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Timestamp: 2018-02-20 19:09:36
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State Court Affirms Striking Class Allegations Before Discovery
Posted on May 11, 2015 by Sean Wajert
A New Jersey appeals court last week upheld the denial of class certification to plaintiffs with claims against automotive insurers relating to the diminished value of policyholders' vehicles. See Myska, et al. v. New Jersey Manufacturers Insurance Co., et al., No. A-4398-13T4 and A-0275-14T4 (Super. Ct. N.J.).
Plaintiffs had been involved in separate accidents with uninsured or underinsured drivers, and were unhappy with the response of their insurance companies. What will be of interest to our readers is the class action legal issue. We have extolled the importance and value of motions to strike class allegations and other procedural mechanisms for getting the class action issue resolved as early as possible, before expensive and wasteful discovery (even bifurcated class discovery). Here, prior to discovery, the Law Division judge concluded class certification was improper. And after review, the appeals court affirmed the denial of class certification, agreeing the controversy did not lend itself to a class action because the facts underpinning each plaintiff's claims were dependent upon the individual insurance policy provisions, the distinct vehicle damaged and the specific calculation of damages alleged, which require separate litigation of every action.
The court noted that no precise procedures are established for granting or denying class certification at the incipient stage of litigation. Rather, the NJ rules state "the court shall, at an
early practicable time, determine by order whether to certify the action." Rule 4:32-2(a). The court rejected the view that would preclude dismissal, following the required analysis, when a court determines alleged claims do not properly lend themselves to class certification. The certification test does not merely turn on the stage of the litigation. Rather, dismissal is dependent on the nature of the claims and the propriety of their presentation as a class action. Thus, said the court, "we flatly reject plaintiffs' urging to impose a bright-line rule prohibiting examination of the propriety of class certification until discovery is undertaken."
Here, individualized facts and circumstances of the relationship between each insurer and its insured precluded a finding of predominance. And the court also noted that the individual claims were not so small (approx. $15,000) as to make separate litigation impossible.
Tags: Articles, Class Action, class, motion, predominance, strike
Snack Bar Class Action Dismissed
Posted on January 14, 2015 by Sean Wajert
A federal court in Texas recently rejected design defect claims in a product liability case when plaintiff failed to offer a required cost estimate for the proposed alternative design. See Flynn, et al v. American Honda Motor Co. Inc., et al, No. 4:11-cv-3908 (S.D. Tex. 2015).
Plaintiff was involved in a fatal a collision with a Chevrolet truck. Ms. Flynn’s airbags deployed but, as alleged in the complaint, supposedly only after a delay. Her parents brought this suit to recover damages resulting from the allegedly defective airbag system. In the three years since this suit was filed, the parties had engaged in extensive discovery, including investigations by and depositions of numerous expert witnesses. Honda moved for summary judgment on Plaintiffs’ claims of a design defect under theories of strict liability, breach of warranty, and negligence.
Under Federal Rule of Civil Procedure 56, summary judgment is warranted if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). Importantly, “the mere existence of some factual dispute will not defeat a motion for summary judgment; Rule 56 requires that the fact dispute be genuine and material.” Willis v. Roche Biomed. Lab., 61 F.3d 313, 315 (5th Cir.1995). Material facts are those whose resolution “might affect the outcome of the suit under the governing law.” Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Id. A court may consider any evidence in the record, “including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed. R. Civ. P. 56(c)(1)(A). “However, neither conclusory allegations nor hearsay, unsubstantiated assertions, or unsupported speculation will suffice to create or negate a genuine issue of fact.” Neal v. City of Hempstead, Tex., No. 4:12-CV-1733, 2014 WL 3907770, at *1 (S.D. Tex. Aug. 11, 2014).
Texas products liability law recognizes three kinds of product defects that will give rise to an actionable claim: manufacturing defects, design defects, and marketing defects. Temple EasTex, Inc. v. Old Orchard Creek Partners, Ltd., 848 S.W.2d 724, 732 (Tex. App. 1992), writ denied, (Sept. 29, 1993). Liability for personal injuries caused by a product's defective design can be imposed under several underlying legal theories, among them negligence, breach of warranty, and strict products liability. The requisite proof for recovery on a design defect claim was prescribed by statute in 1993 and made the same for any legal theory asserted.” Hyundai Motor Co. v. Rodriguez ex rel. Rodriguez, 995 S.W.2d 661, 664 (Tex. 1999). To prevail on his design defect claim, a plaintiff must prove that “(1) the product was defectively designed so as to render it unreasonably dangerous; (2) a safer alternative design
existed; and (3) the defect was a producing cause of the injury for which the plaintiff seeks
recovery.” Casey v. Toyota Motor Eng'g & Mfg. N. Am., Inc., 770 F.3d 322, 330 (5th Cir. 2014).
Texas law defines “safer alternate design” as a product design other than the one actually used, that in reasonable probability:
(1) would have prevented or significantly reduced the risk of the plaintiff's personal injury, property damage, or death without substantially impairing the product's utility; and
TEX. CIV. PRAC. & REM. CODE § 82.005(b). See also Casey, 770 F.3d at 331; Hodges v. Mack
Trucks, Inc., 474 F.3d 188, 196 (5th Cir. 2006).
