Consumer Fraud Class Action Review – 2025

pursuant to Rule 23 a class action plaintiff could not rely on an unexecuted damages model to demonstrate predominance when that model is the only evidence of class-wide injury. The Ninth Circuit explained that class action plaintiffs are not required to prove their case through common proof at the class certification stage but must show that they will be able to prove their case through common proof at trial. The Ninth Circuit held that class action plaintiffs may rely on an unexecuted damages model to demonstrate that damages are susceptible to common proof so long as the district court finds, by a preponderance of the evidence, that the model will be able to reliably calculate damages in a manner common to the class at trial. The Ninth Circuit also held that for purposes of class certification, the plaintiffs had adequately demonstrated that a reasonable consumer would have been misled into believing Cosequin would improve their dogs’ joint health, when, in fact, Cosequin provided no such benefits, and that this misrepresentation would have been material as to the entire class. Accordingly, the Ninth Circuit ruled that the district court did not abuse its discretion in concluding that damages and reliance may be proven on a class-wide basis. For these reasons, it affirmed the district court’s certification ruling. In DZ Reserve, et al. v. Meta Platforms, Inc., 2024 U.S. App. LEXIS 6724 (9th Cir. Mar. 21, 2024), a group of advertisers sued Meta Platforms, Inc. (formerly Facebook), alleging that Meta misrepresented the reach of it ads by stating it estimated people reached when, in reality, it estimated accounts reached. The district court granted the plaintiffs’ motion for class certification and certified a damages class and injunctive relief class. Meta appealed the court’s class certifications orders in both classes. As for the damages class, Meta argued that it lacked predominance, but the Ninth Circuit affirmed the district court’s ruling. The Ninth Circuit held that the alleged misrepresentation was common to all the proposed damages-class members, despite possible variations in the disclosure of information. The Ninth Circuit also opined that the element of justifiable reliance was capable of class-wide resolution because when the same material misrepresentations are communicated to each member of a class, an inference of reliance existed for the entire class. The Ninth Circuit explained that because this presumption of reliance – under California law – applied to each member of the class, the class members’ reliance was a common question provable by common evidence. Meta also argued against certification on the basis that the named plaintiffs did not have claims typical to those of the damages-class and that they were not adequate to represent that sub-class due to alleged issues with the lead plaintiffs’ credibility. The Ninth Circuit disagreed. It affirmed the district court’s findings on typicality and adequacy and held that they were issued without error. Regarding the injunctive relief class, Meta asserted the proposed sub-class of plaintiffs lacked Article III standing to seek injunctive relief under California’s Unfair Competition Law (UCL). The Ninth Circuit largely agreed with Meta. First, it held that lead plaintiff DZ Reserve lacked standing to seek injunctive relief. Next, it held that the district court needed to consider whether another named plaintiff, Cain Maxwell, had Article III standing to seek an injunction. The Ninth Circuit acknowledged that the district court had no occasion to consider the record or to analyze Meta’s argument against Maxwell’s standing to seek injunctive relief, but due to the standing issues on appeal, remand was appropriate for the district court to analyze the Article III standing of the lead plaintiff Maxwell as well as the proposed sub-class of injunctive-relief plaintiffs. Accordingly, the Ninth Circuit affirmed the district court’s certification of the damages-class but vacated and remanded the certification of the injunctive relief-class for further proceedings regarding standing. The plaintiff in Hilario, et al. v. Allstate Insurance Co., 2024 U.S. App. LEXIS 3424 (9th Cir. Feb. 14, 2024), filed a class action for claims of negligence and unfair and fraudulent business practices under § 17200 of the California Business and Professions Code, alleging that the defendant, Allstate, “artificially inflated premiums” for many California homeowners by double counting built-in garage space when calculating total square footage that was insured. Id. at *1. The district court granted the plaintiff’s motion for certification of a class of “California homeowners’ insurance policyholders, as of March 2019, who paid premiums, had at least one built-in garage, and whose garage square footage was counted twice in calculating insured square footage and premiums.” Id. at *1-2. Allstate appealed the class certification order, but, ultimately, the Ninth Circuit affirmed the district court’s decision. For the first time on appeal, Allstate argued that the plaintiff lacked standing to bring her claim because she had not suffered an injury-in-fact. Allstate argued the plaintiff lacked an injury-in-fact because the true square footage of her house was always higher than Allstate’s estimate, the metric that Allstate used to calculate the insurance premiums. About one month before it issued its decision in DZ Reserve, et al. v. Meta Platforms, Inc., 2024 U.S. App. LEXIS 6724 (9th Cir. Mar. 21, 2024), the Ninth Circuit rejected Allstate’s standing arguments. The Ninth Circuit held that the plaintiff paid a higher insurance premium than she otherwise would have because Allstate artificially inflated its square footage estimate of her home by double-counting her garage space, which, according to the Ninth Circuit, constituted an injury-in-fact to confer Article III standing.

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