United States District Court, D. Arizona
G. Campbell United States District Judge
Court previously entered an order denying Plaintiffs'
motion for class certification under Rule 23(b)(2) and (3) of
the Federal Rules of Civil Procedure. Doc. 260. Plaintiffs
also argued in their motion that an issue class should be
certified under Rule 23(c)(4). Doc. 208 at 8,
36-37. The Court requested additional briefing on
the proposed issue class (Doc. 260 at 34-35) and heard oral
argument on March 22, 2017 (Docs. 273, 277). Because
Plaintiffs have not met their burden of showing that an issue
class is appropriate in this case, the Court will deny their
request for issue class certification.
own real property adjacent to a railroad right-of-way
operated by Defendant Union Pacific Railroad Company. Doc.
75, ¶¶ 1-3, 71. For several decades, Defendants
SFPP, L.P. (formerly known as Santa Fe Pacific Pipelines,
Inc. and Southern Pacific Pipelines, Inc.), Kinder Morgan
Operating L.P. “D, ” and Kinder Morgan G.P., Inc.
(collectively, “Kinder Morgan”) paid Union
Pacific rent to operate a pipeline carrying petroleum
products under the right-of-way. Id. ¶¶
4-6, 25-26, 29. Plaintiffs, claiming the land under the
right-of-way was neither Union Pacific's to rent nor
Kinder Morgan's to use, brought this trespass action on
behalf of a putative class of “all landowners who . . .
own or have owned land in fee adjoining and underlying the
railroad easement granted under the General Right of Way Act
of 1875 under which the pipeline is located within the State
of Arizona.” Id. ¶¶ 29-30, 52, 70;
Doc. 208 at 8.
Court denied the motion for Rule 23(b) class certification on
February 21, 2017, concluding that “the
property-specific issues in this case prevent the named
Plaintiffs from being typical or adequate, and will result in
individual issues predominating.” Doc. 260 at 35. The
Court found the following issues to be common to all alleged
class members: (1) whether the Railroad lacks sufficient
property interests in the subsurface of its right-of-way
under the 1875 Act to convey property rights in the
subsurface to the Pipeline, (2) whether the commercial
pipeline underneath the Railroad's right-of-way is a
railroad purpose, and (3) whether Defendants knew or had
reason to know that the Railroad did not possess a sufficient
ownership interest in the subsurface underneath its
right-of-way to grant easements or other property rights to
the Pipeline. Id. at 34 (quoting Doc. 208 at 17).
Although these issues were not sufficiently predominant to
certify the class under Rule 23(b)(2) or (3), Plaintiffs
argued that the Court should resolve these issues in an issue
class under Rule 23(c)(4). Doc. 208 at 36-37. Because a
possible issue class under Rule 23(c)(4) gave rise to matters
the parties had not yet addressed, the Court requested
additional briefing. Doc. 260 at 34-35.
bear the burden of establishing that the requirements of Rule
23(c)(4) have been met. See U.S. Parole Comm'n v.
Geraghty, 445 U.S. 388, 408 (1980); Hawkins v.
Comparet-Cassani, 251 F.3d 1230, 1238 (9th Cir. 2001).
Rule 23(c)(4) provides that, “[w]hen appropriate, an
action may be brought or maintained as a class action with
respect to particular issues.” Fed.R.Civ.P. 23(c)(4);
see also 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) and proceed
with class treatment of these particular issues.”).
Neither the text of the rule nor the advisory committee notes
offers guidance as to what makes an issue class appropriate.
courts have held that certification of an issue class is
warranted where it will “materially advance” the
disposition of the litigation. See, e.g.,
Fulghum v. Embarq Corp., No. 07-2602, 2011 WL 13615,
at *2 (D. Kan. Jan. 4, 2011); Benner v. Becton Dickinson
& Co., 214 F.R.D. 157, 169 (S.D.N.Y. 2003); Emig
v. Am. Tobacco Co., Inc., 184 F.R.D. 379, 395 (D. Kan.
1998) (quoting Harding v. Tambrands Inc., 165 F.R.D.
623, 632 (D. Kan. 1996)). This phrase, commonly associated
with interlocutory appeals, see 42 U.S.C. §
1292(b), first appeared in the Rule 23(c)(4) context in
In re Tetracycline Cases, 107 F.R.D. 719 (W.D. Mo.
1985), where the court declared without citation that the
critical inquiry is whether the resolution of the common
issues would “materially advance a disposition of the
litigation as a whole.” Id. at 727, 732. Years
later, the Second Circuit quoted this language in a footnote.
