same provision of law. Title VII, for example, can be violated in many ways—by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company. Quite obviously, the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate-impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once. Their claims must depend upon a common contention—for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution—which means that 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.

"What matters to class certification ... is not the raising of common `questions'—even in droves—but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation. Dissimilarities within the proposed class are what have the potential to impede the generation of common answers." Nagareda, supra, at 132.

Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively demonstrate his compliance with the Rule—that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc. We recognized in Falcon that "sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question," 457 U.S., at 160, 102 S.Ct. 2364, and that certification is proper only if "the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied," id., at 161, 102 S.Ct. 2364; see id., at 160, 102 S.Ct. 2364 ("[A]ctual, not presumed, conformance with Rule 23(a) remains ... indispensable"). Frequently that "rigorous analysis" will entail some overlap with the merits of the plaintiff's underlying claim. That cannot be helped. "`[T]he [2552] class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'" Falcon, supra, at 160, 102 S.Ct. 2364 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 469, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978); some internal quotation marks omitted).^[6] Nor is there anything unusual about that consequence: The necessity of touching aspects of the merits in order to resolve preliminary matters, e.g., jurisdiction and venue, is a familiar feature of litigation. See Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676-677 (C.A.7 2001) (Easterbrook, J.).

In this case, proof of commonality necessarily overlaps with respondents' merits contention that Wal-Mart engages in a pattern or practice of discrimination.^[7] That is so because, in resolving an individual's Title VII claim, the crux of the inquiry is "the reason for a particular employment decision," Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867, 876, 104 S.Ct. 2794, 81 L.Ed.2d 718 (1984). Here respondents wish to sue about literally millions of employment decisions at once. Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members' claims for relief will produce a common answer to the crucial question why was I disfavored.

B

This Court's opinion in Falcon describes how the commonality issue must be [2553] approached. There an employee who claimed that he was deliberately denied a promotion on account of race obtained certification of a class comprising all employees wrongfully denied promotions and all applicants wrongfully denied jobs. 457 U.S., at 152, 102 S.Ct. 2364. We rejected that composite class for lack of commonality and typicality, explaining:

"Conceptually, there is a wide gap between (a) an individual's claim that he has been denied a promotion [or higher pay] on discriminatory grounds, and his otherwise unsupported allegation that the company has a policy of discrimination, and (b) the existence of a class of persons who have suffered the same injury as that individual, such that the individual's claim and the class claim will share common questions of law or fact and that the individual's claim will be typical of the class claims." Id., at 157-158, 102 S.Ct. 2364.

Falcon suggested two ways in which that conceptual gap might be bridged. First, if the employer "used a biased testing procedure to evaluate both applicants for employment and incumbent employees, a class action on behalf of every applicant or employee who might have been prejudiced by the test clearly would satisfy the commonality and typicality requirements of Rule 23(a)." Id., at 159, n. 15, 102 S.Ct. 2364. Second, "[s]ignificant proof that an employer operated under a general policy of discrimination conceivably could justify a class of both applicants and employees if the discrimination manifested itself in hiring and promotion practices in the same general fashion, such as through entirely subjective decisionmaking processes." Ibid. We think that statement precisely describes respondents' burden in this case. The first manner of bridging the gap obviously has no application here; Wal-Mart has no testing procedure or other companywide evaluation method that can be charged with bias. The whole point of permitting discretionary decisionmaking is to avoid evaluating employees under a common standard.

The second manner of bridging the gap requires "significant proof" that Wal-Mart "operated under a general policy of discrimination." That is entirely absent here. Wal-Mart's announced policy forbids sex discrimination, see App. 1567a-1596a, and as the District Court recognized the company imposes penalties for denials of equal employment opportunity, 222 F.R.D., at 154. The only evidence of a "general policy of discrimination" respondents produced was the testimony of Dr. William Bielby, their sociological expert. Relying on "social framework" analysis, Bielby testified that Wal-Mart has a "strong corporate culture," that makes it "`vulnerable'" to "gender bias." Id., at 152. He could not, however, "determine with any specificity how regularly stereotypes play a meaningful role in employment decisions at Wal-Mart. At his deposition... Dr. Bielby conceded that he could not calculate whether 0.5 percent or 95 percent of the employment decisions at Wal-Mart might be determined by stereotyped thinking." 222 F.R.D. 189, 192 (N.D.Cal.2004). The parties dispute whether Bielby's testimony even met the standards for the admission of expert testimony under Federal Rule of Civil Procedure 702 and our Daubert case, see Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).^[8] The District Court concluded [2554] that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. 222 F.R.D., at 191. We doubt that is so, but even if properly considered, Bielby's testimony does nothing to advance respondents' case. "[W]hether 0.5 percent or 95 percent of the employment decisions at Wal-Mart might be determined by stereotyped thinking" is the essential question on which respondents' theory of commonality depends. If Bielby admittedly has no answer to that question, we can safely disregard what he has to say. It is worlds away from "significant proof" that Wal-Mart "operated under a general policy of discrimination."

C

The only corporate policy that the plaintiffs' evidence convincingly establishes is Wal-Mart's "policy" of allowing discretion by local supervisors over employment matters. On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices. It is also a very common and presumptively reasonable way of doing business—one that we have said "should itself raise no inference of discriminatory conduct," Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 990, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988).

To be sure, we have recognized that, "in appropriate cases," giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory—since "an employer's undisciplined system of subjective decisionmaking [can have] precisely the same effects as a system pervaded by impermissible intentional discrimination." Id., at 990-991, 108 S.Ct. 2777. But the recognition that this type of Title VII claim "can" exist does not lead to the conclusion that every employee in a company using a system of discretion has such a claim in common. To the contrary, left to their own devices most managers in any corporation— and surely most managers in a corporation that forbids sex discrimination— would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all. Others may choose to reward various attributes that produce disparate impact— such as scores on general aptitude tests or educational achievements, see Griggs v. Duke Power Co., 401 U.S. 424, 431-432, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). And still other managers may be guilty of intentional discrimination that produces a sex-based disparity. In such a company, demonstrating the invalidity of one manager's use of discretion will do nothing to demonstrate the invalidity of another's. A party seeking to certify a nationwide class will be unable to show that all the employees' Title VII claims will in fact depend on the answers to common questions.

Respondents have not identified a common mode of exercising discretion that [2555] pervades the entire company—aside from their reliance on Dr. Bielby's social frameworks analysis that we have rejected. In a company of Wal-Mart's size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction. Respondents attempt to make that showing by means of statistical and anecdotal evidence, but their evidence falls well short.

The statistical evidence consists primarily of regression analyses performed by Dr. Richard Drogin, a statistician, and Dr. Marc Bendick, a labor economist. Drogin conducted his analysis region-by-region, comparing the number of women promoted into management positions with the percentage of women in the available pool of hourly workers. After considering regional and national data, Drogin concluded that "there are statistically significant disparities between men and women at Wal-Mart... [and] these disparities ... can be explained only by gender discrimination." 603 F.3d, at 604 (internal quotation marks omitted). Bendick compared work-force data from Wal-Mart and competitive retailers and concluded that Wal-Mart "promotes a lower percentage of women than its competitors." Ibid.

Even if they are taken at face value, these studies are insufficient to establish that respondents' theory can be proved on a classwide basis. In Falcon, we held that one named plaintiff's experience of discrimination was insufficient to infer that "discriminatory treatment is typical of [the employer's employment] practices." 457 U.S., at 158, 102 S.Ct. 2364. A similar failure of inference arises here. As Judge Ikuta observed in her dissent, "[i]nformation about disparities at the regional and national level does not establish the existence of disparities at individual stores, let alone raise the inference that a companywide policy of discrimination is implemented by discretionary decisions at the store and district level." 603 F.3d, at 637. A regional pay disparity, for example, may be attributable to only a small set of Wal-Mart stores, and cannot by itself establish the uniform, store-by-store disparity upon which the plaintiffs' theory of commonality depends.

There is another, more fundamental, respect in which respondents' statistical proof fails. Even if it established (as it does not) a pay or promotion pattern that differs from the nationwide figures or the regional figures in all of Wal-Mart's 3,400 stores, that would still not demonstrate that commonality of issue exists. Some managers will claim that the availability of women, or qualified women, or interested women, in their stores' area does not mirror the national or regional statistics. And almost all of them will claim to have been applying some sex-neutral, performance-based criteria—whose nature and effects will differ from store to store. In the landmark case of ours which held that giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory, the plurality opinion conditioned that holding on the corollary that merely proving that the discretionary system has produced a racial or sexual disparity is not enough. "[T]he plaintiff must begin by identifying the specific employment practice that is challenged." Watson, 487 U.S., at 994, 108 S.Ct. 2777; accord, Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 656, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989) (approving that statement), superseded by statute on other grounds, 42 U.S.C. § 2000e-2(k). That is all the more necessary when a class of plaintiffs is sought to be certified. Other than the bare existence of delegated discretion, respondents have identified no "specific employment practice"—much less one that ties all their 1.5 million claims [2556] together. Merely showing that Wal-Mart's policy of discretion has produced an overall sex-based disparity does not suffice.

Respondents' anecdotal evidence suffers from the same defects, and in addition is too weak to raise any inference that all the individual, discretionary personnel decisions are discriminatory. In Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977), in addition to substantial statistical evidence of companywide discrimination, the Government (as plaintiff) produced about 40 specific accounts of racial discrimination from particular individuals. See id., at 338, 97 S.Ct. 1843. That number was significant because the company involved had only 6,472 employees, of whom 571 were minorities, id., at 337, 97 S.Ct. 1843, and the class itself consisted of around 334 persons, United States v. T.I.M.E.-D.C., Inc., 517 F.2d 299, 308 (C.A.5 1975), overruled on other grounds, Teamsters, supra. The 40 anecdotes thus represented roughly one account for every eight members of the class. Moreover, the Court of Appeals noted that the anecdotes came from individuals "spread throughout" the company who "for the most part" worked at the company's operational centers that employed the largest numbers of the class members. 517 F.2d, at 315, and n. 30. Here, by contrast, respondents filed some 120 affidavits reporting experiences of discrimination—about 1 for every 12,500 class members—relating to only some 235 out of Wal-Mart's 3,400 stores. 603 F.3d, at 634 (Ikuta, J., dissenting). More than half of these reports are concentrated in only six States (Alabama, California, Florida, Missouri, Texas, and Wisconsin); half of all States have only one or two anecdotes; and 14 States have no anecdotes about Wal-Mart's operations at all. Id., at 634-635, and n. 10. Even if every single one of these accounts is true, that would not demonstrate that the entire company "operate[s] under a general policy of discrimination," Falcon, supra, at 159, n. 15, 102 S.Ct. 2364, which is what respondents must show to certify a companywide class.^[9]

The dissent misunderstands the nature of the foregoing analysis. It criticizes our focus on the dissimilarities between the putative class members on the ground that we have "blend[ed]" Rule 23(a)(2)'s commonality requirement with Rule 23(b)(3)'s inquiry into whether common questions "predominate" over individual ones. See post, at 2550-2552 (GINSBURG, J., concurring in part and dissenting in part). That is not so. We quite agree that for purposes of Rule 23(a)(2) "`[e]ven a single [common] question'" will do, post, at 2566, n. 9 (quoting Nagareda, The Preexistence Principle and the Structure of the Class Action, 103 Colum. L.Rev. 149, 176, n. 110 (2003)). We consider dissimilarities not in order to determine (as Rule 23(b)(3) requires) whether common questions predominate, but in order to determine (as Rule 23(a)(2) requires) whether there is "[e]ven a single [common] question." And there is not here. Because respondents provide no convincing proof of a companywide discriminatory pay and promotion policy, we have concluded that they have [2557] not established the existence of any common question.^[10]

In sum, we agree with Chief Judge Kozinski that the members of the class:

"held a multitude of different jobs, at different levels of Wal-Mart's hierarchy, for variable lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of supervisors (male and female), subject to a variety of regional policies that all differed .... Some thrived while others did poorly. They have little in common but their sex and this lawsuit." 603 F.3d, at 652 (dissenting opinion).

III

We also conclude that respondents' claims for backpay were improperly certified under Federal Rule of Civil Procedure 23(b)(2). Our opinion in Ticor Title Ins. Co. v. Brown, 511 U.S. 117, 121, 114 S.Ct. 1359, 128 L.Ed.2d 33 (1994) (per curiam) expressed serious doubt about whether claims for monetary relief may be certified under that provision. We now hold that they may not, at least where (as here) the monetary relief is not incidental to the injunctive or declaratory relief.

A

Rule 23(b)(2) allows class treatment when "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." One possible reading of this provision is that it applies only to requests for such injunctive or declaratory relief and does not authorize the class certification of monetary claims at all. We need not reach that broader question in this case, because we think that, at a minimum, claims for individualized relief (like the backpay at issue here) do not satisfy the Rule. The key to the (b)(2) class is "the indivisible nature of the injunctive or declaratory remedy warranted—the notion that the conduct is such that it can be enjoined or declared unlawful only as to all of the class members or as to none of them." Nagareda, 84 N.Y.U.L.Rev., at 132. In other words, Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class. It does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant. Similarly, it does not authorize class certification when each class member would be entitled to an individualized award of monetary damages.

That interpretation accords with the history of the Rule. Because Rule 23 "stems from equity practice" that predated its codification, Amchem Products, Inc. v. Windsor, 521 U.S. 591, 613, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), in determining its meaning we have previously looked to the historical models on which the Rule was based, Ortiz v. Fibreboard Corp., 527 U.S. 815, 841-845, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999). As we observed in Amchem, "[c]ivil rights cases against parties charged with unlawful, class-based discrimination are prime examples" of what (b)(2) is meant to capture. 521 U.S., at 614, 117 [2558] S.Ct. 2231. In particular, the Rule reflects a series of decisions involving challenges to racial segregation—conduct that was remedied by a single classwide order. In none of the cases cited by the Advisory Committee as examples of (b)(2)'s antecedents did the plaintiffs combine any claim for individualized relief with their classwide injunction. See Advisory Committee's Note, 39 F.R.D. 69, 102 (1966) (citing cases); e.g., Potts v. Flax, 313 F.2d 284, 289, n. 5 (C.A.5 1963); Brunson v. Board of Trustees of Univ. of School Dist. No. 1, Clarendon Cty., 311 F.2d 107, 109 (C.A.4 1962) (per curiam); Frasier v. Board of Trustees of N.C., 134 F.Supp. 589, 593 (NC 1955) (three-judge court), aff'd, 350 U.S. 979, 76 S.Ct. 467, 100 L.Ed. 848 (1956).

Permitting the combination of individualized and classwide relief in a (b)(2) class is also inconsistent with the structure of Rule 23(b). Classes certified under (b)(1) and (b)(2) share the most traditional justifications for class treatment—that individual adjudications would be impossible or unworkable, as in a(b)(1) class,^[11] or that the relief sought must perforce affect the entire class at once, as in a (b)(2) class. For that reason these are also mandatory classes: The Rule provides no opportunity for (b)(1) or (b)(2) class members to opt out, and does not even oblige the District Court to afford them notice of the action. Rule 23(b)(3), by contrast, is an "adventuresome innovation" of the 1966 amendments, Amchem, 521 U.S., at 614, 117 S.Ct. 2231 (internal quotation marks omitted), framed for situations "in which `class-action treatment is not as clearly called for'," id., at 615, 117 S.Ct. 2231 (quoting Advisory Committee's Notes, 28 U.S.C.App., p. 697 (1994 ed.)). It allows class certification in a much wider set of circumstances but with greater procedural protections. Its only prerequisites are that "the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Rule 23(b)(3). And unlike (b)(1) and (b)(2) classes, the (b)(3) class is not mandatory; class members are entitled to receive "the best notice that is practicable under the circumstances" and to withdraw from the class at their option. See Rule 23(c)(2)(B).

Given that structure, we think it clear that individualized monetary claims belong in Rule 23(b)(3). The procedural protections attending the (b)(3) class—predominance, superiority, mandatory notice, and the right to opt out—are missing from (b)(2) not because the Rule considers them unnecessary, but because it considers them unnecessary to a (b)(2) class. When a class seeks an indivisible injunction benefitting all its members at once, there is no reason to undertake a case-specific inquiry into whether class issues predominate or whether class action is a superior method of adjudicating the dispute. Predominance and superiority are self-evident. But with respect to each class member's individualized claim for money, that is not so—which [2559] is precisely why (b)(3) requires the judge to make findings about predominance and superiority before allowing the class. Similarly, (b)(2) does not require that class members be given notice and opt-out rights, presumably because it is thought (rightly or wrongly) that notice has no purpose when the class is mandatory, and that depriving people of their right to sue in this manner complies with the Due Process Clause. In the context of a class action predominantly for money damages we have held that absence of notice and opt-out violates due process. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). While we have never held that to be so where the monetary claims do not predominate, the serious possibility that it may be so provides an additional reason not to read Rule 23(b)(2) to include the monetary claims here.

B

Against that conclusion, respondents argue that their claims for backpay were appropriately certified as part of a class under Rule 23(b)(2) because those claims do not "predominate" over their requests for injunctive and declaratory relief. They rely upon the Advisory Committee's statement that Rule 23(b)(2) "does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages." 39 F.R.D., at 102 (emphasis added). The negative implication, they argue, is that it does extend to cases in which the appropriate final relief relates only partially and nonpredominantly to money damages. Of course it is the Rule itself, not the Advisory Committee's description of it, that governs. And a mere negative inference does not in our view suffice to establish a disposition that has no basis in the Rule's text, and that does obvious violence to the Rule's structural features. The mere "predominance" of a proper (b)(2) injunctive claim does nothing to justify elimination of Rule 23(b)(3)'s procedural protections: It neither establishes the superiority of class adjudication over individual adjudication nor cures the notice and opt-out problems. We fail to see why the Rule should be read to nullify these protections whenever a plaintiff class, at its option, combines its monetary claims with a request—even a "predominating request"—for an injunction.

Respondents' predominance test, moreover, creates perverse incentives for class representatives to place at risk potentially valid claims for monetary relief. In this case, for example, the named plaintiffs declined to include employees' claims for compensatory damages in their complaint. That strategy of including only backpay claims made it more likely that monetary relief would not "predominate." But it also created the possibility (if the predominance test were correct) that individual class members' compensatory-damages claims would be precluded by litigation they had no power to hold themselves apart from. If it were determined, for example, that a particular class member is not entitled to backpay because her denial of increased pay or a promotion was not the product of discrimination, that employee might be collaterally estopped from independently seeking compensatory damages based on that same denial. That possibility underscores the need for plaintiffs with individual monetary claims to decide for themselves whether to tie their fates to the class representatives' or go it alone—a choice Rule 23(b)(2) does not ensure that they have.

The predominance test would also require the District Court to reevaluate the roster of class members continually. The Ninth Circuit recognized the necessity for this when it concluded that those plaintiffs [2560] no longer employed by Wal-Mart lack standing to seek injunctive or declaratory relief against its employment practices. The Court of Appeals' response to that difficulty, however, was not to eliminate all former employees from the certified class, but to eliminate only those who had left the company's employ by the date the complaint was filed. That solution has no logical connection to the problem, since those who have left their Wal-Mart jobs since the complaint was filed have no more need for prospective relief than those who left beforehand. As a consequence, even though the validity of a (b)(2) class depends on whether "final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole," Rule 23(b)(2) (emphasis added), about half the members of the class approved by the Ninth Circuit have no claim for injunctive or declaratory relief at all. Of course, the alternative (and logical) solution of excising plaintiffs from the class as they leave their employment may have struck the Court of Appeals as wasteful of the District Court's time. Which indeed it is, since if a backpay action were properly certified for class treatment under (b)(3), the ability to litigate a plaintiff's backpay claim as part of the class would not turn on the irrelevant question whether she is still employed at Wal-Mart. What follows from this, however, is not that some arbitrary limitation on class membership should be imposed but that the backpay claims should not be certified under Rule 23(b)(2) at all.

Finally, respondents argue that their backpay claims are appropriate for a (b)(2) class action because a backpay award is equitable in nature. The latter may be true, but it is irrelevant. The Rule does not speak of "equitable" remedies generally but of injunctions and declaratory judgments. As Title VII itself makes pellucidly clear, backpay is neither. See 42 U.S.C. § 2000e-5(g)(2)(B)(i) and (ii) (distinguishing between declaratory and injunctive relief and the payment of "backpay," see § 2000e-5(g)(2)(A)).

C

In Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (C.A.5 1998), the Fifth Circuit held that a (b)(2) class would permit the certification of monetary relief that is "incidental to requested injunctive or declaratory relief," which it defined as "damages that flow directly from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory relief." In that court's view, such "incidental damage should not require additional hearings to resolve the disparate merits of each individual's case; it should neither introduce new substantial legal or factual issues, nor entail complex individualized determinations." Ibid. We need not decide in this case whether there are any forms of "incidental" monetary relief that are consistent with the interpretation of Rule 23(b)(2) we have announced and that comply with the Due Process Clause. Respondents do not argue that they can satisfy this standard, and in any event they cannot.

Contrary to the Ninth Circuit's view, Wal-Mart is entitled to individualized determinations of each employee's eligibility for backpay. Title VII includes a detailed remedial scheme. If a plaintiff prevails in showing that an employer has discriminated against him in violation of the statute, the court "may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, [including] reinstatement or hiring of employees, with or without backpay ... or any other equitable relief as the court deems appropriate." § 2000e-5(g)(1). But if the employer can show that it took an adverse employment action against an employee for any [2561] reason other than discrimination, the court cannot order the "hiring, reinstatement, or promotion of an individual as an employee, or the payment to him of any backpay." § 2000e-5(g)(2)(A).

We have established a procedure for trying pattern-or-practice cases that gives effect to these statutory requirements. When the plaintiff seeks individual relief such as reinstatement or backpay after establishing a pattern or practice of discrimination, "a district court must usually conduct additional proceedings ... to determine the scope of individual relief." Teamsters, 431 U.S., at 361, 97 S.Ct. 1843. At this phase, the burden of proof will shift to the company, but it will have the right to raise any individual affirmative defenses it may have, and to "demonstrate that the individual applicant was denied an employment opportunity for lawful reasons." Id., at 362, 97 S.Ct. 1843.

The Court of Appeals believed that it was possible to replace such proceedings with Trial by Formula. A sample set of the class members would be selected, as to whom liability for sex discrimination and the backpay owing as a result would be determined in depositions supervised by a master. The percentage of claims determined to be valid would then be applied to the entire remaining class, and the number of (presumptively) valid claims thus derived would be multiplied by the average backpay award in the sample set to arrive at the entire class recovery— without further individualized proceedings. 603 F.3d, at 625-627. We disapprove that novel project. Because the Rules Enabling Act forbids interpreting Rule 23 to "abridge, enlarge or modify any substantive right," 28 U.S.C. § 2072(b); see Ortiz, 527 U.S., at 845, 119 S.Ct. 2295, a class cannot be certified on the premise that Wal-Mart will not be entitled to litigate its statutory defenses to individual claims. And because the necessity of that litigation will prevent backpay from being "incidental" to the classwide injunction, respondents' class could not be certified even assuming, arguendo, that "incidental" monetary relief can be awarded to a 23(b)(2) class.

* * *

The judgment of the Court of Appeals is

Reversed.

Justice GINSBURG, with whom Justice BREYER, Justice SOTOMAYOR, and Justice KAGAN join, concurring in part and dissenting in part.

The class in this case, I agree with the Court, should not have been certified under Federal Rule of Civil Procedure 23(b)(2). The plaintiffs, alleging discrimination in violation of Title VII, 42 U.S.C. § 2000e et seq., seek monetary relief that is not merely incidental to any injunctive or declaratory relief that might be available. See ante, at 2557-2561. A putative class of this type may be certifiable under Rule 23(b)(3), if the plaintiffs show that common class questions "predominate" over issues affecting individuals—e.g., qualification for, and the amount of, backpay or compensatory damages—and that a class action is "superior" to other modes of adjudication.

Whether the class the plaintiffs describe meets the specific requirements of Rule 23(b)(3) is not before the Court, and I would reserve that matter for consideration and decision on remand.^[12] The Court, [2562] however, disqualifies the class at the starting gate, holding that the plaintiffs cannot cross the "commonality" line set by Rule 23(a)(2). In so ruling, the Court imports into the Rule 23(a) determination concerns properly addressed in a Rule 23(b)(3) assessment.

I

A

Rule 23(a)(2) establishes a preliminary requirement for maintaining a class action: "[T]here are questions of law or fact common to the class."^[13] The Rule "does not require that all questions of law or fact raised in the litigation be common," 1 H. Newberg & A. Conte, Newberg on Class Actions § 3.10, pp. 3-48 to 3-49 (3d ed.1992); indeed, "[e]ven a single question of law or fact common to the members of the class will satisfy the commonality requirement," Nagareda, The Preexistence Principle and the Structure of the Class Action, 103 Colum. L.Rev. 149, 176, n. 110 (2003). See Advisory Committee's 1937 Notes on Fed. Rule Civ. Proc. 23, 28 U.S.C.App., p. 138 (citing with approval cases in which "there was only a question of law or fact common to" the class members).

A "question" is ordinarily understood to be "[a] subject or point open to controversy." American Heritage Dictionary 1483 (3d ed.1992). See also Black's Law Dictionary 1366 (9th ed.2009) (defining "question of fact" as "[a] disputed issue to be resolved... [at] trial" and "question of law" as "[a]n issue to be decided by the judge"). Thus, a "question" "common to the class" must be a dispute, either of fact or of law, the resolution of which will advance the determination of the class members' claims.^[14]

B

The District Court, recognizing that "one significant issue common to the class may be sufficient to warrant certification," 222 F.R.D. 137, 145 (N.D.Cal.2004), found that the plaintiffs easily met that test. Absent an error of law or an abuse of discretion, an appellate tribunal has no warrant to upset the District Court's finding of commonality. See Califano v. Yamasaki, 442 U.S. 682, 703, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979) ("[M]ost issues arising under Rule 23 ... [are] committed in the first instance to the discretion of the district court.").

The District Court certified a class of "[a]ll women employed at any Wal-Mart domestic retail store at any time since December 26, 1998." 222 F.R.D., at 141-143 (internal quotation marks omitted). The named plaintiffs, led by Betty Dukes, propose to litigate, on behalf of the class, allegations that Wal-Mart discriminates on the basis of gender in pay and promotions. [2563] They allege that the company "[r]eli[es] on gender stereotypes in making employment decisions such as ... promotion[s][and] pay." App. 55a. Wal-Mart permits those prejudices to infect personnel decisions, the plaintiffs contend, by leaving pay and promotions in the hands of "a nearly all male managerial workforce" using "arbitrary and subjective criteria." Ibid. Further alleged barriers to the advancement of female employees include the company's requirement, "as a condition of promotion to management jobs, that employees be willing to relocate." Id., at 56a. Absent instruction otherwise, there is a risk that managers will act on the familiar assumption that women, because of their services to husband and children, are less mobile than men. See Dept. of Labor, Federal Glass Ceiling Commission, Good for Business: Making Full Use of the Nation's Human Capital 151 (1995).

Women fill 70 percent of the hourly jobs in the retailer's stores but make up only "33 percent of management employees." 222 F.R.D., at 146. "[T]he higher one looks in the organization the lower the percentage of women." Id., at 155. The plaintiffs'"largely uncontested descriptive statistics" also show that women working in the company's stores "are paid less than men in every region" and "that the salary gap widens over time even for men and women hired into the same jobs at the same time." Ibid.; cf. Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 643, 127 S.Ct. 2162, 167 L.Ed.2d 982 (2007) (GINSBURG, J., dissenting).

The District Court identified "systems for ... promoting in-store employees" that were "sufficiently similar across regions and stores" to conclude that "the manner in which these systems affect the class raises issues that are common to all class members." 222 F.R.D., at 149. The selection of employees for promotion to in-store management "is fairly characterized as a `tap on the shoulder' process," in which managers have discretion about whose shoulders to tap. Id., at 148. Vacancies are not regularly posted; from among those employees satisfying minimum qualifications, managers choose whom to promote on the basis of their own subjective impressions. Ibid.

Wal-Mart's compensation policies also operate uniformly across stores, the District Court found. The retailer leaves open a $2 band for every position's hourly pay rate. Wal-Mart provides no standards or criteria for setting wages within that band, and thus does nothing to counter unconscious bias on the part of supervisors. See id., at 146-147.

Wal-Mart's supervisors do not make their discretionary decisions in a vacuum. The District Court reviewed means Wal-Mart used to maintain a "carefully constructed... corporate culture," such as frequent meetings to reinforce the common way of thinking, regular transfers of managers between stores to ensure uniformity throughout the company, monitoring of stores "on a close and constant basis," and "Wal-Mart TV," "broadcas[t] ... into all stores." Id., at 151-153 (internal quotation marks omitted).

The plaintiffs' evidence, including class members' tales of their own experiences,^[15] suggests that gender bias suffused Wal-Mart's company culture. Among illustrations, [2564] senior management often refer to female associates as "little Janie Qs." Plaintiffs' Motion for Class Certification in No. 3:01-cv-02252-CRB (ND Cal.), Doc. 99, p. 13 (internal quotation marks omitted). One manager told an employee that "[m]en are here to make a career and women aren't." 222 F.R.D., at 166 (internal quotation marks omitted). A committee of female Wal-Mart executives concluded that "[s]tereotypes limit the opportunities offered to women." Plaintiffs' Motion for Class Certification in No. 3:01-cv-02252-CRB (ND Cal.), Doc. 99, at 16 (internal quotation marks omitted).

Finally, the plaintiffs presented an expert's appraisal to show that the pay and promotions disparities at Wal-Mart "can be explained only by gender discrimination and not by ... neutral variables." 222 F.R.D., at 155. Using regression analyses, their expert, Richard Drogin, controlled for factors including, inter alia, job performance, length of time with the company, and the store where an employee worked. Id., at 159.^[16] The results, the District Court found, were sufficient to raise an "inference of discrimination." Id., at 155-160.

C

The District Court's identification of a common question, whether Wal-Mart's pay and promotions policies gave rise to unlawful discrimination, was hardly infirm. The practice of delegating to supervisors large discretion to make personnel decisions, uncontrolled by formal standards, has long been known to have the potential to produce disparate effects. Managers, like all humankind, may be prey to biases of which they are unaware.^[17] The risk of discrimination is heightened when those managers are predominantly of one sex, and are steeped in a corporate culture that perpetuates gender stereotypes.

The plaintiffs' allegations resemble those in one of the prototypical cases in this area, Leisner v. New York Tel. Co., 358 F.Supp. 359, 364-365 (S.D.N.Y.1973). In deciding on promotions, supervisors in that case were to start with objective measures; but ultimately, they were to "look at the individual as a total individual." Id., at 365 (internal quotation marks omitted). The final question they were to ask and answer: "Is this person going to be successful in our business?" Ibid. (internal quotation marks omitted). It is hardly surprising that for many managers, the ideal candidate was someone with characteristics similar to their own.

We have held that "discretionary employment practices" can give rise to Title [2565] VII claims, not only when such practices are motivated by discriminatory intent but also when they produce discriminatory results. See Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 988, 991, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988). But see ante, at 2555 ("[P]roving that [a] discretionary system has produced a ... disparity is not enough."). In Watson, as here, an employer had given its managers large authority over promotions. An employee sued the bank under Title VII, alleging that the "discretionary promotion system" caused a discriminatory effect based on race. 487 U.S., at 984, 108 S.Ct. 2777 (internal quotation marks omitted). Four different supervisors had declined, on separate occasions, to promote the employee. Id., at 982, 108 S.Ct. 2777. Their reasons were subjective and unknown. The employer, we noted "had not developed precise and formal criteria for evaluating candidates"; "[i]t relied instead on the subjective judgment of supervisors." Ibid.

Aware of "the problem of subconscious stereotypes and prejudices," we held that the employer's "undisciplined system of subjective decisionmaking" was an "employment practic[e]" that "may be analyzed under the disparate impact approach." Id., at 990-991, 108 S.Ct. 2777. See also Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 657, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989) (recognizing "the use of `subjective decision making'" as an "employment practic[e]" subject to disparate-impact attack).

The plaintiffs' allegations state claims of gender discrimination in the form of biased decisionmaking in both pay and promotions. The evidence reviewed by the District Court adequately demonstrated that resolving those claims would necessitate examination of particular policies and practices alleged to affect, adversely and globally, women employed at Wal-Mart's stores. Rule 23(a)(2), setting a necessary but not a sufficient criterion for classaction certification, demands nothing further.

II

A

The Court gives no credence to the key dispute common to the class: whether Wal-Mart's discretionary pay and promotion policies are discriminatory. See ante, at 2551 ("Reciting" questions like "Is [giving managers discretion over pay] an unlawful employment practice?" "is not sufficient to obtain class certification."). "What matters," the Court asserts, "is not the raising of common `questions,'" but whether there are "[d]issimilarities within the proposed class" that "have the potential to impede the generation of common answers." Ante, at 2551 (quoting Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U.L.Rev. 97, 132 (2009); some internal quotation marks omitted).

The Court blends Rule 23(a)(2)'s threshold criterion with the more demanding criteria of Rule 23(b)(3), and thereby elevates the (a)(2) inquiry so that it is no longer "easily satisfied," 5 J. Moore et al., Moore's Federal Practice § 23.23[2], p. 23-72 (3d ed.2011).^[18] Rule 23(b)(3) certification [2566] requires, in addition to the four 23(a) findings, determinations that "questions of law or fact common to class members predominate over any questions affecting only individual members" and that "a class action is superior to other available methods for ... adjudicating the controversy."^[19]

The Court's emphasis on differences between class members mimics the Rule 23(b)(3) inquiry into whether common questions "predominate" over individual issues. And by asking whether the individual differences "impede" common adjudication, ante, at 2551-2552 (internal quotation marks omitted), the Court duplicates 23(b)(3)'s question whether "a class action is superior" to other modes of adjudication. Indeed, Professor Nagareda, whose "dissimilarities" inquiry the Court endorses, developed his position in the context of Rule 23(b)(3). See 84 N.Y.U.L.Rev., at 131 (Rule 23(b)(3) requires "some decisive degree of similarity across the proposed class" because it "speaks of common `questions' that `predominate' over individual ones").^[20] "The Rule 23(b)(3) predominance inquiry" is meant to "tes[t] whether proposed classes are sufficiently cohesive to warrant adjudication by representation." Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). If courts must conduct a "dissimilarities" analysis at the Rule 23(a)(2) stage, no mission remains for Rule 23(b)(3).

Because Rule 23(a) is also a prerequisite for Rule 23(b)(1) and Rule 23(b)(2) classes, the Court's "dissimilarities" position is far reaching. Individual differences should not bar a Rule 23(b)(1) or Rule 23(b)(2) class, so long as the Rule 23(a) threshold is met. See Amchem Products, 521 U.S., at 623, n. 19, 117 S.Ct. 2231 (Rule 23(b)(1)(B) "does not have a predominance requirement"); Yamasaki, 442 U.S., at 701, 99 S.Ct. 2545 (Rule 23(b)(2) action in which the Court noted that "[i]t is unlikely that differences in the factual background of each claim will affect the outcome of the legal issue"). For example, in Franks v. Bowman Transp. Co., 424 U.S. 747, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976), a Rule 23(b)(2) class of African-American truckdrivers complained that the defendant had [2567] discriminatorily refused to hire black applicants. We recognized that the "qualification[s] and performance" of individual class members might vary. Id., at 772, 96 S.Ct. 1251 (internal quotation marks omitted). "Generalizations concerning such individually applicable evidence," we cautioned, "cannot serve as a justification for the denial of [injunctive] relief to the entire class." Ibid.

B

The "dissimilarities" approach leads the Court to train its attention on what distinguishes individual class members, rather than on what unites them. Given the lack of standards for pay and promotions, the majority says, "demonstrating the invalidity of one manager's use of discretion will do nothing to demonstrate the invalidity of another's." Ante, at 2554.

Wal-Mart's delegation of discretion over pay and promotions is a policy uniform throughout all stores. The very nature of discretion is that people will exercise it in various ways. A system of delegated discretion, Watson held, is a practice actionable under Title VII when it produces discriminatory outcomes. 487 U.S., at 990-991, 108 S.Ct. 2777; see supra, at 2564-2565. A finding that Wal-Mart's pay and promotions practices in fact violate the law would be the first step in the usual order of proof for plaintiffs seeking individual remedies for company-wide discrimination. Teamsters v. United States, 431 U.S. 324, 359, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); see Albemarle Paper Co. v. Moody, 422 U.S. 405, 415-423, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). That each individual employee's unique circumstances will ultimately determine whether she is entitled to backpay or damages, § 2000e-5(g)(2)(A) (barring backpay if a plaintiff "was refused ... advancement... for any reason other than discrimination"), should not factor into the Rule 23(a)(2) determination.

* * *

The Court errs in importing a "dissimilarities" notion suited to Rule 23(b)(3) into the Rule 23(a) commonality inquiry. I therefore cannot join Part II of the Court's opinion.

[1] The complaint included seven named plaintiffs, but only three remain part of the certified class as narrowed by the Court of Appeals.

[2] Rule 23(b)(1) allows a class to be maintained where "prosecuting separate actions by or against individual class members would create a risk of" either "(A) inconsistent or varying adjudications," or "(B) adjudications.. . that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impeded their ability to protect their interests." Rule 23(b)(3) states that a class may be maintained where "questions of law or fact common to class members predominate over any questions affecting only individual members," and a class action would be "superior to other available methods for fairly and efficiently adjudicating the controversy." The applicability of these provisions to the plaintiff class is not before us.

[3] The District Court excluded backpay claims based on promotion opportunities that had not been publicly posted, for the reason that no applicant data could exist for such positions. 222 F.R.D. 137, 182 (N.D.Cal.2004). It also decided to afford class members notice of the action and the right to opt-out of the class with respect to respondents' punitive-damages claim. Id., at 173.

[4] To enable that result, the Court of Appeals trimmed the (b)(2) class in two ways: First, it remanded that part of the certification order which included respondents' punitive-damages claim in the (b)(2) class, so that the District Court might consider whether that might cause the monetary relief to predominate. 603 F.3d, at 621. Second, it accepted in part Wal-Mart's argument that since class members whom it no longer employed had no standing to seek injunctive or declaratory relief, as to them monetary claims must predominate. It excluded from the certified class "those putative class members who were no longer Wal-Mart employees at the time Plaintiffs' complaint was filed," id., at 623 (emphasis added).

[5] We have previously stated in this context that "[t]he commonality and typicality requirements of Rule 23(a) tend to merge. Both serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence. Those requirements therefore also tend to merge with the adequacy-of-representation requirement, although the latter requirement also raises concerns about the competency of class counsel and conflicts of interest." General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 157-158, n. 13, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). In light of our disposition of the commonality question, however, it is unnecessary to resolve whether respondents have satisfied the typicality and adequate-representation requirements of Rule 23(a).

[6] A statement in one of our prior cases, Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), is sometimes mistakenly cited to the contrary: "We find nothing in either the language or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action." But in that case, the judge had conducted a preliminary inquiry into the merits of a suit, not in order to determine the propriety of certification under Rules 23(a) and (b) (he had already done that, see id.,at 165, 94 S.Ct. 2140), but in order to shift the cost of notice required by Rule 23(c)(2) from the plaintiff to the defendants. To the extent the quoted statement goes beyond the permissibility of a merits inquiry for any other pretrial purpose, it is the purest dictum and is contradicted by our other cases.

Perhaps the most common example of considering a merits question at the Rule 23 stage arises in class-action suits for securities fraud. Rule 23(b)(3)'s requirement that "questions of law or fact common to class members predominate over any questions affecting only individual members" would often be an insuperable barrier to class certification, since each of the individual investors would have to prove reliance on the alleged misrepresentation. But the problem dissipates if the plaintiffs can establish the applicability of the so-called "fraud on the market" presumption, which says that all traders who purchase stock in an efficient market are presumed to have relied on the accuracy of a company's public statements. To invoke this presumption, the plaintiffs seeking 23(b)(3) certification must prove that their shares were traded on an efficient market, Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. ___, ___, 131 S.Ct. 2179, 2185, ___ L.Ed.2d ___, 2011 WL 2175208 (2011) (slip op., at 5), an issue they will surely have to prove again at trial in order to make out their case on the merits.

[7] In a pattern-or-practice case, the plaintiff tries to "establish by a preponderance of the evidence that ... discrimination was the company's standard operating procedure[,] the regular rather than the unusual practice." Teamsters v. United States, 431 U.S. 324, 358, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); see also Franks v. Bowman Transp. Co., 424 U.S. 747, 772, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976). If he succeeds, that showing will support a rebuttable inference that all class members were victims of the discriminatory practice, and will justify "an award of prospective relief," such as "an injunctive order against the continuation of the discriminatory practice." Teamsters, supra, at 361, 97 S.Ct. 1843.

[8] Bielby's conclusions in this case have elicited criticism from the very scholars on whose conclusions he relies for his social-framework analysis. See Monahan, Walker, & Mitchell, Contextual Evidence of Gender Discrimination: The Ascendance of "Social Frameworks," 94 Va. L.Rev. 1715, 1747 (2008) ("[Bielby's] research into conditions and behavior at Wal-Mart did not meet the standards expected of social scientific research into stereotyping and discrimination"); id., at 1745, 1747 ("[A] social framework necessarily contains only general statements about reliable patterns of relations among variables ... and goes no further .... Dr. Bielby claimed to present a social framework, but he testified about social facts specific to Wal-Mart"); id., at 1747-1748 ("Dr. Bielby's report provides no verifiable method for measuring and testing any of the variables that were crucial to his conclusions and reflects nothing more than Dr. Bielby's `expert judgment' about how general stereotyping research applied to all managers across all of Wal-Mart's stores nationwide for the multi-year class period").

[9] The dissent says that we have adopted "a rule that a discrimination claim, if accompanied by anecdotes, must supply them in numbers proportionate to the size of the class." Post, at 2563, n. 4 (GINSBURG, J., concurring in part and dissenting in part). That is not quite accurate. A discrimination claimant is free to supply as few anecdotes as he wishes. But when the claim is that a company operates under a general policy of discrimination, a few anecdotes selected from literally millions of employment decisions prove nothing at all.

[10] For this reason, there is no force to the dissent's attempt to distinguish Falcon on the ground that in that case there were "`no common questions of law or fact' between the claims of the lead plaintiff and the applicant class" post, at 2565-2566, n. 7 (quoting Falcon, 457 U.S., at 162, 102 S.Ct. 2364 (BURGER, C.J., concurring in part and dissenting in part)). Here also there is nothing to unite all of the plaintiffs' claims, since (contrary to the dissent's contention, post, at 2565-2566, n. 7), the same employment practices do not "touch and concern all members of the class."

[11] Rule 23(b)(1) applies where separate actions by or against individual class members would create a risk of "establish[ing] incompatible standards of conduct for the party opposing the class," Rule 23(b)(1)(A), such as "where the party is obliged by law to treat the members of the class alike," Amchem Products, Inc. v. Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), or where individual adjudications "as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests," Rule 23(b)(1)(B), such as in "`limited fund' cases, ... in which numerous persons make claims against a fund insufficient to satisfy all claims," Amchem, supra, at 614, 117 S.Ct. 2231.

[12] The plaintiffs requested Rule 23(b)(3) certification as an alternative, should their request for (b)(2) certification fail. Plaintiffs' Motion for Class Certification in No. 3:01-cv-02252-CRB (ND Cal.), Doc. 99, p. 47.

[13] Rule 23(a) lists three other threshold requirements for class-action certification: "(1) the class is so numerous that joinder of all members is impracticable"; "(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class." The numerosity requirement is clearly met and Wal-Mart does not contend otherwise. As the Court does not reach the typicality and adequacy requirements, ante, at 2551, n. 5, I will not discuss them either, but will simply record my agreement with the District Court's resolution of those issues.

[14] The Court suggests Rule 23(a)(2) must mean more than it says. See ante, at 2550-2552. If the word "questions" were taken literally, the majority asserts, plaintiffs could pass the Rule 23(a)(2) bar by "[r]eciting . . . questions" like "Do all of us plaintiffs indeed work for Wal-Mart?" Ante, at 2551. Sensibly read, however, the word "questions" means disputed issues, not any utterance crafted in the grammatical form of a question.

[15] The majority purports to derive from Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977), a rule that a discrimination claim, if accompanied by anecdotes, must supply them in numbers proportionate to the size of the class. Ante, at 17-18. Teamsters, the Court acknowledges, see ante, at 2556, n. 9, instructs that statistical evidence alone may suffice, 431 U.S., at 339, 97 S.Ct. 1843; that decision can hardly be said to establish a numerical floor before anecdotal evidence can be taken into account.

[16] The Court asserts that Drogin showed only average differences at the "regional and national level" between male and female employees. Ante, at 2555 (internal quotation marks omitted). In fact, his regression analyses showed there were disparities within stores. The majority's contention to the contrary reflects only an arcane disagreement about statistical method—which the District Court resolved in the plaintiffs' favor. 222 F.R.D. 137, 157 (N.D.Cal.2004). Appellate review is no occasion to disturb a trial court's handling of factual disputes of this order.

[17] An example vividly illustrates how subjective decisionmaking can be a vehicle for discrimination. Performing in symphony orchestras was long a male preserve. Goldin and Rouse, Orchestrating Impartiality: The Impact of "Blind" Auditions on Female Musicians, 90 Am. Econ. Rev. 715, 715-716 (2000). In the 1970's orchestras began hiring musicians through auditions open to all comers. Id., at 716. Reviewers were to judge applicants solely on their musical abilities, yet subconscious bias led some reviewers to disfavor women. Orchestras that permitted reviewers to see the applicants hired far fewer female musicians than orchestras that conducted blind auditions, in which candidates played behind opaque screens. Id., at 738.

[18] The Court places considerable weight on General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). Ante, at 2553. That case has little relevance to the question before the Court today. The lead plaintiff in Falcon alleged discrimination evidenced by the company's failure to promote him and other Mexican-American employees and failure to hire Mexican-American applicants. There were "no common questions of law or fact" between the claims of the lead plaintiff and the applicant class. 457 U.S., at 162, 102 S.Ct. 2364 (Burger, C. J., concurring in part and dissenting in part) (emphasis added). The plaintiff-employee alleged that the defendant-employer had discriminated against him intentionally. The applicant class claims, by contrast, were "advanced under the `adverse impact' theory," ibid., appropriate for facially neutral practices. "[T]he only commonality [wa]s that respondent is a Mexican-American and he seeks to represent a class of Mexican-Americans." Ibid. Here the same practices touch and concern all members of the class.

[19]"A class action may be maintained if Rule 23(a) is satisfied and if:

"(1) prosecuting separate actions by or against individual class members would create a risk of ... inconsistent or varying adjudications... [or] adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members .. .;

"(2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief... is appropriate respecting the class as a whole; or

"(3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. Rule Civ. Proc. 23(b) (paragraph breaks added).

[20] Cf. supra, at 2545 (Rule 23(a) commonality prerequisite satisfied by "[e]ven a single question... common to the members of the class" (quoting Nagareda, The Preexistence Principle and the Structure of the Class Action, 103 Colum. L.Rev. 149, 176, n. 110 (2003).

CERTIORARI TO THE SUPREME COURT OF KANSAS

[798] Arthur R. Miller argued the cause for petitioner. With him on the briefs were Joseph W. Kennedy, Robert W. Coykendall, Kenneth Heady, William G. Paul, and T. L. Cubbage II.

Joel I. Klein argued the cause for respondents. With him on the brief were W. Luke Chapin, Ed Moore, and Harold Greenleaf.^[1]

[799] JUSTICE REHNQUIST delivered the opinion of the Court.

Petitioner is a Delaware corporation which has its principal place of business in Oklahoma. During the 1970's it produced or purchased natural gas from leased land located in 11 different States, and sold most of the gas in interstate commerce. Respondents are some 28,000 of the royalty owners possessing rights to the leases from which petitioner produced the gas; they reside in all 50 States, the District of Columbia, and several foreign countries. Respondents brought a class action against petitioner in the Kansas state court, seeking to recover interest on royalty payments which had been delayed by petitioner. They recovered judgment in the trial court, and the Supreme Court of Kansas affirmed the judgment over petitioner's contentions that the Due Process Clause of the Fourteenth Amendment prevented Kansas from adjudicating the claims of all the respondents, and that the Due Process Clause and the Full Faith and Credit Clause of Article IV of the Constitution prohibited the application of Kansas law to all of the transactions between petitioner and respondents. 235 Kan. 195, 679 P. 2d 1159 (1984). We granted certiorari to consider these claims. 469 U. S. 879 (1984). We reject petitioner's jurisdictional claim, but sustain its claim regarding the choice of law.

Because petitioner sold the gas to its customers in interstate commerce, it was required to secure approval for price increases from what was then the Federal Power Commission, and is now the Federal Energy Regulatory Commission. Under its regulations the Federal Power Commission permitted petitioner to propose and collect tentative higher gas prices, subject to final approval by the Commission. If the Commission eventually denied petitioner's proposed price increase or reduced the proposed increase, petitioner would [800] have to refund to its customers the difference between the approved price and the higher price charged, plus interest at a rate set by statute. See 18 CFR § 154.102 (1984).

Although petitioner received higher gas prices pending review by the Commission, petitioner suspended any increase in royalties paid to the royalty owners because the higher price could be subject to recoupment by petitioner's customers. Petitioner agreed to pay the higher royalty only if the royalty owners would provide petitioner with a bond or indemnity for the increase, plus interest, in case the price increase was not ultimately approved and a refund was due to the customers. Petitioner set the interest rate on the indemnity agreements at the same interest rate the Commission would have required petitioner to refund to its customers. A small percentage of the royalty owners provided this indemnity and received royalties immediately from the interim price increases; these royalty owners are unimportant to this case.

The remaining royalty owners received no royalty on the unapproved portion of the prices until the Federal Power Commission approval of those prices became final. Royalties on the unapproved portion of the gas price were suspended three times by petitioner, corresponding to its three proposed price increases in the mid-1970's. In three written opinions the Commission approved all of petitioner's tentative price increases, so petitioner paid to its royalty owners the suspended royalties of $3.7 million in 1976, $4.7 million in 1977, and $2.9 million in 1978. Petitioner paid no interest to the royalty owners although it had the use of the suspended royalty money for a number of years.

Respondents Irl Shutts, Robert Anderson, and Betty Anderson filed suit against petitioner in Kansas state court, seeking interest payments on their suspended royalties which petitioner had possessed pending the Commission's approval of the price increases. Shutts is a resident of Kansas, and the Andersons live in Oklahoma. Shutts and the Andersons [801] own gas leases in Oklahoma and Texas. Over petitioner's objection the Kansas trial court granted respondents' motion to certify the suit as a class action under Kansas law. Kan. Stat. Ann. § 60-223 et seq. (1983). The class as certified was comprised of 33,000 royalty owners who had royalties suspended by petitioner. The average claim of each royalty owner for interest on the suspended royalties was $100.

After the class was certified respondents provided each class member with notice through first-class mail. The notice described the action and informed each class member that he could appear in person or by counsel; otherwise each member would be represented by Shutts and the Andersons, the named plaintiffs. The notices also stated that class members would be included in the class and bound by the judgment unless they "opted out" of the lawsuit by executing and returning a "request for exclusion" that was included with the notice. The final class as certified contained 28,100 members; 3,400 had "opted out" of the class by returning the request for exclusion, and notice could not be delivered to another 1,500 members, who were also excluded. Less than 1,000 of the class members resided in Kansas. Only a minuscule amount, approximately one quarter of one percent, of the gas leases involved in the lawsuit were on Kansas land.

After petitioner's mandamus petition to decertify the class was denied, Phillips Petroleum v. Duckworth, No. 82-54608 (Kan., June 28, 1982), cert. denied, 459 U. S. 1103 (1983), the case was tried to the court. The court found petitioner liable under Kansas law for interest on the suspended royalties to all class members. The trial court relied heavily on an earlier, unrelated class action involving the same nominal plaintiff and the same defendant, Shutts, Executor v. Phillips Petroleum Co., 222 Kan. 527, 567 P. 2d 1292 (1977), cert. denied, 434 U. S. 1068 (1978). The Kansas Supreme Court had held in Shutts, Executor that a gas company owed interest to royalty owners for royalties suspended pending final Commission approval of a price increase. No federal statutes [802] touched on the liability for suspended royalties, and the court in Shutts, Executor held as a matter of Kansas equity law that the applicable interest rates for computation of interest on suspended royalties were the interest rates at which the gas company would have had to reimburse its customers had its interim price increase been rejected by the Commission. The court in Shutts, Executor viewed these as the fairest interest rates because they were also the rates that petitioner required the royalty owners to meet in their indemnity agreements in order to avoid suspended royalties.

The trial court in the present case applied the rule from Shutts, Executor, and held petitioner liable for prejudgment and postjudgment interest on the suspended royalties, computed at the Commission rates governing petitioner's three price increases. See 18 CFR § 154.102 (1984). The applicable interest rates were: 7% for royalties retained until October 1974; 9% for royalties retained between October 1974 and September 1979; and thereafter at the average prime rate. The trial court did not determine whether any difference existed between the laws of Kansas and other States, or whether another State's laws should be applied to non-Kansas plaintiffs or to royalties from leases in States other than Kansas. 235 Kan., at 221, 679 P. 2d, at 1180.

Petitioner raised two principal claims in its appeal to the Supreme Court of Kansas. It first asserted that the Kansas trial court did not possess personal jurisdiction over absent plaintiff class members as required by International Shoe Co. v. Washington, 326 U. S. 310 (1945), and similar cases. Related to this first claim was petitioner's contention that the "opt-out" notice to absent class members, which forced them to return the request for exclusion in order to avoid the suit, was insufficient to bind class members who were not residents of Kansas or who did not possess "minimum contacts" with Kansas. Second, petitioner claimed that Kansas courts could not apply Kansas law to every claim in the dispute. The trial court should have looked to the laws of each State [803] where the leases were located to determine, on the basis of conflict of laws principles, whether interest on the suspended royalties was recoverable, and at what rate.

The Supreme Court of Kansas held that the entire cause of action was maintainable under the Kansas class-action statute, and the court rejected both of petitioner's claims. 235 Kan. 195, 679 P. 2d 1159 (1984). First, it held that the absent class members were plaintiffs, not defendants, and thus the traditional minimum contacts test of International Shoe did not apply. The court held that nonresident class-action plaintiffs were only entitled to adequate notice, an opportunity to be heard, an opportunity to opt out of the case, and adequate representation by the named plaintiffs. If these procedural due process minima were met, according to the court, Kansas could assert jurisdiction over the plaintiff class and bind each class member with a judgment on his claim. The court surveyed the course of the litigation and concluded that all of these minima had been met.

The court also rejected petitioner's contention that Kansas law could not be applied to plaintiffs and royalty arrangements having no connection with Kansas. The court stated that generally the law of the forum controlled all claims unless "compelling reasons" existed to apply a different law. The court found no compelling reasons, and noted that "[t]he plaintiff class members have indicated their desire to have this action determined under the laws of Kansas." 235 Kan., at 222, 679 P. 2d, at 1181. The court affirmed as a matter of Kansas equity law the award of interest on the suspended royalties, at the rates imposed by the trial court. The court set the postjudgment interest rate on all claims at the Kansas statutory rate of 15%. Id., at 224, 679 P. 2d, at 1183.

I

As a threshold matter we must determine whether petitioner has standing to assert the claim that Kansas did not possess proper jurisdiction over the many plaintiffs in the [804] class who were not Kansas residents and had no connection to Kansas. Respondents claim that a party generally may assert only his own rights, and that petitioner has no standing to assert the rights of its adversary, the plaintiff class, in order to defeat the judgment in favor of the class.

Standing to sue in any Article III court is, of course, a federal question which does not depend on the party's prior standing in state court. Doremus v. Board of Education, 342 U. S. 429, 434 (1952); Baker v. Carr, 369 U. S. 186, 204 (1962). Generally stated, federal standing requires an allegation of a present or immediate injury in fact, where the party requesting standing has "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues." Ibid. There must be some causal connection between the asserted injury and the challenged action, and the injury must be of the type "likely to be redressed by a favorable decision." Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 472 (1982). See Simon v. Eastern Kentucky Welfare Rights Org., 426 U. S. 26, 41-42 (1976); Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U. S. 252, 261 (1977).

Additional prudential limitations on standing may exist even though the Article III requirements are met because "the judiciary seeks to avoid deciding questions of broad social import where no individual rights would be vindicated and to limit access to the federal courts to those litigants best suited to assert a particular claim." Gladstone, Realtors v. Village of Bellwood, 441 U. S. 91, 99-100 (1979). One of these prudential limits on standing is that a litigant must normally assert his own legal interests rather than those of third parties. See Singleton v. Wulff, 428 U. S. 106 (1976); Craig v. Boren, 429 U. S. 190 (1976).

Respondents claim that petitioner is barred by the rule requiring that a party assert only his own rights; they point out that respondents and petitioner are adversaries and do [805] not have allied interests such that petitioner would be a good proponent of class members' interests. They further urge that petitioner's interference is unneeded because the class members have had opportunity to complain about Kansas' assertion of jurisdiction over their claim, but none have done so. See Singleton, supra, at 113-114.

Respondents may be correct that petitioner does not possess standing jus tertii, but this is not the issue. Petitioner seeks to vindicate its own interests. As a class-action defendant petitioner is in a unique predicament. If Kansas does not possess jurisdiction over this plaintiff class, petitioner will be bound to 28,100 judgment holders scattered across the globe, but none of these will be bound by the Kansas decree. Petitioner could be subject to numerous later individual suits by these class members because a judgment issued without proper personal jurisdiction over an absent party is not entitled to full faith and credit elsewhere and thus has no res judicata effect as to that party. Whether it wins or loses on the merits, petitioner has a distinct and personal interest in seeing the entire plaintiff class bound by res judicata just as petitioner is bound. The only way a class-action defendant like petitioner can assure itself of this binding effect of the judgment is to ascertain that the forum court has jurisdiction over every plaintiff whose claim it seeks to adjudicate, sufficient to support a defense of res judicata in a later suit for damages by class members.

While it is true that a court adjudicating a dispute may not be able to predetermine the res judicata effect of its own judgment, petitioner has alleged that it would be obviously and immediately injured if this class-action judgment against it became final without binding the plaintiff class. We think that such an injury is sufficient to give petitioner standing on its own right to raise the jurisdiction claim in this Court.

Petitioner's posture is somewhat similar to the trust settlor defendant in Hanson v. Denckla, 357 U. S. 235 (1958), who we found to have standing to challenge the forum's personal [806] jurisdiction over an out-of-state trust company which was an indispensable party under the forum State's law. Because the court could not proceed with the action without jurisdiction over the trust company, we observed that "any defendant affected by the court's judgment ha[d] that `direct and substantial personal interest in the outcome' that is necessary to challenge whether that jurisdiction was in fact acquired." Id., at 245, quoting Chicago v. Atchison, T. & S. F. R. Co., 357 U. S. 77 (1958).

II

Reduced to its essentials, petitioner's argument is that unless out-of-state plaintiffs affirmatively consent, the Kansas courts may not exert jurisdiction over their claims. Petitioner claims that failure to execute and return the "request for exclusion" provided with the class notice cannot constitute consent of the out-of-state plaintiffs; thus Kansas courts may exercise jurisdiction over these plaintiffs only if the plaintiffs possess the sufficient "minimum contacts" with Kansas as that term is used in cases involving personal jurisdiction over out-of-state defendants. E. g., International Shoe Co. v. Washington, 326 U. S. 310 (1945); Shaffer v. Heitner, 433 U. S. 186 (1977); World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286 (1980). Since Kansas had no prelitigation contact with many of the plaintiffs and leases involved, petitioner claims that Kansas has exceeded its jurisdictional reach and thereby violated the due process rights of the absent plaintiffs.

In International Shoe we were faced with an out-of-state corporation which sought to avoid the exercise of personal jurisdiction over it as a defendant by a Washington state court. We held that the extent of the defendant's due process protection would depend "upon the quality and nature of the activity in relation to the fair and orderly administration of the laws . . . ." 326 U. S., at 319. We noted that the Due Process Clause did not permit a State to make a binding judgment against a person with whom the State had no contacts, [807] ties, or relations. Ibid. If the defendant possessed certain minimum contacts with the State, so that it was "reasonable and just, according to our traditional conception of fair play and substantial justice" for a State to exercise personal jurisdiction, the State could force the defendant to defend himself in the forum, upon pain of default, and could bind him to a judgment. Id., at 320.

The purpose of this test, of course, is to protect a defendant from the travail of defending in a distant forum, unless the defendant's contacts with the forum make it just to force him to defend there. As we explained in Woodson, supra, the defendant's contacts should be such that "he should reasonably anticipate being haled" into the forum. 444 U. S., at 297. In Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U. S. 694, 702-703, and n. 10 (1982), we explained that the requirement that a court have personal jurisdiction comes from the Due Process Clause's protection of the defendant's personal liberty interest, and said that the requirement "represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty." (Footnote omitted.)

Although the cases like Shaffer and Woodson which petitioner relies on for a minimum contacts requirement all dealt with out-of-state defendants or parties in the procedural posture of a defendant, cf. New York Life Ins. Co. v. Dunlevy, 241 U. S. 518 (1916); Estin v. Estin, 334 U. S. 541 (1948), petitioner claims that the same analysis must apply to absent class-action plaintiffs. In this regard petitioner correctly points out that a chose in action is a constitutionally recognized property interest possessed by each of the plaintiffs. Mullane v. Central Hanover Bank & Trust Co., 339 U. S. 306 (1950). An adverse judgment by Kansas courts in this case may extinguish the chose in action forever through res judicata. Such an adverse judgment, petitioner claims, would be every bit as onerous to an absent plaintiff as an adverse judgment on the merits would be to a defendant. [808] Thus, the same due process protections should apply to absent plaintiffs: Kansas should not be able to exert jurisdiction over the plaintiffs' claims unless the plaintiffs have sufficient minimum contacts with Kansas.

We think petitioner's premise is in error. The burdens placed by a State upon an absent class-action plaintiff are not of the same order or magnitude as those it places upon an absent defendant. An out-of-state defendant summoned by a plaintiff is faced with the full powers of the forum State to render judgment against it. The defendant must generally hire counsel and travel to the forum to defend itself from the plaintiff's claim, or suffer a default judgment. The defendant may be forced to participate in extended and often costly discovery, and will be forced to respond in damages or to comply with some other form of remedy imposed by the court should it lose the suit. The defendant may also face liability for court costs and attorney's fees. These burdens are substantial, and the minimum contacts requirement of the Due Process Clause prevents the forum State from unfairly imposing them upon the defendant.

A class-action plaintiff, however, is in quite a different posture. The Court noted this difference in Hansberry v. Lee, 311 U. S. 32, 40-41 (1940), which explained that a "class" or "representative" suit was an exception to the rule that one could not be bound by judgment in personam unless one was made fully a party in the traditional sense. Ibid., citing Pennoyer v. Neff, 95 U. S. 714 (1878). As the Court pointed out in Hansberry, the class action was an invention of equity to enable it to proceed to a decree in suits where the number of those interested in the litigation was too great to permit joinder. The absent parties would be bound by the decree so long as the named parties adequately represented the absent class and the prosecution of the litigation was within the common interest.^[2] 311 U. S., at 41.

[809] Modern plaintiff class actions follow the same goals, permitting litigation of a suit involving common questions when there are too many plaintiffs for proper joinder. Class actions also may permit the plaintiffs to pool claims which would be uneconomical to litigate individually. For example, this lawsuit involves claims averaging about $100 per plaintiff; most of the plaintiffs would have no realistic day in court if a class action were not available.

In sharp contrast to the predicament of a defendant haled into an out-of-state forum, the plaintiffs in this suit were not haled anywhere to defend themselves upon pain of a default judgment. As commentators have noted, from the plaintiffs' point of view a class action resembles a "quasi-administrative proceeding, conducted by the judge." 3B J. Moore & J. Kennedy, Moore's Federal Practice ¶ 23.45 [4.-5] (1984); Kaplan, Continuing Work of the Civil Committee: 1966 Amendments to the Federal Rules of Civil Procedure (I), 81 Harv. L. Rev. 356, 398 (1967).

A plaintiff class in Kansas and numerous other jurisdictions cannot first be certified unless the judge, with the aid of the named plaintiffs and defendant, conducts an inquiry into the common nature of the named plaintiffs' and the absent plaintiffs' claims, the adequacy of representation, the jurisdiction possessed over the class, and any other matters that will bear upon proper representation of the absent plaintiffs' interest. See, e. g., Kan. Stat. Ann. § 60-223 (1983); Fed. Rule Civ. Proc. 23. Unlike a defendant in a civil suit, a class-action plaintiff is not required to fend for himself. See Kan. Stat. Ann. § 60-223(d) (1983). The court and named plaintiffs protect his interests. Indeed, the class-action defendant itself has a great interest in ensuring that the absent plaintiffs' claims are properly before the forum. In this case, for [810] example, the defendant sought to avoid class certification by alleging that the absent plaintiffs would not be adequately represented and were not amendable to jurisdiction. See Phillips Petroleum v. Duckworth, No. 82-54608 (Kan., June 28, 1982).

The concern of the typical class-action rules for the absent plaintiffs is manifested in other ways. Most jurisdictions, including Kansas, require that a class action, once certified, may not be dismissed or compromised without the approval of the court. In many jurisdictions such as Kansas the court may amend the pleadings to ensure that all sections of the class are represented adequately. Kan. Stat. Ann. § 60-223(d) (1983); see also, e. g., Fed. Rule Civ. Proc. 23(d).

Besides this continuing solicitude for their rights, absent plaintiff class members are not subject to other burdens imposed upon defendants. They need not hire counsel or appear. They are almost never subject to counter claims or cross-claims, or liability for fees or costs.^[3] Absent plaintiff class members are not subject to coercive or punitive remedies. Nor will an adverse judgment typically bind an absent plaintiff for any damages, although a valid adverse judgment may extinguish any of the plaintiff's claims which were litigated.

Unlike a defendant in a normal civil suit, an absent class-action plaintiff is not required to do anything. He may sit back and allow the litigation to run its course, content in knowing that there are safeguards provided for his protection. In most class actions an absent plaintiff is provided at least with an opportunity to "opt out" of the class, and if he takes advantage of that opportunity he is removed from the [811] litigation entirely. This was true of the Kansas proceedings in this case. The Kansas procedure provided for the mailing of a notice to each class member by first-class mail. The notice, as we have previously indicated, described the action and informed the class member that he could appear in person or by counsel, in default of which he would be represented by the named plaintiffs and their attorneys. The notice further stated that class members would be included in the class and bound by the judgment unless they "opted out" by executing and returning a "request for exclusion" that was included in the notice.

Petitioner contends, however, that the "opt out" procedure provided by Kansas is not good enough, and that an "opt in" procedure is required to satisfy the Due Process Clause of the Fourteenth Amendment. Insofar as plaintiffs who have no minimum contacts with the forum State are concerned, an "opt in" provision would require that each class member affirmatively consent to his inclusion within the class.

Because States place fewer burdens upon absent class plaintiffs than they do upon absent defendants in nonclass suits, the Due Process Clause need not and does not afford the former as much protection from state-court jurisdiction as it does the latter. The Fourteenth Amendment does protect "persons," not "defendants," however, so absent plaintiffs as well as absent defendants are entitled to some protection from the jurisdiction of a forum State which seeks to adjudicate their claims. In this case we hold that a forum State may exercise jurisdiction over the claim of an absent class-action plaintiff, even though that plaintiff may not possess the minimum contacts with the forum which would support personal jurisdiction over a defendant. If the forum State wishes to bind an absent plaintiff concerning a claim for money damages or similar relief at law,^[4] it must provide minimal [812] procedural due process protection. The plaintiff must receive notice plus an opportunity to be heard and participate in the litigation, whether in person or through counsel. The notice must be the best practicable, "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane, 339 U. S., at 314-315; cf. Eisen v. Carlisle & Jacquelin, 417 U. S. 156, 174-175 (1974). The notice should describe the action and the plaintiffs' rights in it. Additionally, we hold that due process requires at a minimum that an absent plaintiff be provided with an opportunity to remove himself from the class by executing and returning an "opt out" or "request for exclusion" form to the court. Finally, the Due Process Clause of course requires that the named plaintiff at all times adequately represent the interests of the absent class members. Hansberry, 311 U. S., at 42-43, 45.

We reject petitioner's contention that the Due Process Clause of the Fourteenth Amendment requires that absent plaintiffs affirmatively "opt in" to the class, rather than be deemed members of the class if they do not "opt out." We think that such a contention is supported by little, if any precedent, and that it ignores the differences between class-action plaintiffs, on the one hand, and defendants in nonclass civil suits on the other. Any plaintiff may consent to jurisdiction. Keeton v. Hustler Magazine, Inc., 465 U. S. 770 (1984). The essential question, then, is how stringent the requirement for a showing of consent will be.

We think that the procedure followed by Kansas, where a fully descriptive notice is sent first-class mail to each class member, with an explanation of the right to "opt out," satisfies due process. Requiring a plaintiff to affirmatively [813] request inclusion would probably impede the prosecution of those class actions involving an aggregation of small individual claims, where a large number of claims are required to make it economical to bring suit. See, e. g., Eisen, supra, at 161. The plaintiff's claim may be so small, or the plaintiff so unfamiliar with the law, that he would not file suit individually, nor would he affirmatively request inclusion in the class if such a request were required by the Constitution.^[5] If, on the other hand, the plaintiff's claim is sufficiently large or important that he wishes to litigate it on his own, he will likely have retained an attorney or have thought about filing suit, and should be fully capable of exercising his right to "opt out."

In this case over 3,400 members of the potential class did "opt out," which belies the contention that "opt out" procedures result in guaranteed jurisdiction by inertia. Another 1,500 were excluded because the notice and "opt out" form was undeliverable. We think that such results show that the "opt out" procedure provided by Kansas is by no means pro forma, and that the Constitution does not require more to protect what must be the somewhat rare species of class member who is unwilling to execute an "opt out" form, but whose claim is nonetheless so important that he cannot be presumed to consent to being a member of the class by his failure to do so. Petitioner's "opt in" requirement would require the invalidation of scores of state statutes and of the class-action provision of the Federal Rules of Civil Procedure,^[6] [814] and for the reasons stated we do not think that the Constitution requires the State to sacrifice the obvious advantages in judicial efficiency resulting form the "opt out" approach for the protection of the rara avis portrayed by petitioner.

We therefore hold that the protection afforded the plaintiff class members by the Kansas statute satisfies the Due Process Clause. The interest of the absent plaintiffs are sufficiently protected by the forum State when those plaintiffs are provided with a request for exclusion that can be returned within a reasonable time to the court. See Insurance Corp. of Ireland, 456 U. S., at 702-703, and n. 10. Both the Kansas trial court and the Supreme Court of Kansas held that the class received adequate representation, and no party disputes that conclusion here. We conclude that the Kansas court properly asserted personal jurisdiction over the absent plaintiffs and their claims against petitioner.

III

The Kansas courts applied Kansas contract and Kansas equity law to every claim in this case, notwithstanding that [815] over 99% of the gas leases and some 97% of the plaintiffs in the case had no apparent connection to the State of Kansas except for this lawsuit.^[7] Petitioner protested that the Kansas [816] courts should apply the laws of the States where the leases were located, or at least apply Texas and Oklahoma law because so many of the leases came from those States. The Kansas courts disregarded this contention and found petitioner liable for interest on the suspended royalties as a matter of Kansas law, and set the interest rates under Kansas equity principles.

Petitioner contends that total application of Kansas substantive law violated the constitutional limitations on choice of law mandated by the Due Process Clause of the Fourteenth Amendment and the Full Faith and Credit Clause of Article IV, § 1. We must first determine whether Kansas law conflicts in any material way with any other law which could apply. There can be no injury in applying Kansas law if it is not in conflict with that of any other jurisdiction connected to this suit.

Petitioner claims that Kansas law conflicts with that of a number of States connected to this litigation, especially Texas and Oklahoma. These putative conflicts range from the direct to the tangential, and may be addressed by the Supreme Court of Kansas on remand under the correct constitutional standard. For example, there is no recorded [817] Oklahoma decision dealing with interest liability for suspended royalties: whether Oklahoma is likely to impose liability would require a survey of Oklahoma oil and gas law. Even if Oklahoma found such liability, petitioner shows that Oklahoma would most likely apply its constitutional and statutory 6% interest rate rather than the much higher Kansas rates applied in this litigation. Okla. Const., Art XIV, § 2; Okla. Stat., Tit. 15, § 266 (Supp. 1984-1985); Rendezvous Trails of America, Inc. v. Ayers, 612 P. 2d 1384, 1385 (Okla. App. 1980); Smith v. Robinson, 594 P. 2d 364 (Okla. 1979); West Edmond Hunton Lime Unit v. Young, 325 P. 2d 1047 (Okla. 1958).

Additionally, petitioner points to an Oklahoma statute which excuses liability for interest if a creditor accepts payment of the full principal without a claim for interest, Okla. Stat., Tit. 23, § 8 (1951). Cf. Webster Drilling Co. v. Sterling Oil of Oklahoma, Inc., 376 P. 2d 236 (Okla. 1962). Petitioner contends that by ignoring this statute the Kansas courts created liability that does not exist in Oklahoma.

Petitioner also points out several conflicts between Kansas and Texas law. Although Texas recognizes interest liability for suspended royalties, Texas has never awarded any such interest at a rate greater than 6%, which corresponds with the Texas constitutional and statutory rate.^[8] Tex. Const., Art. 16, § 11; Tex. Rev. Civ. Stat. Ann., Art. 5069-1.03 (Vernon 1971). See Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S. W. 2d 480 (Tex. 1978); Phillips Petroleum Co. v. Adams, 513 F. 2d 355 (CA5), cert. denied, 423 U. S. 930 (1975); cf. Maxey v. Texas Commerce Bank, 580 S. W. 2d 340, 341 (Tex. 1979). Moreover, at least one court interpreting Texas law appears to have held that Texas excuses interest [818] liability once the gas company offers to take an indemnity from the royalty owner and pay him the suspended royalty while the price increase is still tentative. Phillips Petroleum Co. v. Riverside Gas Compression Co., 409 F. Supp. 486, 495-496 (ND Tex. 1976). Such a rule is contrary to Kansas law as applied below, but if applied to the Texas plaintiffs or leases in this case, would vastly reduce petitioner's liability.

The conflicts on the applicable interest rates, alone — which we do not think can be labeled "false conflicts" without a more thoroughgoing treatment than was accorded them by the Supreme Court of Kansas — certainly amounted to millions of dollars in liability. We think that the Supreme Court of Kansas erred in deciding on the basis that it did that the application of its laws to all claims would be constitutional.

Four Terms ago we addressed a similar situation in Allstate Ins. Co. v. Hague, 449 U. S. 302 (1981). In that case we were confronted with two conflicting rules of state insurance law. Minnesota permitted the "stacking" of separate uninsured motorist policies while Wisconsin did not. Although the decedent lived in Wisconsin, took out insurance policies and was killed there, he was employed in Minnesota, and after his death his widow moved to Minnesota for reasons unrelated to the litigation, and was appointed personal representative of his estate. She filed suit in Minnesota courts, which applied the Minnesota stacking rule.

The plurality in Allstate noted that a particular set of facts giving rise to litigation could justify, constitutionally, the application of more than one jurisdiction's laws. The plurality recognized, however, that the Due Process Clause and the Full Faith and Credit Clause provided modest restrictions on the application of forum law. These restrictions required "that for a State's substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair." Id., at 312-313. The [819] dissenting Justices were in substantial agreement with this principle. Id., at 332 (opinion of POWELL, J., joined by BURGER, C. J., and REHNQUIST, J.). The dissent stressed that the Due Process Clause prohibited the application of law which was only casually or slightly related to the litigation, while the Full Faith and Credit Clause required the forum to respect the laws and judgments of other States, subject to the forum's own interests in furthering its public policy. Id., at 335-336.

The plurality in Allstate affirmed the application of Minnesota law because of the forum's significant contacts to the litigation which supported the State's interest in applying its law. See id., at 313-329. Kansas' contacts to this litigation, as explained by the Kansas Supreme Court, can be gleaned from the opinion below.

Petitioner owns property and conducts substantial business in the State, so Kansas certainly has an interest in regulating petitioner's conduct in Kansas. 235 Kan., at 210, 679 P. 2d, at 1174. Moreover, oil and gas extraction is an important business to Kansas, and although only a few leases in issue are located in Kansas, hundreds of Kansas plaintiffs were affected by petitioner's suspension of royalties; thus the court held that the State has a real interest in protecting "the rights of these royalty owners both as individual residents of [Kansas] and as members of this particular class of plaintiffs." Id., at 211-212, 679 P. 2d, at 1174. The Kansas Supreme Court pointed out that Kansas courts are quite familiar with this type of lawsuit, and "[t]he plaintiff class members have indicated their desire to have this action determined under the laws of Kansas." Id., at 211, 222, 679 P. 2d, at 1174, 1181. Finally, the Kansas court buttressed its use of Kansas law by stating that this lawsuit was analogous to a suit against a "common fund" located in Kansas. Id., at 201, 211-212, 679 P. 2d, at 1168, 1174.

We do not lightly discount this description of Kansas' contacts with this litigation and its interest in applying its law. There is, however, no "common fund" located in Kansas that [820] would require or support the application of only Kansas law to all these claims. See, e. g., Hartford Life Ins. Co. v. Ibs, 237 U. S. 662 (1915). As the Kansas court noted, petitioner commingled the suspended royalties with its general corporate accounts. 235 Kan., at 201, 679 P. 2d, at 1168. There is no specific identifiable res in Kansas, nor is there any limited amount which may be depleted before every plaintiff is compensated. Only by somehow aggregating all the separate claims in this case could a "common fund" in any sense be created, and the term becomes all but meaningless when used in such an expansive sense.

We also give little credence to the idea that Kansas law should apply to all claims because the plaintiffs, by failing to opt out, evinced their desire to be bound by Kansas law. Even if one could say that the plaintiffs "consented" to the application of Kansas law by not opting out, plaintiff's desire for forum law is rarely, if ever controlling. In most cases the plaintiff shows his obvious wish for forum law by filing there. "If a plaintiff could choose the substantive rules to be applied to an action . . . the invitation to forum shopping would be irresistible." Allstate, supra, at 337 (opinion of POWELL, J.). Even if a plaintiff evidences his desire for forum law by moving to the forum, we have generally accorded such a move little or no significance. John Hancock Mut. Life Ins. Co. v. Yates, 299 U. S. 178, 182 (1936); Home Ins. Co. v. Dick, 281 U. S. 397, 408 (1930). In Allstate the plaintiff's move to the forum was only relevant because it was unrelated and prior to the litigation. 449 U. S., at 318-319. Thus the plaintiffs' desire for Kansas law, manifested by their participation in this Kansas lawsuit, bears little relevance.

The Supreme Court of Kansas in its opinion in this case expressed the view that by reason of the fact that it was adjudicating a nationwide class action, it had much greater latitude in applying its own law to the transactions in question than might otherwise be the case:

[821] "The general rule is that the law of the forum applies unless it is expressly shown that a different law governs, and in case of doubt, the law of the forum is preferred.. . . Where a state court determines it has jurisdiction over a nationwide class action and procedural due process guarantees of notice and adequate representation are present, we believe the law of the forum should be applied unless compelling reasons exist for applying a different law. . . . Compelling reasons do not exist to require this court to look to other state laws to determine the rights of the parties involved in this lawsuit." 235 Kan., at 221-222, 679 P. 2d, at 1181.

We think that this is something of a "bootstrap" argument. The Kansas class-action statute, like those of most other jurisdictions, requires that there be "common issues of law or fact." But while a State may, for the reasons we have previously stated, assume jurisdiction over the claims of plaintiffs whose principal contacts are with other States, it may not use this assumption of jurisdiction as an added weight in the scale when considering the permissible constitutional limits on choice of substantive law. It may not take a transaction with little or no relationship to the forum and apply the law of the forum in order to satisfy the procedural requirement that there be a "common question of law." The issue of personal jurisdiction over plaintiffs in a class action is entirely distinct from the question of the constitutional limitations on choice of law; the latter calculus is not altered by the fact that it may be more difficult or more burdensome to comply with the constitutional limitations because of the large number of transactions which the State proposes to adjudicate and which have little connection with the forum.

Kansas must have a "significant contact or significant aggregation of contacts" to the claims asserted by each member of the plaintiff class, contacts "creating state interests," in order to ensure that the choice of Kansas law is not arbitrary [822] or unfair. Allstate, 449 U. S., at 312-313. Given Kansas' lack of "interest" in claims unrelated to that State, and the substantive conflict with jurisdictions such as Texas, we conclude that application of Kansas law to every claim in this case is sufficiently arbitrary and unfair as to exceed constitutional limits.^[9]

When considering fairness in this context, an important element is the expectation of the parties. See Allstate, supra, at 333 (opinion of POWELL, J.). There is no indication that when the leases involving land and royalty owners outside of Kansas were executed, the parties had any idea that Kansas law would control. Neither the Due Process Clause nor the Full Faith and Credit Clause requires Kansas "to substitute for its own [laws], applicable to persons and events within it, the conflicting statute of another state," Pacific Employees Ins. Co. v. Industrial Accident Comm'n, 306 U. S. 493, 502 (1939), but Kansas "may not abrogate the rights of parties beyond its borders having no relation to anything done or to be done within them." Home Ins. Co. v. Dick, supra, at 410.

Here the Supreme Court of Kansas took the view that in a nationwide class action where procedural due process guarantees [823A] of notice and adequate representation were met, "the law of the forum should be applied unless compelling reasons exist for applying a different law." 235 Kan., at 221, 679 P. 2d, at 1181. Whatever practical reasons may have commended this rule to the Supreme Court of Kansas, for the reasons already stated we do not believe that it is consistent with the decisions of this Court. We make no effort to determine for ourselves which law must apply to the various transactions involved in this lawsuit, and we reaffirm our observation in Allstate that in many situations a state court may be free to apply one of several choices of law. But the constitutional limitations laid down in cases such as Allstate and Home Ins. Co. v. Dick, supra, must be respected even in a nationwide class action.

We therefore affirm the judgment of the Supreme Court of Kansas insofar as it upheld the jurisdiction of the Kansas courts over the plaintiff class members in this case, and reverse its judgment insofar as it held that Kansas law was applicable to all of the transactions which it sought to adjudicate. We remand the case to that court for further proceedings not inconsistent with this opinion.

It is so ordered.

JUSTICE POWELL took no part in the decision of this case.

[823B] JUSTICE STEVENS, concurring in part and dissenting in part.

For the reasons stated in Parts I and II of the Court's opinion, I agree that the Kansas courts properly exercised jurisdiction over this class action. I also recognize that the use of the word "compelling" in a portion of the Kansas Supreme Court's opinion, when read out of context, may create an inaccurate impression of that court's choice-of-law holding. See ante, at 821. Our job, however, is to review judgments, not to edit opinions, and I am firmly convinced that there is no constitutional defect in the judgment under review.

As the Court recognizes, there "can be no [constitutional] injury in applying Kansas law if it is not in conflict with that [824] of any other jurisdiction connected to this suit." Ante, at 816. A fair reading of the Kansas Supreme Court's opinion in light of its earlier opinion in Shutts v. Phillips Petroleum Co., 222 Kan. 527, 567 P. 2d 1292 (1977) (hereinafter Shutts I), cert. denied, 434 U. S. 1068 (1978), reveals that the Kansas court has examined the laws of connected jurisdictions and has correctly concluded that there is no "direct" or "substantive" conflict between the law applied by Kansas and the laws of those other States. Cf. ante, at 816, 821-822. Kansas has merely developed general common-law principles to accommodate the novel facts of this litigation — other state courts either agree with Kansas or have not yet addressed precisely similar claims. Consequently, I conclude that the Full Faith and Credit Clause of the Constitution^[10] did not require Kansas to apply the law of any other State, and the Fourteenth Amendment's Due Process Clause^[11] did not prevent Kansas from applying its own law in this case.

The Court errs today because it applies a loose definition of the sort of "conflict" of laws required to state a constitutional claim, allowing Phillips a tactical victory here merely on allegations of "putative" or "likely" conflicts. Ante, at 816, 817. The Court's choice-of-law analysis also treats the two relevant constitutional provisions as though they imposed the same constraints on the forum court. In my view, however, the potential impact of the Kansas choice on the interests of other sovereign States and the fairness of its decision to the litigants should be separately considered. See Allstate Insurance Co. v. Hague, 449 U. S. 302, 320 (1981) (STEVENS, J., concurring in judgment). For both inquiries, it [825] is essential to have a better understanding of the merits of the underlying dispute than can be gleaned from the Court's opinion. I therefore begin with an explanation of the background of this litigation.

I

Petitioner (Phillips) is a large independent producer, purchaser, and seller of natural gas. Beginning in 1954, the prices at which it sold natural gas to interstate pipeline companies were regulated by the Federal Power Commission (Commission).^[12]Phillips Petroleum Co. v. Wisconsin, 347 U. S. 672 (1954). As a party to a large number of producing oil and gas leases, Phillips is obligated to pay a percentage of the value of the production, usually one-eighth, to persons owning an interest in the leased areas, so-called "royalty owners." Some royalty owners are due monthly royalties by contractual agreements made directly with Phillips. See Shutts I, supra, at 532, 567 P. 2d, at 1298. Others are due royalties under contracts made with other gas producers who then sell their gas to Phillips — by separate contract with those producers, Phillips has "assumed the producer's responsibility to distribute the royalties . . . to the royalty owners." 235 Kan. 195, 218, 679 P. 2d 1159, 1178 (1984). The relationship between Phillips and the royalty owners is not regulated by the Commission although it is, of course, materially affected by the Commission's control over the pricing relationship between Phillips and its customers.

In a series of orders entered after 1954, the Commission established a practice of suspending price increases proposed by Phillips until approved by the Commission, but allowing Phillips to collect the higher proposed prices upon the filing by Phillips with the Commission of a corporate undertaking to refund to its customers any portion of an increase [826] that is ultimately disapproved by the Commission. Pursuant to Commission regulation, Phillips agrees that unapproved prices it collects are subject to refund "with interest at seven percent (7%) per annum from the date of receipt until September 18, 1970, and eight percent (8%) per annum thereafter until paid out, if the FPC [does] not approve the sales price." Shutts I, supra, at 533, 567 P. 2d, at 1299 (emphasis deleted) (citing 18 CFR § 154.102(c) (1977) and Commission opinion No. 586, 44 F. P. C. 761, 791 (1970)). Phillips' receipts during periods when its proposed price increases have not yet received final approval therefore include two components — the "firm" proceeds and the "FPC suspense money." For example, while an increase in price from 11 cents per Mcf (thousand cubic feet) to 13 cents is under consideration, the collection of the higher price would include firm proceeds of 11 cents and 2 cents of FPC suspense money.

In July 1961, while a price increase applicable to the tristate Hugoton-Anadarko area (Kansas, Oklahoma, and Texas) was pending, Phillips sent a notice to the royalty owners for that area advising them that "until further notice" they would be paid royalties on the basis of firm proceeds only and that royalties based on suspense money would be paid only after it was "determined that the sums collected are no longer subject to refund." The notice also advised the royalty owners that they could receive ongoing payment of royalties on the suspense money as well if they furnished Phillips with an "acceptable indemnity to cover their proportionate part of any required refunds, plus the required interest." Shutts I, 222 Kan., at 534, 567 P. 2d, at 1299 (emphasis added).^[13] The indemnity which Phillips required was a corporate [827] security bond covering a principal amount based on estimated production for a 2-year period, plus the 7% interest rate Phillips would be required to pay to its customers if the price increase were not approved. Only 17 royalty owners provided Phillips with such an indemnity; approximately 6,400 royalty owners who did not do so did not receive royalties on the suspense proceeds until 11 years later, after the price increase was finally approved. The situation was succinctly summarized by the Kansas Supreme Court in Shutts I:

"From June 1, 1961, to October 1, 1970, Phillips deposited the increased rate monies collected in its general account and commingled it with its other funds, without ever giving notice of this fact to royalty owners during the time it was holding money. It is important to note that during this period of time Phillips had no entitlement to the gas royalty owners' share of the `suspense royalties,' whether or not the rates were approved by the FPC. Phillips never owned this money. While Phillips collected eight-eighths (8/8) of the increased rates, under no condition was the one-eighth (1/8) of the increase attributable to the royalty owners ever to go to Phillips. That royalty share, according to eventual FPC ruling, was either to go to Phillips' royalty owners, or back to Phillips' gas purchasers with interest, or part to one and part to the other." Id., at 535, 567 P. 2d, at 1300 (emphasis in original).

[828] In 1970, the Commission entered an order approving Phillips' Hugoton-Anadarko price increases to the extent of approximately $153,000,000 and disapproving them to the extent of approximately $29,000,000. Thus, over 18% of the suspense money had to be refunded to Phillips' customers, with interest at the rates to which Phillips had agreed under Commission regulation. Having no jurisdiction over the relationship between Phillips and the royalty owners, however, the Commission's order was silent on the subject of royalties on the $153 million of suspense money that did not have to be refunded. After the Commission's order was finally affirmed by the Ninth Circuit in 1972, In re Hugoton-Anadarko Area Rate Case, 466 F. 2d 974, Phillips mailed checks to the royalty owners for their share of the suspense moneys based on the approved higher prices that had been collected since 1961. However, "Phillips neither paid nor offered to pay any interest for the use of the money, nor did Phillips say anything about interest or how long the money had been held or used by Phillips." Shutts I, supra, at 537, 567 P. 2d, at 1301.

