                    RECOMMENDED FOR FULL-TEXT PUBLICATION
                         Pursuant to Sixth Circuit Rule 206
                                File Name: 12a0302p.06

             UNITED STATES COURT OF APPEALS
                             FOR THE SIXTH CIRCUIT
                               _________________


                                                 X
                                                  -
 JASON YOUNG, et al.,
                                                  -
                           Plaintiffs-Appellees,
                                                  -
                                                  -
                                                     Nos. 11-5015/ 5016/ 5018/

                                                  ,
                                                          5019/ 5020
                                                   >
                                                  -
           v.

                                                  -
                                                  -
 NATIONWIDE MUTUAL INSURANCE
                                                  -
 COMPANY, et al.,
                      Defendants-Appellants. N
                   Appeal from the United States District Court
                for the Eastern District of Kentucky at Covington.
     Nos. 2:06-cv-141; 2:06-cv-146; 2:10-cv-215; 2:10-cv-216; 2:10-cv-217;
    2:10-cv-220; 2:10-cv-221; 2:10-cv-224—David L. Bunning, District Judge.
                               Argued: April 11, 2012
                        Decided and Filed: September 5, 2012
      Before: SUHRHEINRICH, STRANCH, and DONALD, Circuit Judges.

                                _________________

                                     COUNSEL
ARGUED: Drew H. Campbell, BRICKER & ECKLER LLP, Columbus, Ohio, for
Appellants. Gary E. Mason, MASON LLP, Washington, D.C., for Appellees.
ON BRIEF: Drew H. Campbell, James P. Schuck, Bridget Purdue Riddell, BRICKER
& ECKLER LLP, Columbus, Ohio, for Appellants in 11-5015. Joseph L. Hamilton,
Michael D. Risley, Marjorie A. Farris, STITES & HARBISON, PLLC, Louisville,
Kentucky, Mark G. Arnzen, ARNZEN MOLLOY & STORM, P.S.C., Covington,
Kentucky, for Appellants in 11-5016. Gerald F. Dusing, ADAMS, STEPNER,
WOLTERMANN & DUSING, Covington, Kentucky, Mark A. Johnson, Rand L.
McClellan, BAKER & HOSTETLER LLP, Columbus, Ohio, for Appellants in 11-5018.
John R. Crockett, III, Jason P. Renzelmann, Cory J. Skolnick, FROST BROWN TODD
LLC, Louisville, Kentucky, for Appellants in 11-5019 and 11-5020. Gary E. Mason,
MASON LLP, Washington, D.C., Alexander F. Edmondson, Jason V. Reed,
EDMONDSON & ASSOCCIATES, Covington, Kentucky, Christopher S. Nordloh,
NORDLOH LAW OFFICE, P.C., Covington, Kentucky, John C. Whitfield,
WHITFIELD & COX, P.S.C., Madisonville, Kentucky, for Appellees.




                                          1
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      STRANCH, J., delivered the opinion of the court in which, DONALD, J., joined.,
and SUHRHEINRICH, J., joined only in the judgment.
                                  _________________

                                       OPINION
                                  _________________

       JANE B. STRANCH, Circuit Judge. Defendants, insurance companies doing
business in Kentucky, appeal the district court’s certification under Federal Rule of Civil
Procedure 23(a) and (b)(3) of statewide plaintiff subclasses. Plaintiffs, insureds of
Defendants, allege in this diversity action that they were assessed incorrect charges for
local government premium taxes as a result of Defendants’ failure to correctly identify
the taxing jurisdiction in which the insured risks of each of the policyholders were
located. The district court accepted Plaintiffs’ proposed ten subclasses (each comprising
of one Defendant company), severed each subclass into a separate action, and certified
the subclasses. Defendants appealed the certification orders and five appeals remain for
consideration. For the following reasons, we AFFIRM certification of the subclasses.

                                  I. BACKGROUND

       Nationwide Mutual Insurance Company, Kentucky Farm Bureau Mutual
Insurance, State Farm Fire and Casualty Insurance, Standard Fire Insurance Company,
and Travelers Property Casualty Insurance Company (collectively, the “Defendants”)
are all insurers that write consumer and commercial insurance in Kentucky. Kentucky
has a unique system of taxation that authorizes local governments to impose a tax on
insurers for the premiums the insurer collects on its sale of certain insurance products.
Ky. Rev. Stat. Ann. § 91A.080. The statute also allows the insurer to charge a
“reasonable collection fee” as compensation for collecting the taxes that are remitted to
the particular local government authority and most insurers, including all Defendants,
pass the tax itself on to the insureds along with the collection fee. See Ky. Rev. Stat.
Ann. § 91A.080(4).
Nos. 11-5015/ 5016/ 5018/            Young, et al. v. Nationwide, et al.              Page 3
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        The named Plaintiffs in the five subclasses in this appeal—Jason and Diana
Young, Matthew Sanning, Robert and Johnna Dyas, and Martha Yunker—are
policyholders of their respective subclass Defendant insurers. Each Plaintiff claims that
their insurer charged them a local government tax on their premiums when either the tax
was not owed or the tax amount owed was less than the insurer billed. Plaintiffs allege
that these miscalculations of premium tax obligations were unlawful under various state
law causes of action.

