The Third Circuit recently affirmed the denial of class certification to end-payor health plans that alleged that the defendant’s “pay-for-delay” settlement of patent infringement litigation inflated prices on a prescription drug. In doing so, the court reaffirmed that named plaintiffs must present an administratively feasible mechanism to ascertain whether putative class members fall within the proposed class definition and thus took sides in a growing circuit split on that issue. See In re Niaspan Antitrust Litig., — F.4th –, 2023 WL 3243532 (3d Cir. 2023).
Third Circuit
Tenth Circuit Permits District Courts to Rely on Third and Seventh Circuit Ascertainability Precedent
By Isaac Chaput on
The Tenth Circuit recently affirmed an order denying class certification, in an unpublished decision holding that district courts may rely on out-of-circuit precedent in deciding whether a proposed class is ascertainable.…
A Closer Look: Does Purchasing a Defective or Contaminated Product Always Cause an Article III Injury?
If a tree falls in the forest but no one is around to hear it, did it make a sound? Philosophers disagree. If a product contains a contaminant but no one gets sick, did it cause an injury? Judges disagree.
In the 2000s, enterprising plaintiffs’ attorneys attempted to push the boundaries of existing tort law by arguing that plaintiffs are entitled to damages for defects even when they cause no physical injury. These so-called “no-injury” theories of liability were largely rejected by courts. E.g., Rivera v. Wyeth-Ayerst Lab’ys, 283 F.3d 315, 320–21 (5th Cir. 2002) (dismissing “no-injury products liability law suit”); Johnson v. Bankers Life & Cas. Co., 2014 WL 4494284, at *7 (W.D. Wis. Sept. 12, 2014) (recognizing that in the “consumer product context, courts routinely find lack of standing where—while a product may have been defective in the hands of others—the individual plaintiffs did not suffer the defect and, therefore, suffered no injury”).
While these cases closed the door on “no-injury” product liability claims, they left open the possibility of other “no-injury” claims, such as claims that a manufacturing defect breached a warranty or constituted fraud. E.g., Cole v. Gen. Motors Corp., 484 F.3d 717, 723 (5th Cir. 2007) (“Notably in this case, plaintiffs may bring claims under a contract theory based on the express and implied warranties they allege.”).
Whether and when “no-injury” claims are viable is a hotly debated question. As more fully discussed below, courts disagree on whether a plaintiff who has purchased a contaminated or defective product—but who has successfully used the product for its intended purpose while suffering no physical injury—can maintain a claim.…
District of New Jersey Continues Third Circuit Trend of Finding Mere Exposure to Toxic Substances in Consumer Products Insufficient for Standing
By Kaixin Fan & Ashley Simonsen on
The District Court for the District of New Jersey recently dismissed a putative class action alleging that defendants sold baby foods with high levels of heavy metals, holding that plaintiffs failed to plead an injury sufficient to support standing. In re Plum Baby Food Litigation, No. 1:21-cv-02417-NLH-SAK, 2022 WL 16552786 (D.N.J. Oct. 31, 2022). This decision adds to the list of cases in the Third Circuit holding that merely alleging exposure to toxic substances in consumer products, without more, is insufficient to establish Article III standing. See Covington’s prior blog post on the trend in the Third Circuit here.…
Third Circuit Confirms Invalidly Assigned Arbitration Agreements May Still Be Enforceable
By Andrew Soukup & Kanu Song on
A recent decision by the Third Circuit examined the circumstances under which an arbitrator must decide gateway questions of arbitrability in cases involving challenged loan assignments. In Zirpoli v. Midland Funding, LLC, the plaintiff took a loan pursuant to a contract that contained an arbitration agreement with a delegation clause. The lender then assigned…
Third Circuit Further Refines Its Ascertainability Requirement
By Sylvia Huang on
Posted in Class Action Procedure, Third Circuit
The Third Circuit recently vacated an order denying class certification, and in the process provided more clarity on what plaintiffs must do to satisfy Rule 23’s predominance and ascertainability requirements.
In Kelly v. RealPage Inc., — F.4th —, 2022 WL 3642113 (3d Cir. Aug. 24, 2022), the plaintiffs alleged that their rental applications were…
Data Breach and the Dark Web: Third Circuit Allows Class Action Standing With Sufficient Risk of Harm
By Kathryn Cahoy on
The Third Circuit recently reinstated the putative class action Clemens v. ExecuPharm Inc., concluding there was sufficient risk of imminent harm after a data breach to confer standing on the named plaintiff when the information had been posted on the Dark Web.…
Third Circuit Adopts “Reasonable Reader” Standard to Evaluate FCRA Claims.
By Marianne Spencer on
Banks, lenders, and other financial institutions who submit information to credit reporting agencies should take note of a recent Third Circuit decision adopting a “reasonable reader” standard for evaluating whether a credit report was inaccurate or misleading under Fair Credit Reporting Act (“FCRA”).…
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Post-Litigation Refund Check Does Not Moot Class Representative’s Damages Claim, but It Does Defeat Class Certification
By Andrew Leff, Andrew Soukup & Sonya Winner on
When a class action is filed, defendants often wonder whether tendering a payment to a class representative can defeat the claims. In a recent decision, the Third Circuit held that a mid-litigation payment to a class representative plaintiff does not moot her claim if the check is not cashed. Duncan v. Governor of the Virgin Islands, — F.4th —-, 2022 WL 3906213 (3d Cir. Aug. 31, 2022). But tendering the payment, even if the check is uncashed and even if the plaintiff claims the payment does not cover the full value of her claim, did make the plaintiff an atypical class representative and provided a basis to defeat certification of a damages class.…
Third Circuit Revives Wiretapping Claims Against Marketing Software Company
By Jenna Zhang on
Last week the Third Circuit reversed a summary judgment ruling in favor of Harriet Carter Gifts and NaviStone for alleged violations of Pennsylvania’s Wiretapping and Electronic Surveillance Control Act, or WESCA. See Popa v. Harriet Carter Gifts, Inc., Case No. 21-2203, 2022 WL 3366425 (3rd Cir. Aug. 16, 2022). This lawsuit is one of many recent putative class actions attempting to apply decades-old wiretapping laws against websites and their service providers. The named plaintiff is a consumer that allegedly shopped on Harriet Carter Gifts’ website while NaviStone’s marketing software was installed on the website. Plaintiff argued that defendants violated WESCA by simultaneously sending her interactions with Harriet Carter’s website to NaviStone.…
Continue Reading Third Circuit Revives Wiretapping Claims Against Marketing Software Company