The NAM, the Chamber and the NFIB joined together in an amicus letter on March 18, 2010, to the California Supreme Court urging that court to review a lower court decision that allowed a group of plaintiffs to be certified as a class for litigation purposes. The case is a breach of warranty claim under California's Unfair Competition Law, involving a piece of dental equipment.
The trial court had decertified the class because there were many individualized questions of damages and reliance, but the appeals court reversed, finding that only the class representatives needed to satisfy these requirements, not the entire class. Our letter brief urged the California Supreme Court to review this decision and provide guidance on what class certification standards apply in Unfair Competition Law cases. We believe that the claims of class representatives must be typical of those of the rest of the class, that trial judges must have the flexibility to revise class certification orders when they are incorrect, and that a product user must prove reliance on a warranty provision before he or she may sue for damages.
Consumer class actions have been steadily increasing in frequency in California for years, and Proposition 64 was intended to rein in some of them. This case offered an opportunity for the California Supreme Court to recognize those limits, and to reduce unjustified burdens on companies that do business in that state. Unfortunately, the court on 4/14/10 declined to review the lower court's ruling.