Honda argued that summary judgment was appropriate because plaintiffs did not present such evidence of a safer alternative design -- instead offering an algorithm that was a generalized concept for a design, which is insufficient under Texas law. Honda used one algorithm and Plaintiffs proposed that a different one – an algorithm patented by Plaintiffs’ expert – should have been used instead. The question of whether an algorithm and its alleged fit to a particular vehicle can constitute a safer alternative design was, the court said, one it need not consider here because, in an event, of Plaintiffs’ failure to provide evidence of economic feasibility. By definition, a safer alternative design must be reasonably probable to be economically feasible at the time the product left control of the manufacturer. See TEX. CIV. PRAC. & REM. CODE § 82.005(b)(2). “To establish economic feasibility, the plaintiff must introduce proof of the ‘cost of incorporating [the] technology.’” Casey, 770 F.3d at 334 (citing Honda of Am. Mfg., Inc. v. Norman, 104 S.W.3d 600, 607 (Tex.Ct.App.2003)). “To prove economic feasibility where the product is not yet in use, courts generally require a party to present evidence of either an estimate or range of the cost of the alternative design.” Casey, 770 F.3d at 335 (citing Brochtrup v. Mercury Marine, 426 Fed.Appx. 335, 339 (5th Cir.2011) (concluding that testimony from builder of alternative design that building cost was $400 was sufficient evidence of economic feasibility to avoid judgment as a matter of law); A.O. Smith Corp. v. Settlement Inv. Mgmt., No. 2–04–270–CV, 2006 WL 176815, at *3–4 (Tex. Ct. App. Jan. 26, 2006) (concluding that detailed testimony about how proposed alternative design would add between $5 and $200 per unit was some evidence of economic feasibility).
In this case, Plaintiffs presented no evidence of either an estimate or a range of the cost of implementing their expert's alternative algorithm. Specifically, the expert report and deposition transcript offered no such calculation, and thus the court found summary judgment appropriate for Honda on Plaintiff’s design defect claim.
Tags: Articles, Consumer Products, airbag, alternative, automobile, cost, defect, design, feasible, judgment, motion, rule 56, summary
New Year's Fitness Resolution- Drop the Fitness Tracker Class Action
Posted on January 9, 2015 by Sean Wajert
Surveys show that getting fit is one of the top 5 New Year's resolutions. So perhaps timely that a federal court recently dismissed a proposed nationwide class concerning fitness-tracker wristbands. See Frenzel v. Aliphcom, No. 14-cv-03587-WHO (N.D. Cal., 12/29/14). While there also was discussion in the opinion of the motion to dismiss various counts of the complaint under California law, let's focus on the class allegations.
Defendant markets and sells a fitness-tracker wristband that contains an accelerometer designed to track the user's daily movements and sleep patterns. Users can connect, or "sync," their device to a mobile application that helps them set personal exercise and diet goals, monitor their progress, and collaborate with other users. The product box states: "Battery life up to 10 days." It is available in major retail stores across the country and online. Defendant has distributed three generations of the device.
Frenzel alleged that each generation has been plagued with power problems, including significant delay in charging, syncing problems, flashing lights indicating low charge, extremely short battery life, and failure to charge at all. Even with later generations, plaintiff alleged, consumers continued to complain about the device's performance, and multiple articles appeared online describing the ongoing power problems.
Frenzel resides in Kansas City, Missouri and is a Missouri citizen. In November 2012, Frenzel purchased a second generation device, and before purchasing the device, Frenzel allegedly reviewed defendant's marketing materials and representations, including that the battery is expected to last for 10 days when fully charged. Within a few months, Frenzel's device allegedly stopped maintaining its charge. Frenzel contacted defendant and was issued a replacement second generation version. The replacement also allegedly experienced power problems as well. On the basis of these allegations, Frenzel sought to represent a national class defined as all persons who purchased any of the three generations for personal use, excluding those who purchased the product for resale.
Defendant moved to dismiss. A motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim is facially plausible when it allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. In considering whether the complaint is sufficient to state a claim, the court need not accept as true allegations that contradict matters properly subject to judicial notice. In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). Nor is the court required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. Id. It is within the district court's purview to reject, as implausible, allegations that are too speculative to warrant further factual development. See Dahlia v. Rodriguez, 735 F.3d 1060, 1076 (9th Cir. 2013).
A threshold issue was choice of law. Defendant contended that under Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th Cir. 2012), Frenzel's claims should be governed by the law of the state in which he purchased his device (which Frenzel conceded was not California). Defendant argued that plaintiff's claims under California law (the CLRA, UCL, and FAL) must therefore be dismissed. Also, defendant made the separate argument that under Mazza, Frenzel cannot maintain a national class action that would apply California law to nonresident class members who purchased their devices in other states.
In Mazza, a putative class sued Honda for violations of the CLRA, UCL, and FAL. Honda was headquartered in California, and the alleged misrepresentations emanated from California, but the transaction that caused the alleged injury (i.e., the lease or purchase of a Honda automobile), had occurred in other states for the majority of class members. The Ninth Circuit reversed the district court's certification of a national class after concluding that, under California's choice of law rules, each class member's consumer protection claim should be governed by the consumer protection laws of the jurisdiction in which the transaction took place. The Ninth Circuit found that there were material differences between the consumer protection regimes of California and a number of other states, and that each state's interest in deciding for itself how to balance the range of products and prices offered to consumers with the legal protections afforded to them outweighed California's attenuated interest in applying its law to residents of foreign states. Id. at 590-94.
