A recent decision by the Western District of Michigan is indicative of the increasing trend in federal district courts to grant early motions to strike class allegations where it is obvious that a class cannot be certified. The benefit of resolving class certification at the pleadings stage, thereby avoiding costly and protracted discovery, is obvious. Moreover, the district court in Oom v. Michaels, Inc., No. 1:16-CV-257, 2017 WL 3048540 (W.D. Mich. July 19, 2017) viewed the motion to strike as case-dispositive and struck the class allegations on four separate grounds: ascertainability, typicality, commonality, and predominance.
In Oom, plaintiffs Oom and Spofford alleged that they bought at a Michaels store in Holland, Michigan custom-framing services for 25 pieces of artwork, but received lesser-value framing that actually caused damage to their artwork. They asserted claims for violations of state consumer protection statutes, the Uniform Deceptive Trade Practices Act (as codified by state statutes), the Magnuson-Moss Warranty Act, and the Michigan Consumer Protection Act, as well as claims for fraud and misrepresentation, unjust enrichment, negligence, breach of express warranty, and breach of implied warranty. They sought to represent nationwide and Michigan classes consisting of persons “who purchased custom framing products, specifically preservation mounting and/or archival tape mounting from Defendants’ store locations and who did not received preservation mounting and/or archival tape mounting.” Id. at *1.
Defendants immediately challenged class certification, filing a motion to strike based exclusively on the allegations in the plaintiffs’ class action complaint. In granting defendants’ motion to strike the class allegations, the district court observed that “a court may strike class-action allegations before a motion for class certification if the complaint demonstrates that the requirements for maintaining a class action cannot be met and discovery or factual development would not ‘alter the central defect in the class claim.’” Id. at *2 (quoting Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 949 (6th Cir. 2011) (noting “that the motion to strike came before the plaintiffs had filed a motion to certify the class does not by itself make the court’s decision reversibly premature” and affirming the district court’s decision because it “cannot see how discovery or for that matter more time would have helped …”)). The district court further noted that the motion to strike standard is the same as applied in deciding a motion to dismiss under Rule 12(b)(6). In other words, the Supreme Court’s decisions in Iqbal and Twombly require that the complaint set out factual allegations that raise a right to class certification above the speculative level.
While predominance and ascertainability are the grounds on which most courts rely in striking class allegations, the Oom court found that ascertainability, typicality, commonality, and predominance were all lacking in plaintiff’s complaint, justifying the motion to strike.
On the ascertainability issue, the district court ruled that the defined class was a “fail safe” class, which is a class defined so that “whether a person qualifies as a member depends on whether the person has a valid claim.” Id. at *4 (citations and punctuation omitted). As the Oom court observed, “[s]uch classes are improper because ‘[e]ither the class members win or, by virtue of losing, they are not in the class and, therefore, not bound by the judgment.’” Id. (citations and punctuation omitted). The district court also found that the plaintiffs could not satisfy the typicality and commonality requirements, because proving plaintiffs’ own claims would not prove any other proposed class member’s claim, absent a separate, fact-specific inquiry of each proposed member and each framing performed by Michaels for each class member. For many of the same reasons, predominance was the last nail in the plaintiffs’ class action coffin. Even in plaintiffs could satisfy the commonality requirement, any common questions of fact or law would not predominate over questions affecting individual class members.
The district court therefore took the unusual step of granting the motion to strike, because, as the district court saw it, there was no way the proposed class could be modified to avoid the problems apparent on the face of the complaint, and, given the individualized nature of the claims, discovery would not cure the Rule 23 deficiencies.
Key Takeaways: While courts most frequently grant motions to strike class allegations on predominance and ascertainability grounds, given the right factual scenario, the Rule 23(a) requirements of commonality, typicality, and adequacy can also be grounds for the motion. Key to success on these requirements is a straightforward identification from the pleadings of disparate facts, theories, and legal elements within the named plaintiff’s own claims and in comparison to those of the putative class members.
Practice Tips: Federal Rules of Civil Procedure 23(c)(1)(A), 23(d)(1)(D) and 12(f) should all be cited in a motion to strike class allegations. Remember to highlight that the burden of proof always lies with the plaintiffs (who are seeking class certification), regardless of who files a motion directed to the issue of class certification (but note that some courts have ruled that, by moving to strike, the burden of proof shifts to the defendant to show that class treatment is inappropriate under the Rule 12(b)(6) standard, as the Western District of Michigan ruled in the Oom case). Also keep in mind that motions to strike are generally disfavored and, as a general matter, are only granted when it is obvious to a district court that a plaintiff will not be able to win certification. When motions to strike are denied, they are typically denied on the ground that they are premature – in other words, the district court holds open the possibility that any problems identified in an early motion to strike could be cured through some combination of class discovery and later modification of the class definition.