Category: Class Certification

In putative class actions alleging false advertising, plaintiffs often argue that class certification is appropriate because the language being challenged appeared on the defendant’s marketing materials or product label, thereby making the class members’ experience—and the question(s) to be resolved—common.  These plaintiffs invariably claim that individualized questions of deception and reliance do not defeat certification, because consumer protection statutes employ an objective, “reasonable consumer” test that does not turn on what each individual class member actually thought or believed.

As our readers know, we’ve kept a close eye on the “flushable wipes” litigation—known variously as Kurtz v. Costco and Belfiore v. Procter & Gamble—as it has bounced between Judge Weinstein’s courtroom in the Eastern District of New York and the Second Circuit.  The cases raise several issues important to class-action defendants, including the necessity of a rigorous damages model at the class-certification stage; the availability of injunctive relief to customers who are already wise to the alleged deception; and the appropriateness of massively multiplied “statutory damages” in the class context.  We (and others) had hoped that the Second Circuit would use the case to provide clear answers to these questions and to remedy the New York federal courts’ status as a hotbed for questionable class-action complaints.  But with that court’s latest ruling—fortunately, an unpublished and non-precedential one—those hopes may have gone down the tubes.

A California district court recently decertified, after a jury trial, a class of vitamin supplement purchasers in a false advertising case.  As we detailed in a prior post, a federal judge declared a mistrial in the same case earlier this this year after the jury deadlocked.  The case, Racies v. Quincy Bioscience, LLC, 15-cv-00292 (N.D. Cal.) (Gilliam, J.), was already interesting because certified class actions rarely make their way to trial.   And it is rarer still for a district court to decertify a class following a trial.  But setting those procedural quirks aside, the opinion may prove useful for defendants seeking to decertify or defeat putative classes on typicality and predominance grounds. 

A few weeks ago, the U.S. Court of Appeals for the D.C. Circuit weighed in on a recurring question in class action litigation: can a court certify a class where some class members—even if only a small fraction of the class—are uninjured? Joining a string of recent decisions on this subject, the circuit court held in In re Rail Freight Fuel Surcharge Antitrust Litig., 934 F.3d 619 (Aug. 30, 2019), that class certification was properly denied for lack of predominance because twelve percent of the proposed class—constituting thousands of proposed class members—were uninjured by the defendants’ alleged misconduct. This ruling follows a similar determination from the First Circuit last October, covered here. Although both cases involved antitrust allegations, their holdings are readily applicable to consumer product class actions, where there is often evidence—either from the defendants’ files or the plaintiffs’ own experts’ analysis—that a considerable number of proposed class members were uninjured by defendant’s alleged mislabeling.

A frequent target of consumer class actions are “structure/function” claims made in connection with dietary supplements.  These claims describe a nutrient or dietary ingredient and its role in the body’s structure or function: for example, “glucosamine promotes healthy joints.”  Plaintiffs may allege that a product’s labeling is misleading because the typical consumer already receives enough of the nutrient or ingredient from her diet.  At the same time, those plaintiffs will seek a refund on behalf of everyone who bought the product—even if many in the class have received a benefit.  A recent decision out of the Southern District of California, Alvarez v. NBTY, Inc., 2019 U.S. Dist. LEXIS 87420 (May 22, 2019), suggests that this disconnect between the proposed class and the plaintiffs’ theory of liability and damages may no longer be tolerated at the class-certification stage.

It’s hard to argue that New York’s consumer-protection laws (Gen. Bus. Law §§ 349–350) are being underutilized by private plaintiffs.  But, on that claimed basis, the state’s Legislature is considering a multifaceted amendment that would make those laws vastly more plaintiff-friendly—and business-unfriendly—than they already are.  It’s hard to understate the impact these changes would have on the business community.  We’re not sure what the bill’s odds of passage are, but given the extremity of the amendments, we’re a bit surprised they haven’t attracted more public attention.

To prove damages in a consumer class action, the named plaintiff must show—among other things—how many units of the defendant’s product were purchased by consumers in the relevant state (or states).  This is easier said than done.  Manufacturers generally keep records of their own wholesale transactions—i.e., how much product they shipped to distributors or large retail chains.  But they generally don’t have direct visibility into sales at the retail level, since they aren’t a party to those transactions.  If not all of the product sold at wholesale ends up being purchased by consumers, manufacturers’ records may not reflect this.  Likewise, if the product that a manufacturer ships to an address in State A (e.g., a regional distribution center) ends up being moved to State B before reaching store shelves, manufacturers’ records will not reflect this either.  What, then, is a class-action plaintiff to do?

Unless you were born yesterday, you know that packaged goods usually contain some empty space in the box, bottle, or bag.  This has been true for as long as there have been packaged goods.  What is relatively new is that consumers—or, rather, a small cadre of specialized plaintiff’s lawyers—are suing over it.  But as Newton said, for every action, there is an equal and opposite reaction.  And the more that lawyers have inundated courts with these suits, the more aggressively courts have responded to shut the silliness down. This post examines the regulatory underpinnings of these so-called “slack-fill” suits and the many bases that courts have found for letting the air out of them.

In Comcast v. Behrend, 569 U.S. 27 (2013), the Supreme Court held that a plaintiff cannot obtain class certification with an inadequate damages model.  In the years since, courts have diverged over how much a plaintiff must do to satisfy this requirement.  Often, plaintiffs seek class certification with nothing more than a skeletal proposal to develop and perform an analysis at some future point, using information they do not—and might never—possess.  While some courts have found such adumbrative “models” sufficient at the class certification stage, the better decisions require more.  As Comcast recognizes, Rule 23 “does not set forth a mere pleading standard.”  Rather, a plaintiff “must affirmatively demonstrate” through “evidentiary proof” that damages are measurable on a class-wide basis through a common methodology.  Faithful application of that principle obligates plaintiffs and their experts to offer a detailed methodology that is tailored to the facts of the case, and to show that any data that the model requires in fact exists and can be obtained.