SUPREME JUDICIAL COURT FOR THE COMMONWEALTH OF MASSACHUSETTS

SJC NO. 10108

CRYSTAL SALVAS, et al.,

PLAINTIFFS-APPELLANTS,

VS . WAL-MART STORES, INC.,

Defendant-Appellee.

Brief Of Amici Curiae New England L e g a l Foundation and Associated Industries of Massachusetts In Support Of

Wal-Mart Stores, Inc.

NEW ENGLAND LEGAL FOUNDATION and ASSOCIATED INDUSTRIES OF MASSACHUSETTS,

B y their attorneys,

Ben Robbins BBO No. 559918 Martin J. Newhouse, President BBO No. 544755 Jo Ann Shotwell Kaplan, General Counsel BBO No. 459800 N e w England Legal Foundation 150 Lincoln Street Boston, MA 02111-2504 (617) 6 9 5 - 3 6 6 0

April .25, 2 0 0 8

Corporate Disclosure Statement

Amicus curiae New England Legal Foundation

('INELF'') states, pursuant to Mass. Sup. Jud. Ct.

R. 1:21, that it is a 26 U . S . C . § 501 ( c ) ( 3 )

nonprofit, public interest law firm, incorporated

in Massachusetts in 1977, with its headquarters

in Boston.

from more than 130 corporations, law firms,

foundations, and individuals, NELF's mission is

to promote balanced economic growth in N e w

NELF is supported by contributions

, England, protect the free enterprise system, and

defend economic rights.

NELF does not issue stock or any other form

of securities and does not have any parent

corporation.

perpetuating Board of Directors, the members of

which serve solely in their personal capacities.

Amicus curiae Associated Industries of

NELF is governed by a self-

Massachusetts ("A.I.M.") states, pursuant to S.J.C.

Rule 1:21, that it is a 26 U.S.C. § 5 0 1 ( c ) (61, 9 0 -

year-old nonprofit association, incorporated in

Massachusetts.

well-being of its members and their employees and the

prosperity of the Commonwealth of Massachusetts by:

A.I.M.'s mission is to promote the

improving the economic climate of Massachusetts;

proactively advocating fair and equitable public

policy; and providing relevant, reliable information

and excellent services. A.I.M. does not issue stock

or any other form of securities and does not have any

parent corporation. A.I.M. is governed by a self-

perpetuating Board of Directors, the members of which

serve solely in their personal capacities.

ii

TABLE OF CONTENTS

CORPORATE DISCLOSURE STATEMENT ..................... .i

TABLE OF AUTHORITIES .................................

INTEREST OF AMICI CURIAE.....,....,,...*.............l

STATEMENT OF THE CASE AND FACTS . . . . . . . . . . * . . - . . . - * . . . 3

I. STRICT ENFORCEMENT OF THE CLASS ACTION REQUIREMENTS OF RULE 23 IS NECESSARY TO PREVENT POTENTIAL ABUSE OF THE CLASS ACTION MECHANISM. . . 4

11. THE DE M I X I M I S EXCEPTION TO CLASS-WIDE INJURY UNDER ASPINALL v. PHILLIP MORRIS COS. IS INAPPLICABLE IN THIS CASE ......................~8

A. The plaintiffs here, unlike the plaintiffs in Aspinall, have failed to show uniform, virtually class-wide injury ...........,...lo

B. The de minimis exception should not apply to class actions under Rule 23 . . . . . . . . . . . .13

C. It is questionable whether the de minimis exception survives the actual injury requirement under Hershenow.........,...*.l8

CERTIFICATE OF COMPLIANCE............... . . . . . . . . . . . - 2 1

CERTIFICATE OF SERVICE.. - 2 2 . . . . . . . . . . . . . . . . . . . . . . . . . . .

iii

Table of Authorities

Cases

Amchem Prods. , Inc. v. Windsor, 521 U.S. 591 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Andrews v. A m . T e l . & Xel. Co., 95 F . 3 d 1014 (11th Cir. 1996) . . . . . . . . . . . . . . . . . . 12

Aspinall v . Philip Morris Cos'., 442 Mass. 381 (2004) . . . . . . . . . . . . . . . . . . . . . . . p a s s i m

