                                       PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
                   ______

                     No. 11-8079
                       ______

  JOHN RODRIGUEZ; JENNIFER WORTHINGTON;
     BOBBY CROUTHER; JESUS CONCHAS;
     ROSE MARIA CONCHAS; LUIS RAMOS;
      JOANN RAMOS, on behalf of themselves
         and all others similarly situated,

                      Petitioners

                          v.

           NATIONAL CITY BANK;
           NATIONAL CITY CORP.;
  THE PNC FINANCIAL SERVICES GROUP, INC.;
            DOES 1-10, INCLUSIVE
                   ______

    On Appeal from the United States District Court
        for the Eastern District of Pennsylvania
               (D.C. No. 2-08-cv-02059)
    District Judge: Honorable Eduardo C. Robreno
                        ______

             Argued November 13, 2012
Before: SCIRICA, FISHER and JORDAN, Circuit Judges.
             (Opinion Filed: August 12, 2013)
                          ______

Edward W. Ciolko
Joseph H. Meltzer
Donna S. Moffa
Peter A. Muhic (ARGUED)
Amanda R. Trask
Kessler, Topaz, Meltzer & Check
280 King of Prussia Road
Radnor, PA 19087

Kevin M. Costello
Roddy Klein & Ryan
727 Atlantic Avenue, Second Floor
Boston, MA 02111

Andrew S. Friedman
Wendy J. Harrison
Bonnett, Fairbourn, Friedman & Balint
2325 East Camelback Road, Suite 300
Phoenix, AZ 85016

Jeffrey L. Taren
Kinoy Taren & Geraghty
224 South Michigan Avenue, #300
Chicago, IL 60604
       Counsel for Petitioners




                            2
Sarah R. Breitlander
Hinshaw & Culbertson
222 North LaSalle Street, Suite 300
Chicago, IL 60601

Martin C. Bryce, Jr.
Ballard Spahr
1735 Market Street, 51st Floor
Philadelphia, PA 19103

Diane M. Kehl
Chad A. Schiefelbein
Vedder Price
222 North LaSalle Street, Suite 2600
Chicago, IL 60601
      Counsel for Respondents,
      National City Bank and
      National City Corp.

David H. Pittinsky (ARGUED)
Ballard Spahr
1735 Market Street, 51st Floor
Philadelphia, PA 19103
       Counsel for Respondents,
       National City Bank,
       National City Corp., and
       The PNC Financial Services
       Group, Inc.
                           ______

                OPINION OF THE COURT
                       ______




                             3
JORDAN, Circuit Judge.

        In this mortgage loan discrimination case, a putative
class of minority borrowers seeks permission under Rule
23(f) of the Federal Rules of Civil Procedure to appeal the
denial of final approval by the United States District Court for
the Eastern District of Pennsylvania of the parties’ proposed
settlement and certification of the settlement class. We will
grant the petition for permission to appeal and, for the reasons
that follow, will affirm the order of the District Court.

I.     Background

       Named       plaintiffs    John    Rodriguez,      Jennifer
Worthington, Bobby Crouther, Jesus Conchas, and Rosa
Maria Conchas (collectively, “Plaintiffs”) are African-
American and Hispanic borrowers who obtained mortgage
loans from Defendant National City Bank in 2006 or 2007.
On May 1, 2008, they filed a class action complaint against
National City Bank and its parent company, National City
Corporation (collectively, “National City”), 1 alleging that
National City had an established pattern or practice of racial
discrimination in the financing of residential home purchases,
in violation of the Fair Housing Act, 42 U.S.C. § 3605, and
the Equal Credit Opportunity Act, 15 U.S.C. § 1691.
Specifically, Plaintiffs asserted that National City issued them
loans pursuant to a “Discretionary Pricing Policy” that

       1
        On October 24, 2008, The PNC Financial Services
Group, Inc. (“PNC”), acquired National City, and Plaintiffs
subsequently filed a second amended complaint that added
PNC as a defendant, as successor-in-interest to National City.



                               4
allowed individual brokers and loan officers to add a
subjective surcharge of additional points, fees, and credit
costs to an otherwise objective, risk-based financing rate.
According to Plaintiffs, as a result of that policy, minority
applicants for home mortgage loans were “charged a
disproportionately greater amount in non-risk-related charges
than similarly-situated Caucasian persons.” (J.A. at 117.) In
other words, the policy allegedly produced a discriminatory
disparate impact.

        After the District Court denied National City’s motion
to dismiss, 2 the parties engaged in extensive discovery.
National City provided Plaintiffs with data on each of the
more than two million loans it issued from 2001 to 2008.
That data included, among other things, the annual percentage
rate, the term of the loan, the interest rate, the prepayment
terms, the origination fee, and the amortization type, as well
as information about the borrower, including income,
ethnicity, race, and debt-to-income ratio. While discovery
was still proceeding, the parties met to explore the possibility
of a negotiated settlement. Plaintiffs presented National City
with preliminary statistical analyses of the loan data they had
received. Although those analyses were shared confidentially
and are thus not in the record, the parties agree that they


       2
          More precisely, the District Court granted National
City’s motion to strike from the complaint certain paragraphs
that would have “require[d] Defendants to undertake
substantial investigation before filing a responsive pleading”
(J.A. at 149), but denied the motion “to the extent that it
[sought] to dismiss Plaintiffs’ amended complaint in whole or
in part” (id. at 150).