The foregoing facts gave rise to Shutts I. This case (Shutts II) involves suspense royalties due on similar price increases approved in 1976, 1977, and 1978 to a larger number of royalty owners (28,100) with interests in leased areas located in 11 States, including Kansas. Otherwise, however, "[w]ith a few exceptions this case is similar in legal issues and factual situation to that presented in Shutts [I]." 235 Kan., at 198, 679 P. 2d, at 1165. Both cases involve what the Kansas Supreme Court has characterized as a "common fund" consisting of the suspense royalties undeniably owed by Phillips [829] but not paid for periods of several years while Commission approval of rate increases were pending.^[14] It is undisputed that Phillips enjoyed the unfettered use of that money. See 222 Kan., at 560, 567 P. 2d, at 1316 (testimony of Phillips' Treasurer). It is also undisputed that when the Commission proceedings ended, none of the money could be retained by Phillips. To the extent that a price increase was disapproved, a refund to the purchasing pipelines, plus interest at the rate set by the Commission, would be required; to the extent that the increases were approved, the money was contractually owned to the royalty owners. As the Kansas court noted: "What is significant is these gas royalty suspense monies never did nor could belong to Phillips." Ibid. (emphasis deleted).^[15]

[830] In Shutts I, the Kansas Supreme Court held that general equitable principles required the award of interest on royalties owned to royalty owners but used by Phillips for a number of years. In support of that conclusion it relied on general statements in two Kansas cases^[16] and a long line of federal cases applying Texas law and concluding that equity requires "the award of interest on suspense royalties under similar circumstances." Id., at 561, 567 P. 2d, at 1317.^[17] The court noted that Oklahoma had no decisions allowing interest on suspense royalties, but concluded that "several Oklahoma decisions hold that interest may be awarded on equitable grounds where necessary to arrive at a fair compensation. (Smith v. Owens, 397 P. 2d 673 [Okla. 1963]; and First Nat. Bank & T. Co. v. Exchange Nat. Bank and T. Co., 517 P. 2d 805 [Okla. App. 1973])."^[18] Finally, the court construed the royalty agreements at issue as containing a "contractual [831] obligation" to pay interest on the royalties "for the period of time the suspense money was held and used by Phillips." Id., at 562, 567 P. 2d, at 1317. Thus the Kansas court also found its result consistent with the only Texas state-court decision on point, Stahl Petroleum Co. v. Phillips Petroleum Co., 550 S. W. 2d 360 (Tex. Civ. App. 1977), which had "awarded interest on suspended royalties" based on "the terms of the royalty agreement . . . rather than unjust enrichment." 222 Kan., at 561, 567 P. 2d, at 1317. Significantly, when the Texas Supreme Court subsequently affirmed the Stahl judgment, it relied on the Kansas Supreme Court's decision in Shutts I to decide that equity as well as contract law requires interest on suspense royalties. Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S. W. 2d 480, 485-488, and n. 5 (1978).

After determining that Phillips was liable for interest on the suspense royalties, the court reversed the trial court's decision that the rate should be 6% because that was the statutory interest rate in Kansas, Oklahoma, and Texas. The Kansas Supreme Court noted that the statutory rate in all three States expressly applied only when no other rate had been agreed upon,^[19] and that in this case Phillips had made an express agreement, evidenced by its corporate undertaking, to pay interest at the rate set by the Commission on suspense moneys found refundable. 222 Kan., at 564, 567 P. 2d, at 1319. The Kansas court therefore declined to apply any State's interest statute, including its own. "[E]quitable principles require, and contractual principles dictate, that the royalty owners receive the same treatment" as refunded purchasers, [832] that is, payment at the same FPC rate of interest.^[20]Id., at 563, 567 P. 2d, at 1318.

Finally, the Kansas Supreme Court rejected Phillips' contention that royalty owners had "waived" their claims to interest by accepting payment of the royalties later or by failing to post an indemnity "acceptable" to Phillips in order to receive contemporaneous payment of suspense royalties. The court noted that the "conditions imposed by Phillips were far more stringent than the corporate undertaking Phillips filed with the FPC," id., at 567, 567 P. 2d, at 1320, and concluded that it was "apparent [that] Phillips' previous imposition of burdensome conditions upon royalty owners . . . was designed to accomplish precisely what the facts disclose. Virtually none of the royalty owners complied with the conditions, thereby leaving the suspense royalties in the hands of Phillips as stakeholder to use at its pleasure . . . ." Id., at 566, 567 P. 2d, at 1320. The court found the rule that "payment of the principal sum is a legal bar to a subsequent action for interest" inapplicable on these facts. Id., at 567, 567 P. 2d, at 1321. Instead, because "payment of [the royalties due] to the plaintiff class members, instead of extinguishing the debt, constituted only a partial payment on an interest-bearing debt[,] [t]his situation invokes application of the so-called `United States Rule,' which provides that in applying partial payments to an interest-bearing debt which is due, in [833] the absence of an agreement or statute to the contrary, the payment should be first applied to the interest due." Ibid.^[21]

In Shutts II, the case now under review, the Kansas Supreme Court adopted its earlier analysis in Shutts I without repeating it. "Although a larger class is involved than in Shutts I, the legal issues presented are substantially the same. While these issues are complex they were thoroughly reviewed in Shutts I." 235 Kan., at 211, 679 P. 2d, at 1174.^[22] Noting that "Phillips has not satisfactorily established why this court should not apply the rule enunciated in Shutts I," the Kansas court went on to state that once jurisdiction over [834] a "nationwide class action" is properly asserted, "the law of the forum should be applied unless compelling reasons exist for applying a different law." Id., at 221, 679 P. 2d, at 1181.

II

This Court, of course, can have no concern with the substantive merits of common-law decisions reached by state courts faithfully applying their own law or the law of another State. When application of purely state law is at issue, "[t]he power delegated to us is for the restraint of unconstitutional [action] by the States, and not for the correction of alleged errors committed by their judiciary." Commercial Bank of Cincinnati v. Buckingham's Executors, 5 How. 317, 343 (1847). The Constitution does not expressly mandate particular or correct choices of law. Rather, a state court's choice of law can invoke constitutional protections, and hence our jurisdiction, only if it contravenes some explicit constitutional limitation.^[23]

Thus it has long been settled that "a mere misconstruction by the forum of the laws of a sister State is not a violation of the Full Faith and Credit Clause." Carroll v. Lanza, 349 U. S. 408, 414, n. 1 (1955) (Frankfurter, J., dissenting).^[24] That Clause requires only that States accord "full faith and credit" to other States' laws — that is, acknowledge the validity and finality of such laws and attempt in good faith to apply them when necessary as they would be applied by home state [835] courts.^[25] But as Justice Holmes explained, when there is "nothing to suggest that [one State's court] was not candidly construing [another State's law] to the best of its ability, . . . even if it was wrong something more than an error of construction is necessary" to invoke the Constitution. Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U. S. 93, 96 (1917).

Merely to state these general principles is to refute any argument that Kansas' decision below violated the Full Faith and Credit Clause. As the opinion in Shutts I indicates, the Kansas court made a careful survey of the relevant laws of Oklahoma and Texas, the only other States whose law is proffered as relevant to this litigation. But, as the Court acknowledges, ante, at 816-818, no other State's laws or judicial decisions were precisely on point, and, in the Kansas court's judgment, roughly analogous Texas and Oklahoma cases supported the results the Kansas court reached. The Kansas court expressly declared that, in a multistate action, a "court should also give careful consideration, as we have attempted to do, to any possible conflict of law problems." 222 Kan., at 557, 567 P. 2d, at 1314.^[26] While a common-law judge might disagree with the substantive legal determinations made by the Kansas court (although nothing in its opinion seems erroneous to me), that court's approach to the possible choices of law evinces precisely the "full faith and credit" that the Constitution requires.

[836] It is imaginable that even a good-faith review of another State's law might still "unjustifiably infring[e] upon the legitimate interests of another State" so as to violate the Full Faith and Credit Clause. Allstate, 449 U. S., at 323 (STEVENS, J., concurring in judgment). If, for example, a Texas oil company or a Texas royalty owner with an interest in a Texas lease were treated directly contrary to a stated policy of the State of Texas by a Kansas court through some honest blunder, the Constitution might bar such "parochial entrenchment" on Texas' interests. Thomas v. Washington Gas Light Co., 448 U. S. 261, 272 (1980) (plurality opinion).^[27] But this case is so distant from such a situation that I need not pursue this theoretical possibility. Even Phillips does not contend that any stated policies of other States have been plainly contravened, and the Court's discussion is founded merely on an absence of reported decisions and the Court's speculation of what Oklahoma or Texas courts might "most likely" do in a case like this. Ante, at 817. There is simply no demonstration here that the Kansas Supreme Court's decision has impaired the legitimate interests of any other States or infringed on their sovereignty in the slightest.

[837] III

It is nevertheless possible for a State's choice of law to violate the Constitution because it is so "totally arbitrary or. . . fundamentally unfair" to a litigant that it violates the Due Process Clause. Allstate, 449 U. S., at 326 (STEVENS, J., concurring in judgment). If the forum court has no connection to the lawsuit other than its jurisdiction over the parties, a decision to apply the forum State's law might so "frustrat[e] the justifiable expectations of the parties" as to be unconstitutional. Id., at 327.^[28]

Again, however, a constitutional claim of "unfair surprise" cannot be based merely upon an unexpected choice of a particular State's law — it must rest on a persuasive showing of an unexpected result arrived at by application of that law. Thus, absent any conflict of laws, in terms of the results they produce, the Due Process Clause simply has not been violated. This is because the underlying theory of a choice-of-law due process claim must be that parties plan their conduct and contractual relations based upon their legitimate expectations [838] concerning the subsequent legal consequences of their actions. For example, they might base a decision on the belief that the law of a particular State will govern. But a change in that State's law in the interim between the execution and the performance of the contract would not violate the Due Process Clause. Nor would the Constitution be violated simply because a state court made an unanticipated ruling on a previously unanswered question of law — perhaps a choice-of-law question.

In this case it is perfectly clear that there has been no due process violation because this is a classic "false conflicts" case.^[29] Phillips has not demonstrated that any significant conflicts exist merely because Oklahoma and Texas state case law is silent concerning the equitable theories developed by the Kansas courts in this litigation, or even because the language of some Oklahoma and Texas statutes suggests that those States would "most likely" reach different results. Ante, at 816-818. The Court's heavy reliance on the characterization of the law provided by Phillips is not an adequate substitute for a neutral review. Ante, at 816, 817 ("Petitioner claims," "petitioner shows," "petitioner points to," "Petitioner also points out . . ."). As is unmistakable from a review of Shutts I, the Kansas Supreme Court has examined the same laws cited by the Court today as indicative of "direct" conflicts, and construed them as supportive of the [839] Kansas result.^[30] Our precedents, to say nothing of the Constitution and our statutory jurisdiction to review state-court judgments, do not permit the Court to second-guess these substantive judgments. Moreover, an independent examination demonstrates solid support for the Kansas court's conclusions.^[31]

[840] The crux of my disagreement with the Court is over the standard applied to evaluate the sufficiency of allegations of choice-of-law conflicts necessary to support a constitutional [841] claim. Rather than potential, "putative," or even "likely" conflicts, I would require demonstration of an unambiguous conflict with the established law of another State as an essential element of a constitutional choice-of-law claim. Arguments that a state court has merely applied general common-law principles in a novel manner, or reconciled arguably [842] conflicting laws erroneously in the face of unprecedented factual circumstances should not suffice to make out a constitutional issue.

In this case, the Kansas Supreme Court's application of general principles of equity, its interpretation of the agreements, its reliance on the Commission's regulations,^[32] and its construction of general statutory terms contravened no established legal principles of other States and consequently cannot be characterized as either arbitrary or fundamentally unfair to Phillips. I therefore can find no due process violation in the Kansas court's decision.^[33]

[843] IV

In final analysis, the Court today may merely be expressing its disagreement with the Kansas Supreme Court's statement that in a "nationwide class action . . . the law of the forum should be applied unless compelling reasons exist for applying a different law." 235 Kan., at 221, 679 P. 2d, at 1181. Considering this statement against the background of the Kansas Supreme Court's careful analysis in Shutts I, however, I am confident that court would agree that every state court has an obligation under the Full Faith and Credit Clause to "respect the legitimate interests of other States and avoid infringement upon their sovereignty." Allstate, 449 U. S., at 322 (STEVENS, J., concurring in judgment); see Nevada v. Hall, 440 U. S. 410, 421, 424, n. 24 (1979).

It is also agreed that "the fact that a choice-of-law decision may be unsound . . . does not necessarily implicate the federal concerns embodied in the Full Faith and Credit Clause." Allstate, 449 U. S., at 323 (STEVENS, J., concurring in judgment); see ante, at 823 ("in many situations a state court may be free to apply one of several choices of law"); Allstate, 449 U. S., at 307 (plurality opinion). When a suit involves claims connected to States other than the forum State, the Constitution requires only that the relevant laws of other States that are brought to the attention of the forum court be examined fairly prior to making a choice of law.^[34] Because this Court "reviews judgments, not opinions," Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842 (1984), criticism of a portion of the Kansas [844] court's opinion taken out of context provides an insufficient basis for reversing its judgment. Unless the actual choice of Kansas law violated substantial constitutional rights of the parties, see 28 U. S. C. § 2111, our power to review judgments of state law — including the state law of choice of law — does not extend to reversal based on disagreement with the law's application. A review of the record and the underlying litigation here convincingly demonstrates that, despite Phillips' protestations regarding Kansas' development of common-law principles, no disregard for the laws of other States nor unfair application of Kansas law to the litigants has occurred.^[35] Phillips has no constitutional right to avoid judgment in Kansas because it might have convinced a court in another State to develop its law differently.

I do not believe the Court should engage in detailed evaluations of various States' laws. To the contrary, I believe our limited jurisdiction to review state-court judgments should foreclose such review.^[36] Accordingly, I trust that today's [845] decision is no more than a momentary aberration, and that the Court's opinion will not be read as a decision to constitutionalize novel state-court developments in the common law whenever a litigant can claim that another State connected to the litigation "most likely" would reach a different result. The Court long ago decided that state-court choices of law are unreviewable here absent demonstration of an unambiguous conflict in the established laws of connected States. See n. 15, supra. "To hold otherwise would render it possible to bring to this court every case wherein the defeated party claimed that the statute of another State had been construed to his detriment." Johnson v. New York Life Ins. Co., 187 U. S. 491, 496 (1903). Having ignored this admonition today, the Court may be forced to renew its turn-of-the-century efforts to convince the bar that state-court judgments based on fair evaluations of other States' laws are final.

Accordingly, while I join Parts I and II of the Court's opinion, I respectfully dissent from Part III and from the judgment.

[1] Briefs of amici curiae urging reversal were filed for the Legal Foundation of America by David Crump; and for Amoco Production Co. by Lucas A. Powe, Jr., R. H. Landt, and Glenn D. Young, Jr.

Alan B. Morrison and David C. Vladeck filed a brief for the Public Citizen as amicus curiae urging affirmance.

David B. Kahn filed a brief for the Consumer Coalition as amicus curiae.

[2] The holding in Hansberry, of course, was that petitioners in that case had not a sufficient common interest with the parties to a prior lawsuit such that a decree against those parties in the prior suit would bind the petitioners. But in the present case there is no question that the named plaintiffs adequately represent the class, and that all members of the class have the same interest in enforcing their claims against the defendant.

[3] Petitioner places emphasis on the fact that absent class members might be subject to discovery, counterclaims, cross-claims, or court costs. Petitioner cites no cases involving any such imposition upon plaintiffs, however. We are convinced that such burdens are rarely imposed upon plaintiff class members, and that the disposition of these issues is best left to a case which presents them in a more concrete way.

[4] Our holding today is limited to those class actions which seek to bind known plaintiffs concerning claims wholly or predominantly for money judgments. We intimate no view concerning other types of class actions, such as those seeking equitable relief. Nor, of course, does our discussion of personal jurisdiction address class actions where the jurisdiction is asserted against a defendant class.

[5] In this regard the Reporter for the 1966 amendments to the Federal Rules of Civil Procedure stated:

"[R]equiring the individuals affirmatively to request inclusion in the lawsuit would result in freezing out the claims of people — especially small claims held by small people — who for one reason or another, ignorance, timidity, unfamiliarity with business or legal matters, will simply not take the affirmative step." Kaplan, Continuing Work of the Civil Committee: 1966 Amendments of the Federal Rules of Civil Procedure (I), 81 Harv. L. Rev. 356, 397-398 (1967).

[6] The following statutes or procedural rules permit "opt out" notice in some types of class actions:

Fed. Rule Civ. Proc. 23(c)(2)(A); Ala. Rule Civ. Proc. 23(c)(2)(A); Alaska Rule Civ. Proc. 23(c)(2)(A); Ariz. Rule Civ. Proc. 23(c)(2)(A); Cal. Civ. Code Ann. § 1781(e)(1) (West 1973) (consumer class action); Colo. Rule Civ. Proc. 23(c)(2)(A); Del. Ch. Ct. Rule 23(c)(2)(A); D. C. Super. Ct. Rule Civ. Proc. 23(c)(2)(A); Fla. Rule Civ. Proc. 1.220(d)(2)(A); Idaho Rule Civ. Proc. 23(c)(2)(A); Ind. Rule Trial Proc. 23(C)(2)(A); Iowa Rule Civ. Proc. 42.8(b); Kan. Stat. Ann. § 60-223(c)(2) (1983); Ky. Rule Civ. Proc. 23.03(2)(a); Me. Rule Civ. Proc. 23(c)(2)(A); Md. Rule Civ. Proc. 2-231(e)(1); Mich. Ct. Rule 3.501(C)(5)(b); Minn. Rule Civ. Proc. 23.03 (2)(A); Mo. Rule Civ. Proc. 52.08; Mont. Rule Civ. Proc. 23(c)(2)(A); Nev. Rule Civ. Proc. 23(c)(2)(A); N. J. Civ. Prac. Rule 4:32-2; N. Y. Civ. Prac. Law § 904 (McKinney 1976); N. D. Rule Civ. Proc. 23(g)(2)(B); Ohio Rule Civ. Proc. 23(C)(2)(a); Okla. Stat., Tit. 12, § 2023(C)(2)(a) (Supp. 1984-1985); Ore. Rule Civ. Proc. 32F(1)(b)(ii); Pa. Rule Civ. Proc. 1711(a); Tenn. Rule Civ. Proc. 23.03(2)(a); Vt. Rule Civ. Proc. 23(c)(2)(A); Wash. Ct. Rule 23(C)(2)(i); Wyo. Rule Civ. Proc. 23(c)(2)(A).

OPINION 770_________________________________________________________________________________________________ No. royalty States No. leases Royalties to owners in state state leases in state_________________________________________________________________________________________________Oklahoma ............... 1,430 $ 471,122.53 2,684Texas................... 3,702 2,615,744.46 8,550Kansas.................. 4 115.10 504Arkansas................ 2 552.83 162Louisiana............... 26 516,248.13 361New Mexico.............. 591 194,799.95 469Illinois ............... 1 .01 353Wyloming................ 476 945,441.95 272Mississippi............. ____ ____ 36Utah.................... ____ ____ 18West Virginia........... ____ ____ 22No State Code........... ____ ____ 1,046 _____ __________ 6,232 $4,744,024.10

[7] The Commission approved petitioner's price increases in Opinion Nos. 699, 749 and 770. Petitioner reimbursed royalty owners $3.7, $2.9, and $4.7 million in suspended royalties, respectively. The States where the leases were located and their resident plaintiffs are as follows.

                              OPINION 699_________________________________________________________________________________________________                                                                            No. royalty      States          No. leases    Royalties to   owners                                in state     state leases  in state_________________________________________________________________________________________________Oklahoma ...............          1,266                  $   83,711.35           2,653Texas...................          4,414                     839,152.73           9,591Kansas..................              3                         152.88             496Arkansas................              6                       3,228.22             173Louisiana...............             68                   2,187,548.06           1,244New Mexico..............            941                     433,574.85             621Illinois ...............           ____                           ____             397Wyoming................             690                     148,906.93             413Mississippi.............           ____                           ____              67Utah....................           ____                           ____              29West Virginia...........           ____                           ____              20No State Code...........              1                          [.05]           1,025                                  _____                   ____________                                  7,389                  $3,696,274.97

                            OPINION 749_________________________________________________________________________________________________                                                                             No. royalty       States         No. leases     Royalties to   owners                                in state      state leases  in state_________________________________________________________________________________________________Oklahoma ...............         1,948                   $   243,163.49         3,591Texas...................         3,479                     2,171,217.36         7,881Kansas..................            15                         2,619.24           553Arkansas................            32                         1,769.33           171Louisiana...............           178                       352,539.45           740New Mexico..............           350                        22,670.27           339Illinois ...............             1                             1.30           357Wyloming................            68                        67,570.01            37Mississippi.............             3                           694.93            88Utah....................             1                           184.60            18West Virginia...........            32                        10,364.61           246No State Code...........             2                         1,032.59         1,553                                 ______                   _____________                                 6,109                    $2,873,827.18

[8] The Kansas interest rate also conflicts with the rate which is applicable in Louisiana. At the time this suit was filed that rate was 7%. See La. Civ. Code Ann., Art. 1938 (1977) (amended in 1982); Wurzlow v. Placid Oil Co., 279 So. 2d 749, 772-774 (La. App. 1973) (applying Art. 1938 to oil and gas royalties).

[9] In this case the Kansas Supreme Court held that "[t]he trial court did not determine whether any difference existed between the laws of Kansas and other states or whether another state's law should be applied." 235 Kan. 195, 221, 679 P. 2d 1159, 1180 (1984). Respondents contend that the trial court and the Supreme Court actually incorporated by reference the opinion in Shutts, Executor, 222 Kan. 527, 567 P. 2d 1292 (1977), where the court looked to the Texas and Oklahoma interest rate statutes and found them inapplicable. We do not think that the Kansas Supreme Court fully adopted the choice-of-law discussion in Shutts, Executor as its holding in this case. But even if we agreed that Shutts, Executor was somehow incorporated below, that would be insufficient. Shutts, Executor was a pre-Allstate case involving only 2 other States, rather than the 10 present here. Moreover, the gas region involved in Shutts, Executor was primarily within Kansas borders. Shutts, Executor only considered the conflict involving interest rate liability and state statutes, and in finding the 6% Texas rate inapplicable it cited but did not follow contrary Texas precedent. 222 Kan., at 562-565, 567 P. 2d, at 1317-1319.

[10] "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof." U. S. Const., Art. IV, § 1. See also 28 U. S. C. § 1738.

[11] "No State shall . . . deprive any person of life, liberty, or property, without due process of law . . . ." U. S. Const., Amdt. 14, § 1.

[12] The responsibilities of the Federal Power Commission were transferred to the Federal Energy Regulatory Commission in 1977. See 91 Stat. 578, 582-584.

[13]The relevant portion of the 1961 notice provided in full:

"Effective June 1, 1961, and until further notice, royalties paid you will be computed by excluding that portion of any price being collected subject to refund which exceeds 11 [cents] per Mcf (presently the maximum area price level for increased rates as recently announced by the Federal Power Commission in its Statement of General Policy). Payment of royalty based on the balance of the sums collected will be made at such time as it is determined that the sums collected are no longer subject to refund.

"Interest owners desiring to receive payments computed currently on the full sums being collected may arrange to do so by furnishing Phillips Petroleum Company acceptable indemnity to cover their proportionate part of any required refunds, plus the required interest." Shutts I, 222 Kan., at 534, 567 P. 2d, at 1299.

The practice of withholding suspense royalties pending final Commission price approval was sustained in Ashland Oil & Refining Co. v. Staats, Inc., 271 F. Supp. 571, 579 (Kan. 1967), and Boutte v. Chevron Oil Co., 316 F. Supp. 524 (ED La. 1970), aff'd, 442 F. 2d 1337 (CA5 1971) (per curiam).

[14] "Had Phillips put the `suspense royalties' into a common trust fund, separate from its operating funds, to be used solely to pay either the pipeline companies or the gas royalty owners once the FPC ultimately decided the rate increase question, this case would dovetail nicely into the `common fund' cases." Shutts I, 222 Kan., at 552, 567 P. 2d, at 1311. Accord, 235 Kan., at 201, 212, 679 P. 2d, at 1168, 1174. The Court criticizes Kansas' use of the "common fund" concept as applied to these funds. Ante, at 819-820. Kansas is not alone, however, in applying the common fund concept in a class action to a pool of readily identifiable moneys placed within the court's power by a liability determined by the lawsuit itself. See, e. g., Perlman v. First National Bank of Chicago, 15 Ill. App. 3d 784, 799-802, 305 N. E. 2d 236, 247-250 (1973) (cited in Shutts I, 222 Kan., at 553, 567 P. 2d, at 1311-1312); see also Sprague v. Ticonic National Bank, 307 U. S. 161, 166-167 (1939) (common fund may be "recovered" in litigation); Dawson, Lawyers and Involuntary Clients: Attorney Fees From Funds, 87 Harv. L. Rev. 1597, 1615 (1974) ("Funds can also be created by the litigation itself"). Moreover, it is of course no concern of this Court how Kansas chooses to develop its state common-law doctrines. Absent some constitutional foundation plainly lacking here, the Court's criticism of Kansas' substantive state law is entirely gratuitous.

[15] Phillips argued below that some distinction should be made for purposes of interest liability between royalties owed on gas sold to pipeline companies who paid the higher "suspense" price and royalties owned on gas used by Phillips itself rather than sold. Yet "Phillips acknowledges . . . that its obligation to pay royalties under the various . . . contracts exists without regard to the actual disposition of the gas." 235 Kan., at 215, 679 P. 2d, at 1177 (emphasis added). Thus, "[b]y choosing to withhold payment Phillips was allowed the use of the suspense monies during the suspense period which rightfully belonged to the royalty owners, and the royalty owners, in turn, were deprived of receiving and using those monies during that time." Id., at 216, 679 P. 2d, at 1177. Applying the same unjust enrichment theory developed in Shutts I, the Kansas Supreme Court accordingly rejected Phillips' proffered distinction. 235 Kan., at 217, 679 P. 2d, at 1178. Significantly, Phillips does not claim here that even a "putative" conflict of laws might turn on this distinction. Phillips pursues the argument only to contend in a footnote that, because it never actually collected higher prices on gas that it used itself, no "fund" actually existed. Brief for Petitioner 21, n. 18. As the Kansas court noted, however, the fund at issue is the "easily computed" amount of royalties that were due the royalty owners in any case, not the moneys collected by Phillips in return for sales. 235 Kan., at 217, 679 P. 2d, at 1178.

[16] Lightcap v. Mobil Oil Corp., 221 Kan. 448, 562 P. 2d 1, cert. denied, 434 U. S. 876 (1977); Shapiro v. Kansas Public Employees Retirement System, 216 Kan. 353, 357, 532 P. 2d 1081, 1084 (1975).

[17] The court cited six cases, four from the Fifth Circuit and two from the Northern District of Texas, in all of which Phillips was a named party.

[18] The Kansas court also pointed out that "the United States Supreme Court has noted the imposition of interest on refunds ordered by the FPC is not an inappropriate means of preventing unjust enrichment. (United Gas v. Callery Properties, 382 U. S. 223)." 222 Kan., at 562, 567 P. 2d, at 1317-1318.

[19] See Kan. Stat. Ann. § 16-201 (1974) ("Creditors shall be allowed to receive interest at the rate of six percent per annum, when no other rate of interest is agreed upon"); Okla. Stat., Tit. 15, § 266 (1971) ("The legal rate of interest shall be six per cent in the absence of any contract as to the rate of interest"); Tex. Rev. Civ. Stat. Ann., Art. 5069-1.03 (Vernon 1971) ("When no specified rate of interest is agreed upon by the parties, interest at the rate of 6% per annum shall be allowed") (all emphasis added).

[20] The court also held that interest accruing after the entry of judgment should be determined by Kansas' postjudgment interest statute. Kan. Stat. Ann. § 16-204 (1974). Phillips does not and could not contend that the Constitution bars a Kansas court from applying the Kansas postjudgment interest statute to judgments entered by Kansas courts. Such statutes demonstrate an irrefutable state interest in the force carried by judgments entered by a State's own courts. See also Klaxon Co. v. Stentor Electric Mfg. Co., 313 U. S. 487, 498 (1941) (State interest statutes concern "an incidental item of damages, interest, with respect to which courts at the forum have commonly been free to apply their own or some other law as they see fit").

[21] The court noted that the " `United States Rule' is also followed in Oklahoma and Texas," and that Phillips had "raised and lost" its contention of waiver in a similar case in Texas. 222 Kan., at 568, 567 P. 2d, at 1321, citing Phillips Petroleum Co. v. Riverview Gas Compression Co., 409 F. Supp. 486 (ND Tex. 1976). Moreover, because the relevant Oklahoma statute expressly stated that payment of a principal sum must be accepted "as such" to support a finding of waiver, Okla. Stat., Tit. 23, § 8 (1971), the statute was inapplicable here inasmuch as the royalty payments were not so accepted. 222 Kan., at 568, 567 P. 2d, at 1321.

[22] The only apparently new argument raised by Phillips in Shutts II was that it should not be liable for interest to a subclass of the affected royalty owners whose direct contractual agreement for royalties was with other producers who sold their gas to Phillips under a separate agreement. Although Phillips assumed the obligation to pay royalties directly to the royalty owners in these separate agreements, the separate agreements also stated that if a suspended price increase were ultimately approved by the Commission, Phillips would pay the other producers additional money "without interest." Phillips argued that this "without interest" clause barred interest to the royalty owners as well as to the other producers. The Kansas Supreme Court rejected this argument, however, because the royalty owners were not parties to the separate agreements and because no consideration was paid to the royalty owners by Phillips in return for this purported waiver of interest. 235 Kan., at 220, 679 P. 2d, at 1180. "[T]hese provisions, entered into between Phillips and the producers, cannot unilaterally deprive royalty owners of interest which they would otherwise be entitled to receive under casing head gas contracts in which the provisions do not appear." Ibid.

[23] See 28 U. S. C. § 1257: "Final judgments or decrees rendered by the highest court of a State . . . may be reviewed by the Supreme Court . . . (3) [b]y writ of certiorari . . . where any title, right, privilege or immunity is specially set up or claimed under the Constitution" (emphasis added).

[24] This principle was settled in a number of cases decided on either side of the turn of this century. See, e. g., Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U. S. 93, 96 (1917); Western Life Indemnity Co. v. Rupp, 235 U. S. 261, 275 (1914); Louisville & Nashville R. Co. v. Melton, 218 U. S. 36, 51, 52 (1910); Allen v. Alleghany Co., 196 U. S. 458, 464-465 (1905); Johnson v. New York Life Ins. Co., 187 U. S. 491, 496 (1903); Glenn v. Garth, 147 U. S. 360, 367-370 (1893).

[25] Cf. Guaranty Trust Co. v. New York, 326 U. S. 99, 109 (1945) (federal courts should apply state law in furtherance of the goal that "the outcome of the litigation in the federal court should be substantially the same . . . as it would be if tried in a State court").

[26] The Kansas court also stated that Kansas' statutory class-action requirements would "not be fulfilled" if "liability is to be determined according to varying and inconsistent state laws." 222 Kan., at 557, 567 P. 2d, at 1314. This belies any notion that the Kansas court plans to "boot-strap," ante, at 821, its choice-of-law decisions onto its assertion of jurisdiction over multistate actions; precisely the opposite is suggested.

[27] As I noted in Allstate, however, the litigant challenging a court's choice of law clearly "bears the burden of establishing" a constitutional infringement. 449 U. S., at 325, n. 13. "Prima facie every state is entitled to enforce in its own courts its own statutes . . . . One who challenges that right . . . assumes the burden of showing, upon some rational basis, that of the conflicting interests involved those of the foreign state are superior to those of the forum." Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532, 547 (1935). See Western Life Indemnity Co. v. Rupp, 235 U. S., at 275 ("It does not appear that the court's attention was called to any decision by the courts of Illinois placing a different construction, or indeed any construction, upon the section in question. If such decision existed, it was incumbent upon defendant to prove it"). Thus, if a litigant has failed to call a state court's attention to relevant law in other jurisdictions, it cannot raise that law here to create a constitutional issue.

[28] I noted in Allstate that choice of forum law might also violate the Due Process Clause in other ways, such as by irrationally favoring residents over nonresidents or representing a "dramatic departure from the rule that obtains in most American jurisdictions." 449 U. S., at 327. The first possibility is not applicable here; all royalty owners were treated exactly alike in the Kansas court's analysis. As for the second possibility, a "dramatic departure" must be distinguished from the application of general equitable principles to address new situations. Phillips may criticize Kansas' allegedly "unique notions of contract and oil and gas law," Brief for Petitioner 33, but such is not a constitutional objection. State courts, like this Court, constantly must apply and develop general legal principles to accommodate novel factual circumstances with the overarching goal of achieving a just result. Today's decision, for example, newly establishes lawful jurisdiction over a multistate plaintiffs' class action that Phillips likely could not have anticipated 15 years ago. Absent some demonstration of a departure from some clear rule obtaining in other States, an argument merely that "[n]o other state ever has hinted" at Kansas' result, id., at 32, is unavailing.

[29] " `[F]alse conflict' really means `no conflict of laws.' If the laws of both states relevant to the set of facts are the same, or would produce the same decision in the lawsuit, there is no real conflict between them." R. Leflar, American Conflicts Law § 93, p. 188 (3d ed. 1977). See also E. Scoles & P. Hay, Conflict of Laws § 2.6, p. 17 (1982) ("A `false conflict' exists when the potentially applicable laws do not differ"). The absence of any direct conflicts here distinguishes this case from decisions such as Home Ins. Co. v. Dick, 281 U. S. 397 (1930), and John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936), where the interstate legal conflicts were clear, conceded, and dispositive.

[30] In Shutts II the Kansas Supreme Court noted that "the legal issues presented are substantially the same" as in Shutts I, and that "[w]hile these issues are complex they were thoroughly reviewed in Shutts I." 235 Kan., at 211, 679 P. 2d, at 1174. The court then addressed the award and rate of interest as "damages to compensate the plaintiffs for the unjust enrichment derived by Phillips from the use of the plaintiffs' money," and concluded that "[i]n the instant case Phillips has not satisfactorily established why this court should not apply the rule enunciated in Shutts I" respecting this claim. Id., at 221, 679 P. 2d, at 1181. Two sentences later in the same paragraph, the court made the broad statement that its forum law should apply absent "compelling reason." The only fair reading of this statement in context is that the Kansas court in Shutts II adopted its multistate choice-of-law survey performed in Shutts I, and properly placed the burden on Phillips, see n. 18, supra, to show why the Shutts I conclusions should be reexamined. Even if this were ambiguous, this Court should give the Kansas Supreme Court the benefit of the doubt when reviewing its judgment. Thus, I frankly do not understand the Court's summary rejection of that court's attempt to incorporate Shutts I. Ante, at 822, n. 8. As for the implication in that same footnote that the choice-of-law discussion in Shutts I may have been erroneous on the merits, the statement that the Kansas court "did not follow contrary Texas precedent" (emphasis added), is simply wrong. See n. 22, infra.

[31] The Court provides a list of "putative conflicts" ante,at 816-818. The errors and omissions apparent in the Court's discussion demonstrate the dangers of relying on characterizations of state law provided by an interested party.

1. Although there technically may be "no recorded Oklahoma decision dealing with interest liability for suspended royalties," ante, at 816-817 (emphasis added), Oklahoma law expressly provides that the damages "caused by the breach of an obligation to pay money only is deemed to be the amount due by the terms of the obligation, with interest thereon." Okla. Stat., Tit. 23, § 22 (1981) (emphasis added); see also § 6 ("Any person who is entitled to recover damages certain, or capable of being made certain by calculation, . . . is entitled also to recover interest thereon"). The Oklahoma Supreme Court has specifically held that oil field royalty owners may sue as a class to recover royalties due them and may recover interest on the amount of recovery. West Edmond Hunton Line Unit v. Young, 325 P. 2d 1047 (1958).

2. No authority in the Court's string citation regarding Oklahoma's 6% statutory interest rate supports the statement that Oklahoma would "most likely" impose that rate in a suit such as this. Ante, at 817. The constitutional and statutory provisions merely provide that "in the absence of any contract" the rate is indeed 6%. Okla. Stat. Ann., Tit. 15, § 266 (1981). The cited judicial decisions merely hold that interest is recoverable on certain obligations, including royalties due to oil field royalty owners, without discussing applicable limitations on the rate.

After examining these Oklahoma authorities, the Kansas Supreme Court found the Oklahoma statutory rate, as well as that of Texas and Kansas, inapplicable by its own terms, because here Phillips had contractually agreed to the higher federal rate. 235 Kan., at 220-221, 679 P. 2d, at 1180; 222 Kan., at 563-565, 567 P. 2d, at 1318-1319. No reported Oklahoma decision contradicts this judgment, and the express terms of the Oklahoma statute permit it. See also McAnally v. Ideal Federal Credit Union, 428 P. 2d 322, 326 (Okla. 1967) (where federal law provides for interest in excess of 12% per year, that rate "must govern" over Oklahoma statutory rate).

3. The Kansas court similarly reviewed Texas' 6% interest statute and found that Phillips' contractual agreement to the FPC rate rendered the statute inapplicable. 235 Kan., at 220, 679 P. 2d, at 1180; 222 Kan., at 563-565, 567 P. 2d, at 1318-1319. It is true that Texas has not awarded suspense royalty interest at a rate higher than 6% — it is equally plain from the cited cases that no higher rate has been sought. Texas courts have, however, specifically permitted recovery at higher rates when a contract, even an implied or oral contract, evidences agreement to such rates. Preston Farm & Ranch Supply, Inc. v. Bio-Zyme Enterprises, 625 S. W. 2d 295 (Tex. 1981); Moody v. Main Bank of Houston, 667 S. W. 2d 613 (Tex. App. 1984).

4. While noting Phillips' reliance on an Oklahoma statute stating that "accepting payment of the whole principal, as such, waives all claim to interest," Okla. Stat. Ann., Tit. 23, § 8 (1981), the Court itself demonstrates that this statute's application here is open to question, by citing as "cf." Webster Drilling Co. v. Sterling Oil of Okla., Inc., 376 P. 2d 236, 238 (Okla. 1962). In that case, the Oklahoma Supreme Court held that when a right to interest is "based upon a contract, the interest has become `a substantive part of the debt itself,' " and Title 23, § 8, "is not applicable." Id., at 238 (citation omitted). The claim to interest upheld in Webster Drilling was based on an implied contract, exactly as the Kansas Supreme Court found in Shutts I. 222 Kan., at 562, 565, 567 P. 2d, at 1317, 1319. The Kansas Supreme Court explicitly considered Title 23, § 8, and relied on Webster Drilling to find it inapplicable. 222 Kan., at 568, 567 P. 2d, at 1321. It is therefore impossible to suggest, as the Court does, that the Kansas court "ignor[ed]" the Oklahoma statute. Ante, at 817.

5. Finally, the Court plainly misconstrues Texas law by suggesting that a mere "offer" to pay suspended royalties in return for an indemnity agreement would, by itself, excuse interest. In the federal decision cited by the Court, which mentions no Texas cases at the relevant pages, Phillips Petroleum Co. v. Riverside Gas Co., 409 F. Supp., at 495-496, indemnity agreements were actually entered into. Id., at 490. The Fifth Circuit case relied on for authority, which did cite Texas cases, states that an "unconditional offer to give up possession of a disputed fund" is necessary before a bar to interest is created. Phillips Petroleum Co. v. Adams, 513 F. 2d 355, 370 (1975) (emphasis added). The Texas Supreme Court has subsequently agreed that Adams correctly stated Texas law. Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S. W. 2d 480, 487 (1978). See also Fuller v. Phillips Petroleum Co., 408 F. Supp. 643, 646 (ND Tex. 1976) (entering indemnity agreement terminates interest liability because Phillips "lost the reasonably free use of the money"). No indemnity agreements were entered into by the plaintiffs here, however, and as the Kansas Supreme Court found, Phillips' indemnity offer was not "unconditional" — to the contrary, it was "far more stringent than the corporate undertaking Phillips filed with the FPC." 222 Kan., at 567, 567 P. 2d, at 1320. It is also uncontested that Phillips continued to use freely the unpaid suspense royalties long after its "burdensome" conditions were not accepted by the royalty owners. Id., at 566, 567 P. 2d, at 1320. The Court errs drastically by relying on what one Federal District Court "appears" to have held to sustain a constitutional choice-of-law claim.

[32] The fact that the Kansas court rejected its own State's statute in favor of the uniform federal interest rate, to which it found Phillips had contractually agreed, demonstrates the absence of parochialism from its decision. There is absolutely no indication that Texas or Oklahoma courts would have decided differently had the same claim been presented there.

[33] Neither Phillips nor the Court contends that Kansas cannot constitutionally apply its own laws to the claims of Kansas residents, even though the leased land may lie in other States and no other apparent connection to Kansas may exist. Phillips has done business in Kansas throughout the years relevant to this litigation and it seems unarguable that application of Kansas law, or indeed the law of any of the 50 States where royalty owners reside, to the claims of at least some of the plaintiff class members was thus "perceived as possible" by Phillips "at the time of contracting." Allstate, 449 U. S., at 331, n. 24 (STEVENS, J., concurring in judgment); see id., at 316-318, and n. 22. It was also possible, of course, that any number of royalty owners might have moved to Kansas in the years Phillips held their suspense royalties, and that Kansas has a substantial interest in seeing its residents treated fairly when they invoke the jurisdiction of its courts. See Weinberg, Conflicts Cases and the Problem of Relevant Time, 10 Hofstra L. Rev. 1023, 1040-1043 (1982). Because Phillips must have anticipated application of Kansas law to some claims, the eventual geographic distribution of royalty owners' residences goes only to "likelihood" and not to fairness of the application of Kansas law. Allstate, 449 U. S., at 331, n. 24 (STEVENS, J., concurring in judgment). Additionally, it is easy enough for national firms like Phillips to make clear their expectations by placing express choice-of-law clauses in their contracts. See Allstate, 449 U. S., at 318, n. 24; id., at 324, 328 (STEVENS, J., concurring in judgment); Clay v. Sun Ins. Office, Ltd., 377 U. S. 179, 182 (1964). No such clauses are present here, however.

[34] See Allstate, 449 U. S., at 326 (STEVENS, J., concurring in judgment) (footnote omitted): "I question whether a judge's decision to apply the law of his own State could ever be described as wholly irrational. For judges are presumably familiar with their own state law and may find it difficult and time consuming to discover and apply correctly the law of another State. The forum State's interest in fair and efficient administration of justice is therefore sufficient, in my judgment, to attach a presumption of validity to a forum State's decision to apply its own law to a dispute over which it has jurisdiction."

[35] Accord, 3 H. Newberg, Newberg on Class Actions § 13.28, p. 63 (2d ed. 1985) ("the Kansas court in Shutts II may have committed only harmless error in applying its own law because there appears to be no significant conflict of laws among the states involved").

[36] The Court's decision in Allstatehas been criticized on the ground that there may well have been no true conflict of laws present, and, therefore, no need for extended constitutional discussion. See Weintraub, Who's Afraid of Constitutional Limitations on Choice of Law?, 10 Hofstra L. Rev. 17, 18-24 (1981). As I have demonstrated, the Court is once again open to this criticism.

Indeed, unless our review is restricted to cases in which conflicts are unambiguous, the Court will constantly run the risk of misconstruing the common law of any number of States. For example, the Kansas Supreme Court has already decided that Oklahoma would not apply its statutory interest rates where there is evidence of a contractual agreement to a different rate, and that such an agreement is present here. 235 Kan., at 220, 679 P. 2d, at 1180; 222 Kan., at 562-565, 567 P. 2d, at 1318-1319. Yet today the Court speculates that Oklahoma "would most likely apply" its statutory rates in this lawsuit. Ante, at 817. Since this Court has no more authority to resolve such issues of Oklahoma law than does the Kansas Supreme Court, however, the latter court remains free to abide by its former judgment.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT.

[816] [817] [818] [819] [820] Souter, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O'Connor, Scalia, Kennedy, Thomas, and Ginsburg, JJ., joined. Rehnquist, C. J., filed a concurring opinion, in which Scalia and Kennedy, JJ., joined, post, p. 865. Breyer, J., filed a dissenting opinion, in which Stevens, J., joined, post, p. 865.

Laurence H. Tribe argued the cause for petitioners. With him on the briefs were Brian Koukoutchos, Jonathan S. Massey, Frederick M. Baron, Brent M. Rosenthal, and Steve Baughman.

Elihu Inselbuch argued the cause for respondents. With him on the brief for respondents Ahearn et al. were Peter Van N. Lockwood, Joseph B. Cox, Jr., Joseph F. Rice, Steven Kazan, and Harry F. Wartnick. Herbert M. Wachtell, Paul J. Bschorr, Richard B. Sypher, Kelly C. Wooster, Stephen M. Snyder, William R. Irwin, Rodney L. Eshelman, Donald T. Ramsey, Stuart Philip Ross, Sean M. Hanifan, Merril J. Hirsh, and Michael E. Jones filed a brief for respondents Continental Casualty Co. et al.^[1]

[821] Justice Souter, delivered the opinion of the Court.

This case turns on the conditions for certifying a mandatory settlement class on a limited fund theory under Federal Rule of Civil Procedure 23(b)(1)(B). We hold that applicants for contested certification on this rationale must show that the fund is limited by more than the agreement of the parties, and has been allocated to claimants belonging within the class by a process addressing any conflicting interests of class members.

I

Like Amchem Products, Inc. v. Windsor, 521 U. S. 591 (1997), this case is a class action prompted by the elephantine mass of asbestos cases, and our discussion in Amchem will suffice to show how this litigation defies customary judicial administration and calls for national legislation.^[2] In 1967, one of the first actions for personal asbestos injury was filed in the United States District Court for the Eastern District [822] of Texas against a group of asbestos manufacturers. App. to Pet. for Cert. 252a. In the 1970's and 1980's, plaintiffs' lawyers throughout the country, particularly in East Texas, honed the litigation of asbestos claims to the point of almost mechanical regularity, improving the forensic identification of diseases caused by asbestos, refining theories of liability, and often settling large inventories of cases. See D. Hensler, W. Felstiner, M. Selvin, & P. Ebener, Asbestos in the Courts: The Challenge of Mass Toxic Torts vii (1985); McGovern, Resolving Mature Mass Tort Litigation, 69 B. U. L. Rev. 659, 660-661 (1989); see also App. to Pet. for Cert. 253a.

Respondent Fibreboard Corporation was a defendant in the 1967 action. Although it was primarily a timber company, from the 1920's through 1971 the company manufactured a variety of products containing asbestos, mainly for high-temperature industrial applications. As the tide of asbestos litigation rose, Fibreboard found itself litigating on two fronts. On one, plaintiffs were filing a stream of personal injury claims against it, swelling throughout the 1980's and 1990's to thousands of new claims for compensatory damages each year. Id., at 265a; App. 1040a. On the second front, Fibreboard was battling for funds to pay its tort claimants. From May 1957 through March 1959, respondent Continental Casualty Company had provided Fibreboard with a comprehensive general liability policy with limits of $1 million per occurrence, $500,000 per claim, and no aggregate limit. Fibreboard also claimed that respondent Pacific Indemnity Company had insured it from 1956 to 1957 under a similar policy. App. to Pet. for Cert. 267a-268a. Beginning in 1979, Fibreboard was locked in coverage litigation with Continental and Pacific in a California state trial court, which in 1990 held Continental and Pacific responsible for indemnification as to any claim by a claimant exposed to Fibreboard asbestos products prior to their policies' respective [823] expiration dates. Id., at 268a-269a. The decree also required the insurers to pay the full cost of defense for each claim covered. Ibid. The insurance companies appealed.

With asbestos case filings continuing unabated, and its secure insurance assets almost depleted, Fibreboard in 1988 began a practice of "structured settlement," paying plaintiffs 40 percent of the settlement figure up front with the balance contingent upon a successful resolution of the coverage dispute.^[3] By 1991, however, the pace of filings forced Fibreboard to start settling cases entirely with the assignments of its rights against Continental, with no initial payment. To reflect the risk that Continental might prevail in the coverage dispute, these assignment agreements generally carried a figure about twice the nominal amount of earlier settlements. Continental challenged Fibreboard's right to make unilateral assignments, but in 1992 a California state court ruled for Fibreboard in that dispute.^[4]

Meanwhile, in the aftermath of a 1990 Federal Judicial Center conference on the asbestos litigation crisis, Fibreboard approached a group of leading asbestos plaintiffs' lawyers, offering to discuss a "global settlement" of its asbestos [824] personal-injury liability. Early negotiations bore relatively little fruit, save for the December 1992 settlement by assignment of a significant inventory of pending claims. This settlement brought Fibreboard's deferred settlement obligations to more than $1.2 billion, all contingent upon victory over Continental on the scope of coverage and the validity of the settlement assignments.

In February 1993, after Continental had lost on both issues at the trial level, and thus faced the possibility of practically unbounded liability, it too joined the global settlement negotiations. Because Continental conditioned its part in any settlement on a guarantee of "total peace," ensuring no unknown future liabilities, talks focused on the feasibility of a mandatory class action, one binding all potential plaintiffs and giving none of them any choice to opt out of the certified class. Negotiations continued throughout the spring and summer of 1993, but the difficulty of settling both actually pending and potential future claims simultaneously led to an agreement in early August to segregate and settle an inventory of some 45,000 pending claims, being substantially all those filed by one of the plaintiffs' firms negotiating the global settlement. The settlement amounts per claim were higher than average, with one-half due on closing and the remainder contingent upon either a global settlement or Fibreboard's success in the coverage litigation. This agreement provided the model for settling inventory claims of other firms.

With the insurance companies' appeal of the consolidated coverage case set to be heard on August 27, the negotiating parties faced a motivating deadline, and about midnight before the argument, in a coffee shop in Tyler, Texas, the negotiators finally agreed upon $1.535 billion as the key term of a "Global Settlement Agreement." $1.525 billion of this sum would come from Continental and Pacific, in the proportion established by the California trial court in the coverage case, [825] while Fibreboard would contribute $10 million, all but $500,000 of it from other insurance proceeds, App. 84a. The negotiators also agreed to identify unsettled present claims against Fibreboard and set aside an as-then unspecified fund to resolve them, anticipating that the bulk of any excess left in that fund would be transferred to class claimants. Ahearn v. Fibreboard Corp., 162 F. R. D. 505, 517 (ED Tex. 1995). The next day, as a hedge against the possibility that the Global Settlement Agreement might fail, plaintiffs' counsel insisted as a condition of that agreement that Fibreboard and its two insurers settle the coverage dispute by what came to be known as the "Trilateral Settlement Agreement." The two insurers agreed to provide Fibreboard with funds eventually set at $2 billion to defend against asbestos claimants and pay the winners, should the Global Settlement Agreement fail to win approval. Id., at 517, 521; see also App. to Pet. for Cert. 492a.^[5]

On September 9, 1993, as agreed, a group of named plaintiffs filed an action in the United States District Court for the Eastern District of Texas, seeking certification for settlement purposes of a mandatory class comprising three groups: all persons with personal injury claims against Fibreboard for asbestos exposure who had not yet brought suit or settled their claims before the previous August 27; those who had dismissed such a claim but retained the right to bring a future action against Fibreboard; and "past, present and future spouses, parents, children, and other relatives" of class members [826] exposed to Fibreboard asbestos.^[6] The class did not include claimants with actions presently pending against Fibreboard or claimants "who filed and, for cash payment or some other negotiated value, dismissed claims against Fibreboard, and whose only retained right is to sue Fibreboard upon development of an asbestos-related malignancy." Id., [827] at 534a-535a. The complaint pleaded personal injury claims against Fibreboard, and, as justification for class certification, relied on the shared necessity of ensuring insurance funds sufficient for compensation. Id., at 552a-569a. After Continental and Pacific had obtained leave to intervene as party-defendants, the District Court provisionally granted class certification, enjoined commencement of further separate litigation against Fibreboard by class members, and appointed a guardian ad litem to review the fairness of the settlement to the class members. See In re Asbestos Litigation, 90 F. 3d 963, 972 (CA5 1996).

As finally negotiated, the Global Settlement Agreement provided that in exchange for full releases from class members, Fibreboard, Continental, and Pacific would establish a trust to process and pay class members' asbestos personal injury and death claims. Claimants seeking compensation would be required to try to settle with the trust. If initial settlement attempts failed, claimants would have to proceed to mediation, arbitration, and a mandatory settlement conference. Only after exhausting that process could claimants go to court against the trust, subject to a limit of $500,000 per claim, with punitive damages and prejudgment interest barred. Claims resolved without litigation would be discharged over three years, while judgments would be paid out over a 5- to 10-year period. The Global Settlement Agreement also contained spendthrift provisions to conserve the trust, and provided for paying more serious claims first in the event of a shortfall in any given year. Id., at 973.

After an extensive campaign to give notice of the pending settlement to potential class members, the District Court allowed groups of objectors, including petitioners here, to intervene. After an 8-day fairness hearing, the District Court certified the class and approved the settlement as "fair, adequate, and reasonable" under Rule 23(e). Ahearn, 162 F. R. D., at 527. Satisfied that the requirements of Rule [828] 23(a) were met, id., at 523-526,^[7] the District Court certified the class under Rule 23(b)(1)(B),^[8] citing the risk that Fibreboard might lose or fare poorly on appeal of the coverage case or lose the assignment-settlement dispute, leaving it without funds to pay all claims. Id., at 526. The "allowance of individual adjudications by class members," the District Court concluded, "would have destroyed the opportunity to compromise the insurance coverage dispute by creating the settlement fund, and would have exposed the class members to the very risks that the settlement addresses." Id., at 527. In response to intervenors' objections that the absence of a "limited fund" precluded certification under Rule 23(b)(1)(B), the District Court ruled that although the subdivision is not so restricted, if it were, this case would qualify. It found both the "disputed insurance asset liquidated by the $1.535 billion Global Settlement," and, alternatively, "the sum of the value of Fibreboard plus the value of its insurance coverage," as measured by the insurance funds' settlement value, to be relevant "limited funds." App. to Pet. for Cert. 491a-492a.

On appeal, the Fifth Circuit affirmed both as to class certification and adequacy of settlement. In re Asbestos Litiga- [829] tion, supra.^[9] Agreeing with the District Court's application of Rule 23(a), the Court of Appeals found that there was commonality in class members' shared interest in securing and equitably distributing maximum possible settlement funds, and that the representative plaintiffs were sufficiently typical both in sharing that interest and in basing their claims on the same legal and remedial theories that absent class members might raise. Id., at 975-976. The Fifth Circuit also thought that there were no conflicts of interest sufficiently serious to undermine the adequacy of class counsel's representation. Id., at 976-982.^[10] As to Rule 23(b)(1)(B), the court approved the class certification on a "limited fund" rationale based on the threat to "the ability of other members of the class to receive full payment for their injuries from Fibreboard's limited assets." Id., at 982.^[11] The Court of Appeals cited expert testimony that Fibreboard faced enormous potential liabilities and defense costs that would likely equal or exceed the amount of damages paid out, and concluded that even combining Fibreboard's value of some $235 million with the $2 billion provided in the Trilateral Settlement Agreement, the company would be unable to pay all valid claims against it within five to nine years. Ibid. Judge Smith dissented, arguing among other things that the [830] majority had skimped on serious due process concerns, had glossed over problems of commonality, typicality, and adequacy of representation, and had ignored a number of justiciability issues. See generally id., at 993-1026.^[12]

Shortly thereafter, this Court decided Amchem and proceeded to vacate the Fifth Circuit's judgment and remand for further consideration in light of that decision. 521 U. S. 1114 (1997). On remand, the Fifth Circuit again affirmed, in a brief per curiam opinion, distinguishing Amchem on the grounds that the instant action proceeded under Rule 23(b)(1)(B) rather than (b)(3), and did not allocate awards according to the nature of the claimant's injury. In re Asbestos Litigation, 134 F. 3d 668, 669-670 (1998). Again citing the findings on certification under Rule 23(b)(1)(B), the Fifth Circuit affirmed as "incontestable" the District Court's conclusion that the terms of the subdivision had been met. Id., at 670. The Court of Appeals acknowledged Amchem `s admonition that settlement class actions may not proceed unless the requirements of Rule 23(a) are met, but noted that the District Court had made extensive findings supporting its Rule 23(a) determinations. Ibid. Judge Smith again dissented, reiterating his previous concerns, and argued specifically that the District Court erred in certifying the class under Rule 23(b)(1)(B) on a "limited fund" theory because the only limited fund in the case was a creature of the settlement itself. Id., at 671-674.

We granted certiorari, 524 U. S. 936 (1998), and now reverse.

II

The nub of this case is the certification of the class under Rule 23(b)(1)(B) on a limited fund rationale, but before we reach that issue, there are two threshold matters. First, [831] petitioners call the class claims nonjusticiable under Article III, saying that this is a feigned action initiated by Fibreboard to control its future asbestos tort liability, with the "vast majority" of the "exposure-only" class members being without injury in fact and hence without standing to sue. Brief for Petitioners 44-50. Ordinarily, of course, this or any other Article III court must be sure of its own jurisdiction before getting to the merits. Steel Co. v. Citizens For Better Environment, 523 U. S. 83, 88-89 (1998). But the class certification issues are, as they were in Amchem, "logically antecedent" to Article III concerns, 521 U. S., at 612, and themselves pertain to statutory standing, which may properly be treated before Article III standing, see Steel Co., supra, at 92. Thus the issue about Rule 23 certification should be treated first, "mindful that [the Rule's] requirements must be interpreted in keeping with Article III constraints . . . ." Amchem, supra, at 612-613.

Petitioners also argue that the Fifth Circuit on remand disregarded Amchem in passing on the Rule 23(a) issues of commonality, typicality, and adequacy of representation. Brief for Petitioners 13-22. We agree that in reinstating its affirmance of the District Court's certification decision, the Fifth Circuit fell short in its attention to Amchem's explanation of the governing legal standards. Two aspects in particular of the District Court's certification should have received more detailed treatment by the Court of Appeals. First, the District Court's enquiry into both commonality and typicality focused almost entirely on the terms of the settlement. See Ahearn, 162 F. R. D., at 524.[13] Second, and more significantly, the District Court took no steps at the outset to ensure that the potentially conflicting interests of [832] easily identifiable categories of claimants be protected by provisional certification of subclasses under Rule 23(c)(4), relying instead on its post hoc findings at the fairness hearing that these subclasses in fact had been adequately represented. As will be seen, however, these points will reappear when we review the certification on the Court of Appeals's "limited fund" theory under Rule 23(b)(1)(B). We accordingly turn directly to that.

III

A

Although representative suits have been recognized in various forms since the earliest days of English law, see generally S. Yeazell, From Medieval Group Litigation to the Modern Class Action (1987); see also Marcin, Searching for the Origin of the Class Action, 23 Cath. U. L. Rev. 515, 517524 (1973), class actions as we recognize them today developed as an exception to the formal rigidity of the necessary parties rule in equity, see Hazard, Gedid, & Sowle, An Historical Analysis of the Binding Effect of Class Suits, 146 U. Pa. L. Rev. 1849, 1859-1860 (1998) (hereinafter Hazard, Gedid, & Sowle), as well as from the bill of peace, an equitable device for combining multiple suits, see Z. Chafee, Some Problems of Equity 161-167, 200-203 (1950). The necessary parties rule in equity mandated that "all persons materially interested, either as plaintiffs or defendants in the subject matter of the bill ought to be made parties to the suit, however numerous they may be." West v. Randall, 29 F. Cas. 718, 721 (No. 17,424) (CC RI) (1820) (Story, J.). But because that rule would at times unfairly deny recovery to the party before the court, equity developed exceptions, among them one to cover situations "where the parties are very numerous, and the court perceives, that it will be almost impossible to bring them all before the court; or where the question is of general interest, and a few may sue for the benefit of the whole; or where the parties form a part of a voluntary association [833] for public or private purposes, and may be fairly supposed to represent the rights and interests of the whole . . . ." Id., at 722; see J. Story, Commentaries on Equity Pleadings § 97 (J. Gould 10th rev. ed. 1892); F. Calvert, A Treatise upon the Law Respecting Parties to Suits in Equity 17-29 (1837) (hereinafter Calvert, Parties to Suits in Equity). From these roots, modern class action practice emerged in the 1966 revision of Rule 23. In drafting Rule 23(b), the Advisory Committee sought to catalogue in "functional" terms "those recurrent life patterns which call for mass litigation through representative parties." Kaplan, A Prefatory Note, 10 B. C. Ind. & Com. L. Rev. 497 (1969).

Rule 23(b)(1)(B) speaks from "a vantage point within the class, [from which the Advisory Committee] spied out situations where lawsuits conducted with individual members of the class would have the practical if not technical effect of concluding the interests of the other members as well, or of impairing the ability of the others to protect their own interests." Kaplan, Continuing Work of the Civil Committee: 1966 Amendments of the Federal Rules of Civil Procedure (I), 81 Harv. L. Rev. 356, 388 (1967) (hereinafter Kaplan, Continuing Work). Thus, the subdivision (read with subdivision (c)(2)) provides for certification of a class whose members have no right to withdraw, when "the prosecution of separate actions . . . would create a risk" of "adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests." Fed. Rule Civ. Proc. 23(b)(1)(B).^[14] Classic examples [834] of such a risk of impairment may, for example, be found in suits brought to reorganize fraternal-benefit societies, see, e. g., Supreme Tribe of Ben-Hur v. Cauble, 255 U. S. 356 (1921); actions by shareholders to declare a dividend or otherwise to "fix [their] rights," Kaplan, Continuing Work 388; and actions charging "a breach of trust by an indenture trustee or other fiduciary similarly affecting the members of a large class" of beneficiaries, requiring an accounting or similar procedure "to restore the subject of the trust," Advisory Committee's Notes on Fed. Rule Civ. Proc. 23, 28 U. S. C. App., p. 696 (hereinafter Adv. Comm. Notes). In each of these categories, the shared character of rights claimed or relief awarded entails that any individual adjudication by a class member disposes of, or substantially affects, the interests of absent class members.

Among the traditional varieties of representative suit encompassed by Rule 23(b)(1)(B) were those involving "the presence of property which call[ed] for distribution or management," J. Moore & J. Friedman, 2 Federal Practice 2240 (1938) (hereinafter Moore & Friedman). One recurring type of such suits was the limited fund class action, aggregating "claims . . . made by numerous persons against a fund insufficient to satisfy all claims." Adv. Comm. Notes 697; cf. 1 Newberg § 4.09, at 4-33 ("Classic" limited fund class actions "include claimants to trust assets, a bank account, insurance proceeds, company assets in a liquidation sale, proceeds of a ship sale in a maritime accident suit, and others").^[15] The Advisory Committee cited Dickinson v. [835] Burnham, 197 F. 2d 973 (CA2), cert. denied, 344 U. S. 875 (1952), as illustrative of this tradition. In Dickinson, investors hoping to save a failing company had contributed some $600,000, which had been misused until nothing was left but a pool of secret profits on a fraction of the original investment. In a class action, the District Court took charge of this fund, subjecting it to a constructive trust for division among subscribers who demonstrated their claims, in amounts proportional to each class member's percentage of all substantiated claims. 197 F. 2d, at 978.[16] The Second Circuit approved the class action and the distribution of the entire pool to claimants, noting that "[a]lthough none of the contributors has been paid in full, no one . . . now asserts or suggests that they should have full recovery . . . as on an ordinary tort liability for conspiracy and defrauding. The court's power of disposition over the fund was therefore absolute [836] and final." Id., at 980.^[17] As the Advisory Committee recognized in describing Dickinson, equity required absent parties to be represented, joinder being impractical, where individual claims to be satisfied from the one asset would, as a practical matter, prejudice the rights of absent claimants against a fund inadequate to pay them all.

Equity, of course, recognized the same necessity to bind absent claimants to a limited fund when no formal imposition of a constructive trust was entailed. In Guffanti v. National Surety Co., 196 N. Y. 452, 458, 90 N. E. 174, 176 (1909), for example, the defendant received money to supply steamship tickets and had posted a $15,000 bond as required by state law. He converted to personal use funds collected from more than 150 ticket purchasers, was then adjudged bankrupt, and absconded. One of the defrauded ticket purchasers sued the surety in equity on behalf of himself and all others like him. Over the defendant's objection, the New York Court of Appeals sustained the equitable class suit, citing among other considerations the fact that all recovery had to come from a "limited fund out of which the aggregate recoveries must be sought" that was inadequate to pay all claims, and subject to pro rata distribution. Id., at 458, 90 N. E., at 176. See Hazard, Gedid, & Sowle 1915 ("[Guffanti] [837] explained that when a debtor's assets were less than the total of the creditors' claims, a binding class action was not only permitted but was required; otherwise some creditors (the parties) would be paid and others (the absentees) would not"). See also Morrison v. Warren 174 Misc. 233, 234, 20 N. Y. S. 2d 26, 27 (Sup. Ct. N. Y. Cty. 1940) (suit on behalf of more than 400 beneficiaries of an insurance policy following a fire appropriate where "the amount of the claims . . . greatly exceeds the amount of the insurance"); National Surety Co. v. Graves, 211 Ala. 533, 534, 101 So. 190 (1924) (suit against a surety company by stockholders "for the benefit of themselves and all others similarly situate who will join the suit" where it was alleged that individual suits were being filed on surety bonds that "would result in the exhaustion of the penalties of the bonds, leaving many stockholders without remedy").

Ross v. Crary, 1 Paige Ch. 416, 417-418 (N. Y. Ch. 1829), presents the concept of the limited fund class action in another incarnation. "[D]ivers suits for general legacies," id., at 417, were brought by various legatees against the executor of a decedent's estate. The Ross court stated that where "there is an allegation of a deficiency of the fund, so that an account of the estate is necessary," the court will "direc[t] an account in one cause only" and "stay the proceeding[s] in the others, leaving all the parties interested in the fund, to come in under the decree." Id., at 417-418. Thus, in equity, legatee and creditor bills against the assets of a decedent's estate had to be brought on behalf of all similarly situated claimants where it was clear from the pleadings that the available portion of the estate could not satisfy the aggregate claims against it.^[18]

[838] B

The cases forming this pedigree of the limited fund class action as understood by the drafters of Rule 23 have a number of common characteristics, despite the variety of circumstances from which they arose. The points of resemblance are not necessarily the points of contention resolved in the particular cases, but they show what the Advisory Committee must have assumed would be at least a sufficient set of conditions to justify binding absent members of a class under Rule 23(b)(1)(B), from which no one has the right to secede.

The first and most distinctive characteristic is that the totals of the aggregated liquidated claims and the fund available for satisfying them, set definitely at their maximums, demonstrate the inadequacy of the fund to pay all the claims. The concept driving this type of suit was insufficiency, which alone justified the limit on an early feast to avoid a later famine. See, e. g., Guffanti, supra, at 457, 90 N. E., at 176 ("The total amount of the claims exceeds the penalty of the bond . . . . A just and equitable payment from the bond would be a distribution pro rata upon the amount of the several embezzlements. Unless in a case like this the amount [839] of the bond is so distributed among the persons having claims which are secured thereby, it must necessarily result in a scramble for precedence in payment, and the amount of the bond may be paid to the favored, or to those first obtaining knowledge of the embezzlements"); Graves, supra, at 534, 101 So., at 190 ("The primary equity of the bill is the adjustment of claims and the equitable apportionment of a fund provided by law, which is insufficient to pay claimants in full"). The equity of the limitation is its necessity.

Second, the whole of the inadequate fund was to be devoted to the overwhelming claims. See, e. g., Dickinson, 197 F. 2d, at 979-980 (rejecting a challenge by holder of funds to the court's disposition of the entire fund); see also United States v. Butterworth-Judson Corp., 269 U. S. 504, 513 (1926) ("Here, the fund being less than the debts, the creditors are entitled to have all of it distributed among them according to their rights and priorities"). It went without saying that the defendant or estate or constructive trustee with the inadequate assets had no opportunity to benefit himself or claimants of lower priority by holding back on the amount distributed to the class. The limited fund cases thus ensured that the class as a whole was given the best deal; they did not give a defendant a better deal than seriatim litigation would have produced.

Third, the claimants identified by a common theory of recovery were treated equitably among themselves. The cases assume that the class will comprise everyone who might state a claim on a single or repeated set of facts, invoking a common theory of recovery, to be satisfied from the limited fund as the source of payment. Each of the people represented in Ross, for example, had comparable entitlement as a legatee under the testator's will. Those subject to representation in Dickinson had a common source of claims in the solicitation of funds by parties whose subsequent defalcation left them without their investment, while in Guffanti the individuals represented had each entrusted [840] money for ticket purchases. In these cases the hope of recovery was limited, respectively, by estate assets, the residuum of profits, and the amount of the bond. Once the represented classes were so identified, there was no question of omitting anyone whose claim shared the common theory of liability and would contribute to the calculated shortfall of recovery. See Railroad Co. v. Orr, 18 Wall. 471, 474 (1873) (reciting the "well settled" general rule "that when it appears on the face of the bill that there will be a deficiency in the fund, and that there are other creditors or legatees who are entitled to a ratable distribution with the complainants, and who have a common interest with them, such creditors or legatees should be made parties to the bill, or the suit should be brought by the complainants in behalf of themselves and all others standing in a similar situation"). The plaintiff appeared on behalf of all similarly situated parties, see Calvert, Parties to Suits in Equity 24 ("[I]t is not sufficient that the plaintiff appear on behalf of numerous parties: the rule seems to be, that he must appear on behalf of all who are interested"); thus, the creditors' bill was brought on behalf of all creditors, cf. Leigh v. Thomas, 2 Ves. Sen. 312, 313, 28 Eng. Rep. 201 (Ch. 1751) ("No doubt but a bill may be by a few creditors in behalf of themselves and the rest. . . but there is no instance of a bill by three or four to have an account of the estate, without saying they bring it in behalf of themselves and the rest of the creditors"), the constructive trust was asserted on behalf of all victims of the fraud, and the surety suit was brought on behalf of all entitled to a share of the bond.^[19] Once all similar claims [841] were brought directly or by representation before the court, these antecedents of the mandatory class action presented straightforward models of equitable treatment, with the simple equity of a pro rata distribution providing the required fairness, see 1 J. Pomeroy, Equity Jurisprudence § 407, pp. 764-765 (4th ed. 1918) ("[I]f the fund is not sufficient to discharge all claims upon it in full . . . equity will incline to regard all the demands as standing upon an equal footing, and will decree a pro rata distribution or payment").^[20]

In sum, mandatory class treatment through representative actions on a limited fund theory was justified with reference to a "fund" with a definitely ascertained limit, all of which would be distributed to satisfy all those with liquidated claims based on a common theory of liability, by an equitable, pro rata distribution.

C

The Advisory Committee, and presumably the Congress in approving subdivision (b)(1)(B), must have assumed that an action with these characteristics would satisfy the limited [842] fund rationale cognizable under that subdivision. The question remains how far the same characteristics are necessary for limited fund treatment. While we cannot settle all the details of a subdivision (b)(1)(B) limited fund here (and so cannot decide the ultimate question whether settlements of multitudes of related tort actions are amenable to mandatory class treatment), there are good reasons to treat these characteristics as presumptively necessary, and not merely sufficient, to satisfy the limited fund rationale for a mandatory action. At the least, the burden of justification rests on the proponent of any departure from the traditional norm.

It is true, of course, that the text of Rule 23(b)(1)(B) is on its face open to a more lenient limited fund concept, just as it covers more historical antecedents than the limited fund. But the greater the leniency in departing from the historical limited fund model, the greater the likelihood of abuse in ways that will be apparent when we apply the limited fund criteria to the case before us. The prudent course, therefore, is to presume that when subdivision (b)(1)(B) was devised to cover limited fund actions, the object was to stay close to the historical model. As will be seen, this limiting construction finds support in the Advisory Committee's expressions of understanding, minimizes potential conflict with the Rules Enabling Act, and avoids serious constitutional concerns raised by the mandatory class resolution of individual legal claims, especially where a case seeks to resolve future liability in a settlement-only action.

To begin with, the Advisory Committee looked cautiously at the potential for creativity under Rule 23(b)(1)(B), at least in comparison with Rule 23(b)(3). Although the Committee crafted all three subdivisions of the Rule in general, practical terms, without the formalism that had bedeviled the original Rule 23, see Kaplan, Continuing Work 380-386, the Committee was consciously retrospective with intent to codify preRule categories under Rule 23(b)(1), not forward looking as it was in anticipating innovations under Rule 23(b)(3). Compare [843] Civil Rules Advisory Committee Meeting, Oct. 31-Nov. 2, 1963, Congressional Information Service Records of the U. S. Judicial Conference, Committee on Rules of Practice and Procedure 1935-1988, No. CI-7104-53, p. 11 (hereinafter Civil Rules Meeting) (comments of Reporter Kaplan) (Rule 23(b)(3) represents "the growing point of the law"); id., at 16 (comments of Committee Member Prof. Albert M. Sacks) (Rule 23(b)(3) is "an evolving area"). Thus, the Committee intended subdivision (b)(1) to capture the "`standard' " class actions recognized in pre-Rule practice, Kaplan, Continuing Work 394.

Consistent with its backward look under subdivision (b)(1), as commentators have pointed out, it is clear that the Advisory Committee did not contemplate that the mandatory class action codified in subdivision (b)(1)(B) would be used to aggregate unliquidated tort claims on a limited fund rationale. See Monaghan, Antisuit Injunctions and Preclusion Against Absent Nonresident Class Members, 98 Colum. L. Rev. 1148, 1164 (1998) ("The `framers' of Rule 23 did not envision the expansive interpretations of the rule that have emerged . . . . No draftsmen contemplated that, in mass torts, (b)(1)(B) `limited fund' classes would emerge as the functional equivalent to bankruptcy by embracing `funds' created by the litigation itself"); see also Schwarzer, Settlement of Mass Tort Class Actions: Order Out of Chaos, 80 Cornell L. Rev. 837, 840 (1995) ("The original concept of the limited fund class does not readily fit the situation where a large volume of claims might eventually result in judgments that in the aggregate could exceed the assets available to satisfy them"); Marcus, They Can't Do That, Can They? Tort Reform Via Rule 23, 80 Cornell L. Rev. 858, 877 (1995). None of the examples cited in the Advisory Committee Notes or by Professor Kaplan in explaining Rule 23(b)(1)(B) remotely approach what was then described as a "mass accident" case. While the Advisory Committee focused much attention on the amenability of Rule 23(b)(3) to such cases, [844] the Committee's debates are silent about resolving tort claims under a mandatory limited fund rationale under Rule 23(b)(1)(B).^[21] It is simply implausible that the Advisory Committee, so concerned about the potential difficulties posed by dealing with mass tort cases under Rule 23(b)(3), with its provisions for notice and the right to opt out, see Rule 23(c)(2), would have uncritically assumed that mandatory versions of such class actions, lacking such protections, could be certified under Rule 23(b)(1)(B).^[22] We do not, it is true, decide the ultimate question whether Rule 23(b)(1)(B) may ever be used to aggregate individual tort claims, cf. Ticor Title Ins. Co. v. Brown, 511 U. S. 117, 121 (1994) [845] (per curiam). But we do recognize that the Committee would have thought such an application of the Rule surprising, and take this as a good reason to limit any surprise by presuming that the Rule's historical antecedents identify requirements.

The Rules Enabling Act underscores the need for caution. As we said in Amchem, no reading of the Rule can ignore the Act's mandate that "rules of procedure `shall not abridge, enlarge or modify any substantive right,'" Amchem, 521 U. S., at 613 (quoting 28 U. S. C. § 2072(b)); cf. Guaranty Trust Co. v. York, 326 U. S. 99, 105 (1945) ("In giving federal courts `cognizance' of equity suits in cases of diversity jurisdiction, Congress never gave, nor did the federal courts ever claim, the power to deny substantive rights created by State law or to create substantive rights denied by State law"). Petitioners argue that the Act has been violated here, asserting that the Global Settlement Agreement's priorities of claims and compromise of full recovery abrogated the state law that must govern this diversity action under 28 U. S. C. § 1652. See Brief for Petitioners 31-36. Although we need not grapple with the difficult choice-of-law and substantive state-law questions raised by petitioners' assertion, we do need to recognize the tension between the limited fund class action's pro rata distribution in equity and the rights of individual tort victims at law. Even if we assume that some such tension is acceptable under the Rules Enabling Act, it is best kept within tolerable limits by keeping limited fund practice under Rule 23(b)(1)(B) close to the practice preceding its adoption.

Finally, if we needed further counsel against adventurous application of Rule 23(b)(1)(B), the Rules Enabling Act and the general doctrine of constitutional avoidance would jointly sound a warning of the serious constitutional concerns that come with any attempt to aggregate individual tort claims on a limited fund rationale. First, the certification of a mandatory class followed by settlement of its action for money [846] damages obviously implicates the Seventh Amendment jury trial rights of absent class members.^[23] We noted in Ross v. Bernhard, 396 U. S. 531 (1970), that since the merger of law and equity in 1938, it has become settled among the lower courts that "class action plaintiffs may obtain a jury trial on any legal issues they present." Id., at 541. By its nature, however, a mandatory settlement-only class action with legal issues and future claimants compromises their Seventh Amendment rights without their consent.

Second, and no less important, mandatory class actions aggregating damages claims implicate the due process "principle of general application in Anglo-American jurisprudence that one is not bound by a judgment in personam in a litigation in which he is not designated as a party or to which he has not been made a party by service of process," Hansberry v. Lee, 311 U. S. 32, 40 (1940), it being "our `deep-rooted historic tradition that everyone should have his own day in court,' " Martin v. Wilks, 490 U. S. 755, 762 (1989) (quoting 18 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 4449, p. 417 (1981)); see Richards v. Jefferson County, 517 U. S. 793, 798-799 (1996). Although "`[w]e have recognized an exception to the general rule when, in certain limited circumstances, a person, although not a party, has his interests adequately represented by someone with the same interests who is a party," or "where a special remedial scheme exists expressly foreclosing successive litigation by nonlitigants, as for example in bankruptcy or probate," Martin, supra, at 762, n. 2 (citations omitted), the burden of justification rests on the exception.

The inherent tension between representative suits and the day-in-court ideal is only magnified if applied to damages claims gathered in a mandatory class. Unlike Rule 23(b)(3) class members, objectors to the collectivism of a mandatory [847] subdivision (b)(1)(B) action have no inherent right to abstain. The legal rights of absent class members (which in a class like this one would include claimants who by definition may be unidentifiable when the class is certified) are resolved regardless of either their consent, or, in a class with objectors, their express wish to the contrary.^[24] And in settlement-only class actions the procedural protections built into the Rule to protect the rights of absent class members during litigation are never invoked in an adversarial setting, see Amchem, supra, at 620.

In related circumstances, we raised the flag on this issue of due process more than a decade ago in Phillips Petroleum Co. v. Shutts, 472 U. S. 797 (1985). Shutts was a state class action for small sums of interest on royalty payments suspended on the authority of a federal regulation. Id., at 800. After certification of the class, the named plaintiffs notified each member by first-class mail of the right to opt out of the lawsuit. Out of a class of 33,000, some 3,400 exercised that right, and another 1,500 were excluded because their notices could not be delivered. Id., at 801. After losing at trial, the defendant, Phillips Petroleum, argued that the state court had no jurisdiction over claims of out-of-state plaintiffs without their affirmative consent. We said no and held that out-of-state plaintiffs could not invoke the same due process limits on personal jurisdiction that out-of-state defendants had under International Shoe Co. v. Washington, 326 U. S. [848] 310 (1945), and its progeny. 472 U. S., at 806-808. But we also saw that before an absent class member's right of action was extinguishable due process required that the member "receive notice plus an opportunity to be heard and participate in the litigation," and we said that "at a minimum . . . an absent plaintiff [must] be provided with an opportunity to remove himself from the class." Id., at 812.^[25]

IV

The record on which the District Court rested its certification of the class for the purpose of the global settlement did not support the essential premises of mandatory limited fund actions. It failed to demonstrate that the fund was limited except by the agreement of the parties, and it showed exclusions from the class and allocations of assets at odds with the concept of limited fund treatment and the structural protections of Rule 23(a) explained in Amchem.

A

The defect of certification going to the most characteristic feature of a limited fund action was the uncritical adoption by both the District Court and the Court of Appeals of figures ^[26] agreed upon by the parties in defining the limits of the fund and demonstrating its inadequacy.^[27] When a district [849] court, as here, certifies for class action settlement only, the moment of certification requires "heightene[d] attention," Amchem, 521 U. S., at 620, to the justifications for binding the class members. This is so because certification of a mandatory settlement class, however provisional technically, effectively concludes the proceeding save for the final fairness hearing. And, as we held in Amchem, a fairness hearing under Rule 23(e) is no substitute for rigorous adherence to those provisions of the Rule "designed to protect absentees," ibid., among them subdivision (b)(1)(B).^[28] Thus, in an action such as this the settling parties must present not only their agreement, but evidence on which the district court may ascertain the limit and the insufficiency of the fund, with support in findings of fact following a proceeding in which the evidence is subject to challenge, see In re Bendect in Products Liability Litigation, 749 F. 2d 300, 306 (CA6 1984) ("[T]he district court, as a matter of law, must have a fact-finding inquiry on this question and allow the opponents of class certification to present evidence that a limited fund [850] does not exist"); see also In re Temple, 851 F. 2d 1269, 1272 (CA11 1988) ("Without a finding as to the net worth of the defendant, it is difficult to see how the fact of a limited fund could have been established given that all of [the defendant's] assets are potentially available to suitors"); In re Dennis Greenman Securities Litigation, 829 F. 2d 1539, 1546 (CA11 1987) (discussing factual findings necessary for certification of a limited fund class action).

We have already alluded to the difficulties facing limited fund treatment of huge numbers of actions for unliquidated damages arising from mass torts, the first such hurdle being a computation of the total claims. It is simply not a matter of adding up the liquidated amounts, as in the models of limited fund actions. Although we might assume, arguendo, that prior judicial experience with asbestos claims would allow a court to make a sufficiently reliable determination of the probable total, the District Court here apparently thought otherwise, concluding that "there is no way to predict Fibreboard's future asbestos liability with any certainty." 162 F. R. D., at 528. Nothing turns on this conclusion, however, since there was no adequate demonstration of the second element required for limited fund treatment, the upper limit of the fund itself, without which no showing of insufficiency is possible.

The "fund" in this case comprised both the general assets of Fibreboard and the insurance assets provided by the two policies, see 90 F. 3d, at 982 (describing the fund as Fibreboard's entire equity and $2 billion in insurance assets under the Trilateral Settlement Agreement). As to Fibreboard's assets exclusive of the contested insurance, the District Court and the Fifth Circuit concluded that Fibreboard had a then-current sale value of $235 million that could be devoted to the limited fund. While that estimate may have been conservative,^[29] at least the District Court heard evidence [851] and made an independent finding at some point in the proceedings. The same, however, cannot be said for the value of the disputed insurance.

The insurance assets would obviously be "limited" in the traditional sense if the total of demonstrable claims would render the insurers insolvent, or if the policies provided aggregate limits falling short of that total; calculation might be difficult, but the way to demonstrate the limit would be clear. Neither possibility is presented in this case, however. Instead, any limit of the insurance asset here had to be a product of potentially unlimited policy coverage discounted by the risk that Fibreboard would ultimately lose the coverage dispute litigation. This sense of limit as a value discounted by risk is of course a step removed from the historical model, but even on the assumption that it would suffice for limited fund treatment, there was no adequate finding of fact to support its application here. Instead of undertaking an independent evaluation of potential insurance funds, the District Court (and, later, the Court of Appeals), simply accepted the $2 billion Trilateral Settlement Agreement figure as representing the maximum amount the insurance companies could be required to pay tort victims, concluding that "[w]here insurance coverage is disputed, it is appropriate to value the insurance asset at a settlement value." App. to Pet. for Cert. 492a.^[30]

[852] Settlement value is not always acceptable, however. One may take a settlement amount as good evidence of the maximum available if one can assume that parties of equal knowledge and negotiating skill agreed upon the figure through arms-length bargaining, unhindered by any considerations tugging against the interests of the parties ostensibly represented in the negotiation. But no such assumption may be indulged in this case, or probably in any class action settlement with the potential for gigantic fees.^[31] In this case, certainly, any assumption that plaintiffs' counsel could be of a mind to do their simple best in bargaining for the benefit of the settlement class is patently at odds with the fact that at least some of the same lawyers representing plaintiffs and the class had also negotiated the separate settlement of 45,000 pending claims, 90 F. 3d, at 969-970, 971, the full payment of which was contingent on a successful Global Settlement Agreement or the successful resolution of the insurance coverage dispute (either by litigation or by agreement, as eventually occurred in the Trilateral Settlement Agreement), id., at 971, n. 3; App. 119a-120a. Class counsel thus had great incentive to reach any agreement in the global settlement negotiations that they thought might survive a Rule 23(e) fairness hearing, rather than the best possible arrangement for the substantially unidentified global settlement class. Cf. Cramton, Individualized Justice, Mass [853] Torts, and "Settlement Class Actions": An Introduction, 80 Cornell L. Rev. 811, 832 (1995) ("[S]ide settlements suggest that class counsel has been laboring under an impermissible conflict of interest and that it may have preferred the interests of current clients to those of the future claimants in the settlement class"). The resulting incentive to favor the known plaintiffs in the earlier settlement was, indeed, an egregious example of the conflict noted in Amchem resulting from divergent interests of the presently injured and future claimants. See 521 U. S., at 626-627 (discussing adequacy of named representatives under Rule 23(a)(4)).

We do not, of course, know exactly what an independent valuation of the limit of the insurance assets would have shown. It might have revealed that even on the assumption that Fibreboard's coverage claim was sound, there would be insufficient assets to pay claims, considered with reference to their probable timing; if Fibreboard's own assets would not have been enough to pay the insurance shortfall plus any claims in excess of policy limits, the projected insolvency of the insurers and Fibreboard would have indicated a truly limited fund. (Nothing in the record, however, suggests that this would have been a supportable finding.) Or an independent valuation might have revealed assets of insufficient value to pay all projected claims if the assets were discounted by the prospects that the insurers would win the coverage cases. Or the court's independent valuation might have shown, discount or no discount, the probability of enough assets to pay all projected claims, precluding certification of any mandatory class on a limited fund rationale. Throughout this litigation the courts have accepted the assumption that the third possibility was out of the question, and they may have been right. But objecting and unidentified class members alike are entitled to have the issue settled by specific evidentiary findings independent of the agreement of defendants and conflicted class counsel.

[854] B

The explanation of need for independent determination of the fund has necessarily anticipated our application of the requirement of equity among members of the class. There are two issues, the inclusiveness of the class and the fairness of distributions to those within it. On each, this certification for settlement fell short.

The definition of the class excludes myriad claimants with causes of action, or foreseeable causes of action, arising from exposure to Fibreboard asbestos. While the class includes those with present claims never filed, present claims withdrawn without prejudice, and future claimants, it fails to include those who had previously settled with Fibreboard while retaining the right to sue again "upon development of an asbestos related malignancy," plaintiffs with claims pending against Fibreboard at the time of the initial announcement of the Global Settlement Agreement, and the plaintiffs in the "inventory" claims settled as a supposedly necessary step in reaching the global settlement, see 90 F. 3d, at 971. The number of those outside the class who settled with a reservation of rights may be uncertain, but there is no such uncertainty about the significance of the settlement's exclusion of the 45,000 inventory plaintiffs and the plaintiffs in the unsettled present cases, estimated by the Guardian Ad Litem at more than 53,000 as of August 27, 1993, see App. in No. 95-40635 (CA5), 6 Record, Tab 55, p. 72 (Report of the Guardian Ad Litem). It is a fair question how far a natural class may be depleted by prior dispositions of claims and still qualify as a mandatory limited fund class, but there can be no question that such a mandatory settlement class will not qualify when in the very negotiations aimed at a class settlement, class counsel agree to exclude what could turn out to be as much as a third of the claimants that negotiators thought might eventually be involved, a substantial number of whom class counsel represent, see App. to Pet. for Cert. [855] 321a (noting that the parties negotiating the global settlement agreed to use a negotiating benchmark of 186,000 future claims against Fibreboard).

Might such class exclusions be forgiven if it were shown that the class members with present claims and the outsiders ended up with comparable benefits? The question is academic here. On the record before us, we cannot speculate on how the unsettled claims would fare if the global settlement were approved, or under the trilateral settlement. As for the settled inventory claims, their plaintiffs appeared to have obtained better terms than the class members. They received an immediate payment of 50 percent of a settlement higher than the historical average, and would get the remainder if the global settlement were sustained (or the coverage litigation resolved, as it turned out to be by the Trilateral Settlement Agreement); the class members, by contrast, would be assured of a 3-year payout for claims settled, whereas the unsettled faced a prospect of mediation followed by arbitration as prior conditions of instituting suit, which would even then be subject to a recovery limit, a slower payout, and the limitations of the trust's spendthrift protection. See supra, at 827. Finally, as discussed below, even ostensible parity between settling nonclass plaintiffs and class members would be insufficient to overcome the failure to provide the structural protection of independent representation as for subclasses with conflicting interests.

On the second element of equity within the class, the fairness of the distribution of the fund among class members, the settlement certification is likewise deficient. Fair treatment in the older cases was characteristically assured by straightforward pro rata distribution of the limited fund. See supra, at 841. While equity in such a simple sense is unattainable in a settlement covering present claims not specifically proven and claims not even due to arise, if at all, until some future time, at the least such a settlement must [856] seek equity by providing for procedures to resolve the difficult issues of treating such differently situated claimants with fairness as among themselves.

First, it is obvious after Amchem that a class divided between holders of present and future claims (some of the latter involving no physical injury and attributable to claimants not yet born) requires division into homogeneous subclasses under Rule 23(c)(4)(B), with separate representation to eliminate conflicting interests of counsel. See Amchem, 521 U. S., at 627 (class settlements must provide "structural assurance of fair and adequate representation for the diverse groups and individuals affected"); cf. 5 J. Moore, T. Chorvat, D. Feinberg, R. Marmer, & J. Solovy, Moore's Federal Practice § 23.25[5][e], p. 23-149 (3d ed. 1998) (an attorney who represents another class against the same defendant may not serve as class counsel).^[32] As we said in Amchem, "for the currently injured, the critical goal is generous immediate payments," but "[t]hat goal tugs against the interest of exposure-only plaintiffs in ensuring an ample, inflationprotected fund for the future." 521 U. S., at 626. No such procedure was employed here, and the conflict was as contrary to the equitable obligation entailed by the limited fund [857] rationale as it was to the requirements of structural protection applicable to all class actions under Rule 23(a)(4).

Second, the class included those exposed to Fibreboard's asbestos products both before and after 1959. The date is significant, for that year saw the expiration of Fibreboard's insurance policy with Continental, the one that provided the bulk of the insurance funds for the settlement. Pre-1959 claimants accordingly had more valuable claims than post1959 claimants, see 90 F. 3d, at 1012-1013 (Smith, J., dissenting), the consequence being a second instance of disparate interests within the certified class. While at some point there must be an end to reclassification with separate counsel, these two instances of conflict are well within the requirement of structural protection recognized in Amchem.

