Spokeo Starting To Impact Class Certification Decisions -- Stay Tuned
We are often asked what we see as the most promising avenues for class action defense arising from the Supreme Court’s Spokeo decision. Our answer is that even if courts, post-Spokeo, give Congress wide latitude to define a compensable “injury,” courts should not certify classes that include people who did not suffer that injury. As an example, just because Congress can determine that the annoyance of receiving an unwanted phone call can entitle the recipient to a statutory penalty, someone who wasn’t home to hear the phone ring shouldn’t be included in a class.
Friday’s decision in Sandoval v. Pharmacare US, Inc., No. 15-cv-0738-H-JLB (S.D. Cal.), is a promising example of Spokeo’s impact on class certification.
Pharmacare sold a dietary supplement called “IntenseX,” advertised to enhance sexual power and performance. The named plaintiffs purchased IntenseX , contend it didn’t deliver the promised sexual punch, and sued under California’s unfair competition and false advertising laws (among other claims), purporting to represent a class of “[a]ll persons in the United States . . . who purchased IntenseX for personal, family, or household use . . . since January 1, 2004.”
The proposed class had a ton of problems, including that the plaintiffs had not submitted sufficient evidence to show that the product universally did not and could not have delivered the promised benefits. Predominance therefore was lacking. The court also rejected out-of-hand the plaintiffs’ attempt to certify a nationwide class.
After denying class certification for those well-established reasons, the court then went out of its way to address Spokeo. Among Pharmacare’s defenses was that some class members “were not dissatisfied, were not harmed, or have no viable claim.” Some class members received the benefits they expected, were not exposed to the allegedly false claims at issue in the case, previously received a refund, or bought the product outside the applicable statute of limitations. The court said that “[t]he Ninth Circuit has been inconsistent about whether [all] absent class members, as opposed to only the named plaintiff, must have standing.” It then suggested that Spokeo should impact this issue, precluding classes that encompass uninjured persons who, post-Spokeo, lack standing.
The court did not firmly decide the Spokeo question, saying only that “[w]hether characterized as problems with overbreadth, commonality, typicality, or Article III standing . . . the class includes consumers who have no cognizable injury,” and therefore could not be certified. The court then cited Spokeo as support for that holding.
We are carefully following all Spokeo developments and would be pleased to discuss Spokeo’s potential impact on any situation our clients face.