Full opinion text
OPINION AND ORDER RE CLASS CERTIFICATION MELINDA HARMON, District Judge. ROADMAP The above referenced putative class action alleges violations of sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934, 15 U.S.C. 783(b), 78t(a), 78N 1(a), and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, and of sections 11, 12(a)(2), and 15 of the Securities Act of 1933, 15 U.S.C. §§ 77k, 771(a), and 77o, during a proposed Class Period commencing on October 19, 1998 and ending November 27, 2001. Pending before the Court is Lead Plaintiff The Regents of the University of California’s amended motion for class certification (# 1445), pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3). A class certification hearing was held on March 7-8, 2006. Because they are directly relevant to the motion for class certification, this Court also addresses the Deutsche Bank Entities’ motion for partial reconsideration and dismissal, or motion to require a second amended complaint before a response by them (# 3791) and Lead Plaintiffs motion for leave to file an amended complaint as to Deutsche Bank and motion for entry of an order requiring Deutsche Bank to answer Lead Plaintiffs amended complaint (# 3903). I. Lead Plaintiffs Objectives Specifically Lead Plaintiff seeks certification of a single plaintiff class defined as follows: [A]ll persons, excluding defendants and members of their immediate families, any officer, director or partner of any defendant, any entity in which a defendant has a controlling interest and the heirs of any such excluded party, who purchased the publicly traded equity and debt securities of Enron Corporation between October 19, 1998 and November 27, 2001, including the publicly traded securities issued by Enron-related entities during the Class Period, the value or repayment of which was dependent upon the credit, financial condition or ability to pay of Enron, and (2) all states or political subdivisions thereof or state pension plans that purchased from defendants Enron’s 6.40% Notes due 7/15/06 or 6.95% Notes due 7/15/28, and that authorize the prosecution of their claim pursuant to the Texas Securities Act. # 1445 at 1. Plaintiffs have alleged a common scheme to defraud throughout the Class Period and argue that any of the multiple “separate schemes” raised in opposition by Defendants are part of this single scheme (including SPEs, off-the-book partnerships and transactions, swaps, etc.) to falsify Enron’s financial results and defraud its investors. The federal securities laws “reach complex fraudulent schemes as well as lesser misrepresentations or omissions.” Shores v. Sklar, 647 p 2d 462; m (5th Cir.1981), cert. denied, 459 U.S. 1102, 103 S.Ct. 722, 74 L.Ed.2d 949 (1983). Lead Plaintiff insists that the investors relied upon the integrity of the market price and on Enron’s reputation as a well run company in determining whether to buy Enron securities. Had they known of the concealed actions of some of the currently objecting Defendants, such as the Financial Institutions, who or which purportedly contributed to the fraudulent scheme but claim Plaintiffs failed to demonstrate reliance, the putative class representatives have testified that they would not have been lured into investing in the company, thereby justifying a presumption of class-wide reliance based on the fraud-on-the-market theory. More recently Lead Plaintiff has alternatively claimed that the class is entitled to a presumption of reliance under Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972). Lead Plaintiff proposes that the following plaintiffs, a mixture of individuals and entities, be designated as class representatives: (1) For purchasers of Enron Common Stock, Lead Plaintiff; Robert V. Flint; Amalgamated Bank, as Trustee for the Long View Collective Investment Fund, Long View Core Bond Index Fund and Certain Other Trust Accounts; Hawaii Laborers Pension Plan; George M. Placke; Michael J. Bessire; Dr. Richard Kimmerling; Michael B. Henning; John Zegarski; Joseph C. Speck; Ben L. Schuette; San Francisco City and County Employees’ Retirement System; John J. and Charlotte E. Cassidy, as Trustees for the John & Charlotte Cassidy Family Trust; Dr. Fitzhugh Mayo; and (2) for purchasers of Enron Debt, Washington State Investment Board; Employer-Teamsters Local Nos. 175 & 505 Pension Trust Fund; Archdiocese of Milwaukee Supporting Fund, Inc.; Nathaniel Pulsifer, trustee of the Shooters Hill Revocable Trust; Staro Asset Management, L.L.C.; and the Greenville Plumbers Pension Plan; (3) for purchasers of Enron Preferred Stock, Mervin Schwartz, Jr.; and Stephen M. Smith. Lead Plaintiff also seeks approval of Lerach Coughlin Stoia Geller Rudman & Robbins LLP as Lead Class Counsel. II. Objections to Motion for Class Certification Because Lead Plaintiff has settled with Bank of America Corporation the Court does not address its individual brief in opposition, on behalf of itself and Banc of America Securities LLC (# 1778) and supplemental memorandum (# 2114). Conseco Annuity Assurance Company, which initially opposed certification (# 1770) here of a class that would include purchasers of credit-linked notes issued by trusts created by Citigroup (“Citigroup CLNs”), not by Enron, for claims brought under § 12(a) (2) of the Securities Act of 1933 and § 10(b) of the Securities Exchange Act of 1934, has since decided to join the Newby class and participated in the settlement between Citigroup and Lead Plaintiff, to which this Court recently gave final approval. Thus the Court also does not address its arguments. A. Certain Defendants’ Opposition (# 1780), Joined by Stanley C. Horton (# 1796) and Ken L. Harrison (# 1798) Certain Defendants argue that Lead Plaintiff has not met its burden on the predominance and superiority requirements of Rule 23(b) and has failed to provide a roadmap of how the § 10(b) and Rule 10b-5 claims would be tried (identifying the substantive issues that will control the outcome, assessing which issues will predominate, and determining whether the issues are common to the class) in light of the variations in circumstances among putative class members, i.e. “manageability issues.” Castano v. American Tobacco Co., 84 F.3d 734, 741 (5th Cir.1996) (reversible error if a class is certified without consideration of how the trial on the merits will be conducted); O’Sullivan v. Countrywide Home Loans, Inc., 319 F.3d 732, 738 (5th Cir.2003) (“Determining whether legal issues common to the class predominate over individual issues requires that the court inquire how the case will be tried”). Certain Defendants contend that the class, defined too broadly, relied on more than eighty-five nonuniform, allegedly material misrepresentations (more than forty of which were oral statements made in conference calls with analysts and investors, followup conversations with analysts, interviews with the press and analysts, and statements made at analyst meetings and conferences) on different subjects and transactions made by different subsets of Defendants, and which gave rise to disparate degrees of reliance by putative class members, over a three-and-a-half-year period. Such claims are unsuitable for single-class certification. See Simon v. Merrill Lynch, Pierce, Fenner & Smith, 482 F.2d 880, 882 (5th Cir.1973) (“If there is any material variation in the representations made or in the degrees of reliance