GEORGE TERSHAKOVEC, DIANA TERSHAKOVEC, JACQUES RIMOKH, HERBERT ALLEY, individually and on behalf of all others similarly situated, MICHAEL DELAGARZA, et al. v. FORD MOTOR COMPANY, INC.
No. 22-10575
United States Court of Appeals For the Eleventh Circuit
July 7, 2023
[PUBLISH]
D.C. Docket No.
NEWSOM, Circuit Judge:
Ford Motor Company advertised its Shelby GT350 Mustang as “track ready.” But some Shelby models weren‘t equipped for long track runs, and when the cars overheated, they would rapidly decelerate. A group of Shelby owners sued Ford on various state-law fraud theories and sought class certification, which the district court granted in substantial part. Ford challenges class certification on the ground that proving each plaintiff‘s reliance on the alleged misinformation requires individualized proof and, therefore, that common questions don‘t “predominate” within the meaning of
For reasons we will explain, the predominance inquiry turns on the specifics of the state laws under which plaintiffs have sued—and, in particular, on (1) whether those laws require proof of reliance, (2) if so, whether they permit reliance to be presumed, and (3) if so, under what circumstances. Having considered those questions, we hold that some of plaintiffs’ claims may be certified for class treatment, that others may not, and that some require the district court to take a closer look at applicable state-law requirements.
I
A
The putative class representatives hail from seven states—California, Florida, Missouri, New York, Tennessee, Texas, and Washington. Each purchased one of two models of Ford‘s Shelby GT350 Mustang.
The Shelby is an upgrade of the standard Mustang and, importantly here, was advertised as “an all-day track car that‘s also street legal.”1 Track-capability refers to the vehicle‘s capacity to perform at higher-than-normal speeds in a controlled environment—like, say, on a racetrack. Track-readiness was a central theme in Ford‘s Shelby advertising. For example, in a race-day invitation to Shelby owners,
The Shelby comes in five trims. Plaintiffs are purchasers of the “Base” and “Technology” trims. Those trims lack “transmission and differential coolers,” a feature—originally included as standard on all Shelbys—that is designed to prevent engine overheating. Without these coolers, the Shelbys compensate at high RPMs by reverting to “limp mode,” a self-preservation status that reduces the vehicle‘s power, speed, and performance to avoid engine damage. “Limp mode” presents a problem for car enthusiasts who want to take Ford up on its promise of “track capab[ility].”
One way that Shelby owners indulge their need for speed is by participating in “Track Days,” organized events at which drivers can take their Shelbys around controlled racetracks at triple-digit clips. According to some plaintiffs, though, “limp mode” set in after six or seven laps—about ten minutes of track time—resulting in rapid deceleration and rendering the vehicles “essentially unusable for sustained track driving,” which, they say, was “the main reason many [of them] bought the car.”
B
Plaintiffs filed this putative class action alleging, among other things, common-law fraud claims and state-specific statutory violations. Plaintiffs alleged that Ford falsely advertised all Shelbys as being track-capable, that those representations induced them to buy Shelbys, but that their Shelbys couldn‘t perform as billed.
Following discovery and a hearing, the district court granted plaintiffs’ request for class certification. In particular, the court chose to create multiple state-law classes within a single class-action case. Although it acknowledged that, as thus structured, the case “look[ed] more like a Multi-District Litigation than a standard class action,” the court thought that this framework would “avoid the choice of law issues concomitant with a proposed nationwide class (an issue that would almost certainly defeat [
The district court certified classes of plaintiffs whose claims arose under the common and/or statutory law of California, Florida, Illinois, Missouri, New York, Oregon, Tennessee, Texas, and
remain, arising under the laws of seven states: California, Florida, Missouri, New York, Tennessee, Texas, and Washington.3
We granted Ford‘s
II
We review a district court‘s decision granting or denying class certification for abuse of discretion. See Local 703, I.B. of T. Grocery & Food Emps. Welfare Fund v. Regions Fin. Corp., 762 F.3d 1248, 1253 (11th Cir. 2014). The district court abuses its discretion if it “applies the wrong legal standard, follows improper procedures in making its determination, bases its decision on clearly erroneous findings of fact, or applies the law in an unreasonable or incorrect manner.” Id. At the class-certification stage, “the trial court can and should consider the merits of the case to the degree necessary to determine whether the requirements of Rule 23 will be satisfied.” Valley Drug Co. v. Geneva Pharms., Inc., 350 F.3d 1181, 1188 n.15 (11th Cir. 2003).
III
under
We must decide whether plaintiffs’ proposed class satisfies
A
First, predominance. Common questions “predominate” within the meaning of
In general, a fraud-related claim comprises the following elements: a misrepresentation or omission, materiality, reliance, causation, and injury. See Restatement (Second) of Torts §§ 525, 550
(1977); W. Prosser, The Law of Torts §§ 108, 110, at 714, 731–32 (4th ed. 1971). The parties vigorously dispute whether the reliance element—that is, the question whether Shelby owners relied on, and
In granting class certification over Ford‘s objection that the issues pertaining to plaintiffs’ reliance were too individualized, the
district court leaned heavily on the notion that reliance can sometimes be presumed. Although the court acknowledged that “a presumption of . . . reliance is only appropriate in some states and in some fact patterns,” one of those “fact patterns,” it said, was “when a [d]efendant‘s representations to the entire class were uniform.” The court reasoned that “Ford‘s representations to Plaintiffs were uniform” and that “the evidence appears to show that no class member could possibly have known [about the defect] from Ford[.]” Accordingly, it concluded that a presumption of reliance was appropriate in this case—and, therefore, that individualized reliance issues didn‘t present a predominance-related barrier to class certification.
The root of the district court‘s error was in overgeneralizing the presumption-of-reliance issue. The court‘s task was to “predict[] how the parties will prove” common and individualized questions. Brown, 817 F.3d at 1234. But doing so requires carefully examining the particular state laws on which plaintiffs’ claims in this case are based. True, a presumption that a plaintiff or group of plaintiffs relied on Ford‘s misstatements may apply—but only if the relevant state‘s common-law-fraud cause of action or deceptive practices statute allows for that presumption. And while the district court seemed to appreciate that the presumption was “only appropriate in some states,” it never seriously investigated whether and under what circumstances each of the various state-law claims at issue permit the presumption. See, e.g., Doc. 231 at 43 (California); id. at 44 (Missouri); id. at 45 (Tennessee); id. at 45 (Texas).
In fact, as we‘ll see, states’ fraud-based causes of action meaningfully differ in terms of both whether proof of reliance is necessary and, if it is, how it is established. Reliance is often, though not uniformly, an essential element of a fraud-based claim. Where it is, it sometimes must be affirmatively proved; in other circumstances, it may be presumed. Affirmatively proving
Bottom line: To assess
B
So a (perhaps the) key issue in this case is whether each of the several state-law causes of action that plaintiffs have alleged permits a presumption of reliance and, if it does, under what circumstances. That‘s a question that we‘ll need to decide on a state-by-state (and claim-by-claim) basis, and we‘ll get to those details soon enough. But first, a more general, preliminary point. All seem to recognize—and we agree—that the permissibility of a presumption of reliance will often turn on whether a fraud-based claim primarily alleges affirmative misrepresentations, omissions (or non-disclosures), or, perhaps, a mixture of both.
While not strictly applicable here, cases decided under the federal securities laws illustrate the distinction between misrepresentations and omissions, as well as the effect that distinction can have on the operation of the presumption of reliance. Here‘s a brief summary: In Affiliated Ute Citizens of Utah v. United States, the Supreme Court held, in a case arising under Rule 10b-5, that “[u]nder the circumstances of th[e] case” before it, which “involv[ed] primarily a failure to disclose, positive proof of reliance is not a prerequisite to recovery,” but rather may be presumed. 406 U.S. 128, 153 (1972). Significantly, though, we have since clarified that the Ute presumption applies only to cases “involving primarily a failure to disclose in which defendants who had an affirmative duty to disclose stood mute, leaving plaintiffs with absolutely nothing upon which to rely.” Cavalier Carpets, Inc. v. Caylor, 746 F.2d 749, 755 (11th Cir. 1984); see also Huddleston v. Herman & MacLean, 640 F.2d 534, 547 (5th Cir. Unit A March 1981), aff‘d in part and rev‘d in part on other grounds, 459 U.S. 375 (1983) (“If a person who has an ‘affirmative duty under [Rule 10b-5] to disclose’ a material fact” fails to disclose “material facts that reasonably could be expected to influence [a security-holder‘s] decision to sell, positive proof of reliance . . . is not a prerequisite to recovery.“). No presumption of reliance applies, we have emphasized, either in cases primarily alleging affirmative misrepresentations or in those “mixing allegations of omissions and misstatements.” Cavalier Carpets, 746 F.2d at 757. So, for instance, in a securities case where plaintiffs “alleged three omissions and three misstatements,” the “mixed case rule of
Huddleston” applied—meaning that a presumption of reliance did not. Id.5
underlying those claims, and the district court‘s treatment of the various allegations in the case, we conclude that Ford has the better of the argument: At its core, this case is about misrepresentations, not omissions.
For starters, plaintiffs’ own complaint repeatedly targets Ford‘s “marketing” and “advertising.” Doc. 43 at 69–86. Indeed, the complaint‘s first factual allegation concerns plaintiffs’ shared love of track racing—the very subject of Ford‘s alleged misrepresentation about the Shelby‘s track-readiness. Id. at 69–70. Plaintiffs’ motion for class certification and their response to Ford‘s Rule 23(f) petition likewise both repeatedly complain about Ford‘s “marketing communications.” See Doc. 122 at 8, 10–11, 15–18; Br. of Plaintiff-Respondents in Response to Petition for Permission to Appeal at 3–5, Ford Motor Company v. George Tershakovec, et al., No. 21-90019 (11th Cir. Feb. 28, 2022). Even before us, plaintiffs continue to focus on Ford‘s “advertising.” Br. of Appellants at 12–14. And that focus makes sense. Plaintiffs’ grievance, fundamentally, is that Ford misled them to believe that their Shelbys could zip around racetracks for hours. And they arrived at that belief not as a result of Ford‘s mere silence but, rather, they claim, as a result of Ford‘s boasting about the Shelby‘s track-readiness.
