Author Archives: David Stein

About David Stein

David Stein represents plaintiffs in class action litigation against the country’s largest corporations. He has served as court-appointed lead counsel in various consumer protection class action and multi-district proceedings, and his advocacy at both the trial and appellate levels has resulted in product recalls, permanent injunctive relief, and substantial remuneration for class members.

Ninth Circuit: 12(b)(6) Not the Time to Decide Whether a Business Practice Was Misleading

|

In a brief memorandum opinion issued Friday, the Ninth Circuit issued a reminder that whether a business practice is misleading under California’s consumer protection statutes is typically a question of fact better deferred until later in the litigation.

In McMahon v. Take-Two Interactive Software, Inc., plaintiffs brought suit after purchasing the Grand Theft Auto V video game.  Plaintiffs alleged that the game was marketed in a fashion that misleadingly marketed the game’s online component.  The district court concluded as a matter of law that the alleged misrepresentations were not actionable under the UCL or the FAL.

The Ninth Circuit reversed, explaining:

plaintiffs alleged that they read all the disclosures and statements on GTA V’s packaging, and that these representations led them to believe that GTA Online would be available to play immediately upon purchase of GTA V. Contrary to these representations, GTA Online was not available immediately to any purchasers. The district court erred by failing to construe plaintiffs’ allegations that these representations were misleading in the light most favorable to plaintiffs, and by making the finding that the representations were not misleading. See Lilly v. ConAgra Foods, Inc., 743 F.3d 662, 665 (9th Cir. 2014) (“Whether a business practice is deceptive will usually be a question of fact not appropriate for decision on [a motion to dismiss].” (quotation marks and citation omitted)).

… Read more

Named Plaintiff’s Standing to Sue Over Products Not Purchased — Best Deferred to Class Cert Stage

|

As noted in a recent post, defendants in proposed class action suits commonly argue that the named plaintiff only has standing to represent those who purchased the very same product that the plaintiff bought.  This argument appeared again in Reid v. GMC Skin Care USA Inc., 2016 WL 403497 (N.D.N.Y. Jan. 15, 2016), with the defendant arguing that plaintiffs lacked both Article III and class standing to assert claims in connection with products they didn’t buy.  

In Reid, the court concluded that because the plaintiffs had sufficiently alleged standing, individually, with respect to the product that plaintiffs did purchase, Article III standing was satisfied and dismissal was inappropriate.  The court held that whether plaintiffs could pursue claims based on other products amounted to a question of class standing, which was better “addressed at the class certification stage.”  Reid, 2016 WL 403497, at *3-4.… Read more

Wisconsin District Court Analyzing Restitution Under California Law

|

In an earlier post, we wrote about the Ninth Circuit’s Pulaski decision, which analyzed restitution under California law among other topics.  A new and thorough opinion from U.S. District Judge J.P. Stadtmueller in Le v. Kohls Dept. Stores, Inc., No. 15-cv-1171 (E.D. Wi. Feb. 8, 2016), expands further on those principles.

The Le case arises from allegations that Kohls Department Stores engages in a continuous marketing campaign that falsely advertises that its products are sold at far higher priced by other merchants.  Mr. Le sought restitution under California’s CLRA and UCL statutes and sought to enjoin the misleading advertising going forward.

Kohls moved to dismiss the restitution claim on the grounds “that the only legally cognizable method of calculating Le’s restitution is through the price-to-value method,” which requires showing the delta between price paid and value received.  Le responded that while it was premature at the pleading stage to sayprecisely how restitution should be calculated, other options existed — full restitution, partial restitution based on the false “transaction value” promised by Kohls, or restitution tied to Kohls’ profits from the scheme. The court agreed:

the Court agrees with Le’s interpretation of California law, namely, that restitutionary relief under the UCL and CLRA is not strictly and categorically confined to the price-to-value method as proffered by Kohls.

… Read more

23(c)(4) Certification Granted in Costco Hepatitis A Lawsuit

|

Judge David O. Carter of the Central District of California recently certified a liability-only class in a case alleging defendants’ conduct created a “risk of exposure to the hepatitis A virus” through the sale of defective food products. See Petersen v. Costco Wholesale Co., 2016 WL 304299 (C.D. Cal. Jan. 25, 2016).

Ruling on the existence and predominance of common questions, the court explained:

Given that Plaintiffs allege that a single product sold only at Costco was defective, there is a common core of salient facts. See Valentino v. Carter-Wallace, Inc., 97 F. 3d 1227, 1229 (9th Cir. 1996).

Thus, the court overruled defendants’ arguments that proving the existence of a defect on a classwide basis would be impossible:

The Ninth Circuit, however, has made clear that “proof of the manifestation of a defect is not a prerequisite to class certification.”  Baker v. Microsoft Corp., 797 F.3d 607, 611 (9th Cir. 2015) (citation omitted).

