BARRY SELTZER, Magistrate Judge
THIS CAUSE is before the Court upon Plaintiffs' Motion for Class Certification (DE 23) and was referred to United States Magistrate Judge Barry S. Seltzer pursuant to 28 U.S.C. § 636. For the reasons set forth below, the undersigned RECOMMENDS that Plaintiffs' Motion be DENIED.
I. BACKGROUND
The National Flood Insurance Program ("NFIP") was established by the National Flood Insurance Act of 1968. The Act authorized flood insurance to be made available nationwide through the cooperative efforts of the federal government and the private insurance industry. Prior to 1983, insurance companies did not offer flood policies; instead, insurance agents wrote flood policies directly through the federal government in exchange for a 15% commission. Although agents would notify the government of claims, agents did not service the policies or adjust the claims; the government appointed independent servicing agents or adjusters to perform those functions.
In 1983, the federal government established the Write Your Own ("WYO") program, which permitted insurance companies to write and service federal flood insurance in their own names. Participating companies received an expense allowance for writing policies, collecting premiums, paying agents, and managing and handling claims.
In 1985, State Farm joined the WYO program. As a WYO participant, State Farm took over the servicing function formerly performed by the government for policies that had been written through it. State Farm presented its agents with the option of either continuing to write flood insurance directly through the NFIP or writing through State Farm; both the NFIP and State Farm paid a 15% commission. To explain the WYO program and to provide agents the option of converting their existing flood policies to State Farm, the company convened a series of local meetings with agents. Agents who chose to transfer business to State Farm could either sign a form ("Authorization to Release Policy Information and/or Change Payor Address for Book of Business") or write renewal policies through State Farm at the one year expiration of a customer's NFIP policy. Many agents did elect to transfer flood policies to State Farm. The parties now dispute whether such transfers constituted a change in ownership of the policies from the agents to State Farm.
To resolve this dispute, the parties look to the State Farm Agent Agreement. In pertinent part, the Agent Agreement states:
The fulfillment of this Agreement will be your principal occupation, and you will not directly or indirectly write or service insurance for any other company, other than a State Farm subsidiary or affiliate or through any governmental or insurance industry plan or facility, or for any agent or broker, except in accordance with the terms of any written consent we may give you.
Agent Agreement, ¶ I.G., Exhibit D to Class Action Petition (DE 1) (emphasis added). The primary issue, therefore, is whether the flood insurance offered through State Farm constitutes a governmental plan or facility. Because WYO flood insurance is not mentioned in the Agent Agreement, the parties agree that the Court may consider extrinsic evidence in resolving the dispute.
At issue here are the terms of three Agent Agreements, known as the AA3, the AA4, and the AA97. Plaintiffs maintain (and Defendants do not dispute) that the AA3 and AA4 contracts are governed by the law of the states in which the (class member) agents are located — Louisiana, Texas, California, and Florida. The AA97 contract, by its terms, is governed by the law of the state of Illinois. However, aside from the law governing the respective contracts, the parties agree that the AA3, AA4, and AA97 Agent Agreements are, in all material respects, identical.
II. PROCEDURAL HISTORY
On March 15, 2002, Plaintiffs filed a Class Action Petition in the Palm Beach County (Florida) Circuit Court; on April 26, 2002, Defendants removed the action to this Court (DE 1). In the Petition, Plaintiffs define the class to include two subclasses:
a. All active State Farm agents who have written flood insurance policies [on] or after March 7, 1997,
b. All terminated State Farm agents (including those agents who have retired, passed away, or have been involuntarily dismissed) who wrote flood policies within 12 months of the time of their termination, and who have been terminated in the last five years.
Class Action Petition, ¶ 35 (DE 1). The Petition contains six counts, five for monetary relief and one for declaratory relief. Plaintiffs, however, have elected to seek class certification on only four counts: Count I — Conversion; Count II — Breach of Contract; Count V — Unjust Enrichment; and Count VI — Declaratory Judgment. Plaintiffs seek compensatory and punitive damages under the counts alleging conversion, unjust enrichment, and breach of contract; and under the counts alleging conversion and unjust enrichment, Plaintiffs also seek damages for loss of goodwill, harm to business reputation, and mental anguish. On May 7, 2002, Defendants filed an Answer and Affirmative Defenses to Class Action Petition, denying the material allegations therein (DE 6).
On November 14, 2002, Plaintiffs filed their Motion for Class Certification (DE 23), along with an accompanying Memorandum (DE 43). The Memorandum defines the putative class more narrowly than does the Petition, to include four subclasses:
Class #1 — (The Active Agent Class): All active State Farm agents who:
• have written flood insurance policies through State Farm's WYO program on or after March 7, 1997; and
• are operating under the AA3f AA4, or AA97 versions of the State Farm Agent's Agreement; and
• A. with respect to agents under the AA3 or AA4 Agent's Agreement, have agencies located in Florida, Louisiana, Texas, and California (subclass 1.A).
• B. with respect to agents under the AA97 Agent's Agreement, have agencies located in the United States (subclass 1.B).
Class #2 — (The Terminated Agent Class): All terminated State Farm agents (including those agents who have retired, passed away, or have been involuntarily dismissed) who:
• wrote flood policies through State Farm's WYO program within 12 months of the time of their termination; and
• have been terminated in the last five years; and
• were operating under either the AA3, AA4 or AA97 versions of the State Farm Agent's Agreement at the time of the termination; and
• A. with respect to agents under the AA3 or AA4 Agent's Agreement, have agencies located in Florida, Louisiana, Texas, and California (subclass 2.A).
• B. with respect to agents under the AA97 Agent's Agreement, have agencies located in the United States (subclass 2.B.)
Plaintiffs' Memorandum, at 9-10 (DE 43). Plaintiffs exclude from the class State Farm agents with less than two years of service,id. at 10.
Later in their Memorandum, Plaintiffs appear to further restrict the nationwide subclasses (1.B and 2.B), which are composed of the agents under AA97 Agreement. They narrow these nationwide subclasses for purposes of the conversion and unjust enrichment claims (Counts I and V) only to agents located in Louisiana, Texas, California and Florida. Plaintiffs explain the intended scope of the subclasses:
Plaintiffs therefore seek certification of a nationwide class of current and terminated agents operating under the AA97 for the AA97 classes' breach of contract and declaratory judgment claims. With respect to Plaintiffs who operate under the AA3 or AA4, Plaintiffs seek certification of the breach of contract and declaratory judgment claims in four states — Florida, Louisiana, Texas, and California. With respect to the other claims — conversion and unjust enrichment — Plaintiffs seek certification of a more limited class of agents operating under AA3, AA4 and AA97. This latter group is limited to current and former agents located in just four states: Florida, Louisiana, Texas, and California (the "class states").
