                              UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                              No. 10-1302


WILLIAM   B.  GRAY,   III,  d/b/a   Greenwood  Clinic  of
Chiropractic, individually and for the benefit and on
behalf of all others similarly situated; B AND K SERVICES
INCORPORATED,

                Plaintiffs – Appellees,

          and

STEVE WALL AND ASSOCIATES LLC, f/k/a SC Insurance Services
LLC, d/b/a Morgan and Associates Incorporated; UNLIMITED
SERVICES OF GREENWOOD INCORPORATED, individually and for
the benefit and on behalf of all others similarly situated,

                Plaintiffs,

          v.

HEARST   COMMUNICATIONS,   INCORPORATED;    WHITE   DIRECTORY
HOLDINGS CAROLINA INCORPORATED,

                Defendants – Appellants,

          and

TALKING PHONE BOOK; SAIA HOLDINGS LLC; SAIA PUBLISHING
COMPANY;   MICHAEL   BROWN;  WHITE   DIRECTORY HOLDINGS
PENNSYLVANIA INCORPORATED; WHITE DIRECTORY OF CAROLINA,
INCORPORATED,

                Defendants.



Appeal from the United States District Court for the District of
South Carolina, at Anderson.     G. Ross Anderson, Jr., Senior
District Judge. (8:08-cv-01833-GRA)
Argued:   December 7, 2010             Decided:   August 25, 2011


Before WILKINSON and SHEDD, Circuit Judges, and Norman K. MOON,
Senior United States District Judge for the Western District of
Virginia, sitting by designation.


Affirmed by unpublished opinion. Judge Shedd wrote the majority
opinion, in which Senior Judge Moon joined.     Judge Wilkinson
wrote a dissenting opinion.


ARGUED: Alan Mansfield, GREENBERG TRAURIG, LLP, New York, New
York, for Appellants.      Daniel S. Haltiwanger, RICHARDSON,
PATRICK, WESTBROOK & BRICKMAN, LLC, Barnwell, South Carolina,
for Appellees.   ON BRIEF: Stephen L. Saxl, William A. Wargo,
GREENBERG TRAURIG, LLP, New York, New York; R. Bruce Shaw,
Stephen G. Morrison, NELSON MULLINS RILEY AND SCARBOROUGH, LLP,
Columbia, South Carolina, for Appellants.   Terry E. Richardson,
Jr., Christopher J. Moore, RICHARDSON, PATRICK, WESTBROOK &
BRICKMAN, LLC, Barnwell, South Carolina; Jon E. Newlon, MCCRAVY,
NEWLON & STURKIE LAW FIRM, P.A., Greenwood, South Carolina, for
Appellees.


Unpublished opinions are not binding precedent in this circuit.




                                2
SHEDD, Circuit Judge:

             Hearst       Communications,         Inc.        and   White     Directory

Holdings Carolina, LLC (collectively “White Directory”) appeal

the district court’s order conditionally certifying class action

claims     against    them      for   breach     of    contract,        breach     of   the

implied covenant of good faith and fair dealing, and unfair and

deceptive trade practices. For the following reasons, we affirm

the certification order.

             These claims, brought by William B. Gray, III, d/b/a

Greenwood Clinic of Chiropractic, and B & K Services, Inc., on

behalf of themselves and other similarly situated advertisers

(collectively “Gray”), stem from Gray’s purchase of advertising

in   The    Talking       Phone    Book   telephone          directories     which      are

published and distributed by White Directory in various markets

throughout        South     Carolina.      Gray        alleges      White     Directory

solicited the class members to enter into advertising contracts

through     the    use     of     concerted    sales         efforts    touting     White

Directory’s       superior        distribution        coverage,     but     that    White

Directory     knowingly         misrepresented         its     actual     distribution,

never made a full distribution as promised, and intentionally

sought to conceal this deception.

             Gray initially asserted seven causes of action, but

eventually sought class certification on only three theories of

relief: breach of contract, breach of the implied covenant of

                                           3
good    faith   and   fair       dealing,       and      unfair    and    deceptive      trade

practices.      After        a        hearing       on     the     motion        for     class

certification, the district court entered an order conditionally

certifying all three class claims. White Directory timely filed

a   petition    for     review.         We    review       the     class      certification

decision for abuse of discretion. Brown v. Nucor Corp., 576 F.3d

149, 152 (4th Cir. 2009).

