Establishing a common misrepresentation can be a high hurdle to class action certification for misrepresentation claims where multiple representations are alleged to have been made. The issue is particularly acute in the consumer protection context, where customers often decide to purchase products only after speaking to a sales representative. The British Columbia Court of Appeal’s recent decision in Marshall v. United Furniture Warehouse Limited Partnership serves as a reminder of how difficult it can be to obtain certification in these types of actions.
The Cash Back Voucher Program
The plaintiffs in Marshall sought certification of a class action against the respondents, United Furniture Warehouse and related entities, for, among other things, alleged deceptive acts or practices and negligent misrepresentation related to a “cash back voucher” program. Through the “cash back voucher” program, United Furniture Warehouse granted vouchers with a cash value to consumers who purchased furniture in some of their stores. Consumers were required to wait three years after the purchase before becoming eligible to redeem the voucher with a third-party, the Consumers Trust.
In late 2005, the Consumers Trust filed for bankruptcy. United Furniture Warehouse offered consumers the opportunity to exchange vouchers for in-store credit. Unsatisfied with this offer, the plaintiffs filed for class action certification, alleging that United Furniture Warehouse misrepresented that it was the administrator of the “cash back voucher” program.
Varying Combinations of Oral and Written Representations
The BC Court of Appeal affirmed the lower court’s decision to refuse certification on the ground that the plaintiffs failed to establish a common issue. Central to each court’s reasoning was that “[e]very customer had to deal with a sales person in making his or her purchase” and, therefore, oral representations were “part of the mix for every customer”. The combinations of written and oral representations made individual inquiries inevitable. It did not matter that the plaintiffs’ claimed the class was not relying on any oral representations — the fact those representations might still affect the common issue question was enough to prevent certification.
These facts are in stark contrast to class actions certified based on an alleged misrepresentation in a single advertisement or written material provided to all members of the proposed class.
The Marshall case suggests that, as long as oral representations are a significant “part of the mix”, plaintiffs will struggle to obtain certification of consumer protection class actions alleging deceptive acts or practices, or negligent misrepresentation. This hurdle is in addition to the traditional barrier to certifying class actions alleging misrepresentation: establishing reliance on a class-wide basis, which Alexander Cobb and Adam Hirsh wrote about last year in the securities context and which has been applied in the consumer protection act context.