Importantly, since Mazza, a number of courts have dismissed CLRA, UCL, and/or FAL claims asserted by named plaintiffs (or on behalf of unnamed class members) who did not purchase the defendant's product in California. See, e.g., Frezza v. Google Inc., No. 12-cv-00237-RMW, 2013 WL 1736788, at *5-6 (N.D. Cal. Apr. 22, 2013); Granfield v. NVIDIA Corp., No. 11-cv-05403-JW, 2012 WL 2847575, at *3 (N.D. Cal. July 11, 2012); Littlehale v. Hain Celestial Grp., Inc., No. 11-cv-06342-PJH, 2012 WL 5458400, at *1-2 (N.D. Cal. July 2, 2012).
Notwithstanding the argument that discovery might be needed to make a choice of law decision, the court here found that in the circumstances of this case, it was not appropriate to delay until class certification to consider the choice of law issue. First, although Mazza was decided at class certification, the principle articulated in Mazza applies generally and is instructive even when addressing a motion to dismiss. In factually analogous cases, Mazza was not only relevant but controlling, even at the pleading phase. Second, while choice of law analysis is often a fact-specific inquiry, this does not necessarily mean that it can never be conducted on a motion to dismiss. There are cases in which further development of the factual record is not reasonably likely to materially impact the choice of law determination. In such cases, there is no benefit to deferring the choice of law analysis until class certification.
The court pointed out that in Werdebaugh v. Blue Diamond Growers, the court applied the governmental interest test to CLRA, UCL, and FAL claims asserted on behalf of a national class, 2013 WL 5487236, at *15-16, at the class certification but with only minimal fact-specific analysis. That court concluded that a national class could not be certified in light of Mazza. 2014 WL 2191901, at *18-21. Likewise, in Brazil v. Dole Food Co., Inc., the court deferred until class certification to consider whether California state-law claims could be asserted on behalf of nonresident class members, but then held that Mazza precluded certification of a national class. 2014 WL 2466559, at *12-14. As in Blue Diamond, the court was able to reach this conclusion with minimal fact-specific analysis. See id. The court concluded that here it was highly unlikely that discovery would uncover information relevant to whether Frenzel could maintain a national class action asserting claims under California law.
Thus, under California's choice of law rules, Frenzel's claims (both individual and class) had to be dismissed. Frenzel's individual claims were dismissed because he had not identified the state in which he purchased his device, but admitted it was not California. Defendant had the burden to demonstrate the material differences in the relevant law of California and the other state or states with regard to the particular claims and facts of the case, and a plaintiff may not preclude a defendant from making it by obfuscating the state in which he purchased his product. As to Frenzel's class claims, the court found that defendant adequately demonstrated that this was a case, like Mazza, where "each class member's consumer protection claim[s] should be governed by the consumer protection laws of the jurisdiction in which the transaction took place." 666 F.3d at 594. The CLRA, UCL, and FAL claims on behalf of the putative class were subject to dismissal for this reason as well.
Plaintiff sought to rely on a choice of law provision allegedly in the terms and conditions of sale of the product, although he never pleaded such terms in his complaint. Moreover, the plain language of the terms limited their application to on-line purchases, and plaintiff alleged he purchased his in a store. Also, the allegations of defect did not claim that the product violated the terms and conditions. See Nikolin v. Samsung Electronics Am., Inc., No. 10-cv-01456, 2010 WL 4116997, at *4 (D.N.J. Oct. 18, 2010); see also, In re Sony Gaming Networks & Customer Data Sec. Breach Litig., 903 F. Supp. 2d 942, 964-65 (S.D. Cal. 2012) (rejecting argument that plaintiffs' CLRA, UCL, and FAL claims were governed by the choice of law provision in defendants' terms of service contract, where "[b]y its own terms, . . . the provision dictates only that California law applies to the construction and interpretation of the contract, and thus the provision does not apply to plaintiffs' non-contractual claims asserted under California's consumer protection statutes").
Complaint dismissed with leave to try to amend.
Tags: Articles, Class Action, Consumer Fraud, Consumer Products, Twombly, choice of law, class, consumer, consumer fraud act, consumer product, dismiss, motion
Class Action on Smoke Detectors Dismissed: All Smoke No Fire
not alert occupants of smoldering-type fires as effectively as photoelectric smoke alarms. However, the ionization alarm, which Bird purchased, explains these differences clearly on its packaging and recommended the use of both types of alarms for “maximum protection."
Defendant moved to dismiss. The allegations in the complaint "must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A motion to dismiss should be granted if the complaint does not proffer enough facts to state a claim for relief that is plausible on its face. See id. at 558-59. W]here the well-pleaded facts do not
Motion to Dismiss Granted in Juice Case
Posted on July 9, 2014 by Sean Wajert
A California federal court has rejected a proposed class action complaint arising from alleged misleading labeling and advertising of vegetable juice products as "raw" and "organic." See Alamilla, et al. v. The Hain Celestial Group Inc., et al., No. 3:13-cv-05595 (N.D. Calif. 7/2/14).
