Early Class Certification Determinations and Use of Motions to Strike Supported by Sixth Circuit: Court Affirms Striking of Class Allegations and Rejects Certification of Nationwide Consumer Class Ac

Seeking to obtain early rulings on certification and avoiding the unnecessary burden and expense of defending meritless actions (at least through the class certification stage), defendants have been turning to a relatively new weapon – the motion to strike.  Rather than waiting until plaintiffs move affirmatively for certification, defendants are now seeking aggressively to strike the class allegations in the complaint.  The United States Court of Appeals for the Sixth Circuit confirms that (in appropriate cases) motions to strike can be used to obtain early rulings on certification.

On November 10, 2011, the Sixth Circuit issued its decision in Pilgrim, et al. v. Universal Health Card, et al., Case No. 10-3211/3475, affirming a decision from the United States District Court for the Northern District of Ohio striking the class allegations because plaintiffs could not meet the predominance requirement of Fed. R. Civ. P. 23(b)(3).  In Pilgrim, plaintiffs sought to represent a nationwide class of consumers.  Plaintiffs alleged that defendants used deceptive advertising to sell their healthcare discount program, asserting claims under the Ohio Consumer Sales Practices Act (as well as Ohio's common law prohibition against unjust enrichment).  While one of the defendants filed a motion to dismiss, the other defendant attacked the complaint differently – seeking to strike the class allegations in the complaint (arguing that the predominance requirement of Rule 23(b)(3) could not be satisfied in the case).

Striking the class allegations (and dismissing the complaint without prejudice as plaintiffs no longer met the amount in controversy requirement of diversity jurisdiction), the District Court agreed -- holding that the case would be "unmanageable as a class action."  The Sixth Circuit affirmed, holding that no class could be certified for three reasons.  First, since different laws would govern each of the class members' claims and consumer protection laws vary greatly from one state to the next (as conceded by plaintiffs), any common issues implicated by the lawsuit would dwarf the individual determinations.  Second, any potential common issues could not overcome the problem of individual legal determinations required by different states' consumer protection laws.  (The Court side-stepped the question of whether a nationwide class covering claims governed by the laws of various states could ever be overcome by "demonstrating considerable factual overlap.")  Third, the conclusion was consistent with the decisions of the Sixth Circuit and several other courts.

Equally important, the Sixth Circuit confirmed that a motion to strike is an available vehicle to obtain an early certification determination (in appropriate cases).  Since Fed. R. Civ. P. 23(c)(1)(A) states that the district court should decide whether to certify a class "[a]t an early practicable time" and nothing in the Rules requires the court to wait for a motion to be filed by a plaintiff, either plaintiff or defendant may move for a determination of whether the action may be certified under Rule 23(c)(1).

Class action litigation is often filed when there is little hope that any class could be certified.  In such cases, rather than waiting until plaintiffs move affirmatively for certification, defendants should seek early a ruling and avoid the unnecessary burden and expense of defending meritless actions (at least through the certification stage).  The Sixth Circuit now confirms that defendants can seek early ruling on certification by seeking to strike the class allegations in a complaint.

About The Author

Brian Wright | Faruki Partner