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        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                       United States Court of Appeals
                                                Fifth Circuit

                                                                  FILED
                                                               March 25, 2020
                                  No. 18-40605                  Lyle W. Cayce
                                                                     Clerk

DAVID CRUSON; JOHN DENMAN,

             Plaintiffs - Appellees

v.

JACKSON NATIONAL LIFE INSURANCE COMPANY,

             Defendant - Appellant




                 Appeal from the United States District Court
                      for the Eastern District of Texas


Before CLEMENT, DUNCAN, and OLDHAM, Circuit Judges.
STUART KYLE DUNCAN, Circuit Judge:
      David Cruson and other Texas residents brought a putative class action
lawsuit against Jackson, a life insurance company that sells annuities,
claiming Jackson overcharged them by miscalculating early-withdrawal fees
in breach of the annuities contracts. The district court certified a nationwide
class of similarly-situated investors and determined that Jackson had waived
its personal jurisdiction defense as to any non-Texas class members. On
interlocutory appeal, we conclude that the district court’s order is flawed in the
following respects. First, we conclude that Jackson did not waive its personal
jurisdiction defense as to non-Texas class members. Second, we conclude that
the district court erred in its predominance analysis—specifically, by failing to
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                                      No. 18-40605
assess how state-law variations may impact adjudication of the breach
question and also by failing to consider the individualized evidence relevant to
Jackson’s affirmative defenses of waiver and ratification. Third, we conclude
that the plaintiffs failed to offer a damages model adequate to support class
treatment, an issue they virtually conceded at oral argument. We therefore
vacate the class certification order and remand for further proceedings.
                                             I.
      Jackson National Life Insurance Company, a Michigan corporation, sells
variable annuities to customers nationwide through a network of brokers and
other intermediaries. Because the annuities are structured as long-term
investments, a customer who withdraws money early incurs charges meant to
compensate Jackson for up-front costs, such as commissions paid to brokers
and enhancements added to the annuities. Different charges, collectively called
“surrender charges,” are calculated according to a schedule of percentages that
decrease with the annuity’s age.1 In other words, the longer a customer has
held an annuity, the lower the surrender charge.
      In November 2016, fourteen Texas residents sued Jackson in federal
district court for breach of contract, breach of fiduciary duty, and negligent
misrepresentation. The plaintiffs—who had all bought Jackson annuities
through a Texas broker, Tim Hightower—alleged Jackson had miscalculated
their surrender charges in violation of the annuity contracts, resulting in lost
income for them and a windfall for Jackson. The plaintiffs also alleged their
living and death benefits under the annuities had been improperly reduced due
to the inflated surrender charges. They sought compensatory and punitive



       1 Surrender charges include “withdrawal charges” and “recapture charges,” each
calculated according to a different percentage scale. Withdrawal charges reimburse for costs
like brokers’ commissions, whereas recapture charges reimburse for “contract enhancements”
Jackson adds to each premium paid.
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                                           No. 18-40605
damages, as well as injunctive relief. They also sought to bring claims on behalf
of a nationwide class, consisting of all Jackson customers who had incurred
surrender charges.
         A complex procedural history followed. Jackson moved to dismiss the
complaint under Rules 12(b)(1) and 12(b)(6) for lack of standing and failure to
state a claim. Plaintiffs then filed an amended complaint, and Jackson again
moved to dismiss under Rules 12(b)(1) and 12(b)(6). The district court denied
Jackson’s motion in large part but did dismiss the claims of three plaintiffs on
standing grounds because they had admittedly never incurred surrender
charges.2 In neither of Jackson’s Rule 12 motions did it raise lack of personal
jurisdiction as a defense. In its subsequent answer, however, Jackson stated
that, “[t]o the extent that a class outside of Texas is certified, [it was] denied
that [the district court] has personal jurisdiction over Jackson for the
remaining two-thirds of the putative class members residing outside of Texas.”
         Plaintiffs then moved to certify a nationwide class under Rule 23(b)(3),
alleging Jackson’s inflated surrender charges had harmed roughly 150,000
people. In support, plaintiffs introduced an expert report which proposed a
damages calculation for inflated surrender charges but not for damages
associated with living and death benefits.3 Jackson opposed class certification,
arguing inter alia that contract formation issues, affirmative defenses, and
damages calculations would require individual determinations that would
predominate over common issues. Moreover, Jackson again raised lack of
personal jurisdiction, arguing that specific jurisdiction over Jackson as to
claims by non-Texas residents was foreclosed by the Supreme Court’s recent


         2   Additionally, plaintiffs did not oppose dismissal of their negligent misrepresentation
claim.
        The report stated the expert had not received the necessary information from
         3

Jackson with respect to living and death benefits.
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decision in Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct.
1773 (2017).4 On the same day that Jackson filed its response opposing class
certification, Jackson also moved for summary judgment. The district court
subsequently held a class certification hearing in March 2018.
       After the hearing, but before any certification ruling, all but one of the
original plaintiffs moved to voluntarily dismiss their claims, stating they would
seek relief in state court. While that motion was pending, plaintiffs moved to
amend their complaint to add an additional plaintiff, John Denman, as a
potential class representative, to join David Cruson (the one original plaintiff
not moving to dismiss his claims). While all initial plaintiffs had been clients
of Tim Hightower, Denman had bought annuities through a different broker.