        In June 2006, Plaintiffs brought their claims in two separate cases filed in
Kentucky state court. Both actions were removed to federal court and were considered
together for the purpose of class certification. Plaintiffs’ claims were ultimately
narrowed to illegal dealing in premiums, negligence, conversion, and a declaration of
rights; Plaintiffs sought refunds of the amount of improperly charged municipal tax and
collection fee as well as injunctive and declarative relief.

        Prior to its final consideration of class certification, the district court considered
several motions that are relevant to this appeal. On March 31, 2007, the court denied
Defendants’ Motions to Dismiss, which alleged that the court lacked jurisdiction because
Kentucky law allowed Plaintiffs an administrative remedy, then subsequently granted
their request to bifurcate class certification discovery from merits-based discovery.
Defendants also unsuccessfully moved to strike Plaintiffs’ class allegations contending
that the definition would require the court to engage in impermissible individual
determinations on the merits of the claims of each putative class member. Finally, on
March 31, 2009, the district court denied Defendants’ motions in limine to exclude the
testimony of Plaintiffs’ expert, Paul Manning, on whom Plaintiffs intended to rely to
show that Defendants’ data was compatible with geocoding software to assist in
identifying the proper tax jurisdiction for Defendants’ insureds. Prior to entry of its class
certification order, the district court also approved several voluntary class settlements
between originally named Defendants and their insureds.
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       On July 10, 2008, Plaintiffs moved for class certification. The district court
entered an order on September 30, 2010 subdividing the Plaintiffs into ten subclasses,
each comprising one of the remaining ten Defendants, and sua sponte severing the
subclasses into separate actions. The district court found the class ascertainable and
administratively feasible, the Rule 23(a) prerequisites —numerosity, commonality,
typicality     and    adequacy       of    representation—met,          and     the    Rule   23(b)(3)
requirements—that class litigation is superior and common questions predominate over
individuals ones—satisfied. The subclasses, as certified, are each defined as follows:

       All persons in the Commonwealth of Kentucky who purchased insurance
       from or underwritten by [Defendant insurer] during the Relevant Time
       Period [[June 16, 2001, through the present) for 06-141 and (June 22,
       2001, through the present) for 06-146] and who were charged local
       government taxes on their payment of premiums which were either not
       owed, or were at rates higher than permitted.1

Defendants timely appealed, challenging each of the district court’s findings. After
several voluntary settlements, only five appeals remain before this court.

                                          II. DISCUSSION

A.     Standard of Review

       The district court has broad discretion to decide whether to certify a class, In re
Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig., 678 F.3d 409, 416 (6th Cir.
2012), and this court reviews class certification for an abuse of discretion, Pipefitters
Local 636 Ins. Fund v. Blue Cross Blue Shield of Mich., 654 F.3d 618, 629 (6th Cir.
2011), cert. denied, 132 S. Ct. 1757 (2012). A district court’s decision to certify a class
is subject to “very limited” review and will be reversed only if a strong showing is made


       1
           Excluded from the class are:
                  (a) any Judge or Magistrate presiding over this action and members
                  of their families; (b) Defendants and any entity in which Defendants
                  have a controlling interest or which have a controlling interest in
                  Defendants and their legal representatives, assigns and successors;
                  and (c) all persons who properly execute and file a timely request for
                  exclusion from the Class.
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that the district court clearly abused its discretion. Olden v. LaFarge Corp., 383 F.3d
495, 507 (6th Cir. 2004). An abuse of discretion occurs if the district court relies on
clearly erroneous findings of fact, applies the wrong legal standard, misapplies the
correct legal standard when reaching a conclusion, or makes a clear error of judgment.
Pipefitters Local 636 Ins. Fund, 654 F.3d at 629. This court should not find an abuse
of discretion unless it has a “definite and firm conviction that the trial court committed
a clear error of judgment.” Miami Univ. Wrestling Club v. Miami Univ., 302 F.3d 608,
613 (6th Cir. 2002) (citation and internal quotation marks omitted).