It is no answer to say, as the Fifth Circuit said on remand, that these conflicts may be ignored because the settlement makes no disparate allocation of resources as between the conflicting classes. See 134 F. 3d, at 669-670. The settlement decides that the claims of the immediately injured deserve no provisions more favorable than the more speculative claims of those projected to have future injuries, and that liability subject to indemnification is no different from liability with no indemnification. The very decision to treat them all the same is itself an allocation decision with results almost certainly different from the results that those with immediate injuries or claims of indemnified liability would have chosen.

Nor does it answer the settlement's failures to provide structural protections in the service of equity to argue that the certified class members' common interest in securing contested insurance funds for the payment of claims was so weighty as to diminish the deficiencies beneath recognition here. See Brief for Respondent Class Representatives Ahearn et al. 31 (discussing this issue in the context of the Rule 23(a)(4) adequacy of representation requirement); id., [858] at 35-36 (citing, e. g., In re "Agent Orange" Product Liability Litigation, 996 F. 2d 1425, 1435-1436 (CA2 1993); In re "Agent Orange" Product Liability Litigation, 800 F. 2d 14, 18-19 (CA2 1986)). This argument is simply a variation of the position put forward by the proponents of the settlement in Amchem, who tried to discount the comparable failure in that case to provide separate representatives for subclasses with conflicting interests, see Brief for Petitioners in Amchem Products, Inc. v. Windsor, O. T. 1996, No. 96-270, p. 48 (arguing that "achieving a global settlement" was "an overriding concern that all plaintiffs [held] in common"); see also id., at 42 (arguing that the requirement of Rule 23(b)(3) that there be predominance of common questions of law or fact had been met by shared interest in "the fairness of the settlement"). The current position is just as unavailing as its predecessor in Amchem. There we gave the argument no weight, see 521 U. S., at 625-628, observing that "[t]he benefits asbestos-exposed persons might gain from the establishment of a grand-scale compensation scheme is a matter fit for legislative consideration," but the determination whether "proposed classes are sufficiently cohesive to warrant adjudication" must focus on "questions that preexist any settlement," id., at 622-623.^[33] Here, just as in the earlier case, the proponents of the settlement are trying to rewrite Rule 23; each ignores the fact that Rule 23 requires protections under subdivisions (a) and (b) against inequity and potential inequity at the precertification stage, quite independently of the required determination at postcertification fairness review under subdivision (e) that any settlement is fair in an overriding sense. A fairness hearing under subdivision (e) can no more swallow the preceding protective requirements [859] of Rule 23 in a subdivision (b)(1)(B) action than in one under subdivision (b)(3).^[34]

C

A third contested feature of this settlement certification that departs markedly from the limited fund antecedents is the ultimate provision for a fund smaller than the assets understood by the Court of Appeals to be available for payment of the mandatory class members' claims; most notably, Fibreboard was allowed to retain virtually its entire net worth. Given our treatment of the two preceding deficiencies of the certification, there is of course no need to decide whether this feature of the agreement would alone be fatal to the Global Settlement Agreement. To ignore it entirely, however, would be so misleading that we have decided simply to identify the issue it raises, without purporting to resolve it at this time.

Fibreboard listed its supposed entire net worth as a component of the total (and allegedly inadequate) assets available for claimants, but subsequently retained all but $500,000 [860] of that equity for itself.^[35] On the face of it, the arrangement seems irreconcilable with the justification of necessity in denying any opportunity for withdrawal of class members whose jury trial rights will be compromised, whose damages will be capped, and whose payments will be delayed. With Fibreboard retaining nearly all its net worth, it hardly appears that such a regime is the best that can be provided for class members. Given the nature of a limited fund and the need to apply its criteria at the certification stage, it is not enough for a District Court to say that it "need not ensure that a defendant designate a particular source of its assets to satisfy the class' claims; [but only that] the amount recovered by the class [be] fair." Ahearn, 162 F. R. D., at 527.

The District Court in this case seems to have had a further point in mind, however. One great advantage of class action treatment of mass tort cases is the opportunity to save the enormous transaction costs of piecemeal litigation, an advantage to which the settlement's proponents have referred in this case.^[36] Although the District Court made no specific [861] finding about the transaction cost saving likely from this class settlement, estimating the amount in the "hundreds of millions," id., at 529, it did conclude that the amount would exceed Fibreboard's net worth as the Court valued it, ibid. (Fibreboard's net worth of $235 million "is considerably less than the likely savings in defense costs under the Global Settlement"). If a settlement thus saves transaction costs that would never have gone into a class member's pocket in the absence of settlement, may a credit for some of the savings be recognized in a mandatory class action as an incentive to settlement? It is at least a legitimate question, which we leave for another day.

V

Our decision rests on a different basis from the ground of Justice Breyer's dissent, just as there was a difference in approach between majority and dissenters in Amchem. The nub of our position is that we are bound to follow Rule 23 as we understood it upon its adoption, and that we are not free to alter it except through the process prescribed by Congress in the Rules Enabling Act. Although, as the dissent notes, post, at 882, the revised text adopted in 1966 was understood (somewhat cautiously) to authorize the courts to provide for class treatment of mass tort litigation, it was also [862] the Court's understanding that the Rule's growing edge for that purpose would be the opt-out class authorized by subdivision (b)(3), not the mandatory class under subdivision (b)(1)(B), see supra, at 843-844. While we have not ruled out the possibility under the present Rule of a mandatory class to deal with mass tort litigation on a limited fund rationale, we are not free to dispense with the safeguards that have protected mandatory class members under that theory traditionally.

Apart from its effect on the requirements of subdivision (a) as explained and held binding in Amchem, the dissent would move the standards for mandatory actions in the direction of opt-out class requirements by according weight to this "unusual limited fund[`s] . . . witching hour," post, at 877, in exercising discretion over class certification. It is on this belief (that we should sustain the allowances made by the District Court in consideration of the exigencies of this settlement proceeding) that the dissent addresses each of the criteria for limited fund treatment (demonstrably insufficient fund, intraclass equity, and dedication of the entire fund, see post, at 873-883).

As to the calculation of the fund, the dissent believes an independent valuation by the District Court may be dispensed with here in favor of the figure agreed upon by the settling parties. The dissent discounts the conflicts on the part of class counsel who negotiated the Global Settlement Agreement by arguing that the "relevant" settlement negotiation, and hence the relevant benchmark for judging the actual value of the insurance amount, was the negotiation between Fibreboard and the insurers that produced the Trilateral Settlement Agreement. See post, at 876. This argument, however, minimizes two facts: (1) that Fibreboard and the insurers made this separate, backup agreement only at the insistence of class counsel as a condition for reaching the Global Settlement Agreement; (2) even more important, that "[t]he Insurers were . . . adamant that they would not agree [863] to pay any more in the context of a backup agreement than in a global agreement," a principle "Fibreboard acceded to" on the day the Global Settlement Agreement was announced "as the price of permitting an agreement to be reached with respect to a global settlement," Ahearn, 162 F. R. D., at 516. Under these circumstances the reliability of the Trilateral Settlement Agreement's figure is inadequate as an independent benchmark that might excuse the want of any independent judicial determination that the Global Settlement Agreement's fund was the maximum possible. In any event, the dissent says, it is not crucial whether a $30 claim has to settle for $15 or $20. But it is crucial. Conflict-free counsel, as required by Rule 23(a) and Amchem, might have negotiated a $20 figure, and a limited fund rationale for mandatory class treatment of a settlement-only action requires assurance that claimants are receiving the maximum fund, not a potentially significant fraction less.

With respect to the requirement of intraclass equity, the dissent argues that conflicts both within this certified class and between the class as certified and those excluded from it may be mitigated because separate counsel were simply not to be had in the short time that a settlement agreement was possible before the argument (or likely decision) in the coverage case. But this is to say that when the clock is about to strike midnight, a court considering class certification may lower the structural requirements of Rule 23(a) as declared in Amchem, and the parallel equity requirements necessary to justify mandatory class treatment on a limited fund theory.

Finally, the dissent would excuse Fibreboard's retention of virtually all its net worth, and the loss to members of the certified class of some 13 percent of the fund putatively available to them, on the ground that the settlement made more money available than any other effort would likely have done. But even if we could be certain that this evaluation were true, this is to reargue Amchem: the settlement's fairness [864] under Rule 23(e) does not dispense with the requirements of Rules 23(a) and (b).

We believe that if an allowance for exigency can make a substantial difference in the level of Rule 23 scrutiny, the economic temptations at work on counsel in class actions will guarantee enough exigencies to take the law back before Amchem and unsettle the line between mandatory class actions under subdivision (b)(1)(B) and opt-out actions under subdivision (b)(3).

VI

In sum, the applicability of Rule 23(b)(1)(B) to a fund and plan purporting to liquidate actual and potential tort claims is subject to question, and its purported application in this case was in any event improper. The Advisory Committee did not envision mandatory class actions in cases like this one, and both the Rules Enabling Act and the policy of avoiding serious constitutional issues counsel against leniency in recognizing mandatory limited fund actions in circumstances markedly different from the traditional paradigm. Assuming, arguendo, that a mandatory, limited fund rationale could under some circumstances be applied to a settlement class of tort claimants, it would be essential that the fund be shown to be limited independently of the agreement of the parties to the action, and equally essential under Rules 23(a) and (b)(1)(B) that the class include all those with claims unsatisfied at the time of the settlement negotiations, with intraclass conflicts addressed by recognizing independently represented subclasses. In this case, the limit of the fund was determined by treating the settlement agreement as dispositive, an error magnified by the representation of class members by counsel also representing excluded plaintiffs, whose settlements would be funded fully upon settlement of the class action on any terms that could survive final fairness review. Those separate settlements, together with other exclusions from the claimant class, precluded adequate structural protection by subclass treatment, which was not even [865] afforded to the conflicting elements within the class as certified.

The judgment of the Court of Appeals, accordingly, is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

Chief Justice Rehnquist, with whom Justice Scalia and Justice Kennedy join, concurring.

Justice Breyer's dissenting opinion highlights in graphic detail the massive impact of asbestos-related claims on the federal courts. Post, at 866-867. Were I devising a system for handling these claims on a clean slate, I would agree entirely with that dissent, which in turn approves the near-heroic efforts of the District Court in this case to make the best of a bad situation. Under the present regime, transactional costs will surely consume more and more of a relatively static amount of money to pay these claims.

But we are not free to devise an ideal system for adjudicating these claims. Unless and until the Federal Rules of Civil Procedure are revised, the Court's opinion correctly states the existing law, and I join it. But the "elephantine mass of asbestos cases," ante, at 821, cries out for a legislative solution.

Justice Breyer, with whom Justice Stevens joins, dissenting.

This case involves a settlement of an estimated 186,000 potential future asbestos claims against a single company, Fibreboard, for approximately $1.535 billion. The District Court, in approving the settlement, made 446 factual findings, on the basis of which it concluded that the settlement was equitable, that the potential claimants had been well represented, and that the distinctions drawn among different categories of claimants were reasonable. Ahearn v. Fibreboard Corp., 162 F. R. D. 505 (ED Tex. 1995); App. to Pet. for [866] Cert. 248a-468a. The Court of Appeals, dividing 2 to 1, held that the settlement was lawful. In re Asbestos Litigation, 134 F. 3d 668 (CA5 1998). I would not set aside the Court of Appeals' judgment as the majority does. Accordingly, I dissent.

I

A

Four special background circumstances underlie this settlement and help to explain the reasonableness and consequent lawfulness of the relevant District Court determinations. First, as the majority points out, the settlement comprises part of an "elephantine mass of asbestos cases," which "defies customary judicial administration." Ante, at 821. An estimated 13-to-21 million workers have been exposed to asbestos. See Report of the Judicial Conference Ad Hoc Committee on Asbestos Litigation 6-7 (Mar. 1991) (hereinafter Report). Eight years ago the Judicial Conference spoke of the mass of related cases having "reached critical dimensions," threatening "a disaster of major proportions." Id., at 2. In the Eastern District of Texas, for example, one out of every three civil cases filed in 1990 was an asbestos case. See id., at 8. In the past decade nearly 80,000 new federal asbestos cases have been filed; more than 10,000 new federal asbestos cases were filed last year. See U. S. District Courts Civil Cases Commenced by Nature of Suit, Administrative Office of the Courts Statistics (Dec. 31, 1994-1998) (Table C2-A) (hereinafter AO Statistics).

The Judicial Conference found that asbestos cases on average take almost twice as long as other lawsuits to resolve. See Report 10-11. Judge Parker, the experienced trial judge who approved this settlement, noted in one 3,000member asbestos class action over which he presided that 448 of the original class members had died while the litigation was pending. Cimino v. Raymark Industries, Inc., 751 F. Supp. 649, 651 (ED Tex. 1990). And yet, Judge Parker [867] went on to state, if the District Court could close "thirty cases a month, it would [still] take six and one-half years to try these cases and [due to new filings] there would be pending over 5,000 untouched cases" at the end of that time. Id., at 652. His subsequent efforts to accelerate final decision or settlement through the use of sample cases produced a highly complex trial (133 trial days, more than 500 witnesses, half a million pages of documents) that eventually closed only about 160 cases because efforts to extrapolate from the sample proved fruitless. See Cimino v. Raymark Industries, Inc., 151 F. 3d 297, 335 (CA5 1998). The consequence is not only delay but also attorney's fees and other "transaction costs" that are unusually high, to the point where, of each dollar that asbestos defendants pay, those costs consume an estimated 61 cents, with only 39 cents going to victims. See Report 13.

Second, an individual asbestos case is a tort case, of a kind that courts, not legislatures, ordinarily will resolve. It is the number of these cases, not their nature, that creates the special judicial problem. The judiciary cannot treat the problem as entirely one of legislative failure, as if it were caused, say, by a poorly drafted statute. Thus, when "calls for national legislation" go unanswered, ante, at 821, judges can and should search aggressively for ways, within the framework of existing law, to avoid delay and expense so great as to bring about a massive denial of justice.

Third, in that search the district courts may take advantage of experience that appellate courts do not have. Judge Parker, for example, has written of "a disparity of appreciation for the magnitude of the problem," growing out of the difference between the trial courts' "daily involvement with asbestos litigation" and the appellate courts' "limited" exposure to such litigation in infrequent appeals. Cimino, 751 F. Supp., at 651.

Fourth, the alternative to class-action settlement is not a fair opportunity for each potential plaintiff to have his or her [868] own day in court. Unusually high litigation costs, unusually long delays, and limitations upon the total amount of resources available for payment together mean that most potential plaintiffs may not have a realistic alternative. And Federal Rule of Civil Procedure 23 was designed to address situations in which the historical model of individual actions would not, for practical reasons, work. See generally Advisory Committee's Notes on Fed. Rule Civ. Proc. 23, 28 U. S. C. App., p. 696 (discussing, in relation to Rule 23(b)(1)(B), instances in which individual judgments, "while not technically concluding the other members, might do so as a practical matter").

For these reasons, I cannot easily find a legal answer to the problems this case raises by referring, as does the majority, to "our `deep-rooted historic tradition that everyone should have his own day in court.' " Ante, at 846 (citation omitted). Instead, in these circumstances, I believe our Court should allow a district court full authority to exercise every bit of discretionary power that the law provides. See generally Califano v. Yamasaki, 442 U. S. 682, 703 (1979) ("[M]ost issues arising under Rule 23 . . . [are] committed in the first instance to the discretion of the district court"); Reiter v. Sonotone Corp., 442 U. S. 330, 345 (1979) (district courts have "broad power and discretion . . . with respect to matters involving the certification" of class actions). And, in doing so, the Court should prove extremely reluctant to overturn a fact-specific or circumstance-specific exercise of that discretion, where a court of appeals has found it lawful. Cf. Universal Camera Corp. v. NLRB, 340 U. S. 474, 490-491 (1951) (Supreme Court will rarely overturn appellate court review of agency factfinding). This cautionary principle of review leads me to an ultimate conclusion different from that of the majority.

B

The case before us involves a class of individuals (and their families) exposed to asbestos manufactured by Fibreboard [869] who, for the most part, had not yet sued or settled with Fibreboard as of August 1993. The negotiating parties estimated that Fibreboard faced approximately 186,000 of these future claims. See App. to Pet. for Cert. 321a; cf. AO Statistics, Table C2-A (total number of all civil cases filed in federal district courts in 1998 was 252,994). Although the District Court was unable to give a precise figure, see App. to Pet. for Cert. 356a-357a, there is no doubt that a realistic assessment of the value of these claims far exceeds Fibreboard's total net worth.

But, as of 1993, one potentially short-lived additional asset promised potential claimants a greater recovery. That asset consisted of two insurance policies, one issued by Continental Casualty, the other by Pacific Indemnity. If the policies were valid (i. e., if they covered most of the relevant claims), they were worth several billion dollars; but if they were invalid, this asset was worth nothing. At that time, a separate case brought by Fibreboard against the insurance companies in California state court seemed likely to resolve the value of the policies in the near future. That separate litigation had a settlement value for the insurance companies. At the time the parties were negotiating, prior to the California court's decision, the insurance policies were worth, as the majority puts it, the value of "unlimited policy coverage" (i. e., perhaps the insurance companies' entire net worth) "discounted by the risk that Fibreboard would ultimately lose the coverage dispute litigation." Ante, at 851.

The insurance companies offered to settle with both Fibreboard and those persons with claims against Fibreboard (who might have tried to sue the insurance companies directly). The settlement negotiations came to a head in August 1993, just as a California state appeals court was poised to decide the validity of the insurance policies. This fact meant speed was important, for the California court could well decide that the policies were worth nothing. It also meant that it was important to certify a non-opt-out class of Fibreboard plaintiffs. [870] If the class that entered into the settlement were an opt-out class, then members of that class could wait to see what the California court did. If the California court found the policies valid (hence worth many billions of dollars), they would opt out of the class and sue for everything they could get; if the California court found the policies invalid (and worth nothing), they would stick with the settlement. The insurance companies would gain little from that kind of settlement, and they would not agree to it. See In re Asbestos Litigation, 90 F. 3d 963, 970 (CA5 1996).

After eight days of hearings, the District Court found that the insurance policies plus Fibreboard's net worth amounted to a "limited fund," valued at $1.77 billion (the amount the insurance companies were willing to contribute to the settlement plus Fibreboard's value). See App. to Pet. for Cert. 492a. The court entered detailed factual findings. See generally 162 F. R. D., at 518-519. It certified a "non-opt-out" class. And the court approved the parties' Global Settlement Agreement. The Global Settlement Agreement allows those exposed to asbestos (and their families) to assert their Fibreboard claims against a fund that it creates. It does not limit recoveries for particular types of claims, but allows for individual determinations of damages based on all historically relevant individual factors and circumstances. See 90 F. 3d, at 976. It contains spendthrift provisions designed to limit the total payouts for any particular year, and a requirement that the claimants with the most serious injuries be paid first in any year in which there is a shortfall. It also permits an individual who wishes to retain his right to bring an ordinary action in court to opt out of the arrangement (albeit after mediation and nonbinding arbitration), but sets a ceiling of $500,000 upon the recovery obtained by any person who does so. See generally 162 F. R. D., at 518-519.

The question here is whether the court's certification of the class under Rule 23(b)(1)(B) violates the law. The majority seems to limit its holding (though not its discussion) [871] to that question, and so I limit the focus of my dissent to the Rule 23(b)(1)(B) issues as well.

II

The District Court certified a class consisting primarily of individuals (and their families) who had been exposed to Fibreboard's asbestos but who had not yet made claims. See ante, at 825-827, and n. 5. It did so under the authority of Federal Rule of Civil Procedure 23(b)(1)(B), which, by analogy to pre-Rules "limited fund" cases, permits certification of a non-opt-out class where

"the prosecution of separate actions by or against individual members of the class would create a risk of . . . adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests."

The majority thinks this class could not be certified under Rule 23(b)(1)(B). I, on the contrary, think it could.

The case falls within the Rule's language as long as there was a significant "risk" that the total assets available to satisfy the claims of the class members would fall well below the likely total value of those claims, for in such circumstances the money would go to those claimants who brought their actions first, thereby "`substantially impair[ing]' " the "`ability' " of later claimants "`to protect their interests.' " And the District Court found there was indeed such a "`risk.' " 162 F. R. D., at 526.

Conceptually speaking, that "risk" was no different from the risk inherent in a classic pre-Rules "limited fund" case. Suppose a broker agrees to invest the funds of 10 individuals who each give the broker $100. The broker misuses the money, and the customers sue. (1) Suppose their claims total $1,000, but the broker's total assets amount to $100. [872] (2) Suppose the same broker has no assets left, but he does have an insurance policy worth $100. (3) Suppose the broker has both $100 in assets and a $100 insurance policy.

The first two cases are classic limited fund cases. See ante, at 834-836 (citing, e. g., Dickinson v. Burnham, 197 F. 2d 973 (CA2 1952), cert. denied, 344 U. S. 875 (1952), an investors' suit for the return of misused funds); ante, at 837 (citing, e. g., Morrison v. Warren, 174 Misc. 233, 234, 20 N. Y. S. 2d 26, 27 (Sup. Ct. N. Y. Cty. 1940), a suit to distribute insurance proceeds to third party beneficiaries). The third case simply combines the first two, and that third case is the case before us.

Of course the value of the insurance policies in our case is not as precise as the $100 in my example, nor was it certain at the time of settlement. But that uncertainty makes no difference. It was certain that the insurance policies' value was limited. And that limitation was created by the likelihood of an independent judicial determination of the meaning of words in the policy, in respect to which the merits or value of the underlying tort claims against Fibreboard were beside the point.

Nor does it matter that the value of the insurance policies in our case might have fluctuated over time. Long before the Federal Rules of Civil Procedure, courts permitted actions by one group of insurance policyholders to bind all policyholders, even where the group proceeded against an insurance-company-administered fund that fluctuated over time. See Hartford Life Ins. Co. v. IBS, 237 U. S. 662, 672 (1915) (life insurance fund which, like the fund before us, was administered through court-ordered rules that bound all policyholders).

Neither does it matter that the insurance policies might be worth much more money if the California court decided the coverage dispute in Fibreboard's favor. A trust worth, say, $1 million (faced with $2 million in claims) is a limited fund, despite the possibility that a company whose stock it [873] holds might strike oil and send the value of the trust skyrocketing. Limitation is a matter of present value, which takes appropriate account of such future possibilities.

I need not pursue the conceptual matter further, however, for the majority apparently concedes the conceptual point that a fund's limit may equal its "value discounted by risk." Ante, at 851. But the majority sets forth three additional conditions that it says are "sufficient . . . to justify binding absent members of a class under Rule 23(b)(1)(B), from which no one has the right to secede." Ante, at 838. The three are:

Condition One: That "the totals of the aggregated liquidated claims and the fund available for satisfying them, set definitely at their maximums, demonstrate the inadequacy of the fund to pay all the claims." Ibid.; Part IV-A, ante.

Condition Two: That "the claimants identified by a common theory of recovery were treated equitably among themselves." Ante, at 839; Part IV-B, ante.

Condition Three: That "the whole of the inadequate fund was to be devoted to the overwhelming claims." Ante, at 839; Part IV-C, ante.

I shall discuss each condition in turn.

A

In my view, the first condition is substantially satisfied. No one doubts that the "totals of the aggregated" claims well exceed the value of the assets in the "fund available for satisfying them," at least if the fund totaled about what the District Court said it did, namely, $1.77 billion at most. The District Court said that the limited fund equaled in value "the sum of the value of Fibreboard plus the value of its insurance coverage," or $235 million plus $1.535 billion. App. to Pet. for Cert. 492a. The Court of Appeals upheld [874] the finding. 90 F. 3d, at 982. And the finding is adequately supported.

The District Court found that the insurance policies were not worth substantially more than $1.535 billion in part because there was a "significant risk" that the insurance policies would soon turn out to be worth nothing at all. 162 F. R. D., at 526. The court wrote that "Fibreboard might lose" its coverage, i. e., that it might lose "on one or more issues in the [California] Coverage Case, or that Fibreboard might lose its insurance coverage as a result of its assignment settlement program." Ibid.

Two California insurance law experts, a Yale professor and a former state court of appeals judge, testified that there was a good chance that Fibreboard would lose all or a significant part of its insurance coverage once the California appellate courts decided the matter. 90 F. 3d, at 974. And that conclusion is not surprising. The Continental policy (for which Fibreboard had paid $10,000 per year) carried limits of $500,000 "per-person" and $1 million "per-occurrence," had been in effect only between May 1957 and March 1959, and arguably denied Fibreboard the right to settle tort cases as it had been doing. See App. to Pet. for Cert. 267a. The Pacific policy was said (no one could find a copy) to carry a $500,000 per-claim limit, and had been in effect only for one year, from 1956 to 1957. See ibid. To win significantly in respect to either of the two policies, Fibreboard had to show that the policies fully covered a person exposed to asbestos long before the policy year (say, in 1948) even if the disease did not appear until much later (say, in 2002). It also had to explain away the $1 million per occurrence limit in the Continental policy, despite policy language defining "one occurrence" as "`[a]ll . . . exposure to substantially the same general conditions existing at or emanating from each premises location.' " Brief for Respondents Continental Casualty et al. 5. And Fibreboard had to show that its tort-suit settlement practice was consistent with the policy.

[875] The settlement value of previous cases also indicated that the insurance policies were of limited value. Fibreboard's "no-cash" settlements (which required a settling plaintiff to obtain recovery from the insurance companies) were twice as high on average as were its comparable 40% cash settlements. App. to Pet. for Cert. 231a. That difference, suggesting a 50% discount for 40% cash, in turn suggests that settling parties estimated the odds of recovering on the insurance policies as worse than 2 to 1 against.

The District Court arrived at the present value of the policies ($1.535 billion) by looking to a different settlement, the settlement arrived at in the insurance coverage case itself as a result of bargaining between Fibreboard and the insurance companies. See id., at 492a. That settlement, embodied in the Trilateral Agreement, created a backup fund by taking from the insurance companies $1.535 billion (plus other money used to satisfy claims not here at issue) and simply setting it aside to use for the payment of claims brought against Fibreboard in the ordinary course by members of this class (in the event that the federal courts ultimately failed to approve the Global Settlement Agreement).

The Fifth Circuit approved this method of determining the value of the insurance policies. See 90 F. 3d, at 982 (discussing value of Trilateral Agreement plus value of Fibreboard). And the majority itself sees nothing wrong with that method in principle. The majority concedes that one

"may take a settlement amount as good evidence of the maximum available if one can assume that parties of equal knowledge and negotiating skill agreed upon the figure through arms-length bargaining, unhindered by any considerations tugging against the interests of the parties ostensibly represented in the negotiation." Ante, at 852.

The majority rejects the District Court's valuation for a different reason. It says that the settlement negotiation [876] that led to the valuation was not necessarily a fair one. The majority says it cannot make the necessary "arms-length bargaining" assumption because "[c]lass counsel " had a "great incentive to reach any agreement" in light of the fact that "some of the same lawyers . . . had also negotiated the separate settlement of 45,000" pending cases, which was partially contingent upon a global settlement or other favorable resolution of the insurance dispute. Ibid. (emphasis added).

The District Court and Court of Appeals, however, did accept the relevant "arms-length" assumption, with good reason. The relevant bargaining (i. e., the bargaining that led to the Trilateral Agreement that set the policies' value) was not between the plaintiffs' class counsel and the insurance companies; it was between Fibreboard and the insurance companies. And there is no reason to believe that that bargaining, engaged in to settle the California coverage dispute, was not "arms length." That bargaining did not lead to a settlement that would release Fibreboard from potential tort liability. Rather, it led to a potential backup settlement that did not release Fibreboard from anything. It created a fund of insurance money, which, once exhausted, would have left Fibreboard totally exposed to tort claims. Consequently, Fibreboard had every incentive to squeeze as much money as possible out of the insurance companies, thereby creating as large a fund as possible in order to diminish the likelihood that it would eventually have to rely upon its own net worth to satisfy future asbestos plaintiffs.

Nor are petitioners correct when they argue that the insurance companies' participation in setting the value of the insurance policies created a fund that is limited "only in the sense that . . . every settlement is limited." Brief for Petitioners 28. As the District Court found, the fund was limited by the value of the insurance policies (along with Fibreboard's own limited net worth), and that limitation arose out of the independent likelihood that the California courts [877] would find the policies valueless. App. to Pet. for Cert. 492a. That is why the District Court said that certification in this case does not determine whether

"mandatory class certification is appropriate in the typical case where a class action is settled with a defendant's own funds, or with insurance funds that are not the subject of genuine and vigorous dispute." 162 F. R. D., at 527.

The court added that, in the ordinary case: "If the settlement failed[,] . . . the defendant would retain the settlement funds (or the insurance coverage), and there might not be the `impair[ment]' to class members' `ability to protect their interests' required for mandatory class certification." Ibid. In this case, however, if settlement failed, coverage "[might] well disappear . . . with the result that Class members could not then secure their due through litigation." Ibid.

I recognize that one could reasonably argue about whether the total value of the insurance policies (plus the value of Fibreboard) is $1.535 billion, $1.77 billion, $2.2 billion, or some other roughly similar number. But that kind of argument, in this case, is like arguing about whether a trust fund, facing $30,000 in claims, is worth $15,000 or $20,000 (e. g., do we count Aunt Agatha's share as part of the fund?), or whether a ship, subject to claims that, by any count, exceed its value, is worth a little more or a little less (e. g., does the coal in the hold count as fuel, which is part of the ship's value, or as cargo, which is not?). A perfect valuation, requiring lengthy study by independent experts, is not feasible in the context of such an unusual limited fund, one that comes accompanied with its own witching hour. Within weeks after the parties' settlement agreement, the insurance policies might well have disappeared, leaving most potential plaintiffs with little more than empty claims. The ship was about to sink, the trust fund to evaporate; time was important. Under these circumstances, I would accept the valuation [878] findings made by the District Court and affirmed by the Court of Appeals as legally sufficient. See supra, at 868.

B

I similarly believe that the second condition is satisfied. The "claimants . . . were treated equitably among themselves." Ante, at 839. The District Court found equitable treatment, and the Court of Appeals affirmed. But a majority of this Court now finds significant inequities arising out of class counsel's "egregious" conflict of interest, the settlement's substantive terms, and the District Court's failure to create subclasses. See ante, at 854-859. But nothing I can find in the Court's opinion, nor in the objectors' briefs, convinces me that the District Court's findings on these matters were clearly erroneous, or that the Court of Appeals went seriously astray in affirming them.

The District Court made 76 separate findings of fact, for example, in respect to potential conflicts of interest. App. to Pet. for Cert. 392a-430a. Of course, class counsel consisted of individual attorneys who represented other asbestos claimants, including many other Fibreboard claimants outside the certified class. Since Fibreboard had been settling cases contingent upon resolution of the insurance dispute for several years, any attorney who had been involved in previous litigation against Fibreboard was likely to suffer from a similar "conflict." So whom should the District Court have appointed to negotiate a settlement that had to be reached soon, if ever? Should it have appointed attorneys unfamiliar with Fibreboard and the history of its asbestos litigation? Where was the District Court to find those competent, knowledgeable, conflict-free attorneys? The District Court said they did not exist. Finding of Fact ¶ 372 says there is "no credible evidence of the existence of other `conflict-free' counsel who were qualified to negotiate" a settlement within the necessary time. Id., at 428a. Finding of Fact ¶ 317 adds that the District Court viewed it as [879] "crucial . . . to appoint asbestos attorneys who were experienced, knowledgeable, skilled and credible in view of the extremely short window of opportunity to negotiate a global settlement, and the very high risk to future claimants presented by the Coverage Case appeal." Id., at 401a. Where is the clear error?

The majority emphasizes the fact that, by settling the claims of a class that consisted, for the most part, of persons who had not yet asserted claims against Fibreboard, counsel assured the availability of funds to pay other clients who had already asserted those claims. Ante, at 852-853. The decision to split the latter "inventory" claims from the former "class" claims, however, reflected the suggestion, not of class counsel, but of a judge, Circuit Judge Patrick Higginbotham, who had become involved in efforts to produce a timely settlement. Judge Higginbotham thought that negotiations had broken down because the combined class was "too complex." App. to Pet. for Cert. 316a-317a; see also id., at 397a. He thought "inventory" claim settlements could be used as benchmarks to determine future class claim values, id., at 316a-317a, and that is just what happened. Although the majority is concerned that "inventory" plaintiffs "appeared to have obtained better terms than the class members," ante, at 855, Finding of Fact ¶ 329 says that class counsel

"used the higher-than-average [inventory plaintiff settlement values] . . . to achieve a global settlement for future claimants at similarly high values, effectively arguing they could not possibly accept less for a class of future claimants than they had just negotiated for their present clients." App. to Pet. for Cert. 407a.

In addition, more than 150 findings of fact, made after an 8-day hearing, support the District Court's finding that overall the settlement is "fair, adequate, and reasonable." See id., at 500a-501a. And, of course, Finding of Fact ¶ 318 says that appointing other attorneys—i. e., those who had no inventory [880] clients—would have "`jeopardiz[ed] any effort at serious negotiations'" and "resulted in a less favorable settlement" for the class, or perhaps no settlement followed by no insurance policy either. Id., at 402a.

The Fifth Circuit found that "[t]he record amply supports" these District Court findings. 90 F. 3d, at 978. Does the majority mean to set them aside? If not, does it mean to set forth a rigid principle of law, such as the principle that asbestos lawyers with clients outside a class, who will potentially benefit from a class settlement, can never represent a class in settlement negotiations? And does that principle apply no matter how unusual the circumstances, or no matter how necessary that representation might be? Why should there be such a rule of law? If there is not an absolute rule, however, I do not see how this Court can hold that the case before us is not that unusual situation.

Consider next the claim that "equity" required more subclasses. Ante, at 855-857. To determine the "right" number of subclasses, a district court must weigh the advantages and disadvantages of bringing more lawyers into the case. The majority concedes as much when it says "at some point there must be an end to reclassification with separate counsel." Ante, at 857. The District Court said that if there had "been as many separate attorneys" as the objectors wanted, "there is a significant possibility that a global settlement would not have been reached before the Coverage Case was resolved by the California Court of Appeal." App. to Pet. for Cert. 428a. Finding of Fact ¶ 346 lists the shared common interests among subclasses that argue for single representation, including "avoiding the potentially disastrous results of a loss . . . in the Coverage Case," "maximizing the total settlement contribution," "reducing transaction costs and delays," "minimizing . . . attorney's fees," and "adopting" equitable claims payment "procedures." Id., at 415a. Surely the District Court was within its discretion to conclude that "the point" to which the majority alludes was reached in this case.

[881] I need not go into further detail here. Findings of Fact ¶¶ 347-354 explain why the alleged conflict between pre- and post-1959 claimants is not significant. Id., at 415a-418a (noting that "the decision as to how to divide the settlement among class members" did not take place until after the Trilateral Agreement was agreed to, at which point money was available equally to both pre- and post-1959 claimants). Findings of Fact ¶¶ 355-363 explain why the alleged conflict between claimants with, and those without, current illnesses is not significant. Id., at 419a-422a (explaining why "the interest of the two subgroups at issue here coincide to a far greater extent than they diverge"). The Fifth Circuit found that the District Court "did not abuse its discretion in finding that the class was adequately represented and that subclasses were not required." 90 F. 3d, at 982. This Court should not overturn these highly circumstance-specific judgments.

C

The majority's third condition raises a more difficult question. It says that the "whole of the inadequate fund" must be "devoted to the overwhelming claims." Ante, at 839 (emphasis added). Fibreboard's own assets, in theory, were available to pay tort claims, yet they were not included in the global settlement fund. Is that fact fatal?

I find the answer to this question in the majority's own explanation. It says that the third condition helps to guarantee that those who held the

"inadequate assets had no opportunity to benefit [themselves] or claimants of lower priority by holding back on the amount distributed to the class. The limited fund cases thus ensured that the class as a whole was given the best deal; they did not give a defendant a better deal than seriatim litigation would have produced."

Ibid.

[882] That explanation suggests to me that Rule 23(b)(1)(B) permits a slight relaxation of this absolute requirement, where its basic purpose is met, i. e., where there is no doubt that "the class as a whole was given the best deal," and where there is good reason for allowing the third condition's substantial, rather than its literal, satisfaction.

Rule 23 itself does not require modern courts to trace every contour of ancient case law with literal exactness. Benjamin Kaplan, Reporter to the Advisory Committee on Civil Rules that drafted the 1966 revisions, upon whom the majority properly relies for explanation, see, e. g., ante, at 833, 834, 842-843, wrote of Rule 23:

"The reform of Rule 23 was intended to shake the law of class actions free of abstract categories . . . and to rebuild the law on functional lines responsive to those recurrent life patterns which call for mass litigation through representative parties. . . . And whereas the old Rule had paid virtually no attention to the practical administration of class actions, the revised Rule dwelt long on this matter—not, to be sure, by prescribing detailed procedures, but by confirming the courts' broad powers and inviting judicial initiative." A Prefatory Note, 10 B. C. Ind. & Com. L. Rev. 497 (1969).

The majority itself recognizes the possibility of providing incentives to enter into settlements that reduce costs by granting a "credit" for cost savings by relaxing the whole-of-theassets requirement, at least where most of the savings would go to the claimants. Ante, at 861.

There is no doubt in this case that the settlement made far more money available to satisfy asbestos claims than was likely to occur in its absence. And the District Court found that administering the fund would involve transaction costs of only 15%. App. to Pet. for Cert. 362a. A comparison of that 15% figure with the 61% transaction costs figure applicable to asbestos cases in general suggests hundreds of millions [883] of dollars in savings—an amount greater than Fibreboard's net worth. And, of course, not only is it better for the injured plaintiffs, it is far better for Fibreboard, its employees, its creditors, and the communities where it is located for Fibreboard to remain a working enterprise, rather than slowly forcing it into bankruptcy while most of its money is spent on asbestos lawyers and expert witnesses. I would consequently find substantial compliance with the majority's third condition.

Because I believe that all three of the majority's conditions are satisfied, and because I see no fatal conceptual difficulty, I would uphold the determination, made by the District Court and affirmed by the Court of Appeals, that the insurance policies (along with Fibreboard's net value) amount to a classic limited fund within the scope of Rule 23(b)(1)(B).

III

Petitioners raise additional issues, which the majority does not reach. I believe that respondents would likely prevail were the Court to reach those issues. That is why I dissent. But, as the Court does not reach those issues, I need not decide the questions definitively.

In some instances, my belief that respondents would likely prevail reflects my reluctance to second-guess a court of appeals that has affirmed a district court's fact- and circumstance-specific findings. See supra, at 868; cf. Amchem Products, Inc. v. Windsor, 521 U. S. 591, 629-630 (1997) (Breyer, J., concurring in part and dissenting in part). That reluctance applies to those of petitioners' further claims that, in effect, attack the District Court's conclusions related to: (1) the finding under Rule 23(a)(2) that there are "questions of law and fact common to the class," see App. to Pet. for Cert. 480a; see generally Amchem, supra, at 634-636 (Breyer, J., concurring in part and dissenting in part); (2) the finding under Rule 23(a)(3) that claims of the representative parties are "typical" of the claims of the class, see App. [884] to Pet. for Cert. 480a-481a; (3) the adequacy of "notice" to class members pursuant to Rule 23(e) and the Due Process Clause, see id., at 511a; see generally Amchem, supra, at 640-641 (Breyer, J., concurring in part and dissenting in part); and (4) the standing-related requirement that each class member have a good-faith basis under state law for claiming damages for some form of injury-in-fact (even if only for fear of cancer or medical monitoring), see App. to Pet. for Cert. 252a; cf., e. g., Coover v. Painless Parker, Dentist, 105 Cal. App. 110, 286 P. 1048 (1930).

In other instances, my belief reflects my conclusion that class certification here rests upon the presence of what is close to a traditional limited fund. And I doubt that petitioners' additional arguments that certification violates, for example, the Rules Enabling Act, the Bankruptcy Act, the Seventh Amendment, and the Due Process Clause are aimed at, or would prevail against, a traditional limited fund (e. g., "trust assets, a bank account, insurance proceeds, company assets in a liquidation sale, proceeds of a ship sale in a maritime accident suit," ante, at 834 (internal quotation marks and citations omitted)). Cf. In re Asbestos Litigation, 90 F. 3d, at 986 (noting that Phillips Petroleum Co. v. Shutts, 472 U. S. 797 (1985), involved a class certified under the equivalent of Rule 23(b)(3), not a limited fund case under Rule 23(b)(1)(B)). Regardless, I need not decide these latter issues definitively now, and I leave them for another day. With that caveat, I respectfully dissent.

[1] Briefs of amici curiae urging reversal were filed for the Association of Trial Lawyers of America by Jeffrey Robert White and Mark S. Mandell; for Trial Lawyers for Public Justice, P. C., by Arthur H. Bryant and Anne Bloom; and for Legal Ethics, Civil Procedure, and Constitutional Law Scholars by Roger C. Cramton, Kenneth J. Chesebro, and Barbara J. Olshansky.

Briefs of amici curiae urging affirmance were filed for Asbestos Victims of America by Daniel U. Smith; for Exxon Corporation by Charles W. Bender, John F. Daum, and Charles C. Lifland; and for the National Association of Securities and Commercial Law Attorneys by Kevin P. Roddy and Arthur R. Miller.

[2]"`[This] is a tale of danger known in the 1930s, exposure inflicted upon millions of Americans in the 1940s and 1950s, injuries that began to take their toll in the 1960s, and a flood of lawsuits beginning in the 1970s. On the basis of past and current filing data, and because of a latency period that may last as long as 40 years for some asbestos related diseases, a continuing stream of claims can be expected. The final toll of asbestos related injuries is unknown. Predictions have been made of 200,000 asbestos disease deaths before the year 2000 and as many as 265,000 by the year 2015.

"`The most objectionable aspects of asbestos litigation can be briefly summarized: dockets in both federal and state courts continue to grow; long delays are routine; trials are too long; the same issues are litigated over and over; transaction costs exceed the victims' recovery by nearly two to one; exhaustion of assets threatens and distorts the process; and future claimants may lose altogether.'" Amchem Products, Inc. v. Windsor, 521 U. S., at 598 (quoting Report of The Judicial Conference Ad Hoc Committee on Asbestos Litigation 2-3 (Mar. 1991) (hereinafter Report)). We noted in Amchem that the Judicial Conference Ad Hoc Committee on Asbestos Litigation in 1991 had called for "federal legislation creating a national asbestos dispute-resolution scheme." 521 U. S., at 528 (citing Report 3, 27-35). To date Congress has not responded.

[3] Because Fibreboard's insurance policy with Continental expired in 1959, before the global settlement the settlement value of claims by victims exposed to Fibreboard's asbestos prior to 1959 was much higher than for victims exposed after 1959, where the only right of recovery was against Fibreboard itself. See In re Asbestos Litigation, 90 F. 3d 963, 1012-1013 (CA5 1996) (Smith, J., dissenting).

[4] Id., at 969, and n. 1 (citing Andrus v. Fibreboard, No. 614747-3 (Sup. Ct., Alameda Cty., June 1, 1992)). Continental appealed, and, after the Global Settlement Agreement was reached in this case, but before the fairness hearing, see infra, at 827, a California appellate court reversed. See 90 F. 3d, at 969, and n. 1 (citing Fibreboard Corp. v. Continental Casualty Co., No. A059716 (Cal. App., Oct. 19, 1994)). Continental and Fibreboard had each brought actions seeking to establish (or challenge) the validity of Fibreboard's assignment-settlement program, but only Andrus produced a definitive ruling as opposed to a settlement. See App. to Pet. for Cert. 288a-290a.

[5] Two related settlement agreements accompanied the Global and Trilateral Settlement Agreements. The first, negotiated with representatives of Fibreboard's major codefendants, preserved credit rights for codefendant third parties, In re Asbestos Litigation, 90 F. 3d 963, 973 (CA5 1996); the second provided that final approval of the Global Settlement Agreement would not constitute a "settlement" under the Longshore and Harbor Workers' Compensation Act, 33 U. S. C. § 933(g), 162 F. R. D., at 521-522. Neither of these agreements is before the Court.

[6]The final judgment regarding class certification in the District Court defined the class as follows:

"(a) All persons (or their legal representatives) who prior to August 27, 1993 were exposed, directly or indirectly (including but not limited to exposure through the exposure of a spouse, household member or any other person), to asbestos or to asbestos-containing products for which Fibreboard may bear legal liability and who have not, before August 27, 1993, (i) filed a lawsuit for any asbestos related personal injury, or damage, or death arising from such exposure in any court against Fibreboard or persons or entities for whose actions or omissions Fibreboard bears legal liability; or (ii) settled a claim for any asbestos-related personal injury, or damage, or death arising from such exposure with Fibreboard or with persons or entities for whose actions or omissions Fibreboard bears legal liability;

"(b) All persons (or their legal representatives) exposed to asbestos or to asbestos-containing products, directly or indirectly (including but not limited to exposure through the exposure of a spouse, household member or any other person), who dismissed an action prior to August 27, 1993 without prejudice against Fibreboard, and who retain the right to sue Fibreboard upon development of a nonmalignant disease process or a malignancy; provided, however, that the Settlement Class does not include persons who filed and, for cash payment or some other negotiated value, dismissed claims against Fibreboard, and whose only retained right is to sue Fibreboard upon development of an asbestos-related malignancy; and

"(c) All past, present and future spouses, parents, children and other relatives (or their legal representatives) of the class members described in paragraphs (a) and (b) above, except for any such person who has, before August 27, 1993, (i) filed a lawsuit for the asbestos-related personal injury, or damage, or death of a class member described in paragraph (a) or (b) above in any court against Fibreboard (or against entities for whose actions or omissions Fibreboard bears legal liability), or (ii) settled a claim for the asbestos-related personal injury, or damage, or death of a class member described in (a) or (b) above with Fibreboard (or with entities for whose actions or omissions Fibreboard bears legal liability)." App. to Pet. for Cert. 534a-535a.

[7] "Rule 23(a) states four threshold requirements applicable to all class actions: (1) numerosity (a `class [so large] that joinder of all members is impracticable'); (2) commonality (`questions of law or fact common to the class'); (3) typicality (named parties' claims or defenses `are typical . . . of the class'); and (4) adequacy of representation (representatives `will fairly and adequately protect the interests of the class')." Amchem Products, Inc. v. Windsor, 521 U. S. 591, 613 (1997).

[8] Rule 23(b)(1)(B) provides that "[a]n action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition: (1) the prosecution of separate actions by or against individual members of the class would create a risk of . . . (B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests."

[9] Continental and Pacific also filed a class action against a defendant class essentially identical to the plaintiff class in the Global Settlement Agreement as well as a class of third parties with asbestos-related claims against Fibreboard, seeking a declaration that the Trilateral Settlement Agreement was fair and reasonable. The District Court certified the class and approved the Trilateral Settlement Agreement, which the Fifth Circuit consolidated with the review of the case below and affirmed. See In re Asbestos Litigation, 90 F. 3d, at 974, 991-993. That decision is now final and is not before this Court.

[10] As the objectors did not challenge the adequacy of representation of class representatives, the Fifth Circuit did not consider the issue. Id., at 976, n. 10. Likewise, no party raised concerns with Rule 23(a)'s numerosity requirement.

[11] Abandoning the District Court's alternative rationale, the Court of Appeals rested entirely on a limited fund theory.

[12] The Fifth Circuit denied rehearing en banc, with Judge Smith, joined by five other Circuit Judges, dissenting. In re Asbestos Litigation, 101 F. 3d 368, 369 (1996).

[13] In Amchem, the Court found that class members' shared exposure to asbestos was insufficient to meet the demanding predominance requirements of Rule 23(b)(3). 521 U. S., at 623-624. We left open the possibility, however, that such commonality might suffice for the purposes of Rule 23(a). Ibid.

[14] In contrast to class actions brought under subdivision (b)(3), in cases brought under subdivision (b)(1), Rule 23 does not provide for absent class members to receive notice and to exclude themselves from class membership as a matter of right. See 1 H. Newberg & A. Conte, Class Actions § 4.01, p. 4-6 (3d ed. 1992) (hereinafter Newberg). It is for this reason that such cases are often referred to as "mandatory" class actions.

[15]Indeed, Professor Kaplan, reporter to the Advisory Committee's 1966 revision of Rule 23, commented in a letter to another member of the Advisory Committee that the phrase "`impair or impede the ability of the other members to protect their interests' " is "redolent of claims against a fund." Letter from Benjamin Kaplan to John P. Frank, Feb. 7, 1963, Congressional Information Service Records of the U. S. Judicial Conference, Committee on Rules of Practice and Procedure 1935-1988, No. CI-6312-31, p. 2.

Some fund-related class actions involved claims for the creation or preservation of a specific fund subject to the interests of numerous claimants. See, e. g., City & County of San Francisco v. Market Street R. Co., 95 Cal. App. 2d 648, 213 P. 2d 780 (1950). The rationale in such cases for representative plaintiffs suing on behalf of all similarly situated potential parties was that benefits arising from the action necessarily inured to the class as a whole. Another type of fund case involved the adjudication of the rights of all participants in a fund in which the participants had common rights. See, e. g., Hartford Life Ins. Co. v. IBS, 237 U. S. 662 (1915); Supreme Council of Royal Arcanum v. Green, 237 U. S. 531 (1915); Hartford Life Ins. Co. v. Barber, 245 U. S. 146 (1917); see also Smith v. Swormstedt, 16 How. 288 (1854). In such cases, regardless of the size of any individual claimant's stake, the adjudication would determine the operating rules governing the fund for all participants. This category is more analogous in modern practice to class actions seeking structural injunctions and is not at issue in this case.

[16] The District Court in Dickinson, as was the usual practice in such cases, distributed the limited fund only after notice had been given to all class members, allowing them to come into the suit, prove their claim, and share in the recovery. See 197 F. 2d, at 978; see also Adv. Comm. Notes 697 (describing limited fund class actions as involving an "action by or against representative members to settle the validity of the claims as a whole, or in groups, followed by separate proof of the amount of each valid claim and proportionate distribution of the fund").

[17] As Dickinson demonstrates, the immediate precursor to the type of limited fund class action invoked in this case was a subset of "hybrid" class actions under the 1938 version of Rule 23. Cf. 1 Newberg § 1.09, at 1-25. The original Rule 23 categorized class actions by "the character of the right sought to be enforced for or against the class," dividing such actions into "(1) joint, or common, or secondary in the sense that the owner of a primary right refuses to enforce that right and a member of the class thereby becomes entitled to enforce it;(2) several, and the object of the action is the adjudication of claims which do or may affect specific property involved in the action; or (3) several, and there is a common question of law or fact affecting the several rights and a common relief is sought." Fed. Rule Civ. Proc. 23(a) (1938 ed., Supp. V). See Moore & Friedman 2240; see also Moore & Cohn, Federal Class Actions, 32 Ill.L. Rev. 307, 317-318 (1937); Moore, Federal Rules of Civil Procedure: Some Problems Raised by the Preliminary Draft, 25 Geo. L. J. 551, 574 (1937).

[18] In early creditors' bills, for example, equity would order a master to call for all creditors to prove their debts, to take account of the entire estate, and to apply the estate in payment of the debts. See 1 J.Story, Commentaries on Equity Jurisprudence §§ 547, 548 (I. Redfield 8th rev. ed. 1861). This decree, with its equitable benefit and incorporation of all creditors was not, however, available when the executor of the estate admitted assets sufficient to cover its debts, because where assets were not limited, no prejudice to the other creditors would result from the simple payment of the debt to the creditor who brought the bill. See Woodgate v. Field, 2 Hare 211, 213, 67 Eng. Rep. 88, 89 (Ch. 1842) ("The reason for . . . the usual form of decree . . . has no application where assets are admitted, for the executor thereby makes himself liable to the payment of the debt. In such a case, the other creditors cannot be prejudiced by a decree for payment of the Plaintiff's debt; and the object of the special form of the decree in a creditors' suit fails"); see also Hallett v. Hallett, 2 Paige 15, 21 (N. Y. 1829) ("[I]f by the answer of the defendant [in a creditors' or legatees' suit] it appears there will be a deficiency of assets so that all the creditors cannot be paid in full, or that there must be an abatement of the complainant's legacy, the court will make a decree for the general administration of the estate, and a distribution of the same among the several parties entitled thereto, agreeable to equity").

[19] Professor Chafee explained, in discussing bills of peace, that where a case presents a limited fund, "it is impossible to make a fair distribution of the fund or limited liability to all members of the multitude except in a single proceeding where the claim of each can be adjudicated with due reference to the claims of the rest. The fund or limited liability is like a mince pie, which can not be satisfactorily divided until the carver counts the number of persons at the table." Bills of Peace with Multiple Parties, 45 Harv. L. Rev. 1297, 1311 (1932).

[20] As noted above, traditional limited fund class actions typically provided notice to all claimants and the opportunity for those claimants to establish their claims before the actual distribution took place. See, e. g., Dickinson v. Burnham, 197 F. 2d 973, 978 (CA2 1952); Terry v. President and Directors of the Bank of Cape Fear, 20 F. 777, 782 (CC WDNC 1884); cf. Johnson v. Waters, 111 U. S. 640, 674 (1884) (in a creditors' bill, "it is the usual and correct course to open a reference in the master's office and to give other creditors, having valid claims against the fund, an opportunity to come in and have the benefit of the decree"). Rule 23, however, specifies no notice requirement for subdivision (b)(1)(B) actions beyond that required by subdivision (e) for settlement purposes. Plaintiffs in this case made an attempt to notify all presently identifiable class members in connection with the fairness hearing, though the adequacy of the effort is disputed. Since satisfaction or not of a notice requirement would not affect the disposition of this case, we express no opinion on the need for notice or the sufficiency of the effort to give it in this case.

[21] To the extent that members of the Advisory Committee explicitly considered cases resembling the current mass tort limited fund class action, they did so in the context of the debate about bringing "mass accident" class actions under Rule 23(b)(3). There was much concern on the Advisory Committee about the degree to which subdivision (b)(3), which the Committee was drafting to replace the old spurious class action category, would be applied to "mass accident" cases. Compare, e. g., Civil Rules Meeting 9, 14, with, e. g., id., at 13, 44-45. See also id., at 51. As a compromise, the Advisory Committee Notes state that a "`mass accident' resulting in injuries to numerous persons is ordinarily not appropriate for a class action because of the likelihood that significant questions, not only of damages but of liability and defenses of liability, would be present, affecting the individuals in different ways." Adv. Comm. Notes 697. See also Kaplan, Continuing Work 393.

[22] The Advisory Committee noted, moreover, that "[w]here the classaction character of the lawsuit is based solely on the existence of a `limited fund,' the judgment, while extending to all claims of class members against the fund, has ordinarily left unaffected the personal claims of nonappearing members against the debtor." Adv. Comm. Notes 698. Cf. Bone, Personal and Impersonal Litigative Forms: Reconceiving the History of Adjudicative Representation, 70 B. U. L. Rev. 213, 282 (1990) (historically suits involving individual claims in the absence of a common fund did not automatically bind class members, instead providing a mechanism for notice and the opportunity to join the suit). This recognition underscores doubt that the Advisory Committee would have intended liberality in allowing such a circumscribed tradition to be transmogrified by operation of Rule 23(b)(1)(B) into a mechanism for resolving the claims of individuals not only against the fund, but also against an individual tortfeasor.

[23] The Seventh Amendment provides: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved . . . ."

[24] It is no answer in this case that the settlement agreement provided for a limited, back-end "opt out" in the form of a right on the part of class members eventually to take their case to court if dissatisfied with the amount provided by the trust. The "opt out" in this case requires claimants to exhaust a variety of alternative dispute mechanisms, to bring suit against the trust,and not against Fibreboard, and it limits damages to $500,000, to be paid out in installments over 5 to 10 years, see supra, at 827, despite multimillion-dollar jury verdicts sometimes reached in asbestos suits, In re Asbestos Litigation, 90 F. 3d, at 1006-1007, n. 30 (Smith, J., dissenting). Indeed, on approximately a dozen occasions, Fibreboard had settled for more than $500,000. See App. to Pet. for Cert. 373a.

[25] We also reiterated the constitutional requirement articulated in Hansberry v.Lee, 311 U. S.32 (1940), that "the named plaintiff at all times adequately represent the interests of the absent class members." Phillips Petroleum Co. v. Shutts, 472 U. S., at 812 (citing Hansberry, supra, at 42-43, 45). In Shutts, as an important caveat to our holding, we made clear that we were only examining the procedural protections attendant on binding out-of-state class members whose claims were "wholly or predominately for money judgments," 472 U. S., at 811, n. 3.

[26] The plural reflects the fact that the insurers agreed to provide $1.525 billion under the Global Settlement Agreement and $2 billion under the Trilateral Settlement Agreement.

[27] The federal courts have differed somewhat in articulating the standard to evaluate whether, in fact, a fund is limited, in cases involving mass torts. Compare, e. g., In re Northern Dist. of California, Dalkon Shield IUD Products Liability Litigation, 693 F. 2d 847, 852 (CA9 1982), cert. denied sub nom. A. H. Robins Co., Inc. v. Abed, 459 U. S. 1171 (1983) (class proponents must demonstrate that allowing the adjudication of individual claims will inescapably compromise the claims of absent class members), with, e. g., In re "Agent Orange" Product Liability Litigation, 100 F. R. D. 718, 726 (EDNY 1983), aff'd 818 F. 2d 145 (CA2 1987),cert.denied sub nom. Fraticelli et al. v. Dow Chemical Co. et al., 484 U. S.1004 (1988) (requiring only a "substantial probability—that is less than a preponderance but more than a mere possibility—that if damages are awarded, the claims of earlier litigants would exhaust the defendants' assets"). Cf. In re Bendect in Products Liability Litigation, 749 F. 2d 300,306 (CA6 1984). Because under either formulation, the class certification in this case cannot stand, it would be premature to decide the appropriate standard at this time.

[28] See Issacharoff, Class Action Conflicts, 30 U. C. D. L. Rev. 805, 822 (1997) ("[I]n the context of a mandatory settlement class, the individual class member is presented with what purports to be a binding fait accompli, with the only recourse a likely futile objection at the fairness hearing required by Rule 23(e)").

[29] The District Court based the $235 million figure on evidence provided by an investment banker regarding what a "financially prudent buyer" would pay to acquire Fibreboard free of its personal injury asbestos liabilities,less transaction costs. App. to Pet. for Cert. 377a, 492a. In 1997, however, Fibreboard was acquired for about $515 million, plus $85 million of assumed debt. See In re Asbestos Litigation, 134 F. 3d 668, 674 (CA5 1998) (Smith, J., dissenting); see also Coffee, Class Wars: The Dilemma of the Mass Tort Class Action, 95 Colum. L. Rev. 1343, 1402 (1995) (noting the surge in Fibreboard's stock price following the settlement below).

[30] Indescribing possible limited funds in this case, the District Court discounted the $2 billion Trilateral Settlement Agreement figure by the amount necessary to resolve present claims included in neither the inventory settlements nor the global classclaims and other items, yielding a figure equal to the $1.535 billion available under the Global Settlement Agreement. App. to Pet. for Cert. 492a. The Court of Appeals, by contrast, assumed that the full $2 billion represented by the Trilateral Settlement Agreement would be available to class claims. In re Asbestos Litigation, 90 F. 3d, at 982. The Court of Appeals provided no explanation for using the higher figure in light of the District Court's conclusion that only $1.535 billion of the $2 billion Trilateral Settlement Agreement figure would actually be available to the class. Either way, the figure represented only the amount the insurance companies agreed to pay, and not an independent evaluation of the limits of their payment obligations.

[31] In a strictly rational world, plaintiffs' counsel would always press for the limit of what the defense would pay. But with an already enormous fee within counsel's grasp, zeal for the client may relax sooner than it would in a case brought on behalf of one claimant.

[32] This adequacy of representation concern parallels the enquiry required at the threshold under Rule 23(a)(4), but as we indicated in Amchem, the same concerns that drive the threshold findings under Rule 23(a) may also influence the propriety of the certification decision under the subdivisions of Rule 23(b). See Amchem,521 U. S., at 623, n. 18.

In Amchem, we concentrated on the adequacy of named plaintiffs, but we recognized that the adequacy of representation enquiry is also concerned with the "competency and conflicts of class counsel." Id., at 626, n. 20 (citing General Telephone Co. of Southwest v. Falcon, 457 U. S. 147, 157-158, n. 13 (1982)); see also 5 Moore's Federal Practice § 23.25[3][a] (adequacy of representation concerns named plaintiff and class counsel). In this case, of course, the named representatives were not even "named [until] after the agreement in principle was reached," App. to Pet. for Cert. 483a; and they then relied on class counsel in subsequent settlement negotiations, ibid.

[33] We made this observation in the context of Rule 23(b)(3)'s predominance enquiry, see Amchem, 521 U. S., at 622-623, and noted that no "`limited fund' capable of supporting class treatment under Rule 23(b)(1)(B)" was involved, id., at 623, n. 19.

[34] As a variation of the argument that class members' common interest in securing the insurance settlement overrode any internal conflicts, respondents put forth an alternative rationale for sustaining the certification in this case under Rule 23(b)(1)(B). They assert that "failure by the class to file and maintain a class action to resolve the coverage disputes on a unitary basis—allowing class members instead to prosecute their claims separately—would have put class members to the `significant risk[s]' that Fibreboard would lose its claimed insurance as a result of the coverage disputes," and that "any separate action by any class member could have itself resulted in an adjudication that the insurers owed no coverage to Fibreboard . . . ." Brief for Respondents Continental et al. 25 (quoting Rule 23(b)(1)(B)). Whatever its merits, this rationale for certification is foreclosed by the class conflicts, rehearsed above, that tainted the negotiation of the global settlement, and that at this point cannot be undone. Thus, whether a mandatory class could now be certified without the excluded inventory plaintiffs (whose settlements would appear to be final), or with properly represented subclasses, is an issue we need not address.

[35] We need not decide here how close to insolvency a limited fund defendant must be brought as a condition of class certification. While there is no inherent conflict between a limited fund class action under Rule 23(b)(1)(B) and the Bankruptcy Code, cf., e. g., In re Drexel Burnham Lambert Group, Inc., 960 F. 2d 285, 292 (CA2 1992), it is worth noting that if limited fund certification is allowed in a situation where a company provides only a de minimis contribution to the ultimate settlement fund, the incentives such a resolution would provide to companies facing tort liability to engineer settlements similar to the one negotiated in this case would, in all likelihood, significantly undermine the protections for creditors built into the Bankruptcy Code. We note further that Congress in the Bankruptcy Reform Act of 1994, Pub. L. 103-394, § 111(a), amended the Bankruptcy Code to enable a debtor in a Chapter 11 reorganization in certain circumstances to establish a trust toward which the debtor may channel future asbestos-related liability, see 11 U. S. C. §§ 524(g), (h).

[36] Some courts certifying limited fund class actions have focused on the advantages such suits have in reducing transaction costs when compared to piecemeal litigation. See, e. g., In re Drexel Burnham Lambert Group, Inc., supra, at 292 (certifying mandatory class in part because "some members of the putative class might attempt to maintain costly individual actions in the hope and, perhaps, the belief that their claims are more meritorious than the claims of other class members," and thus warranting mandatory class certification "to prevent claimants with such motivations from unfairly diminishing the eventual recovery of other class members"). Although the transaction costs Fibreboard faced prior to settlement were at times significant, see Ahearn, 162 F. R. D., at 509; see also App. to Pet. for Cert. 282a (Fibreboard's annual asbestos litigation defense costs ran, at times, as high as twice the total face value of settlements reached), given the exigencies of Fibreboard's contingent insurance asset, this case does not present an instance in which limited fund certification can be justified on the ground that such settlement necessarily provided funds equal to, or greater than, what might have been recovered through individual litigation factoring out transaction costs.

Darius Charney, Esq., Sunita Patel, Esq., Center for Constitutional Rights, New York, New York.

Jonathan C. Moore, Esq., Jennifer Borchetta, Esq., Beldock Levine & Hoffman LLP, New York, New York.

Eric Hellerman, Esq., Philip Irwin, Esq., Gretchen Hoff-Varner, Esq., Covington & Burling LLP, New York, New York. for Plaintiffs.

Heidi Grossman, Linda Donahue, Assistant Corporation Counsel New York City Law Department, New York, New York. for Defendants.

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION

Police officers are permitted to briefly stop any individual, but only upon reasonable suspicion that he is committing a crime.^[1] The source of that limitation is the Fourth Amendment to the United States Constitution, which guarantees that "the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated." The Supreme Court has explained that this "inestimable right of personal security belongs as much to the citizen on the streets of our cities as to the homeowner closeted in his study to dispose of his secret affairs."^[2]

The right to physical liberty has long been at the core of our nation's commitment to respecting the autonomy and dignity of each person: "No right is held more sacred, or is more carefully guarded, by the common law, than the right of every individual to the possession and control of his own person, free from all restraint or interference of others, unless by clear and unquestionable authority of law."^[3] Safeguarding this right is quintessentially the role of the judicial branch.

No less central to the courts' role is ensuring that the administration of law comports with the Fourteenth Amendment, which "undoubtedly intended not only that there should be no arbitrary deprivation of life or liberty, or arbitrary spoliation of property, but that equal protection and security should be given to all under like circumstances in the enjoyment of their personal and civil rights."^[4]

On over 2.8 million occasions between 2004 and 2009, New York City police officers stopped residents and visitors, restraining their freedom, even if only briefly.^[5] Over fifty percent of those stops were of Black people and thirty percent were of Latinos, while only ten percent were of Whites.^[6] The question presented by this lawsuit is whether the New York City Police Department ("NYPD") has complied with the laws and Constitutions of the United States and the State of New York. Specifically, the four named plaintiffs allege, on behalf of themselves and a putative class, that defendants have engaged in a policy and/or practice of unlawfully stopping and frisking people in violation of their Fourth Amendment right to be free from unlawful searches and seizures and their Fourteenth Amendment right to freedom from discrimination on the basis of race.

Plaintiffs David Floyd, Lalit Clarkson, Deon Dennis, and David Ourlicht are Black men who seek to represent a class of similarly situated people in this lawsuit against the City of New York, Police Commissioner Raymond Kelly, Mayor Michael Bloomberg, and named and unnamed police officers. On behalf of the putative class, plaintiffs seek equitable relief in the form of (1) a declaration that defendants' policies, practices, and/or customs violate the Fourth and Fourteenth Amendments, and (2) a class-wide injunction mandating significant changes in those policies, practices, and/or customs.

This case presents an issue of great public concern: the disproportionate number of Blacks and Latinos, as compared to Whites, who become entangled in the criminal justice system. The specific claims raised in this case are narrower but they are raised in the context of the extensively documented racial disparities in the rates of stops, arrests, convictions, and sentences that continue through the present day. Five nonprofit organizations have filed an amicus brief with this Court arguing that the NYPD's stop and frisk practices are harmful, degrading, and demoralizing for too many young people in New York^[7] and twenty-seven of the fifty-one members of the New York City Council have filed a second amicus brief arguing that the practices are a citywide problem that "reinforce[] negative racial stereotypes" and have created "a growing distrust of the NYPD on the part of Black and Latino residents."^[8]

The NYPD's stop and frisk program was first presented to this Court over thirteen years ago, in a class action entitled Daniels v. City of New York.^[9] That case was resolved in 2003 through a settlement that required the City to adopt several remedial measures intended to reduce racial disparities in stops and frisks. Under the terms of that settlement, the NYPD enacted a Racial Profiling Policy; revised the form that police fill out when they conduct a stop so that the encounters would be more accurately documented; and instituted regular audits of the forms, among other measures.

In 2008, after the Daniels settlement expired, plaintiffs brought this action, alleging that defendants had failed to reform their policies and practices. In 2011, after examining the parties' voluminous submissions, I denied defendants' motion for summary judgment.^[10] In April of this year, upon another voluminous record, I granted in part and denied in part defendants' motion to exclude the testimony of Jeffrey Fagan, plaintiffs' statistics and criminology expert.^[11] Plaintiffs now move for certification of the following class:

All persons who since January 31, 2005 have been, or in the future will be, subjected to the New York Police Department's policies and/or widespread customs or practices of stopping, or stopping and frisking, persons in the absence of a reasonable, articulable suspicion that criminal activity has taken, is taking, or is about to take place in violation of the Fourth Amendment, including persons stopped or stopped and frisked on the basis of being Black or Latino in violation of the Equal Protection Clause of the Fourteenth Amendment.^[12]

Because plaintiffs satisfy the legal standard for class certification, their motion is granted.

II. LEGAL STANDARD

A. Rule 23(a)

Rule 23 of the Federal Rules of Civil Procedure permits individuals to sue as representatives of an aggrieved class. To be certified, a putative class must first meet all four prerequisites set forth in Rule 23(a), generally referred to as numerosity, commonality, typicality, and adequacy.^[13] "[C]ertification is proper only if the trial court is satisfied, after rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied."^[14] This rigorous analysis requires examining the facts of the dispute, not merely the pleadings, and it will frequently "entail some overlap with the merits of the plaintiff's underlying claim."^[15]

Even before the Supreme Court clearly articulated this standard in its 2011 Wal-Mart decision, the Second Circuit had "required district courts `to assess all of the relevant evidence admitted at the class certification stage'" and to apply "the preponderance of the evidence standard" when resolving factual disputes relevant to each of the Rule 23 requirements.^[16]Wal-Mart has adopted that standard and it remains the case that at the class certification stage, "a district judge should not assess any aspect of the merits unrelated to a Rule 23 requirement."^[17] The court's "determination as to a Rule 23 requirement is made only for purposes of class certification and is not binding on the trier of facts, even if that trier is the class certification judge."^[18]

"The numerosity requirement in Rule 23(a)(1) does not mandate that joinder of all parties be impossible — only that the difficulty or inconvenience of joining all members of the class make use of the class action appropriate."^[19] Sufficient numerosity can be presumed at a level of forty members or more,^[20] and courts do not require "evidence of exact class size or identity of class members to satisfy the numerosity requirement."^[21]

Commonality requires plaintiffs "to demonstrate that the class members `have suffered the same injury,'" and the claims "must depend upon a common contention . . . of such a nature that it is capable of classwide resolution — which means that 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."^[22]

In this context, "the commonality and typicality requirements of Rule 23(a) tend to merge."^[23] "Typicality `requires that the claims of the class representatives be typical of those of the class, and is satisfied when each class member's claim arises from the same course of events[] and each class member makes similar legal arguments to prove the defendant's liability.'"^[24] Rather than focusing on the precise nature of plaintiffs' injuries, the typicality requirement may be satisfied where "injuries derive from a unitary course of conduct by a single system."^[25] A lack of typicality may be found in cases where the named plaintiff "was not harmed by the [conduct] he alleges to have injured the class"^[26] or the named plaintiff's claim is subject to "specific factual defenses" atypical of the class.^[27]

The question of adequacy "entails inquiry as to whether: 1) plaintiff's interests are antagonistic to the interest of other members of the class and 2) plaintiff's attorneys are qualified, experienced and able to conduct the litigation."^[28]

Some courts have added an "implied requirement of ascertainability"^[29] to the express requirements of Rule 23(a) and have refused to certify a class "unless the class description is sufficiently definite so that it is administratively feasible for the court to determine whether a particular individual is a member."^[30] However, because notice is not obligatory and because the relief sought is injunctive rather than compensatory, "it is not clear that the implied requirement of definiteness should apply to Rule 23(b)(2) class actions at all."^[31] As stated in the Advisory Committee Note to Rule 23(b)(2), it was designed to cover "actions in the civil-rights field where a party is charged with discriminating unlawfully against a class, usually one whose members are incapable of specific enumeration."^[32]

B. Rule 23(b)(2)

If the requirements of Rule 23(a) are met, the court "must next determine whether the class can be maintained under any one of the three subdivisions of Rule 23(b)."^[33] Plaintiffs seek certification under Rule 23(b)(2), which applies where "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole."

C. The Galvan Doctrine

Under the doctrine established by the Second Circuit's decision in Galvan v. Levine, certification of a Rule 23(b)(2) class is unnecessary when "prospective relief will benefit all members of a proposed class to such an extent that the certification of a class would not further the implementation of the judgment."^[34]

III. FACTS

At the class certification stage, district courts must engage in a rigorous analysis of the underlying facts in order to determine whether the plaintiffs have satisfied the requirements of Rule 23. The following factual findings, based on a preponderance of the evidence, are made only for the purpose of adjudicating this motion and will not be binding on the jury at trial.^[35]

A. The NYPD's Stop and Frisk Program

It is indisputable that the NYPD has an enormous stop and frisk program. There were 2.8 million documented stops between 2004 and 2009. Those stops were made pursuant to a policy that is designed, implemented, and monitored by the NYPD's administration. In support of their motion for summary judgment, defendants cited numerous examples of NYPD policies and practices regarding training,^[36] monitoring,^[37] supervision,^[38] and discipline in order to rebut plaintiffs' allegations of municipal liability for widespread constitutional violations during stops and frisks.^[39] That evidence shows that the stop and frisk program is centralized and hierarchical.

Decisions about the policy are made at the highest levels of the department.^[40] At the regular CompStat^[41] meetings involving the NYPD's top officials, "[s]top, question and frisk activity is commonly discussed"^[42] in detail and "[t]he process allows top executives to monitor precincts and operational units, evaluate the skills and effectiveness of managers and properly allocate resources."^[43] The Chief of Patrol's office discusses stop and frisk activity with the individual borough commanders and precinct commanders.^[44]

The UF-250 form was designed by the NYPD and must be filled out by officers after every stop. The form is sometimes reviewed at CompStat meetings^[45] and "the Chief of Patrol's office reviews UF-250s [from high crime `Impact Zones'] in order to determine whether the precinct as a whole is properly deploying its resources."^[46] The NYPD requires that "[a] supervisor must sign off on every stop, question and frisk UF-250 report."^[47]

According to defendants, the NYPD "provides multiple levels of training for officers,"^[48] including numerous courses that cover stop and frisk procedure,^[49] a 4.5-hour role-playing workshop on stop and frisk,^[50] numerous memos and special videos about the law of reasonable suspicion, and ongoing training after graduating from the police academy.^[51]

"The NYPD functions through a chain of command."^[52] Officers are monitored by their supervisors; supervisors are monitored through inspection teams, integrity control officers, and precinct commanding officers; and the Internal Affairs Bureau monitors police personnel throughout the department and is notified of all complaints alleging excessive force, abuse of authority, discourtesy, or offensive language.^[53]

In short, the overwhelming and indisputable evidence shows that the NYPD has a department-wide stop and frisk program; the program has been designed and revised at the highest levels of the department; the implementation of the program is conducted according to uniform and centralized rules; and monitoring of compliance with the program is hierarchical. Defendants acknowledge much of this reality: "To be sure, NYPD's department-wide policies generate from a centralized source and NYPD employs a hierarchical supervisory structure to effect and reinforce its department-wide policies."^[54]

B. The Centralized Use of Performance Standards and Quotas

Hotly contested, however, is whether the NYPD has set quotas governing the number of stops and summonses that NYPD officers must make on a monthly basis. New York's Labor Law makes it unlawful for the NYPD to penalize a police officer, expressly or impliedly, for the officer's failure to meet a summons, arrest, or stop quota.^[55] Defendants argue that

[w]hile the NYPD requires performance goals, they are specifically expected to be set by a command's managers and to be met within appropriate legal standards, including stop activity. These performance goals are not necessarily numerical in character and are instead goals to be set and achieved in relation to current crime conditions in an officer's command. Plaintiffs have made no showing that numerical goals for enforcement activity exist and/or are uniform throughout the NYPD.^[56]

Whether the "performance goals" are accurately characterized as "quotas" under the New York Labor Law is surely important to the NYPD and to police officers and their union. But at the class certification stage of this lawsuit, the applicability of that legal definition is much less important than the substantive question of whether or not the unlawful stops of putative class members result from a common source: the department's policy of establishing performance standards and demanding increased levels of stops and frisks. The preponderance of the evidence shows that the answer to that question is yes.

To begin with, the scope of the NYPD's stop and frisk program is a result of institutional decisions and directives. Over the fourteen months beginning in January 1998, "NYPD officers documented 174,919 street `stops' on UF-250 forms."^[57] That is equivalent to just under 12,500 stops per month or 150,000 stops per year. In 2004, officers documented over 313,000 stops, and since then the number has increased every year except 2007, rising to over 684,000 in 2011.^[58] Given the hierarchical nature of the NYPD, any reasonable observer would conclude simply by looking at the trend that this dramatic increase in the number of stops represents the intentional implementation of a departmental objective. But I need not rely on the overwhelming circumstantial evidence showing that the increase in stops is due to central directives because there is ample direct evidence as well. A small sample of this evidence includes the following:

• In a recent Operations Order, Commissioner Kelly directed all commands that "Department managers can and must set performance goals," relating to "the issuance of summonses, the stopping and questioning of suspicious individuals, and the arrests of criminals."^[59] As part of a weekly review of each police officer, "the squad/unit sergeant will compare the member's current monthly activity as it pertains to the member's daily assignment" and at the end of every month, officers will complete a report "indicating the total activity for the month."^[60] The Order states that during performance evaluations, "a high degree of review and consideration will be given to member's daily efforts" and that "[u]niformed members . . . who do not demonstrate activities . . . or who fail to engage in proactive activities . . . will be evaluated accordingly and their assignments re-assessed."^[61]

• In response to questions about the major increase in stops in recent years, Deputy Commissioner Paul Browne has made clear that the Department continues to embrace stops as a central part of its crime-fighting strategy: "stops save lives," and "[t]hat is a remarkable achievement—5,628 lives saved—attributable to proactive policing strategies that included stops."^[62]

• At a CompStat meeting on July 17, 2008, NYPD Chief of Department Joseph Esposito (who is the highest ranking uniformed member of the force) told the executive officer of the 28th Precinct: "Your enf[orcement] numbers are way down . . . As an [executive officer] you have to look at that . . . If you look at raw number of 250s you are down 50 percent."^[63] At a CompStat meeting three months later, Esposito and Inspector Dwayne Montgomery, who was the commander of the 28th Precinct from 2005 to 2009, discussed the number of stops that an average officer should perform.^[64] At his deposition, Montgomery testified that during those years he expected his officers to conduct a "minimum" of 2.3 UF-250 stops per month and that he used that quota "as a way of just gauging whether or not they were doing their job."^[65] He had discussed that precise figure with Chief Esposito.

• From 2006 until 2009, Adhyl Polanco worked as a patrol officer in the 41st Precinct. At his deposition, he testified that his commanding officers announced specific quotas for arrests and summons (quotas that rose dramatically between early 2008 and 2009) and for UF-250s, assigned supervisors to patrol with under-performing officers so as to ensure that quotas were met, threatened to reduce overtime for officers who failed to perform well, and reassigned to less desirable posts officers who failed to meet quotas.^[66]

• In September and October of 2009, Polanco made audio recordings of the roll calls in the 41st Precinct, which he provided to the Internal Affairs Bureau and plaintiffs provided to the Court. In those roll call meetings, supervisors established specific quotas for summonses and arrests; a union delegate told officers that the union and the NYPD management agreed on a quota of one arrest and twenty summons per month; and a supervisor told officers that the Bronx Borough Commander was yelled at by the Chief of Patrol and others at NYPD headquarters for low summons activity and that officers in the 41st Precinct were expected to increase their summons numbers.^[67]

• In 2008 and 2009, police officer Adrian Schoolcraft recorded roll calls in the 81st Precinct; on the tapes, supervisors can be heard repeatedly telling officers to conduct unlawful stops and arrests and explaining that the instructions for higher performance numbers are coming down the chain of command.^[68]

In response to this evidence, defendants point to the testimony of numerous police officers who say that they have not been subject to or aware of quotas to make "a certain number" of stops or arrests or issue "a certain number" of summonses. Other officers say that they were not even aware of productivity standards or asked to increase their number of stops, arrests, and summonses. And many were never subject to or aware of discipline or rewards relating to quotas or productivity standards.^[69] I have no reason, at this juncture, not to credit these officers' testimony as truthful. I accept (for now) defendants' representation that some officers were not subjected to "quotas" and even that some officers were not aware of productivity standards, although there is no dispute that the use of performance standards is departmental policy.^[70] Nevertheless, the overwhelming evidence — including the precipitous rise in the number of stops, the policy statements from Commissioner Kelly's office, the many comments of Deputy Commissioner Browne and Chief of Department Esposito, the recordings of roll calls from precincts in the Bronx and Brooklyn, and the testimony of numerous police officers — shows that the dramatic increase in stops since 2004 is a direct consequence of a centralized and city-wide program.

C. Statistical Evidence of Unlawful Stops

NYPD officers are required to fill out a detailed worksheet, called a UF-250, describing the events before and during every stop that they perform. 2.8 million of these forms were filled out between 2004 and 2009 and all of them were compiled in a database — a database that now contains a wealth of information about millions of interactions between police officers and civilians.

Both parties have retained experts to perform extensive statistical analysis of this data. Plaintiffs rely heavily on their expert — Jeffrey Fagan, a Columbia University professor — in order to show that the NYPD has stopped many civilians without reasonable suspicion and unlawfully targets Blacks and Latinos for stops, summonses, arrests, and excessive force.^[71] In Wal-Mart, the Supreme Court strongly suggested that Daubert v. Merrell Dow Pharmaceuticals, Inc. (which governs the admissibility of expert testimony) applies at the certification stage of a class action proceeding.^[72] As a result, and in response to defendants' motion to strike plaintiffs' expert, I engaged in a detailed review of Fagan's qualifications and methodology.^[73] Because portions of his analysis were deeply intertwined with the law of reasonable suspicion, I conducted a de novo review of those portions and ordered adjustments to his findings in the two instances where his report misstated the law.^[74] After a rigorous review, I found him qualified and his methodologies reliable, and found much of his report probative and helpful. It is therefore appropriate for me to consider Fagan's conclusions at the class certification stage. In particular, I find that the following factual determinations provide strong evidence regarding the existence of a Fourth Amendment class, and a Fourteenth Amendment subclass, which satisfy the requirements of Rule 23:

1. Fourth Amendment Class

• In at least six percent of all documented stops, police officers' stated reasons for conducting the stop were facially insufficient to establish reasonable suspicion. That is to say, according to their own explanations for their actions, NYPD officers conducted at least 170,000 unlawful stops between 2004 and 2009.^[75]

• In over 62,000 of those cases, police officers gave no reason other than "furtive movement" to justify the stop. These facially unlawful stops occurred in every precinct in the City — from a low of fourteen such stops in Central Park's 22nd Precinct and forty-one such stops in Staten Island's 123rd Precinct to a high of over 3,500 in the western Bronx's 46th Precinct and East New York's 73rd and 75th Precincts.^[76]

• In over four thousand stops, police officers gave no reason other than "high crime area" to justify the stop. These facially unlawful stops also occurred in every precinct in the City.^[77]

• In the 81st Precinct, where Adrian Schoolcraft's recordings document supervisors repeatedly telling officers to conduct unlawful stops, the percentage of stops that were facially unlawful was below the City-wide average.^[78] At least according to this metric, stop and frisk conduct in dozens of New York City precincts was similar to stop and frisk conduct in the 81st Precinct.

• The percentage of documented stops for which police officers failed to list an interpretable "suspected crime" has grown dramatically, from 1.1 percent in 2004 to 35.9 percent in 2009.^[79] Overall, in more than half a million documented stops — 18.4 percent of the total — officers listed no coherent suspected crime.^[80]

• "High crime area" is listed as a justification for a stop in approximately fifty-five percent of all recorded stops, regardless of whether the stop takes place in a precinct or census tract with average, high, or low crime.^[81]

• 5.37 percent of all stops result in an arrest; 6.26 percent of stops result in a summons.^[82] In the remaining eighty-eight percent of cases, although they were required by law to have objective reasonable suspicion that crime was afoot when they made the stop, police officers ultimately concluded that there was no probable cause to believe that crime was afoot. That is to say, according to their own records and judgment, officers' "suspicion" was wrong nearly nine times out of ten.^[83]

• Guns were seized in 0.15 percent of all stops. This is despite the fact that "suspicious bulge" was cited as a reason for 10.4 percent of all stops.^[84] Thus, for every sixty-nine stops that police officers justified specifically on the basis of a suspicious bulge, they found one gun.^[85]

2. Fourteenth Amendment Subclass

• "The racial composition of a precinct, neighborhood, and census tract is a statistically significant, strong and robust predictor of NYPD stop-and-frisk patterns even after controlling for the simultaneous influences of crime, social conditions, and allocation of police resources."^[86]

• Based on Fagan's analysis of the UF-250s, "the search for weapons is (a) unrelated to crime, (b) takes place primarily where weapons offenses are less frequent than other crimes, and (c) is targeted at places where the Black and Hispanic populations are highest . . . . [T]he search for drug offenders is (a) negatively related to rates of crime or drug offenses specifically, and is (b) concentrated in neighborhoods with high proportions of Black and Hispanic residents."^[87]

• "NYPD stops-and-frisks are significantly more frequent for Black and Hispanic residents than they are for White residents, even after adjusting for local crime rates, racial composition of the local population, police patrol strength, and other social and economic factors predictive of police enforcement activity."^[88]

• "Black and Hispanic individuals are treated more harshly during stop-and-frisk encounters with NYPD officers than Whites who are stopped on suspicion of the same or similar crimes."^[89]

• Police officers are more likely to list no suspected crime category (or an incoherent one) when stopping Blacks and Latinos than when stopping Whites.^[90]

• Police officers are more likely to list the stop justification "furtive movement," which is a highly nebulous and not particularly probative of crime, when stopping Blacks and Latinos than when stopping Whites.^[91]

IV. DISCUSSION

A. Plaintiffs Have Standing to Seek Injunctive Relief

Article III of the Constitution requires that a federal court entertain a lawsuit only if the plaintiff has standing to pursue the relief that she seeks. Concrete injury is a prerequisite to standing and a "plaintiff seeking injunctive or declaratory relief cannot rely on past injury to satisfy the injury requirement but must show a likelihood that he or she will be injured in the future."^[92]

The Supreme Court emphasized this requirement in City of Los Angeles v. Lyons, when it held that Lyons, who had been subjected to a dangerous chokehold by a Los Angeles police officer, did not have standing to pursue an injunction against the police department's practice of using chokeholds because his past injury "does nothing to establish a real and immediate threat that he would again be stopped for a traffic violation, or for any other offense, by an officer or officers who would illegally choke him into unconsciousness without any provocation or resistance on his part."^[93]

Defendants argue that plaintiffs Clarkson, Dennis, and Floyd lack standing to seek injunctive relief.^[94] Clarkson and Dennis allege that they were each stopped improperly only once between 2004 and 2009 and Dennis and Floyd no longer live in New York (although Dennis regularly visits his friends and family here and intends to move back in the future and Floyd intends to move back to the City after he finishes medical school).^[95] Accordingly, defendants argue, "[plaintiffs'] assertion that they will again be stopped and deprived of their constitutional rights is wholly speculative."^[96]

The simplest way to address defendants' concern is by noting that David Ourlicht, the fourth plaintiff, indisputably does have standing and that "the presence of one party with standing is sufficient to satisfy Article III's case-or-controversy requirement."^[97]First, unlike Lyons, who alleged only one past instance of unconstitutional police behavior, Ourlicht was stopped by NYPD officers three times in 2008 and once again in 2010, after this lawsuit was filed.^[98] "The possibility of recurring injury ceases to be speculative when actual repeated incidents are documented."^[99]Second, unlike the plaintiffs in Lyons and Shaine v. Ellison,^[100] Ourlicht's risk of future injury does not depend on his being arrested for unlawful conduct and so he cannot avoid that injury by following the law. The risk of injury is not based on a string of unlikely contingencies: according to his sworn affidavit, Ourlicht was stopped and frisked while going about his daily life — walking down the sidewalk, sitting on a bench, getting into a car.^[101]

Finally, as I explained in the Daniels litigation, the frequency of alleged injuries inflicted by the practices at issue here creates a likelihood of future injury sufficient to address any standing concerns.^[102] In Lyons, the police department's challenged policies were responsible for ten deaths; here, the police department has conducted over 2.8 million stops over six years and its paperwork indicates that, at the very least, 60,000 of the stops were unconstitutional (because they were based on nothing more than a person's "furtive movement"). Every day, the NYPD conducted 1200 stops; every day, the NYPD conducted nearly thirty facially unlawful stops based on nothing more than "subjective, promiscuous appeals to an ineffable intuition."^[103] In the face of these widespread practices, Ourlicht's risk of future injury is "`real and immediate,' not `conjectural' or `hypothetical,'"^[104] and he satisfies Article III's standing requirements. Because Ourlicht has standing, I need not consider the standing of the other plaintiffs.^[105] I nevertheless note that Dennis and Floyd have each been stopped by the NYPD more than once (although two of Dennis' three stops occurred many years ago). Even Clarkson's single stop, in light of the tens of thousands of facially unlawful stops, would likely confer standing.^[106]

B. Plaintiffs Satisfy the Four Prerequisites of Rule 23(a)

1. Ascertainability

Defendants argue that the "description of the class must be `sufficiently definite so that it is administratively feasible for the court to determine whether a particular individual is a member.'"^[107] Defendants believe that plaintiffs' proposed class definition — all persons who have been or in the future will be unlawfully stopped in violation of the Fourth Amendment, including all persons stopped on the basis of being Black or Latino in violation of the Fourteenth Amendment — is impremissibly indefinite because "an individualized inquiry must be made into the facts and circumstances surrounding [each] stop" and the "analysis is highly specific and unique in every case."^[108]

The NYPD repeats this argument despite its unsurprising lack of success for over three decades. In 1979, Judge Charles Haight of this Court was presented with a motion for class certification in the landmark Handschu litigation that sought to curtail unconstitutional behavior by the NYPD, including the surveillance of left wing political groups. Plaintiffs sought to certify a class of "[a]ll individuals . . . who are physically present in the City of New York . . . who engage in or have engaged in lawful political, religious, educational or social activities and who, as a result of these activities, have been, are now or hereafter may be subjected to or threatened by" surveillance or violence by the NYPD.^[109] The defendants' "strenuously pressed arguments against certification" focused on the indefinite nature of the class definition. Judge Haight rejected those arguments: "Where, as here, the 23(b)(2) class action seeks equitable relief as opposed to money damages, obviating the need for notice to class members, precise delineation of the class has been held unnecessary."^[110]

Rule 23 does not demand ascertainability. The requirement is a judicial creation meant to ensure that class definitions are workable when members of the class will be entitled to damages or require notice for another reason.^[111] In contrast, as Judge Haight noted, the drafters of the Rule specifically envisioned the use of (b)(2) classes "in the civil-rights field where a party is charged with discriminating unlawfully against a class, usually one whose members are incapable of specific enumeration."^[112] The most prominent treatise on class actions notes that because of the absence of individual damages, "it is not clear that the implied requirement of definiteness should apply to Rule 23(b)(2) class actions at all."^[113]

Defendants repeated their ascertainability argument twenty years after Handschu, in the Daniels case, which sought certification of a nearly identical class to the one sought here. As I explained then, "[b]ecause `general class descriptions based on the harm allegedly suffered by plaintiffs are acceptable in class actions seeking only declaratory and injunctive relief under Rule 23(b)(2),' plaintiffs' proposed class is sufficiently definite to warrant certification."^[114]

Both the Second Circuit and numerous district courts in the circuit have approved of class definitions without precise ascertainability under Rule 23(b)(2).^[115] Other circuits agree with this approach. The Tenth Circuit has made clear that "while the lack of identifiability is a factor that may defeat Rule 23(b)(3) class certification, such is not the case with respect to class certification under Rule 23(b)(2)."^[116] Similarly, the First Circuit has said that ascertainability is unnecessary when "the conduct complained of is the benchmark for determining whether a subdivision (b)(2) class exists."^[117]

It would be illogical to require precise ascertainability in a suit that seeks no class damages. The general demarcations of the proposed class are clear — those people unlawfully stopped or who may be stopped by the NYPD — and that definition makes the class sufficiently ascertainable for the purpose of Rule 23(b)(2).

