573 F.Supp.3d 604
D.P.R.2021Background
- Local Puerto Rican merchants sued several national megastores (Wal‑Mart PR, Costco, Walgreens PR, CVS PR) in Puerto Rico court, alleging unfair competition for selling nonessential items during COVID Executive Orders while local stores complied and suffered losses.
- Costco removed the action to federal court; the plaintiffs previously moved to remand (denied by the court).
- Plaintiffs moved to certify a nationwide Puerto Rico class of businesses that refrained from selling nonessential items; they asserted more than 3,500–9,000 putative members.
- Defendants opposed certification, arguing the proposed class lacks common questions and that injuries are highly individualized.
- The court denied class certification under Federal Rule of Civil Procedure 23(a), finding no commonality of fact or law and insufficient showing of classwide causation; the court also found the complaint did not invoke Puerto Rico’s class statute and would fail its identical requirements (Rule 20.1).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Commonality of fact under Rule 23(a)(2) | Executive Orders barred megastores from selling nonessential items; all class members suffered the same injury from those sales | Putative members sell widely different goods/services, have different locations, and different customer bases; harms are individualized | Denied: no common factual question that can generate classwide answers because members are too dissimilar |
| Commonality of law under Rule 23(a)(2) | Same legal question: whether megastores violated the Executive Orders and engaged in unfair competition | Resolution depends on individualized factual showings about each business; broad legal claim alone is insufficient | Denied: legal questions depend on individualized facts and thus are not common for class purposes |
| Causation / classwide injury | Megastores profited by selling nonessential items; customers would otherwise have bought from local merchants | Plaintiffs provided no proof customers would have shifted purchases to local merchants; membership requirements (e.g., Costco) and product differences undermine causation | Denied: plaintiffs failed to show a common causal link between defendants’ sales and injuries to all class members |
| CAFA class definition via state law analog (Puerto Rico Rule 20.1) | Class action may be found under an analogous Puerto Rico rule to satisfy CAFA | Complaint did not plainly invoke the state rule and, even if invoked, plaintiffs fail the same commonality requirement | Denied: complaint did not invoke Rule 20.1 and plaintiffs would not meet its identical prerequisites anyway |
Key Cases Cited
- Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (commonality requires a common question that can generate a common answer for the class)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (class certification demands proof that the proposed method of proof is reliable for classwide issues)
- General Tel. Co. of Sw. v. Falcon, 457 U.S. 147 (1982) (Rule 23(a)(2) requires that class members suffered the same injury)
- College of Dental Surgeons of P.R. v. Conn. Gen. Life Ins. Co., 585 F.3d 33 (1st Cir. 2009) (CAFA class definition includes actions filed under Rule 23 or a substantially similar state rule)
- Sprague v. Gen. Motors Corp., 133 F.3d 388 (6th Cir. 1998) (not every common question suffices; the question must advance the litigation)
- Alexander v. Gino’s, Inc., 621 F.2d 71 (3d Cir. 1980) (individualized facts can preclude commonality under rule 23)