We've now had a chance to read the Eighth Circuit's short (ten-page) decision in In re St. Jude Medical, Inc., Silzone Heart Valve Prods. Liab. Litig., No. 06-3860, slip. op. (8th Cir. Apr. 9. 2008) (link) (now reported at, 522 F.3d 836). Sometimes good things come in small packages.
St. Jude recalled all Silzone prosthetic heart valves that had not yet been implanted. Plaintiffs were the patients who had been implanted with the valves.
In 2004, the trial court certified a nationwide class to resolve issues under three Minnesota statutes -- the False Advertising Act, the Consumer Fraud Act, and the Deceptive Trade Practices Act. In 2005, the Eighth Circuit reversed the trial court's certification of a subclass of plaintiffs seeking injunctive relief in the form of medical monitoring, because the issues were too individualized for classwide treatment. And the Eighth Circuit remanded the consumer protection subclass for the trial court to conduct a more thorough choice-of-law analysis before deciding whether to apply Minnesota law to the claims of all plaintiffs.
On remand, the trial court recertified a nationwide consumer protection class to be decided under Minnesota law.
Last week, the Eighth Circuit again reversed.
Here's the pearl in this little oyster:
(Shoot! We're second-guessing ourselves again. We can already imagine some plaintiffs' lawyer dropping a footnote in some appellate brief we'll file in the Eighth Circuit next year: "Beck and Herrmann called this court an oyster! The very nerve!" This blogging is dangerous business for practicing lawyers.)
Anyway, here's the diamond in this magnificent ring:
In any fraud- or misrepresentation-based drug or device case, there will be a ton of individualized issues of reliance. Physicians will have heard different information from the product manufacturer, and patients will have heard different information from their treating physicians. Those individualized issues naturally preclude certifying a class.
The St. Jude plaintiffs asserted that those issues should not bar certifying a class under the Minnesota consumer protection statutes, because those statutes supposedly eliminated the need to prove individual reliance. Id. at 5.
The Eighth Circuit rejected that position, because the statutes require that a defendant's conduct cause a plaintiff's injury, whether or not there's an express requirement to prove reliance. For claims based on alleged misrepresentations, "'as a practical matter it is not possible that the damages could be caused by a violation without reliance on the statements or conduct alleged to violate the statutes.'" Id. at 6, quoting Group Health Plan, Inc. v. Philip Morris Inc., 621 N.W.2d 2, 13 (Minn. 2001).
But wait! There's more!
The Eighth Circuit went on to hold that "Group Health surely does not prohibit St. Jude from presenting direct evidence that an individual plaintiff (or his or her physician) did not rely on representations from St. Jude. When such evidence is available, then it is highly relevant and probative on the question whether there is a causal nexus between alleged misrepresentations and any injury." Id. at 7. It was therefore "clear that resolution of St. Jude's potential liability to each plaintiff under the consumer fraud statutes will be dominated by individual issues of causation and reliance. The need for such plaintiff-by-plaintiff determinations means that common issues will not predominate . . . . " Id.
That's the heavenly part of St Jude:
Even if a state consumer protection statute eliminates the need to plead and prove reliance, defendants still have the right to offer individualized evidence that would disprove causation and reliance. The individualized nature of the defendants' disproof precludes certifying a class.
And this holding, to our eye, may extend beyond consumer protection statutes. Suppose a plaintiff convinces a court that statistical, rather than individualized, proof should be sufficient to carry the burden of proving some element of plaintiff's case. Even if statistical proof could carry plaintiff's burden, individualized disproof would still be possible, and that individualized disproof should preclude certifying a class.
We thus read St. Jude to be a helpful precedent to avoid class certification in cases involving either consumer protection acts or attempts to use statistical proof in place of individualized evidence in product liability or consumer fraud cases.
Needless to say, we're on Cloud Nine.