Benedict v. Altria Group, Inc . , 241 F.R.D. 6 6 8 (D.Kan. 2007) . . . . . . . . . . . . . . . . . . . 17

B l a i r v. E q u i f a x Check Servs . , Inc. , 1 8 1 F.3d 8 3 2 (7th Cir. 1 9 9 9 ) . ................... 5

Boughton v. Cotter Corp . , 6 5 F.3d 823 (loth Cir, 1995) . . . . . . . . . . . . . . . . . . . 1 5

Boyd v. Becker, 6 2 7 So.2d 4 8 1 (Fla. 1993) . . . . . . . . . . . 2 0

Broussard v . Meineke Discount M u f f l e r Shops, Inc. , 155 F.3d 331 (4th Cir. 1998) . . . . . . . . . . . . . . . . . . . 15

Califano v. Yamasaki , 442 U.S. 682 (1979). . . . . . . . . . . 1 6

Castano v. Am. Tobacco Co., 84 F.3d 734 (5th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

D a v i e s v. Philip Morris U.S.A., Inc. , 2006 WL 1600067 (Wash.Super. May 26, 2006) . . . . . 17

F e i t e l b e r g v . C r e d i t Suisse First Boston, LLC, 36 Cal.Rptr.3d 592 (Cal. Ct. A p p . 2 0 0 5 ) . . . . . . . . 20

Fletcher v. Cape Cod Gas C o . , 394 Mass. 595 (1985) . . 13

iv

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _

Hershenow v. Enterprise Rent-A-Car Co. , 445 Mass. 802 (2006) ....................... passim

In re Baycol Prods. Litigation, 218 F.R.D. 1 9 7 (D. Minn. 2003) . . . . . . . . . . . . . . . . . 15

Jackson v. Motel 6 Multipurpose, Inc. , 130 F . 3 d 999 (11th C i r . 1 9 9 7 ) . . . . . . . . . . . . . . . . . . 15

McLaughlin v. Am. Tobacco Co., 2008 WL 878627 (2d Cir. A p r . 3, 2 0 0 8 ) . . . . . . . 6 , 1 7

M u l f o r d v. Altria Group, Inc., 2 4 2 F . R . D . 615 (D.N.M. 2 0 0 7 ) . . . . . . . . . . . . . . . . . . . 17

Pearson v. Philip Morris, Inc., 2006 WL 663004, ( O r , C i r . , Feb. 23, 2006) ....................... 17

Philip Morris U S A Inc. v, Hines, 883 So.2d 292, (F1a.Dist.Ct.A~~. 2 0 0 4 ) . . . . . . . . . . . . . . . . . . . . . . . . 17

Polion v. W a l - M a r t , 2006 WL 4472492, ( M a s s - S u p e r . Nov. 7, 2006)) . . . . . . . . . . . . . . . . passim

Sw, Refining Co., Inc. v. Bernal, 22 S.W.3d 425 (Tex. 2000) . . . . . . . . . . . . . . . . . . . 7, 1 6

Sprague v. Gen. Motors Corp., 133 F.3d 388 (6th C i r . 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

S t a t u t e s

G . 1;. c. 93A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim

G . L. c. 93A, § 9 ( 2 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Rules Fed. R. C i v . P. 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Mass. R. C i v . P. 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p a s s i m

Mass. R . C i v . P. 23(b) . . . . . . . . . . . . . . . . . . . . . . . . . . p a s s i m

V

Miscellaneous

1998 Advisory Committee Notes to Fed. R. Civ. P. 23(f) ........................... 6

Richard A. Nagareda, Aggregation And i t s Discontents: C l a s s Settlement Pressure, C l a s s - Wide Arbitration, and CAFA, 106 Colum. L.Rev. 1872 (2006) . . . . . . . . . . . . . . . . . . . 5

Gary M. Kramer, No C l a s s : Post-1991 Barriers to Rule 23 Certification of Across-The-Board Employment Discrimination Cases, 15 L a b . Law. 415 (2000). . . 4

Thomas E. Willging et a l . , An Empirical Analysis of R u l e 23 to A d d r e s s the Rulemaking Challenges, N . Y . U . L. Rev. 74 (1996) ........................ 4

71

vi

ISSUE PRESENTED

Amici will address the following issue set forth in

this Court‘s January 11, 2008 announcement soliciting

amicus briefs:

In this reported case, at issue is the correctness of the Superior Court judge’s . . . decertification, as overbroad, [of] a plaintiff class of approximately 67,000 hourly employees, on whose behalf was alleged the employer’s improper credit for meal and rest breaks and improper compensation for time worked.