Specifically, the complaint asserted that the effects of a pressure treatment in the making of the products were "similar to those of cooking and pasteurization, namely the destruction of vitamins, nutrients, live enzymes, nutritional value, and health benefits." On their own, said the court, these allegations might seem to state a plausible claim that the defendants' representations could lead a reasonable consumer to conclude that pressure treatment did not deprive the juice of its nutritional value in the same way that pasteurization does.
But, the court said, the complaint also incorporated by reference two articles that contradicted the plaintiffs' claim. In particular, the complaint quoted and incorporated by reference a published article that concluded that pressurization has "little or no effects on nutritional and sensory quality aspects of foods." Although the plaintiffs did not include this specific conclusion language in their complaint, there was no doubt they had incorporated by reference the entire text of the articles they quoted in their complaint.
The articles the plaintiffs cited contradicted the allegation upon which their entire complaint hinged—namely, that pressure treatment deprives juice of nutritional value to a similar degree as pasteurization. Courts "need not accept as true allegations contradicting documents that are referenced in the complaint." Lazy Y Ranch LTD v. 24	Behrens, 546 F.3d 580, 588 (9th Cir. 2008). "A plaintiff can plead himself out of court by alleging facts which show that he has no claim, even though he was not required to allege those facts." See Sprewell v. Golden State Warriors, 266 F.3d 979, 988-989 (9th Cir. 2001).
Accordingly, the complaint was dismissed with prejudice.
Tags: Articles, Class Action, Consumer Fraud, Food and Beverage, class, complaint, dismiss, motion
Motion to Strike Class Allegations Granted
Posted on June 10, 2014 by Sean Wajert
Mercedes-Benz USA LLC made a successful preemptive strike against class certification in a proposed class action suit over alleged suspension problems in GL model Mercedes vehicles. See Becnel v. Mercedes-Benz USA, LLC, No. 2:14-cv-00003 (E.D. La., 6/3/14).
This matter arose from Plaintiff's claims for negligence, strict product liability, breach of implied warranty, fraud, and violations of the Louisiana Unfair Trade Practice Act,and the Magnuson-Moss Warranty Act. Plaintiff's claims arise from his purchase of a 2008 Mercedes-Benz GL320 from Mercedes-Benz of New Orleans. Plaintiff brought the vehicle to the Dealer for service several times. Each time that Becnel tendered the vehicle to the Dealer, the Airmatic Suspension System allegedly was cited as the problem and was repaired. Plaintiff alleged that MBUSA knew that the Suspension System was defective but concealed that fact from current, future, and past owners and/or lessors of GL model vehicles. Plaintiff filed a class action complaint on January 2, 2014 against MBUSA on behalf of "[a]ll current and past owners or people who leased Mercedes-Benz USA, LLC GL model of vehicles since 2007."
Defendant moved to strike the class allegations. The standard applied to the motion to strike is essentially identical to the standard applied in class certification motions. See Grant,2010 WL 3303853; see also Markey v. Louisiana Citizens Fair Plan, 2008 WL 5427708 (E.D. La. Dec. 30, 2008)(Vance, J.) ; Truxillo v.Johnson & Johnson, et al., 2007 WL 4365439 *1 (E.D. La. Dec. 12, 2007)(Barbier, J.) (noting that the issues raised in a motion for judgment on the pleadings regarding class allegations overlap with the issues raised in a motion to certify the class.)
Defendant advanced several arguments in support of its motion to strike. For example, MBUSA contended that due process barred the Court from applying Louisiana law to all the claims of absent class members from other states, and that the application of every other applicable state's laws would be unmanageable. Plaintiff suggested that this argument was premature. He argued that despite the potential for uncommon issues of law, it cannot be denied that there were some common issues of fact. Even if the Court would have to engage in a conflicts analysis to determine if the various state laws were incompatible, that only means that class certification may be improper further along in litigation, but was not improper now.
The court focused on the predominance and manageability challenges that were presented by the proposed class. The Court said it could not accept Plaintiff's assertion that he "cannot foresee any manageability problems." Based on the pleadings alone, the Court pointed to several issues: it was reasonable to assume that this matter will require the application of laws from fifty-one different jurisdictions, as it was readily apparent that at least one person from every state and the District of Columbia will be found to have purchased or leased a 2007 GL Class Mercedes. The Court anticipated serious manageability issues in applying these differing laws to Plaintiff's numerous state law causes of action, including claims for: negligence; products liability based on manufacturing defects, design defects, warning defects, and breach of express warranty; redhibition; fraudulent concealment; and unfair trade practices.
Additionally, Plaintiff, and presumably other class members, faced serious prescription.statute of limitations issues that would ultimately hinge on their ability to show that the discovery doctrine tolled the prescriptive period. The use of the discovery doctrine would necessarily involve the task of determining at what time it became unreasonable for each class member to ignore the problems with the vehicles at issue. See Chevron USA, Inc. v. Aker Mar., Inc., 604 F.3d 888, 893-94(5th Cir. 2010) (noting that in such cases, "the prescriptive period [does] not begin to run until [a plaintiff has] a reasonable basis to pursue a claim against a specific defendant.") The same issue would present itself with regard to the fraud claims, in that the Court would have to determine the element of reliance for each and every class member. See Castano, 84 F.3d at 745 ("fraud class action cannot be certified when individual reliance will be an issue.")
