Consumer Class Actions and Mass Torts : Class Action Lawyer & Attorney : J. Russell Jackson : Skadden Law Firm : Complex Class Actions : Consumer Class Actions & Mass Torts Law Blog

Recently the federal multidistrict transferee addressing Fosamax litigation, Judge John F. Keenan, adopted the majority rule and refused to apply cross-jurisdictional tolling of a state's statute of limitations in a products liability action.  See In re Fosamax Prods. Liab. Litig., 2010 WL 908926 (S.D.N.Y. Mar. 15, 2010). 

In Fosamax, a number of Virginia plaintiffs had brought personal injury actions for jaw injuries allegedly caused by the osteoporosis medicine Fosamax.  Each of the plaintiffs' causes of action was untimely under Virginia's two-year statute of limitations.  Plaintiffs argued that this was okay because, prior to the running of the statute of limitations, some Tennessee plaintiffs had brought a nearly identical action under Tennessee law as a class action, and it had been transferred to the federal MDL.  Accordingly, they argue, they were entitled to toll the statute of limitations during the pendency of state law claims in the Tennessee class action.  See id. at *2 (citing American Pipe & Constr. Co. v. Utah, 515 U.S. 538 (1974)).

The Fosamax court correctly recognized that very few states have adopted the rule of "cross-jurisdictional" tolling; although they might allow a prior class action in their own state to toll the statute of limitations for subsequent individual claims filed in that state, they generally have not allowed prior pending class actions in other states or in the federal system to toll the statute of limitations on individuals' claims in their state.  See id. at *3.  Class action tolling, you see, is a based on a complete fiction:  namely, that absent class members actually know about the prior class action and are holding off filing new claims because they are relying on the class action to protect their rights.  This is, of course, for the most part totally bogus.  No absent class member is actually aware of the previously-filed class action.  And although it may be one thing to follow this legal fiction for classes previously-filed in your own state of residence, it is something quite different to give tolling effect to class actions that were previously filed many states away or in the federal system.  Are we really supposed to buy the fiction that some group of litigants actually knew about such foreign class actions and delayed taking action to enforce their rights because they were relying upon the previously-filed foreign class action to do so?

The Fosamax court said no, recognizing that courts that reject cross-jurisdictional tolling do so, in part, because to recognize such tolling would encourage forum shopping in the jurisdiction.  Moreover, for a state like Virginia -- which does not recognize class actions generally -- giving a foreign class action such tolling effect would run contrary to the state's fundamental policy choices.

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Recently another federal court refused to certify a medical monitoring class because it presented too many individual issues.  In Gates v. Rohm and Haas Co., 2010 WL 774327 (E.D. Pa. Mar. 5, 2010), the residents of McCollum Lake Village in Illinois sued the defendant, alleging that its specialty chemicals manufacturing facility contaminated their Village with vinyl chloride, causing a significantly increased risk of developing brain cancer and a drop in property values.  They asserted the following claims:  medical monitoring, public and private nuisance, negligent and intentional trespass, strict liability, negligence, negligence per se, CERCLA, and conspiracy.  They sought class certification under Rules 23(b)(2) and 23(b)(3).  After a three-day hearing, the court denied certification, holding that individual issues predominated.

Although the court found that the numerosity, typicality, and commonality requirements of Rule 23(a) were met, it expressed concern about the adequacy of representation requirement because the class, as defined, ran the risk of precluding people who later developed physical injuries from bringing claims for such injuries under the general rule against claim-splitting.  The court ultimately assumed, without deciding, that the adequacy of representation requirement was met.

In analyzing the medical monitoring claim under Rule 23(b)(3), the court took issue with the failure of plaintiffs' experts to establish a minimum exposure level that applied to the entire class and represented a significant increase in the risk of developing disease.  Plaintiffs experts had earlier admitted that such figures were necessary to establish the need for medical monitoring, but all that they ultimately could deliver were average exposure levels.  They acknowledged that the putative class members' actual exposure levels varied significantly based on how long they spent outside, whether they also worked in the village, etc.  Relying on Rowe v. E.I. DuPont de Nemours & Co., 2008 U.S. Dist. LEXIS 103528 (D.N.J. Dec. 23, 2008), the court rejected the use of exposure levels from risk assessments and concluded that individualized issues predominated and precluded certification of the medical monitoring class.

