Class Action Defense Strategy Blog : Class Action Lawyer & Attorney : Sheppard Mullin Law Firm : Antitrust, Securities, Wage & Hour, Consumer Fraud

By Sascha Henry and Paul Seeley

In Clark v. State Farm Mutual Automobile Insurance Co., Nos. 07-1454, 07-1466, the Tenth Circuit affirmed a district court's order denying class certification because it lost jurisdiction when the representative plaintiff's claims became moot. Clark shows how a defendant's request for a merits determination before class certification was rewarded when the resulting decision mooted the named plaintiff's claim and defeated class certification.
 

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By Ruben Escalante

Two recent Fourth District Court of Appeal cases affirmed the denial of class certification. Kaldenbach v. Mutual of Omaha Life Insurance Co., 178 Cal.App.4^th 830 (2009), was one of the first cases to address the California Supreme Court's decision in the In re Tobacco II Cases, 46 Cal. 4^th 298 (2009). Evans v. Lasco Bathware, Inc., 178 Cal.App.4^th 1417 (2009), held that differences in damages could be a reason for denying class certification.

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By John Stigi and Martin White

In Mims v. Stewart Title Guaranty Co., 2009 WL 4642631 (5th Cir. Dec. 9, 2009), the United States Court of Appeals for the Fifth Circuit considered whether plaintiffs can bring class claims under Section 8(b) of the Real Estate Settlement Procedures Act of 1974 (“RESPA”), codified in relevant part at 12 U.S.C. § 2607(c), where a service provider’s fee “bears no relationship” to the service provided. After careful consideration, the Fifth Circuit concluded that “class issues do not predominate” in such situations, because determining whether the fee charged was reasonable or unreasonable necessarily required a “transaction-by-transaction” analysis, and that a class action is not a “superior method” to trying such individualized claims.
 

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By Sascha Henry and Paul Seeley

In In re Vioxx Class Cases, (2009) __ Cal. App. 4th __, the trial court denied class certification after the defendant, Merck & Co., Inc. effectively showed that the plaintiff's theory of the case was grossly simplified. By introducing copious evidence showing the numerous factors that may relate to each class member's reliance and damages, Merck avoided class certification even in the face of its allegedly pervasive and misleading advertising campaign. The plaintiffs appealed, arguing that the California Supreme Court's decision in In re Tobacco II Cases, (2009) 46 Cal. 4th 298, undermined the trial court's rationale. The Court of Appeal, Second District, affirmed the trial court's denial of class certification.
 

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By Christina Costley and Aimee Kahn

In In re Constar Int’l, Inc. Securities Litigation, No. 08-2461, 2009 WL 3462032 (3d Cir. Oct. 29, 2009), the United States Court of Appeals for the Third Circuit affirmed an order by the United States District Court for the Eastern District of Pennsylvania certifying a class of plaintiffs who brought suit under Section 11 of the Securities Act of 1933. The Court held that the district court did not abuse its discretion by certifying the class, notwithstanding defendants’ argument that the district court erred in concluding that the “predominance” element of Rule 23(b)(3) had been met before deciding whether the stock traded in an efficient market. The district court held that a claim for fraudulent statements in a registration statement under Section 11 (as distinct from a claim for securities fraud brought under Section 10(b) of the Securities Exchange Act of 1934) does not require plaintiffs to establish reliance or loss causation.
 

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