9th Circuit Affirms Class Certification in RICO Suit

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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.  … Read more

Class Representatives Do Not Need to Be Eligible for Each Type of Damages

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In the post-Comcast climate, plaintiffs in consumer class actions often seek to prove damages classwide through damages models.  But what happens when the model would provide damages for many class members, but not for a class representative? Is that a bar to class certification?

Judge David O. Carter, of the Central District of California, has held that class representatives do not need to be eligible to recover all forms of economic damages sought on behalf of the class.  In Petersen v. Costco Wholesale Co., 2016 WL 6768911 (C.D. Cal. Nov. 15, 2016), defendants argued that none of the class representatives could establish all of the economic damages that the class is seeking as a whole—making them atypical class members. Judge Carter agreed with defendants’ premise: no class representative experienced all three injuries, and six of them experienced none of the identified harms.

Nevertheless, Judge Carter held that “the named Plaintiffs need not raise identical claims to all the possible claims in the class.” Judge Carter reasoned, “[t]he tests of typicality does not require identity of claims, and the named Plaintiffs claims need be only reasonably co-extensive with those of absent class members.”  He continued: “The same showing of liability that will entitle the named Plaintiffs to recover will also entitle absent class members to any economic damages they incurred.Read more

11th Circuit: Comcast Doesn’t Require Classwide Proof of Damages

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Today, in Carriuolo v. General Motors Co., the Eleventh Circuit joined a group of circuits that includes at least the Second, Third, Seventh, and Ninth, holding that “individual damages calculations alone cannot defeat class certification.” The court rejected defendant’s argument that, after the Supreme Court’s Comcast v. Behrend decision, “damages must be capable of measurement on a classwide basis.”

The underlying case involves allegations that GM advertised that some of its vehicles had achieved safety ratings that they hadn’t really achieved.  Plaintiffs alleged this conduct violates Florida’s deceptive practices statute.  Based on that theory of liability, the Eleventh Circuit held that damages would be a common issue, since individual buying preferences would not alter the overall market price::

a manufacturer’s misrepresentation may allow it to command a price premium and to overcharge customers systematically. Even if an individual class member subjectively valued the vehicle equally with or without the accurate Monroney sticker, she could have suffered a loss in negotiating leverage if a vehicle with perfect safety ratings is worth more on the open market. … Obviously, prices are determined in substantial measure according to market demand. Thus, because a vehicle with three perfect safety ratings may be able to attract greater market demand than a vehicle with no safety ratings, the misleading sticker arguably was the direct cause of actual damages for the certified class even if members individually value safety ratings differently.

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Class Certification Granted in Automotive Defect Suit

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Judge Dean D. Pregerson certified the class under Rule 23(b)(3) in a suit alleging an undisclosed defect in certain Nissan vehicles.  The court certified California consumer protection and implied warranty claims, a Washington consumer protection claim, and a claim for common law fraud.  The case is Falco v. Nissan N. Am. Inc., 2016 WL 1327474 (C.D. Cal. Apr. 5, 2016).

Several times, the court relied on the ample Ninth Circuit precedent for certifying automotive defect cases:

The Court finds this case raises similar common questions of fact and law to the common questions alleged in another consumer automobile defect class certification case, Chamberlan v. Ford Motor Co., 402 F.3d 952, 962 (9th Cir. 2005). … In these consumer defect cases, commonality can be found in the very legal and factual question of the defect. See, e.g., id.; see also Wolin v. Jaguar Land Rover N. Am. LLC, 617 F.3d 1168, 1172 (9th Cir. 2010); Doyle v. Chrysler Grp. LLC, No. SACV 13-00620, 2014 WL 7690155, at *6-7 (C.D. Cal. Oct. 9, 2014); Parkinson v. Hyundai Motor Am., 258 F.R.D. 580, 595-96 (C.D. Cal. 2008).

The court also approved Plaintiffs’ two closely-related damages methodologies.  First, class members who already spent money on repairs and diagnoses can be provided restitution based on “the average cost of repair.”  Second, class members who had not already paid for repairs could still receive restitution based on the same figure because

the class would be getting the benefit of their bargain because they would be put in the same position they would have been had the car not been sold with the defective timing chain system — it is the cost necessary to make the vehicles conform to the value Plaintiffs thought they were getting in the price tendered.

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Does Tyson Foods Case Redefine Predominance?

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According to Justice Thomas, who (along with Justice Alito) dissented in Tyson Foods v. Bouaphakeo, 555 U.S. ___ (2016), the answer is ‘yes’:

The majority begins by redefining the predominance standard. According to the majority, if some “‘central issues’” present common questions, “ ‘the action may be considered proper under Rule 23(b)(3) even though other important matters will have to be tried separately, such as damages or some affirmative defenses peculiar to some individual class members.’ ” Ante, at 9 (quoting, 7AA C. Wright, A. Miller, & M. Kane, Federal Practice & Procedure §1778, pp. 123–124 (3d ed. 2005; footnotes omitted)). We recently—and correctly—held the opposite. In Comcast, we deemed the lack of a common methodology for proving damages fatal to predominance because “[q]uestions of individual damage calculations will inevitably overwhelm questions common to the class.” 569 U. S., at ___ (slip op., at 7).

