Waste Management Holdings, Inc. v. Mowbray

United States Court of Appeals
For the First Circuit

No. 99-8015

WASTE MANAGEMENT HOLDINGS, INC.,

Petitioner,

v.

ROBERT MOWBRAY, ON HIS OWN BEHALF AND ON
BEHALF OF ALL OTHERS SIMILARLY SITUATED,

Respondent.

PETITION TO APPEAL FROM AN ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
GRANTING CLASS CERTIFICATION

[Hon. William G. Young, U.S. District Judge]

Before

Selya, Stahl and Lipez,
Circuit Judges.

James R. Carroll, with whom William P. Frank, Mark L. Keene,
and Skadden, Arps, Slate, Meagher & Flom LLP were on brief, for
petitioner.
Edward F. Haber, with whom Michelle H. Blauner, Christine
E. Morin, and Shapiro, Haber & Urmy LLP were on brief, for
respondent.

March 31, 2000
 SELYA, Circuit Judge. This is a petition for leave to

appeal from a class certification order. It provides us with

our first real opportunity to delineate the circumstances in

which a court of appeals should exercise its discretion to allow

an interlocutory appeal under Fed. R. Civ. P. 23(f). Seizing

that opportunity, we offer some general guidance and limn three

types of cases in which we will be inclined to grant such

applications.

We then move from the general to the particular. While

the petition at hand does not present an especially compelling

case for interlocutory review, we nonetheless grant it (largely

because the merits already have been fully briefed by able

counsel, pursuant to our express direction). Having thus

drilled down to the core issues that underlie the petition, we

affirm the district court's class certification order.

I. BACKGROUND

The facts relevant to this proceeding are

uncontroversial. On July 31, 1992, Robert Mowbray sold his

business to a predecessor of Waste Management Holdings, Inc.

(WMH), in exchange for shares of WMH's common stock. The asset

sale agreement, which stipulated that Illinois law was to govern

any disputes arising thereunder, contained two provisions that

have particular pertinence here. The first listed several

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securities filings that had been furnished to Mowbray. These

filings contained audited financial statements for the years

1989, 1990, and 1991, and an unaudited statement for the first

quarter of 1992. The second provision warranted that these

filings "did not contain any untrue statement of a material fact

or omit to state a material fact required to be stated therein

or necessary to make the statements therein, in light of the

circumstances under which they were made, not misleading," and

that the audited financial statements "have been prepared in

accordance with generally accepted accounting principles applied

on a consistent basis . . . and fairly present the financial

position of [WMH] as at the dates thereof and the results of its

operations and changes in financial position for the periods

then ended."

Several years later, the bubble burst. On February 24,

1998, WMH announced that its earnings for the previous eight

years had been grossly overstated. The company's press release

explained that certain expense items (principally related to

vehicle, equipment, and container depreciation) had been

incorrectly reported.

It is said that every action produces an equal and

opposite reaction, and this revelation engendered severe

repercussions. On July 31, 1998, Mowbray filed a diversity suit

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in the United States District Court for the District of

Massachusetts, alleging breach of a contractual warranty and

purposing to sue on behalf of a class composed of all persons

who lately had sold assets to WMH in exchange for shares of

WMH's common stock. For reasons that are not immediately

apparent, the presiding judge suggested at a status conference

that Mowbray could move for partial summary judgment prior to a

judicial determination on the class certification issue.

Mowbray took the hint and moved for summary judgment as to

liability. WMH countered on three allied fronts: it opposed

Mowbray's motion, sought to defer any adjudication pending the

completion of discovery, see Fed. R. Civ. P. 56(f), and moved to

dismiss Mowbray's complaint.

In due season, the district court denied both of WMH's

motions, overrode its opposition to Mowbray's motion, and

granted partial summary judgment in Mowbray's favor. See

Mowbray v. WMH, 45 F. Supp. 2d 132 (D. Mass. 1999) (Mowbray I).

In the court's view, the "determinative issue" was that Illinois

law did not require reliance on an express warranty in order to

recover for its breach. Id. at 134. Thus, WMH's recasting of

its financial statements constituted an admission that it had

breached its express warranty to Mowbray, and further discovery

would serve no useful purpose. See id. at 139-43.