2. Numerosity

Rule 23(a)(1) requires that a class be "so numerous that joinder of all members is impracticable." In the Second Circuit, "numerosity is presumed at a level of 40 members."^[118] Defendants argue here that "in the absence of ascertainability plaintiffs cannot establish numerosity,"^[119] but they cite no law for that proposition.^[120] Again, the language of the Rule's drafters is helpful: (b)(2) is meant for classes "whose members are incapable of specific enumeration."^[121] The preponderance of the evidence indicates that the proposed class and subclass easily exceed forty members. Indeed, the size of the class is likely to be well over one hundred thousand.

3. Commonality

Rule 23(a)(2) requires that there be "questions of law or fact common to the class." This requires plaintiffs "to demonstrate that the class members `have suffered the same injury.'"^[122] In Wal-Mart, plaintiffs sought to certify a class of approximately 1.5 million female employees of the retail giant, alleging that "the discretion exercised by their local supervisors over pay and promotion violates Title VII by discriminating against women."^[123] The Supreme Court found that the plaintiffs had failed to satisfy commonality because the putative class members were subjected to an enormous array of different employment practices:

[P]ay and promotion decisions at Wal-Mart are generally committed to the local managers' broad discretion . . . [who may make employment decisions] with only limited corporate oversight^[124] . . . . Wal-Mart has no testing procedure or other companywide evaluation method that can be charged with bias. The whole point of permitting discretionary decisionmaking is to avoid evaluating employees under a common standard^[125] . . . . Other than the bare existence of delegated discretion, respondents have identified no `specific employment practice' — much less one that ties all their 1.5 million claims together.^[126]

Judge Richard Posner recently applied the Wal-Mart decision to the claims of Black Merrill Lynch brokers alleging racial discrimination. This was his summary of the Wal-Mart holding:

Wal-Mart holds that if employment discrimination is practiced by the employing company's local managers, exercising discretion granted them by top management . . . rather than implementing a uniform policy established by top management to govern the local managers, a class action by more than a million current and former employees is unmanageable.^[127]

Merrill Lynch had a policy of permitting brokers in the same office to form work teams of their choosing and a policy of giving the accounts of departed brokers to existing brokers on the basis of various performance formula. Plaintiffs alleged that the "fraternity" nature of the teaming policy and the rich-get-richer nature of the accounts policy had a disparate impact on Black brokers. Reversing the lower court and granting certification, Judge Posner explained that the two policies

are practices of Merrill Lynch, rather than practices that local managers can choose or not at their whim. Therefore challenging those policies in a class action is not forbidden by the Wal-Mart decision; rather that decision helps (as the district judge sensed) to show on which side of the line that separates a company-wide practice from an exercise of discretion by local managers this case falls.^[128]

The court determined that "the plaintiffs' claim of disparate impact is most efficiently determined on a class-wide basis rather than in 700 individual lawsuits"^[129] because, unlike in Wal-Mart, there were two company-wide policies at issue and a class action would be the best mechanism for determining the impact that those policies had on the earnings of Merrill Lynch's brokers. Thus, Judge Posner's opinion stands for the proposition that even after Wal-Mart, Rule 23(b)(2) suits remain appropriate mechanisms for obtaining injunctive relief in cases where a centralized policy is alleged to impact a large class of plaintiffs, even when the magnitude (and existence) of the impact may vary by class member.

This has long been the Second Circuit's standard.^[130] In Marisol A., the Court of Appeals affirmed the certification of a class of all children challenging many different aspects of the child welfare system that implicated different statutory, constitutional, and regulatory schemes. Finding that the district court's characterization of the claims "stretches the notions of commonality and typicality," the court nevertheless affirmed because defendants' actions were alleged to "derive from a unitary course of conduct by a single system."^[131] More recently, the Second Circuit has reiterated the rule that "where plaintiffs were `allegedly aggrieved by a single policy of the defendants,' and there is `strong commonality of the violation and the harm,' this `is precisely the type of situation for which the class action device is suited.'"^[132]

As documented above, there can be no dispute that the NYPD has a single stop and frisk program. Defendants concede that the "NYPD's department-wide policies generate from a centralized source and NYPD employs a hierarchical supervisory structure to effect and reinforce its department-wide policies."^[133] The stop and frisk program is far more centralized and hierarchical than even the employment policies in Merrill Lynch. Precinct commanders are not given leeway to conduct stops and frisks if, when, and how they choose; instead, they are required to use the tactic as a central part of the Department's pro-active policing strategy. They are required to monitor, document, and report their stop and frisk activity to headquarters using a uniform system; all officers are subject to centralized stop and frisk training; performance standards are obligatory and a recognized part of productivity evaluations in all precincts. Since Wal-Mart, at least three district courts have granted class certification in cases alleging Fourth and Fourteenth Amendment violations due to a police department's policy and/or practice of making unlawful stops and arrests; all of these courts have rejected the notion that the individual circumstances of a stop defeat commonality.^[134] Defendants argue that "individual officers' decisions to make stops are akin to the Wal-Mart `policy' of allowing discretion to supervisors over employment matters," and so the NYPD has "essentially a policy against having a uniform practice."^[135] This is belied by the 437 paragraphs of facts that defendants submitted, in support of their motion for summary judgment, showing just how centralized and hierarchical the NYPD's policies and practices are.^[136] Moreover, defendants confuse the exercise of judgment in implementing a centralized policy with the exercise of discretion in formulating a local store policy or practice.^[137]

Plaintiffs allege that their Fourth and Fourteenth Amendment rights are violated as a result of the NYPD's policies and practices. As they argue, these claims raise "central and core questions of fact and law that, when answered, will resolve all class members' Monell claims against the City."^[138] In the terminology of Wal-Mart, a class wide proceeding here will "generate common answers" to these questions that are "apt to drive the resolution of the litigation."^[139]

4. Typicality and Adequacy

Defendants make overlapping objections on the basis of typicality and adequacy, and so I address these two Rule 23(a) prerequisites in tandem.^[140] "Typicality `requires that the claims of the class representatives be typical of those of the class, and is satisfied when each class member's claim arises from the same course of events[] and each class member makes similar legal arguments to prove the defendant's liability.'"^[141] Rather than focusing on the precise nature of plaintiffs' injuries, the typicality requirement may be satisfied where "injuries derive from a unitary course of conduct by a single system."^[142]

The purpose of typicality is to ensure that class representatives "have the incentive to prove all the elements of the cause of action which would be presented by the individual members of the class were they initiating individualized actions."^[143] Similarly, "[a]dequacy is twofold: the proposed class representative must have an interest in vigorously pursuing the claims of the class, and must have no interests antagonistic to the interests of other class members."^[144] As defendants acknowledge, in order to defeat a motion for certification, any such conflicts must be "fundamental."^[145]

Here, the four named plaintiffs' stops arise from the same course of conduct — i.e., the NYPD's centralized program of stops and frisks — and their legal arguments are precisely the typical ones that are made by others who bring or could bring claims for Fourth and Fourteenth Amendment violations by defendants. The named plaintiffs are vigorously pursuing their claims^[146] and defendants have failed to identify any ways in which plaintiffs' interests are antagonistic to those of other class members.^[147]

Defendants' argument is twofold: First, "the Court would be required to assess any unique defenses of the defendants before determining liability, which could include a fact-intensive qualified immunity defense" and "the claims of putative class members who cannot identify an NYPD officer involved in the stop will be subject to unique defenses" that threaten to engulf the litigation.^[148]Second, because none of the named representatives are Latino, "they cannot represent the alleged Latino class members who make race-based claims."^[149] Neither argument is persuasive.

First, courts and juries must always consider defendants' individual defenses before determining liability. That is no bar at the certification stage.^[150] "In practice, courts in this Circuit . . . [refuse] certification only when confronted with a sufficiently clear showing" that a defense unique to the representative plaintiff's claims will in fact defeat those claims.^[151]

It is true that the parties have not been able to identify the police officers involved in five of the plaintiffs' eight alleged stops.^[152] At trial, defendants will argue that plaintiffs cannot establish liability for those stops; the jury may or may not agree. But defendants already moved for summary judgment on the claims of two of the four plaintiffs, including those of David Ourlicht, who was unable to identify the police officers who stopped him. Summary judgment was denied because I found that if a juror were to credit Ourlicht's testimony, she could find that he was stopped in the absence of objective reasonable suspicion that crime was afoot.^[153] That is to say, defendants failed to show that the John Doe defense will defeat plaintiffs' claims.

This issue does not create a "fundamental" conflict between named plaintiffs and unnamed class members: Indeed, it may be that officers often fail to complete the required UF-250 when they conduct a quick stop and frisk.^[154] In addition, three of the named plaintiffs allege stops involving identified police officers and at least two of those stops came from precincts in which commanding officers have acknowledged the use of performance standards or quotas.^[155] The issues involved in these stops go to the core of plaintiffs' claims.

The doctrine of unique defenses is intended to protect absent members of the plaintiff class by ensuring the presence of a typical plaintiff. The doctrine is not meant to protect defendants by permitting them to defeat certification because the facts raised by the claims of the representative plaintiffs are not identical to the facts raised by the claims of all putative class members. Because the named plaintiffs' claims arise from the same policy or practice and the same general set of facts as do the claims of the putative class members, the typicality prong is satisfied.^[156]

Defendants' contention regarding qualified immunity is similarly unavailing: the NYPD routinely argues that its officers are protected by qualified immunity. That defense is common to innumerable Terry stops and frisks; it cannot defeat typicality at the class certification stage.

Second, defendants' claim that the named plaintiffs cannot represent Latinos is likewise unconvincing. The cases that defendants cite denied certification because the named plaintiffs fell outside the subclass that they sought to represent.^[157] Plaintiffs seek certification of a Fourteenth Amendment subclass of Blacks and Latinos stopped because of their race; plaintiffs clearly fall inside that definition.^[158]

Plaintiffs' complaints are typical of those of the class and they will fairly and adequately protect the interests of the class. All four prerequisites of Rule 23(a) are met.

B. Class Certification Is Proper Under Rule 23(b)(2)

To certify a class under Rule 23(b)(2), plaintiffs must show that defendants "acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." As the Supreme Court explained in Wal-Mart, Rule 23(b)(2) is intended to cover cases such as this one:

When a class seeks an indivisible injunction benefitting all its members at once, there is no reason to undertake a case-specific inquiry into whether class issues predominate or whether class action is a superior method of adjudicating the dispute. Predominance and superiority are self-evident.^[159]

Defendants argue that certification under (b)(2) is inappropriate because they have not "acted or refused to act on grounds generally applicable to the class" and because plaintiffs "fail to identify an official policy, or its equivalent, and seek a broad-based structural injunction."^[160] Again, these arguments do not withstand the overwhelming evidence that there in fact exists a centralized stop and frisk program that has led to thousands of unlawful stops. The vast majority of New Yorkers who are unlawfully stopped will never bring suit to vindicate their rights.^[161] It is precisely for cases such as this that Rule 23(b)(2) was designed.^[162]

Defendants close their argument regarding the applicability of Rule 23 with this disturbing statement:

[E]ven if [plaintiffs] prove a widespread practice of suspicionless stops and Monell causation, it is not at all clear that an injunction would be a useful remedy. Certainly, no injunction could guarantee that suspicionless stops would never occur or would only occur in a certain percentage of encounters . . . . Here, plaintiffs essentially seek an injunction guaranteeing that the Fourth Amendment will not be violated when NYPD investigates crime. If a court could fashion an injunction that would have this effect, then it is likely that lawmakers would have already passed laws to the same effect . . . . An injunction here is exactly the kind of judicial intrusion into a social institution that is disfavored . . .

Three points must be made in response. First, suspicionless stops should never occur. Defendants' cavalier attitude towards the prospect of a "widespread practice of suspicionless stops" displays a deeply troubling apathy towards New Yorkers' most fundamental constitutional rights.

Second, it is not readily apparent that if an injunction preventing such widespread practices could be fashioned, it would already have been passed by lawmakers. The twenty-seven members of the Black, Latino and Asian Caucus of the Council of the City of New York who submitted an amicus brief in support of plaintiffs "disagree[] strongly with this assertion."^[163] It is rather audacious of the NYPD to argue that if it were possible to protect "the right of the people to be secure in their persons" from unlawful searches and seizures by the NYPD, then the legislature would already have done so and judicial intervention would therefore be futile. Indeed, it is precisely when the political branches violate the individual rights of minorities that "more searching judicial enquiry" is appropriate.^[164]

Third, if the NYPD is engaging in a widespread practice of unlawful stops, then an injunction seeking to curb that practice is not a "judicial intrusion into a social institution" but a vindication of the Constitution and an exercise of the courts' most important function: protecting individual rights in the face of the government's malfeasance.

V. CONCLUSION

Because plaintiffs have satisfied the requirements of Rule 23, their motion for class certification is granted. The clerk is directed to close this motion [Docket No. 165]. A status conference is scheduled for May 29, 2012 at 4:30 p.m.

SO ORDERED:

[1] See Terry v. Ohio, 392 U.S. 1, 30 (1968).

[2] Id. at 9.

[3] Union Pac. R. Co. v. Botsford, 141 U.S. 250, 251 (1891).

[4] Yick Wo v. Hopkins, 118 U.S. 356, 367 (1886) (citation and quotation omitted). "Though the law itself be fair on its face and impartial in appearance, yet, if it is applied and administered by public authority with an evil eye and an unequal hand, so as practically to make unjust and illegal discriminations between persons in similar circumstances, material to their rights, the denial of equal justice is still within the prohibition of the Constitution." Id. at 373-74.

[5] As the Supreme Court has explained, being stopped and frisked "must surely be an annoying, frightening, and perhaps humiliating experience." Terry, 292 U.S. at 25.

[6] The parties use the terms Hispanic/Latino interchangeably.

[7] "The fact that being stopped is simply a part of life for a young person of color in New York City can only have profound psychological and economic impacts on already disadvantaged communities." Amicus curiae Brief of the Bronx Defenders, Brotherhood/Sister Sol, the Justice Committee, Picture the Homeless, and Streetwise and Safe in Support of Plaintiffs' Motion for Class Certification at 8-9.

[8] Brief of Amicus Curiae the Black, Latino, and Asian Caucus of the Council of the City of New York in Further Support of Plaintiffs' Motion for Class Certification at 3.

[9] 99 Civ. 1695 (SAS).

[10] See Floyd v. City of New York ("Floyd I"), 813 F. Supp. 2d 417 (S.D.N.Y. 2011), partial reconsideration granted, 813 F. Supp. 2d 457 (S.D.N.Y. 2011).

[11] See Floyd v. City of New York, No. 08 Civ. 1034, 2012 WL 1344514 (S.D.N.Y. Apr. 14, 2012) ("Floyd II").

[12] See Memorandum of Law in Support of Plaintiffs' Motion for Class Certification ("Pl. Mem.") at 1.

[13] See Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 201-02 (2d Cir. 2008) ("Teamsters"). In full, Rule 23(a) reads: "Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class."

[14] Wal-Mart Stores, Inc. v. Dukes ("Wal-Mart"), 131 S. Ct. 2541, 2551 (2011) (quotation omitted).

[15] Id. "Nor is there anything unusual about that consequence: The necessity of touching aspects of the merits in order to resolve preliminary matters, e.g., jurisdiction and venue, is a familiar feature of litigation." Id. at 2552.

[16] Teamsters, 546 F.3d at 202 (quoting Miles v. Merrill Lynch & Co. (In re Initial Pub. Offering Sec. Litig.) ("IPO"), 471 F.3d 24, 42 (2d Cir. 2006)).

[17] Shahriar v. Smith & Wollensky Restaurant Group, Inc., 659 F.3d 234, 251 (2d Cir. 2011) (quotation omitted).

[18] IPO, 471 F.3d at 41.

[19] Central States Se. & Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care, LLC, 504 F.3d 229, 244-45 (2d Cir. 2007).

[20] See Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995).

[21] Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir. 1993).

[22] Wal-Mart, 131 S. Ct. at 2551 (quoting General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 157 (1982)).

[23] Id.

[24] Central States, 504 F.3d at 245 (quoting Robinson v. Metro-N. Commuter R.R. Co., 267 F.3d 147, 155 (2d Cir. 2001)).

[25] Marisol A. v. Giuliani, 126 F.3d 372, 377 (2d Cir. 1997).

[26] Newman v. RCN Telecom Servs., Inc., 238 F.R.D. 57, 64 (S.D.N.Y. 2006).

[27] Oshana v. Coca-Cola Co., 472 F.3d 506, 514 (7th Cir. 2006).

[28] Baffa v. Donaldson, Lufkin & Jenrette Secs. Corp., 222 F.3d 52, 60 (2d Cir. 2000).

[29] IPO, 471 F.3d at 30.

[30] Casale v. Kelly, 257 F.R.D. 396, 406 (S.D.N.Y. 2009).

[31] William B. Rubenstein et al, Newberg on Class Actions § 3:7 at 1-172 (2011).

[32] Fed. R. Civ. P. 23 1966 Advisory Committee Note (emphasis added).

[33] McLaughlin v. American Tobacco Co., 522 F.3d 215, 222 (2d Cir. 2008).

[34] Berger v. Heckler, 771 F.2d 1556, 1566 (2d Cir. 1985) (citing Galvan v. Levine, 490 F.2d 1255, 1261 (2d Cir. 1973) (Friendly, J.) (affirming denial of certification of a 23(b)(2) class after the government "withdrew the challenged policy" and "stated it did not intend to reinstate the policy")).

[35] See IPO, 471 F.3d at 41.

[36] See Defendants' Statement of Undisputed Facts Pursuant to Local Rule 56.1 ("Def. 56.1") ¶¶ 191-246; Plaintiffs' Reply Statement of Undisputed Facts Pursuant to Local Rule 56.1 ("Pl. 56.1") ¶¶ 191-246; Plaintiffs' 56.1 Additional Facts ("PAF") ¶¶ 166-198.

[37] See Def. 56.1 ¶¶ 2-59; Pl. 56.1 ¶¶ 2-59; PAF ¶¶ 1-54.

[38] See Def. 56.1 ¶¶ 247-301; Pl. 56.1 ¶¶ 247-301; PAF ¶¶ 159-165. Cf. PAF ¶¶ 55-100 (presenting facts to support plaintiffs' allegations that top-down pressure to increase enforcement activity and stop/summons/arrest quotas lead to widespread unconstitutional stops).

[39] See Floyd I, 813 F. Supp. 2d at 429. The debate at the summary judgment stage centered on whether the NYPD's official policies aimed at ensuring the constitutionality of stops were properly implemented in practice.

[40] See 4/29/09 Letter from Police Commissioner Raymond W. Kelly to Christine C. Quinn, Speaker, New York City Council, App'x G to Report of Jeffrey Fagan ("Fagan Report") [Docket No. 132]; 11/23/09 Deposition of Joseph Esposito ("Esposito Dep"), Ex. 11 to Declaration of Darius Charney ("Charney Decl."), plaintiffs' counsel, at 364:10-365:6 (explaining that Commissioner Kelly "has the last word" on the stop and frisk policy).

Plaintiffs have submitted a sworn affidavit from New York State Senator Eric Adams, who retired as a police captain after more than twenty years of service in the NYPD. Senator Adams says that in July 2010 he met with Commissioner Kelly to discuss proposed legislation regarding stop and frisk practices and that during the meeting "Commissioner Kelly stated that the NYPD targets its stop-and-frisk activity at young black and Latino men because it wants to instill the belief in members of these two populations that they could be stopped and frisked every time they leave their homes so that they are less likely to carry weapons." Affidavit of Eric Adams, Ex. 10 to Charney Decl., ¶ 5. Commissioner Kelly denies Senator Adams' claim: "At that meeting I did not, nor would I ever, state or suggest that the New York City Police Department targets young black and Latino men for stop and frisk activity. That has not been nor is it now the policy or practice of the NYPD. Furthermore, I said nothing at the meeting to indicate or imply that such activity is based on anything but reasonable suspicion. At the meeting, I did discuss my view that stops serve as a deterrent to criminal activity, which includes the criminal possession of a weapon." Declaration of Raymond W. Kelly, Ex. A to Declaration of Heidi Grossman ("Grossman Decl."), Assistant Corporation Counsel, in Support of Defendants' Opposition to Plaintiffs' Motion for Class Certification, ¶¶ 3-4.

[41] "One of the key features of NYPD oversight is the CompStat process.. . . COMPSTAT, which is short for COMPuter STATistics or COMParative STATistics, is the name given to the NYPD's accountability process and has since been replicated in many other departments. CompStat is a multilayered dynamic approach to crime reduction, quality of life improvement, department oversight and personnel and resource management and employs Geographic Information Systems, which map crime and identify high-crime and problematic areas." Def. 56.1 ¶¶ 92-93.

[42] Id. ¶ 143.

[43] Id. ¶ 114.

[44] See id. ¶ 135. See generally id. ¶¶ 92-152.

[45] See id. ¶ 134.

[46] Id. ¶ 172.

[47] Id. ¶ 271.

[48] Id. ¶ 191.

[49] See id. ¶ 195.

[50] See id. ¶ 203.

[51] See id. ¶¶ 207-222.

[52] Id. ¶ 247.

[53] See id. ¶¶ 281-292, 307-308. "Search and seizure allegations relating to stop and frisk fall under the abuse of authority jurisdiction." Id. ¶ 317.

[54] Defendants' Memorandum of Law in Opposition to Plaintiffs' Motion for Class Certification ("Def. Mem.") at 8.

[55] See N.Y. Lab. L. § 215-a. A "quota" is defined as "a specific number of" tickets, summons, or stops. Id.

[56] Def. Mem. at 14-15.

[57] The New York Police Department's "Stop and Frisk" Practices: A Report to the People of the State of New York from the Office of the Attorney General, Ex. 117 to Declaration of Darius Charney in Support of Plaintiffs' Opposition to Defendants' Motion for Summary Judgment ("Charney SJ Decl.") at 91.

[58] See Fagan Report at 19; Sean Gardiner, Stop-and-Frisks Hit Record in 2011, Wall St. J., Feb. 14, 2012, at A21. In the first three months of 2012, the NYPD stopped eleven percent more people than it did in the first three months of 2011. See Al Baker, New York Police Release Data Showing Rise in Number of Stops on Streets, N.Y. Times, May 13, 2012 at A19.

[59] 10/17/11 Police Officer Performance Objectives Operations Order, Ex. 12 to Charney Decl., at 1.

[60] Id. at 3.

[61] Id. at 5.

[62] Gardiner, Stop-and-Frisks Hit Record in 2011.

[63] NYC_2_7010-7017, Ex. 47 to Charney SJ Decl. Plaintiff Deon Dennis was stopped by officers from the 28th Precinct.

[64] See NYC_2_00007026, Ex. 48 to Charney SJ Decl.; PAF ¶ 56.

[65] 10/14/09 Deposition of Dwayne Montgomery ("Montgomery Dep."), Ex. 6 to Charney SJ Decl., at 202:4, 14-15; 209:4-9.

[66] See Deposition of Adhyl Polanco ("Polanco Dep."), Ex. 76 to Charney SJ Decl., at 22-36.

[67] See PAF ¶¶ 64-69 and the evidence cited therein. At his deposition, Polanco testified that he believed the NYPD "absolutely" has a problem with racial profiling: "I work in a minority community and what we do to people in the South Bronx you would never do to people in midtown Manhattan. . . . Illegally searching, illegally stopping, illegally handcuffing, put phoney charges on them, put it through the system." Polanco Dep. 18:7-22. Polanco testified that while he worked at the NYPD, he personally witnessed officers stop and question civilians without having reasonable suspicion "every day." Id. at 52:14-18.

[68] See CD Bates-numbered PL000093, Ex. 1 to Affirmation of NYPD Officer Adrian Schoolcraft ("Schoolcraft Aff."), Ex. B to Declaration of Taylor Hoffman, plaintiffs' counsel, in Support of Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment. The following is a small sampling of the statements made by supervisors that can be heard on the tapes. Lieutenant Delafuente, July 15, 2008: "I want a couple of 250s out of there please, all right?" Deputy Inspector Mauriello, October 31, 2008 (Halloween night): "And they got any bandanas around their necks, Freddy Krueger masks, I want them stopped, cuffed, alright, brought in here, run for warrants. They're juveniles, we're gonna leave `em in here `till their parents come and pick `em up." Sergeant Stukes, November 23, 2008: "If they're on a corner, make `em move. They don't wanna move, lock `em up. You can always articulate [a charge] later." Sergeant Stukes, December 8, 2008: "You're gonna be 120 Chauncey [St.]. You're gonna be [in a?], uh, vehicle out there. Shake everybody up. Anybody moving, anybody coming out of that building — [UF] 250"; "You're gonna be Howard and Chauncey 1900, post one. Same thing. Two, three [inaudible]. Everybody walking around. Stop em. 250-em"; "Anybody walking around, shake `em up, stop `em, 250-em, doesn't matter what it takes." Lieutenant Delafuente, January 13, 2009: "Chief [of Transportation Michael] Scagnelli, three star chief, at traffic stat today. . . he says to two commanders `How many. . . superstars and how many losers? . . . Then he goes down and asks how many summonses per squad?'"

[69] See Reply Declaration of Heidi Grossman in Support of Defendants' Motion for Summary Judgment ¶ 21 [Docket No. 142].

[70] See 10/17/11 Police Officer Performance Objectives Operations Order, Ex. 12 to Charney Decl.

[71] See Fagan Report and Supplemental Report of Jeffrey Fagan ("Supp. Rep.") [Docket No. 132].

[72] See Wal-Mart, 131 S. Ct. at 2541 (citing Daubert, 509 U.S. 579 (1993)).

[73] See Floyd II, 2012 WL 1344514.

[74] See id. at *14-*19.

[75] I say "at least" because a significant number of the 400,000 stops that include only an "Other" indicator of suspicion on Side 1 of their UF-250 are also facially insufficient; these do not include any of the 170,000. See Floyd II, 2012 WL 1344514, at *14-*16. However, neither party has yet convincingly explained to the Court how to properly estimate how many of those 400,000 are facially insufficient.

As I discussed at length in my Daubert evaluation of Fagan's report, I recognize that the legality of an individual stop cannot be determined on the basis of the corresponding UF-250 alone: a lawful stop is not made unlawful simply because the police officer fails to fill out the paperwork properly and an unlawful stop is not made lawful because the police officer fills out the paperwork dishonestly or inaccurately. See Floyd II, 2012 WL 1344514, at *11-*12. Nevertheless, it is powerful and probative evidence that police officers themselves have justified 170,000 stops on the basis of legally insufficient criteria.

[76] See Table 2 to Declaration of Jeffrey Fagan in Support of Plaintiffs' Motion for Class Certification ("Fagan Decl."); Floyd II, 2012 WL 1344514, at *17.

[77] See Table 2 to Fagan Decl; Floyd II, 2012 WL 1344514, at *18 n.130.

[78] See Table 1 to Fagan Decl.

[79] See Floyd II, 2012 WL 1344514, at *7 n.41.

[80] See Fagan Report at 23.

[81] See id. at 52-55.

[82] See id. at 63.

[83] In addition, approximately seventeen percent of summonses from 2004 and 2009 were thrown out by the New York courts as being facially (i.e., legally) insufficient and more than fifty percent of all summons were dismissed before trial. See Stinson v. City of New York, No. 10 Civ. 4228, 2012 WL 1450553 (S.D.N.Y. Apr. 23, 2012).

[84] See Fagan Report at 51, 63.

[85] I recognize that officers may occasionally have some other reason to cite "suspicious bulge," but guns are surely the most obvious. In addition, I presume that guns are sometimes recovered in instances when "suspicious bulge" is not checked on the UF-250 form.

[86] Declaration of Jeffrey Fagan in Support of Plaintiffs' Opposition to Defendants' Motion to Exclude Plaintiffs' Proposed Expert Reports, Opinions and Testimony of Jeffrey Fagan ("Fagan Daubert Decl.") ¶ 4(a).

[87] Fagan Report at 34.

[88] Fagan Daubert Decl. ¶ 4(b). This particular aspect of Fagan's report has been criticized vehemently by defendants, who argue that it fails to account for who is engaging in crime and, relatedly, who is engaging in suspicious behavior that justifies a stop. See Floyd II, 2012 WL 1344514, at *4, *10-*11. There are good arguments on both sides of this debate. I do not know if this evidence, standing alone, would be sufficient to certify a Fourteenth Amendment subclass. However, in combination with Fagan's other findings and plaintiffs' qualitative proof, the preponderance of the evidence clearly supports certification.

[89] Fagan Daubert Decl. ¶4(d).

[90] This occurred in 19.68 percent of stops of Blacks, 18.27 percent of stops of Latinos, and 16.66 percent of stops of Whites. See Report at 23.

[91] Officers list "furtive movement" in 45.5 percent of stops of Blacks, 42.2 percent of stops of Latinos, and 37.4 percent of stops of Whites. See Fagan Report App'x Table D1. See also Floyd II, 2012 WL 1344514, at *17.

[92] Deshawn v. Safir, 156 F.3d 340, 344 (2d Cir. 1998) (citing City of Los Angeles v. Lyons, 461 U.S. 95, 105-06 (1983)).

[93] Lyons, 461 U.S. at 105.

[94] See Def. Mem. at 20-21.

[95] See Declarations of Lalit Clarkson, Deon Dennis, David Floyd, and David Ourlicht ("Plaintiffs' Declarations"), Exs. 2-5 to Charney Decl.

[96] Def. Mem. at 20-21.

[97] Rumsfeld v. Forum for Academic and Institutional Rights, Inc., 547 U.S. 47, 53 n.2 (2006).

[98] See Affidavit of David Ourlicht, Ex. 5 to Charney Decl., ¶¶ 6-18.

[99] Nicacio v. United States Immigration & Naturalization Serv., 768 F.2d 1133, 1136 (9th Cir. 1985). Accord Aguilar v. Immigration & Customs Enforcement Div. of the United States Dep't of Homeland Sec., 811 F. Supp. 2d 803, 828 (S.D.N.Y. 2011) (finding standing in a case where one set of plaintiffs had allegedly been subject to two unlawful searches and other plaintiffs feared repeat injury because the searches were part of defendants' "condoned, widespread, and ongoing" practice).

[100] 356 F.3d 211 (2d Cir. 2004).

[101] See Hodgers-Durgin v. De La Vina, 199 F.3d 1037, 1041-42 (9th Cir. 1999) (en banc) (stating that the Supreme Court in Spencer v. Kemna, 523 U.S. 1, 15 (1998) "characterized the denial of Article III standing in Lyons as having been based on the plaintiff's ability to avoid engaging in illegal conduct")).

[102] See National Congress for Puerto Rican Rights by Perez v. City of New York, 75 F. Supp. 2d 154, 161 (S.D.N.Y. 1999) (later renamed Daniels).

[103] United States v. Broomfield, 417 F.3d 654, 655 (7th Cir. 2005) (Posner, J.) (criticizing the use of the vague term "furtive" and opining that "[w]hether you stand still or move, drive above, below, or at the speed limit, you will be described by the police as acting suspiciously should they wish to stop or arrest you. Such subjective, promiscuous appeals to an ineffable intuition should not be credited.").

[104] Lyons, 461 U.S. at 102.

[105] See Forum for Academic and Institutional Rights, Inc., 547 U.S. at 53 n.2.

[106] "[T]here is no per se rule requiring more than one past act, or any prior act, for that matter, as a basis for finding a likelihood of future injury." Roe v. City of New York, 151 F. Supp. 2d 495, 503 (S.D.N.Y. 2001).

[107] Def. Mem. at 16 (quoting 7A Wright, Miller & Kane, Federal Practice and Procedure § 1760).

[108] Id.

[109] Handschu v. Special Servs. Div., No. 71 Civ. 2203, 1979 U.S. Dist. Lexis 12148, at *3 (S.D.N.Y. May 25, 1979).

[110] Id. at *10.

[111] See IPO, 471 F.3d at 30. Defendants cite to Forman v. Data Transfer, 164 F.R.D. 400, 403 (E.D. Pa. 1995) for support, but that decision concerned a proposed (b)(3) class that sought individual damages. The need for ascertainability in (b)(1) or (b)(3) cases — or in (b)(2) cases that, pre-Wal-Mart, sought individual damages — has no bearing on the need for such ascertainability in (b)(2) cases seeking only injunctive relief for the class.

[112] Fed. R. Civ. P. 23 1966 Advisory Committee Note (emphasis added).

[113] William B. Rubenstein et al., Newberg on Class Actions § 3:7 at 1-172 (2011).

[114] Daniels, 198 F.R.D. at 415 (quoting Wanstrath v. Time Warner Entm't Co., No. 93 Civ. 8538, 1997 WL 122815 (S.D.N.Y. Mar. 17, 1997)). Defendants argue that Daniels was more narrow in scope because it addressed only the stop and frisk practices of one unit of the NYPD. See Def. Mem. at 17-18. But the smaller number of people stopped by the Street Crimes Unit (18,000 in 1997) has no impact on the ascertainability question. The court cannot (and need not) determine which of the class members' stops were lawful, whether the number in question is 18,000 or 2.8 million.

[115] See Marisol v. Giuliani, 126 F.3d 372 (2d Cir. 1997) (certifying a class of children who "are or will be at risk of neglect or abuse and whose status is or should be known to" a City agency). See also, e.g., Biediger v. Quinnipiac Univ., No. 09 Civ. 621, 2010 WL 2017773, at *7 (D. Conn. May 20, 2010) (certifying a class of all present and future female students who "want to end Quinnipiac University's sex discrimination" even though ascertaining who will be a future student and what these students will want is of course impossible); Mental Disability Law Clinic v. Hogan, No. 06 Civ. 6320, 2008 WL 4104460, at *18 (E.D.N.Y. Aug. 26, 2008) (certifying a class of "all individuals who (1) suffer from mental illness . . ." and explaining that "because only declaratory and injunctive relief is sought, individual assessments of disability need not be made"); Finch v. New York State Office of Children & Family Servs., 252 F.R.D. 192, 203 (S.D.N.Y. 2008) ("Rule 23(b)(2) classes need not be precisely defined").

[116] Shook v. El Paso County, 386 F.3d 963, 972 (10th Cir. 2004).

[117] Yaffe v. Powers, 454 F.2d 1362, 1366 (1st Cir. 1972) ("notice to the members of a (b)(2) class is not required and the actual membership of the class need not therefore be precisely delimited"). Accord Baby Neal v. Casey, 43 F.3d 48, 54 (3d Cir. 1995) (certifying the entirely unascertainable class of "all children in Philadelphia who have been abused or neglected and are known or should be known to the Philadelphia Department of Human Services").

[118] Consolidated Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995).

[119] Def. Mem. at 18.

[120] See Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir. 1993) ("Courts have not required evidence of exact class size or identity of class members to satisfy the numerosity requirement.").

[121] Fed. R. Civ. P. 23 1966 Advisory Committee Note.

[122] Wal-Mart, 131 S. Ct. at 2551 (quoting Falcon, 457 U.S. at 157).

[123] Id. at 2547.

[124] Id.

[125] Id. at 2553.

[126] Id. at 2555.

[127] McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482, 488 (7th Cir. 2012).

[128] Id. at 490.

[129] Id.

[130] See Pl. Mem. at 12.

[131] Marisol A., 126 F.3d at 377.

[132] Brown v. Kelly, 609 F.3d 467, 468 (2d Cir. 2010) (quoting In re Visa Check/Mastermoney Antitrust Litig., 280 F.3d 124, 146 (2d Cir. 2001)). Accord Damassia v. Duane Reade, Inc., 250 F.R.D. 152, 156 (S.D.N.Y. 2008) ("Commonality does not mean that all issues must be identical as to each member, but it does require that plaintiffs identify some unifying thread among the members' claims that warrant[s] class treatment.") (quotation omitted); Daniels, 198 F.R.D. at 417; D.S. v. New York City Dep't of Educ., 255 F.R.D. 59, 71 (E.D.N.Y. 2008).

[133] Def. Mem. at 8.

[134] Three weeks ago Judge Robert Sweet of this court certified a class of 620,000 people who were issued summonses by the NYPD between 2004 and 2009 and who had those summonses dismissed for being facially insufficient. See Stinson, 2012 WL 1450553. In Stinson, like in this case and unlike in Wal-Mart, plaintiffs allege "a specific policy promulgated by defendants" (namely that NYPD officers issue summonses without probable cause in order to meet their quotas). See also Morrow v. City of Tenaha, No. 08 Civ. 288, 2011 WL 3847985, at *192-94 (E.D. Tex. Aug. 29, 2011) (certifying class of Latinos who were stopped for alleged traffic violations and finding commonality in light of statistical evidence showing significant increases in the number of minorities stopped after the adoption of a new police policy); Ortega-Melendres v. Arpaio, No. 07 Civ. 2513, 2011 WL 6740711, at *19 (D. Ariz. Dec. 23, 2011) (certifying class of Latino motorists alleging racial profiling and finding that differences in subjective motivations of officers do not defeat commonality or typicality when there is evidence of a departmental policy of violating constitutional rights). Four weeks ago, Judge Katherine Forrest denied plaintiffs' motion to certify a class of all Latinos in the New York area who have been or will be subject to a home raid operation by Immigration and Customs Enforcement. See Aguilar v. Immigration and Customs Enforcement Div. of U.S. Dept. of Homeland Sec., No. 07 Civ. 8224, 2012 WL 1344417 (S.D.N.Y. Apr. 16, 2012). Judge Forrest placed significant emphasis on the fact that defendants' raids on the named plaintiffs' homes took place in 2007 and that there was "no evidence in the record" to suggest that defendants' practices in 2012 shared commonality with the practices in 2007. Id. at *9. She therefore deemed injunctive relief inappropriate. Here, in contrast, there is ample evidence to show that stop and frisk practices have not changed since the 2004 to 2009 period, except that the numbers of stops have continued to rise. It is also worth noting that Judge Forrest did not emphasize that the lack of commonality in Wal-Mart was based on the company's de-centralized approach to employment decisions. As the courts in Stinson, Morrow, and Ortega-Melendres explained, Wal-Mart's structure is worlds away from centralized and hierarchical policing practices.

[135] Def. Mem. at 8 n.9.

[136] Some of this material was submitted in order to show that the NYPD was not liable for failure to train, supervise, monitor, and discipline because it in fact has a robust system of training, supervision, monitoring and discipline. I denied summary judgment on this claim because there exist material disputes of fact about the "constitutional sufficiency" of this system, not about its existence. Floyd I, 813 F. Supp. 2d at 429.

[137] I also note that plaintiffs' level of proof here is particularly strong: if plaintiffs in Wal-Mart had produced sixty thousand human resource forms, including forms from every Wal-Mart store in the country, in which supervisors gave facially unlawful reasons for denying women employees raises or promotions, the Supreme Court's commonality determination may well have been different. As the Wal-Mart Court explained, plaintiffs could establish commonality even in the absence of a centralized employment system by showing "`significant proof' that Wal-Mart `operated under a general policy of discrimination.'" Wal-Mart, 131 S. Ct. at 2553 (quoting Falcon, 457 U.S. at 159).

[138] Pl. Mem. at 12. Plaintiffs list four such questions: (1) Whether New York City has a Policy and/or Practice of conducting stops and frisks without reasonable suspicion? (2) Whether the City has a Policy and/or Practice of stopping and frisking Black and Latino persons on the basis of race rather than reasonable suspicion? (3) Whether the NYPD's department-wide auditing and command self-inspection protocols and procedures demonstrate a deliberate indifference to the need to monitor officers adequately to prevent a widespread pattern of suspicionless and race-based stops? (4) Whether the NYPD's Policy and/or Practice of imposing productivity standards and/or quotas on the stop-and-frisk, summons, and other enforcement activity of officers is a moving force behind widespread suspicionless stops by NYPD officers?

[139] 131 S. Ct. at 2551.

[140] Adequacy requires both that the plaintiffs themselves be adequate representatives of the class and that the plaintiffs' counsel be qualified, experienced, and able to conduct the litigation. Defendants do not challenge the second prong and there is no doubt that plaintiffs are in excellent hands. See Charney Decl. ¶¶ 3-12. Defendants' challenge to plaintiffs' Article III standing, discussed above, was also framed as a problem of adequacy.

[141] Central States, 504 F.3d at 245 (quoting Robinson, 267 F.3d at 155).

[142] Marisol A., 126 F.3d at 377.

[143] In re NASDAQ Market-Makers Antitrust Litig., 169 F.R.D. 493, 510 (S.D.N.Y. 1996).

[144] Denney v. Deutsche Bank AG, 443 F.3d 253, 268 (2d Cir. 2006).

[145] In re Flag Telecom Holdings, Ltd. Secs. Litig., 574 F.3d 29, 35 (2d Cir. 2009).

[146] See Plaintiffs' Declarations.

[147] "An order requiring defendants to comply with federal and state law in order to remedy the systemic failures that are the source of plaintiffs' claims constitutes relief that would serve the entire putative class." Marisol A. v. Giuliani, 929 F. Supp. 662, 692 (S.D.N.Y. 1996).

[148] Def. Mem. at 14; see id. at 21-23.

[149] Id. at 19.

[150] The court "should not assess any aspect of the merits unrelated to a Rule 23 requirement" and must ensure "that a class certification motion does not become a pretext for a partial trial of the merits." IPO, 471 F.3d at 41. "`The unique defense rule, however, is not rigidly applied in this Circuit, and is intended to protect plaintiff class — not to shield defendants from a potentially meritorious suit.'" Duling v. Gristede's Operating Corp., 267 F.R.D. 86, 97 (S.D.N.Y. 2010) (quoting In re NYSE Specialists Sec. Litig., 260 F.R.D. 55, 71 (S.D.N.Y. 2009)). Accord Sirota v. Solitron Devise, Inc., 673 F.2d 566, 571 (2d Cir. 1982) ("If [] defendants were arguing that a district court must determine whether the named plaintiffs have a meritorious claim before they can be certified as class representatives, they would plainly be wrong.").

[151] In re Omnicom Group, Inc. Sec. Litig., No. 02 Civ. 4483, 2007 WL 1280640, at *4 (S.D.N.Y. Apr. 30, 2007) (explaining that the court "need not deny certification merely because of the presence of a colorable unique defense").

[152] See Plaintiffs' Declarations.

[153] See Floyd I, 813 F. Supp. 2d 417.

[154] At a recent conference regarding a related action, one Assistant Corporation Counsel informed me that "the UF-250s, they're not always, you know, made or written . . . . I suspect for many of the incidents in the complaint, there would not be UF-250s," although a second Assistant Corporation Counsel said that "that's not the case. When there's a stop based on a penal law violation or misdemeanor, there will be a UF-250." 4/17/12 Transcript at 10:7-25 [Docket No. 15], Ligon v. City of New York, No. 12 Civ. 2274.

[155] Defendant Officer Luis Pichardo, who stopped plaintiff Deon Dennis in the 28th Precinct in January 2008, testified that his supervisors imposed a five summons-per-tour quota on the officers working his tour when he stopped Dennis. Dwayne Montgomery, who was commander of the 28th Precinct at the time, testified that he imposed monthly stop and frisk and summons requirements on all officers and disciplined officers who failed to meet those quotas. See Pichardo Dep., Ex. 68 to Charney SJ Decl., at 218-219 and PAF ¶ 58. Plaintiff David Floyd was stopped by officers from the 43rd precinct. Chief Esposito told the commander of the 43rd, Charles Ortiz, that his officers did not have enough stops and summonses and Ortiz frequently conveyed that message to his subordinates. See PAF ¶¶ 80-82.

[156] See Central States, 504 F.3d at 245; Daniels, 198 F.R.D. at 419.

[157] See Norman v. Connecticut State Bd. of Parole, 458 F.2d 497, 499 (2d Cir. 1972); Kenavan v. Empire Blue Cross & Blue Shield, No. 91 Civ. 2393, 1996 WL 14446 (S.D.N.Y. Jan. 16, 1996).

[158] See, e.g., Leonard v. Southtec, LLC, No. 04 Civ. 72, 2005 WL 2177013 (M.D. Tenn. Sept. 8, 2005) (certifying Black named plaintiffs to represent Blacks and Latinos).

[159] 131 S. Ct. at 2558. See also Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614 (1997) ("Civil rights cases against parties charged with unlawful, class-based discrimination are prime examples" of Rule 23(b)(2) class actions).

[160] Def. Mem. at 23-24.

[161] See James Forman, Jr. Criminal Law: Community Policing and Youth As Assets, 95 J. Crim. L. & Criminology 1, at n.47 (2004) (citing the scholarship of Professors Charles Ogletree, Angela Davis, Pamela Karlan and others who document that the vast majority of people who are unconstitutionally stopped and not charged with any crime will never bring civil actions in court).

[162] Under the doctrine established in Galvan, 490 F.2d 1255, district courts may decline to certify a class if doing so would not further the implementation of the judgment. See Davis v. Smith, 607 F.2d 535 (2d Cir. 1978). As plaintiffs note, the doctrine is only applicable when a defendant affirmatively states that it will apply any remedy across the board. Here, defendants have offered to apply any remedy to "all persons similarly situated to the named plaintiffs" but simultaneously argue that the alleged class members are not similarly situated to the named plaintiffs. "It is plainly inconsistent for Defendants to argue that any relief granted in connection with this action will be applied to benefit every member of the class, while at the same time they contest the existence of commonality and typicality." Bishop v. New York City Dep't of Hous. Pres. and Dev., 141 F.R.D. 229, 241 (S.D.N.Y. 1992). In addition, because potentially complex City-wide injunctive relief would be more appropriate as a remedy in the context of a class action, there are collateral consequences to denying certification and the Galvan doctrine is inapplicable.

[163] Brief of Amicus Curiae The Black, Latino and Asian Caucus of the Council of the City of New York in Further Support of Plaintiffs' Motion for Class Certification at 8.

[164] United States v. Carolene Prods. Co., 304 U.S. 144, 153 n.4 (1938). "If we were to accept the State's argument, we would be enshrining the rather perverse notion that traditional rights are not to be protected in precisely those instances when protection is essential, i.e., when a dominant group has succeeded in temporarily frustrating exercise of those rights. We prefer a view more compatible with the theory of this nation's founding: rights do not cease to exist because a government fails to secure them. See The Declaration of Independence (1776)." Mescalero Apache Tribe v. New Mexico, 630 F.2d 724, 730 (10th Cir. 1980), vacated, 450 U.S. 1036 (1981), aff'd, 462 U.S. 324 (1983).

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

[593] [593] [594] [595] Ginsburg, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Scalia, Kennedy, Souter, and Thomas, JJ., joined. Breyer, J., filed an opinion concurring in part and dissenting in part, in which [596] Stevens, J., joined, post, p. 629. O'Connor, J., took no part in the consideration or decision of the case.

Stephen M. Shapiro argued the cause for petitioners. With him on the briefs were John D. Aldock, Elizabeth Runyan Geise, Richard M. Wyner, Kenneth S. Geller, Andrew J. Pincus, Charles A. Rothfeld, Eileen Penner, Robert H. Bork, Max Gitter, Blake Perkins, and Nancy B. Stone.

Laurence H. Tribe argued the cause and filed a brief for respondent Windsor et al. With him on the brief were Brian Koukoutchos, Jonathan S. Massey, Frederick M. Baron, Brent M. Rosenthal, and Steve Baughman. Brad Seligman, Jocelyn D. Larkin, Donna M. Ryu, Sharon R. Vinick, and Steven Kazan filed a brief for respondent Cargile et al. Shepard A. Hoffman filed a brief for respondent Balonis et al. Ronald L. Motley, Joseph F. Rice, Nancy Worth Davis, Gene Locks, and Jonathan W. Miller filed a brief for respondent Georgine et al. Brian Wolfman and Alan B. Morrison filed a brief for respondent White Lung Association of New Jersey et al.^[1]

[597] Justice Ginsburg, delivered the opinion of the Court.

This case concerns the legitimacy under Rule 23 of the Federal Rules of Civil Procedure of a class-action certification sought to achieve global settlement of current and future asbestos-related claims. The class proposed for certification potentially encompasses hundreds of thousands, perhaps millions, of individuals tied together by this commonality: Each was, or some day may be, adversely affected by past exposure to asbestos products manufactured by one or more of 20 companies. Those companies, defendants in the lower courts, are petitioners here.

The United States District Court for the Eastern District of Pennsylvania certified the class for settlement only, finding that the proposed settlement was fair and that representation and notice had been adequate. That court enjoined class members from separately pursuing asbestos-related personal-injury suits in any court, federal or state, pending the issuance of a final order. The Court of Appeals for the Third Circuit vacated the District Court's orders, holding that the class certification failed to satisfy Rule 23's requirements in several critical respects. We affirm the Court of Appeals' judgment.

I

A

The settlement-class certification we confront evolved in response to an asbestos-litigation crisis. See Georgine v. Amchem Products, Inc., 83 F. 3d 610, 618, and n. 2 (CA3 1996) (citing commentary). A United States Judicial Conference [598] Ad Hoc Committee on Asbestos Litigation, appointed by The Chief Justice in September 1990, described facets of the problem in a 1991 report:

"[This] is a tale of danger known in the 1930s, exposure inflicted upon millions of Americans in the 1940s and 1950s, injuries that began to take their toll in the 1960s, and a flood of lawsuits beginning in the 1970s. On the basis of past and current filing data, and because of a latency period that may last as long as 40 years for some asbestos related diseases, a continuing stream of claims can be expected. The final toll of asbestos related injuries is unknown. Predictions have been made of 200,000 asbestos disease deaths before the year 2000 and as many as 265,000 by the year 2015.

"The most objectionable aspects of asbestos litigation can be briefly summarized: dockets in both federal and state courts continue to grow; long delays are routine; trials are too long; the same issues are litigated over and over; transaction costs exceed the victims' recovery by nearly two to one; exhaustion of assets threatens and distorts the process; and future claimants may lose altogether." Report of The Judicial Conference Ad Hoc Committee on Asbestos Litigation 2-3 (Mar. 1991).

Real reform, the report concluded, required federal legislation creating a national asbestos dispute-resolution scheme. See id., at 3, 27-35; see also id., at 42 (dissenting statement of Hogan, J.) (agreeing that "a national solution is the only answer" and suggesting "passage by Congress of an administrative claims procedure similar to the Black Lung legislation"). As recommended by the Ad Hoc Committee, the Judicial Conference of the United States urged Congress to act. See Report of the Proceedings of the Judicial Conference of the United States 33 (Mar. 12, 1991). To this date, no congressional response has emerged.

[599] In the face of legislative inaction, the federal courts—lacking authority to replace state tort systems with a national toxic tort compensation regime—endeavored to work with the procedural tools available to improve management of federal asbestos litigation. Eight federal judges, experienced in the superintendence of asbestos cases, urged the Judicial Panel on Multidistrict Litigation (MDL Panel), to consolidate in a single district allasbestos complaints then pending in federal courts. Accepting the recommendation, the MDL Panel transferred all asbestos cases then filed, but not yet on trial in federal courts to a single district, the United States District Court for the Eastern District of Pennsylvania; pursuant to the transfer order, the collected cases were consolidated for pretrial proceedings before Judge Weiner. See In re Asbestos Products Liability Litigation (No. VI), 771 F. Supp. 415, 422-424 (JPML 1991).^[2] The order aggregated pending cases only; no authority resides in the MDL Panel to license for consolidated proceedings claims not yet filed.

B

After the consolidation, attorneys for plaintiffs and defendants formed separate steering committees and began settlement negotiations. Ronald L. Motley and Gene Locks—later appointed, along with Motley's law partner Joseph F. Rice, to represent the plaintiff class in this action— cochaired the Plaintiffs' Steering Committee. Counsel for the Center for Claims Resolution (CCR), the consortium of [600] 20 former asbestos manufacturers now before us as petitioners, participated in the Defendants' Steering Committee.^[3] Although the MDL Panel order collected, transferred, and consolidated only cases already commenced in federal courts, settlement negotiations included efforts to find a "means of resolving . . . future cases." Record, Doc. 3, p. 2 (Memorandum in Support of Joint Motion for Conditional Class Certification); see also Georgine v. Amchem Products, Inc., 157 F. R. D. 246, 266 (ED Pa. 1994) ("primary purpose of the settlement talks in the consolidated MDL litigation was to craft a national settlement that would provide an alternative resolution mechanism for asbestos claims," including claims that might be filed in the future).

In November 1991, the Defendants' Steering Committee made an offer designed to settle all pending and future asbestos cases by providing a fund for distribution by plaintiffs' counsel among asbestos-exposed individuals. The Plaintiffs' Steering Committee rejected this offer, and negotiations fell apart. CCR, however, continued to pursue "a workable administrative system for the handling of future claims." Id., at 270.

To that end, CCR counsel approached the lawyers who had headed the Plaintiffs' Steering Committee in the unsuccessful negotiations, and a new round of negotiations began; that round yielded the mass settlement agreement now in controversy. At the time, the former heads of the Plaintiffs' Steering Committee represented thousands of plaintiffs with then-pending asbestos-related claims—claimants the parties [601] to this suit call "inventory" plaintiffs. CCR indicated in these discussions that it would resist settlement of inventory cases absent "some kind of protection for the future." Id., at 294; see also id. , at 295 (CCR communicated to the inventory plaintiffs' attorneys that once the CCR defendants saw a rational way to deal with claims expected to be filed in the future, those defendants would be prepared to address the settlement of pending cases).

Settlement talks thus concentrated on devising an administrative scheme for disposition of asbestos claims not yet in litigation. In these negotiations, counsel for masses of inventory plaintiffs endeavored to represent the interests of the anticipated future claimants, although those lawyers then had no attorney-client relationship with such claimants.

Once negotiations seemed likely to produce an agreement purporting to bind potential plaintiffs, CCR agreed to settle, through separate agreements, the claims of plaintiffs who had already filed asbestos-related lawsuits. In one such agreement, CCR defendants promised to pay more than $200 million to gain release of the claims of numerous inventory plaintiffs. After settling the inventory claims, CCR, together with the plaintiffs' lawyers CCR had approached, launched this case, exclusively involving persons outside the MDL Panel's province—plaintiffs without already pending lawsuits.^[4]

C

The class action thus instituted was not intended to be litigated. Rather, within the space of a single day, January 15, 1993, the settling parties—CCR defendants and the representatives of the plaintiff class described below—presented to the District Court a complaint, an answer, a proposed [602] settlement agreement, and a joint motion for conditional class certification.^[5]

The complaint identified nine lead plaintiffs, designating them and members of their families as representatives of a class comprising all persons who had not filed an asbestosrelated lawsuit against a CCR defendant as of the date the class action commenced, but who (1) had been exposed— occupationally or through the occupational exposure of a spouse or household member—to asbestos or products containing asbestos attributable to a CCR defendant, or (2) whose spouse or family member had been so exposed.^[6] Untold numbers of individuals may fall within this description. All named plaintiffs alleged that they or a member of their family had been exposed to asbestos-containing products of [603] CCR defendants. More than half of the named plaintiffs alleged that they or their family members had already suffered various physical injuries as a result of the exposure. The others alleged that they had not yet manifested any asbestos-related condition. The complaint delineated no subclasses; all named plaintiffs were designated as representatives of the class as a whole.

The complaint invoked the District Court's diversity jurisdiction and asserted various state-law claims for relief, including (1) negligent failure to warn, (2) strict liability, (3) breach of express and implied warranty, (4) negligent infliction of emotional distress, (5) enhanced risk of disease, (6) medical monitoring, and (7) civil conspiracy. Each plaintiff requested unspecified damages in excess of $100,000. CCR defendants' answer denied the principal allegations of the complaint and asserted 11 affirmative defenses.

A stipulation of settlement accompanied the pleadings; it proposed to settle, and to preclude nearly all class members from litigating against CCR companies, all claims not filed before January 15, 1993, involving compensation for present and future asbestos-related personal injury or death. An exhaustive document exceeding 100 pages, the stipulation presents in detail an administrative mechanism and a schedule of payments to compensate class members who meet defined asbestos-exposure and medical requirements. The stipulation describes four categories of compensable disease: mesothelioma; lung cancer; certain "other cancers" (colonrectal, laryngeal, esophageal, and stomach cancer); and "non-malignant conditions" (asbestosis and bilateral pleural thickening). Persons with "exceptional" medical claims— claims that do not fall within the four described diagnostic categories—may in some instances qualify for compensation, but the settlement caps the number of "exceptional" claims CCR must cover.

For each qualifying disease category, the stipulation specifies the range of damages CCR will pay to qualifying claimants. [604] Payments under the settlement are not adjustable for inflation. Mesothelioma claimants—the most highly compensated category—are scheduled to receive between $20,000 and $200,000. The stipulation provides that CCR is to propose the level of compensation within the prescribed ranges; it also establishes procedures to resolve disputes over medical diagnoses and levels of compensation.

Compensation above the fixed ranges may be obtained for "extraordinary" claims. But the settlement places both numerical caps and dollar limits on such claims.^[7] The settlement also imposes "case flow maximums," which cap the number of claims payable for each disease in a given year.

Class members are to receive no compensation for certain kinds of claims, even if otherwise applicable state law recognizes such claims. Claims that garner no compensation under the settlement include claims by family members of asbestos-exposed individuals for loss of consortium, and claims by so-called "exposure-only" plaintiffs for increased risk of cancer, fear of future asbestos-related injury, and medical monitoring. "Pleural" claims, which might be asserted by persons with asbestos-related plaques on their lungs but no accompanying physical impairment, are also excluded. Although not entitled to present compensation, exposure-only claimants and pleural claimants may qualify for benefits when and if they develop a compensable disease and meet the relevant exposure and medical criteria. Defendants forgo defenses to liability, including statute of limitations pleas.

Class members, in the main, are bound by the settlement in perpetuity, while CCR defendants may choose to withdraw [605] from the settlement after ten years. A small number of class members—only a few per year—may reject the settlement and pursue their claims in court. Those permitted to exercise this option, however, may not assert any punitive damages claim or any claim for increased risk of cancer. Aspects of the administration of the settlement are to be monitored by the AFL—CIO and class counsel. Class counsel are to receive attorneys' fees in an amount to be approved by the District Court.

D

On January 29, 1993, as requested by the settling parties, the District Court conditionally certified, under Federal Rule of Civil Procedure 23(b)(3), an encompassing opt-out class. The certified class included persons occupationally exposed to defendants' asbestos products, and members of their families, who had not filed suit as of January 15. Judge Weiner appointed Locks, Motley, and Rice as class counsel, noting that "[t]he Court may in the future appoint additional counsel if it is deemed necessary and advisable." Record, Doc. 11, p. 3 (Class Certification Order). At no stage of the proceedings, however, were additional counsel in fact appointed. Nor was the class ever divided into subclasses. In a separate order, Judge Weiner assigned to Judge Reed, also of the Eastern District of Pennsylvania, "the task of conducting fairness proceedings and of determining whether the proposed settlement is fair to the class." See 157 F. R. D., at 258. Various class members raised objections to the settlement stipulation, and Judge Weiner granted the objectors full rights to participate in the subsequent proceedings. Ibid.^[8]

[606] In preliminary rulings, Judge Reed held that the District Court had subject-matter jurisdiction, see Carlough v. Amchem Products, Inc., 834 F. Supp. 1437, 1467-1468 (ED Pa. 1993), and he approved the settling parties' elaborate plan for giving notice to the class, see Carlough v. Amchem Products, Inc., 158 F. R. D. 314, 336 (ED Pa. 1993). The courtapproved notice informed recipients that they could exclude themselves from the class, if they so chose, within a threemonth opt-out period.

Objectors raised numerous challenges to the settlement. They urged that the settlement unfairly disadvantaged those without currently compensable conditions in that it failed to adjust for inflation or to account for changes, over time, in medical understanding. They maintained that compensation levels were intolerably low in comparison to awards available in tort litigation or payments received by the inventory plaintiffs. And they objected to the absence of any compensation for certain claims, for example, medical monitoring, compensable under the tort law of several States. Rejecting these and all other objections, Judge Reed concluded that the settlement terms were fair and had been negotiated without collusion. See 157 F. R. D., at 325, 331-332. He also found that adequate notice had been given to class members, see id., at 332-334, and that final class certification under Rule 23(b)(3) was appropriate, see id., at 315.

As to the specific prerequisites to certification, the District Court observed that the class satisfied Rule 23(a)(1)'s numerosity requirement,^[9] see ibid., a matter no one debates. The [607] Rule 23(a)(2) and (b)(3) requirements of commonality^[10] and preponderance^[11] were also satisfied, the District Court held, in that

"[t]he members of the class have all been exposed to asbestos products supplied by the defendants and all share an interest in receiving prompt and fair compensation for their claims, while minimizing the risks and transaction costs inherent in the asbestos litigation process as it occurs presently in the tort system. Whether the proposed settlement satisfies this interest and is otherwise a fair, reasonable and adequate compromise of the claims of the class is a predominant issue for purposes of Rule 23(b)(3)." Id., at 316.

The District Court held next that the claims of the class representatives were "typical" of the class as a whole, a requirement of Rule 23(a)(3),^[12] and that, as Rule 23(b)(3) demands,^[13] the class settlement was "superior" to other methods of adjudication. See ibid.

Strenuous objections had been asserted regarding the adequacy of representation, a Rule 23(a)(4) requirement.^[14] Objectors maintained that class counsel and class representatives had disqualifying conflicts of interests. In particular, objectors urged, claimants whose injuries had become manifest and claimants without manifest injuries should not have common counsel and should not be aggregated in a single [608] class. Furthermore, objectors argued, lawyers representing inventory plaintiffs should not represent the newly formed class.

Satisfied that class counsel had ably negotiated the settlement in the best interests of all concerned, and that the named parties served as adequate representatives, the District Court rejected these objections. See id., at 317-319, 326-332. Subclasses were unnecessary, the District Court held, bearing in mind the added cost and confusion they would entail and the ability of class members to exclude themselves from the class during the three-month opt-out period. See id., at 318-319. Reasoning that the representative plaintiffs "have a strong interest that recovery for all of the medical categories be maximized because they may have claims in any, or several categories," the District Court found "no antagonism of interest between class members with various medical conditions, or between persons with and without currently manifest asbestos impairment." Id. , at 318. Declaring class certification appropriate and the settlement fair, the District Court preliminarily enjoined all class members from commencing any asbestos-related suit against the CCR defendants in any state or federal court. See Georgine v. Amchem Products, Inc., 878 F. Supp. 716, 726-727 (ED Pa. 1994).

The objectors appealed. The United States Court of Appeals for the Third Circuit vacated the certification, holding that the requirements of Rule 23 had not been satisfied. See 83 F. 3d 610 (1996).

E

The Court of Appeals, in a long, heavily detailed opinion by Judge Becker, first noted several challenges by objectors to justiciability, subject-matter jurisdiction, and adequacy of notice. These challenges, the court said, raised "serious concerns." Id., at 623. However, the court observed, "the jurisdictional issues in this case would not exist but for the [class-action] certification." Ibid. Turning to the classcertification [609] issues and finding them dispositive, the Third Circuit declined to decide other questions.

On class-action prerequisites, the Court of Appeals referred to an earlier Third Circuit decision, In re General Motors Corp. Pick-Up Truck Fuel Tank Products Liability Litigation, 55 F. 3d 768, cert. denied, 516 U. S. 824 (1995) (hereinafter GM Trucks), which held that although a class action may be certified for settlement purposes only, Rule 23(a)'s requirements must be satisfied as if the case were going to be litigated. 55 F. 3d, at 799-800. The same rule should apply, the Third Circuit said, to class certification under Rule 23(b)(3). See 83 F. 3d, at 625. But cf.In re Asbestos Litigation, 90 F. 3d 963, 975-976, and n. 8 (CA5 1996), cert. pending, Nos. 96-1379, 96-1394. While stating that the requirements of Rule 23(a) and (b)(3) must be met "without taking into account the settlement," 83 F. 3d, at 626, the Court of Appeals in fact closely considered the terms of the settlement as it examined aspects of the case under Rule 23 criteria. See id., at 630-634.

The Third Circuit recognized that Rule 23(a)(2)'s "commonality" requirement is subsumed under, or superseded by, the more stringent Rule 23(b)(3) requirement that questions common to the class "predominate over" other questions. The court therefore trained its attention on the "predominance" inquiry. See id., at 627. The harmfulness of asbestos exposure was indeed a prime factor common to the class, the Third Circuit observed. See id., at 626, 630. But uncommon questions abounded.

In contrast to mass torts involving a single accident, class members in this case were exposed to different asbestoscontaining products, in different ways, over different periods, and for different amounts of time; some suffered no physical injury, others suffered disabling or deadly diseases. See id., at 626, 628. "These factual differences," the Third Circuit explained, "translate[d] into significant legal differences." Id., at 627. State law governed and varied widely [610] on such critical issues as "viability of [exposure-only] claims [and] availability of causes of action for medical monitoring, increased risk of cancer, and fear of future injury." Ibid.^[15] "[T]he number of uncommon issues in this humongous class action," the Third Circuit concluded, ibid., barred a determination, under existing tort law, that common questions predominated, see id., at 630.

The Court of Appeals next found that "serious intra-class conflicts preclude[d] th[e] class from meeting the adequacy of representation requirement" of Rule 23(a)(4). Ibid. Adverting to, but not resolving charges of attorney conflict of interests, the Third Circuit addressed the question whether the named plaintiffs could adequately advance the interests of all class members. The Court of Appeals acknowledged that the District Court was certainly correct to this extent: "`[T]he members of the class are united in seeking the maximum possible recovery for their asbestos-related claims.' " Ibid. (quoting 157 F. R. D., at 317). "But the settlement does more than simply provide a general recovery fund," the Court of Appeals immediately added; "[r]ather, it makes important judgments on how recovery is to be allocated among different kinds of plaintiffs, decisions that necessarily favor some claimants over others." 83 F. 3d, at 630.

In the Third Circuit's view, the "most salient" divergence of interests separated plaintiffs already afflicted with an asbestos-related disease from plaintiffs without manifest injury (exposure-only plaintiffs). The latter would rationally want protection against inflation for distant recoveries. See ibid. They would also seek sturdy back-end opt-out rights and "causation provisions that can keep pace with changing [611] science and medicine, rather than freezing in place the science of 1993." Id., at 630-631. Already injured parties, in contrast, would care little about such provisions and would rationally trade them for higher current payouts. See id., at 631. These and other adverse interests, the Court of Appeals carefully explained, strongly suggested that an undivided set of representatives could not adequately protect the discrete interests of both currently afflicted and exposureonly claimants.

The Third Circuit next rejected the District Court's determination that the named plaintiffs were "typical" of the class, noting that this Rule 23(a)(3) inquiry overlaps the adequacy of representation question: "both look to the potential for conflicts in the class." Id., at 632. Evident conflict problems, the court said, led it to hold that "no set of representatives can be `typical' of this class." Ibid.

The Court of Appeals similarly rejected the District Court's assessment of the superiority of the class action. The Third Circuit initially noted that a class action so large and complex "could not be tried." Ibid. The court elaborated most particularly, however, on the unfairness of binding exposure-only plaintiffs who might be unaware of the class action or lack sufficient information about their exposure to make a reasoned decision whether to stay in or opt out. See id., at 633. "A series of statewide or more narrowly defined adjudications, either through consolidation under Rule 42(a) or as class actions under Rule 23, would seem preferable," the Court of Appeals said. Id., at 634.

The Third Circuit, after intensive review, ultimately ordered decertification of the class and vacation of the District Court's antisuit injunction. Id., at 635. Judge Wellford concurred, "fully subscrib[ing] to the decision of Judge Becker that the plaintiffs in this case ha[d] not met the requirements of Rule 23." Ibid. He added that in his view, named exposure-only plaintiffs had no standing to pursue the [612] suit in federal court, for their depositions showed that "[t]hey claimed no damages and no present injury." Id., at 638.

We granted certiorari, 519 U. S. 957 (1996), and now affirm.

II

Objectors assert in this Court, as they did in the District Court and Court of Appeals, an array of jurisdictional barriers. Most fundamentally, they maintain that the settlement proceeding instituted by class counsel and CCR is not a justiciable case or controversy within the confines of Article III of the Federal Constitution. In the main, they say, the proceeding is a nonadversarial endeavor to impose on countless individuals without currently ripe claims an administrative compensation regime binding on those individuals if and when they manifest injuries.

Furthermore, objectors urge that exposure-only claimants lack standing to sue: Either they have not yet sustained any cognizable injury or, to the extent the complaint states claims and demands relief for emotional distress, enhanced risk of disease, and medical monitoring, the settlement provides no redress. Objectors also argue that exposureonly claimants did not meet the then-current amount-incontroversy requirement (in excess of $50,000) specified for federal-court jurisdiction based upon diversity of citizenship. See 28 U. S. C. § 1332(a).

As earlier recounted, see supra, at 608, the Third Circuit declined to reach these issues because they "would not exist but for the [class-action] certification." 83 F. 3d, at 623. We agree that "[t]he class certification issues are dispositive," ibid.; because their resolution here is logically antecedent to the existence of any Article III issues, it is appropriate to reach them first, cf. Arizonans for Official English v. Arizona, 520 U. S. 43, 66-67 (1997) (declining to resolve definitively question whether petitioners had standing because mootness issue was dispositive of the case). We therefore follow the path taken by the Court of Appeals, mindful that [613] Rule 23's requirements must be interpreted in keeping with Article III constraints, and with the Rules Enabling Act, which instructs that rules of procedure "shall not abridge, enlarge or modify any substantive right," 28 U. S. C. § 2072(b). See also Fed. Rule Civ. Proc. 82 ("rules shall not be construed to extend . . . the [subject-matter] jurisdiction of the United States district courts").^[16]

III

To place this controversy in context, we briefly describe the characteristics of class actions for which the Federal Rules provide. Rule 23, governing federal-court class actions, stems from equity practice and gained its current shape in an innovative 1966 revision. See generally Kaplan, Continuing Work of the Civil Committee: 1966 Amendments of the Federal Rules of Civil Procedure (I), 81 Harv. L. Rev. 356, 375-400 (1967) (hereinafter Kaplan, Continuing Work). Rule 23(a) states four threshold requirements applicable to all class actions: (1) numerosity (a "class [so large] that joinder of all members is impracticable"); (2) commonality ("questions of law or fact common to the class"); (3) typicality (named parties' claims or defenses "are typical . . . of the class"); and (4) adequacy of representation (representatives "will fairly and adequately protect the interests of the class").

[614] In addition to satisfying Rule 23(a)'s prerequisites, parties seeking class certification must show that the action is maintainable under Rule 23(b)(1), (2), or (3). Rule 23(b)(1) covers cases in which separate actions by or against individual class members would risk establishing "incompatible standards of conduct for the party opposing the class," Fed. Rule Civ. Proc. 23(b)(1)(A), or would "as a practical matter be dispositive of the interests" of nonparty class members "or substantially impair or impede their ability to protect their interests," Rule 23(b)(1)(B). Rule 23(b)(1)(A) "takes in cases where the party is obliged by law to treat the members of the class alike (a utility acting toward customers; a government imposing a tax), or where the party must treat all alike as a matter of practical necessity (a riparian owner using water as against downriver owners)." Kaplan, Continuing Work 388 (footnotes omitted). Rule 23(b)(1)(B) includes, for example, "limited fund" cases, instances in which numerous persons make claims against a fund insufficient to satisfy all claims. See Advisory Committee's Notes on Fed. Rule Civ. Proc. 23, 28 U. S. C. App., pp. 696-697 (hereinafter Adv. Comm. Notes).

Rule 23(b)(2) permits class actions for declaratory or injunctive relief where "the party opposing the class has acted or refused to act on grounds generally applicable to the class." Civil rights cases against parties charged with unlawful, class-based discrimination are prime examples. Adv. Comm. Notes, 28 U. S. C. App., p. 697; see Kaplan, Continuing Work 389 (subdivision (b)(2) "build[s] on experience mainly, but not exclusively, in the civil rights field").

In the 1966 class-action amendments, Rule 23(b)(3), the category at issue here, was "the most adventuresome" innovation. See Kaplan, A Prefatory Note, 10 B. C. Ind. & Com. L. Rev. 497, 497 (1969) (hereinafter Kaplan, Prefatory Note). Rule 23(b)(3) added to the complex-litigation arsenal class actions for damages designed to secure judgments binding all class members save those who affirmatively elected to be [615] excluded. See 7A C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 1777, p. 517 (2d ed. 1986) (hereinafter Wright, Miller, & Kane); see generally Kaplan, Continuing Work 379-400. Rule 23(b)(3) "opt-out" class actions superseded the former "spurious" class action, so characterized because it generally functioned as a permissive joinder ("opt-in") device. See 7A Wright, Miller, & Kane § 1753, at 28-31, 42-44; see also Adv. Comm. Notes, 28 U. S. C. App., p. 695.

Framed for situations in which "class-action treatment is not as clearly called for" as it is in Rule 23(b)(1) and (b)(2) situations, Rule 23(b)(3) permits certification where class suit "may nevertheless be convenient and desirable." Adv. Comm. Notes, 28 U. S. C. App., p. 697. To qualify for certification under Rule 23(b)(3), a class must meet two requirements beyond the Rule 23(a) prerequisites: Common questions must "predominate over any questions affecting only individual members"; and class resolution must be "superior to other available methods for the fair and efficient adjudication of the controversy." In adding "predominance" and "superiority" to the qualification-for-certification list, the Advisory Committee sought to cover cases "in which a class action would achieve economies of time, effort, and expense, and promote . . . uniformity of decision as to persons similarly situated, without sacrificing procedural fairness or bringing about other undesirable results." Ibid. Sensitive to the competing tugs of individual autonomy for those who might prefer to go it alone or in a smaller unit, on the one hand, and systemic efficiency on the other, the Reporter for the 1966 amendments cautioned: "The new provision invites a close look at the case before it is accepted as a class action. . . ." Kaplan, Continuing Work 390.

Rule 23(b)(3) includes a nonexhaustive list of factors pertinent to a court's "close look" at the predominance and superiority criteria:

[616] "(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action."

In setting out these factors, the Advisory Committee for the 1966 reform anticipated that in each case, courts would "consider the interests of individual members of the class in controlling their own litigations and carrying them on as they see fit." Adv. Comm. Notes, 28 U. S. C. App., p. 698. They elaborated:

"The interests of individuals in conducting separate lawsuits may be so strong as to callfor denial of a class action. On the other hand, these interests may be theoretic rather than practical; the class may have a high degree of cohesion and prosecution of the action through representatives would be quite unobjectionable, or the amounts at stake for individuals may be so small that separate suits would be impracticable." Ibid.

See also Kaplan, Continuing Work 391 ("Th[e] interest [in individual control] can be high where the stake of each member bulks large and his will and ability to take care of himself are strong; the interest may be no more than theoretic where the individual stake is so small as to make a separate action impracticable." (footnote omitted)). As the Third Circuit observed in the instant case: "Each plaintiff [in an action involving claims for personal injury and death] has a significant interest in individually controlling the prosecution of [his case]"; each "ha[s] a substantial stake in making individual decisions on whether and when to settle." 83 F. 3d, at 633.

[617] While the text of Rule 23(b)(3) does not exclude from certification cases in which individual damages run high, the Advisory Committee had dominantly in mind vindication of "the rights of groups of people who individually would be without effective strength to bring their opponents into court at all." Kaplan, Prefatory Note 497. As concisely recalled in a recent Seventh Circuit opinion:

"The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone's (usually an attorney's) labor." Mace v. Van Ru Credit Corp., 109 F. 3d 338, 344 (1997).

To alert class members to their right to "opt out" of a (b)(3) class, Rule 23 instructs the court to "direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort." Fed. Rule Civ. Proc. 23(c)(2); see Eisen v. Carlisle & Jacquelin, 417 U. S. 156, 173-177 (1974) (individual notice to class members identifiable through reasonable effort is mandatory in (b)(3) actions; requirement may not be relaxed based on high cost).

No class action may be "dismissed or compromised without [court] approval," preceded by notice to class members. Fed. Rule Civ. Proc. 23(e). The Advisory Committee's sole comment on this terse final provision of Rule 23 restates the Rule's instruction without elaboration: "Subdivision (e) requires approval of the court, after notice, for the dismissal or compromise of any class action." Adv. Comm. Notes, 28 U. S. C. App., p. 699.

In the decades since the 1966 revision of Rule 23, classaction practice has become ever more "adventuresome" as a means of coping with claims too numerous to secure their [618] "just, speedy, and inexpensive determination" one by one. See Fed. Rule Civ. Proc. 1. The development reflects concerns about the efficient use of court resources and the conservation of funds to compensate claimants who do not line up early in a litigation queue. See generally J. Weinstein, Individual Justice in Mass Tort Litigation: The Effect of Class Actions, Consolidations, and Other Multiparty Devices (1995); Schwarzer, Settlement of Mass Tort Class Actions: Order out of Chaos, 80 Cornell L. Rev. 837 (1995).

Among current applications of Rule 23(b)(3), the "settlement only" class has become a stock device. See, e. g., T. Willging, L. Hooper, & R. Niemic, Empirical Study of Class Actions in Four Federal District Courts: Final Report to the Advisory Committee on Civil Rules 61-62 (1996) (noting large number of such cases in districts studied). Although all Federal Circuits recognize the utility of Rule 23(b)(3) settlement classes, courts have divided on the extent to which a proffered settlement affects court surveillance under Rule 23's certification criteria.

In GM Trucks, 55 F. 3d, at 799-800, and in the instant case, 83 F. 3d, at 624-626, the Third Circuit held that a class cannot be certified for settlement when certification for trial would be unwarranted. Other courts have held that settlement obviates or reduces the need to measure a proposed class against the enumerated Rule 23 requirements. See, e. g., In re Asbestos Litigation, 90 F.3d, at 975 (CA5) ("in settlement class context, common issues arise from the settlement itself") (citing H. Newberg & A. Conte, 2 Newberg on Class Actions § 11.28, p. 11-58 (3d ed. 1992)); White v. National Football League, 41 F. 3d 402, 408 (CA8 1994) ("adequacy of class representation . . . is ultimately determined by the settlement itself"), cert. denied, 515 U. S. 1137 (1995); In re A. H. Robins Co., 880 F. 2d 709, 740 (CA4) ("[i]f not a ground for certification per se, certainly settlement should be a factor, and an important factor, to be considered when determining certification"), cert. denied sub nom. Anderson [619] v. Aetna Casualty & Surety Co., 493 U. S. 959 (1989); Malchman v. Davis, 761 F. 2d 893, 900 (CA2 1985) (certification appropriate, in part, because "the interests of the members of the broadened class in the settlement agreement were commonly held"), cert. denied, 475 U. S. 1143 (1986).

A proposed amendment to Rule 23 would expressly authorize settlement class certification, in conjunction with a motion by the settling parties for Rule 23(b)(3) certification, "even though the requirements of subdivision (b)(3) might not be met for purposes of trial." Proposed Amendment to Fed. Rule Civ. Proc. 23(b), 117 S. Ct. No. 1 CXIX, CLIV to CLV (Aug. 1996) (Request for Comment). In response to the publication of this proposal, voluminous public comments—many of them opposed to, or skeptical of, the amendment—were received by the Judicial Conference Standing Committee on Rules of Practice and Procedure. See, e.g., Letter from Steering Committee to Oppose Proposed Rule 23, signed by 129 law professors (May 28, 1996); Letter from Paul D. Carrington (May 21, 1996). The Committee has not yet acted on the matter. We consider the certification at issue under the Rule as it is currently framed.

IV

We granted review to decide the role settlement may play, under existing Rule 23, in determining the propriety of class certification. The Third Circuit's opinion stated that each of the requirements of Rule 23(a) and (b)(3) "must be satisfied without taking into account the settlement." 83 F. 3d, at 626 (quoting GM Trucks, 55 F. 3d, at 799). That statement, petitioners urge, is incorrect.

We agree with petitioners to this limited extent: Settlement is relevant to a class certification. The Third Circuit's opinion bears modification in that respect. But, as we earlier observed, see supra, at 609, the Court of Appeals in fact did not ignore the settlement; instead, that court homed in on settlement terms in explaining why it found the absentees' [620] interests inadequately represented. See 83 F. 3d, at 630— 631. The Third Circuit's close inspection of the settlement in that regard was altogether proper.

Confronted with a request for settlement-only class certification, a district court need not inquire whether the case, if tried, would present intractable management problems, see Fed. Rule Civ. Proc. 23(b)(3)(D), for the proposal is that there be no trial. But other specifications of the Rule— those designed to protect absentees by blocking unwarranted or overbroad class definitions—demand undiluted, even heightened, attention in the settlement context. Such attention is of vital importance, for a court asked to certify a settlement class will lack the opportunity, present when a case is litigated, to adjust the class, informed by the proceedings as they unfold. See Rule 23(c), (d).^[17]

And, of overriding importance, courts must be mindful that the Rule as now composed sets the requirements they are bound to enforce. Federal Rules take effect after an extensive deliberative process involving many reviewers: a Rules Advisory Committee, public commenters, the Judicial Conference, this Court, the Congress. See 28 U. S. C. §§ 2073, 2074. The text of a rule thus proposed and reviewed limits judicial inventiveness. Courts are not free to amend a rule outside the process Congress ordered, a process properly tuned to the instruction that rules of procedure "shall not abridge . . . any substantive right." § 2072(b).

Rule 23(e), on settlement of class actions, reads in its entirety: "A class action shall not be dismissed or compromised [621] without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs." This prescription was designed to function as an additional requirement, not a superseding direction, for the "class action" to which Rule 23(e) refers is one qualified for certification under Rule 23(a) and (b). Cf. Eisen, 417 U. S., at 176-177 (adequate representation does not eliminate additional requirement to provide notice). Subdivisions (a) and (b) focus court attention on whether a proposed class has sufficient unity so that absent members can fairly be bound by decisions of class representatives. That dominant concern persists when settlement, rather than trial, is proposed.

The safeguards provided by the Rule 23(a) and (b) classqualifying criteria, we emphasize, are not impractical impediments—checks shorn of utility—in the settlement-class context. First, the standards set for the protection of absent class members serve to inhibit appraisals of the chancellor's foot kind—class certifications dependent upon the court's gestalt judgment or overarching impression of the settlement's fairness.

Second, if a fairness inquiry under Rule 23(e) controlled certification, eclipsing Rule 23(a) and (b), and permitting class designation despite the impossibility of litigation, both class counsel and court would be disarmed. Class counsel confined to settlement negotiations could not use the threat of litigation to press for a better offer, see Coffee, Class Wars: The Dilemma of the Mass Tort Class Action, 95 Colum. L. Rev. 1343, 1379-1380 (1995), and the court would face a bargain proffered for its approval without benefit of adversarial investigation, see, e. g., Kamilewicz v. Bank of Boston Corp., 100 F. 3d 1348, 1352 (CA7 1996) (Easterbrook, J., dissenting from denial of rehearing en banc) (parties "may even put one over on the court, in a staged performance"), cert. denied, 520 U. S. 1204 (1997).

[622] Federal courts, in any case, lack authority to substitute for Rule 23's certification criteria a standard never adopted— that if a settlement is "fair," then certification is proper. Applying to this case criteria the rulemakers set, we conclude that the Third Circuit's appraisal is essentially correct. Although that court should have acknowledged that settlement is a factor in the calculus, a remand is not warranted on that account. The Court of Appeals' opinion amply demonstrates why—with or without a settlement on the table— the sprawling class the District Court certified does not satisfy Rule 23's requirements.^[18]

A

We address first the requirement of Rule 23(b)(3) that "[common] questions of law or fact . . . predominate over any questions affecting only individual members." The District Court concluded that predominance was satisfied based on two factors: class members' shared experience of asbestos exposure and their common "interest in receiving prompt and fair compensation for their claims, while minimizing the risks and transaction costs inherent in the asbestos litigation process as it occurs presently in the tort system." 157 F. R. D., at 316. The settling parties also contend that the settlement's fairness is a common question, predominating over disparate legal issues that might be pivotal in litigation but become irrelevant under the settlement.

The predominance requirement stated in Rule 23(b)(3), we hold, is not met by the factors on which the District Court relied. The benefits asbestos-exposed persons might gain from the establishment of a grand-scale compensation scheme is a matter fit for legislative consideration, see supra, [623] at 598, but it is not pertinent to the predominance inquiry. That inquiry trains on the legal or factual questions that qualify each class member's case as a genuine controversy, questions that preexist any settlement.^[19]

The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation. See 7A Wright, Miller, & Kane 518— 519.^[20] The inquiry appropriate under Rule 23(e), on the other hand, protects unnamed class members "from unjust or unfair settlements affecting their rights when the representatives become fainthearted before the action is adjudicated or are able to secure satisfaction of their individual claims by a compromise." See 7B Wright, Miller, & Kane § 1797, at 340-341. But it is not the mission of Rule 23(e) to assure the class cohesion that legitimizes representative action in the first place. If a common interest in a fair compromise could satisfy the predominance requirement of Rule 23(b)(3), that vital prescription would be stripped of any meaning in the settlement context.

The District Court also relied upon this commonality: "The members of the class have all been exposed to asbestos products supplied by the defendants . . . ." 157 F. R. D., at 316. Even if Rule 23(a)'s commonality requirement may be satisfied [624] by that shared experience, the predominance criterion is far more demanding. See 83 F. 3d, at 626-627. Given the greater number of questions peculiar to the several categories of class members, and to individuals within each category, and the significance of those uncommon questions, any overarching dispute about the health consequences of asbestos exposure cannot satisfy the Rule 23(b)(3) predominance standard.

The Third Circuit highlighted the disparate questions undermining class cohesion in this case:

"Class members were exposed to different asbestoscontaining products, for different amounts of time, in different ways, and over different periods. Some class members suffer no physical injury or have only a symptomatic plural changes, while others suffer from lung cancer, disabling asbestos is, or from mesothelioma . . . . Each has a different history of cigarette smoking, a factor that complicates the causation inquiry.

"The [exposure-only] plaintiffs especially share little in common, either with each other or with the presently injured class members. It is unclear whether they will contract asbestos-related disease and, if so, what disease each will suffer. They will also incur different medical expenses because their monitoring and treatment will depend on singular circumstances and individual medical histories." Id., at 626.

Differences in state law, the Court of Appeals observed, compound these disparities. See id., at 627 (citing Phillips Petroleum Co. v. Shutts, 472 U. S. 797, 823 (1985)).

No settlement class called to our attention is as sprawling as this one. Cf. In re Asbestos Litigation, 90 F. 3d, at 976, n. 8 ("We would likely agree with the Third Circuit that a class action requesting individual damages for members of a global class of asbestos claimants would not satisfy [Rule 23] requirements due to the huge number of individuals and [625] their varying medical expenses, smoking histories, and family situations."). Predominance is a test readily met in certain cases alleging consumer or securities fraud or violations of the antitrust laws. See Adv. Comm. Notes, 28 U. S. C. App., p. 697; see also supra, at 615, 616. Even mass tort cases arising from a common cause or disaster may, depending upon the circumstances, satisfy the predominance requirement. The Advisory Committee for the 1966 revision of Rule 23, it is true, noted that "mass accident" cases are likely to present "significant questions, not only of damages but of liability and defenses of liability, . . . affecting the individuals in different ways." Adv. Comm. Notes, 28 U. S. C. App., p. 697. And the Committee advised that such cases are "ordinarily not appropriate" for class treatment. Ibid. But the text of the Rule does not categorically exclude mass tort cases from class certification, and District Courts, since the late 1970's, have been certifying such cases in increasing number. See Resnik, From "Cases" to "Litigation," 54 Law & Contemp. Prob. 5, 17-19 (Summer 1991) (describing trend). The Committee's warning, however, continues to call for caution when individual stakes are high and disparities among class members great. As the Third Circuit's opinion makes plain, the certification in this case does not follow the counsel of caution. That certification cannot be upheld, for it rests on a conception of Rule 23(b)(3)'s predominance requirement irreconcilable with the Rule's design.

B

Nor can the class approved by the District Court satisfy Rule 23(a)(4)'s requirement that the named parties "will fairly and adequately protect the interests of the class." The adequacy inquiry under Rule 23(a)(4) serves to uncover conflicts of interest between named parties and the class they seek to represent. See General Telephone Co. of Southwest v. Falcon, 457 U. S. 147, 157-158, n. 13 (1982). "[A] class representative must be part of the class and `possess [626] the same interest and suffer the same injury' as the class members." East Tex. Motor Freight System, Inc. v. Rodriguez, 431 U. S. 395, 403 (1977) (quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U. S. 208, 216 (1974)).^[21]

As the Third Circuit pointed out, named parties with diverse medical conditions sought to act on behalf of a single giant class rather than on behalf of discrete subclasses. In significant respects, the interests of those within the single class are not aligned. Most saliently, for the currently injured, the critical goal is generous immediate payments. That goal tugs against the interest of exposure-only plaintiffs in ensuring an ample, inflation-protected fund for the future. Cf. General Telephone Co. of Northwest v. EEOC, 446 U. S. 318, 331 (1980) ("In employment discrimination litigation, conflicts might arise, for example, between employees and applicants who were denied employment and who will, if granted relief, compete with employees for fringe benefits or seniority. Under Rule 23, the same plaintiff could not represent these classes.").

