Keker, Van Nest & Peters and Wilkinson Walsh + Eskovitz scored separate defense verdicts in California this month in the rarest of trials: class actions.
The lawsuits were both in consumer class actions. On Feb. 21, Los Angeles Superior Court Judge Carolyn Kuhl issued a tentative verdict for Keker Van Nest’s client, Public Storage, following a bench trial. And, on Feb. 22, a federal jury in San Francisco sided with Wilkinson Walsh’s client, Bayer.
In some ways, the trials were like many others, relying on expert witnesses and the credibility of the lead plaintiffs who testified. But class action issues, and potential damages of hundreds of millions of dollars, made them unlike most trials.
“It’s still rare to see these cases go to trial,” said Sean Eskovitz, a founding partner at Wilkinson Walsh in Los Angeles. “In our case, it was a client that had the courage of convictions. It thought this was a case that didn’t have merit, knew it had put these challenged statements through a rigorous review process, based on science, and they thought this was a case that needed to be tried.”
Here’s a look at how both teams won:
Public Storage: Class Certification in Mind
Filed in 2016, the class action against Public Storage started as two lawsuits later consolidated. The case alleged that the Glendale, California-based provider of self-storage rentals had forced customers into paying for insurance that, although underwritten by a third party, was a “hidden revenue generator” for Public Storage. Filed by four lead plaintiffs, the lawsuit encompassed a class of 700,000 Public Storage customers in California and sought more than $100 million in restitution.
Last year, the judge, Kuhl, certified a class that alleged Public Storage made “uniform misleading statements” to customers about insurance coverage.
“It is important to emphasize that plaintiffs will have to prove their case based on the training materials and uniform sales representation,” Kuhl wrote in her class certification order. “If plaintiffs stray into reliance on individual class members’ assertions that sales employees deviated from the presentation, common issues will not predominate and the case will not be able to proceed as a class action.”
That was important because it meant that if the lead plaintiffs testified that sales representatives did something other than what Public Storage told them to do in the script or training manuals, they could not represent the unnamed class members.
“Certainly, when we deposed the plaintiffs, we had class certification in mind, because we didn’t think they had claims typical of the classes based on what happened to them,” said Simona Agnolucci, a partner at San Francisco’s Keker Van Nest.
The trial lasted three weeks. Keker Van Nest assembled a diverse team that also included partner Erin Meyer and associates Christopher Sun and Kristen Lovin.
On the plaintiffs’ side was Steve Weinmann at San Francisco’s Audet & Partners and Albro Lundy at Baker Burton & Lundy in Hermosa Beach, California, along with Los Angeles-based Milstein Jackson Fairchild & Wade. At trial, they insisted that Public Storage required customers to have insurance and that its employees, through a “uniform sales pitch” and brochures, “tricked” customers into purchasing its service.
Lundy declined to comment.
The Keker Van Nest team insisted that Public Storage provided sales employees with a script to follow that offered its insurance as an option but notified customers they could choose their own. Customers also signed disclosures stating that Public Storage insurance was not required.
“Class members were read a uniform script about insurance. And they all received the same written disclosures,” Agnolucci said. “But the named plaintiffs claimed they had been told things at the storage counter that deviated from the script. It therefore was clear to us that they could not represent the class. They didn’t have claims typical of the class based on what they said happened to them.”
The Keker Van Nest team also struck plaintiffs’ experts on damages, but, in the end, Kuhl found nothing misleading about Public Storage’s statements.
“The court finds that there were not uniform misleading statements to the class that would lead a reasonable person to believe that they were required to purchase insurance offered to them during the rental transaction,” she wrote in her tentative verdict.
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Bayer: Voice of the Class
The class action against Bayer, filed in 2014, alleged false statements relating to its One A Day multivitamins. In particular, the case challenged TV advertising and packaging claims that the vitamins contributed to “heart health,” “immunity” and “physical energy,” when, in reality, they did nothing for the average consumer.
Originally filed on behalf of a nationwide class action, the case slimmed down after U.S. District Judge William Orrick in San Francisco ruled in 2017 that the plaintiffs could represent subclasses of customers in California, Florida and New York. Orrick then split the trial into two phases: liability first and damages second.
Sidley Austin represented Bayer, but Wilkinson Walsh stepped into the case last year just before trial. In addition to Eskovitz, Bayer’s trial team included Washington, D.C., partners Alexandra Walsh and James Rosenthal and of counsel Kieran Gostin.
At trial, the case became much like any other, Walsh said, because it focused on the credibility of the lead plaintiffs.
“There are hundreds of thousands of consumers, but what a jury cares about is who’s sitting in front of them, who’s the voice of the class,” Walsh said. “At the end of the day, it was the jury looking at these three class representatives, or the people chosen to represent the class.”
Two of the lead plaintiffs were married to employees of Kaplan Fox & Kilsheimer, the plaintiffs firm that filed the lawsuit. That connection did not play well in front of jurors, acknowledged Jeff Tillotson of Tillotson Law in Dallas, who tried the case with fellow Dallas lawyers Josh Bennett of Carter Arnett and Matt Zevin at Stanley Law Group, as well as Kaplan Fox partner Laurence King in San Francisco.
“The reps were brought into the case because they knew someone at the law firms who were investigating the claims,” he said. “While that connection is not strange to the plaintiffs bar at all, or defense lawyers, it is somewhat foreign to jurors.”
More broadly, jurors had trouble believing that the lead plaintiffs felt wronged, Tillotson said.
“What our jury research showed us, and what the jury showed us, is people are so jaded and so used to businesses doing things like this, it doesn’t get them as worked up as it used to,” he said. “For consumer fraud, that’s a hurdle you have to overcome to motivate people into thinking this is something worth fighting about.”
Then there was the damages theory. The lawsuit sought $600 million, and damages would not come up until the trial’s second phase. Plaintiffs had based their damages on full refunds, rather than the trickier calculation of a premium paid for “One A Day,” as opposed to other multivitamins. But that meant that plaintiffs had to prove in the first phase that “One A Day” multivitamins, which many people take, had no benefit at all for the average customer, who required a full refund.
When plaintiffs attempted to provide scientific evidence to back up that claim, Wilkinson Walsh obliterated their experts.
Tillotson admitted he had a challenge. “Refund was far easier, but that required proving the product was worthless to the class at large,” he said. “That’s a hard case to win.”
After a week of trial and one hour of deliberations, the jury found that Bayer’s statements were not false or misleading, and that the lead plaintiffs didn’t rely on them anyway when they chose to purchase “One A Day” multivitamins.
“Often, those theories never get tested in front of a jury because once it’s certified a lot of clients can’t take on the risk of such a big judgment,” Walsh said. “In this case, it went forward, and this extreme position they took to get certification couldn’t withstand testing in front of a jury.”