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Tag Archives: Class Actions

Strong Class Certification Decision from NJ Appellate Division

March 6, 2020Class Actions, Issues, News, Recent News, Top StoriesClass ActionsNJCJI

The New Jersey Appellate Division has issued a strong published decision in the case of Ellen Baskin v. P.C. Richard & Son, LLC.  The opinion by Judge Firko, sitting with Judges Yannotti and Hoffman, clarified and strengthened “superiority” and “predominance” requirements for class certification – affirming the trial court’s order finding plaintiffs had failed to establish that a class action was the superior means to resolve the claims, or that the alleged class had been damaged in a way that would be representative of the whole. 

The panel also affirmed the trial court’s decision to dismiss claims brought by New York residents, arising out of sales transactions that occurred in New York, finding the New Jersey courts lacked personal jurisdiction over a New York LLC or Delaware corporation with a principal place of business in New York.

No-Injury Class Action

Plaintiffs had claimed credit or debit card’s expiration dates and last four digits of card numbers had been printed on receipts in violation of FACTA, and that printing the information on their receipts subjected them to “an increased risk of identity theft and/or credit card fraud.”  None of the plaintiffs suffered identity theft or fraud.

Court noted the purpose of the statute is to ensure consumers “suffering from any actual harm to their credit or identity are protected while simultaneously limiting abusive lawsuits that do not protect consumers but only result in increased cost to business and potentially increased prices to consumers.”

Superiority

Thecourt applied the reasoning of Local Baking Products v. Kosher Bagel Munch, an appellate division decision from 2011 involving the Telephone Consumer Protection Act (TCPA).  Local Baking held that the superiority requirement for class certification implies “a comparison with alternative procedures.”  The statutory penalty of $500, obtainable by individual consumers in small claims court, eliminated the need for class action treatment. 

Because FACTA provides up to $1,000 for individuals proceeding in small claims section – a penalty comparable to the damages under TCPA – this panel concluded that “the benefit of a class action has been conferred on a litigant.”  The “cost of litigating for an individual is significantly less than the potential recovery.

Predominance

The court also held the putative class failed to meet the predominance requirement for class certification. 

Because FACTA was enacted to ensure that consumers suffering from “any actual harm” are protected, the disparate nature of “damages that may or may not have been suffered by consumers” would require the courts to “adjudicate defendants’ liability on a case by case basis,” cutting “directly against the purpose of [the Rule’s] class certification predominance and superiority prongs.”  The court concluded that the plaintiffs had failed to allege that the class had been “damaged in such a way that would be representative of the whole.”

Notably, the court declined to follow several federal cases that have concluded a class action would be the superior means to adjudicate FACTA claims as not binding on state courts.  Judge Firko noted that these particular plaintiffs had already had their claims dismissed in federal court for failure to state a claim under FACTA and lack of Article III standing, having failed to allege anything that would actually “raise a material risk of identity theft.”

Jurisdiction

Finally, the court addressed the jurisdictional problems with the putative class.  The claims were filed against P.C. Richard & Son, LLC and P.C. Richard & Son, Inc., a New York based limited liability company and a Delaware corporation.  The court noted explained that although defendants conduct business in New York, New Jersey, Pennsylvania, and Delaware, they “clearly cannot be considered to be ‘at home’ in all four states,” and “more than three-quarters of their business is conducted outside of the State of New Jersey.”  The panel concluded that the New Jersey courts could not exercise general jurisdiction over defendants and lacked specific jurisdiction to consider the claims of plaintiffs who were not residents of New Jersey.

Significance

All three elements of this decision clarify and strengthen the standards for bringing class actions in New Jersey state courts.  The superiority analysis is a useful reminder that statutory penalties are themselves the mechanism by which an individual consumer can seek redress, obviating the need for a class wide mechanism.  The predominance analysis is likely to be broadly beneficial in deterring putative classes that seek an end run around demonstrating actual harm.  And finally, the jurisdiction analysis is a reminder that plaintiffs are not free to forum-shop into jurisdictions perceived to be more favorable.  The question of when a corporation is subject to jurisdiction in a given state is a hot topic, with two cases set to be argued at the U.S. Supreme Court in April.  It’s nice to see New Jersey courts carefully applying the law.

Top News Clips for February 17-23

February 23, 2018News, Recent NewsBusiness Climate, Class Actions, Food Law, TCCWNANJCJI

A selection of the need-to-know civil justice news for February 17-23.

 

Fears of More N.J. Plaintiffs Spur Biz Push for Legal FixesFears of More N.J. Plaintiffs Spur Biz Push for Legal Fixes

Bruce Kaufman | Bloomberg Law’s Product Safety & Liability Reporter

Business groups are ratcheting up the pressure to improve their legal defenses in New Jersey in anticipation of a wave of new plaintiffs who may be encouraged to sue in the Garden State after a recent U.S. Supreme Court ruling.

Read more.

 

 

DOJ Signals New Interest In Policing Class Action Settlements

Alison Frankel | Reuters

On Friday, the Justice Department filed a statement of interest opposing final court approval of a proposed consumer class action settlement in federal court in Camden, New Jersey. I’ll tell you below about the substance of the government’s qualms with the settlement, which resolves allegations that a website called Wines ‘Til Sold Out misrepresented the original prices of wines it sold at a purported discount. But the significance of DOJ’s filing isn’t the particular flaws it highlights in the proposed deal. It’s that the Justice Department is exercising its authority to oppose a private class action settlement – and that, based on comments from departing Justice Department official Rachel Brand, the Wines ‘Til Sold Out filing is likely to be just the first in a series from the Trump DOJ.

