Duane Morris Consumer Fraud Class Action Review – 2024

Class action litigation in the consumer fraud area has exponentially increased over the past several years. Most consumer fraud class actions come with the possibility of excessive payouts for corporations. We hope the Duane Morris Consumer Fraud Class Action Review – 2023 will demystify some of the complexities of consumer fraud class action litigation through our analysis of trends and significant rulings that enable corporate counsel to make informed decisions in dealing with complex litigation risks.

DISCLAIMER The material in this Review is of the nature of general commentary only. It is not meant as or offered as legal advice on any particular issue and should not be considered as such. The views expressed are solely those of the authors. In addition, the authors disclaim any and all liability to any person in respect of anything and of the consequences of anything done wholly or partly in reliance on the contents of this Review. This disclaimer is from the Declaration of Principles jointly adopted by the Committee of the American Bar Association and a Committee of Publishers and Associations.

CITATION FORMATS All citations in the Duane Morris Consumer Fraud Class Action Review are designed to facilitate research. If available, the preferred citation of the opinion included in the West bound volumes is used, such as Baysal, et al. v. Midvale Indemnity Co., 78 F.4th 976 (7th Cir. 2023). If the decision is not available in the preferred format, a Lexis cite from the electronic database is provided, such as Moehrl, et al. v. National Association of Realtors, 2023 U.S. Dist. LEXIS 53299 (N.D. Ill. Mar. 29, 2023). If a ruling is not available in one of these sources, the full case name and docket information is included, such as Yates, et al. v. Traeger Pellet Grills , Case No. 19-CV-723 (D. Utah Sept. 7, 2023). eBOOK HIGHLIGHTS The Duane Morris Consumer Fraud Class Action Review is available for use on a smartphone, laptop, iPad, or any personal electronic reader by using any eBook reader application. eBook reading allows users to quickly scroll, highlight important information, link directly to different sections of the Review, and bookmark pages for quick access at a later time. The eBook is designed for easy navigation and quick access to informative data. The eBook is available by scanning the below QR code:

Duane Morris Consumer Fraud Class Action Review – 2024

NOTE FROM THE EDITORS The stakes at issue in class action litigation are typically significant and are apt to keep corporate counsel and senior management up at night. A company ’ s market share and corporate reputation are often implicated by a class action and these exposures and risks put immense pressure on corporate decision- makers. The purpose of the Duane Morris Consumer Fraud Class Action Review is multi-faceted. We hope it will demystify some of the complexities of consumer fraud class action litigation, and keep corporate counsel updated on the ever-evolving nuances of Rule 23 issues. In this respect, we hope this book will provide our clients with an analysis of trends and significant rulings that enable them to make informed decisions in dealing with complex litigation risks. Defense of class actions is a hallmark of the litigation practice at Duane Morris. We hope this book – manifesting the collective experience and expertise of our class action defense group – will assist our clients by identifying developing trends in the consumer fraud case law and offering practical approaches in dealing with consumer fraud class action litigation.

Sincerely,

Gerald L. Maatman, Jr.

Jennifer A. Riley

General Editor March 21, 2024

iii

Duane Morris Consumer Fraud Class Action Review – 2024

CONTRIBUTORS

Courtney L. Baird Partner CLBaird@duanemorris.com +1 619 744 2285

Dana B. Klinges Partner dklinges@duanemorris.com +1 215 979 1143

Alessandra Mungioli Associate AMungioli@duanemorris.com +1 215 979 1298

Ethan R. Feldman Associate ERFeldman@duanemorris.com +1 215 979 1131

Duane Morris Consumer Fraud Class Action Review – 2024

GLOSSARY AND KEY U.S. SUPREME COURT DECISIONS Adequacy Of Representation – Plaintiffs must show adequacy of representation per Rule 23(a)(4) to secure class certification. It requires representative plaintiffs and their counsel to be capable of fairly and adequately protecting the interests of the class. Amchem Products, Inc. v. Windsor, et al. , 521 U.S. 591 (1997) – Windsor is the U.S. Supreme Court decision that elucidated the requirements in Rule 23(b), insofar as common questions must predominate over any questions affecting only individual class members and class resolution must be superior to other methods for the adjudication of the claims. Ascertainability – Although not an explicit requirement of Rule 23, some courts hold that the members of a proposed class must by ascertainable by objective criteria. Comcast Corp. v. Behrend, et al. , 569 U.S. 27 (2013) – Comcast is the U.S. Supreme Court decision that interpreted Rule 23(b)(3) to require that, for questions of law or fact common to the class, the plaintiffs’ damages model must show damages are capable of resolution on a class-wide basis. Commonality – Plaintiffs must show commonality per Rule 23(a)(2) to secure class certification. This requires that common questions of law and fact exist as to the proposed class members. Class – A group of individuals that has suffered a similar loss or alleged illegal experience on whose behalf one or more representatives seek to bring suit. Class Action – The civil action brought by one or more plaintiffs in which they seek to sue on behalf of themselves and others not named in the suit but alleged to have suffered the same or similar harm. Class Certification – The judicial process in which a court reviews the submissions of the parties to determine whether the plaintiffs have met their burden of showing that class treatment is the most appropriate form of adjudication. In federal courts, the process is governed by Rule 23 of the Federal Rules of Civil Procedure. Cy Pres Fund – In class action settlement agreements, this is the money set aside for distribution to a § 501(c) organization when class members do not return a settlement claim form and money is left over after distribution to the class. Epic Systems Inc. v. Lewis, et al. , 138 S. Ct. 1612 (2018) – Epic Systems is the U.S. Supreme Court decision holding that arbitration agreements requiring individual arbitration and waiving a litigant ’ s right to bring or participate in class actions are enforceable under the Federal Arbitration Act. Opt-Out Procedures – If a court certifies a class under Rule 23(b)(3), class members are bound by the court ’ s judgment unless they opt-out after receiving notice of the lawsuit. Numerosity – Plaintiffs must show that their proposed class is sufficiently numerous that adding each class member to the complaint would be impractical. This is a requirement for class certification imposed by Rule 23(a)(1). Ortiz, et al. v. Fibreboard Corp., 527 U.S. 815 (1999) – Ortiz is the U.S. Supreme Court ruling that interpreted Rule 23(b)(3) to require personal notice and an opportunity to opt-out of a class action where money damages are sought in a class action. Predominance – The Rule 23(b)(3) requirement that, to obtain class certification, the plaintiffs must show that common questions predominate over any questions affecting individual members.