INTEREST OF AMICI CURIAE

Amicus curiae New England Legal Foundation (”NELF”)

is a nonprofit, public interest law firm, incorporated in

Massachusetts in 1977 and headquartered in Boston. Its

membership consists of corporations, law firms,

individuals, and others who believe in NELF‘s mission of

promoting balanced economic growth in New England,

protecting the free enterprise system, and defending

economic rights. NELF’s more than 139 members and

supporters include a cross-section of large and small

businesses and other organizations from a11 parts of the

Commonwealth, New England, and the United States.

Amicus curiae Associated Industries of Massachusetts

(\\A.I,M.”) is a 90-year-old non-profit association with

over 7,000 employer members doing business in the

Commonwealth. A.I.M.‘s mission is to promote the well-

being of its members and their employees, and the

prosperity of the Commonwealth of Massachusetts, by:

improving the economic climate of Massachusetts;

proactively advocating fair and equitable public policy;

and providing relevant and reliable information and

excellent services.

class actions can increase greatly the costs and

burdens of litigation on business defendants. NELF,

A.I.M., and their respective members accordingly seek

strict enforcement of Rule 2 3 ’ s requirements and oppose

the certification of class actions where, as here, the

plaintiffs have failed to show class-wide injury.

Certification of such a class would expose a business to

the risk of protracted and costly litigation and a large

settlement when it is doubtful that the plaintiffs could

prove liability for a11 or even most of the putative

class members.

NELF and A.I.M. have regularly appeared as amici

curiae in cases, such as this one, that raise issues of

general concern for the business community in

Massachusetts.’ Amici believe that this brief will

1 See, e . g . , Scott v. NG U . S . 1, Inc., 450 Mass. 7 6 0 (2008); St. Fleur v . WPI Cable Sys./Mutron, 450 Mass. 345 (2008); Eigerrnan v. Putnam Inv . , Inc. , 4 5 0 Mass. 281 ( 2 0 0 7 ) ; Allen v. Boston Redevelopment Auth . , 450 Mass.

2

provide an additional perspective that may assist the

Court . Accordingly, amici have sought leave to file this

brief. 2

STATEMENT OF THE CASE AND FACTS

NELF and A.I.M. hereby incorporate by reference the

Statement of the Prior Proceedings and Statement of Facts

contained in the Brief of the Defendant-Appellee Wal-Mart

Stores, Inc. (Wal-Mart) .

2 4 2 ( 2 0 0 7 ) ; Jepson v. Z o n i n g B d . of Appeals of I p s w i c h , 450 Mass. 81 (2007); Hanover Ins. Co. v. R a p 0 & Jepsen Ins . Servs . , Inc . , 449 Mass. 609 ( 2 0 0 7 ) ; Devine v. Town of Nantucket, 4 4 9 Mass. 4 9 9 ( 2 0 0 7 ) ; C i o v a n e l l a v. C o n s e r v a t i o n Cornmln of A s h l a n d , 4 4 7 Mass. 7 2 0 ( 2 0 0 6 ) ; C e n t r a l Steel Supp ly C o . v . Planning B d . of Somervil le, 4 4 7 Mass. 3 3 3 ( 2 0 0 6 ) ; Humphrey v , B y r o n , 4 4 7 Mass. 3 2 2 ( 2 0 0 6 ) ; Mscisz v. K a s h n e r Dav idson Sec. C o r p . 4 4 6 Mass. 1 0 0 8 ( 2 0 0 6 ) ; Superadio L t d . P'ship. v. W i n s t a r R a d i o P r o d . , 4 4 6 Mass. 330 ( 2 0 0 6 ) ; Hershenow v. E n t e r p r i s e R e n t - A - C a r C o . of B o s t o n , 4 4 5 Mass. 7 9 0 ( 2 0 0 6 ) ; Roberts v. Enterpr ise R e n t - A - C a r C o . of B o s t o n l 4 4 5 Mass. 8 1 1 ( 2 0 0 6 ) ; S u l l i v a n v. Liberty M u t . Ins. C o , , 444 Mass. 34 ( 2 0 0 5 ) ; Phillips v. Pembroke R e a l E s t a t e , Inc., 443 Mass. 110 ( 2 0 0 4 ) ; Phelan v. May Dep't Stores Co., 4 4 3 Mass. 52 ( 2 0 0 4 ) ; White v. B l u e Cross & B l u e S h i e l d , Inc . , 4 4 2 Mass. 64 ( 2 0 0 4 ) ; Stonehill College v. Massachuset ts Comm'n Against Discrimination, 441 Mass. 5 4 9 ( 2 0 0 4 ) ; Morrison v . Toys "R" U s , Inc., 441 Mass. 451 ( 2 0 0 4 ) .