The disparity between the currently injured and exposure-only categories of plaintiffs, and the diversity within each category are not made insignificant by the District Court's finding that petitioners' assets suffice to pay claims under the settlement. See 157 F. R. D., at 291. Although [627] this is not a "limited fund" case certified under Rule 23(b)(1)(B), the terms of the settlement reflect essential allocation decisions designed to confine compensation and to limit defendants' liability. For example, as earlier described, see supra, at 604-605, the settlement includes no adjustment for inflation; only a few claimants per year can opt out at the back end; and loss-of-consortium claims are extinguished with no compensation.

The settling parties, in sum, achieved a global compromise with no structural assurance of fair and adequate representation for the diverse groups and individuals affected. Although the named parties alleged a range of complaints, each served generally as representative for the whole, not for a separate constituency. In another asbestos class action, the Second Circuit spoke precisely to this point:

"[W]here differences among members of a class are such that subclasses must be established, we know of no authority that permits a court to approve a settlement without creating subclasses on the basis of consents by members of a unitary class, some of whom happen to be members of the distinct subgroups. The class representatives may well have thought that the Settlement serves the aggregate interests of the entire class. But the adversity among subgroups requires that the members of each subgroup cannot be bound to a settlement except by consents given by those who understand that their role is to represent solely the members of their respective subgroups." In re Joint Eastern and South- ern Dist. Asbestos Litigation, 982 F. 2d 721, 742-743 (1992), modified on reh'g sub nom. In re Findley, 993 F. 2d 7 (1993).

The Third Circuit found no assurance here—either in the terms of the settlement or in the structure of the negotiations—that the named plaintiffs operated under a proper understanding of their representational responsibilities. See [628] 83 F. 3d, at 630-631. That assessment, we conclude, is on the mark.

C

Impediments to the provision of adequate notice, the Third Circuit emphasized, rendered highly problematic any endeavor to tie to a settlement class persons with no perceptible asbestos-related disease at the time of the settlement. Id., at 633; cf. In re Asbestos Litigation, 90 F. 3d, at 999-1000 (Smith, J., dissenting). Many persons in the exposure-only category, the Court of Appeals stressed, may not even know of their exposure, or realize the extent of the harm they may incur. Even if they fully appreciate the significance of class notice, those without current afflictions may not have the information or foresight needed to decide, intelligently, whether to stay in or opt out.

Family members of asbestos-exposed individuals may themselves fall prey to disease or may ultimately have ripe claims for loss of consortium. Yet large numbers of people in this category—future spouses and children of asbestos victims—could not be alerted to their class membership. And current spouses and children of the occupationally exposed may know nothing of that exposure.

Because we have concluded that the class in this case cannot satisfy the requirements of common issue predominance and adequacy of representation, we need not rule, definitively, on the notice given here. In accord with the Third Circuit, however, see 83 F. 3d, at 633-634, we recognize the gravity of the question whether class action notice sufficient under the Constitution and Rule 23 could ever be given to legions so unselfconscious and amorphous.

V

The argument is sensibly made that a nationwide administrative claims processing regime would provide the most secure, fair, and efficient means of compensating victims of asbestos [629] exposure.^[22] Congress, however, has not adopted such a solution. And Rule 23, which must be interpreted with fidelity to the Rules Enabling Act and applied with the interests of absent class members in close view, cannot carry the large load CCR, class counsel, and the District Court heaped upon it. As this case exemplifies, the rulemakers' prescriptions for class actions may be endangered by "those who embrace [Rule 23] too enthusiastically just as [they are by] those who approach [the Rule] with distaste." C. Wright, Law of Federal Courts 508 (5th ed. 1994); cf.83 F. 3d, at 634 (suggesting resort to less bold aggregation techniques, including more narrowly defined class certifications).

* * *

For the reasons stated, the judgment of the Court of Appeals for the Third Circuit is

Affirmed.

Justice O'Connor took no part in the consideration or decision of this case.

Justice Breyer, with whom Justice Stevens joins, concurring in part and dissenting in part.

Although I agree with the Court's basic holding that "[s]ettlement is relevant to a class certification," ante, at 619, I find several problems in its approach that lead me to a different conclusion. First, I believe that the need for settlement in this mass tort case, with hundreds of thousands of lawsuits, is greater than the Court's opinion suggests. Second, I would give more weight than would the majority to settlement-related issues for purposes of determining whether common issues predominate. Third, I am uncertain about the Court's determination of adequacy of representation, [630] and do not believe it appropriate for this Court to second-guess the District Court on the matter without first having the Court of Appeals consider it. Fourth, I am uncertain about the tenor of an opinion that seems to suggest the settlement is unfair. And fifth, in the absence of further review by the Court of Appeals, I cannot accept the majority's suggestions that "notice" is inadequate.

These difficulties flow from the majority's review of what are highly fact-based, complex, and difficult matters, matters that are inappropriate for initial review before this Court. The law gives broad leeway to district courts in making class certification decisions, and their judgments are to be reviewed by the court of appeals only for abuse of discretion. See Califano v. Yamasaki, 442 U. S. 682, 703 (1979). Indeed, the District Court's certification decision rests upon more than 300 findings of fact reached after five weeks of comprehensive hearings. Accordingly, I do not believe that we should in effect set aside the findings of the District Court. That court is far more familiar with the issues and litigants than is a court of appeals or are we, and therefore has "broad power and discretion . . . with respect to matters involving the certification" of class actions. Reiter v. Sonotone Corp., 442 U. S. 330, 345 (1979); cf. Cooter & Gell v. Hartmarx Corp., 496 U. S. 384, 402 (1990) (district court better situated to make fact-dependent legal determinations in Rule 11 context).

I do not believe that we can rely upon the Court of Appeals' review of the District Court record, for that review, and its ultimate conclusions, are infected by a legal error. E. g., Georgine v. Amchem Products, Inc., 83 F. 3d 610, 626 (CA3 1996) (holding that "considered as a litigation class, " the class cannot meet Federal Rule of Civil Procedure 23's requirements (emphasis added)). There is no evidence that the Court of Appeals at any point considered the settlement as something that would help the class meet Rule 23. I find, moreover, the fact-related issues presented here sufficiently [631] close to warrant further detailed appellate court review under the correct legal standard. Cf. Reno v. Bossier Parish School Bd., 520 U. S. 471, 486 (1997). And I shall briefly explain why this is so.

I

First, I believe the majority understates the importance of settlement in this case. Between 13 and 21 million workers have been exposed to asbestos in the workplace—over the past 40 or 50 years—but the most severe instances of such exposure probably occurred three or four decades ago. See Report of The Judicial Conference Ad Hoc Committee on Asbestos Litigation, pp. 6-7 (Mar. 1991) (Judicial Conference Report); App. 781-782, 801; B. Castleman, Asbestos: Medical and Legal Aspects 787-788 (4th ed. 1996). This exposure has led to several hundred thousand lawsuits, about 15% of which involved claims for cancer and about 30% for asbestos is. See In re Joint Eastern and Southern Dist. Asbestos Litigation, 129 B. R. 710, 936-937 (E and SD N. Y. 1991). About half of the suits have involved claims for plural thickening and plaques—the harmfulness of which is apparently controversial. (One expert below testified that they "don't transform into cancer" and are not "predictor[s] of future disease," App. 781.) Some of those who suffer from the most serious injuries, however, have received little or no compensation. In re School Asbestos Litigation, 789 F. 2d 996, 1000 (CA3 1986); see also Edley & Weiler, Asbestos: A MultiBillion-Dollar Crisis, 30 Harv. J. Legis. 383, 384, 393 (1993) ("[U]p to one-half of asbestos claims are now being filed by people who have little or no physical impairment. Many of these claims produce substantial payments (and substantial costs) even though the individual litigants will never become impaired"). These lawsuits have taken up more than 6% of all federal civil filings in one recent year, and are subject to a delay that is twice that of other civil suits. Judicial Conference Report 7, 10-11.

[632] Delays, high costs, and a random pattern of noncompensation led the Judicial Conference Ad Hoc Committee on Asbestos Litigation to transfer all federal asbestos personalinjury cases to the Eastern District of Pennsylvania in an effort to bring about a fair and comprehensive settlement. It is worth considering a few of the Committee's comments. See Judicial Conference Report 2 ("`Decisions concerning thousands of deaths, millions of injuries, and billions of dollars are entangled in a litigation system whose strengths have increasingly been overshadowed by its weaknesses.' The ensuing five years have seen the picture worsen: increased filings, larger backlogs, higher costs, more bankruptcies and poorer prospects that judgments—if ever obtained—can be collected" (quoting Rand Corporation Institute for Civil Justice)); id., at 13 ("The transaction costs associated with asbestos litigation are an unconscionable burden on the victims of asbestos disease." "[O]f each asbestos litigation dollar, 61 cents is consumed in transaction costs . . . . Only 39 cents were paid to the asbestos victims" (citing Rand finding)); id., at 12 ("Delays also can increase transaction costs, especially the attorneys' fees paid by defendants at hourly rates. These costs reduce either the insurance fund or the company's assets, thereby reducing the funds available to pay pending and future claimants. By the end of the trial phase in [one case], at least seven defendants had declared bankruptcy (as a result of asbestos claims generally")); see also J. Weinstein, Individual Justice in Mass Tort Litigation 155 (1995); Edley & Weiler, supra, at 389-395.

Although the transfer of the federal asbestos cases did not produce a general settlement, it was intertwined with and led to a lengthy year-long negotiation between the cochairs of the Plaintiff's Multi-District Litigation Steering Committee (elected by the Plaintiff's Committee Members and approved by the District Court) and the 20 asbestos defendants who are before us here. Georgine v. Amchem Products, Inc., 157 F. R. D. 246, 266-267 (ED Pa. 1994); App. 660-662. [633] These "protracted and vigorous" negotiations led to the present partial settlement, which will pay an estimated $1.3 billion and compensate perhaps 100,000 class members in the first 10 years. 157 F. R. D., at 268, 287. "The negotiations included a substantial exchange of information" between class counsel and the 20 defendant companies, including "confidential data" showing the defendants' historical settlement averages, numbers of claims filed and settled, and insurance resources. Id., at 267. "Virtually no provision" of the settlement "was not the subject of significant negotiation," and the settlement terms "changed substantially" during the negotiations. Ibid. In the end, the negotiations produced a settlement that, the District Court determined based on its detailed review of the process, was "the result of armslength adversarial negotiations by extraordinarily competent and experienced attorneys." Id., at 335.

The District Court, when approving the settlement, concluded that it improved the plaintiffs' chances of compensation and reduced total legal fees and other transaction costs by a significant amount. Under the previous system, according to the court, "[t]he sickest of victims often go uncompensated for years while valuable funds go to others who remain unimpaired by their mild asbestos disease." Ibid. The court believed the settlement would create a compensation system that would make more money available for plaintiffs who later develop serious illnesses.

I mention this matter because it suggests that the settlement before us is unusual in terms of its importance, both to many potential plaintiffs and to defendants, and with respect to the time, effort, and expenditure that it reflects. All of which leads me to be reluctant to set aside the District Court's findings without more assurance than I have that they are wrong. I cannot obtain that assurance through comprehensive review of the record because that is properly the job of the Court of Appeals and that court, understandably, but as we now hold, mistakenly, believed that settlement [634] was not a relevant (and, as I would say, important) consideration.

Second, the majority, in reviewing the District Court's determination that common "issues of fact and law predominate," says that the predominance "inquiry trains on the legal or factual questions that qualify each class member's case as a genuine controversy, questions that preexist any settlement." Ante, at 623 (footnote omitted). I find it difficult to interpret this sentence in a way that could lead me to the majority's conclusion. If the majority means that these presettlement questions are what matters, then how does it reconcile its statement with its basic conclusion that "settlement is relevant" to class certification, or with the numerous lower court authority that says that settlement is not only relevant, but important? See, e. g., In re A. H. Robins Co., 880 F. 2d 709, 740 (CA4), cert. denied sub nom. Anderson v. Aetna Casualty & Surety Co., 493 U. S. 959 (1989); In re Beef Industry Antitrust Litigation, 607 F. 2d 167, 177— 178 (CA5 1979), cert. denied sub nom. Iowa Beef Processors, Inc. v. Meat Price Investigators Assn., 452 U. S. 905 (1981); 2 H. Newberg & A. Conte, Newberg on Class Actions § 11.27, pp. 11-54 to 11-55 (3d ed. 1992).

Nor do I understand how one could decide whether common questions "predominate" in the abstract—without looking at what is likely to be at issue in the proceedings that will ensue, namely, the settlement. Every group of human beings, after all, has some features in common, and some that differ. How can a court make a contextual judgment of the sort that Rule 23 requires without looking to what proceedings will follow? Such guideposts help it decide whether, in light of common concerns and differences, certification will achieve Rule 23's basic objective—"economies of time, effort, and expense." Advisory Committee's Notes on Fed. Rule Civ. Proc. 23(b)(3), 28 U. S. C. App., p. 697. As this Court has previously observed, "sometimes it may be necessary for the court to probe behind the pleadings before coming to [635] rest on the certification question." General Telephone Co. of Southwest v. Falcon, 457 U. S. 147, 160 (1982); see also 7B C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 1785, p. 107, and n. 34 (1986). I am not saying that the "settlement counts only one way." Ante, at 620, n. 16. Rather, the settlement may simply "add a great deal of information to the court's inquiry and will often expose diverging interests or common issues that were not evident or clear from the complaint" and courts "can and should" look to it to enhance the "ability . . . to make informed certification decisions." In re Asbestos Litigation, 90 F. 3d 963, 975 (CA5 1996).

The majority may mean that the District Court gave too much weight to the settlement. But I am not certain how it can reach that conclusion. It cannot rely upon the Court of Appeals, for that court gave no positive weight at all to the settlement. Nor can it say that the District Court relied solely on "a common interest in a fair compromise," ante, at 623, for the District Court did not do so. Rather, it found the settlement relevant because it explained the importance of the class plaintiffs' common features and common interests. The court found predominance in part because:

"The members of the class have all been exposed to asbestos products supplied by the defendants and all share an interest in receiving prompt and fair compensation for their claims, while minimizing the risks and transaction costs inherent in the asbestos litigation process as it occurs presently in the tort system." 157 F. R. D., at 316.

The settlement is relevant because it means that these common features and interests are likely to be important in the proceeding that would ensue—a proceeding that would focus primarily upon whether or not the proposed settlement fairly and properly satisfied the interests class members had in common. That is to say, the settlement underscored the importance [636] of (a) the common fact of exposure, (b) the common interest in receiving some compensation for certain rather than running a strong risk of no compensation, and (c) the common interest in avoiding large legal fees, other transaction costs, and delays. Ibid.

Of course, as the majority points out, there are also important differences among class members. Different plaintiffs were exposed to different products for different times; each has a distinct medical history and a different history of smoking; and many cases arise under the laws of different States. The relevant question, however, is how much these differences matter in respect to the legal proceedings that lie ahead. Many, if not all, toxic tort class actions involve plaintiffs with such differences. And the differences in state law are of diminished importance in respect to a proposed settlement in which the defendants have waived all defenses and agreed to compensate all those who were injured. Id., at 292.

These differences might warrant subclasses, though subclasses can have problems of their own. "There can be a cost in creating more distinct subgroups, each with its own representation. . . . [T]he more subclasses created, the more severe conflicts bubble to the surface and inhibit settlement.. . . The resources of defendants and, ultimately, the community must not be exhausted by protracted litigation." Weinstein, Individual Justice in Mass Tort Litigation, at 66. Or these differences may be too serious to permit an effort at group settlement. This kind of determination, as I have said, is one that the law commits to the discretion of the district court—reviewable for abuse of discretion by a court of appeals. I believe that we are far too distant from the litigation itself to reweigh the fact-specific Rule 23 determinations and to find them erroneous without the benefit of the Court of Appeals first having restudied the matter with today's legal standard in mind.

[637] Third, the majority concludes that the "representative parties" will not "fairly and adequately protect the interests of the class." Rule 23(a)(4). It finds a serious conflict between plaintiffs who are now injured and those who may be injured in the future because "for the currently injured, the critical goal is generous immediate payments," a goal that "tugs against the interest of exposure-only plaintiffs in ensuring an ample, inflation-protected fund for the future." Ante, at 626.

I agree that there is a serious problem, but it is a problem that often exists in toxic tort cases. See Weinstein, supra, at 64 (noting that conflict "between present and future claimants" "is almost always present in some form in mass tort cases because long latency periods are needed to discover injuries"); see also Judicial Conference Report 34-35 ("Because many of the defendants in these cases have limited assets that may be called upon to satisfy the judgments obtained under current common tort rules and remedies, there is a `real and present danger that the available assets will be exhausted before those later victims can seek compensation to which they are entitled' " (citation omitted)). And it is a problem that potentially exists whenever a single defendant injures several plaintiffs, for a settling plaintiff leaves fewer assets available for the others. With class actions, at least, plaintiffs have the consolation that a district court, thoroughly familiar with the facts, is charged with the responsibility of ensuring that the interests of no class members are sacrificed.

But this Court cannot easily safeguard such interests through review of a cold record. "What constitutes adequate representation is a question of fact that depends on the circumstances of each case." 7A Wright, Miller, & Kane, Federal Practice and Procedure § 1765, at 271. That is particularly so when, as here, there is an unusual baseline, namely, the "`real and present danger' " described by the Judicial Conference Report above. The majority's use of the [638] lack of an inflation adjustment as evidence of inadequacy of representation for future plaintiffs, ante, at 626-627, is one example of this difficulty. An inflation adjustment might not be as valuable as the majority assumes if most plaintiffs are old and not worried about receiving compensation decades from now. There are, of course, strong arguments as to its value. But that disagreement is one that this Court is poorly situated to resolve.

Further, certain details of the settlement that are not discussed in the majority opinion suggest that the settlement may be of greater benefit to future plaintiffs than the majority suggests. The District Court concluded that future plaintiffs receive a "significant value" from the settlement due to a variety of its items that benefit future plaintiffs, such as: (1) tolling the statute of limitations so that class members "will no longer be forced to file premature lawsuits or risk their claims being time-barred"; (2) waiver of defenses to liability; (3) payment of claims, if and when members become sick, pursuant to the settlement's compensation standards, which avoids "the uncertainties, long delays and high transaction costs [including attorney's fees] of the tort system"; (4) "some assurance that there will be funds available if and when they get sick," based on the finding that each defendant "has shown an ability to fund the payment of all qualifying claims" under the settlement; and (5) the right to additional compensation if cancer develops (many settlements for plaintiffs with noncancerous conditions bar such additional claims). 157 F. R. D., at 292. For these reasons, and others, the District Court found that the distinction between present and future plaintiffs was "illusory." Id., at 317-318.

I do not know whether or not the benefits are more or less valuable than an inflation adjustment. But I can certainly recognize an argument that they are. (To choose one more brief illustration, the majority chastises the settlement for extinguishing loss-of-consortium claims, ante, at 627, 628, but [639] does not note that, as the District Court found, the "defendants' historical [settlement] averages, upon which the compensation values are based, include payments for loss of consortium claims, and, accordingly, the Compensation Schedule is not unfair for this ascribed reason," 157 F. R. D., at 278.) The difficulties inherent in both knowing and understanding the vast number of relevant individual fact-based determinations here counsel heavily in favor of deference to district court decisionmaking in Rule 23 decisions. Or, at the least, making certain that appellate court review has taken place with the correct standard in mind.

Fourth, I am more agnostic than is the majority about the basic fairness of the settlement. Ante, at 625-628. The District Court's conclusions rested upon complicated factual findings that are not easily cast aside. It is helpful to consider some of them, such as its determination that the settlement provided "fair compensation . . . while reducing the delays and transaction costs endemic to the asbestos litigation process" and that "the proposed class action settlement is superior to other available methods for the fair and efficient resolution of the asbestos-related personal injury claims of class members." 157 F. R. D., at 316 (citation omitted); see also id., at 335 ("The inadequate tort system has demonstrated that the lawyers are well paid for their services but the victims are not receiving speedy and reasonably inexpensive resolution of their claims. Rather, the victims' recoveries are delayed, excessively reduced by transaction costs and relegated to the impersonal group trials and mass consolidations. The sickest of victims often go uncompensated for years while valuable funds go to others who remain unimpaired by their mild asbestos disease. Indeed, these unimpaired victims have, in many states, been forced to assert their claims prematurely or risk giving up all rights to future compensation for any future lung cancer or mesothelioma. The plan which this Court approves today will correct that unfair result for the class members and the . . . defendants"); [640] id., at 279, 280 (settlement "will result in less delay for asbestos claimants than that experienced in the present tort system" and will "result in the CCR defendants paying more claims at a faster rate, than they have ever paid before"); id., at 292; Edley & Weiler, 30 Harv. J. Legis., at 405, 407 (finding that "[t]here are several reasons to believe that this settlement secures important gains for both sides" and that they "firmly endorse the fairness and adequacy of this settlement"). Indeed, the settlement has been endorsed as fair and reasonable by the AFL—CIO (and its Building and Construction Trades Department), which represents a "`substantial percentage' " of class members, 157 F. R. D., at 325, and which has a role in monitoring implementation of the settlement, id., at 285. I do not intend to pass judgment upon the settlement's fairness, but I do believe that these matters would have to be explored in far greater depth before I could reach a conclusion about fairness. And that task, as I have said, is one for the Court of Appeals.

Finally, I believe it is up to the District Court, rather than this Court, to review the legal sufficiency of notice to members of the class. The District Court found that the plan to provide notice was implemented at a cost of millions of dollars and included hundreds of thousands of individual notices, a wide-ranging television and print campaign, and significant additional efforts by 35 international and national unions to notify their members. Id., at 312-313, 336. Every notice emphasized that an individual did not currently have to be sick to be a class member. And in the end, the District Court was "confident" that Rule 23 and due process requirements were satisfied because, as a result of this "extensive and expensive notice procedure," "over six million" individuals "received actual notice materials," and "millions more" were reached by the media campaign. Id., at 312, 333, 336. Although the majority, in principle, is reviewing a Court of Appeals' conclusion, it seems to me that its opinion might call into question the fact-related determinations of the District [641] Court. Ante, at 628. To the extent that it does so, I disagree, for such findings cannot be so quickly disregarded. And I do not think that our precedents permit this Court to do so. See Reiter, 442 U. S., at 345; Yamasaki, 442 U. S., at 703.

II

The issues in this case are complicated and difficult. The District Court might have been correct. Or not. Subclasses might be appropriate. Or not. I cannot tell. And I do not believe that this Court should be in the business of trying to make these fact-based determinations. That is a job suited to the district courts in the first instance, and the courts of appeals on review. But there is no reason in this case to believe that the Court of Appeals conducted its prior review with an understanding that the settlement could have constituted a reasonably strong factor in favor of class certification. For this reason, I would provide the courts below with an opportunity to analyze the factual questions involved in certification by vacating the judgment, and remanding the case for further proceedings.

[1] Briefs of amici curiae urging reversal were filed for the National Association of Securities and Commercial Lawyers by Kevin P. Roddy, Clinton A. Krislov, and Robert J. Stein III; for the Chamber of Commerce of the United States by John H. Beisner, Brian D. Boyle, Stephen A. Bokat, and Robin S. Conrad; for Rhone-Poulenc Rorer Inc. et al. by Carter G. Phillips, Richard L. Berkman, and Fred T. Magaziner; and for the Washington Legal Foundation by Daniel J. Popeo.

Briefs of amici curiae urging affirmance were filed for the State of New York et al. by Dennis C. Vacco, Attorney General of New York, Barbara Gott Billet, Solicitor General, Shirley F. Sarna, Nancy Spiegel, Joy Feigenbaum, and Jane M. Kimmel, Assistant Attorneys General, Daniel E. Lungren, Attorney General of California, Thomas F. Gede, Special Assistant Attorney General, and Albert Norman Shelden, Supervising Deputy Attorney General, Charles P. C. Ruff, Corporation Counsel of the District of Columbia, and by the Attorneys General of their respective jurisdictions as follows: Winston Bryant of Arkansas, M. Jane Brady of Delaware, Alan G. Lance of Idaho, Carla J. Stovall of Kansas, Albert B. Chandler III of Kentucky, Frank J. Kelley of Michigan, Hubert H. Humphrey III of Minnesota, Joseph P. Mazurek of Montana, Frankie Sue Del Papa of Nevada, Michael F. Easley of North Carolina, Heidi Heitkamp of North Dakota, W. A. Drew Edmondson of Oklahoma, James S. Gilmore III of Virginia, and Calvin E. Holloway, Sr., of Guam; for the Asbestos Victims of America by Maynard Ungerman; for the Association of Trial Lawyers of America by Jeffrey Robert White and Howard F. Twiggs; for Law Professors by Charles Silver and Samuel Issacharoff; for Owens-Illinois, Inc., by James D. Miller; and for Trial Lawyers for Public Justice by Leslie A. Brueckner and Arthur H. Bryant.

[2] In a series of orders, the MDL Panel had previously denied other asbestos-case transfer requests. See In re Asbestos and Asbestos Insulation Material Products Liability Litigation, 431 F. Supp. 906, 910 (JPML 1977); In re Asbestos Products Liability Litigation (No. II), MDL-416 (JPML Mar. 13, 1980) (unpublished order); In re Asbestos School Products Liability Litigation, 606 F. Supp. 713, 714 (JPML 1985); In re Ship Asbestos Products Liability Litigation, MDL-676 (JPML Feb. 4, 1986) (unpublished order); In re Leon Blair Asbestos Products Liability Litigation, MDL-702 (JPML Feb. 6, 1987) (unpublished order).

[3] The CCR Companies are Amchem Products, Inc.; A. P. Green Industries, Inc.; Armstrong World Industries, Inc.; Asbestos Claims Management Corp.; Certainteed Corp.; C. E. Thurston & Sons, Inc.; Dana Corp.; Ferodo America, Inc.; Flexitallic, Inc.; GAF Building Materials, Inc.; I. U. North America, Inc.; Maremont Corp.; National Services Industries, Inc.; Nosroc Corp.; Pfizer Inc.; Quigley Co.; Shook & Fletcher Insulation Co.; T & N, PLC; Union Carbide Corp.; and United States Gypsum Co. All of the CCR petitioners stopped manufacturing asbestos products around 1975.

[4] It is basic to comprehension of this proceeding to notice that no transferred case is included in the settlement at issue, and no case covered by the settlement existed as a civil action at the time of the MDL Panel transfer.

[5] Also on the same day, the CCR defendants filed a third-party action against their insurers, seeking a declaratory judgment holding the insurers liable for the costs of the settlement. The insurance litigation, upon which implementation of the settlement is conditioned, is still pending in the District Court. See, e. g., Georgine v. Amchem Prods., Inc., No. 93— 0215, 1994 WL 502475 (ED Pa., Sept. 2, 1994) (denying motion of insurers to compel discovery).

[6] The complaint defines the class as follows:

"(a) All persons (or their legal representatives) who have been exposed in the United States or its territories (or while working aboard U. S. military, merchant, or passenger ships), either occupationally or through the occupational exposure of a spouse or household member, to asbestos or to asbestos-containing products for which one or more of the Defendants may bear legal liability and who, as of January 15, 1993, reside in the United States or its territories, and who have not, as of January 15, 1993, filed a lawsuit for asbestos-related personal injury,or damage, or death in any state or federal court against the Defendant(s) (or against entities for whose actions or omissions the Defendant(s) bear legal liability).

"(b) All spouses, parents, children, and other relatives (or their legal representatives) of the class members described in paragraph (a) above who have not, as of January 15, 1993, filed a lawsuit for the asbestosrelated personal injury, or damage, or death of a class member described in paragraph (a) above in any state or federal court against the Defendant(s) (or against entities for whose actions or omissions the Defendant(s) bear legal liability)."1 App. 13-14.

[7] Only three percent of the qualified mesothelioma, lung cancer, and "other cancer" claims, and only one percent of the total number of qualified "non-malignant condition" claims can be designated "extraordinary." Average expenditures are specified for claims found "extraordinary"; mesothelioma victims with compensable extraordinary claims, for example, receive, on average, $300,000.

[8] These objectors, now respondents before this Court, include three groups of individuals with overlapping interests, designated as the "Windsor Group," the New Jersey "White Lung Group," and the "Cargile Group." Margaret Balonis, an individual objector,is also a respondent before this Court. Balonis states that her husband, Casimir, was exposed to asbestos in the late 1940's and was diagnosed with mesothelioma in May 1994, after expiration of the opt-out period, see infra this page and 608. The Balonises sued CCR members in Maryland state court, but were charged with civil contempt for violating the Federal District Court's antisuit injunction. Casimir Balonis died in October 1996. See Brief for Balonis Respondents 9-11.

[9] Rule 23(a)(1)requires that the class be "so numerous that joinder of all members is impracticable."

[10] Rule 23(a)(2) requires that there be "questions of law or fact common to the class."

[11] Rule 23(b)(3) requires that "the [common] questions of law or fact . . . predominate over any questions affecting only individual members."

[12] Rule 23(a)(3) states that "the claims . . . of the representative parties [must be] typical of the claims . . . of the class."

[13] Rule 23(b)(3) requires that "a class action [be] superior to other available methods for the fairand efficient adjudication of the controversy."

[14] Rule 23(a)(4) requires that "the representative parties will fairly and adequately protect the interests of the class."

[15] Recoveries under the laws of different States spanned a wide range. Objectors assert,for example, that 15 percent of current mesothelioma claims arise in California, where the statewide average recovery is $419,674—or more than 209 percent above the $200,000 maximum specified in the settlement for mesothelioma claims not typed "extraordinary." See Brief for Respondents George Windsor et al. 5-6, n. 5 (citing 2 App. 461).

[16] The opinion dissenting in part does not find the class-certification issues dispositive—at least not yet, and would return the case to the Third Circuit for a second look. See post, at 630-631, 641. If certification issues were genuinely in doubt, however, the jurisdictional issues would loom larger. Concerning objectors' assertions that exposure-only claimants do not satisfy the $50,000 amount-in-controversy and may have no currently ripe claim, see Metro-North Commuter R. Co. v. Buckley, ante, p. 424 (Federal Employers' Liability Act, 35 Stat. 65, as amended, 45 U. S. C. § 51 et seq., interpreted in light of common-law principles, does not permit "exposure-only" railworker to recover for negligent infliction of emotional distress or lump-sum damages for costs of medical monitoring).

[17] Portions of the opinion dissenting in part appear to assume that settlement counts only one way—in favor of certification. See post, at 629, 630, 641. But see post, at 635. To the extent that is the dissent's meaning, we disagree. Settlement, though a relevant factor, does not inevitably signal that class-action certification should be granted more readily than it would be were the case to be litigated. For reasons the Third Circuit aired, see 83 F. 3d 610, 626-635 (1996), proposed settlement classes sometimes warrant more, not less, caution on the question of certification.

[18] We do not inspect and set aside for insufficient evidence District Court findings of fact. Cf. post, at 633, 637-638. Rather, we focus on the requirements of Rule 23, and endeavor to explain why those requirements cannot be met for a class so enormously diverse and problematic as the one the District Court certified.

[19] In this respect, the predominance requirement of Rule 23(b)(3) is similar to the requirement of Rule 23(a)(3) that "claims or defenses" of the named representatives must be "typical of the claims or defenses of the class." The words "claims or defenses" in this context—just as in the context of Rule 24(b)(2) governing permissive intervention—"manifestly refer to the kinds of claims or defenses that can be raised in courts of law as part of an actual or impending law suit." Diamond v. Charles, 476 U. S. 54, 76-77 (1986) (O'Connor, J., concurring in part and concurring in judgment).

[20] This case, we note, involves no "limited fund" capable of supporting class treatment under Rule 23(b)(1)(B), which does not have a predominance requirement. See Georgine v. Amchem Products, Inc., 157 F. R. D. 246, 318 (ED Pa. 1994); see also id., at 291, and n. 40. The settling parties sought to proceed exclusively under Rule 23(b)(3).

[21] The adequacy-of-representation requirement "tend[s] to merge" with the commonality and typicality criteria of Rule 23(a), which "serve as guideposts for determining whether . . . maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence." General Telephone Co. of Southwest v. Falcon, 457 U. S. 147, 157, n. 13 (1982). The adequacy heading also factors in competency and conflicts of class counsel. See id., at 157— 158, n. 13. Like the Third Circuit, we decline to address adequacy-ofcounsel issues discretely in light of our conclusions that common questions of law or fact do not predominate and that the named plaintiffs cannot adequately represent the interests of this enormous class.

[22] The opinion dissenting in part is a forceful statement of that argument.

[1429] Miguel Estrada, Washington, DC, for Petitioners.

Barry Barnett, Dallas, TX, for Respondents.

Sheron Korpus, Kasowitz, Benson, Torres & Friedman LLP, New York, NY, Miguel A. Estrada, Counsel of Record, Mark A. Perry, Scott P. Martin, Gibson, Dunn & Crutcher LLP, Washington, DC, for Petitioners.

Barry Barnett, Counsel of Record, Daniel H. Charest, Susman Godfrey L.L.P., Dallas, TX, Anthony J. Bolognese, Joshua H. Grabar, Bolognese & Assocs., LLC, Philadelphia, PA, Samuel D. Heins, Vincent J. Esades, David Woodward, Heins Mills & Olson, P.L.C., Minneapolis, MN, Joseph Goldberg, Freedman, Boyd, Hollander, Goldberg, Urias & Ward, P.A., Albuquerque, NM, for Respondents.

Justice SCALIA delivered the opinion of the Court.

The District Court and the Court of Appeals approved certification of a class of more than 2 million current and former Comcast subscribers who seek damages [1430] for alleged violations of the federal antitrust laws. We consider whether certification was appropriate under Federal Rule of Civil Procedure 23(b)(3).

I

Comcast Corporation and its subsidiaries, petitioners here, provide cable-television services to residential and commercial customers. From 1998 to 2007, petitioners engaged in a series of transactions that the parties have described as "clustering," a strategy of concentrating operations within a particular region. The region at issue here, which the parties have referred to as the Philadelphia "cluster" or the Philadelphia "Designated Market Area" (DMA), includes 16 counties located in Pennsylvania, Delaware, and New Jersey.^[1] Petitioners pursued their clustering strategy by acquiring competitor cable providers in the region and swapping their own systems outside the region for competitor systems located in the region. For instance, in 2001, petitioners obtained Adelphia Communications' cable systems in the Philadelphia DMA, along with its 464,000 subscribers; in exchange, petitioners sold to Adelphia their systems in Palm Beach, Florida, and Los Angeles, California. As a result of nine clustering transactions, petitioners' share of subscribers in the region allegedly increased from 23.9 percent in 1998 to 69.5 percent in 2007. See 264 F.R.D. 150, 156, n. 8, 160 (E.D.Pa.2010).

The named plaintiffs, respondents here, are subscribers to Comcast's cable-television services. They filed a class-action antitrust suit against petitioners, claiming that petitioners entered into unlawful swap agreements, in violation of § 1 of the Sherman Act, and monopolized or attempted to monopolize services in the cluster, in violation of § 2. Ch. 647, 26 Stat. 209, as amended, 15 U.S.C. §§ 1, 2. Petitioners' clustering scheme, respondents contended, harmed subscribers in the Philadelphia cluster by eliminating competition and holding prices for cable services above competitive levels.

Respondents sought to certify a class under Federal Rule of Civil Procedure 23(b)(3). That provision permits certification only if "the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members." The District Court held, and it is uncontested here, that to meet the predominance requirement respondents had to show (1) that the existence of individual injury resulting from the alleged antitrust violation (referred to as "antitrust impact") was "capable of proof at trial through evidence that [was] common to the class rather than individual to its members"; and (2) that the damages resulting from that injury were measurable "on a class-wide basis" through use of a "common methodology." 264 F.R.D., at 154.^[2]

Respondents proposed four theories of antitrust impact: First, Comcast's clustering made it profitable for Comcast to withhold local sports programming from its competitors, resulting in decreased market penetration by direct broadcast satellite providers. Second, Comcast's activities reduced the level of competition from "overbuilders," [1431] companies that build competing cable networks in areas where an incumbent cable company already operates. Third, Comcast reduced the level of "benchmark" competition on which cable customers rely to compare prices. Fourth, clustering increased Comcast's bargaining power relative to content providers. Each of these forms of impact, respondents alleged, increased cable subscription rates throughout the Philadelphia DMA.

The District Court accepted the overbuilder theory of antitrust impact as capable of classwide proof and rejected the rest. Id., at 165, 174, 178, 181. Accordingly, in its certification order, the District Court limited respondents' "proof of antitrust impact" to "the theory that Comcast engaged in anticompetitive clustering conduct, the effect of which was to deter the entry of overbuilders in the Philadelphia DMA." App. to Pet. for Cert. 192a-193a.^[3]

The District Court further found that the damages resulting from overbuilder-deterrence impact could be calculated on a classwide basis. To establish such damages, respondents had relied solely on the testimony of Dr. James McClave. Dr. McClave designed a regression model comparing actual cable prices in the Philadelphia DMA with hypothetical prices that would have prevailed but for petitioners' allegedly anticompetitive activities. The model calculated damages of $875,576,662 for the entire class. App. 1388a (sealed). As Dr. McClave acknowledged, however, the model did not isolate damages resulting from any one theory of antitrust impact. Id., at 189a-190a. The District Court nevertheless certified the class.

A divided panel of the Court of Appeals affirmed. On appeal, petitioners contended the class was improperly certified because the model, among other shortcomings, failed to attribute damages resulting from overbuilder deterrence, the only theory of injury remaining in the case. The court refused to consider the argument because, in its view, such an "attac[k] on the merits of the methodology [had] no place in the class certification inquiry." 655 F.3d 182, 207 (C.A.3 2011). The court emphasized that, "[a]t the class certification stage," respondents were not required to "tie each theory of antitrust impact to an exact calculation of damages." Id., at 206. According to the court, it had "not reached the stage of determining on the merits whether the methodology is a just and reasonable inference or speculative." Ibid. Rather, the court said, respondents must "assure us that if they can prove antitrust impact, the resulting damages are capable of measurement and will not require labyrinthine individual calculations." Ibid. In the court's view, that burden was met because respondents' model calculated "supra-competitive prices regardless of the type of anticompetitive conduct." Id., at 205.

We granted certiorari. 567 U.S. ___, 133 S.Ct. 24, 183 L.Ed.2d 673 (2012).^[4]

[1432] II

The class action is "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Califano v. Yamasaki, 442 U.S. 682, 700-701, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). To come within the exception, a party seeking to maintain a class action "must affirmatively demonstrate his compliance" with Rule 23. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, ___, 131 S.Ct. 2541, 2551-2552, 180 L.Ed.2d 374 (2011). The Rule "does not set forth a mere pleading standard." Ibid. Rather, a party must not only "be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact," typicality of claims or defenses, and adequacy of representation, as required by Rule 23(a). Ibid. The party must also satisfy through evidentiary proof at least one of the provisions of Rule 23(b). The provision at issue here is Rule 23(b)(3), which requires a court to find that "the questions of law or fact common to class members predominate over any questions affecting only individual members."

Repeatedly, we have emphasized that it "`may be necessary for the court to probe behind the pleadings before coming to rest on the certification question,' and that certification is proper only if `the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.'" Ibid. (quoting General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 160-161, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)). Such an analysis will frequently entail "overlap with the merits of the plaintiff's underlying claim." 564 U.S., at ___, 131 S.Ct., at 2551. That is so because the "`class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'" Ibid. (quoting Falcon, supra, at 160, 102 S.Ct. 2364).

The same analytical principles govern Rule 23(b). If anything, Rule 23(b)(3)'s predominance criterion is even more demanding than Rule 23(a). Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623-624, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). Rule 23(b)(3), as an "`adventuresome innovation,'" is designed for situations "`in which "class-action treatment is not as clearly called for."'" Wal-Mart, supra, at ___, 131 S.Ct., at 2558 (quoting Amchem, 521 U.S., at 614-615, 117 S.Ct. 2231). That explains Congress's addition of procedural safeguards for (b)(3) class members beyond those provided for (b)(1) or (b)(2) class members (e.g., an opportunity to opt out), and the court's duty to take a "`close look'" at whether common questions predominate over individual ones. Id., at 615, 117 S.Ct. 2231.

III

Respondents' class action was improperly certified under Rule 23(b)(3). By refusing to entertain arguments against respondents' damages model that bore on the propriety of class certification, [1433] simply because those arguments would also be pertinent to the merits determination, the Court of Appeals ran afoul of our precedents requiring precisely that inquiry. And it is clear that, under the proper standard for evaluating certification, respondents' model falls far short of establishing that damages are capable of measurement on a classwide basis. Without presenting another methodology, respondents cannot show Rule 23(b)(3) predominance: Questions of individual damage calculations will inevitably overwhelm questions common to the class. This case thus turns on the straightforward application of class-certification principles; it provides no occasion for the dissent's extended discussion, post, at 1437-1441 (GINSBURG and BREYER, JJ., dissenting), of substantive antitrust law.

A

We start with an unremarkable premise. If respondents prevail on their claims, they would be entitled only to damages resulting from reduced overbuilder competition, since that is the only theory of antitrust impact accepted for class-action treatment by the District Court. It follows that a model purporting to serve as evidence of damages in this class action must measure only those damages attributable to that theory. If the model does not even attempt to do that, it cannot possibly establish that damages are susceptible of measurement across the entire class for purposes of Rule 23(b)(3). Calculations need not be exact, see Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 563, 51 S.Ct. 248, 75 L.Ed. 544 (1931), but at the class-certification stage (as at trial), any model supporting a "plaintiff's damages case must be consistent with its liability case, particularly with respect to the alleged anticompetitive effect of the violation." ABA Section of Antitrust Law, Proving Antitrust Damages: Legal and Economic Issues 57, 62 (2d ed. 2010); see, e.g., Image Tech. Servs. v. Eastman Kodak Co., 125 F.3d 1195, 1224 (C.A.9 1997). And for purposes of Rule 23, courts must conduct a "`rigorous analysis'" to determine whether that is so. Wal-Mart, supra, at ___, 131 S.Ct., at 2551-2552.

The District Court and the Court of Appeals saw no need for respondents to "tie each theory of antitrust impact" to a calculation of damages. 655 F.3d, at 206. That, they said, would involve consideration of the "merits" having "no place in the class certification inquiry." Id., at 206-207. That reasoning flatly contradicts our cases requiring a determination that Rule 23 is satisfied, even when that requires inquiry into the merits of the claim. Wal-Mart, supra, at ___, and n. 6, 131 S.Ct., at 2551-2552, and n. 6. The Court of Appeals simply concluded that respondents "provided a method to measure and quantify damages on a classwide basis," finding it unnecessary to decide "whether the methodology [was] a just and reasonable inference or speculative." 655 F.3d, at 206. Under that logic, at the class-certification stage any method of measurement is acceptable so long as it can be applied classwide, no matter how arbitrary the measurements may be. Such a proposition would reduce Rule 23(b)(3)'s predominance requirement to a nullity.

B

There is no question that the model failed to measure damages resulting from the particular antitrust injury on which petitioners' liability in this action is premised.^[5] The scheme devised by respondents' [1434] expert, Dr. McClave, sought to establish a "but for" baseline — a figure that would show what the competitive prices would have been if there had been no antitrust violations. Damages would then be determined by comparing to that baseline what the actual prices were during the charged period. The "but for" figure was calculated, however, by assuming a market that contained none of the four distortions that respondents attributed to petitioners' actions. In other words, the model assumed the validity of all four theories of antitrust impact initially advanced by respondents: decreased penetration by satellite providers, overbuilder deterrence, lack of benchmark competition, and increased bargaining power. At the evidentiary hearing, Dr. McClave expressly admitted that the model calculated damages resulting from "the alleged anticompetitive conduct as a whole" and did not attribute damages to any one particular theory of anticompetitive impact. App. 189a-190a, 208a.

This methodology might have been sound, and might have produced commonality of damages, if all four of those alleged distortions remained in the case. But as Judge Jordan's partial dissent pointed out:

"[B]ecause the only surviving theory of antitrust impact is that clustering reduced overbuilding, for Dr. McClave's comparison to be relevant, his benchmark counties must reflect the conditions that would have prevailed in the Philadelphia DMA but for the alleged reduction in overbuilding. In all respects unrelated to reduced overbuilding, the benchmark counties should reflect the actual conditions in the Philadelphia DMA, or else the model will identify `damages' that are not the result of reduced overbuilding, or, in other words, that are not the certain result of the wrong." 655 F.3d, at 216 (internal quotation marks omitted).

The majority's only response to this was that "[a]t the class certification stage we do not require that Plaintiffs tie each theory of antitrust impact to an exact calculation of damages, but instead that they assure us that if they can prove antitrust impact, the resulting damages are capable of measurement and will not require labyrinthine individual calculations." Id., at 206. But such assurance is not provided by a methodology that identifies damages that are not the result of the wrong. For all we know, cable subscribers in Gloucester County may have been overcharged because of petitioners' alleged elimination of satellite competition (a theory of liability that is not capable of classwide proof); while subscribers in Camden County may have paid elevated prices because of petitioners' increased bargaining power vis-à-vis content providers (another theory that is not capable of classwide proof); while yet other subscribers in Montgomery County may have paid rates produced by the combined effects of multiple forms of alleged antitrust harm; and so on. The permutations involving four theories of liability [1435] and 2 million subscribers located in 16 counties are nearly endless.

In light of the model's inability to bridge the differences between supra-competitive prices in general and supra-competitive prices attributable to the deterrence of overbuilding, Rule 23(b)(3) cannot authorize treating subscribers within the Philadelphia cluster as members of a single class.^[6] Prices whose level above what an expert deems "competitive" has been caused by factors unrelated to an accepted theory of antitrust harm are not "anticompetitive" in any sense relevant here. "The first step in a damages study is the translation of the legal theory of the harmful event into an analysis of the economic impact of that event." Federal Judicial Center, Reference Manual on Scientific Evidence 432 (3d ed. 2011) (emphasis added). The District Court and the Court of Appeals ignored that first step entirely.

The judgment of the Court of Appeals for the Third Circuit is reversed.

It is so ordered.

Justice GINSBURG and Justice BREYER, with whom Justice SOTOMAYOR and Justice KAGAN join, dissenting.

Today the Court reaches out to decide a case hardly fit for our consideration. On both procedural and substantive grounds, we dissent.

I

This case comes to the Court infected by our misguided reformulation of the question presented. For that reason alone, we would dismiss the writ of certiorari as improvidently granted.

Comcast sought review of the following question: "[W]hether a district court may certify a class action without resolving `merits arguments' that bear on [Federal Rule of Civil Procedure] 23's prerequisites for certification, including whether purportedly common issues predominate over individual ones under Rule 23(b)(3)." Pet. for Cert. i. We granted review of a different question: "Whether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis." 567 U.S. ___, 133 S.Ct. 24, 183 L.Ed.2d 673 (2012) (emphasis added).

Our rephrasing shifted the focus of the dispute from the District Court's Rule 23(b)(3) analysis to its attention (or lack thereof) to the admissibility of expert testimony. The parties, responsively, devoted much of their briefing to the question whether the standards for admissibility of expert evidence set out in Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), apply in class certification proceedings. See Brief for Petitioners 35-49; Brief for Respondents 24-37. Indeed, respondents confirmed at oral argument that they understood our rewritten question to center on admissibility, not Rule 23(b)(3). See, e.g., Tr. of Oral Arg. 25.

As it turns out, our reformulated question was inapt. To preserve a claim of error in the admission of evidence, a party must timely object to or move to strike the evidence. Fed. Rule Evid. 103(a)(1). In [1436] the months preceding the District Court's class certification order, Comcast did not object to the admission of Dr. McClave's damages model under Rule 702 or Daubert. Nor did Comcast move to strike his testimony and expert report. Consequently, Comcast forfeited any objection to the admission of Dr. McClave's model at the certification stage. At this late date, Comcast may no longer argue that respondents' damages evidence was inadmissible.

Comcast's forfeiture of the question on which we granted review is reason enough to dismiss the writ as improvidently granted. See Rogers v. United States, 522 U.S. 252, 259, 118 S.Ct. 673, 139 L.Ed.2d 686 (1998) (O'Connor, J., concurring in result) ("[W]e ought not to decide the question if it has not been cleanly presented."); The Monrosa v. Carbon Black Export, Inc., 359 U.S. 180, 183, 79 S.Ct. 710, 3 L.Ed.2d 723 (1959) (dismissal appropriate in light of "circumstances ... not fully apprehended at the time certiorari was granted" (internal quotation marks omitted)). The Court, however, elects to evaluate whether respondents "failed to show that the case is susceptible to awarding damages on a class-wide basis." Ante, at 1431, n. 4 (internal quotation marks omitted). To justify this second revision of the question presented, the Court observes that Comcast "argued below, and continue[s] to argue here, that certification was improper because respondents had failed to establish that damages could be measured on a classwide basis." Ibid. And so Comcast did, in addition to endeavoring to address the question on which we granted review. By treating the first part of our reformulated question as though it did not exist, the Court is hardly fair to respondents.

Abandoning the question we instructed the parties to brief does "not reflect well on the processes of the Court." Redrup v. New York, 386 U.S. 767, 772, 87 S.Ct. 1414, 18 L.Ed.2d 515 (1967) (Harlan, J., dissenting). Taking their cue from our order, respondents did not train their energies on defending the District Court's finding of predominance in their briefing or at oral argument. The Court's newly revised question, focused on predominance, phrased only after briefing was done, left respondents without an unclouded opportunity to air the issue the Court today decides against them. And by resolving a complex and fact-intensive question without the benefit of full briefing, the Court invites the error into which it has fallen. See infra, at 1437-1441.

II

While the Court's decision to review the merits of the District Court's certification order is both unwise and unfair to respondents, the opinion breaks no new ground on the standard for certifying a class action under Federal Rule of Civil Procedure 23(b)(3). In particular, the decision should not be read to require, as a prerequisite to certification, that damages attributable to a class-wide injury be measurable "`on a class-wide basis.'" See ante, at 1431-1432 (acknowledging Court's dependence on the absence of contest on the matter in this case); Tr. of Oral Arg. 41.

To gain class-action certification under Rule 23(b)(3), the named plaintiff must demonstrate, and the District Court must find, "that the questions of law or fact common to class members predominate over any questions affecting only individual members." This predominance requirement is meant to "tes[t] whether proposed classes are sufficiently cohesive to warrant adjudication by representation," Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), but it scarcely demands commonality as to all questions. See 7AA C. Wright, A. Miller, & M. Kane, Federal Practice [1437] and Procedure § 1778, p. 121 (3d ed. 2005) (hereinafter Wright, Miller, & Kane). In particular, when adjudication of questions of liability common to the class will achieve economies of time and expense, the predominance standard is generally satisfied even if damages are not provable in the aggregate. See Advisory Committee's 1966 Notes on Fed. Rule Civ. Proc. 23, 28 U.S.C.App., p. 141 ("[A] fraud perpetrated on numerous persons by the use of similar misrepresentations may be an appealing situation for a class action, and it may remain so despite the need, if liability is found, for separate determination of the damages suffered by individuals within the class."); 7AA Wright, Miller, & Kane § 1781, at 235-237.^[7]

Recognition that individual damages calculations do not preclude class certification under Rule 23(b)(3) is well nigh universal. See 2 W. Rubenstein, Newberg on Class Actions § 4:54, p. 205 (5th ed. 2012) (ordinarily, "individual damage[s] calculations should not scuttle class certification under Rule 23(b)(3)"). Legions of appellate decisions across a range of substantive claims are illustrative. See, e.g., Tardiff v. Knox County, 365 F.3d 1, 6 (C.A.1 2004) (Fourth Amendment); Chiang v. Veneman, 385 F.3d 256, 273 (C.A.3 2004) (Equal Credit Opportunity Act); Bertulli v. Independent Assn. of Continental Pilots, 242 F.3d 290, 298 (C.A.5 2001) (Labor-Management Reporting and Disclosure Act and Railway Labor Act); Beattie v. CenturyTel, Inc., 511 F.3d 554, 564-566 (C.A.6 2007) (Federal Communications Act); Arreola v. Godinez, 546 F.3d 788, 801 (C.A.7 2008) (Eighth Amendment). Antitrust cases, which typically involve common allegations of antitrust violation, antitrust impact, and the fact of damages, are classic examples. See In re Visa Check/MasterMoney Antitrust Litigation, 280 F.3d 124, 139-140 (C.A.2 2001). See also 2A P. Areeda, H. Hovenkamp, R. Blair, & C. Durrance, Antitrust Law ¶ 331, p. 56 (3d ed. 2007) (hereinafter Areeda & Hovenkamp); 6 A. Conte & H. Newberg, Newberg on Class Actions § 18:27, p. 91 (4th ed. 2002). As this Court has rightly observed, "[p]redominance is a test readily met" in actions alleging "violations of the antitrust laws." Amchem, 521 U.S., at 625, 117 S.Ct. 2231.

The oddity of this case, in which the need to prove damages on a classwide basis through a common methodology was never challenged by respondents, see Brief for Plaintiffs-Appellees in No. 10-2865(CA3), pp. 39-40, is a further reason to dismiss the writ as improvidently granted. The Court's ruling is good for this day and case only. In the mine run of cases, it remains the "black letter rule" that a class may obtain certification under Rule 23(b)(3) when liability questions common to the class predominate over damages questions unique to class members. 2 Rubenstein, supra, § 4:54, at 208.

III

Incautiously entering the fray at this interlocutory stage, the Court sets forth a profoundly mistaken view of antitrust law. And in doing so, it relies on its own version of the facts, a version inconsistent with factual findings made by the District Court and affirmed by the Court of Appeals.

A

To understand the antitrust problem, some (simplified) background discussion is [1438] necessary. Plaintiffs below, respondents here, alleged that Comcast violated §§ 1 and 2 of the Sherman Act. See 15 U.S.C. §§ 1, 2. For present purposes, the § 2 claim provides the better illustration. A firm is guilty of monopolization under § 2 if the plaintiff proves (1) "the possession of monopoly power in the relevant market" and (2) "the willful acquisition or maintenance of that power[,] as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." United States v. Grinnell Corp., 384 U.S. 563, 570-571, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966). A private plaintiff seeking damages must also show that (3) the monopolization caused "injur[y]." 15 U.S.C. § 15. We have said that antitrust injuries must be "of the type the antitrust laws were intended to prevent and that flo[w] from that which makes defendants' acts unlawful." Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990) (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977)). See 2A Areeda & Hovenkamp ¶ 391a, at 320 (To prove antitrust injury, "[a] private plaintiff must identify the economic rationale for a business practice's illegality under the antitrust laws and show that its harm flows from whatever it is that makes the practice unlawful.").

As plaintiffs below, respondents attempted to meet these requirements by showing that (1) Comcast obtained a 60% or greater share of the Philadelphia market, and that its share provides it with monopoly power; (2) Comcast acquired its share through exclusionary conduct consisting of a series of mergers with competitors and "swaps" of customers and locations; and (3) Comcast consequently injured respondents by charging them supra-competitive prices.

If, as respondents contend, Philadelphia is a separate well-defined market, and the alleged exclusionary conduct permitted Comcast to obtain a market share of at least 60%, then proving the § 2 violation may not be arduous. As a point of comparison, the government considers a market shared by four firms, each of which has 25% market share, to be "highly concentrated." Dept. of Justice & Federal Trade Commission, Horizontal Merger Guidelines § 5.3, p. 19 (2010). A market, such as the one alleged by respondents, where one firm controls 60% is far worse. See id., § 5.3, at 18-19, and n. 9 (using a concentration index that determines a market's concentration level by summing the squares of each firm's market share, one firm with 100% yielding 10,000, five firms with 20% each yielding 2000, while a market where one firm accounts for 60% yields an index number of at least 3,600). The Guidelines, and any standard antitrust treatise, explain why firms in highly concentrated markets normally have the power to raise prices significantly above competitive levels. See, e.g., 2B Areeda & Hovenkamp ¶ 503, at 115.

B

So far there is agreement. But consider the last matter respondents must prove: Can they show that Comcast injured them by charging higher prices? After all, a firm with monopoly power will not necessarily exercise that power by charging higher prices. It could instead act less competitively in other ways, such as by leading the quiet life. See J. Hicks, Annual Survey of Economic Theory: The Theory of Monopoly, 3 Econometrica 1, 8 (1935) ("The best of all monopoly profits is a quiet life.").

It is at this point that Dr. McClave's model enters the scene. His model first selects a group of comparable outside-Philadelphia [1439] "benchmark" counties, where Comcast enjoyed a lower market share (and where satellite broadcasting accounted for more of the local business). Using multiple regression analysis, McClave's model measures the effect of the anticompetitive conduct by comparing the class counties to the benchmark counties. The model concludes that the prices Philadelphia area consumers would have paid had the Philadelphia counties shared the properties of the benchmark counties (including a diminished Comcast market share), would have been 13.1% lower than those they actually paid. Thus, the model provides evidence that Comcast's anticompetitive conduct, which led to a 60% market share, caused the class to suffer injuriously higher prices.

C

1

The special antitrust-related difficulty present here stems from the manner in which respondents attempted to prove their antitrust injuries. They proffered four "non-exclusive mechanisms" that allegedly "cause[d] the high prices" in the Philadelphia area. App. 403a. Those four theories posit that (1) due to Comcast's acquisitions of competitors, customers found it more difficult to compare prices; (2) one set of potential competitors, namely Direct Broadcast Satellite companies, found it more difficult to obtain access to local sports broadcasts and consequently decided not to enter the Philadelphia market; (3) Comcast's ability to obtain programming material at lower prices permitted it to raise prices; and (4) a number of potential competitors (called "overbuilders"), whose presence in the market would have limited Comcast's power to raise prices, were ready to enter some parts of the market but decided not to do so in light of Comcast's anticompetitive conduct. 264 F.R.D. 150, 161-162 (E.D.Pa.2010).

For reasons not here relevant, the District Court found the first three theories inapplicable and limited the liability-phase proof to the "overbuilder" theory. See App. to Pet. for Cert. 192a-193a. It then asked the parties to brief whether doing so had any impact on the viability of McClave's model as a measure of classwide damages. See 264 F.R.D., at 190. After considering the parties' arguments, the District Court found that striking the three theories "does not impeach Dr. McClave's damages model" because "[a]ny anticompetitive conduct is reflected in the [higher Philadelphia] price [which Dr. McClave's model determines], not in the [the model's] selection of the comparison counties, [i.e., the lower-price `benchmark counties' with which the Philadelphia area prices were compared]." Id., at 190-191. The court explained that "whether or not we accepted all [four] ... theories ... is inapposite to Dr. McClave's methods of choosing benchmarks." Ibid. On appeal, the Third Circuit held that this finding was not an abuse of discretion. 655 F.3d 182, 207 (2011).

2

The Court, however, concludes that "the model failed to measure damages resulting from the particular antitrust injury on which petitioners' liability in this action is premised." Ante, at 1433. To reach this conclusion the Court must consider fact-based matters, namely what this econometric multiple-regression model is about, what it proves, and how it does so. And it must overturn two lower courts' related factual findings to the contrary.

We are normally "reluctant to disturb findings of fact in which two courts below have concurred." United States v. Doe, 465 U.S. 605, 614, 104 S.Ct. 1237, 79 [1440] L.Ed.2d 552 (1984). See also United States v. Virginia, 518 U.S. 515, 589, n. 5, 116 S.Ct. 2264, 135 L.Ed.2d 735 (1996) (SCALIA, J., dissenting) (noting "our well-settled rule that we will not `undertake to review concurrent findings of fact by two courts below in the absence of a very obvious and exceptional showing of error'" (quoting Graver Tank & Mfg. Co. v. Linde Air Products Co., 336 U.S. 271, 275, 69 S.Ct. 535, 93 L.Ed. 672 (1949))). Here, the District Court found McClave's econometric model capable of measuring damages on a classwide basis, even after striking three of the injury theories. 264 F.R.D., at 190-191. Contrary to the Court's characterization, see ante, at 1433-1434, n. 5, this was not a legal conclusion about what the model proved; it was a factual finding about how the model worked. Under our typical practice, we should leave that finding alone.

In any event, as far as we can tell, the lower courts were right. On the basis of the record as we understand it, the District Court did not abuse its discretion in finding that McClave's model could measure damages suffered by the class — even if the damages were limited to those caused by deterred overbuilding. That is because respondents alleged that Comcast's anticompetitive conduct increased Comcast's market share (and market power) by deterring potential entrants, in particular, overbuilders, from entering the Philadelphia area market. See App. 43a-66a. By showing that this was so, respondents' proof tends to show the same in respect to other entrants. The overbuilders' failure to enter deprives the market of the price discipline that their entry would have provided in other parts via threat of the overbuilders' expansion or that of others potentially led on by their example. Indeed, in the District Court, Comcast argued that the three other theories, i.e., the three rejected theories, had no impact on prices. See 264 F.R.D., at 166, 176, 180-181. If Comcast was right, then the damages McClave's model found must have stemmed exclusively from conduct that deterred new entry, say from "overbuilders." Not surprisingly, the Court offers no support at all for its contrary conclusion, namely, that the District Court's finding was "`obvious[ly] and exceptional[ly]' erroneous." Ante, at 1433-1434, n. 5 (quoting Virginia, 518 U.S., at 589, n. 5, 116 S.Ct. 2264 (SCALIA, J., dissenting)).

We are particularly concerned about the matter because the Court, in reaching its contrary conclusion, makes broad statements about antitrust law that it could not mean to apply in other cases. The Court begins with what it calls an "unremarkable premise" that respondents could be "entitled only to damages resulting from reduced overbuilder competition." Ante, at 1433. In most § 2 cases, however, the Court's starting place would seem remarkable, not "unremarkable."

Suppose in a different case a plaintiff were to prove that Widget, Inc. has obtained, through anticompetitive means, a 90% share of the California widget market. Suppose the plaintiff also proves that the two small remaining firms — one in Ukiah, the other in San Diego — lack the capacity to expand their widget output to the point where that possibility could deter Widget, Inc. from raising its prices. Suppose further that the plaintiff introduces a model that shows California widget prices are now twice those in every other State, which, the model concludes is (after accounting for other possible reasons) the result of lack of competition in the California widget market. Why would a court hearing that case restrict damages solely to customers in the vicinity of Ukiah and San Diego?

[1441] Like the model in this example, Dr. McClave's model does not purport to show precisely how Comcast's conduct led to higher prices in the Philadelphia area. It simply shows that Comcast's conduct brought about higher prices. And it measures the amount of subsequent harm.

* * *

Because the parties did not fully argue the question the Court now answers, all Members of the Court may lack a complete understanding of the model or the meaning of related statements in the record. The need for focused argument is particularly strong here where, as we have said, the underlying considerations are detailed, technical, and fact-based. The Court departs from our ordinary practice, risks inaccurate judicial decisionmaking, and is unfair to respondents and the courts below. For these reasons, we would not disturb the Court of Appeals' judgment and, instead, would dismiss the writ as improvidently granted.

[1] A "Designated Market Area" is a term used by Nielsen Media Research to define a broadcast-television market. Strictly speaking, the Philadelphia DMA comprises 18 counties, not 16.

[2] Respondents sought certification for the following class: "All cable television customers who subscribe or subscribed at any times since December 1, 1999, to the present to video programming services (other than solely to basic cable services) from Comcast, or any of its subsidiaries or affiliates in Comcast's Philadelphia cluster." App. 35a.

[3] The District Court did not hold that the three alternative theories of liability failed to establish antitrust impact, but merely that those theories could not be determined in a manner common to all the class plaintiffs. The other theories of liability may well be available for the plaintiffs to pursue as individual actions. Any contention that the plaintiffs should be allowed to recover damages attributable to all four theories in this class action would erroneously suggest one of two things — either that the plaintiffs may also recover such damages in individual actions or that they are precluded from asserting those theories in individual actions.

[4] The question presented reads: "Whether a district court may certify a class action without resolving whether the plaintiff class had introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis." 567 U.S., at ___, 133 S.Ct. 24. Respondents contend that petitioners forfeited their ability to answer this question in the negative because they did not make an objection to the admission of Dr. McClave's testimony under the Federal Rules of Evidence. See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Such a forfeit would make it impossible for petitioners to argue that Dr. McClave's testimony was not "admissible evidence" under the Rules; but it does not make it impossible for them to argue that the evidence failed "to show that the case is susceptible to awarding damages on a class-wide basis." Petitioners argued below, and continue to argue here, that certification was improper because respondents had failed to establish that damages could be measured on a classwide basis. That is the question we address here.

[5] The dissent is of the view that what an econometric model proves is a "question of fact" on which we will not "undertake to review concurrent findings ... by two courts below in the absence of a very obvious and exceptional showing of error." Post, at 1440 (quoting United States v. Virginia, 518 U.S. 515, 589, n. 5, 116 S.Ct. 2264, 135 L.Ed.2d 735 (1996) (SCALIA, J., dissenting) (internal quotation marks omitted)). To begin with, neither of the courts below found that the model established damages attributable to overbuilding alone. Second, while the data contained within an econometric model may well be "questions of fact" in the relevant sense, what those data prove is no more a question of fact than what our opinions hold. And finally, even if it were a question of fact, concluding that the model here established damages attributable to overbuilding alone would be "obvious[ly] and exceptional[ly]" erroneous.

[6] We might add that even if the model had identified subscribers who paid more solely because of the deterrence of overbuilding, it still would not have established the requisite commonality of damages unless it plausibly showed that the extent of overbuilding (absent deterrence) would have been the same in all counties, or that the extent is irrelevant to effect upon ability to charge supra-competitive prices.

[7] A class may be divided into subclasses for adjudication of damages. Fed. Rule Civ. Proc. 23(c)(4)-(5). Or, at the outset, a class may be certified for liability purposes only, leaving individual damages calculations to subsequent proceedings. See 2 W. Rubenstein, Newberg on Class Actions § 4:54, pp. 206-208 (5th ed. 2012). Further, a certification order may be altered or amended as the case unfolds. Rule 23(c)(1)(C).

[412] ARGUED: Malcolm E. Wheeler, Wheeler Trigg O'Donnell LLP, Denver, Colorado, for Appellant. Jonathan D. Selbin, Lieff, Cabraser, Heimann & Bernstein, LLP, New York, New York, for Appellees. ON BRIEF: Malcolm E. Wheeler, Michael T. Williams, Galen D. Bellamy, Joel S. Neckers, Wheeler Trigg O'Donnell LLP, Denver, Colorado, F. Daniel Balmert, Anthony J. O'Malley, Vorys, Sater, Seymour and Pease LLP, Cleveland, Ohio, for Appellant. Jonathan D. Selbin, Jason L. Lichtman, Lieff, Cabraser, Heimann & Bernstein, LLP, New York, New York, for Appellees. John H. Beisner, Skadden, Arps, Slate, Meagher & Flom LLP, Washington, D.C., for Amicus Curiae.

Before: KENNEDY, MARTIN, and STRANCH, Circuit Judges.

OPINION

JANE B. STRANCH, Circuit Judge.

Whirlpool Corporation brings this interlocutory appeal of the district court's decision to certify an Ohio plaintiff liability class under Federal Rule of Civil Procedure 23(a) and (b)(3). The case involves multi-district litigation concerning alleged design defects in Whirlpool's Duet®, Duet HT®, Duet Sport®, and Duet Sport HT® front-load washing machines ("the Duets").^[1] Named plaintiffs Gina Glazer and Trina Allison alleged on behalf of the class that the Duets do not prevent or eliminate accumulating residue, which leads to the growth of mold and mildew in the machines, ruined laundry, and malodorous homes.

As certified, the liability class is comprised of current Ohio residents who purchased one of the specified Duets in Ohio primarily for personal, family, or household purposes and not for resale, and who bring legal claims for tortious breach of warranty, negligent design, and negligent failure to warn. Proof of damages is reserved for individual determination. Because the district court did not abuse its discretion in certifying the Ohio plaintiff liability class, we AFFIRM.

I. BACKGROUND

The named plaintiffs are Ohio residents. In 2005 Trina Allison purchased a Whirlpool Duet HT® washing machine. In 2006 Gina Glazer bought a Duet Sport® washing machine. Allison used high efficiency ("HE") detergent in her washing machine, while Glazer used a reduced amount of regular detergent. Within six to eight months after their purchases, the plaintiffs noticed the smell of mold or mildew emanating from the machines and from laundry washed in the machines. Allison [413] found mold growing on the sides of the detergent dispenser, and Glazer noticed mold growing on the rubber door seal. Although both plaintiffs allowed the machine doors to stand open as much as possible and also used ordinary household products to clean the parts of the machines they could reach, their efforts achieved only temporary relief from the pungent odors.

Allison contacted Whirlpool about the problem. A company representative told her to use the washer's monthly cleaning cycle, add an Affresh™ tablet to that cleaning cycle, and manually clean under the rubber door seal. Allison followed this advice, but when the problem persisted, she placed a service call. The technician who examined the washing machine advised Allison to leave the door open between laundry cycles to let the machine air-dry.

Glazer also complained to Whirlpool. A company representative advised her to switch to HE detergent and Glazer did so. Whirlpool's Use & Care Guide recommended adding bleach to the washer's cleaning cycle, but Glazer did not utilize the cleaning cycle or use bleach to clean her washing machine.

Allison and Glazer continued to experience a mold problem. Neither of them knew at the time of purchase that a Duet washer could develop mold or mildew inside the machine. They allege that, if this information had been disclosed to them, their purchase decisions would have been affected.

Whirlpool began selling the Duet® and Duet HT® front-load washing machines in 2002. These washers are built on the "Access" platform and are nearly identical, although certain models have functional or aesthetic differences. In 2006, Whirlpool began selling the smaller-capacity Duet Sport® and Duet Sport HT® front-load washing machines, which are built on the "Horizon" platform. These machines are also nearly identical, although some models have functional or aesthetic differences. The "Access" and "Horizon" platforms are nearly identical to each other. The two differences are that the "Access" platform is slightly larger than the "Horizon" and the "Access" is tilted a few degrees from the horizontal axis, while the "Horizon" is not.

In contrast to a top-load washing machine, a front-load washer contains a wash basket within a tub that rotates on a horizontal axis to create a tumbling mechanical wash action instead of the agitation characteristic of top-load machines. A front-load washing machine offers the consumer greater water and energy savings than a top-load machine because it needs less energy to heat water, it maintains lower temperatures during the wash, and the "tumbling" mechanical motion is more energy efficient than the "spinning" of a top-load machine. Front-load washing machines are designed for use with HE detergent. While all washing machines have the potential to develop some mold or mildew after a period of use, front-load machines promote mold or mildew more readily due to lower water levels, high moisture, and reduced ventilation.

In support of their motion for class certification, plaintiffs produced the report of an expert who opined that the common design defect in the Duets is their failure to clean or rinse their own components to remove residue consisting of dried suds, fabric softener, soil, lint, body oils, skin flakes, and hair. Bacteria and fungi feed on the residue, and their excretions produce offensive odors. Plaintiffs allege that the Duets fail to clean the back of the tub that holds the clothes basket, the aluminum bracket used to attach the clothes basket to the tub, the sump area, the [414] pump strainer and drain hose, the door gasket area, the air vent duct, and the detergent dispenser duct.

Plaintiffs' evidence shows that Whirlpool knew the design of its Access and Horizon platforms contributed to residue buildup resulting in rapid fungal and bacterial growth. As early as September 2003, Whirlpool began receiving two to three customer complaints each day about the problem. When Whirlpool representatives instructed consumers to lift up the rubber door gaskets on their machines, the common findings were deposits of water, detergent, and softener, along with mold or mildew. Service call reports confirmed problems around the rubber door gaskets, as well as residue deposits and black mold inside the drain hoses. Whirlpool also knew that numerous consumers complained of breathing difficulties after repair technicians scrubbed the Duets in their homes, releasing mold spores to the air.

In 2004 Whirlpool formed an internal team to analyze the problems and formulate a plan. In gathering information about the complaints, Whirlpool learned that the mold problem was not restricted to certain models or certain markets. Whirlpool also knew that mold growth could occur before the Duets were two to four years old, that traditional household cleaners were not effective treatments, and that consumer laundry habits and use of non-HE detergent might exacerbate the problem, but did not cause it. Whirlpool contemplated whether it should issue a warning to consumers about the mold problem. To avoid alarming consumers with words like "mold," "mildew," "fungi," and "bacteria," Whirlpool adopted the term "biofilm" in its public statements about mold complaints.

Later in 2004, Whirlpool engineers discussed the need to redesign the tub on the "Horizon" platform because soil and water pooling served as the nucleation site for mold and bacterial growth. Chemical analysis Whirlpool conducted showed that the composition of biofilm found in the "Horizon" and "Access" platforms was identical. Engineers determined that the "Access" platform's webbed tub structure was extremely prone to water and soil deposits, and the aluminum basket crossbar was extremely susceptible to corrosion from biofilm. Whirlpool found a number of design factors contributing to corrosion, including insufficient draining of water at the end of a cycle and water flowing backward after draining through the non-return valve between the tub and the drain pump. The company made certain design changes to later generations of Duets.

By 2005, Whirlpool unveiled a special cleaning cycle in the Duets, but the company was aware that the new cycle would not remove all residue deposits. Engineers remained concerned whether the cleaning cycle would be effective to control odor and whether the use of bleach in the cleaning cycle would increase corrosion of aluminum parts. By March 2006 Whirlpool acknowledged that consumers might notice black mold growing on the bellows or inside the detergent dispenser, and that laundry would smell musty if the machine was "heavily infected."

By late 2006, having received over 1.3 million calls at its customer care centers and having completed thousands of service calls nationwide, Whirlpool internally acknowledged its legal exposure, noting that it had already settled a class action concerning its Calypso machines, and that Maytag, another of Whirlpool's brands, had settled a class action concerning the Neptune washer.

At this point, Whirlpool decided to formulate a new cleaning product for all front-load washing machines, regardless of [415] make or model. Whirlpool expected the "revolutionary" product to produce a new revenue stream of $50 million to $195 million based on the assumption that fifty percent of the 14 million current front-load washer owners might be looking for a solution to an odor problem with their machines.

In September 2007 Whirlpool introduced to the market two new front-load washer cleaning products: Affresh™ tablets for washers in use from zero to twelve months, and Affresh™ tablets with six door seal cleaning cloths for machines in use more than twelve months. To encourage sales, the company placed samples of Affresh™ tablets in all new Whirlpool and Maytag HE washers. Whirlpool marketed Affresh™ as "THE solution to odor causing residue in HE washers." The company changed its Use and Care Guides for Whirlpool, Maytag, and Amana brands to advise consumers to use an Affresh™ tablet in the first cleaning cycle to remove manufacturing oil and grease. Whirlpool believed this advice would encourage consumers to use the cleaning cycle and Affresh™ tablets regularly, like teaching vehicle owners to change the oil in their cars. Service technicians and call centers were instructed to recommend the use of Affresh™ to consumers. But as plaintiff Allison learned from experience, even using Affresh™ tablets in the washer's special cleaning cycle did not cure the mold problem.

Whirlpool shipped 121,033 "Access" platform Duet washers to Ohio from 2002 through March 2009. Whirlpool shipped 41,904 "Horizon" platform Duet Sport washers to Ohio during the period 2006 through March 2009.

In the district court, Whirlpool opposed class certification primarily on the grounds that: the vast majority of Duet owners have not had a mold problem with their washing machines and the incidence of mold is actually rare; Whirlpool made dozens of changes between 2002 and 2009 to increase customer satisfaction and reduce service costs; washers owned by class members were built on different platforms, involve twenty-one different engineering models, spanning nine model years; and consumer laundry habits and experiences with the Duets are so diverse that even the two named plaintiffs do not present a common liability question. Whirlpool contended that numerous liability questions exist as to each of the legal claims, requiring individual proof of the elements of each claim by each consumer.

In support of its arguments, Whirlpool presented copies of its Use & Care Guides, various articles from Consumer Reports, deposition excerpts, affidavits from employees and satisfied Duet owners, expert reports, internal company documents, and photographs. Whirlpool also provided its data showing that the rate of consumer complaints about the mold problem was far less than the plaintiffs alleged. The company contends that its figures undercut the plaintiffs' assertion that thirty-five percent of Whirlpool customers complained about mold. Whirlpool requested permission to present live testimony at the class action certification hearing, but ultimately did not do so.

After reviewing the factual record and hearing the parties' oral arguments, the district court determined that the Rule 23(a) and (b)(3) prerequisites were met as to liability on plaintiffs' claims for tortious breach of warranty, negligent design, and negligent failure to warn. The court certified the following liability class:

All persons who are current residents of Ohio and purchased a Washing Machine (defined as Whirlpool Duet®, Duet HT®, and Duet Sport® Front-Loading Automatic Washers) for primarily personal, [416] family or household purposes, and not for resale, in Ohio, excluding (1) Whirlpool, any entity in which Whirlpool has a controlling interest, and its legal representatives, officers, directors, employees, assigns, and successors; (2) Washing Machines purchased through Whirlpool's Employee Purchase Program; (3) the Judge to whom this case is assigned, any member of the Judge's staff, and any member of the Judge's immediate family; (4) persons or entities who distribute or resell the Washing Machines; (5) government entities; and (6) claims for personal injury, wrongful death, and/or emotional distress.

Whirlpool appeals the district court's decision to certify this class.

II. ANALYSIS

A. Standard of Review

The district court has broad discretion to decide whether to certify a class. In re Am. Med. Sys., Inc., 75 F.3d 1069, 1079 (6th Cir.1996). We review class certification for an abuse of discretion. Pipefitters Local 636 Ins. Fund v. Blue Cross Blue Shield of Mich., 654 F.3d 618, 629 (6th Cir.2011). An abuse of discretion occurs if the district court relies on clearly erroneous findings of fact, applies the wrong legal standard, misapplies the correct legal standard when reaching a conclusion, or makes a clear error of judgment. Id.

B. The Class Action Determination

1. The requirements of Rule 23(a) and (b)(3)

To obtain class certification, the plaintiffs must show that "(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class." Fed.R.Civ.P. 23(a). Rule 23(a)'s requirements of numerosity, commonality, typicality, and adequate representation serve to limit class claims to those which are fairly encompassed within the claims of the named plaintiffs. Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___, 131 S.Ct. 2541, 2550, 180 L.Ed.2d 374 (2011).

The proposed class must also meet at least one of the three requirements listed in Rule 23(b). Id. at 2548; Sprague v. Gen. Motors Corp., 133 F.3d 388, 397 (6th Cir.1998) (en banc). The plaintiffs sought class certification under (b)(3), which requires a demonstration that questions of law or fact common to the class predominate over individual questions and that the class action is superior to other available methods to adjudicate the controversy fairly and efficiently. The plaintiffs had the burden to prove that the class certification prerequisites were met, In re Am. Med. Sys., Inc., 75 F.3d at 1079, and the plaintiffs, as class representatives, were required to establish that they possess the same interest and suffered the same injury as the class members they seek to represent. Dukes, 131 S.Ct. at 2550.

2. Eisen and consideration of the merits at the class certification stage

Class certification is appropriate if the court finds, after conducting a "rigorous analysis," that the requirements of Rule 23 have been met. Dukes, 131 S.Ct. at 2551; Daffin v. Ford Motor Co., 458 F.3d 549, 552 (6th Cir.2006). Ordinarily, this means that the class determination should be predicated on evidence the parties present concerning the maintainability of the class action. In re Am. Med. Sys., [417] Inc., 75 F.3d at 1079. "[S]ometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question," Gen. Tele. Co. of Southwest v. Falcon, 457 U.S. 147, 160, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982), and "rigorous analysis" may involve some overlap between the proof necessary for class certification and the proof required to establish the merits of the plaintiffs' underlying claims. Dukes, 131 S.Ct. at 2551. There is nothing unusual about "touching aspects of the merits in order to resolve preliminary matters ... [because doing so is] a familiar feature of litigation." Id. at 2552.

Like some other federal courts, this Court had ruled that a district judge need not consider the merits of a case when entertaining a class certification motion in light of the Supreme Court's statement in Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), that "nothing in either the language or history of Rule 23 ... gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action." See e.g., Beattie v. CenturyTel, Inc., 511 F.3d 554, 560 (6th Cir.2007) (quoting Eisen to hold that district court did not have to inquire into the merits of the suit to resolve Rule 23 issues). In Dukes, however, the Supreme Court clarified that courts may inquire preliminarily into the merits of a suit to determine if class certification is proper, although courts need not resolve all factual disputes on the merits before deciding if class certification is warranted. Dukes, 131 S.Ct. at 2551-52 & n. 6 ("To the extent the quoted statement [from Eisen] goes beyond the permissibility of a merits inquiry for any other pretrial purpose, it is the purest dictum and is contradicted by our other cases.").

We have indicated, both before and after Dukes, that Eisen "merely stand[s] for the proposition that ... the relative merits of the underlying dispute are to have no impact upon the determination of the propriety of the class action." Gooch v. Life Investors Ins. Co. of Am., 672 F.3d 402, 432 (6th Cir.2012) (quoting Thompson v. Cnty. of Medina, Ohio, 29 F.3d 238, 241 (6th Cir.1994)) (alteration in original) (internal quotation marks omitted). "[W]hether the class members will ultimately be successful in their claims is not a proper basis for reviewing a certification of a class action." Daffin, 458 F.3d at 552.

Other federal appellate decisions are in accord with the view of Supreme Court precedent articulated by this Court. For example, the Third Circuit held after Dukes that courts need not address at the class certification stage any merits inquiry that is unnecessary to the Rule 23 determination and that any findings made for class certification purposes do not bind the fact-finder on the merits. Behrend v. Comcast Corp., 655 F.3d 182, 190 (3d Cir. 2011). Behrend is consistent with the Third Circuit's pre-Dukes jurisprudence holding that "Eisen is best understood to preclude only a merits inquiry that is not necessary to determine a Rule 23 requirement" and noting that other courts of appeal had agreed. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 317 & n. 17 (3d Cir.2008) (and cases cited therein). Similarly, the Fourth Circuit had held before Dukes that "Eisen simply restricts a court from expanding the Rule 23 certification analysis to include consideration of whether the proposed class is likely to prevail ultimately on the merits." Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir.2004). The Seventh Circuit recently observed that a district court must resolve factual disputes necessary to class certification, but that "the court should not [418] turn the class certification proceedings into a dress rehearsal for the trial on the merits." Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012).

Whirlpool contends that the district court improperly relied on Eisen to avoid consideration of the merits of plaintiffs' legal claims, failed to conduct the required "rigorous analysis" of the factual record, and failed to make specific findings to resolve factual disputes before certifying the liability class. We disagree. The district court closely examined the evidentiary record and conducted the necessary "rigorous analysis" to find that the prerequisites of Rule 23 were met. See Gooch, 672 F.3d at 418 (rejecting a similar argument and concluding that the district court "probed behind the pleadings, considering all of the relevant documents that were in evidence").

3. Plaintiffs' proof on the Rule 23(a) prerequisites

a. Numerosity

Like the district court, we can safely conclude that the numerosity requirement of Rule 23(a)(1) is met. While no strict numerical test exists, "substantial" numbers of affected consumers are sufficient to satisfy this requirement. Daffin, 458 F.3d at 552. The evidence shows that Whirlpool shipped thousands of Duet washers to Ohio for retail sale. This is sufficient evidence to support the certification of a class of all Ohio residents who purchased a Duet in Ohio.

b. Commonality, typicality, and fair representation

Rule 23(a)(2) requires plaintiffs to prove that there are questions of fact or law common to the class, and Rule 23(a)(3) requires proof that plaintiffs' claims are typical of the class members' claims. To demonstrate commonality, plaintiffs must show that class members have suffered the same injury. Dukes, 131 S.Ct. at 2551. "Their claims must depend upon a common contention ... of such a nature that it is capable of classwide resolution—which means that 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." Id. The court's inquiry focuses not on whether common questions can be raised, but on whether a class action will generate common answers that are likely to drive resolution of the lawsuit. Id.

Commonality and typicality "tend to merge" because both of them "serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence." Dukes, 131 S.Ct. at 2551 n. 5. These two factors also tend to merge with the requirement of adequate representation, although the latter factor also brings into play concerns about competency of class counsel and any conflicts of interest. Id. Accordingly, we will consider these factors together. See Gooch, 672 F.3d at 429 (considering typicality and adequate representation together).

Whirlpool contends that plaintiffs cannot show commonality because the Duets were built over a period of years on different platforms, there were approximately twenty-one different models manufactured during that time, and consumer laundry habits vary widely by household. Whirlpool also suggests that the district court erroneously identified the alleged design defect as the use of "less and cooler water."

[419] The district court did not make the mistake that Whirlpool alleges. Whirlpool's own lead engineer stated that the Duets' use of less and cooler water, among other factors, encouraged mold growth. The district court well understood the proof to show that there were various alleged design defects in the Duets that allowed "biofilm" to collect and mold to grow. More importantly, the district court reached the conclusion that the issues relating to the alleged design defects and the adequacy of Whirlpool's warnings to consumers are likely to result in common answers, thus advancing the litigation. See Dukes, 131 S.Ct. at 2551; Gooch, 672 F.3d at 427. "[T]here need only be one question common to the class[,]" Sprague, 133 F.3d at 397, and "[n]o matter how individualized the issue of damages may be, these issues may be reserved for individual treatment with the question of liability tried as a class action." Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1197 (6th Cir.1988).

Based on the evidentiary record, the district court properly concluded that whether design defects in the Duets proximately caused mold or mildew to grow and whether Whirlpool adequately warned consumers about the propensity for mold growth are liability issues common to the plaintiff class. These issues are capable of classwide resolution because they are central to the validity of each plaintiff's legal claims and they will generate common answers likely to drive the resolution of the lawsuit.

Whirlpool asserts that proof of proximate cause will require individual determination, but the record shows otherwise. Whirlpool's own documents confirm that its design engineers knew the mold problem occurred despite variations in consumer laundry habits and despite remedial efforts undertaken by consumers and service technicians. Plaintiffs' expert, Dr. Gary Wilson, opined that consumer habits and the home environment in which a Duet sits could influence the amount of biofilm buildup, but those factors were not the underlying cause of biofilm buildup. Whirlpool contends that Dr. Wilson did not evaluate later design changes to the Duets to see if they rectified the mold problem. As we read the pertinent testimony and expert report, Dr. Wilson acknowledged that Whirlpool made some changes to the "Access" platform tub design, but there continued to be other areas in the machine that collected debris. He also examined a new "Horizon" platform washer and found that it still had cavities on the inside of the tub exposed to the water side, increasing the likelihood of biofilm collection. Dr. Wilson testified that even removing those cavities would not eliminate the biofilm problem. See Samuel-Bassett v. KIA Motors Am., Inc., 34 A.3d 1, 13 (Pa.2011) (rejecting claim that design changes defeated commonality and predominance where modifications did not significantly alter the basic defective design).

Because the plaintiffs have produced evidence of alleged common design flaws in the Duet platforms, this case is dissimilar to In re Am. Med. Sys., 75 F.3d 1069, a case on which Whirlpool relies. In that case, the commonality factor was not satisfied because plaintiffs did not allege any particular defect common to all plaintiffs where there were at least ten different prosthesis implant models that had been modified over the years. Id. at 1080-81. The plaintiffs' medical histories were also at issue and proof varied from plaintiff to plaintiff because complications from an implanted prosthesis could be due to a variety of factors, including surgical error, improper use of the device, anatomical incompatibility, and infection, among others. Id. at 1081. A similar situation is not [420] presented here. As the plaintiffs argue, this case is more like Daffin, 458 F.3d at 550, in which the plaintiff class alleged that a defective throttle body assembly installed in vehicles caused the accelerators to stick. In this case, the plaintiffs established the existence of common issues among class members that warrant certification of a liability class.

In addition, Glazer and Allison are typical of the class members. They purchased Whirlpool washing machines, used their washers for domestic purposes, and experienced problems with mold despite remedial efforts. While Allison may have followed Whirlpool's suggested care instructions more conscientiously than Glazer did, Whirlpool's own internal documents point to the conclusion that, no matter what consumers did or did not do, the mold problem persisted. Whirlpool's own engineers recognized that the Duets provided the ideal environment for bacteria and mold to flourish. The district court did not abuse its discretion in finding that Glazer and Allison are typical of class members, and that they and their class counsel will adequately represent the class.

Whirlpool insists that the class as certified is overly broad because it includes Duet owners who have not experienced a mold problem. Additionally, Whirlpool argues, Glazer and Allison are not typical of consumers swept into the class who have had no problems and are pleased with their Duets.

The liability class as defined is not too broad. "What is necessary is that the challenged conduct or lack of conduct be premised on a ground that is applicable to the entire class." Gooch, 672 F.3d at 428 (internal quotation marks omitted). Class certification is appropriate "if class members complain of a pattern or practice that is generally applicable to the class as a whole. Even if some class members have not been injured by the challenged practice, a class may nevertheless be appropriate." Id. (quoting Walters v. Reno, 145 F.3d 1032, 1047 (9th Cir.1998)) (internal quotation marks omitted).

Additionally, the class plaintiffs may be able to show that each class member was injured at the point of sale upon paying a premium price for the Duet as designed, even if the washing machines purchased by some class members have not developed the mold problem. In Wolin v. Jaguar Land Rover North Am., LLC, 617 F.3d 1168, 1173 (9th Cir.2010), a car manufacturer successfully argued before the district court that class certification was inappropriate because the named class plaintiffs did not prove that an alignment geometry defect causing premature tire wear manifested in a majority of the class members' vehicles. The Ninth Circuit reversed and remanded for class certification, holding that "proof of the manifestation of a defect is not a prerequisite to class certification[,]" and that "individual factors may affect premature tire wear, [but] they do not affect whether the vehicles were sold with an alignment defect." Id. Similarly, in Stearns v. Ticketmaster Corp., 655 F.3d 1013, 1021 (9th Cir.2011), the Ninth Circuit concluded that the plaintiff class sufficiently established injury for standing purposes by showing that "[e]ach alleged class member was relieved of money in the transactions." See also Montanez v. Gerber Childrenswear, LLC, No. CV09-7420, 2011 WL 6757875, *1-2 (C.D.Cal. Dec. 15, 2011) (holding injury shown where class members spent money on defective infant clothing that was less valuable than Gerber represented it to be); Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 120 Cal.Rptr.3d 741, 246 P.3d 877, 895 (2011) (observing diminishment in value of an asset purchased by the consumer is sufficient to establish injury). [421] The Third Circuit recently observed that "Rule 23(b)(3) does not ... require individual class members to individually state a valid claim for relief" and the "question is not what valid claims can plaintiffs assert; rather, it is simply whether common issues of fact or law predominate." Sullivan v. DB Invs., Inc., 667 F.3d 273, 297, 305 (3d Cir.2011) (en banc) (reviewing settlement classes). These cases support the plaintiffs' position that the class as certified is appropriate.

