Will “Sea Change” in Florida Class Action Standards Unleash Flood of Suits?

Cruz-Alvarez_FFeatured Regular Expert Column

Frank Cruz-Alvarez, Shook, Hardy & Bacon, L.L.P. (co-authored with Talia Zucker, Shook, Hardy & Bacon, L.L.P.)

On January 24, 2013, in Soper v. Tire Kingdom, Inc., No. SC11-1462, — So. 3d —, 2013 WL 264441 (Fla. Jan. 24, 2013), the Florida Supreme Court took its most recent step to further distance itself from the United States Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, — U.S. —, 131 S. Ct. 2541 (2011).  Despite Wal-Mart’s comprehensive analysis of the commonality requirement for class certification, the Florida Supreme Court insists on watering down what commonality means and how it is applied.

As Florida Supreme Court Justice Charles Canady rightly observed in Soper, the Sunshine State’s class action laws have undergone a “sea change”, beginning one and a half years ago – post Wal-Mart­ – with the decision of Sosa v. Safeway Premium Finance Company, 73 So. 3d 91 (Fla. 2011).  See Soper, 2013 WL 264441 at *2 (Canady, J., dissenting) (emphasizing that “[t]he majority’s commonality analysis in Sosa cannot be reconciled with the reasoning of Wal-Mart.”).

In Sosa, the trial court granted class certification on the facts that Safeway Premium Insurance Company violated Florida law by knowingly imposing an additional service charge on its customers.  The Third District Court of Appeal reversed, finding, inter alia, that plaintiff and the putative class did not satisfy the commonality requirement for class certification because “there would be different circumstances for each individual member of the class which would serve as the bases for and as defenses to the additional premiums charged. … In order to prove damages, individual questions pertinent to all potential class members are subject to different explanations and defenses relating to knowing violations of these statutes.”  Safeway Premium Fin. Co. v. Sosa, 15 So. 3d 8, 11 (Fla. 3d DCA 2009).

In a 4-3 ruling, the Florida Supreme Court quashed the Third DCA’s decision, holding that the claims arose from the routine billing practices by Safeway and the knowing overcharging of its customers – enough to satisfy commonality.  Sosa, 73. So. 2d at 107.  In so holding, the Court found that it was error to focus on the “possibility of mere factual differences in the individual circumstances surrounding each of the putative class members’ claims and the variances in defense to them.”  Id. at 110.  Instead, the Third DCA should have focused on “whether the class members predicated their claims on the same common course of conduct by the defendant and the same legal theory.”  Id.  This decision by the Florida Supreme Court was a significant retreat from the established precedent concerning application of the commonality element to class actions, particularly as interpreted by the United States Supreme Court in Wal-Mart.  Indeed, the varying factual circumstances of the class members is, in certain instances, essential in determining commonality.

Around the same time the Florida Supreme Court handed down its decision in Sosa, the Third DCA decided Tire Kingdom, Inc. v. Dishkin, 81 So. 3d 437 (Fla. 3d DCA 2011).  In Dishkin, two putative classes of consumers alleged that in violation of Florida law, Tire Kingdom either (1) failed to disclose the imposition of a “shop fee” to the discounted price advertised on their coupons; or (2) overcharged for a service by the imposition of a “shop fee” based on the retail price of that service instead of the discount price.  81 So. 3d at 439.  In a thoughtful opinion authored by Judge Shepherd, the court found that the commonality element for class certification was simply not satisfied, explaining that “each class member’s Tire Kingdom experience – including the precise language of each advertisement, the class member’s awareness of Tire Kingdom’s shop-fee signage, and the class member’s conversations with Tire Kingdom employees – would have to be explored to determine Tire Kingdom’s liability to each class member.”  Id. at 449.  The court recognized that the commonality element can only be extended so far before it becomes impractical to certify a class due to varying factual circumstances and the need for individualized proof.  Id. at 447-449.

In Soper1 (substantively addressing the Dishkin case), the Florida Supreme Court, rather than retreating from Sosa, decided to double down by quashing another well-reasoned Third DCA opinion that was fully aligned with Wal-Mart.  The Florida high court passed up an idea opportunity to correct its Sosa mistake.  Instead, fully aware that the threshold for commonality required for class certification is not high, they insist on lowering the bar even further by extending the commonality factor beyond what is practical.  The Court’s actions will necessarily result in “expanding class actions to contexts where they should not be available.”  Soper, 2013 WL 264441 at *1 (Canady, J., dissenting).  Marking a significant shift in Florida class action law, this decision is undoubtedly favorable to potential plaintiffs, but only time will tell if they will take advantage.  Unfortunately, if they do, Florida state courts can expect “a gaggle of mini-trials masquerading as[] class action[s].”  Safeway Premium Finance Co., 15 So. 3d at 13 (Shepherd, J., concurring).

Notes

1. For reasons unknown, the style of the Florida Supreme Court case (Soper) and the Third DCA case it quashed (Dishkin) are different.  However, Soper and Dishkin both involve the same set of facts – two putative classes of consumers (different only in location) alleging deception by Tire Kingdom.  Aimee Dishkin and James Soper are each a class representative.

One thought on “Will “Sea Change” in Florida Class Action Standards Unleash Flood of Suits?

  1. Pingback: Class action roundup - Overlawyered

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