Neither Defendant-Appellee nor its counsel in this matter, nor any individual or entity aside from amici, has authored this brief in whole or in part or made any monetary contribution to its preparation or submission.

2

3

ARGUMENT

I. STRICT ENFORCEMENT OF THE CLASS ACTION REQUIREMENTS OF RULE 23 IS NECESSARY TO PREVENT POTENTIAL ABUSE OF THE CLASS ACTION MECHANISM.

AS the Superior Court properly held, the plaintiffs

here have failed to satisfy Mass. R . Civ. P. 23(b)'s

predominance requirement, because individual inquiries

are necessary to determine whether any m e m b e r of the

putative employee class was injured. See Polion v. Wal-

M a r t , 2006 WL 4472492 at *15 (Mass,Super. Nov. 7, 2 0 0 6 ) .

Strict enforcement of Rule 23's class certification

requirements, in this o r any other putative class action,

is essential to prevent the improper use of the c l a s s

action mechanism to force a favorable settlement of

uncertain or dubious claims, and to expose businesses to

costly and unwarranted litigation costs. 3 \\[CIlass

It is a well-established fact that most class actions settle after certification, even when the merits of the underlying claims are doubtful, due to the high cost of defending a class action and the risk of exposure to a large and potentially crippling aggregated damages award. 'The percentage of certified class actions terminated by a class settlement ranged from 6 2 % to l o o % , while settlement rates (including stipulated dismissals) f o r cases not certified ranged from 20% to 30%." Thomas E. Willging et a l . , An Empirical Analysis of R u l e 23 to Address the Rulemaking Challenges, 71 N . Y . U . L. Rev. 74, 143 ( 1 9 9 6 ) . When faced with potentially dire financial consequences after class certification, \\companies often perceive that they have little choice but to cut their losses through settlement." Gary M. Kramer, No C l a s s :

4

certification creates insurmountable pressure on

defendants to settle, whereas individual trials would

not. The risk of facing an all-or-nothing verdict

presents too high a risk, even when the probability of an

adverse judgment is low. These settlements have been

referred to as judicial blackmail.'' C a s t a n o v. Am.

Tobacco Co., 84 F.3d 734, 740 (5th Cir. 1996)

(decertifying multi-state class based in part on

plaintiffs' failure to show that common factual issues

concerning elements of reliance and addiction-as-injury

would predominate over individual issues). 4

In fact, Fed. R . Civ. P. 2 3 was amended expressly to

counter the potentially extortionate effect of class

certification by creating a discretionary right to

Post-1991 Barriers to Rule 23 Certification of Across- The-Board Employment Discrimination Cases, 15 Lab. Law. 415, 416 (2000).

See also B l a i r v. E q u i f a x Check Servs., Inc., 181 F.3d 832, 834 (7th Cir. 1999) ('[A] grant of class status can put considerable pressure on the defendant to settle, even when the plaintiff's probability of success on the merits is slight. Many corporate executives are unwilling to bet their company that they are in the right in big- stakes litigation, and a grant of class status can propel the stakes of a case into the stratosphere."); Richard A. Nagareda, Aggregation And its Discontents: C l a s s Set t 1 ement Pressure, C1 ass - Wide Arbi trat ion, and CAFA, 106 Colum. L.Rev. 1872, 1873 (2006) ( " [ C l l a s s certification operates most disturbingly when the underlying merits of class members' claims are most dubious. " ) .