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 Invoking Fed. R. Civ. P. 23(b)(3), Mowbray then moved

for certification of a class consisting of all persons who,

during the period January 1, 1990 to February 24, 1998, had sold

assets to WMH in exchange for shares of WMH's common stock.1 The

record reflects that the proposed class comprised 324 sellers in

119 transactions; that the transactions were governed variously

by the laws of twenty states and three Canadian provinces; that

thirty-two of the transactions involved sales agreements in

which WMH had expressly warranted the accuracy of its financial

statements; and that these thirty-two transactions involved

eighty-one potential class members (the Warranty Group).

WMH opposed class certification, arguing, inter alia,

that the application of the laws of multiple jurisdictions to

individual questions of reliance, waiver, and prescription

predominated over any common questions. The district court

agreed that individual questions predominated over common

questions with respect to the potential class members who had

sold assets pursuant to contracts that did not contain express

warranties and therefore denied class certification as to this

subset of individuals, but reached the opposite conclusion with

1Although Mowbray's motion also mentioned Rule 23(b)(2),
this reference appears extraneous, given his specific
allegations. Thus, we disregard it.

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respect to the Warranty Group. See Mowbray v. WMH, 189 F.R.D.

194, 197-202 (D. Mass. 1999) (Mowbray II).

Pursuant to Fed. R. Civ. P. 23(f), WMH timely

petitioned this court for permission to appeal the class

certification order. Mowbray opposed the application. Spurred

in part by the lack of precedent in this newly constructed

corner of the law, we set an expedited briefing schedule and

instructed the parties to address not only the standards for

granting leave to appeal, but also the merits of the class

certification decision. In the meantime, proceedings continue

in the district court.

II. LEAVE TO APPEAL

Rule 23(f), which took effect on December 1, 1998,

provides that:

A court of appeals may in its discretion
permit an appeal from an order of a district
court granting or denying class action
certification under this rule if application
is made to it within ten days after entry of
the order. An appeal does not stay
proceedings in the district court unless the
district judge or the court of appeals so
orders.

This is the first Rule 23(f) application in this circuit to

reach the briefing stage (and, insofar as we can tell, among the

first in the nation).

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 The threshold question before us involves the criteria

that should guide an appellate court's exercise of discretion in

passing upon applications under this neoteric rule. The parties

offer divergent answers to this question. WMH takes an

expansive view, suggesting that appellate review is proper

whenever the court of appeals suspects that the trial court may

have committed an error of law, or whenever the class action

determination hinges upon a question of law that has not been

definitively resolved in this circuit. In contrast, Mowbray

asserts more grudgingly that a Rule 23(f) application should be

granted only if the applicant makes out a compelling case that

the district court committed a clear and dispositive error of

law or otherwise manifestly abused its discretion. Using the

underlying purposes of the new rule as a beacon, we chart a

middling course.

The advisory committee's note accompanying Rule 23(f)

underscores that "[t]he court of appeals is given unfettered

discretion whether to permit the appeal," likening this to the

Supreme Court's authority in granting or denying certiorari.2

2Embracing this analogy, Mowbray argues that because the
Supreme Court grants certiorari only for "compelling reasons,"
Sup. Ct. Rule 10, we should restrict Rule 23(f) applications
accordingly. But the advisory committee's note, read as a
whole, does not support this attempt to transplant the
certiorari standard root and branch into the virgin soil of Rule
23(f).

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In the same breath, however, the advisory committee predicts

that "[p]ermission is most likely to be granted when the

certification decision turns on a novel or unsettled question of

law, or when, as a practical matter, the decision on

certification is likely dispositive of the litigation." Id.

The advisory committee explains:

[M]any suits with class-action allegations
present familiar and almost routine issues
that are no more worthy of immediate appeal
than many other interlocutory rulings. Yet
several concerns justify expansion of
present opportunities to appeal. An order
denying certification may confront the
plaintiff with a situation in which the only
sure path to appellate review is by
proceeding to final judgment on the merits
of an individual claim that, standing alone,
is far smaller than the costs of litigation.
An order granting certification, on the
other hand, may force a defendant to settle
rather than incur the costs of defending a
class action and run the risk of potentially
ruinous liability.

