This week we consider a decision that illustrates how the suitability—or unsuitability—of certain causes of action for certification can render certain defendants more susceptible to class actions than others, as well as a state court’s specific objection to a proposed class action settlement.
Breach of Implied Warranty of Merchantability Claim Provides Path to Certification Where Fraud Claim Dead Ends: Fraud is a notoriously difficult claim to litigate on a class-wide basis due to the individualized proof required to meet the reliance element. In the context of false advertising claims, an unintended consequence of this is that it may be easier to pursue a class action against the seller of a product than the manufacturer whose packaging included the purported misrepresentation. At least such was the case in a recent Northern District of Ohio decision regarding consumers’ allegations that packaging on toddler wipes misrepresented they were “sewer and septic safe.” The court refused to certify a fraud claim against the manufacturer due to the predominance of individualized issues, but did certify a breach of the implied warranty of merchantability claim against the seller on the grounds that if the product did not live up to this warranty, all purchasers were affected in the same way.
Broad Release Language in Settlement Agreement Precludes Preliminary Approval: Rather than striking an objectionable provision in a class action settlement, a California Superior Court denying preliminary approval issued a ruling so specific as to essentially toss the blue pencil to the parties and say, “Here, you do it.” The action arose out of claims of underpayment of wages by an insurance company, and the provision the court refused to approve purported to release all class-member employees’ claims “known or unknown, that were or could have been brought based on the facts or claims alleged in any version of the complaints filed in this matter arising during the class period.” The court emphasized that the release was the only piece of the settlement standing in the way of the approval, and that the denial of preliminary approval was without prejudice. The case is captioned Tara Tunforss v. Allstate Insurance Co., Case No. BC448390.
Court Denies Satellite Radio Provider’s Motion for Decertification as the Same Old Song: The Central District of California denied a satellite radio provider’s motion to decertify a class of song owners who filed suit over the payment of royalties for the use of their material. Defendant Sirius XM contended that each artist’s claim would be too individualized for class resolution, but the court denied the motion without oral argument, characterizing the defendant’s arguments as rehashes of those asserted sixteen months ago in opposition to the plaintiffs’ motion for certification. In that initial ruling on certification, the court held that individualized issues did not predominate as to song ownership because those questions could be resolved through a streamlined attestation process. The court further held that individualized issues did not predominate as to the plaintiff’s proposed damages analysis, because the theory’s reliance on already available data concerning the percentage of plays of each song on satellite radio made it a logical and workable damages theory.