                               5
included regression analyses of National City’s loan data. 3
Plaintiffs say that those regression analyses revealed that,
overall, “Blacks and Hispanics paid more for their loans than
similarly situated Caucasians (a ‘disparate impact’) that
amounted to damages … of at least $350 and up to $1,100 per
loan.” (Petitioners’ Opening Br. at 5.) Plaintiffs further
contend that, because they controlled for “all objective credit
and risk factors impacting loan pricing” (Id. at 12), those
analyses prove that National City’s Discretionary Pricing
Policy produced the disparate impact.

       After participating in two days of mediation, the
parties arrived at a proposed settlement agreement. Under its
terms, the class would include “[a]ll African-American and
Hispanic persons who obtained a Mortgage Loan” from
National City, its affiliates, or its successor-in-interest, PNC,
from January 1, 2004, through the date of the settlement’s
preliminary approval. (J.A. at 250.) National City did not
concede any wrongdoing, but it agreed to pay $7,000,000 for
the benefit of the settlement class in exchange for a release of
claims. Specifically, the agreement provided a service award
of $7,500 to each of the named plaintiffs, $200 to each class
payee, $75,000 to two organizations that would provide
counseling and other services to the settlement class, and
$2,100,000 in attorneys’ fees. The agreement also included a
provision barring either party from attempting to void the
agreement, except in the event of an appeal.


       3
           Plaintiffs describe a regression analysis as “a
statistical tool which determines the relationship between a
variable to be studied and one or more potentially explanatory
variables.” (Petitioners’ Opening Br. at 4 n.3.)



                               6
        On July 21, 2010, the District Court granted
preliminary approval of the settlement and preliminarily
certified the proposed class under Federal Rule of Civil
Procedure 23(b)(3). Notice was then sent to the more than
153,000 members of the putative class. In response to that
notice, six people objected to the proposed agreement, 66
opted out of the settlement, and 24,631 sought to take part in
it by submitting claim forms. On December 9, 2010,
Plaintiffs filed an unopposed motion requesting final approval
of the settlement agreement, final certification of the
settlement class, and attorneys’ fees. In January 2011, after
holding an initial fairness hearing, the District Court ordered
additional briefing regarding certain aspects of the settlement
agreement. Before the Court reached a final determination in
light of that briefing, the Supreme Court issued its now well-
known opinion in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct.
2541 (2011). The District Court ordered another round of
supplemental briefing, this time asking the parties to discuss
the impact of Dukes on class certification. In that briefing,
both parties continued to support class certification, as they
had promised in their settlement agreement.

        The District Court, however, read Dukes as preventing
certification, and, on September 8, 2011, it issued an order to
that effect, denying at the same time Plaintiffs’ motion for
final settlement approval. In its memorandum opinion, the
Court held that the settlement class failed to meet Rule




                              7
23(a)’s commonality and typicality requirements. 4           It
explained that Dukes had clarified the standard for
establishing commonality, and that, under that standard,
“Plaintiffs would likely have to show the disparate impact and
analysis for each loan officer or at a minimum each group of
loan officers working for a specific supervisor” in order to
demonstrate commonality. Rodriguez v. Nat’l City Bank, 277
F.R.D. 148, 155 (E.D. Pa. 2011). The regression analyses’
demonstration of an overall race-based disparity was
inadequate, the Court said, because, even if the analyses
“remove[d] all credit related reasoning, there may be non-
credit related reasoning that individual loan officers
contemplated that is not based on race.” Id. Accordingly, the
Court decided that Plaintiffs had “fail[ed] to show that the
class could be certified,” and it denied their motion. Id. This
timely appeal followed.


       4
          As more fully described herein, infra Part III.B,
“commonality” demands that the members of a prospective
class share at least one question of fact or law common to
their claims. Baby Neal v. Casey, 43 F.3d 48, 56 (3d Cir.
1994). The “typicality” requirement instructs courts “to
assess whether the class representatives themselves present
[the] common issues of law and fact that justify class
treatment … .” Eisenberg v. Gagnon, 766 F.2d 770, 786 (3d
Cir. 1985).      As the District Court rightly noted, see
Rodriguez, 277 F.R.D. at 154 n.5, we have said that the
commonality and typicality requirements “tend to merge,”
such that if commonality is not satisfied, typicality is likely
not satisfied for the same reason. In re Cmty. Bank of N. Va.,
418 F.3d 277, 300 (3d Cir. 2005) (quoting Baby Neal, 43 F.3d
at 56) (internal quotation marks omitted).



                              8
II.    Jurisdiction and Standard of Review

        The District Court had jurisdiction under 28 U.S.C.
§ 1331. The matter is before us on Plaintiffs’ petition for
leave to appeal, filed in accordance with Rule 23(f) of the
Federal Rules of Civil Procedure, which allows us to “permit
an appeal from an order granting or denying class-action
certification … if a petition for permission to appeal is filed
with the circuit clerk within 14 days after the order is
entered.”

        We have “very broad discretion in deciding whether to
grant permission to pursue a Rule 23(f) appeal.” Gutierrez v.
Johnson & Johnson, 523 F.3d 187, 192 (3d Cir. 2008); see
also Fed. R. Civ. P. 23(f) advisory committee’s note (“Appeal
from an order granting or denying class certification is
permitted in the sole discretion of the court of appeals.”). In
Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259
F.3d 154 (3d Cir. 2001), we identified several circumstances
in which appellate review is appropriate, including: (1) “when
denial of certification effectively terminates the litigation
because the value of each plaintiff’s claim is outweighed by
the costs of stand-alone litigation”; (2) when class
certification risks placing “inordinate … pressure on
defendants to settle”; (3) “when an appeal implicates novel or
unsettled questions of law”; (4) when the district court’s class
certification determination was erroneous; and (5) when the
appeal might “facilitate development of the law on class
certification.” Id. at 164-65. By contrast, review is
discouraged when the natural course of litigation will provide
the moving party with an adequate remedy, or when the
certification decision was routine and easily resolved. Id.




