{1} The issues raised by this appeal involve the intersection of two complex areas of law — multi-state class action lawsuits and conflict-of-laws principles. We hold that the correct standard for determining when an actual conflict ■ exists between states’ laws such that application of the forum state’s law is inappropriate for a class action is more than a mere hypothetical conflict or uncertainty based on the lack of foreign appellate precedent. Rather, proof of an actual conflict is required. Having so concluded, we reverse the Court of Appeals and remand for proceedings consistent with this Opinion.
BACKGROUND
{2} This appeal arises as a result of the district court’s decision to certify a multistate class in Néw Mexico for the purposes of litigating a class action lawsuit against Allstate Insurance Company (Allstate). Plaintiffs are Allstate insureds who contend that Allstate is liable for breach of contract for failing to include installment fees that are charged when an insured opts to pay the premium in monthly installments in the total premium calculation. Allstate counters that the installment fees are not part of the premium; instead, the fees are imposed when an insured chooses to pay the policy in installments rather than in one lump sum. 1
{3} Plaintiffs originally requested that the district court certify a nationwide class, but eventually narrowed the class to fifteen states, including New Mexico. The district court, in its Findings of Fact and Conclusions
{4} The Court of Appeals first reviewed the laws of the states connected to the dispute and determined that the laws of the thirteen states potentially conflicted with one another, due to unresolved ambiguities in each state’s law. Ferrell v. Allstate Ins. Co.,
DISCUSSION
{5} The district court’s certification was appropriate if the court properly considered the requirements of our class action rule, portions of which can only be satisfied in a multi-state class action by considering conflict-of-laws principles. We begin our discussion with an overview of our class action rule, which forms the backdrop of this appeal. We then discuss the Court of Appeals’ determination that the laws of the thirteen states connected to this dispute conflicted. In so doing, we consider as a vital threshold inquiry whether the class proponent has the burden of affirmatively disproving a hypothetical conflict between the laws of the relevant states, as the Court of Appeals held, or whether the party opposing certification has the burden of affirmatively proving that the laws of the relevant states actually conflict.
Class Actions in General
{6} To put our discussion in context, we set out the relevant portions of our class action rule, Rule 1-023(A) and (B):
A. Prerequisites to a class action. One or more members of a class may sue or be sued as 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 interests of the class.
B. Class actions maintainable. An action may be maintained as a class action if the prerequisites of Paragraph A of this rule are satisfied, and in addition:
(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.
{7} New Mexico’s current class action rule mirrors the federal rule upon which it is based. Compare Rule 1-023, with Fed. R.Civ.P. 23; see also Berry,
{8} The district court certifies a class in the first instance. Rule 1-023(C)(1) (“As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained.”). The court “must engage in a rigorous analysis of whether the Rule’s requirements have actually been met.” Brooks v. Norwest Corp.,
Rule 1-023(A): Prerequisites to a Class Action
{9} Rule 1-023(A) lists four prerequisites to certification of a class action:
(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 interests of the class.
These four requirements are commonly referred to as numerosity, commonality, typicality, and adequacy of representation. See Berry,
Rule 1-023(B): Class Actions Maintainable
{10} In addition to meeting all of the threshold requirements of Rule 1-023(A), a district court may only certify a class if the class meets the requirements of one of the categories contained in Rule 1-023(B). See 1 Alba Conte & Herbert B. Newberg, Newberg on Class Actions § 3:1, at 210 (4th ed.2002). Of the three categories of Rule 1-023(B), only subsection (B)(3) is relevant to this appeal because it is the category that generally applies when class members seek monetary damages. See Rory Ryan, Comment, Uncertifiable?: The Current Status of Nationwide State-Law Class Actions, 54 Baylor L.Rev. 467, 472 (2002) (“As a practical matter, nationwide state-law class actions seeking damages invariably will be brought under Rule 23(b)(3).”). Rule 1-023(B)(3) provides that a class action is maintainable only if “the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and
{11} The requirements contained in subsection (B)(3) are commonly referred to as predominance and superiority. Our class action rule does not define predominance and superiority, but the rule contains several factors to consider when making a determination about whether predominance and superiority have been met. Those relevant factors include:
(a) the interest of members of the class in individually controlling the prosecution or defense of separate actions;
(b) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class;
(c) the desirability or undesirability of concentrating the litigation of the claims in the particular forum;
(d) the difficulties likely to be encountered in the management of a class action.