Duane Morris Consumer Fraud Class Action Review – 2024

Rule 23 – This rule from the Federal Rules of Civil Procedure governs class actions in federal courts and requires that a party seeking class certification meet four requirements of section (a) and one of three requirements under section (b) of the rule. Rule 23(a) – It prescribes that a class meet four requirements for purposes of class certification, including numerosity, commonality, typicality, and adequacy of representation. Rule 23(b) – To secure class certification, a class must meet one of three requirements of Rule 23(b)(1), Rule 23(b)(2), or Rule 23(b)(3). Rule 23(b)(1) – A class action may be maintained if Rule 23(a) is satisfied and if prosecuting separate actions would create a risk of inconsistent or varying adjudications with respect to individual class members or adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests. Rule 23(b)(2) – A class action may be maintained if Rule 23(a) is satisfied and the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole. Rule 23(b)(3) – A class action may be maintained if Rule 23(a) is satisfied and questions of law or fact common to class members predominate over any questions affecting only individual members and a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. Similarly-Situated – Under 29 U.S.C. § 216, employees may bring suit on behalf of themselves and others who are similarly-situated. The standard is not clearly defined in the statute and many courts have found that, if plaintiffs make a preliminary showing that they are similarly situated to those they seek to represent, conditional certification is appropriate. A finding in this regard is usually not based on the merits of the claims. Superiority – The Rule 23(b)(3) requirement that a class action can be permitted only if class resolution is the superior method of adjudicating the claims. Typicality – The plaintiffs’ claims and defenses must be typical to those of proposed class members’ claims. This is required by Rule 23(a)(3). Wal-Mart Stores, Inc. v. Dukes, et al., 564 U.S. 338 (2011) – Wal-Mart is the U.S. Supreme Court ruling that tightened the commonality requirement of Rule 23(a)(2) and held that judges must conduct a “rigorous analysis” to determine whether there is a “common” contention central to the validity of the claims that is “capable of class-wide resolution.”

Duane Morris Consumer Fraud Class Action Review – 2024

TABLE OF CONTENTS

Page CHAPTER 1 .................................................................................................................... 1 I. Introduction ............................................................................................ 1 II. What Should Companies Expect In 2024? ........................................... 2 Consumer Fraud Class Actions ................................................................................... 4 I. Executive Summary ............................................................................... 4 II. Significant Rulings In Consumer Fraud Class Actions In 2023 ......... 5 1. Motions For Class Certification Granted.............................................. 5 2. Motions For Class Certification Denied ............................................. 11 3. Motions On Class Decertification ....................................................... 14 4. Rulings On Other Issues In Consumer Fraud Class Actions ........... 14 5. Artificial Intelligence In The Consumer Fraud Class Action Space . 19 III. Top Consumer Fraud Class Action Settlements In 2023 .................. 20 Table Of 2023 Consumer Fraud Class Action Litigation Rulings ............................ 22

vii

Duane Morris Consumer Fraud Class Action Review – 2024

CHAPTER 1 Overview I. Introduction

Class action litigation presents one of the most significant risks to corporate defendants today. Procedural mechanisms like the one set forth in Rule 23 of the Federal Rules of Civil Procedure have the potential to expand a claim asserted on behalf of a single person into a claim asserted on behalf of a behemoth that includes every employee, customer, or user of a particular company, product, or service, over an extended period. A class action allows one or more individuals to pursue claims on behalf of a defined and sometimes sprawling group of similarly situated individuals. When the plaintiffs’ bar aggregates the claims of many individuals in a single lawsuit, a class action can present substantial implications for a corporate defendant. As a result, class action litigation poses some of the most significant legal risks that companies face. By joining the claims of many individuals in a single lawsuit, class actions have the potential to increase potential damages exponentially. A negative ruling in a class action has the potential to reshape a defendant’s business model, to impact future cases, as well as to set guidelines for the entire industry. This can make the outcome of a class action lawsuit significant and potentially devastating for a company. Due to their potential implications, class actions are often costly to defend. Defending against a class action can be a time-consuming and resource-intensive process that diverts management attention from core business activities. Plaintiffs can attempt to leverage this reality to make class actions as expensive and disruptive as possible, in an effort to bring about litigation fatigue and to extract a sizable settlement. Given the potential size and impact of class actions, class actions and class action settlements inevitably attract media attention and lead to public scrutiny. Negative publicity surrounding a class action or class action settlement can have widespread implications, including potential harm to a company's reputation, potential damage to its brand, and potential drop in consumer trust. It sometimes spells the end of the career of a general counsel or chief executive officer if the problems at the heart of the lawsuit happened on their watch. Class actions are often complex legal proceedings with uncertain outcomes. The complexity can arise from managing multiple claims, myriad legal issues, and assorted class members, making it challenging for corporate defendants to predict and control the result. Due to these factors, corporate defendants should approach class actions from a broad vantage point with a thoughtful and multi-faceted defense strategy. We developed this one-of-a-kind resource to provide a practical desk reference for corporate counsel faced with defending class action litigation. We have organized this year’s book into 23 chapters, with five appendices, each of which provides a rundown of the trends in a particular area of class action litigation, along with the key decisions from courts across the country that companies can use to shape their defense strategies. This Review offers an overview of 2023 in terms of the most significant trends and developments that shaped the consumer fraud class action landscape, the top consumer fraud class action settlements in 2023, and what companies can expect in 2024