            Although     White          Directory        raises     several      issues       on

appeal, the primary issue is whether the district court erred in

finding that Gray’s proposed class action claims satisfy the

commonality     and    predominance          requirements          of    Federal       Rule    of

Civil    Procedure     23.       In    granting       certification,           the   district

court determined that each of Gray’s claims ultimately hinges on

whether he can establish a distribution obligation, which is a

question that the district court found is capable of classwide

proof and predominates over any individual issues.                            We agree.

            Federal     Rule      of     Civil      Procedure      23     establishes         the

standard for class certification, and a proposed class must meet

the requirements of both Rule 23(a) and Rule 23(b). First, a

class     action      “must       comply        with       the     four       prerequisites

established     in    Rule       23(a):      (1)      numerosity         of   parties;        (2)

commonality     of    factual          and   legal       issues;    (3)       typicality      of

claims and defenses of class representatives; and (4) adequacy

of representation.” Gunnells v. Healthplan Services, Inc., 348

                                                4
F.3d 417, 423 (4th Cir. 2003) (quoting Fed. R. Civ. P. 23(a)).

Second, the class action must also fall within one of the three

categories    established         in     Rule      23(b).   Id.    Here,       Gray   seeks

certification of his claims under Rule 23(b)(3), which requires

proof that “the questions of law or fact common to class members

predominate        over     any    questions         affecting        only     individual

members, and that a class action is superior to other available

methods      for      fairly         and        efficiently        adjudicating          the

controversy.”       Fed.    R.    Civ.     P.     23(b)(3).    A   plaintiff       seeking

class certification bears the burden of proving the proposed

class complies with the requirements of Rule 23. Windham v. Am.

Brands, Inc., 565 F.2d 59, 65 n.6 (4th Cir. 1977) (en banc).

             Commonality          is       generally        established          when     a

plaintiff’s claims have “questions of law or fact common to the

class.” Fed. R. Civ. P. 23(a)(2). As the Supreme Court recently

clarified, in order to satisfy the commonality requirement, the

plaintiff     must        “demonstrate        that    the     class      members      ‘have

suffered the same injury,’” Wal-Mart Stores, Inc., v. Dukes, 131

S. Ct. 2541, 2551 (2011) (quoting Gen. Tel. Co. of Southwest v.

Falcon, 457 U.S. 147, 156 (1982)), and that the claim “depend[s]

upon   a    common        contention”       that     “is    capable       of    classwide

resolution    –    which     means     that       determination     of   its     truth   or

falsity will resolve an issue that is central to the validity of

each one of the claims in one stroke,” id.

                                              5
            “In a class action brought under Rule 23(b)(3), the

commonality requirement of Rule 23(a)(2) is subsumed under, or

superseded by, the more stringent Rule 23(b)(3) requirement that

questions common to the class predominate over other questions.”

Lienhart v. Dryvit Sys., Inc., 255 F.3d 138, 146 n.4 (4th Cir.

2001) (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 609

(1997)) (internal quotation marks omitted). The Rule 23(b)(3)

predominance       requirement        is     “far    more      demanding”      than     Rule

23(a)(2)’s     commonality            requirement,         and      the     "predominance

inquiry tests whether proposed classes are sufficiently cohesive

to warrant adjudication by representation.” Amchem Prods., 521

U.S. at 623. In other words, to satisfy Rule 23(b)(3), “[c]ommon

questions    must    predominate           over    any    questions        affecting     only

individual    members;    .       .   .    [such     that]     a    class    action    would

achieve      economies       of       time,         effort,        and      expense,     and

promote . . .      uniformity         of    decision      as   to    persons     similarly

situated.” Id. at 615 (internal quotation marks omitted).

            White     Directory           initially      argued      the     contracts    at

issue did not include an express distribution term and therefore

contained     no    contractual            obligation      regarding        distribution.

