United States: Nationwide Class Claims Under A Single State's Consumer Protection Laws?

Last Updated: May 13 2017
Article by Christine A. Stoddard

A flurry of recent consumer protection cases in California federal courts led to mixed results for defendants attempting to dismiss nationwide class claims based on the state's choice of law rules. The U.S. District Court for the Southern District of California recently addressed the issue in Azar v. Gateway Genomics, LLC, in which plaintiff brought a putative nationwide class action alleging, inter alia, violations of California's Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumer Legal Remedies Act (CLRA) in connection with the purchase of an early detection gender test. The defendant moved to dismiss the nationwide claims, relying on Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th Cir. 2012) and arguing the claims should be governed by the consumer protection statutes of the relevant jurisdictions. In Mazza, the Ninth Circuit vacated a class certification order after finding California's consumer protection statutes could not be applied to members of a nationwide class who made purchases in jurisdictions with materially different laws. The Southern District acknowledged that California federal courts have disagreed about whether to apply Mazza at the pleading stage, but ultimately determined that it would defer addressing the choice of law issue until class certification. The court emphasized that the plaintiff was herself a California resident who allegedly made a purchase and suffered an injury in the state, and the court was not yet able to determine whether California's choice of law rules would bar all or any of plaintiff's claims.

The Northern District of California came to a similar conclusion in Gerstle v. American Honda Motor Company, in which plaintiffs filed a putative class action that also alleged violations of state consumer protection statutes, this time related to allegedly defective vehicle Bluetooth systems. Defendant also relied on Mazza in moving to dismiss, arguing California's choice of law rules barred the nonresident plaintiffs from relying on California law. The court concluded, however, that it could not conduct a choice of law analysis until some discovery had taken place, as it was premature to attempt to determine whether differences in state consumer protection laws would be material. Instead, the court found that such a challenge would be more appropriate at the certification stage.

The results, however, appear to be fact-driven, as not all plaintiffs have avoided dismissal in the face of such challenges. The Southern District of California itself came to a different result in Azimpour v. Sears, Roebuck & Company, a putative class action involving allegedly fraudulent sale prices. Plaintiff alleged the defendant violated the UCL, FAL, and CLRA, as well as similar consumer protection laws in other states. Defendant moved to dismiss or strike the nationwide class allegations, arguing plaintiff could not apply California law to class members in other states. Apparently conceding this, plaintiff argued that he only sought to bring California claims on behalf of a California class, and he would move to certify multistate class claims rather than a nationwide class related to the other states' laws. However, this resulted in dismissal pursuant to Article III; because plaintiff himself was a California resident, the court held that he lacked standing to bring claims on behalf of consumers in other states based on other statutes. These differing outcomes have caused uncertainty for California litigants in consumer protection class actions.

Azar v. Gateway Genomics, LLC, No. 15-cv-02945 AJB (WVG) (S.D. Cal. April 25, 2017).

Gerstle v. American Honda Motor Company, No. 16-cv-04384 (N.D. Cal. April 25, 2017).

Azimpour v. Sears, Roebuck & Company, No. 15-cv-02798 (S.D. Cal. April 26, 2017).

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