Class Actions and Consumer Defense: Is Your Business Prepared?

To certify a class under Rule 23, the plaintiff must satisfy all four requirements of Rule 23(a): numerosity, commonality, typicality, and adequacy, and must also satisfy Rule 23(b)(3), which requires that common questions predominate and a class action is superior to individual suits. Wal-Mart v. Dukes established that commonality demands proof of a common contention capable of classwide resolution, and defendants can exploit this standard by demonstrating that the proof required varies from plaintiff to plaintiff.

Class action litigation and consumer protection law counsel can advise on the Rule 23 requirements and develop the certification opposition strategy.

Class action litigation and commercial litigation counsel can advise on the Rule 23 requirements and develop the certification opposition strategy.

The most effective defenses include challenging predominance by showing that individual issues of liability or damages require individualized inquiry, challenging ascertainability by showing that identifying class members requires an individualized factual inquiry, and challenging the damages model by showing that the plaintiff's proposed classwide damages method is incapable of measuring damages consistently with the liability theory.

Class actions and multi-district litigation and appellate litigation counsel can advise on the most effective defenses against class certification and develop the certification opposition and appellate strategy.

CAFA grants federal courts original jurisdiction over class actions in which the amount in controversy exceeds five million dollars, any member of the class is a citizen of a different state from any defendant, and the number of proposed class members is 100 or more, and a defendant may remove to federal court within 30 days of service. CAFA removal is particularly valuable because federal courts apply the more demanding Wal-Mart commonality standard.

Class action fairness act and federal court trial counsel can advise on whether the action satisfies CAFA requirements and develop the removal and jurisdictional strategy.

A class action requires that common questions predominate and that a class action is superior to individual suits, while a mass tort involves individualized personal injury claims that may be consolidated in an MDL proceeding. MDL consolidation under 28 U.S.C. § 1407 allows the Judicial Panel on Multidistrict Litigation to transfer related cases to a single district for coordinated pretrial proceedings.

Mass tort and multi-district litigation counsel can advise on the procedural vehicle most appropriate for the specific multi-plaintiff litigation and develop the MDL defense strategy.

The TCPA imposes statutory damages of between five hundred and fifteen hundred dollars per violation, and the FCRA imposes statutory damages of between one hundred and one thousand dollars per willful violation, and the aggregate exposure in even a moderately sized class can reach hundreds of millions of dollars. The most effective defenses include challenging Article III standing without concrete harm and challenging whether evidence of willfulness can be established classwide.

Consumer protection disputes and data privacy class action counsel can advise on the defenses available against the specific TCPA or FCRA claim and develop the statutory damages defense strategy.

Ascertainability requires that a class be defined by reference to objective criteria so that membership can be determined without a mini-trial, and commonality under Wal-Mart requires identifying a common contention resolvable in one stroke. Defendants can attack both requirements by demonstrating that determining who is in the class requires examining individual purchasing records, individual reliance, or individual damage calculations.

Class action litigation and civil litigation evidence counsel can advise on the ascertainability and commonality defenses and develop the class definition challenge strategy.

Early resolution options include a motion to strike class allegations before discovery if the complaint makes clear that Rule 23 requirements cannot be satisfied, an early merits attack through a motion to dismiss or summary judgment, and a pre-certification mediation without the leverage of a certified class.

Class actions and multi-district litigation and commercial litigation counsel can advise on early resolution options and develop the settlement negotiation and approval strategy.

A class action waiver in an arbitration agreement is the most effective preventive tool against consumer class action exposure, and the Supreme Court's decisions in AT&T Mobility v. Concepcion and Epic Systems v. Lewis established that class action waivers are enforceable under the Federal Arbitration Act even if state law would otherwise invalidate them. A well-drafted waiver can compel individual arbitration, which eliminates the economies of scale that make class actions viable for plaintiffs.

Corporate compliance and risk management and consumer law counsel can advise on the arbitration agreement structure that best protects against class action exposure and develop the arbitration agreement drafting and enforcement strategy.