4

interlocutory appellate review. "An order granting

certification . . . may force a defendant to settle

rather than incur the costs of defending a class action

and run the risk of potentially ruinous liability," 1998

Advisory Committee Notes to Fed. R. Civ. P. 2 3 ( f ) .

In addition to forcing inappropriate settlements, a

decision .allowing class certification in the

circumstances of this case could invite the potential for

damages verdicts far in excess of a defendant company's

actual liability. This is so because here there is no

proof of uniform class-wide injury. Were t h e class

certified and the plaintiff class representatives to

prevail at t r i a l , a substantial portion of the damages

verdict could be based on inclusion of class members who

were not actually injured. '\[S]uch an aggregate

determination [of damages] is likely to result in an

astronomical damages figure that does not accurately

reflect the number of plaintiffs actually injured by

defendants and that bears little or no relationship to

the amount of economic harm actually caused by

defendants.'' McLaughlin v. American Tobacco Co. , 2 0 0 8 WL

8 7 8 6 2 7 , at *11 (2d Cir. A p r . 3, 2 0 0 8 ) (decertifying

"light cigarette" class for lack of proof of class-wide

injury and rejecting, on constitutional and other

6

grounds, calculation of class-wide damages based on rough

initial estimate of number of class members actually

injured) .

Such an outcome would not only impose an unwarranted

financial burden on the class action defendant but would

also violate the fundamental principle that the class

action mechanism does not affect in any way the

substantive proof requirements for establishing liability

and damages with respect to each class member.

R e f i n i n g Co., Inc. v. Bernal, 22 S.W.3d 425, 437 (Tex.

See Sw.

2000) *

As a policy matter, a decision allowing class

certification in this case, where there is insufficient

proof of class-wide injury, might discourage employers

from locating in Massachusetts, for fear of exposure to

onerous class-action litigation without the guarantee of

fairness that only a strict application of Rule 23’s

class action certification requirements can provide.

Rigorous enforcement of Rule 2 3 ’ s class certification

requirements is necessary to avoid these deleterious

effects and to prevent t h e extortionate settlement effect

of allowing plaintiffs to aggregate many, dubious

individual claims into a single class action.

The Superior Court's decision in this case should be

affirmed because the lower court appropriately applied

the requirements of Rule 23 and thereby prevented abuse

of the class action mechanism in this case.

11. THE DE Mmrms EXCEPTION TO CLASS-WIDE INJURY UNDER ASPINALL v . PHILLIP MORRIS COS. IS INAPPLICABLE.

This employment case clearly does not arise under

G . L. c. 93A. Nevertheless, the Superior Court invoked

the Court's c. 93A jurisprudence by assuming, without

deciding, the applicability of the so-called de m i n i m i s

exception to class-wide injury recognized in Aspinall. v .

Philip Morris Cos., 442 Mass. 381 ( 2 0 0 4 ) * 5 As amici

argue below, the Superior Cour t correctly decided that

the plaintiffs could not satisfy Aspinall's de m i n i m i s

exception, even assuming i t s applicability to this case.

In addition to elaborating upon t h e sound basis of the

' The majority in Aspinall did not use the term 'de m i n i m i s " when discussing the permissible inclusion of a limited number of uninjured class members in a certified class. Instead, the Court stated that there were "members of the class who have not suffered the 'injury' of higher t a r and nicotine [who] are both very few in number and impossible to identify." Aspinall I 442 Mass. a t 398 n.21 (emphasis added). In his dissent, Justice Cordy restated this language as allowing class certification when there is a 'de minimis number of uninjured class members who are difficult to identify with specificity." Id. at 405. Both the lower court and the p a r t i e s here have adopted Justice Cordy's " d e m i n i m i s " terminology.

Superior Court's decision, amici advance two.other

compelling reasons why the d e m i n i m i s exception should

not apply in this case.

In A s p i n a l l , the Court certified a class of

consumers alleging violation of c . 93A even though the

plaintiffs conceded that certain class members,

very few in number and impossible to identify," suffered

no injury whatsoever because they received the promised

benefits of lower tar and nicotine whenever they smoked

Marlboro Lights. Aspinall, 442 Mass. at 398 n.21. The

Superior Court here considered the applicability of

A s p i n a l l ' s d e m i n i m i s exception, stating that "[tlhe

application of this [ d e m i n i m i s ] principle to

certification under Mass, R. Civ. P. 2 3 is uncertain, but

in making this decision,

d e m i n i m i s inclusion is allowable. ' I P o l i o n v. Wal -Mart ,

2 0 0 6 WL 4472492 , at *15.

