The U.S. Court of Appeals for the Seventh Circuit recently affirmed a district court's decision to certify two classes in a state UDAP "consumer fraud" case, clarifying that elements of state UDAP or "consumer fraud" cases often present difficulties for class treatment of such claims, but that such claims may at times be amenable to class treatment. A copy of the opinion is attached.
Plaintiffs brought this class action against a defendant window manufacturer and seller, alleging consumer fraud claims for defects in windows manufactured and sold by the defendant over an 18 year period and for defendant's failure to publicly declare the role that the design defect played in allowing rot. The district court certified two classes of plaintiffs, a nationwide class under Fed. R.Civ. P. 23(b)(2) who owned structures with the windows but whose windows had not yet manifested the defect or whose windows had not yet been replaced and a smaller, more narrowly defined, class of plaintiffs consisting of only those who had a manifest defect and whose windows had already been replaced. The appellate court granted defendant's Fed. R. Civ. P. 23(f) appeal of the certifications.
On appeal, defendant argued that consumer fraud cases are not amenable to class treatment. The appellate court, however, noted that "[w]hile consumer fraud class actions present problems that courts must carefully consider before granting certification, there is not and should not be a rule that they never can be certified."
Plaintiffs brought this class action against a defendant window manufacturer and seller, alleging consumer fraud claims for defects in windows manufactured and sold by the defendant over an 18 year period and for defendant's failure to publicly declare the role that the design defect played in allowing rot. The district court certified two classes of plaintiffs, a nationwide class under Fed. R.Civ. P. 23(b)(2) who owned structures with the windows but whose windows had not yet manifested the defect or whose windows had not yet been replaced and a smaller, more narrowly defined, class of plaintiffs consisting of only those who had a manifest defect and whose windows had already been replaced. The appellate court granted defendant's Fed. R. Civ. P. 23(f) appeal of the certifications.
On appeal, defendant argued that consumer fraud cases are not amenable to class treatment. The appellate court, however, noted that "[w]hile consumer fraud class actions present problems that courts must carefully consider before granting certification, there is not and should not be a rule that they never can be certified."
The Court rejected the defendants' argument that it had ever opined that class certification was never appropriate in consumer fraud cases, pointing out instead that there are times when class certification is a sensible and legally permissible alternative in the consumer fraud context. As related to this particular case, the Court held that the district court "properly weighed the facts before it and exercised its discretion to conclude that the common predominant issue of whether the windows suffer from a single, inherent design defect leading to wood rot is the essence of the dispute and is better resolved by class treatment."
The Court explained that issues present in certifying a class in other consumer fraud actions were not present here, including: (1) the risk of error in cases with complex issues; (2) proximate causation; and (3) whether the claim requests final injunctive relief or primarily monetary damages.
The Court explained that issues present in certifying a class in other consumer fraud actions were not present here, including: (1) the risk of error in cases with complex issues; (2) proximate causation; and (3) whether the claim requests final injunctive relief or primarily monetary damages.
Let me know if you have any questions. Thanks.
Ralph T. Wutscher
Kahrl Wutscher LLP
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RWutscher@kw-llp.com
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