See Robinson v. Metro-N. Commuter R.R. Co., 267 F.3d
147, 167 n.12 (2d Cir. 2001) (discussing circuit split on
issue of whether an issue class presupposes Rule 23(b)(3)
predominance). A few other courts, including district courts
in this Circuit, have used the “materially
advances” language over the years. See, e.g.,
Tasion Commc'ns, Inc. v. Ubiquiti Networks,
Inc., 308 F.R.D. 630, 633 (N.D. Cal. 2015); Rahman
v. Mott's LLP, No. 13-3482, 2014 WL 6815779, at *9
(N.D. Cal. Dec. 3, 2014) (citing Jacob v. Duane Reade,
Inc., 293 F.R.D. 578, 589 (S.D.N.Y. 2013)); In re
Methyl Tertiary Butyl Ether (MTBE) Prods. Liab. Litig.,
209 F.R.D. 323, 351 (S.D.N.Y. 2002); Harding, 165
F.R.D. at 632.
of the provenance of the “materially advances”
standard, its focus on whether issue class certification will
move the litigation forward - saving money, time, and
judicial resources in the process - is a sensible
consideration. See Valentino, 97 F.3d at 1229
(evaluating “whether the adjudication of the certified
issues would significantly advance the resolution of the
underlying case, thereby achieving judicial economy and
efficiency”). Even where courts have not used that
specific language, the factors that have guided their
decisions are consistent with the theme of moving the
litigation forward efficiently. Some of these courts have
considered whether the issue class will save time and reduce
costs, see, e.g., id.; In re N. Dist.
of Cal., Dalkon Shield IUD Prods. Liab. Litig., 693 F.2d
847, 856 (9th Cir. 1982), as well as conserve judicial
resources, see, e.g., Fulghum, 2011 WL
13615, at *2; In re Activision Sec. Litig., 621
F.Supp. 415, 438 (N.D. Cal. 1985). Others have looked to the
overall convenience of issue class certification. See,
e.g., Soc'y for Individual Rights, Inc. v.
Hampton, 528 F.2d 905, 906 (9th Cir. 1975) (per curiam)
(citing Nix v. Grand Lodge, IAM, 479 F.2d 382, 385
(5th Cir. 1973)). Conversely, an issue class is “not
appropriate if, despite the presence of a common issue,
certification would not make the case more
manageable.” MTBE, 209 F.R.D. at 351 (quoting
Hamilton v. Accu-Tek, 935 F.Supp. 1307, 1332
considerations are closely related to the significance of the
issue to be certified: the more significant the common issue,
the more likely class-wide adjudication of that issue will
advance the litigation. See In re Copley Pharm.,
Inc., 158 F.R.D. 485, 491 (D. Wyo. 1994) (even where
“significant issues” would “require
individual determination, ” certification is
appropriate if “equally significant common
issues” could be resolved). A common issue is
sufficiently significant if it relates to “important
aspects of plaintiffs' claims” that form “the
centerpiece” of the case, such that deciding the issue
“will resolve the core of plaintiffs' claims for
the classes as a whole.” See In re Motor Fuel
Temperature Sales Practices Litig., 279 F.R.D. 598,
610-11 (D. Kan. 2012).
considering the parties' arguments carefully, the Court
cannot conclude that issue class certification would
significantly advance this litigation, nor have Plaintiffs
shown that an issue class will save time and resources. Even
if the disputed common issues were to be litigated on a
class-wide basis, significant complexity would remain.
An Issue Class Will Not Materially Advance the
previous order denying certification under Rule 23(b)(2) and
(3), the Court identified three common issues: (1) whether
Union Pacific had title to the subsurface under the 1875 Act
that could be conveyed to Kinder Morgan, (2) whether Kinder
Morgan's pipeline under Union Pacific's right-of-way
is a “railroad purpose, ” and (3) whether
Defendants knew or should have known that Union Pacific did
not have title to the property. Doc. 260 at 4-5. The Court
will confine its analysis to these three issues, and will not
consider undisputed common issues as suggested by Plaintiffs.
Doc. 269 at 5. Precisely because those issues are undisputed,
resolving them in an issue class would do nothing to move the
litigation forward. See McDaniel v. Qwest Commc'ns
Corp., 2006 WL 1476110, at *17 (N.D. Ill. May 23, 2006).
have failed to show that the three common issues are
“the centerpiece of this case, ” and that their
resolution would “materially advance the
litigation.” Motor Fuel, 279 F.R.D. at 610-11.
Issue classes are most often used to “accurately and
efficiently resolve the question of liability, while leaving
the potentially difficult issue of individualized damage
assessments for a later day.” See Kamakahi v. Am.
Soc'y for Reprod. Med., 305 F.R.D. 164, 176 (N.D.
Cal. 2015) (quoting Jimenez v. Allstate Ins. Co.,
765 F.3d 1161, 1164 (9th Cir. 2014) (affirming order
certifying class on liability); see also In re Nassau
Cty. Strip Search Cases, 461 F.3d 219, 226 (2d Cir.
2006) (courts can use issue class certification to
“separate the issue of liability from damages”));
Frlekin v. Apple Inc., 309 F.R.D. 518, 526 (N.D.
Cal. 2015) (only fact of injury and damages remained to be
determined individually); Campion v. Credit Bureau
Servs., Inc., 206 ...