California Court Affirms Denial of Class Certification in Lasik Litigation
One of my all-time favorite bartenders, Howie, just can't believe what I do for a living. "You mean you defend cases brought by a bunch of people who weren't hurt and didn't have their product break on them," he asks incredulously.
"For a lot of my cases, that's pretty much it." I respond.
"So what kindof money do they think they're going to get outta these class actions?"
"Well, Howie, sometimes they want everybody who bought the product to get all of their money back. And sometimes they just want the difference between the value of what they thought they were buying and the so-called "diminished value" of what they actually bought. And again, they want this for everybody who bought the product, which can be a lot of money."
"Aww, that's ridiculous," Howie says. Shaking his head and pouring another round, he consoles me: "Well, Cuz, with cases like that out there for you to defend, at least you ought to win a lot!"
I'll enjoy telling Howie this weekend about Williams v. Nidek Co., Ltd., 2009 WL 226024 (Cal. App. -- 4th Dist. Feb. 2, 2009). Fortunately, the court in Williams got it right, affirming the denial of class certification. But the claims in Williams go a long way toward demonstrating everything that is wrong with consumer class action practice today.
The plaintiffs in Williams had undergone Lasik surgery on their eyes to achieve hyperopic corrections (i.e., corrections for far-sightedness). The Nidek laser that had been used during their surgeries had not yet been approved by the FDA for hyperopic correction. (It subsequently was in 2006.) Plaintiffs claimed that Nidek and plaintiff's doctors violated a host of statutes by "concealing" from plaintiffs that the Nidek laser was not approved by the FDA for this particular kind of Lasik surgery. But plaintiffs admitted that they had not relied on any representations from the doctors about FDA approval, and they conceded that they "do not contend they were disappointed in the results of the surgery." Id. at *6. Indeed, plaintiffs defined a California residents class and a nationwide class, both consisting of people who had had the surgery, but who had not suffered personal injuries. Id. at n.8.
Yes, you read that right: the putative class members were perfectly satisfied with the results of their surgeries and had not been physically injured. Still, they wanted money back: either "the entire cost of the surgery (because they did not receive what they had been promised) or, alternatively, the difference between the value of what they had been promised (surgery on an approved Laser) and what they received (surgery on a nonapproved Laser)." Id. at n.14.
Of course the reason consumer class actions like Williams are pled to exclude the very people, if any, who may have been injured is that including them in the class would present too many individual issues, making class certification inappropriate. So instead, plaintiffs plead it as a straightforward fraudulent concealment claim for economic harm, thinking that doing so will make it seem like there are fewer individual issues that would predominate a trial of the action.
California's class action rule doesn't mirror the federal Rule 23 exactly, but as it has been interpreted by California's courts, its elements are similar. In particular, the common issues to be tried on a classwide basis need to predominate over the issues that require individual determination for each class member. The trial court in Williams concluded that they did not, and the Court of Appeal affirmed.
As the court observed, the bulk of plaintiffs' claims were misrepresentation claims; they "turned on the assertion that the physicians misrepresented the Lasers as appropriate or approved for hyperopic procedures, or intentionally concealed (or negligently failed to disclose) that the Lasers were not approved for such treatments, and/or conspired to engage in such conduct." Id. at *9.
But as the Court of Appeal recognized, "plaintiffs' misrepresentation/concealment/nondisclosure claims would have required a mini-trial to assess each permutation of the representations made to each class member by 60 to 70 doctors or their staff . . . and required an examination of the informed consent forms signed by the patient, and/or each patient's discussion with his or her doctor or staff, and whether [Nidek's Patient Information Booklet] had been given to some patients by some physicians." Id. (emphasis in original). Nidek had distributed, as required by the FDA, a booklet explicitly advising patients that the Laser was not approved for hyperopia. Id. at n.13. Moreover, even the named plaintiff's doctor had a patient's informed consent form disclosing that the FDA had not yet approved the Laser for hyperopia.
As the Court of Appeal recognized, these patient-specific mini-trials "would be further complicated by the fact that the physicians making (and the patients receiving) the representations spanned an approximately seven-year period," making "mini-mini-trials" on statute of limitations and tolling issues necessary for each class member. Id. at *10. Also, issues inherent to the 60-70 doctors potentially would be added to the mix.
Moreover, by adding the distributor, Nidek -- which had had interactions with many of the doctors, informed them that the hyperopic use was unapproved, and asked them to install software that would prevent use of the Laser to treat hyperopic conditions -- mini-trials also would be necessary addressing Nidek's dealings with each physician.
Even the damages inquiry would require individual mini-trials because the measure of damages required comparing the amounts paid and the value actually received by each patient. Id. at *11.
The Court of Appeal in Williams clearly reached the right result by affirming the denial of class certification. And yet it's disappointing that such a frivolous lawsuit had to go even that far: through costly discovery, dispositive motion practice, and ultimately a class certification hearing.
Just try explaining to Howie why this suit wasn't easily dismissed at the outset. If you can do that, the next one's on me.