The court also held that the medical monitoring requested -- annual MRIs in asymptomatic individuals -- were problematic from a class certification perspective; the risks for various individuals (children, people with kidney disease, claustrophobic patients) made it unlikely that "'informed physicians, unaffected by litigation considerations, would recommend routine monitoring' with MRIs in asymptomatic patients such as the proposed class members."  Gates, 2010 WL 774327 at *19 (citation omitted).

The court also rejected class certification under Rule 23(b)(2), holding that for the same reasons the class failed the predominance requirements, it also failed the "cohesiveness" requirement inherent in Rule 23(b)(2).

Finally, the court also rejected the property damage class proposed for certification under Rule 23(b)(3).  For that class, the court concluded that plaintiffs could not prove that each property was exposed to vinyl chloride, and certainly not in the same amounts.  Moreover, the fact of damages and the extent of damages were considerations weighing against a finding of predominance and superiority.

Gates is an example of a court that took its responsibilities seriously, holding three days of class certification hearings and receiving copious amounts of expert testimony on the key issues.  It did not lightly come to the conclusion that the prerequisites of Rule 23 were not met. 

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It's the question a defense lawyer seldom actually confronts head-on, but one that is always at the front of his or her mind:  how can the judgment against my client in one case be used to bind it in other cases?

Or, for you law review types:  will the findings of fact and conclusions of law in this case subject the client to non-mutual collateral estoppel in a subsequent case?

Where there are multiple lawsuits, there is always a risk that someone may take the defendant's loss in one case and try to bar the defendant from presenting evidence on the issue in the next case, arguing that what was already found by a court once should hold true in the later action.  That is called "collateral estoppel" or, more simply, "issue preclusion."  The fact that the plaintiff in the second action is different from the plaintiff in the first action means that it is "non-mutual."  The plaintiffs are different, but the defendant remains the same.

Some people can make it sound awfully efficient and useful to have one court's judgment bind a defendant on certain issues in subsequent trials.  But the fact remains that -- particularly in mass tort litigation, where there are hundreds or thousands of such claims -- prematurely binding a defendant to one particular outcome deprives us of the benefit of a robust number of trials to see how patterns of liability or non-liability may develop.  It's the American way to allow juries in different states to hear evidence and apply their own law to the facts and reach a conclusion, rather than having one trial decide everything.  And it can seem downright un-American to prematurely cut-off a defendant's right to present a defense and hold it to a single jury's determination of an issue.

Recently, the question of issue preclusion was presented to a federal court in Maine that was presiding over a multidistrict litigation involving cases alleging fraud and unjust enrichment against Philip Morris and Altria for their allegedly fraudulent promotion of "light" cigarettes as being safer than ordinary cigarettes.  See In re:  Light Cigarettes Marketing Sales Practices Litigation, MDL Docket No. 1-09-MD-2068 (D. Me. Mar. 5, 2010).  

In 2006, a federal judge in the District of Columbia -- the Honorable Gladys Kessler -- had issued a mammoth final judgment in a civil RICO case that had been brought by the Department of Justice against the entire tobacco industry.  See United States v. Philip Morris USA, Inc., 449 F. Supp. 2d 1 (D.D.C. 2006), aff'd in part and vacated in part, 566 F.3d 1095 (D.C. Cir. 2009), petition for cert. filed (Feb. 19, 2010).  That landmark case had proceeded for more than 7 years.  It was tried to the judge; there was no jury.  Judge Kessler had issued some 4,088 separate factual findings, and found the industry liable for a variety of alleged schemes to defraud.

