PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
                ___________

                    No. 24-1267
                    ___________

 LEON DRUMMOND; LEE WILLIAMS, On behalf of
    themselves and all others similarly situated;
            YESHONDA DRIGGINS

                          v.

   PROGRESSIVE SPECIALTY INSURANCE CO;
   PROGRESSIVE ADVANCED INSURANCE CO,
                                  Appellants
          _______________________

    On Appeal from the United States District Court
       for the Eastern District of Pennsylvania
            (D. C. Civil No. 5:21-cv-04479)
      District Judge: Honorable Elizabeth T. Hey
                   ______________

             Argued on November 8, 2024

Before: KRAUSE, BIBAS, and SCIRICA, Circuit Judges.

                 (Filed: July 7, 2025)
James M. Brigman
Jeffrey S. Cashdan [ARGUED]
Allison H. White
King & Spalding
1180 Peachtree Street NE
Suite 1600
Atlanta, GA 30309

Nicole E. Bronnimann
King & Spalding
1100 Louisiana Street
Suite 4100
Houston, TX 77002

Paul A. Mezzina
Amy R. Upshaw
King & Spalding
1700 Pennsylvania Avenue NW
Suite 900
Washington, DC 20006

  Counsel for Appellants

Adam G. Unikowsky
Jenner & Block
1099 New York Avenue NW
Suite 900
Washington, DC 20001

  Counsel for Amicus Appellants Chamber of Commerce of
  the United States of America and American Property
  Casualty Insurance Association




                           2
Stephanie A. Douglas
Nicole Haelterman
Susan M. McKeever
Bush Seyferth
100 W Big Beaver Road
Suite 400
Troy, MI 48084

  Counsel for Amicus Appellant Lawyers for Civil Justice

Joseph H. Bates, III
Edwin L. Lowther, III
Carney Bates & Pulliam
One Allied Drive
Suite 1400
Little Rock, AR 72202

Jacob L. Phillips [ARGUED]
Jacobson Phillips
2277 Lee Road
Suite B
Altamonte Springs, FL 32789

  Counsel for Appellees

                  _________________

               OPINION OF THE COURT
                  _________________




                              3
SCIRICA, Circuit Judge.

       This is an interlocutory appeal under Federal Rule of
Civil Procedure 23(f) in two consolidated suits against
Progressive Specialty Insurance and Progressive Advanced
Insurance (collectively, “Progressive”). Plaintiffs represent a
class of drivers who, seeking coverage for their totaled
vehicles, allege Progressive systematically underestimated the
actual cash value of their cars and so breached its insurance
agreements with them. The District Court certified two
damages classes.

        We conclude that proving whether Progressive
undercompensated each class member is an individual issue
incapable of proof on a class-wide basis. And because that
individual issue is the dispositive question of Progressive’s
liability for breach of contract, we hold both classes fail to clear
Rule 23(b)(3)’s requirement that common issues predominate
over individual ones. So the District Court abused its
discretion in certifying the classes. Accordingly, we will
reverse and remand.

                                 I.

       Between 2018 and 2021, each named plaintiff in the
putative classes filed a claim with Progressive after a car
accident. In each instance, Progressive declared plaintiff’s
vehicle a total loss, triggering Progressive’s contractual
obligation to pay them the “actual cash value” (“ACV”) of their
totaled vehicle. That obligation derives from Progressive’s
“Pennsylvania Auto Policy,” which states the ACV is
“determined by the market value, age, and condition of the
vehicle at the time the loss occurs.” App. 117.




                                 4
       Plaintiffs allege Progressive’s method of calculating
each insured’s ACV systematically underestimated that value.
Specifically, plaintiffs contend that one component of
Progressive’s settlement valuation methodology, the
“Projected Sold Adjustment” (“PSA”)—which accounts for
the fact that used cars often sell for less than dealers’ listed
prices—is categorically improper and should be omitted from
the ACV calculation. Accordingly, plaintiffs, all of whom
reside in Pennsylvania, sued on a state-law breach-of-contract
theory.

                              A.

       As relevant here, Progressive’s methodology for
calculating a final settlement value that approximates a
vehicle’s ACV requires several steps.1 Progressive’s coverage
policy permits it to use any evaluation “systems . . . developed
by . . . a third party and may include computer software,
databases, and specialized technology” in assessing ACV.
App. 122. Here, that third party is Mitchell International, Inc.
(“Mitchell”), and that system is Mitchell’s WorkCenter Total
Loss (“WCTL”), which generates a “dual source report.” As
its name suggests, that report uses two figures to reach its
estimate, which represent the first two steps in Progressive’s


       1
        Progressive’s methodology comports with the “Guide
Source” method, which is one of the pre-approved valuation
techniques under Pennsylvania insurance law. See 

(e)(1)(i). That method allows Progressive to “calculate
the average of two figures reflecting the retail book value” of
similar cars, “as provided by guide sources approved by the
Commissioner.” 

                               5
ACV calculation process. For the sake of ease, we call these
two values the “Mitchell value” and the “NADA value.”

        First, Mitchell estimates a car’s market value by
averaging the list prices of comparable vehicles in the area and
weeding out comparable vehicles whose list prices deviated
substantially from that average. Mitchell takes the list prices
of those comparable vehicles and applies to it a downward
adjustment—the PSA. It does so as a way of approximating
the ultimate sale price of a vehicle, in recognition of dealers’
routine practice of negotiating down from the advertised price
when attempting to sell the vehicle. But Mitchell does not
apply a PSA to vehicles listed for sale at “no-haggle” or “one-
price” dealerships that disallow price negotiation. Mitchell
only applies a PSA to comparable vehicles that are not yet sold.
The PSAs result in an average reduction in base market value
of 6.7 percent, but Progressive emphasizes that a PSA is “not
a blanket reduction that is uniformly applied.” App. Br. 14.
Instead, the PSAs account for vehicle make, model, year, and
where the insured resides, among other factors.

       Second, Progressive obtains another valuation
estimate—this one from the National Automobile Dealers
Association (“NADA”) Official Used Car Guide.2 In essence,
NADA starts with the car’s NADA retail value—a regional
value (e.g., Pennsylvania vehicles are assigned the NADA
“Eastern” regional retail value) listed in the NADA guide.
Similar to Mitchell’s process, NADA adjusts the NADA retail


       2
         NADA changed its name to J.D. Power Values in
2023, but in following the terminology of the litigation at the
District Court, we use the older name.




                               6
value based on the sale prices of comparable vehicles, in
recognition of the fact that vehicles’ retail sale prices are lower
than their initial asking prices. So NADA factors in vehicle-
specific factors, including age, mileage, condition, prior
damage, aftermarket parts, and refurbishment. The result is a
NADA market value estimate—i.e., the NADA value.

       Third, Progressive averages the Mitchell value and the
NADA value, yielding the WCTL dual source base value. In
summary, this value is the average of two estimates, each of
which involves applying vehicle-specific adjustments to
comparable vehicles’ list prices as a way of approximating the
totaled vehicle’s sales price. Both components of the dual
source base value are displayed in the vehicle valuation report.

       Fourth, Progressive takes the WCTL dual source base
value and adjusts it further for condition, prior damage,
refurbishment, and value of aftermarket markets. Sometimes,
the base value is adjusted even further by subtracting the
salvage value if the insured elects to retain the totaled vehicle.

       Accordingly, the final settlement value includes three
types of adjustments: (1) the PSA, applied to the Mitchell base
value; (2) NADA’s adjustments to the NADA Eastern retail
value; and (3) Progressive’s final adjustments to the dual
source base value. The final settlement value also subtracts
any non-waived deductible specific to the insured’s policy.

                                B.

      Plaintiffs object to just the first of the three adjustments
involved in Progressive’s total loss settlement process. They
contend the PSA should not be applied to the Mitchell base




                                7
value because it results in a lower final settlement value. If that
final settlement value is less than ACV, then Progressive
would be in breach of its form insurance contracts. Plaintiffs
further allege Progressive’s breach follows from its
“manipulati[on of] the data used to determine the ACV of the
vehicles.” App. 55. Accordingly, plaintiffs pleaded breach of
contract and actual damages on the basis of underpayment.