These serious manageability problems far outweighed any benefit that a class action would create, said the court. Plaintiff conclusorily pointed to the usual presumed benefits highlighted in class certification motions, but did not propose any concrete strategy for achieving these goals. In light of the manageability issues. The Court said it could not imagine that that the many issues that would require individual treatment for each class member would not outweigh or at least balance out any benefit conferred by class treatment.
Tags: Articles, Class Action, Consumer Products, automobile, choice of law, class, manageability, motion, predominance, strike
Fail Safe Class Rejected in TCPA Case
Posted on May 8, 2014 by Sean Wajert
This year marks the 50th Anniversary of the taut Cold War thriller "Fail-Safe", starring Henry Fonda and Walter Matthau. (If I recall, there is no music in the entire B&W film.) In honor of the film, we post about a modern day fail-safe issue, less dramatic of course.
A crucial implicit requirement for class certification is that the plaintiff propose a workable, ascertainable class definition. One sub-set of this issue is the highly improper "fail-safe" class in which absent class members can use an imprecise class definition to affirm their membership when the class wins, but assert they were never members of the class when the defendant wins. A recent federal case sees the court striking class allegations that fall under this impermissible “fail safe” class rubric. See Sauter v. CVS Pharmacy, Inc., No. 2:13-cv-846 (S.D. Ohio, 5/7/14).
The Plaintiff brought a putative class action against the Defendant for alleged violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227. Plaintiff alleged that the class received phone calls from CVS, which utilized an automatic telephone dialing system (ATDS) to call, without the Plaintiffs' consent. The call allegedly provided general information about a prescription refill and the location of his local CVS pharmacy. (actually sounds kind of useful, but we digress)
Defendant made a Motion to Strike Plaintiff's Class Allegations. Most courts recognize that a motion to strike class action allegations may properly be filed before plaintiffs have filed a motion for class certification. See, e.g., Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 945 (6th Cir. 2011); Bearden v. Honeywell Intern., Inc., No. 3:09-01035, [2010 BL 63279], 2010 WL 1223936, at *9 (M.D. Tenn. Mar. 24, 2010). A court may strike class action allegations before a motion for class certification where the complaint itself demonstrates that the requirements for maintaining a class action cannot be met. See Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982) ("Sometimes the issues are plain enough from the pleadings").
The big issue here was whether the complaint proposed a fail-safe class. A class definition is impermissible where it is a class that cannot be defined until the case is resolved on its merits. See Randleman v. Fidelity Nat'l Title Ins. Co., 646 F.3d 347, 352 (6th Cir. 2011). A fail-safe class is defined to in essence include only those who are entitled to relief. Such a class is prohibited because it would allow putative class members to seek a remedy but not be bound by an adverse judgment — either those class members win or, by virtue of losing, they are not in the class and are not bound.
The various subclasses here included those who received calls and did not provide prior express written consent, and those who received calls who had expressly revoked their consent for such calls. Thus, each of the Plaintiff's proposed classes was defined to include only those individuals who did not expressly consent to the receipt of the defendant's phone calls made with the use of an ATDS. Because the TCPA prohibits calls to cellular telephones using ATDSs unless prior express consent has been given, defining the class to include anyone who received such a call without prior express consent meant that only those potential members who would prevail on this liability issue would be members of the class. In other words, the proposed classes consisted solely of persons who could establish that defendant violated the TCPA. Thus, if the Plaintiff successfully demonstrated that the Defendant made calls using an ATDS without the class members' prior express consent, then the class members would win, said the court. However, if the Plaintiffs were unsuccessful in meeting their burden of proof, the class did not even not exist and the apparent class members (folks who got a call) would not be bound by the judgment in favor of the Defendant. This was the very definition of a prohibited fail-safe class.
So, motion granted; class allegations struck.
Tags: Articles, Class Action, Consumer Fraud, Consumer Products, Rule 23, class, definition, fail safe, fail-safe, motion, strike
Defense Verdict Upheld on Post-trial Motion in Levaquin MDL
Posted on October 11, 2012 by Sean Wajert
About 1700 federal cases sit in the MDL for the product Levaquin makers. Levaquin is an antibiotic used to treat a variety of bacterial infections, including upper respiratory infections. Plaintiffs in the MDL allege they have been prescribed Levaquin, and allege that it causes tendons to rupture. They claim that defendants' warnings about this alleged side effect were inadequate. Defendants deny these allegations.