B.     Class Certification

       “The class action is ‘an exception to the usual rule that litigation is conducted by
and on behalf of the individual named parties only.’” Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2541, 2550 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-01
(1979)). “A class representative must be part of the class and possess the same interest
and suffer the same injury as the class members.” Id. (citation and internal quotation
marks omitted). To be certified, a class must satisfy all four of the Rule 23(a)
prerequisites—numerosity, commonality, typicality, and adequate representation—and
fall within one of the three types of class actions listed in Rule 23(b). Sprague v. Gen.
Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998) (en banc). The party seeking class
certification has the burden to prove the Rule 23 certification requirements. In re Am.
Med. Sys., Inc., 75 F.3d 1069, 1079 (6th Cir. 1996).

       “Rule 23 does not set forth a mere pleading standard. A party seeking class
certification must affirmatively demonstrate his compliance with the Rule.” Dukes,
131 S. Ct. at 2551. Such compliance must be checked through a “rigorous analysis.”
Id. (quoting Gen. Tel. Co. v. Falcon, 457 U.S. 147, 161 (1982)). Meeting the
requirements of “Rule 23(a) requires something more than mere repetition of the rule’s
language; ‘[t]here must be an adequate statement of the basic facts to indicate that each
requirement of the rule is fulfilled.’” Pipefitters Local 636 Ins. Fund, 654 F.3d at 629
(citation omitted). Ordinarily, this means the class determination should be predicated
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on evidence the parties present concerning the maintainability of the class action. In re
Am. Med. Sys., Inc., 75 F.3d at 1079. Dukes verified that the district court should not
merely presume that the plaintiffs’ allegations in the complaint are true for the purposes
of class motion without resolving factual and legal issues. See Gooch v. Life Investors
Ins. Co. of Am., 672 F.3d 402, 417 (6th Cir. 2012). Nevertheless, it “is not always
necessary to probe behind the pleadings before coming to rest on the certification
question, because sometimes there may be no disputed factual and legal issues that
strongly influence the wisdom of class treatment.” Id. (alteration, citations, and internal
quotation marks omitted).

        In laying out the required standard of review, the district court recognized the
need to conduct a “rigorous analysis” of the Rule 23 factors and the fact that Plaintiffs
carried the burden of establishing those requirements, but erroneously stated that it
“must take the substantive allegations of the complaint as true.” However, a review of
the district court’s opinion suggests this erroneous statement of the law was harmless.
See, e.g., Gooch, 672 F.3d at 418 (finding error harmless even though district court
stated it must presume plaintiffs’ allegations to be true and only conduct a limited factual
inquiry); In re Zurn Pex Plumbing Prods. Liab. Litig., 644 F.3d 604, 618 (8th Cir. 2011)
(finding error harmless where district court stated it presumed plaintiffs’ allegations in
the complaint to be true). Although the district court stated it would accept Plaintiffs’
allegations as true, it is clear from the opinion that the district court based its
determination on the evidence submitted by the parties rather than the bare allegations
of the complaint.

        1.      Class Definition

        Before a court may certify a class pursuant to Rule 23, “the class definition must
be sufficiently definite so that it is administratively feasible for the court to determine
whether a particular individual is a member of the proposed class.” See 5 James W.
Moore et al., Moore’s Federal Practice § 23.21[1] (Matthew Bender 3d ed. 1997)
(“Although the text of Rule 23(a) is silent on the matter, a class must not only exist, the
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class must be susceptible of precise definition. There can be no class action if the
proposed class is ‘amorphous’ or ‘imprecise.’”); see also John v. Nat’l Sec. Fire & Cas.
Co., 501 F.3d 443, 445 (5th Cir. 2007). Defendants assert that the proposed definition
creates an impermissible “fail-safe” class and is not administratively feasible because
it would require the court to resolve merits issues and require a significant number of
individual determinations.

        All parties concede that a class definition is impermissible where it is a “fail-
safe” class, that is, a class that cannot be defined until the case is resolved on its merits.
See Randleman v. Fidelity Nat’l Title Ins. Co., 646 F.3d 347, 352 (6th Cir. 2011)
(“Either the class members win or, by virtue of losing, they are not in the class and,
therefore, not bound by the judgment.”). The class definition at issue before us includes
persons “who were charged local government taxes on their payment of premiums which
were either not owed, or were at rates higher than permitted.” Defendants assert that the
determination of whether premium taxes were charged that were not owed or were at
rates higher than permitted goes to the heart of the claims and impermissibly determines
a required element of each claim against them. But a “fail-safe” class is one that
includes only those who are entitled to relief. Such a class is prohibited because it would
allow putative class members to seek a remedy but not be bound by an adverse
judgment—either those “class members win or, by virtue of losing, they are not in the
class” and are not bound. Randleman, 646 F.3d at 352. Such a result is prohibited in
large part because it would fail to provide the final resolution of the claims of all class
members that is envisioned in class action litigation. Plaintiffs’ classes will include both
those entitled to relief and those not. Defendants’ other argument—that they are not
ultimately liable for many of the class members, even if they were incorrectly
charged—proves the point. This is not a proscribed fail-safe class.