        Furthermore, seemingly in support of their breach-of-
contract claim, plaintiffs contend ACV calculations should
exclude PSAs because those adjustments create “an outdated
and false characterization of the market.” Ans. Br. 6.
According to Plaintiffs’ expert, due to the rise in Internet
advertising and sophisticated pricing tools, consumers know
which dealerships are inflating their list prices and simply seek
out dealerships who actually price to market. Plaintiffs raise a
host of other issues with PSAs, but for our purposes, plaintiffs’
arguments reduce to a promise that, at the merits stage, they
can show the PSAs systematically undervalue ACV and thus
result in underpayment.

       Plaintiffs moved to certify two classes.      Leon
Drummond is the lead plaintiff of the Progressive Specialty
Class, which has the following proposed definition:

       All Pennsylvania citizens insured by Progressive
       Specialty who, from the earliest allowable time
       through the date an Order granting class
       certification is entered, received compensation
       for the total loss of a covered vehicle, where that
       compensation was based on a ‘dual source’
       valuation report . . . prepared by Mitchell and the
       ACV was decreased based upon Projected Sold




                                8
       Adjustments to the comparable vehicles used to
       determine ACV.

App. 67 (emphasis added). The second class, the Progressive
Advanced Class, has the same definition word-for-word, other
than that the word “Specialty” is replaced with the word
“Advanced.” App. 67. Plaintiffs Lee Williams and Yeshonda
Driggins are the named representatives for that class.

        The District Court then certified the classes, disposing
of three Rule 23 objections by Progressive: commonality and
predominance, superiority, and adequacy. Drummond v.
Progressive Specialty Ins. Co., No. 21-4479, 

, at *12 (E.D. Pa. Aug. 11, 2023). The crux of the
opinion—and the core issue on appeal—is predominance.
Specifically, the court characterized plaintiffs’ claims as
challenging “the application of PSAs altogether.” 

.
That is, the putative class comprises insureds awarded
improper total loss amounts that deviated from ACV, because
Mitchell factored projected sale prices of the totaled vehicles
into one component of the ACV formula, the court reasoned.
The court continued, “Progressive maintains that PSAs are
legitimate. The putative plaintiffs maintain they are inaccurate
because they misrepresent current market behavior. It is this
dispute, not the individual projected sale price of each vehicle,
that is at the center of this action.” 

 (emphasis added).

       The District Court also held plaintiffs had Article III
standing and rejected Progressive’s argument that the
possibility that a minority of the putative classes might have
benefited from the PSAs posed a fundamental intraclass
conflict that thwarted Rule 23(a) adequacy.




                               9
                              II.

       The District Court had jurisdiction under 

(d). We have jurisdiction under 

(e) and
Federal Rule of Civil Procedure 23(f), which provides that “[a]
court of appeals may permit an appeal from an order granting
or denying class-action certification.” Fed. R. Civ. P. 23(f).

       We “review a class certification order for abuse of
discretion, which occurs if the district court's decision rests
upon a clearly erroneous finding of fact, an errant conclusion
of law or an improper application of law to fact.” In re
Hydrogen Peroxide Antitrust Litig., 

 (3d Cir.
2008) (internal quotation marks omitted). “We exercise
plenary review over a threshold question of law . . . .” Neale
v. Volvo Cars of N. Am., 

 (3d Cir. 2015).

                              III.

        Rule 23 sets forth the requirements for class
certification. In addition to clearing the requirements of Rule
23(a), putative classes seeking damages must additionally
satisfy the “twin requirements” of Rule 23(b)(3), In re
Hydrogen Peroxide, 

, including that “questions
of law or fact common to class members predominate over any
questions affecting only individual members,” Fed. R. Civ. P.
23(b)(3). This predominance requirement is the core issue on
appeal. The District Court characterized plaintiffs’ claims as a
challenge not to “the price for which PSAs predict each car will
sell” but rather to “the application of PSAs altogether.”
Drummond, 

, at *10. Because the District
Court improperly framed the predominance inquiry, we
conclude it abused its discretion in certifying both classes.




                              10
        Namely, the court failed to recognize that plaintiffs’
theory of liability hinged on proving Progressive breached its
insurance agreement with insureds by underpaying them for
their totaled vehicles. And the court did not consider that many
class members’ breach-of-contract claims would be thwarted
by their receipt of a final settlement value equivalent to or
greater than ACV, in spite of Progressive’s application of
PSAs, as a consequence of other steps in the settlement
methodology described above. The District Court would need
to evaluate plaintiff-by-plaintiff proof to ascertain which
plaintiffs Progressive actually underpaid and, accordingly, to
which plaintiffs Progressive is liable for breach of contract.

                              A.

       We begin with the District Court’s erroneous framing
of the predominance inquiry. Under the proper framing, the
District Court should have analyzed whether common issues
predominate over individual issues with respect to proving the
elements of breach of contract. See In re Hydrogen Peroxide,

 (“[We] must resolve all factual or legal
disputes relevant to class certification, even if they overlap
with the merits—including disputes touching on elements of
the cause of action.” (emphasis added)). But the District Court
instead focused merely on the “legitimacy” of the PSAs.
Reasoning that proving whether PSAs were applied to the
class’s vehicle valuations was easily supported by common
evidence, the court stopped its predominance inquiry there.
That analysis fell short of the Supreme Court’s requirement
that “questions of law or fact common to class members
predominate over any questions affecting only individual
members” with respect to the “existence of individual injury.”
Comcast Corp. v. Behrend, 

 (2013).




                              11
                               1.

        The Supreme Court in Comcast prescribed two distinct
tracks for the predominance analysis: (1) Did the defendant
cause injury that is capable of proof common to the class rather
than to individual members? and (2) Are the damages
stemming from that injury measurable on a class-wide basis by
a “common methodology”? 

 The first track—the so-called
liability prong—is at issue here. Under that prong, the District
Court was required to assess whether “the existence of
individual injury resulting from [Progressive’s] alleged
[breach of contract] . . . was capable of proof at trial through
evidence . . . common to the class rather than individual to its
members.” 

 We have held that class certification is
“unsuitable” when “proof of the essential elements of the cause
of action requires individual treatment.” Newton v. Merrill
Lynch, Pierce, Fenner & Smith, Inc., 

, 172 (3d
Cir. 2001) (citation and internal quotation marks omitted).
“Accordingly, we examine the elements of plaintiffs’ claim
through the prism of Rule 23 to determine whether the District
Court properly certified the class.” In re Hydrogen Peroxide,

 (citation and internal quotation marks omitted).

        Specifically, of the state-law elements for breach of
contract in Pennsylvania, breach and resulting damages are the
liability issues Progressive contests on the merits. See Gorski
v. Smith, 

 (Pa. Super. Ct. 2002). Both
elements boil down to whether Progressive underpaid an
insured by compensating them less than the ACV of their
totaled vehicle. So plaintiffs would have to show at this
dispositive step of the predominance analysis that they could
prove Progressive’s underpayment without relying on




                              12
plaintiff-by-plaintiff evidence.3

       Instead, the District Court improperly characterized the
predominance inquiry as boiling down to whether class-wide
evidence could be used to prove whether “PSAs are
legitimate.” Drummond, 

, at *10. The court
summarized plaintiffs’ complaint as averring that PSAs
“misrepresent current market behavior” and “ACV should not
be calculated based on projected sale prices, which is what
applying PSAs does.” 

 “It is this dispute, not the individual
projected sale price of each vehicle, that is at the center of this
action,” the court concluded. 

 And earlier in its opinion, the
court acknowledged Progressive’s contention that “a breach
only occurs if an insured is paid less than ACV”—and then
promptly disagreed with that black-letter assertion. 

 at *8-
9. Specifically, the court first reasoned that “the case turns
generally on whether Progressive's use of PSAs violated its
contractual obligation to pay the proposed class members the
ACV of their vehicles. 

. But it then reiterated that, in
its view, it need reach only one issue at the merits stage:

       3
          The elements of the cause of action are not in the
domain of Comcast’s second prong, which concerns
the calculation of class damages, rather than the determination
of actual damages a prerequisite to breach of contract. See
Neale, 

; see also Comcast 

(Ginsburg and Breyer, JJ., dissenting) (“Recognition that
individual damages calculations do not preclude class
certification under Rule 23(b)(3) is well nigh universal.”
(citation omitted)). For purposes of Rule 23(b)(3), then,
plaintiffs must show they can prove Progressive underpaid
insureds relative to the ACVs of their totaled vehicles.




                                13
whether “the use of PSAs . . . did or did not violate the
contract.” 