"both

t h e court has assumed that the

The Superior Court carefully reviewed the record

before it and concluded t h a t the plaintiffs had failed t o

establish that t he number of uninjured Wal-Mart employees

in the proposed class was only de m i n i m i s .

case, t o determine whether any associate was i n j u r e d - -

e . g . , whether an associate was coerced to miss a rest

break or not--mandates individualized inquiry of the

"In this

associates. In this court's view, such a determination

cannot be made on a class-wide basis." Polion, id.

(emphasis added). Accordingly, the Superior Court

decertified the class.

Consistent with the Superior Court's decision, amici

assert that the de m i n i m i s exception adopted in A s p i n a l l

is inapplicable to this case, for three compelling

reasons. First, the plaintiffs have failed to produce

information sufficient to prove generally class-wide

injury, which is the necessary foundation to application

of the d e m i n i m i s exception. Secondly, the d e m i n i m i s

exception is limited to c. 9 3 A cases due to c. 93A's

unique c l a s s certification requirements, which are less

stringent than those contained in Mass. R. Civ. P. 2 3 .

Finally, the d e m i n i m i s exception is of dubious continued

validity in light of this Court's decision in Hershenow

v. E n t e r p r i s e Rent-A-Car C o . , 445 Mass. 790 ( 2 0 0 6 ) ' which

requires a c. 93A plaintiff to prove actual i n ju ry to

establish liability.

A. The plaintiffs here, unlike the plaintiffs in Aspinall, have failed to show uniform, virtually class-wide injury.

The d e m i n i m i s exception can apply only where, as in

A s p i n a l l , plaintiffs have produced information capable of

10

establishing uniform, virtually class-wide injury.6

Aspinall, the plaintiffs had also conceded that a few

unidentified class members were not injured.

Aspinall, 442 Mass. at 393. The Court permitted the

inclusion of a small number of uninjured,

members in the certified c l a s s only because the

plaintiffs produced evidence capable of establishing that

the vast majority of class members had been injured. The

Cour t explained:

In

See

unidentified

What we have in [ A s p i n a l l are] statements made by the defendants which are alleged to be untrue for the overwhelming majority of smokers, with only a very few smokers who fortuitously happened to smoke all their cigarettes in a manner that has resulted in the intake of lower t a r and nicotine.

Aspinall, 442 Mass. at 398 n.21 (emphasis added).

Therefore, a strong showing of virtually uniform class-

wide injury was a necessary precondition to recognition

of the de m i n i m i s exception in Aspinall.

In Aspinall, the plaintiffs produced documents showing that the defendant designed and mass-marketed a so-called “light” cigarette that was allegedly designed not to deliver its promised benefits of lower tar and nicotine when used as directed in ordinary use. Aspinall, 442 Mass. at 386-88. Thus, the plaintiffs in Aspinall produced information capable of proving that virtually all purchasers of these Marlboro Light cigarettes suffered economic 105s from the purchase and ordinary use of the product. Id. at 488.

11

By contrast, in this case the Superior Court

correctly determined that the plaintiffs have failed to

show that they represent a unified class suffering a

common injury.

member's circumstances would be necessary to determine

liability. Polion v. W a l - M a r t , 2006 WL 4472492 at *15.7

That is, "as a practical matter, the resQlution of this

overarching common issue breaks down into an unmanageable

variety of individual legal and factual issues." A n d r e w s

v. Am. Tel. & T e l . Co., 95 F.3d 1014, 1023 (11th Cir.