In this mass tort, the MDL court has begun to try bellwether cases. Recently the MDL court rejected a plaintiff's post-trial motion after he lost the third such trial. See Straka v. Johnson & Johnson, No. 08-5742 (D. Minn., 9/28/12). A jury found that the alleged failure to warn Straka's prescribing physician about the risk of tendon rupture did not cause the plaintiff's injuries. After trial, one issue was the ubiquitous and almost never prevailing "verdict against the weight of the evidence" argument. The court disposed of this by noting the sufficient evidence at trial supporting the jury's finding in that Straka's injuries were caused by something other than Levaquin, and that a different warning would not have changed his physician's decision to prescribe Levaquin. Defendants presented evidence about Straka’s steroid use and testimony that steroid use can contribute to tendon injury without the use of Levaquin. And defendants did a good job presenting evidence that the prescriber could not remember reading the Levaquin label and did not learn of the tendon-associated risks of Levaquin until well after the black box warning was added and a Dear Doctor letter was distributed.
Perhaps more interesting for the trial lawyers among our readers is the argument for a new trial because one juror worked for a company that had a business connection to one of the defendants. Specifically the juror disclosed after trial began that her employer provided services to one of the defendants' (J&J) disability insurance carrier. Straka contended the doctrine of “implied bias” required the court to strike this juror. But the juror could not recall having ever worked on a Johnson & Johnson issue, and she indicated that she was unaware what proportion of her work came indirectly from Johnson & Johnson. When asked if her company’s connection with Johnson & Johnson would affect her ability to be fair and impartial, she said no.
The doctrine of implied bias (also referred to in some cases as “implicit bias”) requires a court to strike a juror in extreme situations where the relationship between a prospective juror and some aspect of the litigation is such that it is highly unlikely that the average person could remain impartial in his deliberations under the circumstances. See Sanders v. Norris, 529 F.3d 787, 792 (8th Cir. 2008). The juror here did not have the type of financial relationship that would require the Court to presume implied bias: she was not employed by defendants, or even employed by a company that worked directly for Johnson & Johnson. Nor was it unlikely that the average person could remain impartial in deliberations in this situation. She was sufficiently removed from Johnson & Johnson that she did not realize that her company did any work relating to the defendants until a co-worker recognized it. So no error in proceeding.
[FYI, according to the court, some MDL parties discussed have discussed a tentative settlement agreement reached on September 25, 2012, in a conference held in front of Chief Magistrate Judge Boylan. This tentative settlement agreement is being drafted, and involves the case inventories of 6 law firms. The effect of this settlement would reduce the MDL case count by 845 cases and plaintiffs. At the time of the status conference several other plaintiffs' firms have expressed an interest in exploring settlement, but there remain firms that are interested in going forward with the litigation, according to the court.]
Tags: Articles, Drug and Device, Levaquin, drug, juror, jury, motion, trial, verdict
Coffee's On: Claims Dismissed in Single-Cup Brewing Class Litigation
Posted on December 30, 2011 by Sean Wajert
A federal court last week dismissed the claims in a case accusing Green Mountain Coffee Roasters of misrepresenting the performance quality of its single-cup brewing systems. See Green v. Green Mountain Coffee Roasters Inc., et al., 2011 WL 6372617 (12/20/12 D.N.J.).
Your humble blogger is in the minority, not being a coffee drinker. Nearly 60% of adults drink coffee daily. The average American drinks 3.1 cups of coffee each day. This contributes to an $18 billion U.S. coffee market. One of the tremendous innovations (speaking from experience, having given these as holiday gifts) in the market is the single cup brewing machine for the home, allowing coffee lovers to make less than a full pot, and to choose from among hundreds of flavors and brands of coffee-related beverages.
Defendants are in the specialty coffee and coffee maker businesses. They manufacture single-cup brewers, accessories and coffee, tea, cocoa and other beverages in "K–Cup portion packs.” Plaintiff Green maintained that his machine failed to brew the programmed amounts of K–Cup coffee within a few weeks of use. Plaintiff asserted that the machines had defective components, including defective pumps. As a result, the machines allegedly failed and brewed less than the specified amount. Furthemore, this defect allegedly caused consumers to use additional K–Cups to brew a single beverage.
Plaintiff maintained that defendants' actions were in violation of the New Jersey Consumer Fraud Act (“CFA”), N.J. Stat. Ann. § 56:8–1, et seq., and constituted a breach of implied warranty.
Defendants moved to dismiss. The court noted that threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice under Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). If the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint should be dismissed for failing to show that the pleader is entitled to relief. A plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.
The motion challenged plaintiffs' standing. To have standing, the plaintiff must have suffered an injury in fact—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of—the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. The injury-in-fact element is often determinative.
The injury must affect the plaintiff in a personal and individual way. Here, Green alleged that he purchased and used the Keurig Platinum Brewing System (model series B70). Nevertheless, he sought to represent all individuals in New Jersey who “purchased or received” a variety of Keurig Brewing Systems. Plaintiff did not have standing to pursue a claim that products he neither purchased nor used did not work as advertised.
Regarding that model series B70, plaintiff contended in his complaint that, because of defective components, the coffee machines at issue brew a lesser amount of coffee than the companies represented, compromising the quality of the beverage. Consumers are then forced to use additional K-Cups, which are a portion pack for the systems, according to the complaint. Defendants maintained that even if their alleged conduct was unlawful, plaintiff had not sufficiently pled ascertainable loss. In a misrepresentation case, a plaintiff generally may show ascertainable loss by either out-of-pocket loss or a demonstration of loss in value. In this case, Green did not allege that he made a claim for warranty repair or replacement of his machine. The warranty provided as part of the contract of sale is part of the benefit of the bargain between the parties. Any defects that arise and are addressed by warranty, at no cost to the consumer, do not provide the predicate loss that the CFA expressly requires for a private claim. Because plaintiff had not availed himself of defendants' warranty, he could not allege that the warranty does not address the defect in his machine.