thereupon, a fraud case may be unsuitable for treatment as a class action”; an action based substantially on oral rather than written misrepresentations cannot be maintained as a class action); Castano, 84 F.3d at 745. “Similarly, if the writings contain material variations, emanate from several sources, or do not actually reach the subject investors, they are not more valid a basis for a class action than dissimilar oral representations.” Simon, 482 F.2d at 882. Certain Defendants argue that the complaint identifies many separate fraudulent schemes, in at least seven distinct time periods, involving different subsets of Defendants, with each scheme purportedly inflating the market price of the securities. Thus they maintain that different class members purchased and sold Enron securities at different times and presumptively relied on different alleged misrepresentations; such highly individualized issues are not subject to class-wide proof, insist Defendants. See, e.g., Richland v. Cheatham, 272 F.Supp. 148 (S.D.N.Y.1967). The class includes some investors who bought and sold during the first two years and were not damaged by the alleged fraud and indeed may even have made money. Others bought their securities after the alleged fraud was disclosed to the market. “Where the plaintiffs’ damage claims focus almost entirely on facts and issues specific to individuals rather than the class as a whole, the potential ... that the class action may degenerate in practice into multiple lawsuits separately tried renders class treatment inappropriate.” Bell Atlantic Corp. v. AT&T Corp., 339 F.3d 294, 307 (5th Cir.2003) (antitrust case), quoting Countrywide Home Loans, 319 F.3d at 744. Additionally, Certain Defendants contend that unlike § 11 claims, whose damages could be determined by a mathematical or formulaic calculation, damages for § 10(b) claims would depend on date(s) of trading, profit or loss incurred, the extent to which the price paid and received reflected the “true” value versus inflated value of the stock, i.e., individual issues that would predominate over questions common to the class. Finally Certain Defendants insist that current and former Enron employees should not be included in the class because they claim that they based their decisions to buy and sell Enron stock on various misrepresentations made to them as employees that were not made to the public, and therefore did not impact the public market price for the Enron stock. The employees, also, will have individual reliance issues and some may have had personal knowledge from working on the transactions involved. B. Alliance Capital Management LLP’s Objections (# 1781, 1782) Alliance Capital Management LLP (“Alliance Capital”) objects on the grounds of inadequacy to the appointment, as a class representative for all purchasers of Enron Debt Securities, of Staro Asset Management, LLC, which asserts only a § 11 claim based on a purportedly misleading Registration Statement for Enron Zero Coupon Notes. Alliance Capital explains that Staro is a general partner of a group of limited partnerships that focus on hedging and arbitrage and seek profits independent of the direction of the market. It is also an investment manager and advisor for client companies. Alliance Capital charges generally, “Sta-ro has demonstrated a lack of candor in its dealing with the Court; it is subject to unique defenses, including lack of standing because it never owned either the Zero Coupon Notes or a derivative interest keyed to the value of the Notes; its interests are not typical of, and indeed are in direct conflict with, the interests of a majority of the class it seeks to represent; and Staro’s management has demonstrated a fundamental ignorance of the litigation, completely abdicating responsibility for its control to Staro’s lawyers.” # 1781 at 1. Alliance Capital emphasizes, with supporting documents, that when Staro earlier and unsuccessfully sought appointment as Lead Plaintiff for a class of debt investors in Newby, Staro claimed that it was a pure debt investor and that its losses amounted to $40 million. On deposition, its designated representative, investment analyst Donald Trent Bobbs, revealed that Staro’s note and bond purchases were only “one leg” of its “unified debt/equity investment strategy” and that its actual loss was half that it previously claimed because it offset its loss through the purchase and exercise of puts on Enron equity, which Staro had failed to disclose to the Court. Thus its claims are not typical of the class members’ either in its investment strategy nor its “loss.” Furthermore Alliance Capital asserts that based on the documents produced by Staro and the deposition testimony of its representative, there is no evidence that Staro or any of its limited partners purchased the Enron Zero Coupon Convertible Senior Notes Due 2021, on which Staro grounds its claim, but only that one of its limited partners had purchased an economic interest in a derivative. In addition Bobbs testified that Staro had not notified the actual purchasers (its limited partners, to which Staro is a fiduciary) of the extent of its Enron losses and its decision to file this suit nor obtained their consent to filing it. Alliance Capital argues that Staro’s arbitrage strategy (purchasing Enron convertible debt while it sold Enron stock short) differentiates its economic interests from those of investors in Enron, both equity and debt. Moreover Staro continued to trade in Enron securities after Enron’s negative disclosures in November 2001 and even after it filed for bankruptcy on December 2, 2001, and it made a profit from doing so; thus its interests differ sharply from those of most class members. While it now seeks to represent both equity and debt investors, Staro primarily was a short seller of Enron stock, with interests directly opposite those of most Enron equity investors. Finally they challenge, as an inadequate class representative, Staro’s designated management witness, Donald Trent Bobbs. Bobbs admitted ignorance about fundamental developments in this litigation, including that he did not know of the court-ordered mediation, he had never seen Sta-ro’s application to be Lead Plaintiff, but could only guess that someone at Staro had read it, he had not authorized the filing of the motion, and he disagreed with some of the main contentions in Professor Stephen P. Feinstein’s supporting declaration, which he had not reviewed before it was filed (Dep. At 202-04). The Outside Directors, the remainder of whose opposition will be discussed next, also argue that Staro has no standing to pursue claims on behalf of the Zero Coupon Convertible Notes because it did not purchase them; instead the three funds managed by Staro (Stark Investments, Shepherd and Reliant) purchased them and are the record holders of the securities in question. # 1785 at 13; Ex. 141 to Bobbs Dep. and Ex. B to # 1785. Outside Directors state that they consider the three funds to be adequate class representatives and that the three funds should be substituted for Staro. Id. at 14 n. 20. The Outside Directors also argue that Amalgamated Bank is suing in a representative capacity on behalf of other entities that are the actual holders of record of the notes at issue and that the real parties should be substituted as class representatives. C. Outside Directors’ Opposition (# 1785), Joined by Rebecca Mark-Jusbasche (# 1792), and in part by Ken L Harrison (# 1798) The Outside Directors oppose the motion for class certification for a single “behemoth” class as it relates to the claims under § 11 because (1) the class representatives lack standing; (2) the class includes claims that have previously been dismissed by the Court; (3) the class is not limited to the time periods authorized by § 11 and prior order of the Court (i.e., the periods after the registration statement for the offer was filed and before a Form 10K was filed by Enron (# 1269 at 130-32)); and (4) unlike § 10(b), § 11 does not require proof of reliance. They ask the Court to order Lead Plaintiff to amend and request “certification of tailored classes that conform to Fifth Circuit law and the Court’s previous orders,” specifically a “pure Section 11 class, with subclasses for each note offering.” Outside Directors challenge Lead Plaintiffs standing to bring Section 11 claims when it bought no debt because that provision limits suits to purchasers of “such security.” 