                               9
       Permitting this appeal facilitates the development of
the law on class certification by allowing us to consider the
nature of the commonality inquiry in light of the Supreme
Court’s important instruction in Dukes. We therefore will
grant Plaintiffs’ petition and exercise our jurisdiction pursuant
to Rule 23(f) and 28 U.S.C. § 1292(e).

       We review a district court’s decision to approve or
reject a class action settlement agreement for abuse of
discretion. Newton, 259 F.3d at 165; see also In re Hydrogen
Peroxide Antitrust Litig., 552 F.3d 305, 310 (3d Cir. 2008)
(“The trial court, well-positioned to decide which facts and
legal arguments are most important to each Rule 23
requirement, possesses broad discretion to control
proceedings and frame issues for consideration under Rule
23.”) A district court abuses its discretion if its decision
“rests upon a clearly erroneous finding of fact, an errant
conclusion of law or an improper application of law to fact.”
Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 590 (3d Cir.
2012) (internal quotation marks omitted). “Whether an
incorrect legal standard has been used is an issue of law to be
reviewed de novo.” Id. (internal quotation marks omitted).

III.   Discussion

       Plaintiffs argue that the District Court abused its
discretion in two ways: it contravened the “limited role” a
court should occupy when deciding whether to certify a
settlement class, and it based its commonality determination
on an erroneous application of Dukes. National City, now
free under the terms of the settlement agreement to object to




                               10
class certification, 5 contends that the Court occupied its
prescribed role and reached the correct result under Dukes.
We address those competing arguments in turn and conclude
that the scope of the District Court’s inquiry was fully
consistent with Dukes, as well as with our own precedent and
Rule 23, and that the Court rightly concluded that the putative
class lacks commonality.

       A.       Certification of a Settlement Class

        Federal Rule of Civil Procedure 23(a) requires that the
members of a proposed class share a common question of law
or fact. Fed. R. Civ. P. 23(a)(2). That commonality
requirement is, along with numerosity, typicality, and
adequacy of representation, one of Rule 23(a)’s four
“threshold requirements” for class certification, Amchem
Prods., Inc. v. Windsor, 521 U.S. 591, 613 (1997), which are
intended to “limit the class claims to those fairly
encompassed by the named plaintiff’s claims,” Dukes, 131 S.
Ct. at 2550 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S.
147, 156 (1982)) (internal quotation marks omitted). 6



       5
         The settlement agreement provides that, “[i]n the
event any court disapproves or sets aside this Settlement
Agreement” and the “Parties do not agree jointly to appeal
such ruling,” the parties are released from their obligations
under the agreement. (J.A. at 265.)
       6
           Specifically, Rule 23(a) provides that:
       [o]ne or more members of a class may sue or be
       sued as representative parties on behalf of all
       members only if:



                                 11
Although they apply to all putative classes, those
requirements are of “vital importance” in the settlement
context because they protect absent class members “by
blocking unwarranted or overbroad class definitions.”
Amchem, 521 U.S. at 620. For that reason, the Supreme
Court held in Amchem that, although certain Rule 23
considerations, such as “whether the case, if tried, would
present intractable management problems,” are not applicable
in the settlement class context, the Rule’s other requirements
“demand undiluted, even heightened, attention” when class
action representatives are seeking certification for the purpose
of settlement. Id. at 620. Thus, in addition to determining
whether a proposed settlement is “fair, reasonable, and
adequate,” Fed. R. Civ. P. 23(e), district courts must ensure
that each of Rule 23(a)’s requirements, including
commonality, is satisfied before certifying a class and




               (1) the class is so numerous that joinder
       of all members is impracticable;
               (2) there are questions of law or fact
       common to the class;
               (3) the claims or defenses of the
       representative parties are typical of the claims
       or defenses of the class; and
               (4) the representative parties will fairly
       and adequately protect the interests of the class.
Fed. R. Civ. P. 23(a).



                              12
approving a class settlement agreement. 7 See Sullivan v. DB
Invs., Inc., 667 F.3d 273, 296 (3d Cir. 2011) (en banc)
(“[B]efore approving a class settlement agreement, a district
court first must determine that the requirements for class
certification under Rule 23(a) and (b) are met.” (internal
quotation marks omitted)); In re Cmty. Bank of N. Va., 418
F.3d 277, 300 (3d Cir. 2005) (“[R]egardless of whether a
district court certifies a class for trial or for settlement, it must
first find that the class satisfies all the requirements of Rule
23.”).

        Plaintiffs agree that the requirements of Rule 23(a)
remain intact in the settlement context, but they maintain that,
“when a settlement class … is presented for consideration,”
those requirements “operate in tandem with a strong
presumption in favor of voluntary settlement agreements.”
(Petitioners’ Opening Br. at 25-26.) They say the District

       7
         Parties seeking certification must also show that “the
action is maintainable under Rule 23(b)(1), (2), or (3).” In re
Warfarin Sodium Antitrust Litig., 391 F.3d 516, 527 (3d Cir.
2004). Plaintiffs here brought their case under both Rule
23(b)(2) and Rule 23(b)(3), and the District Court
preliminarily certified the class pursuant to Rule 23(b)(3).
Rule 23(b)(3) imposes two additional requirements: (1)
common questions must “predominate over any questions
affecting only individual members” and (2) class resolution
must be “superior to other available methods for fairly and
efficiently adjudicating the controversy.” Fed. R. Civ. P.
23(b)(3). Because of its Rule 23(a) determination, the
District Court in its final review of the proposed settlement
did not reach the issue of whether those Rule 23(b)
requirements were satisfied.