       4  Bristol-Myers held that, in a mass tort action, a California court could not exercise
specific jurisdiction over a non-California corporation with respect to claims by nonresidents
based on conduct and injuries outside California. See 137 S. Ct. at 1781–82. The decision left
open how it would apply to federal courts or class actions. See id. at 1784 (leaving “open the
question whether the Fifth Amendment imposes the same restrictions on the exercise of
personal jurisdiction by a federal court”); id. at 1789 n.4 (Sotomayor, J., dissenting) (noting
decision does not address whether it “would also apply to a class action in which a plaintiff
injured in the forum State seeks to represent a nationwide class of plaintiffs, not all of whom
were injured there”). One commentator has predicted that, while “[n]ationwide class actions
filed against large national corporations in states that are not their homes have not raised
significant personal jurisdiction challenges,” “[t]his is likely to change in wake of Bristol-
Myers Squibb.” 2 WILLIAM B. RUBENSTEIN, NEWBERG ON CLASS ACTIONS § 6:26 (5th ed. 2012)
[hereinafter NEWBERG]. To date, courts have split on how Bristol-Myers applies to class
actions brought in federal court. Compare DeBernardis v. NBTY, Inc., No. 17 C 6125, 2018
WL 461228, at *2 (N.D. Ill. Jan. 18, 2018) (concluding it “more likely than not” that “courts
will apply [Bristol-Myers] to outlaw nationwide class actions . . . where there is no general
jurisdiction over the Defendants”), and Molock v. Whole Foods Mkt. Grp., Inc., No. 18-7162,
2020 WL 1146733, at *9–12 (D.C. Cir. Mar. 10, 2020) (Silberman, J., dissenting) (concluding
Bristol-Myers applies to class actions in federal court), with Casso’s Wellness Store & Gym,
L.L.C. v. Spectrum Lab. Prods., Inc., No. 17-2161, 2018 WL 1377608, at *5 (E.D. La. Mar. 19,
2018) (agreeing with courts that “have declined to extend the holding in Bristol-Myers to class
actions” given “the material differences between mass tort actions and class actions”), and
Mussat v. IQVIA, Inc., No. 19-1204, 2020 WL 1161166, at *2–4 (7th Cir. Mar. 11, 2020)
(Bristol-Myers does not apply to class actions because only named class representatives, not
unnamed class members, must demonstrate personal jurisdiction). See also, e.g., 2 NEWBERG
§ 6:26 (noting “district court[ ] decisions have advanced divergent interpretations of Bristol-
Myers Squibb’s effect on class action practice”) (and collecting cases).
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Jackson opposed this addition, claiming it was too late to add a named party
and that doing so would prejudice Jackson.
      On May 9, 2018, the district court issued an order addressing three
issues. First, the court granted plaintiffs’ motion to add Denman. Second, the
court held that Jackson had waived any personal jurisdiction defense by failing
to raise it in its Rule 12 motions and, alternatively, by litigating on the merits
of plaintiffs’ claims. Third, the district court certified a nationwide class
composed of “[a]ll persons who, within the applicable statute of limitations,
purchased [various] variable annuity products from [Jackson] or its affiliates,
and incurred a Surrender Charge during their ownership of such product.”5
The court found that determining the correct calculation of surrender charges
under Jackson’s contracts, an issue common to all plaintiffs, would
“predominate over any questions affecting only individual members.” See FED.
R. CIV. P. 23(b)(3). The court further held that predominance was not defeated
by issues pertaining to affirmative defenses or damages calculations.
      We granted Jackson permission to appeal the district court’s class
certification order under Federal Rule of Civil Procedure 23(f). On appeal,
Jackson challenges the certification order on three fronts. First, Jackson
reasserts its claim that the district court lacks personal jurisdiction over it with
respect to the claims of potential class members outside Texas, and argues that
the court erred in holding that Jackson waived its personal jurisdiction
defense. Second, Jackson contends that the district court erred in concluding
that issues common to the class predominated over individualized issues.




      5 The certified class excludes Jackson investors whose contracts were issued in
Louisiana or Tennessee.
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                                     No. 18-40605
Finally, Jackson argues that the district court erred in certifying a class when
plaintiffs failed to provide a damages model.6
                                            II.
      Our court has not settled the standard for reviewing a district court’s
finding of waiver of personal jurisdiction. See In re Depuy Orthopaedics, Inc.,
870 F.3d 345, 351 n.43 (5th Cir. 2017) (stating “[w]e need not decide th[e]
standard-of-review question” for personal jurisdiction waiver); id. at 359
(Jones, J., concurring in part and dissenting in part) (noting majority “takes
no firm position on . . . [whether] waiver of personal jurisdiction should be
reviewed for abuse of discretion”). Several circuits review waiver for abuse of
discretion, reasoning that the finding pertains to the “[district court’s] broad
duties in managing the conduct of cases pending before it.” Lechoslaw v. Bank
of Am., N.A., 618 F.3d 49, 55–56 (1st Cir. 2010) (quoting United States v.
Ziegler Bolt & Parts Co., 111 F.3d 878, 882 (Fed. Cir. 1997)); see also, e.g.,
InfoSpan, Inc. v. Emirates NBD Bank PJSC, 903 F.3d 896, 900 (9th Cir. 2018);
Hamilton v. Atlas Turner, Inc., 197 F.3d 58, 60 (2d Cir. 1999). By contrast, the
Tenth Circuit treats the issue as a mixed question of law and fact, reviewing
pertinent factual findings for clear error but legal conclusions de novo. Am.
Fid. Assurance Co. v. Bank of N.Y. Mellon, 810 F.3d 1234, 1237 (10th Cir.
2016). Much recommends the Tenth Circuit’s nuanced approach, given the
presence of personal jurisdiction is itself a legal question reviewed de novo. See
Patin v. Thoroughbred Power Boats Inc., 294 F.3d 640, 652 (5th Cir. 2002)
(“Whether in personam jurisdiction can be exercised over a defendant is a
question of law subject to de novo review by this court.”); see also, e.g.,
Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins. Co., 921 F.3d 522,