15 U.S.C. § 77k. See Krim v. pcOrder, 402 F.3d 489, 495, 498 (5th Cir.2005) (Section ll’s “standing provisions limit putative plaintiffs to the ‘narrow class of persons’ consisting of ‘those who purchase securities that are the direct subject of the prospectus and registration statement’ “Section 11 is available for anyone who purchased directly in the offering and any after market purchasers who can demonstrate that their shares are traceable to the registration statement in question”). A Section 11 class representative must have purchased the same security sold pursuant to the same registration statement and offering documents as the class it seeks to represent. Furthermore, Outside Directors insist the “mass class” motion does not provide a manageable trial plan for such a broad and amorphously described single class — it covers different classes of securities (debt, equity, and preferred stock for both Enron-related securities and Enron securities) purchased at different times over a three-year period, under three different statutes of the two federal securities acts (§§ 10(b) and 20(a) of the 1934 Act and §§ 11, 12, and 15 of the 1933 Act), as well as state statutory claims, involving different elements and types of proof (some requiring reliance and scienter, others not), against different parties, and involving different defenses. Submitting jury instructions if there is a single class would be rife with problems. Outside Directors suggest that a separate § 11 class be certified with subclasses for each note offering with proposed class representative with standing to represent each subclass. They contend that proper subclassing would insure that common issues predominate, specifically the two issues in § 11 claims, i.e., that financial statements in registration statements were misleading and the defendants’ due diligence defense (15 U.S.C. § 77k(b)(3)), which they claim is a common and predominant element of every § 11 trial. By certifying a section 11 class, judicial efficiency will be served because the defense need be tried only once, and if defendants prevail, no § 11 claim will survive. Individual reliance is not an issue under these claims because the Court dismissed all reliance-based claims. # 1269 at 130-32. While calculation of damages under § 11 will require each purchaser’s proof of purchase and sales prices, it is formulaic because it does not require calculation of the “true value” of Enron stock. Moreover, for the Zero Coupon Convertible Notes, which originated as a Rule 144A private placement but were subsequently registered, the Court ruled (# 1269 at 132) that the § 11 claims were limited to persons who purchased in the registered offering filed on July 18, 2001; therefore claimants who bought in the 144A private placement lack standing to sue and should not be included in that subclass. Since the Court also dismissed § 11 claims brought on behalf of persons who purchased after the filing of a Form 10K because Lead Plaintiff failed to plead reliance by any of these parties, the subclass for claims for each note offering should be limited to persons who purchased after the registration statement and before the filing of a cumulative Form 10-K. # 1269 at 130; 15 U.S.C. § 77k(a) (requiring proof of reliance by persons who purchased after the issuer made available an earning statement covering a period of at least 12 months beginning after the effective date of the registration statement). D. Financial Institutions (# 1788) (Joined by Deutsche Bank Entities # 4128), Supplemental Submission (# 1793), Supplemental Memorandum in Further Opposition (# 2317), Supplemental Memorandum in Opposition (# 4491), Notice of Supplemental Authority (#4596) and Reply (# 4629) to Response, Credit Suisse and Pershing LLC’s Supplemental Memorandum in Opposition (4490), Barclay’s Supplemental Memorandum (# 4492), and Deutsche Bank’s Opposition (# 4489) The Financial Institutions also object to the lumping together of so many distinct claims with different elements, against different defendants, arising at different times, into one undifferentiated class. Because the § 10(b) claims against the Financial Institutions are not based on alleged material misrepresentations, but on their conduct in the alleged fraudulent scheme under Rule 10b-5(a) and (c), and because Lead Plaintiff relies on the fraud-on-the-market presumption to satisfy the reliance element, the Financial Institutions argue that since their conduct was not conveyed to investors and the market, it could not have been relied upon by the investors and the market; therefore the presumption of reliance does not apply. Basic, Inc., 485 U.S. at 247, 108 S.Ct. 978 (presumption of reliance applies to “any public material misrepresentations”). Thus each plaintiff must demonstrate that he relied on the specific conduct of each Financial Institution Defendant — undermining class certification because the predominance requirement cannot be satisfied. Sandwich Chef of Tex., Inc. v. Reliance Nat'l Indemn. Ins. Co., 319 F.3d 205, 211 (5th Cir.2003) (“Fraud actions that require proof of individual reliance cannot be certified as Fed.R.Civ.P. 23(b)(3) class actions because individual, rather than common, issues will predominate.”), cert. denied, 540 U.S. 819, 124 S.Ct. 101, 157 L.Ed.2d 37 (2003). Similarly, the Financial Institutions argue, it is also improper to presume that Lead Plaintiff can satisfy the requirement that the fraud be “in connection with the purchase or sale of any security,” i.e., that there be a nexus between the alleged fraud and a securities transaction, with respect to them. The transactions through which each of them allegedly participated in the alleged scheme took place at different times throughout the class period and affected different statements read by different plaintiffs in different ways; thus the Financial Defendants alleged transactions cannot be presumed to be “interdependent and coincidental” with all plaintiffs’ purchases. The Financial Institutions cite testimony from the proposed representatives’ depositions that the Financial Institutions did not make any express representations to the representatives, but only “enabled,” “assisted” or “helped to perpetuate” Enron’s fraud, to demonstrate that it is inappropriate to presume that all putative class members relied upon the Financial