Duane Morris Class Action Review - 2023 - Report - Page 265
Fifth Circuit therefore vacated the class certification order and remanded the case for
further proceedings.
In Lee, et al. v. Samsung Electric America, Inc., 2022 U.S. Dist. LEXIS 181165 (S.D.
Tex. Sept. 21, 2022), the court also examined standing concepts in ruing on class
certification. In Lee, the court found that claims for fraud among various consumer
protection laws were not appropriate because the alleged injuries required an
individualized analysis not appropriate for class certification. The plaintiffs filed a
nationwide class claim based on their purchases of the defendant’s black stainless steel
kitchen appliances, and asserted claims under state consumer protection laws, as well
as for common law fraudulent concealment, unjust enrichment, and breach of implied
warranty of merchantability. Id. at *1-2. The defendant moved to strike the class claims,
asserting that they were facially deficient and could not meet Rule 23’s requirements.
The plaintiffs contended that the motion was premature. The court granted the motion. It
found that the fraud reliance and causation claims were highly individualized and the
variations in the applicable state laws precluded class certification. The plaintiffs
specifically alleged that they would not have purchased or paid more for the black
stainless steel appliances “if they knew that the finish was simply a plastic coating that
was prone to peeling, chipping, flaking, discoloration, and premature degradation.” Id. at
*11. The defendant argued that the reliance and causation issues embedded in the
plaintiffs’ common law and statutory fraud claims were fatal to class treatment because
fraud requires showing individualized reliance. The court agreed, and reasoned that the
Fifth Circuit has repeatedly found that class issues failed to predominate when the
plaintiff asserted fraud claims that require showing individualized reliance. Id. The court
thereby found that the plaintiffs’ common law fraud and consumer fraud claims were not
appropriate for class treatment. The court also ruled that as to the plaintiffs’ state law
claims, under Texas law, the state laws of the consumer would have to be evaluated for
each claim. The court underwent its own review of only four of the 51 jurisdictions, and
found marked differences in the law, and thus concluded that there was no
ascertainable national class for fraudulent concealment or unjust enrichment. For these
reasons, the court granted the defendant’s motion to strike the plaintiffs’ class claims.
In Correll, et al. v. Amazon.com, 2022 U.S. Dist. LEXIS 183736 (S.D. Cal. Oct. 6, 2022),
the court examined standing concepts under state law substantive claims. The plaintiff,
an on-line seller, filed a class action alleging that discriminated against straight white
male sellers. He sought injunctive relief and damages under California’s Unruh Civil
Rights Act and the California Civil Code, arguing that the defendant’s purported desire
to foster diversity did not rise to the level of persuasive justification under the Unruh Civil
Rights Act and that California case law authorities had rejected unequal treatment
based on gender or race. The defendant filed a motion to dismiss for lack of standing,
and the court granted the motion. The court found that the plaintiff failed to allege
sufficient facts in order to allege an injury. The court noted that the plaintiff’s complaint
failed to include information regarding what he actually sold, his selling history, or that
he actually had products for sale on the defendant’s on-line platform. The court ruled
that “as the party invoking federal jurisdiction,” the plaintiff bears “the burden of clearly
alleging facts which demonstrate injury, that is, but for the discrimination, he had a
product ready to sell.” Id. at *8. The court thereby found that the plaintiff failed to
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Duane Morris Class Action Review – 2023
