Presenting a live 90-minute webinar with interactive Q&A Predominance in Motions to Strike or Dismiss Class Allegations Navigating Burden of Proof, Standard of Review and Procedural Issues When Pursuing or Opposing Early Motions WEDNESDAY, AUGUST 6, 2014 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Scott D. Kaiser, Partner, Shook Hardy & Bacon , Kansas City, Mo. Annika K. Martin, Partner, Lieff Cabraser Heimann & Bernstein , New York 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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Predominance in Motions to Strike or Dismiss Class Allegations Navigating Burden of Proof, Standard of Review and Procedural Issues When Pursuing or Opposing Early Motions Scott D. Kaiser - Shook Hardy & Bacon Annika K. Martin - Lieff Cabraser Heimann & Bernstein
Bases for a Motion to Strike. Variable sources of authority: Rule 12(f) Rule 23(c)(1)(A) Rule 23(d)(1)(D) “Prima facie” case Mantolete v. Bolger, 767 F.2d 1416 (9th Cir. 1985). Heerwagen v. Clear Channel Commc'ns , 435 F.3d 219 (2d Cir. 2006). 6
Standard of Review Generally uses same test as used for 12(b)(6) motion: Accept as true all well-pleaded factual allegations in complaint BUT will not accept conclusions of law as true Draw all reasonable inferences in plaintiff’s favor Resolve all doubts in favor of denying motion to strike The motion to strike must be denied if: If disputed questions of fact/law remain re class allegations If any doubt remains as to potential later relevance of class allegations Motion granted only if clear, from face of complaint alone, that no class could plausibly be certified under any facts consistent with allegations in complaint 7
Burden of Proof Burden is on moving party Burden is “formidable” b/c MTS are generally disfavored as “a drastic remedy” Movant generally must show the challenged allegations: Have no possible relation to the controversy AND May cause prejudice to movant if not striken OR May confuse the issues in the case 8
Timing Considerations. Most courts recognize that a motion to strike class allegations may be properly filed before Plaintiffs have filed a motion for class certification. A minority view treats a motion to strike as an opposition to a motion for class certification “for all practical purposes,” and therefore hold that a motion to strike may not be granted before Plaintiffs move for class certification. 9
Jurisdictional Considerations 10
Jurisdictional Considerations “Disfavored” in First Circuit. 11
Jurisdictional Considerations Allowed in Second Circuit Heerwagen v. Clear Channel Commc'ns , 435 F.3d 219 (2d Cir. 2006). Fifth Circuit John v. Nat'l Security Fire & Cas. Co ., 501 F.3d 442 (5th Cir. 2007). Sixth Circuit Pilgrim v. Universal Health Card, LLC , 660 F.3d 943 (6th Cir. 2011). Seventh Circuit Kasalo v. Harris & Harris , Ltd ., 656 F.3d 557, 563 (7th Cir. 2011). Eighth Circuit McRary v. Stifel, Nicolaus & Co., Inc ., 687 F.3d 1052 (8th Cir. 2012). Ninth Circuit Eleventh Circuit 12
Jurisdictional Considerations Neutral treatment in Third Circuit Fourth Circuit Tenth Circuit DC Circuit 13
Predominance-based arguments 14
Nationwide or multi-state classes pursuing state-law claims. Are plaintiffs’ state -law claims governed by the differing laws of multiple states? Pilgrim v. Universal Health Card, LLC , 660 F.3d 943 (6th Cir. 2011). Plaisance v. Bayer Corp ., 275 F.R.D. 270 (S.D. Ill. 2011). Becnel v. Mercedes-Benz USA, LLC , No. 14-0003, 2014 U.S. Dist. LEXIS 75470 (E.D. La. Jun. 3, 2014). 15
Personal-injury and property-damage classes. Are Plaintiffs seeking recovery for personal injuries or property damage that clearly have multiple causes? Bevrotte v. Caesars Ent. Corp , 2011 U.S. Dist. LEXIS 114463 (E.D. La. Oct. 4, 2011). Hill v. Wells Fargo Bank, N.A ., No. 12 C 7240, 2013 U.S. Dist. LEXIS 73750 (N.D. Ill. May 24, 2013). 16
Fraud and warranty classes. Are Plaintiffs pursuing claims for which reliance or personal knowledge is an element? McRary v. Stifel, Nicolaus & Co., Inc ., 687 F.3d 1052 (8th Cir. 2012). Rowe v. Morgan Stanley Dean Witter , 191 F.R.D. 398 (D.N.J. 1999) Bauer v. Dean Morris, L.L.P. , 2011 U.S. Dist. LEXIS 100399 (E.D. La. Sep. 7, 2011). 17
Other specific inquiries FDCPA Alqaq v. CitiMortgage, Inc ., No. 13 C 5130, 2014 U.S. Dist. LEXIS 59366 (N.D. Ill. Apr. 29, 2014). ADA Semenko v. Wendy's Int'l, Inc ., 2013 U.S. Dist. LEXIS 52582 (W.D. Pa. Apr. 12, 2013). 18
“Kitchen sink” classes Is the class action so expansive that it is clear from its face that inquiries cannot be common? Duvio v. Viking Range Corp ., No. 12-1430, 2013 U.S. Dist. LEXIS 38592 (E.D. La. Mar. 20, 2013). 19
Related Arguments 20
Unascertainable class definitions. Are class members impossible to identify using an objective and easily administrable method? Is the class a so- called ‘‘failsafe’’ class – i.e. class members cannot be identified without conducting individualized inquiries into the merits of their claims? Sauter v. CVS Pharm., Inc ., No. 2:13-cv-846, 2014 U.S. Dist. LEXIS 63122 (S.D. Ohio May 7, 2014). 21
Overbroad class definitions. Does the class definition include people who were not injured and therefore lack standing to sue? E.g., Edwards v. Zenimax Media Inc ., No. 12-cv-00411- WYD-KLM, 2012 U.S. Dist. LEXIS 137520 (D. Colo. Sep. 25, 2012). Does the class definition cover a period barred by a statute of limitations or a contractual limitation? 22
Classes piggybacking on recalls or voluntary repair or replacement programs. Has the defendant voluntary provided a remedy for members of the proposed class? 23
Comity/copycat class actions. Is the class action a carbon copy of another class action in which class certification was denied? E.g., Edwards v. Zenimax Media Inc ., No. 12-cv-00411- WYD-KLM, 2012 U.S. Dist. LEXIS 137520 (D. Colo. Sep. 25, 2012). Baker v. Home Depot USA, Inc ., 2013 U.S. Dist. LEXIS 9377 (N.D. Ill. Jan. 24, 2013). 24
Inadequate class representatives. Is the named plaintiff’s ineligibility to represent a class apparent from the complaint alone – e.g., plaintiff is proceeding pro se or is obviously related to or employed by class counsel? 25
Trends Courts that have stricken class allegations at the pleading stage have done so where the class definition is obviously defective in some way. In particular, courts have generally struck class allegations on the basis that the class definitions were overbroad, and therefore, the class was not ascertainable. In instances where courts strike class allegations at the pleading stage, courts tend to grant leave to amend to cure the deficiency. Rare for courts to strike class allegations based on predominance. 26
Scott D. Kaiser Shook Hardy & Bacon, Kansas City, Mo. skaiser@shb.com Annika K. Martin Lieff Cabraser Heimann & Bernstein, New York akmartin@lchb.com 27
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