Defendants’ nonpublic conduct. At deposition most representatives stated that they had had no contact with the Financial Institutions and had not relied on anything the Financial Institution Defendants said or did in making their investment decisions. Each class member must individually establish that he relied on each Financial Defendant’s conduct, they contend. In sum, they insist under Plaintiffs theory of liability, individual issues of reliance predominate over common questions. Furthermore the Financial Institutions argue that Lead Plaintiffs class definition does not meet Rule 23(b)(3)’s superiority requirement because there are numerous different factual and legal issues relating to each defendant and because the huge putative class presents insurmountable manageability problems. If a class is certified for the § 10(b), § 11, and § 12(a)(2) claims, the Financial Institutions insist that the proposed class period for claims against the Financial Institution Defendants must be modified to begin on April 8, 1999 instead of October 19, 1998. They maintain that any claims made before April 8, 1999 against them are time-barred under the Lampf three-year period of repose, as this Court has ruled, and that the Class Period must end on October 16, 2001, when Lead Plaintiff has asserted that Enron “shocked the markets” by announcing it had overstated its financial condition by more that $1 billion, a disclosure that operated as a “correction” of earlier financial statements and other statements about Enron’s financial condition. Basic, Inc., 485 U.S. at 248, 108 S.Ct. 978 (if the fraud-on-the-market presumption applied and if the information that Lead Plaintiff claims has been concealed or misrepresented “credibly entered the market and dissipated the effects of the misstatements,” a plaintiff who “trades ... after the corrective statements would have no direct or indirect connection with the fraud.”); In re Enron Corp. Sec., Derivative & ERISA Litig., 235 F.Supp.2d 549, 574 (S.D.Tex.2002) (a misrepresentation is “immaterial if the information is already known to the market because the misrepresentation therefore cannot defraud the market”). Thus investors who purchased Enron securities after October 16, 2001 could not have relied on the alleged fraud and their claims cannot be saved by certifying them together with those of purchasers before October 16, 2001. Moreover, argue the Financial Institutions, class members who purchased after that date cannot prevail as a matter of law because (1) for their § 10(b) claims relying on the fraud-on-the-market presumption, “[a]ny showing that severs the link between the alleged misrepresentation and either the price received (or paid) by the plaintiff, or his decision to trade at a fair market price [such as this corrective information], will be sufficient to rebut the presumption of reliance,” Basic, Inc., 485 U.S. at 248, 108 S.Ct. 978; (2) their §§ 11 and 12(a)(2) claims are subject to an absolute loss causation defense (because of Enron’s statement that “shocked the markets” their losses could not have been caused by the alleged fraud); and (3) three of their § 11 claims (based on the May 19, 1999 offering of Enron Corp. 7.375% Notes due 5/15/2019, the August 10, 1999 offering of Enron Corp. 7% Exchangeable Notes due 7/31/2002, and a June 1, 2000 offering of Enron Corp. 7.875% Notes due 6/15/2003) require establishment of reliance because Enron filed a Form 10-K for the 12-month period after the registration statements became effective before their purchases, and thus the purchasers could not have relied upon the alleged fraud. 15 U.S.C. § 77k(a). Regardless, argue the Financial Institutions, the Class Period alternatively must end at the latest by November 8, 2001 when Enron publicly announced that it was restating its financial statements for 1997-2000 to eliminate $600 million in profits and approximately $1.2 billion in shareholder equity and expressly warned that its financial statements and audit reports for that period “should not be relied upon.” Such an announcement precluded any reasonable reliance on Enron’s financial statements. Lead Plaintiffs § 11 claims against the Financial Institution Defendants are based on four public securities offerings, three of which were underwritten by different subsets of these Defendants. Not only do the claims present manageability problems because the offerings were conducted at different times, incorporated different Enron financial statements, and were underwritten by different combinations of them, argue the Financial Institutions, but some class members must prove reliance because they purchased them after Enron filed its Form 10-Ks for 1999 and 2000; these factors work against certifying this action as a single class. At minimum, different subclasses would have to be created under Rule 23(c)(4) for each of the three offerings for purchasers who must prove reliance and those who do not need to prove rebanee. Financial Institution Defendants additionally assert that the claims under § 12(a)(2) fail because not a single proposed class representative bought the securities at issue and thus no one has standing to pursue claims based on any of the nine offerings, which were issued from September 1999 through July 2001. See this Court’s orders, # 1999 and 2043. The Financial Institutions’ Supplemental Submission points out that intervenor the Imperial County Employees Retirement System (“ICERS”) has withdrawn. Alternatively, if the Court does certify a class, a separate subclass should be established for each of the nine offerings. Moreover, Financial Institution Defendants argue, since § 12(a) (2) claims must be brought within three years of the sale of the securities, the claims are barred by the applicable § 13’s statute of limitations/repose, 15 U.S.C. § 77m. Since equitable tolling principles do not apply to the statute of repose (# 1999 at 58 & n. 44, 59), they maintain that any belated inter-venor will not relate back to Lead Plaintiffs filing of the Amended Consolidated Complaint on May 15, 2003, which this Court has deemed filed as of January 14, 2003 (# 2044 at 6-7). That complaint asserted the § 12(a)(2) claims for the first time based on the Foreign Debt Securities, all the offerings of which occurred on or before July 12, 2001. Thus the statute of repose for the § 12(a)(2) claims expired at the latest on July 12, 2004, since the last of the offerings occurred on July 12, 2001, and no class member with standing has come forward. (ICERS settled its claims and withdrew.) Financial Institutions further argue that the American Pipe rule tolling statutes of limitations and of repose when a class action is commenced does not apply when no named plaintiff has standing to assert the claims. In re Colonial Ltd. P’ship Litig., 854 F.Supp. 64, 82 (D.Conn.1994). In their most recent memorandum (# 4491), the Financial Institutions contend that to be primarily liable under § 10(b) in the wake of Central Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994) and progeny a defendant must have made a material misstatement or omission on which the market could rely. They insist Lead Plaintiff has not established any misrepresentation made by any Financial Institution Defendant with the requisite scienter of the individual corporate official making the statement to hold the Financial Institution liable under Southland