The district court itself treated plaintiffs’ claims as primarily alleging affirmative misrepresentations. In its order granting class certification, for instance, the court described plaintiffs’ theory as follows: “Ford advertised all Shelbys as track-capable, the advertising induced Plaintiffs to purchase the car, and then the car did not
perform as advertised.” Doc. 231 at 3. Contrast that with a claim that plaintiffs pleaded in their complaint but that the district court later dismissed. There, plaintiffs separately alleged that their Shelbys can enter “limp mode” even during non-track conditions, when being driven normally. See Doc. 43 at 72. Notably, the district court referred to this as “the omission claim[]“—and rejected it on the ground that there was no evidence that Ford was aware of the defect and thus couldn‘t have fraudulently concealed it. Doc. 231 at 13–15 (emphasis added).
In the end, even interpreted charitably, plaintiffs’ current claims allege an omission only derivatively: Ford affirmatively misrepresented the Shelbys as track-capable, which entailed an implicit “omission” that the cars can enter “limp mode” under track conditions. In the language of our securities cases, plaintiffs don‘t allege that Ford “st[ood] mute in the face of a duty to disclose“; rather, they contend that it
Having established that plaintiffs’ case is fundamentally about misrepresentations—or, at most, a mix of misrepresentations and corollary omissions—we‘re ready to dive into the central question: Which of the various fraud-based causes of action that plaintiffs have alleged requires proof of reliance, and which among
those permits reliance to be presumed—and under what circumstances?6
C
On, then, to the core of our analysis. Because different states’ fraud-related causes of action—both statutory and common-law—treat reliance differently, we have to get into the specifics of those laws. We find that we can group plaintiffs’ claims into
three categories. First, some causes of action don‘t require proof of reliance at all. Needless to say, reliance poses no predominance-related barrier to class treatment of those claims. Second—at the other end of the spectrum, so to speak—some claims require individual plaintiffs to prove reliance affirmatively, without the benefit of any presumption.
In the sections that follow, we‘ll sort the claims that plaintiffs have alleged into these three categories.
1
The first category comprises state causes of action that don‘t require proof of reliance.
Three are easy. First, the district court certified a class of plaintiffs who sued under the Florida Deceptive and Unfair Trade Practices Act,
deceptive act or unfair practice, (2) causation, and (3) actual damages. Carriuolo v. General Motors Co., 823 F.3d 977, 983 (11th Cir. 2016) (citing City First Mortg. Corp. v. Barton, 988 So. 2d 82, 86 (Fla. 4th Dist. Ct. App. 2008)). Dispositively here, “a plaintiff asserting a FDUTPA claim need not show actual reliance on the representation or omission at issue.” Id. at 985 (quotation omitted). Because a FDUTPA plaintiff needn‘t prove that he or she relied on any alleged misstatement, Ford‘s reliance-based predominance objection fails.
Second, the district court certified a class of plaintiffs alleging claims under New York‘s consumer-fraud statute,
Third, the district court certified a class of plaintiffs alleging claims under Washington‘s consumer-fraud statute, which
prohibits “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”
A final claim also belongs in this category. The Missouri Merchandising Practices Act prohibits “deception, fraud, . . . misrepresentation, . . . or the concealment, suppression, or omission of any material fact in connection with the sale or
Missouri courts have repeatedly observed that “[a] consumer‘s reliance on an unlawful practice is not required under the MMPA.” Murphy v. Stonewall Kitchen, LLC, 503 S.W.3d 308, 311 (Mo. Ct. App. 2016) (quotation omitted); accord, e.g., Hess v. Chase Manhattan Bank, USA, N.A., 220 S.W.3d 758, 774 (Mo. 2007) (“[A] fraud claim requires both proof of reliance and intent to induce reliance; the [M]MPA claim expressly does not.“).
Even so, citing State ex rel. Coca-Cola Co. v. Nixon, 249 S.W.3d 855 (Mo. 2008), Ford asks us to imply a reliance element for MMPA claims. But Coca-Cola isn‘t quite on point. There, plaintiffs sought to certify a class of consumers who alleged that they wouldn‘t have purchased certain Diet Coke products had they known that they contained both saccharin and aspartame, rather than just aspartame as advertised. Id. at 858. Evidence showed, however, that the “proposed class undoubtedly include[d] an extremely large number of uninjured class members, that is, those who did not care if the Diet Coke they purchased contained saccharin.” Id. at 862. The Missouri Supreme Court declined to “imply” harm with respect to those “uninjured” plaintiffs and affirmed the district court‘s denial of class certification on the ground that the class was “overbroad.” Id. at 862–63. Although we understand Ford‘s point, Coca-Cola was concerned about an altogether different element—injury—and the proper definition of classes, not the existence or non-existence of a reliance requirement.
Nor does White v. Just Born, Inc., No. 2:17-cv-04025-NKL, 2018 WL 3748405 (W.D. Mo. Aug. 7, 2018), persuade us that the
MMPA entails an implicit reliance requirement. In fact, the White court cited the Missouri Court of Appeals‘s decision in Murphy, already noted, for the proposition that “[a] consumer‘s reliance on an unlawful practice is not required under the MMPA.” Id. at *4. It‘s true that the federal district court in White held that class certification was improper there because individualized issues concerning plaintiffs’ injuries and causation would predominate over common ones. See id. But state courts in Missouri have held that the injury- and causation-related elements of an MMPA claim can be established class-wide under what those courts call a “benefit-of-the-bargain rule.” See, e.g., Plubell v. Merck & Co., 289 S.W.3d 707, 714–15 (Mo. Ct. App. 2009); Craft v. Phillip Morris Companies, Inc., No. 002-00406A, 2003 WL 23355745, at *8–9 (Mo. Cir. Ct. Dec. 31, 2003) (“[T]he necessary causation element is satisfied under § 407.025, as is the economic harm element, whenever a plaintiff can simply show that he purchased a product that was falsely represented, and that he thereby received a product that would have been worth more money if it had truly been as represented.“). Accordingly, we reject Ford‘s contention that individualized reliance issues prevent certification of plaintiffs alleging MMPA claims.
2
The second category occupies the opposite pole—it comprises those causes of action (1) that require a plaintiff to prove that he or she relied on a defendant‘s misinformation and (2) that don‘t recognize a presumption of reliance. Plaintiffs’ claims brought under these causes of action can‘t be certified for class treatment because proving an individual‘s reliance will necessarily require
individualized evidence. We conclude that, as relevant here, this category includes four claims.
The district court certified a class of plaintiffs who sued under the Texas Deceptive Trade Practices-Consumer Protect Act. That statute prohibits “[f]alse, misleading, or deceptive acts or practices in the conduct of any trade or commerce,”
The district court also certified a class of plaintiffs who alleged common-law fraud claims under Washington law. Washington courts have held that a fraud plaintiff must prove, among other things, “the listener’s reliance on the false representation, [] the listener’s right to rely on the representation, and [] damage from reliance on the false representation.” Landstar Inway Inc. v. Samrow, 325 P.3d 327, 337 (Wash. App. 2014) (citing Baertschi v. Jordan, 413 P.2d 657, 660 (Wash. 1966)). To be sure, that description doesn’t expressly foreclose a presumption of reliance, but neither it nor any other that we’ve found expressly authorizes one, and we decline to graft one onto Washington law.7 So plaintiffs’ Washington common-law fraud claims are not appropriate for class treatment.
The district court’s certification of plaintiffs’ New York common-law fraud claims was also improper. According to the New York Court of Appeals, the elements of a New York common-law fraud claim include, among others, “justifiable reliance by the plaintiff.” Eurycleia Partners, LP v. Seward & Kissel, LLP, 910 N.E.2d 976, 979 (N.Y. 2009). Indeed, that court has emphasized that “[j]ustifiable reliance is a ‘fundamental precept’ of a fraud cause of action.” Ambac Assurance Corp. v. Countrywide Home Loans, Inc., 106 N.E.3d 1176, 1182 (N.Y. 2018) (quoting Danann Realty Corp. v. Harris, 157 N.E.2d 597, 599 (N.Y. 1959)). Absent support for presuming reliance under New York law—of which we have been
So too with respect to plaintiffs’ Tennessee common-law fraud claims. “In an action for fraudulent misrepresentation” brought under Tennessee law, “a plaintiff must show,” among other elements, that he or she “acted reasonably in relying on the representation.” City State Bank v. Dean Witter Reynolds, Inc., 948 S.W.2d 729, 738 (Tenn. Ct. App. 1996). And courts applying Tennessee law have looked to a whole host of factors “in determining whether a party reasonably relied,” all of which turn on individualized facts about the plaintiff, the defendant, and the specifics of their relationship. See, e.g., Boynton v. Headwaters, Inc., 737 F. Supp. 2d 925, 931 (W.D. Tenn. 2010) (citing City State Bank, 948 S.W.2d at 737). Accordingly, plaintiffs’ Tennessee common-law claims will turn on individualized issues that make class treatment inappropriate.
3
The third category includes causes of action that require proof of reliance but allow it to be presumed in certain circumstances. Class certification may be appropriate with respect to plaintiffs pursuing claims in this category—but only if the circumstances support the presumption’s application. This category, we conclude, covers the California claims, both statutory and common-law.