Rule 1-023(B)(3).
{12} Class actions involving plaintiffs from multiple states present particular challenges for district courts, and may “implicate the predominance and superiority requirements ... because of the combination of individual legal and factual issues that need to be determined.” 7AA Charles Alan Wright et al, Federal Practice and Procedure § 1780.1, at 202 (3d ed.2005). If too many separate state laws must be applied, then the class proponent may have a difficult time persuading the district court that common questions of law predominate and that a class action is the superior method of litigation. See Castano,
{13} A decision to apply the laws of several states does not, however, necessarily foreclose class certification. A court may be able to manage a class through the use of subclasses or by grouping certain issues together that can be resolved by applying one state’s law. See In re Sch. Asbestos Litig.,
{14} Thus, a certifying court must first determine which law will apply to the class so that it can then assess the predominance and superiority of the proposed class action. See Wash. Mut. Bank, FA v. Super. Ct.,
{15} In this case, the district court’s decision to certify the class was proper if the district court correctly determined that New Mexico law applied to the entire class. A district court’s choice to apply forum law is appropriate if (1) the choice to apply forum law is constitutional or (2) an application of the forum’s choice-of-law rules leads to the selection of forum law. A forum’s choice to apply its own law is constitutional if the law of the forum does not actually conflict with the law of any other jurisdiction connected to the dispute. See Phillips Petroleum Co. v. Shutts,
Conflict-of-Laws
{16} The Court of Appeals in this case adopted the “false conflict” doctrine as the initial step that a district court must undertake when making the determination about what law applies to the claims of a multi-state class.
2
Ferrell,
{17} A district court’s conclusion that the laws of the various states do not actually conflict is particularly important in multi-state class actions. If the law of a single state can be applied to the entire class, it is more likely that the class will meet the predominance and superiority requirements of our class action rule. The converse is true as well. If the laws of the states connected to the dispute actually conflict, and if the court’s choice-of-law analysis provides that the laws of several states must apply to the class, then it is less likely that the class will meet the certification requirements.
When can the laws of the interested states be said to actually conflict such that application of forum law is inappropriate?
{18} In the instant appeal, the Court of Appeals concluded that a district court may
{19} The Court limited its analysis to a comparison of the statutory definition of premium, id. ¶¶ 16-17, and to the issue of whether fees constitute premiums, id. ¶¶ 20-30. The Court noted that six states “have a statutory definition of ‘premium’ that is materially the same as the definition found in New Mexico’s Section 59A-18-3.” Id. ¶ 17. The Court further stated that three states “have statutes that essentially define premium as ‘the consideration for insurance’ but do not provide the list of examples that New Mexico’s statute does.” Id. And, while three states did not have a statutory definition of premium, the Court acknowledged that two of those states had appellate opinions “holding that fees charged by insurance companies for the privilege of paying in monthly installments constitute ‘gross premium’ for purposes of statutory or constitutional provisions that require insurance companies to pay taxes on the ‘gross premiums’ collected.” Id. (citing Allstate Ins. Co. v. State Bd. of Equalization,
{20} Relying on Berry,
{21} The question before us, then, is whether an actual conflict exists when the laws of the other states could hypothetically produce different results or whether an actual conflict requires a showing of something more. In answering that question, we examine whether the uncertainty created by the lack of appellate precedent necessarily creates an actual conflict. We also consider who must demonstrate the existence of an actual conflict and who carries the burden of failing to prove that an actual conflict exists.
