A rare nationwide class of plaintiffs in a fraud action was certified by the United States District Court for the Southern District of New York in the case of Rodriguez, et al. v. It’s Just Lunch International, Inc., et al., No. 07 Civ. 9227 (SHS), May 14, 2014.
As everyone knows from its advertising, It’s Just Lunch (“IJL”) provides personalized matchmaking services nationally through franchises. The plaintiffs proposed that both a nationwide class of customers and a New York specific class of customers be certified. The crux of the plaintiffs’ nationwide fraud claim was that they were enticed to pay for IJL’s services by means of corporate-mandated misrepresentations repeated by individual IJL employees. Specifically, plaintiffs allege that IJL required its salespeople to use a corporate prepared uniform script that told prospective customers that IJL had at least two matches in mind for those customers’ first dates – even if this statement was not true.
As practitioners know, it is generally quite difficult to certify a nationwide class alleging a fraud claim - because such claims naturally turn on what each individual plaintiff was told about a product or service at the time of purchase, which generally requires an individualized inquiry. Accordingly, it is rare to be able to satisfy the commonality requirement because it is highly unusual that a nationwide class of plaintiffs can prove they were essentially all told the same misrepresentation about a product or service, much less that the misrepresentations were material or that they relied upon them when making their purchasing decision.
Recognizing this, the Rodriguez Court explained that the “alleged common issues of fact or law for the claims of the proposed class revolve around whether or not IJL made substantially uniform representations to the members of the proposed class.” Not surprisingly, IJL disputed whether its employees in fact told all customers during initial interviews that IJL had multiple matches for first dates.
However, the evidence that uniform representations were made was fairly compelling. All IJL sales staff went through sales training covering the entire sales process known as “First Date University.” At this training, all sales staff members were provided with an “info-call script” to use when conversing with prospective customers, and were directed in writing not to deviate from the script. Testimony from IJL sales personnel confirmed they were trained to follow the script – whether or not they actually had matches available for those prospective new members. Although IJL argued its script was merely a guildeline, the Rodriguez Court found that “when pressed to give examples of the extent to which salespeople could or did deviate from the script, IJL’s witnesses gave only narrow or speculative examples.” Ultimately, the Rodriguez Court weighed the evidence and concluded that “…IJL staff informed all prospective members during the intake interview that IJL had multiple matches in mind, regardless of the truth of that statement.”
Finally, the Rodriguez Court also certified the nationwide class despite its finding that under New York choice-of-law principles, the law governing each state in which the alleged misrepresentations were made to each prospective class member was to be applied. In reaching this conclusion, the Court stated that although states vary on whether they require proof of intent as an element in a fraud claim, all states require proof that a misrepresentation was made, that it was material, and that the hearer justifiably relied upon the misrepresentation. The Court explained that – with respect to the fraud claim - it was satisfied that plaintiffs’ claim would “rise or fall in significant part based on whether IJL’s materially uniform representations to the class were materially misleading,” an issue that could be determined on a classwide basis without regard to possible variations in state law.
Given the unique factual circumstances of this case, it seems unlikely that we will see a significant uptick in class certifications involving nationwide fraud claims.