First, what we’ll call the California statutory claim. Technically, plaintiffs have presented claims under three different California statutes—the Unfair Competition Law,
Second, the California common-law claim. “The necessary elements of fraud” under California law include, among others, proof (1) that the defendant “inten[ded] to defraud (i.e., to induce reliance [by])” the plaintiff and (2) that the plaintiff “justifiabl[y] reli[ed]” on the defendant’s misinformation. Alliance Mortg. Co. v. Rothwell, 900 P.2d 601, 608 (Cal. 1995). “California courts have always required plaintiffs in actions for deceit to plead and prove the common law element of actual reliance.” Mirkin v. Wasserman, 858 P.2d 568, 572 (Cal. 1993) (citations omitted). As in the statutory context, though, California courts have permitted a presumption of reliance “when the same material misrepresentations have actually been communicated to each member of a class.” Id. at 575 (emphasis omitted). Because the district court didn’t consider whether that precondition to the reliance presumption was satisfied, it will need to make that determination on remand.
D
Finally, we turn to the two certified classes—one in California, one in Texas—for breach-of-implied-warranty claims and violations of the federal Magnuson-Moss Warranty Act. The Magnuson-Moss Act merely “supplement[s] state-law implied warranties” by “affording a federal remedy for their breach,” Richardson v. Palm Harbor Homes, Inc., 254 F.3d 1321, 1325 (11th Cir. 2001) (internal citations omitted), so the Magnuson-Moss claims can be certified only if the state-law breach-of-implied-warranty claims are also certified. See
In Brown, we held that to certify California and Texas implied-warranty classes, like those here, the district court first needed to decide “whether California and Texas law require pre-suit notice, an opportunity to cure, and manifestation of the defect.” Id. at 1237. The answers to these questions were important, we explained, as they “bear on predominance.” Id. at 1238. As we have explained:
If California and Texas law do not excuse pre-suit notice and an opportunity to cure when the defendant had prior knowledge of the design defect, as the district court speculated, then each class member will need to prove that he gave [the defendant] pre-suit notice and an opportunity to cure. This showing could require individual proof. And if California and Texas law require the defect to manifest, then each class member will need to prove that his washing machine actually grew mildew during the warranty period. This showing could also require individual proof. Because the answers to these preliminary questions of California and Texas law could affect whether Rule 23(b)(3) is satisfied, the district court had a duty to resolve them.
Id. (citations and quotation marks omitted).
The district court here said only (1) that “notice is an individual issue,” (2) that the notice issue “is a simple one” that could be determined by a claims administrator, and (3) that the “big question of whether the product was defective at the time it was sold is a common one.” Brown requires more than that. Here, nothing indicates that the district court determined “what the law is in California and Texas,” which would, in turn, “help it identify the overall mix of individual versus common questions for purposes of predominance.” Id.
For this reason, we must “remand to the district court so it can answer these questions of state law in the first instance.” Id. We express no view on whether the implied-warranty claims will ultimately satisfy the predominance requirement for class certification.
Having tackled the predominance inquiry, we turn to superiority. Under
The district court acknowledged that authorizing a single trial for eleven proposed state-law classes was “unusual,” but it asserted that it could deal with the complexity by issuing “appropriate jury instructions” and “multiple verdict forms that tick through the [varying] elements of [the] certified state class[es]’ statutory and common law fraud claims.” We aren’t so confident.
“Rule 23 demands an early consideration of class certification, including its practical implications for case manageability.” Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1279 (11th Cir. 2009). For reasons we have already explained,
V
In summary, we affirm the district court’s certification of the statutory classes in Florida, New York, Missouri, and Washington. We reverse certification of the Texas statutory consumer-fraud claim and the Tennessee, New York, and Washington common-law fraud claims. And we remand for the district court to consider whether the facts in this case support a presumption of reliance for the California statutory and common-law fraud claims and whether the California- and Texas-based breach-of-implied-warranty claims satisfy state-law requirements. Finally, we instruct the district court on remand to reconsider the manageability issue.9
AFFIRMED in part, REVERSED in part, and VACATED and REMANDED in part.
TJOFLAT, J., Concurring and Dissenting in Part
TJOFLAT, Circuit Judge, concurring in part and dissenting in part:
I agree with the Majority that required proof of reliance makes class certification of the Texas Deceptive Trade Practices-Consumer Protect Act claim, and the Tennessee, Washington, and New York common law fraud claims inappropriate.1 I part company with the Majority, however, regarding the certification of the classes for the Florida, New York, Missouri, California,
My reasoning derives from lifting the hood and examining the various parts of the law before this Court on appeal. At first glance, the six claims with which I disagree with the Majority look ready to drive off the lot, but in fact, they are lemons. Here is the User’s Manual for this opinion as we engage in a multi-point diagnostic. This opinion (1) begins by surveying the consumer protection scheme provided by the Federal Trade Commission Act (the “FTC Act”); (2) compares and contrasts that scheme to the mechanisms established by Florida, New York, Missouri, Washington, and California’s respective consumer protection statutes; (3) identifies the inherent causal mechanism required for misrepresentation causes of action; (4) outlines four constitutional defects—First Amendment, due process, Article III standing, and separation of powers—inherent in allowing certification of claims under these statutes; and (5) explains why none of the cases cited by the Majority ought to bind or persuade this Court.
I.
The FTC Act declares unlawful “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce.”
Charlie owns Brown’s Gas and an attached hamburger stand—called the Chuck Wagon and run by his business partner, Patty—off a state highway between fictional towns Riverton and Clifton. Travelers from Clifton pass Brown’s Gas on their way out of town and never fuel up—even though they love Patty’s burgers—because Charlie consistently charges $3 more per gallon than the average price in Clifton. Travelers from Riverton, on the other hand, pass Brown’s Gas after having driven 120 miles with no gas station, and those travelers cannot see that Clifton lies just on the other side of a hill. The Riverton travelers consistently fill up with Charlie’s inflated fuel.
Enter the FTC. The FTC determines that this sort of behavior “causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.”
The FTC ultimately issues Charlie a cease and desist order, which Charlie can
After the cease and desist order “has become final,”3 Charlie continues to charge $3 more per gallon than other Clifton establishments, and so, the Attorney General can now file a civil action against Charlie for a monetary penalty.4
Importantly for the claims against Ford, the FTC Act does not allow for damages and contains no private right of action. See Holloway v. Bristol-Myers Corp., 485 F.2d 986, 987 (D.C. Cir. 1973) (“[P]rivate actions to vindicate rights asserted under the Federal Trade Commission Act may not be maintained.”); id. at 999–1000 (recognizing that “the FTC has no power to award damages” and that the “1938 amendments [to the FTC Act] relied instead on the FTC’s cease and desist procedures, and their provision of opportunity for voluntary compliance and informal administrative conflict resolution”); Fulton v. Hecht, 580 F.2d 1243, 1249 n.2 (5th Cir. 1978) (“[T]here is no private cause of action for violation of the FTC Act.”);5 Am. Airlines v. Christensen, 967 F.2d 410, 414 (10th Cir. 1992) (“[T]here is no private right of action under [the FTC Act].”). Rather, section 5 of the FTC Act empowers the FTC itself or the Attorney General—both arms of the government—to pursue violators for forward-looking relief and, after notice and opportunity to be heard, civil penalties.
While the state consumer protection statutes at issue in this appeal derive from the FTC Act, the differences cause problems that we will come back to later.
A.
Florida’s analogous consumer protection statute, the Florida Deceptive and Unfair Trade Practices Act (the “FDUTPA”) declares a similarly vague set of acts unlawful.6
Florida’s Department of Legal Affairs, like the FTC, has power to issue cease and desist orders; a defendant business has the right (1) to respond to the complaint at a hearing and (2) to judicial review of the ultimate agency decision.
The FDUTPA continues differentiating itself from the FTC Act by providing two private rights of action. Anyone “aggrieved by a violation of” the FDUTPA can bring a declaratory judgment action and enjoin a “person who has violated, is violating, or is otherwise likely to violate” the FDUTPA.
B.
New York’s consumer protection law also utilizes vague language.10 The statute authorizes the state attorney general to enjoin (forward-looking) unlawful acts or practices by anyone who “has engaged in or is about to engage in any of the acts or practices stated to be unlawful.”
In addition to enforcement actions by the attorney general, “any person who has been injured by reason of any violation of this section may bring an action in his own name to enjoin such unlawful act or practice, an action to recover his actual damages or fifty dollars, whichever is greater, or both such actions.”
Much like the FDUTPA, the New York statute adds private rights of action and backward-looking relief to the FTC Act scheme.12
C.
The Missouri Merchandising Practices Act (the “MMPA”) more specifically defines the prohibited acts under the statute than do the Florida and New York statutes, including specifically prohibiting “misrepresentation.”13
The MMPA authorizes the attorney general to pursue forward-looking injunctions against further violations of the MMPA and authorizes courts in such actions to award restitution “as may be necessary to restore to any person who has suffered any ascertainable loss . . . which may have been acquired by means of any” violation of the MMPA.
Much like the Florida and New York statutes, the MMPA authorizes a private cause of action to recover damages to those who “suffer[] an ascertainable loss of money or property, real or personal, as a result of” an MMPA violation.
actions for damages,
D.
The Washington consumer protection statute also uses vague language to outlaw conduct.18
In addition to the attorney general’s remedies, “[a]ny person who is injured in his or her business or property by a violation” of the consumer protection statute “may bring a civil action in superior court to enjoin further violations, to recover the actual damages sustained by him or her, or both.”
TJOFLAT, J., Concurring and Dissenting in Part 22-10575
E.
Finally, the
The same section provides for a private cause of action by stating, “Any person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of Section 17204.”
Much like the other five statutes, the UCL authorizes civil penalties.
To summarize, though each of the five state consumer protection laws closely resemble the FTC Act in certain respects,
II.
With the statutory landscape before us, we must now define the claims with which I disagree with the Majority and determine where they fit in with that landscape. This is an important step because these state consumer protection statutes, on their faces, cover the waterfront of prohibited conduct by outlawing anything qualified as an “unfair business practice.”
