As discussed in State Attorneys General 101, State Attorneys General are the primary enforcers of consumer protection laws within their state and hold sweeping powers to protect the public they serve by launching investigations and litigation alone or in multi-state actions involving numerous states and territories across the country.
In February 2018, I reported on a 20-state objection brief, filed with the U.S. Supreme Court, asking the Court to reverse the approval of the class action settlement in Gaos v. Google. That deal would have distributed a few million dollars to nonprofit groups, while the AGs wanted money paid to real people, even if
Last week, in Cline v. Touchtunes Music Corp., No. 18-1756, the Second Circuit Court of Appeals upheld a Manhattan district judge’s decision to approve a low-cost class action settlement in what the judge termed a “nuisance” case, while basically zeroing out the $100,000 fee requested by the plaintiffs’ class counsel.
Defendants who have faced
It’s no secret that the Justice Department and state Attorneys General don’t like coupon settlements in class actions. Since 2007, groups of state AGs have been objecting regularly to coupon settlements that would force class members to pay more money to defendants accused of consumer fraud. On February 4, the Justice Department filed an amicus
Defendants have had a nice run recently in winning pleading-stage dismissal of “reasonable consumer” false advertising cases. That run came to an end yesterday, however, when the Second Circuit Court of Appeals in New York reversed the dismissal of claims regarding Kellogg’s “Cheez-It” crackers. The front of the “Cheez-It” package prominently describes the crackers as
The debate between two Third Circuit judges and a dissenting colleague in In re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Liability Litigation, a case decided last Thursday, is the best distillation I have seen of a debate raging in federal and state courts throughout the country: When, if ever, can
Lawyers who file “slack-fill” cases against food manufacturers found a friendly venue in Missouri. Missouri has a broad consumer fraud law and multiple courts have denied motions to dismiss slack-fill claims pleaded under that statute. But the real fight in class actions—where the money is, in a bank robber’s parlance—is over class certification, and on Tuesday, a Missouri judge denied certification in one of the closely-watched slack-fill cases against a candy maker.
In White v. Just Born, Inc., a Missouri case against the maker of Mike and Ike® candies, it was no great shock that the Court denied multi-state class certification. Convincing a court to certify a multi-state class is a tough slog for plaintiffs in any state law-based case, especially so if the case has only one plaintiff, rather than a plaintiff from each of the states in question. Even a single-state class can pose the threat of massive statutory damages, however, so the real victory in White was the Court’s refusal to certify even a Missouri-only class.
The plaintiff in White bought two boxes of the defendant’s candy at a dollar store. He pleaded that he personally “attached importance” to the “size” of the candy boxes and thought he was buying “more Product than [he] actually received.” Bully for him, the Court thought, but “the question of whether any [consumer fraud] violation injured each class member will require individualized inquiry” because “if an individual [already] knew how much slack-fill was in a candy box before he purchased it, he suffered no injury.” It does not matter at the class certification stage that a “reasonable consumer” may have been deceived. What matters instead is whether the practice actually caused injury to all putative class members in a common and centrally determinable manner. In a slack-fill case over a dollar’s worth of candy, it seems, it cannot.
Continue Reading Slack Fill Plaintiffs May Win Battles But Lose the War
The “Show Me” state of Missouri has not been kind to candy makers in cases where consumers allege that packages contain non-functional “slack fill.” Cases against the makers of Mike and Ike® candies, Raisinets®, and Reese’s® Pieces® all survived motions to dismiss within the last year or so, with judges finding that what “reasonable consumers”
Early this year, a Ninth Circuit panel upended a major nationwide class action settlement because it found that the District Court had not sufficiently considered material differences among the 50 states’ relevant laws. I called that decision—now likely headed for en banc review–“Regrettable But Forgettable” because the district court should be able to correct the error the Ninth Circuit identified. The district court had not conducted any predominance analysis at all, which always is required, even for settlement classes. Had it done so, it very likely could have found that for settlement purposes, with no questions for a jury to try, variations in state law would not have been material.
Yesterday, the Second Circuit reminded us that for litigation classes, variations in state laws absolutely can and should tank class certification. Langan v. Johnson & Johnson Consumer Cos., No. 17-1605 (2d Cir. July 24, 2018) is a “natural” case, challenging that label on two several baby-oriented bath products. The plaintiff allegedly purchased some in Connecticut and contended that 20 other states have similar consumer fraud laws. The district court certified a 21-state class, after which J&J successfully petitioned the Second Circuit, under Rule 23(f), to hear an interlocutory appeal.
J&J tried to argue that the plaintiff lacked Article III (constitutional “case or controversy”) standing to sue on behalf of purchasers in other states, but the Second Circuit rejected that contention. “[A]s long as the named plaintiffs have standing to sue the named defendants, any concern about whether it is proper for a class to include out-of-state, nonparty class members with claims subject to different state laws is a question of predominance under Rule 23(b)(3), not a question of ‘adjudicatory competence’ under Article III.” The court recognized some tension in case law over this question, but thought that Supreme Court guidance counseled treating “modest variations between class members’ claims as substantive questions, not jurisdictional ones.”
Continue Reading Second Circuit Bounces Multistate “Natural” Class. Now, Keep An Eye On the Ninth Circuit
Today, the New Jersey Supreme Court issued a much-anticipated decision construing New Jersey’s Truth-in-Consumer Contract, Warranty, and Notice Act (“TCCWNA”). The decision affirmed that one who has not suffered actual harm from an allegedly unlawful provision in a contract or notice is not “aggrieved” and therefore cannot sue under the TCCWNA. Importantly, the Court held
