X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Two recent decisions on class actions by Philadelphia Common Pleas Judge John W. Herron emphasized the need for common questions of fact among plaintiffs seeking class certification. While he overruled preliminary objections in a proposed class action against SmithKline Beecham, Herron expressed doubt that the case would be certified in the future because it lacked commonality of issues. The judge denied class certification in a case against a mortgage broker for the same reason. The proposed Pennsylvania state class action — which in part accuses SKB of failure to warn consumers of the dangers of the drug phenylpropanolamine, known as PPA — were overruled, although Herron said he “shared SmithKline’s doubts about whether the instant action will survive the certification process. … “ “If the plaintiff’s false advertising claims were to proceed as a class action, ‘questions of fact applicable to each private plaintiff would … be numerous and extensive,’” Herron wrote in his Oct. 8 opinion. The variety of scenarios would threaten the requirement of a common question of fact. Herron said the plaintiffs’ false advertising claims were sufficient to show reliance, a required element under the UTPCPL and Weinberg v. Sun, a state supreme court 2001 decision. PPA, which was pulled from the market last year by various manufacturers, was used in over-the-counter decongestants and over-the-counter diet pills. The Food and Drug Administration issued an advisory in November that stated PPA would no longer be considered safe for over-the-counter use, after a study reported PPA could cause strokes in women. Weiler seeks to represent a class of plaintiffs who bought products with PPA and suffered economic damages. The class claims SmithKline Beecham — now Glaxo SmithKline — violated Pennsylvania’s Unfair Trade Practices and Consumer Protection Law. It also accuses SKB of breach of implied warranty, strict liability and unjust enrichment. The current version of the “catchall provision” of the UTPCPL requires proof of a causal link of harm, but does not require evidence of each element of common law fraud, Herron said, as SKB had claimed. While the provision used to prohibit only “fraudulent conduct, which creates a likelihood of confusion or misunderstanding,” it was amended in 1996 to prohibit both “fraudulent or deceptive” conduct. The addition of the “deceptive” language implied that deceptive conduct is not the same as fraudulent conduct, Herron said. That, along with the supreme court’s instruction that the UTPCPL be “liberally construed,” dictate that a plaintiff need not plead all the elements of fraud (including reliance) to sustain a claim under the catchall provision. The proposed action to certify a class of homeowners who paid defendants Jules Clearfield and First Clearfield Fund a mortgage broker fee between Feb. 21, 1995, and Feb. 21, 2001, was denied certification. In a second decision issued the same day as Weiler, Herron said the plaintiffs’ claims “cannot be resolved fairly and efficiently by a class action and do not present predominating common questions of fact and law.” The plaintiffs in Floyd were not without the court’s sympathy. “In essence, the defendants are accused of embarking on a scheme by which they have defrauded unsophisticated parties and bilked them out of hundreds of thousands of dollars. This conduct is reprehensible, and the defendants’ failure to enter an appearance in this matter, let alone to submit any filings, no doubt has added to the plaintiffs’ fury,” Herron wrote. According to the complaint, each plaintiff was victim to a scheme of loans in which they were charged high broker fees. In one scenario, the terms of a promised loan were allegedly changed from the originally agreed-to terms; in another, the broker’s fee amounted to 90 percent of the amount the borrower sought to finance. In still another loan, a borrower who was supposed to receive almost $3,000 instead got only $73. Although Herron said the allegations in the complaint were “disturbing, to say the least,” he said the action was not appropriate for resolution as a class action. Herron said the action could not proceed because two of the five prongs necessary for a class action were not met. Neither were there common questions of law or fact, nor would a class action provide a fair and efficient method for adjudication of the controversy under Pennsylvania Rule of Civil Procedure 1708. Under that rule, reaching the decision that a class action is a fair and efficient method of adjudication presupposes that common questions of law predominate over any question affecting only individual members, Herron said. Herron said although the plaintiffs listed 10 items they said were common questions of fact, the UTPCPL claims they raised would present “numerous and extensive” questions of fact applicable to each individual private plaintiff. Again citing Weinberg v. Sun to support denying class certification, Herron explained, “The plaintiffs would have the burden of establishing that the damage suffered by each member of the class was caused by the defendants’ improper conduct. “This would require reviewing the reasons of each class member for entering into the transaction. Such an undertaking would involve a painstaking survey of each class member’s transaction, each of which appears to have taken place under different circumstances. …” The plaintiffs argued that an agency and/or fiduciary relationship was created between the class members and Clearfield, eliminating the need for them to prove a causal relationship on an individual level. But Herron said there was no common scheme — either argued in the complaint or apparent from the facts — to provide “the basis for finding an agency relationship on a classwide scale.”

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.