        Defendants also assert that the class definition is not administratively feasible
because it requires impermissible merits inquiries. Defendants’ argument is less a
question of violating the limitation on merits inquiries and more related to fulfilling the
requirement that a class description must be sufficiently definite so that it is
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administratively feasible for the court to determine whether a particular individual is a
member. See Crosby v. Social Sec. Admin., 796 F.2d 576, 580 (1st Cir. 1986) (citations
omitted). Courts have found feasibility lacking in a class definition that contains
claimants who did not have a hearing “within a reasonable time,” id., a definition
requiring individual determinations of constitutional violations, see Catanzano v.
Dowling, 847 F. Supp. 1070, 1079 (W.D.N.Y. 1994), and a definition requiring legal
determinations of whether each class member was “disabled” under the Americans with
Disabilities Act, Davoll v. Webb, 194 F.3d 1116, 1146 (10th Cir. 1999). Permissible
defining criteria have been described as follows:

       For a class to be sufficiently defined, the court must be able to resolve
       the question of whether class members are included or excluded from the
       class by reference to objective criteria. In some circumstances, a
       reference to damages or injuries caused by particular wrongful actions
       taken by the defendants will be sufficiently objective criterion for proper
       inclusion in a class definition. Similarly, a reference to fixed, geographic
       boundaries will generally be sufficiently objective for proper inclusion
       in a class definition.

Moore’s Federal Practice § 23.21[3] (citations omitted).

       Plaintiffs’ classes are defined by classic categories of objective criteria. Class
membership based on the proposed definition requires determining the following facts:
the location of the insured risk/property; the geographical boundaries for the relevant
local government; the local tax for a particular taxing district within whose boundaries
the insured property is located; and the local tax charged and collected from the
policyholder. Although Defendants describe these facts as disputed, it is clear from their
briefs and arguments below that what they dispute is whether they are ultimately liable
to a policyholder for an incorrect overcharge, not whether the policyholder was, in fact,
so charged. Cf. Kinder v. Nw. Bank, 278 F.R.D. 176, 183 (W.D. Mich. 2011) (finding
class definition sufficiently definite when based on objective criteria including whether
plaintiffs used one of the defendant’s ATMs at one of the specified locations during the
relevant time period and whether they were charged a fee).
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         To the extent that these facts overlap with a required element of Plaintiffs’ claims
(such as showing injury), allowing a determination that an individual was subject to one
tax, but was charged a different tax, is no different than determining whether an
individual is of a minority race or gender, required elements in class action
discrimination cases and most certainly part of the class definition. See, e.g., Dukes,
131 S. Ct. at 2547 (describing class as including only female employees of Wal-Mart).
Had this class included all Kentucky policyholders, Defendants would surely have
challenged the definition as overly broad. The criteria referenced in the class definition
are objective and are not necessarily determinative of the ultimate issue of liability. The
district court did not abuse its discretion in finding the proposed definition sufficiently
definite.2

         Defendants also argue the class is not administratively feasible because it would
entail a large number of individual determinations in order to ascertain class
membership. Defendants point to the great number of policies issued to Kentucky
insureds3 that they claim would have to be reviewed in order to determine which
policyholders overpaid premium taxes. Finding that the class properly could be certified
without the 100% accuracy Defendants assume to be requisite, the district court agreed
with Plaintiffs that the subclasses can be “discerned with reasonable accuracy” using
Defendants’ electronic records and available geocoding software, though the process
may require additional, even substantial, review of files.

         Several other courts have found that the size of a potential class and the need to
review individual files to identify its members are not reasons to deny class certification.
See, e.g., In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d 124, 145 (2d Cir.


         2
            For similar reasons, Defendants’ challenge—that the class definition violates their Seventh
Amendment right to have one jury resolve all factual disputes that go to liability—fails. Cf. Dukes,
131 S. Ct. at 2552 (“The necessity of touching aspects of the merits in order to resolve preliminary matters,
e.g., jurisdiction and venue, is a familiar feature of litigation.”).
         3
           For example, for several insurers involved in this appeal, the district court identified the number
of policy transactions during the class period, through the time of briefing, involving assignment of a risk
location as follows: (1) State Farm, 7,027,320; (2) Nationwide, 339,587; and (3) Kentucky Farm Bureau,
6,970,763.
Nos. 11-5015/ 5016/ 5018/                  Young, et al. v. Nationwide, et al.                     Page 10
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2001), (holding that the sheer size of a class and the concomitant size of liability “alone
cannot defeat an otherwise proper certification”), superseded by statute on other grounds
as stated in Attenborough v. Constr. & Gen. Bldg. Laborers’ Local 79, 238 F.R.D. 82,
100 (S.D.N.Y. 2006); cf. Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708, 722 (9th
Cir. 2010) (holding that if the size of the defendant’s potential liability alone was a
sufficient reason to deny class certification, “the very purpose of Rule 23(b)(3)—‘to
allow integration of numerous small individual claims into a single powerful
unit’—would be substantially undermined”); Perez v. First Am. Title Ins. Co., No.
CV-08-1184-PHX-DGC, 2009 WL 2486003, at *7 (D. Ariz. Aug. 12, 2009) (“Even if
it takes a substantial amount of time to review files and determine who is eligible for the
[denied] discount, that work can be done through discovery.”); Slapikas v. First Am.
Title Ins. Co., 250 F.R.D. 232, 250 (W.D. Pa. 2008) (finding class action manageable
despite First American’s assertion that “no database exists easily and efficiently to make
the determination that would be required for each file”).4