The plaintiffs in the MDL pending in Maine wanted to use more than a thousand of Judge Kessler's findings of fact to bind Philip Morris and its parent, Altria, in the subsequent civil class action cases brought by individual smokers under state consumer protection laws and for unjust enrichment.  Chief Judge John A. Woodcock, Jr., who is presiding over the Light Cigarettes MDL, thus was confronted with whether to impose non-mutual collateral estoppel on the defendants.

There are four basic requirements for issue preclusion generally:  (1) the issues in the earlier and later cases must be identical, (2) the issues must have been actually litigated in the prior action, (3) the prior judgment must be final, and (4) the issue must have been essential to the final judgment, not merely incidental or collateral to it.

Chief Judge Woodcock determined that there was no doubt that the issues plaintiffs sought preclusion on were actually litigated before Judge Kessler, so requirement 2 was definitely met.  And her judgment was properly considered final, even though a certiorari petition is pending before the United States Supreme Court, so requirement 4 was met, too.

But Chief Judge Woodcock had many doubts about whether the identity of issues requirement was met.  Many of Judge Kessler's findings referred to the "Defendants" and were not specific to Philip Morris or Altria.  He reasoned that it would be unfair to hold those two companies liable for the collective wrongful acts of all tobacco companies.  Moreover, the "light cigarette" scheme was only one of six that Judge Kessler had held the industry liable for in her opinion, and it was unclear how heavily if at all, her judgment relied on the specific actions of Philip Morris and Altria regarding light cigarettes. 

In addition, the period of time relevant to Judge Kessler had been fifty years.  In contrast, many of the suits pending in Maine had much shorter proposed class periods that began near the time of Judge Kessler's opinion.  Thus, the overlap of time may not be identical.

Chief Judge Woodcock acknowledged that there were some findings -- particularly relating to Philip Morris's knowledge about the health risks of light cigarettes -- that might be identical.  But Chief Judge Woodcock was concerned that "because of the small number of findings related to light cigarettes, the Court is not convinced that they were central to [Judge Kessler's] conclusion of light cigarette fraud on the part of the enterprise."  Slip op. at 15.

Indeed, the court concluded that the sheer volume of the findings plaintiffs wanted to use -- 1,083 -- proved that they could not possibly have been central to Judge Kessler's holding.  As the court explained:  "Judge Kessler included the lengthy findings so that readers could 'fully appreciate how massive the case is against the Defendants,' not necessarily because the facts were critical to her conclusion."  Slip op. at 14 (citation omitted).

Ultimately, Chief Judge Woodcock applied the Supreme Court's decision in Parklane Hosiery Co. v. Shore, 439 U.S. 329 (1979) to decide against giving Judge Kessler's findings issue-preclusive effect in the cases before him.  In Parklane Hosiery, the Supreme Court had counseled that where issue preclusion is being used by someone who was not a party to the prior suit, certain public policy and fairness factors also must be considered.  Slip op. at 3. 

Weighing those factors, Chief Judge Woodcock noted that the defendants had been deprived of a jury trial before Judge Kessler, whereas they would be entitled to one in the actions pending before him.  He also expressed the very practical concern about "the possibility for jury confusion and the lack of efficiency."  Id. at 15.  Indeed, given the sheer number of factual conclusions that plaintiffs wanted to use (more than 1,000), the court noted that they would likely confuse the jury without presenting some background and clarifying testimony -- but that would defeat the whole efficiency purpose being used to justify issue preclusion.  Id. at n.17.  Moreover, the Supreme Court recently has admonished that punitive damages may not be used to punish a defendant for injuries it inflicted on people other than the plaintiffs; but using findings of fact from a prior trial necessarily would run afoul of that rule and would require potentially confusing corrective instructions.  Id. at 15-16. In addition, the court concluded, little efficiency would be achieved because individual plaintiffs still would need to prove that they relied on the defendants' alleged misrepresentations and that they were actually deceived.  Id. at 16. 

Interestingly, Chief Judge Woodcock did not seem to take a position on one of the defendants' arguments that I found most logical and compelling:  namely, that applying issue preclusion would be unfair under Parklane Hosiery because the defendants routinely had won jury verdicts in cases involving light cigarettes, and thus Judge Kessler's findings did not stand uncontradicted and could not be given preclusive effect without arbitrarily favoring one judgment over another.  Id. at 7-8.

