If you think that tailors have nothing to do with class actions, you are wrong. Judge Jolly denied a motion for class certification last week because the proposed class was not "tailored" as was "practicable under the circumstances." Op. ¶37 & n.34 The case is Lee v. Coastal Agrobusiness, Inc., 2012 NCBC 49.
Here's the story: Plaintiffs bought an inoculant called N-TAKE from the Defendant to use on their peanut crop. Instead of enhancing their crop of peanuts, the N-TAKE application resulted in the loss of Plaintiffs' entire peanut crop. Twenty of the 87 other purchasers of N-TAKE had similar problems and settled their claims with the Defendant. Plaintiffs didn't settle and sought to represent a class of the remaining 67 purchasers of N-TAKE.
Plaintiffs alleged that all the other N-TAKE purchasers had suffered similar harm to their peanut crops, and were therefore proper members of the proposed class. But Judge Jolly was not willing to accept that assertion without "at least some demonstration of a causal connection between the purchase and use of N-TAKE by proposed class members and some harm suffered by them as a result." Op. ¶36. He said there was no evidence in the record of losses to the proposed class members.
What led in part to this ruling was the advanced stage of the case. It was well past the pleadings, and there had been substantial discovery and therefore an opportunity to contact the members of the [proposed class and to confirm their actual losses. Judge Jolly held:
Our courts have made a distinction between a plaintiff's burden of demonstrating the existence of a class at the pleading stage and the same burden following discovery and a hearing on class certification. [Crow v. Citicorp Acceptance Co., 319 N.C. 274, 282, 354 S.E.2d 459, 465 (1987)] Where, as here, there have been ample opportunities for discovery and a hearing on class certification, Plaintiffs must establish, to the satisfaction of this court, "the actual existence of a class, the existence of other for prerequisites to utilizing the class action procedure, and the propriety of their proceeding on behalf of the class." Id. (emphasis added). At the current stage of these proceedings it is insufficient for Plaintiffs merely to allege the existence of a class. Id. Instead, Plaintiffs must demonstrate the actual existence of a class. Id.
Op. ¶32 (emphasis in original).
He remarked (in ¶34) that plaintiffs' counsel had not done anything to contact the potential class members, although the names of all the N-TAKE purchasers had been disclosed by the defendants during discovery.
Further daunting the request for class certification was the Court's perspective that it would "be required to conduct sixty-seven separate trials in order to reach an appropriate damages award as to the class plaintiffs." Op. ¶42.
So where does this "tailoring" business come from? The NC Court of Appeals said in Blitz v. Agean,, Inc., 197 N.C. App. 296, 311, 677 S.E.2d 1 (2009) that a class plaintiff has the burden to "show that he has, through thorough discovery and investigation, presented the trial court with as tailored a proposed class as practicable." Op. ¶37 & n.34.
Lexis.com subscribers can access the Lexis enhanced version of the Lee v. Coastal Agrobusiness, Inc., 2012 NCBC 49 (N.C. Super. Ct. 2012), Crow v. Citicorp Acceptance Co., 319 N.C. 274 (N.C. 1987), and Blitz v. Agean, Inc., 197 N.C. App. 296 (N.C. Ct. App. 2009) decisions with summary, headnotes, and Shepard's.
Read this article in its entirety on North Carolina Business Litigation Report, a blog for lawyers focusing on issues of North Carolina business law and the day-to-day practice of business litigation in North Carolina courts.
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