{22} We begin our discussion with Phillips and Sun Oil, two U.S. Supreme Court cases relied upon by Plaintiffs in this appeal, before turning our attention to Plaintiffs’ arguments premised on Berry, a ease similar to Ferrell, involving appellate review of a district court’s decision to certify a multi-state class. In Phillips, the U.S. Supreme Court reviewed the constitutionality of the Kansas court’s decision to apply principles of Kansas law to the claims of a multi-state class.
{23} In Sun Oil, the U.S. Supreme Court had the opportunity to review how the Kansas court complied with the constitutional mandates set forth in Phillips. Sun Oil,
{24} The U.S. Supreme Court acknowledged that the statutes of the relevant states were facially different, yet upheld the Kansas court’s decision to apply Kansas law to determine the prejudgment interest rate for the entire class. Id. at 731-34,
{25} We now turn to a discussion of Berry, which Plaintiffs cite as additional support for their position that they only need to demonstrate that the laws of the relevant states are substantially similar. In Berry, the district court certified a nationwide class seeking
{26} The Court noted that, as an initial step, “courts dealing with multistate class actions must consider and evaluate how the laws of other states apply to the class claims.” Id. ¶ 78. While “[t]he forum state cannot simply assume that its law will govern!}] ... the forum court [is not] required to try to match or divine the result of the ease as if it were being decided in the other states. The forum court is only bound by ‘clearly established’ law brought to its attention.” Id. (quoted authority omitted). After setting forth these general principles, the Court then utilized them to analyze the plaintiffs’ claims arising under both breach of contract, id. ¶¶ 82-88, and breach of good faith and fair dealing, id. ¶¶ 89-94.
{27} With respect to the breach of contract claim, the Berry court focused on the significance of the demonstrated conflicts, not on potential conflicts. Rather than requiring an affirmative showing that the laws would produce identical results, the court noted that “the law in this area [was] uniform enough,” there was “no significant variation in the eases from the standard approach to interpretation of insurance contracts,” id. ¶ 82 (emphasis added), and there were “no fatal contradictions of law,” id. ¶ 87 (emphasis added). Significantly, the Berry court rejected the defendant’s argument that it would be improper to apply New Mexico law to the entire class because a determination of “whether the policy would be deemed ambiguous ‘could’ vary from state to state.” Id. ¶ 88.
{28} The Berry court rejected this argument for two reasons, which we find persuasive. Id. First, the court noted that the district court had yet to decide that an ambiguity existed. Id. Second, the court stated that it saw “no significant variation among the states concerning how [the] decision [about ambiguity] is made.” Id. Thus, the court rejected the defendant’s argument — that the laws could potentially produce different results — because “there is no need to forecast how the inquiry would actually be resolved in any other court because the ease is here, and the decision is to be made here in accordance with reasonably uniform rules.” Id. Because the laws of the relevant states were sufficiently uniform to allow the application of New Mexico law, the Court affirmed the district court’s certification decision with respect to the breach of contract claim. Id. ¶ 102.
{29} The Berry court’s discussion of the breach of good faith and fair dealing claim is illustrative of the level of proof required by a defendant to establish that an actual conflict exists. See id. ¶¶ 89-94. In its analysis, the court relied on actual variations among the laws of certain states in making the determination that the laws of the various states were not sufficiently uniform to apply New Mexico law. Id. ¶¶ 90-94. Significantly, the defendant cited established cases from the class states with holdings that were contrary to New Mexico law. Id. Because the laws of the states were not sufficiently uniform, the court decertified the class with respect to the breach of good faith and fair dealing claim. Id. ¶ 94.