Read more.

 

 

Is It ‘Natural’? Consumers, and Lawyers, Want to Know

Julie Creswell | New York Times

In recent years, one bright spot in an otherwise lackluster market for packaged foods, beverages and consumer products has been merchandise promoted as “natural.” Consumers, increasingly wary of products that are overly processed or full of manufactured chemicals, are paying premium prices for natural goods, from fruit juices and cereals to shampoos and baby wipes. But as a spate of lawsuits and consumer advocacy efforts show, one person’s “natural” is another person’s methylisothiazolinone.

Read more.

 

Follow @NJCivilJustice on Twitter for even more news.

 

Top News Clips for January 20-26

January 26, 2018News, Recent NewsCFA, Class Actions, Employment LawNJCJI

A selection of the need-to-know civil justice news for January 20-26. Continue reading →

Top News Clips for January 6-12

January 12, 2018News, Recent NewsClass Actions, Outrageous LawsuitsNJCJI

A selection of the need-to-know civil justice news for January 6-12. Continue reading →

Top News Clips for September 2-8

September 8, 2017News, Recent NewsArbitration, Class Actions, Outrageous LawsuitsNJCJI

A selection of the need-to-know civil justice news for September 2-8. Continue reading →

Top News Clips for August 26-September 1

September 1, 2017News, Recent NewsClass Actions, Expert Evidence, New Jersey Courts, New Jersey Supreme Court, Outrageous LawsuitsNJCJI

A selection of the need-to-know civil justice news for August 26-September 1. Continue reading →

Top News Clips for August 19-25

August 25, 2017News, Recent NewsClass Actions, Outrageous Lawsuits, TCCWNANJCJI

A selection of the need-to-know civil justice news for August 19-25. Continue reading →

High Court Bursts TCCWNA Bubble

October 13, 2017News, Top StoriesClass Actions, New Jersey Courts, New Jersey Supreme Court, TCCWNA, Third CircuitNJCJI

Dugan Bozzi OpinionThe New Jersey Supreme Court has finally brought some clarity and sanity to the Truth-in-Consumer Contract, Warranty, and Notice Act (TCCWNA). Continue reading →

The One They’ve Been Waiting For

September 29, 2017News, Top StoriesClass Actions, Expert Evidence, Legal Reform, New Jersey Courts, New Jersey Supreme Court, Pharmaceutical LitigationNJCJI

New Jersey is an outlier. Though nearly 40 states and the federal court system have adopted similar rules governing the admissibility of expert evidence, New Jersey has stuck with an older rule. Continue reading →

Jersey Law Firm Loses Out On Footlong Payday

September 21, 2017News, Top StoriesClass Actions, Legal Reform, Outrageous Lawsuits, Trial LawyersNJCJI

footlongA law firm in Evesham, New Jersey is fuming at the fact that the Subway “Footlong” settlement was thrown out.

 

As the Courier-Post reports:

DeNittis Osefchen Prince P.C. of Evesham was expected to share in a $520,000 payment by the restaurant chain, a sum intended to settle a class-action lawsuit over the actual length of Subway’s six- and 12-inch sandwiches.

 

But a federal appeals court in Chicago has rejected the deal, saying it would have enriched attorneys while doing nothing for most Subway customers.

 

In a sometimes-sharply worded decision, the three-judge panel described the settlement as “no better than a racket.”

 

The Race to the Courthouse

The suit filed by the attorneys at DeNittis Osefchen Prince, was the first of eight similar lawsuits that were filed after a photo showing a sandwich measuring only 11 inches went viral. All the suits were eventually consolidated as multi-district litigation in the Eastern District of Wisconsin.

 

Plaintiff counsel soon realized their claim for damages had no merit since Subway’s bread dough is apportioned by weight, and standardized fillings means no consumer was deprived of any food. So, they shifted from a claim for damages to a claim for injunctive relief, and Subway agreed to a settlement, promising to implement the same quality control measures that were already in place, and to pay class counsel $520,000.

 

Ted Frank, the founder and director of the Competitive Enterprise Institute’s Center for Class Action Fairness,  objected to the settlement, arguing that the class had received nothing and their attorneys were the only beneficiaries of the deal. The district judge nevertheless approved settlement.

 

 

Frank appealed, and a Seventh Circuit panel rejected the settlement unanimously. Judge Sykes wrote the decision and condemned the settlement in scathing terms. Citing precedent from a previous Ted Frank objection, she wrote that “no class action settlement that yields zero benefits for the class should be approved, and a class action that seeks only worthless benefits for the class should be dismissed out of hand.”

 

This is Happening Too Often

The race to be first to the courthouse to file even meritless lawsuits exists because there is no penalty for being incorrect – the Subway suit demonstrates that even when that claim turns out to be meritless, the attorneys will still walk away with good chunk of money, absent an objection.

 

The attorneys in the footlong case plainly believe they did nothing wrong. In the Courier-Post article, attorney Stephen DeNittis disputes claims that the settlement was “a windfall for the attorneys at the expense of the class” He said, “Such was clearly not the case. There were 10 law firms involved in the 3 1/2-year-long action who devoted well over 2,000 hours in time in litigating the matter.”

 

Unfortunately for them, work put into a worthless project doesn’t turn a sow’s ear into a silk purse.

 

A Bright Line Rule

The New Jersey Civil Justice Institute supports Frank’s effort to create a bright line rule that will discourage class action abuse and inspire courts to toss sham settlements. Businesses should only be forced to pay out when they have done something wrong, not be punished for having deep pockets.

 

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