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Castano v. Am. Tobacco Co. - 84 F.3d 734 (5th Cir. 1996)

Rule:

A district court's duty to determine whether a plaintiff has borne its burden on class certification requires that a court consider variations in state law when a class action involves multiple jurisdictions. In order to make the findings required to certify a class action under Fed. R. Civ. P. 23(b)(3) one must initially identify the substantive law issues which will control the outcome of the litigation. A requirement that a court know which law will apply before making a predominance determination is especially important when there may be differences in state law. Given the plaintiffs' burden, a court cannot rely on assurances of counsel that any problems with predominance or superiority can be overcome.

Facts:

Dianne Castano and others filed a class action complaint against American Tobacco Co. alleging that American Tobacco Co. fraudulently failed to inform consumers that nicotine is addictive and manipulated the level of nicotine in cigarettes to sustain their addictive nature. The district court certified the complaint as a class pursuant to Fed. R. Civ. P. 23(a) and 23(b)(3).

Issue:

Was the class certification analysis proper?

Answer:

No

Conclusion:

The Fifth Circuit reversed the certification and held that the district court erred in its class certification analysis and abused its discretion by failing to consider how variations in state law would affect predominance and superiority, and by not including consideration of how a trial on the merits would be conducted in its predominance inquiry. The Court also held that the class of Castano and others independently failed the superiority requirement of Fed. R. Civ. P. 23(b)(3) because the lack of individual trials based on Castano's novel theory made it impossible to properly conduct the predominance and superiority analyses required by the rule. The Court noted that the amount of judicial resources that would be conserved in trying Castano's and others' claims through the class action method was highly speculative.

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