{30} Having reviewed both Ferrell and Berry, it is clear that the two New Mexico Court of Appeals’ opinions set forth conflicting standards for what constitutes an actual conflict. Plaintiffs argue that Berry and Sun Oil set forth rules that a court should follow when determining whether the laws of the states connected to the dispute can be said to conflict. The Ferrell court disagreed and did not rely on Sun Oil for what constitutes an actual conflict, because that court concluded that Sun Oil “does not say anything about when the laws of two jurisdictions can be
{31} Because the court was not persuaded that Sun Oil applied, the Court of Appeals turned to two non-class action cases from other jurisdictions for guidance. Ferrell,
{32} Despite the procedural similarities with the instant appeal, we do not find these opinions particularly helpful. First, the facts of Ferrell are distinguishable from Fioretti and Dugan because in those two cases there was no binding authority, whereas in the instant appeal a majority of the relevant states have statutes defining premium, some of which are identical to the New Mexico statutory definition, while others vary only slightly. See Ferrell,
{33} Further, a fair reading of Berry suggests that the Court considered, and resolved, the issue of what a New Mexico court should do when faced with unsettled or unclear law in a manner different from Fioretti and Dugan. In Berry, our Court of Appeals rejected the defendant’s argument that was premised on the possibility that the laws of the other states “could” conflict with New Mexico law, which was the same argument set forth in Fioretti and Dugan. Rather than concluding that the possibility of a potential conflict could defeat the application of forum law, the court indicated that only proof of an actual conflict will preclude a district court from making a determination that it may apply forum law. Berry,
{34} Finally, with respect to the level of proof required to defeat a court’s decision to apply one state’s law over another, the Connecticut Supreme Court’s rationale in Dugan comports with the rationale in Berry. The Connecticut court rejected the plaintiffs contention that Connecticut law should apply, in part because the plaintiff had not adequately argued that New York law should apply to the dispute rather than Connecticut law. Dugan,
{35} In addition to reading Sun Oil differently, Berry and Ferrell diverge on the issue of who bears the risk of ambiguity in the law. Both opinions appropriately place the initial burden of persuasion on the class proponent by requiring the plaintiffs to persuade the district court that there are no significant variations among the laws of the states connected to the dispute. However, the opinions apportion the risk of ambiguity differently. The Berry court places the risk of ambiguity on the party opposing certification by requiring that party to demonstrate that the laws of the various states actually conflict. The Ferrell court, on the other hand,
{36} By placing the risk of ambiguity on the party seeking certification, the Court of Appeals’ opinion in Ferrell can be read as holding that the party seeking certification cannot meet its burden if the laws of the other states are unclear or unsettled, despite significant facial similarities between the statutes at issue. Such a holding places an intolerable burden on the party seeking certification. Multi-state class actions might never be possible if courts must await final appellate court decisions in each state resolving all hypothetical conflicts.
{37} We agree with Plaintiffs that Berry sets forth the preferable analysis. The party opposing certification must establish that the laws of the relevant states actually conflict. Sun Oil,
{38} The Berry court’s approach is consistent with the principles underlying our class action rule — -judicial economy and fairness to the parties. See Brooks,
Was an actual conflict proven such that it was inappropriate for the district court to determine that New Mexico law could apply to the entire class?
{39} With these general principles in mind, we now review whether the district court’s decision to apply New Mexico law to the entire class was appropriate. We review a district court’s decision to certify a class under an abuse of discretion standard. Berry,
{40} In this case, the district court found that the class met the requirements of Rule 1-023(B). The district court made its determination based on its understanding of the various states’ laws as presented by the parties. Plaintiffs presented the court with surveys detailing the laws from the various states involved in an attempt to meet their burden of showing that the predominance and superiority requirements of Rule 1-023 were met. These surveys consisted of: (1) excerpts from the relevant statutory provisions, (2) statutory definitions of “premium,” and (3) case citations for various legal propositions relating to breach of contract. Allstate submitted a memorandum in opposition, which included a discussion regarding variations among the states’ laws. In its memorandum, Allstate specifically argued
{41} Appropriately, the district court held a multi-day certification hearing. During the hearing, Plaintiffs again argued that the laws of the relevant states did not materially conflict. Allstate countered that significant conflicts existed among the laws of the various states and presented demonstrative exhibits for the court to review during the certification hearing. These demonstrative exhibits, however, are not part of the record because they were not entered into evidence.
