Plaintiffs alleged in their putative nationwide class action complaint that Quest Diagnostics was liable for consumer fraud, unjust enrichment, and violations of the Fair Debt Collections Practices Act for overbilling putative class members and, in some instances, sending them improper written demands from debt collectors. The district court denied certification, holding that the fraud claims implicated the various laws of numerous states, making a class action “unwieldy and inappropriate,” the unjust enrichment claims required individualized showings of wrongful action, thereby precluding certification, and the proposed FDCPA class representative was inadequate because he had not received a written demand from a debt collector. The Third Circuit affirmed.
Plaintiffs argued on appeal that the consumer fraud claim should have been certified as a Nationwide class because: (1) the district court contravened the Third Circuit’s holding in Sullivan v. DB Investments, Inc., by considering choice of law issues at the class certification stage, (2) the district court’s choice of law analysis was incorrect, and (3) even if different states’ laws applied, the court should have created subgroups of applicable laws to facilitate nationwide class litigation. The Third Circuit rejected each argument. First, it held that plaintiffs’ reliance on Sullivan was misplaced because Sullivan involved a settlement, which “did not pose the types of management problems that can arise in a nationwide class action trial.” It also affirmed the propriety of the district court’s choice of law analysis under the Restatement (Second) of the Conflict of Laws, agreeing that the consumer fraud laws of each putative class member’s home state would apply even though the alleged misrepresentations were all allegedly “made” from New Jersey. The court further affirmed the district court’s refusal to create groupings of purportedly similar state consumer fraud laws, holding that plaintiffs failed to meet their “significant burden” of demonstrating a workable solution to the problem of applying varied laws.
The Third Circuit also affirmed that plaintiffs’ unjust enrichment claims could not be certified because determining class membership would require individualized analyses regarding whether Quest had “wrongfully harmed” each plaintiff given that Quest had presented evidence demonstrating that many putative class members had received refunds. Finally, the court affirmed that the proposed FDCPA class representative was inadequate because, although he had received collection calls, he did not receive an allegedly improper “written demand” for payment as did the putative class he sought to represent.
Grandalski v. Quest Diagnostics, Inc., No. 13-4329 (3d Cir. Sept. 11, 2014).