TJOFLAT, J., Concurring and Dissenting in Part 22-10575
The claims against Ford have three features that make them what I define as “Misrepresentative Advertising Class Actions.” First, the claims assert that Ford‘s alleged unlawful conduct was contained in its advertising. See Maj. Op. at 4. Second, the claims against Ford assert that Ford misrepresented something in its advertisements, making the claims specifically about misrepresentation as opposed to some other type of unfair business practice. See id. at 13. Third, the complaint alleges harm against a class rather than against an individual or named individuals.
The significance of the class action nature will become clear in part III, and that of the advertising element in part III.A. For now, the nature of the claims asserted against Ford as involving misrepresentation carries two significances: (1) the deleterious effects of the vague statutes are reduced and (2) misrepresentation comes with an inherent causal mechanism.
As mentioned in part I, supra, the consumer protection statutes at issue here—with the possible exceptions of the MMPA and the UCL—including the FTC Act itself, are written very broadly to capture much ill-defined “unfair” or “deceptive” acts in business. As part III.A will further flesh out, these statutes, standing alone, pose a notice problem. The statute itself does not alert Charlie that what he is doing is prohibited by the statute. To avoid the notice problem, we must find further definition of the prohibited conduct elsewhere. There are two places to look.
First, we can look to prior decisions under the statute. “Unfair business practice” might not in itself tell a cruise ship company that it cannot charge customers an additional fee, label it a “port charge,” then pocket some of that extra money as profit. See, e.g., Latman v. Costa Cruise Lines, N.V., 758 So. 2d 699 (Fla. 3d Dist. Ct. App. 2000). But a previous case decided by a court under the consumer protection statute dealing with that situation would.21
Second, we might solve the notice issue by importing the common law definition of fraudulent misrepresentation. In that regard, if a defendant‘s conduct rises to the level of common law fraudulent misrepresentation,
Therefore, to get around the notice problem inherent in the vaguely worded statutes before us, plaintiffs in a Misrepresentative Advertising Class Action have two options: present the district court with a case on point adjudicating similar behavior as violating the statute or satisfy the common law elements of misrepresentation. Utilizing either option, a misrepresentation allegation comes with a built-in causal mechanism: reliance. The latter option requires it explicitly while the former must require it unless a plaintiff need not prove causation.
Misrepresentation only causes harm if the misrepresentee relies on the misrepresentation of the misrepresentor. For instance, take the instant case. Some of the class members (1) may not have seen the advertisements at issue, (2) may not have wanted a track-ready car, or (3) wanted merely to collect the car without ever driving it around the track. None of these three kinds of class members could have relied on Ford‘s alleged misrepresentation. Either they did not see the misrepresentation, or the misrepresentation did not play any part in their decision to buy this car. The alleged misrepresentation therefore could not have caused any complained-of harm. Insofar as these three kinds of class members suffered an injury, it remains independent of any misrepresentation on the part of Ford. Therefore, in a misrepresentation case, reliance is the causal mechanism. No reliance inherently means no causation.
None of the consumer protection statutes at issue here—Florida, Missouri, New York, Washington, or California—explicitly disclaims a reliance element.22 That is to say, none of those statutes say, “reliance is not an element of a cause of action under” the statute. Rather, state court cases have interpreted the consumer protection statutes as not requiring reliance. See Maj. Op. at 16–20, 23–25. As discussed in part III.D, infra, by reading out a reliance element in all cases, a court usurps the legislature‘s power and attempts to bind future courts in a way inconsistent with our conception of judicial power.
III.
Now that we have laid out the statutory frameworks and shown that misrepresentation claims require a showing of reliance, this opinion now explains why a Misrepresentative Advertising Class Action cannot be certified. Certifying such a class runs afoul of the United States Constitution in four ways creating four distinct but related problems: the Free Speech Problem, the Due Process Problem, the Separation of Powers Problem, and the Standing Problem.
A.
We begin with the Free Speech Problem. This case involves speech because it
Clifton has an ordinance that prohibits unfair business practices and enforces it by the FTC Act model. Lucy, a resident of Clifton, needs to sell her blue car. She takes out an advertisement in the Clifton Chronicle that says, “Buy my red car.” Lucy thus engages in speech—albeit unprotected speech. If Lucy did not know the Clifton ordinance prohibited her false advertisement, that would still be ok under the FTC Act model. Before any damages or penalties could be assessed against her, the Clifton authorities would have to tell her to stop, and if Lucy did not want to stop, she could get a court to weigh in.
Now, suppose Clifton instead has an ordinance that prohibits unfair business practices and allows for private damages. This is closer to the state models. Lucy advertises her blue car as a red car. Sally agrees to buy Lucy‘s car on Monday and pays Lucy. On Tuesday, Lucy delivers the car and Sally discovers it is blue. Sally sues under the Clifton ordinance alleging misrepresentation and can either (1) rescind the contract, or (2) recover the difference between the value of a blue car and the value of a red car—the two possible remedies for fraud. Lucy‘s speech would not be protected. Lucy could not claim she was not on notice that her conduct violated the ordinance, even if a previous case dealing with similar conduct had not yet been decided. That is because Sally proved the elements of common law fraud, including that she relied on Lucy‘s misrepresentation about the car‘s color. See supra part II (naming two ways in which a defendant may have notice under vague consumer protection statutes).
Finally, imagine Clifton has just enacted the same ordinance; it is new so there are no prior decisions to define prohibited conduct. A state court has interpreted the ordinance as not requiring a plaintiff to prove reliance (and therefore causation). Lucy, now the owner of a car dealership that only sells blue cars, places an advertisement in the Clifton Chronicle that says, “Our cars are red hot!” accompanied by a cartoon picture of a red car. Sally, who wants to purchase a red car, sees the advertisement and purchases a car over the phone only to later discover that it is blue. Sally begins a class action against Lucy on behalf of everyone who has ever bought a car from Lucy‘s car dealership. Because Lucy engaged in an unfair business practice and all her customers bought less valuable blue cars, Judge Franklin decides that Lucy‘s advertisement violated the ordinance and orders her to pay the difference in value between a red car and a blue car to every class member.23
Where is the free speech problem here? For one, Lucy was not on notice that her advertisement fell under the ambit of the ordinance. Perhaps she thought she was merely puffing. The ordinance used vague language, and neither of our two workarounds apply. See supra part II. Sally could not use a prior decision to prove the advertisement was prohibited because the ordinance was new, and the common law analogy could not help because nobody had to prove reliance (and therefore causation).
In engaging in speech that Judge Franklin would later deem violated the statute and fell outside the First Amendment‘s protection, what sanction did Lucy incur? She was not merely told to stop through a cease and desist order. See supra part I.A. That would be fine. She was not even held liable for the actual damage her advertisement caused Sally.24 Rather, Lucy had to pay damages to all of her customers irrespective of whether (1) they saw the advertisement, (2) they thought the advertisement was advertising red cars, or (3) they wanted a red car. Class member Snoopy could recover damages because he bought a blue car from Lucy despite having never seen the advertisement and the fact that he shopped at Lucy‘s car dealership specifically because he wanted a blue car. This is troubling in and of itself, as part of the Due Process Problem. See infra part III.B. But now we get to the Free Speech Problem.
What would a rational businessperson do if faced with a vague statute that might penalize her advertising with runaway damages liability to an unforeseeable number of plaintiffs? Not advertise, or at least severely restrict her advertising. So, while the ordinance on its face only prohibits unprotected speech, any rational businessperson would stand so far away from the ill-defined line between outlawed advertising and permissible advertising—thus chilling protected speech—to avoid the potentially catastrophic consequences of damages to all. This is the Free Speech Problem.
All the consumer protection statutes at issue in this case touch speech in some way by barring misrepresentation—either explicitly like Missouri, or implicitly like the other four statutes. While, again, forbidding such misrepresentative commercial speech generally falls within the ambit of a state‘s police power, a court that allows unforeseeable damages to unforeseeable plaintiffs through a reliance-less cause of action, in effect, prophylactically prohibits potentially misleading—and therefore protected—speech. And chilling that extra, protected speech goes well beyond that necessary to further a state‘s interest in protecting consumers from misrepresentation. See Cen. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm‘n of N.Y., 447 U.S. 557, 569–70, 100 S. Ct. 2343, 2353 (1980).
B.
Though we have already touched on the Due Process Problem, let us hit a couple more points.
Class actions can be an efficient method by which to resolve a great quantity of legal claims. A class action can benefit putative plaintiffs by allowing many individuals with meritorious claims—though perhaps small—to pool their resources to vindicate their injuries against a common defendant. A class action can benefit defendants by allowing them to defend against many similar legal claims in one fell swoop as opposed to defending individually against death by a thousand cuts.
But efficiency is not the be-all-end-all, especially in a justice system. In addition to the First Amendment interests explored in part III.A, supra, interests in efficiency must yield to due process concerns when
The predominance requirement of
Much as a court eliminating causation from the traditional elements of negligence would deprive a defendant of property without notice—thus denying the defendant due process—so would excusing the reliance (and therefore causation) element in these state consumer protection statutes. All a plaintiff needs to prove under a causation-less cause of action is that the defendant committed an act prohibited by the statute and the plaintiff suffered some sort of recoverable injury, whether or not any causal connection exists between the two. That would be like if defendant Linus—under a duty not to leave his blanket on the ground for fear of creating a slip hazard and yet breaching that duty—was held liable to plaintiff Schroeder for his injury sustained from a falling piano on the other side of Clifton.26
C.
Any elimination of a reliance (and thus causation) element in a Misrepresentative Advertising Class Action also poses a Standing Problem. It is hard for me to believe that—especially after TransUnion—any class action scheme in a Misrepresentative Advertising context can pass muster under Article III standing law if the cause of action contains no reliance or causation requirement or allows a class to ride the coattails of named class representatives as to reliance or causation. See TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). While two of the three standing requirements allow a plaintiff to enter the courthouse on probabilities, one does not. The Supreme Court identified three standing requirements: (1) “that the injury was
Contrast such a suit to an objective test for a forward-looking injunction. See City of L.A. v. Lyons, 461 U.S. 95, 105, 103 S. Ct. 1660, 1667 (1983) (evaluating injunctive standing using a “likely to suffer future injury” standard). For forward-looking relief, only one plaintiff need show an actual injury because, with injunctive relief, whether the suit is brought by one plaintiff or one million plaintiffs, the injunction preventing future conduct remains the same.