Plaintiffs' Memorandum, at 20 (DE 43). Hence, only agents in four states now seek recovery in tort, irrespective of the contract under which they operated. By contrast, agents nationwide seek recovery in contract under the AA97 Agreement; and agents in four states seek recovery in contract under AA3 and AA4 Agreements.
III. REQUIREMENTS FOR CLASS CERTIFICATION
The initiation and maintenance of a class action is governed by Rule 23 of the Federal Rules of Civil Procedure. The Rule places upon the named class representatives the burden of proving entitlement to class certification. Gilchrist v. Bolger, 733 F.2d 1551, 1556 (11th Cir. 1984); Brooks v. Southern Bell Tel. Tel. Co., 133 F.R.D. 54, 56 (S.D. Fla. 1990) (Moreno, J.). In determining whether the class representatives have met this burden, the court considers only whether the representatives have satisfied the requirements of Rule 23; it should not consider the merits of the proponents' claim. Eisen v. Carlisle Jacquelin, 417 U.S. 156, 177-78, 94 S.Ct. 2140, 2152, 40 L.Ed.2d 732 (1974). This Circuit, however, has cautioned that this principle not be invoked so rigidly as "to artificially limit a trial court's examination of the factors necessary to a reasoned determination of whether a plaintiff has met [his] burden of establishing each of the Rule 23 class action requirements." Love v. Turlington, 733 F.2d 1562, 1564 (11th Cir. 1984). Accordingly, "a court may look beyond the allegations of the complaint in determining whether a motion for class certification should be granted." Kirkpatrick v. J.C. Bradford Co., 827 F.2d 718, 722 (11th Cir. 1987). cert. denied. 485 U.S. 959. 108 S.Ct. 1221, 99 L.Ed.2d 421 (1988). See also Singer v. AT T Corp., 185 F.R.D. 681, 685 (S.D. Fla. 1998) (Kehoe, J., adopting Report and Recommendation of Garber, J.) ("In reaching the class certification decision, the district court may consider both the allegations of the complaint and the supplemental evidentiary submissions of the parties.").
A district court is vested with broad discretion in determining whether to certify a class. Washington v. Brown Williamson Tobacco Corp., 959 F.2d 1566, 1569 (11th Cir. 1992). And where a court does decide to certify a class, such "certification is conditional only, and if it appears through discovery that certification was improvidently granted, options such as decertification or revised certification are always available to the district court." Singer, 185 F.R.D. at 185. See Fed.R.Civ.P. 23(c)(1).
A. Federal Rule of Civil Procedure 23(a) Prerequisites for Class Certification Rule 23(a) sets forth certain prerequisites that a plaintiff must satisfy before a court may further consider certifying a class:
1. the class must be "so numerous that joinder of all members is impracticable" ("numerosity");
2. there must be "questions of fact or law common to the class" ("commonality");
3. "the claims or defenses of the representative parties must be typical of the claims or defenses of the class" ("typicality"); and
4. the named representative must "fairly and adequately protect the interests of the class" ("adequacy of representation").
Although not expressly stated in Rule 23(a), implicit is the additional requirement that the class be identiFlable and that the named representatives be members of the class. Jack Friedenthal et al.,Civil Procedure § 16.2, at 726-27 (2d Ed. 1993);Gomez, 117 F.R.D. at 397. The four subclasses, as most recently proposed by Plaintiffs, are sufficiently delineated so that the Court may ascertain by reference to objective criteria whether particular agents are members. See id — However, based upon the allegations of the Petition and Memorandum, the two named representatives (Plaintiffs) cannot establish that they are members of each of the four (mutually exclusive) subclasses they seek to represent. The two class representatives operated under the AA3 and AA4 Agreements and belonged to subclass 1.A and subclass 2.A. Neither operated under the AA97 Agreement and, therefore, neither representative is a member of subclass 1.B or subclass 2.B. Presumably, Plaintiffs could remedy the matter by amending the Petition to add representatives belonging to the two unrepresented subclasses. The analysis proceeds, therefore, on the assumption that Plaintiffs would be willing and able to add such representatives.
1. Numerosity
To satisfy Rule 23(a)'s "numerosity" requirement, the named representatives need only show that it is difficult or inconvenient to join all members of the class. Phillips v. Joint Legis.Comm., 637 F.2d 1014, 1022 (5th Cir. Unit A 1981), cert. denied, 456 U.S. 960, 102 S.Ct. 2035, 72 L.Ed.2d 483 (1982). The class representatives need not demonstrate the precise number and identity of all of the class members; they must merely establish that joinder is impracticable through a reasonable estimate of the number of prospective class members. Kilgo v. Bowman Transp. Inc., 789 F.2d 859, 878 (11th Cir. 1986). Although there is no threshold size a given class must attain to satisfy the numerosity requirement, this Circuit has noted that the requirement is generally met where the proposed class has more than 40 members. Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1553 (11th Cir.), cert. denied, 479 U.S. 883, 107 S.Ct. 274, 93 L.Ed.2d 250 (1986). In deciding whether the numerosity requirement is met, a court may consider not only class size, but also geographic diversity and judicial economy. Kreuzfeld A.G. v. Carnehammar, 138 F.R.D. 594, 598 (S.D. Fla. 1991) (Paine, J.) (certifying a 130 member class and recognizing that classes as small as 25 have met the numerosity requirement).
Although Plaintiffs here do not know the precise number of prospective class members, they believe that the class will include "thousands of class members dispersed throughout the United States." Class Action Petition, ¶ 37 (DE 1). State Farm does not dispute that Plaintiffs satisfy the numerosity requirement. Accordingly, the undersigned finds that both the number and geographic diversity of prospective class members make joinder impracticable and concludes that the numerosity requirement has been satisfied.