Ultimately, Chief Judge Woodcock's order is the third one that has refused to give issue-preclusive effect to Judge Kessler's behemoth 2006 order.  Its careful reasoning is instructive and should give any court faced with mass tort litigation pause before artificially depriving a defendant of its right to present evidence to contest a claim.

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Continuing with our settlement theme, this post discusses True v. American Honda Motor Co., 2010 WL 707338 (C.D. Cal. Feb. 26, 2010), in which U.S. District Judge Virginia A. Phillip ultimately rejected as unfair a class action settlement that she had preliminarily approved last August.  What changed in 6 months' time?  And can the settlement be salvaged?

Plaintiffs in True had sued Honda under California's Unfair Competition Law, the False Advertising Act, and unjust enrichment, alleging that Honda had falsely advertised the fuel economy of its Honda Civic Hybrid vehicles between 2003 and 2008 and claiming that the class had relied on these misrepresentations in paying a premium price for the vehicles.

It would appear that this is yet another one of those lawsuits that claims that the federal fuel efficiency standards that are required to be posted on new vehicles require certain kinds of driving for hybrid vehicles that some people may not understand actually promotes fuel efficiency, so that when they buy the car and drive it as they would other non-hybrid vehicles, they do not achieve the same fuel efficiency as the advertised performance using the federal standard.

After 11 months of discovery, the parties engaged in mediation and negotiated a nationwide class action settlement that the District Court preliminarily approved.  Notice went out to the class.  Ultimately, there were a number of objectors and a coalition of 25 state Attorneys General that filed oppositions to the initial proposed settlement.  The parties modified the settlement to meet many of the objections, and then moved for final approval by the District Court.

The proposed settlement did not create a settlement fund, but instead created certain categories of relief for class members.  Every class member would receive a DVD that Honda would produce that would demonstrate how to maximize the fuel efficiency of their hybrid vehicles.  Class members also could receive one of two rebates.  Option A gave a $1,000 cash rebate to those who sell their Civic Hybrid and trade it in on an eligible Honda vehicle.  Option B gave a $500 cash rebate to those who kept their Civic Hybrid and bought another eligible Honda vehicle.  In addition, a small subset of class members could receive a $100 cash payment, but only if they complained to their dealer or Honda and the dealer or Honda kept a written record of it. Finally, there was "injunctive" relief requiring Honda to change the advertising phrase "actual mileage may vary" to "actual mileage will vary."

The proposed settlement provided a full release to Honda of all claims relating to the fuel economy of the Civic Hybrid, and it allowed for incentive payments of $10,000 and $12,500 to the named plaintiffs, respectively.  Plaintiffs' counsel sought an award of $2,950,000, which Honda did not oppose.

Judge Phillip held that the class met the numerosity, commonality, and typicality requirements of Rule 23, but it failed the adequacy of representation requirement because the two named plaintiffs were part of the small subset of class members who would receive an actual $100 cash payment.  This presented an inherent conflict with the other class members, the court explained.  The court also held that the predominance and superiority requirements of Rule 23(b)(3) were met.

In assessing the fairness and adequacy of the settlement, the court challenged whether the sub-class of people who received a cash payment was fair at all.  They had no stronger or weaker legal claims than anyone else in the class.  And whether the defendants kept a record of their complaints was not in their control.  The court concluded that "the settlement here draws an arbitrary distinction among class members with identical claims and injuries, and allows some to receive a cash award, and others only a DVD and a limited rebate.  This is patently unfair, and counsels against approval of the proposed settlement."  Id. at *11.

The court also assessed the value of the rebates, noting that this is a coupon settlement that is generally disfavored.  The court analyzed whether the value of the settlement was reasonable in relation to the value of the class claims.