Any use of the state legislative power does not solve the standing problem. “[E]ven though ‘Congress [or a state legislature] may elevate harms that exist in the real world before [the legislature] recognized them to actionable legal status, it may not simply enact an injury into existence.‘” TransUnion, 141 S. Ct. at 2205 (internal quotations omitted) (quoting Hagy v. Demers & Adams, 882 F.3d 616, 622 (6th Cir. 2018)). And the Supreme Court has already rejected the idea that “a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Spokeo, Inc. v. Robins, 578 U.S. 330, 341, 136 S. Ct. 1540, 1549 (2016). “[T]he public interest that private entities comply with the law cannot ‘be converted into an individual right by a statute that denominates it as such, and that permits all citizens . . . to sue.‘”27 TransUnion, 141 S. Ct. at 2206 (quoting Lujan, 504 U.S. at 576–77, 112 S. Ct. at 2145).
Further, vindicating the public interest ought to be in the hands of a democratically accountable enforcing party, such as a state attorney general, not private parties with no standing. “Private plaintiffs are not accountable to the people and are not charged with pursuing the public interest in enforcing a defendant‘s general compliance with regulatory law.” Id. at 2207 (citation omitted).
Importantly for a Misrepresentative Advertising Class Action, “[e]very class member must have Article III standing in order to recover individual damages.” Id. at 2208. In other words, unnamed class members cannot get into court using the named plaintiff‘s ticket.28
D.
Finally, the way these statutory causes of action are presented in the Majority opinion presents a Separation of Powers Problem.
Each and every statutory cause of action—Florida, New York, Washington, and Missouri—requires causation as an element. See City First Mortg. Corp. v. Barton, 988 So. 2d 82, 86 (Fla. 4th Dist. Ct. App. 2008) (requiring “causation“); Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 126 (2d Cir. 2007) (requiring the plaintiff to have sustained an injury “as a result” of defendant‘s act or practice); Peoples v. United Servs. Auto. Ass‘n, 452 P.3d 1218, 1221 (Wash. 2019) (requiring “a causal link between the act and the injury“); Murphy v. Stonewall Kitchen, LLC, 503 S.W.3d 308, 311 (Mo. Ct. App. 2016) (requiring the plaintiff‘s injury to occur “as a result of” a violation of the statute); Kwikset Corp. v. Superior Ct., 246 P.3d 877, 887 (Cal. 2011) (requiring causation for standing under the UCL).
As shown in part II, supra, the inherent causal mechanism in a misrepresentation claim is reliance. Therefore, any state court that announces that the respective state statute does not require a showing of reliance must have done one of two things.
One, it might be that the case before that state court, though brought under the state consumer protection statute, was not a misrepresentation case. Perhaps then, a causal mechanism other than reliance might suffice and the plaintiff in fact does not need to prove reliance. If so, an announcement that the statute does not require a showing of reliance has nothing to say about this case—a Misrepresentative Advertising Class Action—where reliance is the causal mechanism.
Two, the state court might have usurped the state legislature‘s power and rewrote the statute. Separation of powers principles in all five of the states at issue here forbid such a usurpation. See Hawkins v. Ford Motor Co., 748 So. 2d 993, 1000 (Fla. 1999) (“[T]his Court may not rewrite statutes contrary to their plain language.“); In re Chase Nat‘l Bank of City of N.Y., 28 N.E.2d 868, 871 (N.Y. 1940) (“[I]t is not within the province of this court to rewrite the enactments of the Legislature.“); City of Charleston ex rel. Brady v. McCutcheon, 227 S.W.2d 736, 739 (Mo. 1950) (“To so rewrite this statute would be but judicial usurpation of the legislative function. That we cannot do.“); Millay v. Cam, 955 P.2d 791, 795 (Wash. 1998) (“Courts do not amend statutes by judicial construction . . . nor rewrite statutes to avoid difficulties in construing and applying them.” (internal quotation marks and citations omitted)); Seaboard Acceptance Corp. v. Shay, 5 P.2d 882, 885 (Cal. 1931) (“This court cannot . . . in the exercise of its power to interpret, rewrite the statute.“).
This Separation of Powers Problem is further exacerbated by the Free Speech Problem. While state legislatures can exercise their police power to proscribe unprotected speech, if the government has an interest in protecting the populace from some sort of injury, it is a completely different matter if courts, which do not possess police power, do so. Compare Gitlow v. New York, 268 U.S. 652, 670, 45 S. Ct. 625, 631 (1925) (finding that an enactment by the state legislature did not exceed the police power and violate the defendant‘s free speech right), with Cantwell v. Connecticut, 310 U.S. 296, 307–308, 60 S. Ct. 900, 905 (1940) (coming to the opposite conclusion because a state court rather than the legislature attempted to engage in the police power by weighing the state‘s interest against the First Amendment interest).
As stated in part III.A, supra, in reading out the causation element of these statutes on its own initiative, the state court creates a prophylactic ban on protected and unprotected speech alike out of whole cloth. If a state desires to penalize unprotected speech, the state legislature can craft a prohibition by utilizing the police power. But the state court cannot so exercise the police power. See Gandy v. Borras, 154 So. 248, 249 (Fla. 1934) (“When a subject lies within the police power of the state, debatable questions as to reasonableness of the exercise of the power are not for the courts but for the Legislature.“); People v. Munoz, 172 N.E.2d 535, 539 (N.Y. 1961) (“It is for the courts to determine, not how the police power should be exercised, but whether there is reasonable relation between the statute or ordinance and the object sought to be attained.“); Star Square Auto Supply Co. v. Gerk, 30 S.W.2d 447, 462 (Mo. 1930) (“The propriety, wisdom, and expediency of legislation enacted in pursuance of the police power is exclusively a matter for the Legislature. The single question which lies within the province of the judiciary for its determination is whether the Legislature, in the exercise of the police power, has exceeded the limits imposed by the Constitution, federal or state.“); Granat v. Keasler, 663 P.2d 830, 832 (Wash. 1983) (implying that the police power rests outside the judiciary because “[a]n exercise of the police power . . . is subject to judicial review“); Frost v. City of L.A., 183 P. 342, 345 (Cal. 1919) (“The Legislature is possessed of the entire police power of the state . . . .“).
Normally, the legislature exercises the police power, and the courts serve as backstops to ensure the legislature‘s use of the power does not violate the state or federal constitutions. The situation we have here turns this on its head. In reading out a necessary element of a Misrepresentative Advertising Class Action, courts usurp the police power and do so not to remedy constitutional deficiencies, but to create them.
IV.
With these four constitutional problems, how could these six Misrepresentative Advertising Class Actions go forward? These four constitutional problems, see supra part III, can remain hidden under the hood if a court adopts state court language wholesale. The Majority opinion illustrates this point. The Majority frames the predominance inquiry of the state laws at issue here as asking “(1) whether those laws require proof of reliance, (2) if so, whether they permit reliance to be presumed, and (3) if so, under what circumstances.” Maj. Op. at 2.
The Majority correctly sets off on the proper inquiry under the predominance requirement:
The first step in assessing predominance is to “identify the parties’ claims and defenses and their elements” and to categorize “these issues as common questions or individual questions by predicting how the parties will prove them at trial.” Id. A common issue is one that will likely be proved using the same evidence for all class members; an individualized issue, by contrast, is one that will likely be proved using evidence that “var[ies] from member to member.”
Instead of ending its analysis, however, the Majority splits the claims before us into three buckets: Bucket One—the Florida, Missouri, Washington, and New York statutory claims—includes the class certifications which the Majority affirms; Bucket Two—the Texas statutory claim and Tennessee, Washington, and New York common law fraud claims—includes the class
But the Majority‘s analyses of the Bucket One claims do not rely on a presumption because that bucket “comprises state causes of action that don‘t require proof of reliance.” Id. at 16. It therefore appears a presumption analysis only plays a part in the Buckets Two and Three analyses. Id. at 20–25. As to the Bucket One
claims, in a Misrepresentative Advertising Class Action, causation inherently requires reliance. See supra part II.B. And just as state courts cannot pluck the causation element out of a statutory cause of action, see supra part III.D, the Majority cannot do the same in this Court without itself violating the four constitutional principles outlined in part III, supra.
What about the two California claims in Bucket Three? The Majority identifies the Bucket Three claims as those causes of action that rely on the presence of a presumption. Maj. Op. at 23. Presumptions come in two flavors: what I will call classical and conclusive. A classical presumption, which generally applies to a fact the plaintiff must prove to establish a claim, temporarily excuses the plaintiff’s burden of proving such a fact to establish a claim sufficient to withstand a motion for judgment as a matter of law at the close of the plaintiff’s case. The defendant can rebut the presumption and, if successful, the plaintiff has the burden of proving the presumed fact at trial.
The classical presumption could not possibly apply to any of the claims asserted in this case. The classical presumption works when a defendant possesses evidence the plaintiff needs to establish a prima facie case. Therefore, the plaintiff needs evidence of the presumed fact to avoid a judgment as a matter of law. The classical presumption temporarily relieves the plaintiff until the defendant—the party with control over the evidence necessary to prove or disprove the presumed element—rebuts the presumption. A conclusive presumption, on the other hand, operates as a matter of policy—if enacted in a statute itself—or interpretation—if a court creates the presumption through a judicial decision “declaring” common law—and serves as a prophylactic. Essentially, because it permanently relieves a party of the burden to prove an element, the conclusive presumption erases the element. For example, if a cause of action requires (1) a false statement, (2) an economic injury, and (3) reliance, a judicially created conclusive presumption as to reliance makes a defendant liable whether or not a plaintiff relied, despite the statute requiring a showing of reliance. The constitutional problems, therefore, that accompany a court reading out an element of a claim discussed in part III, supra, all apply to a judicially created conclusive presumption as well.