         Equally—if not more—persuasive is the district court’s practical rationale:
“[T]he need to manually review files is not dispositive. If it were, defendants against
whom claims of wrongful conduct have been made could escape class-wide review due
solely to the size of their businesses or the manner in which their business records were
maintained.” We find this reasoning compelling. It is often the case that class action
litigation grows out of systemic failures of administration, policy application, or records
management that result in small monetary losses to large numbers of people. To allow
that same systemic failure to defeat class certification would undermine the very purpose
of class action remedies. We reject Defendants’ attacks on administrative feasibility
based on the number of insurance policies at issue.




         4
          As Defendants note, this court reached a different result than Slapikas in a recent title insurance
case, Randleman v. Fidelity Nat’l Title Ins. Co., 646 F.3d 347 (6th Cir. 2011). However, in Randleman,
we distinguished Slapikas on a different basis—namely the different state title insurance laws in
Pennsylvania, which made the result in Slapikas reasonable but not reasonable under Ohio law.
Randleman, 646 F.3d at 354-55.
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         Plaintiffs further support administrative feasibility through expert evidence that
Defendants’ policy records are in a form compatible with geocoding software. Such
software uses geographic information systems technology to verify the precise location
of any address and has been used to process local-tax-jurisdiction data. Plaintiffs’
software expert, Paul Manning, was permitted to testify (after an earlier, separate
Daubert hearing5) that he believed Defendants’ data is in a format that can be used in
conjunction with geocoding software. Although Defendants argue that Manning opined
beyond his training, the district court’s ruling on admissibility was limited and also noted
that the software would be used to assist in identifying potential class members and
would be used in conjunction with manual review.

         Defendants argue that their own software expert, Craig Knoblock, provided the
only testimony about the accuracy of the geocoding programs and he opined that the
error rate could be between 5 and 30%. Alleging that the error rate could be great,
Defendants argue geocoding provides no assistance in identifying potential class
members. As noted above, it is difficult to understand why Defendants should be able
to avoid a class suit even if Plaintiffs did not offer a means to escape the burden of
identifying class members. See Slapikas, 250 F.R.D. at 250 (finding class action
manageable despite assertion that “no database exists easily and efficiently to make the
determination that would be required for each file”). Regardless, the district court did
not fail to consider Knoblock’s testimony or fail to look beyond Plaintiffs’ submission
that the geocoding programs are reasonably accurate. The district court noted that an
error rate was essentially unknown and that Knoblock’s error range was not dispositive
for this program.        The court noted that geocoding programs have been used in
settlements of other class litigation over the same local taxation system and, in fact, the
specific program used by Plaintiffs has been approved by the Kentucky Department of


         5
           Defendants argue the district court did not conduct a full Daubert analysis of Manning’s
qualification to testify about the accuracy of geocoding software. This argument is incorrect for two
reasons: (1) Manning was not offered to testify about the software’s accuracy, nor did the district court
rely on any such statements; and (2) the district court fully considered Manning’s qualifications as they
related to his offered testimony on Defendants’ data’s compatibility with the software and stated it passes
a “limited or full Daubert analysis.” (Emphasis added).
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Insurance (“KDI”) as one verification program among several that the KDI now
mandates insurers utilize. Therefore, the record before the district court supports its
determination that the class was administratively feasible using a geocoding software
program and manual review.

         Defendants’ arguments are unavailing. The district court did not abuse its
discretion in deciding that the class is not “fail-safe” and in finding that the class
definition is administratively feasible.