Id. The raison d'être for Rule 23(f), then, is twofold. First,

the rule provides a mechanism through which appellate courts, in

the interests of fairness, can restore equilibrium when a

doubtful class certification ruling would virtually compel a

party to abandon a potentially meritorious claim or defense

before trial. Second, the rule furnishes an avenue, if the need

is sufficiently acute, whereby the court of appeals can take

earlier-than-usual cognizance of important, unsettled legal

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questions, thus contributing to both the orderly progress of

complex litigation and the orderly development of the law.

The seminal opinion dealing with the standards

applicable to Rule 23(f) applications is Blair v. Equifax Check

Services, Inc., 181 F.3d 832 (7th Cir. 1999). That cogently

reasoned opinion captures the essential principles on which Rule

23(f) rests. There, the court delineated three categories of

cases that customarily would warrant the exercise of

discretionary appellate jurisdiction. First, an appeal

ordinarily should be permitted when a denial of class status

effectively ends the case (because, say, the named plaintiff's

claim is not of a sufficient magnitude to warrant the costs of

stand-alone litigation). Second, an appeal ordinarily should be

permitted when the grant of class status raises the stakes of

the litigation so substantially that the defendant likely will

feel irresistible pressure to settle. Third, an appeal

ordinarily should be permitted when it will lead to

clarification of a fundamental issue of law. See id. at 834-35.

The Blair court then placed a useful gloss on the first

two categories. Mindful that some cases deserve to die and

others deserve to settle, it made pellucid that an applicant who

invokes either of the first two classifications must also

"demonstrate that the district court's ruling on class

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certification is questionable — and must do this taking into

account the discretion the district judge possesses in

implementing Rule 23, and the correspondingly deferential

standard of appellate review." Id. at 835. The court glossed

the third category as well, noting that the importance of the

issue to be resolved, more so than the likelihood of reversal,

ought to determine whether a case falls into this grouping. See

id. Moreover, even when an application touts a supposedly

fundamental issue of law, a showing that an end-of-case appeal

promises to be an adequate remedy will weigh heavily against

granting a Rule 23(f) application. See id. Thus, the

likelihood that a party will be forced to throw in the towel

factors into the discretionary calculus in all three branches of

the Blair formulation.

We regard the Seventh Circuit's taxonomy as

structurally sound. We worry, however, that the third category,

as framed, may encourage too many disappointed litigants to file

fruitless Rule 23(f) applications. The law is a seamless and

evolving web, so a creative lawyer almost always will be able to

argue that deciding her case would clarify some "fundamental"

issue. But interlocutory appeals should be the exception, not

the rule; after all, many (if not most) class certification

decisions turn on "familiar and almost routine issues." Fed. R.

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Civ. P. 23(f) advisory committee's note. We believe, therefore,

that Blair's third category should be restricted to those

instances in which an appeal will permit the resolution of an

unsettled legal issue that is important to the particular

litigation as well as important in itself and likely to escape

effective review if left hanging until the end of the case.3

With this small emendation, we adopt the Blair

taxonomy. This means that we ordinarily will grant leave to

appeal when a Rule 23(f) application falls into one of the three

described categories. We emphasize, however, the discretionary

nature of the authority ceded to us by the rule. While we hope

that these general comments will be helpful to parties deciding

whether to pursue applications under Rule 23(f), we do not

foreclose the possibility that special circumstances may lead us

either to deny leave to appeal in cases that seem superficially

to fit into one of these three pigeonholes, or conversely, to

grant leave to appeal in cases that do not match any of the

three described categories.

3
We reject WMH's suggestion that there must be a First
Circuit precedent directly on point in order for a question of
law to be considered settled. If the law elsewhere is developed
and a consensus is apparent, or if the answer to a question
seems straightforward, the absence of circuit precedent will not
afford an independent basis for immediate review.

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 The bar also should be aware that we intend to exercise

our discretion judiciously. By their nature, interlocutory

appeals are disruptive, time-consuming, and expensive. Thus, we

have elevated the threshold for discretionary review in other

instances, endeavoring to discourage piecemeal appeals. See,

e.g., In re Cargill, Inc., 66 F.3d 1256, 1259 (1st Cir. 1995)

(dealing with writs of mandamus); Heddendorf v. Goldfine (In re

Heddendorf), 263 F.2d 887, 889 (1st Cir. 1959) (dealing with

applications under 28 U.S.C. § 1292(b)). Although Rule 23(f) is

designed to operate from a more accessible plateau, the same

policy considerations counsel in favor of some restraint. We

should err, if at all, on the side of allowing the district

court an opportunity to fine-tune its class certification order,

see Fed. R. Civ. P. 23(c)(1) (authorizing district courts to

alter or amend class certification orders at any time before the

decision on the merits), rather than opening the door too widely

to interlocutory appellate review.