2. Commonality
To satisfy Rule 23(a)'s "commonality" requirement, the named representatives must show that there are questions of law or fact common to the class. The common questions, however, need not be controlling; the class need only have one significant common question. Cox, 784 F.2d at 1557 ("The claims actually litigated in the suit must simply be those fairly represented by the named plaintiffs."); Kreuzfeld, 138 F.R.D. at 599. Rule 23(a)(2)'s commonality threshold, therefore, is not high. Jenkins v. Raymark Indus., Inc., 782 F.2d 468, 472 (5th Cir. 1986). Indeed, it is significantly less rigorous than Rule 23(b)'s requirement that common questions of law or fact actually predominate over questions affecting only individual class members.McMahon Books, Inc. v. Willow Grove Assoc., 108 F.R.D. 32, 35 (E.D. Pa. 1985). Where the allegations of wrongdoing involve a common course of conduct, the class members' claims will generally involve common questions of law or fact. Kennedy v. Tallant, 710 F.2d 711, 717 (11th Cir. 1983); Haitian Refugee Center v. Nelson, 694 F. Supp. 864, 877 (S.D. Fla. 1988) ("Commonality . . . exists when plaintiffs allege that a defendant has acted or is acting uniformly regarding a class."), aff'd, 872 F.2d 1555 (11th Cir. 1990),aff'd, 498 U.S. 479, 111 S.Ct. 888, 112 L.Ed.2d 1005 (1991).
Plaintiffs here allege a common course of conduct by Defendants — the wrongful assertion of ownership over flood policies written by State Farm agents. Additionally, Plaintiffs maintain that there exist several common questions of law: whether State Farm converted flood policies owned by active and terminated agents; whether State Farm breached its contracts with active agents by preventing them from selling flood insurance through other WYO carriers; whether it breached its contract with terminated agents by refusing to adequately compensate them for their flood business and by refusing to allow them to sell their flood business through other WYO carriers after termination; whether State Farm has been unjustly enriched by collecting and keeping commissions for servicing NFIP policies that agents desire to move to other WYO carriers and by collecting and keeping commissions for sales of NFIP policies that are due terminated agents; whether class members are entitled to damages for State Farm's conduct; and whether declaratory relief providing that active and terminated State Farm agents are free to sell flood policies through other WYO carriers is appropriate. Class Action Petition, ¶ 38 (DE 1). Defendants do not dispute that Plaintiffs have satisfied the commonality requirement. The undersigned finds, therefore, that Plaintiffs have identified several common issues of fact and law and concludes that they have satisfied the relatively modest standards for commonality.
3. Typicality
To satisfy Rule 23(a)'s "typicality" requirement, the named representatives must present claims that are typical of those of the class. This Circuit has described the typicality requirement:
[Rule 23(a)(3)] primarily directs the district court to focus on whether the named representatives have the same essential characteristics as the claims of the class at large. Moreover, the typicality requirement may be satisfied even if there are factual distinctions between the claims of the named plaintiffs and other class members. Thus, courts have found a strong similarity of legal theories will satisfy the typicality requirement despite substantial factual differences.Appleyard v. Wallace, 754 F.2d 955, 958 (11th Cir. 1985) (citations and internal quotation marks omitted). See also Andrews v. AT T Co., 95 F.3d 1014, 1022 (11th Cir. 1996) ("Typicality exists when a plaintiff's injury arises from or is directly related to a wrong to a class, and that wrong includes the wrong to the plaintiff.") (internal quotation marks omitted). To establish "typicality," the named representatives must show a nexus between their claims and the common questions of law or fact that unite the class.Kornberg v. Carnival Cruise Lines. Inc., 741 F.2d 1332, 1337 (11th Cir. 1984). cert. denied, 470 U.S. 1004, 105 S.Ct. 1357, 84 L.Ed.2d 379 (1985).
Plaintiffs allege here that the representatives' claims are typical of those of the class because they are "based on conduct identical to that of each class member — State Farm's violation of the [A]gent [A]greement, State Farm's conversion of the flood policies, and other related conduct." Class Action Petition, ¶ 39 (DE 1). According to the Petition, "Plaintiffs' injuries, like those of each agent class member, are financial injuries differing only [in] the number of flood policies held by each class member." id. Defendants counter that typicality is lacking because each of the class representatives is subject to a valid statute of limitations defense.
A statute of limitations defense, however, does not defeat typicality. Another judge of this Court has described the adequacy prerequisite:
In essence, a plaintiff and each member of the represented group must have an interest in prevailing on similar legal claims. Assuming such interest, particular factual differences, differences in the amount of damages claimed, or even the availability of certain defenses against a class representative may not render his or her claims atypical. Clearly, the threshold for typicality is low and Rule 23(a)(3) criterion serves one simple purpose: to assure that the named representatives' interests are aligned with those of the class.Singer, 185 F.R.D. at 689 (S.D. Fla. 1998) (Kehoe, J., adopting Report and Recommendation of Garber, J.) (citations and internal quotation marks omitted) (emphasis added). Here, the representatives' claims are factually typical of those of the prospective class members. The representatives are current and former State Farm agents who sold flood insurance under the WYO program, as did every other prospective member of the class. The representatives' claims are also legally typical of the class; they may all proceed on theories of conversion, unjust enrichment, and breach of contract. That Defendants may raise a statute of limitations defense against the class representatives is of no moment; the representatives' claims and those of the prospective class members still arise out of the same practice by Defendants and are based on the same theories. The undersigned, therefore, concludes that Plaintiffs have satisfied the low threshold for typicality.
4. Adequacy of Representation
To satisfy Rule 23(a)'s "adequacy of representation" prerequisite, the named representatives must demonstrate that they will fairly and adequately represent the interests of the class. This requirement serves to protect the legal rights of absent class members.Kirkpatrick, 827 F.2d at 726. To establish adequacy of representation, the named representatives generally must show both "(1) that [their] attorney is qualified, experienced, and will competently and vigorously prosecute the suit; and (2) that the interest of the class representative[s] [are] not antagonistic to or in conflict with the other members of the class." Singer, 185 F.R.D. at 690 (citingGriffin v. Carlin, 755 F.2d 1516, 1533(11th Cir 1985)).
"The attorney-competence prong involves questions of whether representatives' counsel are qualified, experienced and generally able to conduct the proposed litigation." id. Defendants here do not dispute the qualifications or competence of Plaintiffs' counsel, and the undersigned has no reason to doubt that counsel would represent the class in a professional and competent manner. Plaintiffs' counsel is experienced in class action litigation and has already demonstrated his competence through his oral argument and his written submissions to this Court.
