Authored by Jacob Oslick
Adventuring heroes in fantasy fiction soon learn to fight different types of evil beast differently. Some must be fought by fire, some by water, some by the sword, and some by magic. The hero who foolishly treats diverse opponents the same does so at his peril.
The Third Circuit recently taught this same basic lesson to the dastardly villains of class action litigation: plaintiffs’ attorneys. In a recent decision, (see here), the Third Circuit faced an attempt to certify a consumer fraud “class” under the state consumer fraud statutes of all fifty states. The plaintiffs’ attorneys theorized that such a class was manageable, because each of the fifty states could be “grouped” into one of two categories: (1) states that prohibited “unfair or deceptive” conduct; and (2) states that prohibited “false and misleading conduct.” In so doing, the plaintiffs’ attorneys glossed over the subtle differences amongst the states in each alleged “group.”
The Third Circuit didn’t let them get away with it, and affirmed the District Court’s decision to reject class certification. The Third Circuit acknowledged that “grouping” can sometimes make a multi-state class feasible. But, the Third Circuit held, plaintiffs’ attorneys who seek to certify a multi-state class for trial “face a significant burden to demonstrate that grouping is a workable solution.” To this end, plaintiffs’ attorneys must provide more than “their own ipse dixit” or “generic assessment” that different states share the same law. They must provide an “in-depth” treatment of each state, to establish the appropriateness of trying the various state sub-classes together as a “group.” In other words, just as Harry Potter cannot ignore the differences between basilisks, dementors, and Death-Eaters, plaintiffs’ attorneys cannot merely say that a claim involves “fraud” and then ask the Court to ignore the differences in state laws. Instead, plaintiffs’ attorneys must do the hard work in showing that a class is manageable, by proving that enough states share functionally identical laws.
So what does this mean for employers? The Third Circuit’s recent decision involved a consumer fraud statute. But its holding is not limited to it. And plaintiffs’ attorneys have increasingly sought to certify multi-state employment class actions. For instance, some have tried to couple an FLSA claim with counts that allege violations of scores of roughly analogous state laws. And others have tried to challenge an employer’s pay practices by asserting fifty-state “breach of contract” claims.
The Third Circuit has now armed employers with powerful weapons to fight back against these efforts. Plaintiffs’ counsel within the Third Circuit (i.e., Pennsylvania, New Jersey, Delaware and the Virgin Islands) will need to work much harder to “prove” that dozens of state employment laws truly fit into just a few groups. Yet the more specificity that plaintiffs’ attorneys provide, the easier it should be to pick-apart their proposed groups, such as by identifying state-specific defenses, exemptions, and doctrines. Beyond that, this increased certification burden may cause some plaintiffs’ employment attorneys to reconsider bringing largely superfluous counts (such as “breach of contract” claims) that serve little purpose except to over-complicate matters, raise defense costs, and encourage unwarranted settlement. And that’s very good news for employers trying to heroically beat back ghoulish onslaughts from the plaintiffs’ bar.