Mass tort and consumer product class actions are on the rise as courts grow more willing to certify classes solely on the issue of liability. In the past, certification of such class actions was rare, because courts generally forced the named plaintiff to demonstrate that common issues predominated across an entire claim before any portion of the action could be certified. Recently, some courts have held that FRCP 23(c)(4), which states, “[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues,” allows for the resolution of liability on a class-wide basis, regardless of how individualized other aspects of the claim may be. In other words, one jury could be asked to determine whether a product is defective on a class-wide basis, and that decision could apply to every individual purchaser’s claims across the state or country. Courts have also certified issue classes on settlements, cause-in-fact, and punitive damages.
On Monday, December 15, the U.S. Supreme Court issued an opinion that makes it easier for defendants to remove class actions to federal court under the Class Action Fairness Act of 2005 (“CAFA”). Dart Cherokee Basin Operating Co. v. Owens does so in three ways:
1. A defendant’s Notice of Removal does not have to include evidentiary submissions to establish federal jurisdiction under CAFA. A CAFA class action can be removed to federal court if the amount in controversy – i.e. value of the case – exceeds $5 million. Under Dart, defendants need only make a “plausible allegation” that the value of the case satisfies this jurisdictional amount. Evidence supporting the amount alleged is not required. This “plausible allegation” standard echoes the “short and plain statement” pleading standard in Federal Rule of Civil Procedure 8(a). If neither the plaintiff nor the district court contests the defendant’s allegations regarding the amount in controversy, no “evidence” is necessary. But if the allegations are contested, both sides submit proof, and the court will decide, by a preponderance of the evidence standard, whether the amount in controversy is met. Continue Reading Supreme Court Eases Removal of CAFA Actions
“Made in the USA” does not necessarily mean the same thing outside of California. In a recent decision, Paz v. AG Adriano Goldschmied Inc., a federal judge refused to dismiss a class action “Made in the USA” lawsuit, based on California’s strict regulation about the use of “Made in the USA” labels, suggesting that retailers may need to use different labels on the same goods depending on whether they are being sold inside or outside of California.
The issue stems from the fact that California is the only state in the union with its own statute governing the use of “Made in the USA” labels on consumer products. Most states use the Federal Trade Commission’s (FTC) regulation, which requires “all or virtually all” of the product be made in the United States to qualify for a “Made in the USA” label. The FTC regulation allows small amounts of foreign parts to be included as long as the product’s final assembly or processing happens in the U.S. In contrast, California’s stricter regulation prohibits use of the label if the merchandise “or any article, unit, or part thereof, has been entirely or substantially made, manufactured or produced outside the United States.” Continue Reading “Made in the USA” Continues to be Fodder for Class Action Lawsuits
Speculative risk of future injury is not enough to support a class action claim according to a recent decision from the First Circuit. On November 4, 2014, the First Circuit affirmed the United States District Court of Massachusetts’ decision to dismiss a putative class action for lack of standing, finding that the alleged risk of future injury was too speculative to give rise to a case or controversy.
In Kerin v. Titeflex Corp., the named plaintiff alleged that corrugated stainless steel natural gas tubing manufactured by the defendant and built-in to residential homes was vulnerable to puncture in the event of a nearby lightning strike, which could instigate a natural gas-fueled fire. The putative class action asserted design defect, manufacturing defect, and failure to warn claims against the manufacturer, seeking damages of overpayment for a defective product and the cost of replacing the tubing with a safer alternative. Continue Reading First Circuit Deals a Blow to Speculative Risk Class Actions
A putative class action plaintiff’s affidavit claiming that they qualify to be a class member may not be sufficient in many cases going forward. This “self-selection” of class members is coming under fire from more federal courts. A growing trend suggests that courts have started taking a harder look at how class membership is defined under Rule of Civil Procedure 23, and demanding that named plaintiffs show that the proposed class is ascertainable when there is no reasonably objective means of determining class membership – i.e. no receipts or business records establishing proof of purchase in consumer product class action.
Ascertainability requires an administratively feasible means of identifying class membership using objective criteria. Continue Reading Self-Selection of Lawsuit Class Members Coming Under Fire
The National Highway Traffic Safety Administration (“NHTSA”) issued a final rule requiring vehicle manufacturers to install rear view cameras in all vehicles by May 1, 2018. Will this new rule lead to new avenues of litigation risk and potential liability for vehicle manufacturers? If past history is a guide, the answer may well be yes.
This new rule, announced on April 7, 2014, applies to all vehicles under 10,000 pounds gross vehicle weight, excluding motorcycles and trailers. NHTSA established a 48-month phase-in period for manufacturers to equip vehicles with rear view cameras. The phase-in period runs from May 1, 2016 to May 1, 2018. The rear view cameras must have a 10-foot by 20-foot field of view directly behind the vehicle. Small volume and multi-stage vehicle manufacturers are excluded from the phase-in but must comply with all requirements by May 1, 2018. Continue Reading Rear-View Liability: NHTSA Issues New Rule Requiring Rear Visibility Technology