9th Circuit Affirms Class Certification in RICO Suit

Last week, the Ninth Circuit affirmed certification of nationwide classes in a suit featuring RICO, contract, and other claims.  The published opinion dealt with a range of issues, including typicality, predominance, and superiority.

The case is Just Film, Inc. v. Buono.  No. 14-16132, 2017 WL 510452 (9th Cir. Feb. 7, 2017).  The full opinion is worth a read; a few highlights follow.

Typicality

One argument defendants raised was that the named plaintiffs’ injuries differed from the injuries suffered by other class members.  The Ninth Circuit held that the differing injuries did not defeat typicality:

The requirement of typicality is not primarily concerned with whether each person in a proposed class suffers the same type of damages; rather, it is sufficient for typicality if the plaintiff endured a course of conduct directed against the class. Although Campbell was able to fend off the attempted fraud before it reached into and diminished her bank account, there is no reason why she cannot prove the nature of the fraudulent scheme for benefit of all class members, whether or not their precise injuries are identical.

Predominance

Defendants challenged predominance on several grounds, including that damages would vary by class member and would require individualized evidence.  The Ninth Circuit has held that individualized damages issues do not defeat predominance, and reiterated that point again:

Rule 23(b)(3)’s predominance requirement takes into account questions of damages. … However, “damage calculations alone cannot defeat certification.” Yokoyama, 594 F.3d at 1094. “[T]he presence of individualized damages cannot, by itself, defeat class certification under Rule 23(b)(3).” Leyva, 716 F.3d at 514. … To gain class certification, Plaintiffs need to be able to allege that their damages arise from a course of conduct that impacted the class. But they need not show that each members’ damages from that conduct are identical.

That some individualized calculations may be necessary does not defeat finding predominance.

At this stage, Plaintiffs need only show that such damages can be determined without excessive difficulty and attributed to their theory of liability, and have proposed as much here.

Superiority

The court also briefly addressed Rule 23(b)(3)’s superiority requirement, affirming the district court’s finding that the class action was the superior method of adjudication:

The district court did not err in determining that Plaintiffs satisfied the superiority requirement. If a class action is not superior, then individual actions must carry the day. The court concluded that the “risks, small recovery, and relatively high costs of litigation” make it unlikely that plaintiffs would individually pursue their claims. These considerations are at the heart of why the Federal Rules of Civil Procedure allow class actions in cases where Rule 23’s requirements are satisfied. This case vividly points to the need for class treatment. The individual damages of each merchant are too small to make litigation cost effective in a case against funded defenses and with a likely need for expert testimony. The district court also found that class action was superior because litigation on a classwide basis would promote greater efficiency in resolving the classes’ claims.