4. The Rule 23(b)(3) prerequisites: predominance and superiority

In light of all that we have already said, we have no difficulty affirming the district court's finding that common questions predominate over individual ones and that the class action mechanism is the superior method to resolve these claims fairly and efficiently. This is especially true since class members are not likely to file individual actions because the cost of litigation would dwarf any potential recovery. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) (finding that in drafting Rule 23(b)(3), "the Advisory Committee had dominantly in mind vindication of `the rights of groups of people who individually would be without effective strength to bring their opponents into court at all'"); Carnegie v. Household Int'l, Inc., 376 F.3d 656, 661 (7th Cir.2004) (Posner, J.) (noting that "[t]he realistic alternative to a class action is not 17 million individual suits, but zero individual suits" because of litigation costs). Further, the district court observed, any class member who wishes to control his or her own litigation may opt out of the class under Rule 23(b)(3)(A).

Assuming plaintiffs are successful regarding liability or the parties resolve the case by settlement, we urge the parties and the district court to revisit the issue of whether the liability class should be subdivided into subclasses in order to determine appropriate remedies. For the purpose of determining damages, class members who were injured at the point of sale and also experienced a mold problem might be placed in one Rule 23(b)(3) subclass, while class members who were injured at the point of sale but have not yet experienced a mold problem might be placed in a separate Rule 23(b)(3) subclass. Alternatively, the class members who have not experienced a mold problem might be placed in a Rule 23(b)(2) subclass to allow any declaratory or injunctive relief necessary to protect their interests. See Gooch, 672 F.3d at 428-29; Pella Corp. v. Saltzman, 606 F.3d 391, 395 (7th Cir.2010) (per curiam).

III. CONCLUSION

For all of the reasons stated, we conclude that the Rule 23(a) and (b)(3) prerequisites were met. Plaintiffs' proof established numerosity, commonality, typicality, and adequate representation. In addition, plaintiffs' proof showed that common questions predominate over individual ones and that the class action is a superior method to adjudicate the claims. The district court did not abuse its discretion in certifying a class on the issue of liability. Accordingly, we AFFIRM.

[1] Whirlpool is supported in this appeal by the Product Liability Advisory Council as amicus curiae.

[258] Louis C. Ricciardi, Esquire (Argued), Trujillo Rodriguez & Richards, Aaron J. Freiwald, Esquire, Layser & Freiwald, Philadelphia, PA, for Appellants.

Carl A. Solano, Esquire (Argued), Nilam A. Sanghvi, Esquire, Samuel W. Silver, Esquire, Ralph G. Wellington, Esquire, Schnader Harrison Segal & Lewis, Philadelphia, PA, for Appellees, Rohm and Haas Company, Morton International, Inc., Rohm and Haas Chemicals LLC.

Before: SCIRICA, RENDELL and ROTH, Circuit Judges.

OPINION OF THE COURT

SCIRICA, Circuit Judge.

This is an interlocutory appeal under Fed.R.Civ.P. 23(f) from the denial of class certification for medical monitoring and property damage. Plaintiffs aver chemical companies dumped an alleged carcinogen at an industrial complex near their residences. The District Court found individual issues predominated on exposure, causation, and the need for medical monitoring and also found individual issues predominated as to a liability-only issue class for the property damage claims.

I.

Named plaintiffs Glenn and Donna Gates are residents of McCullom Lake Village, Illinois, a primarily residential area of approximately 2000 people and 400 homes. Defendants are chemical companies that owned and operated a facility in Ringwood, Illinois, one mile north of McCullom Lake Village. According to plaintiffs, defendants dumped wastewater containing vinylidene chloride into a nearby lagoon that seeped into an underground aquifer where it degraded into vinyl chloride, a carcinogen. Plaintiffs contend vinyl chloride evaporated into the air from the shallow aquifer and was swept by the wind over McCullom Lake Village.

Plaintiffs seek certification of two classes: (1) a class seeking medical monitoring for village residents exposed to the airborne vinyl chloride between 1968 and 2002, and (2) a liability-only issue class seeking compensation for property damage from the exposure. At issue is whether the District Court erred in finding individual issues barred certification of the proposed trial classes under Fed.R.Civ.P. 23(b)(2) or 23(b)(3). We will affirm.

A.

From 1951 to 2005, defendant Morton International owned and operated the Ringwood facility. In June 1999, defendant Rohm & Haas Co. acquired Morton and from 2005, defendant Rohm & Haas Chemicals, LLC, a wholly-owned subsidiary of Rohm & Haas Co., has operated the Ringwood facility.^[1]

Morton made use of vinylidene chloride at the Ringwood facility and from 1960 to 1978, disposed wastewater containing vinylidene chloride into an on-site lagoon. In 1973, tests of the shallow aquifer under the Ringwood facility showed elevated levels of ammonia and chloride. This shallow aquifer does not extend under McCullom Lake Village. In 1978, Morton ceased using the on-site lagoon and covered it.

In 1984, Morton conducted an environmental assessment of the Ringwood facility and installed nineteen monitoring wells [259] at the facility. Samples from these wells contained vinylidene chloride and vinyl chloride. Subsequently, more than ninety monitoring wells were installed in the area around the Ringwood facility.^[2] To date, neither vinylidene chloride nor vinyl chloride has been detected in tests of residential wells in McCullom Lake Village used to obtain drinking water. Plaintiffs contend these chemicals may be present at undetectable levels.

B.

In 2006, named plaintiffs filed a complaint alleging there were multiple pathways of contamination from multiple chemicals including vinyl chloride.^[3] The putative classes include only those with economic injury or exposure. Persons alleging physical injury (including brain cancer) are excluded from the classes.

Despite asserting multiple potential pathways of contamination, plaintiffs limited their arguments at class certification to a single chemical, vinyl chloride, and a single pathway, via a shallow aquifer into the air. A deeper aquifer runs underneath the Ringwood facility, but the parties dispute whether it has become contaminated and whether the aquifer flows to the village. Plaintiffs originally alleged this deeper aquifer ("deeper plume") carried vinyl chloride to the ground water under the village. They also alleged "air stripping" equipment used to remove contamination from the facility's groundwater caused contaminants to be released into the air.

Despite asserting several claims for relief including medical monitoring, property damage claims, relief under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., the Illinois Environmental Protection Act, 415 Ill. Comp. Stat. § 5/1 et seq., and state-law fraudulent misrepresentation and willful and wanton misconduct claims, plaintiffs chose to proceed on a class basis only on the medical monitoring and property damage claims and, as noted, solely with regard to vinyl chloride exposure. The proposed medical monitoring class includes:

All individuals who lived for one year or more in total (whether consecutively or not) within McCullom Lake Village during the time period from January 1, 1968 to December 31, 2002. Excluded from the class are individuals for whom brain cancer has been detected and individuals bringing claims in any court of competent jurisdiction arising out of exposure to chlorinated solvents.

The proposed property damage class includes:

All persons who presently own real property within McCullom Lake Village, or who owned real property within McCullom Lake Village as of April 25, 2006 (the date of the filing of the complaint) through the present. Excluded from the Class are individuals who have already brought claims in any court of competent jurisdiction arising out of exposure to chlorinated solvents.

Plaintiffs sought certification of only these classes.

At the class certification hearing both parties submitted expert evidence.^[4] Plaintiffs [260] relied on a report from Paolo Zannetti and a report and testimony from Gary Ginsberg. Zannetti, an expert in modeling dispersion of air pollution, submitted a report estimating the dispersion of vinyl chloride over the village based on data from the monitoring wells. Ginsberg, a toxicologist at the Connecticut Department of Public Health, presented a risk assessment of exposure to vinyl chloride.

To measure the exposure from pollutants such as vinyl chloride, the experts modeled the exposure of residents compared to their background levels of exposure absent the alleged pollution attributable to the defendants.^[5] Plaintiffs contend the natural background level is 0.042 micrograms per cubic meter ("µ/m3"), a measure contained in the federal Environmental Protection Agency's 1999 National-Scale Air Toxics Assessment.

Zannetti's report modeled the emissions over the village using data from monitoring wells to develop models for the concentration of vinyl chloride in the air during four time periods, 1940-67, 1968-89, 1990-96, and 1997-2006. Included in his report are maps of the village with isopleth lines^[6] showing the concentration of vinyl chloride exposure for persons within the isopleth during each time period. The isopleths are based on his "high scenario," which was an estimate based on the highest single recorded concentration at each monitoring site. He also developed a scenario he termed the "low scenario," which extrapolated exposure from the average of all recorded concentrations at each site. Zannetti used the highest recorded data because, in his opinion, the contamination had ended by the time the monitoring began and the historical levels were expected to be significantly higher than those measured. The exposure at the part of the village closest to the shallow plume ranged from 0.0266 µ/m3 to 0.210 µ/m3 in the "high scenario" and 0.00554 µ/m3 to 0.0159 µ/m3 in the "low scenario."^[7]

Ginsberg testified that the average amount of exposure for residents of the village over a twenty-five year period from the shallow plume would be 0.127 µ/m3 (in addition to any background exposure). Ginsberg arrived at this figure by averaging [261] the concentrations in Zannetti's isopleths based on the "high scenario."^[8] The "high scenario" extrapolated exposure levels based on maximum detected concentration at monitoring wells from 1985 to 1990. He used the "high scenario" because "the contamination was likely higher in the past." In his view, the scenario still probably underestimated the exposure. If the "low scenario" were used the average exposure for a twenty-five year period would be 0.011 µ/m3.

Ginsberg disclaimed that his report^[9] was conclusive as to individual cases. At one point during his hearing testimony, Ginsberg stated the hypothetical risk calculations are "not meant to predict risk for a single individual under any specific scenario" because of "individual or personal variability — susceptibility."

The District Court denied class certification for both classes. It found the medical monitoring class lacked the cohesiveness needed to maintain a class under Rule 23(b)(2) and that common issues of law and fact did not predominate as required under Rule 23(b)(3). Both failed for the same reason — the "common" evidence proposed for trial did not adequately typify the specific individuals that composed the two classes. The court also found the remaining individual issues would require trial, undoing any efficiencies of class proceedings and possibly leading a second jury to reconsider evidence presented to the jury in the class proceeding.

The court found plaintiffs failed to present common proof of three issues critical to recovering on the medical monitoring claim — (1) that plaintiffs suffered from exposure greater than normal background levels, (2) the proximate result of which is significantly increased risk of developing a serious disease, and (3) whether the proposed medical monitoring regime is reasonably medically necessary.

The court found the proposed expert evidence demonstrating the first element — exposure greater than normal background levels — did not reflect the exposure of any specified individuals within the class. The court rejected Ginsberg's risk analysis and use of the 0.127 µ/m3 figure because it represented an average exposure, not the exposure of any actual class member. The court also rejected as insufficient Zannetti's isopleths because the maps assumed a constant value for exposure during lengthy time periods. It found the isopleths were "overly simplistic" and averaged the class members' exposures, rendering them unsuitable as common proof.

The court found no common proof of minimum exposure level above which class members were at an increased risk of serious disease. The court rejected the proposed value of 0.07 µ/m3 — the EPA's regulatory standard for exposure to a mixed population of children and adults — because 0.07 µ/m3 is a precautionary value below which a mixed population is likely to be [262] safe. It does not establish the converse, the required element — the point at which class members would likely be at risk.

The court doubted that putative "common" proof could demonstrate whether the proposed monitoring regime is reasonably medically necessary. Plaintiffs wanted class members to receive serial MRIs to scan for cancerous tumors or CAT scans, if MRIs would pose health risks. The court did not believe a regime could be developed using common proof because of class members' differing ages, medical histories, genetic predispositions, and tolerance of serial MRIs.

The court also denied certification of the property damage class, finding similar defects with the "common" proof. The court noted "[p]laintiffs rely on the same expert testimony that they offered to support their medical monitoring claim." The court refused to certify a liability-only class because the common evidence could not establish contamination at each property that was attributable to the defendants.

II.

The District Court's reasoned analysis of the denial of class certification makes clear it did not abuse its discretion. "Factual determinations necessary to make Rule 23 findings must be made by a preponderance of the evidence." Hydrogen Peroxide, 552 F.3d at 320. We review the District Court's findings for abuse of discretion. Id. at 312. A district court abuses its discretion if its "decision rests upon a clearly erroneous finding of fact, an errant conclusion of law or an improper application of law to fact." Id. (internal quotation marks omitted). Plaintiffs sought certification of the medical monitoring class under either Rule 23(b)(2) or 23(b)(3). We will first address denial of class certification under Rule 23(b)(2).

A.

Rule 23(b)(2) applies when "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." Fed.R.Civ.P. 23(b)(2). The Supreme Court recently clarified "Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class." Wal-Mart Stores, Inc., v. Dukes, ___ U.S. ___, 131 S.Ct. 2541, 2557, 180 L.Ed.2d 374 (2011). Rule 23(b)(2), in contrast to (b)(3), "does not authorize class certification when each class member would be entitled to an individualized award of monetary damages." Id. But the Court did not conclusively decide "whether there are any forms of `incidental' monetary relief that are consistent with the interpretation of Rule 23(b)(2) we have announced and that comply with the Due Process Clause." Id. at 2561.

1.

Medical monitoring cannot be easily categorized as injunctive or monetary relief. A medical monitoring cause of action allows those exposed to toxic substances to recover the costs of periodic medical appointments and the costs of tests to detect the early signs of diseases associated with exposure. The few states that recognize medical monitoring as a remedy recognize it as a cause of action, like Pennsylvania, Redland Soccer Club, Inc. v. Dep't of the Army, 548 Pa. 178, 696 A.2d 137, 142 (1997), or treat it as a type of relief granted in connection with a traditional tort cause of action, see, e.g., Bourgeois v. A.P. Green Indus., Inc., 716 So.2d 355, 359 (La.1998).^[10] The remedy of medical monitoring has divided courts on whether plaintiffs should proceed under Rule 23(b)(2) or [263] Rule 23(b)(3).^[11] The Pennsylvania Supreme Court has endorsed awarding medical monitoring damages as a trust fund which "compensates the plaintiff for only the monitoring costs actually incurred." Redland Soccer Club, 696 A.2d at 142 n. 6. It has not yet decided whether medical monitoring awards can be in the form of a lump-sum verdict. Id. We have previously reviewed the certification of a Pennsylvania-law medical monitoring class under Rule 23(b)(2) without comment on whether medical monitoring claims are predominately claims for injunctive or monetary relief. See Barnes v. Am. Tobacco Co., 161 F.3d 127, 143 (3d Cir.1998).

The District Court here denied certification under both subsections for reasons unrelated to the injunctive or monetary nature of the relief sought. In light of the Supreme Court's recent decision in Wal-Mart Stores, Inc., v. Dukes, ___ U.S. ___, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011), we question whether the kind of medical monitoring sought here can be certified under Rule 23(b)(2) but we do not reach the issue. As noted, the Court held "Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class" but left open the question "whether there are any forms of `incidental' monetary relief that are consistent with the interpretation of Rule 23(b)(2) we have announced and that comply with the Due Process Clause." Id. at 2557, 2561 (quoting Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (5th Cir.1998)). If the plaintiffs prevail, class members' regimes of medical screenings and the corresponding cost will vary individual by individual. But we need not determine whether the monetary aspects of plaintiffs' medical monitoring claims are incidental to the grant of injunctive or declaratory relief. "[A] single injunction or declaratory judgment" cannot "provide relief to each member of the class" proposed here, id. at 2557, due to individual issues unrelated to the monetary nature of the claim. For its part, the District Court found certification improper under either category for reasons apart from the monetary nature of plaintiffs' claims.

2.

Although Rule 23(b)(2) classes need not meet the additional predominance and superiority [264] requirements of Rule 23(b)(3), "it is well established that the class claims must be cohesive." Barnes, 161 F.3d at 143. Rule 23(b)(2) requires that "the party opposing the class has acted or refused to act on grounds that apply generally to the class." Fed.R.Civ.P. 23(b)(2). "The key to the (b)(2) class is `the indivisible nature of the injunctive or declaratory remedy warranted — the notion that the conduct is such that it can be enjoined or declared unlawful only as to all of the class members or as to none of them.'" Wal-Mart Stores, Inc., 131 S.Ct. at 2557 (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L.Rev. 97, 132 (2009)). "Indeed, a (b)(2) class may require more cohesiveness than a (b)(3) class." Barnes, 161 F.3d at 142.^[12]

As all class members will be bound by a single judgment, members of a proposed Rule 23(b)(2) injunctive or declaratory class must have strong commonality of interests. The Supreme Court in Wal-Mart recently highlighted the importance of cohesiveness in light of the limited protections for absent class members under subsections (b)(1) and (b)(2):

Classes certified under (b)(1) and (b)(2) share the most traditional justifications for class treatment — that individual adjudications would be impossible or unworkable, as in a (b)(1) class, or that the relief sought must perforce affect the entire class at once, as in a (b)(2) class. For that reason these are also mandatory classes: The Rule provides no opportunity for (b)(1) or (b)(2) class members to opt out, and does not even oblige the District Court to afford them notice of the action.

Wal-Mart Stores, Inc., 131 S.Ct. at 2558 (footnote omitted). The "disparate factual circumstances of class members" may prevent a class from being cohesive and, therefore, make the class unable to be certified under Rule 23(b)(2). Carter v. Butz, 479 F.2d 1084, 1089 (3d Cir.1973).

Because causation and medical necessity often require individual proof, medical monitoring classes may founder for lack of cohesion. See In re St. Jude Med. Inc., 425 F.3d 1116, 1122 (8th Cir.2005); Ball v. Union Carbide Corp., 385 F.3d 713, 727-28 (6th Cir.2004); Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1195-96, amended, 273 F.3d 1266 (9th Cir.2001); Barnes, 161 F.3d at 143-46; Boughton v. Cotter Corp., 65 F.3d 823, 827 (10th Cir. 1995). Rule 23(b)(2) "does not authorize class certification when each class member would be entitled to an individualized award of monetary damages."^[13]Wal-Mart, 131 S.Ct. at 2557.

The District Court found individual issues were significant to certain elements of the medical monitoring claims here. To prevail on a medical monitoring claim under Pennsylvania law,^[14] plaintiffs [265] must prove:

(1) exposure greater than normal background levels;

(2) to a proven hazardous substance;

(3) caused by the defendant's negligence;

(4) as a proximate result of the exposure, plaintiff has a significantly increased risk of contracting a serious latent disease;

(5) a monitoring procedure exists that makes the early detection of the disease possible;

(6) the prescribed monitoring regime is different from that normally recommended in the absence of the exposure; and

(7) the prescribed monitoring regime is reasonably necessary according to contemporary scientific principles.

Redland Soccer Club, 696 A.2d at 145-46. "Expert testimony is required to prove these elements." Sheridan v. NGK Metals Corp., 609 F.3d 239, 251 (3d Cir.2010) (citing Redland Soccer Club, 696 A.2d at 145-46). The District Court identified individual issues that would eclipse common issues in at least three of the required elements, noting several potential variations in proving exposure above background, a significantly increased risk of a serious latent disease, and the reasonable necessity of the monitoring regime. Plaintiffs contend the court misinterpreted and improperly evaluated the evidence on the merits, rather than under a class certification standard, an error compounded by the parties' stipulation that consideration of Daubert issues would be put off until after class certification.

3.

The District Court did not err in considering whether the proposed common proof would accurately reflect the exposure of individual members of the class to vinyl chloride.^[15] "Frequently the `rigorous analysis' will entail some overlap with the merits of the plaintiff's underlying claim." Wal-Mart Stores, Inc., 131 S.Ct. at 2551. "[T]he court may `consider the substantive elements of the plaintiffs' case in order to envision the form that a trial on those issues would take.'" Hydrogen Peroxide, 552 F.3d at 317 (quoting Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 166 (3d Cir.2001)).

Plaintiffs proposed to show the exposure of class members through the expert opinions of Zannetti and Ginsberg. On appeal, plaintiffs contend the court failed to concentrate on Zannetti's isopleths and failed to recognize that the isopleths provide average exposure per person, not a class-wide average across class members.

The District Court found that the isopleths could not constitute common proof of exposure above background levels. It noted several problems — that the isopleths only showed average daily exposure, not minimum exposure, used average exposure over very long periods of time when exposure likely varied, and could not show that every class member was exposed above background.^[16]

[266] Instead of showing the exposure of the class member with the least amount of exposure, plaintiffs' proof would show only the amount that hypothetical residents of the village would have been exposed to under a uniform set of assumptions without accounting for differences in exposure year-by-year or based upon an individual's characteristics. At most, the isopleths show the exposure only of persons who lived in the village for the entire period the isopleth represents and who behaved according to all assumptions that Zannetti made in creating the isopleth.

Plaintiffs cannot substitute evidence of exposure of actual class members with evidence of hypothetical, composite persons in order to gain class certification. Cf. Principles of the Law of Aggregate Litigation § 2.02 cmt. d, at 89 (2010) ("Aggregate treatment is thus possible when a trial would allow for the presentation of evidence sufficient to demonstrate the validity or invalidity of all claims with respect to a common issue under applicable substantive law, without altering the substantive standard that would be applied were each claim to be tried independently and without compromising the ability of the defendant to dispute allegations made by claimants or to raise pertinent substantive defenses."). The evidence here is not "common" because it is not shared by all (possibly even most) individuals in the class. Averages or community-wide estimations would not be probative of any individual's claim because any one class member may have an exposure level well above or below the average.

Attempts to meet the burden of proof using modeling and assumptions that do not reflect the individual characteristics of class members have been met with skepticism. See In re Fibreboard Corp., 893 F.2d 706, 712 (5th Cir.1990) ("It is evident that these statistical estimates deal only with general causation, for population-based probability estimates do not speak to a probability of causation in any one case; the estimate of relative risk is a property of the studied population, not of an individual's case." (internal quotation omitted) (emphasis in original)); In re "Agent Orange" Prod. Liab. Litig. MDL No. 381, 818 F.2d 145, 165 (2d Cir.1987) (noting that "generic causation and individual circumstances concerning each plaintiff and his or her exposure to Agent Orange... appear to be inextricably intertwined" and expressing concern that if the class had been certified for trial "the class action would have allowed generic causation to be determined without regard to those characteristics and the individual's exposure"); see also 2 Joseph M. McLaughlin, McLaughlin on Class Actions: Law and Practice § 8:9, at 8-55 to -57 (3d ed.2006) ("Permitting a class to proceed with its suit without linking its proof to even a single class member would contravene the overwhelming authority recognizing the individualized nature of the causation inquiry in mass tort cases.").

There are several reasons the amount of vinyl chloride exposure for class members would differ from the exposure estimated by Zannetti's isopleths. Levels of vinyl chloride varied within the periods the isopleth measures. Zannetti assumes one constant level of exposure for 1968 to 1989, another for 1990 to 1996 and a third for 1997 to 2006. But another part of Zannetti's report notes the temporal level of exposure varied drastically — even hourly. He states "hourly concentration impacts are frequently one order of magnitude (i.e., 10 times) greater and even two orders of magnitude (i.e., 100 times) greater than the annual average." The implication of Zannetti's statement is that for the average to be at the calculated level there would be periods when the concentration would be significantly lower than the period average, in addition to the periods when [267] the concentration is significantly higher. This fluctuation makes the specific period of time and amount of time class members were in the village critical in deciding whether they were exposed to higher than background levels. As the court noted, within each of these periods, the exposure varied and only persons residing within the village the entire period would have their personal average exposure equal the average exposure within the isopleth lines.

Plaintiffs' experts contended that, because the dumping of vinylidene chloride stopped in 1978, the concentration of vinyl chloride fell during much of the class period. But under the plaintiffs' proposed modeling and isopleths, a class member who lived in the village from 1988-89 — a full decade after the dumping ended — would be assumed to have been exposed to the same concentration of vinyl chloride as a person living in the same neighborhood from 1968-69 when dumping occurred.

Moreover, the isopleths do not reflect that different persons may have different levels of exposure based on biological factors or individual activities over the class period. Factors which affect a person's exposure to toxins can include activity level, age, sex, and genetic make-up. See Federal Judicial Center, Reference Manual on Scientific Evidence 430 (2d ed.2000). On cross-examination, Ginsberg stated that "[s]ome people will have higher breathing rates per body weight, et cetera," which would create a disparity between the concentrations of vinyl chloride (based on estimated exposure as opposed to actual exposure).

Each person's work, travel, and recreational habits may have affected their level of exposure to vinyl chloride. Ginsberg admitted that differences in the amount of time spent outside the village would create different average concentrations to which the class members were exposed. A person who worked outside the village would have been exposed less than a stay-at-home parent, or retiree. The isopleths assume exposure to the same concentration for class members who may have spent very different amounts of time in the village.

Plaintiffs argue unconvincingly that the isopleths reflect average exposure of individuals rather than a classwide average. They contend the isopleth represents a concentration which is the "least exposure of anyone within the area circumscribed by the isopleth line." But one cannot evaluate the accuracy of this claim unless plaintiffs presented some way to measure the actual minimum levels of exposure of individual class members. Plaintiffs' model assumes away relevant variations between the hundreds of residents within the same isopleth lines that would result in exposure to different concentrations of vinyl chloride.^[17] Their model does not provide individual average exposures of actual class members.

4.

The District Court did not abuse its discretion in finding plaintiffs would be unable to prove a concentration of vinyl chloride that would create a significant risk of contracting a serious latent disease for all class members. Nor was there common proof that could establish the danger point for all class members.

The court identified two problems with the proposed evidence. First, it rejected the plaintiffs' proposed threshold — exposure above 0.07 µ/m3, developed as a regulatory [268] threshold by the EPA for mixed populations of adults and children — as a proper standard for determining liability under tort law. Second, the court correctly noted, even if the 0.07 µ/m3 standard were a correct measurement of the aggregate threshold, it would not be the threshold for each class member who may be more or less susceptible to diseases from exposure to vinyl chloride.^[18]

Although the positions of regulatory policymakers are relevant, their risk assessments are not necessarily conclusive in determining what risk exposure presents to specified individuals. See Federal Judicial Center, Reference Manual on Scientific Evidence 413 (2d ed.2000) ("While risk assessment information about a chemical can be somewhat useful in a toxic tort case, at least in terms of setting reasonable boundaries as to the likelihood of causation, the impetus for the development of risk assessment has been the regulatory process, which has different goals."); id. at 423 ("Particularly problematic are generalizations made in personal injury litigation from regulatory positions.... [I]f regulatory standards are discussed in toxic tort cases to provide a reference point for assessing exposure levels, it must be recognized that there is a great deal of variability in the extent of evidence required to support different regulations.").

Thus, plaintiffs could not carry their burden of proof for a class of specific persons simply by citing regulatory standards for the population as a whole. Cf. Wright v. Willamette Indus., Inc., 91 F.3d 1105, 1107 (8th Cir.1996) ("Whatever may be the considerations that ought to guide a legislature in its determination of what the general good requires, courts and juries, in deciding cases, traditionally make more particularized inquiries into matters of cause and effect.").

Plaintiffs have failed to propose a method of proving the proper point where exposure to vinyl chloride presents a significant risk of developing a serious latent disease for each class member. Plaintiffs propose a single concentration without accounting for the age of the class member being exposed, the length of exposure, other individual factors such as medical history, or showing the exposure was so toxic that such individual factors are irrelevant. The court did not abuse its discretion in concluding individual issues on this point make trial as a class unfeasible, defeating cohesion.

5.

Nor did the court abuse its discretion in determining individual issues defeat cohesion with respect to whether the proposed monitoring regime is reasonably medically necessary. We have been skeptical that the necessity for individuals' medical monitoring regimes can be proven on a class basis. See Barnes, 161 F.3d at 146 ("Although the general public's monitoring program can be proved on a classwide basis, an individual's monitoring program [269] by definition cannot."); see Principles of the Law of Aggregate Litigation § 2.04 reporter's notes cmt. b, at 126 (2010) ("[A]fter Barnes, courts often have withheld class certification for medical monitoring due to the presence of individualized issues...."). Plaintiffs' proposed common evidence and trial plan do not resolve any of the issues in proving medical necessity on an aggregate basis.

The District Court did not err in rejecting plaintiffs' conclusory allegation they could prove the need for serial MRIs on a classwide basis. There were conflicting expert reports. Ginsberg's report contended class members were at increased risk due to exposure but did not discuss possible monitoring and treatment regimes. Melissa Neiman, a neurosurgeon, suggested that serial MRIs and neurological examinations can be used to detect types of brain cancer associated with exposure to vinyl chloride without explanation of their effectiveness or potential risk. None of plaintiffs' experts addressed how medical monitoring would proceed. Defendants' expert Peter Valberg, a toxicologist, maintained the negative health effects of screening may outweigh any potential benefits. Another defense expert, Henry Friedman, a neuro-oncologist, contended a regime of serial MRIs would be contraindicated and potentially risky because the contrast agent used for MRIs poses dangers to those with kidney disease. The court did not err in crediting defense experts' detailed discussions of why the medical monitoring regime would present individual rather than common issues. See Hydrogen Peroxide, 552 F.3d at 323 ("Weighing conflicting expert testimony at the certification stage is not only permissible; it may be integral to the rigorous analysis Rule 23 demands.").

Plaintiffs' proposed common evidence and trial plan would not be able to prove the medical necessity of plaintiffs' proposed monitoring regime without further individual proceedings to consider class members' individual characteristics and medical histories and to weigh the benefits and safety of a monitoring program. Plaintiffs cannot show the cohesiveness required for certification of a Rule 23(b)(2) class. The court did not abuse its discretion in refusing to certify a class that would be able to resolve few if any issues that would materially advance resolution of the underlying claims.

B.

1.

Plaintiffs also sought certification under Rule 23(b)(3). The requirements of predominance and superiority^[19] for maintaining a class action under Rule 23(b)(3) are less stringent than the cohesiveness requirement of Rule 23(b)(2).^[20]See [270] Barnes, 161 F.3d at 143; In re St. Jude Med. Inc., 425 F.3d at 1121. But the two inquiries are similar. "The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." Amchem Products, Inc. v. George Windsor, 521 U.S. 591, 623, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997).

Courts have generally denied certification of medical monitoring classes when individual questions involving causation and damages predominate over (and are more complex than) common issues such as whether defendants released the offending chemical into the environment. See In re St. Jude Med., Inc., 522 F.3d 836, 840 (8th Cir.2008) (reversing the decision to certify a Rule 23(b)(3) class for "the highly individualized remedy of medical monitoring"); see generally 7AA Charles Alan Wright, Arthur R. Miller, Mary Kay Kane & Richard L. Marcus, Federal Practice & Procedure § 1782 (3d ed.2005) ("[T]o the extent that different injuries are alleged to have occurred to different class members and over different periods of time, it is difficult to show that common issues predominate and that a class action would be superior.").

As discussed, the inquiries into whether class members were exposed above background levels, whether class members face a significantly increased risk of developing a serious latent disease, and whether a medical monitoring regime is reasonably medically necessary all require considering individual proof of class members' specific characteristics. The court did not abuse its discretion in finding individual issues predominate over any issues common to the class.

2.

Plaintiffs contend an alternative class could have been certified. They offer three possible modifications — only one of which they presented to the District Court. Plaintiffs suggested in a footnote in their trial reply brief that, if their proposed common proof were insufficient, they could create isopleths measuring exposure in each calendar year. The jury would then use these yearly isopleths to determine if residents' exposure levels in that year satisfied the elements of Pennsylvania's medical monitoring cause of action.

The court did not err in rejecting plaintiffs' alternative class definition. "A party's assurance to the court that it intends or plans to meet the requirements is insufficient." Hydrogen Peroxide, 552 F.3d at 318 (citing Newton, 259 F.3d at 191). "Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively demonstrate his compliance with the Rule — that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc." Wal-Mart Stores, Inc., 131 S.Ct. at 2551. "[A] district court errs as a matter of law when it fails to resolve a genuine legal or factual dispute relevant to determining the requirements." Hydrogen Peroxide, 552 F.3d at 320. Plaintiffs did not present yearly isopleths to the trial court, did not show such isopleths to be feasible given the limited data available, and did not explain how these yearly determinations would correspond to actual class members.

On appeal, plaintiffs suggest for the first time two further refinements to their class definition. Plaintiffs contend common issues would predominate if the class definition were (1) amended to include only class residents who lived in the village for the entire period represented by the isopleths presented to the trial court, or (2) amended to include only class members who lived in the village for an entire calendar year and yearly isopleths were created. These alternatives are not properly before us, [271] having never been presented to the trial court. Even if we were to consider plaintiffs' arguments, their alternatives do not resolve the defects in the isopleths nor provide enough detail to determine how the claims of such a class would be tried.

C.

1.

Plaintiffs also sought certification of a Rule 23(b)(3) class of property owners who allegedly suffered loss in property values due to defendants' contamination under theories of public nuisance, private nuisance, strict liability, CERCLA, conspiracy, negligence, negligence per se, and trespass. The court noted "[p]laintiffs rely on the same expert testimony that they offered to support their medical monitoring claim." Accordingly, it found common questions did not predominate over individual questions because "[a]lthough many aspects of [p]laintiffs' claims may be common questions, the parties agree that resolution of those questions leaves significant and complex questions unanswered, including questions relating to causation of contamination, extent of contamination, fact of damages, and amount of damages."

The District Court properly explained its reasons for finding that individuals issues predominated over common issues. Plaintiffs cannot fault the court for failing to examine each element of their purported causes of action when they failed to present arguments or propose common proof for each element. As the arguments for certification of the property class relied on the same purported "common" evidence as the medical monitoring class, the court did not err by denying certification of the property damage class.

The trial court properly considered and rejected the arguments plaintiffs did make. Plaintiffs rely on other instances of property contamination where the courts found common issues predominated. But those cases presented simpler theories of contamination or discrete incidents of contamination. In Mejdrech v. Met-Coil Systems Corp., 319 F.3d 910 (7th Cir.2003), the plaintiffs alleged the improper handling of chemicals contaminated the soil and groundwater beneath their properties. The court certified an issue class on the defendant's negligence and the extent of contamination but left damages to be resolved individually. But the Seventh Circuit, in affirming the order certifying the class, noted the question of the "geographical scope of the contamination" was "not especially complex." Id. at 912.

Similarly, in Sterling v. Velsicol Chemical Corp., 855 F.2d 1188 (6th Cir.1988), the plaintiffs alleged groundwater contamination that could be discovered merely by testing local wells. Id. at 1193. The Sixth Circuit affirmed the certification order but noted a class action is only suited for situations when "the cause of the disaster is a single course of conduct which is identical for each of the plaintiffs." Id. at 1197. The court warned:

In complex, mass, toxic tort accidents, where no one set of operative facts establishes liability, no single proximate cause equally applies to each potential class member and each defendant, and individual issues outnumber common issues, the district court should properly question the appropriateness of a class action for resolving the controversy.

Id. Not all claims of property damage based on exposure are alike. Single instances or simple theories of contamination may be more apt for consolidated proceedings than extensive periods of contamination with multiple sources and various pathways. See In re Methyl Tertiary Butyl Ether ("MTBE") Prods. Liab. Litig., 241 F.R.D. 435, 447 (S.D.N.Y.2007) (certifying class for damage to property from water contamination but noting "[c]ourts [272] have repeatedly drawn distinctions between proposed classes involving a single incident or single source of harm and proposed classes involving multiple sources of harm occurring over time"); Reilly v. Gould, Inc., 965 F.Supp. 588, 602 (M.D.Pa. 1997) (noting in refusing to certify a property damage class "it is the presence of additional individualized factors affecting individual plaintiffs which wreaks havoc on the notion that all plaintiffs' injuries have been caused solely by the defendant's actions").

Here, plaintiffs contend varied levels of vinylidene chloride at various times seeped into a shallow aquifer, degraded into vinyl chloride, diffused from the aquifer to the ground above, and evaporated into the air to be carried over the village. Given the potential difference in contamination on the properties, common issues do not predominate. Cf. Fisher v. Ciba Specialty Chems. Corp., 238 F.R.D. 273, 305 n. 70 (S.D.Ala.2006) ("[A] property-by-property inquiry will unquestionably be necessary to determine whether that source and that pathway have any bearing on the experience of a particular property owner within the Proposed Class Area."). The District Court did not abuse its discretion in finding the property damage class members' individual issues predominated over the issues common to the class.

2.

Alternatively, plaintiffs contend that, even if common issues do not predominate, the court should have certified an "issue only" class on liability. The court found an issue class was not feasible and would not advance the resolution of class members' claims. The court noted both the fact of damages and the amount of damages "would remain following the class-wide determination of any common issues," and further that causation and extent of contamination would need to be determined at follow-up proceedings. Due to the numerous individual issues that would remain, the court declined to certify a liability-only class.

"[A] court's decision to exercise its discretion under Rule 23(c)(4),[^[21]] like any other certification determination under Rule 23, must be supported by rigorous analysis." Hohider v. United Parcel Serv., Inc., 574 F.3d 169, 200-01 (3d Cir.2009). Rule 23(c)(4) "both imposes a duty on the court to insure that only those questions which are appropriate for class adjudication be certified, and gives it ample power to `treat common things in common and to distinguish the distinguishable.'" Chiang v. Veneman, 385 F.3d 256, 267 (3d Cir. 2004) (quoting Jenkins v. United Gas Corp., 400 F.2d 28, 35 (5th Cir.1968)). "The interaction between the requirements for class certification under Rule 23(a) and (b) and the authorization of issue classes under Rule 23(c)(4) is a difficult matter that has generated divergent interpretations among the courts." Hohider, 574 F.3d at 200 n. 25.

Courts have disagreed over the extent to which the ability to certify issue classes alters the predominance requirement. Some appellate courts have viewed Rule 23(c)(4) as a "housekeeping rule" allowing common issues to be certified only when the cause of action, taken as a whole, meets the predominance requirement. See Castano v. Am. Tobacco Co., 84 F.3d 734, 745 n. 21 (5th Cir.1996). Others have allowed certification of issue classes even if common questions do not predominate for the cause of action as a whole. See In re Nassau County Strip Search Cases, 461 F.3d 219, 226 (2d Cir.2006); Gunnells v. [273] Healthplan Servs., Inc., 348 F.3d 417, 439 (4th Cir.2003); Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996). We noted the split of authority in Hohider. 574 F.3d at 200 & n. 25.

The District Court here found "resolution of [common] questions leaves significant and complex questions unanswered." We agree, as the common issues here are not divisible from the individual issues. See Hohider, 574 F.3d at 200 n. 25. Following Hohider, the District Court conducted a rigorous analysis on the effect "partial certification would have on the class action going forward." Id. at 202. In Hohider, we provided relevant considerations on when a district court may wish to carve at the joints to form issue classes and cited the ALI's Proposed Final Draft of the Principles of the Law of Aggregate Litigation. The ALI's final draft preserved and expanded its discussion of these important considerations. See Principles of the Law of Aggregate Litigation §§ 2.02-05, 2.07-2.08 (2010).

Rather than joining either camp in the circuit disagreement, we believe the considerations set forth in Hohider and more recently in the Final Draft of the ALI's Principles of Aggregate Litigation provide the most sound guidance in resolving this complicated area of class action procedure.

In light of the adoption of the Final Draft of the Principles of Aggregate Litigation, when deciding whether or not to certify an issue class, the trial court should consider: the type of claim(s) and issue(s) in question; the overall complexity of the case; the efficiencies to be gained by granting partial certification in light of realistic procedural alternatives; the substantive law underlying the claim(s), including any choice-of-law questions it may present and whether the substantive law separates the issue(s) from other issues concerning liability or remedy; the impact partial certification will have on the constitutional and statutory rights of both the class members and the defendant(s); the potential preclusive effect or lack thereof that resolution of the proposed issue class will have; the repercussions certification of an issue(s) class will have on the effectiveness and fairness of resolution of remaining issues; the impact individual proceedings may have upon one another, including whether remedies are indivisible such that granting or not granting relief to any claimant as a practical matter determines the claims of others; and the kind of evidence presented on the issue(s) certified and potentially presented on the remaining issues, including the risk subsequent triers of fact will need to reexamine evidence and findings from resolution of the common issue(s). See Principles of the Law of Aggregate Litigation §§ 2.02-05 (2010); Hohider, 574 F.3d at 201. This non-exclusive list of factors should guide courts as they apply Fed.R.Civ.P. 23(c)(4) "to `treat common things in common and to distinguish the distinguishable.'" Chiang, 385 F.3d at 256 (quoting Jenkins, 400 F.2d at 35).

When certifying an issue class the court should clearly enumerate the issue(s) to be tried as a class as required by Fed. R.Civ.P. 23(c)(1)(B). See Wachtel v. Guardian Life Ins. Co. of Am., 453 F.3d 179, 184-85 (3d Cir.2006). It should also explain how class resolution of the issue(s) will fairly and efficiently advance the resolution of class members' claims, including resolution of remaining issues. See Principles of the Law of Aggregate Litigation §§ 2.02(e) (2010).

The trial court here did not abuse its discretion by declining to certify a liability-only issue class when it found liability inseverable from other issues that would be left for follow-up proceedings. Nor did the court err in finding no marked division between damages and liability.

[274] Plaintiffs have neither defined the scope of the liability-only trial nor proposed what common proof would be presented.^[22] The claims and issues here are complex and common issues do not easily separate from individual issues. A trial on whether the defendants discharged vinylidene chloride into the lagoon that seeped in the shallow aquifer and whether the vinyl chloride evaporated from the air from the shallow aquifer is unlikely to substantially aid resolution of the substantial issues on liability and causation.

Certification of a liability-only issue class may unfairly impact defendants and absent class members. Plaintiffs' bald assertion that class members claims share "the same nucleus of operative facts" is a mere "assurance to the court that it intends or plans to meet the requirements." Hydrogen Peroxide, 552 F.3d at 318 (citing Newton, 259 F.3d at 191). Plaintiffs appear to rely on the same "common" evidence used for the medical monitoring class, but fail to explain how their estimates of exposure to residents over substantial periods of time corresponds to the level of contamination currently present at each home. It may prejudice absent class members whose properties may be shown to have suffered greater contamination.^[23]

Given the inability to separate common issues from issues where individual characteristics may be determinative, the District Court did not abuse its discretion in refusing to certify a liability-only property damage class.

III.

For the foregoing reasons the District Court did not abuse its discretion in denying the plaintiffs' motion for class certification under Fed.R.Civ.P. 23(b)(2) and (b)(3). We will affirm its judgment.

[1] Additional defendants Huntsman and Huntsman Polyurethanes were dismissed by stipulation without prejudice and defendant Modine reached a class settlement that the District Court approved.

[2] In 1991, Morton voluntarily enrolled the Ringwood facility in the Illinois Environmental Protection Agency's remediation program, an ongoing process. The remediation plan for the shallow aquifer involves using wells and a wastewater treatment plant to decontaminate the water.

[3] The other contaminants included trichloroethylene (TCE), and 1, 1-Dichloroethylene (DCE) both industrial solvents.

[4] By stipulation the parties agreed to delay consideration of a pending omnibus Daubert motion regarding their proposed experts. In the interim, we decided In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305 (3d Cir. 2008), which required a "rigorous analysis" of the proposed classes in light of the requirements for class certification. Id. at 309. The District Court ordered supplementary briefing and informed the parties that they may need to address the reliability of expert evidence to the extent it related to class certification issues. The District Court's analysis turned largely on whether the experts' opinions qualified as common proof and not whether their methods were reliable.

[5] Exposure is compared to background levels unless the defendant's contamination is so severe that it alters the baseline background level. See In re Paoli R.R. Yard PCB Litig., 113 F.3d 444, 461 (3d Cir.1997). The District Court found the expert testimony did not meet that standard and plaintiffs do not challenge that finding on appeal.

[6] Isopleths are lines on a map joining points of equal value to show distributions of a specific variable, such as the use of contour lines on a topographical map to show elevation. The isopleth lines here demark areas in and around the village where the estimated concentration of vinyl chloride within the line equals or exceeds the stated value.

[7] Three isopleth maps show the concentration during the class period. The isopleth modeling the high emission scenario from 1968 to 1989 shows a small fraction of the Village in an isopleth of 0.20 µ/m3 with the remainder of the Village in an isopleth of 0.08 µ/m3. The isopleth of the period from 1990 to 1996 shows a significant portion of the Village in an isopleth of 0.08 µ/m3 and the rest in an isopleth of 0.022 µ/m3. The last isopleth map showing the period from 1997 to 2006 shows a minority of the village in an isopleth of 0.026 µ/m3 and the remainder in an isopleth of 0.008 µ/m3.

[8] The District Court noted Ginsberg described his calculation of the 0.127 figure "in two different, contradictory ways" at the hearing and during his deposition. At his deposition Ginsberg testified he used Zannetti's "high scenario" which is calculated only for the point of the Village closest to the plume. But at the hearing, Ginsberg testified he averaged the two ends of the isopleth distribution — the point closest to the contamination and the point at the furthest end of the village. The District Court found that either explanation would not change the fact the number represents an average of class members' exposure.

[9] The bulk of Ginsberg's report provides a detailed analysis of the carcinogenic nature of vinyl chloride. The defendants dispute whether vinyl chloride poses a cancer risk to humans. We need not address the issue as it presents a merits determination that does not alter the analysis of the propriety of class certification.

[10] See Principles of the Law of Aggregate Litigation § 2.04 reporter's notes cmt. b, at 124 (2010) ("As a matter of substantive law, courts are split on the viability of, and proper approach to medical monitoring actions."); 7AA Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1775, at 55-56 (3d ed.2005) ("One type of order about which there is some disagreement in the courts is a request for medical monitoring. Some courts have deemed that request the equivalent of one for an injunction; others have treated it as a form of damage relief." (footnote omitted)); 1 Joseph M. McLaughlin, McLaughlin on Class Actions: Law and Practice § 5:18, at 5-70 (3d ed.2006) ("Medical monitoring is a controversial, cutting-edge concept that has not undergone widespread scrutiny in the state courts, let alone gained widespread acceptance."). Only a handful of states have allowed plaintiffs to recover the costs of medical monitoring without other physical injury. See Burns v. Jaquays Mining Corp., 156 Ariz. 375, 752 P.2d 28, 33-34 (App. 1987); Potter v. Firestone Tire and Rubber Co., 6 Cal.4th 965, 25 Cal. Rptr.2d 550, 863 P.2d 795, 822-23 (1993); Ayers v. Twp. of Jackson, 106 N.J. 557, 525 A.2d 287, 314 (1987); Redland Soccer Club, Inc. v. Dep't of the Army, 548 Pa. 178, 696 A.2d 137, 142 (1997); Hansen v. Mountain Fuel Supply Co., 858 P.2d 970, 979-80 (Utah 1993); Bower v. Westinghouse Elec. Corp., 206 W.Va. 133, 522 S.E.2d 424, 429-30 (1999); see also Adkins v. Thomas Solvent Co., 440 Mich. 293, 487 N.W.2d 715, 720 (1992) (recognizing threats or impending threats to health as actionable under a private nuisance cause of action).

[11] Compare, e.g., Boughton v. Cotter Corp., 65 F.3d 823, 827 (10th Cir.1995) with Zinser v. Accufix Research Inst. Inc., 253 F.3d 1180, 1194-96, amended, 273 F.3d 1266 (9th Cir. 2001).

[12] Commentators have noted that certification requirements under Rule 23(b)(2) are more stringent than under (b)(3). See 7AA Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure, § 1784.1, at 343 (3d ed.2005) ("[T]he common-question and superiority standards of Rule 23(b)(3) are in some ways much less demanding than that of either Rule 23(b)(1) or Rule 23(b)(2)...."); see also 1 Joseph M. McLaughlin, McLaughlin on Class Actions: Law and Practice § 5:15, at 5-57 (3d ed.2006) ("[I]t is well established that a rule 23(b)(2) class should actually have more cohesiveness than a Rule 23(b)(3) class." (internal quotations omitted)).

[13] As noted, the Court left open whether monetary awards incidental to the grant of declaratory or injunctive relief were permissible. Id. at 2561.

[14] Neither party challenges the trial court's conclusion that Pennsylvania law applies or that, if Illinois law applied, the Illinois Supreme Court would adopt a cause of action for medical monitoring with the same essential elements as Pennsylvania law.

[15] Plaintiffs were aware that the issues of class certification were linked to the merits of their claims. In their reply brief to the District Court, plaintiffs stated "[a]lthough typically a party moving for class certification need not present expert opinions on the merits (as opposed to the experts' proposed methodologies), in this case, merits and certification are closely linked."

[16] While plaintiffs argue the court committed error by describing their evidence as "averages," plaintiffs themselves stated in their reply brief to the District Court that "[p]laintiffs will prove that daily average levels of vinyl chloride during the defined periods of time migrated from defendants' manufacturing sites to the Village." (emphasis added).

[17] Zannetti's report does not list the assumptions made that would affect the concentration of exposure, such as the amount of time spent in the village. Ginsberg, in reaching his average, assumed the residents were present 350 days in a year for 24 hours-a-day, 7 days-a-week for twenty-five years.

[18] Plaintiffs' experts agreed risk levels varied by individual. Melissa Neiman, a board certified neurosurgeon, noted "[i]ndividuals in the class will likely have varying degrees of risk regarding the development of brain tumors," although in her opinion all exposed persons would have a higher risk than the average non-exposed person. Ginsberg's report states exposure to vinyl chloride has "greater cancer effects in early life for liver and other tumor sites." Therefore, exposure at the screening target of 0.07 µ/m3 used for "mixed populations" may pose little risk for healthy adults, but may pose a great risk for children. For example, Ginsberg testified that EPA Region 3 considers 0.16 µ/m3 as the "de minimis risk threshold" but, according to Ginsberg, the EPA uses "a lower screening level [the 0.07 µ/m3 standard] for community risk if it's a mixed population, meaning young children and adults."

[19] Rule 23(b)(3) requires "that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed.R.Civ.P. 23(b)(3). It lists factors relevant to the predominance and superiority requirements:

(A) the class members' interests in individually controlling the prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.

Id.

[20] The parties do not address the court's findings that a class action would not be a superior method of adjudication. In any event, we see no error here.

[21] Fed.R.Civ.P. 23(c)(4) states: "Particular Issues. When appropriate, an action may be brought or maintained as a class action with respect to particular issues."

[22] Plaintiffs appear to rely on the same purported common proof used for the medical monitoring class. But the common evidence presented for the medical monitoring class shows present levels of contamination to be very low, undercutting the claims of the class seeking damages for present contamination of their property.

[23] Cf. Boughton, 65 F.3d at 827 n. 1 ("[W]here, as here, there are multiple types of claims, more than one form of relief sought and the parties disagree about the number of models necessary to deal with the various ways in which properties may have become contaminated it may not be so simple as to err on the side of certification just to keep the option open because there may be mutually exclusive ways of defining subclasses and any attempt to certify subclasses before it is clear what the common issues are carries with it the potential for making the case less manageable.")

[1326] Samuel Issacharoff, New York University Sch. of Law, New York City, Norwood S. Wilner, Frank Fratello, Jr., Wilner, Hartley & Metcalf, P.A., Jacksonville, FL, for Plaintiffs.

Stephanie Ethel Parker, Jones Day, Atlanta, GA, Andrew L. Frey, Mayer, Brown, Rowe & Maw, New York City, Elliot H. Scherker, Brigid F. Cech Samole, David L. Ross, Greenberg Traurig, P.A., Miami, FL, for Defendants.

John H. Beisner, Matthew Shoes, Scott M. Edson, O'Melveny & Myers, LLP, Washington, DC, for Amicus Curiae.

Before CARNES, HULL and ANDERSON, Circuit Judges.

CARNES, Circuit Judge:

I.

Almost two decades ago, six individuals filed a lawsuit in Florida state court against the major domestic makers of cigarettes and two industry organizations seeking over $100 billion in both compensatory and punitive damages for injuries allegedly caused by smoking. Liggett Grp. Inc. v. Engle, 853 So.2d 434, 440-41 (Fla. 3d DCA 2003) (Engle II). The plaintiffs asserted claims of "strict liability, negligence, breach of express warranty, breach of implied warranty, fraud, conspiracy to commit fraud, and intentional infliction of emotional distress." Id. at 441. After some wrangling between the parties and an interlocutory appeal to the Third District Court of Appeal, a class was certified composed of "[a]ll Florida citizens and residents," R.J. Reynolds Tobacco Co. v. Engle, 672 So.2d 39, 42 (Fla. 3d DCA 1996) (Engle I), "and their survivors who have suffered, presently suffer or who have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine." Engle v. Liggett Grp. Inc., 945 So.2d 1246, 1256 (Fla.2006) (Engle III). There were estimated to be at least 700,000 class members. Id. at 1258; Engle II, 853 So.2d at 442.

To manage the class action, the trial court developed a trial plan that had three phases. See Engle III, 945 So.2d at 1256. Phase I was a year-long trial that involved only "common issues relating . . . to the defendants' conduct and the general health [1327] effects of smoking." Id. The jury was given a verdict form at the end of Phase I containing a series of questions. The verdict form asked the jury to answer "yes" or "no" to each question for specific time periods for each of the defendants.

The Engle class came close to running the table—the jury answered "yes" to almost every question put to them. The jury found: (1) that smoking cigarettes causes 20 of 23 listed diseases or medical conditions; (2) that cigarettes containing nicotine are addictive or dependence producing; (3) that the defendants placed cigarettes on the market that were defective and unreasonably dangerous; (4) that the defendants made a false statement of a material fact, either knowing the statement was false or misleading, or being without knowledge as to its truth or falsity, with the intention of misleading smokers; (4a) that the defendants concealed or omitted material information, not otherwise known or available, knowing the material was false and misleading, or failed to disclose a material fact concerning or proving the health effects and/or addictive nature of smoking cigarettes; (5) that the defendants entered into an agreement to misrepresent information relating to the health effects of cigarette smoking, or the addictive nature of smoking cigarettes, with the intention that smokers and members of the public rely to their detriment; (5a) that the defendants entered into an agreement to conceal or omit information regarding the health effects of cigarette smoking, or the addictive nature of smoking cigarettes, with the intention that smokers and members of the public rely to their detriment; (6) that the defendants sold or supplied cigarettes that were defective in that they were not reasonably fit for the uses intended; (7) that the defendants sold or supplied cigarettes that, at the time of sale or supply, did not conform to representations of fact made by the defendants either orally or in writing; (8) that the defendants failed to exercise the degree of care that a reasonable cigarette manufacturer would exercise under like circumstances; (9) that the defendants engaged in extreme and outrageous conduct or with reckless disregard relating to cigarettes sold to Florida smokers with the intent to inflict severe emotional distress; and (10) that the defendants' conduct rose to a level that would permit a potential award or entitlement to punitive damages. See id. at 1257 n. 4.^[1]

In Phase I, however, the jury was not asked whether the class had proven any of its claims; it did not decide if the defendants were liable to anyone on any cause of action. See Engle III, 945 So.2d at 1246 ("In Phase I, the jury decided issues related to Tobacco's conduct but did not consider whether any class members relied on Tobacco's misrepresentations or were injured by Tobacco's conduct."); Engle II, 853 So.2d at 450 ("In Phase [I], the jury answered certain general questions about the defendants' products and conduct. The questions related to some, but not all of the elements of each legal theory alleged. . . . The jury did not determine whether defendants were liable to anyone. Essential elements of liability, such as reliance [1328] and proximate cause, were [not] tried in Phase I.").

Later, in Phase II, the same jury did determine that the defendants' conduct was the legal cause of three individual class representatives' injuries. The three were awarded a total of $12.7 million in compensatory damages after their comparative fault was taken into account. Engle III, 945 So.2d at 1257. The jury also awarded a lump sum of $145 billion in punitive damages to the entire Engle class. Id.

Before Phase III could be conducted, the defendants appealed the verdicts the jury had returned in Phases I and II. Engle II, 853 So.2d at 441-42; see also Brown v. R.J. Reynolds Tobacco Co., 576 F.Supp.2d 1328, 1332 (M.D.Fla.2008). The appeal resulted in a Third District Court of Appeal decision that the Engle class should be decertified. The court concluded that class action treatment was inappropriate because "the plaintiffs smokers' claims [we]re uniquely individualized and [could not] satisfy the `predominance' and `superiority' requirements imposed by Florida's class action rules." Engle II, 853 So.2d at 444. The court also reversed the compensatory damages award in favor of the three individual class representatives, finding that none of them had valid claims against any of the defendants.^[2] As for the punitive damages award, the court reversed it on a variety of grounds that are not relevant to the present case. See id. at 470.

The class appealed the Third District Court of Appeal's decision to the Florida Supreme Court. That court agreed that the punitive damages award to the class should be reversed, Engle III, 945 So.2d at 1254, and agreed with the reversal of the compensatory damages award to one of the three individual class representatives, id. at 1276. However, the court reinstated the compensatory damages award to the other two class representatives.^[3] Id. For our purposes though, the most important parts of the Engle III decision are those involving certification of the Engle class and the jury's findings in Phase I.

The Florida Supreme Court decided that the trial court had not abused its discretion in certifying the Engle class for Phases I and II but also decided that "continued class action treatment for Phase III of the trial plan [was] not feasible because individualized issues such as legal causation, comparative fault, and damages [would] predominate." Id. at 1267-68. As for the jury's findings in Phase I, the court threw out four of them but determined that the remainder could stand.^[4] See Engle III, 945 So.2d at 1255. (We will refer to the findings that were not [1329] thrown out by the Florida Supreme Court as the Phase I "approved" findings.) The court then set out where the case should go from there:

The pragmatic solution is to now decertify the class, retaining the jury's Phase I findings other than those on the fraud and intentional infliction of emotion distress claims, which involved highly individualized determinations, and the findings on the entitlement to punitive damages questions, which was premature. Class members can choose to initiate individual damages actions and the Phase I common core findings we approved above will have res judicata effect in those trials.

Id. at 1269 (emphasis added). The Florida Supreme Court's instruction that the Phase I approved findings have "res judicata effect" is at the heart of this appeal, which resulted from a lawsuit filed in federal district court by some of the former Engle class members.

In their amended complaint, the plaintiffs sought to recover compensatory and punitive damages from the defendants under theories of strict liability, breach of express warranty, breach of implied warranty, civil conspiracy to fraudulently conceal, fraudulent concealment, negligence, and loss of consortium. The plaintiffs asserted the "res judicata effect" of the Engle Phase I approved findings and took the position that the only issues left in the case were "specific causation, apportionment of damages, comparative fault, compensatory damages, entitlement to punitive damages, and punitive damages." The defendants disagreed and countered by asking the district court for a pre-trial order outlining the preclusive effect that the Phase I approved findings would have in this case. They wanted an order "specifying that Plaintiffs cannot rely on the Engle findings as establishing any of the elements of their claims." The district court did issue an order that "the findings [could] not be given preclusive effect in any proceeding to establish any element of an Engle Plaintiff's claim." Brown, 576 F.Supp.2d at 1348. The order, however, "reserv[ed] judgment on whether the findings [could] have any other preclusive effect." Id. The district court explained:

[T]he Phase I findings may prevent a defendant from arguing, inter alia, that it never acted negligently, never engaged in a conspiracy to conceal, or never placed a defective product on the market. In addition, the general findings of Question 1, that cigarette smoking causes various diseases and illnesses and, in a proper circumstance, may be given preclusive effect, prevents the Defendants from denying that cigarette smoking itself has been found to cause, inter alia, aortic aneurysm, bladder cancer, coronary heart disease, and lung cancer.

Id. at 1344 n. 25. This is the plaintiffs' interlocutory appeal of that pretrial order. See 28 U.S.C. § 1292(b).

II.

The district court determined that allowing the Engle Phase I approved findings to establish elements of the plaintiffs' causes of action would violate the defendants' due process rights. See Brown, 576 F.Supp.2d at 1344-46. The plaintiffs contend that under the Rooker-Feldman doctrine the [1330] district court lacked jurisdiction to determine whether applying the Florida Supreme Court's decision about the preclusive effect of the Engle Phase I approved findings would be unconstitutional. See Rooker v. Fid. Trust Co., 261 U.S. 114, 43 S.Ct. 288, 67 L.Ed. 556 (1923); Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). We disagree.

The Rooker-Feldman doctrine is jurisdictional. It "prevents . . . lower federal courts from exercising jurisdiction over cases brought by `state-court losers' challenging `state-court judgments rendered before the district court proceedings commenced.'" Lance v. Dennis, 546 U.S. 459, 460, 126 S.Ct. 1198, 1199, 163 L.Ed.2d 1059 (2006) (quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 1521-22, 161 L.Ed.2d 454 (2005)). The doctrine bars the losing party in state court "from seeking what in substance would be appellate review of the state judgment in a United States district court, based on the losing party's claim that the state judgment itself violates the loser's federal rights." Johnson v. De Grandy, 512 U.S. 997, 1005-06, 114 S.Ct. 2647, 2654, 129 L.Ed.2d 775 (1994).

Recently, in Exxon Mobil Corp. v. Saudi Basic Industries Corp., 544 U.S. 280, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005), the Supreme Court clarified the doctrine and narrowed its application, noting that "the doctrine has sometimes been construed [by lower federal courts] to extend far beyond the contours of the Rooker and Feldman cases." Id. at 283, 125 S.Ct. at 1521. The Court held that it should be "confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments." Id. at 284, 125 S.Ct. at 1521-22; see Casale v. Tillman, 558 F.3d 1258, 1261 (11th Cir.2009) (per curiam) ("[T]he Supreme Court's recent Rooker-Feldman decisions have noted the `narrowness' of the rule . . . ." (citing Lance, 546 U.S. at 464, 126 S.Ct. at 1201)); Hoblock v. Albany County Bd. of Elections, 422 F.3d 77, 85 (2d Cir.2005) ("In Exxon Mobil, the Supreme Court pared back the Rooker-Feldman doctrine to its core . . . .").

Although the defendants before us were the "state-court losers" in Engle Phase I, where the approved findings were entered, they did not bring this lawsuit. It was brought by the plaintiffs who were the state-court winners. The Rooker-Feldman doctrine only applies when the federal plaintiff is the "state-court loser."^[5] See Exxon Mobil, 544 U.S. at 284, 125 S.Ct. at 1521-22. The plaintiffs argue that the state-court-loser-as-plaintiff procedural model is simply the usual fact pattern, not a requirement for application of the doctrine. They point out that 28 U.S.C. § 1257(a), the principal statute upon which the doctrine is based, makes no distinction between plaintiffs and defendants.^[6] It does not, but the Supreme Court did.

[1331] In Exxon Mobil the Court could scarcely have been clearer in stating that the Rooker-Feldman doctrine is "confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments." Id. (emphasis added). We will not ignore the Supreme Court's instruction and apply the doctrine to a case like this one where the federal plaintiff is not the "state-court loser" and is not seeking "review and rejection" of a state court judgment. The Rooker-Feldman doctrine is inapplicable here. In place of it, ordinary preclusion rules govern the effect of the Engle Phase I approved findings. See id. at 284, 125 S.Ct. at 1522 ("Rooker-Feldman does not otherwise override or supplant preclusion doctrine. . . .").

III.

Under the Full Faith and Credit Act, 28 U.S.C. § 1738, a federal court must "give preclusive effect to a state court judgment to the same extent as would courts of the state in which the judgment was entered." Kahn v. Smith Barney Shearson Inc., 115 F.3d 930, 933 (11th Cir.1997); see also Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 380, 105 S.Ct. 1327, 1332, 84 L.Ed.2d 274 (1985) (stating that § 1738 "directs a federal court to refer to the preclusion law of the State in which judgment was rendered"). That means the Phase I approved findings must be given the same preclusive effect in this federal court case that they would be given if the case were in state court. Florida preclusion law controls.

In Engle III, as we have already noted, the Florida Supreme Court directed that the Phase I approved findings were to have "res judicata effect" in future trials involving former class members. See Engle III, 945 So.2d at 1269 ("Class members can choose to initiate individual damages actions and the Phase I common core findings we approved above will have res judicata effect in those trials." (emphasis added)); id. at 1254 ("[W]e remand with directions that the class should be decertified without prejudice to the class members filing individual claims . . . with res judicata effect given to certain Phase I findings." (emphasis added)); id. at 1277 ("Individual plaintiffs within the class will be permitted to proceed individually with the [approved] findings . . . given res judicata effect in any subsequent trial between individual class members and the defendants." (emphasis added)).

The term "res judicata" is translated from the Latin as "a thing adjudicated," but it has more than one meaning. See Black's Law Dictionary 1336 (8th ed.2004). It can refer specifically to claim preclusion or it can refer generally to the preclusive effect of earlier litigation. See Wacaster v. Wacaster, 220 So.2d 914, 915 (Fla. 4th DCA 1969) ("Res judicata is a [1332] term which has been given a good many different meanings. Current usage apparently gives it a broad meaning which covers all the various ways in which a judgment in one action will have a binding effect in another."). When the term has that second meaning, it encompasses claim preclusion and issue preclusion, and it can mean either or both. See Taylor v. Sturgell, 553 U.S. 880, 128 S.Ct. 2161, 2171, 171 L.Ed.2d 155 (2008) ("The preclusive effect of a judgment is defined by claim preclusion and issue preclusion, which are collectively referred to as `res judicata.'"); David Vincent, Inc. v. Broward County, 200 F.3d 1325, 1330 n. 7 (11th Cir.2000) ("Claim and issue preclusion are often lumped together under the rubric of res judicata."); Aquatherm Indus., Inc. v. Fla. Power & Light Co., 84 F.3d 1388, 1391 n. 1 (11th Cir.1996) ("[T]he terminology used to discuss the preclusive effects of earlier litigation is somewhat confusing because res judicata is often used to refer both to claim preclusion and to issue preclusion."). Issue preclusion is also sometimes called collateral estoppel. Thus, the Florida Supreme Court's direction that the Phase I approved findings were to have "res judicata effect" could have referred to claim preclusion, to issue preclusion, or to both.

Claim preclusion "bars a subsequent action between the same parties on the same cause of action." State v. McBride, 848 So.2d 287, 290 (Fla.2003); see also Pumo v. Pumo, 405 So.2d 224, 226 (Fla. 3d DCA 1981) ("Under the doctrine of res judicata, a final judgment or decree on the merits by a court of competent jurisdiction constitutes an absolute bar to a subsequent suit on the same cause of action and is conclusive of all issues which were raised or could have been raised in the action."); Seaboard Coast Line R.R. Co. v. Indus. Contracting Co., 260 So.2d 860, 862 (Fla. 4th DCA 1972) (same). The doctrine applies under Florida law "when all four of the following conditions are present: (1) identity of the thing sued for; (2) identity of the cause of action; (3) identity of persons and parties to the action; and (4) identity of quality in persons for or against whom claim is made." Fla. Bar v. Rodriguez, 959 So.2d 150, 158 (Fla. 2007) (quotation marks omitted).

Issue preclusion, by contrast, operates more narrowly to prevent re-litigation of issues that have already been decided between the parties in an earlier lawsuit. See Mortg. Elec. Registration Sys., Inc. v. Badra, 991 So.2d 1037, 1039 (Fla. 4th DCA 2008) (stating that issue preclusion "precludes re-litigating an issue where the same issue has been fully litigated by the same parties or their privies, and a final decision has been rendered by a court"); State Dep't of Revenue v. Ferguson, 673 So.2d 920, 922 (Fla. 2d DCA 1996) ("The doctrine of collateral estoppel prevents identical parties from relitigating issues that have previously been decided between them."); Rohan v. Trakker Maps, Inc., 633 So.2d 1176, 1177 (Fla. 3d DCA 1994) ("The application of collateral estoppel prevents the parties in a second suit from litigating those points in question which were actually adjudicated in the first suit."); Liberty Mut. Ins. Co. v. Jozwick, 204 So.2d 216, 218 (Fla. 3d DCA 1967) ("Estoppel by judgment [or issue preclusion] prevents parties from litigating in a second suit common issues which were actually adjudicated in a prior action.").

The "essential elements" of issue preclusion under Florida law are "that the parties and issues be identical, and that the particular matter be fully litigated and determined in a contest which results in a final decision of a court of competent jurisdiction." Dadeland Depot, Inc. v. St. Paul Fire & Marine Ins. Co., 945 So.2d 1216, 1235 (Fla.2006) (quotation marks omitted); see also Dep't of Health & Rehabilitative [1333] Servs. v. B.J.M., 656 So.2d 906, 910 (Fla. 1995) (same); Mobil Oil Corp. v. Shevin, 354 So.2d 372, 374 (Fla.1977) (same); Holt v. Brown's Repair Serv., Inc., 780 So.2d 180, 182 (Fla. 2d DCA 2001) ("[F]or the doctrine of collateral estoppel to apply, an identical issue must be presented in a prior proceeding; the issue must have been a critical and necessary part of the prior determination; there must have been a full and fair opportunity to litigate that issue; the parties in the two proceedings must be identical; and the issues must have been actually litigated.").

When those elements are present, issue preclusion can be applied offensively or defensively. See E.C. v. Katz, 731 So.2d 1268, 1269 (Fla.1999) (recognizing that Florida law requires mutuality of parties for both defensive and offensive use of issue preclusion); Massey v. David, 831 So.2d 226, 233 (Fla. 1st DCA 2002) (same); Zeidwig v. Ward, 548 So.2d 209, 212 (Fla. 1989) (offensive use occurs when a plaintiff seeks to prevent a defendant from relitigating an identical issue previously decided against that defendant); see also Katz, 731 So.2d at 1269-70 (defensive use occurs when a defendant seeks to prevent a plaintiff from re-litigating an identical issue previously decided against that plaintiff).

In Phase I the same parties as in the present lawsuit litigated "common issues" relating to "the defendants' conduct and the general health effects of smoking." Engle III, 945 So.2d at 1256; see also id. at 1263 (noting that the Phase I jury "did not determine whether the defendants were liable to anyone" (quotation marks omitted)); id. at 1267-68 (explaining that the Engle class must be prospectively decertified because "individualized issues such as legal causation, comparative fault, and damages [would] predominate"). "The idea underlying [claim preclusion] is that if a matter has already been decided, the [litigant] has already had his or her day in court, and for purposes of judicial economy, that matter generally will not be reexamined . . . ." Topps v. State, 865 So.2d 1253, 1254-55 (Fla.2004); see also Denson v. State, 775 So.2d 288, 290 n. 3 (Fla.2000) (per curiam) (same). The defendants had their day in court on the "common issues" of fact that were decided in Phase I, and later approved by the Florida Supreme Court, but they did not have their day in court on the broader questions involving the causes of action the class asserted, which were left undecided. See Engle III, 945 So.2d at 1263.

Because factual issues and not causes of action were decided in Phase I, the Florida Supreme Court's direction that the approved findings were to have "res judicata effect" in future trials involving former class members necessarily refers to issue preclusion. See Rice-Lamar v. Fort Lauderdale, 853 So.2d 1125, 1131 (Fla. 4th DCA 2003) (stating that issue preclusion "does not require prior litigation of an entire claim, only a particular issue"); Club & Cmty. Consulting Corp. v. Brown, 728 So.2d 822, 824 (Fla. 4th DCA 1999) ("The application of collateral estoppel does not require that the entire claim have been previously litigated, only that an issue have been litigated."). The parties agree that issue preclusion, not claim preclusion, is what the Florida Supreme Court meant.^[7] They also agree that the defendants [1334] cannot re-litigate the Phase I approved findings. The parties disagree, however, about what the findings mean to this case. The plaintiffs think that they mean a lot while the defendants think that they mean not so much.

As we have already explained, issue preclusion only operates to prevent the relitigation of issues that were decided, or "actually adjudicated," between the parties in an earlier lawsuit. See Gordon v. Gordon, 59 So.2d 40, 44 (Fla.1952) (stating that issue preclusion prevents "parties from litigating in the second suit issues— that is to say points and questions—common to both causes of action and which were actually adjudicated in the prior litigation"); Hittel v. Rosenhagen, 492 So.2d 1086, 1089-90 (Fla. 4th DCA 1986) ("It is essential that the question [being given issue preclusive effect] was actually adjudicated and that, if there is any doubt as to whether a litigant has had his day in court such doubt must be resolved in favor of the full consideration of the substantive issues of the litigation. . . ."); Chandler v. Chandler, 226 So.2d 697, 699 (Fla. 4th DCA 1969) (noting that "[i]n collateral estoppel the `precise fact' or `every point and question' on the issue must have been decided").

Florida courts have enforced the "actually adjudicated" requirement, see Gordon, 59 So.2d at 44, with rigor. Issue preclusive effect is not given to issues which could have, but may not have, been decided in an earlier lawsuit between the parties. See, e.g., Acadia Partners, L.P. v. Tompkins, 673 So.2d 487, 488-89 (Fla. 5th DCA 1996) (holding that jury's verdict "for [the defendant]" in a breach of contract action did not establish the absence of breach because the jury was instructed that it could find for the defendant if it concluded that the defendant had not breached the contract or if the defendant proved an affirmative defense); Allstate Ins. Co. v. A.D.H., Inc., 397 So.2d 928, 929-30 (Fla. 3d DCA 1981) (concluding that subcontractor could not show that general contractor was at fault and therefore not entitled to indemnification based on jury's "undifferentiated general verdict finding [the general contractor] `negligent'" in an earlier lawsuit; the jury could have determined that the general contractor was at fault or vicariously liable); Seaboard, 260 So.2d at 864-65 (finding that general verdict "in favor of the defendant" could have been based on jury's conclusion that the defendant was not negligent or that the plaintiff was contributorily negligent); see id. at 865 ("[I]t is impossible to ascertain with any reasonable degree of certainty as to what issue was adjudicated in the former suit except to say that the jury found in favor of [the defendant]. Such uncertainty as to the effect of the prior adjudication renders the doctrine of collateral estoppel inapplicable.").

Applying the "actually adjudicated" requirement to this case, the Phase I approved findings may not be used to establish facts that were not actually decided by the jury. The plaintiffs, who want the benefit of the findings in this case, do not disagree with that proposition. And, of course, neither do the defendants. In fact, the defendants contend that using the findings to establish facts that were not decided by the jury would violate their due process rights. We need not decide that constitutional issue, because under Florida law the findings could not be used for that purpose anyway. The bottom line, then, is that the Phase I approved findings may be given effect to the full extent of, but no farther than, what the jury found. The disagreement is about what the jury actually did find. The defendants, taking a narrow view, insist that the only facts found by the jury are those framed by the specific factual issue set out in the questions posed to them on the verdict form.

[1335] The plaintiffs, by contrast, take a broader view of what facts the jury decided, arguing that the language of the questions, and hence the jury's answers, can and should be fleshed out using the record as a whole and apparently by going outside the record.

For example, Question 3 on the verdict form asked the jury: "Did one or more of the Defendant Tobacco Companies place cigarettes on the market that were defective and unreasonably dangerous?" The jury answered "yes," for every time period for every defendant except Brooke Group, Ltd., Inc.^[8] Under the defendants' view, the only fact that the jury found was that they sold some cigarette that was defective and unreasonably dangerous during the time periods listed on the verdict form. That would mean that the finding may not establish anything more specific; it may not establish, for instance, that any particular type or brand of cigarette sold by a defendant during the relevant time period was defective and unreasonably dangerous. Under the plaintiffs' broader view the jury's finding must mean that all cigarettes the defendants sold were defective and unreasonably dangerous because there is nothing to suggest that any type or brand of cigarette is any safer or less dangerous than any other type or brand. One problem with that argument is that the plaintiffs have pointed to nothing in the record, and there is certainly nothing in the jury findings themselves, to support their factual assertion.^[9] Under Florida law the issue preclusion standard requires the asserting party to show with a "reasonable degree of certainty" that the specific factual issue was determined in its favor. See Seaboard, 260 So.2d at 864-65. The entire trial record may be considered for that purpose, although the burden is on the asserting party to point to specific parts of it to support its position, so long as those parts of the record combine to show to a reasonable degree of certainty that the jury made the specific factual determination that is being asserted. Nothing in the decisions we have read suggests that the inquiry may extend to matters outside the trial record, and it would not make sense to do so since the jury could not have appropriately considered anything outside the record.^[10]

In the pre-trial order that is the subject of this interlocutory appeal, the district court decided that the Phase I approved findings may not be used to establish any element of the plaintiffs' causes of action. Brown, 576 F.Supp.2d at 1348. The district court reached that conclusion without first giving preclusive effect to the Phase I approved findings. See id. The Phase I approved findings have to be given preclusive effect; they do establish some facts [1336] that are relevant to this litigation. Otherwise, the Florida Supreme Court's statement in Engle III that the Phase I approved findings were to have "res judicata effect" in trials involving former class members would be meaningless. See Engle III, 945 So.2d at 1254, 1269, 1277.

We leave it to the district court to apply Florida law as we have outlined it and decide in the first instance precisely what facts are established when preclusive effect is given to the approved findings. It is for the district court to determine, for example, whether the jury's answer to Question 3 establishes only that the defendants sold some cigarettes that were defective and unreasonably dangerous, or whether the plaintiffs have carried their burden of showing to a reasonable degree of certainty that it also establishes that all of the cigarettes that the defendants sold fit that description. See Seaboard, 260 So.2d at 864-65.

Until the scope of the factual issues decided in the Phase I approved findings is determined, it is premature to address whether those findings by themselves establish any elements of the plaintiffs' claims. Only after Florida law is properly applied to determine the scope of the facts established by the approved findings can it be decided which, if any, elements of the claims are established by them. Accordingly, the district court's ruling that "the findings may not be given preclusive effect in any proceeding to establish any element of an Engle Plaintiff's claim," cannot stand, at least not at this time. That finishes our consideration of the case. See McFarlin v. Conseco Servs., LLC, 381 F.3d 1251, 1255-56 (11th Cir.2004) ("[T]he scope of appellate review is not limited to the precise question certified by the district court because the district court's order, not the certified question, is brought before the court. . . . [W]e have the power to review an entire order, either to consider a question different from the one certified as controlling or to decide the case despite the lack of any identified controlling question." (quotation marks and citations omitted)).^[11]

IV.

The district court's order that was certified for interlocutory appeal is VACATED, and the case is REMANDED for further proceedings consistent with this opinion.

ANDERSON, Circuit Judge, concurring specially:

I concur in Judge Carnes' opinion for the court. Although plaintiffs failed to persuade the district court at this stage of the litigation that they could show with the requisite degree of certainty that all facts necessary to establish any particular element of any plaintiff's cause of action had been actually adjudicated and actually decided by the Phase I jury,^[12] I agree that it would be premature at this stage of the litigation to rule flatly that the Phase I findings cannot be given preclusive effect in these proceedings to contribute to or establish any element of any plaintiff's [1337] claim. I agree that it would be premature at this stage of the litigation to conclude that later in this litigation plaintiffs will be unable to use some Phase I findings to contribute to or establish some particular element of a plaintiff's cause of action, perhaps in conjunction with other facts proved in this litigation. For example, see footnote 10 of Judge Carnes' opinion for the court.

[1] The exceptions were that the jury found that smoking did not cause asthmatic bronchitis, infertility, or bronchioloalveolar carcinoma. The jury also found that one of the defendants, Brooke Group, Ltd., did not: place defective and unreasonably dangerous cigarettes on the market until after July 1, 1974; make a false statement of material fact with the intention of misleading smokers until after May 5, 1982; conceal or omit material information until after May 5, 1982; sell or supply defective cigarettes until after July 1, 1974; sell or supply cigarettes in breach of an express warranty until after July 1, 1974; or fail to exercise the degree of care that a reasonable cigarette manufacturer would exercise under like circumstances until July 1, 1969.

[2] The court concluded that two of the class representatives were not proper members of the class because they were not diagnosed with a disease until after October 31, 1994, the date it determined was the cut-off for class membership. The third class representative's claims, the court concluded, were barred by the statute of limitations. See Engle II, 853 So.2d at 455 n. 23.

[3] The Florida Supreme Court concluded that "the critical event" for class membership was "not when an illness was actually diagnosed by a physician, but when the disease or condition first manifested itself." Engle III, 945 So.2d at 1276. The court also determined that the cut-off date for class membership was November 21, 1996, not October 31, 1994, meaning that a would-be class member's disease must have manifested itself before that date. Id. at 1275. Because the disease of both class representatives had manifested itself before then, the court concluded that they were proper members of the class and reinstated the part of the judgment awarding them compensatory damages. Id. at 1276.

[4] The Florida Supreme Court threw out the jury's findings in response to Question 4, which involved fraud and misrepresentation, and Question 9, which involved intentional infliction of emotional distress. Engle III, 945 So.2d at 1255. The court explained that the jury's findings in response to those questions were "nonspecific" and were "inadequate to allow a subsequent jury to consider individual questions of reliance and legal cause." Id. The court also threw out the jury's finding in response to Question 5, which involved civil conspiracy-misrepresentation, reasoning that finding could not stand because it "relie[d] on the underlying tort of misrepresentation." See id. Finally, the court threw out as premature the jury's finding in response to Question 10 that the plaintiffs were entitled to punitive damages. See id. at 1269.

[5] The district court's order applies to 3,200 cases removed from state court and another 661 cases originally filed in federal court. Even in the removed cases, the federal plaintiff is still the "state-court winner," not the "state-court loser."

[6]That statute provides:

Final judgments or decrees rendered by the highest court of a State in which a decision could be had, may be reviewed by the Supreme Court by writ of certiorari where the validity of a treaty or statute of the United States is drawn in question or where the validity of a statute of any State is drawn in question on the ground of its being repugnant to the Constitution, treaties, or laws of the United States, or where any title, right, privilege, or immunity is specially set up or claimed under the Constitution or the treaties or statutes of, or any commission held or authority exercised under, the United States.

28 U.S.C. § 1257(a). The Rooker-Feldman doctrine "draws a negative inference from section 1257: because Congress only provided for review of state court judgments by the Supreme Court, Congress therefore intended to preclude lower federal courts from exercising such review." Nicholson v. Shafe, 558 F.3d 1266, 1272 (11th Cir.2009) (quotation marks omitted). The doctrine is also shaped by 28 U.S.C. § 1331, which provides federal district courts with "original jurisdiction," rather than appellate jurisdiction, "of all civil actions arising" under federal law. See 28 U.S.C. § 1331; Nicholson, 558 F.3d at 1271-72; Green v. Jefferson Cnty. Comm'n, 563 F.3d 1243, 1249 (11th Cir.2009).

[7] The plaintiffs argued before the district court and suggested in their brief to this Court that the Florida Supreme Court was referring to claim preclusion in Engle III. However, at oral argument the plaintiffs clarified that their position is that the Phase I approved findings are entitled to issue preclusive effect. As our discussion in the text makes clear, if the plaintiffs had continued to argue for claim preclusion, we would have rejected that position.

[8] The jury found that Brooke Group, Ltd., Inc., sold cigarettes that were defective and unreasonably dangerous after July 1, 1974, but not before that date.

[9] In their brief the plaintiffs point to the website of Philip Morris as evidence that all cigarette types and brands are equally dangerous, but the brief does not suggest that the website was part of the trial record. Even if it was, there still would be no indication that the jury actually found as a fact that all types and brands of cigarettes were equally defective and unreasonably dangerous.

[10] Although not deftly presented, there is in the plaintiffs' main brief something from which one might infer an argument that the jury's findings can be combined with facts that can be proven through other means to establish an element of a claim. For example, a Phase I approved finding that the defendants sold cigarettes that were defective and unreasonably dangerous might be combined with proof in this lawsuit that all cigarettes are equally defective and unreasonably dangerous. Maybe, but the argument is too poorly developed now for us to address. We leave it to the district court to decide the matter if it is appropriately presented.

[11] Our colleague, Judge Anderson, has filed a concurring opinion. We fully agree with everything that he says in that opinion and incorporate its statements into this one.

[12] Nor have plaintiff's arguments on appeal been persuasive in this regard. The generality of the Phase I findings present plaintiffs with a considerable task. The Florida issue preclusion law will have to be applied to specific facts demonstrated with the requisite certainty to have been adjudicated and decided by the Phase I jury (which plaintiffs thus far have not attempted to do). In order to use Phase I findings to help establish any particular element of any plaintiff's cause of action, plaintiffs not only will have to do the foregoing, but it will also probably be necessary for plaintiffs to prove additional facts in this litigation.

[1253] Stanley M. Rosenblatt and Susan Rosenblatt of Stanley M. Rosenblatt, P.A., Miami, Florida, for Petitioners.

Alvin Bruce Davis of Steel, Hector and Davis, P.A., Miami, Florida, Mercer K. Clarke and Kelly A. Luther of Clarke, Silverglate, Campbell, Williams and Montgomery, Miami, Florida, Marc E. Kasowitz, Daniel R. Benson and Aaron H. Marks of Kasowitz, Benson, Torres and Friedman, LLP, New York, New York, Elliott H. Scherker, Arthur J. England, Jr., and David L. Ross of Greenberg Traugrig, P.A., Miami, Florida, Norman A. Coll and Kenneth J. Reilly of Shook, Hardy and Bacon, LLP, Miami, Florida, Stephen N. Zack of Zack, Sparber, Kosnitzky, Spratt and Brooks, P.A., Miami, Florida, Benjamine Reid and Wendy F. Lumish of Carlton Fields, P.A., Miami, Florida, Anthony N. Upshaw of Adorno and Yoss, P.A., Miami, Florida, Renaldy J. Gutierrez and Kathleen M. Sales of Gutierrez and Associates, Miami, Florida, Dan K. Webb and Stuart Altschuler of Winston and Strawn, LLP, Chicago, Illinois, Robert H. Klonoff of Jones Day, Washington, D.C., Robert C. Heim and Joseph Patrick Archie of Dechert, LLP, Philadelphia, Pennsylvania, James R. Johnson and Diane P. Flannery of Jones Day, Atlanta, Georgia, and Richard A. Schneider of King and Spalding, LLP, Atlanta, Georgia, Joseph P. Moodhe of Debevoise and Plimpton, New York, New York, James T. Newsom of Shook, Hardy and Bacon, LLP, Kansas City, Missouri, for Respondents.

Norwood S. Wilner of Spohrer, Wilner, Maxwell and Matthews, P.A., Jacksonville, Florida on behalf of Tobacco Trial Lawyers Association; Theodore Jon Leopold of Ricci—Leopold, P.A., Palm Beach Gardens, Florida, Richard Frankel, Matthew L. Myers, and Michael Stroud, Washington, D.C. on behalf of Trial Lawyers for Public Justice and Public Citizen, the Campaign for Tobacco-Free Kids, and the American Cancer Society; Stephen P. Teret and Jon S. Vernick, Center for Law and the Public's Health, Johns Hopkins Bloomberg School of Public Health, Baltimore, Maryland, and John B. Ostrow, Miami, Florida on behalf of American Public Health Association, American Medical Association, American Academy of Pediatrics, American Heart Association, American Lung Association, American Legacy Foundation and Roswell Park Cancer Institute, Sylvester Comprehensive Cancer Center/University of Miami Hospital and Clinics and the Women's Cancer League of Greater Miami; Phillip Timothy Howard of Howard and Associates, P.A., Tallahassee, Florida, Douglas Blanke, Executive Director, William Mitchell College of Law, Saint Paul, Minnesota, Richard A. Daynard, Ph.D., Robert L. Kline and Christopher Banthin, Northeastern University School of Law, Boston, Massachusetts on behalf of Tobacco Control Legal Consortium and Tobacco Control Resource Center; Roy C. Young of Young Van Assenderp, Tallahassee, Florida, John H. Beisner, John F. Niblock and Jessica Davidson Miller of O'Melveny and Myers, LLP, Washington, D.C., and Robin S. Conrad, National Chamber Litigation Center, Inc., Washington, D.C., on behalf of the Chamber of Commerce of the United States; Rebecca O'Dell Townsend of Haas, Dutton, Blackburn, Lewis and Longley, P.L., Tampa, Florida, Daniel J. Popeo and David Price, Washington, D.C., on behalf of Washington Legal Foundation and National Association of Manufacturers, for Amici Curiae.

[1254] PER CURIAM.

This case arises from the Third District Court of Appeal's reversal of a final judgment entered in a smokers' class action lawsuit that sought damages against cigarette companies and industry organizations for alleged smoking-related injuries. See Liggett Group, Inc. v. Engle, 853 So.2d 434 (Fla. 3d DCA 2003) (hereinafter "Engle II"). The final judgment awarded $12.7 million in compensatory damages to three individual plaintiffs and $145 billion in punitive damages to the entire class. See id. at 441. We have jurisdiction because Engle II misapplies our decision in Young v. Miami Beach Improvement Co., 46 So.2d 26 (Fla.1950). See art. V, § 3(b)(3), Fla. Const.

For the reasons explained more fully in this opinion, although we approve the Third District's reversal of the $145 billion class action punitive damages award, we quash the remainder of the Third District's decision. A majority of the Court (Anstead, Pariente, Lewis and Quince) holds that the compensatory damages award in favor of Mary Farnan in the amount of $2,850,000 and Angie Della Vecchia in the amount of $4,023,000 should be reinstated. However, the court unanimously agrees that the compensatory damages award in favor of Frank Amodeo must be vacated based on the statute of limitations.

Further, a majority of the Court (Anstead, Pariente, Lewis and Quince) concludes that Engle II misapplied our decision on the law of the case doctrine in Florida Department of Transportation v. Juliano, 801 So.2d 101, 106 (Fla.2001); that the certification of the class action and the Phase I trial process were not abuses of the trial court's discretion; and that certain common liability findings can stand. However, we also conclude that the remaining issues, including individual causation and apportionment of fault among the defendants, are highly individualized and do not lend themselves to class action treatment. Thus, we remand with directions that the class should be decertified without prejudice to the class members filing individual claims within one year of the issuance of our mandate in this case with res judicata effect given to certain Phase I findings.

More specifically, we hold as follows:

PUNITIVE DAMAGES: We unanimously hold that the Third District erred in concluding that under Young the class action punitive damages claims were barred by the settlement agreement between the State of Florida and many of the defendants involved in the present action (Florida Settlement Agreement or FSA). However, we vacate the punitive damages award because we unanimously conclude that the punitive damages award is excessive as a matter of law.