Sec. Corp. v. INSpire Ins. Solutions Inc., 365 F.3d 353, 366-67 (5th Cir.2004). Lead Plaintiff has also failed to demonstrate that any Financial Institution made an actionable misstatement through an analyst that had a material and measurable impact on the price of Enron securities. Greenberg v. Crossroads Sys., Inc., 364 F.3d 657, 663-66 (5th Cir.2004). They insist that Lead Plaintiffs allegation that claims against the Financial Institutions based on statements made by Enron, on which class members relied, about transactions funded or structured by the Financial Institution Defendants, are not actionable under Central Bank and In re Dynegy, Inc. Sec. Litig., 339 F.Supp.2d 804, 913, 916 (S.D.Tex.2004) (holding that Citigroup, alleged to have “structured, funded and executed two major series of transactions to hide off Dynegy’s balance sheet hundreds of millions of dollars in debt” and to have issued misleading analyst reports about Dynegy, was not liable for misstatements made by Dynegy in Dynegy’s financial statements because such claims are barred by “Central Bank’s limitations on liability for a secondary actor’s involvement in the preparation of false and misleading statements.”). Furthermore the Financial Institutions assert that Lead Plaintiff has failed to demonstrate an efficient market for the Foreign Debt Securities, Enron Registered Bonds, Enron Preferred Securities, and Stock Options. The Foreign Debt Securities were issued pursuant to unregistered private placements under 17 C.F.R. §§ 230.901-230.905 in private offerings limited to Qualified Institutional Buyers (“QIBs,” i.e., entities owning and investing in the aggregate at least $100 million in securities that are exempted from registration for private resales of securities, under 17 C.F.R. § 230.144A). Regulation S, under which the foreign portions of the Foreign Debt Securities were issued, exempts such securities from registration requirements under § 5 of the Securities Act of 1933. The offering memoranda state they are confidential and prepared solely for the QIBs permitted to purchase them, are not offers to any other persons of the public generally, and that there is no existing market for the notes offered nor any assurance that there would be the development or liquidity of a market for them. They point out that Lead Plaintiffs expert, Dr. Blaine Nye, does not try to demonstrate that the primary offerings of the Foreign Debt Securities traded in efficient markets. Moreover, argue the Financial Defendants, the market for the Foreign Debt Securities was inefficient. Dr. Nye’s data reflect that the Foreign Debt Securities were thinly traded in the secondary market, while Dr. Suresh M. Sundaresan, Deutsche Bank’s expert on market efficiency, shows they had small weekly turnover rates and low trading frequencies. Dr. Nye merely points out that the number of days during the Class Period when these securities even traded varied from 6.1% to 31.6%, with an average trading frequency of 20.6% and a median trading frequency of 21.0%; there was no trading of these securities on the majority of trading days. Dr. Nye provides data on institutional holdings, but fails to explain how that data compare with data for securities in inefficient markets. Dr. Nye states that analysts at only seven institutions covered Osprey and Marlin securities, at only five financial institutions covered Yosemite securities, and at only four financial institutions covered Enron credit-linked notes, far fewer than the 29-31 analysts covering Enron common stock. Moreover some of those analysts were affiliated with the underwriters of the Rule 144A offerings. In addition these debt securities were traded over the counter by calling around an informal net of investors and brokers rather than having a centralized trading platform with publicly quoted bids, asks and transactions. See In re Livent, Inc. Sec. Litig., 211 F.R.D. 219, 222 (S.D.N.Y.2002) (holding that notes not purchased on a public exchange but “bought and sold through an informal net of contacts among institutional investors and brokers who would exchange bids and negotiate prices privately” and where there “was no centralized source of price and trading information” was “inconsistent with the central tenet of ‘fraud on the market’ theory, which presupposes that ‘an efficient securities market rapidly incorporates all publicly available information about a company’s business and financial situation.’”); Camden Asset Management, L.P. v. Sunbeam Corp., No. 99-CV-8275, 2001 WL 34556527, *10 (S.D.Fla. July 3, 2001) (“debentures were not priced efficiently” where “the only way to obtain pricing information ... was by ‘calling around,’ rather than relying on a market where bids, asks, and transactions are quoted publicly and accurate transaction data and information is [sic ] available”); Greenberg v. Boettcher & Co., 755 F.Supp. 776, 782 (N.D.Ill.1991) (an efficient market for bonds is “ ‘a developed market — a secondary market with a relatively high level of trading activity and for which trading information such as price and volume were readily available’ ”). In addition to joining in the Financial Institution Defendants’ briefs, Barclays, in a separate memorandum (#4492), points out that Barclays did not make any misrepresentations upon which class member or the market could have relied. It argues that the fraud-on-the-market doctrine is unavailable against Barclays because the doctrine applies only to Rule 10b-5(b) claims; thus there are no common questions, including questions of reliance, that will predominate in claims against Bar-clays. It is also unavailable because Lead Plaintiff failed to show that any statement by Barclays had any effect on Enron’s stock price or was anything other than confirmatory under Greenberg v. Crossroads Sys., Inc., 364 F.3d 657 (5th Cir.2004). Deutsche Bank entities filed additional Opposition (# 4489) to the motion for class certification. They identify as the § 10(b) allegations against them that Deutsche Bank entities made misrepresentations in Osprey, Yosemite and/or Marlin offering memoranda and in debt and equity analyst reports. With respect to the fraud-on-the-market presumption of reliance, pointing to Dr. Sundaresan’s expert report, they argue that Lead Plaintiff cannot satisfy the touchstones for class certification established in recent Fifth Circuit cases for application of the fraud-on-the-market presumption of classwide reliance because Lead Plaintiff cannot show that (1) the primary (new issue) or secondary markets for the Foreign Debt Securities, the Enron Registered Bonds, and the Preferred Securities were efficient, and (2) any of the alleged public misrepresentations is actionable, since the statements are either confirmatory or they cannot be shown to have affected the price of the security (materiality). Furthermore, since many of the alleged misrepresentations occurred long after the start of the proposed class period and thus after many class members’ purchases, the proposed dates for the Class Period are not applicable against Deutsche Bank entities. Nor, Deutsche Bank entities maintain, has Lead Plaintiff alleged that Deutsche Bank performed any timely fraudulent act that could independently constitute a primary violation upon which plaintiffs relied, since this Court previously ruled that structured tax transactions involving Enron and Deutsche Bank were