Furthermore, the court found unpersuasive plaintiff's argument that the warranty did not address the defects in the brewers because other consumers allegedly reported that their replaced or repaired brewers were equally defective. Allegations regarding the experience of absent members of the putative class, in general, cannot fulfill the requirement of pleading injury with adequate specificity.
Similarly, plaintiff did not sufficiently plead loss in value. Plaintiff broadly asserted that he suffered a loss because each brewer failed to perform its advertised purpose and caused purchasers to suffer a loss of value of the product. But Green failed to allege how much he paid for his brewer and how much other comparable brewers manufactured by competitors cost at the time of purchase. Furthermore, Green had not suffered a diminution in value because the defective brewer could have been repaired or replaced with a new brewer which would have had its own one-year warranty.
Regarding the implied warranty claim, the general purpose of the brewers is to brew beverages. Even if defendants may have advertised that the machines would brew a specific amount of beverage, that alone did not transform the “general” purpose. Green did not allege that his machine would not brew coffee or that it was inoperable. The complaint was also devoid of any allegation that plaintiff can no longer use his brewer. Therefore, Green had not sufficiently alleged that his brewer was unfit for its ordinary purpose of brewing beverages at the time of purchase.
Defendants also contended that the class allegations should be dismissed. Plaintiff argued that the Court should deny the motion because it was premature. Nevertheless, a court may strike class action allegations in those cases where the complaint itself demonstrates that the requirements for maintaining a class action cannot be met. Here, the court concluded that the plaintiff could not meet the predominance requirement set forth in Fed.R.Civ.P. 23(b).
The complaint did not allege that all individuals in New Jersey who purchased the Keurig Brewing Systems had experienced the defect. Plaintiff acknowledged that there were members in the putative class who had not yet suffered the alleged pump failure. Consequently, the putative class included individuals who do not presently have a claim against defendants. Proving that defendants breached the implied warranty of merchantability would also require an individualized inquiry. Not every member of the putative class experienced a defect with the model series B70. Even if the purported defect had manifested in all of the brewers purchased within the class period, the court would have to make individual inquiries as to the cause and extent of the defect. Motion granted.
Tags: Articles, Class Action, Consumer Products, class, coffee, dismiss, implied, injury, motion, standing, warranty
Posted on September 6, 2011 by Sean Wajert
The MDL court overseeing the claims arising from the 2010 Gulf of Mexico oil spill has ruled that plaintiffs can seek punitive damages against allegedly responsible parties in economic loss and property damage suits. In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 2010, No. 2:10-md-02179 (E.D. La., 8/26/11).
Readers may recall that this MDL consists of hundreds of consolidated cases, with thousands of claimants, arising from the April 20, 2010 explosion, fire, and sinking of the Deepwater Horizon mobile offshore drilling unit, which resulted in the release of millions of gallons of oil into the Gulf of Mexico before it was finally capped approximately three months later. In order to efficiently manage this complex MDL, the court consolidated and organized the various types of claims (e.g., personal injury, environmental, property, and economic damages) into several “pleading bundles.” One such pleading bundle includes all claims for private or non-governmental economic loss and property damages. There are in excess of 100,000 individual claims encompassed within this bundle.
The court recently ruled on several pending motions to dismiss the claims by this sub-group of plaintiffs, but let's focus on the punitive damages claims. The court's analysis began with the Oil Pollution Act of 1990: the OPA is silent as to the availability of punitive damages. So the issue became whether plaintiffs who could assert general maritime claims pre-OPA enactment could still plausibly allege punitive damages under general maritime. The court concluded they could.
First, punitive damages have long been available at common law, and the common-law tradition of punitive damages extends to maritime claims. The court reasoned that Congress had not occupied the entire field of oil spill liability in light of the OPA provision preserving admiralty and maritime law, “except as otherwise provided.” OPA does not mention punitive damages; thus, while punitive damages are not available under OPA, the court did not read OPA’s silence as meaning that punitive damages are precluded under general maritime law. The MDL court observed that Congress knows how to proscribe punitive damages when it intends to, as it did in the commercial aviation exception under the Death on the High Seas Act, 46 U.S.C. § 30307(b) (“punitive damages are not recoverable”).
Second, the court saw nothing to indicate that allowing a claim for punitive damages in this context would frustrate the OPA liability scheme. All claims against the allegedly Responsible Party must comply with OPA’s procedure, regardless of whether there is also cause of action against the Responsible Party under general maritime law. However, the behavior that would give rise to punitive damages under general maritime law–gross negligence–would also break OPA’s limit of liability. See 33 U.S.C. § 2704(a). Thus, the imposition of punitive damages under general maritime law would not, according to the court, circumvent OPA’s limitation of liability.