{42} Plaintiffs suggested that the variations among the laws of the states connected to the dispute were either irrelevant or did not rise to the level of constitutional significance. For example, in its briefing, Allstate contended that the states differed with respect to authorizing or implying' a private right of action for violations of the state insurance code. Plaintiffs countered that they were not seeking a private right of action under any state insurance code, but rather were suing under a common-law theory of breach of contract. Further, Plaintiffs noted that many of the conflicts discussed by Allstate arose in states other than those implicated in the proposed class. More to the point, Plaintiffs insisted that the definition of premium did not vary materially from state to state, and this went to the heart of Plaintiffs’ class-wide claims for breach of contract. Additionally, Plaintiffs noted that the affirmative defenses that Allstate argued defeated class certification were simply “hypothetical.”
{43} After the hearing, the district court concluded that “a class action is a superior method of litigation instead of individual lawsuits in each member’s respective state.” The court also concluded that the case was manageable because “there [was] no debilitating conflict of law among the thirteen (13) states on the issues of contract interpretation, right to jury trial, and the definition and specification of insurance policy premiums, the issues to be adjudicated under the breach of contract claim.” (Emphasis added.) Significantly, the district court excluded the plaintiffs from Hawaii and Washington, which demonstrates that the court considered the differences between the policies, and the breach of contract claims premised on those policies, in the relevant states.
{44} And, while Allstate argues that certain states may take a different approach with respect to the “four corners” rule for resolving an ambiguity in the contract, the district court’s decision about whether an ambiguity exists would again be made using relatively uniform rules. If the district court determines that an ambiguity exists in some contracts, and that the states where those contracts were entered into vary significantly in their approach to the “four corners” doctrine, the district court may revisit its certification decision. Until that time, “there is no need to forecast how the inquiry would actually be resolved in any other court because the case is here, and the decision is to be made here in accordance with reasonably uniform rules.” Berry,
{45} Thus, Plaintiffs met their burden of showing that the laws of the class states were similar enough to support certification. The statutes at issue do not present “fatal contradictions of law.” Berry,
{46} Thus, we conclude that the district court’s decision to apply New Mexico law, in the absence of a demonstrated, material conflict, was proper. Because the district court’s decision to apply New Mexico law to the entire class was appropriate, we conclude that the court did not abuse its discretion when it certified the class, and we remand to the district court for further proceedings consistent with this Opinion.
{47} On remand the district court retains jurisdiction over the class and may revisit its certification decision. See Rule 1 — 023(C)(1). Thus, the court may need to consider changes in the laws of the class states that may have occurred while this appeal has been pending to ensure that class certification is still appropriate. See Ferrell,
Continued Viability of the Restatement (First) of Conflict of Laws for Multi-State Class Action Lawsuits
{48} After determining that an actual conflict existed in this case, the Court of Appeals correctly relied on the Restatement (First) of Conflict of Laws and the place of contracting rule contained within the Restatement (First) to determine what law ought apply to the class members from states other than New Mexico. See Ferrell,
{49} Despite being contrary to a traditional choice-of-law analysis, the Court’s decision to adopt the actual conflict doctrine is consistent with the procedures required by our class action rule. As discussed above, a district court must undertake an analysis of the laws of the relevant states to ensure that the predominance and superiority requirements of the class action rule are met. If a court finds that the laws of the relevant states are similar enough to meet the predominance requirement, but then has to apply the laws of the state where the insured entered into the contract, the district court’s analysis regarding predominance would have been in vain. Thus, a strict adherence to the traditional principles espoused by the Restatement (First) may render multi-state class actions a virtual nullity. Because we reverse the Court of Appeals’ determination that an actual conflict exists in this case, we could stop at this point. However, because the doctrine we currently follow may no longer be appropriate for multi-state class action litigation, we resolve this potential problem in this Opinion for the benefit of our class action jurisprudence.