       By its own reasoning, the District Court would have to
find, on the merits, that even class members who were paid
above ACV—despite use of PSAs—would still have a breach-
of-contract claim against Progressive. But that would not
constitute a breach here. Rather, the only way “PSAs . . .
violate[d] the contract” is if, in the course of applying them
during the multi-step final settlement valuation, Progressive
paid an insured less than the ACV of their vehicle. Id.; see
Gorski, 

.

                               2.

       Under the proper framing, the District Court should
have analyzed whether common issues predominate over
individual issues with respect to proving the elements of breach
of contract. Progressive could meet its contractual obligation
to pay insureds their vehicles’ ACV in several ways. Consider
three scenarios:      First, Progressive could scrap PSAs
altogether, as plaintiffs urge, and pay the insured the average
of the Mitchell base value—without a PSA—and the NADA
value. This average could conceivably approximate ACV.
Second, Progressive could follow its current methodology and
average the Mitchell value (which includes a PSA) and the
NADA value (which includes various NADA-specific
adjustments)—as it actually does—but balance out (or even
exceed) any intermediate downward adjustments with several
upward adjustments at the final step of the settlement
calculation. Third, the NADA value could be higher than the
Mitchell value, resulting in a final settlement value which,
depending on any final adjustments, could match or exceed




                              14
ACV. This third situation is not uncommon, according to the
sworn affidavit of Progressive’s insurance expert. Contrary to
plaintiffs’ argument that only the first scenario would preclude
a breach-of-contract claim, any of these approaches would
allow Progressive to meet its contractual obligation to pay
ACV.

        The second scenario was squarely addressed by the
Ninth Circuit in Lara v. First Nat’l Ins. Co. of Am., 

 (9th Cir. 2022). There, Liberty Mutual applied a uniform
downward adjustment to its initial estimate of totaled vehicles’
ACV. 

. The court noted, however, that after
applying that downward adjustment, Liberty would often
“reverse[] the negative adjustment and sometimes even appl[y]
a positive adjustment.” 

. This practice of undoing
the downward adjustments undermined putative plaintiffs’
breach-of-contract theory, the court held, because “if a putative
class member was given [the car’s ACV] or more, then he or
she cannot win on the merits.” 

. Why? Because
“[t]o win on the merits of breach of contract, plaintiffs must
show that the breach proximately causes damage to the
[plaintiff].” 

 (citation and internal quotation marks omitted)
(alteration in original). The Lara court also held the putative
class lacked predominance on the same grounds, reasoning that
“figuring out whether each individual putative class member
was harmed would involve an inquiry specific to that person.”

       Likewise here. Just because Progressive applies PSAs
to the Mitchell list prices to arrive at the Mitchell value does
not mean insureds are not being paid ACV. Progressive could
have properly compensated class members while employing
the PSAs.




                               15
        Consider, again, Progressive’s settlement calculation
process. The WCTL dual source base value is the average of
the Mitchell value and the NADA value. Systematically
decreasing one of those two base value components would
always decrease the base value, as plaintiffs emphasize. And
after further adjustments to that base value, Progressive arrives
at the final settlement value it pays to insureds. So
systematically decreasing the Mitchell value would always
mean a lower final settlement value. That is, if we accept
plaintiffs’ allegation that Progressive manipulated the Mitchell
value by applying improper downward adjustments to it, the
final settlement value would always be lower than what it
otherwise would have been. But that is not what matters for
purposes of breach of contract. Rather, what matters is whether
the decrease in the Mitchell value led to the final settlement
value dropping below the true ACV of the totaled vehicle—
because that is what Progressive is contractually obliged to pay
insureds. For example, imagine a class member whose NADA
value exceeded the Mitchell value such that their average offset
any PSA applied to the Mitchell value. That is the third
scenario mentioned above. Or what if Progressive’s final-step
adjustments to the WCTL dual source base value offset the
PSA? That is the second scenario, as well as Liberty Mutual’s
practice addressed in Lara. In each hypothetical, the insured
has suffered no actual injury. Just because the Mitchell value
decreased does not mean the resulting final settlement value
was less than the true ACV of the vehicle.4


       4
         Accord Lara, 25 F.4th at 1139 (“[T]his class could
include a plaintiff whose car was valued using the CCC report
with the disputed condition adjustment, and for whom Liberty
used CCC's estimate without making any further adjustments.




                               16
       We conclude that, contrary to plaintiffs’ argument that
the only way for Progressive to avoid breach of contract is by
eliminating PSAs, Progressive could conceivably meet its
contractual duty to pay ACV notwithstanding the application
of those adjustments in determining just one component of a
vehicle’s final settlement value.

                                B.

       With the proper framing of the predominance inquiry on
Progressive’s liability, we now apply that inquiry to the
putative classes. Individual issues are those “where members
of a proposed class will need to present evidence that varies
from member to member,” and common issues are those where
“the same evidence will suffice for each member to make a
prima facie showing [or] the issue is susceptible to generalized,
class-wide proof.” Tyson Foods, Inc. v. Bouaphakeo, 

, 453 (2016) (internal quotation marks omitted) (quoting 2
Newberg on Class Actions § 4:50 (William Rubenstein ed., 5th
ed. 2012)).

       Although “the presence of individual questions does not
per se rule out a finding of predominance,” In re Prudential
Ins. Co. Am. Sales Prac. Litig. Agent Actions, 

 (3d Cir. 1998), and “[i]ndividual questions need not be
absent,” Messner v. Northshore Univ. HealthSystem, 

 (7th Cir. 2012), a putative class fails to clear the
predominance requirement when a district court “formulate[s]


Even for that plaintiff, the district court would have to look into
the actual value of the car, to see if there was an injury.”).




                                17
some prediction as to how specific issues will play out . . . in a
given case,” In re Hydrogen Peroxide, 

 (citation
omitted), and concludes it “cannot be adequately assured that
individualized evidence will not later overwhelm the case and
render it unsuitable for class-wide adjudication,” Harnish v.
Widener Univ. Sch. of L., 

 (3d Cir. 2016).
“This analysis will often resemble a merits determination, in
that it relates to plaintiffs’ ability to prove the elements of their
claims.” 

 And we must be “pragmatic” in our “assessment
of the entire action and all the issues involved.” Williams v.
Mohawk Indus., Inc., 

 (11th Cir. 2009)
(internal quotation marks omitted) (quoting 5 Moore's Federal
Practice § 23.45[1] (3d ed. 2008)).

        We conclude that identifying whether each class
member was actually paid less than true ACV is an individual
question. Rule 23(b)(3) requires that plaintiffs prove this core
issue of underpayment—on which both breach and damages in
their breach-of-contract claim turn—with class-wide proof.
Plaintiffs cannot meet that burden. And because proving the
underpayment issue is essential to Progressive’s alleged
liability for breach of contract, we believe that “individualized
evidence” of whether each class member’s vehicle’s ACV was
greater than the final settlement value would “overwhelm the
case.” Harnish, 

. Accordingly, because “proof
of the essential elements of [plaintiffs’] cause of action requires
individual treatment,” common issues as to Progressive’s
liability do not predominate. In re Hydrogen Peroxide, 

 (citation omitted).

       Our conclusion is apparent from plaintiffs’ proposed
class definitions—each runs squarely into the actual-
underpayment issue. Namely, each definition is inclusive of




                                 18
only those insureds whose “ACV was decreased based upon
Projected Sold Adjustments.” App. 67 (emphasis added). The
definition’s use of the term “actual cash value” cannot mean
the true ACV of a vehicle, because that is an absolute, static
value that cannot be “decreased.”            Rather, plaintiffs
presumably meant “final settlement value,” which Progressive
guarantees equates to the insured vehicle’s true ACV. Indeed,
plaintiffs use the term “ACV” interchangeably with final
settlement value. See, e.g., App. 66-67.

       Per the class definition, then, the class could include
insureds whose final settlement values decreased as a
consequence of PSAs yet still did not drop below the vehicle’s
true ACV. Plaintiffs cannot prove breach without first proving
Progressive’s final settlement value in a class member’s
vehicle valuation report was lower than true ACV.
Accordingly, each class would have to bring in necessarily
individual proof, plaintiff-by-plaintiff, to determine which
were undercompensated.

       In a recent case, the Ninth Circuit similarly scrutinized
the class definitions in litigation against State Farm. See Jama
v. State Farm Mutual Auto. Ins. Co., 

, 931-36
(9th Cir. 2024). There, the district court declined to certify two
classes, each challenging a distinct adjustment State Farm
made to the value of class members’ totaled vehicles. 

. The “negotiation” adjustment, like the PSA here, captures
the “typical amount buyers may negotiate down the price of a
replacement car” at the dealership. 