Duane Morris Consumer Fraud Class Action Review – 2024

II. What Should Companies Expect In 2024? Class action litigation is a staple of the American judicial system. The volume of class action filings has increased each year for the past decade, and 2024 is likely to follow that trend. In this environment, corporate programs designed to ensure compliance with existing laws and strategies to mitigate class action litigation risks are corporate imperatives. The plaintiffs’ bar is nothing if not innovative and resourceful. Given the massive class action settlement figures in 2022 and 2023 (a combined total of $113 billion), coupled with the ever-developing law, corporations can expect more lawsuits, expansive class theories, and an equally if not more aggressive plaintiffs’ bar in 2024. These conditions necessitate planning, preparation, and decision-making to position corporations to withstand and defend class action exposures. Defendants often have very little time to react to the plaintiff’s forum choice after a class action is filed, even though it may be one of the most important initial questions in the case. In turn, a cascading number of strategic considerations are typically faced by corporate decision-makers upon receipt of the class action filing. Should the company opt to remove the case from state court to federal court (and are there grounds to do so under the Class Action Fairness Act of 2005)? Is it better to have a federal judge who has the time and expertise to fully vet the parties’ briefs and arguments and likely will apply a more rigorous evidentiary standard to expert testimony and class certification requirements? However, will removing the case cause other plaintiff’s counsel to track the litigation and lead to more sophisticated counsel becoming involved or more “tag-along” class action filings? Will removing the case make settlement more difficult and potentially affect the structure of the settlement as well as its costs and the exposure in the class action? How will standing issues play out in each forum, and is standing a viable defense to gut the basis of the class theories? Can jurisdictional defenses fracture the class action by invoking Bristol-Myers Squibb ? Does the company have an arbitration agreement with employees, consumers, or third-parties that would support a motion to compel arbitration of the claims in the lawsuit on an individual, bilateral basis? Is the potential of a motion to transfer the case to an MDL after removal good or bad for the ultimate defense and handling of the litigation? What are the steps for a full and complete early case assessment, and is the company’s relevant electronically-stored information (ESI) available, assessable, and in a format that can be easily and quickly analyzed? Are there ways to resolve the individual complaint, either before filing responsive pleadings or by way of negotiation with plaintiffs’ counsel? Could early concessions or a voluntary change to a challenged practice moot the litigation, or lead to an argument by plaintiff’s counsel that they are entitled to attorneys’ fees if corporate changes are made? Once the parties are at issue in the litigation, another series of strategic decisions needs to be confronted. Should the company request a stay of discovery while the court is considering a motion to dismiss? Should the defendant agree to broader discovery in the hope of demonstrating the presence of individualized issues to set up its class certification defenses? How broadly should discovery be drafted and what type of agreement on ESI is appropriate? Can the defendant make predominance arguments regarding varying facts without allowing broad discovery on those facts? Is bifurcation of discovery between merits issues and class issues still a viable option after Rule 23 case law has made clear that merits issues can overlap with the elements of class certification? Are communications allowed with class members before and/or after certification and on what terms? Is the list of class members discoverable? Is discovery allowed from absent class members and, if so, in what forms? Can and should a corporate defendant move for summary judgment before class certification (as to the named plaintiffs’ claims individually or as to all class claims)? Are there advantages even if the motion will not win the case (for instance, narrowing the case, causing the plaintiff to respond in an individualized way, etc.)? As to the future opposition to the plaintiffs’ motion for class certification, can the class definition be attacked because it includes uninjured class members? Further, it is rare that a motion for class certification is filed without an accompanying expert witness report. Likewise, virtually every opposition brief uses expert testimony. When should a defense expert be retained, on what subjects, and how should they plan their