                                 13
Court disregarded that presumption and “undermin[ed] the
well-established policy interest in promoting settlements” (id.
at 28), by “delving into the merits of Class Members’ claims”
(id. at 24) and “speculat[ing] regarding evidence not on the
record” (id. at 28). They argue that the Court should have
occupied a more “limited” role in conducting its Rule 23
inquiry – one that respected the bargain the parties had struck
in reaching a negotiated settlement.

        Laying particular emphasis on Sullivan v. DB
Investments, Inc., 667 F.3d 273 (3d Cir. 2011) (en banc), and
Ehrheart v. Verizon Wireless, 609 F.3d 590 (3d Cir. 2010),
Plaintiffs correctly assert that we have, on several occasions,
articulated a policy preference favoring voluntary settlement
in class actions. Sullivan instructed that assessing whether
individual class members have viable claims is inappropriate
in the context of reviewing a proposed settlement class
because such an inquiry would “seriously undermine” our
strong preference for settlement agreements. 667 F.3d at 311;
see id. at 305 (explaining that “[a]n analysis into the legal
viability of asserted claims is properly considered through a
motion to dismiss … or summary judgment … , not as part of
a Rule 23 certification process”). In Ehrheart, we refused to
vacate a settlement despite an intervening change in the law
that eliminated the plaintiffs’ underlying cause of action. 609
F.3d at 595-96. We concluded that the settlement agreement
was a binding contract, and that permitting a party to “back
out of an agreement at any time before court approval” would
render the settlement process “meaningless.” Id. at 594.
Thus, we held the parties to their bargain, upholding our
“strong judicial policy in favor of class action settlement.”
Id. at 595.




                              14
         But while that policy is indeed strong, it cannot alter
the strictures of Rule 23. The Supreme Court explained in
Amchem that courts must be “mindful that the Rule as now
composed sets the requirements they are bound to enforce,”
as the Federal Rules of Civil Procedure may be amended only
through the “extensive deliberative process” Congress
prescribed. 521 U.S. at 620. Rule 23 has been amended to
provide for settlement classes, but solely to add the additional
hurdle of Rule 23(e), which mandates that the reviewing court
find the settlement to be “fair, reasonable, and adequate.”
Fed. R. Civ. P. 23(e)(2). That amendment “was designed to
function as an additional requirement, not a superseding
direction” respecting the class-qualifying criteria of Rule
23(a) and (b). Amchem, 521 U.S. at 621. The “dominant
concern” of Rule 23 – that “a proposed class has sufficient
unity so that absent members can fairly be bound by decisions
of class representatives” – “persists when settlement, rather
than trial, is proposed.” Id. Therefore, whether class action
representatives are seeking certification for the purpose of
settlement or with the intent to litigate, the members of the
proposed class must meet the threshold requirements of Rule
23(a), and our policy preference for voluntary settlement
cannot and does not alter that demand.

       In Sullivan and Ehrheart, we recognized the constant
applicability of Rule 23. We said in Sullivan that, although
settlement is clearly favored, “global settlements may
nevertheless be rejected for failing to meet the requirements
of Rule 23.” 667 F.3d at 311 n.40. In Ehrheart too we
acknowledged that district courts have a responsibility to
review settlements, and we reversed the district court not for
any Rule 23 determination but for granting judgment on the
pleadings after the parties had entered into a binding contract.




                              15
609 F.3d at 593 (describing the district court’s role and
explaining that the court in that case “never considered
whether to approve the settlement”). In neither case did we
excuse a failure to establish commonality, nor did we bar the
district court from exercising its independent judgment in
deciding whether the Rule 23 requirements were met. See In
re Cmty. Bank of N. Va., 418 F.3d at 301 (requiring that a
district court “exercise[] independent judgment” in the Rule
23 determination).

        Furthermore, neither case lessened the burden required
to demonstrate that putative class members share a common
question of law or fact. As we have repeatedly stated, the
Rule 23(a) requirements are “not mere pleading rules.”
Marcus, 687 F.3d at 591 (quoting In re Hydrogen Peroxide,
552 F.3d at 316) (internal quotation marks omitted). Rather,
at the threshold, “[t]he party seeking certification bears the
burden of establishing each element of Rule 23 by a
preponderance of the evidence,” which requires
demonstrating “actual, not presumed, conformance” with the
Rule. Id. (alterations and internal quotation marks omitted).
The district court “must conduct a ‘rigorous analysis’ of the
evidence and arguments put forth,” id. (quoting In re
Hydrogen Peroxide, 552 F.3d at 316), a task that sometimes
involves “a preliminary inquiry into the merits” of the
plaintiffs’ claims to ensure they can be “properly resolved as
a class action,” Newton, 259 F.3d at 168; see also Dukes, 131
S. Ct. at 2551 (“Frequently that rigorous analysis will entail
some overlap with the merits of the plaintiff’s underlying
claim.” (internal quotation marks omitted)).

