Court Certifies Liability-Only Class in Costco Frozen Berry Class Action

Three years after Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), lower courts continue to certify classes for liability purposes only, thereby reserving consideration of damages for individual determination during subsequent phases of litigation. These courts reason that Comcast’s predominance and superiority concerns are “largely irrelevant” to this approach, which is permitted by Rule 23(c)(4). E.g., In re Deepwater Horizon, 739 F.3d 790, 817 (5th Cir. 2014); Butler v. Sears, Roebuck and Co., 727 F.3d 796, 800 (7th Cir. 2013).

A recent order granting class certification in Peterson v. Costco Wholesale Co., Inc., 2016 WL 304299 (C.D. Cal. Jan. 26, 2016), exemplifies the trend. Following a Hepatitis A outbreak in the western United States “linked to the consumption of Townsend berry mix sold to consumers at various Costco locations in early 2013,” id. at *1, individuals from nine different states filed a class action in California state court, seeking damages in part on strict liability theories. The case was then removed to federal district court, where it was assigned to Judge David O. Carter.

At the class certification stage, the Court inquired whether the use of subclasses can account for variations in state law, and whether individual inquiries, such as differences in emotional distress damages, impact the Court’s predominance inquiry.

The Court suggested some concern that “different state law formulation concerning whether a product has to be both defective and unreasonably dangerous, or just defective,” could prove to be material, thus presenting a hurdle to class certification. Id. at *12. The Court resolved this potential dilemma by certifying nine state sub-classes. This approach, it explained, “both overcome[s] the state law variation problems and present[s] a manageable option for the litigation moving forward.” Id. at *13.

Regarding damages, the Court noted that Plaintiffs were seeking economic damages for those class members who paid out-of-pocket for Hepatitis A vaccinations, lost wages, and non-economic damages. Plaintiffs proposed a damages model by which “class members can provide receipts to prove actual out-of-pocket expenses, offer an approximation of a reasonable lost wages amount, and use past settlement amounts and testimony to adequately measure non-economic damages.” Id. at *14 (internal quotation marks omitted).

In response, Defendants “raise[d] concerns” about Plaintiffs’ damages model for measuring lose wages and economic damages. Id. The Court, however, brushed this concern aside, finding that it “need not be resolved” because the Court was certifying liability-only sub-classes. Id. Damages calculations, the Court explained, cannot alone defeat certification. Id. And just because “a class may not be satisfied for purposes of seeking damages does not mean that it cannot be certified at all.” Id. (quoting Lilly v. Jamba Juice Co., 308 F.R.D. 231, 244 (N.D. Cal. 2014)). Because Plaintiffs “established that, with the exception of determining damages, all of the required elements of class certification have been met, the Court . . . exercise[d] its discretion pursuant to Rule 23(c)(4) of the Federal Rules of Civil Procedure to certify the proposed class solely for purposes of determining liability.” Id. (quoting Lilly, 308 F.R.D. at 244).