Abbey Spanier: Court Finds That Dukes Does Not Bar Consumer Class Action

Abbey Spanier: Court Finds That Dukes Does Not Bar Consumer Class Action

As we have discussed several times in this blog, since the Supreme Court's decision last June in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) [enhanced version available to lexis.com subscribers], defendants in lawsuits throughout the country have asked the courts to de-certify previously certified class actions. Most recently, in In re Motor Fuel Temperature Sales Practices Litigation MDL, 2012 U.S. Dist. LEXIS 6163 (D. Kan. Jan. 19, 2012), the court, after being asked to reconsider its class certification order, determined that Dukes did not affect the classes that had been previously certified. Although the Court did modify the previously certified classes, it was not due to Dukes.

On May 28, 20201, the court in Motor Fuel, certified classes under Rule 23(b)(2) as to the liability and injunctive relief aspects of the plaintiffs' claims, bifurcated the claims and did not certify plaintiffs' claims for damages. In that lawsuit, the plaintiffs alleged that because defendants sell motor fuel for a specified price per gallon without disclosing or adjusting for temperature expansion, they are liable under Kansas law for unjust enrichment, civil conspiracy and violating the Kansas Consumer Protection Act. 2012 U.S. LEXIS 6163, at *10-11.

Following the decision in Dukes, Defendants moved for reconsideration and argued that Dukes required the Court to decertify the (b)(2) classes. Specifically, Defendants argued that the plaintiffs' claims did not satisfy the commonality requirement of Rule 23(a)(2) and do not qualify for class certification. In responding to defendants' motion, plaintiffs asked the court to redefine the already certified Rule 23(b)(2) classes and to certify classes under Rules 23(b)(3) and (c). Although the plaintiffs asked the court to recalibrate the class definitions, the changes did not affect the court's original class certification decision.

The court found that although Dukes arguably heightened the commonality requirement and narrowed the permissible scope of classes certifiable under Rule 23(b)(2), it was not fatal to the class action before it. In so finding, the court distinguished Dukes. In Motor Fuel, the plaintiffs alleged a common practice by all defendants that applied to the entire class uniformly. Thus, they alleged the same injury. Although the case involved a large class, the claims do not turn on a number of variables like in Dukes, i.e. different jobs at different levels with difference supervisors in 50 different states governed by different regional policies. The cases differed because Motor Fuel involved a single price that defendants allegedly implemented uniformly with respect to all class members. Because the plaintiffs alleges a common practice that caused class members a common injury, the court determined that, class wide proceedings would "generate common answers apt to drive the resolution of the litigation" and any dissimilarities within the proposed class do not "impede the generation of common answers." 2012 U.S. LEXIS 6163, at *47-48, citing Dukes, 131 S. Ct. at 2551 (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 131-32 (2009). The Court also held that significant proof that defendants operated under a general policy of selling motor fuel by the gallon without disclosing or adjusting for temperature was sufficient to satisfy the commonality requirement with respect to both the liability and injunctive relief aspects of plaintiffs' claims. Id. at *47.

In addition to its determination that the previously certified classes are not barred by Dukes, the Motor Fuel court also confronted the question of when issues classes can be certified under Federal Rule of Procedure 23 (c)(4). Pursuant to Rule 23(c)(4), when appropriate, an action may be brought or maintained as a class action with respect to particular issues.

In Motor Fuel, the court had already certified classes under Rule 23(b)(2) as to the liability and injunctive relief aspects of plaintiffs' claims. Defendants asked the Court to reconsider that ruling and to clarify what constitutes the "liability aspects" of plaintiffs' claims. In response, plaintiffs asked the Court to certify limited (b)(3) issues classes under Rule 23(c)(4) as to the liability aspects of their three claims. The court noted that the circuit courts are split on whether courts can use issue certification under Rule 23(c)4 to certify a (b)(3) class as to parts of a claim without first finding that the whole claim satisfies the predominance requirements (and presumably all the requirements of) Rule 23(b)(3). The Court noted that the Tenth Circuit had not yet addressed these issues. 2012 LEXIS 6163, at *30. Thus, the Court determined to follow the approach of the Second, Seventh and Ninth Circuits, which have used Rule 23(c)(4) to certify only parts of claims where doing so "would materially advance the disposition of the litigation of the whole." Id. at *32-33. Although the defendants pointed out that the cases the Court relied on in following the approach of the Second, Seventh and Ninth Circuits were decided before Dukes, they did not argue that Dukes undermined their rationale or persuasive value. Id. at *32. The Court explicitly declined to follow the more strict approach of the Fifth Circuit that has held that "the proper interpretation of the interaction between subdivisions (b)(3) and (c)(4) is that a cause of action, as a whole, must satisfy the predominance requirements of (b)(3) and that (c)(4) is a housekeeping rule that allows courts to sever the common issues for a class trial." Id. at *30, citing Castano v. Am. Tobacco Co., 84 F.3d 734, 745 n.21 (5th Cir. 1996).

Abbey Spanier Rodd & Abrams, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.

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