 The “condition”
adjustment accounts for the typically worse condition of used
cars. 

 The Jama plaintiffs alleged the “negotiation”
adjustment is unlawful under a Washington statute that sets




                               19
forth guidelines for the calculation of ACV.5 

. The
court, speaking through Judge Rakoff sitting by designation,
concluded, “All members of the negotiation class . . . received
less than they were owed in the exact amount of the
impermissible negotiation deduction.” 

 (emphasis
added).      Accordingly, because the negotiation class was
defined clearly as those insureds who were “paid the value
determined in [the valuation] report with the negotiation
discount applied,” 

 (emphasis added), the court
reversed the denial of certification for that class only, 

.
But the court went the other way on the condition class, holding
that the adjustment at issue there—whose legality plaintiffs did
not contest—did not necessarily result in a uniform downward
adjustment in final settlement values. 

 Rather, the
“[condition] class definition alone does not exclude the
plaintiff . . . whose payout nonetheless equaled or exceeded
their pre-cash car’s actual cash value.” 

 (citation and
internal quotation marks omitted).

       The Jama court’s conclusion that “there is no way to
know as to any individual class member in the condition class
whether their actual payout was more, less, or equal to what
State Farm could lawfully have paid if it had calculated a


       5
         No such statute is on the books in Pennsylvania. Here,
plaintiffs proceed on a breach of contract theory, alleging
systemic undervaluation of ACV, which Progressive is
contractually obligated to pay to insureds. Washington law,
however, explicitly permits the condition adjustment, so the
Jama plaintiffs contended instead that State Farm’s condition
adjustments “lack[ed] sufficient empirical foundation.” Jama,
113 F.4th at 928.




                                 20
condition adjustment appropriately,” id. at 936, is relevant
here. We do not know whether each insured whose Mitchell
value was reduced by a PSA received an “actual payout [that]
was more, less, or equal to what [Progressive] could lawfully
have paid” if it had omitted PSAs. Id. (alteration in original).
“There is therefore no way to know without individualized
inquiry whether such a class member received less than their
car’s actual cash value and therefore suffered any injury.” Id.

       In sum, just because Progressive’s final settlement
value could have been higher but for the use of the PSA does
not mean that a given insured was actually underpaid. And if
an insured was not underpaid, then Progressive did not breach
its contract with that insured.6 Accordingly, individual issues


       6
         A pair of amici make this argument directly. The U.S.
Chamber of Commerce and the American Property Casualty
Insurance Association contend that “[f]or every class member,
the determination of whether Progressive breached the contract
would still require an individualized analysis of whether the
amount of money the class member received is lower than
ACV.” Chamber Amicus Br. 7. They continue,

       [E]ven if Plaintiffs were to prove, following
       class certification, that PSAs rest on outdated
       assumptions about the market for used cars, that
       fact would teach precisely nothing about whether
       Progressive is liable to any particular class
       member. For every single class member, the
       court would still have to ask the question: was
       the payment in fact lower than ACV? That
       question would depend on individualized




                              21
predominate as to whether the putative class members actually
received less than ACV. Since the District Court’s conclusion
as to Rule 23(b)(3) predominance “rest[ed] upon . . . an errant
conclusion of law,” In re Hydrogen Peroxide, 

(citation omitted), the classes must be decertified.

                              C.

       Because we hold the classes failed to satisfy Rule
23(b)(3)’s predominance requirement, we need not reach
Progressive’s alternative argument that the classes presented a
fundamental intraclass conflict in violation of Rule 23(a)(4)’s
adequacy requirement.

       Furthermore, Progressive’s challenge to commonality
under Rule 23(a)(2) is unavailing. To prove the classes here
raise “questions of law or fact common to the class,” Fed. R.
Civ. P. 23(a)(2), plaintiffs need only “demonstrate that the
class members have suffered the same injury.” Wal-Mart


       evidence regarding the characteristics of the
       class member’s particular car.

Id. at 7-8 (emphasis added). The question these amici pose is
the crux of the predominance problem here—whether the final
settlement value is in fact lower than the (true) ACV.
Answering that question would require the court “to review
particularized evidence with respect to every putative class
member” before determining whether Progressive breached its
contract with each member. Id. at 8; see also Ferreras v. Am.
Airlines, Inc., 

, 186 (3d Cir. 2019).




                              22
Stores, Inc. v. Dukes, 

 (2011) (quoting
Gen. Tel. Co. of S.W. v. Falcon, 

 (1982)).
Best framed, the common question here is whether insureds
were underpaid relative to their ACV, as a crucial element of
Progressive’s liability for breach of contract. We have already
explained why proving underpayment is impossible without
individualized inquiries for purposes of the predominance
requirement, which is ultimately more exacting than the
commonality requirement. See Amchem Prods. v. Windsor,

 (1997) (“Even if Rule 23(a)’s
commonality requirement may be satisfied by [plaintiffs’]
shared experience, the predominance criterion is far more
demanding.”); see also Ferreras v. Am. Airlines, Inc., 

, 185 (3d Cir. 2019); Reinig v. RBS Citizens, N.A., 

 (3d Cir. 2018) (“Rule 23(b)’s predominance
requirement incorporates Rule 23(a)’s commonality
requirement . . . .”); In re Hydrogen Peroxide, 

(3d Cir. 2008).

       Lastly, Progressive contends the class cannot
demonstrate common issues predominate as to standing, in
addition to liability. As a threshold matter, we note
Progressive does not contest class standing as a whole. See
App. Br. 31 n.4 (“To be clear, Progressive does not dispute that
the named plaintiffs determine standing for the case as a
whole.” (citation and internal quotation marks omitted)). Nor
could it. “[W]e have held that the cases or controversies
requirement is satisfied so long as a class representative has
standing, whether in the context of a settlement or litigation
class.” Huber v. Simon’s Agency, Inc., 

, 154 (3d
Cir. 2023) (internal quotation marks omitted) (quoting Neale,

). Here, the named plaintiffs all claim they
were undercompensated, and on the record before us, we lack




                              23
any basis to find their vehicle valuations included mitigating
upward adjustments that would balance out their PSAs and
destroy injury-in-fact. Cf. Lewis v. Gov’t Emps. Ins. Co., 

, 457, 460-61 (3d Cir. 2024) (holding Geico’s
application of an upward adjustment to named plaintiff’s
vehicle valuation that entirely offset challenged downward
adjustment defeated class standing). And we need not decide
whether the possibility that some class members’ final
settlement values were the equivalent of or exceeded ACV
would create a predominance issue with respect to standing.
We rest our disposition on the conclusion that, with respect to
liability for breach of contract, the putative classes cannot
prove breach and damages without overly individualized
inquiries.     Accordingly, the putative classes are not
“sufficiently cohesive to warrant adjudication by
representation.” Tyson Foods, 557 U.S. at 453 (citation
omitted). That is enough to bar class certification.

                              IV.

        The purpose of Rule 23(b)(3)’s predominance
requirement “is to determine whether ‘a class action would
achieve economies of time, effort, and expense and promote
. . . uniformity of decision as to persons similarly situated,
without sacrificing procedural fairness.” Sullivan v. DB Invs.,
Inc., 

 (3d Cir. 2011) (Scirica, J., concurring)
(quoting Amchem, 

). Courts must scrutinize the
elements of plaintiffs’ cause of action in determining whether
liability issues at the merit stage will be capable of common
proof. See In re Hydrogen Peroxide, 

 (“If proof
of the essential elements of the cause of action requires
individual treatment, then class certification is unsuitable.
Accordingly, we examine the elements of plaintiffs’ claim




                              24
through the prism of Rule 23 . . . .” (citations and internal
quotation marks omitted)).

       As the Ninth Circuit concluded, when a particular
downward adjustment in an insurance valuation is both
statutorily unlawful and uniform, proving damages incurred by
each plaintiff because of that adjustment is straightforward.
See Jama, 113 F.4th at 932 (“Plaintiffs contend that
Washington law flatly prohibits any negotiation adjustment;
and if Plaintiffs are correct about that legal issue, then each
Plaintiff suffered damages equal to the amount of the
negotiation adjustment that State Farm made.”). Here, by
contrast, plaintiffs brought a contract claim, so they must show
that proving whether Progressive breached its insurance
agreement with each class member does not require a plaintiff-
by-plaintiff determination as to underpayment. Because they
cannot make that showing, we will reverse the District Court’s
order certifying the classes and remand for further proceedings
consistent with this opinion.




