Gibbons Law Alert

Gibbons Law Alert

Tagged: Consumer Fraud

Third Circuit Deflates Run-Flat Tire Class Action Against BMW and Bridgestone

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Posted in Class Action Defense

On September 21, 2012

In Marcus v. BMW of N. Am, LLC, et al., the Third Circuit vacated an order certifying a class of owners and lessees of various model-year BMW vehicles equipped with run-flat tires, finding the class definition impermissibly vague, the proposed class not ascertainable, and otherwise rejecting certification on numerosity and predominance grounds. Although the Court remanded for further proceedings, it will likely be very difficult for the plaintiff to have a class certified in light of the Court’s directives for the necessary proof.

Third Circuit Concludes that Tying Arrangement Does Not Violate New Jersey’s Truth-in Consumer Contract, Warranty, and Notice Act

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Posted in General Litigation

On July 12, 2012

The New Jersey Truth-in-Consumer Contract, Warranty, and Notice Act (the “NJ Warranty Act”) prohibits a seller from offering to consumers any warranty containing a provision that violates a “clearly established legal right” under state or federal law. The Third Circuit analyzed the scope of this “clearly established legal right” in its July 2, 2012 opinion in McGarvey v. Penske Auto Group and suggested that a warranty will be upheld absent a blatant violation of law.

Third Circuit Rejects Volkswagen Class Settlement for Fundamental Intra-Class Conflict in Consumer Fraud Class Action

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Posted in Class Action Defense

On June 8, 2012

In a precedential opinion issued on May 31, 2012, the Third Circuit in Dewey v. Volkswagen AG, et al., reversed an order granting final approval of a nationwide class action settlement on the ground that the class representative plaintiffs could not adequately represent the interests of the entire class, as required by Fed. R. Civ. P. 23(a)(4).

Third Circuit Affirms Dismissal of Off-Label Marketing Actions Against Schering for Lack of Standing

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Posted in Class Action Defense / General Litigation

On May 31, 2012

In a consolidated appeal pitting a putative class of third-party payors of drugs prescribed for uses not approved by the Food and Drug Administration, and a putative class of individual patients prescribed such drugs, against Schering-Plough and affiliated entities, the Third Circuit in In re Schering-Plough Corp. Intron/Temodar Consumer Class Action affirmed the district courts’ dismissals of both actions for lack of standing. The Third Circuit held that both plaintiffs, who brought federal and state statutory and common law causes of action, failed to allege a plausible nexus between Schering’s allegedly illegal marketing campaign and the doctors’ decisions to prescribe various drugs for unapproved uses.

Ninth Circuit Reverses Itself, Withdraws Opinion Which Held that Magnuson-Moss Warranty Act Prohibits Mandatory Arbitration in Warranties

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Posted in Class Action Defense / General Litigation

On April 19, 2012

As reported in an earlier post in September 2011, the Ninth Circuit in Kolev v. EuroMotors West/The Auto Gallery held that the Magnuson Moss Warranty Act (“MMWA”) “precludes enforcement of pre-dispute agreements . . . that require mandatory binding arbitration of consumer warranty claims.” The Ninth Circuit’s ruling would have prohibited manufacturers and distributors of consumer products from attempting to take advantage of the Supreme Court’s recent pro-arbitration rulings, including AT&T Mobility v. Concepcion, involving MMWA consumer warranty claims. According to the original majority opinion in Kolev, to the extent the MMWA precludes arbitration clauses, class waivers in such clauses, which Concepcion rendered immune from invalidation under state laws, would thus likewise be unenforceable in MMWA actions, providing a complete end-run around Concepcion.

Third Circuit Holds that Injunctive-Relief-Only Class Cannot Be Certified Where Plaintiffs Based the Threat of Future Harm on Irrational Consumer Behavior

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Posted in Class Action Defense

On March 23, 2012

In McNair v. Synapse, a precedential opinion, the Third Circuit held that former customers could not certify an injunctive-relief-only class asserting consumer fraud claims against defendant Synapse, Inc., the largest marketer of magazine subscriptions in the United States, because they lacked Article III standing. In short, the Third Circuit concluded that plaintiffs could not show a likelihood of future injury based on their claim that they might be deceived by the same conduct twice.

Third Circuit, En Banc, Approves Settlement Class Containing Members Who Lack “Viable Claim”

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Posted in Class Action Defense

On February 14, 2012

The U.S. Court of Appeals for the Third Circuit has issued an en banc opinion in Sullivan v. DB Investments, Inc. affirming a District Court’s certification of two nationwide settlement classes. In sum, though the multiplicity of states’ laws would affect the predominance inquiry in a litigated nationwide class action, in the settlement context, the Circuit eased the burden somewhat by declining to require a showing that each class member possess “a viable claim” based upon what would have been the applicable state statute or law.

New Jersey Framework for Analyzing Attorneys’ Fee Awards, Including Contingency Fee Enhancements, Unchanged

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Posted in General Litigation

On February 2, 2012

Last week, the New Jersey Supreme Court reiterated that lawyers who represent clients on a contingency basis in disputes brought under New Jersey laws that permit the recovery of attorneys’ fees can recover an additional fee “enhancement” pursuant to the framework the Court set forth nearly 20 years ago in Rendine v. Pantzer, 141 N.J. 292 (1995) . The decision, Walker v. Guiffre, Case Nos. 72-10, 100-10 (N.J. Jan. 25, 2012), is noteworthy for businesses that all too frequently must weigh the risk of paying their opponents’ attorneys’ fees when deciding whether to settle disputes – particularly those companies that wishfully thought the reins on contingency fee enhancers might be tightened in light of two recent decisions by New Jersey appellate courts.

Third Circuit Enforces Arbitration Provision in Consumer Contract Where Designated Arbitral Forum is Unavailable

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Posted in General Litigation

On January 30, 2012

In a matter of first impression, the Third Circuit in Khan v. Dell Inc. held that the Federal Arbitration Act requires the appointment of a substitute arbitral forum where the forum designated by the parties is unavailable and the designation of that particular (unavailable) forum was not integral to the arbitration provision. The case stemmed from alleged design defects in a Dell computer purchased by plaintiff Khan. Dell’s Terms and Conditions of Sale included an arbitration provision which provided that any dispute between Khan and Dell “SHALL BE RESOLVED EXCLUSIVELY AND FINALLY BY BINDING ARBITRATION ADMINISTERED BY THE NATIONAL ARBITRATION FORUM (NAF)” and that “this provision shall be governed by the Federal Arbitration Act 9 U.S.C. sec. 1-16 (FAA).” The arbitration provision did not designate a replacement arbitrator in the event that NAF was unavailable.

Lack of Standing and Choice-of-Law Rules Doom Nationwide Consumer Fraud Class Action Against BMW

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Posted in General Litigation

On November 23, 2011

On October 31, 2011, in Nirmul v. BMW, the District Court for the District of New Jersey dismissed a nationwide class action against BMW asserting claims under the New Jersey Consumer Fraud Act (“NJ CFA”), concluding, essentially, that none of the three plaintiffs had a standing to sue. The complaint alleged that the high pressure fuel pump in BMW’s N54 turbo engines had a known defect and that BMW failed to disclose this fact to purchasers throughout the country.

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