time-barred. In re Enron Corp., 310 F.Supp.2d 819, 859 (S.D.Tex.2004). Because the allegations against the Deutsche Bank entities are in the nature of misrepresentation and affirmative deceit, not of silence and omission, the Deutsche Bank entities insist the Affiliated Ute presumption of reliance is not applicable to the claims against them; it also does not apply because the proposed class had no special relationship with Deutsche Bank that could give rise to a duty to disclose. Since there is not classwide presumption of reliance available to Lead Plaintiff according to Deutsche Bank, Lead Plaintiff must show reliance upon each Financial Institution’s statements or actions to avoid imposing liability on an entity that did not commit a primary violation but merely aided others; thus individual proof of reliance is required and bars class certification. Deutsche Bank entities further argue that the market for each security must be considered separately in determining market efficiency and that primary markets by definition are not efficient. Moreover, they maintain that Dr. Nye’s Declaration ignores the primary market for the Enron debt securities and thus Lead Plaintiff has not met its burden of proof to trigger the fraud-on-the-market presumption. E. Putative Class Members’ Partial Objection (# 1789) Putative Class Members (“Objectors”), as QIBs, purchased notes issued by the Osprey Trust. These Osprey Notes were not registered under the 1933 Securities Act and, as stated in the Offering Memorandum, were offered and sold only to QIBs in reliance on Rule 144A and in offshore transactions in reliance on Regulation S. The Objectors purchased only the Rule 144A Notes, but note that Lead Plaintiff asserts that both kinds of Osprey Notes fall inside the Newby class definition. The Objectors are opposed to certification of a single class of purchasers of Enron Corp. securities and purchasers of Osprey Notes. They explain that the original Newby class action complaint, filed in April 2002, reached only investor losses in Enron Corp. securities, not losses in securities that were not issued by Enron, which include Osprey Notes. Thus these Objectors filed a separate non-class action in October 2002 in the California Superior Court against the banks and affiliated controlled entities that sold them the Osprey Notes, based solely on their losses from those Notes. Then on May 14, 2003 the Newby plaintiffs filed a first amended consolidated complaint that expanded the class to include losses for securities issued by Enron-related entities, which includes Osprey Notes. The two Newby claims based on the Osprey Notes are grounded in (1) § 10(b) and Rule 10b-5, and (2) § 12(a)(2). The Objectors point out that none of the proposed class representatives purchased Osprey Notes, received any of the Osprey offering materials, discussed the offering with the selling syndicate member, nor read or relied on particularized, material, false and misleading statements in those offering materials. Objectors argue that because no proposed class representative purchased the Osprey Notes, none has standing to bring claims on behalf of Osprey purchasers because none has a stake in the Osprey Notes nor interests aligned with those of the Osprey Note purchasers, and none can adequately prosecute claims. They contend that for claims under § 10(b) and § 12(a)(2), a plaintiff only has standing if it purchased or sold the relevant securities. They further argue that even if a class representative had purchased Osprey Notes, the typicality and predominant elements for class certification cannot be satisfied. The Objectors point out that Newby Lead Plaintiff has failed to name key Osprey Note sellers as defendants, including Bear Stearns for Osprey I and UBS War-burg for Osprey II, has failed to assert key facts and legal theories relating to the Osprey claims, and has characterized and attacked the Osprey structure as an artifice for Enron shareholders. They also object that the Newby plaintiffs have failed to consider the relative strengths and weaknesses of the Enron securities claims and the Foreign Debt Securities claims, but instead have insisted that all recovery be distributed pro-rata among class members. The Objectors argue that they have different elements of proof to satisfy and different remedies available under California state law, which they contend they should not be deprived of the opportunity of pursuing, and that the Osprey Notes were not “covered securities” under SLU-SA. While the Objectors could opt-out of Newby, they would risk their claims relating to their purchase of other Enron securities, which might be time-barred outside of Newby and which they did not include in their California lawsuit because they were being pursued in Newby. They ask the Court either to certify a class that excludes Osprey Notes purchasers from the Newby class or to allow them to opt out of the Newby class with respect to their Osprey Note purchases only, while still participating in the class with respect to any Enron-issued securities. The Objectors emphasize the differences in situation, claims, and defenses of Osprey Noteholders from those of the Proposed Representative and other putative class members. The private offering to QIBs is different from public trading of securities on an United States securities exchange or in the NASDAQ system, which was the case with publicly traded Enron Corporation securities purchased by Lead Plaintiff and other proposed class representatives. The latter are not exempted from registration under Rule 144A. 17 C.F.R. § 230.144A(d)(3)(I). In contrast investment banks purchase the Rule 144A securities and resell them to QIBs by means of printed private offering memoranda and direct sales presentations, and the QIBs buy directly from these investment banks. For example, the Osprey I syndicate directly solicited PIMCO and gave it the Osprey I Memorandum and DLJ Summary Sheet. In contrast the Newby plaintiffs did not receive those offering materials and thus were not affected by the alleged misleading statements made by the investment banks in those offering materials regarding the use of the offering proceeds, an absence of conflicts of interest, the Whitewing asset transactions and value of Whitewing assets, and the Osprey Noteholders’ ability to force liquidation of those assets upon default. The Objectors characterize Newby as a fraud-on-the-market case charging an overarching scheme and artifice to defraud against all scheme participants who are allegedly responsible for materially inflating Enron’s financial statements and caused the losses of investors who relied on the integrity of the market; they insist none of the six claims in Newby adequately covers the Osprey Note purchasers. F. Certain Individual Defendants’ Opposition to Class Certification of § 20A claims (# 1795), Joined by Andrew Fastow (# 1796), and in part by Ken L Harrison (# 1798) To prevail in a § 20A claim, a plaintiff must show that a defendant (1) used material, nonpublic information, (2) knew or recklessly disregarded that the information was material and nonpublic, and (3) traded contemporaneously with the plaintiff in the same class of security. Insisting that the adequacy, typicality, commonality, predominance, superiority, and manageability requirements of Rule 23 cannot be met, and that classwide proof is not possible, Certain