The court determined that the plaintiffs had reasonably strong claims.  It rejected the defendant's preemption defense, discounted the issue of whether California law could apply to a nationwide class, and then proceeded to discuss how strong the California Supreme Court's decision in In re Tobacco II, 46 Cal. 4th 298 (2009) was for the class.  The court did acknowledge, however, that a number of class members had objected to the settlement, indicating that they were pleased with their Honda Civic Hybrids and had achieved the mileage that Honda had advertised.  Id. at *15.  Indeed, the "majority of class members who opted-out . . . cited their satisfaction with the gas mileage they were receiving from their HCHs, or otherwise opposed the merits of the suit."  Id. at *23.

The court rejected the conclusions of plaintiffs' expert, which had assigned monetary values to the rebates and the DVD.

The court also expressed great concern about class counsel's requested fee, noting that a "lodestar amount is particularly inappropriate where, as here, the benefit achieved for the class is small and the lodestar award is large."  Id. at 20.  The court also expressed concern about the procedures used to negotiate the fee:

The size of the fee request also raises concerns in light of the fact that it was negotiated at the same time as the substantive relief to the class.  "Ordinarily, 'a defendant is interested only in disposing of the total claim asserted against it . . . the allocation between the class payment and the attorneys' fees is of little or no interest to the defense.'" . . .

Here, of all of the components of the settlement, the only components with any determinative value are the attorneys' fees and incentive payments.  Under the terms of the settlement, there is no certainty that class members will receive any cash payments or rebates at all, but class counsel will receive a three million dollar payment regardless of whether one or 10,000 class members file valid claims.  Since there is no guarantee that [Honda] will pay any money out of the settlement to either class members or a cy pres beneficiary, to award three million dollars to class counsel who may have achieved no financial recovery for the class would be unconscionable.

Id. at *21 (citations omitted).

As a result of its analysis, the court concluded that the value of the settlement weighed against approval.

The decision in True demonstrates the continuing difficulty of obtaining approval of coupon settlements, even for weak claims that have little, if any, merit.

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Last week the Ninth Circuit issued an opinion that highlights the fact that no matter how broadly you draft the release in a class action settlement, you can't necessarily count on a subsequent court enforcing it.

In Hesse v. Sprint Corp., No. 08-35235, Slip op. (9th Cir. Mar. 2010), plaintiffs brought a class action against Sprint, alleging that it improperly charged Washington State's business and operations tax as a line item to its customers when the law disallows such a pass-through and instead requires it to be part of the company's "operating overhead."  Plaintiffs assert causes of action under Washington's Consumer Protection Act, breach of contract, and unjust enrichment.

Sprint moved for summary judgment in the trial court, holding that the action was barred by the release and judgment in a nationwide class action settlement entered by a Kansas state court (the "Benney Settlement") in 2006.  The Benney Settlement involved a class of Sprint customers who were charged various federal regulatory fees between 2000 and 2006.  The class in the Benney Settlement released:

any and all claims  . . . that have been, could have been, or in the future might be asserted in the [Benney] Action[] or in any other court or proceeding which relate in any way to the allegations that . . . Sprint failed to properly disclose or otherwise improperly charged for surcharges, regulatory fees, or excise taxes, including but not limited to the [federal] Regulatory Fees; and all other causes of action . . . whether based on federal, state, or local statute . . . that have been, could have been, may be, or could be alleged or asserted by any Class member . . . against [Sprint] relating to . . . the subject matter of any of the claims alleged in the Benney Action.  

Slip op. at 3852.

The plaintiffs in Hesse admittedly were members of the Benney class.  The question, then, was whether the release in the Benney Settlement precluded plaintiffs' claims premised on Sprint's charging of a state-law tax (Washington's B&O tax) when the underlying claim in the Benney action had been the charging of federal regulatory taxes.

The Ninth Circuit held that "the release cannot preclude the Washington Plaintiffs' claims because the Benney Class Plaintiff did not adequately represent the Washington Plaintiffs and because the Washington Plaintiffs' claims are based on a set of facts different from those underlying the claims settled in the Benney Settlement."  Id. at 3854.

