When the U.S. Supreme Court decided Wal-Mart v. Dukes back in June, we observed that the Court’s interpretation of Federal Rule of Civil Procedure 23(b)(2) might lead federal courts to conclude that claims for punitive damages cannot be certified for class treatment under this rule. Late last week, the Ninth Circuit instructed a federal district court to consider this very question in Ellis v. Costco Wholesale Corp.

Rule 23(b)(2) allows for class treatment only 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.” In Wal-Mart, the Supreme Court assessed whether this rule justified class certification where the class sought not only declaratory and injunctive relief but backpay as well. The Court held that Rule 23(b)(2) does not authorize class certification where, as with claims for backpay, each class member would be entitled to an individualized award of monetary damages.

As we explained at that time, the Supreme Court has previously held that any punitive damages award must be tied to the harm suffered by a plaintiff. (See, e.g., State Farm Mutual Auto. Ins. Co. v. Campbell (2003) 538 U.S. 408, 422-423.) We therefore noted that, in the future, courts may well conclude that claims for punitive damages, like claims for backpay, are claims for an individualized award of monetary damages that cannot be certified for class treatment under Rule 23(b)(2). Since then, several federal district courts have reached precisely that conclusion. (See, e.g., Morrow v. Washington (E.D. Tex. Aug. 29, 2011) 2011 WL 3847985, at *30 [claims for punitive damages “are not appropriate for Rule 23(b)(2) certification” because they “would require an individualized, factual determination for each claim”]; Altier v. Worley Catastrophe Response, LLC (E.D. La. July 26, 2011) 2011 WL 3205229, at *13 [denying class certification under Rule 23(b)(2) with respect to punitive damages claim because such a claim “requires a focus on individualized issues to comply with constitutional protections”].)

This issue also came up in Ellis. There, the Ninth Circuit vacated a district court’s order granting class certification and remanded to the district court to consider whether class certification should be granted pursuant to the legal standards established in Wal-Mart. In doing so, the Ninth Circuit “highlight[ed] several factors for the district court to consider” on remand. Among those factors, the Ninth Circuit—rather than deciding the issue itself—said the district court may consider on remand whether plaintiffs’ claim for punitive damages could be certified in accordance with Wal-Mart‘s interpretation of Rule 23(b)(2).

Of course, it’s possible the district court may sidestep this Rule 23(b)(2) issue since the Ninth Circuit also indicated the district court could consider whether to certify the punitive damages claim pursuant to Rule 23(b)(3). But there is no guarantee the district court would do so. As we’ve previously pointed out, although some courts have certified punitive damages claims for class treatment, several federal courts have declined to do so because the necessity of assessing an award of punitive damages in light of the defendant’s conduct toward a particular plaintiff requires individualized inquiries that prevent a plaintiff from satisfying Rule 23(b)(3)’s predominance requirement.