Individual Defendants argue that trying the § 20A claims as a single class “ignores the practical realities of what will be required for claimants to establish liability with respect to nearly 450 separate transactions, completed on more than 200 days, by 16 defendants, over a 3-year period.” Determining standing to sue requires a claimant-by-claimant inquiry as to when the individual plaintiff investor purchased and sold which stock, whether and to what extent the price of that stock was inflated at the time of that purchase and sale as a result of particular undisclosed material information used by which defendant, and whether that plaintiff suffered a loss and if so, how much. They insist that proof would vary with individual defendants, trading days, and transactions. The Court would have to examine the particular circumstances of each transaction (e.g., material nonpublic information allegedly available to the trading defendant at the time of the transaction) to determine standing, liability and damages for that transaction. They cite conflicts of interest among putative class members in competition with each other to demonstrate that Enron stock was the most inflated on the day each traded. Certain Individual Defendants further object that Lead Plaintiff has provided no trial plan to show how these individualized determinations could proceed as a class proceeding; indeed the motion for class certification does not mention the § 20A claims. Not only do they assert that individual questions would make a trial unmanageable, but they question how the enormous number of issues could be submitted to a jury, how a jury could keep track of the different issues for different plaintiffs against different defendants over a three-year period, and how standing could be established on a classwide basis without bringing each class member before the Court. They insist there are too many transactions with individual issues to make subclassing of any help. In the event that the Court does certify a § 20A class, Certain Individual Defendants ask that the Court limit membership in that class or in subclasses to those who purchased stock within one day after a defendant sold his stock to satisfy the contemporaneity requirement, in light of recent case law. Certain Individual Defendants argue that the proposed § 20A class representatives are not adequate to represent the class because they are not familiar with the legal and factual theories of the case, have relied entirely on Lead Counsel for factual investigation, and cannot distinguish among the defendants in this action. Many have never even read an opinion or order issued by the Court in this litigation and have not spent more than a few hours on this suit since its commencement. They cite examples from the deposition testimony of Dr. Richard Kimmerling, Michael Henning, Dr. Fitzhugh Mayo, Joseph Speck, Ben Schuette, and John Cassidy. G. Vinson & Elkins, LLP (# 1799) Vinson & Elkins LLP (“V & E”) also argues that class treatment is not appropriate as applied to claims against it because the fraud-on-the-market theory of presumed reliance applies only where a defendant communicated a misrepresentation to the relevant market, thus distorting the market price for the security at issue. V & E insists there is no evidence that it communicated any misrepresentation to the markets for Enron securities. Therefore each plaintiff would have to prove reliance on the alleged fraud claims against it, precluding class certification. Moreover it argues that Lead Plaintiff has not shown that it was the creator of any misleading statements that did reach the market, although the Court found that Lead Plaintiff has alleged that it was. Lead Plaintiff has not provided any support for its unsubstantiated claim that V & E “drafted and/or approved the adequacy of Enron’s press releases, shareholder reports and SEC filings.” Nor has Lead Plaintiff identified specific statements that V & E allegedly was involved in creating or the specific securities to which such statements relate. V & E urges the Court to follow the majority rule of those courts that apply a “bright line rule” prohibiting a finding of primary liability under § 10(b) unless the secondary actor is identified as the author of a statement that reached the market; otherwise, it argues, application of the creator standard to support invocation of the fraud-on-the-market theory would allow plaintiffs to circumvent the reliance requirement. H. Merrill Lynch’s Supplemental Opposition (#2286), Reply to Lead Plaintiffs Opposition (#2318), and Supplemental Memorandum (# 4486) With respect to the claims against it, Merrill Lynch argues that the class is not certifiable under Greenberg v. Crossroads Systems, 364 F.3d 657, 663 (5th Cir.2004) (holding that plaintiffs are not entitled to the fraud-on-the-market presumption of reliance for confirmatory statements, i.e., statements embodying information already known to the market and therefore already reflected in a stock’s price), and that Greenberg disposes of the entire case against Merrill Lynch. The Greenberg panel opined that “[a] causal relationship between the statement and actual movement of the stock price” is essential to demonstrate reliance. Id. at 665. The Fifth Circuit concluded that even for non-confmmatory, i.e., “actionable,” statements, there is no presumption of reliance where the price of the company’s stock “did not decline significantly after a revelation that the earlier positive statements were misleading.” Id. at 665. Furthermore, merely offering evidence that the price decreased after negative “truthful” information was released does not trigger the presumption of reliance; plaintiffs must also show that the earlier false statement that affected the stock’s price and that was not confirmatory is related to the later “truthful” statement with negative information that caused the decrease in value, i.e., “that it is more probable than not that it was this negative statement, and not other unrelated negative statements, that caused a significant amount of decline.” Id. at 665-66. Merrill Lynch labels as “confirmatory” the fraudulent conduct claims asserted against it, specifically the allegations that it engaged in power swaps, the Nigerian barge transaction, and the LJM2 transactions in the fourth quarter of 1999 that “falsely inflated Enron’s profits to meet Wall Street’s and Enron’s internal targets,” and that “in response to Enron meeting analysts’ estimates,” Enron’s stock price increased. The alleged purpose and the resulting effect of Enron’s wrongful conduct was for Enron to meet Wall Street’s and analysts’ estimates. Merrill Lynch argues that Enron’s January 18, 2000 announcement, that Enron’s earnings for the fourth quarter of 1999 of $.31 per share ($1.18 for the year) were in line with the consensus estimates, is a “classic example of confirmatory information,” (Greenberg, 364 F.3d at 668 n. 16, and Amended Complaint at ¶¶ 742.5, 742.16, 742.18, and 742.22). Moreover, Merrill Lynch insists that the press statement “embodied virtually all of Merrill Lynch’s allegedly wrongful conduct” and emphasizes that despite the alleged fraud, Enron’s stock price did not go up, but down. Lead Plaintiff also alleges that Merrill Lynch issued misleading analyst reports, but Merrill Lynch claims that those alleged misrepresentations were also confirmatory, based on information