New Barrier to Class Actions for Franchisors
New barriers stand in the way of consumer class-action lawsuits, according to Bethany Appleby of Wiggin and Dana.
This fall the Third Circuit Court of Appeals issued two opinions reversing district court certification of consumer classes. In both instances, the plaintiffs did not present “a viable way of demonstrating” that each proposed class member had actually purchased the product at issue, the court said.
Along with a 2012 Third Circuit decision, these two decisions “present a new barrier for money damage class claims” related to a product purchase, Appleby notes.
Because many franchise systems involve sales where no record of the purchase is kept, “these cases are likely to be particularly useful to franchisors defending against consumer class actions,” she adds.
In Marcus v. BMW North America, plaintiffs sued BMW and Bridgestone for selling allegedly defective tires. The court found the class definition in the case raised “serious ascertainability” issues, because the purchase and lease records did not document the brand of tires on each car, and not all owners and lessees had their vehicles repaired at a BMW dealership.