       Relying on Sullivan, Plaintiffs imply that a “rigorous
analysis” is inappropriate in the context of a class action




                             16
settlement. They note that Sullivan instructed courts not to
delve into the underlying merits to determine if individual
claims are viable. See Sullivan, 667 F.3d at 306 (“[T]he
merits inquiry is particularly unwarranted in the settlement
context … .”).           Ehrheart made similar statements,
emphasizing the “restricted, tightly focused role that Rule 23
prescribes for district courts,” 609 F.3d at 593, and holding
that the district court abused its discretion by rescinding the
parties’ settlement agreement due to a change in the law that
made plaintiffs’ claims nonviable, id. at 595-96. But while
both decisions advised courts not to assess whether plaintiffs’
claims would be capable of succeeding if the case were to go
to trial, neither limited the ability of district courts to consider
the merits of a case when necessary for a Rule 23
determination. In fact, Sullivan specifically explained that
“an examination of the elements of plaintiffs’ claim is
sometimes necessary, not in order to determine whether each
class member states a valid claim, but instead to determine
whether the requirements of Rule 23 … are met.” 667 F.3d at
306. Put more simply, our policy in favor of voluntary
settlement does not alter the “rigorous analysis” needed to
ensure that the Rule 23 requirements are satisfied. Dukes,
131 S. Ct. at 2551; see also Sullivan, 667 F.3d at 335 (“The
same analytical rigor is required for litigation and settlement
certification … .”) (Scirica, J., concurring).

       Plaintiffs’ other arguments regarding the proper role of
the district court in settlement certification are similarly
unavailing. They take particular issue with the District
Court’s alleged “conjecture” regarding evidence not in the
record. (Petitioners’ Opening Br. at 34.) Noting that “the
parties in this case agreed to a settlement before the record
was as developed as it would have been in a fully contested




                                17
motion on class certification” (id. at 29), they argue that the
District Court should not have “quibble[d] with and
concentrate[d] on the quantity of evidence at settlement”
because “[s]uch considerations do not apply in a settlement
class” (id. at 30). They contend that by “speculat[ing]” about
nondiscriminatory explanations for individual loan officers’
decisions (id. at 28), the District Court improperly elevated
the evidentiary showing needed for certification of a
settlement class.

        That argument misunderstands the burden of proof
required for class certification. It is not enough that the
parties agreed to settle and believed that “a more fully
developed record would show that there were questions of
law and fact common to all Class Members.” (Id. at 29-30.)
One cannot say, in effect, “we could show commonality, if
we had to.” The short answer is, “you do have to.” See
Marcus, 687 F.3d at 591 (holding that the party seeking class
certification must demonstrate the putative class’s
conformance with Rule 23). That burden is not onerous. It
does, however, require an affirmative showing that the class
members share a common question of law or fact. Sullivan,
667 F.3d at 306. The mere possibility that evidence of
commonality could have been produced does not satisfy that
burden. Therefore, the District Court did not err by requiring
actual evidence that the putative class satisfies the
requirements of Rule 23(a).

       Plaintiffs further contend that the District Court erred
by “fail[ing] to fulfill its fiduciary role” to protect the
interests of the unnamed members of the class. (Petitioners’
Opening Br. at 26.) They argue that that role defines the
scope of a district court’s responsibilities in certifying a




                              18
settlement class, and they imply that the District Court here
acted beyond the scope of those responsibilities by denying
class certification. Both contentions are incorrect. Although
we have indeed highlighted the district court’s role as a
protector of absent members of the plaintiff class, see
Sullivan, 667 F.3d at 319 (“[A] district court acts as a
fiduciary for absent class members[.]” (internal quotation
marks omitted)), our emphasis on that role has never been
meant as a substitute for the requirements of Rule 23. Rule
23(a) explicitly requires that a putative class possess
commonality, and courts are bound to enforce that
requirement regardless of whether it benefits plaintiffs or
defendants. In any event, there is no indication that the
District Court’s decision to decertify the class here failed to
protect the interests of absent class members. When a class
of plaintiffs does not share a common question of law or fact,
it may well include individuals who did not actually
experience the harm allegedly caused by the defendants. If
that class is certified, those individuals will nonetheless
partake in the recovery, which diminishes the relief for class
members who actually were harmed. The Supreme Court
stated in Amchem that the Rule 23(a) requirements are of
“vital importance” in the settlement context precisely because
they are “designed to protect absentees by blocking
unwarranted or overbroad class definitions.” 521 U.S. at 620
(emphasis added). Thus, denial of certification to a class that
lacks commonality falls squarely within the district court’s
prescribed role in considering the propriety of a settlement
class.

       Finally, Plaintiffs argue that the parties entered into
their agreement knowing that Dukes might alter the legal
landscape, and the District Court should have respected their




                              19
decision “to settle and achieve certainty” rather than gamble
on what the Supreme Court would decide. (Petitioners’
Opening Br. at 33.) They again cite Ehrheart and Sullivan,
this time for the proposition that the “choice to settle
implicitly acknowledges calculated risks and, in the end,
reflects deliberate decisions of both parties to opt for certainty
in terminating their litigation.” (Id. (quoting Ehrheart, 609
F.3d at 594) (internal quotation marks omitted).) See also
Sullivan, 667 F.3d at 312 (“[A] district court’s certification of
a settlement simply recognizes the parties’ deliberate decision
to bind themselves according to mutually agreed-upon terms
… .”). According to Plaintiffs, “[t]he District Court’s
decision does … injustice to the Parties’ bargain” by
“render[ing] [the] settlement void, seemingly because the
Parties had agreed to put a halt to this litigation before class,
expert, factual and merits issues were fully litigated, an
eventuality that the Parties consciously chose to avoid … .” 8
(Petitioners’ Opening Br. at 35-36.)