The Ninth Circuit cited Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367 (1996) to conclude that although the subsequent class could not mount an all-out collateral attack on the prior state court judgment, it could seek limited review of whether the procedures in the prior litigation afforded them due process.  Slip op. at 3855.  The Ninth Circuit found that the Kansas court had not made an explicit finding that the class representative in the Benney Settlement adequately represented class members who also had claims based on state taxes.  Accordingly, the Ninth Circuit undertook its own analysis of the adequacy of representation in the Benney Settlement.

The Ninth Circuit held that because the named plaintiff in the Benney Settlement -- who, like me, hails from Missouri -- did not have claims based on Washington's B&O tax, he did not adequately represent the plaintiffs in the Hesse class.  This was not only because he did not "vigorously prosecute the claims relevant to this case," but also because he "had an insurmountable conflict of interest with those members of the class."  Id. at 3857-58.

The Ninth Circuit took care to indicate that it was not invalidating the Benney Settlement -- at least as to the release of all claims pertaining to the federal regulatory fees at issue in Benney.  Instead, it held "only that any release of the B&O Tax Surcharge claims at issue in this case by the judgment approving the Benney Settlement would violate due process."  Id. at n.5.

So are class action settlements only able to release the claims that the plaintiffs brought in the case?  The Ninth Circuit said no, a release may be broader than the claims stated, but only to a point:

A settlement agreement may preclude a party from bringing a related claim in the future "even though the claim was not presented and might not have been presentable in the class action," but only where the released claim is "based on the identical factual predicate as that underlying the claims in the settled class action."

Id. at 3860 (quoting Williams v. Boeing Co., 517 F.3d 1120 (9th Cir. 2008)).  The Ninth Circuit concluded that because "the Washington Plaintiffs' claims do not share an identical factual predicate with the claims resolved in the Benney Settlement," they were not derived from the same transaction or occurrence and thus could not be precuded by the Benney Settlement.

The Hesse opinion is an important read for all counsel who draft class action settlements.

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We defense lawyers have grown so accustomed to plaintiffs trying to repackage a products liability claim as one for consumer fraud that we sometimes forget to check a state's products liability statute for potential defenses when the complaint fails to mention it and instead cites the state's consumer fraud act.  But by failing to look at the product liability statute, we may be passing up an important defense, as was demonstrated in Mitchell v. Proctor & Gamble, 2010 WL 728222 (S.D. Ohio Mar. 1, 2010).

The plaintiff in Mitchell brought a putative class action against the maker of an over-the-counter heartburn medicine, Prilosec OTC.  The plaintiff, who said he was the only one who became ill after a buffet-style dinner party, claimed that taking Prilosec OTC predisposed consumers to contracting food-borne illnesses.  His class was defined as all consumers of Prilosec OTC from 2004 to the present.  He asserted causes of action for strict liability failure to warn, negligent failure to warn, violations of Ohio's Consumer Sales Practices Act, breach of express warranty, and breach of implied warranty.

The court first analyzed the defendants' argument that the entire action was preempted by Ohio's Products Liability Act.  The OPLA defined a "products liability claim" as a civil claim seeking recovery for compensatory damages from a manufacturer for death, personal injury, emotional distress, or property damage arising from the product's design, any warning or instruction, or the product's failure to conform to a warranty.  Id. at *2-*3.  The OPLA had eliminated all common-law product liability causes of action.

The plaintiff sought recovery for "treatments for food-borne illnesses," "the purchase price of the product," and the difference between the market value of the product and its actual value.  But the court held that "[plaintiff] cannot separate out his claims from the purview of the OPLA simply by claiming only economic losses.  His claims . . . are products liability claims.  And the injury he is alleged to have suffered relates directly to that product."  Id. at *4.

The court also noted that there was a long line of authority holding that where a plaintiff used the consumer fraud statute (the OCSPA) to assert claims that were primarily rooted in products liability claims, the OPLA preempted those claims, too.  Id.  Accordingly, the court dismissed all of plaintiff's claims without prejudice for him to plead a proper claim under the OPLA, which he had not previously cited.  Thus, an unpled product liability statute proved to be the Defendant's best weapon to defeat a host of consumer fraud claims. 