                              25


                                         PRECEDENTIAL

      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
                ___________

                    No. 24-1267
                    ___________

 LEON DRUMMOND; LEE WILLIAMS, On behalf of
    themselves and all others similarly situated;
            YESHONDA DRIGGINS

                          v.

   PROGRESSIVE SPECIALTY INSURANCE CO;
   PROGRESSIVE ADVANCED INSURANCE CO,
                                  Appellants
          _______________________

    On Appeal from the United States District Court
       for the Eastern District of Pennsylvania
           (D. C. Civil No. 5:21-cv-04479)
     District Judge: Honorable Mark A. Kearney
                  ______________

             Argued on November 8, 2024

Before: KRAUSE, BIBAS, and SCIRICA, Circuit Judges.

                 (Filed: July 7, 2025)
James M. Brigman
Jeffrey S. Cashdan [ARGUED]
Allison H. White
King & Spalding
1180 Peachtree Street NE
Suite 1600
Atlanta, GA 30309

Nicole E. Bronnimann
King & Spalding
1100 Louisiana Street
Suite 4100
Houston, TX 77002

Paul A. Mezzina
Amy R. Upshaw
King & Spalding
1700 Pennsylvania Avenue NW
Suite 900
Washington, DC 20006

  Counsel for Appellants

Adam G. Unikowsky
Jenner & Block
1099 New York Avenue NW
Suite 900
Washington, DC 20001

  Counsel for Amicus Appellants Chamber of Commerce of
  the United States of America and American Property
  Casualty Insurance Association




                           2
Stephanie A. Douglas
Nicole Haelterman
Susan M. McKeever
Bush Seyferth
100 W Big Beaver Road
Suite 400
Troy, MI 48084

  Counsel for Amicus Appellant Lawyers for Civil Justice

Joseph H. Bates, III
Edwin L. Lowther, III
Carney Bates & Pulliam
One Allied Drive
Suite 1400
Little Rock, AR 72202

Jacob L. Phillips [ARGUED]
Jacobson Phillips
2277 Lee Road
Suite B
Altamonte Springs, FL 32789

  Counsel for Appellees

                  _________________

               OPINION OF THE COURT
                  _________________




                              3
SCIRICA, Circuit Judge.

       This is an interlocutory appeal under Federal Rule of
Civil Procedure 23(f) in two consolidated suits against
Progressive Specialty Insurance and Progressive Advanced
Insurance (collectively, “Progressive”). Plaintiffs represent a
class of drivers who, seeking coverage for their totaled
vehicles, allege Progressive systematically underestimated the
actual cash value of their cars and so breached its insurance
agreements with them. The District Court certified two
damages classes.

        We conclude that proving whether Progressive
undercompensated each class member is an individual issue
incapable of proof on a class-wide basis. And because that
individual issue is the dispositive question of Progressive’s
liability for breach of contract, we hold both classes fail to clear
Rule 23(b)(3)’s requirement that common issues predominate
over individual ones. So the District Court abused its
discretion in certifying the classes. Accordingly, we will
reverse and remand.

                                 I.

       Between 2018 and 2021, each named plaintiff in the
putative classes filed a claim with Progressive after a car
accident. In each instance, Progressive declared plaintiff’s
vehicle a total loss, triggering Progressive’s contractual
obligation to pay them the “actual cash value” (“ACV”) of their
totaled vehicle. That obligation derives from Progressive’s
“Pennsylvania Auto Policy,” which states the ACV is
“determined by the market value, age, and condition of the
vehicle at the time the loss occurs.” App. 117.




                                 4
       Plaintiffs allege Progressive’s method of calculating
each insured’s ACV systematically underestimated that value.
Specifically, plaintiffs contend that one component of
Progressive’s settlement valuation methodology, the
“Projected Sold Adjustment” (“PSA”)—which accounts for
the fact that used cars often sell for less than dealers’ listed
prices—is categorically improper and should be omitted from
the ACV calculation. Accordingly, plaintiffs, all of whom
reside in Pennsylvania, sued on a state-law breach-of-contract
theory.

                              A.

       As relevant here, Progressive’s methodology for
calculating a final settlement value that approximates a
vehicle’s ACV requires several steps.1 Progressive’s coverage
policy permits it to use any evaluation “systems . . . developed
by . . . a third party and may include computer software,
databases, and specialized technology” in assessing ACV.
App. 122. Here, that third party is Mitchell International, Inc.
(“Mitchell”), and that system is Mitchell’s WorkCenter Total
Loss (“WCTL”), which generates a “dual source report.” As
its name suggests, that report uses two figures to reach its
estimate, which represent the first two steps in Progressive’s


       1
        Progressive’s methodology comports with the “Guide
Source” method, which is one of the pre-approved valuation
techniques under Pennsylvania insurance law. See 

(e)(1)(i). That method allows Progressive to “calculate
the average of two figures reflecting the retail book value” of
similar cars, “as provided by guide sources approved by the
Commissioner.” 

                               5
ACV calculation process. For the sake of ease, we call these
two values the “Mitchell value” and the “NADA value.”

        First, Mitchell estimates a car’s market value by
averaging the list prices of comparable vehicles in the area and
weeding out comparable vehicles whose list prices deviated
substantially from that average. Mitchell takes the list prices
of those comparable vehicles and applies to it a downward
adjustment—the PSA. It does so as a way of approximating
the ultimate sale price of a vehicle, in recognition of dealers’
routine practice of negotiating down from the advertised price
when attempting to sell the vehicle. But Mitchell does not
apply a PSA to vehicles listed for sale at “no-haggle” or “one-
price” dealerships that disallow price negotiation. Mitchell
only applies a PSA to comparable vehicles that are not yet sold.
The PSAs result in an average reduction in base market value
of 6.7 percent, but Progressive emphasizes that a PSA is “not
a blanket reduction that is uniformly applied.” App. Br. 14.
Instead, the PSAs account for vehicle make, model, year, and
where the insured resides, among other factors.

       Second, Progressive obtains another valuation
estimate—this one from the National Automobile Dealers
Association (“NADA”) Official Used Car Guide.2 In essence,
NADA starts with the car’s NADA retail value—a regional
value (e.g., Pennsylvania vehicles are assigned the NADA
“Eastern” regional retail value) listed in the NADA guide.
Similar to Mitchell’s process, NADA adjusts the NADA retail


       2
         NADA changed its name to J.D. Power Values in
2023, but in following the terminology of the litigation at the
District Court, we use the older name.




                               6
value based on the sale prices of comparable vehicles, in
recognition of the fact that vehicles’ retail sale prices are lower
than their initial asking prices. So NADA factors in vehicle-
specific factors, including age, mileage, condition, prior
damage, aftermarket parts, and refurbishment. The result is a
NADA market value estimate—i.e., the NADA value.

       Third, Progressive averages the Mitchell value and the
NADA value, yielding the WCTL dual source base value. In
summary, this value is the average of two estimates, each of
which involves applying vehicle-specific adjustments to
comparable vehicles’ list prices as a way of approximating the
totaled vehicle’s sales price. Both components of the dual
source base value are displayed in the vehicle valuation report.

       Fourth, Progressive takes the WCTL dual source base
value and adjusts it further for condition, prior damage,
refurbishment, and value of aftermarket markets. Sometimes,
the base value is adjusted even further by subtracting the
salvage value if the insured elects to retain the totaled vehicle.

       Accordingly, the final settlement value includes three
types of adjustments: (1) the PSA, applied to the Mitchell base
value; (2) NADA’s adjustments to the NADA Eastern retail
value; and (3) Progressive’s final adjustments to the dual
source base value. The final settlement value also subtracts
any non-waived deductible specific to the insured’s policy.

                                B.

      Plaintiffs object to just the first of the three adjustments
involved in Progressive’s total loss settlement process. They
contend the PSA should not be applied to the Mitchell base




                                7
value because it results in a lower final settlement value. If that
final settlement value is less than ACV, then Progressive
would be in breach of its form insurance contracts. Plaintiffs
further allege Progressive’s breach follows from its
“manipulati[on of] the data used to determine the ACV of the
vehicles.” App. 55. Accordingly, plaintiffs pleaded breach of
contract and actual damages on the basis of underpayment.

