False advertising class unaffected by Wal-Mart v. Dukes

Jermyn v. Best Buy Stores, L.P., 276 F.R.D. 167 (S.D.N.Y. 2011)

Jermyn got a class certified. Best Buy moved to decertify it. The court denied the motion. Best Buy again moved to decertify it. The court again denied the motion. “For background information, the reader is referred to the first six published decisions in this case.” The class consists of NY customers who were refused a valid “price match” at Best Buy, which advertises that it will meet any competitor’s price on products it sells, subject to several conditions. The court determined that there was a common question whether Best Buy maintains and communicates to local branches a corporate policy of denying valid price matches, and the existence of this policy was a jury question.

Best Buy argued that the class had to be decertified because of Wal-Mart Stores, Inc. v. Dukes, –– U.S. – (2011). That decision decertified a Rule 23(b)(2) class because there was insufficient commonality and because an injunction class under Rule 23(b)(2) was not appropriate when accompanied by class claims for individualized money damages that are more than merely “incidental” to the injunctive relief. The court here found it important that the plaintiffs in Wal-Mart didn’t allege an express corporate policy or uniform employment practice across the country. “If the reader wonders exactly what Dukes' commonality analysis has to do with this case, s/he is likely not alone.” It was a Title VII case holding that plaintiffs were required to identify “significant proof” of a general corporate policy of discrimination; delegation of discretion to individual managers can only be such a policy if the delegation creates a disparate impact and some “specific employment practice” is the source of discrimination. The Supreme Court held that there was no significant proof of any specific employment practice leading to a disparate impact.

Best Buy tried “to import these Title VII pleading requirements to Plaintiffs' claims, which allege deceptive business practices under New York's General Business Law.” This failed for two reasons: “First, these additional requirements are designed for and unique to the context of employment discrimination. They are necessary because the employer's motivation is crucial to establishing liability, and therefore to the common liability necessary to glue the plaintiff class together. In the deceptive business practice context, by contrast, the ‘why’ is less relevant, if it is relevant at all.” It’s enough if Best Buy advertises its price match guarantee, secretly disavows it, and thereby deceives the public. Motive is not required.

Second, “to the extent Plaintiffs here are required to identify a specific, illegal corporate policy rendering Defendant liable to all the class members, they have manifestly done so.” They alleged that Best Buy communicated to local branches a corporate policy of denying valid price match requests. “If that allegation were proved, it would render Defendant liable to every class member who suffered under the practice.... Had the Dukes plaintiffs actually alleged a general, non-discretionary corporate policy disfavoring women and offered some proof that such a policy existed, then obviously the case could have and would have proceeded as a class action. What the Supreme Court held was that the plaintiffs failed to present ‘significant proof’ of such a policy.” By contrast, plaintiffs here presented “significant (indeed, ample) proof that the illegal policy alleged in fact exists. I have already so held, not once, but at least three times.”

Best Buy simply conflated liability and damages:

It fails to appreciate that by deceiving the public alone it would have committed a legal wrong against anyone who can prove that he was injured thereby. If, in Dukes, the plaintiffs had sufficiently proved a general corporate policy of sexual discrimination, class treatment would have been appropriate; as explained, that policy would be the ‘thread’ or ‘glue’ tying all of the plaintiff's injuries together. The mere fact that some women (only putatively) in the class were, in fact, turned down for non-discriminatory reasons would not preclude certification in that case, any more than the fact that one woman's adverse treatment damaged her in the amount of $100, while another woman's damaged her in the amount of $500. One thing that Dukes clearly does not change is that ‘for purposes of Rule 23(a)(2) even a single common question will do.’ 131 S.Ct. at 2556 (internal quotation marks and alterations omitted). Here, the significant proof an illegal, centralized corporate policy presents the requisite common question.

The court continued that Dukes’ second holding on Rule 23(b)(2) was potentially relevant here. The Supreme Court held that back pay claims shouldn’t have been certified as part of a Rule 23(b)(2) injunctive class: “Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class. It does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant. Similarly, it does not authorize class certification when each class member would be entitled to an individualized award of monetary damages.”

But this applied to Rule 23(b)(2) classes seeking both injunctive and monetary relief. In this case, by contrast, the court also certified the class under Rule 23(b)(3), after finding that the additional predominance and superiority requirements of (b)(3) were satisfied. Unlike the Dukes class, this (b)(2) class was not seeking monetary relief, but only an injunction against further statutory violations. The separately certified (b)(3) class sought money damages. Because violation of the GBL entitles both classes to relief, only one liability trial would need to be held to determine the existence of the alleged anti-price matching policy. Best Buy reiterated its argument that it would be “impossible, or unconstitutional, or uneconomical” to resolve the individual claims for damages in the Rule 23(b)(3) class. Dukes provided no basis for revisiting the court’s earlier rejection of that argument.