With respect to the second prong, Defendants argue that Plaintiffs are inadequate class representatives because their interests conflict with those of prospective class members. According to Defendants, if Plaintiffs are successful in obtaining a declaration that flood policies are part of a governmental plan and, therefore, are not owned by State Farm, then the agents who elected to write flood policies through State Farm would have to forfeit all the benefits they received from the company when it was proceeding under the assumption that it (State Farm) owned the policies. By way of example, State Farm paid certain termination benefits to agents who wrote flood insurance through the company. The State Farm Agent Agreement, however, does not provide for termination payments for policies issued pursuant to a governmental plan or facility: "All policies, premium collections and compensation you receive thereon, issued by the Companies pursuant to any governmental or insurance industry plan or facility, shall be excluded from calculations and provisions for termination payments." Agent Agreement, § IV.A.5, Exhibit D to Class Action Petition (DE 1). If Plaintiffs were to establish that the flood policies are a "governmental plan," then agents who wrote flood insurance through State Farm would have to return the termination benefits they received, benefits to which they would not otherwise have been entitled.
At oral argument, Plaintiff sought to allay concern over the prospective conflict by suggesting that the Court could construe State Farms' past termination payments as "gifts." Defendants countered that Plaintiffs' proposal would unjustly enrich the agents and is without a basis in law; the undersigned concurs.
Plaintiffs counter that agents could opt out of the class if they were displeased with the prospect of forfeiting their termination pay or any other State Farm benefit they had received. While class members do retain the discretion to opt out of the class, the undersigned does not believe that this cures the defect. Prospective conflicts between class representatives and class members must be assessed at the outset of the litigation. Here, the class representatives seek to negate the choice of those agents who elected to write their flood policies through State Farm, in part, due to the benefits they would receive, including the termination pay. In this respect, the interests of the class representatives are antagonistic to those of prospective class members. The representatives, therefore, do not satisfy the adequacy prerequisite. Yet, even were such a conflict not grounds to deem the representatives inadequate, they could not satisfy the remaining requirements for class certification.
B. Federal Rule of Civil Procedure 23(b) Requirements for Class Certification
In addition to satisfying the four Rule 23(a) prerequisites, the proponents of class certification must also satisfy one of the three subsections of Rule 23(b). Here, Plaintiffs seek class certification for the legal claims under Rule 23(b)(3) and for the equitable claim under Rule 23(b)(2).
1. Rule 23(b)(3)
Under Rule 23(b)(3), a court may certify a class if it "finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Fed.R.Civ.P. 23(b)(3).
a. Predominance Requirement
The initial burden is upon the class proponent to tender some credible basis for claiming that the issues subject to generalized proof on a class-wide basis — the common questions — predominate over questions subject only to individualized proof. See id.;Walsh v. Ford Motor Co., 807 F.2d 1000, 1017-18 (D.C. Cir. 1986), cert. denied, 482 U.S. 915, 107 S.Ct. 3188, 96 LEd.2d 677 (1987); Nichols v. Mobile Bd. of Realtors, Inc., 675 F.2d 671, 676 (5th Cir. Unit B 1982). The opponent may then rebut the proffer by showing that it is so substantially flawed it should be disregarded. In re Indus. Gas Antitrust Litig., 100 F.R.D. 280, 288 (N.D. III. 1983). The reason for requiring a class proponent to satisfy the predominance requirement was well-articulated by the former Fifth Circuit: "[I]f the effect of class certification is to bring in thousands of possible claimants whose presence will in actuality require a multitude of mini-trials (a procedure which will be tremendously time consuming and costly), then the justification for class certification is absent." Alabama v. Blue Bird Body Co., Inc., 573 F.2d 309, 328 (5th Cir. 1978) (Fay, J.).
To assess whether a proposed class action would degenerate into a series of time consuming and costly mini-trials, the court must consider the nature of the claims, as well as the facts and the issues presented by those claims; it may not, however, consider the particular merits of the claims. Brooks, 133 F.R.D. at 56 (citing Coopers Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978); Eisen v. Carlisle Jacquelin, 417 U.S. 156, 163, 94 S.Ct. 2140, 2145, 40 LEd.2d 732 (1974); Abercrombie v. Lum's Inc., 345 F. Supp. 387, 390 (S.D. Fla. 1972) (King, J.)) — In this cause, the undersigned concludes that the justification for certification is absent because the large number of factual variations and legal variations would give rise to a multitude of time consuming and costly mini-trials.
(i) Factual Variations
Plaintiffs contend that Defendants subjected them to a common course of conduct. After the putative class members placed their flood policies with State Farm, the insurance company asserted ownership over the policies and denied them the opportunity to conduct their flood business with other WYO carriers. Although this common course of conduct satisfies the commonality prerequisite of Rule 23(a)(2), the undersigned does not find that it satisfies the more rigorous Rule 23(b)(3) requirement that common questions of fact actually predominate over questions affecting only individual class members. See McMahon Books, Inc., 108 F.3d at 35.
The damages phase of the proceedings here would give rise to innumerable factual issues. The Class Action Petition demands damages,inter alia, for mental anguish, harm to business reputation, and loss of good will. Such determinations are highly individualized and would require a detailed examination of the circumstances peculiar to each of the thousands of agent-members of the class. See Murray, 244 F.3d at 812 (assessing damages for mental anguish compels an inquiry into each class member's individual circumstances); Copper Liquor, Inc. v. Adolph Coors, Co., 624 F.2d 575, 579 n. 8 (5th Cir 1980) (valuing business's goodwill is subjective determination that factors business's age, profit history, customers, and potential for future earnings).
Plaintiffs appear to have retreated from their damages demand for mental anguish, loss of good will, and harm to business reputation. At oral argument, after initially denying that they had requested such damages, they acknowledged that they had made such demands and indicated that they would not seek certification for these damages.