With the conclusive presumption a non-starter, what about the classical version? The classical presumption makes absolutely no sense in the context of reliance. Between the purchasing customer and the manufacturing seller, who is more likely to possess evidence of the reliance or non-reliance of any given purchaser? Obviously, the purchaser him or herself. What could the seller—defendant Ford in this case—possibly have to offer the factfinder
So, the Majority, in focusing on a presumption of reliance for the Bucket Three claims, must mean a conclusive presumption. As for the California statutory claim, a presumption—let alone a conclusive presumption—does not derive from the statute. See supra part I.E. Rather, “Courts applying California law” have declared the statute implies it. Maj. Op. at 24. Likewise, the Majority indicates that the California common law claim includes reliance as an element, but that courts apply a presumption to those common law claims as well. Id. at 25. The Majority says that they do this where “the same material misrepresentations have actually been communicated to each member of a class.” Id. (quoting Mirkin v. Wasserman, 858 P.2d 568, 575 (Cal. 1993)). The fact that courts interpreting California law had to create and apply a presumption (thus excusing proof of reliance) suggests that the default prior to the court-created presumption, even for the common law misrepresentation claim, required plaintiffs to plead and prove reliance. Thus, the judicial elimination of an element—despite being labelled a presumption—runs afoul of the four constitutional problems explained in part III, supra.31
V.
The Majority‘s analysis integrates two errors: (1) it interprets state cases about non-Misrepresentative Advertising Class Actions as issuing guidance (though in dicta) for decisions involving Misrepresentative Advertising Class Actions; and (2) it allows state court cases that involve Misrepresentative Advertising Class Actions but that do not wrestle with the four constitutional problems, see supra part III, to bind this Court, when we should refuse to give full faith and credit to those decisions. The Majority cites other federal courts and state courts interpreting the consumer protection statutes in this case and, at first glance, they seem to say that for the Florida, New York, Washington, Missouri, and California statutory claims and the California common law claims, there is no need for each individual plaintiff to plead and prove individual reliance. But these prior cases do not cure the four constitutional ills discussed in part III, supra.
The remainder of part V looks to each state and the case or cases where the Majority finds either a state law presumption of reliance (for Bucket Three) or an elimination of a reliance requirement (for Bucket One). Then, for each state court case, I provide an explanation why either (1) the proposition the Majority cites the case for is dicta due to the case being so different from the Misrepresentative Advertising Class Action we have here, or (2) the state court case was constitutionally deficient and should therefore not be followed, or (3) both.
A.
We begin with New York. The Majority correctly identifies a claim under
Does Stutman control here? In short, no. In Stutman, [The] plaintiffs allege[d] that defendant violated section 349 by promising . . . that there would be no “prepayment charge,” but then assessing a $275 “attorney‘s fee” when plaintiffs sought to refinance their loan. Plaintiffs contend that the $275 fee was a “prepayment charge” in disguise and that the note was deceptive for not revealing that fee.
Stutman, 731 N.E.2d at 612. The New York Court of Appeals recognized that while a
The New York court stated that the Stutmans and their associated class members “allege[d] that defendant‘s material deception caused them to suffer a $275 loss” by “alleg[ing] that because of defendant‘s deceptive act, they were forced to pay a $275 fee that they had been led to believe was not required.” Id. at 612–13 (emphasis added). According to the New York court, they did not also need to “additionally allege that they would not otherwise have entered into the transaction.” Id. at 613. For the Stutmans’ claim, causation and reliance could be separated. In a Misrepresentative Advertising Class Action, however, causation inherently requires reliance. See supra part II. Stutman‘s general statements about reliance cannot bind this Court now.
Further, the entire reliance discussion in Stutman is dicta. As soon as the New York court declared that the plaintiffs adequately alleged causation, it held, “Nevertheless, we uphold the Appellate Division‘s dismissal of plaintiffs’ claim, for a different reason: plaintiffs have failed to show that defendant committed a deceptive act.” Stutman, 731 N.E.2d at 613. The Majority‘s look to New York state court precedent does not change the analysis in parts I–III, supra. Individual issues will predominate for the New York claim class because each plaintiff will need to individually establish reliance.
B.
Let us move on to Missouri. The MMPA requires a plaintiff to prove that he has “(1) purchased merchandise (which includes services) from defendants; (2) for personal, family or household purposes; and (3) suffered an ascertainable loss of money or property; (4) as a result of an act declared unlawful under the [MMPA].” Murphy v. Stonewall Kitchen, LLC, 503 S.W.3d 308, 311 (Mo. Ct. App. 2016) (citing Hess v. Chase Manhattan Bank, USA, 220 S.W.3d 758, 773 (Mo. 2007)). Just as with the New York statute, “there is no denying that causation is a necessary element of an MMPA claim.” Owen v. Gen. Motors Corp., 533 F.3d 913, 922 (8th Cir. 2008).
Murphy likely could not guide this Court even without any concern over not following constitutionally deficient state court cases. In Murphy, the intermediate appellate court in Missouri reversed the trial court‘s dismissal of Murphy‘s MMPA claim that asserted the defendant misrepresented that “its cupcake mix was ‘all natural’ when it contained the ingredient of sodium acid pyrophosphate (SAPP), a chemical that acts as a leavening agent and is found in commercial baking powders.” Murphy, 503 S.W.3d at 310. In its reasoning, the Murphy court declaims a reliance requirement and uses an objective test.34 Id. at 311–12. But the court made such declarations not in discussing causation
In actually addressing the “ascertainable loss” prong, the Murphy court briefly remarked that Murphy adequately pled an ascertainable loss under the “benefit-of-the-bargain rule.” Id. at 313. In so doing, however, the Murphy court explicitly recognized that the “plaintiff‘s loss should be a result of the defendant‘s unlawful practice.” Id. (emphasis added). In a Misrepresentative Advertising Class Action, such causation requires reliance. See supra part II. I also note that, though Murphy filed the complaint as a putative class action, the opinion suggests that no court had yet analyzed whether a putative class could be certified and therefore no court had yet wrestled with the predominance questions we wrestle with here. Therefore, Murphy seems to be inapposite, especially in its adoption of a reliance-less causation standard and objective test for causation. Insofar as Murphy is on point, however, we need not give it weight as the court would have overstepped constitutionally by not requiring a showing of reliance (and thus causation) in a misrepresentation case.
Further, I do not think the benefit-of-the-bargain rule can apply to a case like that which the instant plaintiffs allege against Ford. The Majority notes that “state courts in Missouri have held that the injury- and causation-related elements of an MMPA claim can be established class-wide under what those courts call a ‘benefit-of-the-bargain rule.‘” Maj. Op. at 20 (citing Plubell v. Merck & Co., 289 S.W.3d 707, 714–15 (Mo. Ct. App. 2009)).35 While that may work for some types of MMPA claims, in my view the “benefit-of-the-
bargain” theory does not work when it comes to products like cars and houses. Unlike most other products, the final price of a car or home results from negotiations between a buyer and a seller. The price is not taken as a given like with most products one picks up at the local big box store. For plaintiffs to show they did not receive the benefit of their bargain, they would need to show what they specifically bargained for with the seller, here, the Ford dealership. This would cause the same predominance problems as an individual reliance requirement. And if we were to allow a presumption that the plaintiff did not receive the benefit of their bargain without giving Ford a chance to respond or rebut, we would violate Ford‘s due process rights.36 Therefore, Missouri case law, as
C.
Now, we move to Washington. Even the Majority recognizes that such a Washington statutory claim explicitly requires “a causal link between the act and the injury.” Peoples v. United Servs. Auto. Ass‘n, 452 P.3d 1218, 1221 (Wash. 2019); Maj. Op. at 18. The Washington Supreme Court adopted a proximate cause standard that requires a plaintiff to “establish that, but for the defendant‘s unfair or deceptive practice, the plaintiff would not have suffered an injury.” Schnall v. AT&T Wireless Servs., Inc., 259 P.3d 129, 137 (Wash. 2011) (emphasis added) (quoting Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 170 P.3d 10, 22 (Wash. 2007)). This sounds like the Washington high court recognizes that in a Misrepresentative Advertising Class Action, reliance would be required to prove causation.
The Majority relies on Thornell v. Seattle Serv. Bureau, Inc. for the proposition that reliance is not necessarily required to make out a cause of action under Washington‘s consumer protection statute. Thornell, 363 P.3d 587 (Wash. 2015). This case involved answering two certified questions from the United States District Court for the Western District of Washington. First, the Washington court said the Washington consumer protection act “allows a cause of action for a plaintiff residing outside Washington to sue a Washington corporate defendant for allegedly deceptive acts.” Id. at 589. Any discussion of this point cannot have any bearing on the instant analysis except via dicta. Second, the Washington court said, “the [consumer protection statute] supports a cause of action for an out-of-state plaintiff to sue an out-of-state defendant for the allegedly deceptive acts of its in-state agent.” Id. Again, any discussion on this holding relevant to our discussion would have to be in dicta.37
D.
The California statutory claim‘s deficiency cannot be cured by additional factual findings on remand. The Majority points to a possible court-created presumption of reliance where “the defendant so pervasively disseminated material misrepresentations that all plaintiffs must have been exposed to them.” Walker v. Life Ins. Co. of the Sw., 953 F.3d 624, 631 (9th Cir. 2020); Maj. Op. at 24. But the instant case, at bottom, involves the plaintiffs asserting that Ford falsely or misleadingly advertised the Shelby GT350. Such a claim is encapsulated by the “untrue or misleading advertising” prong of the UCL.