        Furthermore, seemingly in support of their breach-of-
contract claim, plaintiffs contend ACV calculations should
exclude PSAs because those adjustments create “an outdated
and false characterization of the market.” Ans. Br. 6.
According to Plaintiffs’ expert, due to the rise in Internet
advertising and sophisticated pricing tools, consumers know
which dealerships are inflating their list prices and simply seek
out dealerships who actually price to market. Plaintiffs raise a
host of other issues with PSAs, but for our purposes, plaintiffs’
arguments reduce to a promise that, at the merits stage, they
can show the PSAs systematically undervalue ACV and thus
result in underpayment.

       Plaintiffs moved to certify two classes.      Leon
Drummond is the lead plaintiff of the Progressive Specialty
Class, which has the following proposed definition:

       All Pennsylvania citizens insured by Progressive
       Specialty who, from the earliest allowable time
       through the date an Order granting class
       certification is entered, received compensation
       for the total loss of a covered vehicle, where that
       compensation was based on a ‘dual source’
       valuation report . . . prepared by Mitchell and the
       ACV was decreased based upon Projected Sold




                                8
       Adjustments to the comparable vehicles used to
       determine ACV.

App. 67 (emphasis added). The second class, the Progressive
Advanced Class, has the same definition word-for-word, other
than that the word “Specialty” is replaced with the word
“Advanced.” App. 67. Plaintiffs Lee Williams and Yeshonda
Driggins are the named representatives for that class.

        The District Court then certified the classes, disposing
of three Rule 23 objections by Progressive: commonality and
predominance, superiority, and adequacy. Drummond v.
Progressive Specialty Ins. Co., No. 21-4479, 

, at *12 (E.D. Pa. Aug. 11, 2023). The crux of the
opinion—and the core issue on appeal—is predominance.
Specifically, the court characterized plaintiffs’ claims as
challenging “the application of PSAs altogether.” 

.
That is, the putative class comprises insureds awarded
improper total loss amounts that deviated from ACV, because
Mitchell factored projected sale prices of the totaled vehicles
into one component of the ACV formula, the court reasoned.
The court continued, “Progressive maintains that PSAs are
legitimate. The putative plaintiffs maintain they are inaccurate
because they misrepresent current market behavior. It is this
dispute, not the individual projected sale price of each vehicle,
that is at the center of this action.” 

 (emphasis added).

       The District Court also held plaintiffs had Article III
standing and rejected Progressive’s argument that the
possibility that a minority of the putative classes might have
benefited from the PSAs posed a fundamental intraclass
conflict that thwarted Rule 23(a) adequacy.




                               9
                              II.

       The District Court had jurisdiction under 

(d). We have jurisdiction under 

(e) and
Federal Rule of Civil Procedure 23(f), which provides that “[a]
court of appeals may permit an appeal from an order granting
or denying class-action certification.” Fed. R. Civ. P. 23(f).

       We “review a class certification order for abuse of
discretion, which occurs if the district court's decision rests
upon a clearly erroneous finding of fact, an errant conclusion
of law or an improper application of law to fact.” In re
Hydrogen Peroxide Antitrust Litig., 

 (3d Cir.
2008) (internal quotation marks omitted). “We exercise
plenary review over a threshold question of law . . . .” Neale
v. Volvo Cars of N. Am., 

 (3d Cir. 2015).

                              III.

        Rule 23 sets forth the requirements for class
certification. In addition to clearing the requirements of Rule
23(a), putative classes seeking damages must additionally
satisfy the “twin requirements” of Rule 23(b)(3), In re
Hydrogen Peroxide, 

, including that “questions
of law or fact common to class members predominate over any
questions affecting only individual members,” Fed. R. Civ. P.
23(b)(3). This predominance requirement is the core issue on
appeal. The District Court characterized plaintiffs’ claims as a
challenge not to “the price for which PSAs predict each car will
sell” but rather to “the application of PSAs altogether.”
Drummond, 

, at *10. Because the District
Court improperly framed the predominance inquiry, we
conclude it abused its discretion in certifying both classes.




                              10
        Namely, the court failed to recognize that plaintiffs’
theory of liability hinged on proving Progressive breached its
insurance agreement with insureds by underpaying them for
their totaled vehicles. And the court did not consider that many
class members’ breach-of-contract claims would be thwarted
by their receipt of a final settlement value equivalent to or
greater than ACV, in spite of Progressive’s application of
PSAs, as a consequence of other steps in the settlement
methodology described above. The District Court would need
to evaluate plaintiff-by-plaintiff proof to ascertain which
plaintiffs Progressive actually underpaid and, accordingly, to
which plaintiffs Progressive is liable for breach of contract.

                              A.

       We begin with the District Court’s erroneous framing
of the predominance inquiry. Under the proper framing, the
District Court should have analyzed whether common issues
predominate over individual issues with respect to proving the
elements of breach of contract. See In re Hydrogen Peroxide,

 (“[We] must resolve all factual or legal
disputes relevant to class certification, even if they overlap
with the merits—including disputes touching on elements of
the cause of action.” (emphasis added)). But the District Court
instead focused merely on the “legitimacy” of the PSAs.
Reasoning that proving whether PSAs were applied to the
class’s vehicle valuations was easily supported by common
evidence, the court stopped its predominance inquiry there.
That analysis fell short of the Supreme Court’s requirement
that “questions of law or fact common to class members
predominate over any questions affecting only individual
members” with respect to the “existence of individual injury.”
Comcast Corp. v. Behrend, 

 (2013).




                              11
                               1.

        The Supreme Court in Comcast prescribed two distinct
tracks for the predominance analysis: (1) Did the defendant
cause injury that is capable of proof common to the class rather
than to individual members? and (2) Are the damages
stemming from that injury measurable on a class-wide basis by
a “common methodology”? 

 The first track—the so-called
liability prong—is at issue here. Under that prong, the District
Court was required to assess whether “the existence of
individual injury resulting from [Progressive’s] alleged
[breach of contract] . . . was capable of proof at trial through
evidence . . . common to the class rather than individual to its
members.” 

 We have held that class certification is
“unsuitable” when “proof of the essential elements of the cause
of action requires individual treatment.” Newton v. Merrill
Lynch, Pierce, Fenner & Smith, Inc., 

 (3d
Cir. 2001) (citation and internal quotation marks omitted).
“Accordingly, we examine the elements of plaintiffs’ claim
through the prism of Rule 23 to determine whether the District
Court properly certified the class.” In re Hydrogen Peroxide,

 (citation and internal quotation marks omitted).

        Specifically, of the state-law elements for breach of
contract in Pennsylvania, breach and resulting damages are the
liability issues Progressive contests on the merits. See Gorski
v. Smith, 

 (Pa. Super. Ct. 2002). Both
elements boil down to whether Progressive underpaid an
insured by compensating them less than the ACV of their
totaled vehicle. So plaintiffs would have to show at this
dispositive step of the predominance analysis that they could
prove Progressive’s underpayment without relying on




                              12
plaintiff-by-plaintiff evidence.3

       Instead, the District Court improperly characterized the
predominance inquiry as boiling down to whether class-wide
evidence could be used to prove whether “PSAs are
legitimate.” Drummond, 

, at *10. The court
summarized plaintiffs’ complaint as averring that PSAs
“misrepresent current market behavior” and “ACV should not
be calculated based on projected sale prices, which is what
applying PSAs does.” 

 “It is this dispute, not the individual
projected sale price of each vehicle, that is at the center of this
action,” the court concluded. 

 And earlier in its opinion, the
court acknowledged Progressive’s contention that “a breach
only occurs if an insured is paid less than ACV”—and then
promptly disagreed with that black-letter assertion. 

 at *8-
9. Specifically, the court first reasoned that “the case turns
generally on whether Progressive's use of PSAs violated its
contractual obligation to pay the proposed class members the
ACV of their vehicles. 

. But it then reiterated that, in
its view, it need reach only one issue at the merits stage:

       3
          The elements of the cause of action are not in the
domain of Comcast’s second prong, which concerns
the calculation of class damages, rather than the determination
of actual damages a prerequisite to breach of contract. See
Neale, 

; see also Comcast 

(Ginsburg and Breyer, JJ., dissenting) (“Recognition that
individual damages calculations do not preclude class
certification under Rule 23(b)(3) is well nigh universal.”
(citation omitted)). For purposes of Rule 23(b)(3), then,
plaintiffs must show they can prove Progressive underpaid
insureds relative to the ACVs of their totaled vehicles.




                                13
whether “the use of PSAs . . . did or did not violate the
contract.” 

