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.
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© Duane Morris LLP 2024
Duane Morris Consumer Fraud Class Action Review – 2024
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