After the Supreme Court decided Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) (blog post), requiring damages to be provable on a classwide basis in order for a class to be certified under Rule 23(b)(3), class action practitioners and commentators wondered how much impact Comcast would have. The Seventh Circuit recently addressed the scope of Comcast in a products liability case. The decision potentially could impact other types of consumer class actions, and warrants a careful read.
If you’ve been anywhere near a supermarket in recent years, I’m sure you’ve seen a lot of foods advertised as organic. But you may not have heard about organic shingles for your roof. I had not, until I read In re IKO Roofing Shingle Products Liability Litigation, No. 14-1532, 2014 U.S. App. LEXIS 12684 (7th Cir. July 2, 2014). The issue in the case, though, appears to have nothing to do with what “organic” means when it is used in describing a roofing shingle. The plaintiffs allege that the defendant manufacturer falsely told consumers that certain organic roofing shingles met an ASTM D225 standard, and were tested using an ASTM D228 protocol. Id. at *1-2. The district court denied class certification on the grounds that individual consumers’ experiences with the roofing shingles would vary substantially based on the weather the shingles experienced, whether they were installed properly, etc. Id. at *7-8.
The Seventh Circuit vacated the denial of certification, rejecting the district court’s view that Comcast requires “commonality of damages,” explaining that “[i]f this is right, then class actions about consumer products are impossible,” and that recent Seventh Circuit precedent finding class certification appropriate in two products cases would have to be overruled. Id. at *8 (citing Butler v. Sears, Roebuck & Co., 727 F.3d 796 (7th Cir. 2013) and Pella Corp. v. Saltzman, 606 F.3d 391 (7th Cir. 2010)). The Seventh Circuit described Comcast’s primary focus as being on whether the theory of loss matched the theory of liability. It noted that there were two potential approaches to damages identified by the plaintiffs that matched the theory of liability: (1) damages potentially could be calculated based on the difference in market price between a shingle that satisfies the applicable standard and one that does not; or (2) if the putative class members’ shingles failed, and the shingles’ failure to meet the applicable standard caused the failure, they would be entitled to damages (although this would require individual hearings, which the court appeared to recognize might not be manageable). Id. at *11. The Seventh Circuit repeatedly made clear, however, that it was not ruling that class certification was required or would even be prudent. That was left to the district court to determine on remand. The Seventh Circuit noted that a thorough examination of the expert testimony and other evidence appeared warranted, but was not before the court of appeals. Id. at *12-15.
Plaintiffs’ lawyers undoubtedly will cite this decision when faced with defendants’ arguments in consumer class actions that damages are not provable on a classwide basis, as required by Comcast. From the defendants’ perspective, however, it is important that the Seventh Circuit clearly was not saying that there was no need for a deeper dive by the district court into whether in fact damages could be proven on a class wide basis, and whether the plaintiffs’ damages theories were viable as a matter of law. Comcast would support further examination of those issues as well. The Seventh Circuit’s opinion seems clear that such further analysis would be appropriate, and certainly not foreclosed by its opinion.