The Petition also demands damages for lost profits attributable to the agents' inability to place their flood policies with other WYO carriers. Yet, this demand is predicated upon several questionable assumptions. First, the demand assumes that each agent-member of the class would have been inclined to place some or all of his State Farm policies with another WYO carrier had State Farm so permitted. Second, it assumes that each policyholder would have acquiesced in such transfer and, further, would have renewed with the non-State Farm carrier at the expiration of the policy term. Such assumptions fail to account for the prospect that certain State Farm agents and policyholders may have chosen to place their flood policies through State Farm owing to the company's reputation and quality of service and (for the policyholders) owing to the convenience of placing all their insurances, particularly the homeowners and flood policies, with one carrier. Third, Plaintiffs' demand for lost profits assumes that another carrier would have been available at the time and place a particular agent may have been inclined to change carriers. And finally, Plaintiffs' demand for lost profits assumes that an available carrier would have offered a more favorable compensation package, including a higher commission rate, than State Farm. These assumptions ignore the possibility that alternative carriers may not have been available at all times in all markets and that carriers' compensation packages may have varied over time. At trial, Defendants would be entitled to test each of these assumptions through an exacting scrutiny of every class member, resulting in a multitude of highly individualized determinations. Contrary to Plaintiffs' contention, therefore, the damages phase of the trial would not be subject to generalized proof and the damages calculation would not be a matter of simple mathematical formula.
Nor would the entire liability phase of the trial be subject to generalized proof; it too would degenerate into a multitude of mini-trials. Defendants will raise a statute of limitations defense; they maintain that many claims accrued outside the limitations period. By way of example, they argue that each of the class representatives learned of State Farms' assertion of ownership over the policies well outside the governing tort limitations periods for the respective states in which those representatives were located. Determining when each agent-member of the class knew or reasonably should have known of the wrongful act — State Farm's assertion of ownership — would overwhelm those liability issues subject to generalized proof. See Barnes v. Am. Tobacco Co., 161 F.3d 127, 149 (3rd Cir. 1998) ("[D]etermining whether each class member's claim is barred by the statute of limitations raises individual issues that prevent certification."); Mahoney v. RJ. Reynolds Tobacco Co., 204 F.R.D. 150, 159 (S.D. Iowa 2001) (individual evaluations are critical to determining when person was placed on inquiry notice for purposes of statute of limitations defense); Badillo v. Am Tobacco Co., 202 F.R.D. 261, 264 (D. Nev. 2001) (individual issues, including statute of limitations defense, insurmountably frustrates plaintiffs' ability to satisfy predominance requirement).
Although Plaintiffs dispute that any agent's claims would be barred by the applicable statute of limitations, they acknowledge that the date on which an agent learned of State Farm's assertion of ownership may affect the amount of tort damages such agent would be entitled to recover.
The liability phase of the trial would also be replete with individual determinations that bear on the interpretation of the contract itself. Although the Agent Agreements are identical in all material respects, Defendants maintain, and Plaintiffs acknowledge, that this Court would have to consider extrinsic evidence to determine whether the flood insurance sold through State Farm's participation in the WYO program constitutes a "governmental plan or facility" under the Agreement. See Plaintiffs' Reply, at 7 (DE 55). But this extrinsic evidence would not be uniform. State Farm maintains that its representatives convened local meetings with agents to explain the WYO program and to provide them the option of converting their existing flood policies to State Farm. In the Petition, Plaintiffs allege certain representations by State Farm personnel. Class Action Petition, ¶¶ 26, 54 (DE 1). According to Plaintiffs, in describing the WYO program, State Farm representatives stated that the program would in no way affect the agents' ownership of the policies. Id. But Defendants have denied the allegation, and they would be entitled to elicit evidence concerning each of these presentations — formal or informal; this would create a mini-trial as to each class member. See In re Jackson Nat'l Life Ins. Co. Premium Litig., 183 F.R.D. 217, 222 (W.D. Mich. 1998) (predominance lacking where class claims dependent upon non-uniform oral representations).
In sum, the large number of individualized factual determinations as to liability and as to damages would overwhelm those matters amenable to generalized proof, would result in a series of time consuming and costly mini-trials, and would defeat the purposes of class certification.
(ii) Legal Variations
Plaintiffs acknowledge that were this class certified, the Court would need to apply the contract law of five jurisdictions (Louisiana, Texas, California, Florida, and Illinois) and the tort law of four jurisdictions (Louisiana, Texas, California, and Florida). Plaintiffs attempt to allay concern over this multi-state class by assuring the Court that their claims are "based solely on the common law, not on state-specific statutory schemes that have more tendency to vary from state to state." Plaintiffs' Memorandum, at 21 (DE 43). Defendants counter that the state laws at issue are not uniform, but contain substantial variations; the undersigned concurs.
Unlike a federal question case, when plaintiffs seek certification of a multi-state non-federal question class, a court cannot turn to a uniform body of law to guide the litigation. Because Plaintiffs here have invoked the laws of several states, the court must examine their impact on the proceedings in light of the predominance requirement. See Hammett v. Am. Bankers Ins. Co. of Florida, 203 F.R.D. 690, 701 (S.D. Fla. 2001) (Ungaro-Benages, J.) ("Considering adjudication of Plaintiff's breach of contract claim will require consideration of the laws of many states, Plaintiff has failed to establish predominance."). Although variation among the laws of multiple jurisdictions will not necessarily defeat predominance, Plaintiff has the burden to establish that the varying laws of the jurisdictions do not differ substantially with respect to the elements of the claims, the defenses thereto, and the standards and burdens of proof. See In re Ford Motor Comp. Ignition Switch Products Liability Litig. v. Ford Motor Co., 174 F.R.D. 332, 349 (D.N.J. 1997) ("In a motion for class certification, plaintiff's bear the burden of providing an `extensive analysis' of state law variations to determine whether there are `insuperable obstacles' to class certification."); Zarrella v. Minnesota Mut. Life Ins. Co., No. Civ A 96-2782, 1999 WL 226223, at * 9 (R.I.Super. April 14, 1999) (same). Plaintiffs here have failed to meet their burden.
