Presenting a live 90-minute webinar with interactive Q&A "No Injury" and "Overbroad" Consumer Class Actions: Strategies to Pursue or Defend Class Certification Navigating Complex Issues of Overbreadth and Damages in Consumer Product Cases WEDNESDAY, OCTOBER 7, 2015 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Frederick S. Longer, Member, Levin Fishbein Sedran & Berman , Philadelphia Jessica D. Miller, Partner, Skadden Arps Slate Meagher & Flom , Washington, D.C. Geoffrey M. Wyatt, Counsel, Skadden Arps Slate Meagher & Flom , Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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“No Injury” and “Overbroad” Consumer Class Actions: Strategies to Pursue or Defend Class Certification SPEAKERS: FRED LONGER flonger@lfsblaw.com JESSICA MILLER jessica.miller@skadden.com GEOFFREY WYATT geoffrey.wyatt@skadden.com
OVERVIEW – “No - Injury” Class Actions – “Overbroad” Class Actions – Supreme Court has granted review in two cases – Spokeo v. Robins and Tyson Foods, Inc. v. Bouaphakeo – that will present the opportunity for the Court to address each issue – Issues Classes 6
NO-INJURY CLASS ACTIONS • Background – The past few years have seen various federal courts embrace overbroad, no-injury class actions – Defendants have long argued that such class actions are illegitimate because the plaintiffs are seeking damages for a risk that has not materialized and may never materialize – For many years, courts agreed that no-injury class actions are not viable – Many cases were resolved at the motion-to-dismiss stage because they were brought by plaintiffs who had experienced no problem with the product, and thus could not state a claim 7
NO-INJURY CLASS ACTIONS • Background – Many “no - injury” cases were resolved at the motion -to-dismiss stage • Lee v. General Motors Corp. , 950 F. Supp. 170 (S.D. Miss. 1996) (uninjured plaintiffs sued General Motors, alleging that the detachable fiberglass roofs on certain vehicles did not meet GM’s safety inspection standards; court dismissed the claims, explaining that the vehicles in question operated without any problems or difficulties for multiple years, making it impossible for plaintiffs to establish that they had been injured by the alleged defect) • Yost v. General Motors Corp. , 651 F. Supp. 656 (D.N.J. 1986) (plaintiff alleged that oil and water and/or coolant tended to mix in the crankcase in certain of defendant’s engines and that defendant failed to disclose the defect; case was dismissed, and the court noted that “[t]he basic problem in this case [was] that plaintiff Yost ha[d] not alleged that he ha[d] suffered any damages. . . . All he [was] able to allege [was] that the potential leak [was] ‘ likely ’ to cause damage and ‘ may ’ create potential safety hazards”) • Yu v. IBM , 732 N.E.2d 1173 (Ill. App. Ct. 2000) (plaintiff sued over computer system he claimed was not Y2k compliant, even though he had taken advantage of a free fix that rendered the computer not defective; court dismissed the case because plaintiff had suffered no injury) 8
NO-INJURY CLASS ACTIONS • Background – Recently, courts have entertained an array of cases that in prior years might have been rejected as improper “no injury” class actions 9
NO-INJURY CLASS ACTIONS • Examples of recent “no injury” class actions – Lilly v. Jamba Juice Co. , No. 13-cv-02998-JST, 2014 WL 4652283 (N.D. Cal. Sept. 18, 2014) – Plaintiffs sought to certify a class of California purchasers of Jamba Juice Smoothie Kit products that were allegedly mislabeled as “All Natural” – The plaintiffs did not allege that they experienced any problems with the juice – The named plaintiffs sometimes consumed other products that contain the same allegedly unnatural ingredients – When one of the named plaintiffs was asked during a deposition if she thought she was harmed from purchasing and consuming the smoothie kit, she answered “no” – The court nonetheless certified the class for purposes of determining liability 10
NO-INJURY CLASS ACTIONS • Examples of recent “no injury” class actions – McCrary v. Elations Co., LLC , 2014 WL 1779243, at *14 (C.D. Cal. Jan. 13, 2014) – Certified a class of purchasers of joint health supplements, despite defendant’s argument that some members of the class were happy with the supplement – “Defendant’s concern that some putative class members were happy with Elations and thus were uninjured is unpersuasive. The requirement of concrete injury is satisfied when the Plaintiffs and class members ... suffer an economic loss caused by the defendant, namely the purchase of defendant’s product containing misrepresentations .” 11
NO-INJURY CLASS ACTIONS • Examples of recent “no injury” class actions – Zeisel v. Diamond Foods, Inc. , No. C 10-01192 JSW, 2011 U.S. Dist. LEXIS 60608 (N.D. Cal. June 7, 2011) – Plaintiff brought a putative class action on behalf of walnut purchasers who alleged that certain walnut products were deceptively marketed as being good for the heart – The case was certified even though the named plaintiff continued to purchase the walnuts after filing suit and testified that he would continue to purchase the walnuts, belying any claim of actual injury 12
NO-INJURY CLASS ACTIONS • Examples of recent “no injury” class actions – Rikos v. Procter & Gamble Co. , --- F.3d ----, 2015 WL 4978712, at *5 (6th Cir. Aug. 20, 2015) – Affirmed certification of multistate class of purchasers of a particular brand of probiotics – Defendant argued that some class members were clearly not injured because they kept buying the probiotics – Court disagreed: “[A]lthough P & G argues that some class members were not injured because they kept buying Align — a sign that Align works, says P & G — that is not the right way to think about ‘injury’ in the false- advertising context. The false-advertising laws at issue punish companies that sell products using advertising that misleads the reasonable consumer .” 13
NO-INJURY CLASS ACTIONS • Examples of recent “no injury” class actions – Remijas v. Neiman Marcus Group, LLC , 794 F.3d 688, 693 (7th Cir. 2015) – 350,000 Neiman Credit Card holders had their accounts pilfered but only 9,200 cards were known to have been used fraudulently – 7th Circuit reversed dismissal for lack of standing – Held: customers should not have to wait until hackers commit identity theft or credit-card fraud in order to give the class standing, because there is an “objectively reasonable likelihood” that “such an injury will occur.” • Citing Clapper v. Amnesty Int’l USA , 133 S.Ct. 1138, 1147 (2013) 14
NO-INJURY CLASS ACTIONS • Examples of recent “no injury” class actions – Mabary v. Home Town Bank, N.A. , 771 F.3d 820 (5th Cir. 2014) • Plaintiff brought suit against a bank, alleging that it failed to post a placard about transaction fees in violation of the federal Electronic Funds Transfer Act • Defendant argued that plaintiff was aware of the fee and thus had no injury • Court disagreed, holding that the violation of the statute was itself an injury 15
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