No Class Certification in Consumer Fraud Case When Lead Plaintiff Seeks to Recant Critical Allegations in Complaint

A lead plaintiff in a consumer class action who attempts to recant allegations in her complaint concerning the date she purchased the product at issue places her credibility in issue and, therefore, subjects her claim to unique defenses. Such a plaintiff may not be an adequate class representative under Rule 23(a)(4) and therefore may not be able to certify a class.

In Coyle v. Hornell Brewing Co. the class-action complaint alleged that on March 30, 2008 the lead plaintiff bought a beverage which was deceptively labeled “natural” in violation of the New Jersey Consumer Fraud Act. The lead plaintiff, however, had retained counsel for the purpose of prosecuting the class action in August 2007, months before she purchased the beverage. When defense counsel opposed class certification by arguing that the timing of the lead plaintiff’s retention of counsel relative to her purchase of the subject product made her an inadequate class representative, the plaintiff sought to recant the complaint’s allegation about when she purchased the product, contending that her counsel had made an error in drafting the complaint, which error was repeated in subsequent discovery materials.

Notwithstanding the plaintiff’s efforts to recant her allegations and subsequent contrary discovery responses, and without deciding whether plaintiff had, in fact, purchased the qualifying beverage after she had retained counsel, Judge Simandle of the United States District Court for the District of New Jersey, ruled that plaintiff was subject to defenses which other class members were not and, therefore, was not an adequate class representative under Rule 23(a)(4). In particular, the Court found that the plaintiff’s credibility was seriously tarnished by her recantation of prior allegations. In addition, based on the timing of the purchase of the qualifying product, plaintiff’s claim was subject to a substantial risk of an adverse summary judgment motion for a failure to show an “ascertainable loss.” In this regard, Judge Simandle noted that any affidavit by plaintiff which might contradict her earlier allegations and representations about her date of purchase would likely be struck as a “sham affidavit.”

The lesson from Coyle is that, when considering the adequacy of the lead plaintiff as a class representative, defense counsel should examine not just weaknesses in the merits of the proposed claim, but also weaknesses arising from the plaintiff’s credibility. Further, a plaintiff who purchased a product for the purpose of suing seemingly would run into the same credibility problems as those in Coyle.

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