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Finally, Some Good News on the Class Action Front

11 Jul, 2011 By: Gregory J. Sater


Those of us who live in the legal trenches of direct response advertising litigation, and who fret about the proliferation of class actions against our clients, were closely following the Dukes v. Wal-Mart case, which was finally decided by the U.S. Supreme Court this past month.

The high court decided that there was insufficient commonality among the different members of the putative class, as to how (if at all) each class member was harmed by Wal-Mart. Thus, the case could not go forward as a class action, and each claimant would need to file his or her own separate lawsuit. That, of course, is what every defendant wants – compared to facing a class. Dukes is a step in the right direction for any industry – including ours – that finds itself besieged by class action cases.

Because Dukes was an employment discrimination case, it isn’t exactly on point with the kind of case we typically face in direct response. We typically face cases alleging false advertising. Nevertheless, I predict Dukes will have a great impact in our favor, and that lower court judges will apply its reasoning to false advertising cases that are brought – but perhaps shouldn’t be brought – as class actions.

In Dukes, the plaintiffs claimed that Wal-Mart had committed employment discrimination on the basis of gender. They sought to certify a class of 1.5 million female employees. To get class status for such a case, they needed to show that the case presented “common questions” of law and fact. Although the lower court had found that they had shown this, the high court reversed. It ruled that it would be “impossible” to find a common reason (let alone a common discriminatory reason) for “millions of employment decisions,” including answering the individualized question of why a particular employee had or had not been discriminated against.

As in Dukes, plaintiffs who bring false advertising cases as class actions also need to show commonality to get their cases certified as class actions. Thus, in an appropriate false advertising case, Dukes can be cited in support of denying class certification where there is evidence that the ads varied in different media and/or on different dates, so that there were different exposures, i.e., no commonality of exposure; or where there is evidence that, even if there was a uniform exposure, the takeaway or the understanding of consumers was not uniform but variable.

This isn’t going to come easy, post-Dukes. Indeed, the “variable takeaway” argument mentioned above is one that plaintiff’s attorneys are sure to fight very hard against in any false advertising case, particularly if they’ve filed their class action in a state like California, where some prior cases have held that if the advertising claim is deemed to be material, then one may presume that everyone who was exposed to it relied on it (and where the rules of civil procedure in state court can be different from those used in Dukes, which was a federal court case).

But there’s no doubt that Dukes is a step in the right direction. It shows that, quite rightly, the burden should be rigorous for a plaintiff to demonstrate the requisite degree of commonality for his or her case to be certified as a class action. Where there are great differences among the experiences of the members of the putative class, it simply shouldn’t be a class – it should be separate cases.

Gregory J. Sater is a partner at Los Angeles-based Rutter Hobbs & Davidoff. He can be reached at gsater@rutterhobbs.com or (310) 286-1700.


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