       6 The district court stayed proceedings pending appeal, except for Jackson’s pending
summary judgment motion. The court subsequently granted summary judgment for Jackson
on the breach of fiduciary duty claims but denied summary judgment on all other claims.
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                                  No. 18-40605
539 (5th Cir. 2019) (reviewing de novo “a district court’s decision to grant a
motion to dismiss for lack of personal jurisdiction”). We need not choose sides
in this debate, however. As explained below, even under an abuse of discretion
standard we conclude the district court committed reversible error in finding
Jackson waived the defense of personal jurisdiction.
      We review the district court’s class certification order for abuse of
discretion. Crutchfield v. Sewerage & Water Bd. of New Orleans, 829 F.3d 370,
375 (5th Cir. 2016); Union Asset Mgmt. Holding A.G. v. Dell, Inc., 669 F.3d 632,
638 (5th Cir. 2012). We review the legal conclusions in the order de novo,
“[b]ecause . . . a court by definition abuses its discretion when it applies an
incorrect legal standard.” Steering Comm. v. Exxon Mobil Corp., 461 F.3d 598,
601 (5th Cir. 2006). While retaining broad discretion to certify a class, “[a]
district court must rigorously analyze Rule 23’s prerequisites before certifying
a class.” Spence v. Glock, Ges.m.b.H., 227 F.3d 308, 310 (5th Cir. 2000) (citing
Gen. Tel. Co. v. Falcon, 457 U.S. 147, 161 (1982); Castano v. Am. Tobacco Co.,
84 F.3d 734, 740 (5th Cir. 1996)). Finally, “if the district court has committed
legal error in the predominance inquiry, reversal is required.” Id. at 311.
                                       III.
                                        A.
      We first consider whether Jackson waived its defense of personal
jurisdiction, either by failing to raise the defense in its Rule 12 motions or else
by litigating the merits. Jackson denies both conclusions. It argues that the
personal jurisdiction defense was not “available” as to the putative class of non-
Texas residents (and so could not be waived) when it filed its Rule 12 motions.
Jackson also argues that its litigation conduct was consistent with preserving
its objection to personal jurisdiction, which it raised in both its answer and




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                                        No. 18-40605
opposition to class certification. We agree with Jackson that it did not waive
its personal jurisdiction defense.7
       Federal Rule of Civil Procedure 12(h)(1) relevantly provides that a party
waives the defense of lack of personal jurisdiction by “omitting it from a motion
in the circumstances described in Rule 12(g)(2).” FED. R. CIV. P. 12(h)(1)(A).
Rule 12(g)(2) prohibits a party from a raising a defense “that was available to
the party but omitted from its earlier [Rule 12] motion.” FED. R. CIV. P. 12(g)(2).
Thus, lack of personal jurisdiction is waived if a party omits the defense from
a Rule 12 motion and the defense was “available.” See Jackson v. FIE Corp.,
302 F.3d 515, 523 (5th Cir. 2002); Cactus Pipe & Supply Co. v. M/V
Montmartre, 756 F.2d 1103, 1107–08 (5th Cir. 1985). See generally 5C CHARLES
ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE
§ 1391 (3d ed. 2004) [hereinafter WRIGHT & MILLER] (discussing waiver under
Rule 12(h)(1)). A defense is not “available” under Rule 12(g)(2), for instance, if
“its legal basis did not [then] exist,” Gilmore v. Palestinian Interim Self-Gov’t
Auth., 843 F.3d 958, 964 (D.C. Cir. 2016), or if the defense would have been
“futile” in the sense it was precluded by controlling precedent, In re Micron
Tech., Inc., 875 F.3d 1091, 1097–98 (Fed. Cir. 2017) (collecting decisions). See
generally 5C WRIGHT & MILLER § 1388 (discussing “available” factor under
Rule 12(g)).
       The issue, then, is whether the personal jurisdiction defense was
“available” under Rule 12(g)(2) when Jackson filed its Rule 12 motions. We



       7  We decline Jackson’s request to address the merits of its personal jurisdiction
defense for the first time on appeal. “[A]s we have repeatedly observed, we are a court of
review, not first view.” Lopez v. Pompeo, 923 F.3d 444, 450 (5th Cir. 2019) (Ho, J., concurring).
Because we find that Jackson did not waive the defense, and because we vacate the district
court’s certification order and remand for further proceedings, Jackson is free to raise the
defense again should plaintiffs seek to re-certify a class. We express no opinion on the merits
of the personal jurisdiction issue, should it be raised again on remand.
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                                       No. 18-40605
conclude it was not. Jackson’s objection to personal jurisdiction concerned only
class members who were non-residents of Texas. Those members, however,
were not yet before the court when Jackson filed its Rule 12 motions. What
brings putative class members before the court is certification: “Certification
of a class is the critical act which reifies the unnamed class members and,
critically, renders them subject to the court’s power.” In re Checking Account
Overdraft Litig., 780 F.3d 1031, 1037 (11th Cir. 2015); accord Molock, 2020 WL
1146733, at *3 (“Putative class members become parties to an action—and thus
subject to dismissal—only after class certification.” (citing In re Bayshore Ford
Trucks Sales, Inc., 471 F.3d 1233, 1245 (11th Cir. 2006))).8 When Jackson filed
its pre-certification Rule 12 motions, however, the only live claims belonged to
the named plaintiffs, all Texas residents as to whom Jackson conceded
personal jurisdiction. See, e.g., Police & Fire Ret. Sys. of Detroit v. IndyMac
MBS, Inc., 721 F.3d 95, 112 n.22 (2d Cir. 2013) (noting “until certification there
is no class action but merely the prospect of one; the only action is the suit by
the named plaintiffs” (quoting Morlan v. Universal Guar. Life Ins. Co., 298
F.3d 609, 616 (7th Cir. 2002))).9 Thus, at that time, a personal jurisdiction