Slip op. at 8-9 (Thomas, J., dissenting). To drive this point home, Justice Thomas observes in a footnote that “[t]he majority relies on the same treatise citations that the Comcast dissent invoked to argue that individualized damages calculations should never defeat predominance. 569 U. S., at ___–___ (slip op., at 3–4) (opinion of Breyer, J.).” Id.… Read more

More Comcast Confusion

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Yesterday, we wrote about the ruling in Moore v. Ulta Salon, Cosmetics & Fragrance, in which Central District of California Judge Fernando M. Olguin  concluded (correctly) that “the [Comcast] Court did not hold that damages must be shown through classwide evidence for common liability issues to predominate.”  (emphasis added). Judge Olguin’s conclusion jives with several post-Comcast rulings by the Ninth Circuit.

Today, we note that another court in the same district reached the opposite conclusion, stating that “to certify a class under Federal Rule of Civil Procedure 23(b)(3)” plaintiffs must show that “damages are capable of measurement on a classwide basis.” In re NJOY, Inc. Consumer Class Action Litig., 2016 WL 787415 (C.D. Cal. Feb. 2, 2016). The continuing divergent results on this issue will likely require the Ninth Circuit to take up the issue yet again.

In the Seventh Circuit, on the other hand, there appears to be less uncertainty about interpreting Comcast. Judge Barabara B. Crabb of the Western District of Wisconsin issued a ruling quite similar in tone to Judge Olguin’s.  See Eggen v. Westconsin Credit Union, 2016 WL 797614 (W.D. Wisc. Feb. 26, 2016).  Like Judge Olguin, Judge Crabb was compelled to note that the defendant had ignored circuit court precedent on Comcast, instead arguing that certification was inappropriate due to individualized damages issues.  … Read more

Once Again, Comcast Does Not Require Classwide Proof of Damages

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In previous posts, we’ve noted that some district courts have continued to grapple with Comcast v. Behrend, even though the Ninth Circuit has repeatedly clarified that Rule 23(b)(3) does not require classwide proof of damage.  Given the inconsistent district court holdings, it is not surprising that defendants sometimes avoid mentioning the Ninth Circuit’s holdings.  But in a recent opinion, Judge Fernando M. Olguin dealt with the failure harshly, writing that defense counsel had “misstate[d] the standard set forth in Comcast.” See Moore v. Ulta Salon, Cosmetics & Fragrance, 311 F.R.D. 590 (C.D. Cal. 2015).

In Moore, defendant argued that regardless of whether common questions predominate in the liability context, plaintiff cannot satisfy the predominance requirement unless she also “show[s] that damages can be proven on a class-wide basis.”  Judge Olguin began by noting that the argument hinged on a “failure to address applicable Ninth Circuit precedent.”  Id. at 607.  He continued:

defendant misstates the standard set forth in Comcast. …  The [Comcast] Court did not hold that damages must be shown through classwide evidence for common liability issues to predominate.… Here, if the class prevails on its liability claims … only then will the court determine how many hours of pay each plaintiff is entitled to, how many meal and/or rest breaks each plaintiff was denied, and the resulting penalties that defendant must pay.

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23(c)(4) Certification Granted in Costco Hepatitis A Lawsuit

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Judge David O. Carter of the Central District of California recently certified a liability-only class in a case alleging defendants’ conduct created a “risk of exposure to the hepatitis A virus” through the sale of defective food products. See Petersen v. Costco Wholesale Co., 2016 WL 304299 (C.D. Cal. Jan. 25, 2016).

Ruling on the existence and predominance of common questions, the court explained:

Given that Plaintiffs allege that a single product sold only at Costco was defective, there is a common core of salient facts. See Valentino v. Carter-Wallace, Inc., 97 F. 3d 1227, 1229 (9th Cir. 1996).

Thus, the court overruled defendants’ arguments that proving the existence of a defect on a classwide basis would be impossible:

The Ninth Circuit, however, has made clear that “proof of the manifestation of a defect is not a prerequisite to class certification.”  Baker v. Microsoft Corp., 797 F.3d 607, 611 (9th Cir. 2015) (citation omitted).

Indeed, there are several significant common issues here, including Plaintiffs’ contention that a single, specific lot of allegedly defective organic pomegranate seed has given rise to Plaintiffs’ claims. … Put differently, determining whether Defendants sold a defective product in this case will not require a searching individualized inquiry; rather, there will be significant common proof at issue in resolving Defendants’ liability.

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

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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.… Read more

Comcast, Restitution, and Trump University

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As California courts continue to grapple with the Supreme Court’s 2013 Comcast v. Behrend decision and appropriate restitution calculations under California’s consumer protection statutes, a recent decision from Judge Gonzalo P. Curiel of the Central District of California provides helpful analysis. Makaeff v. Trump University, LLC, 309 F.R.D. 631 (C.D. Cal. 2015).

The Trump case arose from real estate seminar students’ claims that, in short, they didn’t get what they were promised.  Plaintiffs brought suit under California’s CLRA and UCL, as well as under Florida’ FDUTPA and New York’s General Business Law sec. 349(h).

The primary issue was whether plaintiffs’ proposed classwide restitution and damages model complies with Comcast and applicable state law: Plaintiffs argued that they received no value (or at best de minimis value) in exchange for their money, and argued they were thus entitled to full refunds. Defendants, for their part, argued that state law doesn’t condone a “full refund” theory, and instead requires an amount-paid minus value-received calculation.

The court sided with plaintiffs. First, under California law, plaintiffs were entitled to offer evidence to substantiate their theory that “only a full-refund will return them to the position that they were in before being ensnared by Defendants’ scam.”  Makaeff, 309 F.R.D.… Read more