The supposed conclusive presumption of reliance derives from a case in which the Supreme Court of California constitutionally overstepped. In re Tobacco II Cases, 207 P.3d 20 (Cal. 2009). In that iteration of the wide-ranging tobacco class action litigation, the California high court held (1) “that standing requirements [under the UCL] are applicable only to the class representatives” and (2) “a class representative proceeding on a claim of misrepresentation as the basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements, in accordance with well-settled principles regarding the element of reliance in ordinary fraud actions.” Id. at 25–26. The California court, quoting its previous cases, concluded, “[T]o state a claim under either the UCL or the false advertising law, based on false advertising or promotional practices, it is necessary only to show that members of the public are likely to be deceived.” Id. at 29 (alteration in original) (internal quotation marks and citation omitted). This probabilistic objective test would be troubling by itself, but the court goes on, again quoting itself, “A UCL action is equitable in nature; damages cannot be recovered. . . . We have stated under the UCL, [p]revailing plaintiffs are generally limited to injunctive relief and restitution.” Id. (alteration in original) (internal quotation marks and citation omitted). The California court seems to miss the difference between forward-looking injunctive relief and backward-looking damages, and creates Due Process, Standing, and Free Speech Problems for future California class litigants.
The court continues by differentiating a fraudulent business practice UCL claim from common law fraud. “None of these elements[, including reliance,] are required to state a claim for injunctive relief under the UCL.” Id. (emphasis added) (internal quotation marks and citation omitted). Despite recognizing that an objective test springs from relief under the UCL being injunctive, the Tobacco II court appears to adopt the objective test for damages actions as well, at least as far as unnamed plaintiffs go:
Id. at 35 (emphases in original) (citations omitted). Even if the California court correctly interpreted the statute as a linguistic matter,38 excusing such proof of reliance runs afoul of the four constitutional problems discussed in part III, supra.
Similarly, the language of section 17203 with respect to those entitled to restitution—“to restore to any person in interest any money or property, real or personal, which may have been acquired” . . . by means of the unfair practice—is patently less stringent than the standing requirement for the class representative—“any person who has suffered injury in fact and has lost money or property as a result of the unfair competition.” . . . This language, construed in light of the “concern that wrongdoers not retain the benefits of their misconduct” . . . has led courts repeatedly and consistently to hold that relief under the UCL is available without individualized proof of deception, reliance and injury.
Named class members must still prove actual reliance. Tobacco II, 207 P.3d at 39. Excusing the unnamed class members from this burden causes a practical problem in addition to the constitutional problems. How is an unnamed class member to obtain restitution without an individual inquiry into injury and damages? For this reason, California‘s interpretation of the UCL is erroneous, at least as applied to a misrepresentation case like we have here. For all the reasons just discussed, we should not follow the California court‘s lead in not requiring an individual showing of reliance because such a holding would violate the United States Constitution. Because California case law, as cited by the Majority, does not change the analysis in parts I–III, supra, individual issues will predominate for the California statutory claim class because each plaintiff will need to individually establish reliance.
I briefly note that, even without the Separation of Powers Problem, the same reasoning above applies to the California common law fraud claim. Even California courts recognize that “there is no doubt that reliance is the causal mechanism of fraud.” Tobacco II, 207 P.3d at 39. For the reasons discussed above, California courts cannot constitutionally skirt this required element of fraud by deploying a conclusive presumption. See Mirkin v. Wasserman, 858 P.2d 568, 572 (Cal. 1993) (requiring actual reliance for a common law deceit cause of action). Therefore, this claim should also be reversed.
E.
1.
Finally, we come to the FDUTPA claim. This claim suffers from the same deficiencies as many of the other claims we have discussed. A FDUTPA claim requires a plaintiff to show (1) a deceptive act or unfair practice, (2) actual damages, and (3) causation. Carriuolo v. Gen. Motors Co., 823 F.3d 977, 983 (11th Cir. 2016) (citing City First Mortg. Corp. v. Barton, 988 So. 2d 82, 86 (Fla. 4th Dist. Ct. App. 2008)). In a Misrepresentative Advertising Class Action, causation inherently requires a showing of reliance. See supra part II. Because Florida is geographically within this Circuit
To begin, almost all roads lead back to Davis v. Powertel, Inc., 776 So. 2d 971 (Fla. 1st Dist. Ct. App. 2000). In Davis, the plaintiffs alleged that Powertel sold cell phones without informing purchasers that the phones “had been programmed to work only with Powertel‘s wireless communication service,” despite looking identical to cell phones from the same brands one could buy at other retail outlets. Id. at 972. The plaintiffs sought damages because they argued the nondisclosure of this modification “reduced the value of the phone in each case,” even for those who actually desired Powertel‘s wireless service. Id. at 973. The court held that a class action for damages under the FDUTPA does not require “an allegation that individual members of the class relied on the act or omission that is alleged to be unlawful.” Id. at 972. In reaching this conclusion, though, the Davis court incorrectly interpreted federal law. Therefore, despite Davis being a Florida court‘s interpretation of Florida law—and in addition to the reasons discussed in part IV, supra, for not crediting state courts’ unconstitutional statutory interpretations—the Davis court incorrectly interpreted federal law to interpret the FDUTPA and this federal Court need not have accepted the Florida court‘s incorrect interpretation of federal law. I explain.
The FDUTPA explicitly requires courts to interpret the statute by giving “‘due consideration and great weight’ to Federal Trade Commission and federal court interpretations of section 5(a)(1) of the Federal Trade Commission Act.” Davis, 776 So. 2d at 974 (quoting
The FTC Act only allows for forward-looking relief (initially) pursued by an arm of the government. See supra part I.A. The FDUTPA, however, allows for damages through a private right of action.
In sum, the FTC Act does not require reliance because suits are brought by the government and offer only prospective relief or civil damages. Retrospective private damages are a completely different animal. The FDUTPA does not deputize every Florida citizen to police false advertising
2.
Unfortunately, our survey of the shaky ground on which Davis sits continues. The Davis court cited a case from another Florida District Court and further confuses the difference between
52 TJOFLAT, J., Concurring and Dissenting in Part 22-10575
damages and injunctive relief. Davis, 776 So. 2d at 974 (citing Millennium Commc‘ns & Fulfillment, Inc. v. Off. of the Att‘y Gen., 761 So. 2d 1256 (Fla. 3d Dist. Ct. App. 2000)). One can tell merely from the title of the case that Millennium was not a damages action by a private plaintiff, but rather an enforcement action by the Florida attorney general under the FDUTPA; a situation actually analogous to the actions under section five of the FTC Act. But let us not judge a book by its cover or a case by its title. In fact, Millennium was an appeal of a temporary injunction (equitable relief) in a case brought by the Attorney General‘s Department of Legal Affairs, not a private party. Millennium, 761 So. 2d at 1257. The Department ultimately sought only “an injunction, civil penalties and other statutory relief,” not damages. Id. at 1258.
Next, the Davis court enlisted the help of another case from Florida‘s Third District Court of Appeal for the objective test; this one seemingly more relevant. Davis, 776 So. 2d at 974 (citing Latman v. Costa Cruise Lines, N.V., 758 So. 2d 699 (Fla. 3d Dist. Ct. App. 2000)). In Latman, the District Court of Appeal reversed denials of class certification. Latman, 758 So. 2d at 700-01. Plaintiffs, cruise ship passengers, alleged claims under the FDUTPA against defendant cruise lines related to “port charges” that cruise lines included in the ticket price and allegedly kept for themselves. Id. at 701. The Latman court analogized the cruise lines’ alleged behavior to a hypothetical company before adopting an objective, reliance-free test under the FDUTPA. Id. at 703.
Suppose that a company systematically overcharges its customers on sales tax. The hypothetical company pays the state the sales tax that it owes, and then keeps the overcharge for itself.
We would not hesitate to say that an intentional overcharge of sales tax, which is kept by the company itself, is an unfair and deceptive trade practice and that the consumer must be repaid. That is so even though the consumers clearly were willing to pay the price charged—in the hypothetical example, they actually paid the sales tax overcharges—nor would it make a difference that the consumers paid no attention to the sales tax amount.
Id. This hypothetical differs vastly from a situation like the instant case where the alleged misrepresentation derived from multiple sources and a plaintiff class member may not have actually suffered damages depending on his or her intended use of the vehicle or negotiations prior to purchasing the vehicle. In fact, the analogous circumstance in the instant case would be if Ford charged 1% additional sales tax and pocketed that money. That deception would be uniform, and damages would be, if not uniform, easily ascertainable by a
The Davis court tries to strengthen its citation to Latman by pointing to one other jurisdiction where a court favorably cited the case and three other jurisdictions that also adopted an objective test under their respective consumer protection statutes. History has not been kind to these citations.
First, Davis says Washington adopted Latman‘s objective test. Davis, 776 So. 2d at 974 (citing Pickett v. Holland Am. Line-Westours, Inc., 6 P.3d 63 (Wash. Ct. App. 2000)). However, after Davis, the Supreme Court of Washington reversed the Pickett court‘s “deciding the merits of the trial court‘s denial of class certification,” which included that court‘s approval of Latman. Pickett v. Holland Am. Line-Westours, Inc., 35 P.3d 351, 360, 362 (Wash. 2001).
Second, Davis looks to an Illinois court‘s rejection of a reliance element in that state‘s consumer protection statute. Davis, 776 So. 2d at 974 (citing Oliveira v. Amoco Oil Co., 726 N.E.2d 51 (Ill. App. Ct. 2000)). Again, after Davis, the Supreme Court of Illinois reversed the Oliveira court‘s decision, explicitly stating that the Illinois consumer protection statute requires something akin to reliance. Oliveira v. Amoco Oil Co., 776 N.E.2d 151, 161 (Ill. 2002). The plaintiff in that case did not successfully allege the statute‘s proximate cause element because he did not allege he was deceived by the advertisements in that case. Id. at 164.
