For Manufacturers, Suits Over Lost Benefits Are a Growing Threat

Manufacturers of different products now face an increasing number of class action suits under state consumer protection or unfair trade practice statutes in which the plaintiffs claim only to have suffered economic harm. In these cases, the plaintiffs assert that their injury is the “lost benefit of the bargain” — the difference in market value between the promised product and the delivered product.

Such “lost-benefit” suits are especially threatening to product manufacturers because these claims are particularly susceptible to class aggregation. Rule 23 of the Federal Rules of Civil Procedure permits plaintiffs to assemble into classes when, among other things, they share “questions of law or fact” and those common questions “predominate over any questions affecting only individual members.” Fed. R. Civ. P. 23. Ordinarily, injury and causation are sources of diversity between plaintiffs and, by extrapolation, impediments to class treatment. Plaintiffs who claim injury from tobacco, for example, frequently claim different injuries and different causal mechanisms and, therefore, typically may not assemble into classes. See, e.g., Aspinall v. Philip Morris, 442 Mass. 381, 392-93, 813 N.E.2d 476, 485-86. By dispensing with the injury and causation requirements, lost-benefit suits destroy a source of diversity between plaintiffs and promote class treatment.