4. Moving to Strike Class Allegations
If the complaint is not disposed of on a motion to dismiss, the courts decision on class certification may be the single most important event in the litigation. A defendant can try to thwart these allegations early in the litigation by filing a motion to strike the class allegations. Pursuant to Rule 23(c), at an early practicable time . . . the court must determine by order whether to certify the action as a class action. Courts can strike and have struck class allegations at the pleading stage if the class allegations are deficient or improper on their face.
The defendants argument in the food-labeling context would be that, in light of Mazza, the plaintiff cannot maintain a nationwide class action based simply on Californias consumer protection statutes. This is because Mazza found that the consumer protection laws of the states where each class member purchased the product apply to that members claims, precluding a finding that common issues of law predominate under Rule 23(b)(3) and, thus, certification of a nationwide class.
A successful motion to strike the nationwide class allegations could significantly reduce potential exposure of the client by leaving only a California (or other state) sub-class. While plaintiffs could presumably refile complaints in other jurisdictions seeking certification of a class of consumers in those states, many consumer protection laws in other states are not as plaintiff-friendly as those in California, which may deter plaintiffs from pursuing cases in those jurisdictions.
5. Bifurcating Discovery
If the case is not dismissed at the pleading stage, the parties will have to proceed with discoverya time-consuming and expensive process. Indeed, in light of the rigorous analysis necessary to determine whether the prerequisites for class certification have been satisfied under the U.S. Supreme Courts 2011 decision in Wal-Mart Stores, Inc. v. Dukes, there is increasing pressure for meaningful pre-class certification discovery.
One way to try to limit the scope and cost of discovery is to bifurcate class action discovery from merits discovery. That way, if the case does not proceed through class certification, the defendant did not waste resources discovering the merits of the plaintiffs complaint. Whether the defendant should raise bifurcation at the initial scheduling conference, however, depends on when the defendant proposes to file a summary judgment briefing. If the plan is to adjudicate summary judgment at or near the same time as class certification, bifurcation offers no real advantage. Bifurcation may also work better in theory than in practice. Drawing the line between issues of class certification and issues on the merits is often difficult, and there may be substantial overlap. And a plaintiff may argue that, by bifurcating, it is unable to meet its burden of proving that class certification is appropriate, particularly where the class certification question necessitates a merits-type inquiry.
Once discovery begins, you are off to the races. You may find yourself litigating through class certification until trial. You may find yourself weighing the pros and cons of settling. How you proceed will likely be guided by the decisions you makeand the results you and other companies have obtainedin these early stages. If it is any solace, know that, as a food marketer, you are not alone in facing legal attacks on how your products are labeled.
Kelsey Larson is an associate in OMelveny & Myerss class actions, mass torts, and insurance litigation practice. Carlos Lazatin is a partner in the firms class actions, mass torts, and insurance litigation group and the intellectual property and technology group, with a particular focus on consumer product litigation. Both reside in OMelvenys Los Angeles office.