Third, Davis tries Pennsylvania. Davis, 776 So. 2d at 974 (citing Weinberg v. Sun Co., 740 A.2d 1152 (Pa. Super. Ct. 1999)). But again, after Davis, the Supreme Court of Pennsylvania reversed the Weinberg court in part, holding that the state consumer protection statute “clearly requires, in a private action, that a plaintiff suffer an ascertainable loss as a result of the defendant‘s prohibited action. That means . . . a plaintiff must allege reliance.” Weinberg v. Sun Co., 777 A.2d 442, 446 (Pa. 2001) (emphasis in original).
Fourth and finally, Davis points to Michigan‘s objective test. Davis, 776 So. 2d at 974 (citing Dix v. Am. Bankers Life Assurance Co. of Fla., 415 N.W.2d 206 (Mich. 1987)). Admittedly, Dix has not been overturned and directly states, “We hold that members of a class proceeding under the [Michigan] Consumer Protection Act need not individually prove reliance on the alleged misrepresentations. It is sufficient if the class can establish that a reasonable person would have relied on the representations.” Dix, 415 N.W.2d at 209 (footnote omitted). Not only is Dix in no way binding on either this Circuit or the Florida courts, but its reasoning implicates all the constitutional concerns discussed in part III, supra. Further, the Dix holding resides in a discussion of the “convenient
3.
While Davis recognizes that “the ‘likely to mislead’ standard was developed for use with the Federal Trade Commission Act, which has no provision for a suit by a private citizen,” it still adopts the test, absent more specific guidance about the interpretative clause of the FDUTPA. Davis, 776 So. 2d at 974. This was erroneous. And because the Davis court explicitly looked to federal law to interpret Florida law, this issue falls within our bailiwick and we need not blindly follow this Florida court‘s holding. Hopefully, the preceding analysis shows that Davis is a thin reed to lean on, the Davis court misinterpreted the FTC Act, and we should not have relied on that case to interpret the FDUTPA in this Court. Again, I call on the court en banc to address our erroneous cases that adopt Florida‘s supposed objective test and correct the case law in this Circuit. Let us now examine the Eleventh Circuit cases that seem to adopt the objective test and determine whether or not they can stand.
In Zlotnick v. Premier Sales Group, Inc., a plaintiff appealed the dismissal for failure to state a claim of his class action complaint alleging FDUTPA violations against real estate companies for “market[ing a] condominium complex, solicit[ing] deceptive reservation agreements to secure financing and then terminat[ing] the reservation agreements with the sole purpose of reaping the benefits of a rising real estate market.” 480 F.3d 1281, 1283-84 (11th Cir. 2007). The Zlotnick court adopted the objective test from Millennium Commc‘ns—which we have already seen is inapposite to a damages claim—rather than from Davis. Id. at 1284 (citing 761 So. 2d at 1263). The erroneous reading of Florida law did not negatively impact the outcome, however, because the Court found Zlotnick failed to state a claim even under the objective test. Id. at 1287.
In Fitzpatrick v. General Mills, Inc., this Court considered an interlocutory appeal of class certification. 635 F.3d 1279, 1280 (11th Cir. 2011). The plaintiffs in that case claimed to have been duped by General Mills‘s advertisements touting the digestive health benefits of YoPlus yogurt and filed a FDUTPA claim. Id. at 1281. While remanding for a new definition of the class, this Court agreed with the District Court and praised its analysis that concluded the class members did not need to individually prove reliance, specifically that they purchased YoPlus “to obtain its claimed digestive health benefits.” Id. at 1282-83. In reaching this conclusion, the Court cited the objective test prescribed by Davis as well as in another Florida state court case. Id. (citing Davis, 776 So. 2d at 973 and State, Off. of Att‘y Gen. v. Com. Com. Leasing, 946 So. 2d 1253, 1258 (Fla. 1st Dist. Ct. App. 2007)). We have already discussed Davis at length. But Com. Com. Leasing serves as a bad guide as well. That case involved the Florida Attorney General suing to enforce the FDUTPA, not a class action under the FDUTPA. Com. Com. Leasing, 946 So. 2d at 1255. Therefore, the en banc Court should overturn Fitzpatrick as erroneously
In Carriuolo v. General Motors Co., this Court considered an interlocutory appeal of class certification. 823 F.3d 977, 980-81 (11th Cir. 2016). The nub of the claim in that case was that the National Highway Traffic Safety Administration had not yet assigned safety ratings to the 2014 Cadillac CTS sedan, despite the cars being sold with a sticker touting its five-star rating on certain features. Id. at 981-82. General Motors argued that common issues did not predominate because “some class members may have known that the safety ratings were inaccurate; some may not have been aware of the Monroney sticker; and each member negotiated the purchase or lease price individually with the dealer from whom the member purchased or leased the vehicle.” Id. at 985. But this Court relevantly held that the District Court did not abuse its discretion in certifying the plaintiff class for the FDUTPA claim because Davis instructs that plaintiffs do not need to show actual reliance. Id. at 985, 990 (citing Davis, 776 So. 2d at 973). Carriuolo also looks to Com. Com. Leasing, and Fitzpatrick. As already discussed, all three of these cases led the Carriuolo court astray, and the en banc Court ought to overturn Carriuolo as well.
In Debernardis v. IQ Formulations, LLC, plaintiffs appealed the dismissal of their complaint on grounds that they lacked standing. 942 F.3d 1076, 1080 (11th Cir. 2019). The complaint sought class action certification and alleged that the defendants sold dietary supplements that were “adulterated” as defined by the
The plaintiff in Marrache v. Bacardi U.S.A., Inc. filed a putative class action against Bacardi and Winn-Dixie asserting, relevantly, a FDUTPA claim that defendants “adulterat[ed] Bombay [Sapphire Gin] with grains of paradise.” 17 F.4th 1084, 1089-90 (11th Cir. 2021). The District Court dismissed the amended complaint, and we affirmed. Id. This Court affirmed the dismissal “because Marrache‘s FDUTPA claims fall under FDUTPA‘s safe harbor provision,” and in the alternative “because Marrache failed to state a plausible claim for actual damages under FDUTPA.” Id. at 1101. Though Marrache takes the objective test from Carriuolo and Zlotnick, id. at 1097-98, the erroneous reading of the FDUTPA did not negatively impact this decision, as the Court ultimately concluded none of the class members alleged actual damages. Id. at 1101. Therefore, Marrache also likely need not be addressed en banc.
4.
I take a moment now to discuss another Florida District Court of Appeal case cited in Carriuolo, Debernardis, and Marrache for the benefit-of-the-bargain theory under FDUTPA: Rollins, Inc. v. Heller, 454 So. 2d 580 (Fla. 3d Dist. Ct. App. 1984). Heller was an appeal of a final judgment awarding the plaintiffs damages on their claims
First, the benefit-of-the-bargain damages measurement Heller adopted from Texas (and for which our Court cites Heller), was used to limit, the plaintiff‘s damages in Heller itself. Id. at 585-86. The Hellers originally won damages for the property stolen during the burglary, but the District Court of Appeal limited the FDUTPA damages to “the difference in the market value of the [alarm system] in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties.” Id. at 585 (citation omitted). Absent other Florida courts independently adopting the test, we should hesitate before leaning too heavily on this case to expand liability and damages in the class action context. Second, before adopting the Texas test for damages, the Heller court recognized erroneously that the Florida “legislature specifically provided that great weight was to be given to the federal courts’ interpretations of the Federal Trade Commission Act.” Id. at 584. Of course, this is only erroneous because Heller involved a FDUTPA damages claim, see supra V.D.1, not an injunctive FDUTPA claim.
5.
Before signing off, I also would like to point out that a Florida state court has recognized the dangers of rolling over due process rights in the interest of class action efficiency.
In Rollins Inc. v. Butland, plaintiffs filed a class action complaint in part under the FDUTPA, alleging violations “arising from Orkin‘s contractual undertakings related to the control of subterranean termites.” 951 So. 2d 860, 865 (Fla. 2d Dist. Ct. App. 2006). Plaintiffs sought actual damages for payments made to Orkin as well as property damage caused by subterranean termites. Id. at 866. “[M]embership in the proposed class was not limited to customers who sustained damage to their residences as a result of an infestation of subterranean termites,” but members who did not suffer damages were limited to the actual damages from payments to Orkin. Id. The District Court of Appeal reversed class certification, id. at 882, specifically finding that individual questions predominated both to prove the deceptive acts and unfair practices themselves (prong one of the FDUTPA), id. at 871, and to prove causation and damages. Id. at 873.
The court lucidly stated the following regarding the trial court‘s attempt to utilize the class-wide proof for this complex contract case alleging fourteen separate deceptive acts, id. at 870:
In a case such as this, authorizing class-wide proof to be made based on alleged company-wide pervasive schemes and business practices is not only inconsistent with established Florida precedent, but it also has the potential to deny the Appellants substantive due process of law. Under the substantive law applicable to the FDUTPA damages claim, each member of the putative class must establish that the Appellants committed a deceptive act or unfair practice that caused their actual loss. Under the circumstances presented here, collective proof cannot satisfy the class members’ burden. However, if the Appellees are permitted to establish the putative class members’ claims by proof of common schemes or patterns of behavior, the Appellants
will be unable to defend against individual claims where there may be no liability. By any standard, this would amount to a violation of substantive due process of law.
VI.
In sum, I concur in the Majority‘s handling of the Texas statutory class, the Washington, New York, and Tennessee common law classes, and the California and Texas implied warranty classes. I dissent with respect to the Majority‘s position on the Florida, California, Missouri, New York, and Washington statutory classes and the California common law class. Rather than affirming them, I would have held the District Court abused its discretion when it certified those classes.
Notes
- That the person acted as a reasonable consumer would in light of all circumstances;
- That the method, act, or practice declared unlawful by [the MMPA] would cause a reasonable person to enter into the transaction that resulted in damages; and
- Individual damages with sufficiently definitive and objective evidence to allow the loss to be calculated with a reasonable degree of certainty.