Duane Morris Consumer Fraud Class Action Review – 2024

support of the defense efforts to block class certification? The competing expert testimony typically centers on whether the claims can be proven with common evidence although they can be used for many other purposes (e.g., numerosity, feasibility of notice, merits issues, etc.). Daubert motions, which test the admissibility of expert testimony, are an essential part of almost every class certification battle, and the U.S. Supreme Court has focused on expert testimony in several of its recent class certification decisions. Does the court apply the same Daubert standard at class certification as it does before trial? Does the expert rely upon admissible evidence? Does the testimony “fit” the legal theory and claims? Would the testimony be admissible in an ordinary single plaintiff case? Should the plaintiff or defendant hire a consulting expert to assist in litigating the case? How can an expert use sampling to support claims of class-wide liability or impact? Finally, corporations must consider settlement from the very beginning of a class action and the desire for a final global resolution can drive decision-making in terms of overall defense strategies. Defendants may decide not to remove or compel arbitration; plaintiffs may avoid issuing press releases to avoid copycat cases. Settlement on a class-wide basis pose myriad strategic issues. When the defense has decided to settle, a corporation will normally want the most expansive class definition and the broadest release, even though it has vociferously opposed any certification earlier in the case. When the terms of a settlement are finally hammered out, the plaintiff’s lawyers and defense counsel share a common goal of obtaining approval and will then join forces to this end and against any objectors who oppose the accord. These crucial questions are inevitably posed by any class action litigation. By their very nature, class actions involve decisions on strategy at every turn. The positions of the parties are constantly changing and corporate defendants must always be looking ahead and anticipating issues during every phase of the litigation. We hope the Duane Morris Consumer Fraud Class Action Review provides practical insights into complex potential strategies relevant to all aspects of class action litigation and other claims that can cost billions of dollars and require changed business practices in order to resolve.

Duane Morris Consumer Fraud Class Action Review – 2024

Consumer Fraud Class Actions I. Executive Summary

In 2023, courts granted plaintiffs’ motions for class certification in consumer fraud lawsuits approximately 66% of the time. For more than seven decades, class actions have been one of the most effective procedural tools used to vindicate the rights of consumers who, had they attempted to pursue relief individually, may have been unsuccessful. Within the vast realm of class action litigation, consumer fraud class actions remain at the forefront. Consumer fraud class actions typically involve a class of consumers who believe they were participating in a legitimate business transaction, but, due to a merchant or company ’ s alleged deceptive or fraudulent practices, the consumers were actually being defrauded. A wide variety of conduct gives rise to consumer fraud claims. For example, if a business or merchant makes misleading statements about a retail product ’ s origin, quality, or potential use, over- exaggerates a product ’ s benefits, imposes classic bait- and-switch tactics on consumers – wherein consumers are forced to make decisions based on inaccurate or incomplete information – or charges fees or surcharges that are unrelated to the subject of the merchant ’ s transaction with the consumer, a claim for

consumer fraud will arise because these actions may harm consumers. Just as the type of actionable conduct varies, so too do the industries within which consumer fraud claims abound. In last several years, for example, the beauty and cosmetics industries saw a boom in consumer fraud class actions for mislabeled products that physically harmed unknowing consumers. Other consumer fraud claims arise over things like household appliances, hidden fees, faulty warranties, deceptive credit reporting practices, and even for misrepresentations about the concentration of THC in cannabis products. In 2023, consumer fraud class actions ran the gamut of false advertising and false labeling claims. The products at issue included everything from cannabis to nuts. Every state has consumer protection laws, and consumer fraud class actions require courts to analyze these statutes both with respect to plaintiffs’ claims, and also with respect to choice of law analyses when a complaint seeks to impose liability upon multiple states’ consumer protection laws. Careful analysis and attention to the allegations is paramount, and often, factual issues prevent dismissal of claims at the pleading stage. Thus, a defendant faced with a consumer fraud class action will often have to defend the matter at least through class-wide discovery. A helpful tool in this regard is a bifurcated discovery process wherein the first stage of discovery can focus on class allegations and class certification, and the second phase of discovery can focus on the actual merits of the case.