However,    during    oral    argument,           White      Directory       conceded    the

contracts    do    contain    a       distribution        obligation,         and   further

conceded the distribution plan or scheme is the same for all



                                              6
advertisers      in     any   given     coverage        area.   Thus,     there     is   no

dispute that a uniform distribution obligation exists.

               Having     conceded       the        existence        of     a     uniform

distribution obligation, White Directory’s remaining objections

to class certification carry little weight. White Directory’s

insistence       that    there    can    be       no    proof   of    a     distribution

obligation absent a distribution number, which the contracts do

not contain, is simply a variation of its now-rejected argument

that the contracts contain no distribution obligation at all.

Likewise, because White Directory concedes it has a distribution

obligation under the contract, the contracts’ integration clause

and North Carolina’s parol evidence rule 1 do not bar the use of

extrinsic evidence to determine what that obligation is. See,

e.g., Edwards v. Hill, 703 S.E.2d 452, 456 (N.C. Ct. App. 2010)

(noting extrinsic evidence may be used to explain the terms and

the parties’ expressed intentions in an integrated agreement).

In   fact,     during    oral    argument         White   Directory       described      its

distribution      requirement         under       the   contracts    as     its    “normal

course    of     distributing     books.”          Evidence     of   such       course   of

dealings and course of performance is permissible to explain or

supplement contractual terms. See Phelps v. Spivey, 486 S.E.2d

      1
       The parties agree that North Carolina law applies to
Gray’s breach of contract claim pursuant to the choice of law
provision in the contracts.



                                              7
226, 228-29 (N.C. Ct. App. 1997) (citing N.C. Gen. Stat. § 25-2-

202).

            Finally, White Directory misses the mark by focusing

on the individualized nature of the different representations

that may (or may not) have been made in the negotiations between

each advertiser and White Directory. As we already discussed:

White Directory concedes (and common sense dictates) that the

normal   course        of   distribution       is    the   same     for   all    directory

advertisers       in    a    given    market.        Accordingly,         the   level      of

distribution does not vary based on what advertisers pay.

            It     is       this     uniform        distribution      practice        which

distinguishes Wal-Mart. In Wal-Mart, the putative class sought

to prove Wal-Mart had a general policy of discrimination that

guided     millions          of      allegedly        discriminatory            employment

decisions. However, in Wal-Mart there was a question of whether

a general policy concerning such decisions existed and whether

that    general    policy         applied    to     all    hiring    decisions.       Here,

unlike Wal-Mart, there is no dispute that a uniform policy (or

obligation) exists or that such a uniform policy applies to all

plaintiffs;      White      Directory       concedes       both.    Moreover,        to   the

extent   White     Directory        argues     its    sales     representatives           made

representations         regarding     distribution         that     differed     from     the

distribution      obligation         in     the     contract,      evidence     of    those

representations – unlike evidence of White Directory’s course of

                                              8
dealings    concerning      distribution            -     would       be     barred    by     the

contract’s integration clause.

            Thus, although White Directory’s sales representatives

may have had broad discretion to make different sales pitches to

different      advertisers,      they    could          not    make        binding    promises

regarding      distribution      obligations            which     differed          from     that

reflected in the contract. And, even if the parties may have had

different      expectations      regarding          other      variables        (e.g.       size,

color, location, price, etc.), the common predominating question

focuses on whether White Directory fulfilled that distribution

obligation.

            To summarize, we think the district court was correct:

the   common    question    regarding             White    Directory’s         distribution

obligation predominates over any individual issues because the

putative class members all assert injury from the same action

(i.e.   failure     by     White    Directory             to     follow       its     standard

distribution      practice),       and    determination               of     whether       White

Directory   breached       its   standard           distribution            obligation       will

resolve in one stroke an issue that is central to the validity

of the class members’ breach of contract claims. In addition,

the   district     court    correctly         found        that       Gray    may     rely    on

extrinsic      evidence    to    establish          what       that    normal       course     of

distribution      is.     Because       the        same       distribution          obligation