Finally on this issue, the court noted that some courts had held that the Trans-Alaska Pipeline Authorization Act (“TAPAA”), which provided “the liability regime governing certain types of Alaskan oil spills, imposing strict liability but also capping recovery,” did not restrict the availability of punitive damages. OPA, like TAPAA, creates a liability regime governing oil spills, imposes strict liability on the Responsible Parties, includes liability limits, and is silent on the issue of punitive damages.
Thus, the court concluded, the OPA does not displace general maritime law claims for those plaintiffs who would have been able to bring such claims prior to OPA’s enactment.
Tags: Articles, Chemical, Class Action, Horizon, MDL, Toxic Tort, deepwater, dismiss, motion, oil, punitive damages, spill
Third Circuit Affirms Forum Non Conveniens Dismissal
Posted on January 26, 2011 by Sean Wajert
We have posted before about how foreign plaintiffs desire to take advantage of U.S. product liability law and remedies. The Third Circuit last week affirmed the granting of a forum non conveniens motion against the claims of hundreds of Australian plaintiffs seeking to sue Alcoa Inc. in the U.S. over injuries allegedly caused by emissions at three refineries in Western Australia. See Cameron Auxer et al. v. Alcoa Inc., No. 10-2131(3d Cir. 1/20/11).
These five consolidated cases involved 244 plaintiffs who claim to have suffered personal injuries caused by their alleged exposure to emissions from three alumina refineries in Western Australia. The plaintiffs filed suit in June, 2009, alleging that Alcoa was liable for exposing them to a variety of toxic chemicals from the Wagerup, Kwinana and Pinjarra refineries, and allegedly intentionally concealing the dangers of the pollution. Alcoa produces alumina or aluminum oxide at its Western Australia facilities.
FYI, the state of Western Australia is Australia’s face on the Indian Ocean. Its capital, Perth, is closer to Singapore and Jakarta than it is to Canberra. The majority of people live in and around Perth. Western Australia is the largest Australian State. With an area of more than 2,500,000 sq km, a 12,500 km coastline, and spanning 2,400 km from north to south, it occupies a third of the continent.
Defendant moved to dismiss, and the lower court dismissed the five consolidated suits on forum non conveniens grounds. Plaintiffs appealed.
While plaintiffs acknowledged that their exposure, injuries, diagnoses, and medical treatment all occurred exclusively in Western Australia, and that none of the operative facts material to causation, injuries, diagnoses and treatments occurred in Pennsylvania, they insisted that the witnesses and documentary evidence necessary for the plaintiffs to prove liability are located at defendant’s corporate headquarters in Pittsburgh. Thus, the cases should proceed in Pennsylvania.
The key issues to be considered in reaching a decision on the appropriate forum are: (1) what degree of deference is to be given the plaintiffs’ choice of forum, (2) whether there is an adequate alternative forum, (3) whether a balancing of the private factors weighs in favor of dismissal, and (4) whether a balancing of public factors weighs in favor of dismissal. See, e.g., Lacey v. Cessna Aircraft Co., 862 F.2d 38, 43 (3d Cir. 1988).
The court of appeals addressed the lower court's treatment of factors 2-4. On the second, Alcoa was registered to do business and subject to service of process in Western Australia; the courts of Western Australia had jurisdiction over cases of this kind and recognize theories of liability for negligence, reckless conduct, and “damage caused by hazardous activities,” and, the applicable foreign court rules provide for discovery of documents, interrogatories, and the compelling of the attendance of witnesses and production of documents at trial by court-ordered subpoenas. For these reasons, numerous federal courts have found Australia to be an adequate alternative forum and dismissed on grounds of forum non conveniens. Some have specifically held that the mere absence of pretrial depositions does not render an alternative forum inadequate.
On factor three, the court observed that Pennsylvania evidence from a party would be much more accessible to plaintiffs for trial in a Western Australian forum than Western Australian evidence from non-parties would be for Alcoa for trial in a Pennsylvania forum. Because of this distinction between access to party and non-party witnesses and documents and the primary importance of a party’s being able to present its case at trial, the District Court correctly had concluded that this factor weighed heavily in favor of dismissal.
On the final factor, the lower court was fully aware that plaintiffs alleged culpable conduct in Pennsylvania and expressly recognized at the outset of its public interest factor discussion that it must consider the locus of the alleged culpable conduct and the connection of that conduct to plaintiff’s chosen forum. But, said the Third Circuit, even if the District Court had failed to take this interest of Pennsylvania into account, it would not alter the outcome of these appeals. The applicable precedent does not suggest that, where culpable conduct takes place in a mass tort case in both jurisdictions and injury in only one, the interests of the two are in any way “comparable.” This issue is "not a close call."
Tags: Articles, Chemical, Toxic Tort, discovery, dismiss, foreign, forum, forum non conveniens, motion
BPA Litigation Update- Part I
It may seem clear to readers of MassTortDefense that even with respect to those claims the court concluded should not be dismissed on the pleadings, the court's analysis highlights several issues that may make it difficult for the plaintiffs to proceed as a viable class action.
Tags: Articles, BPA, Chemical, Class Action, Consumer Fraud, Consumer Products, Food and Beverage, Iqbal, MDL, Toxic Tort, bisphenol-A, class, dismiss, fraud, jurisdiction, misrepresentaion, motion, pleasing, preemption, primary, warranty