The Southern District of California and the Northern District of Illinois recently entered orders addressing motions to strike class allegations—with very different results for the respective defendants. Although the claims and facts at issue in each case may warrant the different results, a contrast in approaches is evident.
In Kim v. Shellpoint Partners, LLC, No. 15CV611-LAB (BLM), 2016 WL 1241541 (S.D. Cal. Mar. 30, 2016), the Southern District of California granted a motion to strike class allegations contained in the plaintiff’s complaint. There, the plaintiff sought to pursue class claims centering primarily on alleged Truth in Lending Act (TILA) violations against an entity that she claimed was a mortgage lender. The motion to strike centered on ascertainability problems with two of the proposed subclasses.
The first stricken subclass involved persons billed for monthly mortgage payments in excess of the regular payments specified in the borrower’s loan-modification agreement. The court held that this was a highly individualized inquiry that would have to proceed on a borrower-by-borrower basis to examine the terms of each borrower’s agreement. The district court accordingly held that determining class membership was not administratively feasible, and struck the class allegations regarding this allegedly “overbilled” subclass.
The second stricken subclass involved persons who allegedly applied for and received a first-lien loan modification and who were charged illegal fees after the submission of their applications. On similar ascertainability grounds, the district court ruled that it would strike this “illegal fees” subclass because “there are potentially many governing documents and many ways for fees to be illegal,” which would also involve administratively unfeasible individualized inquiries to determine class membership. The court thus concluded that these two proposed subclasses “fail[ed] the ascertainability requirement even at this early stage of litigation.”
Conversely, in Van v. Ford Motor Co., No. 14 CV 8708, 2016 WL 1182001 (N.D. Ill. Mar. 28, 2016), the Northern District of Illinois denied a motion to strike class allegations that centered on Ford’s contentions that: (1) the allegations of the plaintiffs’ 123-count employment-discrimination complaint created class definitions that were impermissibly “fail safe” – i.e., class membership inherently depended on the defendant’s liability vel non and thus could not be determined until final judgment; and (2) the class allegations demonstrated conflicts of interest that rendered class treatment improper, inter alia, because “the proposed class definition could include both managerial and non-managerial employees and the complaint contains allegations that female supervisors engaged in some of the allegedly wrongful conduct” vis-à-vis female employees.
In contrast to the Southern District of California’s willingness in Kim to strike class allegations at an early stage in the litigation, the Northern District of Illinois rejected Ford’s attempts to do so in Van because Ford’s arguments were “too .. easily resolved by refinement of the class definition at such time that plaintiffs seek” class certification. Even considering the differing facts and claims involved in these two cases, tension still seems to exist between the two orders regarding the level of willingness to strike class allegations before certification is sought.