previously announced by Enron. See # 2286 at 5 n. 6, listing the reports and their derivations from Enron announcements; Amended Complaint at ¶¶ 130, 142, 147, 149, 162, 181, 201, 208-09, 226, 250, 266, 321, and 362 (the bulk of which Merrill Lynch argues are repetitions of Enron information). Merrill Lynch further contends that Plaintiffs have not provided any evidence that the alleged false statements by Merrill Lynch’s analysts materially affected the price of Enron’s stock. In addition to alleged conduct that was merely confirmatory and thus had no impact on stock price, not only did the price of Enron stock decline, not rise, after Merrill Lynch’s alleged participation in illicit transactions followed by Enron’s positive earnings announcement on January 18, 2000, but after the ultimate revelation of (“the truth”) in the Nigerian barge transaction and the power swaps transaction on April 9, 2002 and August 8, 2002, respectively, after Enron had filed for bankruptcy in December 2001, Enron stock actually rose three cents in value. Thus even for non-confirmatory statements Lead Plaintiff failed to show a significant decline following revelation of the truth, much less that any drop in price was attributable to these revelations as opposed to other news about Enron. Therefore because Lead Plaintiff has not shown that Merrill Lynch’s conduct actually moved Enron’s stock price, the presumption of reliance is not triggered and a class cannot be certified on the claims against Merrill Lynch. Ex. C to #2286, Enron Press Release, Jan. 18, 2000; Ex. D, Houston Chronicle, Jan. 19, 2000; Ex. E, Stock Price Chart. In addition, under the Fifth Circuit’s holding in Southland Sec. Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353, 364, 366 (5th Cir.2004) (because group pleading did not survive passage of the PSLRA, to determine whether a statement was made by a corporation with scienter one must examine the state of mind of the individual corporate official making or issuing the statement), the firm insists the § 10(b) claims against Merrill Lynch based on the analysts’ reports must be dismissed. III. Prerequisites for Class Certification Under Rule 23 A. General Principles Under Federal Rule of Civil Procedure 23(e)(1)(A) and (B), as amended in 2003, the court “must — -at an early practicable time—determine by order whether to certify the action as a class action” and, if it determines that it should do so, “define the class and the class claims, issues, or defenses” in the order certifying the class. The court has wide discretion in determining whether to certify a class, but that discretion must be exercised within the bounds of Rule 23. Henry v. Cash Today, Inc., 199 F.R.D. 566, 570 (S.D.Tex.2000), citing Castano v. American Tobacco Co., 84 F.3d 734, 740 (5th Cir.1996). “Rule 23 is a remedial rule which should be construed liberally to permit class actions, especially in the context of securities fraud suits, where the class action device can prove effective in deterring illegal activity.” Longden v. Sunderman, 123 F.R.D. 547, 551 (N.D.Tex.1988), citing inter alia Simon v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 482 F.2d 880 (5th Cir.1973), and 5 Newberg on Class Actions § 8800 (1977). The district court’s decision to certify a class will only be reversed for abuse of discretion or application of incorrect legal standards. Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 624 (5th Cir.1999), cert. denied, 528 U.S. 1159, 120 S.Ct. 1169, 145 L.Ed.2d 1078 (2000). In the process of determining whether a class should be certified, the court is required to conduct a rigorous analysis of Federal Rule of Civil Procedure 23’s prerequisites. General Telephone Co. v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982); Castano, 84 F.3d at 740. “Class certification hearings should not be mini-trials on the merits of the class or individual claims,” but nevertheless the court must go beyond the pleadings and examine the evidence to understand the claims, defenses and relevant facts and applicable substantive law to make a meaningful certification decision. Unger v. Amedisys Inc., 401 F.3d 316, 321 (5th Cir.2005) (“The plain text of Rule 23 requires the court to ‘find,’ not merely assume, the facts favoring class certification.”), citing Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974). The Fifth Circuit has stated that Eisen does not support “the view that a district court must accept, on nothing more than pleadings, allegations of elements central to the propriety of class certification under rule 23.” Bell v. Ascendant Solutions, Inc., 422 F.3d 307, 311-12 (5th Cir.2005) (holding that a review of the merits of a claim is proper to the degree necessary to determine whether the requirements of Rule 23 have been satisfied). Where the facts that must be considered for a Rule 23 determination overlap with the facts relating to the merits, they may be reviewed even where the resulting court findings might also coincidentally overlap. Id. at 312 (but warning that “ ‘[t]he findings made for resolving a class action certification motion serve the court only in its determination of whether the requirements of Rule 23 have been demonstrated’ ”), citing and quoting Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir.2004). In addition, the court, though not reaching the merits, must consider how plaintiffs’ claims will be tried, individually or on a class basis. Castano, 84 F.3d at 744. While the Court has reached the motion to certify rather late in the litigation, with fact discovery in large part completed, the evidence gleaned by the parties in that pursuit makes easier a rigorous analysis of the elements of Rule 23. “District courts are permitted to limit or modify class definitions to provide the necessary precision.” In re Monumental Life Ins. Co., 365 F.3d 408, 414 & n. 7 (5th Cir.2004) (citing and quoting Robidoux v. Celani, 987 F.2d 931, 937 (2d Cir.1993) (“A court is not bound by the class definition proposed in the complaint and should not dismiss the action simply because the complaint seeks to define the class too broadly.”)), cert. denied sub nom. Am. Nat’l Ins. Co. v. Bratcher, 543 U.S. 870, 125 S.Ct. 277, 160 L.Ed.2d 117 (2004); Harris v. Gen. Dev. Corp., 127 F.R.D. 655, 659 (N.D.Ill.1989) (“[I]t is certainly within the court’s discretion to limit or redefine the scope of the class.”); Meyer v. Citizens & S. Nat’l Bank, 106 F.R.D. 356, 360 (M.D.Ga.1985) (“The Court has discretion in ruling on a motion to certify a class. This discretion extends to defining the scope of the class.”), cert, denied sub nom. American Nat’l Ins. Co. v. Bratcher, 543 U.S. 870, 125 S.Ct. 277, 160 L.Ed.2d 117 (2004); Turner v. Murphy Oil USA Inc., No. CIV. A. 05-4206, 234 F.R.D. 597, 2006 WL 267333 (E.D.La. Jan.30, 2006) (citing Monumental Life for that proposition). As the movant for class certification here, Lead Plaintiff bears the burden of demonstrating that a class action is appropriate and that all requirements of Rule 23 are satisfied. Berger v. Compaq Computer Corp., 257 F.3d 475, 479 (5th Cir.2001), clarified and reh’g en banc denied, 279 F.3d 313 (5th Cir.2002). B. Rule 23(a)’s Requirements Rule 23(a), setting forth part of the “Prerequisites to a Class Action,” provides, One or more members of a class may sue or be sued as class representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the