This is part two in a six-part series on attacking class certification on constitutional grounds. Read part one here.
The plaintiffs’ bar often tries to raise the stakes in class actions by seeking to bring nationwide or multi-state class actions. But courts have appropriately recognized that differences among the various states’ laws often preclude class certification. For example, the 5th Circuit has stated that certification is inappropriate “in a multi-state class action [where] variations in state law” would “swamp any common issues and defeat predominance”—thus flunking Federal Rule of Civil Procedure 23(b)(3).(Castano v. American Tobacco Co. ) In an attempt to sidestep these limitations on sprawling, nationwide classes, plaintiffs’ counsel often contend that courts may simply apply the law where the defendant is located to the entire putative class, regardless of where the class members may reside.
Similarly, in Mazza, a federal district court certified a nationwide class of car buyers in an action alleging that a car manufacturer engaged in deceptive advertising. Although California’s false-advertising laws differ dramatically from those of other states, the plaintiffs persuaded the district court that California law should apply to the nationwide class because “no foreign state has ‘an interest in denying its citizens recovery under California's potentially more comprehensive consumer protection laws.’” This argument is one that the plaintiffs’ class-action bar has been making with increasing frequency, in our experience. In Mazza, however, the 9th Circuit refused to accept it, and instead reversed the district court’s order certifying a nationwide class. As the 9th Circuit explained, “discounting or not recognizing each state’s valid interest in shielding out-of-state businesses from what the state may consider to be excessive litigation” runs counter to key federalism principles. Quoting State Farm Mutual Auto Insurance Co. v. Campbell—a landmark Supreme Court case involving the Due Process Clause in the punitive damages context—the Mazza court explained: “It is a principle of federalism that ‘each State may make its own reasoned judgment about what conduct is permitted or proscribed within its borders.’” Accordingly, the 9th Circuit held, “each class member’s consumer protection claim should be governed by the consumer protection laws of the jurisdiction in which the transaction took place.”
Importantly, the 9th Circuit’s approach is consistent with the Supreme Court’s pronouncements in other contexts—both due-process limitations on awards of punitive damages and the dormant commerce clause—that a “single state [cannot] impose its own policy choice on neighboring States” (BMW of N. Am., Inc. v. Gore,) nor “project its legislation into [other states].” (Brown-Forman Distillers Corp. v. New York State Liquor Auth. ) As such, defendants should not hesitate to use Mazza as persuasive authority outside of the 9th Circuit in opposing efforts to certify a nationwide or multi-state class.