Duane Morris Consumer Fraud Class Action Review – 2024

II. Significant Rulings In Consumer Fraud Class Actions In 2023 1. Motions For Class Certification Granted

The plaintiffs in Banks, et al. v. R.C. Bigelow, Inc., 2023 U.S. Dist. LEXIS 135167 (C.D. Cal. July 31, 2023), consisted of a group of consumers who asserted that Bigelow ’ s label on its tea, stating the manufacturing locale of the tea, was misleading. Specifically, the plaintiffs averred that Bigelow ’ s label of tea, stating that it was “Manufactured in the USA 100% Family Owned,” was misleading in violation of the California Consumer Legal Remedies Act (CLRA), common law fraud, negligent misrepresentation, and breach of express warranty. Id. at *3-4. The plaintiffs filed a motion for class certification and the court granted the motion. First, the court found that the class, at over one hundred consumers, was sufficiently numerous. The court determined that the plaintiffs’ claims were typical to those of the class members because they purchased the defendant ’ s products in part based on their belief the products were made in the USA. Bigelow argued that the plaintiffs could not credibly demonstrate reliance on the label and were thus subject to unique defenses not applicable to other class members. The court found that the fact that the plaintiffs may have considered other factors in their purchasing decisions did not make them atypical. The court also concluded that the plaintiffs and their counsel met the adequacy requirement. The court addressed commonality and predominance in tandem. The court determined that the class was bound by common questions, including: (i) whether reasonable consumers would believe, based on the label, that Bigelow ’ s products were 100% manufactured and processed in the United States, and (ii) whether its products actually were 100% manufactured and processed in the United States. The defendants argued that individual questions predominated about class members’ exposure to the label, because: (i) products with the label appeared at different times, for different durations, due to haphazard shipment to stores; and (ii) the label was not prominent enough to infer class-wide exposure. The court found that even accounting for the delay between label approval and shipping for some products, the label was printed on all products identified in the class definition throughout the vast majority of the period class period. The defendant also contended that even as to products that did bear the label, it was not sufficiently prominent to assume that all purchasers saw it and relied on its representations. The court rejected the argument. It held that the label was sufficiently prominent. The court also rejected the defendant ’ s argument that individual questions about the materiality of the 100% Manufactured in the USA label defeated predominance. For these reasons, the court granted the plaintiffs’ motion for class certification. Consumer fraud plaintiffs often seek issue certification on a discrete issue in a class action. For example, the plaintiffs in the case of In Re Fieldturf Artificial Turf Marketing And Sales Practices Litigation, 2023 U.S. Dist. LEXIS 121042 (D.N.J. July 13, 2023), were school districts, a county, a borough, and a city that purchased allegedly defective FieldTurf Duraspine fields. The plaintiffs brought claims for fraudulent concealment, statutory consumer fraud, implied warranty, and unjust enrichment based on FieldTurf ’ s representations that the fields had superior materials and designs to other similar products and a useful lifespan of more than 10 years. The plaintiffs contended that FieldTurf knew its artificial turf was defective but sold it anyway. The plaintiffs filed a motion for class certification of a defect and deception issues class under Rule 23(c)(4). The court granted the motion. The court determined that the class met all the requirements of Rule 23(a). The court stated that the issue in granting certification would be in the different state laws for different class members. The plaintiffs contended that there were two common questions that predominated over individual issues, including: (i) whether all Duraspine fields sold by FieldTurf to the class shared a common inherent defect; and (ii) whether FieldTurf knowingly omitted the facts of this common defect from the proposed class in its marketing and sales presentations. The court concluded that the plaintiffs satisfied the predominance and superiority requirements. The court reasoned that granting certification would significantly advance the litigation by determining key elements of FieldTurf ’ s liability using class-wide evidence. Accordingly, the court certified the class. The plaintiffs filed a putative consumer class action alleging that former President Donald Trump conned them with his endorsements of ACN Opportunity, LLC (ACN), a multi-level marketing company in McKoy,

Duane Morris Consumer Fraud Class Action Review – 2024

et al. v. The Trump Corp ., 2023 U.S. Dist. LEXIS 186110 (S.D.N.Y. Oct. 17, 2023). The plaintiffs brought claims under their respective state consumer protection statutes, alleging that they did not recoup their payments to ACN as independent business owners. The plaintiffs also brought common law fraud and negligent misrepresentation claims on behalf of a nationwide class. The plaintiffs moved to certify four putative classes under Rule 23(b)(3) or, in the alternative, to certify an issue class under Rule 23(c)(4) on the issues of the falsity and materiality of statements made by Trump regarding ACN. The court denied the plaintiffs’ motion for class certification. The court held that common issues did not predominate over individual issues because the alleged misrepresentations made by Trump were not uniform, and reliance on these statements varied among potential class members. The recruitment strategy of ACN involved personal contacts and various marketing materials, making it difficult to determine whether Trump ’ s statements were the primary reason for enrolling. The court also determined that certification of a nationwide common law class was inappropriate because the potential application of 50 different state laws for fraud and negligent misrepresentation would complicate the case. The court reasoned that the plaintiffs failed to demonstrate how common issues of law or fact would predominate over individual questions with variations in state law. The court also denied certification of an issue class under Rule 23(c)(4) because individual issues related to exposure, reliance, and causation would still need to be resolved, thereby making issue certification impractical. For these reasons, the court denied the plaintiffs’ motion for class certification. In Moyer, et al v. Home Point Financial Corp., 2023 U.S. Dist. LEXIS 183339 (D. Md. Oct. 11, 2023), the plaintiffs, a group of mortgage borrowers, filed a class action alleging that the defendant engaged in an illegal kickback scheme in exchange for payments from a title and settlement services company that were laundered through third parties. The plaintiffs filed a motion for class certification pursuant to Rule 23, and the court granted the motion. The plaintiffs alleged that defendant ’ s employees accepted illegal kickbacks from All Star Title Inc. in exchange for sending residential mortgage loans, refinances, and reverse mortgages to All Star for title and settlement services. The defendant thereafter charged unnecessary fees for title and settlement services, and sent the kickbacks to a third-party marketing company to create the false impression that All Star was making a legitimate payment for marketing services. The defendant argued that common issues did not predominate because the borrowers’ claims were individualized and the amount of fees charged for each title and for each settlement service would vary greatly based on the price of the property. The court found that the common question of whether class members were overcharged would predominate over the individual different amounts of damages. The court stated that the issue of damages would thereby not destroy standing or predominance. Accordingly, the court concluded that a class action would be the superior method of adjudication, and granted the plaintiffs’ motion for class certification. The plaintiffs in Ninivaggi, et al. v. University Of Delaware, 2023 U.S. Dist. LEXIS 56194 (D. Del. Mar. 23, 2023), a group of university students and parents, filed a class against the defendant, the University of Delaware, alleging breach of contract and unjust enrichment after the COVID-19 pandemic forced classes to go online during the Spring 2020 semester. The plaintiffs sought to certify a class of all undergraduate students who paid tuition during the spring 2020 semester. The court granted the motion. The class was defined as all students who paid tuition, excluding those who received full scholarships. The court found that the definition was objectively clear and administratively feasible for determining class membership. In its analysis of the Rule 23 requirements, the court determined that the class was sufficiently numerous at over 9,000 students who paid tuition during the Spring 2020 semester. The court also stated that there were questions of whether the in person instruction was contractually obligated was common to each class member. The court also found that the plaintiffs’ claims were typical to those of the class members because all of them were charged full tuition and all of them received on-line instruction during the relevant time period. The court ruled that the named plaintiffs were adequate representatives for the class, and they had a basic understanding of the case and that the counsel was qualified and experienced in class actions. As to the Rule 23(b) requirements, the court concluded that common questions predominated, and that a

