Class Actions Brief Blog

Federal Rule of Civil Procedure Rule 23(c)(1)(A) requires district courts to decide whether to certify a class at “an early practicable time.” When defendants seek to strip a suit of its class allegations at the earliest practicable time — before discovery — parties and courts have varied in the analytical frameworks that they cite as the basis for certification decisions, sometimes relying on subsections of Rule 23 and sometimes on Rule 12(f).

The Fourth Circuit recently clarified the applicable analytical framework for pre-discovery class certification decisions in Oliver v. Navy Federal Credit Union, No. 24-1656 (4th Cir. Feb. 9, 2026).

In Oliver, nine applicants for residential mortgage products sued Navy Federal Credit Union individually and on behalf of a putative class, claiming that the credit union’s underwriting algorithm systematically discriminated against racial minorities. The applicants sought classwide declaratory and injunctive relief, as well as damages. Their complaint defined the putative class to include all “minority residential loan applicants” for certain home mortgage products whose applications were denied or were approved on less favorable terms or processed more slowly than applications submitted by similarly situated non-minority applicants.

Navy Federal moved to dismiss under Rule 12(b)(6). It also moved to strike the complaint’s class allegations under Rule 12(f) and Rule 23(d)(1)(D), arguing that the differences across the loan products at issue precluded class certification. The district court agreed, striking all class allegations pursuant to Rule 12(f) and Rule 23(d)(1)(D).

The applicants sought, and the Fourth Circuit granted, interlocutory review of the district court’s order. In its opinion, the Court held that neither Rule 12(f) nor Rule 23(d)(1)(D) is a proper source of authority for a pre-discovery order denying class certification. The Court reasoned that Rule 12(f) only permits striking “redundant, immaterial, impertinent, or scandalous matter” from a pleading. Allegations about the suitability of a putative class for certification do not fall within that scope. The Court interpreted Rule 23(d)(1)(D) narrowly, reasoning that it only permits the district court to require pleadings to be amended to remove “allegations about representation of absent persons.” The Court explained that these “housekeeping” amendments can occur only after a separate order denying certification has been entered.^[1] Based on this reasoning, the Court concluded that Rule 23(d)(1)(D) cannot be the source of the district court’s pre-discovery authority to rule on class certification motions.

In place of Rules 12(f) and 23(d)(1)(D), the Court deemed Rule 23(c)(1)(A) itself the source of the district court’s authority to make pre-discovery class certification determinations. In light of this ruling, the proper procedure for a defendant seeking a pre-discovery denial of class certification is to move under Rule 23(c)(1)(A) for denial of class certification and under Rule 23(d)(1)(D) to strike the class allegations if the motion to deny certification is granted.

In addition to this procedural roadmap, the Court emphasized that district courts may only deny class certification at the pleadings stage if the complaint fails on its face to satisfy the relevant legal standard. Applying this standard, the Fourth Circuit affirmed the district court’s order denying certification of a Rule 23(b)(3) class, deeming the applicants’ effort “the unusual case in which the district court could determine — based solely on the face of the complaint” that a (b)(3) class failed as a matter of law. In reaching that conclusion, the Fourth Circuit emphasized that the named plaintiffs resided in five states, had applied for at least four different mortgage products and had experienced different outcomes with their applications. These facial differences led the district court to conclude, and the Fourth Circuit to agree, that predominance and superiority could not be proven as a matter of law.

As to the putative Rule 23(b)(2) injunctive and declaratory relief class, the Fourth Circuit reversed the order denying certification. The panel majority found that numerous allegations about Navy Federal’s uniform process for running applicant data through an algorithm to make creditworthiness and lending decisions gave rise to numerous common questions of law and fact capable of class-wide resolution.

After Oliver, defendants should carefully scrutinize complaints for facial allegations undermining class certification efforts and be sure to cite the proper source of authority for seeking a pre-discovery denial of class certification: Rule 23(c)(1)(A).

[1] Judge Richardson authored an opinion concurring in part and dissenting in part. He would have held that Rule 23(d)(1)(D) is the source of the district court’s pre-discovery authority to deny class certification.