Opinion ID: 792156
Heading Depth: 2
Heading Rank: 1

Heading: Consumer Protection Class

Text: 7 The district court concluded it would apply Minnesota law to the consumer protection statutes class because the Minnesota statutes permit any person to bring suit thereunder. The court conducted a cursory conflict-of-laws analysis as to the application of the Minnesota consumer protection statutes. The court concluded applying Minnesota law was proper because the parties, particularly SJM, had significant contacts with Minnesota, including SJM being headquartered in Minnesota, and the fact that much of the conduct relevant to the claims occurred or emanated from Minnesota. 8 SJM makes numerous assertions of error regarding the district court's order certifying the consumer protection class. SJM argues the U.S. Constitution does not permit a nationwide personal injury class action using the consumer protection law of one state to the exclusion of all other states. SJM claims the nationwide class violates the Constitution's Commerce Clause, the Due Process Clause, the Full Faith and Credit Clause, the Erie doctrine, and the Rules Enabling Act. SJM also argues the nationwide consumer protection class violates Federal Rule of Civil Procedure 23, questioning the manageability of the class, the adequacy of the class representatives, and the typicality of their claims. Finally, SJM argues the plaintiffs cannot meet the predominance or superiority requirements of Rule 23(b)(3). 9 Addressing the class certification issues only with regard to the Due Process and Full Faith and Credit Clauses, we conclude the district court did not conduct a sufficient conflicts-of-law analysis. The due process and full faith and credit issues are dispositive, and we believe it prudent not to decide issues unnecessary to the disposition of the case, especially given the numerous constitutional issues implicated in such an analysis. See Georgine v. Amchem Prods., Inc., 83 F.3d 610, 623 (3d Cir.1996), aff'd sub nom., Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). 10 The district court's class certification was in error because the district court did not conduct a thorough conflicts-of-law analysis with respect to each plaintiff class member before applying Minnesota law. The Supreme Court has held an individualized choice-of-law analysis must be applied to each plaintiff's claim in a class action. Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 822-23, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). There is, of course, no constitutional injury to out-of-state plaintiffs in applying Minnesota law unless Minnesota law is in conflict with the other states' laws. Therefore, we must first decide whether any conflicts actually exist. See id. at 816, 105 S.Ct. 2965. The district court certified a class of over 11,000 Silzone valve recipients, assumedly residing in numerous states. We deem it unnecessary here to review each state's consumer protection laws, and rather rely on our sister circuit's conclusion that [s]tate consumer-protection laws vary considerably, and courts must respect these differences rather than apply one state's law to sales in other states with different rules. In re Bridgestone/Firestone, Inc., 288 F.3d 1012, 1018 (7th Cir.2002). 11 [F]or a State's substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair. Allstate Ins. Co. v. Hague, 449 U.S. 302, 312-13, 101 S.Ct. 633, 66 L.Ed.2d 521 (1981). Here, we cannot determine whether the district court's choice of Minnesota law was arbitrary or unfair, because the court did not analyze the contacts between Minnesota and each plaintiff class member's claims. Application of Minnesota law to all plaintiffs' claims ultimately may be proper, although we suspect Minnesota lacks sufficient contacts with all the parties' claims, and the different states have material variances between their consumer protection laws and Minnesota's. There is no indication out-of-state parties had any idea that [Minnesota] law could control potential claims when they received their Silzone-coated valves. Phillips Petroleum, 472 U.S. at 822, 105 S.Ct. 2965. Regardless, protection of out-of-state parties' constitutional rights requires an inquiry into their claims' contacts with Minnesota and their individual state laws before concluding Minnesota law may apply. 12 The district court justified its decision not to conduct a conflicts analysis by relying on section 8.31 of the Minnesota Statutes. This section permits any person injured by a violation of Minnesota's consumer protection statutes to bring suit. Minn.Stat. § 8.31, subd. 3a. The court also cited statutory language allowing [a] person likely to be damaged by a deceptive trade practice to seek injunctive relief. Minn.Stat. § 325D.45, subd. 1. The court reasoned these statutes permit out-of-state plaintiffs to bring suit under Minnesota law, and [t]he fact that individual plaintiffs hail from other states is immaterial, relying on Group Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2 (Minn.2001), and In re Lutheran Brotherhood Variable Insurance Products Co. Sales Practices Litigation, 201 F.R.D. 456, 461 n. 1 (D.Minn.2001). In Group Health, the Minnesota Supreme Court addressed the question whether a private plaintiff [must] be a purchaser of the defendant's products in order to properly plead a claim under Minnesota's misrepresentation in sales statutes, Minn.Stat. §§ 325F.67, 325F.69, subd. 1, 325D.13 (2000), and Minn.Stat. § 8.31, subd. 3a (2000). 621 N.W.2d at 4. The plaintiffs were all Minnesota companies, thus the court did not consider the extraterritorial application of the any person language contained in the statutes. Instead, the court considered only who had standing to sue under the statutes, i.e., individual consumers rather than sophisticated purchasers. Id. at 8-9. Lutheran Brotherhood cited Group Health to conclude any person meant the Minnesota consumer protection law could be applied to a nationwide class. 201 F.R.D. at 461 n. 1. Lutheran Brotherhood 's citation to Group Health was misplaced because Group Health spoke only to standing rather than extraterritorial application to a nationwide class. 13 The district court essentially attempted to preempt the Due Process and Full Faith and Credit Clauses with state standing statutes. This opposes basic constitutional law and is error. See U.S. Const., art. VI, cl. 2; Brooks v. Howmedica, Inc., 273 F.3d 785, 792 (8th Cir.2001) (State law which conflicts with federal law is preempted under the Supremacy Clause of the Constitution.) State consumer protection standing statutes do not extinguish federal constitutional rights or relieve courts from performing the analysis required to safeguard those rights. We therefore conclude the district court should have conducted the proper choice-of-law analysis, Phillips Petroleum, 472 U.S. at 822-23, 105 S.Ct. 2965, and we reverse and remand for that analysis.