2012 Predictions for Consumer Class Actions and Mass Torts
As a kid, I was a huge fan of Carnac the Magnificent on Johnny Carson's Tonight Show. In this first post of the new year, I thought I would channel my inner Carnac to make some predictions about what we can expect in the field of consumer class actions and mass torts in 2012.
1. Wal-Mart v. Dukes will have tremendous impact on consumer class actions and mass torts. Despite plaintiffs' attempts to limit the opinion solely to employment discrimination cases, the actual holdings in Dukes go to the fundamental core of class actions. A unanimous Court said you can't deprive a defendant of its substantive right to challenge the elements of individual class members' claims just to make it easier to have a class. Similarly, a unanimous Court strongly suggested -- even if the 8th Circuit didn't get it -- that Daubert rules matter at the class cert stage. And a unanimous Court rejected the use of "trial by formula" rather than proof of actual damages. These holdings are just as important -- if not moreso -- as the Court's articulation of the commonality standard, and you will begin to see the impact of these Dukes holdings in consumer class action cases this year.
2. So many courts -- primarily in California -- have struggled to get around the clear preemption analysis in AT&T Mobility v. Concepcion that the U.S. Supreme Court is going to have to take up the issue of class arbitration waivers again. It may not happen by the end of 2012, but too many courts have shot the bird to the Supremes since Concepcion. Some argue that the decision does not apply to a particular cause of action under a state statute. Others just find the whole arbitration provision containing a class action waiver void as against public policy. But the simple fact is that it is nearly impossible to square these opinions with the very clear preemption analysis in Concepcion, and in the right case, the Court is going to have to issue certiorari to say that it really meant what it said.
3. Courts may struggle for the right standard by which to judge personal jurisdiction, but plain ole stream-of-commerce theory is dead. A majority of justices made that much plain in J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011). They just couldn't agree on a new standard. But we know there must be some purposeful availment in addition to mere awareness that the product might reach the forum. I believe most courts that find jurisdiction will rely on web presence in the forum as the "plus" factor that shows purposeful availment of the forum's laws.
4. Prescription medicine plaintiffs will continue to cast their plain old failure to warn claims as "design defect" claims to try to get around the clear bar of the learned intermediary doctrine. Hopefully, most courts will continue to recognize that medicines are unavoidably unsafe products for which you cannot have a design defect claim. Indeed, you can't even propose a feasible alternative design, because to do so is to change the product into something else!
5. Global warming lawsuits seeking to foist on certain industries humanity's collective responsibility for climate change will continue, but the defenses of standing, remoteness, proximate cause and the political question doctrine will continue to be strong defenses. Because the Supremes dealt only with federal law issues in American Electric Power Co. v. Connecticut, 131 S. Ct. 2527 (2011), courts will still have to work these issues out as matters of state law. We can expect plaintiffs to win at least one of these cases at a trial court level. But the sheer magnitude of how far they are attempting to stretch state law should cause appellate courts to be more circumspect.
6. Product sellers from tobacco to telephones will continue to vigorously defend their commercial speech rights under the First Amendment. Appellate courts will grapple with these sellers' rights to not be forced to convey government messages about their products where there are other, less intrusive means of achieving the government's purpose.
7. Plaintiffs will attempt to circumvent the federal preemption for generic medicines recognized in Pliva, Inc. v. Mensing, 131 S. Ct. 2567 (2011), by trying to describe various claims -- such as express warranty claims -- as enforcing voluntarily adopted standards, rather than imposing state law requirements that conflict with federal law. Plaintiffs will be hard-pressed to succeed on such dubious claims for at least two reasons. First, the statements they point to will be consistent with what FDA has approved for the label, making plaintiffs' claims conflict with federal law. And second, it will be very difficult to find statements that were actually material and became part of the basis of the bargain.
8. The food and beverage industries are going to continue to be a primary target for consumer fraud claims. Often these suits are fueled by health claims in advertising or on the label. But increasingly such suits are being brought based on an ingredient in the product. Although FDA has balked at issuing regulations that fully define when products may be labeled "natural," it has begun enforcement actions against products that use the term and contain synthetic preservatives or other synthetic ingredients. Expect more of such consumer fraud class actions in 2012.
9. Although class action suits over head injuries in professional football players may capture the imagination of sports writers and the public, the fact remains that class actions for personal injuries are almost never certified because the individualized issues regarding each class member's alleged injury, causation, and damages predominate over any common issues. Don't expect 2012 to bring a big class action payday for professional footballers who allege concussion-related harm.
10. The U.S. Supreme Court's majority and dissenting opinions in Kiobel v. Royal Dutch Petroleum, No. 10-1491, are going to be fascinating reading. Kiobel, of course, raises the issue of whether legally fictitious entities -- corporations, rather than individuals or Nation-States -- can be sued under the Alien Tort Statute, which dates back to 1789. The Second Circuit -- looking around the globe to foreign legal precedents -- held that corporations were not subject to ATS suits. One may imagine that certain Justices who might concur in that result might bristle at relying on foreign legal precedents to get there. While I'm willing to bet that the result in Kiobel is affirmed, I'll honestly admit that I can't predict what the opinion(s) will look like in reaching that result.