       8 See also, e.g., Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 75 (2013) (observing
“a putative class acquires an independent legal status once it is certified under Rule 23”);
Smith v. Bayer Corp., 564 U.S. 299, 313 (2011) (disapproving “the novel and surely erroneous
argument that a nonnamed class member is a party to the class-action litigation before the
class is certified” (quoting Devlin v. Scardelletti, 536 U.S. 1, 16 n.1 (2002) (Scalia, J.,
dissenting))); Sosna v. Iowa, 419 U.S. 393, 399 (1975) (upon certification, “the class of
unnamed persons . . . acquired a legal status separate from the [named plaintiff]”); Zeidman
v. J. Ray McDermott & Co., 651 F.2d 1030, 1045 (5th Cir. Unit A July 1981) (explaining “the
act of certification brought the unnamed members of the class before the court for Article III
purposes”) (discussing Sosna).
       9 See also, e.g., Gibson v. Chrysler Corp., 261 F.3d 927, 940 (9th Cir. 2001) (observing
that “a class action, when filed, includes only the claims of the named plaintiff or plaintiffs”
and that “[t]he claims of unnamed class members are added to the action later, when the
action is certified as a class under Rule 23”); Biscone v. JetBlue Airways Corp., 681 F. Supp.
2d 383, 386 (E.D.N.Y. 2010) (“As a general rule, until a class action is certified pursuant to
Rule 23 of the Federal Rules of Civil Procedure, the claims of potential class members cannot
be considered.”). See generally 2 NEWBERG § 7:12 (explaining that, before certification,
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                                      No. 18-40605
objection respecting merely putative class members was not “available,” as
Rule 12(g)(2) requires for waiver.
       We find additional support for this conclusion in an analogous Eleventh
Circuit decision, In re Checking Account Overdraft Litigation. That case
addressed whether a defendant, who had waived arbitration against named
plaintiffs prior to class certification, should also be “preclude[d] . . . from
compelling arbitration of the unnamed putative class members’ claims.” 780
F.3d at 1034. The district court had extended the waiver to the putative class
members, id. at 1036, but the Eleventh Circuit reversed. It explained that,
“[a]bsent class certification, there is no justiciable controversy between [the
defendant] and the unnamed putative class members,” who “[were] not yet
before the court.” Id. at 1037. Consequently, any ruling by the district court
purporting to foreclose arbitration of “hypothetical” claims by “future” class
members was, the court concluded, “an impermissible ‘advisory opinion on an
abstract proposition of law.’” Id. (quoting Hall v. Beals, 396 U.S. 45, 48 (1969)
(per curiam)) (cleaned up).
       Applying the Eleventh Circuit’s reasoning here, it is evident why a
personal jurisdiction objection was not “available” with respect to the putative
claims of unnamed Texas non-residents. Prior to certification, those non-
residents were “not yet before the [district] court,” their possible “future”
claims against Jackson were “hypothetical,” and so there was no “justiciable
controversy between [Jackson] and [them].” Id. To rule that Jackson was
required, on pain of waiver, to raise a personal jurisdiction objection against
those putative class members would validate “the novel and surely erroneous
argument that a nonnamed class member is a party to the class-action



“putative absent class members . . . remained complete nonparties” and so could not be bound
by a dispositive motion granted to defendants).
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                                        No. 18-40605
litigation before the class is certified.” Bayer Corp., 564 U.S. at 313 (quoting
Devlin, 536 U.S. at 16 n.1 (Scalia, J., dissenting)). That we decline to do.10
       Alternatively, the district court ruled that Jackson waived the defense
“by delaying in challenging personal jurisdiction and substantially litigating
on the merits.” In particular, the district court faulted Jackson for “waiting
exactly seven months after Bristol-Myers” to raise a personal jurisdiction
objection. This reasoning is flawed. Jackson did not “delay” in raising an
objection to personal jurisdiction—it raised the defense in its answer and in its
opposition to class certification. Prior to class certification, we have already
explained, a personal jurisdiction defense as to putative non-resident class
members was not “available” under Rule 12. Although Bristol-Myers provided
new legal support for Jackson’s objection, the Supreme Court’s decision did not
make the objection “available.” Certification did.
       Furthermore, nothing in Jackson’s subsequent litigation conduct was
inconsistent with maintaining an objection to personal jurisdiction. We have
“long held that a non-resident defendant may participate in litigation without
submitting to the court’s jurisdiction so long as it maintains its objection to
personal jurisdiction.” Halliburton, 921 F.3d at 540. The district court focused
on Jackson’s summary judgment motion, but the same day that was filed


       10  Instead of addressing Jackson’s Rule 12 argument, the district court suggested
Jackson waived the argument by raising it in a sur-reply. We disagree. Jackson raised the
personal jurisdiction defense in opposing the motion for class certification. In reply, plaintiffs
argued for the first time that Jackson had waived the defense. Thus, the sur-reply was
Jackson’s first opportunity to contest waiver, and by briefing the issue there Jackson
preserved its argument. See, e.g., Hanson Pipe & Prods., Inc. v. Bridge Techs., LLC, 351 F.
Supp. 2d 603, 614 (E.D. Tex. 2004) (if a reply brief raised a new argument, the “sur-reply
would have been the appropriate time to counter [that] argument”), aff’d, 160 F. App’x 380
(5th Cir. 2005). Nor did Jackson concede personal jurisdiction as to non-Texas putative class
members in the parties’ Rule 26(f) Joint Conference Report. That report merely restated the
plaintiffs’ jurisdictional assertions—it did not reflect Jackson’s acquiescence to those
assertions.


