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Consumer Class Actions: 17.3.5 Proof Through Experts

In many cases, expert testimony regarding liability and common course of conduct can be crucial in demonstrating that the applicable standard of care was violated or that the defendant’s actions were unjustified, misleading, or unfair. Indeed, sometimes expert testimony is the only means by which liability may be proven. In appropriate cases, consideration should be given to calling the liability expert as the first witness in the case.

Consumer Class Actions: 17.4.2 Standards of Proof

At the outset, counsel should pay particular attention to the standards for proof of damages for their particular case and how the fact of damage and the amount of damages may be proven. While proof of damages is generally subject to a preponderance of the evidence standard, for some types of torts a number of jurisdictions require that the “fact” that at least some damage has occurred be shown with reasonable certainty.

Consumer Class Actions: 17.4.3 Classwide Proof by Use of a Formula

Counsel should determine early in the case whether classwide damages can be proven through proof of damages by the class representative. This may be done in conjunction with a Rule 16 case management conference or certification hearing or through a motion to determine the method by which damages may be proven.

Consumer Class Actions: 17.4.5 Classwide Proof by Sampling and Extrapolation

Sampling has been used in class cases, including frequent use in Title VII cases.39 As one court noted:

[C]ourts have approved various methods of discovering and determining damages in class actions on the basis of classwide, rather than individualized proof of damages, and the use of statistics and representative samples are one such legitimate method.40

Consumer Class Actions: 17.4.6.1 Generally

Individual issues sometimes arise in class actions seeking monetary relief under any class category.44 When they do, the computation of individual benefits for particular class members usually is handled in one of three ways after the common issues have been resolved in a classwide trial before the court or the jury. One is to have the court, or more likely a magistrate or a special master, hold individual hearings.

Home Foreclosures: 8.5.1.5 Removal of Actions

When a case has been filed in state court, the defendant may remove the case to federal court if federal jurisdiction standards are satisfied and removal procedures are followed. The party seeking removal bears the burden of establishing federal jurisdiction, including Article III standing, and generally there is a presumption against removal jurisdiction.357 Standing is an essential element of the federal court’s subject matter jurisdiction. In light of the Supreme Court’s holding in TransUnion, L.L.C. v.

Consumer Class Actions: 5.2 General Pleading Considerations

A class action complaint should be drafted to withstand the judicial scrutiny that will be undertaken according to the standards applied by the forum court. The pleading should contain a complete statement of all facts and the legal elements necessary to show entitlement to class certification and relief on the merits of the claims. It should be written in anticipation of an immediate motion to dismiss by the defendants.

Consumer Class Actions: 9.1 Introduction

You should expect that defense counsel will depose the class representatives in hopes of eliciting responses that will show that they are atypical, inadequate, or lack Article III standing, and are therefore unsuitable to represent the class.1 Some defense counsel use the deposition as an opportunity to harass or intimidate plaintiffs, who already are likely to be wary of the process. A class may be certified without allowing defense counsel to depose any named plaintiff, but that is very much the exception to the rule.

Consumer Class Actions: 5.4 Special Pleading Considerations—Spokeo, Ramirez, and Standing

In 2016, the Supreme Court decided Spokeo, Inc. v. Robins,28 which considered whether the plaintiff had Article III standing to redress a bare procedural violation of the Fair Credit Reporting Act (FCRA). The violation in Spokeo involved a credit reporting agency publishing inaccurate information about the consumer on its website. The Court decided that, to have standing, a plaintiff must have suffered or faced a material threat of a concrete, particularized injury—a bare procedural violation does not suffice.

Consumer Class Actions: 5.7.2 Claim-Splitting

“Claim-splitting” refers to the general requirement that all claims for relief arising from a single transaction or occurrence must be brought in one action.67 A subsequent suit, arising from the same transaction or events underlying a previous suit would be barred under the doctrine of res judicata.68

Consumer Class Actions: 17.4.1 Overview

Classwide proof of damages may take many forms. Although counsel must always look to the simplest and most straightforward approach, each case will have its own challenges. These challenges arise both in the methods by which damages are computed as well as in the factual bases of proving them once a method is accepted by the court.

Fair Debt Collection: 11.11.2.2.3 Commonality

Federal Rule of Civil Procedure 23(a)(2) requires that issues of law or fact be common to the class.895 Defense challenges to commonality are often, in fact, arguments about whether the case has merit, and therefore are inappropriate.896 However, the Supreme Court, in both Wal-Mart Stores, Inc. v. Dukes,897 and Amgen Inc. v.

Consumer Class Actions: 10.6.3.1 Generally

In addition to meeting the prerequisite of superiority discussed in the preceding section, Rule 23(b)(3) certification requires that the common questions that satisfy the commonality requirement of Rule 23(a)(2) “predominate over any questions affecting only individual members.”576 The Supreme Court has said that “predominance is a test readily met in certain cases alleging consumer or securities fraud.”577 The predominance inquiry “tests whether proposed classes are sufficiently cohesive to

Consumer Class Actions: 14.7 The Defendant’s Plea of Poverty

If the defendant is a small company, the defendant’s lawyer will often plead the company’s poverty in negotiations49 and threaten that bankruptcy will be filed if the settlement is not within the company’s ability to pay. In response to such a threat, demand that the defendant demonstrate that it cannot afford the settlement.50 To evaluate the defendant’s financial condition, ask for the company’s tax returns for the past several years and a current certified audit.

Consumer Class Actions: 13.4.2 Claim Forms and Notice

When possible, use of claim forms should be avoided. As NACA Guideline 11 provides:

Class counsel should approach settlement discussion with a presumption against using claim forms, so that claim forms are used only where necessary.

Claim forms should not be used when the identity and location of class members can be determined from the defendant’s records, or when relief provided by the settlement is an account credit in an amount that the defendant can administer based on its records.

Fair Debt Collection: 11.11.3.1 Generally

The FDCPA provides for statutory damages in class actions, in addition to actual damages, as follows:

(a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person in an amount equal to the sum of—

* * *

Consumer Class Actions: 1.9.5 Counsel’s Relationship with the Class Representative

A clear retainer agreement and good communication with the class representative before and during the lawsuit are essential, in order to avoid challenges to adequacy (of both the class representative and class counsel), to make sure the class representative is prepared for depositions and other steps in the litigation, and to satisfy class counsel’s ethical obligation to the class representative as a client.

Consumer Class Actions: 15.1.4 The Timing of Opt-Out and Objection Deadlines

Experienced class counsel differ on how much time should be given to class members to decide whether to opt out or object. Some prefer a shorter amount of time38—for example, forty-five days—after the date notice is given, whereas others prefer up to ninety days or longer.39 Among the relevant considerations are whether the class is comprised of a mobile group, such as low-income consumers, and whether the subject of the lawsuit involves accounts from a number of years ago.

Consumer Class Actions: 14.8.6 Distribution of Benefits

When negotiating a class fund settlement, a few practice pointers are worth keeping in mind. Although most defendants will not fund a settlement until a court has granted final approval of it, try to get payment into an escrow account upon the agreement to settle or upon preliminary approval and an agreement to use some of it for costs of notice and administration.

Consumer Class Actions: 1.3.1 Class Action Litigation Often Requires Large Up-Front Investments

Litigating a consumer class action can be both time consuming and expensive. Because the defendant’s potential exposure in most class cases amounts to a substantial sum and may challenge the core of a defendant’s business, the defendant’s attorney will almost always litigate the case vigorously. Therefore, before filing a class case, plaintiffs’ counsel must determine whether the time and financial resources necessary to represent the class will be available.