In applying Rule 23(a)’s commonality requirement for class certification, at what point in the analysis of the class members’ claims must the common issue arise? A recent decision by a Massachusetts federal court denying certification to a putative class of foreclosure victims turned on this very question.
In Manson v. GMAC Mortgage, LLC, the plaintiffs sought to certify a class of Massachusetts residents whose homes were foreclosed, or against whom an invalid foreclosure process was initiated. The plaintiffs allege that the defendants, various foreclosing entities and their law firms, repeatedly violated state law by foreclosing on properties without first obtaining valid assignments of the underlying mortgages. Their argument was buoyed by a 2011 decision from the Supreme Judicial Court of Massachusetts, U.S. Bank Nat’l Ass’n v. Ibanez, which held that foreclosures not in strict compliance with state law are void, not merely voidable.
The putative class was defined as Massachusetts foreclosure victims for whose property a mortgage assignment had been recorded after the notice of sale. The court, however, denied class certification on commonality and typicality grounds. While the plaintiffs contended that the common violations of Massachusetts’ statutory foreclosure scheme constituted a common question, the court held that a fact-specific inquiry would be required as to whether the statute was violated in each case—more specifically, as to whether a pre-sale assignment in each case had occurred, or whether the post-dated assignment was the operative assignment. “In other words,” the court said, “the glue [binding the proposed class] would only adhere after the merits of each case had been fully investigated and only in those instances in which an Ibanez violation in fact was uncovered.” (Emphasis in original.) At that point, however, no common question would remain, as the only remaining issue would be the calculation of each plaintiff’s damages.
As to typicality, the court noted that “the primary relief sought for all class members” was an injunction requiring the defendants to notify class members that they may have a latent interest in their properties. The representative plaintiffs, however, were “already well-aware of this latent property interest.” Accordingly, the court held, the interests of the representative plaintiffs were insufficiently aligned with those of the class to permit certification.
In essence, the court’s application of the commonality requirement holds that it is insufficient to allege a systematic violation of law that affected all class members where the facts do not demonstrate that each class member has been injured. Presumably, if the “glue” had been a policy—rather than a just a frequent occurrence—of post-dating assignments, commonality would have been easier to establish.