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Jackson also filed its opposition to class certification, which raised lack of
personal jurisdiction as to “non-Texas putative class members.” In other words,
Jackson’s summary judgment motion did not waive its personal jurisdiction
defense because its contemporaneous litigation conduct “reflect[ed] a
continuing objection to the power of the court to act over the defendant’s
person.” PaineWebber Inc. v. Chase Manhattan Private Bank (Switz.), 260 F.3d
453, 460 (5th Cir. 2001) (quoting Alger v. Hayes, 452 F.2d 841, 844 (8th Cir.
1972)); see also Halliburton, 921 F.3d at 540 (explaining a non-resident
defendant may “simultaneously protest personal jurisdiction while vigorously
advocating the merits of his case” (quoting Toshiba Int’l Corp. v. Fritz 993 F.
Supp. 571, 573–74 (S.D. Tex. 1998))).
      In sum, we conclude the district court legally erred, and thus abused its
discretion, in finding Jackson waived its personal jurisdiction defense.
                                        B.
      We next consider the propriety of the district court’s order certifying a
nationwide class of Jackson customers who have incurred surrender charges.
Jackson argues that the district court erred in its Rule 23(b)(3) analysis by
concluding that common issues would predominate. According to Jackson,
individual issues predominate both in determining breach and in evaluating
affirmative defenses. Although we recognize that cases involving form
contracts are often prime candidates for class certification because of the
common interpretive questions at stake, we agree with Jackson that the
district court’s predominance analysis was deficient.
      “To obtain class certification, parties must satisfy [Federal Rule of Civil
Procedure] 23(a)’s four threshold requirements, as well as the requirements of
Rule 23(b)(1), (2), or (3).” Ludlow v. BP, P.L.C., 800 F.3d 674, 682 (5th Cir.
2015) (alteration in original) (quoting Funeral Consumers All., Inc. v. Serv.
Corp. Int'l, 695 F.3d 330, 345 (5th Cir. 2012)). See generally Amchem Prods.,
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                                       No. 18-40605
Inc. v. Windsor, 521 U.S. 591, 613–14 (1997). After finding Rule 23(a)
satisfied,11 the district court certified the nationwide class under Rule 23(b)(3),
which embodies two requirements: (1) “[c]ommon questions must ‘predominate
over any questions affecting only individual members’”; and (2) “class
resolution must be ‘superior to other available methods for the fair and efficient
adjudication of the controversy.’” Amchem, 521 U.S. at 615 (quoting FED. R.
CIV. P. 23(b)(3)).
       Jackson’s arguments on appeal address only the district’s court’s
findings on the “predominance” prong, which Jackson contends are flawed in
two ways. First, Jackson argues the court failed to recognize that individual
issues would predominate over common issues of contract interpretation.
Second, Jackson argues the court misconstrued the law applicable to Jackson’s
affirmative defenses and thus failed to appreciate the individual issues that
would be raised by those defenses.
       Before addressing those issues, we summarize the standards that guide
our analysis. “Where the plaintiff seeks to certify a class under Rule 23(b)(3),
the Rules demand ‘a close look at the case before it is accepted as a class
action.’” Madison v. Chalmette Refining, L.L.C., 637 F.3d 551, 554 (5th Cir.
2011) (quoting Amchem, 521 U.S. at 615). We have long cautioned that “[a]
district court must conduct a rigorous analysis of the rule 23 prerequisites
before certifying a class.” Castano, 84 F.3d at 740. Furthermore, “[t]he plain
text of Rule 23 requires the court to ‘find,’ not merely assume, the facts favoring



       11The Rule 23(a) prerequisites are (1) numerosity, (2) commonality, (3) typicality, and
(4) adequacy of representation. See Amchem, 521 U.S. at 613. Jackson does not directly
challenge the district court’s findings that the class satisfies those prerequisites. While
Jackson obliquely contests the commonality finding as to contract interpretation issues, its
arguments on that point are subsumed into its predominance argument. We therefore do not
consider any of the district court’s Rule 23(a) findings and focus only on the Rule 23(b)(3)
predominance findings.
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class certification.” Unger v. Amedisys Inc., 401 F.3d 316, 321 (5th Cir. 2005)
(quoting FED. R. CIV. P. 23(b)(3)). “[I]t is the party seeking certification who
bears the burden of establishing that the requirements of Rule 23 have been
met.” Bell Atl. Corp. v. AT&T Corp., 339 F.3d 294, 301 (5th Cir. 2003).
       Our focus here is the Rule 23(b)(3) predominance requirement, which
“tests whether proposed classes are sufficiently cohesive to warrant
adjudication by representation.” Torres v. S.G.E. Mgmt., L.L.C., 838 F.3d 629,
636 (5th Cir. 2016) (en banc) (quoting Amchem, 521 U.S. at 623). Predominance
is a “far more demanding” hurdle than Rule 23(a)’s commonality requirement.
Amchem, 521 U.S. at 623–24; see also, e.g., Maldonado v. Ochsner Clinic
Found., 493 F.3d 521, 525 (5th Cir. 2007) (predominance is “more demanding
than the commonality requirement of Rule 23(a)” (quoting Bell Atl., 339 F.3d
at 301)). Assessing predominance “calls upon courts to give careful scrutiny to
the relation between common and individual questions in a case.” Tyson Foods,
Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016). The Supreme Court has
distinguished common and individual questions this way:
       An individual question is one where “members of a proposed class
       will need to present evidence that varies from member to member,”
       while a common question is one where “the same evidence will
       suffice for each member to make a prima facie showing [or] the
       issue is susceptible to generalized, class-wide proof.”
Id. (alteration in original) (quoting 2 NEWBERG § 4:50); see also, e.g.,
Crutchfield, 829 F.3d at 376–78 (discussing individual versus common
questions).12


       12 See also, e.g., Avritt v. Reliastar Life Ins. Co., 615 F.3d 1023, 1029 (8th Cir. 2010)
(explaining that “[a]t the core of Rule 23(b)(3)’s predominance requirement is the issue of
whether the defendant’s liability to all plaintiffs may be established with common evidence,”
or, conversely, whether “the members of a proposed class will need to present evidence that
varies from member to member” (quoting Blades v. Monsanto Co., 400 F.3d 562, 566 (8th Cir.
2005))); In re Visa Check/Mastermoney Antitrust Litig., 280 F.3d 124, 136 (2d Cir. 2001)
(predominance requires showing that issues “subject to generalized proof” predominate over
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                                       No. 18-40605
       When “one or more of the central issues in the action are common
       to the class and can be said to predominate, the action may be
       considered proper under Rule 23(b)(3) even though other
       important matters will have to be tried separately, such as
       damages or some affirmative defenses peculiar to some individual
       class members.”
Tyson Foods, 136 S. Ct. at 1045 (quoting 7AA WRIGHT & MILLER § 1778).
       “At bottom, the [predominance] inquiry requires the trial court to weigh
common issues against individual ones and determine which category is likely
to be the focus of a trial.” Crutchfield, 829 F.3d at 376; see also, e.g., Sandwich
Chef of Tex., Inc. v. Reliance Nat’l Indem. Ins. Co., 319 F.3d 205, 218 (5th Cir.
2003) (court considers “how a trial on the merits would be conducted if a class
were certified”). The court must “go[ ] beyond the pleadings” to “understand
the claims, defenses, relevant facts, and applicable substantive law.” Madison,
637 F.3d at 555 (quoting Unger, 401 F.3d at 321). “This, in turn, ‘entails
identifying the substantive issues that will control the outcome, assessing
which issues will predominate, and then determining whether the issues are
common to the class,’ a process that ultimately ‘prevents the class from
degenerating into a series of individual trials.’” Id. (quoting O’Sullivan v.
Countrywide Home Loans, Inc., 319 F.3d 732, 738 (5th Cir. 2003)).
       Having set out the governing standards, we turn to Jackson’s arguments.
                                              1.
       Jackson first argues that, contrary to the district court’s ruling,
individual issues will predominate over common issues in determining
whether Jackson breached the annuity contracts by miscalculating surrender
charges. The court relied on Jackson’s stipulations that there are “no material