applies to every advertiser within the same geographic market

                                              9
area,    evidence   of   White    Directory’s   distribution     obligation

would apply to all such advertisers. Whether White Directory

reasonably met that obligation becomes a common question of fact

for the jury to decide. 2

            Accordingly,     we     affirm      the   district      court’s

certification of the class. 3

                                                                   AFFIRMED




     2
       We have reviewed Gray’s breach of a good faith and fair
dealing and unfair trade practices claim and believe he
satisfied his burden of establishing commonality as to those two
claims. Like the breach of contract claim, both of the remaining
claims center on the distribution obligation.
     3
       White Directory also argues that the district court abused
its discretion by (a) certifying Gray’s class on a conditional
basis, (b) failing to conduct a rigorous analysis of the record,
and (c) finding the class satisfied the superiority, typicality,
and adequacy requirements of Rule 23(b)(3). We have reviewed the
record and find no abuse of discretion by the district court on
these matters.



                                     10
WILKINSON, Circuit Judge, dissenting:

            This     case     concerns    whether        advertisers      pursuing      a

breach of contract class action met the commonality requirement

of Rule 23(b)(3) for class certification, that “questions of law

or fact common to class members predominate over any questions

affecting only individual members.”                    Fed. R. Civ. P. 23(b)(3)

(emphasis added).           Plaintiffs contend that this standard was

satisfied,    but    an     irresolvable       paradox    lies    at    the    heart    of

their position.       On the one hand, plaintiffs insist that there

is commonality due to a uniform distribution obligation in the

contracts.      See ante, at 8.          Yet on the other, they nonetheless

concede     that    extrinsic      evidence,      which        inevitably      will     be

individualized, is permissible and necessary to establish what

the normal course of distribution even was.                       See ante, at 9.

Because   the      integrated      contracts      in     fact    lack    any    uniform

distribution term to supply the necessary commonality of law or

fact, I respectfully dissent.


                                          I.

             There     is     no   uniform      distribution        policy      in     the

contracts for the defendants to have allegedly breached.                               The

contracts    would    be     the   logical      place     to    look    for    such     an

obligation and if it were there, the certification could readily

be affirmed.       I have looked high and low for such a distribution


                                          11
term,    but       cannot       find    one    for   the    simple    reason      that   the

contracts in this breach of contract action do not have one.                              It

is the contracts that would have supplied a ready commonality

for something that now is anybody’s guess.

               The    majority’s         conclusion        depends    on    its   assertion

that     “during       oral       argument,      White      Directory        conceded    the

contracts do contain a distribution obligation.”                              Ante, at 6.

But concessions at oral argument, if made, are always to be

taken cautiously and there remains no provision in the contract

in which any distribution obligation is embodied.

               So when and how was what to be distributed to whom?

Plaintiffs         fail    to    cite    any    language      from    the    contracts    to

demonstrate that any such distribution obligation exists within

them.        They don’t do so because they can’t -- such language is

nowhere to be found in the contracts themselves.



                                               II.

               To      establish          a     distribution          requirement        and

demonstrate          its        breach        therefore       requires        resort      to

individualized         extrinsic        evidence     of     exactly    the    kind     deemed

insufficient to support class certification by the Supreme Court

in Wal-Mart under the even lower threshold of Rule 23(a)(2).

See Fed. R. Civ. P. 23(a)(2) (requiring commonality of questions

of     law    or     fact,      but     not    requiring      predominance        of    those

                                                12
questions as in Rule 23(b)(3)); Wal-Mart Stores, Inc. v. Dukes,

131 S. Ct. 2541 (2011).                In Wal-Mart, the Court was troubled by

the lack of proof of a uniform discrimination policy.                                     Likewise,

in   Hearst,     there    is     no     distribution              term   in    the    integrated

contracts speaking to what appellees contend is the common issue

demonstrating       breach       of    contract.               Without    a    contract       term

directly addressing the mechanics of distribution or the exact

number of phone books to be distributed, plaintiffs must turn to

individualized        extrinsic         evidence             to     establish        an     implied

distribution term.



                                                  A.