…

Indeed, there are several significant common issues here, including Plaintiffs’ contention that a single, specific lot of allegedly defective organic pomegranate seed has given rise to Plaintiffs’ claims. … Put differently, determining whether Defendants sold a defective product in this case will not require a searching individualized inquiry; rather, there will be significant common proof at issue in resolving Defendants’ liability.

… Read more

Superiority Not Defeated Just Because More Money Was Theoretically Available in Non-Class Proceedings

|

In Corvello v. Wells Fargo Bank, N.A., No. 10-cv-5072 (N.D. Cal.), the defendant contested class certification by arguing that class treatment would not be the superior form of adjudication.

Wells Fargo argued that whereas the FDCPA sets a $500,000 limit on statutory damages in class actions, class members could obtain up to $1,000 each in statutory damages if they proceeded individually.  In other words, absent class members would be better off without the class action device — they should file individual cases and claim their thousand dollars.

Judge Chhabria rejected the argument.  First, he noted that the statutory damages were not the sole source of damages available; class members may also be able to recover actual damages or restitution.  He went on to debunk the assumption that affected individuals would do better without the class device:

Moreover, even with respect to statutory damages, Wells Fargo appears to assume that every borrower who pursued [his or her] claim would be able to recover the maximum amount of statutory damages (namely, $1,000).  But the maximum statutory damages award of $1,000 is not automatic.  Instead, the amount of statutory damages (if any) depends on a court’s analysis of many factors.  Individual class members would not be sacrificing an automatic higher award of statutory damages, but the opportunity to argue for one on a case-by-case basis.

… Read more

Automotive Class Action Not Restricted to the Specific Vehicle Model Owned by Plaintiff

|

In Bedi v. BMW of N. Am., LLC, 2016 WL 324950 (D.N.J. Jan. 27, 2016), the court was presented with an increasingly common issue:  BMW argued that the named plaintiff only has standing to represent those members of the class who purchased the very same vehicle model as he did.  The court disagreed:

In this district, a class complaint generally may survive a motion to dismiss on products a lead plaintiff did not purchase, so long as: (1) the basis for each of the claims is the same, (2) the products are closely related, and (3) the defendants are the same. Eberhart v. LG Elecs. USA, Inc., No. CV 15-1761, 2015 WL 9581752, at *3 (D.N.J. Dec. 30, 2015); In re L’Oreal Wrinkle CreamMktg. & Sales Practices Litig., No. 12-03571, 2013 WL 6450701, at *4 (D.N.J. Dec. 9, 2013); Burke v. Weight Watchers Int’l, Inc., No. 12-6742, 2013 WL 5701489, at *3-4 (D.N.J. Oct. 17, 2013); Stewart v. Smart Balance, Inc., No. 11-6174, 2012 WL 4168584, at *16 (D.N.J. June 26, 2012).
.
The alleged misrepresentation in this case is identical across all BMW vehicles included in the class: the use of “TwinPower Turbo” to describe single turbocharger engines.
… Read more

Rule 26 Proportionality and Class Counsel’s Communications With Class Members

|

A number of courts have grappled with whether a defendant may discover the identities of the absent class members with whom class counsel have communicated, as well as whether counsel may be compelled to produce the underlying communications.

Typically, the analysis has turned on privilege and privacy concerns.  See, e.g., Barton v. U.S. Dist. Court for Cent. Dist. of Cal., 410 F.3d 1104, 1111 (9th Cir. 2005); Tien v. Superior Court, 139 Cal. App. 4th 528, 540 (2006).  A recent opinion adds Rule 26 proportionality concerns as yet another basis for deeming such requests objectionable.

In O’Connor v. Uber Technologies, No. 13-cv-03826, 2016 WL 107461 (N.D. Cal. Jan. 11, 2016), Magistrate Judge Donna M. Ryu acknowledged that the requests “raise the questions of attorney client privilege and work product,” Id. at *4 n.4,  but opted to deny Uber’s motion to compel on other grounds.  The court held Uber failed to show that the utility or significance of the information justified the concomitant burdens:

In light of the foregoing, Uber’s wildly overbroad discovery requests fail Rule 26(b)’s proportionality requirements, given the lack of importance of the discovery to the resolution of the issues in the case, as well as the enormous burden such discovery would place on the attorney-client relationship between class members and class counsel.

… Read more

In re: Rust-Oleum (N.D. Ill.)

|

Judge Amy St. Eve’s recent motion to dismiss ruling in the In re Rust-Oleum Restore Marketing, Sales Practices and Products Liability Litigation, 2016 WL 74671 (N.D. Ill. Jan. 7, 2016), is worthy of review — it covers a range of warranty and consumer protection issues.

The opinion is noted without further analysis since my colleagues and I contributed to the pleadings.… Read more