Rather than provide an "extensive analysis" of the variations of state law, Plaintiffs have offered only broad definitions, outlines, and generalized statements about the claims they plead. Plaintiffs' Memorandum, at 22-25 (DE 43). Defendants have responded by highlighting some of the more significant differences among the state laws. By way of example, Plaintiffs seeks certification for the claim of conversion. Defendants point out that under Florida common law intent is not an element of conversion. City of Cars v. Simms, 526 So.2d 119, 120 (Fla. 5th DCA 1988). In Louisiana, conversion is not governed by common law, but by statute, a fact that belies Plaintiffs' assurance that their claims are "based solely on the common law." Plaintiffs Memorandum, at 21 (DE 43). Further, in Louisiana, conversion is not an "intentional wrong giving rise to liability," but a civil law action predicated upon "the fault of the defendant." Dual Drilling Co. v. Mills Equip. Invs., Inc., 721 So.2d 853, 857 n. 3 (La. 1998) (instructing practitioners to look to Louisiana's "own legal tradition and to developments in civil law countries" rather than the common law of other states; "[t]he protection of proprietary interests in common law jurisdictions is substantially different from that accorded in civil law countries and in Louisiana"), As the Louisiana Supreme Court noted in Dual Drilling: "[t]he absolute liability which characterizes [the common law tort of] conversion is in direct conflict with Article 2315 of the Louisiana Civil Code and the principle that liability for wrongful dispossession rests on fault." Id. (emphasis omitted from original). In contrast to Louisiana, where conversion is a fault-based tort, in California, conversion is a strict liability tort; questions of good faith, lack of knowledge, and motive are ordinarily immaterial. The "foundation of the action rests neither in the knowledge nor the intent of the defendant." Burlesci v. Peterson, 68 Cal. App. 4th 1062, 1066, 8 Cal.Rptr.2d 704, 706 (Cal.App. 1998), Such differences in the state law of conversion militate against a predominance finding. Variations in state contract law also militate against a predominance finding. Defendants here highlight variations in the states' respective parol evidence rules. These variations are significant; the parties acknowledge that the Court will need to consider extrinsic evidence in construing the Agent Agreement. In Florida, even where there is an integration clause in a contractual document, extrinsic evidence will be admitted to determine whether each of several contractual documents is meant to be independent, or whether the parties intended all documents taken together to form an integrated contract. Burgan v. Pines Co. of Georgia, Ltd., 382 So.2d 1295, 1296 (Fla. 1st DCA 1980). Parol evidence is further admissible (1) to show that the contract document is not intended to be a complete statement of the parties' transactions, or (2) to explain an ambiguity in the contract. Outlaw v. McMichael, 397 So.2d 1009, 1011 (Fla. 1st DCA 1981). In Texas, the parol evidence rule bars extrinsic evidence that seeks to vary, add to, or contradict the terms of a written agreement. But the rule does not apply to extrinsic evidence used to establish fraud, even where there is an integration clause. Lau v. Corbitt, No. 05-00-01020-CV, 2001 WL 910931, at *4 (Tex.App. Dallas Aug. 13, 2001). Further, the parol evidence rule does not bar extrinsic evidence of an oral agreement, provided the oral agreement is not inconsistent with the written contract. Nor does it bar corporate records or mere statements of past fact. Gannon v. Baker, 818 S.W.2d 754, 755-56 (Tex. 1991).
The declaratory judgment claim also raises issues of legal variation. Declaratory judgment actions in California, Florida, Texas, and Louisiana are governed not by common law (as Plaintiff maintains), but by specific statutes and rules of procedure. Compare Cal. C.C.P. § 1060 with LSA C.C.P. art. 1871 et seq. and Fla. Stat. 86.011 et seq. and Tex. Civ. Prac. Rem. § 37.003.
While Texas enforces a strict version of the parol evidence rule, California's parol evidence rule, now codified in section 1856 of the Code of Civil Procedure, appears somewhat looser. There, the terms of a writing may not be contradicted by evidence of a prior or contemporaneous oral agreement. But the terms of a writing may be supplemented by extrinsic evidence of consistent additional terms, unless the writing was intended to be a complete and exclusive statement of the parties' agreement. On the other hand, extrinsic evidence is admissible to show whether or not the writing was intended to be exclusive and complete. Extrinsic evidence is also admissible not just to explain patent ambiguities, but to reveal latent ambiguities in the meaning of the written instrument's terms. FPI Dev., Inc. v. Al Nakashima, 282 Cal. Rptr 508, 519-22 (Cal.App. 3d 1991).
In Texas, the parol evidence rule is substantive, not evidentiary.Weinacht v. Phillips Coal Co., 673 S.W.2d 677, 679-80 (Tex.App. Dallas 1984). In Louisiana, by contrast, the parol evidence rule is evidentiary and not substantive, and it may be waived if not asserted as an evidentiary objection. Wade v. Joffrion, 387 So.2d 1265, 1266 n. 1 (La.App. 1st Cir. 1980). In that state, parol evidence is admissible to prove such circumstances as a "vice of consent," "a simulation," to prove that a written contract was modified by a subsequent and valid oral agreement, or to clarify a patent ambiguity in the contractual writing. Robert Inv. Co., Inc. v. Eastbank, Inc., 496 So.2d 465, 471-72 (La.App. 1st Cir. 1986). And in that state, the admissibility of parol evidence is governed by a specific code provision — LSA C.C. art. 1848.
Defendants further point to significant differences in the limitations periods for contract actions. In California and Texas, the statute of limitations for contract actions is four years, while in Florida it is five years. Compare Cal. Com. Code § 2725 and Tx. Civ. Prac. Rem. § 16.004 with Fla. Stat § 95.11. In Louisiana, the statute of limitations for contract claims is ten years,see LSA C.C. art. 3499, but whether this limitations period or the one year limitations period for tort claims applies to a given claim is itself an individualized issue depending on the mix of contracts and oral representations alleged by a particular plaintiff. See LSA C.C. art. 3492. In that state, the nature of the duty breached determines whether the action is in tort or in contract for purposes of determing which limitations period applies. See Harrison v. Gore, 660 So.2d 563 (La.App. 2d Cir. 1995).
In Ex parte Green Tree Financial Corp. 723 So.2d 6 (Ala. 1998), the Alabama Supreme Court addressed the impact of state law variations on the issues of predominance and superiority. The Green Tree Court reversed a class certification, notwithstanding that the plaintiffs had presented a chart showing which jurisdictions agree upon the elements of a breach of contract action; they had not, however, presented evidence as to variations in state law on such related issues as the admissibility of parol evidence, the statute of limitations, or other available defenses. Id. at 10-11. Similarly, in Jackson Nat. Life Ins. Co. Premium Litig., 183 F.R.D. 217, 222-23 (W.D. Mich 1998), a federal trial court declined to certify a contract claim class, noting numerous variations in state contract laws, including variations relating to the statute of limitations, burden of proof standards, and the parol evidence rule. And in Zarrella, 1999 WL 226223 at *9, the court held that a contract claim class should not be certified given varying statutes of limitations and burdens of proof among the states. Plaintiffs here have not carried their burden of providing an extensive analysis of the variations in state law and, in particular, have failed to analyze the impact of varying parol evidence rules and statutes of limitations.