In dicta, the court also commented on the inadequacy of the factual pleadings under the Rule 8 standard of Twombly/Iqbal.  Plaintiff alleged that he attended a dinner, that he had been taking Prilosec, and that he was the only one who became sick.  That, the court held was not enough:

Nowhere in [plaintiff's] factual allegations does he connect his assertion that Prilosec OTC increase the risk of foodborne illness with the circumstances surrounding his illness.  Thus, his Amended Complaint is full of "naked assertions" that are lacking "further factual enhancement."  This Court cannot make inference upon inferences to provide the factual enhancement to [plaintiff's] claims.

Id. at *5 (citations omitted).

Ultimately, the court held that plaintiff should have another chance to plead an OPLA claim with sufficient factual particularity.  But it was clear from Mitchell that both the common law and OCSPA claims were preempted -- proving once again that it pays to check statutes that are not cited in the complaint when making decisions about motions to dismiss and affirmative defenses.

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I'm instituting a new feature on the blog this month:  "Torts Twit of the Month."  Each month I'll name someone who has done something exceptionally ridiculous in the field of torts be our Twit of the Month.  Who knows, if it catches on, perhaps we can vote for our favorite Torts Twit of the Year!

The idea came to me as I read about the legislation featured below.  To be candid, I'm not at all sure that I'll be able to keep up a Torts Twit of the Month feature.  Most folks who do things that I disagree with in the field of torts are motivated by a legitimate reason.  I may not agree with it, but I wouldn't go so far as to call them a twit.  Biased, maybe.  Wrong even.  But not a twit.

But every once in a while you come across some bozo who is just soooo far out there that he just cries out for recognition of some kind.  Here are their stories.

Three members of the New York Assembly make up our first recipients of the Torts Twit of the Month honors.  This great triumvirate sponsors legislation to ban New York restaurants from cooking with salt.

Yes, you read that right:  BAN New York restaurants from COOKING with ANY salt WHATSOEVER! 

This salty troika's bill would empower the Attorney General -- who surely has better things to do -- to go to court to enjoin restaurants that violate the salt ban "without requiring proof that any person has, in fact, been injured or damaged thereby."  The bill also would allow civil penalties of up to $1,000 for each instance of a restaurant's use of salt in meal preparation.    

Salt, of course, is the oldest known food additive.  It enhances other tastes, so that sweets taste sweeter and bitters less bitter.  Salt is used in everything from eggs to soups to baked goods.  It even acts as a preservative in my favorite Easter ham.

Which is what makes it so darn ridiculous that our March Torts Twits want to ban it entirely from restaurants.  These elected officials are no doubt motivated by a desire to improve public health by lowering our salt intake.  They may even have compelling personal stories about family experiences with health issues caused by the overconsumption of salt.

But that does not excuse the sheer hubris of this trio of local politicos in deciding for the rest of New Yorkers that they shall never have salt in a restaurant meal again.  That's no way to approach a public health problem.  Education?  Sure.  Public information campaigns?  You bet.  Targeted interventions by medical professionals?  Absolutely.

But for the arrogance to assume the power to tell New Yorkers what we can and can't eat in our increasingly expensive restaurants, these three Assembly members have jointly earned the title of Torts Twits of the Month:

Assemblyman Felix Ortiz

District 51 (Brooklyn)

Salt Ban Sponsor

Assemblywoman Margaret M. Markey

District 30  (Queens)

Salt Ban Co-Sponsor

Assemblyman N. Nick Perry

District 58 (Brooklyn)

Salt Ban Multi-Sponsor

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A recent tobacco decision out of the Northern District of Illinois highlights the importance of challenging the class definition in the defense of consumer fraud cases.  in Cleary v. Philip Morris USA, Inc., 2010 WL 680957 (N.D. Ill. Feb. 22, 2010), plaintiffs had brought three different class actions against the tobacco industry.  One was for illegal underage smoking, one was for nicotene addiction, and one was for allegedly deceptively marketing "low tar," "light," and "ultra light" cigarettes as safer than other cigarettes.