A majority of the Court (Anstead, Pariente, Lewis, and Quince) also concludes that the Third District misapplied Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989), by holding that compensatory damages must be determined before a jury can consider entitlement to punitive damages. Although Justices Lewis and Quince would allow the finding of entitlement to punitive damages to stand, a different majority of the Court (Wells, Anstead, Pariente, and Bell) concludes that the trial court erred in allowing the jury to make this finding during Phase I because, consistent with Ault, proof of liability, which includes both reliance and causation, is a predicate to the determination of entitlement to punitive damages.

PHASE I FINDINGS: A majority of the Court (Anstead, Pariente, Lewis, and Quince) concludes that the Third District erred as a matter of law in conducting a [1255] plenary review of the trial court's decision to certify the Engle Class after completion of an extended Phase I trial and after a different panel of the Third District upheld the certification.^[1] This same majority concludes that it was proper to allow the jury to make findings in Phase I on Questions 1 (general causation), 2 (addiction of cigarettes), 3 (strict liability), 4(a) (fraud by concealment), 5(a) (civil-conspiracy-concealment), 6 (breach of implied warranty), 7 (breach of express warranty), and 8 (negligence). Therefore, these findings in favor of the Engle Class can stand. The Court unanimously agrees that the nonspecific findings in favor of the plaintiffs on Questions 4 (fraud and misrepresentation) and 9 (intentional infliction of emotional distress) are inadequate to allow a subsequent jury to consider individual questions of reliance and legal cause. Therefore, these findings cannot stand. Because the finding in favor of the plaintiffs on Question 5 (civil conspiracy-misrepresentation) relies on the underlying tort of misrepresentation, this finding also cannot stand.

ARGUMENTS OF ENGLE CLASS'S COUNSEL: A majority of the Court (Anstead, Pariente, Lewis, and Quince) disagrees with the Third District's conclusion that the plaintiffs' counsel's improper arguments require reversal, but we condemn in no uncertain terms some of these arguments. We do not address the Phase II arguments because we are reversing the punitive damages award from Phase II-B and the defendants do not raise any error with respect to arguments made during Phase II-A, in which the jury determined the individual compensatory damages of three class representatives.

CLASS CERTIFICATION CUT-OFF DATE: While a majority (Anstead, Pariente, Lewis, and Quince) agrees that the class cannot be open-ended, we disagree with the Third District's ruling that the appropriate cut-off date for class membership is October 31, 1994, the date the class was initially certified. We conclude that the date of the trial court's November 21, 1996, order that recertified a narrower class is the appropriate cut-off date.

JUDGMENT FOR CLASS MEMBERS: Because Mary Farnan, who was diagnosed with lung cancer in April 1996, is clearly a proper member of the class, the Third District erred in reversing the compensatory verdict in favor of Farnan in the amount of $2,850,000, except as against Liggett Group Inc. and Brooke Group Holding Inc., whom the jury found to be zero percent at fault. We thus approve the Third District's conclusion that a directed verdict should be granted in favor of Liggett and Brooke.

As for Angie Della Vecchia, she was diagnosed with lung cancer in early 1997. However, at that time, it was also noted by her doctors that she had a past medical history of chronic obstructive pulmonary disease ("COPD") and significant hypertension. Because two of the diseases at issue in this case are coronary heart disease and COPD, Della Vecchia's medical records indicate that she had been suffering from a tobacco related disease prior to the time of certification and is therefore properly included as a class member. The jury specifically found that her lung disease was caused by smoking. Thus, a majority of the Court concludes that the compensatory judgment in favor of Della Vecchia in the amount of $4,023,000 should stand, except as against Liggett and [1256] Brooke, who were found to be zero percent at fault.^[2] The Court unanimously agrees with the Third District that the final judgment in favor of class representative Frank Amodeo must be reversed because all of Amodeo's claims are barred by the statute of limitations.

With the summary of this Court's holdings set forth above, we now turn to a more in-depth discussion of the background of this case and the salient issues.

FACTS AND PROCEDURAL HISTORY

On October 31, 1994, the trial court certified as a nationwide class action a group of smokers and their survivors under Florida Rule of Civil Procedure 1.220(b)(3). The class representatives on behalf of themselves, and all others similarly situated, filed an amended class action complaint seeking compensatory and punitive damages against major domestic cigarette companies and two industry organizations (hereinafter collectively referred to as "Tobacco") for injuries allegedly caused by smoking.^[3]

The trial court defined the class as: "All United States citizens and residents, and their survivors, who have suffered, presently suffer or who have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine." Tobacco filed an interlocutory appeal of the trial court's order certifying the Engle Class pursuant to Florida Rule of Appellate Procedure 9.130(a)(6). See R.J. Reynolds Tobacco Co. v. Engle, 672 So.2d 39, 40 (Fla. 3d DCA 1996) (hereinafter "Engle I"). On January 31, 1996, the Third District affirmed the trial court's order certifying the class but reduced the class to include only Florida smokers. See id. at 42 (striking "[a]ll United States citizens and residents" provision and substituting in its place "[a]ll Florida citizens and residents"). Tobacco's petition for review by this Court was denied. See R.J. Reynolds Tobacco Co. v. Engle, 682 So.2d 1100 (Fla.1996).

On February 4, 1998, the trial court issued a trial plan, dividing the trial proceedings into three phases. Phase I consisted of a year-long trial to consider the issues of liability and entitlement to punitive damages for the class as a whole. See Engle II, 853 So.2d at 441. The jury considered common issues relating exclusively to the defendants' conduct and the general health effects of smoking. See id. On July 7, 1999, at the conclusion of Phase I, the jury rendered a verdict for the Engle Class and against Tobacco on all [1257] counts.^[4]

Phase II was divided into two subparts—Phase II-A and Phase II-B. Phase II-A was intended to resolve the issues of entitlement and amount of compensatory damages, if any, that the three individual class representatives—Frank Amodeo, Mary Farnan, and Angie Della Vecchia— should receive. Phase II-B was designed to result in a jury determination of a total lump sum punitive damage award, if any, that should be assessed in favor of the class as a whole.

At the conclusion of Phase II-A, the jury determined that the three individual class representatives were entitled to compensatory damages in varying amounts, which were offset by their comparative fault. The total award was $12.7 million. The jury subsequently determined in Phase II-B the lump-sum amount of punitive damages for the entire class to be $145 billion, without allocation of that amount to any class member. Tobacco filed several post-verdict motions, including a motion at the conclusion of phase II-B for a new trial or remittitur, a motion to set aside the verdict, and for entry of judgment, and another motion to decertify the class. See Engle v. R.J. Reynolds Tobacco, No. 94-08273 CA-22 (Fla. 11th Cir.Ct. Nov. 6, 2000) (hereinafter "Engle F.J."), rev'd, 853 So.2d 434 (Fla. 3d DCA 2003).

On November 6, 2000, the trial court entered a final judgment and amended omnibus order, in which it granted judgment in Tobacco's favor in two respects. First, the trial court granted Tobacco's motion for directed verdict on a statute of limitations basis with regard to named plaintiff Frank Amodeo on the counts based on strict liability, implied warranty, express warranty, negligence, and intentional infliction of emotional distress. However, the trial court ruled that Amodeo's fraud and conspiracy claims were not time-barred. Second, the court granted Tobacco's motion for directed verdict with regard to count seven of the complaint, in which the Engle Class sought equitable relief, upon the basis that the count had previously been dismissed by the court. The court entered judgment in favor of the Engle Class on all other counts, ordered immediate payment to the individual plaintiffs, and directed Tobacco to pay the $145 billion in punitive damages into the registry of the Dade County Circuit Court for the benefit of the entire class.

[1258] According to the trial plan, in Phase III, new juries are to decide the individual liability and compensatory damages claims for each class member (estimated to number approximately 700,000). See Engle II, 853 So.2d at 442. Thereafter, the plan contemplated that the trial court would divide the punitive damages previously determined equally among any successful class members. Pursuant to the omnibus order, interest on the punitive award began accruing immediately. See id.

Tobacco filed an appeal and the Third District reversed the final judgment with instructions that the class be decertified. See id.

ANALYSIS

1. Res Judicata

A. History of the Florida Settlement Agreement and the Master Settlement Agreement

In 1995, the State of Florida and others (hereinafter "State") filed a complaint against many of the defendants involved in the present action (hereinafter "FSA Defendants").^[5] This earlier action was initiated by the State under the Medicaid Third-Party Liability Act, section 409.910, Florida Statutes (1995). In its complaint, the State alleged counts of negligence, strict liability in tort, injunctive relief, various statutory and criminal violations, and violations of the Florida RICO Act. The State sought reimbursement of Medicaid monies expended in treating the victims of tobacco-related illnesses as well as other damages permitted by law, including punitive damages where available. Subsequent to the filing of the State's complaint, the circuit court granted the FSA Defendants' motion for summary judgment and dismissed all claims by the State for punitive damages with the exception of its claim for punitive damages contained in count four of the complaint alleging only statutory and criminal violations.^[6]

In 1997, the State and the FSA Defendants entered into the Florida Settlement Agreement, which resolved "all present and future civil claims against all parties to [the] litigation relating to the subject matter of [the] litigation, which [were] or could have been asserted by any of the parties [thereto]." (Emphasis supplied.) Pursuant to the terms of the FSA, in exchange for agreeing to resolve these claims, the State received $550 million for unspecified purposes, $200 million for a pilot program by the State of Florida aimed at the reduction of the use of tobacco products by minors, several billion dollars paid out over a period of time for the benefit of the State of Florida, and injunctive relief. As stated by the FSA, the [1259] monies received "constitute[d] not only reimbursement for Medicaid expenses incurred by the State of Florida, but also settlement of all of Florida's other claims, including those for punitive damages, RICO and other statutory theories." Also included in the FSA was a "Non-Admissibility" provision which provided:

These settlement negotiations have been undertaken by the parties in good faith and for settlement purposes only, and neither this Settlement Agreement nor any evidence of negotiations hereunder, shall be offered or received in evidence in this Action, or any other action or proceeding, for any purpose other than in an action or proceeding arising under this Settlement Agreement.

During the time period in which Florida pursued an action against the FSA Defendants, several other states also initiated actions against the FSA Defendants for similar if not identical claims. These states settled their claims against the FSA Defendants in November of 1998 when all parties to that action entered into a Master Settlement Agreement (the "MSA"). The MSA released all claims of the participating states and also included a "Non-Admissibility" provision similar to that in the FSA. Under the MSA, the FSA Defendants are required to pay certain participating states more than $200 billion over the first twenty-five years, with additional amounts to be paid in perpetuity after that.

B. Res Judicata Effect of the FSA

The Third District in this case held that the punitive damages claims of the Engle Class were precluded by the FSA. See Engle II, 853 So.2d at 467. The district court reasoned that Florida, in agreeing to relinquish its claims through the FSA, had effectively resolved a matter of general interest to all of its citizens and, therefore, the FSA was binding upon all citizens even though they were not parties to the original litigation. See id. at 468. The district court therefore concluded that the FSA's "release, and the res judicata effect of the resulting final judgment, preclude[d] the [Engle Class's] punitive-damage claims here." Id.

We agree with the Third District that whether the application of res judicata was proper is a question of law. See id. at 468. We therefore apply a de novo standard of review. See D'Angelo v. Fitzmaurice, 863 So.2d 311, 314 (Fla.2003) (stating that standard of review for pure questions of law is de novo).

The doctrine of res judicata serves an important purpose in the judicial system of this state. The foundation of res judicata is that a final judgment in a court of competent jurisdiction is absolute and settles all issues actually litigated in a proceeding as well as those issues that could have been litigated. We have explained the doctrine of res judicata as follows:

A judgment on the merits rendered in a former suit between the same parties or their privies, upon the same cause of action, by a court of competent jurisdiction, is conclusive not only as to every matter which was offered and received to sustain or defeat the claim, but as to every other matter which might with propriety have been litigated and determined in that action.

Fla. Dep't of Transp. v. Juliano, 801 So.2d 101, 105 (Fla.2001) (alteration in original) (quoting Kimbrell v. Paige, 448 So.2d 1009, 1012 (Fla.1984)).

In Young, this Court held that citizens of the City of Miami Beach were bound by a judgment against the city that enjoined the city from asserting any interest in a particular parcel of oceanfront property. See 46 So.2d at 30. An association of [1260] citizens of the City of Miami Beach filed an action to determine the public's interest in this parcel, which was owned by the defendant, a private corporation. See id. at 26. In holding that the claim was barred by the prior decree enjoining the City, we noted that a "judgment against a municipal corporation in a matter of general interest to all its citizens is binding on the latter, although they are not parties to the suit." Id. at 30 (emphasis supplied) (quoting 38 Am.Jur. § 728).

Similarly, in Castro v. Sun Bank of Bal Harbour, 370 So.2d 392, 393 (Fla. 3d DCA 1979), the Third District held that private parties were precluded from relitigating public nuisance and zoning violation claims that had already been settled by the State. The district court reasoned that the plaintiffs were bound by the final judgment of the prior action "irrespective of whether they were formal parties to the . . . action" because they were "citizens of the State of Florida and the City of Miami at the time of the [prior] litigation." Id.

The district court, as well as Tobacco, relied on Young and Castro to support the position that the FSA is binding on all citizens of the State of Florida. However, in both of these cases the governmental entity was asserting interests of concern common to all of its citizens: the public's interest in oceanfront property and public nuisance and zoning violations. Application of res judicata in these contexts is supported by precedent that has established that for a State to bind its citizens as a result of litigation advanced by the State, the government must be suing in its parens patriae capacity, litigating the rights or interests common to the public at large and thereby representing the citizenry of the State. See Satsky v. Paramount Commc'ns, Inc., 7 F.3d 1464, 1470 (10th Cir.1993). The Eleventh Circuit Court of Appeals appropriately described this form of action when it stated:

"In order to maintain [a parens patriae] action, the State must articulate an interest apart from the interests of particular private parties, i.e., the State must be more than a nominal party. The State must express a quasi-sovereign interest." Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex rel. Barez, 458 U.S. 592, 607, 102 S.Ct. 3260, 3268, 73 L.Ed.2d 995 (1982). "Parens patriae standing has been explained on the ground that the plaintiff state is not merely advancing the rights of individual injured citizens, but has an additional sovereign or quasi-sovereign interest." 17 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure: Jurisdiction 2d § 4047 at 223 (1988). Although the Supreme Court has not expressly defined what is a "quasi-sovereign" interest, it is clear that a state may sue to protect its citizens against "the pollution of the air over its territory; or of interstate waters in which the state has rights." 12 Moore's Federal Practice ¶ 350.02[3] at 3-20 (1993). It is equally clear, however, that a state may not sue to assert the rights of private individuals. See Alfred L. Snapp, 458 U.S. at 600, 102 S.Ct. at 3265; Pennsylvania v. New Jersey, 426 U.S. 660, 665, 96 S.Ct. 2333, 2335, 49 L.Ed.2d 124 (1976); New York by Abrams v. Seneci, 817 F.2d 1015, 1017 (2nd Cir.1987); Illinois v. Life of Mid-America Ins. Co., 805 F.2d 763, 766 (7th Cir.1986), 13A Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure: Jurisdiction 2d § 3531.11 at 19 (1984).

Id. at 1469 (alteration in original).

In Satsky, the court analyzed an action in which a group of property owners alleged a variety of private property claims [1261] arising from the defendant's operation of a mine. See id. at 1466. The defendant claimed that a consent decree between itself and the State of Colorado precluded the plaintiffs' claims. See id. at 1467. In reversing a final summary judgment entered by the lower court for the defendant, the court held that "[t]o the extent [the] claims involve injuries to purely private interests, which the State cannot raise, then the claims are not barred." Id. at 1470. We agree with the reasoning of Satsky and with the principle that "litigation by a government agency will not preclude a private party from vindicating a wrong that arises from related facts but generates a distinct individual cause of action." Southwest Airlines Co. v. Texas Intern. Airlines, Inc., 546 F.2d 84, 98 (5th Cir.1977).

In the litigation that resulted in the FSA, the State, in support of its claim for punitive damages, alleged knowing and intentional dissemination of false, fraudulent and misleading statements to the general public by the FSA Defendants in violation of section 817.41, Florida Statutes (1995).^[7] In the present case, the Engle Class relied on legal theories that were based on injuries personal to the class members to support the claim for punitive damages. Since the State had no right to pursue these types of private interests on behalf of its citizens, the punitive damages claims settled by the State in the FSA, if any, were distinct from the punitive damages sought by the Engle Class in the present case.

The reasoning in In re Exxon Valdez, 270 F.3d 1215 (9th Cir.2001), is instructive. In that case, the defendants appealed a punitive damages award for claims arising out of the Exxon Valdez oil spill. See id. at 1221. The plaintiffs consisted of separate classes of commercial fishermen, Alaskan natives, and landowners affected by the spill. See id. at 1225. These distinct classes sought compensatory and punitive damages for injuries resulting from the Exxon Valdez spill. See id. The jury returned a verdict in favor of the plaintiffs which assessed $287 million in compensatory damages and $5 billion in punitive damages. See id. Exxon appealed the resulting judgment, asserting that the punitive damages award was barred by the res judicata effect of a consent decree between Exxon and the United States and the State of Alaska that settled claims in a previous action filed under the Clean Water Act. See id. at 1227. In holding that the award was not barred by the previous settlement, the court concluded that the interests asserted by the plaintiffs were distinct from those asserted by the United States and Alaska in the prior action. See id. at 1228. The court, relying on Satsky, noted that the prior consent decree addressed harms caused to the environment and the general public whereas the claims in the class action were to vindicate wrongs that resulted in individual injuries. See In re Exxon Valdez, 270 F.3d at 1227-28. Moreover, the court stressed that although the consent decree "released all government claims, [it] provides explicitly that `nothing in this agreement, however, is intended to affect legally the claims, if any, of any person or entity not a Party to this Agreement.'" Id. at 1227. The FSA expressly provided that neither the agreement itself "nor any evidence of negotiations [t]hereunder, shall be offered or received in evidence in this Action, or any other action or proceeding, for any purpose other than in [1262] an action or proceeding arising under this Settlement Agreement." The facts of In re Exxon are similar to the circumstances presented in this case and support our conclusion that the Third District erred in holding that the FSA barred the Engle Class's punitive damages claim.

2. Punitive Damages Award

Although we conclude that the Third District erred in applying the doctrine of res judicata to bar the Engle Class's punitive damages claim, we must vacate the classwide punitive damages award because we unanimously agree with the Third District that the trial court erred in allowing the jury to determine a lump sum amount before it determined the amount of total compensatory damages for the class. As a matter of law, the punitive damages award violates due process because there is no way to evaluate the reasonableness of the punitive damages award without the amount of compensatory damages having been fixed. The amount awarded is also clearly excessive because it would bankrupt some of the defendants. A majority of the Court further concludes that the trial court erred in allowing the jury to consider entitlement to punitive damages during the Phase I trial. We address these issues separately.

A. Phase I Finding on Entitlement to Punitive Damages

The last question on the Phase I verdict form asked the jury to determine whether "[u]nder the circumstances of this case, . . . the conduct of any Defendant rose to a level that would permit a potential award or entitlement to punitive damages." The jury answered "yes" with respect to each of the defendants. In Phase II-B, the jury awarded a total of $145 billion in punitive damages to the class.

The Third District ruled that the trial erred in awarding classwide punitive damages "without the necessary findings of liability and compensatory damages." Engle II, 853 So.2d at 450. A majority of the Court (Anstead, Pariente, Lewis, and Quince) concludes that an award of compensatory damages is not a prerequisite to a finding of entitlement to punitive damages. Compensatory and punitive damages serve distinct purposes. As the United States Supreme Court has explained:

The former are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant's wrongful conduct. The latter, which have been described as "quasi-criminal," operate as "private fines" intended to punish the defendant and to deter future wrongdoing. A jury's assessment of the extent of a plaintiff's injury is essentially a factual determination, whereas its imposition of punitive damages is an expression of its moral condemnation.

Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001) (citations omitted).

Because a finding of entitlement to punitive damages is not dependent on a finding that a plaintiff suffered a specific injury, an award of compensatory damages need not precede a determination of entitlement to punitive damages. Therefore, we conclude that the order of these determinations is not critical. See Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 474 (5th Cir.1986).

A different majority of the Court (Wells, Anstead, Pariente, and Bell) concludes that under our decision in Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989), a finding of liability is required before entitlement to punitive damages can be determined, and that liability is more than a breach of duty. A finding of liability necessarily precedes a determination of [1263] damages, but does not compel a compensatory award. For example, in Ault, the jury found that the defendant had committed an assault and battery but awarded $0 in compensatory damages and $5000 in punitive damages. See id. at 455. Thus, unlike the Phase I jury in this case, the jury in Ault found that the plaintiff had proved the underlying cause of action but did not suffer any compensable damage.

Although we appeared to use "breach of duty" and "liability" interchangeably in Ault, the Court expressly adopted the principles set forth in dicta in Lassiter v. International Union of Operating Engineers, 349 So.2d 622 (Fla.1976). Specifically, we stated that

[n]ominal damages are awarded to vindicate an invasion of one's legal rights where, although no physical or financial injury has been inflicted, the underlying cause of action has been proved to the satisfaction of a jury. Accordingly, the establishment of liability for a breach of duty will support an otherwise valid punitive damage award even in the absence of financial loss for which compensatory damages would be appropriate.

Ault, 538 So.2d at 455 (some emphasis supplied) (quoting Lassiter, 349 So.2d at 625-26).

In this case, the Phase I verdict did not constitute a "finding of liability" under Ault. This is evidenced by the fact that had the jury found for Tobacco on the legal cause and reliance issues during Phase II, there would have been no opportunity for the jury to award the named plaintiffs damages of any type. In other words, Phase II findings for Tobacco on legal causation and reliance would have precluded the jury from awarding compensatory or punitive damages. It was error for the trial court to allow the jury to consider entitlement to punitive damages before the jury found that the plaintiffs had established causation and reliance.

In Phase I, the jury decided issues related to Tobacco's conduct but did not consider whether any class members relied on Tobacco's misrepresentations or were injured by Tobacco's conduct. As the Third District noted, the Phase I jury "did not determine whether the defendants were liable to anyone." Engle II, 853 So.2d at 450. It was therefore error for the Phase I jury to consider whether Tobacco was liable for punitive damages.

B. Excessiveness

Even if it were not error to determine entitlement to punitive damages in Phase I, it was clear error to allow the jury to go beyond mere entitlement and award classwide punitive damages when total compensatory damages had not been determined. Under Florida law, a trial court's determination of whether a damage award is excessive, requiring a remittitur or a new trial, is reviewed by an appellate court under an abuse of discretion standard. See St. John v. Coisman, 799 So.2d 1110, 1114 (Fla. 5th DCA 2001). However, a trial court's determination as to whether a punitive damage award exceeds the boundaries of due process as guaranteed by the Unites States Constitution is reviewed by a court under a de novo standard. See Cooper Indus., 532 U.S. at 436, 121 S.Ct. 1678.

Florida law requires that an appellate court review a punitive damages award to make certain that the manifest weight of the evidence does not render the amount of punitive damages assessed out of all reasonable proportion to the malice, outrage, or wantonness of the tortious conduct. See Arab Termite & Pest Control of Fla., Inc. v. Jenkins, 409 So.2d 1039, 1043 (Fla.1982). Additionally, an award must be reviewed to ensure that it bears some [1264] relationship to the defendant's ability to pay and does not result in economic castigation or bankruptcy of the defendant. See Bould v. Touchette, 349 So.2d 1181, 1186 (Fla.1977).

In the past, we have not discussed whether punitive damages awards must bear some reasonable relation to compensatory damages. See Lassiter v. Int'l Union of Operating Eng'rs, 349 So.2d 622, 626 (Fla.1977); see also Ault, 538 So.2d at 456; Bankers Multiple Line Ins. Co. v. Farish, 464 So.2d 530, 533 (Fla.1985); Arab Termite, 409 So.2d at 1043. For example in Arab Termite, we stated that punitive damages "are to be measured by the enormity of the offense, entirely aside from the measure of compensation for the injured plaintiff." 409 So.2d at 1043. However, we now hold, consistent with United States Supreme Court decisions after Ault that recognize due process limits on punitive damages, that a review of the punitive damages award includes an evaluation of the punitive and compensatory amounts awarded to ensure a reasonable relationship between the two.

The United States Supreme Court has stated that a review of a punitive damages award must include consideration of three guideposts to determine whether the award is unconstitutionally excessive:

(1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in comparable cases.

State Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (citing BMW of North America, Inc. v. Gore, 517 U.S. 559, 575, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996)).

The second guidepost is determinative in this case. As the United States Supreme Court has explained regarding this second factor:

[W]e have been reluctant to identify concrete constitutional limits on the ratio between harm, or potential harm, to the plaintiff and the punitive damages award. Gore, 517 U.S., at 582, 116 S.Ct. 1589 ("[W]e have consistently rejected the notion that the constitutional line is marked by a simple mathematical formula, even one that compares actual and potential damages to the punitive award"); TXO [Production Corp. v. Alliance Resources Corp., 509 U.S.] at 458[, 113 S.Ct. 2711]. We decline again to impose a bright-line ratio which a punitive damages award cannot exceed. Our jurisprudence and the principles it has now established demonstrate, however, that, in practice, few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process. In [Pacific Mutual Life Insurance Co. v.] Haslip, in upholding a punitive damages award, we concluded that an award of more than four times the amount of compensatory damages might be close to the line of constitutional impropriety. 499 U.S., at 23-24[, 111 S.Ct. 1032]. We cited that 4-to-1 ratio again in Gore. 517 U.S., at 581[, 116 S.Ct. 1589]. The Court further referenced a long legislative history, dating back over 700 years and going forward to today, providing for sanctions of double, treble, or quadruple damages to deter and punish. Id., at 581, and n. 33[, 116 S.Ct. 1589]. While these ratios are not binding, they are instructive. They demonstrate what should be obvious: Single-digit multipliers are more likely to comport with due process, while still achieving [1265] the State's goals of deterrence and retribution, than awards with ratios in range of 500 to 1, id., at 582[, 116 S.Ct. 1589], or, in this case, of 145 to 1.

Nonetheless, because there are no rigid benchmarks that a punitive damages award may not surpass, ratios greater than those we have previously upheld may comport with due process where "a particularly egregious act has resulted in only a small amount of economic damages." Ibid.; see also ibid. (positing that a higher ratio might be necessary where "the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine"). The converse is also true, however. When compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee. The precise award in any case, of course, must be based upon the facts and circumstances of the defendant's conduct and the harm to the plaintiff.

In sum, courts must ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered.

Campbell, 538 U.S. at 424-26, 123 S.Ct. 1513. Thus, the amount of compensatory damages must be determined in advance of a determination of the amount of punitive damages awardable, if any, so that the relationship between the two may be reviewed for reasonableness.

In this case, the district court stated that without having total compensatory damages determined it would be "impossible to determine whether punitive damages bear a `reasonable' relationship to the actual harm inflicted on the plaintiff." Engle II, 853 So.2d at 451. We agree. The trial plan allowed a lump sum determination of punitive damages for the entire class when compensatory damages had been determined only for the three individual class representatives. This approach does not provide a reviewing court with an adequate starting point to compare the lump sum punitive damages amount to compensatory damages to ensure there is some reasonable relationship. Accordingly, even if there was no error in allowing the Phase I jury to find entitlement to punitive damages, the classwide punitive damages award must be reversed.^[8]

3. Law of the Case—Class Certification

In concluding that the Engle Class must be decertified, the Third District in Engle II ruled that the "`predominance' or `commonality' requirement is not satisfied, where claims involve factual determinations unique to each plaintiff." 853 So.2d at 445. The district court explained that "common questions" did not predominate over individual issues because the choice of law analysis would require examination of numerous different state laws governing different individual claims. See id. at 449. The court also concluded that class representation would not be "superior" to individual suits because: (1) individualized issues of liability, affirmative defenses, and damages outweighed any common issues in [1266] the case; (2) each class member had unique and different experiences, which would necessitate litigation of substantially separate issues, including legal causation, specific medical causation, reliance, and awareness of risks; and (3) individualized choice of law issues would cause class proceedings to be unmanageable. See id. at 445-47.

We conclude that the Third District erred in nullifying its previous affirmance of the trial court's certification order. Contrary to the Third District's conclusion, Florida Rule of Civil Procedure 1.220(d)(1) did not authorize the subsequent (and different) panel of appellate judges to simply substitute its judgment for that of the prior panel and reverse the trial court's certification order after the trial court entered its final judgment after Phase II. See Engle II, 853 So.2d at 443 n. 4.

A class is normally certified at an early stage of the proceedings, certainly before trial, and typically before discovery is completed. Rule 1.220(d)(1) provides an avenue for reexamining certification if subsequent discovery shows that circumstances have changed. See Int'l Longshoremen's Ass'n, Deep Sea Local 1408 v. Fisher, 860 So.2d 1078, 1078 (Fla. 1st DCA 2003) (affirming the trial court's nonfinal order certifying a class but noting that "because the order is interlocutory, it may be revisited by the trial court should circumstances change"). Rule 1.220(d)(1) was not designed to allow a district court to decertify a class, contrary to its previous affirmance of class certification and after notice to thousands of Floridians, a two-year trial, and an entry of final judgment.

Moreover, under the doctrine of law of the case, the Third District would have been justified in reversing its previous ruling in Engle I only if it concluded that the prior ruling would have resulted in a clear manifest injustice. See Juliano, 801 So.2d at 106 ("[A]n appellate court has the power to reconsider and correct an erroneous ruling that has become the law of the case where a prior ruling would result in a `manifest injustice.'") (quoting Strazzulla v. Hendrick, 177 So.2d 1, 4 (Fla.1965)).

Law of the case "requires that questions of law actually decided on appeal must govern the case in the same court and the trial court, through all subsequent stages of the proceedings." Juliano, 801 So.2d at 105. The Third District recently reiterated the purpose of the law of the case doctrine in a decision holding that the doctrine precluded relitigation of the propriety of class action treatment: "[P]oints of law adjudicated in a prior appeal are binding in order to promote stability of judicial decisions and to avoid piecemeal litigation." State, Dep't of Revenue v. Bridger, 935 So.2d 536, 538, 539 (Fla. 3d DCA 2006) (quoting Bueno v. Bueno de Khawly, 677 So.2d 3, 4 (Fla. 3d DCA 1996)).

The law of the case applies in subsequent proceedings as long as there has been no change in the facts on which the mandate was based. Specifically, we have recognized that

an appellate court should reconsider a point of law previously decided on a former appeal only as a matter of grace, and not as a matter of right; and that an exception to the general rule binding the parties to "the law of the case" at the retrial and at all subsequent proceedings should not be made except in unusual circumstances and for the most cogent reasons—and always, of course, only where "manifest injustice" will result from a strict and rigid adherence to the rule.

Strazzulla v. Hendrick, 177 So.2d 1, 4 (Fla.1965). We have also cautioned that [1267] "the exception to the rule should never be allowed when it would amount to nothing more than a second appeal on a question determined on the first appeal." Id. (emphasis supplied).

We conclude that no circumstances existed that justified the subsequent panel's reconsideration of the prior Third District decision approving class certification, which all parties and the trial court relied on to govern the continuation of the class action. On this issue, the analysis of the Engle II court was flawed in several respects. First, the Engle II court ignored the trial court's pretrial ruling that only Florida law would apply when it stated that the "choice-of-law analysis in the present case will require examination of numerous significantly different state laws governing the different plaintiffs' claims." Engle II, 853 So.2d at 449. Second, none of the cases from other jurisdictions cited by the Third District in Engle II to justify decertification was in the procedural posture of the present case.^[9]

This case came before the Third District in Engle II after it had affirmed the class certification and after the conclusion of a trial on all common issues. Thus, there is no need to engage in an abstract analysis of the propriety of separate proceedings on common limited liability issues. Invalidating the completed class action proceedings on manageability and superiority grounds after a trial has occurred does not accord with common sense or logic.

Of course, this Court is not bound by the Third District's law of the case. See Juliano, 801 So.2d at 105 ("The doctrine of the law of the case requires that questions of law actually decided on appeal must govern the case in the same court and the trial court, through all subsequent stages of the proceedings."). Nevertheless, we conclude that the trial court did not abuse its discretion in certifying the class. See Fla. Dep't of Agric. & Consumer Servs. v. City of Pompano Beach, 829 So.2d 928, 929 (Fla. 4th DCA 2002) ("The trial court's order certifying the class is subject to review under an abuse of discretion standard."); Bouchard Transp. Co. v. Updegraff, 807 So.2d 768, 771 (Fla. 2d DCA 2002) ("[T]he determination that a case meets the requirements of a class action is a factual finding that is within the trial court's discretion and will be reversed on appeal only if an abuse of discretion is shown.").

4. Three-Phase Trial Plan—Decertification

We agree with the Third District that problems with the three-phase trial [1268] plan negate the continued viability of this class action. We conclude that continued class action treatment for Phase III of the trial plan is not feasible because individualized issues such as legal causation, comparative fault, and damages predominate. See Fla. R. Civ. P. 1.220(b)(3) ("A claim or defense may be maintained on behalf of a class if the court concludes that the prerequisites of subdivision (a) are satisfied, and that . . . the claim or defense is not maintainable under either subdivision (b)(1) or (b)(2), but the questions of law or fact common to the claim or defense of the representative party and the claim or defense of each member of the class predominate over any question of law or fact affecting only individual members of the class. . . . ").

Florida Rule of Civil Procedure 1.220(d)(4)(A) provides that "[w]hen appropriate . . . a claim or defense may be brought or maintained on behalf of a class concerning particular issues." Although no Florida cases address whether it is appropriate under rule 1.220(d)(4)(A) to certify class treatment for only limited liability issues, several decisions by federal appellate courts applying a similar provision in the Federal Rules of Civil Procedure provide persuasive authority for this approach.

Federal Rule of Civil Procedure 23(c)(4)(A) provides that "[w]hen appropriate . . . an action may be brought or maintained as a class action with respect to particular issues." In determining whether the predominance requirement of Federal Rule of Civil Procedure 23(b)(3)^[10] has been met, several United States Courts of Appeals have concluded that under federal rule 23(c)(4)(A) a trial court can properly separate liability and damages issues, certifying class treatment of liability while leaving damages to be determined on an individual basis. See Olden v. LaFarge Corp., 383 F.3d 495, 509 (6th Cir.2004) (stating that the district court can properly "bifurcate the issue of liability from the issue of damages, and if liability is found, the issue of damages can de decided by a special master or by another method"); Carnegie v. Household Int'l, Inc., 376 F.3d 656, 661 (7th Cir.2004) (noting that "Rule 23 allows district courts to devise imaginative solutions to problems created by the presence in a class action litigation of individual damages issues"); In re Visa Check/MasterMoney Antitrust Litigation, 280 F.3d 124, 139-41 (2d Cir.2001) (noting that "[c]ommon issues may predominate when liability can be determined on a class-wide basis, even when there are some individualized damage issues" and that "[t]here are a number of management tools available to a district court to address any individualized damages issues that might arise in a class action"); Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir.1996) ("Even if the common questions do not predominate over the individual questions so that class certification of the entire action is warranted, Rule 23 authorizes the district court in appropriate cases to isolate the common issues under Rule 23(c)(4)(A) and proceed with class treatment of these particular issues."); see also Slaven v. BP America, Inc., 190 F.R.D. 649, 658 (C.D.Cal.2000) (maintaining class status "solely for the determination of liability" and stating that "[i]f plaintiffs prevail on the liability portion of their case, the Court will determine the appropriate [1269] method of adjudicating causation and damages issues at that juncture").^[11]

The Second and Seventh Circuits have also stated that the determination that class treatment of damages issues is inappropriate can be made after a finding on liability. See Carnegie, 376 F.3d at 661 (explaining that one option available to the district courts for solving problems created by the presence in a class action litigation of individual damages issues is to decertify the class after the liability trial); Visa Check/MasterMoney Antitrust Litigation, 280 F.3d at 141 (same). In Carnegie, the Seventh Circuit discussed the manageability of a class action alleging RICO violations and explained:

Often . . . there is a big difference from the standpoint of manageability between the liability and remedy phases of a class action. The number of class members need have no bearing on the burdensomeness of litigating a violation of RICO. Whether particular members of the class were defrauded and if so what their damages were are another matter, and it may be that if and when the defendants are determined to have violated the law separate proceedings of some character will be required to determine the entitlements of the individual class members to relief. That prospect need not defeat class treatment of the question whether the defendants violated RICO. Once that question is answered, if it is answered in favor of the class, a global settlement . . . will be a natural and appropriate sequel. And if there is no settlement, that won't be the end of the world. Rule 23 allows district courts to devise imaginative solutions to problems created by the presence in a class action litigation of individual damages issues.

376 F.3d at 661 (citations omitted). In Visa Check/MasterMoney Antitrust Litigation, the Second Circuit concluded that the district court adequately addressed individual issues that might arise from certifying the class by specifically recognizing "its ability to modify its class certification order, sever liability and damages, or even decertify the class if such an action ultimately became necessary." 280 F.3d at 141.

In this case, the Phase I trial has been completed. The pragmatic solution is to now decertify the class, retaining the jury's Phase I findings other than those on the fraud and intentional infliction of emotion distress claims, which involved highly individualized determinations, and the finding on entitlement to punitive damages questions, which was premature. Class members can choose to initiate individual damages actions and the Phase I common core findings we approved above will have res judicata effect in those trials. See Daenzer v. Wayland Ford, Inc., 210 F.R.D. 202, 205 (W.D.Mich.2002) (entering summary judgment on the issue of liability, decertifying the class on the issue of damages and stating that "[t]he Court's [1270] decision as to liability is res judicata in any damages action individual class members decide to bring"); McCormack v. Abbott Labs., 617 F.Supp. 1521 (D.Mass.1985) (concluding that plaintiff's strict liability claim was barred by judgment for the defendants entered in a prior class action, which the plaintiff joined, before that class action was decertified).^[12]

We disagree with Justice Wells' conclusion that bifurcating the trial in this manner violates article I, section 22 of the Florida Constitution. See concurring in part and dissenting in part op. at 1285-87. We recognize the concerns expressed by the Fifth Circuit Court of Appeals in Castano v. American Tobacco Co., 84 F.3d 734, 750 (5th Cir.1996), in which that court held that bifurcation of issues in a nationwide smoking class action violated the Seventh Amendment to the United States Constitution.^[13] However, subsequent to its decision in Castano, the Fifth Circuit held that the risk of infringing on the parties' Seventh Amendment rights is not significant and is in fact avoided where the liability issues common to all class members are tried together by a single initial jury, and issues affecting individual class members such as causation, damages, and comparative negligence are tried by different juries. See Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 628-29 (5th Cir.1999). Recognizing that it had previously reached a different conclusion in Castano, the Fifth Circuit explained that the circumstances of Castano were distinct from those present in Mullen:

In Castano, we were concerned that allowing a second jury to consider the plaintiffs' comparative negligence would invite that jury to reconsider the first jury's findings concerning the defendants' conduct. We believe that such a risk has been avoided here by leaving all issues of causation for the phase-two jury. When a jury considers the comparative negligence of a plaintiff, "the focus is upon causation. It is inevitable that a comparison of the conduct of plaintiffs and defendants ultimately be in terms of causation." Lewis v. Timco, Inc., 716 F.2d 1425, 1431 (5th Cir.1983) (en banc); see id. (permitting the use of comparative negligence in strict liability claims). Thus, in considering comparative negligence, the phase two jury would not be reconsidering the first jury's findings of whether Treasure Chest's conduct was negligent or the [vessel] unseaworthy, but only the degree to which those conditions were the sole or contributing cause of the class member's injury. Because the first jury will not be considering any issues of causation, no Seventh Amendment implications affect our review of the district court's superiority finding.

Mullen, 186 F.3d at 628-29 (emphasis supplied).

[1271] The Fifth Circuit's reasoning in Mullen is persuasive. In this case, although the jury decided issues common to all class members, none involved whether, or the degree to which, the defendants' conduct was the sole or contributing cause of the class members' injuries, which is the pertinent question in applying the doctrine of comparative negligence. We thus follow the reasoning of Mullen and conclude that the trial plan in this case did not violate Tobacco's rights under article I, section 22 of the Florida Constitution.

5. Arguments of Engle Class's Counsel

We conclude that, under the totality of the circumstances, reversal is not warranted based on the remarks made by the Engle Class's counsel, Stanley Rosenblatt. Nevertheless, we must again remind counsel that we will not condone improper arguments. Inappropriate jury arguments in this type of case risk wasting significant judicial resources. Here, trial counsel ventured very close to the line of reversible error on a number of occasions in his attempt to counteract opposing counsel's contentions that Tobacco acted lawfully and to communicate his message to the jury that "legal doesn't make it right." However, we conclude that under the totality of the circumstances these comments did not rise to the level of reversible error.

If the issue of an opponent's improper argument has been properly preserved by objection and motion for mistrial, the trial court should grant a new trial if the argument was "so highly prejudicial and inflammatory that it denied the opposing party its right to a fair trial." Tanner v. Beck, 907 So.2d 1190, 1196 (Fla. 3d DCA 2005); see also Murphy v. Int'l Robotic Sys., Inc., 766 So.2d 1010, 1013 n. 2 (Fla. 2000) (stating the Court's decision addressing unobjected-to argument "does not impact the legal standards applicable to consideration of the issue that has been properly preserved by objection and motion for mistrial, which remains whether the comment was highly prejudicial and inflammatory"). To justify granting a motion for a new trial based on unobjected-to improper argument, the trial court must find that the improper argument is of such a nature as to reach into the validity of the trial itself to the extent that the verdict could not have been obtained but for such comments. See Murphy, 766 So.2d at 1029-30. A trial court's order granting or denying a motion for a new trial based on either objected-to or unobjected-to improper argument is reviewed for abuse of discretion. See id. at 1030-31 ("[T]he appellate court must . . . apply an abuse of discretion standard in reviewing either the trial court's grant or denial of a new trial based on the unobjected-to closing argument."); Bocher v. Glass, 874 So.2d 701, 704 (Fla. 1st DCA 2004) (reviewing a trial court's order denying a motion for rehearing based on objected-to improper argument for an abuse of discretion).

In denying Tobacco's motions for mistrial, the trial court stated:

The Court has carefully considered the Motions for Mistrial in this cause and has determined that curative instructions to the jury and/or motions to strike have been granted as requested by the movant, for most of the motions, and in any event the cumulative effect of the alleged error, was not in the opinion of the Court, sufficient to have so influenced the jury as to affect the outcome of the case considering the length of the trial, the number of witnesses presented, the quality and quantity of the testimony, the huge amount of documentary evidence, and specifically the substance of the alleged remarks. The jury in this case rendered three verdicts, each based [1272] upon a mountain of evidence over a period of two years in three separate trials. The court feels confident, that although some remarks of counsel may have been uncalled for, or subject to objection, they were not so egregious as to require a new trial.

Engle F.J., No. 94-08273 CA-22 order at 17. However, the Third District held that the comments "caused irreparable prejudice and require reversal." Engle II, 853 So.2d at 458. Specifically, the district court determined that this was accomplished in two stages:

First, by inflaming the jury with racial pandering and pleas for nullification of the law to secure entitlement to punitive damages. And second, by removing responsibility from the jury for the size of the award, through arguing the award would be subject to appellate review and that it would not be paid out in a lump sum, but rather through a payout scheme.

Id. at 459. The district court then proceeded to list all of counsel's arguments it determined were improper.

Significantly, the manner in which the district court has set forth and presented the offending argument, stringing the comments together, would certainly cause a reader to assume that the comments are prejudicial. However, this is not proper analysis for review under the totality of the circumstances. Context is crucial. To determine whether the challenged statements and arguments were in fact prejudicial, the statements cannot be evaluated in isolation but must be placed and evaluated in context. See State v. Jones, 867 So.2d 398, 400 (Fla.2004) ("[T]his Court has evaluated the prosecutor's action in context rather than focusing on the challenged statement in isolation.").

We emphasize that the duration of this trial does not mean that a comment or several comments standing alone would not warrant reversal. Nonetheless, the length of the trial is relevant to the analysis because the alleged improper statements were not made on the same day or contained within a two- or three-hour closing argument. These statements spanned a two-year period. Some comments were made during opening statements in Phase I (liability phase) in October of 1998, some during Phase I closing argument in June of 1999, and others during the closing statements in Phase II-B (punitive damages phase) in July of 2000. Many of the alleged improper comments did not even prompt an objection by Tobacco.^[14]

We begin with the Third District's conclusion that plaintiffs' counsel engaged in "racial pandering" and that the jury's "runaway" verdict was evidently one inflamed by passion and prejudice. A single reference to "race" in the Phase I opening statement was in the context of the consumer studies that the defendants conducted that divide American consumers into groups. Mr. Rosenblatt's comment that "they study races" was part of a statement about the study of the American consumer: "They study kids; they study races; they divide the American consumer into groups to sell their product." In fact, when the defense objected on the basis that those [1273] comments were "only designed to prejudice the jury," the trial court rejected this argument because that was "not the context of which it's being used." Mr. Rosenblatt then followed up with the statement that this is an industry that "divides the American consumer into groups: white, black, Jewish, Christian, young, old." The trial court did not abuse its discretion by determining that these statements were made in an attempt to show how Tobacco sells its products and advertises to different groups, not to impermissibly prejudice the jury.

As to the Phase I closing argument, we agree that a series of improper remarks occurred when counsel injected race into his argument:

Are there two sides to every question? And the immediate gut reaction is: Yeah, yeah. You want to be fair and you say: Right, there's two sides to every question. What's the other side to the Holocaust? What is the other side to slavery?

An objection was made and sustained. While one could posit that this was merely an attempt to explain to the jury that there are not always two sides, several minutes later Mr. Rosenblatt returned to a race-based theme by referring to Rosa Parks:

Let's discuss the concept of legal in the context of America. I noticed in last week's newspaper, Rosa Parks, who is 86 years old, got the Congressional Gold Medal because in 1955. . . .

Mr. Rosenblatt got no further because an objection was made and sustained. Undaunted by the trial court's ruling, Mr. Rosenblatt continued:

We look back in history. We look back in history. The whole civil rights movement of the '60s was fighting against unjust laws. Dr. King was arrested in the '60s. . . .

An objection was made and overruled and Mr. Rosenblatt continued:

In this building, in this building, a temple to the law, they were—there were drinking fountains which said Whites Only.

Once again, an objection was made and overruled.

There is absolutely no justification for this series of remarks, which appears to compare the tobacco industry with slavery and, by invoking civil rights leaders Rosa Parks and Martin Luther King, appealed to the jury's sense of outrage for the injustices visited upon African-Americans in this country. We condemn these tactics of Mr. Rosenblatt. His attempt to incite racial passions was conduct unbecoming an attorney practicing in our state courts.

Nevertheless, we note that the trial court sustained objections to several of these remarks and no motion for mistrial was made or curative instruction requested. In addition, there was no further race-based argument during the remainder of the closing, and, significantly, no such references were made in any of Mr. Rosenblatt's Phase I rebuttal argument.

We next discuss the Third District's conclusion that Mr. Rosenblatt's Phase I closing argument was also replete with impermissible references to jury nullification. The relevant comments were made in response to Tobacco's preemption defense: that the warnings on the cigarettes were as provided by law. Although compliance with the federal warnings preempted any claim based on failure to warn, it did not eliminate the other causes of action that the jury had to consider in Phase I. As for the comment "legal don't make it right," Mr. Rosenblatt was referring to the answers given by the CEO for Brown & Williamson, Nick Brookes. Mr. [1274] Brookes was asked what he would do with his product if he became convinced that cigarettes caused cancer and heart disease. His reply was it would not affect his business because "it's a legal product." Mr. Rosenblatt's response was that "legal don't make it right." No objection was made. In fact, this theme continued in rebuttal when Mr. Rosenblatt explained without objection:

It's a legal product. There is no question about it. But a legal product does not mean that the cigarette companies are not responsible when their product causes harm and death to their customers. And being legal is a very relative term.

These arguments were not an attempt to tell the jury to ignore the law.

We conclude, under the totality of the circumstances, including that several objections were sustained and a number of the arguments were unobjected-to, that the defendants did not sustain their burden of proving reversible error under Murphy or that the trial court abused its discretion in denying the motion for new trial as to Phase I. As to Phase II, we note that no arguments have been raised as to impermissible comments during Phase II-A, in which the jury determined compensatory damages as to the three class representatives. Moreover, a review of the verdicts reveals that each verdict reflected a careful and differentiated analysis as to comparative fault and individual damages and in no way justifies the Third District's overall conclusion that this was a runaway jury inflamed by race because of the arguments directed to the four of the six members of the jury who were African-American. As to Phase II-B, because we are reversing the punitive damages award we do not separately review each of these arguments except to again note that no race-based arguments were made.

6. Reversal of Final Judgments in Favor of the Three Class Representatives

The issue of whether two of the three Engle Class representatives are properly included within the class as certified by the trial court and approved on appeal involves the application of the law to a set of undisputed facts. "[W]here the facts are essentially undisputed, the legal effect of the evidence will be a question of law." Town of Palm Beach v. Palm Beach County, 460 So.2d 879, 882 (Fla.1984). Questions of law are reviewed de novo.

The trial court originally certified this class on October 31, 1994. This order provided for notice to the members of the class by way of publication and indicated that the trial court was to hold an additional hearing "to discuss the content, timing and manner of providing notice." At that time, the class was described as:

All United States citizens and residents, and their survivors, who have suffered, presently suffer or who have died from diseases and medical conditions caused by their addiction to cigarettes that contain nicotine. The class shall specifically exclude officers, directors and agents of the [d]efendants.

Engle I, 672 So.2d at 40. The class certification was affirmed by the Third District on January 31, 1996, but the class membership was altered by the district court to include only Florida citizens and residents. See id. at 42. Subsequent to the district court's modification limiting the class to Florida citizens, the trial court issued an amended order on November 21, 1996, recertifying the more limited class.

The final class description could lead one to believe that the class is open-ended because there is no stated cut-off date for membership. However, an open-ended class would not allow for notice and [1275] an opportunity to opt out as required by rule 1.220(d)(2) and may implicate potential class members' right of access to the courts under article I, section 21 of the Florida Constitution.

Further, without the ability to opt out, potential plaintiffs could argue that they should be allowed to intervene after a judgment in favor of the class or, alternatively, that they are not bound by an adverse judgment. Cf. Katz v. Carte Blanche Corp., 496 F.2d 747, 759 (3d Cir. 1974) (explaining that prior to the adoption of Federal Rule of Civil procedure 23(c)(2) some courts suggested that "it would be proper to make the class action determination and permit class members to intervene after the defendant's liability had been determined in the single lawsuit," that this "one-way intervention had the effect of giving collateral estoppel effect to the judgment of liability in a case where the estoppel was not mutual," and that the notice and opt-out provisions were adopted to give mutual estoppel effect to the judgment on liability). A finite class is necessary to avoid multiple similar lawsuits and to make legal process more effective and expeditious, important goals of a class action suit. See Tenney v. City of Miami Beach, 152 Fla. 126, 11 So.2d 188, 189 (1942) ("The very purpose of a class suit is to save a multiplicity of suits, to reduce the expense of litigation, to make legal processes more effective and expeditious, and to make available a remedy that would not otherwise exist.").

The plain language of the class certification indicates that the trial court anticipated that the class would be cut off or limited to the date of final certification. The phrase "who have suffered, presently suffer or have died" supports the view that the class should include only those people who were affected in the past or who were presently suffering at the time the class was recertified by the trial court. Moreover, although not controlling, federal case law supports the interpretation that the date of final class certification should be presumed the proper cut-off date for class membership. See Sosna v. Iowa, 419 U.S. 393, 403, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975) ("A litigant must be a member of the class which he or she seeks to represent at the time the class action is certified by the district court.") (citing Bailey v. Patterson, 369 U.S. 31, 82 S.Ct. 549, 7 L.Ed.2d 512 (1962)); Davis v. Ball Mem'l Hosp. Ass'n, 753 F.2d 1410, 1420 (7th Cir. 1985) ("To be a proper class representative, the named plaintiff must be a member of the class at the time the class action is certified.").

In our view, it is reasonable to conclude that the cut-off date for class membership is November, 21, 1996, the date the trial court recertified the class and issued an amended order conforming the class description to the Third District's decision. It was with this November 21, 1996, order that the circuit court first ordered that notice to potential class members be published in newspapers and magazines circulated in Florida. The language employed by the United States Supreme Court in Sosna, although not addressing a scenario such as we face today, is not contrary to our conclusion.

Relying upon Davis v. Ball Memorial Hospital Association, the district court held that "[s]ince Farnan was diagnosed in April 1996, and Della Vecchia was diagnosed in February 1997, they are clearly excluded from the class and the judgment in their favor must be reversed." Engle II, 853 So.2d at 454 n. 23 (emphasis supplied). However, "diagnosis" as a qualifying factor does not appear anywhere in the description of the class certified. Rather, the class is described as those "who have suffered, presently suffer or [1276] have died from diseases and medical conditions." Engle I, 672 So.2d at 40 (emphasis supplied). The critical event is not when an illness was actually diagnosed by a physician, but when the disease or condition first manifested itself.

Our review of the medical records demonstrates that class representative Farnan was formally diagnosed with lung cancer in March of 1996, clearly demonstrating her disease had manifested by that time. Therefore, she was a proper member of the class at the time of the circuit court's November 21, 1996, order. As for class representative Della Vecchia, it was noted by her doctors in early 1997 that she had a past medical history of "COPD" and significant hypertension. Thus, Della Vecchia's medical records indicate that she had been suffering from a tobacco-related disease prior to the time of certification and is also properly included as a class member. We therefore quash the district court's reversal of judgment entered in favor of class representatives Farnan and Della Vecchia and hereby order that the judgments be reinstated.

In addition to reversing the judgments in favor of Farnan and Della Vecchia, the district court also held that the judgment in favor of Tobacco should have been entered as to all of class representative Amodeo's claims. See Engle II, 853 So.2d at 455 n. 23. We agree that the district court properly held that all judgments in favor of class representative Amodeo were barred by the applicable statute of limitations.

6. Final Judgments Entered in Favor of the Three Class Representatives in Favor of Liggett and Brooke

As noted above, the final judgments entered in favor of class representative Amodeo, including those against Liggett and Brooke, must be reversed because Amodeo's claims are barred by the statute of limitations. We also agree with the Third District that the judgments against defendants Liggett and Brooke in favor of Farnan and Del Vecchia must be reversed because there was insufficient evidence to support these judgments. As the Third District explained, "it is undisputed that the Liggett defendants did not manufacture or sell any of the products that allegedly caused injury to the individual plaintiff representatives. It is also undisputed that the jury found the Liggett defendants zero percent at fault with respect to each of the named plaintiffs." Engle II, 853 So.2d at 466 n. 46. A defendant who is found to be zero percent at fault for a plaintiff's damages cannot be held jointly and severally liable for those damages. We agree with the Third District that this inconsistency in the verdict requires reversal of the judgments entered against Liggett and Brooke. See id.

CONCLUSION

In conclusion, we approve the Third District's holding that the $145 billion award of punitive damages must be vacated. However, we disapprove the Third District's conclusion that the class action punitive damages claims were barred by the FSA.

We also disapprove the Third District's holding that the trial court abused its discretion in denying Tobacco's motion for a mistrial due to improper argument by the Engle Class's counsel. We uphold the award of compensatory damages as to plaintiffs Farnan and Della Vecchia, and approve the reversal of the entry of judgment in favor of Amodeo. However, the judgments against defendants Liggett and Brooke must reversed.

We approve the Phase I findings for the class as to Questions 1 (that smoking cigarettes [1277] causes aortic aneurysm, bladder cancer, cerebrovascular disease, cervical cancer, chronic obstructive pulmonary disease, coronary heart disease, esophageal cancer, kidney cancer, laryngeal cancer, lung cancer (specifically, adenocarinoma, large cell carcinoma, small cell carcinoma, and squamous cell carcinoma), complications of pregnancy, oral cavity/tongue cancer, pancreatic cancer, peripheral vascular disease, pharyngeal cancer, and stomach cancer), 2 (that nicotine in cigarettes is addictive), 3 (that the defendants placed cigarettes on the market that were defective and unreasonably dangerous), 4(a) (that the defendants concealed or omitted material information not otherwise known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking cigarettes or both), 5(a) (that the defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature with the intention that smokers and the public would rely on this information to their detriment), 6 (that all of the defendants sold or supplied cigarettes that were defective), (7) (that all of the defendants sold or supplied cigarettes that, at the time of sale or supply, did not conform to representations of fact made by said defendants), and 8 (that all of the defendants were negligent). Therefore, these findings in favor of the Engle Class can stand.

The class consists of all Florida residents fitting the class description as of the trial court's order dated November 21, 1996. However, we conclude for the reasons explained in this opinion that continued class action treatment is not feasible and that upon remand the class must be decertified. Individual plaintiffs within the class will be permitted to proceed individually with the findings set forth above given res judicata effect in any subsequent trial between individual class members and the defendants, provided such action is filed within one year of the mandate in this case. We remand this case to the Third District for further proceedings consistent with this opinion.

It is so ordered.

ANSTEAD and PARIENTE, JJ., concur.

LEWIS, C.J., concurs in part and dissents in part with an opinion, in which QUINCE, J., concurs.

WELLS, J., concurs in part and dissents in part with an opinion, in which BELL, J., concurs.

CANTERO, J., recused.

LEWIS, C.J., concurring in part and dissenting in part.

I concur in the majority's opinion and most of the reasoning employed therein. However, I cannot agree with the majority's analysis and conclusion with regard to entitlement to punitive damages. For the reasons that follow, in my view Florida law clearly requires that the jury's determination of entitlement to punitive damages which resulted in Phase I must stand.

PHASE I FINDINGS ON ENTITLEMENT TO PUNITIVE DAMAGES

Although I do agree with the majority's conclusion that the Third District misapplied our decision in Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989), in holding that compensatory damages must be determined before a jury can consider entitlement to punitive damages, I cannot agree with the majority's view that the trial court erred in allowing the jury to consider the entitlement of the class to punitive damages during Phase I of the trial based [1278] on the majority's conclusion that proof of liability, which includes both reliance and causation, is a missing predicate here to the determination of entitlement to punitive damages. For the reasons that follow, I would allow the jury's determination of punitive conduct and of entitlement to punitive damages to stand for the class to be later applied as the case proceeds.

This Court has previously addressed "whether a plaintiff can recover punitive damages where the factfinder has found a breach of duty but no compensatory or actual damages have been proven." Ault v. Lohr, 538 So.2d 454, 456 (Fla.1989). In Ault, we clearly recognized that "an express finding of a breach of duty should be the critical factor in an award of punitive damages." Id. Further, this Court has held that "a finding of liability alone will support an award of punitive damages `even in the absence of financial loss for which compensatory damages would be appropriate.' "Id. (quoting Lassitter v. Int'l Union of Operating Eng'rs, 349 So.2d 622, 626 (Fla.1977)); see also Mortellite v. Am. Tower, L.P., 819 So.2d 928, 935 (Fla. 2d DCA 2002) (concluding that, based on the trial court's finding of breach of duty, the appellant was ultimately entitled to a punitive damage award even if, after remand, it was again determined that he was not entitled to compensatory damages); Horizon Leasing v. Leefmans, 568 So.2d 73, 75 (Fla. 4th DCA 1990) ("[A] plaintiff can recover punitive damages where the fact finder has found a breach of duty but no compensatory or actual damages have been proven.").

In this matter, Tobacco asserts, and the majority agrees, that the jury in Phase I only determined that Tobacco breached its duty and that a breach of duty does not constitute "a finding of liability" under Ault. Contrary to this assertion, the Phase I jury in the present case found Tobacco responsible with regard to the common core issues pertaining to liability and general causation. This is supported by the fact that the trial plan only allowed the jury to proceed to the next stage of Phase I—a determination of entitlement to punitive damages—if liability was found. The final judgment awarding compensatory damages to the three class representatives and punitive damages to the entire class was only possible after liability was determined because a judgment for damages could not be entered if there had been no finding of liability. See Oliveira v. Ilion Taxi Aero LTDA, 830 So.2d 241, 242 (Fla. 4th DCA 2002) (recognizing "as does Ault, that as a matter of law a judgment for damages cannot be entered where there is no finding of liability"); Cont'l Assurance Co. v. Davis, 538 So.2d 542, 544 (Fla. 1st DCA 1989) (concluding that "absent the jury's finding of liability on the underlying fraud issue, there can be no valid award of punitive damages," citing Ault); Cloutier v. Cent. Contracting, Inc., 418 So.2d 1233, 1234 (Fla. 5th DCA 1982) (concluding that a verdict finding damages without finding liability cannot support the damage award). Pursuant to Ault, the jury's finding of liability and responsibility with regard to the common core issues alone in Phase I could support the jury's determination that the class was entitled to punitive damages, notwithstanding that compensatory damages have not yet been awarded to all class members. In fact, a final judgment awarding punitive damages has been affirmed notwithstanding that the judgment awarded no compensatory damages. See Russin v. Richard F. Greminger, P.A., 563 So.2d 1089 (Fla. 4th DCA 1990) (citing Ault). A finding of liability, not compensatory damages, is the sine qua non of entitlement to a punitive damage award.

In support of its argument that compensatory damages are a prerequisite for [1279] awarding punitive damages, Tobacco relies, as did the subsequent panel in Engle II, on only a concurring opinion in Ault, in which it was stated:

The crucial element in determining whether punitive damages may be awarded absent an award of compensatory damages is proof of the underlying cause of action. Where actual damage is an essential element of the underlying cause of action, an award of compensatory damages must be a prerequisite to an award of punitive damages. This case involved the torts of assault and battery, which do not require proof of actual damage.

853 So.2d at 457 (Ehrlich, C.J., concurring specially). However, a majority of this Court did not agree with that statement and did not join with that concurring opinion and, therefore, it is of no precedential value whatsoever. See Greene v. Massey, 384 So.2d 24, 27 (Fla.1980) ("A concurring opinion does not constitute the law of the case nor the basis of the ultimate decision unless concurred in by a majority of the Court. . . . The special concurring opinion has no precedential value and it cannot serve to condition or limit the concurrence in the [majority] opinion. . . ."); Lendsay v. Cotton, 123 So.2d 745, 746 (Fla. 3d DCA 1960) ("A concurring opinion has no binding effect as precedent; such an opinion represents only the personal view of the concurring judge and does not constitute the law of the case."). Moreover, neither the Ault court nor any other Florida court has ever addressed Ault in the class action context. Due to the uniqueness and purpose of the class action device, which allows a jury to determine liability with regard to common issues first before determining individual damages, in my view, the jury's verdict in Phase I finding Tobacco liable with regard to the common issues is a sufficient predicate to constitute a "finding of liability" under Ault. This conclusion is supported by the fact that had the jury in Phase I found Tobacco not liable with regard to the common issues of liability and general causation each class member's claim at that point would have been rendered moot, thereby precluding Phase II.

In addition, a key factor in considering whether compensatory damages should be awarded prior to a determination of entitlement to punitive damages in a class action is whether the awarding of one is critical to awarding the other. In other words, is the relative timing of the awards the determinative factor? I conclude that the timing of the awards should not be the absolute controlling factor.

Compensatory and punitive damages serve distinct purposes. See Arab Termite & Pest Control of Fla., Inc. v. Jenkins, 409 So.2d 1039, 1042-43 (Fla.1982). In Arab Termite we recognized the distinction between compensatory and punitive damages, specifically:

[T]he amount of compensation for loss is an entirely separate matter from the amount of punitive damages. Punitive damages apply to wrongdoing not covered by the criminal law, where the private injuries inflicted partake of public wrongs. They are to be measured by the enormity of the offense, entirely aside from the measure of compensation for the injured plaintiff.

Jenkins, 409 So.2d at 1042-43. In awarding punitive damages, the focus is on the defendant's conduct, not on the conduct of the plaintiff or the extent of the injury to be compensated. See Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 474 (5th Cir. 1986). While the purpose of compensatory damages is "to restore the injured party to the position it would have been [in] had the wrong not been committed," Laney v. Am. Equity Inv. Life Ins. Co., 243 F.Supp.2d [1280] 1347, 1354 (M.D.Fla.2003), the purpose of punitive damages "is not to further compensate the plaintiff, but to punish the defendant for its wrongful conduct and to deter similar misconduct by it and other actors in the future." Owens-Corning Fiberglas Corp. v. Ballard, 749 So.2d 483, 486 (Fla.1999). "Punitive damages are appropriate when a defendant engages in conduct which is fraudulent, malicious, deliberately violent or oppressive, or committed with such gross negligence as to indicate a wanton disregard for the rights of others." W.R. Grace & Co.-Conn. v. Waters, 638 So.2d 502, 503 (Fla.1994). The punitive damage inquiry, unlike that for compensatory damages, "focuses primarily on the egregiousness of the defendant's conduct." Watson v. Shell Oil Co., 979 F.2d 1014, 1019 (5th Cir.1992).

Moreover, the United States Supreme Court has also recognized the distinct purposes of compensatory and punitive damages:

The former are intended to redress the concrete loss that the plaintiff has suffered by reason of the defendant's wrongful conduct. The latter, which have been described as "quasi-criminal," operate as "private fines" intended to punish the defendant and to deter future wrongdoing. A jury's assessment of the extent of a plaintiff's injury is essentially a factual determination, whereas its imposition of punitive damages is an expression of its moral condemnation.

Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001) (citations omitted). Punitive damages "are not compensation for injury. Instead, they are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence." Gertz v. Robert Welch, Inc., 418 U.S. 323, 350, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). Punitive damages "serve a broader function; they are aimed at deterrence and retribution." State Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003).

Entitlement to punitive damages, therefore, aimed at deterrence and retribution for a public wrong, is distinct and not dependent on the specific injury suffered by the class member. While no plaintiff in the Engle Class may ultimately receive an award of punitive damages without proving that he or she suffered actual damages in Phase III, the determination with regard to entitlement to punitive damages on a class basis need not be made concurrently with an evaluation of a particular claimant. See Sterling v. Velsicol Chemical Corp., 855 F.2d 1188, 1217 (6th Cir.1988) ("[T]he district court need not defer its award of punitive damages prior to determining compensatory damages for the entire class of 128 individuals. So long as the court determines the defendant's liability and awards representative class members compensatory damages, the district court may in its discretion award punitive damages to the class as a whole at that time.") Moreover, although the Unites States Supreme Court has recognized that "compensatory damages and punitive damages are typically awarded at the same time by the same decisionmaker," it has never held that entitlement to these damages must absolutely be assessed at the same time. Cooper Indus., Inc., 532 U.S. at 432, 121 S.Ct. 1678 (emphasis supplied). Therefore, in my view, the relative timing of the assessment of entitlement to punitive damages and a compensatory damage award is not critical. See Jenkins, 782 F.2d at 474. But see Allison v. Citgo Petroleum Corp., 151 F.3d 402, 417-18 (5th Cir.1998).

It is important to highlight the distinction between a jury determination that a class is entitled to punitive damages before [1281] compensatory damages have been actually awarded versus an actual jury award of a specific amount to a class as a lump sum punitive damage award before compensatory damages have been determined. In my view, the former comports with the requirements of due process while the latter, as the majority correctly concludes, does not. However, contrary to the conclusion reached by the majority, in my view, the trial court did not abuse its discretion in allowing the jury in Phase I of the trial plan to determine whether the class was entitled to punitive damages after liability regarding the common issues had been determined. Notwithstanding the above, I concur in the majority's holding which disapproves the trial court's trial plan in Phase II-B in which it allowed a lump sum punitive damage award to be determined prior to a determination of individual class members' compensatory damage awards, which will occur in Phase III, based on due process concerns. A simple determination of entitlement to punitive damages on a class basis does not violate Tobacco's due process rights because no class member will be awarded punitive damages until the class member has been awarded compensatory damages in Phase III. See In re New Orleans Train Car Leakage Fire Litigation, 795 So.2d 364, 379 (La.Ct.App.2001) (determining that there was no due process violation where the quantum of punitive damages was determined when the quantum of compensatory damages had been determined as to only 20 of 8,047 plaintiff class members). Ultimately, Tobacco will not be required to pay a class member punitive damages until that class member demonstrates his or her entitlement to compensatory damages in Phase III. Tobacco will have the opportunity to be heard at each Phase III trial with regard to why that individual plaintiff is not entitled to compensatory damages. To date, Tobacco has not been required to pay any class member a punitive damage award. Therefore, because Tobacco in Phase III will be heard with regard to each class member's compensatory damage claim before they are required to pay that class member any punitive damages, I conclude that Phases I and II-A of the trial court's trial plan did not violate Tobacco's due process rights, and that the jury's finding with regard to entitlement to punitive damages should stand. The majority today has inflicted serious harm to class actions which involve egregious behavior and has done so contrary to the clear law of Florida.

CONCLUSION

For the above reasons, I respectfully dissent from the portion of the majority opinion that reasons and holds that it was error for the trial court to allow the jury to make a determination of the entitlement of the class to punitive damages during Phase I of the trial. If the majority had properly analyzed and discussed the availability of the class action status here the contrary result on the punitive issue would have been obvious. I concur in the majority's decision in all other respects.

QUINCE, J., concurs.

WELLS, J., concurring in part and dissenting in part.

I concur with the following in the majority decision and opinion:

1. Approving the Third District Court of Appeal's reversal of the $145 billion class action punitive damages award.

2. Approving the Third District's reversal of the judgment on behalf of plaintiff Amodeo.

3. Holding that the Third District misapplied Young v. Miami Beach Improvement Co., 46 So.2d 26 (Fla.1950), to the extent that the Third District's decision [1282] would bar individual smokers' claims. I do not, though, join in the majority's opinion to the extent that it implies that there could be a proper class action for smokers' claims.

4. Holding that the trial court erred in allowing the jury to find entitlement to punitive damages in Phase I of the trial.

5. Holding that the class be decertified.

I dissent as to all other parts of the majority decision and opinion for the reasons that I will write about in this opinion. In sum, I would affirm the remainder of the Third District's extensive opinion, except that I would provide that any individual who can show that he or she relied on being a member of the class certified by the trial court in this case and based on that reliance did not bring an individual action would be allowed to file suit within one year of our decision becoming final.^[15]

ANALYSIS

Overview

The bottom line is that this was not properly a class action. The Third District's decision that this was not a proper class action is in accord with the overwhelming majority of courts from numerous jurisdictions. The Third Circuit in Barnes v. American Tobacco Co., 161 F.3d 127, 143 (3d Cir.1998), explains why:

In decertifying the class, the District Court decided that "too many individual issues exist which prevent this case from proceeding as a class action." Barnes [v. American Tobacco Co.], 176 F.R.D. [479,] at 500. As noted, the District Court found that addiction, causation, and affirmative defenses all presented individual issues not properly decided in a class action. We believe that addiction, causation, the defenses of comparative and contributory negligence, the need for medical monitoring and the statute of limitations present too many individual issues to permit certification. As in Amchem [Products, Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)], plaintiffs were "exposed to different . . . products, for different amounts of time, in different ways, and over different periods." See Amchem, [521 U.S. at 624, 117 S.Ct. 2231] (citation omitted). These disparate issues make class treatment inappropriate. [n. 19]

[n. 19.] We note that the individual issues raised by cigarette litigation often preclude class certification. See, e.g., Castano v. The American Tobacco Co., 84 F.3d 734 (5th Cir.1996) (decertifying 23(b)(3) class because individual issues predominated); Smith v. Brown & Williamson Tobacco Corp., 174 F.R.D. 90 (W.D.Mo.1997) (denying certification under 23(b)(1), (2) & (3) because of the presence of individual issues); Ruiz v. The American Tobacco Co., 180 F.R.D. 194 (D.Puerto Rico 1998) (denying certification under 23(b)(2) and 23(b)(3) because "cigarette addiction" claims raised too [1283] many individual issues). Significantly, no federal appeals court has upheld the certification [of] a class of cigarette smokers or reversed a District Court's refusal to certify such a class. In some state cases, however, plaintiff smokers have succeeded in certification. See Richardson v. Phillip Morris, No. 96145050/CE212596[, 1998 WL 35164799] (Baltimore Cir. Ct. Jan. 28, 1998) (certifying class of Maryland smokers seeking compensatory and punitive damages); R.J. Reynolds Tobacco Co. v. Engle, 672 So.2d 39 (Fla. App. 3 Dist.1996), rev. denied, 682 So.2d 1100 (1996) (certification of state-wide class of tobacco smokers suing for damages caused by smoking).[^[16]]

Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir.1996), was the initial case which comprehensively examined whether a class action could be pursued in tobacco litigation. While Castano was a class action claiming a nationwide class and the present case was limited to a Florida class, much of the analysis is applicable to the present case.^[17] The Castano court stated:

The Castano class suffers from many of the difficulties that the Georgine [v. Amchem Prods., 83 F.3d 610 (3d Cir. 1996),] court found dispositive. The class members were exposed to nicotine through different products, for different amounts of time, and over different time periods. Each class member's knowledge about the effects of smoking differs, and each plaintiff began smoking for different reasons. Each of these factual differences impacts the application of legal rules such as causation, reliance, comparative fault, and other affirmative defenses.

Id. at 742-43 n. 15. The United States Supreme Court's analysis in Amchem Products, Inc. v. Windsor, 521 U.S. 591, 624-25, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), instructs on the point in rejecting a settlement of an asbestos litigation class action. Other cases with similar holdings are: Philip Morris USA Inc. v. Hines, 883 So.2d 292 (Fla. 4th DCA 2003); Estate of Mahoney v. R.J. Reynolds Tobacco Co., 204 F.R.D. 150, 156 (S.D.Iowa 2001); Badillo v. American Tobacco Co., 202 F.R.D. 261, 264 (D.Nev.2001); Guillory v. American Tobacco Co., No. 97 C 8641, 2001 WL 290603 at *20, *24, *27 (N.D.Ill. Mar.20, 2001); Aksamit v. Brown & Williamson Tobacco Corp., No. C.A. 6:XX-XXXX-XX, 2001 WL 1809378 at *24 (D.S.C. Dec.29, 2000); Thompson v. American Tobacco Co., 189 F.R.D. 544, 551 (D.Minn.1999); Hansen v. American Tobacco Co., No. LR-C-96-881, 1999 WL 33659388, *2, 1999 U.S. Dist. LEXIS 11277 at *7 (E.D.Ark. July 21, 1999); Insolia v. Philip Morris Inc., 186 F.R.D. 535, 546 (W.D.Wis.1998); Emig v. American Tobacco Co., 184 F.R.D. 379, 389 (D.Kan.1998); Barreras Ruiz v. American Tobacco Co., 180 F.R.D. 194, 197 (D.P.R.1998); Smith v. Brown & Williamson Tobacco Corp., 174 F.R.D. 90, 94 (W.D.Mo.1997); In re Simon II, 407 F.3d 125 (2d Cir.2005); Arch v. American Tobacco Co., Inc., 175 F.R.D. 469 (E.D.Pa. 1997).

I recognize that a problem exists in this case because of the interlocutory appeal to [1284] the Third District in which a different panel of the Third District approved a class action for a class composed of Florida smokers. But I also recognize that the 1996 decision by the Third District was made at a time when this case was only in the pleading stage. At the time of the 1996 decision, there was no trial plan with Phases I, II, and III. In fact, the three individuals who became the class representatives and who presented claims for compensatory damages, Farnan, Della Vecchia, and Amodeo, were added as class representatives after the Third District's 1996 decision. Though the trial court proceeded on the basis of the 1996 Third District decision, for the reasons stated by the Second District in Toledo v. Hillsborough County Hospital Authority, 747 So.2d 958 (Fla. 2d DCA 1999), the 1996 decision in the interlocutory appeal should not be given law-of-the-case effect: "Due to the trial court's broad authority to alter or amend orders determining class certification, the doctrine of law of the case `applies only sparingly in class certification proceedings.' Fair Housing for Children Coalition, Inc. v. Pornchai Int'l, 890 F.2d 420, at 421 (9th Cir.1989) (unpublished disposition)." Toledo, 747 So.2d at 960. The present majority apparently agrees because the majority ultimately decertifies the class.

In what I conclude will be harmful and confusing precedent, the majority saves some of the jury findings in Phase I of the class action before decertifying the class. I do not join in doing that; rather, I would follow the overwhelming majority of courts and hold that this was not a proper class action. The result of the majority "retaining the jury's Phase I findings" is not, as the majority asserts, "pragmatic," majority op. at 1269; rather, it is problematic. Under the majority's holding, the class closed a decade ago. Who are the individuals that are to get the use of these "findings"? How will a trial court make that determination? Does the individual only have to have an injury manifest prior to November 21, 1996, or does the individual have to have notice of the class action? Does the majority's holding mean that the statute of limitation has not run on any Florida resident's claim whose injury manifested prior to November 21, 1996? How long do individuals have to file such individual actions? How are these findings to be used in cases in which the findings are used? I assume that any individual cases filed on claims in which injuries manifested on November 22, 1996, or later do not get the benefit of these findings, so that there will be two classes of claimants. These are only a few of the issues which arise in application of the majority's holding.

Punitive Damages

As previously stated, I concur in the majority's holding that agrees with the Third District that the trial court erred in allowing the jury to consider entitlement to punitive damages during the Phase I trial. I do not concur, however, with the majority's opinion that an award of compensatory damages is not a prerequisite to a finding of entitlement to punitive damages and that an award of compensatory damages need not precede a determination of entitlement to punitive damages. I do not concur because the majority's opinion is in conflict with the Supreme Court's decisions in BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), and State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 418, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003).

The Supreme Court has made it clear that punitive damages must be in ratio to compensatory damages. In fact, the majority quotes a passage from the Campbell decision which makes this clear. It necessarily [1285] follows, then, that there must be compensatory damages in order for punitive damages to be in ratio to compensatory damages. Thus, I conclude that the majority decision here is in conflict with the Supreme Court decisions and is thereby erroneous.

Law-of-the-Case Class Certification

I have previously stated why the law-of-the-case doctrine should not apply to the Third District's 2003 review of this case, which followed the Phase I and Phase II jury trials and judgments. Florida Department of Transportation v. Juliano, 801 So.2d 101 (Fla.2001), should not be applied in this class action. Moreover, since the majority ends up decertifying the class, I fail to understand the point of the majority's discussion of this issue. Majority op. at 1265-67.

The Third District in its 2003 opinion correctly explains why the law-of-the-case doctrine does not apply. Liggett Group, Inc. v. Engle, 853 So.2d 434, 443 n. 4 (Fla. 3d DCA 2003). Furthermore, as the majority states, "Of course, this Court is not bound by the Third District's law of the case." Majority op. at 1267.

In the present case, the trial plan was not decided by the trial court until after the 1996 interlocutory appeal. The defendants objected to the trial plan and moved to decertify the class. The trial court denied the motion, although it expressed reservations about the manageability of the case and predicted that the necessary individual hearings will place a serious demand upon Florida's judicial resources. The denial of the defendant's motion to decertify was then appealed to the Third District. The Third District dismissed the appeal for lack of jurisdiction but expressly stated that the defendants had a right to obtain review of the propriety of the order by plenary appeal from any adverse judgment. Engle, 853 So.2d at 443. But now the majority in this Court makes the trial plan unreviewable in the district court by applying the law of the case to the earlier certification. Certainly, the trial plan should have been reviewable by the district court as part of a review of the motion to decertify after the trial plan was ordered.^[18] It was the trial plan which demonstrated just how unworkable this class action was and why the class should have been decertified. It was the trial plan which resulted in the errors upon which the majority in this Court reverses the trial court's final judgment.

It was the trial plan which resulted in the Phase I jury deciding whether the defendants were negligent, breached warranties, were strictly liable, or were guilty of fraud and misrepresentation, but Phase II decided the claimant's comparative fault. Such a bifurcation of issues violates article I, section 22 of the Florida Constitution, just as the Fifth Circuit in Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir.1996), found that such a bifurcation of [1286] issues violated the Seventh Amendment to the United States Constitution.

The Castano court explained why a bifurcation of the comparative negligence issue from the defendant's negligence issue with a trial by separate juries is a violation of the Seventh Amendment to the United States Constitution:

Another factor weighing heavily in favor of individual trials is the risk that in order to make this class action manageable, the court will be forced to bifurcate issues in violation of the Seventh Amendment. This class action is permeated with individual issues, such as proximate causation, comparative negligence, reliance, and compensatory damages. In order to manage so many individual issues, the district court proposed to empanel a class jury to adjudicate common issues. A second jury, or a number of "second" juries, will pass on the individual issues, either on a case-by-case basis or through group trials of individual plaintiffs.

The Seventh Amendment entitles parties to have fact issues decided by one jury, and prohibits a second jury from reexamining those facts and issues. [n. 30] Thus, Constitution allows bifurcation of issues that are so separable that the second jury will not be called upon to reconsider findings of fact by the first:

[T]his Court has cautioned that separation of issues is not the usual course that should be followed, and that the issue to be tried must be so distinct and separable from the others that a trial of it alone may be had without injustice. This limitation on the use of bifurcation is a recognition of the fact that inherent in the Seventh Amendment guarantee of a trial by jury is the general right of a litigant to have only one jury pass on a common issue of fact. The Supreme Court recognized this principle in Gasoline Products [Co., Inc. v. Champlin Refining Co., 283 U.S. 494, 51 S.Ct. 513, 75 L.Ed. 1188 (1931)]. . . . The Court explained . . . that a partial new trial may not be "properly resorted to unless it clearly appears that the issue to be retried is so distinct and separable from the others that a trial of it alone may be had without injustice." Such a rule is dictated for the very practical reason that if separate juries are allowed to pass on issues involving overlapping legal and factual questions the verdicts rendered by each jury could be inconsistent.

Alabama v. Blue Bird Body Co., 573 F.2d 309, 318 (5th Cir.1978) (citations and footnotes omitted).

[n. 30] "[N]o fact tried by jury, shall be otherwise re-examined in any Court of the United States . . ." U.S. Const. amend VII.

The Seventh Circuit recently addressed Seventh Amendment limitations to bifurcation. In [In re] Rhone-Poulenc [Rorer, Inc.], 51 F.3d [1293] at 1302-03, Chief Judge Posner described the constitutional limitation as one requiring a court to "carve at the joint" in such a way so that the same issue is not reexamined by different juries. "The right to a jury trial . . . is a right have juriable issues determined by the first jury impaneled to hear them (provided there are no errors warranting a new trial), and not reexamined by another finder of fact." Id. at 1303.

Severing a defendant's conduct from comparative negligence results in the type of risk that our court forbade in Blue Bird. Comparative negligence, by definition, requires a comparison between the defendant's and the plaintiff's conduct. Rhone-Poulenc, 51 F.3d at [1287] 1303 ("Comparative negligence entails, as the name implies, a comparison of the degree of negligence of plaintiff and defendant.") At a bare minimum, a second jury will rehear evidence of the defendant's conduct. There is a risk that in apportioning fault, the second jury could reevaluate the defendant's fault, determine that the defendant was not at fault, and apportion 100% of the fault to the plaintiff. In such a situation, the second jury would be impermissibly reconsidering the findings of a first jury. The risk of such reevaluation is so great that class treatment can hardly be said to be superior to individual adjudication.

84 F.3d at 750-51. Every smoker's case has a substantial comparative fault defense.

The majority's opinion approves one jury making the decision on the defendant's negligence and a different jury making a decision on the plaintiff's negligence and comparing the two. The second jury will be required to accept the first jury's findings as to the defendant's negligence and then in some way compare the defendant's negligence with the second jury's finding as to the plaintiff's negligence. It is only logical that comparative negligence, which the second jury will be finding, is an evaluation of how the negligence of the two parties relate. That can only be accomplished by weighing the evidence of each party's negligence as a cause of the defendant's negligence, which the majority's bifurcation of negligence and comparative negligence prevents from occurring on the basis of one jury's findings. Similarly, there is no logical way to decide the issues of misrepresentation and the element within misrepresentation of reliance by separate juries without having the second jury required to accept the findings of the first jury. Both constitutionally and practically, these are issues which should be decided by one fact-finder so that there is consistency in the resolution of the facts.

The majority states that it will follow the Fifth Circuit's two-to-one majority opinion in Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 628-29 (5th Cir. 1999), rather than the Fifth Circuit's decision in Castano. I cannot agree. Mullen was not a smoker's case. Mullen was a case brought under the federal Jones Act,^[19] in which the claims by the individuals were from the same defective ventilation system in a floating casino that occurred over the same general period of time. The Mullen majority pointed out that these were important distinguishing facts from Castano and from the asbestos case decided by the Supreme Court in Amchem Products, Inc. Moreover—and very significantly—the Mullen majority specifically pointed out that as in Treasure Chest, the defendant in the Mullen case did not raise in the trial court the Seventh Amendment issue of having one jury consider the defendant's conduct and another consider the plaintiffs' comparative negligence. I find the dissent in Mullen, which adheres to Castano and In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1302-03 (7th Cir.1995), to be the view which is correct for smokers' cases in Florida.

Finally, the majority opinion decides that the cut-off date for class membership should be November 21, 1996. Majority op. at 1274. This was, of course, after the Third District decision in the interlocutory appeal, which was issued on January 31, 1996. R.J. Reynolds Tobacco Co. v. Engle, 672 So.2d 39 (Fla. 3d DCA 1996). It is wholly inconsistent for the majority to apply the law of the 1996 case to prevent the Third District's 2003 review of the certification and to also hold that the cut-off date [1288] for the class was after the 1996 review. This results in the actual order of certification being unreviewable in the district court.

Closing Arguments and Individual Judgments

I dissent from the majority's decision that the blatantly improper closing arguments do not require reversal. The Third District's decision concerning this offensive argument was precisely correct. There is no way to read the argument of plaintiff's counsel other than to conclude that it dwelled upon issues which are and should be per se reversible error because the arguments were intended to have jurors make their decisions on issues which had no relevancy or materiality in the case. These arguments were extreme in my view. I will not join in a decision which affirms judgments which in part are a result of such arguments.

It is because of the closing arguments that the judgments for compensatory damages on behalf of Farnan and Della Vecchia against the defendants other than Liggett and Brooke^[20] must be reversed. Additionally, the individual verdicts cannot stand because the closing argument in Phase I was not only materially tainted by racial pandering and pleas for nullification but was also materially tainted by arguments which would have only been appropriate in seeking punitive damages. Since, as the majority has held, it was improper for the trial court to allow the Phase I jury to consider punitive damages, the arguments in support of punitive damages were improper and wrongfully prejudiced the defendants from receiving a fair trial in Phase I. This is still another reason why it is error for the majority to allow some of the Phase I jury findings to stand.

CONCLUSION

For the foregoing reasons, I concur with the majority's reversal of the $145 billion judgment; reversal of the judgment in behalf of Amodeo; holding that the Third District misapplied Young v. Miami Beach Improvement Co., 46 So.2d 26 (Fla.1950); and holding that the trial court erred in allowing the jury to find entitlement to punitive damages in Phase I of the trial. I dissent to all other parts of the majority decision and opinion.

BELL, J., concurs.

[1] Justices Wells and Bell would affirm the Third District as to its conclusions regarding the class action.

[2] We also note that the defendants never objected to Farnan or Della Vecchia as a proper members of the class. Although the defendants opposed the Engle Class's 1998 motion to add thirteen class representatives, which listed Farnan and Della Vecchia, their arguments focused on the timeliness of the motion and on the fact that adding thirteen new class representatives was unnecessary. The defendants did state that the brief descriptions of the proposed new class representatives that were provided by the plaintiffs did not indicate that "they would be adequate class representatives, whose claims are not time-barred." However, the defendants did not argue that any of the proposed class representatives, including Farnan and Della Vecchia, were not proper members of the class because of the class cut-off date.

[3] The cigarette companies are: R.J. Reynolds Tobacco Company; RJR Nabisco, Inc.; Philip Morris Incorporated (Philip Morris U.S.A.); Philip Morris Companies, Inc.; Lorillard Tobacco Company; Lorillard, Inc.; Brown & Williamson Tobacco Corporation, individually and as successor by merger to The American Tobacco Company; Liggett Group Inc.; Brooke Group Holding Inc., and Dosal Tobacco Corp. The industry organizations are The Council for Tobacco Research-U.S.A., Inc., and The Tobacco Institute, Inc.

[4] The Phase I findings were: (1) that cigarettes cause some of the diseases at issue; (2) that nicotine is addictive; (3) that the defendants placed cigarettes on the market that were defective and unreasonably dangerous; (4) that the defendants made a false or misleading statement of material fact with the intention of misleading smokers; (4)(a) that the defendants concealed or omitted material information not otherwise known or available knowing that the material was false or misleading or failed to disclose a material fact concerning the health effects or addictive nature of smoking cigarettes or both; (5) that all of the defendants agreed to misrepresent information relating to the health effects of cigarettes or the addictive nature of cigarettes with the intention that smokers and the public would rely on this information to their detriment; (5)(a) that the defendants agreed to conceal or omit information regarding the health effects of cigarettes or their addictive nature with the intention that smokers and the public would rely on this information to their detriment; (6) that all of the defendants sold or supplied cigarettes that were defective; (7) that all of the defendants sold or supplied cigarettes that at the time of the sale or supply did not conform to representations of fact made by the defendants; (8) that all of the defendants were negligent; (9) that all of the defendants engaged in extreme and outrageous conduct or with reckless disregard relating to cigarettes sold or supplied to Florida smokers with the intent to inflict severe emotional distress; and (10) that all of the defendants' conduct rose to a level that would permit an award of punitive damages.

[5] The named plaintiffs in the State's suit were: The State of Florida; Lawton Chiles, Jr., Individually and as Governor; the Department of Business and Professional Regulation; the Agency for Health Care Administration; and the Department of Legal Affairs.

The named defendants in the State's suit were: The American Tobacco Company; R.J. Reynolds Tobacco Company; RJR Nabisco, Inc.; B.A.T. Industries, PLC; Batus Holdings, Inc.; Brown & Williamson Tobacco Corporation; Philip Morris Companies, Inc.; Philip Morris Incorporated (Philip Morris U.S.A.); Loews Corporation; Lorillard Tobacco Company; United States Tobacco Company; UST Inc.; The Council for Tobacco Research-U.S.A. Inc. (successor to Tobacco Institute Research Committee); The Tobacco Institute, Inc.; Hill & Knowlton, Inc.; British American Tobacco Co., Ltd.; and Dosal Tobacco Corp., Inc.

[6] Specifically, count four contained allegations that the defendants violated the Florida Drug and Cosmetic Act, statutory provisions prohibiting the wrongful targeting of minors, statutory provisions prohibiting fraudulent practices, statutory provisions prohibiting public nuisances, and the Florida Deceptive and Unfair Trade Practices Act.