         2.     Rule 23(a) Requirements

                a.      Numerosity

         Federal Rule of Civil Procedure 23(a)(1) requires as a prerequisite to class action
that “the class [be] so numerous that joinder of all members is impracticable.” See In re
Am. Med. Sys., Inc., 75 F.3d at 1079. “While no strict numerical test exists, ‘substantial’
numbers of affected consumers are sufficient to satisfy this requirement.” In re
Whirlpool, 2012 WL 1537914, at *7 (citing Daffin v. Ford Motor Co., 458 F.3d 549, 552
(6th Cir. 2006)). Nonetheless, “impracticability of joinder must be positively shown,
and cannot be speculative.” Golden v. City of Columbus, 404 F.3d 950, 966 (6th Cir.
2005).

         Defendants assert the district court erred in finding numerosity because it
impermissibly calculated potential class size by relying on an assumption that a 1% error
rate could be attributed to the assignment of premium tax rates by all Defendants. “In
ruling on a class action a judge may consider reasonable inferences drawn from facts
before him at that stage of the proceedings.” Senter v. Gen. Motors Corp., 532 F.2d 511,
523 (6th Cir. 1976); see also In re Am. Med. Sys., Inc., 75 F.3d at 1079. Plaintiffs
presented evidence from their expert, Manning, on the total number of policies written
by each Defendant during the class period. Plaintiffs then advocated for application of
a 1% error rate to these totals, relying on Plaintiffs’ past experience with identifying
members of other settlement subclasses in related actions and relying on the results
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offered by the Kentucky Office of Insurance when it conducted random market analyses
of some insurers.

        It was within the district court’s discretion to infer that the 1% error rate was
applicable to the Defendants. Cf. Kinder, 2011 WL 5282589, at *5 (relying on
assumption about number of potential class members to satisfy numerosity requirement);
Garrison v. Asotin Cnty., 251 F.R.D. 566, 569 (E.D. Wash. 2008) (requirement is met
“so long as general knowledge and common sense indicate that joinder would be
impracticable”). This error rate results in class members ranging between 270 and 9,000
depending on the insurer. Although Defendant Kentucky Farm Bureau argues that its
tax assignment process is more reliable than the other insurers and it is unreasonable to
attribute a 1% error rate to its practices, Kentucky Farm Bureau also has one of the
larger number of policies among the named Defendants. As Plaintiffs point out, even
if the error rate were reduced to 0.0001%, the class would consist of approximately
69 members. See In re Am. Med. Sys., 75 F.3d at 1076 (noting that this circuit had found
a class of 35 to be sufficient to meet the numerosity requirement). The court did not
abuse its discretion in finding numerosity satisfied.

                b.      Commonality and Typicality

        Rule 23(a)(2) requires plaintiffs to prove that there are questions of fact or law
common to the class, and Rule 23(a)(3) requires proof that plaintiffs’ claims are typical
of the class members’ claims. Commonality and typicality “tend to merge” because both
of them “serve as guideposts for determining whether under the particular circumstances
maintenance of a class action is economical and whether the plaintiff’s claim and the
class claims are so interrelated that the interests of the class members will be fairly and
adequately protected in their absence.” Dukes, 131 S. Ct. at 2551 n.5. To demonstrate
commonality, the plaintiffs’ “claims must depend on a common contention . . . of such
a nature that it 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. Similarly, “[a] necessary consequence of the typicality
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requirement is that the representative’s interests will be aligned with those of the
represented group, and in pursuing his own claims, the named plaintiff will also advance
the interests of the class members.” Sprague, 133 F.3d at 399.

       Plaintiffs present two facts common to the class: (1) whether each member was
charged an incorrect amount for local government premium taxes; and (2) whether the
insurer had a uniform, institutional policy or practice to identify local government taxing
districts for its insureds. Plaintiffs present seven common legal questions:

       (1) have Defendants engaged in unlawful billing practices and illegal
       dealings contra to Kentucky’s illegal Dealing in Premium statute, Ky.
       Rev. Stat. Ann. § 304-12-190;
       (2) is a “charge” on a premium a tax within the meaning of the Illegal
       Dealing statute;
       (3) does “willful” under the Illegal Dealing statute require individual
       proof of intent;
       (4) does Defendants’ collection of taxes that were either not owed or at
       rates higher than permitted constitute conversion;
       (5) are Defendants authorized to charge their customers a collection fee
       that is in addition to an otherwise lawful premium tax;
       (6) do Defendants owe Plaintiffs and class members a duty to use best
       methodologies available to determine the applicable local government
       premium tax; and
       (7) does Defendants’ charge of additional fees to Plaintiffs and class
       members violate Kentucky Department of Insurance regulations for
       servicing the collection of municipal taxes imposed by local
       governments.