This brings us to the moment of decision. The case at

bar does not fit snugly into any of the described categories.

We explain briefly.

When asked at oral argument to situate this case within

one of these boxes, WMH's counsel stated that the situation

would be potentially "ruinous" were the case to be maintained as

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a class action. This is plausible at first blush: the average

value of the transactions at issue — in excess of $16,000,000 —

suggests that WMH's aggregate exposure may be quite large.

Still, what might be "ruinous" to a company of modest size might

be merely unpleasant to a behemoth, and the record makes

manifest that WMH is a massive corporation. Furthermore, the

magnitude of damages will be diminished if (as appears likely)

some class members liquidated all or part of their stock before

news of the downward earnings adjustment filtered into the

market. In all events, no matter how strong the economic

pressure to settle, a Rule 23(f) application, in order to

succeed, also must demonstrate some significant weakness in the

class certification decision. WMH cannot satisfy this

criterion. See infra Part III.

Nor does this case reside comfortably in the third

branch of the Blair taxonomy. We do not gainsay that the

application, as framed, implicates issues that are both

fundamentally important and important in the context of this

litigation. Withal, a stray district court opinion or two does

not herald a jurisprudential tangle, and the relevant points of

law are reasonably well-settled. Then, too, our doubts as to

how much pressure there will be on WMH to settle this case

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rather than pursue it to final judgment counsel against hasty

authorization of an immediate appeal.

Given these circumstances, we normally would deny the

application for leave to appeal. Nonetheless, we exercise our

discretion to accept the application and hear this appeal

because of special circumstances. As a result of our original

order, issued in hopes of minimizing piecemeal review, the

merits already have been briefed with exquisite care.

Consequently, an opinion can, at little cost, clarify some

imprecision in the case law, while at the same time giving the

parties (and the lower court) a better sense as to which aspects

of the class certification decision might reasonably be open to

subsequent reconsideration. We proceed accordingly.

III. OBJECTIONS TO CLASS CERTIFICATION

Rule 23(b)(3) requires, as a condition precedent to

class certification, that "questions of law or fact common to

the members of the class predominate over any questions

affecting only individual members." WMH argues that the

district court erred in finding that the certified class met

this predominance requirement. We review rulings granting or

denying class certification to ascertain whether the district

court's order constituted an abuse of discretion. See Andrews

v. Bechtel Power Corp., 780 F.2d 124, 130 (1st Cir. 1985). An

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abuse occurs when a court, in making a discretionary ruling,

relies upon an improper factor, omits consideration of a factor

entitled to substantial weight, or mulls the correct mix of

factors but makes a clear error of judgment in assaying them.

See Independent Oil & Chem. Workers, Inc. v. Procter & Gamble

Mfg. Co., 864 F.2d 927, 929 (1st Cir. 1988). An abuse of

discretion also occurs if the court adopts an incorrect legal

rule. See United States v. Snyder, 136 F.3d 65, 67 (1st Cir.

1998).

A

WMH devotes the lion's share of both its opening and

reply briefs to the thesis that the presence of idiosyncratic

statute-of-limitations issues precluded a finding of

predominance in this case, and that the district court, in

failing to recognize this reality, committed an error of law.

To be specific, WMH contends that the district court operated

under the false assumption that limitations defenses were not to

be considered at the class certification stage. We agree with

the premise that underlies this thesis: we regard the law as

settled that affirmative defenses should be considered in making

class certification decisions. See, e.g., Castano v. American

Tobacco Co., 84 F.3d 734, 744 (5th Cir. 1996) (explaining that

"a court must understand the claims, defenses, relevant facts,

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and applicable substantive law in order to make a meaningful

determination of the certification issues"). Because a time bar

constitutes an affirmative defense, see Fed. R. Civ. P. 8(c),

statute-of-limitations defenses are appropriate for

consideration in the class certification calculus. However, as

we explain below, the district court's actions were not at

variance with these principles.