Because of summary judgments that previously had been granted, the first two classes failed for lack of a representative plaintiff.  But the court considered the class certification motion for the "light" cigarettes case.

The class was defined expansively:  "persons who purchased and consumed Marlboro Lights in Illinois 'from the time such cigarettes were placed into the stream of commerce until the date that the defendant publicly and adequately disclosed to consumers the true nature and effect of these cigarettes."  Id. at *1. 

The court found that the complaint met the numerosity and commonality requirements of Rule 23(a), but it failed to meet the typicality requirement for two reasons.  First, the plaintiff did not explain how he intended to demonstrate that he suffered an injury from defendant's alleged fraud and how that was typical of the class members.  Second -- and more important -- the court focused on the overbreadth of plaintiff's class definition.

As the court explained:

Class C is defined so broadly that it is likely to include persons who suffered no detriment at all due to Philip Morris's conduct.  Some class members may have purchased Marlboro Lights for reasons wholly unrelated to its purportedly less-unhealthy qualities--for example, because they preferred the flavor of other brands.  And other class members may have purchased Marlboro Lights despite being completely unaware of claimed differences between the adverse effects of "light" cigarettes and other, non-"light" brands.   It is not entirely clear where Cleary fits in along this spectrum.  Though it is true, as Cleary points out, that factual differences among the claims of class members do not necessarily defeat typicality, the likelihood that some significant proportion of class members experienced no injury at all does, at least in a case like this one in which proof of detriment is a necessary element of the claim. 

Id. at *4 (citation omitted).

Whether the court treats it as part of the element of typicality, as the Cleary court did here, or whether it treats it as a fundamental problem with the class definition, "overbreadth" (i.e., including within the class people who were uninjured by the product) presents serious problems that go to the core of who is going to be bound by the verdict and how the proof is going to establish classwide truths.  That is why courts increasingly are denying class certification to overbroad classes. 

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Right around Christmas I gave you a boxed set of decisions involving Apple as a defendant.  Today I thought I would even the score a bit and report on a short decision by U.S. District Judge Marsha J. Pechman regarding claims against Microsoft.

In Alvarado v. Microsoft Corp., 2010 WL 715455 (W.D. Wash. Feb. 22, 2010), the plaintiff had brought a putative class action under Washington's Consumer Protection Act, as well as a common law claim of unjust enrichment and a request for declaratory judgment.  Plaintiff complained that customers who buy new computers and only want to run Windows XP must first buy a computer with Vista or Windows 7 and then "downgrade" their computer to XP.

Plaintiff alleged that she bought a Lenovo laptop that included a license to use the Vista Business Operating System.  

Judge Pechman analyzed the CPA claim first, holding that plaintiff failed to plead that she was a direct purchaser, thus running afoul of the CPA's direct purchaser requirement.  Washington's intermediate appellate court had rendered a decision in a pharmacy case that patients who buy medicines from a pharmacy are indirect purchasers who do not have claims against the maufacturers.  See Id. at *2 (citations omitted). 

She also held that plaintiff failed to identify an unfair or deceptive act or practice.  Unfairness, under Washington law, requires a legislative declaration that certain acts are per se unfair.  There were no such declarations here.  Second, there was nothing deceptive about Microsoft's conduct of selling new computers with the most advanced operating systems.  Because the plaintiff had been given multiple opportunities to plead a CPA claim, the court dismissed this count with prejudice.

The court dismissed the unjust enrichment count without prejudice.  The court rejected Microsoft's argument that an indirect purchaser cannot assert an unjust enrichment claim.  Id. at *5.  She did note, however, that plaintiff never pled that she had to pay for a downgrade; in fact, from the complaint it seemed that she received both XP and Vista for the price of one.  Accordingly, there was no unjust enrichment.  And since there was no unjust enrichment and no violation of the CPA, there could be no declaratory judgment.

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