issues “subject only to individualized proof” (quoting Rutstein v. Avis Rent–A–Car Sys., Inc.,
211 F.3d 1228, 1233 (11th Cir. 2000))), overruled on other grounds by In re Initial Pub.
Offerings Sec. Litig., 471 F.3d 24 (2d Cir. 2006); Beatty v. CenturyTel, Inc., 511 F.3d 554, 564
(6th Cir. 2007) (same).
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                                  No. 18-40605
differences” in the pertinent contract language and that Jackson calculates
surrender charges “uniformly”; it also noted that “neither party asserts that
the contract is ambiguous.” The court thus reasoned that the only evidence
necessary to prove breach is “whether class members purchased an annuity
policy with Jackson and whether they suffered a surrender charge.” The only
disputed issue, the court continued, was whether “Jackson’s method of
calculating surrender charges is permitted by Jackson’s contracts” and that
could be done on a class-wide basis: “For every class member, the answer will
uniformly be either ‘yes’ or ‘no.’” Jackson argued that, to the contrary,
determining breach would involve consideration of extrinsic evidence—for
example, prospectuses accompanying the annuity contracts and individual
brokers’ advice illustrating the surrender charge calculations—that must be
assessed on a case-by-case basis according to varying state-law standards. The
court rejected Jackson’s argument, reasoning that courts “routinely” certify
class actions involving “form contracts” like Jackson’s, and that it was “hard to
see what extrinsic evidence would be relevant to interpreting [such]
unambiguous form contract[s].” Jackson renews its arguments on appeal. We
agree with Jackson that the district court’s predominance inquiry failed to
rigorously analyze the potential impact of state-law variations on the question
of breach, as our precedents require.
      Where a proposed class stretches across multiple jurisdictions, we have
underscored that a Rule 23(b)(3) analysis must carefully consider variations in
pertinent state laws:
      [I]n a class action governed by the laws of multiple
      states, . . . “variations in state law may swamp any common issues
      and defeat predominance.” The party seeking certification of a
      nationwide class must therefore “provide an ‘extensive analysis’ of
      state law variations to reveal whether these pose ‘insuperable
      obstacles.’” And the district court must then “consider how

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                                       No. 18-40605
       [variations in state law] affect predominance.” Failure to engage in
       an analysis of state law variations is grounds for decertification.

Cole v. Gen. Motors Corp., 484 F.3d 717, 724 (5th Cir. 2007) (citations omitted)
(first quoting Castano, 84 F.3d at 741; then quoting Spence, 227 F.3d at 313;
and then quoting Castano, 84 F.3d at 740). Here, the district court provided
only a cursory analysis on this key point. That is reversible error. See, e.g.,
Castano, 84 F.3d at 742 (vacating predominance finding because court
“conducted a cursory review of state law variations and gave short shrift to the
defendants’ arguments concerning [state-law] variations”).13
       As noted, the district court’s decision not to delve into state-law
variations rested on its conclusion that the central interpretive issue in the
case could be resolved by parsing the contract language alone. The court
thought it unlikely that extrinsic evidence was “relevant to interpreting
unambiguous form contract terms.” Even if that is right, the court needed to
conduct an “extensive analysis” of whether any state-law variations existed
and, if they did, determine whether those variations defeated predominance.
Cole, 484 F.3d at 724. Whether the district court’s conclusion is ultimately
correct or not, its failure to conduct a thorough analysis was reversible error.
       We recognize that suits involving form contracts often lend themselves
to class treatment. See, e.g., Sacred Heart Health Sys., Inc. v. Humana Military
Healthcare Servs., Inc., 601 F.3d 1159, 1171 (11th Cir. 2010) (observing “[i]t is
the form contract, executed under like conditions by all class members, that
best facilitates class treatment”); Kolbe v. BAC Home Loans Servicing, LP, 738
F.3d 432, 441 (1st Cir. 2013) (explaining that class certification is generally


