Ronald Perras v. H&R Block, 789 F.3d 914

Background

In 2011–2012 H&R Block charged customers a “Tax Preparer Compliance Fee” to recoup costs of new IRS preparer-certification requirements ($2 in 2011; $4 in 2012).
Ronald Perras (California resident) sued in federal court in Missouri on behalf of a putative nationwide class (all states except Missouri) alleging the fee was deceptive under the Missouri Merchandising Practices Act (MMPA).
District court compelled arbitration of 2011 claims, found Rule 23(a) satisfied, but denied class certification under Rule 23(b)(3) (concluding class action was not the superior method and/or predominance not met).
On interlocutory appeal, Perras argued Missouri law applies because H&R is headquartered in Missouri and the fee was designed/implemented there; Missouri AG filed amicus supporting certification.
The Eighth Circuit affirmed, holding the MMPA does not reach the out-of-state transactions here because the challenged sales and payments occurred in each consumer’s home state, not “in or from” Missouri; therefore state laws of each class member govern and common questions do not predominate.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether claims by out-of-state purchasers may be brought under the MMPA (i.e., whether transactions occurred “in or from” Missouri)	Perras: Missouri has sufficient contacts (H&R headquartered there; fee decisions implemented there) so MMPA covers out-of-state class members	H&R: The challenged transactions—contracts, communications, payments, and materials—occurred in each purchaser’s home state, not in or from Missouri	Held: MMPA does not cover the out-of-state transactions; each member’s claims governed by their state’s consumer-protection law
Whether common questions of law predominate under Rule 23(b)(3) when state consumer laws differ	Perras: Common issues (deceptive fee) predominate; Missouri law should apply	H&R: Different state laws and individualized evidence will govern each claim, defeating predominance	Held: Predominance not met because applicable law varies by state and evidence is individualized
Whether the district court erred by deciding constitutional choice-of-law issues (Due Process/Full Faith & Credit)	Perras: District court’s constitutional analysis supports using Missouri law	H&R: Constitutional analysis unnecessary; focus should be on scope of MMPA	Held: Court avoids constitutional questions and resolves case by applying state-law scope (judicial restraint)
Whether class action was a superior method under Rule 23(b)(3)	Perras: (Argued superiority below)	H&R: Individual lawsuits in multiple states are superior given differing laws and individualized proof	Held: Court did not reach superiority after finding predominance failed; affirmation rests on predominance ruling

Key Cases Cited

Avritt v. Reliastar Life Ins. Co., 615 F.3d 1023 (8th Cir.) (standard for reviewing class-certification issues and predominance analysis)
In re St. Jude Med., Inc., 425 F.3d 1116 (8th Cir.) (de novo review for legal rulings in class-certification context)
Camreta v. Greene, 131 S. Ct. 2020 (U.S. 2011) (judicial restraint counsels avoiding unnecessary constitutional rulings)
Lyng v. Nw. Indian Cemetery Protective Ass’n, 485 U.S. 439 (U.S. 1988) (supports principle of avoiding unnecessary constitutional decisions)
Ashley County, Ark. v. Pfizer, Inc., 552 F.3d 659 (8th Cir.) (guidance on predicting state-law decisions when state supreme court is silent)
Ports Petroleum Co. of Ohio v. Nixon, 37 S.W.3d 237 (Mo. banc) (describing MMPA as broad but still limited to trade or commerce “in or from” Missouri)
State ex rel. Nixon v. Estes, 108 S.W.3d 795 (Mo. Ct. App.) (MMPA reached out-of-state consumers where defendants’ fraudulent operations and transactions had substantial ties to Missouri)
Raines v. Byrd, 521 U.S. 811 (U.S. 1997) (standing requires personal injury redressable by relief sought)