       8
          To the extent that Plaintiffs are arguing that the
District Court was wrong to even consider Dukes in its Rule
23 review because it is a “change[] in the law after
settlement,” see Ehrheart, 609 F.3d at 595, that argument
lacks merit. Although the Supreme Court’s decision in Dukes
is an intervening and pointedly clear explication of the law, it
did not announce any change in the test for determining
commonality. It relied on existing precedent to emphasize
the necessity of meeting the commonality standard under
Rule 23(a). Dukes, 131 S. Ct. at 2556-57; id. at 2554
(applying existing precedent to reach its conclusion). That
standard – both before and after Dukes – requires that a
putative class of plaintiffs share a common question of law or
fact. Compare Baby Neal, 43 F.3d at 56 (“The commonality



                               20
        Yet again, that argument fails because, as much as they
might like to, parties cannot choose to avoid the judicial
scrutiny demanded by Rule 23. Before approving the
settlement of a class action, a district court must certify that
the settlement comports with Rule 23 and is “fair, reasonable,
and adequate.” Fed. R. Civ. P. 23(e). Nothing less will
suffice. It is true that we have advised courts not to “intrude
upon the parties’ bargain” after a settlement agreement is
reached, Ehrheart, 609 F.3d at 593, but a denial of class
certification does not constitute such an intrusion, as it is the
result of a required inquiry that both parties had to have
contemplated from the outset of their agreement. The parties
in this case may well have considered in their bargaining that
the Supreme Court had granted certiorari in Dukes, but that
consideration does not insulate them from the District Court’s
responsibilities under Rule 23.

       At base, Plaintiffs’ argument regarding the proper role
of the District Court seems to be that the Court was required

requirement will be satisfied if the named plaintiffs share at
least one question of fact or law with the grievances of the
prospective class.”), with Sullivan, 667 F.3d at 297 (“[A]
proposed class must share a common question of law or fact
… .”). Indeed, Dukes specifically stated that “for purposes of
Rule 23(a)(2) even a single common question will do,” 131 S.
Ct. at 2556 (alterations omitted) (internal quotation marks
omitted), making clear that it did not alter the standard for
assessing commonality. Ehrheart’s admonition that “changes
in the law after settlement … do not provide a legitimate basis
for rescinding [a] settlement,” 609 F.3d at 595, therefore has
no bearing on this case.



                               21
to conduct its commonality review in a manner that did not
upset the parties’ settlement agreement. Such a review,
though, is no review at all. The Rule 23 inquiry is certainly
not meant to discourage settlement, but it is more than a
rubber stamp, and thus it will sometimes result in the undoing
of a settlement. The fact that it did so in this instance is
therefore not in itself a basis for reversing the denial of class
certification. The District Court stayed fully within its
prescribed role and conducted the inquiry required of it by
our precedent, by the Supreme Court, and by the Federal
Rules of Civil Procedure.

       B.     The Commonality Determination

        Because we conclude that the District Court properly
fulfilled its prescribed role in conducting a Rule 23 review,
we turn to the question of whether the Court rightly
concluded that commonality is lacking in the class proposed
in this case.       A putative class satisfies Rule 23(a)’s
commonality requirement if “the named plaintiffs share at
least one question of fact or law with the grievances of the
prospective class.” Baby Neal v. Casey, 43 F.3d 48, 56 (3d
Cir. 1994). Again, that bar is not a high one. We have
acknowledged commonality to be present even when not all
plaintiffs suffered an actual injury, id., when plaintiffs did not
bring identical claims, In re Prudential, 148 F.3d at 311, and,
most dramatically, when some plaintiffs’ claims may not have
been legally viable, Sullivan, 667 F.3d at 305-07. In reaching
those conclusions, we explained that the focus of the
commonality inquiry is not on the strength of each plaintiff’s
claim, but instead is “on whether the defendant’s conduct was
common as to all of the class members.” Id. at 299; see also
In re Warfarin Sodium Antitrust Litig., 391 F.3d 516, 528 (3d




                               22
Cir. 2004) (focusing the commonality inquiry on the
defendant’s conduct, not “on the conduct of individual class
members”); Newton, 259 F.3d at 183 (identifying common
questions regarding the defendant’s conduct); Baby Neal, 43
F.3d at 57 (considering whether the defendant “engag[ed] in a
common course of conduct toward” the class members). In
other words, there may be many legal and factual differences
among the members of a class, as long as all were subjected
to the same harmful conduct by the defendant. Baby Neal, 43
F.3d at 56.

        In Dukes, the Supreme Court explained how the
commonality standard applies when the complained-of
conduct is a discretionary corporate policy that allegedly has
a discriminatory effect. The putative class in that case
consisted of “all women employed at any Wal-Mart domestic
retail store at any time since December 26, 1998, who have
been or may be subjected to Wal-Mart’s challenged pay and
management track promotions policies and practices.” 131 S.
Ct. at 2549 (alteration and internal quotation marks omitted).
That enormous class of about 1.5 million women alleged that
Wal-Mart’s policy “allowing discretion by local supervisors
over employment matters” produced a disparate
discriminatory impact, evidenced by a statistical analysis of




