There’s an ideological battle under way in the federal courts of America that will determine the future viability of class actions.
The conservative wing of the U.S. Supreme Court is leading a camp that believes the rules governing class actions establish high barriers for class certification, even if those obstacles are sometimes so high that legitimate claims can’t be asserted. (The exception to this general rule is securities class actions, which the justices have so far treated with relative gentleness.)Opposing the Supreme Court are a few federal circuits – most notably, the 7th Circuit Court of Appeals, in opinions by the wise and contrarian Judge Richard Posner – that continue to believe class actions are an efficient vehicle to determine whether defendants are responsible for wronging large groups of people, no matter how small their individual damages might be. You can bet that cert petitions in October by Sears and Whirlpool in the infamous moldy washer class action litigation are going to be a flashpoint in this debate, focusing on whether alleged victims with disparate damages claims can litigate as a class. But in the meantime, a three-judge panel of the 3rd Circuit Court of Appeals has provoked a new controversy with a holding in August that classes may not be certified unless individual class members can be ascertained. According to a motion for reconsideration filed Friday, the 3rd Circuit’s “unprecedented” theory has the potential to eliminate corporate accountability to private consumers who buy their products.
The new motion asks the 3rd Circuit for en banc reconsideration of an Aug. 21 opinion in Carrera v. Bayer by Judges Anthony Scirica, Brooks Smith and Michael Chagares, who decertified a class of Florida purchasers of Bayer’s One-A-Day WeightSmart diet supplement. The consumers claimed they were deceived by Bayer’s representation that green tea extract in the supplement would boost their metabolism. U.S. District Judge Jose Linares of Newark, New Jersey, refused to approve a nationwide class asserting claims under New Jersey consumer laws, but granted the name plaintiff’s subsequent motion for certification of a class of Florida purchasers under that state’s consumer-friendly trade practices statute.
On appeal at the 3rd Circuit, Bayer’s lawyers at Bartlit Beck Herman Palenchar & Scott revived an argument that failed to sway Judge Linares: The class shouldn’t have been certified because it’s impossible to figure out who actually bought the product. Ascertainability of the class is a requirement for certification under the civil procedure rules governing class actions, Bayer said. But in a case involving a widely distributed over-the-counter product that consumers are unlikely to have a record of buying, the drugmaker said, membership cannot be ascertained so the class may not be certified.
The class, represented at the 3rd Circuit by Whatley Drake & Kallas and Carella, Byrne, Cecchi, Olstein, Brody & Agnello, countered with two methods of identifying class members, through pharmacy membership programs that track their purchases and through screening of affidavits from consumers who claim to have bought One-A-Day WeightSmart. Class lawyers also argued that because Florida’s consumer law doesn’t require a showing of individual reliance, Bayer’s potential $14 million exposure isn’t affected by the size or composition of a class defined as all Florida purchasers of One-A-Day WeightSmart. According to the class, either the company misrepresented its product and must refund all of its sales to Florida consumers or it’s off the hook. (Bayer, by the way, claims that, at most, it’s responsible for the differential value of the weight loss feature.)