            To      compensate              for        the        contract’s        silence      on

distribution and construct what might pass for a distribution

policy,    plaintiffs        invite          the       district       court    to     resort    to

extrinsic      evidence        regarding           White       Directory’s       distribution

practices.       See ante, at 9.                   But by focusing on distribution

practices, and not on the representations made to clients with

respect to their individual contracts, plaintiffs are the ones

that      “miss[]     the      mark.”             Ante,      at     8.    Any       practice     of

distribution      still     begs       the        critical         question     of    what    that

distribution number was or whether the clients had any uniform

expectation      of      what     it        would        be.          Absent     an        explicit

distribution      term      in        the     contracts,            uniformity        in    actual

                                                  13
distribution tells us nothing about the reliance interests of

individual clients that could form the basis of a contractual

breach.     This is especially true if the expectations and intent

of each client varied as a product of the individualized sales

representations that client received.

                With respect, the majority is mistaken in its attempt

to    distinguish          Wal-Mart      on    the      basis       of     White    Directory’s

“uniform    distribution            practice.”              Ante,   at     8.      The   relevant

policy     is    not       White    Directory’s         distribution            practices,      but

rather     its       sales    policy,      which       sheds       light    on     the   reliance

interests of the parties and whether they were uniform.                                    And in

this respect, Wal-Mart is squarely on point.                               Wal-Mart’s policy

that granted broad discretion to local supervisors over pay and

promotion        (in         conjunction         with        its     written        policy      of

nondiscrimination)            was    fatal     to      the    plaintiffs’          assertion     of

commonality.          As in Wal-Mart, White Directory’s sales policy was

one   of   broad          discretion.          Specifically,             salesmen    had     broad

discretion       to       craft    their      sales     pitch       to    the    needs     of   the

specific client.

                As    a    result,       there        was     substantial        variation       in

written and oral sales pitches.                        Not all members of the class

saw the same sales aids or the same salespersons nor were they

subject         to     the        same     representations               with      respect       to

distribution.             Evidence of the parties’ intent and expectations

                                                 14
with       respect      to      distribution     will     therefore     necessarily       be

individualized            and      anecdotal,    just    like    the   evidence     deemed

insufficient in Wal-Mart.                  Thus, even if the actual distribution

of   phone        books      was    uniform,    the     lack    of   uniformity     in    the

representations           to       class   members    indicates      that   there    is    no

“common answer” to the critical question of the intent of the

parties to each contract.                  See Wal-Mart, 131 S. Ct. at 2552.



                                                B.

                 The extrinsic evidence and the individualized nature

of the claims deriving from it forecast all sorts of difficult

problems         down   the      road.      Plaintiffs     would     need   to   introduce

individualized evidence, of the kind rejected in Wal-Mart, to

prove      a     specific       numerical    distribution       term   --   specifically

evidence of what sales aids were used or what sales pitches were

given       at     individual         meetings. *        Individualized      evidentiary

hearings will be necessary to prove both injury and any damages

that may flow from a breach of contract.                        In contrast, the class

action device as applied to this variety of circumstances may


       *
       It is worth emphasizing that even appellees have never
identified a uniform distribution policy within the contracts as
the basis for the breach. Rather, their theory of the case has
always rested on extrinsic evidence of the representations about
distribution   made  to   clients  in   sales  aids   and  sales
conversations.



                                                15
force appellants into a one-size-fits-all defense, compromising

what is and should have been their legitimate right to make a

defense tailored to individual circumstances.                        In this case,

therefore, the class action method hardly seems “superior to

other available methods for fairly and efficiently adjudicating

the controversy.”        Fed. R. Civ. P. 23(b)(3).



                                        III.

              In   the   end,   we   are     still   left    with    the    question,

unanswered by the contract, of what the uniform distribution

policy was.        Plaintiffs want to have their cake and eat it too.

They allege commonality for class certification on the basis of

an alleged uniform distribution obligation, and yet expect use

of extrinsic evidence to demonstrate that such an obligation

existed and was breached.            But just as the absence of a uniform

discrimination policy was fatal to certification in Wal-Mart, so

too is the absence of uniform representations with respect to

distribution fatal to the certification effort here.                        Again, it

is the representations that matter, because it is the violation

of   those    representations        that    alone   could    lead    to    a   viable

breach   of    contract    claim.       Accordingly,        there    is    no   way   to

“resolve an issue that is central to the validity of each one of

the claims in one stroke.”             Wal-Mart, 131 S. Ct. at 2545.                  I



                                            16
would therefore reverse the class certification order in this

case.




                             17