{50} New Mexico has traditionally followed the Restatement (First). See United Wholesale Liquor Co. v. Brown-Forman Distillers Corp.,
{52} Thus, with respect to the instant appeal, the district court would have simply applied the Restatement (First) § 311, at 395, “the [law of] ‘the place of contracting.’ ” Assuming that the place of making the contract was the state where the insured entered into the contract, the district court would have been required to apply the separate law of each of the thirteen states involved in the class action, without considering the competing laws and policies of the other states connected to the suit. This leads to problems and could conflict with the policy behind class actions, i.e., the district court would have no choice but to apply the thirteen states’ laws, which may make the class action unmanageable.
{53} Because of the mechanical nature of its application, the Restatement (First) has been widely criticized as being inflexible, rigid, and leading to unjust results. See Scoles et al., supra, § 2.7, at 21-22. Another criticism levied against the Restatement (First) is that it does not recognize choice-of-law provisions. Scoles et al., supra, § 18.14, at 989. Currently only eleven states, including New Mexico, continue to follow the choice-of-law rules set forth in the Restatement (First) with respect to contract claims. Scoles et al., supra, § 2.21, at 87.
{54} Twenty-four states have rejected the Restatement (First) in favor of the Restatement (Second) of Conflict of Laws (1971) with respect to contract conflicts. Scoles et al., supra, § 2.23, at 99. The Restatement (Second) eschews a rigid, mechanical selection of a particular jurisdiction and, instead, focuses on the content of the laws of the states connected to the dispute. As such, a court does not choose between two competing jurisdictions, but between competing bodies of law, and competing public policies. See Leflar et al., supra, § 100, at 282-84. Additionally, the Restatement (Second) proceeds issue by issue, rather than by an entire claim, so one issue may be resolved under the law of one jurisdiction, while another issue may be resolved under the law of a different jurisdiction. Further, the Restatement (Second), unlike the Restatement (First), acknowledges the realities of modern contracts and respects party autonomy by allowing the parties to choose the law that will govern the dispute. Restatement (Second) § 187, at 561; see also Symeon C. Symeonides, Oregon’s Choice-of-Law Codification for Contract Conflicts: An Exegesis, 44 Willamette L.Rev. 205, 222 (2007) (“[T]he drafters of the First Restatement rejected party autonomy____Recognizing this reality, the Restatement (Second) formally sanctioned and codified the principle of party autonomy.”). If the contract has a valid choice-of-law provision, that law presumptively applies. Restatement (Second) § 187, at 561.
{55} In the absence of an enforceable choice-of-law provision, and if the rules regarding specific types of contracts or specific issues in contract do not supply the law to be applied, the Restatement (Second) relies on the “most significant relationship” test which is used to determine which state has the most significant relationship to the transaction and to the parties. Id. § 188(1), at 575. A court considers a variety of contacts when making a determination about which state’s law applies to the dispute. See id. (listing the following relevant contacts “(a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied.
Id. § 6, at 10.
{56} After comparing the Restatement (First) and the Restatement (Second), it is apparent that the rigidity of the Restatement (First) is particularly ill-suited for the complexities present in multi-state class actions. It does not allow a court to consider the competing policies of the states implicated by the suit.
3
We conclude that the Restatement (Second) is a more appropriate approach for multi-state contract class actions. See, e.g., Chrysler Corp. v. Skyline Indus. Servs., Inc.,
{57} Thus, if a district court determines that the laws of the states implicated in a multi-state contract class action actually conflict, the court should then apply the principles of the Restatement (Second) to determine which law applies to the disputed issue. Once the court determines which law applies, the court must then determine whether the application of that chosen law is constitutional. See Phillips,
{58} In the instant case, some class member policies, issued in certain states, contain forum-selection clauses designating the state where the insured entered into the policy as the forum. Allstate contends that these forum-selection clauses preclude class certification in New Mexico. We reach this issue because, unlike the Court of Appeals, we affirm the district court’s certification decision. See Ferrell,
{59} Plaintiffs argue that Allstate waived this defense by not raising it in its first responsive pleading because forum-selection clauses are properly treated as venue defenses under Rule 1-012(B)(3) NMRA. The district court agreed and concluded that Allstate had waived the defense. Allstate counters that forum-selection clauses are properly brought as motions to dismiss for failure to state a claim under Rule 1-012(B)(6), which may be raised at any time. See Rule 1-012(H)(2). While our courts have discussed in general terms the nature and effect of forum-selection clauses, our courts have yet to determine whether a forum-selection clause should be brought as a motion to dismiss for failure to state a claim or as a motion to dismiss based on improper venue. Thus, we now consider the proper analysis for a forum-selection clause defense.