[7] The State's only claim for punitive damages arose from the alleged violation of this Florida statutory provision prohibiting misleading advertising. None of the other statutory provisions alleged to be violated by the FSA Defendants in count four of the State's complaint allowed the recovery of punitive damages.

[8] We also conclude that the punitive damages award was clearly excessive under the limitation based on ability to pay established by our precedent because it is "so inordinately large as obviously to exceed the maximum limit of a reasonable range within which the jury may properly operate." Lassiter, 349 So.2d at 627. A comparison of the amounts awarded and the financial worth assigned to each company by the Engle Class's expert clearly demonstrates that the award would result in an unlawful crippling of the defendant companies.

[9] See, e.g., Barnes v. American Tobacco Co., 161 F.3d 127 (3d Cir.1998) (affirming district court's decertification); Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir.1996) (reversing class certification on interlocutory appeal); Estate of Mahoney v. R.J. Reynolds Tobacco Co., 204 F.R.D. 150 (S.D.Iowa 2001) (denying motion to certify class action); Badillo v. American Tobacco Co., 202 F.R.D. 261 (D.Nev.2001) (denying motions to certify class action); Guillory v. American Tobacco Co., No. 97 C 8641, 2001 WL 290603 (N.D.Ill. Mar.20, 2001) (denying motion to certify class action); Aksamit v. Brown & Williamson Tobacco Corp., No. C.A. 6:XX-XXXX-XX, 2001 WL 1809378 at *9 (D.S.C. Dec.29, 2000) (denying a motion to certify class action); Thompson v. American Tobacco Co., Inc., 189 F.R.D. 544 (D.Minn.1999) (denying motion to certify class action); Insolia v. Philip Morris Inc., 186 F.R.D. 535, 546 (W.D.Wis.1998) (denying motion to certify class action); Emig v. American Tobacco Co., 184 F.R.D. 379, 389 (D.Kan. 1998) (denying motion to certify class action); Barreras Ruiz v. American Tobacco Co., 180 F.R.D. 194, 197 (D.P.R.1998) (denying motion to certify class action); Smith v. Brown & Williamson Tobacco Corp., 174 F.R.D. 90, 94 (W.D.Mo.1997) (denying motion to certify class action); Philip Morris, Inc. v. Angeletti, 358 Md. 689, 752 A.2d 200 (2000) (reversing trial court's class certification after trial plan had been established but before trial commenced).

[10] Federal rule 23(b)(3) is similar to Florida rule 1.220(b)(3) and provides in pertinent part that "[a]n action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition . . . the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members."

[11] But see Castano v. American Tobacco Co., 84 F.3d 734, 745 n. 21 (5th Cir.1996) (concluding that the interaction of (b)(3) and (c)(4) requires that "a cause of action, as a whole, must satisfy the predominance requirement of (b)(3) and that (c)(4) is a housekeeping rule that allows courts to sever the common issues for a class trial"). Both the Second and Fourth Circuits have noted the conflict on this issue. See Gunnells v. Healthplan Services, Inc., 348 F.3d 417, 444 (4th Cir.2003) ("[T]here is a circuit conflict as to whether predominance must be shown with respect to an entire cause of action, or merely with respect to a specific issue, in order to invoke (c)(4)."); Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 167 n. 12 (2d Cir. 2001) (noting that "an alternate understanding of the interaction of (b)(3) and (c)(4) to that set forth in Castano has been advanced elsewhere").

[12] Justice Wells asserts that allowing limited Phase I findings to stand sets "harmful and confusing precedent." Concurring in part and dissenting in part op. at 1284. However, the procedural posture of this case is unique and unlikely to be repeated. Further, many of the questions posed by Justice Wells are answered in this opinion. As we state in both the opening and closing of the opinion, class members (i.e. those individuals who fit the class description as of the November 21, 1996, cut-off date) must file individual actions against the defendants within one year of the issuance of this Court's mandate to benefit from the Phase I finding we uphold herein.

[13] When this Court has interpreted article I, section 22 of the Florida Constitution, it found guidance in the Seventh Amendment of the United States Constitution while recognizing that the Seventh Amendment does not apply to actions brought in state court. See Dep't of Revenue v. The Printing House, 644 So.2d 498, 500 (Fla.1994).

[14] This Court has recognized:

Harmfulness in this context also carries a requirement that the comments be so highly prejudicial and of such collective impact as to gravely impair a fair consideration and determination of the case by the jury. Passing remarks of little consequence in the scope of a lengthy trial should find little sympathy if no contemporaneous objection is voiced. The extensiveness of the objectionable material is a factor to be considered in the harmfulness analysis.

Murphy, 766 So.2d at 1029-30.

[15] There is no record of how many, if any, unnamed individuals relied upon being members of the class and thus did not file an independent action. I conclude that the latest date that this class could have closed was November 21, 1996, so that individuals would have to have claims which were not barred on that date. To avoid barring any of those individuals who did in good faith rely upon being members of the class, I would order that the statute of limitations can be avoided for those individuals or claims filed for one year from the date of our decision becoming final. An individual would have to plead and prove the avoidance as a reply to a statute of limitation affirmative defense pursuant to Florida Rule of Civil Procedure 1.100(a). I believe that this procedure would conform to what this Court allowed in Lance v. Wade, 457 So.2d 1008 (Fla.1984).

[16] Barnes was decided, and thus this footnote was written, before the Maryland Court of Appeals (Maryland's court of last resort) held that the class action in the Maryland case cited was not proper and decertified the class in Philip Morris v. Angeletti, 358 Md. 689, 752 A.2d 200 (2000).

[17] See Susan E. Kearns, Decertification of Statewide Tobacco Class Actions, 74 N.Y.U. L.Rev. 1336 (1999).

[18] See William Dodds, Trial Plans Come to Class Action Arena, 226 N.Y. Law J. (Aug. 13, 2001) at 2:

Faced with actions that seek to aggregate claims of increasingly broad and disparate groups of plaintiffs, many courts across the country now require that plaintiffs, and sometimes both parties, prepare detailed trial plans at the time of or in advance of class certification. For example, in In re Ford Motor Company Vehicle Paint Litigation, 182 F.R.D. 214, 224 (E.D.La.1998), the district court required the plaintiff to submit a trial plan, saying it was constrained from "certifying a class now and worrying about how to try it later." Similarly, in Southwestern Refining Co., Inc. v. Bernal, 22 S.W.3d 425, 435 (Tex.2000), the Texas Supreme Court declared that "it is improper to certify a class without knowing how the claims can and will likely be tried," requiring plaintiffs to submit trial plans prior to certification.

[19] 46 U.S.C. § 688 (1988).

[20] The majority held that the Third District was correct that the judgments against Liggett and Brooke should be reversed on other grounds. I agree.

[1190] Seth P. Waxman, Washington, DC, for Petitioners.

David C. Frederick, Washington, DC, for Respondents.

Melissa Arbus Sherry, for the United States as amicus curiae, by special leave of the Court, supporting the Respondent.

Noah A. Levine, Wilmer Cutler Pickering, Hale and Dorr LLP, New York, NY, Steven O. Kramer, John P. Stigi III, John M. Landry, Jonathan D. Moss, Sheppard, Mullin, Richter & Hampton LLP, Los Angeles, CA, Seth P. Waxman, Counsel of Record, Louis R. Cohen, Andrew N. Vollmer, Daniel S. Volchok, Weili J. Shaw, Wilmer Cutler Pickering, Hale and Dorr LLP, Washington, DC, for Petitioners.

Edward Labaton, Jonathan M. Plasse, Christopher J. McDonald, Labaton Sucharow LLP, New York, NY, David C. Frederick, Counsel of Record, Derek T. Ho, Emily T.P. Rosen, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, DC, for Respondent.

Justice GINSBURG delivered the opinion of the Court.

This case involves a securities-fraud complaint filed by Connecticut Retirement Plans and Trust Funds (Connecticut Retirement) against biotechnology company Amgen Inc. and several of its officers (collectively, Amgen). Seeking class-action certification under Federal Rule of Civil Procedure 23, Connecticut Retirement invoked the "fraud-on-the-market" presumption endorsed by this Court in Basic Inc. v. Levinson, 485 U.S. 224, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988), and recognized most recently in Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. ___, 131 S.Ct. 2179, 180 L.Ed.2d 24 (2011). The fraud-on-the-market premise is that the price of a security traded in an efficient market will reflect all publicly available information about a company; accordingly, a buyer of the security may be presumed to have relied on that information in purchasing the security.

Amgen has conceded the efficiency of the market for the securities at issue and has not contested the public character of the allegedly fraudulent statements on which Connecticut Retirement's complaint is based. Nor does Amgen here dispute [1191] that Connecticut Retirement meets all of the class-action prerequisites stated in Rule 23(a): (1) the alleged class "is so numerous that joinder of all members is impracticable"; (2) "there are questions of law or fact common to the class"; (3) Connecticut Retirement's claims are "typical of the claims ... of the class"; and (4) Connecticut Retirement will "fairly and adequately protect the interests of the class."

The issue presented concerns the requirement stated in Rule 23(b)(3) that "the questions of law or fact common to class members predominate over any questions affecting only individual members." Amgen contends that to meet the predominance requirement, Connecticut Retirement must do more than plausibly plead that Amgen's alleged misrepresentations and misleading omissions materially affected Amgen's stock price. According to Amgen, certification must be denied unless Connecticut Retirement proves materiality, for immaterial misrepresentations or omissions, by definition, would have no impact on Amgen's stock price in an efficient market.

While Connecticut Retirement certainly must prove materiality to prevail on the merits, we hold that such proof is not a prerequisite to class certification. Rule 23(b)(3) requires a showing that questions common to the class predominate, not that those questions will be answered, on the merits, in favor of the class. Because materiality is judged according to an objective standard, the materiality of Amgen's alleged misrepresentations and omissions is a question common to all members of the class Connecticut Retirement would represent. The alleged misrepresentations and omissions, whether material or immaterial, would be so equally for all investors composing the class. As vital, the plaintiff class's inability to prove materiality would not result in individual questions predominating. Instead, a failure of proof on the issue of materiality would end the case, given that materiality is an essential element of the class members' securities-fraud claims. As to materiality, therefore, the class is entirely cohesive: It will prevail or fail in unison. In no event will the individual circumstances of particular class members bear on the inquiry.

Essentially, Amgen, also the dissenters from today's decision, would have us put the cart before the horse. To gain certification under Rule 23(b)(3), Amgen and the dissenters urge, Connecticut Retirement must first establish that it will win the fray. But the office of a Rule 23(b)(3) certification ruling is not to adjudicate the case; rather, it is to select the "metho[d]" best suited to adjudication of the controversy "fairly and efficiently."

I

A

This case involves the interaction between federal securities-fraud laws and Rule 23's requirements for class certification. To obtain certification of a class action for money damages under Rule 23(b)(3), a plaintiff must satisfy Rule 23(a)'s above-mentioned prerequisites of numerosity, commonality, typicality, and adequacy of representation, see supra, at 1190-1191, and must also establish that "the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." To recover damages in a private securities-fraud action under § 10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, as amended, 15 U.S.C. § 78j(b) (2006 ed., Supp. V), and Securities and Exchange Commission Rule 10b-5, 17 CFR § 240.10b-5 (2011), a [1192] plaintiff must prove "(1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation." Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. ___, ___, 131 S.Ct. 1309, 1317, 179 L.Ed.2d 398 (2011) (internal quotation marks omitted).

"Reliance," we have explained, "is an essential element of the § 10(b) private cause of action" because "proof of reliance ensures that there is a proper connection between a defendant's misrepresentation and a plaintiff's injury." Halliburton, 563 U.S., at ___, 131 S.Ct., at 2184 (internal quotation marks omitted). "The traditional (and most direct) way" for a plaintiff to demonstrate reliance "is by showing that he was aware of a company's statement and engaged in a relevant transaction... based on that specific misrepresentation." Ibid. We have recognized, however, that requiring proof of direct reliance "would place an unnecessarily unrealistic evidentiary burden on [a] plaintiff who has traded on an impersonal market." Basic, 485 U.S., at 245, 108 S.Ct. 978. Accordingly, in Basic the Court endorsed the "fraud-on-the-market" theory, which permits certain Rule 10b-5 plaintiffs to invoke a rebuttable presumption of reliance on material misrepresentations aired to the general public. Id., at 241-249, 108 S.Ct. 978.^[1]

The fraud-on-the-market theory rests on the premise that certain well developed markets are efficient processors of public information. In such markets, the "market price of shares" will "reflec[t] all publicly available information." Id., at 246, 108 S.Ct. 978. Few investors in such markets, if any, can consistently achieve above-market returns by trading based on publicly available information alone, for if such above-market returns were readily attainable, it would mean that market prices were not efficiently incorporating the full supply of public information. See R. Brealey, S. Myers, & F. Allen, Principles of Corporate Finance 330 (10th ed. 2011) ("[I]n an efficient market, there is no way for most investors to achieve consistently superior rates of return.").

In Basic, we held that if a market is shown to be efficient, courts may presume that investors who traded securities in that market relied on public, material misrepresentations regarding those securities. See 485 U.S., at 245-247, 108 S.Ct. 978. This presumption springs from the very concept of market efficiency. If a market is generally efficient in incorporating publicly available information into a security's market price, it is reasonable to presume that a particular public, material misrepresentation will be reflected in the security's price. Furthermore, it is reasonable to presume that most investors — knowing that they have little hope of outperforming the market in the long run based solely on their analysis of publicly available information — will rely on the security's market price as an unbiased assessment of the security's value in light of all public information. Thus, courts may presume that investors trading in efficient markets indirectly rely on public, material [1193] misrepresentations through their "reliance on the integrity of the price set by the market." Id., at 245, 108 S.Ct. 978. "[T]he presumption," however, is "just that, and [can] be rebutted by appropriate evidence." Halliburton, 563 U.S., at ___, 131 S.Ct., at 2185. See also Basic, 485 U.S., at 248-249, 108 S.Ct. 978 (providing examples of showings that would rebut the fraud-on-the-market presumption).

Although fraud on the market is a substantive doctrine of federal securities-fraud law that can be invoked by any Rule 10b-5 plaintiff, see, e.g., Black v. Finantra Capital, Inc., 418 F.3d 203, 209 (C.A.2 2005); Blackie v. Barrack, 524 F.2d 891, 908 (C.A.9 1975), the doctrine has particular significance in securities-fraud class actions. Absent the fraud-on-the-market theory, the requirement that Rule 10b-5 plaintiffs establish reliance would ordinarily preclude certification of a class action seeking money damages because individual reliance issues would overwhelm questions common to the class. See Basic, 485 U.S., at 242, 108 S.Ct. 978. The fraud-on-the-market theory, however, facilitates class certification by recognizing a rebuttable presumption of classwide reliance on public, material misrepresentations when shares are traded in an efficient market. Ibid.^[2]

B

In its complaint, Connecticut Retirement alleges that Amgen violated § 10(b) and Rule 10b-5 through certain misrepresentations and misleading omissions regarding the safety, efficacy, and marketing of two of its flagship drugs.^[3] According to Connecticut Retirement, these misrepresentations and omissions artificially inflated the price of Amgen's stock at the time Connecticut Retirement and numerous other securities buyers purchased the stock. When the truth came to light, Connecticut Retirement asserts, Amgen's stock price declined, resulting in financial losses to those who purchased the stock at the inflated price. In its answer to Connecticut Retirement's complaint, Amgen conceded that "[a]t all relevant times, the market for [its] securities," which are traded on the NASDAQ stock exchange, "was an efficient market"; thus, "the market for Amgen's securities promptly digested current information regarding Amgen from all publicly available sources and reflected such information in Amgen's stock price." Consolidated Amended Class Action Complaint ¶¶ 199-200 in No. CV-07-2536 (CD Cal.); Answer ¶¶ 199-200.

The District Court granted Connecticut Retirement's motion to certify a class action under Rule 23(b)(3) on behalf of all investors who purchased Amgen stock between the date of the first alleged misrepresentation and the date of the last alleged corrective disclosure. After granting Amgen's request to take an interlocutory appeal from the District Court's class-certification order, see Fed. Rule Civ. Proc. 23(f), the Court of Appeals affirmed. See 660 F.3d 1170 (C.A.9 2011).

Amgen raised two arguments on appeal. First, Amgen contended that the District Court erred by certifying the proposed class without first requiring Connecticut [1194] Retirement to prove that Amgen's alleged misrepresentations and omissions were material. Second, Amgen argued that the District Court erred by refusing to consider certain rebuttal evidence that Amgen had proffered in opposition to Connecticut Retirement's class-certification motion. This evidence, in Amgen's view, demonstrated that the market was well aware of the truth regarding its alleged misrepresentations and omissions at the time the class members purchased their shares.

The Court of Appeals rejected both contentions. Amgen's first argument, the Court of Appeals noted, made the uncontroversial point that immaterial misrepresentations and omissions "by definition [do] not affect ... stock price[s] in an efficient market." Id., at 1175. Thus, where misrepresentations and omissions are not material, there is no basis for presuming classwide reliance on those misrepresentations and omissions through the information-processing mechanism of the market price. "The problem with that argument," the Court of Appeals observed, is evident: "[B]ecause materiality is an element of the merits of their securities fraud claim, the plaintiffs cannot both fail to prove materiality yet still have a viable claim for which they would need to prove reliance individually." Ibid. The Court of Appeals thus concluded that "proof of materiality is not necessary" to ensure compliance with Rule 23(b)(3)'s requirement that common questions predominate. Id., at 1177.

With respect to Amgen's second argument, the Court of Appeals determined that Amgen's proffered rebuttal evidence was merely "a method of refuting [the] materiality" of the misrepresentations and omissions alleged in Connecticut Retirement's complaint. Ibid. Having already concluded that a securities-fraud plaintiff does not need to prove materiality before class certification, the court similarly held that "the district court correctly refused to consider" Amgen's rebuttal evidence "at the class certification stage." Ibid.

We granted Amgen's petition for certiorari, 567 U.S. ___, 132 S.Ct. 2742, 183 L.Ed.2d 614 (2012), to resolve a conflict among the Courts of Appeals over whether district courts must require plaintiffs to prove, and must allow defendants to present evidence rebutting, the element of materiality before certifying a class action under § 10(b) and Rule 10b-5. Compare 660 F.3d 1170 (case below); and Schleicher v. Wendt, 618 F.3d 679, 687 (C.A.7 2010) (materiality need not be proved at the class-certification stage), with In re Salomon Analyst Metromedia Litigation, 544 F.3d 474, 484-485, 486, n. 9 (C.A.2 2008) (plaintiff must prove, and defendant may present evidence rebutting, materiality before class certification). See also In re DVI, Inc. Securities Litigation, 639 F.3d 623, 631-632, 637-638 (C.A.3 2011) (plaintiff need not prove materiality before class certification, but defendant may present rebuttal evidence on the issue).

II

A

The only issue before us in this case is whether Connecticut Retirement has satisfied Rule 23(b)(3)'s requirement that "questions of law or fact common to class members predominate over any questions affecting only individual members." Although we have cautioned that a court's class-certification analysis must be "rigorous" and may "entail some overlap with the merits of the plaintiff's underlying claim," Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, ___, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011) (internal quotation marks omitted), Rule 23 grants courts no license to engage in free-ranging merits [1195] inquiries at the certification stage. Merits questions may be considered to the extent — but only to the extent — that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied. See id., at ___, n. 6, 131 S.Ct., at 2552, n. 6 (a district court has no "`authority to conduct a preliminary inquiry into the merits of a suit'" at class certification unless it is necessary "to determine the propriety of certification" (quoting Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974))); Advisory Committee's 2003 Note on subd. (c)(1) of Fed. Rule Civ. Proc. 23, 28 U.S.C.App., p. 144 ("[A]n evaluation of the probable outcome on the merits is not properly part of the certification decision.").

Bearing firmly in mind that the focus of Rule 23(b)(3) is on the predominance of common questions, we turn to Amgen's contention that the courts below erred by failing to require Connecticut Retirement to prove the materiality of Amgen's alleged misrepresentations and omissions before certifying Connecticut Retirement's proposed class. As Amgen notes, materiality is not only an element of the Rule 10b-5 cause of action; it is also an essential predicate of the fraud-on-the-market theory. See Basic, 485 U.S., at 247, 108 S.Ct. 978 ("[W]here materially misleading statements have been disseminated into an impersonal, well-developed market for securities, the reliance of individual plaintiffs on the integrity of the market price may be presumed." (emphasis added)). That theory, Amgen correctly observes, is premised on the under-standing that in an efficient market, all publicly available information is rapidly incorporated into, and thus transmitted to investors through, the market price. See id., at 246-247, 108 S.Ct. 978. Because immaterial information, by definition, does not affect market price, it cannot be relied upon indirectly by investors who, as the fraud-on-the-market theory presumes, rely on the market price's integrity. Therefore, the fraud-on-the-market theory cannot apply absent a material misrepresentation or omission. And without the fraud-on-the-market theory, the element of reliance cannot be proved on a classwide basis through evidence common to the class. See id., at 242, 108 S.Ct. 978. It thus follows, Amgen contends, that materiality must be proved before a securities-fraud class action can be certified.

Contrary to Amgen's argument, the key question in this case is not whether materiality is an essential predicate of the fraud-on-the-market theory; indisputably it is.^[4] Instead, the pivotal inquiry is whether proof of materiality is needed to ensure that the questions of law or fact common to the class will "predominate over any questions affecting only individual members" as the litigation progresses. Fed. Rule Civ. Proc. 23(b)(3). For two reasons, the answer to this question is clearly "no."

First, because "[t]he question of materiality ... is an objective one, involving the significance of an omitted or misrepresented fact to a reasonable investor," materiality can be proved through evidence common to the class. TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, [1196] 445, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976). Consequently, materiality is a "common questio[n]" for purposes of Rule 23(b)(3). Basic, 485 U.S., at 242, 108 S.Ct. 978 (listing "materiality" as one of the questions common to the Basic class members).

Second, there is no risk whatever that a failure of proof on the common question of materiality will result in individual questions predominating. Because materiality is an essential element of a Rule 10b-5 claim, see Matrixx Initiatives, 563 U.S., at ___, 131 S.Ct., at 1317-1318, Connecticut Retirement's failure to present sufficient evidence of materiality to defeat a summary-judgment motion or to prevail at trial would not cause individual reliance questions to overwhelm the questions common to the class. Instead, the failure of proof on the element of materiality would end the case for one and for all; no claim would remain in which individual reliance issues could potentially predominate.

Totally misapprehending our essential point, Justice THOMAS' dissent asserts that our "entire argument is based on the assumption that the fraud-on-the-market presumption need not be shown at certification because it will be proved later on the merits." Post, at 1212, n. 9. Our position is not so based. We rest, instead, entirely on the text of Rule 23(b)(3), which provides for class certification if "the questions of law or fact common to class members predominate over any questions affecting only individual members." A failure of proof on the common question of materiality ends the litigation and thus will never cause individual questions of reliance or anything else to overwhelm questions common to the class. Therefore, under the plain language of Rule 23(b)(3), plaintiffs are not required to prove materiality at the class-certification stage. In other words, they need not, at that thresh-old, prove that the predominating question will be answered in their favor.

Justice THOMAS urges that a plaintiff seeking class certification "must show that the elements of [her] claim are susceptible to classwide proof." Post, at 1209-1210. See also post, at 1212 (criticizing the Court for failing to focus its analysis on "whether the element of reliance is susceptible to classwide proof"). From this premise, Justice THOMAS concludes that Rule 10b-5 plaintiffs must prove materiality before class certification because (1) "materiality is a necessary component of fraud on the market," and (2) without fraud on the market, the Rule 10b-5 element of reliance is not "susceptible of a classwide answer." Post, at 1209, 1211-1212. See also post, at 1212 ("[I]f a plaintiff wishes to use Basic's presumption to prove that reliance is a common question, he must establish the entire presumption, including materiality, at the class certification stage.").

Rule 23(b)(3), however, does not require a plaintiff seeking class certification to prove that each "elemen[t] of [her] claim [is] susceptible to classwide proof." Post, at 1210. What the rule does require is that common questions "predominate over any questions affecting only individual [class] members." Fed. Rule Civ. Proc. 23(b)(3) (emphasis added). Nowhere does Justice THOMAS explain how, in an action invoking the Basic presumption, a plaintiff class's failure to prove an essential element of its claim for relief will result in individual questions predominating over common ones. Absent proof of materiality, the claim of the Rule 10b-5 class will fail in its entirety; there will be no remaining individual questions to adjudicate.

Consequently, proof of materiality is not required to establish that a proposed class is "sufficiently cohesive to warrant adjudication by representation" — the focus of the predominance inquiry under Rule 23(b)(3). [1197] Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). No doubt a clever mind could conjure up fantastic scenarios in which an individual investor might rely on immaterial information (think of the superstitious investor who sells her securities based on a CEO's statement that a black cat crossed the CEO's path that morning). But such objectively unreasonable reliance does not give rise to a Rule 10b-5 claim. See TSC Industries, 426 U.S., at 445, 96 S.Ct. 2126 (materiality is judged by an objective standard). Thus, "the individualized questions of reliance," post, at 1211, n. 8, that hypothetically might arise when a failure of proof on the issue of materiality dooms the fraud-on-the-market class are far more imaginative than real. Such "individualized questions" do not undermine class cohesion and thus cannot be said to "predominate" for purposes of Rule 23(b)(3).^[5]

Because the question of materiality is common to the class, and because a failure of proof on that issue would not result in questions "affecting only individual members" predominating, Fed. Rule Civ. Proc. 23(b)(3), Connecticut Retirement was not required to prove the materiality of Amgen's alleged misrepresentations and omissions at the class-certification stage. This is not a case in which the asserted problem — i.e., that the plaintiff class cannot prove materiality — "exhibits some fatal dissimilarity" among class members that would make use of the class-action device inefficient or unfair. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U.L. Rev. 97, 107 (2009). Instead, what Amgen alleges is "a fatal similarity — [an alleged] failure of proof as to an element of the plaintiffs' cause of action." Ibid. Such a contention is properly addressed at trial or in a ruling on a summary-judgment motion. The allegation should not be resolved in deciding whether to certify a proposed class. Ibid. See also Schleicher, 618 F.3d, at 687 ("[W]hether a statement is materially false is a question common to all class members and therefore may be resolved on a class-wide basis after certification.").

B

Insisting that materiality must be proved at the class-certification stage, Amgen relies chiefly on two arguments, neither of which we find persuasive.^[6]

[1198] 1

Amgen points first to our statement in Halliburton that "securities fraud plaintiffs must prove certain things in order to invoke Basic's rebuttable presumption of reliance," including "that the alleged misrepresentations were publicly known ..., that the stock traded in an efficient market, and that the relevant transaction took place `between the time the misrepresentations were made and the time the truth was revealed.'" 563 U.S., at ___, 131 S.Ct., at 2185 (quoting Basic, 485 U.S., at 248, n. 27, 108 S.Ct. 978). See also Dukes, 564 U.S., at ___, n. 6, 131 S.Ct., at 2552, n. 6 ("[P]laintiffs seeking 23(b)(3) certification [of a securities-fraud class action] must prove that their shares were traded on an efficient market."). If these fraud-on-the-market predicates must be proved before class certification, Amgen contends, materiality — another fraud-on-the-market predicate — should be treated no differently.

We disagree. As an initial matter, the requirement that a putative class representative establish that it executed trades "between the time the misrepresentations were made and the time the truth was revealed" relates primarily to the Rule 23(a)(3) and (a)(4) inquiries into typicality and adequacy of representation, not to the Rule 23(b)(3) predominance inquiry. Basic, 485 U.S., at 248, n. 27, 108 S.Ct. 978.^[7] A security's market price cannot be affected by a misrepresentation not yet made, and in an efficient market, a misrepresentation's impact on market price is quickly nullified once the truth comes to light. Thus, a plaintiff whose relevant transactions were not executed between the time the misrepresentation was made and the time the truth was revealed cannot be said to have indirectly relied on the misrepresentation through its reliance on the integrity of the market price.^[8] Such a plaintiff's claims, therefore, would not be "typical" of the claims of [1199] investors who did trade during the window between misrepresentation and truth revelation. Fed. Rule Civ. Proc. 23(a)(3). Nor could a court confidently conclude that such a plaintiff would "fairly and adequately protect the interests" of investors who traded during the relevant window. Rule 23(a)(4). The requirement that the fraud-on-the-market theory's trade-timing predicate be established before class certification thus sheds little light on the question whether materiality must also be proved at the class-certification stage.

Amgen is not aided by Halliburton's statement that market efficiency and the public nature of the alleged misrepresentations must be proved before a securities-fraud class action can be certified. As Amgen notes, market efficiency, publicity, and materiality can all be proved on a classwide basis. Furthermore, they are all essential predicates of the fraud-on-the-market theory. Unless those predicates are established, there is no basis for presuming that the defendant's alleged misrepresentations were reflected in the security's market price, and hence no grounding for any contention that investors indirectly relied on those misrepresentations through their reliance on the integrity of the market price. But unlike materiality, market efficiency and publicity are not indispensable elements of a Rule 10b-5 claim. See Matrixx Initiatives, 563 U.S., at ___, 131 S.Ct., at 1317-1318 (listing elements of a Rule 10b-5 claim). Thus, where the market for a security is inefficient or the defendant's alleged misrepresentations were not aired publicly, a plaintiff cannot invoke the fraud-on-the-market presumption. She can, however, attempt to establish reliance through the "traditional" mode of demonstrating that she was personally "aware of [the defendant's] statement and engaged in a relevant transaction ... based on that specific misrepresentation." Halliburton, 563 U.S., at ___, 131 S.Ct., at 2185. Individualized reliance issues would predominate in such a lawsuit. See Basic, 485 U.S., at 242, 108 S.Ct. 978. The litigation, therefore, could not be certified under Rule 23(b)(3) as a class action, but the initiating plaintiff's claim would remain live; it would not be "dead on arrival." 660 F.3d, at 1175.

A failure of proof on the issue of materiality, in contrast, not only precludes a plaintiff from invoking the fraud-on-the-market presumption of classwide reliance; it also establishes as a matter of law that the plaintiff cannot prevail on the merits of her Rule 10b-5 claim. Materiality thus differs from the market-efficiency and publicity predicates in this critical respect: While the failure of common, classwide proof on the issues of market efficiency and publicity leaves open the prospect of individualized proof of reliance, the failure of common proof on the issue of materiality ends the case for the class and for all individuals alleged to compose the class. See Brief for United States as Amicus Curiae 20 ("Unless the failure of common proof gives rise to a need for individualized proof, it does not cast doubt on the propriety of class certification."). In short, there can be no actionable reliance, individually or collectively, on immaterial information. Because a failure of proof on the issue of materiality, unlike the issues of market efficiency and publicity, does not give rise to any prospect of individual questions overwhelming common ones, materiality need not be proved prior to Rule 23(b)(3) class certification.

2

Amgen also contends that certain "policy considerations" militate in favor of requiring precertification proof of materiality. Brief for Petitioners 28. An order granting [1200] class certification, Amgen observes, can exert substantial pressure on a defendant "to settle rather than incur the costs of defending a class action and run the risk of potentially ruinous liability." Advisory Committee's 1998 Note on subd. (f) of Fed. Rule Civ. Proc. 23, 28 U.S.C.App., p. 143. See also AT & T Mobility LLC v. Concepcion, 563 U.S. ___, ___, 131 S.Ct. 1740, 1752, 179 L.Ed.2d 742 (2011) (class actions can entail a "risk of `in terrorem' settlements"). Absent a requirement to evaluate materiality at the class-certification stage, Amgen contends, the issue may never be addressed by a court, for the defendant will surrender and settle soon after a class is certified. Insistence on proof of materiality before certifying a securities-fraud class action, Amgen thus urges, ensures that the issue will be adjudicated and not forgone. See also post, at 1208 (SCALIA, J., dissenting) (expressing the same concerns).

In this regard, however, materiality does not differ from other essential elements of a Rule 10b-5 claim, notably, the requirements that the statements or omissions on which the plaintiff's claims are based were false or misleading and that the alleged statements or omissions caused the plaintiff to suffer economic loss. See Matrixx Initiatives, 563 U.S., at ___, 131 S.Ct., at 1317-1318. Settlement pressure exerted by class certification may prevent judicial resolution of these issues. Yet this Court has held that loss causation and the falsity or misleading nature of the defendant's alleged statements or omissions are common questions that need not be adjudicated before a class is certified. See Halliburton, 563 U.S., at ___, 131 S.Ct., at 2184 (loss causation need not be proved at the class-certification stage); Basic, 485 U.S., at 242, 108 S.Ct. 978 ("the falsity or misleading nature of the ... public statements" allegedly made by the defendant is a "common questio[n]"). See also Schleicher, 618 F.3d, at 685 (falsity of alleged misstatements need not be proved before certification of a securities-fraud class action).

Congress, we count it significant, has addressed the settlement pressures associated with securities-fraud class actions through means other than requiring proof of materiality at the class-certification stage. In enacting the Private Securities Litigation Reform Act of 1995 (PSLRA), 109 Stat. 737, Congress recognized that although private securities-fraud litigation furthers important public-policy interests, prime among them, deterring wrongdoing and providing restitution to defrauded investors, such lawsuits have also been subject to abuse, including the "extract[ion]" of "extortionate `settlements'" of frivolous claims. H.R. Conf. Rep. No. 104-369, pp. 31-32 (1995). The PSLRA's response to the perceived abuses was, inter alia, to "impos[e] heightened pleading requirements" for securities-fraud actions, "limit recoverable damages and attorney's fees, provide a `safe harbor' for forward-looking statements, impose new restrictions on the selection of (and compensation awarded to) lead plaintiffs, mandate imposition of sanctions for frivolous litigation, and authorize a stay of discovery pending resolution of any motion to dismiss." Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71, 81-82, 126 S.Ct. 1503, 164 L.Ed.2d 179 (2006). See also 15 U.S.C. § 78u-4 (2006 ed. and Supp. V). Congress later fortified the PSLRA by enacting the Securities Litigation Uniform Standards Act of 1998, 112 Stat. 3227, which curtailed plaintiffs' ability to evade the PSLRA's limitations on federal securities-fraud litigation by bringing class-action suits under state rather than federal law. See 15 U.S.C. § 78bb(f)(1) (2006 ed.).

[1201] While taking these steps to curb abusive securities-fraud lawsuits, Congress rejected calls to undo the fraud-on-the-market presumption of classwide reliance endorsed in Basic. See Langevoort, Basic at Twenty: Rethinking Fraud on the Market, 2009 Wis. L. Rev. 151, 153, and n. 8 (noting that the initial version of H.R. 10, 104th Cong., 1st Sess. (1995), an unenacted bill that, like the PSLRA, was designed to curtail abuses in private securities litigation, "would have undone Basic"). See also Common Sense Legal Reform Act: Hearings before the Subcommittee on Telecommunications and Finance of the House Committee on Commerce, 104th Cong., 1st Sess., 92, 236-237, 251-252, 272 (1995) (witnesses criticized the fraud-on-the-market presumption and expressed support for H.R. 10's requirement that securities-fraud plaintiffs prove direct reliance). Nor did Congress decree that securities-fraud plaintiffs prove each element of their claim before obtaining class certification. Because Congress has homed in on the precise policy concerns raised in Amgen's brief, "[w]e do not think it appropriate for the judiciary to make its own further adjustments by reinterpreting Rule 23 to make likely success on the merits essential to class certification in securities-fraud suits." Schleicher, 618 F.3d, at 686; cf. Smith v. Bayer Corp., 564 U.S. ___, ___, 131 S.Ct. 2368, 2382, 180 L.Ed.2d 341 (2011) ("Congress's decision to address the relitigation concerns associated with class actions through the mechanism of removal provides yet another reason for federal courts to adhere in this context to longstanding principles of preclusion.").

In addition to seeking our aid in warding off "in terrorem" settlements, Amgen also argues that requiring proof of materiality before class certification would conserve judicial resources by sparing judges the task of overseeing large class proceedings in which the essential element of reliance cannot be proved on a classwide basis. In reality, however, it is Amgen's position, not the judgments of the lower courts in this case, that would waste judicial resources. Amgen's argument, if embraced, would necessitate a mini-trial on the issue of materiality at the class-certification stage. Such preliminary adjudications would entail considerable expenditures of judicial time and resources, costs scarcely anticipated by Federal Rule of Civil Procedure 23(c)(1)(A), which instructs that the decision whether to certify a class action be made "[a]t an early practicable time." If the class is certified, materiality might have to be shown all over again at trial. And if certification is denied for failure to prove materiality, nonnamed class members would not be bound by that determination. See Smith, 564 U.S., at ___, 131 S.Ct., at 2378-2382. They would be free to renew the fray, perhaps in another forum, perhaps with a stronger showing of materiality.

Given the tenuousness of Amgen's judicial-economy argument, Amgen's policy arguments ultimately return to the contention that private securities-fraud actions should be hemmed in to mitigate their potentially "vexatiou[s]" character. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 739, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975). We have already noted what Congress has done to control exorbitant securities-fraud actions. See supra, at 1200-1201. Congress, the Executive Branch, and this Court, moreover, have "recognized that meritorious private actions to enforce federal antifraud securities laws are an essential supplement to criminal prosecutions and civil enforcement actions brought, respectively, by the Department of Justice and the Securities and Exchange Commission." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, [1202] 313, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007); see H.R. Conf. Rep. No. 104-369, at 31; Brief for United States as Amicus Curiae 1. See also Amchem, 521 U.S., at 617, 117 S.Ct. 2231 ("`The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights.'" (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (C.A.7 1997))). We have no warrant to encumber securities-fraud litigation by adopting an atextual requirement of precertification proof of materiality that Congress, despite its extensive involvement in the securities field, has not sanctioned.

C

Justice SCALIA acknowledges that proof of materiality is not required to satisfy Rule 23(b)(3)'s predominance requirement. See post, at 1204-1205. Nevertheless, he maintains that full satisfaction of Rule 23's requirements is insufficient to obtain class certification under Basic. In Justice SCALIA's view, the Court's decision in Basic established a special rule: A securities-fraud class action cannot be certified unless all of the prerequisites of the fraud-on-the-market presumption of reliance, including materiality, have first been established. Post, at 1205.

The purported rule is Justice SCALIA's invention. It cannot be attributed to anything the Court said in Basic. That decision is best known for its endorsement of the fraud-on-the-market theory. But the opinion also established something more. It stated the proper standard for judging the materiality of misleading statements regarding the existence and status of preliminary merger discussions. See 485 U.S., at 230-241, 250, 108 S.Ct. 978 ("Materiality in the merger context depends on the probability that the transaction will be consummated, and its significance to the issuer of the securities."). The District Court in Basic certified a class of investors whose share prices were allegedly depressed by misleading statements that disguised ongoing merger negotiations. Id., at 228, 108 S.Ct. 978. Postcertification, the court granted summary judgment to the defendants on the ground that the alleged misstatements were immaterial as a matter of law. Id., at 228-229, 108 S.Ct. 978. The Court of Appeals affirmed the class certification but reversed the grant of summary judgment. Id., at 229, 108 S.Ct. 978. This Court, in turn, vacated the Court of Appeals' judgment and remanded for further proceedings on the defendants' summary-judgment motion in light of the materiality standard set forth in the Court's opinion. Id., at 240-241, 250, 108 S.Ct. 978. Notably, however, we did not disturb the District Court's class-certification order, which we stated "was appropriate when made." Id., at 250, 108 S.Ct. 978.^[9]

If Justice SCALIA were correct that our decision in Basic demands proof of materiality before class certification, the Court in Basic should have ordered the lower courts to reconsider on remand [1203] both the defendants' entitlement to summary judgment and the propriety of class certification. Instead, the Court expressly endorsed the District Court's class-certification order while at the same time recognizing that further proceedings were necessary to determine whether the plaintiffs had mustered sufficient evidence to satisfy the relatively lenient standard for avoiding summary judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ("[S]ummary judgment will not lie if ... the evidence is such that a reasonable jury could return a verdict for the nonmoving party."). Unlike Justice SCALIA, we are unwilling to presume that Basic announced a rule requiring precertification proof of materiality when Basic failed to apply any such rule to the very case before it.^[10]

III

Amgen also argues that the District Court erred by refusing to consider the rebuttal evidence Amgen proffered in opposing Connecticut Retirement's class-certification motion. This evidence, Amgen contends, showed that "in light of all the information available to the market," its alleged misrepresentations and misleading omissions "could not be presumed to have altered the market price because they would not have `significantly altered the total mix of information made available.'" Brief for Petitioners 40-41 (quoting Basic, 485 U.S., at 232, 108 S.Ct. 978). For example, Connecticut Retirement's complaint alleges that an Amgen executive misleadingly downplayed the significance of an upcoming Food and Drug Administration advisory committee meeting by incorrectly stating that the meeting would not focus on one of Amgen's leading drugs. See App. to Pet. for Cert. 17a. Amgen responded to this allegation by presenting public documents — including the committee's meeting agenda, which was published in the Federal Register more than a month before the meeting — stating that safety concerns associated with Amgen's drug would be discussed at the meeting. See id., at 41a-42a. See also 69 Fed. Reg. 16582 (2004).

The District Court did not err, we agree with the Court of Appeals, by disregarding Amgen's rebuttal evidence in deciding whether Connecticut Retirement's proposed class satisfied Rule 23(b)(3)'s predominance requirement. The Court of Appeals concluded, and Amgen does not contest, that Amgen's rebuttal evidence aimed to prove that the misrepresentations and omissions alleged in Connecticut Retirement's complaint were immaterial. 660 F.3d, at 1177 (characterizing Amgen's rebuttal evidence as an attempt to present a "`truth-on-the-market' defense," which the Court of Appeals explained "is a method of refuting an alleged misrepresentation's materiality"). See also Reply Brief 17 (Amgen's evidence was offered to rebut the "materiality predicate" of the fraud-on-the-market theory). As explained above, however, the potential immateriality of Amgen's alleged misrepresentations and omissions is no barrier to finding that common questions predominate. See Part II, supra. If the alleged misrepresentations and omissions are ultimately found immaterial, the fraud-on-the-market presumption [1204] of classwide reliance will collapse. But again, as earlier explained, see supra, at 1195-1197, individual reliance questions will not overwhelm questions common to the class, for the class members' claims will have failed on their merits, thus bringing the litigation to a close. Therefore, just as a plaintiff class's inability to prove materiality creates no risk that individual questions will predominate, so even a definitive rebuttal on the issue of materiality would not undermine the predominance of questions common to the class.

We recognized as much in Basic itself. A defendant could "rebut the [fraud-on-the-market] presumption of reliance," we observed in Basic, by demonstrating that "news of the [truth] credibly entered the market and dissipated the effects of [prior] misstatements." 485 U.S., at 248-249, 108 S.Ct. 978. We emphasized, however, that "[p]roof of that sort is a matter for trial" (and presumably also for a summary-judgment motion under Federal Rule of Civil Procedure 56). Id., at 249, n. 29, 108 S.Ct. 978.^[11] The District Court thus correctly reserved consideration of Amgen's rebuttal evidence for summary judgment or trial. It was not required to consider the evidence in determining whether common questions predominated under Rule 23(b)(3).

* * *

For the reasons stated, the judgment of the Court of Appeals for the Ninth Circuit is affirmed.

It is so ordered.

Justice ALITO, concurring.

I join the opinion of the Court with the understanding that the petitioners did not ask us to revisit Basic's fraud-on-the-market presumption. See Basic Inc. v. Levinson, 485 U.S. 224, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988). As the dissent observes, more recent evidence suggests that the presumption may rest on a faulty economic premise. Post, at 1208, n. 4 (opinion of THOMAS, J.); see Langevoort, Basic at Twenty: Rethinking Fraud on the Market, 2009 Wis. L. Rev. 151, 175-176. In light of this development, reconsideration of the Basic presumption may be appropriate.

Justice SCALIA, dissenting.

I join the principal dissent, that of Justice THOMAS, except for Part I-B.

The fraud-on-the-market rule says that purchase or sale of a security in a well functioning market establishes reliance on a material misrepresentation known to the market. This rule is to be found nowhere in the United States Code or in the common law of fraud or deception; it was invented by the Court in Basic Inc. v. Levinson, 485 U.S. 224, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988). Today's Court applies to that rule the principles of Federal Rule of Civil Procedure 23(b)(3), and thereby concludes (logically enough) that commonality is established at the certification [1205] stage even when materiality has not been shown. That would be a correct procedure if Basic meant the rule it announced to govern only the question of substantive liability — what must be shown in order to prevail. If that were so, the new substantive rule, like the more general substantive rule that reliance must be proved, would be subject, at the certification stage, to the commonality analysis of Rule 23(b)(3). In my view, however, the Basic rule of fraud-on-the-market — a well functioning market plus purchase or sale in the market plus material misrepresentation known to the market establishes a necessary showing of reliance — governs not only the question of substantive liability, but also the question whether certification is proper. All of the elements of that rule, including materiality, must be established if and when it is relied upon to justify certification. The answer to the question before us today is to be found not in Rule 23(b)(3), but in the opinion of Basic.

Basic established a presumption that the misrepresentation was relied upon, not a mere presumption that the plaintiffs relied on the market price. And it established that presumption not just for the question of substantive liability but also for the question of certification. "We granted certiorari... to determine whether the courts below properly applied a presumption of reliance in certifying the class, rather than requiring each class member to show direct reliance on Basic's statements." 485 U.S., at 230, 108 S.Ct. 978 (emphasis added). Of course it makes no sense to "presume reliance" on the misrepresentation merely because the plaintiff relied on the market price, unless the alleged misrepresentation would likely have affected the market price — that is, unless it was material. Thus, as Justice THOMAS' dissent shows, the Basic opinion is shot through with references to the necessary materiality. The presumption of reliance does not apply, and hence neither substantive liability will attach nor will certification be proper, unless materiality is shown. The necessity of materiality for certification is demonstrated by the last sentence of the Basic opinion, which comes after the Court has decided to remand the case for reconsideration of materiality under the appropriate legal standard: "The District Court's certification of the class here was appropriate when made but is subject on remand to such adjustment, if any, as developing circumstances demand." Id., at 250, 108 S.Ct. 978. Those circumstances are the establishment of facts that rebut the presumption, including of facts that show the misrepresentation was not material, or was not known to the market.

The Court argues that if materiality were a predicate to certification on a fraud-on-the-market theory, the Basic Court would not have approved the class certification order while remanding for reconsideration of "whether the plaintiffs had mustered sufficient evidence to satisfy the relatively lenient standard for avoiding summary judgment." See ante, at 1203. The Court manufactures an inconsistency on the basis of doctrine that did not govern class certification at the time of Basic. We recently clarified that "Rule 23 does not set forth a mere pleading standard." Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, ___, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011). But review of the Basic certification order shows that the District Court's fraud-on-the-market analysis was based exclusively on the pleadings: "[T]he allegations of plaintiffs' complaint are sufficient to bring this section 10(b) and Rule 10(b)(5) claim within the so-called `fraud on the market' theory." App. to Pet. for Cert. in Basic Inc. v. Levinson, O.T. 1987, No. 86-279, p. 115a (emphasis added); see also ibid. (citing complaint paragraphs as establishing fraud on the [1206] market). Under a pleadings standard, the District Court found that the plaintiffs had satisfied Rule 23(b)(3) with regard to fraud on the market, including its materiality predicate. See id., at 133a (denial of reconsideration) ("This court ruled on December 10 that transaction causation [i.e., reliance] could be established by the following: proof of a material misrepresentation which affected the market price of the stocks with a resulting injury to the plaintiffs" (emphasis added)). Thus, even if the plaintiffs sufficiently pleaded materiality that the certification order "was appropriate when made," Basic, supra, at 250, 108 S.Ct. 978, the defendants retained an opportunity on remand to rebut the pleading in order to defeat certification.^[*]

Certification of the class is often, if not usually, the prelude to a substantial settlement by the defendant because the costs and risks of litigating further are so high. It does an injustice to the Basic Court to presume without clear evidence — and indeed in the face of language to the contrary — that it was establishing a regime in which not only those market class-action suits that have earned the presumption of reliance pass beyond the crucial certification stage, but all market-purchase and market-sale class-action suits do so, no matter what the alleged misrepresentation. The opinion need not be read this way, and it should not.

The fraud-on-the-market theory approved by Basic envisions a demonstration of materiality not just for substantive recovery but for certification. Today's holding does not merely accept what some consider the regrettable consequences of the four-Justice opinion in Basic; it expands those consequences from the arguably regrettable to the unquestionably disastrous.

Justice THOMAS, with whom Justice KENNEDY joins, and with whom Justice SCALIA joins except for Part I-B, dissenting.

I

The Court today allows plaintiffs to obtain certification of securities-fraud class actions without proof that common questions predominate over individualized questions of reliance, in contravention of Federal Rule of Civil Procedure 23(b)(3). The Court does so by all but eliminating materiality as one of the predicates of the fraud-on-the-market theory, which serves as an alternative mode of establishing reliance. See Basic Inc. v. Levinson, 485 U.S. 224, 241-250, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988). Without demonstrating materiality at certification, plaintiffs cannot establish Basic's fraud-on-the-market presumption. Without proof of fraud on the market, plaintiffs cannot show that otherwise individualized questions of reliance will predominate, as required by Rule 23(b)(3). And without satisfying Rule 23(b)(3), class certification is improper. Fraud on the market is thus a condition precedent to class certification, without which individualized questions of reliance will defeat certification.

The Court's opinion depends on the following assumption: Plaintiffs will either (1) establish materiality at the merits stage, in which case class certification was proper because reliance turned out to be a common question, or (2) fail to establish materiality, in which case the claim would [1207] fail on the merits, notwithstanding the fact that the class should not have been certified in the first place, because reliance was never a common question. The failure to establish materiality retrospectively confirms that fraud on the market was never established, that questions regarding the element of reliance were not common under Rule 23(b)(3), and, by extension, that certification was never proper. Plaintiffs cannot be excused of their Rule 23 burden to show at certification that questions of reliance are common merely because they might lose later on the merits element of materiality. Because a securities-fraud plaintiff invoking Basic's fraud-on-the-market presumption to satisfy Rule 23(b)(3) should be required to prove each of the predicates of that theory at certification in order to demonstrate that questions of reliance are common to the class, I respectfully dissent.

A

We begin with § 10 of the Securities Exchange Act of 1934, 15 U.S.C. § 78j (2006 ed. and Supp. V).^[1] We "have implied a private cause of action from the text and purposes of § 10(b)" and Securities and Exchange Commission Rule 10b-5, 17 CFR § 240.10b-5 (2011).^[2]Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. ___, ___, 131 S.Ct. 1309, 1317-1318, 179 L.Ed.2d 398 (2011). See also Superintendent of Ins. of N.Y. v. Bankers Life & Casualty Co., 404 U.S. 6, 13, n. 9, 92 S.Ct. 165, 30 L.Ed.2d 128 (1971) ("It is now established that a private right of action is implied under § 10(b)"). The elements of an implied § 10(b) cause of action for securities fraud are "`(1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation.'" Matrixx, supra, at ___, 131 S.Ct., at 1317 (quoting Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148, 157, 128 S.Ct. 761, 169 L.Ed.2d 627 (2008)). This case concerns the reliance element of the § 10(b) claim and its interaction with Rule 23(b)(3).

To prove reliance, a plaintiff, whether proceeding individually or as a class member, must show that his stock transaction was caused by the specific alleged misstatement. "[P]roof of reliance ensures that there is a proper `connection between a defendant's misrepresentation and a plaintiff's injury.'" Erica P. John Fund, [1208] Inc. v. Halliburton Co., 563 U.S. ___, ___, 131 S.Ct. 2179, 2184, 180 L.Ed.2d 24 (2011) (quoting Basic, supra, at 243, 108 S.Ct. 978).^[3] To satisfy this element, a plaintiff traditionally was required to "sho[w] that he was aware of a company's statement and engaged in a relevant transaction... based on that specific misrepresentation." Erica P. John Fund, supra, at ___, 131 S.Ct., at 2185 (emphasis added). In the face-to-face fraud cases from which securities claims historically arose, see, e.g., Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 343-344, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005) (discussing common-law roots of securities-fraud actions), this requirement was easily met by showing that the seller made statements directly to the purchaser and that the purchaser bought stock in reliance on those statements. However, in a modern securities market many, if not most, individuals who purchase stock from third parties on an impersonal exchange will be unaware of statements made by the issuer of those securities. As a result, such purchaser-plaintiffs are unable to meet the traditional reliance requirement because they cannot establish that they "engaged in a relevant transaction ... based on [a] specific misrepresentation." Erica P. John Fund, supra, at ___, 131 S.Ct., at 2185.

This concern was the driving force behind the development of the fraud-on-the-market theory adopted in Basic. Because individuals trading stock on an impersonal market often cannot show reliance even for purposes of an individual securities-fraud action, Basic permitted "plaintiffs to invoke a rebuttable presumption of reliance." Erica P. John Fund, supra, at ___, 131 S.Ct., at 2185.^[4]Basic presumes that "`in an open and developed securities market, the price of a company's stock is determined by the available material information regarding the company and its business.'" 485 U.S., at 241, 108 S.Ct. 978 (quoting Peil v. Speiser, 806 F.2d 1154, 1160-1161 (C.A.3 1986); emphasis added).<sup>[5]</sup> [1209] "`Misleading statements will therefore defraud purchasers of stock even if the purchasers do not directly rely on the misstatements.'" 485 U.S., at 241-242, 108 S.Ct. 978. As a result, "[a]n investor who buys or sells stock at the price set by the market does so in reliance on the integrity of that price," and "an investor's reliance on any public material misrepresentations" may therefore "be presumed for purposes of a Rule 10b-5 action." Id., at 247, 108 S.Ct. 978 (emphasis added).

If a plaintiff opts to show reliance through fraud on the market, Basic is clear that the plaintiff must show the following predicates in order to prevail: (1) an efficient market, (2) a public statement, (3) that the stock was traded after the statement was made but before the truth was revealed, and (4) the materiality of the statement. Id., at 248, n. 27, 108 S.Ct. 978.^[6] Both the Court and respondent agree that materiality is a necessary component of fraud on the market. See, e.g., ante, at 1194-1195 (materiality is "indisputably" "an essential predicate of the fraud-on-the-market theory"); Brief for Respondent 29 ("If the statement is not materially false, then no one in the class can establish reliance via the integrity of the market"). The materiality of a specific statement is, therefore, essential to the fraud-on-the-market presumption, which in turn enables a plaintiff to prove reliance.

B

Basic's fraud-on-the-market presumption is highly significant because it makes securities-fraud class actions possible by converting the inherently individual reliance inquiry into a question common to the class, which is necessary to satisfy the dictates of Rule 23(b)(3).^[7] Rule 23(b)(3) requires the party seeking certification to prove that "questions of law or fact common to class members predominate over [1210] any questions affecting only individual members." A plaintiff seeking class certification is not required to prove the elements of his claim at the certification stage, but he must show that the elements of the claim are susceptible to classwide proof. See, e.g., Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, ___, n. 6, 131 S.Ct. 2541, 2552, n. 6, 180 L.Ed.2d 374 (2011) ("[P]laintiffs seeking 23(b)(3) certification must prove that their shares were traded on an efficient market," an element of the fraud-on-the-market theory (emphasis added)). Without that proof, there is no justification for certifying a class because there is no "`capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation.'" Id., at ___, 131 S.Ct., at 2551 (quoting Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U.L. Rev. 97, 132 (2009)).

If plaintiffs fail to show that reliance is a common question at the time of certification, certification is improper. For if reliance is not a common question, each plaintiff would be required to prove that he in fact relied on a misstatement, a showing which is simply not susceptible to classwide proof. Individuals make stock transactions for divergent, even idiosyncratic, reasons. As the leading pre-Basic fraud-on-the-market case recognized, "[a] purchaser on the stock exchanges may be either unaware of a specific false representation, or may not directly rely on it; he may purchase because of a favorable price trend, price earnings ratio, or some other factor." Blackie v. Barrack, 524 F.2d 891, 907 (C.A.9 1975). The inquiry's inherently individualized nature renders it impossible to generate the common answers necessary for certification under Rule 23(b)(3). See Basic, 485 U.S., at 242, 108 S.Ct. 978 ("Requiring proof of individualized reliance from each member of the proposed plaintiff class effectively would have prevented respondents from proceeding with a class action, since individual issues then would have overwhelmed the common ones").

The Court's solution in Basic was to allow putative class members to prove reliance through the fraud-on-the-market presumption. Id., at 241-250, 108 S.Ct. 978. As the Court today recognizes, failure to establish fraud on the market "leaves open the prospect of individualized proof of reliance." Ante, at 1199. Notably, the Court and the Ninth Circuit both acknowledge that in order to obtain the benefit of the presumption, plaintiffs must establish two of the fraud-on-the-market predicates at class certification: (1) that the market was generally efficient, and (2) that the alleged misstatement was public. See ante, at 1199 (acknowledging "that market efficiency and the public nature of the alleged misrepresentations must be proved before a securities-fraud class action can be certified"); 660 F.3d 1170, 1175 (C.A.9 2011) (same). See also Erica P. John Fund, 563 U.S., at ___, 131 S.Ct., at 2185 ("It is undisputed that securities fraud plaintiffs must prove," at certification inter alia, "that the alleged misrepresentations were publicly known ... [and] that the stock traded in an efficient market"). The Court is correct insofar as its statements recognize that fraud on the market is a condition precedent to showing that there are common questions of reliance at the time of class certification.

Nevertheless, the Court asserts that materiality — by its own admission an essential predicate to invoking fraud on the market — need not be established at certification because it will ultimately be proved at the merits stage. Ante, at 1198-1200. This assertion is an express admission that parties will not know at certification whether reliance is an individual or common question.

[1211] To support its position, the Court transforms the predicate certification inquiry into a novel either-or inquiry occurring much later on the merits. According to the Court, either (1) plaintiffs will prove materiality on the merits, thus demonstrating ex post that common questions predominated at certification, or (2) they will fail to prove materiality, at which point we learn ex post that certification was inappropriate because reliance was not, in fact, a common question. In the Court's second scenario, fraud on the market was never established, reliance for each class member was inherently individualized, and Rule 23(b)(3) in fact should have barred certification long ago.^[8] The Court suggests that the problem created by the second scenario is excusable because the plaintiffs will lose anyway on alternative merits grounds, and the case will be over. See ante, at 1199 ("[F]ailure of proof on the issue of materiality [at the merits stage] ... not only precludes a plaintiff from invoking the fraud-on-the-market presumption of classwide reliance; it also establishes as a matter of law that the plaintiff cannot prevail on the merits of her Rule 10b-5 claim"). But nothing in logic or precedent justifies ignoring at certification whether reliance is susceptible to Rule 23(b)(3) classwide proof simply because one predicate of reliance — materiality — will be resolved, if at all, much later in the litigation on an independent merits element.

It is the Court, not Amgen, that "would have us put the cart before the horse," ante, at 1191, by jumping chronologically to the § 10(b) merits element of materiality. But Rule 23, as well as common sense, requires class certification issues to be addressed first. See Rule 23(c)(1)(A) ("At an early practicable time after a person sues or is sued ... the court must determine by order whether to certify the action as a class action"). A plaintiff who cannot prove materiality does not simply have a claim that is "`dead on arrival'" at the merits, ante, at 1199 (quoting 660 F.3d, at 1175); he has a class that should never have arrived at the merits at all because it failed Rule 23(b)(3) certification from the outset. Without materiality, there is no fraud-on-the-market presumption, questions of reliance remain individualized, and Rule 23(b)(3) certification is impossible. And the fact that evidence of materiality goes to both fraud on the market at certification and an independent merits element is no issue; Wal-Mart expressly held that a court at certification may inquire into questions that also have later relevance on the merits. See 564 U.S., at ___, 131 S.Ct., at 2551-2552. The Court reverses that inquiry, effectively saying that certification [1212] may be put off until later because an adverse merits determination will retroactively wipe out the entire class. However, a plaintiff who cannot prove materiality cannot prove fraud on the market and, thus, cannot demonstrate that the question of reliance is susceptible of a classwide answer.

The fact that a statement may prove to be material at the merits stage does not justify conflating the doctrinally independent (and distinct) elements of materiality and reliance.^[9] The Court's error occurs when, instead of asking whether the element of reliance is susceptible to classwide proof, the Court focuses on whether materiality is susceptible to classwide proof. Ante, at 1195 ("[T]he pivotal inquiry is whether proof of materiality is needed to ensure that the questions of law or fact common to the class will `predominate'"). The result is that the Court effectively equates § 10(b) materiality with fraud-on-the-market materiality and elides reliance as a § 10(b) element. But a plaintiff seeking certification under Rule 23 bears the burden of proof with regard to all the elements of a § 10(b) claim, which includes materiality and reliance. As Wal-Mart explained, "[a] party seeking class certification must affirmatively demonstrate his compliance with the Rule — that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc." 564 U.S., at ___, 131 S.Ct., at 2551. If the elements of fraud on the market are not proved at certification, a plaintiff has failed to carry his burden of establishing that questions of individualized reliance will not predominate, without which the plaintiff class cannot obtain certification. Cf. id., at ___, 131 S.Ct., at 2552 (holding in Rule 23(a)(2) context that "[w]ithout some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members' claims for relief will produce a common answer"). It is only by establishing all of the elements of the fraud-on-the-market presumption that reliance can be proved on a classwide basis. Therefore, if a plaintiff wishes to use Basic's presumption to prove that reliance is a common question, he must establish the entire presumption, including materiality, at the class certification stage.

Nor is it relevant, as respondent argues, that requiring plaintiffs to establish all predicates of fraud on the market at certification will make it more difficult to obtain certification. See Brief for Respondent 35-38. In Basic, four Justices of a six-Justice Court created the fraud-on-the-market presumption from a combination of newly minted economic theories, 485 U.S., at 250-251, n. 1, 108 S.Ct. 978 (White, J., [1213] concurring in part and dissenting in part), and "considerations of fairness, public policy, and probability," id., at 245, 108 S.Ct. 978 (majority opinion), to allow claims that otherwise would have been barred due to the plaintiffs' inability to show reliance, id., at 242, 108 S.Ct. 978. Basic is a judicially invented doctrine based on an economic theory adopted to ease the burden on plaintiffs bringing claims under an implied cause of action. There is nothing untoward about requiring plaintiffs to take the steps that the Basic Court created in an effort to save otherwise inadequate claims.

II

The majority's approach is, thus, doctrinally incorrect under Basic. Its shortcomings are further highlighted by the role that materiality played in the pre-Basic development of the fraud-on-the-market theory as a condition precedent to showing that there are common questions of reliance in the class-action context. Materiality, at the time of certification, has been a driving force behind the theory from the outset. This fact further supports the need to prove materiality at the time the fraud-on-the-market theory is invoked to show that questions of reliance can be answered on a classwide basis.

A

Before Basic, two signposts marked the way for courts applying the fraud-on-the-market theory. Both demonstrate that the materiality of an alleged falsehood was not a mere afterthought but rather one of the primary reasons for allowing traditional proof of reliance to be brushed aside at certification. This fact weighs strongly in favor of the conclusion that materiality must be resolved at certification when the fraud-on-the-market presumption is invoked to show that reliance can be proved on a classwide basis.

The first signpost was the Ninth Circuit's 1975 opinion in Blackie, termed by one pre-Basic court the "seminal fraud on the market case." Peil, 806 F.2d, at 1163, n. 16. See also Basic, supra, at 251, n. 1, 108 S.Ct. 978 (White, J., dissenting) ("The earliest Court of Appeals case adopting this theory cited by the Court is Blackie v. Barrack, 524 F.2d 891 (C.A.9 1975), cert. denied, 429 U.S. 816, 97 S.Ct. 57, 50 L.Ed.2d 75 (1976)").

Blackie arose from a $90 million loss reported by audio equipment manufacturer Ampex Corp. in its 1972 annual report. 524 F.2d, at 894.^[10] Ampex's independent auditors not only refused to certify the 1972 annual report but also withdrew certification of all 1971 financial statements "because of doubts that the loss reported for 1972 was in fact suffered in that year." Ibid. In resultant class actions, the defendants argued that reliance stood in the way of class certification under Rule 23(b)(3) because it was not a common question.

The Ninth Circuit disagreed. Instead, it relieved plaintiffs from providing traditional proof of reliance, explaining that "causation is adequately established in the impersonal stock exchange context by proof of purchase and of the materiality of misrepresentations, without direct proof of reliance." Id., at 906 (emphasis added). The court left no doubt that the materiality of the $90 million shortfall in Ampex's financial statements was central to its determination that reliance could be presumed. It asserted that "[m]ateriality circumstantially establishes the reliance of some market [1214] traders and hence the inflation in the stock price — when the purchase is made[,] the causational chain between defendant's conduct and plaintiff's loss is sufficiently established to make out a prima facie case." Ibid. Materiality was not merely an important factor that allowed reliance to be presumed at certification; materiality was the factor. It demonstrated that the defendants had committed a fraud on the market, that all putative class plaintiffs had relied on it in purchasing stock, and, therefore, that questions of reliance would be susceptible to common answers.^[11]

The second fraud-on-the-market signpost prior to Basic was a note in the Harvard Law Review, which described the nascent theory. See Note, The Fraud-on-the-Market Theory, 95 Harv. L. Rev. 1143 (1982) (hereinafter Harv. L. Rev. Note). The Sixth Circuit opinion reviewed in Basic termed the Note "[t]he clearest statement of the theory of presumption of reliance." Levinson v. Basic Inc., 786 F.2d 741, 750 (1986). Indeed, in the briefing for Basic itself, the plaintiffs, the United States, and plaintiffs' amicus cited the article repeatedly as an authoritative statement on the subject. See Brief for Respondent 43, n. 18, 46, n. 20 (cited in Peil, supra, at 1160), Brief for Securities and Exchange Commission as Amicus Curiae 22, n. 25, 24, n. 30, 26, n. 32, and Brief for Joseph Harris et al. as Amicus Curiae 4, n. 2, in Basic Inc. v. Levinson, O.T. 1987, No. 86-279.

Like Blackie, the Note also hinged the fraud-on-the-market presumption of reliance on proof of materiality. Harv. L. Rev. Note 1161 ("In developed markets, which are apparently efficient, reliance should be presumed from the materiality of the deception" (emphasis added)). Ultimately, in language that will be familiar to anyone who has read Basic, the Note formulated a "pivotal assumption" underlying the fraud-on-the-market theory as the belief that:

"market prices respond to information disseminated (or not disseminated) concerning the companies whose securities are traded. In such a setting — often described as an `efficient market' — the reliance of some traders upon a material deception influences market prices and thereby affects even traders who never read or hear of the deception." Harv. L. Rev. Note 1154 (footnote omitted).

Again, the materiality of the alleged misstatement was a key component, without which the market could not be presumed to move. As a result, without materiality it is impossible to say that there has been a fraud on the market at all, and if that is not the case there is no reason to believe that the market price at which stock transactions occurred was affected by an alleged misstatement or, by extension, that any market participants relied on it. Materiality should thus be proved when the fraud-on-the-market presumption is invoked, or there is no commonality with respect to questions of reliance.

B

Nor did the importance of materiality diminish in the Sixth Circuit opinion reviewed [1215] in Basic. Rather, the court followed the path marked by the signposts discussed above. It excused plaintiffs from offering traditional evidence of reliance, so long as "a defendant is shown to have made a material public misrepresentation that, if relied on directly, would fraudulently induce an individual to misjudge the value of the stock." Levinson, 786 F.2d, at 750 (emphasis added). The court's analysis made clear that materiality should be demonstrated at the time the presumption was invoked: "In order to invoke the presumption of reliance based upon the fraud on the market theory, a plaintiff must allege and prove ... that the misrepresentations were material...." Ibid. (citing Blackie, 524 F.2d, at 906).

C

Finally, the briefing before this Court in Basic itself built upon this framework and the foundational principle that materiality is an integral part of the theory. Critically, the Basic defendants argued that the plaintiffs could not establish fraud on the market at certification even if the theory were valid because the alleged misstatement was immaterial. They "contrast[ed] the likely market impact of disclosure of the [$90 million Blackie loss] ... with the disclosure of the information which respondents contend[ed] rendered Basic's statements materially misleading." See Brief for Petitioners in O.T. 1987, No. 86-279, p. 42. The Basic defendants concluded that "the differences between a company's $90 million loss and a company's sporadic contacts with a friendly suitor are substantial.... [T]he fraud on the market theory, if it has vitality, should not be applied in a case such as this." Id., at 43.

In response, the plaintiffs in Basic did not argue that the defendants misunderstood the role of materiality in the fraud-on-the-market theory. They instead advanced a now-foreclosed interpretation of dicta from Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974):

"Petitioners' final argument — that respondents will be unable to establish that Basic's repeated false and misleading statements impacted the price of Basic stock over a fourteen month period — represents an effort to litigate the merits of this case on the motion for class certification.... As this Court held in Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 [94 S.Ct. 2140, 40 L.Ed.2d 732] (1974): `We find nothing in either the language or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action.'" Brief for Respondents in O.T. 1987, No. 86-279, p. 54.

The Court rejected this reading of Eisen two Terms ago, explaining that the very language the Basic plaintiffs quoted was "sometimes mistakenly cited" as prohibiting inquiry into "the propriety of certification under Rules 23(a) and (b)." Wal-Mart Stores, Inc., 564 U.S., at ___, n. 6, 131 S.Ct., at 2552, n. 6. That reading, the Court explained, "is the purest dictum and is contradicted by our other cases." Ibid. The Basic defendants' reply is consistent with Wal-Mart:

"Putative class representatives, such as respondents, should not be permitted to invoke the fraud on the market theory while, at the same time, arguing that courts may not make any preliminary inquiry into the claimed impact on the market. See, e.g., Resp. Br., p. 54. By seeking the benefit of the presumption, respondents necessarily invite judicial scrutiny of the circumstances in which it is invoked." Reply Brief for Petitioners in O.T. 1987, No. 86-279, p. 18.

[1216] Well said. The history of Basic is worth the volume of argument offered by the majority. Cf. New York Trust Co. v. Eisner, 256 U.S. 345, 349, 41 S.Ct. 506, 65 L.Ed. 963 (1921) (majority opinion of Holmes, J.). Materiality was central to the development, analysis, and adoption of the fraud-on-the-market theory both before Basic and in Basic itself. Materiality, therefore, must be demonstrated to prove fraud on the market, and until materiality of an alleged misstatement is shown there is no reason to believe that all market participants have relied equally on it. Otherwise individualized questions of reliance remain. This history confirms that materiality must be proved at the time that the theory is invoked — i.e., at certification.

III

I, thus, would reverse the judgment of the Ninth Circuit and hold that a plaintiff invoking the fraud-on-the-market presumption bears the burden to establish all the elements of fraud on the market at certification, including the materiality of the alleged misstatement.

[1] Part IV of Justice Blackmun's opinion in Basic — the part endorsing the fraud-on-the-market theory — was joined by Justices Brennan, Marshall, and Stevens. Together, these Justices composed a majority of the quorum of six Justices who participated in the case. See 28 U.S.C. § 1 ("The Supreme Court of the United States shall consist of a Chief Justice of the United States and eight associate justices, any six of whom shall constitute a quorum.").

[2] Although describing Basic's adoption of the fraud-on-the-market presumption of reliance as "questionable," Justice THOMAS' dissent acknowledges that "the Court has not been asked to revisit" that issue. Post, at 1208, n. 4. See also post, p. 1204 (ALITO, J., concurring).

[3] Amgen's allegedly improper marketing practices have sparked federal and state investigations and several whistleblower lawsuits. See Dye, Amgen to pay $762 million in drug-marketing case, Washington Post, Dec. 19, 2012, p. A17.

[4] We agree with Justice THOMAS that "[m]ateriality was central to the development, analysis, and adoption of the fraud-on-the-market theory both before Basic and in Basic itself." Post, at 1216. We disagree, however, that the history of the fraud-on-the-market theory's development "confirms that materiality must be proved at the time that the theory is invoked — i.e., at certification." Ibid. As explained below, see infra this page and 1195-1197, proof of materiality is not required prior to class certification because such proof is not necessary to ensure satisfaction of Rule 23(b)(3)'s predominance requirement.

[5] Justice THOMAS is also wrong in arguing that a failure of proof on the issue of materiality would demonstrate that a Rule 10b-5 class action "should not have been certified in the first place." Post, at 1207. Quite the contrary. The fact that such a failure of proof resolves all class members' claims once and for all, leaving no individual issues to be adjudicated, confirms that the original certification decision was proper.

[6] Amgen advances a third argument founded on modern economic research tending to show that market efficiency is not "`a binary, yes or no question.'" Brief for Petitioners 32 (quoting Langevoort, Basic at Twenty: Rethinking Fraud on the Market, 2009 Wis. L. Rev. 151, 167). Instead, this research suggests, differences in efficiency can exist within a single market. For example, a market may more readily process certain forms of widely disseminated and easily digestible information, such as public merger announcements, than information more difficult to acquire and understand, such as obscure technical data buried in a filing with the Securities and Exchange Commission. See, e.g., Macey & Miller, Good Finance, Bad Economics: An Analysis of the Fraud-on-the-Market Theory, 42 Stan. L. Rev. 1059, 1083-1087 (1990); Stout, The Mechanisms of Market Inefficiency: An Introduction to the New Finance, 28 J. Corp. L. 635, 653-656 (2003). Amgen, however, never clearly explains how this research on market efficiency bolsters its argument that courts should require precertification proof of materiality. In any event, this case is a poor vehicle for exploring whatever implications the research Amgen cites may have for the fraud-on-the-market presumption recognized in Basic. As noted above, see supra, at 1193-1194, Amgen conceded in its answer that the market for its securities is "efficient" and thus "promptly digest[s] current information regarding Amgen from all publicly available sources and reflect[s] such information in Amgen's stock price." Consolidated Amended Class Action Complaint ¶¶ 199-200; Answer ¶¶ 199-200. See also App. to Pet. for Cert. 40a (relying on the admission in Amgen's answer and an unchallenged expert report submitted by Connecticut Retirement, the District Court expressly found that the market for Amgen's stock was efficient). Amgen remains bound by that concession. See American Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224, 226 (C.A.9 1988) ("Factual assertions in pleadings and pretrial orders, unless amended, are considered judicial admissions conclusively binding on the party who made them."); cf. Christian Legal Soc. Chapter of Univ. of Cal., Hastings College of Law v. Martinez, 561 U.S. ___, ___, 130 S.Ct. 2971, 2983, 177 L.Ed.2d 838 (2010) ("This Court has ... refused to consider a party's argument that contradicted a joint `stipulation [entered] at the outset of th[e] litigation.'" (quoting Board of Regents of Univ. of Wis. System v. Southworth, 529 U.S. 217, 226, 120 S.Ct. 1346, 146 L.Ed.2d 193 (2000))). We thus find nothing in the cited research that would support requiring precertification proof of materiality in this case.

[7] As earlier noted, see supra, at 1190-1191, Amgen does not here contest Connecticut Retirement's satisfaction of Rule 23(a)'s requirements.

[8] Accordingly, "the timing of the relevant stock trades" is indeed an "element" of the fraud-on-the-market theory. Post, at 1209, n. 6 (opinion of THOMAS, J.). Unlike Justice THOMAS, however, see ibid., we do not understand the United States as amicus curiae to take a different view. See Brief for United States 15, n. 2 ("Precise identification of the times when the alleged misrepresentation was made and the truth was subsequently revealed is ... important to ensure that the named plaintiff has traded stock during the time the stock price allegedly was distorted by the defendant's misrepresentations.").

[9] Scouring the Court's decision in Basic for some semblance of support for his position, Justice SCALIA attaches portentous significance to Basic's statement that the District Court's class-certification order, although "`appropriate when made,'" was "`subject on remand to such adjustment, if any, as developing circumstances demand[ed].'" Post, at 1205 (quoting Basic, 485 U.S., at 250, 108 S.Ct. 978). This statement, however, merely reminds that certifications are not frozen once made. Rule 23 empowers district courts to "alte[r] or amen[d]" class-certification orders based on circumstances developing as the case unfolds. Fed. Rule Civ. Proc. 23(c)(1) (1988). See also Rule 23(c)(1)(C) (2013).

[10] Justice SCALIA suggests that the Court's approach in Basic might have been influenced by the obsolete view that "`Rule 23 ... set[s] forth a mere pleading standard.'" Post, at 1205 (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, ___, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011)). The opinion in Basic, however, provides no indication that the Court perceived any issue before it to turn on the question whether a plaintiff must merely plead, rather than "affirmatively demonstrate," her satisfaction of Rule 23's certification requirements. Dukes, 564 U.S., at ___, 131 S.Ct., at 2551.

[11] Amgen attempts to minimize the import of this statement by noting that it was made prior to a 2003 amendment to Rule 23 that eliminated district courts' authority to conditionally certify class actions. See Advisory Committee's 2003 Note on subd. (c)(1) of Fed. Rule Civ. Proc. 23, 28 U.S.C.App., p. 144. Nothing in our opinion in Basic, however, suggests that the statement relied in any way on district courts' conditional-certification authority. To the contrary, the Court in Basic stated: "Proof of that sort [i.e., that news of the truth had entered the market and dissipated the effects of prior misstatements] is a matter for trial, throughout which the District Court retains the authority to amend the certification order as may be appropriate." 485 U.S., at 249, n. 29, 108 S.Ct. 978 (emphasis added). Rule 23(c)(1)(C) continues to provide that a class-certification order "may be altered or amended before final judgment."

[*] As for the Court's contention that I have "[s]cour[ed] the Court's decision in Basic" to find "some semblance of support" for my reading of the case, ante, at 1202, n. 9: It does not take much scouring to come across the Court's opening statement that "[w]e granted certiorari ... to determine whether the courts below properly applied a presumption of reliance in certifying the class." 485 U.S., at 230, 108 S.Ct. 978 (emphasis added).

[1] Section 10 states, in relevant part:

"It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange —

. . . . .

"(b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange ... any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe...."

[2] Rule 10b-5 states:

"It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

"(a) To employ any device, scheme, or artifice to defraud,

"(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

"(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security."

[3] Courts have also "referred to the element of reliance as `transaction causation.'" Erica P. John Fund, 563 U.S., at ___, 131 S.Ct., at 2186 (quoting Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 341-342, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005), in turn citing Basic Inc. v. Levinson, 485 U.S. 224, 248-249, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988)). This alternative phrasing recognizes that the reliance inquiry is directed at determining whether a particular piece of information caused an individual to enter into a given transaction.

[4] The Basic decision itself is questionable. Only four Justices joined the portion of the opinion adopting the fraud-on-the-market theory. Justice White, joined by Justice O'Connor, dissented from that section, emphasizing that "[c]onfusion and contradiction in court rulings are inevitable when traditional legal analysis is replaced with economic theorization by the federal courts" and that the Court is "not well equipped to embrace novel constructions of a statute based on contemporary microeconomic theory." 485 U.S., at 252-253, 108 S.Ct. 978 (concurring in part and dissenting in part). Justice White's concerns remain valid today, but the Court has not been asked to revisit Basic's fraud-on-the-market presumption. I thus limit my dissent to demonstrating that the Court is not following Basic's dictates.

Moreover, the Court acknowledges there is disagreement as to whether market efficiency is "`"a binary, yes or no question,"'" or instead operates differently depending on the information at issue, see ante, at 1197-1198, n. 6 (quoting Brief for Petitioners 32, in turn quoting Langevoort, Basic at Twenty: Rethinking Fraud on the Market, 2009 Wis. L. Rev. 151, 167).

[5] Basic "adopt[ed] the TSC Industries standard of materiality for the § 10(b) and Rule 10b-5 context." 485 U.S., at 232, 108 S.Ct. 978. That standard indicates that "`[a]n omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote.'" Id., at 231, 108 S.Ct. 978 (quoting TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976); alteration in original). "[T]o fulfill the materiality requirement `there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the "total mix" of information made available.'" 485 U.S., at 231-232, 108 S.Ct. 978 (quoting TSC Industries, supra, at 449, 96 S.Ct. 2126).

[6] The United States as amicus curiae invokes Rule 23(a)(3) to suggest that the third element, the timing of the relevant stock trades, is a "limit on the definition of the class." Brief for United States 15, n. 2. But it is also necessary to establish the timing of the allegedly material, public misstatement made into an allegedly efficient market (as well as when the fraud ended due to entry of truth on the market) before the fraud-on-the-market theory can be evaluated under Rule 23(b)(3). Thus, the lower court opinion in Basic expressly identified "the time the misrepresentations were made and the time the truth was revealed" as part of fraud on the market. Levinson v. Basic Inc., 786 F.2d 741, 750 (C.A.6 1986). The Basic Court cited the formulation approvingly, 485 U.S., at 248, n. 27, 108 S.Ct. 978, and recently in Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. ___, 131 S.Ct. 2179, 180 L.Ed.2d 24 (2011), the Court cited the same language as part of the "undisputed" elements a securities-fraud plaintiff must prove to invoke Basic. 563 U.S., at ___, 131 S.Ct., at 2185 (quoting Basic, supra, at 248, n. 27, 108 S.Ct. 978). Unless the timing of the misrepresentation and truth is established at certification, there is no framework within which to determine whether fraud on the market renders reliance a common question. Thus, insofar as the majority recognizes that timing is a factor of the fraud-on-the-market theory, ante, at 1198, n. 8, I agree. It would be incorrect to suggest that timing solely relates to Rules 23(a)(3) and (4). It is equally important to establish the timing range at certification for Rule 23(b)(3) reliance purposes. This fact undercuts the majority's attempt to isolate materiality as the only factor of fraud on the market that need not be shown at certification to demonstrate that reliance is a common question.

[7] There is no dispute that respondent meets the prerequisites of Fed. Rule Civ. Proc. 23(a).

[8] The majority ignores this explanation of the fundamental flaw in its position, asserting that I never "explain how ... a plaintiff class's failure to prove an essential element of its claim for relief will result in individual questions predominating over common ones." Ante, at 1196. But a plaintiff, who is excused from his burden of showing, at certification that reliance is a common question, fails to demonstrate that common questions predominate over the individualized questions of reliance that are inherent in a securities fraud claim. A plaintiff must carry this burden at certification for certification to be proper. The majority does not respond to the inherent timing problem in its position. It does not explain how ignoring questions of reliance — that undeniably will be individualized in some cases — at certification is justified by the fact that those questions will be resolved months or years later on the merits in a way that indicates reliance was indeed an individualized question all along. Far from obeying the dictates of Rule 23(b)(3) as it claims, ante, at 1196-1197, the majority unjustifiably puts off a critical part of the Rule 23(b)(3) inquiry until the merits. The only way the majority can purport to follow Rule 23(b)(3) is by ignoring the fact that, under its own analysis, reliance may be an individualized question that predominates over common questions at certification.

[9] Of course, the Court's assertion that materiality will be resolved on the merits presumes that certification will not bring in terrorem settlement pressures to bear, foreclosing any materiality inquiry at all. The Court dismisses this concern, ante, at 1199-1201, attempting to give fraud-on-the-market analysis the imprimatur of congressional enactment instead of recognizing it as a judicially created doctrine grafted onto an implied cause of action. But the fact that Congress has enacted legislation to curb excesses in securities litigation while leaving Basic intact, see ante, at 1200-1201, says nothing about the proper interpretation of Basic at issue here. The Court retains discretion over the contours of Basic unless and until Congress sees fit to alter them — a fact Congress must also have realized when it passed the Private Securities Litigation Reform Act of 1995, 109 Stat. 737, and other legislation. The Court's entire argument is based on the assumption that the fraud-on-the-market presumption need not be shown at certification because it will be proved later on the merits; insofar as certification makes that later determination unlikely to occur, it at least counsels against the certitude with which the Court assures us that its gloss on Basic is correct.

[10] Ampex's sales for 1971 were just under $284 million. See Reckert, A. & P. Registers Deficit for First Fiscal Quarter, N.Y. Times, July 1, 1972, p. 30 (discussing Ampex's revenue and net loss in its 1972 Annual Report).

[11] Blackie's use of materiality to satisfy reliance for purposes of Rule 23(b)(3) predominance continued to form the foundation for the fraud-on-the-market concept in subsequent pre-Basic appellate cases. See, e.g., Peil v. Speiser, 806 F.2d 1154, 1161 (C.A.3 1986) ("[W]e hold that plaintiffs who purchase in an open and developed market need not prove direct reliance on defendants' misrepresentations, but can satisfy their burden of proof on the element of causation by showing that the defendants made material misrepresentations" (footnote omitted)); Panzirer v. Wolf, 663 F.2d 365, 368 (C.A.2 1981) ("Blackie held that the materiality of a fraud creates a presumption of reliance through its presumed effect on the market.... Our holding is no more than an extension of Blackie").

[133] Seth P. Waxman (Louis R. Cohen, Randolph D. Moss, Daniel P. Kearney, Jr., Ari Holtzblatt, on the brief) Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, for Appellant Google Inc.

Daralyn J. Durie, Joseph C. Gratz, Durie Tangri LLP, San Francisco, CA, for Appellant Google Inc.

Robert J. Larocca, Kohn, Swift & Graf, P.C., Philadelphia, PA, for Appellees The Authors Guild Inc., et al.

Michael J. Boni, Joshua D. Snyder, John E. Sindoni, Boni & Zack LLC, Bala Cynwyd, PA, for Appellees The Authors Guild Inc., et al.

Sanford P. Dumain, Milberg LLP, New York, NY, for Appellees The Authors Guild Inc., et al.

Before: LEVAL, CABRANES, and B.D. PARKER, Circuit Judges.

PER CURIAM:

Plaintiff-appellee The Authors Guild, an association of authors, as well as several individual authors (jointly, "plaintiffs"), began this suit in 2005, alleging that defendant-appellant Google Inc. ("Google") committed copyright infringement through the Library Project of its "Google Books" search tool by scanning and indexing more than 20 million books and making available for public display "snippets" of most books upon a user's search.^[1] Following a course of discovery and settlement discussions, the parties moved for final approval of an amended proposed class settlement agreement ("ASA") before the District Court. In a thorough opinion, Judge Chin refused to approve the ASA on March 22, 2011. See Authors Guild v. Google, Inc., 770 F.Supp.2d 666, 686 (S.D.N.Y.2011).

Following the District Court's denial of the motion to approve the ASA, plaintiffs moved to certify a proposed class of "[a]ll persons residing in the United States who [134] hold a United States copyright interest in one or more Books reproduced by Google as part of its Library Project, who are either (a) natural persons who are authors of such Books or (b) natural persons, family trusts or sole proprietorships who are heirs, successors in interest or assigns of such authors." Authors Guild v. Google, Inc., 282 F.R.D. 384, 393 (S.D.N.Y.2012) (alteration in original).^[2] The District Court granted plaintiffs' motion to certify the proposed class of authors pursuant to Federal Rule of Civil Procedure 23. Id. at 395.

Google opposed the motion for class certification before the District Court and now appeals the District Court's grant of class certification to us. Google argues, inter alia, that it intends to assert a "fair use" defense,^[3] which might moot the litigation. Google also claims that plaintiffs are unable to "fairly and adequately protect the interests of the class," Fed.R.Civ.P. 23(a)(4), because many members of the class, perhaps even a majority, benefit from the Library Project and oppose plaintiffs' efforts. See Appellant's Br. 25 (arguing that class certification has "potentially tied many [authors] in the class to a suit that is contrary to their interests"); see also Joint App'x 244 (summarizing the findings of a controverted survey of authors).

Putting aside the merits of Google's claim that plaintiffs are not representative of the certified class — an argument which, in our view, may carry some force — we believe that the resolution of Google's fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues, including those regarding the commonality of plaintiffs' injuries, the typicality of their claims, and the predominance of common questions of law or fact, see Fed.R.Civ.P. 23(a)(2), (3), (b)(3). See, e.g., FPX, LLC v. Google, Inc., 276 F.R.D. 543, 551 (E.D.Tex. 2011) (denying plaintiffs' request for class certification "because of the fact-specific inquiries the court would have to evaluate to address [defendants'] affirmative defenses [including fair use of trademarks]"); Vulcan Golf, LLC v. Google Inc., 254 F.R.D. 521, 531 (N.D.Ill.2008) ("The existence of affirmative defenses [such as fair use of trademarks] which require individual resolution can be considered as part of the court's analysis to determine whether individual issues predominate under Rule 23(b)(3)."); see also Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 n. 12, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) ("Evaluation of many of the questions entering into determination of class action questions is [135] intimately involved with the merits of the claims. The typicality of the representative's claims or defenses ... and the presence of common questions of law or fact are obvious examples." (quotation marks omitted)); Castano v. Am. Tobacco Co., 84 F.3d 734, 744 (5th Cir.1996) ("[A] court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues."); cf. WalMart Stores, Inc. v. Dukes, ___ U.S. ___, 131 S.Ct. 2541, 2561, 180 L.Ed.2d 374 (2011) (holding that "a class cannot be certified on the premise that [a defendant] will not be entitled to litigate its statutory defenses to individual claims"). Moreover, we are persuaded that holding the issue of class certification in abeyance until Google's fair use defense has been resolved will not prejudice the interests of either party during the projected proceedings before the District Court following remand. Accordingly, we vacate the District Court's order of June 11, 2012 certifying plaintiffs' proposed class, and we remand the cause to the District Court, for consideration of the fair use issues.

CONCLUSION

For the reasons stated above, we VACATE the June 11, 2012 order of the District Court certifying plaintiffs' proposed class and REMAND the cause to the District Court for consideration of the fair use issues, without prejudice to any renewal of the motion for class certification before the District Court following its decision on the fair use defense. In the interest of judicial economy, any further appeal from the decisions of the District Court shall be assigned to this panel.

The mandate shall issue forthwith.

[1] Plaintiffs sought injunctive and declaratory relief as well as statutory damages. See Authors Guild v. Google, Inc., 282 F.R.D. 384, 387 (S.D.N.Y.2012).

[2] The motion for class certification also specified that a "book" was defined as each "full-length book published in the United States in the English language and registered with the United States Copyright Office within three months after its first publication. Google's directors, officers, and employees [were] excluded from the class, as well as United States Government and Court personnel." Id. at 393 n. 7 (internal citations omitted).

[3] As we have explained, "[f]air use is a judicially created doctrine dating back nearly to the birth of copyright in the eighteenth century, but first explicitly recognized in statute in the Copyright Act of 1976." On Davis v. The Gap, Inc., 246 F.3d 152, 173 (2d Cir.2001) (internal citations omitted). Under that statute, to determine whether the use of a work is a fair use, courts consider four factors, including:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

17 U.S.C. § 107.