Although a necessity for individualized statute-of-

limitations determinations invariably weighs against class

certification under Rule 23(b)(3), we reject any per se rule

that treats the presence of such issues as an automatic

disqualifier. In other words, the mere fact that such concerns

may arise and may affect different class members differently

does not compel a finding that individual issues predominate

over common ones. As long as a sufficient constellation of

common issues binds class members together, variations in the

sources and application of statutes of limitations will not

automatically foreclose class certification under Rule 23(b)(3).

See 5 James Wm. Moore et al., Moore's Federal Practice §

23.46[3], at 23-210 to -211 (3d ed. 1999). Predominance under

-17-
Rule 23(b)(3) cannot be reduced to a mechanical, single-issue

test.4

As a fallback, WMH criticizes the district court for

relying on securities fraud cases in its consideration of how

statute-of-limitations concerns affect predominance. This

criticism is misplaced. Cases alleging fraud on the market may

be particularly well-suited for class treatment, but the generic

requirements of Rule 23(b)(3) do not vary with the type of claim

asserted. Thus, courts confronting a collocation of divergent

limitations defenses regularly apply the totality-of-the-

circumstances test not only in security fraud cases but also in

other types of Rule 23(b)(3) class actions. See, e.g., Hoxworth

v. Blinder, Robinson & Co., 980 F.2d 912, 924-25 (3d Cir. 1992)

(RICO claim); Shroder v. Suburban Coastal Corp., 729 F.2d 1371,

1378-79 (11th Cir. 1984) (TILA case); Riordan v. Smith Barney,

113 F.R.D. 60, 65 (N.D. Ill. 1986) (case concerning fraud and

breach of fiduciary duty claims); Cohen v. District of Columbia

4
In adopting this position, we respectfully reject the
Fourth Circuit's suggestion that "when the defendant's
affirmative defenses (such as . . . the statute of limitations)
may depend on facts peculiar to each plaintiff's case, class
certification is erroneous." Broussard v. Meineke Discount
Muffler Shops, Inc., 155 F.3d 331, 342 (4th Cir. 1998)
(alteration in original) (internal quotation marks omitted).
While we do not quarrel with the result reached in Broussard,
the quoted statement, to the extent that it purports to
establish a per se rule, contradicts the weight of authority and
ignores the essence of the predominance inquiry.

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Nat'l Bank, 59 F.R.D. 84, 90 (D.D.C. 1972) (usury and antitrust

case).

WMH has two more shots in its statute-of-limitations

sling. First, it condemns the district court for ignoring WMH's

potential limitations defenses altogether. The court's opinion,

read as a whole, belies this condemnation. After summarizing

WMH's statute-of-limitations argument, the court articulated the

correct rule, observing that "possible differences in the

application of a statute of limitations to individual class

members . . . does not preclude certification of a class action

so long as the necessary commonality and, in a 23(b)(3) class

action, predominance, are otherwise present." Mowbray II, 189

F.R.D. at 199 (alteration in original) (quoting In re Energy

Sys. Equip. Leasing Sec. Litig., 642 F. Supp. 718, 752-53

(E.D.N.Y. 1986)). Although it then included in a string cite

two district court cases better omitted (each erroneously

suggesting that statute-of-limitations defenses should not be

considered at the class certification stage),5 it did not rest

its determination on this false assumption. Instead, it

assessed the impact of WMH's asserted limitations defenses vis-

à-vis members of the Warranty Group, acknowledged the lack of

5
See Mowbray II, 189 F.R.D. at 199 (citing CV Reit, Inc. v.
Levy, 144 F.R.D. 690, 699 (S.D. Fla. 1992), and Gruber v. Price
Waterhouse, 117 F.R.D. 75, 78-80 (E.D. Pa. 1987)).

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uniformity, and explained why the limitations problems

nonetheless appeared to be inconsequential:

[O]nly 13 of the 32 transactions are
presumptively time-barred, implicating only
eight different states' statutes of
limitations laws. Half of these eight
states have a discovery rule while the
remaining half have an operationally similar
fraudulent concealment rule. Under either
rule, the factual proffer will be largely
the same, depending as it does on the fact
that Waste Management had exclusive control
over the collection and release of its
financial data.