{60} Courts disagree about the proper procedural mechanism a party must use to raise a forum-selection clause defense. The majority of circuit courts that have considered the issue have concluded that forum-selection clauses are properly raised under Federal Rule of Civil Procedure 12(b)(3), improper venue. See Sucampo Pharm., Inc. v. Astellas Pharma, Inc.,
{61} We find the Fourth Circuit’s analysis in Sucampo,
{62} Having rejected an analysis under Rule 12(b)(1) and Rule 12(b)(6), the court determined that a motion to dismiss based on a forum-selection clause is properly treated as a Rule 12(b)(3) motion. Id. The court concluded that such an analysis “would avoid
{63} We find this reasoning particularly persuasive when dealing with multi-state class actions certified under Rule 1-023(B)(3) of our class action rule. Allowing a defendant to wait to raise a forum-selection clause defense until after certification, i.e., “testing the waters” of the class proponents’ chosen forum, is inefficient and may result in a waste of judicial resources. The district court would have spent unnecessary time and effort analyzing the laws of each implicated state to ensure that the predominance and superiority requirements were met. Thus, allowing a defendant to raise a forum-selection clause defense at any time during the litigation undermines the “economies of time, effort, and expense” sought to be achieved by Rule 1-023(B)(3). Berry, 2004-NMGA-116, ¶ 47 (quoted authority omitted).
{64} Instead, treating a motion to dismiss based on a forum-selection clause as a Rule 1-012(B)(3) motion comports with the goals underlying our class action rule — “judicial efficiency and the need to provide a forum for the vindication of dispersed losses.” Berry,
{65} Because Allstate did not raise the forum-selection clause as a defense in its motion to dismiss, or any other pleading prior to the certification hearing, we affirm the district court’s ruling that Allstate waived the defense. See Steward v. Up N. Plastics, Inc.,
CONCLUSION
{66} We reverse the Court of Appeals and affirm the district court’s certification decision. We remand to the district court for proceedings consistent with this Opinion.
{67} IT IS SO ORDERED.
Notes
. Plaintiffs acknowledge that the underlying issue in this case may, in fact, be moot based on the Court of Appeals’ recent decision in Nakashima v. State Farm Mutual Automobile Insurance Co.,
. We use the term “actual conflict” throughout this Opinion, rather than the term "false conflict" used by the Court of Appeals, because "false conflict" actually has two different meanings. See Robert A. Leflar et al., American Conflicts Law, § 92, at 270 (4th ed.1986). The first meaning of "false conflict” arises from the choice-of-law method advanced by Professor Brainerd Currie, "the governmental interest” analysis. Id. at 270-71. Under Currie's method, a false conflict arises when "only one of the involved states would be interested in applying its law.” Eugene F. Scoles et al., Conflict of Laws § 2.9, at 28 (4th ed.2004). The second meaning of the term "false conflict” is "no conflict of laws.” Leflar et al., supra, § 92, at 272. The analysis undertaken by the Court of Appeals is consistent with the "no conflict of laws” approach, rather than the governmental interest analysis approach. To avoid any confusion, we use the term "actual conflict” throughout this Opinion when referring to the "no conflict of laws” approach.
. Our courts have been willing to consider the Restatement (Second) approach in other circumstances. See Fed. Deposit Ins. Corp. v. Hiatt,