       By its own reasoning, the District Court would have to
find, on the merits, that even class members who were paid
above ACV—despite use of PSAs—would still have a breach-
of-contract claim against Progressive. But that would not
constitute a breach here. Rather, the only way “PSAs . . .
violate[d] the contract” is if, in the course of applying them
during the multi-step final settlement valuation, Progressive
paid an insured less than the ACV of their vehicle. Id.; see
Gorski, 

.

                               2.

       Under the proper framing, the District Court should
have analyzed whether common issues predominate over
individual issues with respect to proving the elements of breach
of contract. Progressive could meet its contractual obligation
to pay insureds their vehicles’ ACV in several ways. Consider
three scenarios:      First, Progressive could scrap PSAs
altogether, as plaintiffs urge, and pay the insured the average
of the Mitchell base value—without a PSA—and the NADA
value. This average could conceivably approximate ACV.
Second, Progressive could follow its current methodology and
average the Mitchell value (which includes a PSA) and the
NADA value (which includes various NADA-specific
adjustments)—as it actually does—but balance out (or even
exceed) any intermediate downward adjustments with several
upward adjustments at the final step of the settlement
calculation. Third, the NADA value could be higher than the
Mitchell value, resulting in a final settlement value which,
depending on any final adjustments, could match or exceed




                              14
ACV. This third situation is not uncommon, according to the
sworn affidavit of Progressive’s insurance expert. Contrary to
plaintiffs’ argument that only the first scenario would preclude
a breach-of-contract claim, any of these approaches would
allow Progressive to meet its contractual obligation to pay
ACV.

        The second scenario was squarely addressed by the
Ninth Circuit in Lara v. First Nat’l Ins. Co. of Am., 

 (9th Cir. 2022). There, Liberty Mutual applied a uniform
downward adjustment to its initial estimate of totaled vehicles’
ACV. 

. The court noted, however, that after
applying that downward adjustment, Liberty would often
“reverse[] the negative adjustment and sometimes even appl[y]
a positive adjustment.” 

. This practice of undoing
the downward adjustments undermined putative plaintiffs’
breach-of-contract theory, the court held, because “if a putative
class member was given [the car’s ACV] or more, then he or
she cannot win on the merits.” 

. Why? Because
“[t]o win on the merits of breach of contract, plaintiffs must
show that the breach proximately causes damage to the
[plaintiff].” 

 (citation and internal quotation marks omitted)
(alteration in original). The Lara court also held the putative
class lacked predominance on the same grounds, reasoning that
“figuring out whether each individual putative class member
was harmed would involve an inquiry specific to that person.”

       Likewise here. Just because Progressive applies PSAs
to the Mitchell list prices to arrive at the Mitchell value does
not mean insureds are not being paid ACV. Progressive could
have properly compensated class members while employing
the PSAs.




                               15
        Consider, again, Progressive’s settlement calculation
process. The WCTL dual source base value is the average of
the Mitchell value and the NADA value. Systematically
decreasing one of those two base value components would
always decrease the base value, as plaintiffs emphasize. And
after further adjustments to that base value, Progressive arrives
at the final settlement value it pays to insureds. So
systematically decreasing the Mitchell value would always
mean a lower final settlement value. That is, if we accept
plaintiffs’ allegation that Progressive manipulated the Mitchell
value by applying improper downward adjustments to it, the
final settlement value would always be lower than what it
otherwise would have been. But that is not what matters for
purposes of breach of contract. Rather, what matters is whether
the decrease in the Mitchell value led to the final settlement
value dropping below the true ACV of the totaled vehicle—
because that is what Progressive is contractually obliged to pay
insureds. For example, imagine a class member whose NADA
value exceeded the Mitchell value such that their average offset
any PSA applied to the Mitchell value. That is the third
scenario mentioned above. Or what if Progressive’s final-step
adjustments to the WCTL dual source base value offset the
PSA? That is the second scenario, as well as Liberty Mutual’s
practice addressed in Lara. In each hypothetical, the insured
has suffered no actual injury. Just because the Mitchell value
decreased does not mean the resulting final settlement value
was less than the true ACV of the vehicle.4


       4
         Accord Lara, 

 (“[T]his class could
include a plaintiff whose car was valued using the CCC report
with the disputed condition adjustment, and for whom Liberty
used CCC's estimate without making any further adjustments.




                               16
       We conclude that, contrary to plaintiffs’ argument that
the only way for Progressive to avoid breach of contract is by
eliminating PSAs, Progressive could conceivably meet its
contractual duty to pay ACV notwithstanding the application
of those adjustments in determining just one component of a
vehicle’s final settlement value.

                                B.

       With the proper framing of the predominance inquiry on
Progressive’s liability, we now apply that inquiry to the
putative classes. Individual issues are those “where members
of a proposed class will need to present evidence that varies
from member to member,” and common issues are those where
“the same evidence will suffice for each member to make a
prima facie showing [or] the issue is susceptible to generalized,
class-wide proof.” Tyson Foods, Inc. v. Bouaphakeo, 

 (2016) (internal quotation marks omitted) (quoting 2
Newberg on Class Actions § 4:50 (William Rubenstein ed., 5th
ed. 2012)).

       Although “the presence of individual questions does not
per se rule out a finding of predominance,” In re Prudential
Ins. Co. Am. Sales Prac. Litig. Agent Actions, 

 (3d Cir. 1998), and “[i]ndividual questions need not be
absent,” Messner v. Northshore Univ. HealthSystem, 

 (7th Cir. 2012), a putative class fails to clear the
predominance requirement when a district court “formulate[s]


Even for that plaintiff, the district court would have to look into
the actual value of the car, to see if there was an injury.”).




                                17
some prediction as to how specific issues will play out . . . in a
given case,” In re Hydrogen Peroxide, 

 (citation
omitted), and concludes it “cannot be adequately assured that
individualized evidence will not later overwhelm the case and
render it unsuitable for class-wide adjudication,” Harnish v.
Widener Univ. Sch. of L., 

 (3d Cir. 2016).
“This analysis will often resemble a merits determination, in
that it relates to plaintiffs’ ability to prove the elements of their
claims.” 

 And we must be “pragmatic” in our “assessment
of the entire action and all the issues involved.” Williams v.
Mohawk Indus., Inc., 

 (11th Cir. 2009)
(internal quotation marks omitted) (quoting 5 Moore's Federal
Practice § 23.45[1] (3d ed. 2008)).

        We conclude that identifying whether each class
member was actually paid less than true ACV is an individual
question. Rule 23(b)(3) requires that plaintiffs prove this core
issue of underpayment—on which both breach and damages in
their breach-of-contract claim turn—with class-wide proof.
Plaintiffs cannot meet that burden. And because proving the
underpayment issue is essential to Progressive’s alleged
liability for breach of contract, we believe that “individualized
evidence” of whether each class member’s vehicle’s ACV was
greater than the final settlement value would “overwhelm the
case.” Harnish, 

. Accordingly, because “proof
of the essential elements of [plaintiffs’] cause of action requires
individual treatment,” common issues as to Progressive’s
liability do not predominate. In re Hydrogen Peroxide, 

 (citation omitted).

       Our conclusion is apparent from plaintiffs’ proposed
class definitions—each runs squarely into the actual-
underpayment issue. Namely, each definition is inclusive of




                                 18
only those insureds whose “ACV was decreased based upon
Projected Sold Adjustments.” App. 67 (emphasis added). The
definition’s use of the term “actual cash value” cannot mean
the true ACV of a vehicle, because that is an absolute, static
value that cannot be “decreased.”            Rather, plaintiffs
presumably meant “final settlement value,” which Progressive
guarantees equates to the insured vehicle’s true ACV. Indeed,
plaintiffs use the term “ACV” interchangeably with final
settlement value. See, e.g., App. 66-67.

       Per the class definition, then, the class could include
insureds whose final settlement values decreased as a
consequence of PSAs yet still did not drop below the vehicle’s
true ACV. Plaintiffs cannot prove breach without first proving
Progressive’s final settlement value in a class member’s
vehicle valuation report was lower than true ACV.
Accordingly, each class would have to bring in necessarily
individual proof, plaintiff-by-plaintiff, to determine which
were undercompensated.

       In a recent case, the Ninth Circuit similarly scrutinized
the class definitions in litigation against State Farm. See Jama
v. State Farm Mutual Auto. Ins. Co., 

(9th Cir. 2024). There, the district court declined to certify two
classes, each challenging a distinct adjustment State Farm
made to the value of class members’ totaled vehicles. 