Id. at 200 n.4 (citations omitted). The court then made an

explicit finding that predominance was not negated by the need

for idiosyncratic statute-of-limitations determinations "in the

instant action." Id. at 200. Because it reached that

conclusion on the assumption that affirmative defenses were

relevant to the predominance question, it did not apply an

erroneous rule of law.

WMH's remaining claim is that the lower court abused

its discretion by not probing deeply enough into how the

statute-of-limitations issues were likely to be litigated and

resolved. This claim rests primarily on the Supreme Court's

opinion in General Telephone Co. v. Falcon, 457 U.S. 147 (1982).

There, the Court held that the trial judge erred in allowing a

plaintiff who complained of discrimination in promotion to

maintain a class action on behalf of applicants whom the

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defendant did not hire. See id. at 157-61. In the Court's

view, the trial judge's reliance on an "across-the-board rule"

that, in effect, permitted a plaintiff who challenged any

employment practice to challenge all employment practices

departed from the "rigorous analysis" required by Rule 23. Id.

at 161. In explicating its reasoning, the Court reiterated that

"the class determination generally involves considerations that

are enmeshed in the factual and legal issues comprising the

plaintiff's cause of action," id. at 160 (quoting Coopers &

Lybrand v. Livesay, 437 U.S. 463, 469 (1978) (internal quotation

marks omitted)), and suggested that "sometimes it may be

necessary for the court to probe behind the pleadings before

coming to rest on the certification question," id.

Building on this foundation, WMH asseverates that the

district court did not delve deeply enough before it concluded

that the incidence, variety, and complexity of statute-of-

limitations issues did not defeat the quest for class

certification. This asseveration is unconvincing. The court

below did not rely on a generalization (like the one that the

General Telephone Court found objectionable), but, rather,

engaged in a case-specific analysis that went well beyond the

pleadings. The court noted, for example, that most class

members' claims were unaffected by possible limitations defenses

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and that, in those few instances in which a limitations defense

might have bite, a common proffer likely would establish the

factual predicate necessary for a tolling determination. See

Mowbray II, 189 F.R.D. at 200 n.4. The district court's failure

to mention the possibility that WMH might retort with

individualized counter-proffers did not undermine the court's

otherwise thorough consideration of the issue. On this record,

that possibility was too conjectural to be accorded decretory

significance.6

B

WMH next assails the district court's treatment of its

waiver defense. At the outset, this assault calumnizes the

court for burrowing too far behind the pleadings and, thus,

effectively rejecting the waiver defense on the merits.

In Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974),

the Court held that Rule 23 did not authorize an inquiry into

the merits in order to apportion the costs of notice to a

putative class. The Court explained that, "[i]n determining the

propriety of a class action, the question is not whether the

plaintiff or plaintiffs have stated a cause of action or will

6
In all events, should WMH demonstrate in the future that
individualized statute-of-limitations problems actually shift
the balance and undercut the predominance of common issues, the
district court may modify its class certification order (or even
decertify the class). See Fed. R. Civ. P. 23(c)(1).

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prevail on the merits, but rather whether the requirements of

Rule 23 are met." Id. at 178 (quoting Miller v. Mackey Int'l,

Inc., 452 F.2d 424, 427 (5th Cir. 1971) (Wisdom, J.)). WMH

asserts that the district court, which concluded that waiver

issues did not destroy predominance because these issues

appeared unlikely to survive summary judgment, see Mowbray II,

189 F.R.D. at 201-02, transgressed Eisen.

This argument reads too much into too little. Eisen

may place a gloss on General Telephone, but it in no way

purports to overrule that precedent. Nor does Eisen, fairly

read, foreclose consideration of the probable course of the

litigation at the class certification stage. Indeed, such a

proscription would be inconsistent not only with General

Telephone, but also with the method of Rule 23. After all, a

district court must formulate some prediction as to how specific

issues will play out in order to determine whether common or

individual issues predominate in a given case. See General

Telephone, 457 U.S. at 160-61; Coopers & Lybrand, 437 U.S. at

469; Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d

584, 598-99 (7th Cir. 1993); see also Moore et al., supra, §

23.46[4], at 23-211 to -213.

Rule 23(b)(3)(D), for example, states that "the

difficulties likely to be encountered in the management of a

-23-
class action" are pertinent to the predominance inquiry.

