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

SDNY: Defer Standing Until Class Certification

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Awhile back, we wrote about the practice of named plaintiffs asserting state-law claims arising under the laws of states in which no named plaintiff resides. Our last post looked at a decision out of the Northern District of California.  More recently, a decision from the Southern District of New York has addressed the issue.

In Kaatz v. Hyland’s, 2016 WL 3676697 (S.D.N.Y. July 6, 2016), the court addressed a defense argument that the plaintiffs lacked standing to bring a putative nationwide class action under any state’s laws except their own.  The court disagreed:

Although standing is generally a threshold issue for an Article III court to determine at the outset of the case, the Supreme Court created an exception for courts to address class certification prior to standing when certification issues are logically antecedent to Article III concerns.

There is a growing consensus among district courts that class certification is logically antecedent, where its outcome will affect the Article III standing determination, and the weight of authority holds that in general class certification should come first.  In other words, when class certification is the source of the potential standing problems, class certification should precede the standing inquiry.

(Quotations and citations omitted.)

The court also noted that plaintiffs in a “consumer protection class action may assert claims under laws of states where they do not reside to preserve those claims in anticipation of eventually being joined by class members who do reside in the states for which claims have been asserted.”
 .… Read more

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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Automotive Class Action Not Restricted to the Specific Vehicle Model Owned by Plaintiff

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In Bedi v. BMW of N. Am., LLC, 2016 WL 324950 (D.N.J. Jan. 27, 2016), the court was presented with an increasingly common issue:  BMW argued that the named plaintiff only has standing to represent those members of the class who purchased the very same vehicle model as he did.  The court disagreed:

In this district, a class complaint generally may survive a motion to dismiss on products a lead plaintiff did not purchase, so long as: (1) the basis for each of the claims is the same, (2) the products are closely related, and (3) the defendants are the same. Eberhart v. LG Elecs. USA, Inc., No. CV 15-1761, 2015 WL 9581752, at *3 (D.N.J. Dec. 30, 2015); In re L’Oreal Wrinkle CreamMktg. & Sales Practices Litig., No. 12-03571, 2013 WL 6450701, at *4 (D.N.J. Dec. 9, 2013); Burke v. Weight Watchers Int’l, Inc., No. 12-6742, 2013 WL 5701489, at *3-4 (D.N.J. Oct. 17, 2013); Stewart v. Smart Balance, Inc., No. 11-6174, 2012 WL 4168584, at *16 (D.N.J. June 26, 2012).
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The alleged misrepresentation in this case is identical across all BMW vehicles included in the class: the use of “TwinPower Turbo” to describe single turbocharger engines.
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Certification in Keurig coffee case in the Southern District of Illinois

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Judge Nancy Rosentstengel’s lengthy opinion certifying a class under Rule 23(b)(3) in Suchanek v. Strum Foods, is worth a read in its entirety and is available at 2015 WL 6689359 (S.D. Ill. Nov. 3, 2015), clarified and reconsideration denied at ECF No. 250 (Nov. 19, 2015).

The case is based on allegations that defendants marketed and sold “premium, ground coffee,” which in truth was more than 95% instant coffee. Here are some highlights:

Commonality:
This case had previously been to the 7th Circuit, which concluded that plaintiffs had satisfied commonality. Suchanek v. Sturm Foods, 764 F.3d 750, 756 (7th Cir. 2014). The district court declined to reconsider that conclusion and reaffirmed that the following question was common classwide: whether the coffee’s packaging was likely to mislead a reasonable consumer.

Typicality:
Defendants contested typicality on the grounds that plaintiffs and other class members bought the coffee for different reasons and based on their own beliefs. The court rejected that argument:

What Defendants are essentially saying is that typicality is not satisfied unless the class members all had the same perceptions and knowledge … and the same preferences and reasons for purchasing [the coffee]. This argument goes too far. The standard for typicality does not require the facts underlying every claim to be identical.

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