. The “negotiation” adjustment, like the PSA here, captures
the “typical amount buyers may negotiate down the price of a
replacement car” at the dealership. 

 The “condition”
adjustment accounts for the typically worse condition of used
cars. 

 The Jama plaintiffs alleged the “negotiation”
adjustment is unlawful under a Washington statute that sets




                               19
forth guidelines for the calculation of ACV.5 

. The
court, speaking through Judge Rakoff sitting by designation,
concluded, “All members of the negotiation class . . . received
less than they were owed in the exact amount of the
impermissible negotiation deduction.” 

 (emphasis
added).      Accordingly, because the negotiation class was
defined clearly as those insureds who were “paid the value
determined in [the valuation] report with the negotiation
discount applied,” 

 (emphasis added), the court
reversed the denial of certification for that class only, 

.
But the court went the other way on the condition class, holding
that the adjustment at issue there—whose legality plaintiffs did
not contest—did not necessarily result in a uniform downward
adjustment in final settlement values. 

 Rather, the
“[condition] class definition alone does not exclude the
plaintiff . . . whose payout nonetheless equaled or exceeded
their pre-cash car’s actual cash value.” 

 (citation and
internal quotation marks omitted).

       The Jama court’s conclusion that “there is no way to
know as to any individual class member in the condition class
whether their actual payout was more, less, or equal to what
State Farm could lawfully have paid if it had calculated a


       5
         No such statute is on the books in Pennsylvania. Here,
plaintiffs proceed on a breach of contract theory, alleging
systemic undervaluation of ACV, which Progressive is
contractually obligated to pay to insureds. Washington law,
however, explicitly permits the condition adjustment, so the
Jama plaintiffs contended instead that State Farm’s condition
adjustments “lack[ed] sufficient empirical foundation.” Jama,

.




                                 20
condition adjustment appropriately,” 

, is relevant
here. We do not know whether each insured whose Mitchell
value was reduced by a PSA received an “actual payout [that]
was more, less, or equal to what [Progressive] could lawfully
have paid” if it had omitted PSAs. 

 (alteration in original).
“There is therefore no way to know without individualized
inquiry whether such a class member received less than their
car’s actual cash value and therefore suffered any injury.” 

       In sum, just because Progressive’s final settlement
value could have been higher but for the use of the PSA does
not mean that a given insured was actually underpaid. And if
an insured was not underpaid, then Progressive did not breach
its contract with that insured.6 Accordingly, individual issues


       6
         A pair of amici make this argument directly. The U.S.
Chamber of Commerce and the American Property Casualty
Insurance Association contend that “[f]or every class member,
the determination of whether Progressive breached the contract
would still require an individualized analysis of whether the
amount of money the class member received is lower than
ACV.” Chamber Amicus Br. 7. They continue,

       [E]ven if Plaintiffs were to prove, following
       class certification, that PSAs rest on outdated
       assumptions about the market for used cars, that
       fact would teach precisely nothing about whether
       Progressive is liable to any particular class
       member. For every single class member, the
       court would still have to ask the question: was
       the payment in fact lower than ACV? That
       question would depend on individualized




                              21
predominate as to whether the putative class members actually
received less than ACV. Since the District Court’s conclusion
as to Rule 23(b)(3) predominance “rest[ed] upon . . . an errant
conclusion of law,” In re Hydrogen Peroxide, 

(citation omitted), the classes must be decertified.

                              C.

       Because we hold the classes failed to satisfy Rule
23(b)(3)’s predominance requirement, we need not reach
Progressive’s alternative argument that the classes presented a
fundamental intraclass conflict in violation of Rule 23(a)(4)’s
adequacy requirement.

       Furthermore, Progressive’s challenge to commonality
under Rule 23(a)(2) is unavailing. To prove the classes here
raise “questions of law or fact common to the class,” Fed. R.
Civ. P. 23(a)(2), plaintiffs need only “demonstrate that the
class members have suffered the same injury.” Wal-Mart


       evidence regarding the characteristics of the
       class member’s particular car.

Id. at 7-8 (emphasis added). The question these amici pose is
the crux of the predominance problem here—whether the final
settlement value is in fact lower than the (true) ACV.
Answering that question would require the court “to review
particularized evidence with respect to every putative class
member” before determining whether Progressive breached its
contract with each member. Id. at 8; see also Ferreras v. Am.
Airlines, Inc., 

 (3d Cir. 2019).




                              22
Stores, Inc. v. Dukes, 

 (2011) (quoting
Gen. Tel. Co. of S.W. v. Falcon, 

 (1982)).
Best framed, the common question here is whether insureds
were underpaid relative to their ACV, as a crucial element of
Progressive’s liability for breach of contract. We have already
explained why proving underpayment is impossible without
individualized inquiries for purposes of the predominance
requirement, which is ultimately more exacting than the
commonality requirement. See Amchem Prods. v. Windsor,

 (1997) (“Even if Rule 23(a)’s
commonality requirement may be satisfied by [plaintiffs’]
shared experience, the predominance criterion is far more
demanding.”); see also Ferreras v. Am. Airlines, Inc., 

 (3d Cir. 2019); Reinig v. RBS Citizens, N.A., 

 (3d Cir. 2018) (“Rule 23(b)’s predominance
requirement incorporates Rule 23(a)’s commonality
requirement . . . .”); In re Hydrogen Peroxide, 

(3d Cir. 2008).

       Lastly, Progressive contends the class cannot
demonstrate common issues predominate as to standing, in
addition to liability. As a threshold matter, we note
Progressive does not contest class standing as a whole. See
App. Br. 31 n.4 (“To be clear, Progressive does not dispute that
the named plaintiffs determine standing for the case as a
whole.” (citation and internal quotation marks omitted)). Nor
could it. “[W]e have held that the cases or controversies
requirement is satisfied so long as a class representative has
standing, whether in the context of a settlement or litigation
class.” Huber v. Simon’s Agency, Inc., 

 (3d
Cir. 2023) (internal quotation marks omitted) (quoting Neale,

). Here, the named plaintiffs all claim they
were undercompensated, and on the record before us, we lack




                              23
any basis to find their vehicle valuations included mitigating
upward adjustments that would balance out their PSAs and
destroy injury-in-fact. Cf. Lewis v. Gov’t Emps. Ins. Co., 

, 457, 460-61 (3d Cir. 2024) (holding Geico’s
application of an upward adjustment to named plaintiff’s
vehicle valuation that entirely offset challenged downward
adjustment defeated class standing). And we need not decide
whether the possibility that some class members’ final
settlement values were the equivalent of or exceeded ACV
would create a predominance issue with respect to standing.
We rest our disposition on the conclusion that, with respect to
liability for breach of contract, the putative classes cannot
prove breach and damages without overly individualized
inquiries.     Accordingly, the putative classes are not
“sufficiently cohesive to warrant adjudication by
representation.” Tyson Foods, 557 U.S. at 453 (citation
omitted). That is enough to bar class certification.

                              IV.

        The purpose of Rule 23(b)(3)’s predominance
requirement “is to determine whether ‘a class action would
achieve economies of time, effort, and expense and promote
. . . uniformity of decision as to persons similarly situated,
without sacrificing procedural fairness.” Sullivan v. DB Invs.,
Inc., 

 (3d Cir. 2011) (Scirica, J., concurring)
(quoting Amchem, 

). Courts must scrutinize the
elements of plaintiffs’ cause of action in determining whether
liability issues at the merit stage will be capable of common
proof. See In re Hydrogen Peroxide, 

 (“If proof
of the essential elements of the cause of action requires
individual treatment, then class certification is unsuitable.
Accordingly, we examine the elements of plaintiffs’ claim




                              24
through the prism of Rule 23 . . . .” (citations and internal
quotation marks omitted)).

       As the Ninth Circuit concluded, when a particular
downward adjustment in an insurance valuation is both
statutorily unlawful and uniform, proving damages incurred by
each plaintiff because of that adjustment is straightforward.
See Jama, 

 (“Plaintiffs contend that
Washington law flatly prohibits any negotiation adjustment;
and if Plaintiffs are correct about that legal issue, then each
Plaintiff suffered damages equal to the amount of the
negotiation adjustment that State Farm made.”). Here, by
contrast, plaintiffs brought a contract claim, so they must show
that proving whether Progressive breached its insurance
agreement with each class member does not require a plaintiff-
by-plaintiff determination as to underpayment. Because they
cannot make that showing, we will reverse the District Court’s
order certifying the classes and remand for further proceedings
consistent with this opinion.




                              25