       Defendants generally do not challenge the enumerated common questions of law.
Instead, Defendants each contend that they do not have a uniform institutional policy
that affected the tax jurisdiction assignment of each policyholder. They argue that
misassignments result from factual circumstances unique to each individual
policyholder. For example, Defendant Nationwide argues that research shows named-
Plaintiffs Jason and Diana Young were assigned to an incorrect taxing jurisdiction due
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to a “garbled” voice mail message which resulted in a misspelling of the Youngs’
address. In essence, Defendants argue that litigation by policyholders is advanced only
by examining each individual policyholder’s circumstances. Plaintiffs respond that they
expect to demonstrate that the injury sustained by the named Plaintiffs could have been
prevented by appropriate practices, such as utilization of geocoding software, which
would also have prevented similar harm to others.

       Because the named Plaintiffs allege that geocoding verification procedures would
have prevented both their tax misassignment, notwithstanding the allegedly garbled
voice mail message, and the tax misassignments of the class members generally,
Plaintiffs have satisfied the elements of both commonality and typicality. Common
proof of causation—that use of geocoding software could have prevented the harms
suffered by the class members—is central to all of Plaintiffs’ claims and would advance
the interests of the class as a whole. As Plaintiffs concede, Defendants will have some
individualized defenses against certain policyholders; however, the existence of these
defenses does not defeat the commonality requirement under the theory asserted by
Plaintiffs. See Sterling v. Velsicol Chem. Corp, 855 F.2d 1188, 1197 (6th Cir. 1988)
(holding that the presence of questions peculiar to each individual member of the class
was no bar when liability arose from a single course of conduct). The court did not
abuse its discretion in finding commonality under Rule 23(a)(2). Because Plaintiffs
allege both a single practice or course of conduct on the part of each Defendant—the
failure to implement a geocoding verification system—that gives rise to the claims of
each class member and a single theory of liability, the court did not abuse its discretion
in finding that named Plaintiffs’ claims are typical of the class as required by Rule
23(a)(3). In re Am. Med. Sys., 75 F.3d at 1082 (“[A] plaintiff’s claim is typical if it
arises from the same event or practice or course of conduct that gives rise to the claims
of other class members, and if his or her claims are based on the same legal theory.”).
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                c.      Adequacy of Representation

        “The adequacy inquiry under Rule 23(a)(4) serves to uncover conflicts of interest
between named parties and the class they seek to represent. A class representative must
be part of the class and possess the same interest and suffer the same injury as the class
members.” Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 625-26 (1997) (citations and
internal quotation marks omitted). This court looks to two criteria for determining
adequacy of representation: “1) the representative must have common interests with
unnamed members of the class, and 2) it must appear that the representatives will
vigorously prosecute the interests of the class through qualified counsel.” In re Am.
Med. Sys., Inc., 75 F.3d at 1083 (citation omitted). This court also “reviews the
adequacy of class representation to determine whether class counsel are qualified,
experienced and generally able to conduct the litigation.” Stout v. J.D. Byrider, 228 F.3d
709, 717 (6th Cir. 2000).

        Based on this standard, the district court did not abuse its discretion in
concluding that the adequacy requirement of Rule 23(a)(4) was satisfied. The court
stated that Plaintiffs’ prosecution of the litigation to date supported a finding that they
will continue to vigorously prosecute the claims of the class as a whole. On appeal,
Defendants argue that (1) some of the named Plaintiffs are no longer policyholders of
the Defendants and/or received reimbursements for the overcharged premium taxes and
(2) the named Plaintiffs are willing to sacrifice inclusion of some members of the defined
class who will not be identified using the geocoding software.

        The district court rejected Defendant Nationwide’s argument that its post-filing
refund of excess taxes to the Youngs rendered them inadequate class representatives.
Nationwide fails to explain how this refund satisfies all the Youngs’ claims against it
such that it removes their incentive to be vigorous advocates for the interests of the class.
Further, a review of the class identification process advocated by Plaintiffs and approved
by the district court—the use of geocoding software combined with manual
review—does not reveal a carelessness with regard to potentially unidentified members.
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       The district court also found Plaintiffs’ counsel were sufficiently qualified and
experienced and thus capable of serving as class counsel. Defendants do not dispute this
finding on appeal.

       3.      Rule 23(b)(3)

       In addition to meeting the requirements of Rule 23(a), a class must satisfy one
of the categories of Rule 23(b). The district court found the requirements of Rule
23(b)(3), that common questions predominate and that a class action is a superior way
to resolve the controversy, to be satisfied.

               a.      Predominance

       “To meet the predominance requirement, a plaintiff must establish that issues
subject to generalized proof and applicable to the class as a whole predominate over
those issues that are subject to only individualized proof.” Randleman, 646 F.3d at 352-
53 (citing Beattie v. CenturyTel, Inc., 511 F.3d 554, 564 (6th Cir. 2007)). Further, “the
fact that a defense may arise and may affect different class members differently does not
compel a finding that individual issues predominate over common ones.” Beattie,
511 F.3d at 564 (citation and internal quotation mark omitted). While the commonality
element of Rule 23(a)(2) requires showing one question of law or fact common to the
class, a Rule 23(b)(3) class must show that common questions will predominate over
individual ones.

