Aug 1, 2018
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Second Circuit Reverses Class Certification; Insists that District Court Take Close Look at Effect of Various State Consumer Laws on Predominance Requirement

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Greetings, August!  These are called the Dog Days of Summer, but a lot more gets done this month than you might think.  Sure, we usually take our vacation in August.  And yes, there are some especially silly official days in August, e.g. Wiggle Your Toes Day (6th), Sneak Some Zucchini onto Your Neighbor’s Porch Day (8th), Bad Poetry Day (18th), and Frankenstein Day (30th).  But for some reason, August has figured mightily in the history of intellectual property.  Copyrights were filed for The Wonderful Wizard of Oz on August 1, 1900, and for “Hey Jude” on August 30, 1968.  Philo Farnsworth patented the television on August 20, 1930 (and yet August is a month full of reruns). 

 

Who are we kidding?  You are probably on a beach as you read this, or at least wishing you were on a beach.  So we’ll keep today’s discussion short and light.  (Almost as short and light as the district court’s analysis that drew scorn from the Second Circuit in the case we review below.)  After you read this little post, feel free to stick it into a blender with tequila, Grand Marnier, lime juice, and ice, and press “puree.”

 

Earlier this week we mentioned Langan v. Johnson & Johnson Consumer Companies, Inc., – F.3d -, 2018 WL 3542624 (2d Cir. July 24, 2018), a case that said some very useful things about class certification when there are plaintiffs from multiple states.  It is not a drug or device case, but it makes the point that when the laws of many different states are implicated for many different plaintiffs, aggregated treatment might not be such a good idea.  The plaintiff in Langan alleged that baby products were labeled “natural” when they were not. The complaint claimed that this labeling was deceptive and violated the Connecticut Unfair Trade Practices Act (CUTPA) as well as the state consumer protection laws (charmingly referred to as “mini-FTC acts”) of twenty other states, and sought to certify a plaintiff class covering many states.  (Permit us a brief, but utterly characteristic moment of cynicism:  many states = many plaintiffs = huge attorneys’ fees.)     

 

The district court certified a class of consumers who purchased two baby bath products.  (For some reason, baby sunscreens were omitted from the class.)  The plaintiff petitioned for permission to appeal pursuant to Federal Rule of Civil Procedure 23(f), and the Second Circuit granted leave.  The appeal was directed against the district court’s conclusions that (1) the plaintiff had Article III standing to bring a class-action claim on behalf of consumers in states other than Connecticut, and (2) the state laws in the other states are sufficiently similar to support certifying the class. 

 

An appellate court will overturn class certification if the district court abused its discretion.  That is not an easy standard for an appellant to meet.  But it was met here.  The Second Circuit was not receptive to the standing argument, but did conclude that the district court did not adequately analyze whether the multiplicity of applicable laws meant that common legal issues did not predominate over individual legal issues.  The district court found predominance of common issues because the “minor differences” the defendant  identified among the various state consumer protection laws would not “overwhelm the questions common to the class” given that “[a]ll the states have a private right of action for consumer protection violations, allow class actions, and have various other important similarities.”  The district court’s discussion of this issue occupied a single paragraph.  Brevity can be the sole of wit.  But sometimes not. 

 

The Second Circuit held that the issue of the effect of the various state consumer laws on predominance rated a bit more analysis than that solitary paragraph. Under Rule 23(b)(3), the district court has a “duty,” before certifying a class, to “take a close look” at whether the common legal questions predominate over individual ones.  District courts “must do more than take the plaintiff’s word that no material differences exist.”  As you would expect, both parties had submitted “complicated and conflicting summaries of the state consumer protection laws in eighteen states” to the district court.  The district court’s resolution of this dispute wasn’t merely, er, concise (Cursory? Dismissive?).  Worse, in the view of the Second Circuit, the district court did not “sufficiently engage” with the defendant’s “arguments about reliance, instead concluding that ‘it appears’ that none of the states’ high courts have insisted on reliance.  The other identified differences – including whether intent to deceive is required, and whether causation can be presumed – were not discussed.”  The district court’s  opinion was not a “close look.”  It was more like a no look.    

 

Accordingly, the Second Circuit remanded the case to the district court “to conduct a more thorough analysis” and “to carefully analyze the relevant state laws, decide whether subclasses are appropriate, reconsider the predominance questions, and explain in greater detail its conclusion on that question.”  That is no small effort, and perhaps it will force the district court to confront the complexities of the variations among the state consumer laws, and realize that class certification would be a messy mistake. 

 

Just as we finished this post, the summer issue of the ABA section of Litigation publication, Litigation News, plopped on our desk.  There is an article in that issue that is pertinent to today’s post:  S. Carr, “Slamming the Brakes on Nationwide Class Actions,” 43 Litigation News No. 4, pp. 4-5  (Summer 2018).  More beach reading.      

 



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Class Action · predominance

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