Duane Morris Consumer Fraud Class Action Review – 2024

class action would be the superior method for adjudicating the controversy, given the small individual recovery sought by the plaintiffs. In Schultz, et al. v. Emory University, 2023 U.S. Dist. LEXIS 103979 (N.D. Ga. June 15, 2023), another COVID-19 tuition reimbursement class action, the father of an Emory University student (who was enrolled in classes for the Spring and Fall 2020 semesters) sued Emory on behalf of himself and other similarly- situated tuition payers. When the COVID-19 pandemic began, many schools across the country shifted their curriculums from in-person learning models to remote learning ones. Emory was no exception. The problem, though, according to the plaintiff, was that despite Emory ’ s transition to remote learning, the university did not reimburse the plaintiff or the putative class members for this change in model. The plaintiff asserted that Emory ’ s failure to reimburse payors for the qualitative deficits inherent in a transition from in-person learning to remote learning allegedly caused the plaintiff and the putative class members to lose the benefit of their respective bargains with Emory University. The plaintiff moved for class certification pursuant to Rule 23, arguing: (i) the class of payors harmed by Emory ’ s remote learning transition was so numerous that joinder of all members was impracticable; (ii) questions of law or fact common to the class existed; (iii) the claims or defenses of the plaintiff were typical of those that other payors had as well; and (iv) the plaintiff would be a fair and adequate representative, capable of protecting the interests of the class. The defendant contested the appropriateness of class certification on the grounds of commonality and adequacy. Regarding the plaintiff ’ s adequacy as a class representative, Emory argued he had not been sufficiently active in the litigation to be considered an “adequate” representative knowledgeable and capable of representing the rights of class members. The court rejected Emory ’ s argument, finding that the plaintiff was an adequate class representative because he understood the allegations of the case and was committed to pursuing the best interests of the class. The court reasoned that “class certification should not be denied simply because of a perceived lack of subjective interest on the part of the named plaintiffs unless their participation is so minimal that they virtually have abdicated to their attorneys the conduct of the case.” Id. at *4 (quoting Kirkpatrick v. J.C. Bradford & Co. , 827 F.2d 718, 726 (11th Cir. 1987)). As for commonality, the plaintiff argued that common issues of law and fact existed as to all class members because they all sought similar refunds for the defendant ’ s failure to provide in-person instruction due to the pandemic. Emory countered that individualized issues regarding each putative class member ’ s specific situations made class certification improper. The court rejected these arguments. It found commonality established because the putative class members all experienced a common injury – a failure to be reimbursed for in-person learning that the beneficiaries of their tuition payments did not receive – pursuant to a common claim – the breach of an implied contract. Accordingly, the court concluded that a class action would be the superior form of adjudication because there was no reason to believe that the putative class members had any interest in controlling their own litigation, nor was the court aware of other class members separately pursuing the same claims in other cases. Accordingly, the court granted the plaintiff ’ s motion for class certification. In Yates, et al. v. NewRez LLC, 2023 U.S. Dist. LEXIS 140406 (D. Md. Aug. 9, 2023), the court certified a class of homeowner plaintiffs who alleged that a mortgage servicing company charged them inspection fees in violation of Maryland ’ s usury law that prohibited lenders from levying inspection fees on loans secured by residential real property. The putative class consisted of people in Maryland who had a loan serviced by the defendant, NewRez LLC, on behalf of Fannie Mae and who were charged inspection fees related to the residential properties. To meet the putative class definition, putative class members also could not have paid off their respective mortgages on or before April 5, 2021. The court determined that the homeowner class easily satisfied Rule 23(a) ’ s requirement for numerosity because hundreds of homeowners met the putative class definition. Commonality was also easily established because class members all possessed similar questions of law – whether NewRez LLC could lawfully impose inspection

