D. Joseph Kurtz v. Costco Wholesale Corp., Kimberly-Clark Corp.
17-1856-cv(L) 17-1861-cv
| 2d Cir. | May 14, 2019Background
- Two putative class actions brought in EDNY: Kurtz v. Costco & Kimberly-Clark and Belfiore v. Procter & Gamble, alleging wipes falsely marketed as "flushable."
- Plaintiffs asserted claims under New York Gen. Bus. Law § 349, seeking damages and injunctive relief for an alleged price premium paid due to the "flushable" representation.
- District court certified damages and injunctive classes under Rule 23 on March 27, 2017.
- Defendants appealed, arguing Plaintiffs failed to show predominance because injury and causation cannot be proven with common evidence.
- Plaintiffs relied on an expert proposing hedonic regression to prove classwide price premium (injury and causation).
- The Second Circuit concluded the record was insufficient to resolve predominance and remanded under Jacobson for further factual development and express findings by the district court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 23(b)(3) predominance is satisfied for damages classes | Plaintiffs say common proof (hedonic regression) can show classwide injury and causation (price premium for "flushable"). | Defendants say Plaintiffs' expert has not demonstrated that hedonic regression will establish injury/causation on a classwide basis; individual issues will predominate. | Remanded for further factual development; district court to allow supplemental evidence and make express findings on predominance. |
| Whether existing record permits appellate resolution of predominance | Plaintiffs contend the record and expert support certification. | Defendants contend the record is inadequate to show Rule 23 compliance. | Court found the record inadequate to decide and ordered remand under Jacobson for supplementation. |
| Appropriate procedural vehicle when record is incomplete on class certification issues | Plaintiffs implicit: affirm certification now. | Defendants implicit: decertify or reverse based on inadequate common proof. | Court directed remand under Jacobson (and following Davis) so district court can receive additional submissions and reassess certification. |
| Status of injunctive-relief classes pending further proceedings | Plaintiffs seek maintenance of injunctive classes. | Defendants want review tied to damages-class issues. | Appeals relating to injunctive classes stayed pending district court proceedings; appellate jurisdiction may be restored within 30 days after supplemental order. |
Key Cases Cited
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (plaintiff must affirmatively demonstrate Rule 23 compliance)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (plaintiff must present a model showing damages are susceptible to common proof)
- United States v. Jacobson, 15 F.3d 19 (2d Cir. 1994) (procedure for remanding to develop the factual record)
- Davis v. New York City Hous. Auth., 205 F.3d 1322 (2d Cir. 2000) (summary order remanding under Jacobson for further factual development)