                             23
the company’s employment information. 9 Id. at 2547, 2554
(emphasis omitted). The Supreme Court concluded that that
evidence was insufficient to establish commonality. While
acknowledging that “giving discretion to lower-level
supervisors can,” in some circumstances, “be the basis of
Title VII liability under a disparate impact theory,” id. at
2554, the Court quoted Watson v. Fort Worth Bank & Trust,
487 U.S. 977, 994 (1988), to emphasize that such claims must
do more than “merely prov[e] that the discretionary system
has produced a racial or sexual disparity” – they must also
identify “the specific employment practice that is
challenged,” id. at 2555 (internal quotation marks omitted). 10
       9
          The plaintiffs in Dukes also brought a disparate
treatment claim, which alleged that Wal-Mart had a corporate
culture of bias against women. Dukes, 131 S. Ct. at 2548.
They attempted to demonstrate that culture of bias through a
sociologist’s analysis, affidavits recounting individual
plaintiffs’ experiences, and a regression analysis purporting to
show gender-based disparities that “can be explained only by
gender discrimination.” Id. at 2555 (internal quotation marks
omitted). Plaintiffs here bring only a disparate impact claim,
and they do not allege any intentional discrimination or
“culture of bias” on the part of National City. (See
Petitioners’ Opening Br. at 50 (“[T]his is a disparate impact
case and not a disparate treatment case … .”).)
       10
          The plaintiffs in Dukes failed to do that, the
Supreme Court said, because “Wal-Mart’s ‘policy’ of
allowing discretion by local supervisors …. is just the
opposite of a uniform employment practice that would
provide the commonality needed for a class action.” Id. at
2554.




                              24
Moreover, to bring a case as a class action, the named
plaintiffs must show that each class member was subjected to
the specific challenged practice in roughly the same manner.
Dukes, 131 S. Ct. at 2555-56. The Dukes plaintiffs were all
subjected to the discretion of their supervisors, but they had
not demonstrated “a common mode of exercising discretion
that pervades the entire company,” id. at 2554-55, such that
the policy could be considered a “uniform employment
practice” that all members of the putative class had
experienced, id. at 2554. Rather, the Dukes plaintiffs
encountered different managers making different types of
employment decisions for different reasons, many of them
likely nondiscriminatory in nature. They therefore had not
been subjected to a common harm, and the proposed class
lacked commonality. Id. at 2555.

       This case bears a striking resemblance to Dukes. Here,
the class proposed by the Plaintiffs consists of “[a]ll African-
American and Hispanic persons who obtained a Mortgage
Loan” from National City between January 1, 2004 and the
date the class was preliminarily certified. (J.A. at 250.) On
behalf of those 153,000 class members, the named plaintiffs
allege that National City’s “Discretionary Pricing Policy” had
the effect of charging African-American and Hispanic
borrowers “a disproportionately greater amount in non-risk-
related charges than similarly-situated Caucasian persons.”
(J.A. at 102, 117.) More specifically, Plaintiffs argue that
National City granted brokers and loan officers the discretion
to increase or decrease loan prices after an objective
determination of loan eligibility, which discretion produced
an overall disparate discriminatory impact. Therefore, in
order to demonstrate that they have suffered a common harm,
the putative class here must show that National City’s grant




                              25
of discretion to individual loan officers constitutes a “specific
practice” that affected all the class members in the same
general fashion. In other words, Plaintiffs must identify some
“common mode” in which those brokers exercised their
discretion. 131 S. Ct. at 2554.

       Plaintiffs claim they have done so. They conducted
regression analyses of National City’s loan data, which they
say demonstrate the Discretionary Pricing Policy’s disparate
impact even after controlling for legitimate factors affecting
the price of loans. 11 From what Plaintiffs characterize as “the
objective nature of a loan pricing decision,” they argue that,
by “eliminat[ing] all objective credit and risk factors
impacting loan pricing,” they have shown that the only
function the discretionary policy served was to produce a
discriminatory effect. (Petitioners’ Opening Br. at 12.)
Therefore, they say, the regression analyses show that the
loan officers’ “common mode of exercising discretion,”
Dukes, 131 S. Ct. at 2554, was discriminatory.

       But that conclusion is simply unsupported by the
evidence. Even if Plaintiffs had succeeded in controlling for
every objective credit-related variable – something no court
could have reviewed because the analyses are not of record –
the regression analyses do not even purport to control for
individual, subjective considerations. A loan officer may
have set an individual borrower’s interest rate and fees based
on any number of non-discriminatory reasons, such as
whether the mortgage loans were intended to benefit other

       11
         Notably, those analyses were not included in the
record before the District Court, although they were presented
to National City during settlement negotiations.



                               26
family members who were not borrowers, whether borrowers
misrepresented their income or assets, whether borrowers
were seeking or had previously been given favorable loan-to-
value terms not warranted by their credit status, whether the
loans were part of a beneficial debt consolidation, or even
concerns the loan officer may have had at the time for the
financial institution irrespective of the borrower. 12 While
those possibilities do not necessarily rebut the argument that
the Discretionary Pricing Policy opened the door to biases
that individual loan officers could have harbored, they do
undermine the assertion that there was a common and
unlawful mode by which the officers exercised their
discretion.

       Even assuming, however, that Plaintiffs had succeeded
in identifying a specific employment policy that could be
sufficiently distinguished from the discretionary policy in
Dukes, they still have not shown that it affected all class

       12
         Plaintiffs argue that contemplating such subjective-
yet-not-discriminatory reasons for individual loan pricing
decisions involves impermissible “speculation and
conjecture.” (Petitioners’ Opening Br. at 2.) Far more
speculative, we believe, are the Plaintiffs’ unsupported
presumptions that a loan pricing determination is a purely
objective matter and that an average racial disparity indicates
that each minority borrower experienced National City’s
policy in a discriminatory way. More to the point, though,
the burden is on the Plaintiffs to establish the threshold Rule
23(a) requirements. Marcus, 687 F.3d at 591; see also supra,
Section III.A. If the District Court engaged in speculation, it
is because the Plaintiffs failed to provide enough evidence to
demonstrate commonality.