Duane Morris Consumer Fraud Class Action Review – 2024

fees on their residential mortgages and whether members were entitled to statutory damages as a result. Typicality was met because the lead plaintiff ’ s claims were of the same nature as those of the putative class members, and the lead plaintiff was found to be fair and adequate. Notably, just as Emory University argued the putative tuition payer class could not be found “common” because individualized inquiries as to each payer ’ s respective relationship to Emory would abound, NewRez LLC made a similar argument. NewRez LLC took things one step further than Emory, though, in that NewRez LLC argued that questions as to each mortgagee ’ s loans and the alleged fees charged to them required individualized inquiries into the nature of each mortgagee ’ s alleged harm and that the putative class could not be reasonably ascertained from NewRez LLC ’ s business records. The court rejected NewRez ’ s ascertainability argument on the basis that such an argument called into question whether NewRez transacted in good faith. Considering NewRez ’ s notice of removal, in which NewRez submitted the case consisted of approximately 1,500 mortgagees who were alleged charged a clearly defined sum of money, the court contemplated the propriety of applying principles of judicial estoppel to reject NewRez ’ s ascertainability argument at class certification. Ultimately the court declined to do so sua sponte , but Yates, et al. v. NewRez LLC is an excellent reminder that missteps at the class certification stage are costly. In Sihler, et al. v. Fulfillment Laboratory, Inc., 2023 U.S. Dist. LEXIS 116306 (S.D. Cal. June 23, 2023), the plaintiffs filed a class action alleging that the defendants engaged in a fraudulent scheme in which they used fake celebrity and magazine endorsements, along with misrepresentations about price and availability, to deceive consumers into buying weight-loss pills branded as “Ultra Fast Keto Boost” and “Instant Keto.” Id. at *2. The defendants allegedly overcharged customers, made returns and refunds difficult, and operated deceptive websites to mislead banks and credit card companies. The plaintiffs asserted that they would not have purchased these products or would have paid less if not for these deceptive practices. The plaintiffs brought claims for violation of California ’ s consumer protection laws and civil RICO violations. The plaintiffs filed a motion for class certification of two classes, including a nationwide class for RICO claims and a California sub-class for state law claims, both consisting of consumers who were billed for these products. The court granted the motion. The court found that the numerosity requirement was met, as there were likely more than 40 individuals who purchased these products based on shipping and sales data. The court determined that the plaintiffs established commonality as there were common questions regarding the deceptive practices, especially related to the pricing information. The court opined that the plaintiffs met the typicality requirement as the claims of the named plaintiffs were similar to those of the class, arising from the same alleged unlawful conduct. The court also reasoned that the plaintiffs and counsel met the adequacy requirement because they had no conflicts of interest and had demonstrated experience in class action litigation. The court found that common questions predominated over individual inquiries for the consumer law claims, RICO claims, and aiding and abetting claims against the defendants. The court also determined that a class action would be the superior of adjudication fairly and efficiently litigating the claims. For these reasons, the court granted the plaintiffs’ motion for class certification. The plaintiffs in Tershakovec, et al. v. Ford Motor Co., Inc., 79 F.4th 1299 (11th Cir. 2023), filed a class action alleging that Ford falsely advertised all Shelby cars as track-capable, leading the plaintiffs to purchase them, but only to discover that the Shelbys did not perform as advertised. The district court granted the plaintiffs’ motion for class certification, and authorized multiple state law classes. On appeal, the Eleventh Circuit affirmed in part and reversed in part the district court ’ s ruling. The primary issue was whether the plaintiffs’ proposed class met Rule 23(b)(3) ’ s requirements for predominance and superiority. The Eleventh Circuit focused on reliance in fraud claims and found that the district court erred in overgeneralizing the presumption of reliance, as it varied by state laws. The Eleventh Circuit noted that the district court did not investigate whether and when a presumption of reliance was applicable under each state ’ s laws. Because the Eleventh Circuit restated the critical nature of reliance analyses in class

Duane Morris Consumer Fraud Class Action Review – 2024

certification, the district court needed to consider the specific elements of each state ’ s claims to determine if reliance issues were common or individualized. Based on the reliance element, the Eleventh Circuit determined that there were three types of claims at issue, including: (i) claims that did not require proof of reliance; (ii) claims that did require individual proof of reliance; and (iii) claims that required proof of reliance but may be presumed. The Eleventh Circuit found that the claims from Texas, New York, and Tennessee, which required individualized proof of reliance, were not appropriate for class certification. The Eleventh Circuit, however, upheld the district court ’ s ruling granting class certification for claims brought under Florida, New York, Washington, and Missouri consumer fraud laws, as these laws allowed a presumption that the entire class relied on Ford ’ s advertising statements about the cars. Finally, the Eleventh Circuit remanded the district court ’ s ruling on whether the plaintiffs could establish reliance on a class-wide basis for claims brought under California ’ s common law fraud structure and its Unfair Competition, False Advertising, and Consumers Legal Remedies statutes and claims from California and Texas with consumers alleging breach of implied warranty and violations of the federal Magnuson-Moss Warranty Act. The Eleventh Circuit concluded that the district court should further consider whether reliance could be presumed on a class-wide basis and whether common questions predominated over individual ones for those claims. For these reasons, the Eleventh Circuit affirmed in part, reversed in part, and remanded the district court ’ s ruling. In Vizcarra, et al. v. Unilever United States, Inc., 2023 U.S. Dist. LEXIS 38208 (N.D. Cal. Feb. 24, 2023), the plaintiff, a consumer, filed a class action alleging that the defendant ’ s Breyers Natural Vanilla Ice Cream labeling was misleading to customers as having its vanilla flavor derived exclusively from the vanilla plant. The plaintiff brought: (i) claims under the unlawful, unfair, and fraudulent prongs of California ’ s Unfair Competition Law (UCL); (ii) a claim for false and misleading advertising in violation of California ’ s False Advertising Law (FAL); and (iii) a claim for violations of the California Consumer Legal Remedies Act (CLRA). The plaintiff filed a motion for class certification pursuant to Rule 23, and the court granted the motion. The plaintiff argued that the question of whether the vanilla representation was likely to deceive a reasonable consumer could be resolved with common proof, namely the opinions of an expert, who conducted a “consumer perception” survey, which he designed with the purpose of testing the effect of the vanilla representation on California purchasers’ perceptions of vanilla-flavored ice cream. Id. at *25. The survey involved presenting to respondents an un-branded ice cream product that displayed only the vanilla representation – that its vanilla flavor was derived exclusively from the vanilla plant – on the front label of the product. Results of the survey showed that 78.7% of respondents reported that they believed that “all of the vanilla flavor” comes from the vanilla plant; 16.6% perceived that “not all of the vanilla flavor” comes from the vanilla plant; and 4.7% were not sure. Id. The expert therefore concluded that a reasonable consumer in California perceived the vanilla representation to convey that all of the vanilla flavor comes from vanilla extract (from the vanilla plant). The court determined that a factfinder at trial could, based on the expert ’ s opinions, find that a reasonable consumer would likely be deceived by the vanilla representation. The court concluded that the expert ’ s explanations for his methodology and survey design and the undisputed fact that he had decades of experience in survey research and design, that the revised survey and its results, as well as the expert ’ s opinions based thereon, were sufficiently reliable and could sustain a jury finding that a reasonable consumer in California was likely to be deceived by the vanilla representations. Accordingly, the court concluded that the expert ’ s opinions were capable of answering the common question of likelihood of deception on a class-wide basis such that class certification would be appropriate. Id. at *31. As a result, the court granted the plaintiff ’ s motion for class certification. The plaintiff in White, et al. v. General Motors LLC, 2023 U.S. Dist. LEXIS 79295 (D. Colo. May 5, 2023), a consumer, filed a class action alleging that the defendant sold vehicles with faulty engines because, among other defects, the piston rings failed to keep oil in the crankcase, thereby resulting in the consumption of an abnormally high quantity of oil, and far exceeding industry standards for oil

