Consumer Cases Brought under Rule 23(b)(3) STRATEGIES FOR DEFEATING CLASS CERTIFICATION By Thomas A. Dye and Dean A. Morande A lawsuit founded defeating succeed in class tainable. consumer A class definition fails if it is on to ever even seemingly innocuous individual certification of consumer claims. overbroad. This is an important ele- allegations, certified class ment as courts continue to analyze the once as a action, raises the specter of protracted, Setting the Stage under Rule 23 proposed class definition to be sure a bet-the-company litigation. Unless It is the plaintiff's burden to prove ai] workable class has been circumscribed. early settlement is deemed to be the the necessary requirements of FLule 23. wiser course, defense counsel should The court is charged with the duty of Probing Mere Lip Service to employ their entire arsenal undertaking a "rigorous analysis" derail Predominance to to class certification early on. This article determine whether the plaintiff has For plaintiffs seeking class certification addresses important and sometimes satisfied each element of the rule. A under R.ule 23(b)(3), in addition to overlooked tools that counsel failure to establish any one factor is other factors not discussed here, the can use to challenge whether a potential con- fatal class certification. It is the rule itself recognizes that certification to class action truly satisfies the defendant's objective in opposing class is permissible only when "questions of sumer requirements for certification under certification to demonstrate that rigor- law or fact common to the members Federal P,.ule of Civil Procedure 23. ous analysis will reveal at least one, if of the class predominate over any In 1966, R_ule 23 was expanded to numerous, shortcomings in the questions affecting only individual not allow for recovery of damages in class plaintiff's motion for certification. In members." This predominance inquiry action cases. Those amendments trig- doing so, defense counsel should pre- is "far more demanding" than Rule gered the filing of a wide of pare for the class certification hearing 23(a)'s commonality requirement and range class actions. The business if it trial with evidentiary "tests whether proposed classes are suf- consumer as were a community, in turn, became increas- proof. Defendant's counsel should pur- ficiently cohesive to warrant adjudica- ingly discontented with class actions, sue rigorous and thorough discovery to tion by representation."' which resulted in lobbying efforts for hearing, including prep•ire the The predominance requirement to restrict what some considered abuses. investigation into the appropriateness must be examined against the back- Around 1995, tort reform and court of the class representative and the rela- drop elements of plaintiff's of the interpretations began of R.ule 23 tionship with the proposed class coun- claims, any defenses asserted, relevant whittling class sel. Expert witnesses should also be facts, away at and the substantive law. As consumer a actions. example, For in 1995, considered, and convincing demon- result, defendants should approach the Congress passed the Private Securities strative proof should be assembled. predominance issue understanding that Litigation R.eform Act, which restricts A plaintiff typically cannot simply the issues presented by a potential class the choice of counsel to represent the rely on the allegations of the complaint cannot predominate in abstract an class to the lead plaintiff--the largest to satisfy its burden under P-.ule 23; the sense; that is, plaintiffs must be able to shareholder. court must be satisfied that there is suf- demonstrate in concrete way how a Federal state procedural and class ficient evidence each common issues will predominate as to to support action reform culminated in the passage P..ule 23 element. Mthough the court each member of the class. This requires of the Class Action Fairness Act of 2005. should not delve into the merits of the the plaintiffs be able that to present (See P..ubenstien article on page 4.) lawsuit, it must, if necessary, go beyond evidence to support their allegations to The determination of whether the pleadings to make whatever legal prove a case, not only for the class rep- to certify a class remains within the dis- and factual determinations resentative, but for each and are neces- every cretion of the trial court. Nonetheless, sary to evaluate whether the R.ule 23 potential class member as against each that determination must be guided by requirements are met.: and every defendant. several principles, in accord with which Furthermore, class be Simply listing common issues and must a defendants now have more tools than "adequately defined and clearly ascer- suggesting that they "predominate" is CLASS ACTIONS today 22 2008
If the plaintiffs might seek not sufficient, in even the most border- all defendants. to limit their class to the cannot line of cases, any plaintiff's counsel can devise a single (or common) set of facts residents of a single state. However, not come up with a laundry list of common their claims, the all individualized inquiries be to prove common can issues cannot be said to predominate. questions, such as "Did Defendant X defeated by narrowing the class defini- a public dis- For example, make a false statement in For example, in In re Ford Motor Co. class definition tion. a including closure?" or "Did Defendant X know, Ignition Stvitcti Products Liability only those who persons actually relied on allegedly fraudulent or should have known, that the Litigation," the class claims were essen- state- tially ment made was false?" In essence, com- founded allegations that conduct will the reliance not on cure problem. The court mon questions be made broader the ignition million switches in 23 is still faced with can and broader, until the common ques- vehicles Plaintiffs the prospect of conducting a mini-trial defective. were tion might as well be presented as "Is brought several for every potential class member.just to causes of action con- Defendant liable the proposed sisting of, among other things, fraudu- establish who actually X falls into the to class members for damages?" lent concealment and violation of state class. Nor can plaintiffs (or the court) Another way of thinking about how ignore the defenses that will be raised consumer fraud statutes. Plaintiffs were the proof must predominate taken to task for failing to create over the a trial at trial. Each defendant must have the a practical blueprint demonstrating "how right class is to recognize that, their its evidence, and this to present as matter, the plaintiffs will actually have to multiple causes of action could be pre- must be accounted for in determining prove their allegations at trial) In that sented to a.jury for resolution in whether common or individual ques- a way that fairly represents the law of the 50 tions predominate. sense, defendants should demand that the plaintiffs present a trial plan where- states while not overwhelming jurors in they demonstrate their allegations on Framing Reliance as an with hundreds of interrogatories and a Individualized Issue a class-wide basis, using a single set of verdict form as large as an almanac." facts that apply to all plaintiffs vis-a-vis as this, plaintiffs In situations such In the of fraud context consumer claims, for example, a class cannot be certified if the claims are based on oral representations or nonuniform writ- ings that vary from putative class mem- ber putative class member. This to result flows from the principle that "a fraud case may be unsuited for treat- class if there action ment as a was material variation the in representa- tions made. As for the reliance element itself, although common-law fraud requires proof of reliance, some consumer fraud and deceptive trade practices statutes do not.Yet, even under consumer fraud statutes lacking a "reliance" element, courts require something like many reliance to establish the required causa- tion. other words, such In statutes usually require proof that the plaintiff suffered damages result of the as a fraudulent conduct. Demonstrating that causal link is, for the most part, similar to demonstrating reliance and, most important, requires individual- ized proof. if the plaintiffs can demon- Even that the defendants made uni- strate form representations each class to SECTION OF LITIGATION AMERICAN BAR ASSOCIATION 23
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