                              27
members in all regions and bank branches in a common way.
Another significant problem with the proposed class in Dukes
was that the statistical disparity was based on an average of
national data that was not necessarily representative of
regional or store disparities. The Court explained that “a
regional pay disparity … may be attributable to only a small
set of Wal-Mart stores, and cannot by itself establish the
uniform, store-by-store disparity upon which plaintiffs’
theory of commonality depends.” Id. at 2555.

       The proposed class in this case is also national, with
153,000 plaintiffs who obtained loans at more than 1,400
bank branches.       As in Dukes, the application of the
Discretionary Pricing Policy may have resulted in a disparity
in some regions or branches but not at all in others.
Accordingly, a very significant disparity in one branch or
region could skew the average, producing results that indicate
a national disparity, when the problem may be more
localized. If the national disparity is not reflective of regional
or even individual branch data, the putative class cannot show
the policy affected each individual plaintiff in the same
general fashion.

        Plaintiffs contend that they controlled for regional
differences in their regression analyses, but they must show
that the putative class meets the commonality requirement by
a preponderance of the evidence. In re Hydrogen Peroxide,
552 F.3d at 320. They did not introduce their data, regression
analyses, or any other evidence to support a finding of
commonality.        Although Plaintiffs moved for class
certification before the Supreme Court issued the Dukes
opinion, the District Court requested the parties to submit
briefs on class certification in light of the guidance given in




                               28
that decision, and still Plaintiffs did not give the District
Court a factual foundation for a commonality finding in their
favor. 13

        Whether an appropriate foundation could be laid in a
case like this is a question we leave for another day. 14 We
note, however, that, when faulting the Dukes plaintiffs for
failing to account for regional differences that could
undermine their claim of commonality, the Supreme Court
went on to say: “There is another, more fundamental, respect
in which respondents’ statistical proof fails. Even if it
established (as it does not) a pay or promotion pattern that
differs from the nationwide figures or the regional figures in
all of Wal-Mart’s 3,400 stores, that would still not
demonstrate that commonality of issue exists.” Dukes, 131 S.
Ct. at 2555. The Court then explained why, emphasizing that,
as we have already noted, Watson requires that “the plaintiff
must begin by indentifying the specific employment practice
       13
          Had the District Court found commonality to be
present, it might have been guilty of simply accepting the
parties’ assertions at face value, which we have explicitly
stated is improper in a final Rule 23 determination. In re
Cmty. Bank of N. Va., 418 F.3d at 300 (reversing the district
court because it simply adopted “a party’s proposed findings”
without exercising its own independent judgment).
       14
          We likewise do not attempt to sort out here how the
issues discussed in Dukes may play out differently, if at all, in
a disparate treatment case as opposed to a disparate impact
case. As previously noted, see supra note 9, we are dealing
here solely with the claim as the plaintiffs have chosen to
frame it.




                               29
that is challenged.” Id. (quoting Watson, 487 U.S. at 994)
(internal quotation marks and alteration omitted). “Other than
the bare existence of delegated discretion,” the Court
observed, “respondents have identified no ‘specific
employment practice’ – much less one that ties all their 1.5
million claims together. Merely showing that Wal-Mart’s
policy of discretion has produced an overall sex-based
disparity does not suffice.” Id. at 2555-56.

        Here, as in Dukes, the exercise of broad discretion by
an untold number of unique decision-makers in the making of
thousands upon thousands of individual decisions undermines
the attempt to claim, on the basis of statistics alone, that the
decisions are bound together by a common discriminatory
mode. 15 Plaintiffs therefore have not met their burden of
demonstrating that the “defendant’s conduct was common as
to all of the class members,” Sullivan, 667 F.3d at 299, and

       15
           That is not to say that statistics could never be a
viable element of proof of commonality in a disparate impact
case. Indeed, several post-Dukes cases have relied on
statistical analyses in their commonality       determinations.
See, e.g., Floyd v. City of New York, 283 F.R.D. 153, 166-68
(S.D.N.Y. 2012) (relying in part on statistical evidence that
demonstrated racial disparities in the implementation of New
York’s “stop and frisk” policy); Morrow v. Washington, 277
F.R.D. 172, 193 (E.D. Tex. 2011) (concluding that “statistical
evidence that the number of racial and ethnic minorities
stopped in and around [the city] increased dramatically when
the [challenged program] was implemented” helped
demonstrate that the city’s program “operates as a ‘general
policy of discrimination’”).




                              30
thus the District Court was correct to conclude that they do
not share a common question of law or fact. 16

IV.    Conclusion

        Because the putative class lacks commonality, the
District Court did not abuse its discretion by denying the
Plaintiffs’ motion for final approval of the settlement and
certification of the settlement class. Accordingly, we will
affirm the Court’s order.




       16
          That conclusion is not, as Plaintiffs imply, the death
knell for all disparate impact class actions. When a
challenged policy affects class members in roughly the same
manner, that class can likely establish commonality. In fact,
Mt. Holly Garden’s Citizens in Action, Inc. v. Township of
Mt. Holly, a case that Plaintiffs claim is effectively overruled
by the District Court’s reading of Dukes, provides an example
of a disparate impact case that could survive the commonality
inquiry. 658 F.3d 375 (3d Cir. 2011). In that case, African-
American and Hispanic residents of a low-income
neighborhood brought a lawsuit contending that the city’s
proposed redevelopment plan had produced a disparate
discriminatory impact. Id. at 377-81. The contested policy in
that case is readily apparent, and it was applied to each
resident in a common manner. Id. The Mt. Holly plaintiffs
therefore shared a common question, and, although they
chose not to bring their claims as a class action, Dukes would
fully support a finding of commonality in cases like theirs.



                              31