       13 This may have been due, in part, to the plaintiffs’ failure to satisfy their burden of
providing the district court with an “extensive analysis” of pertinent state-law variations.
Cole, 484 F.3d at 724. While plaintiffs did submit a chart addressing state laws on certain
interpretation issues, they provided no analysis of state-law variations on the use of extrinsic
evidence.
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                                  No. 18-40605
proper where the outcome will not depend on extrinsic evidence “that would be
different for each putative class member”); 2 NEWBERG § 3.24 (explaining that
claims arising out of “form contracts” are often “particularly appropriate for
class action treatment”). But this is not always so. Predominance in form
contract cases may be defeated, for instance, “if individualized extrinsic
evidence bears heavily on the interpretation of the class members’
agreements,” or if “there may be considerable variation in the state law under
which any extrinsic evidence would have to be scrutinized.” Sacred Heart
Health Sys., 601 F.3d at 1176–77, 1180. Because of this possibility, it is
incumbent on the district court to undertake a “rigorous analysis” of the
predominance requirements, “including the question of whether variations in
state law will destroy predominance.” Id. at 1180; see also, e.g., Spence, 227
F.3d at 313 (noting “the court’s duty to determine whether the plaintiffs have
borne their burden where a class will involve multiple jurisdictions and
variations in state law”); cf., e.g., McKeage v. TMBC, LLC, 847 F.3d 992, 999
(8th Cir. 2017) (predominance requirement met in nationwide form contract
class where, inter alia, all claims were governed by Missouri law). One such
rigorous predominance analysis appears in Steinberg v. Nationwide Mutual
Insurance Co., involving a 46-state putative class claiming breach of standard-
form car insurance contracts. 224 F.R.D. 67, 76 (E.D.N.Y. 2004). Assisted by
the plaintiffs’ extensive “50-state breach of contract analysis,” the district court
concluded that states could be grouped into four categories based on their
varying contract interpretation laws. Id. at 77–78. The court found that these
state-law differences would be manageable in the class context or,
alternatively, that sub-classes could be created based on the four categories.
Id. at 78. This is the kind of “extensive analysis,” Cole, 484 F.3d at 724, of the
potential impact of state-law variations on predominance that the district court
should conduct on remand.
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                                 No. 18-40605
                                       2.
      Jackson next argues that predominance is also defeated by its
affirmative defenses of waiver and ratification. Those defenses, Jackson urges,
depend on individual class members’ knowledge of the facts surrounding
formation of the annuity contracts, thus privileging individual issues over
common ones. The district court disagreed, rejecting the salience of Jackson’s
affirmative defenses to predominance. We agree with Jackson that the district
court erred in assessing the impact of Jackson’s affirmative defenses on
predominance.
      “We have noted that the ‘predominance of individual issues necessary to
decide an affirmative defense may preclude class certification.’” Gene & Gene
LLC v. BioPay LLC, 541 F.3d 318, 327 (5th Cir. 2008) (quoting In re
Monumental Life Ins. Co., 365 F.3d 408, 420 (5th Cir. 2004)). Even in form
contract cases, “[t]he risk of voluminous and individualized extrinsic proof
[defeating predominance] runs particularly high where a defendant raises
substantial affirmative defenses to breach.” Sacred Heart Health Sys., 601 F.3d
at 1177. Here the pertinent defenses are waiver and ratification. The
gravamen of Jackson’s waiver defense is that individual class members waived
any objection to the calculation of surrender charges by knowingly accepting
charges calculated according to Jackson’s formula. See, e.g., Jernigan v.
Langley, 111 S.W.3d 153, 156 (Tex. 2003) (under Texas law, waiver is “an
intentional relinquishment of a known right or intentional conduct
inconsistent with claiming that right” (quoting Sun Expl. & Prod. Co. v.
Benton, 728 S.W.2d 35, 37 (Tex. 1987))). Similarly, the gravamen of Jackson’s
ratification defense is that individual class members ratified Jackson’s
calculation of surrender charges by accepting those charges with full
knowledge of the surrounding facts. See, e.g., Fortune Prod. Co. v. Conoco, Inc.,
52 S.W.3d 671, 678 (Tex. 2000) (“Ratification is the adoption or confirmation
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                                  No. 18-40605
by a person with knowledge of all material facts of a prior act which did not
then legally bind him and which he had the right to repudiate.” (quoting
Spellman v. Am. Universal Inv. Co., 687 S.W.2d 27, 29 (Tex. App.—Corpus
Christi 1984, writ ref’d n.r.e.))). Jackson argues that assessing the validity of
these affirmative defenses “will require individual inquiries into the
knowledge and actions of each class member, overwhelming predominance.”
      The district court rejected this argument. It reasoned that these
affirmative defenses would require class members to know not only the facts
informing contract formation, such as the advice given by brokers or the
contents of prospectuses annexed to the contracts, but also the “proper
interpretation” of the surrender charge provisions and the “unlawfulness” of
Jackson’s conduct. Because customers could not have been aware of this
knowledge “until either liability is established or Jackson admits that its
actions were unlawful,” the district court held that Jackson’s affirmative
defenses could not defeat predominance. Jackson argues that the district court
legally erred in requiring this kind of legal knowledge to trigger waiver or
ratification. We agree.
      Generally speaking, the knowledge contemplated in the defenses of
waiver or ratification is knowledge of the essential facts of a transaction, not
the legal effects of those facts. See, e.g., RESTATEMENT (SECOND) OF CONTRACTS
§ 93 (1981) (making various promises non-binding unless promisor “knew or
had reason to know the essential facts . . . but his knowledge of the legal effects
of the facts is immaterial”); id. § 84 cmt. b (rejecting for waiver purposes “the
incorrect inference that the promisor must know his legal rights,” while
explaining “it is sufficient if he has reason to know the essential facts”);
WILLISTON ON CONTRACTS § 39:22 (4th ed. 1999) (explaining “a waiver made
with knowledge of facts which would put an ordinary person on inquiry is
sufficient” but “it is not necessary that the party charged with a waiver be
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                                 No. 18-40605
aware of the exact legal nature or scope of the right being relinquished or of
the legal effect of the right at issue”). Based on these authorities, one well-
reasoned Texas decision explains that “[p]roof regarding a party’s actual
understanding of the legal consequences of those [essential] facts is not
required” to establish waiver, because “parties are presumed to know and
understand the legal effect of their contracts and waivers.” Trelltex, Inc. v.
Intecx, LLC, 494 S.W.3d 781, 792 & n.10 (Tex. App.—Houston [14th Dist.]
2016, no pet.) (and collecting decisions). Taking this proper view of the
knowledge requirement, a defense of waiver or ratification would be based on
customers’ knowledge of facts, not their knowledge of the legal effect of those
facts, such as the proper interpretation of the surrender charge provisions or
the unlawfulness of Jackson’s conduct.
      The district court cited no authority supporting its view that Jackson’s
affirmative defenses require class members’ knowledge of legal conclusions.
The court cited In re Checking Account Overdraft Litigation, 307 F.R.D. 630,
650 (S.D. Fla. 2015), but that decision simply states the general rule that
affirmative defenses like ratification and waiver “require a party to have had
full knowledge of the circumstances in order for the defense to prevail.” In that
case predominance was not defeated by those defenses, however, because the
defendant had allegedly engaged in widespread concealment of its illegal
scheme—meaning that plaintiffs could “undercut [its] defenses through the
use of common evidence.” Id. at 651. No such allegations are present here. The
court also cited Allen v. Holiday Universal, 249 F.R.D. 166, 174 (E.D. Pa. 2008),
but that decision again recites the general rule that a “party charged with




