The Roundup covers notable class action decisions each month from federal appellate courts, as well as notable Supreme Court class action cert petitions.

Seventh Circuit

In re Recalled Abbott Infant Formula Products Liability Litigation – This decision concerns Article III standing. The FDA warned consumers not to use baby formula produced at a certain Abbott facility during a certain period. Abbott voluntarily recalled some of the baby formula manufactured at the facility in question and offered a full refund to purchasers of those products. Some individual plaintiffs sued Abbott for personal injuries allegedly caused by the formula, while a putative class sued Abbott solely for economic harm. Specifically, the putative class asserted that they would not have paid the purchase price of the formula had they known that the formula was at substantial risk of being contaminated, and that they were injured by being deprived of the benefit of their bargain and/or by having paid a premium price for the formula. The district court dismissed the purely economic harm claims for lack of Article III standing, and the Seventh Circuit affirmed. The Seventh Circuit explained that the named plaintiffs lacked standing because they did not allege that the particular products they purchased were contaminated, nor did they “allege facts suggesting that contamination of Abbott’s products was sufficiently widespread so as to plausibly affect any given product, including the ones they purchased. The potential risk of contamination is not enough to confer standing.” The Seventh Circuit distinguished cases where a “universal defect inherent in a product—such as a design defect or a fundamental flaw—renders each product valueless to each plaintiff.”

Scott v. Dart – In this case, a named plaintiff alleged that the Cook County Jail provided him and other inmates with inadequate dental care. The named plaintiff settled his individual claim, but in that settlement he reserved the right to appeal the district court’s denial of class certification and, in so doing, to seek an incentive award for his role as a named plaintiff. Cook County contended that the named plaintiff lacked Article III standing to appeal the denial of class certification, arguing both that incentive awards are per se unlawful and that, even if incentive awards are not per se unlawful, seeking an incentive award is not a sufficient basis for standing. The Seventh Circuit rejected both arguments. It began by reaffirming circuit precedent that “the prospect of an incentive award is enough to support the named plaintiff’s concrete interest in the litigation.” It then joined the First, Second, and Ninth Circuits in registering disagreement with the Eleventh Circuit’s view, adopted in Johnson v. NPAS Solutions, LLC, 975 F.3d 1244 (11th Cir. 2020), that two late 19th century Supreme Court decisions make incentive awards per se unlawful. The Seventh Circuit also reversed the district court’s denial of class certification. The Seventh Circuit read its circuit precedent to distinguish “between challenges to confinement conditions that allege gross and systemic deficiencies (which may proceed on a classwide basis) and those that allege individual claims of inadequate medical care (which may not),” finding that this case fell on the former side of the line. Judge Kirsch dissented from the majority opinion of Judge Wood (joined by Judge Jackson-Akiwumi) on the class certification issue.

Ninth Circuit

Lytle v. Nutramax Laboratories Inc. – The Ninth Circuit held that a district court can certify a class based on an expert’s damage model that the court finds reliable, even though the expert has not actually applied the model to the proposed class to establish classwide damages through common proof. In doing so, the court affirmed a class certification order in a case alleging a pet health product had been falsely marketed as promoting healthy joints in dogs. The plaintiff’s expert proposed to conduct a “conjoint survey” of a representative sample of consumers, showing them the product with or without certain features to calculate the economic value of the product with or without those features. But the expert had not written or conducted the survey yet. And he acknowledged that he did not know if the class had suffered damages at all until he ran the survey. Such a model was sufficient at class certification because the district court need only determine if damages are capable of being proven on a classwide basis, the court held. An expert need only show their method would be viable and lay out a path to obtain the necessary data and information to complete the model. And the court does not need to conduct a full-blown Daubert analysis and hearing at the class certification stage, either. A “limited” Daubert analysis will suffice. The court also held that a plaintiff suing under the California Consumer Legal Remedies Act could establish a rebuttable presumption of classwide reliance on a misrepresentation, without individual inquiries, so long as the defendant made a material misrepresentation. Well-known U.S. District Judge Jed Rakoff, visiting from Manhattan, wrote the court’s opinion.

Eleventh Circuit

In re Takata Airbag Products Liability Litigation – Federal Rule of Civil Procedure 54(b) allows a district court to certify an order or judgment as immediately appealable though it does not resolve all claims in a case. But the district court does not have the last word on the certification. A court of appeals can decide that the district court erred in sending it an interlocutory appeal and dismiss the appeal. That’s what the Eleventh Circuit did in this complex multidistrict litigation of consolidated class actions. The district court had certified as immediately appealable an order dismissing certain claims. It found the orders final and stated that there is “no just reason for delay.” The Eleventh Circuit, however, found there were ample reasons to delay an appeal. The case was far along, and discovery had closed. An interlocutory appeal would not streamline the case or facilitate settlement. And it would require the appeals court to review the “immense district court docket.” No thank you, the Eleventh Circuit said. It dismissed the appeal and sent it back to the trial court to complete its work.

Supreme Court

Smith v. Spizzirri – In a six-page, unanimous decision, the Supreme Court held that Section 3 of the Federal Arbitration Act requires a court to stay a dispute subject to arbitration when a party has requested a stay, which means that the court does not have discretion to dismiss the case instead of staying it.

Behenna v. Blue Cross Blue Shield Association – This cert petition asks the Supreme Court to review the rule in the Eleventh and D.C. Circuits that courts should award fees in a common-fund class settlement as a percent of the common fund rather than by calculating the lodestar amount based on a reasonable hourly rate and reasonable number of hours worked. It also asks the Supreme Court to consider whether courts should treat as presumptively reasonable a fee award of 25% of the common fund. The legal issue means the difference in millions of fees in this antitrust case against Blue Cross Blue Shield and its member businesses. The Eleventh Circuit affirmed an award to the lawyer of $626.25 million, or 23.47% of the $2.67 billion common fund. A class member representing himself in the district court objected. He argued the lawyers should been awarded the lodestar, a mere $194.23 million in fees. Goldstein Russell Woofter LLC now represents the formerly pro se objector in the Supreme Court.