In sum, the undersigned concludes that the variations in tort and contract law of the several governing jurisdictions, as well as the sheer volume of individual factual variations that would arise at trial, overwhelm the common issues subject to generalized proof and defeat predominance.
b. Superiority Requirement
In addition to establishing that common questions predominate, a plaintiff seeking class certification must also establish that a class action is the superior method of adjudicating the dispute. "If another available method of handling the controversy appears better suited for a particular action then the action should not be allowed to proceed under 23(b)(3)." Singer, 185 F.R.D. at 692. In making the superiority determination, a court may consider the four non-exclusive factors set forth in Rule 23(b)(3):
(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.
Fed.R.Civ.P. 23(b)(3).
Plaintiffs' proposed class is composed of thousands of active and terminated State Farm agents. Neither Plaintiffs nor Defendants has apprised the Court of any pending suits by other class members. The absence of separate lawsuits by prospective class members suggests that they lack any compelling interest in controlling the prosecution of separate actions. See Walco Invs. v. Therien, 168 F.R.D. 315, 337 (S.D. Fla. 1996) (finding that lack of prospective class members' interest in trying individual suits was evidenced by fact that none had filed individual suits); Basile v. Merrill Lynch. Pierce, Fenner Smith. Inc., 105 F.R.D. 506, 510 (S.D. Ohio 1985) (finding that existence of small number of suits pending in other courts as result of same underlying action demonstrated that individual investors not interested in controlling litigation). See also In re AmeriFirst Securities Litig., 139 F.R.D. 423, 435 (S.D. Fla. 1991) ("Where class members possess no strong interest in individually controlling the prosecution of separate actions . . . a class action is particularly appropriate.").
With respect to the desirability of concentrating the legal action in this forum, the undersigned notes that this lawsuit has been actively litigated in this District since March 2002. Additionally, Defendants conduct business in this District, and one of the class representatives resides here. Defendants have not apprised the Court, and the undersigned is not aware of, any reason why it would be undesirable to concentrate the litigation in this forum.
However, the final factor — the difficulties likely to be encountered in the management of a class action — militates strongly against class certification. "Manageability" . . . encompasses the whole range of practical problems that may render the class action format inappropriate for a particular suit."Eisen, 417 U.S. at 164, 94 S.Ct. at 2146. For the reasons stated above, this Court would need to resolve a multitude of factual issues pertinent to liability and damages, and the trial of the cause would require the application of four sets of state tort law and five sets of state contract law. The volume of these individualized factual determinations, which would need to be made according to varying state laws, would render the proposed action unmanageable for the Court alone. But the Petition here raises three legal claims that entitle the parties to a trial by jury.
Delegating an already unmanageable task to a jury would further complicate the manageability of the action. Requesting a jury to make several thousand factual findings would not be feasible. Nor would it be feasible to instruct a jury on the relevant law; the Court could not fashion one instruction on each claim that "would account for all the varying nuances that state law givers command." In re Masonite Corp. Hardboard Siding Products Liab. Litig., 170 F.R.D. 417, 423 (E.D. La. 1997) (notwithstanding common elements in negligence law of each state, plaintiffs did not show that it would be possible to give one instruction that would account for "varying nuances"). And asErie teaches, a "court must give effect to the variations in state law, however minor they may be." In re Stucco Litig., 175 F.R.D. 210, 217 (E.D.N.C. 1997) (citing Erie v. Tompkins 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed.2d 1188 (1938)).
Plaintiffs here have not explained how varying state laws and thousands of factual issues "could be presented to a jury for resolution in a way that fairly represents the law of the [various] states while not overwhelming jurors with [thousands] of interrogatories and a verdict form as large as an almanac." In re Ford Motor Co., 174 F.R.D. at 350. The undersigned finds that this case presents insurmountable manageability issues and, for that reason, is better suited for trial in individual actions. The class action, therefore, is not the superior method for adjudicating this dispute.
2. Rule 23(b)(2)
For purposes of the declaratory judgment count (only), Plaintiffs propose certifying this class under Rule 23(b)(2). Federal Rule of Civil Procedure 23(b)(2) permits a cause to be maintained as a class action if the prerequisites of subdivision (a) are all satisfied, and "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole. . . ." Fed.R.Civ.P. 23(b)(2). The Advisory Committee Notes explain that Rule 23(b)(2) "does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages." Advisory Committee Notes to 1966 Amendment. See also Murray v. Auslander, 244 F.3d 807, 812 (11th Cir. 2001) (monetary relief may be obtained in (b)(2) action only if predominant relief sought is declaratory); Vaughter v. Eastern Air Lines, Inc., 817 F.2d 685, 687, 690 (11th Cir. 1987) (Rule 23(b)(2) not applicable in action seeking more than just injunctive and declaratory relief, that is, monetary relief for ERISA violations, breach of contract, negligence, unjust enrichment, and conversion). "Monetary relief predominates in (b)(2) class actions unless it is incidental to requested injunctive or declaratory relief." Murray, 244 F.3d at 812 (citation and internal quotations omitted) (emphasis in original). As this Circuit has explained:
By incidental, we mean damages that flow directly from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory relief. . . . Ideally, incidental damages should be only those to which class members automatically would be entitled once liability to the class (or subclass) as a whole is established. . . . Liability for incidental damages should not . . . entail complex individualized determinations. Thus, incidental damages will, by definition, be more in the nature of a group remedy, consistent with the forms of relief intended for (b)(2) class actions.
id. (quoting Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (5th Cir. 1998)).