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                                       No. 18-40605
ratification must have acted . . . with full knowledge of all material facts,” while
saying nothing to support the district court’s view about legal consequences.14
       In sum, the district court legally erred, and therefore abused its
discretion, in assessing the potential impact of Jackson’s affirmative defenses
on the predominance inquiry.
                                            C.
       Finally, Jackson argues that plaintiffs failed to offer a damages model
adequate to support class treatment. Because plaintiffs only put forth a model
for calculating one aspect of the damages alleged, we agree with Jackson.
       Even where plaintiffs seeking class certification show that common
issues predominate on questions of liability, they must also present a damages
model “establishing that damages are capable of measurement on a classwide
basis.” Comcast Corp. v. Behrend, 569 U.S. 27, 34 (2013). The issue of damages
may defeat predominance “where the calculation of damages is not susceptible
to a mathematical or formulaic calculation.” Bell Atl., 339 F.3d at 307.
       Here, plaintiffs seek two kinds of damages linked to Jackson’s allegedly
inflated surrender charges: (1) the excessive charges themselves and (2) the
effect of those charges on living and death benefits paid under the annuity
contracts. At the certification stage, plaintiffs offered an expert opinion that
excessive    charges     could    be    uniformly     calculated    through     “relevant
mathematical calculations appropriately applied” to Jackson’s own records.
But the report offered no formula for calculating damages related to living and
death benefits. Instead, it asserted that “[t]he precise details of how the
calculation of these additional damages will be performed will depend on what
information Jackson makes available.” Without separately addressing living


       14Furthermore, the ratification defense did not defeat predominance in Allen because
the defense was “irrelevant to liability”—it was relevant “only with respect to damages”
under the consumer protection law at issue there. Id.
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                                   No. 18-40605
and death benefits, the district court concluded that damages could be
uniformly calculated based on Jackson’s records and, therefore, would not
defeat predominance.
      We do not question the district court’s conclusion regarding excessive
charges. The record persuades us that those damages can be reckoned by fairly
straightforward math from Jackson’s files. The fact that this will require
individualized calculations does not defeat predominance. See, e.g., Ibe v.
Jones, 836 F.3d 516, 529 (5th Cir. 2016) (“Generally, individualized damages
calculations will not preclude a finding of predominance.” (citing Tyson Foods,
136 S. Ct. at 1045)). The more complex damages related to living and death
benefits are another matter, however. The expert report plaintiffs relied on
offered no indication how those damages would be calculated and, indeed,
candidly admitted that it lacked any basis for an opinion. This was inadequate
to meet plaintiffs’ burden to show that these kinds of damages are appropriate
for class treatment. To be sure, proposed damages “[c]alculations need not be
exact.” Comcast Corp., 569 U.S. at 35. But here plaintiffs offered barely a
“preliminary overview of how [these] damages might be calculated.” Piggly
Wiggly Clarksville, Inc. v. Interstate Brands Corp., 100 F. App’x 296, 299 (5th
Cir. 2004). On remand, the district court should reassess whether the
calculation of damages related to living and death benefits would defeat
predominance.
      We suspect this issue may disappear on remand, however. At oral
argument, plaintiffs’ counsel announced that plaintiffs would no longer seek
damages based on living and death benefits, because calculating those
damages turned out to be “complicated.” OA Audio 40:40–41:10. We decline to
speculate on the effect of counsel’s concession, which is better left to the district
court on remand. See, e.g., Slade v. Progressive Sec. Ins. Co., 856 F.3d 408, 412–


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                               No. 18-40605
15 (5th Cir. 2017) (remanding for consideration of how class representative’s
waiver of claims impacts the adequacy requirement of Rule 23(a)(4)).
                                     IV.
     In sum, we VACATE the district court’s order certifying the class and
REMAND for further proceedings consistent with this opinion.




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                                   No. 18-40605
EDITH BROWN CLEMENT, Circuit Judge, concurring:
        I concur in the opinion and write separately to explain why our
resolution of the personal-jurisdiction issue is appropriate even though
Jackson does not directly address one of the district court’s rulings: that
Jackson waived its personal-jurisdiction defense by substantially litigating on
the merits. The appellate rules require an appellant to state in his brief his
“contentions and the reasons for them, with citations to the authorities and
parts of the record on which the appellant relies.” FED. R. APP. P. 28(a)(8)(A).
Failure to argue an issue often means that the appellant has abandoned that
issue. E.g., United States v. Scroggins, 599 F.3d 433, 446–47 (5th Cir. 2010).
But not always. Our rule of deeming unargued issues abandoned is “a
prudential construct that requires the exercise of discretion.” United States v.
Miranda, 248 F.3d 434, 443 (5th Cir. 2001). I would reach the personal-
jurisdiction issue through the exercise of our discretion.
        The district court held that Jackson waived its personal-jurisdiction
defense “[b]y waiting exactly seven months after Bristol-Myers to informally
raise    the   personal[-]jurisdiction   objection     in   its   response    to   class
certification . . . and then proceed[ing] to substantially litigate on the merits,
including filing its motion for summary judgment.” [ROA.852.] The district
court cited two motions that Jackson filed. [Id. at n.5.] Those motions, plus
Jackson’s summary-judgment motion, were what the district court apparently
thought constituted substantial litigation on the merits. Jackson does not
directly state why this was wrong, but it was plainly wrong.
        Jackson likely thought that the district court’s error was so obvious that
it needn’t be explained—if class certification, rather than Bristol-Myers, is
what made available Jackson’s personal-jurisdiction defense as to the putative
class members, Jackson could not be faulted for filing motions after Bristol-
Myers came down but before certification. That is true, but only to the extent
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                                 No. 18-40605
that filing motions could itself constitute substantial litigation on the merits.
Yet Jackson might have forfeited the defense if, in those motions, it had
substantially litigated issues involving the putative class members. Jackson
does not address that possibility, and it obviously did not litigate any such
issues. In those motions, Jackson neither concedes personal jurisdiction as to
the putative class members nor argues the merits of issues involving them.
Thus, the district court clearly erred in holding that Jackson forfeited its
personal-jurisdiction defense through its litigation conduct. Because this error
was clear and obvious, I would exercise our discretion to reach this issue
despite Jackson’s failure to address it head-on. With that caveat, I concur.




                                       26