       As in the commonality and typicality discussions, Defendants again urge that
individualized inquiries are required. Defendants, in essence, argue that Plaintiffs cannot
establish the causation element of their claims without reviewing the communications
between each policyholder and insurance agent to decipher where the error originated.
Defendants point to situations, such as the provision of incorrect information by a
policyholder, which they claim relieve them of responsibility for an incorrect premium
tax charge. These potential individual inquiries do not defeat the predominance of
common questions. See Powers v. Hamilton Pub. Defender Com’n, 501 F.3d 592, 619
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(6th Cir. 2007) (rejecting challenge to class of criminal defendants allegedly denied
indigency hearings before being taken into custody based on variations in the
experiences of individual class members).

          Plaintiffs proceed on the theory that verification processes using geocoding
software would catch most types of errors and that Defendants caused each class
members’ injury simply by failing to use such processes. Plaintiffs will have to prove
their theory at trial; but for class certification, this is a predominate issue central to each
of Plaintiffs’ claims and subject to generalized proof. And, of course, the district court
would be free to revisit this issue at a later time if discovery shows that the number of
policyholders whose tax overcharges are due to matters unrelated to the Defendants’
actions is more significant than it now appears. See Messner v. Northshore Univ.
HealthSystem, 669 F.3d 802, 826 (7th Cir. 2012). The district court did not abuse its
discretion in determining that common issues predominate.

                 b.      Superiority

          “The policy at the very core of the class action mechanism is to overcome the
problem that small recoveries do not provide the incentive for any individual to bring a
solo action prosecuting his or her rights.” Amchem Prods., Inc., 521 U.S. at 617 (citation
omitted). In considering whether the superiority requirement of Rule 23(b)(3) is
satisfied, courts consider “the difficulties likely to be encountered in the management
of a class action.” Beattie, 511 F.3d at 567. “Where it is not economically feasible to
obtain relief within the traditional framework of a multiplicity of small individual suits
for damages, aggrieved persons may be without any effective redress unless they may
employ the class-action device.” Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326, 339
(1980).

          “[C]ases alleging a single course of wrongful conduct are particularly well-suited
to class certification.” Powers, 501 F.3d at 619; see also Sterling, 855 F.2d at 1197
(acknowledging an “increasingly insistent need” to certify class actions for lawsuits
arising out of a “single course of conduct”). Where many individual inquiries are
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necessary, a class action is not a superior form of adjudication. See Pipefitters Local
636 Ins. Fund, 654 F.3d at 631. However, where a threshold issue is common to all
class members, class litigation is greatly preferred. Daffin, 458 F.3d at 554 (“Permitting
individual owners and lessees of 1999 or 2000 Villagers to litigate their cases is a vastly
inferior method of adjudication when compared to determining threshold issues of
contract interpretation that apply equally to the whole class.”).

         Defendants again rely on their assertion that individual inquiries predominate in
arguing Plaintiffs have not shown that class litigation is a superior method of
adjudication. For the reasons discussed above, this argument will not prevail here.
Defendants also argue class litigation is not superior because the Kentucky Office of
Insurance has an administrative process by which policyholders can challenge a
premium tax charge and that process has been made mandatory since the start of this
litigation.6 See Ky. Rev. Stat. Ann. § 304.2-165.

         The alleged tax overcharges in this case are relatively small for each potential
class member, ranging from $32.60 to $126. Further, few policyholders are likely to be
aware of their tax misassignment. See Kinder, 278 F.R.D. at 186 (“Most members of the
class are likely not aware of the technical violation of the statute. The likelihood that
many members of the class will choose to bring individual lawsuits is remote.”). Given
the unlikelihood that many injured policyholders will discover, let alone attempt to
vindicate, their injury individually through the administrative process in Kentucky, the
district court did not abuse its discretion in finding that class litigation was a superior
method of adjudicating Plaintiffs’ claims. Cf. Franklin Cnty., Ky. v. Travelers Prop.
Cas. Ins. of Am., 368 F. App’x 669, 672 (6th Cir. 2010) (noting that the Kentucky Office
of Insurance cited “manpower concerns” when it declined to consider all plaintiff’s
claims of tax miscalculations by insurance companies).



         6
          In an earlier decision, the district court in this case held that exhaustion of those administrative
remedies was not mandatory for policyholders prior to the recent amendments. Defendants do not
challenge that decision and argue only that the class action vehicle is not superior to the administrative
option.
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                               III. CONCLUSION

       For the foregoing reasons, we AFFIRM the district court’s certification of the
Plaintiff subclasses.