Duane Morris Consumer Fraud Class Action Review – 2024

consumption. The plaintiff asserted six claims against General Motors, including one under the Magnuson- Moss Warranty Act on behalf of a nationwide class of individuals who purchased or leased vehicles that were within the putative class definition. The plaintiff sought to certify a class consisting of any Colorado consumer who purchased or leased Chevrolet ’ s Avalanche, Silverado, Suburban or Tahoe and GMC ’ s Sierra, Yukon or Yukon XL for model years 2011 to 2014. General Motors argued that the class should not be certified because the majority of the putative class members never experienced the alleged defect or any injury. Specifically, the defendant contended that the plaintiff lacked evidence demonstrating that the Gen IV engines in the vehicles were defective without engaging in individualized inquiries, and thus could not meet his burden to establish commonality. The court disagreed. It found that the plaintiff sufficiently demonstrated that the defect was common across all engines. The court also rejected General Motors’ argument that the plaintiff lacked evidence from a technical expert regarding the vehicles’ defects and thus individualized inquiries into putative class members’ injuries would be required. The court reasoned that, at this stage of the litigation, the plaintiff was not required to produce technical expert evidence proving the defects’ manifestation to meet the commonality burden. The court found that the plaintiff met the remaining requirements of Rule 23 such that class certification was an appropriate way to proceed, and thereby granted the plaintiff ’ s motion for class certification. In Yates, et al. v. Traeger Pellet Grills , Case No. 19-CV-723 (D. Utah Sept. 7, 2023), the plaintiffs alleged they purchased bags of Treager ’ s wood pellets for use as a source of fuel and flavor in home grills. They filed a class action alleging that based on the representations on Traeger ’ s wood-pellet packaging, the plaintiffs believed Traeger ’ s pellets were comprised entirely of the wood species indicated on the bag, either mesquite or hickory. The plaintiffs alleged they were harmed because the pellets they actually purchased were comprised entirely, or mostly, of alder or oak wood that was flavored with oil derived from either hickory or mesquite, and had they known, they would not have purchased the wood pellets. The plaintiffs moved for class certification pursuant to Rule 23, and the court granted the motion. The court determined that common questions predominated over individual questions regarding causation. The court opined that the statements at issue, in addition to being the most prominent on the bag, provided the lone description on Traeger ’ s packaging describing the content of the pellet bags. Id. at 14. The court found that every customer relied on the defendant ’ s statements made on every package sold that the defendant admitted were not accurate. The court held that the plaintiffs made a sufficient showing that damages were capable of determination on a class-wide basis. The court also ruled that the information on market prices for pellets, with Traeger ’ s own internal information, demonstrated that the defendant charged a premium over competitors’ offerings, thereby providing evidence of damages applicable to the entire class. Accordingly, the court ruled that class certification would be the superior form of adjudication, and granted the plaintiffs’ motion. Finally, after securing class certification in a consumer fraud class action, the plaintiffs sought to amend the class certification order in In Re Takata Airbag Products Liability Litigation , 2023 U.S. Dist. LEXIS 156005 (S.D. Fla. Aug. 24, 2023). The plaintiffs filed a multistate common law fraud class against FCA US, LLC. The plaintiffs initially moved to certify two classes, one for common law fraud claims in 11 jurisdictions and one for a North Carolina consumer protection class. The court had granted certification for both classes but, following a recent legal decision, the plaintiffs requested to narrow the multistate fraud class by excluding purchasers from five jurisdictions. The court ruled to exclude all Georgia purchasers from the multistate common law fraud class because Georgia law permits a class-wide presumption of reliance only under specific conditions, which were not met in this case. The court also found that there was no evidence of uniform written misrepresentations in standardized documents that were received by all class members in Georgia. Therefore, the court concluded that the class claims for alleged violations in Georgia failed to predominance requirement of Rule 23(b)(3). The court thereby amended the class definitions.

Duane Morris Consumer Fraud Class Action Review – 2024

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35

www.duanemorris.com

Made with FlippingBook - professional solution for displaying marketing and sales documents online