A request for monetary relief is not "incidental" to a request for declaratory relief where the declaratory relief is designed to facilitate and ensure the satisfaction of any monetary relief the court might award.In re Jackson Nat'l Life Ins. Co., 183 F.R.D. 217. See Powers v. Gov't Employees Ins. Co., 192 F.R.D. 313, 318 (S.D. Fla. 1998) (Highsmith, J.) (Rule 23(b)(2) class certification is not appropriate where "[t]he declaratory judgment count serves the ultimate goal of monetary restitution and is designed primarily to facilitate and ensure the satisfaction of monetary relief."). Therefore, 23(b)(2) certification is not appropriate where the declaratory relief sought is equivalent to a request for a declaration of liability. Goldberg v. Winston Maroone, No. 95 Civ. 9282 (LAK), 1997 WL 139526, at *3-4 (S.D.N.Y. Mar. 26, 1997) (certification inappropriate where declaratory relief would be tantamount to a declaration of liability for which plaintiffs seek damages award).
This Circuit has noted the difference in character between a (b)(2) class and a (b)(3) class: "At base, the (b)(2) class is distinguished from the (b)(3) class by class cohesiveness. . . . The members of a (b)(2) class are generally bound together through `pre-existing or continuing legal relationships' or by some significant common trait such as race or gender" that transcends the specific set of facts giving rise to the litigation. Holmes v. Cont'l Can Co., 706 F.2d 1144, 1155 n. 8 and 1156 (11th Cir. 1983). As the Eleventh Circuit explained inHolmes: "[S]ubsection (b)(2) was intended primarily to facilitate civil rights class actions, where the class representatives typically sought broad injunctive relief against discriminatory practices. . . . Subsection (b)(2) by its terms, clearly envisions a class defined by the homogeneity and cohesion of its members' grievances, rights and interests." Id. at 1155 (citation and internal quotations omitted).
In support of their request for certification under Rule 23(b)(2), Plaintiffs argue that State Farm has uniformly taken what belongs to the agents and claimed an ownership interest in all the policies. Plaintiffs, therefore, reason that State Farm's conduct is applicable to the class as a whole and that the Court can redress this group through a declaration that "State Farm agents are free to move flood insurance policies to the WYO carrier of their choice and that such policies are the property of Plaintiffs and not State Farm." Class Action Petition, ¶ 75 (DE 1). Plaintiffs additionally argue that any monetary relief sought is merely incidental to the declaratory relief because the damages would flow directly from a finding of liability to the class as a whole and are a function of simple mathematical formula. The undersigned disagrees.
Preliminarily, the undersigned notes that the putative class, unlike the civil rights classes for whom Rule 23(b)(2) was primarily intended,see Holmes, 706 F.2d at 1155, is not bound together by a pre-existing legal relationship or by a common trait that transcends the specific facts giving rise to this litigation. Although the agents are contractually related to State Farm, the agents are not legally related to one another. And although they were all denied the option of moving their flood policies to other WYO carriers, they do not share a common trait such as race or gender. Indeed, they share no common condition other than the specific facts that gave rise to this litigation. For this reason alone, they do not satisfy the homogeneity and cohesiveness requirements for certification under Rule 23(b)(2). But Plaintiffs' request for (b)(2) certification fails for other reasons as well.
The relief that Plaintiffs seek is not a group remedy. The putative class is composed of thousands of agents, some of whom may never have had any desire to move their flood business to other WYO carriers; such agents, therefore, suffered no damages. Among those agents who would have transferred their policies had State Farm (and the policyholders) consented, their entitlement to damages (due to statute of limitations and other defenses) and the amount of damages incurred (including mental anguish, loss of good will, harm to business reputation, and lost profits) could only be ascertained by highly individualized determinations.
Furthermore, although Plaintiffs contend that the relief they seek is primarily equitable, if they succeed in establishing that the agents own the flood policies, the damages award could well total in the millions of dollars. As Plaintiffs' themselves acknowledge in their Petition, "Plaintiffs' injuries, like those of each agent class member, are financial injuries differing only in the number of flood policies held by each class member." Class Action Petition, ¶ 39 (DE 1) (emphasis added). Accordingly, although Plaintiffs have an interest in obtaining a declaratory judgment that they own the flood policies, the predominant nature of the relief they seek is monetary.
Finally, Rule 23(b)(2) certification is inappropriate because it is clear that the declaratory relief sought by Plaintiffs is equivalent to a declaration of liability. Plaintiffs filed a six count Class Action Petition; all counts but one (for a declaratory judgment) seek monetary relief. A declaratory judgment in Plaintiffs' favor would be tantamount to a finding of liability on the breach of contract claim for which Plaintiffs seek damages and, therefore, would facilitate Plaintiffs' ultimate goal of monetary recovery.
In sum, the putative class here lacks the cohesiveness and homogeneity that are characteristic of a (b)(2) class. Further, the predominant relief sought here is monetary, and a declaratory judgment in Plaintiffs' favor would be tantamount to a liability finding on the contract claim; this would facilitate their recovery of substantial, yet highly individualized, monetary damages. The undersigned, therefore, concludes that Plaintiffs do not satisfy the criteria for (b)(2) certification.
IV. CONCLUSION
For the foregoing reasons, it is respectfully RECOMMENDED that the Motion for Class Certification (DE 23) be DENIED. Plaintiffs have not satisfied the "adequacy" prerequisite under Rule 23(a) due to conflicting interests between the class representatives and prospective class members. Yet, even if they had satisfied all the Rule 23(a) prerequisites, Plaintiffs' claims for monetary relief do not satisfy the predominance and superiority requirements of Rule 23(b)(3). Further, Plaintiffs' claim for declaratory relief does not satisfy the requirements of Rule 23(b)(2) because the class lacks cohesiveness, because a favorable ruling would be tantamount to a finding of liability on the contract claim, and because such a finding would facilitate monetary recoveries that would entail highly individualized determinations. The undersigned, therefore, reaches the same conclusion as the court in Zarrella: "The class action, although a valuable litigation tool, is neither an appropriate nor superior format for the case at bar." 1999 WL 226223, at *11.
The parties shall have ten (10) days from the date of being served with a copy of this Report and Recommendation within which to file written objections, if any, with the Honorable Daniel T. K. Hurley, United States District Judge. Failure to file objections timely shall bar the parties from a de novo determination by the District Judge of an issue covered in the report and shall bar the parties from attacking on appeal factual findings accepted or adopted by the District Court except upon grounds of plain error or manifest injustice. See 28 U.S.C. § 636(b)(1); Nettles v. Wainwright, 677 F.2d 404, 410 (5th Cir. Unit B 1982) (en banc).
DONE and SUBMITTED.
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