Nonetheless, when "[c]onfronted with a request for settlement-

only class certification, a district court need not inquire

whether the case, if tried, would present intractable management

problems, for the proposal is that there be no trial." Amchem

Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997) (citation

omitted). By like token, when the court supportably finds that

an issue which, in theory, requires individualized factfinding

is, in fact, highly unlikely to survive typical pretrial

screening (such as a motion to strike or a motion for summary

judgment), a concomitant finding that the issue neither renders

the case unmanageable nor undermines the predominance of common

issues generally will be in order. Because this is such a case,

the district court did not err in discounting WMH's waiver

defense.

WMH also contends that the district court

misapprehended the way in which the waiver defense would affect

both pretrial discovery and proof at trial, and thus failed to

apply the "rigorous analysis" required by General Telephone, 457

U.S. at 161. According to WMH, the district court — perhaps

blinded by its unusually early summary judgment decision, see

Mowbray I, 45 F. Supp. 2d at 132 — overlooked the fact that

Mowbray's situation was not typical of all class members, many

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of whom worked for WMH as employees or consultants after their

businesses were acquired (and, thus, might have been able to

discover the earnings overstatement before WMH announced it).

Although WMH made this argument below, the district court

discussed only ex ante waiver and did not specifically address

the possibility that class members might have waived their

claims at some point after the transactions were completed. See

Mowbray II, 189 F.R.D. at 201-02.

We reject this argument. The record before the

district court did not in any way support the possibility of ex

post waiver (a circumstance that, in all likelihood, accounted

for the district court's silence anent the issue). We are

unwilling to fault a district court for not permitting arguments

woven entirely out of gossamer strands of speculation and

surmise to tip the decisional scales in a class certification

ruling. See Zeigler v. Gibralter Life Ins. Co., 43 F.R.D. 169,

173 (D.S.D. 1967) (explaining that "Rule 23 was not designed to

encourage [this type of] conjecture"). Consequently, we find no

abuse of discretion.

C

In its reply brief, WMH advances yet another argument.

It asserts that, in light of the lower court's entry of partial

summary judgment on the question of liability, see Mowbray I, 45

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F. Supp. 2d at 132, it was an abuse of discretion for the court

to find a predominance of common issues because individual-

specific affirmative defenses were all that remained to be

litigated. 7 We have held, with a regularity bordering on the

monotonous, that issues advanced for the first time in an

appellant's reply brief are deemed waived. See, e.g., Wills v.

Brown Univ., 184 F.3d 20, 27 (1st Cir. 1999); Executive Leasing

Corp. v. Banco Popular, 48 F.3d 66, 68 n.3 (1st Cir. 1995);

Aetna Cas. Sur. Co. v. P & B Autobody, 43 F.3d 1546, 1571 (1st

Cir. 1994); Sandstrom v. ChemLawn Corp., 904 F.2d 83, 87 (1st

Cir. 1990).

In all events, the fact that an issue has been resolved

on summary judgment does not remove it from the predominance

calculus. A certification decision is still necessary to

determine whether the prior resolution carries res judicata

effect with respect to purported class members. Thus, the

district court did not err by taking into account the common

7Because WMH does not directly challenge the unorthodox
timing of the district court's entry of partial summary
judgment, we do not pass upon the appropriateness of delaying a
class certification ruling until after acting upon an individual
plaintiff's summary judgment motion. We note, however, that
this sequencing raises serious questions, see 2 Herbert B.
Newberg & Alba Conte, Newberg on Class Actions § 7.15, at 7-48
to -59 (3d ed. 1992); L. Stevenson Parker, Note, Reopening the
Debate: Postjudgment Certification in Rule 23(b)(3) Class
Actions, 66 Cornell L. Rev. 1218 (1981), and we urge district
courts to exercise caution before deciding to embrace it.

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nucleus of operative facts and issues, even though certain of

these already had been resolved, when it was deciding whether to

certify the class. Cf. Wright v. Schock, 742 F.2d 541, 545 (9th

Cir. 1984) (affirming a postjudgment class certification

decision in part because "the district court did not use its

Rule 56 determination as a basis for deciding whether a class

action was maintainable").

We need go no further. We conclude, on the record

presented, that the district court did not abuse its discretion

in certifying the plaintiff class.

The application for leave to appeal is granted and the

ruling appealed from is affirmed. Costs in favor of respondent.

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