1996) (no class certification in customers' claims

against long-distance telephone companies' "900"

telephone number services where multiple such services in

use). Absent such a record of uniform class-wide injury,

the de minimis exception cannot apply.

irrelevant to consider whether a de m i n i m i s number of

putative class members may not have been injured when the

An individual inquiry into each class

It is simply

7 As Wal-Mart ably argues in i t s appellate brief, the plaintiffs have failed to meet their burden, under Mass. R . Civ. P. 23(b), of establishing the predominance of common questions of fact over individual questions concerning liability for each employee class member. H e r e the c lass is a sprawling and unwieldy assortment of approximately 67,000 individual employees who, alleged time period of more than a decade, were subject to a myriad of particular circumstances unique to their job schedules, positions, branch locations and managers. There is no generalized proof of class-wide liability.

f o r the

i2

plaintiffs have not even shown that a de maximis number

of class members have been injured.

B . The de minimis exception should not apply to class ac t ions under Rule 23.

The de m i n i m i s exception should not apply to this

case as a matter of law, independent of the inadequate

record information, because the case does not arise under

c. 93A. As this Court discussed in Aspinall, c. 9 3 A

contains its own class certification provision, at

3 9 ( 2 ) , which is s u i generis and is less stringent than

the requirements for c lass certification under Mass. R.

Civ. P. 2 3 . See Aspinall, 442 Mass. at 391-92.8 In

particular, the Cour t has " [ n J o t [ e d ] that Ec. 9 3 A l does

not contain t h e predominance or superiority requirements

found in rule 23 [and has] recognized that § 9 ( 2 ) has 'a

more mandatory tone' than the rule [ 2 3 ] . ' I Fletcher v.

Cape Cod Gas C o . , 394 Mass. 5 9 5 , 6 0 5 (1985) (quoting

Chapter 93A's class certification section provides, in relevant part:

(2) Any persons entitled to bring such action may, if the use or employment of the unfair or deceptive act or practice has caused similar iniurv to d 6 - -

numerous other persons similarly situated and if the court finds in a preliminary hearing that he adequately and fairly represents such other persons, bring the action on behalf of himself and such other similarly injured and situated persons . - . .

G . L. c. 9 3 A § 9 ( 2 ) .

13

B a l d a s s a r i v. Public F i n . Trust, 369 Mass. 33, 40

(1975)). Moreover, the Court in Aspinall cautioned that

a t r i a l judge deciding a motion for c . 93A class

certification "must bear in mind a pressing need f o r an

effective private remedy for consumers, and that

traditional technicalities are not to be read into the

statute in such a way as to impede the accomplishment of

substantial j u s t i c e . " Aspinall, 442 Mass. at 391-92

(internal citations omitted).

a de m i n i m i s exception t o class-wide injury therefore

arose in t h e unique and specific context of c . 93A.

The Court's recognition of

By contrast, Rule 23's more rigorous class

certification requirements apply in this case. O f

particular relevance here is the predominance requirement

under Mass, R. Civ. P. 23(b), which was the basis of the

Superior Court's decision to decertify the c l a s s . 9

'[Wlhen the court must explore whether any harm actually

resulted, individual questions predominate and class

certification is not appropriate." Polion v. WaL-Mart,

2006 WL 4472492 at *15.

~ .-

Mass. R . C i v . P. 23(b) provides, in relevant part, that " [ a l n action may be maintained as a class action if . . . the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members . . , . ' I

14

To amici's knowledge, no court in the nation has

adopted a de m i n i m i s exception to class-wide injury under

Rule 2 3 . To the contrary, courts have routinely denied

class certification under Rule 23(b)'s predominance

requirement where, as here, the plaintiffs have failed to

show that each putative class member has suffered a

cognizable loss or injury. 10 As these cases reflect, the

lo See A m c h e m Prods., Inc. v. Windsor , 521 U.S. 591, 6 2 4 - 25 (1997) (no class certification in asbestos litigation where putative class members were exposed to different asbestos-containing products for different amounts of time and in different ways, where each class member had different smoking history complicating causation element, and where range of manifested physical injury varied from none at all to disabling asbestosis); Broussard v . Meineke Discount Muffler Shops, Inc. , 155 F.3d 331,340-344 (4th Cir. 1998) (no class certification of franchisees' claims against franchisor alleging mismanagement of pooled advertising contributions; individual inquiries required to determine which of many franchise agreements were in use, what particular representations franchisor made to each franchisee, and how each franchisee relied on such representations); Sprague v. Gen. Motors Corp. , 133 F . 3 d 3 8 8 , 3 9 7 - 9 9 (6th Cir, 1998) (en banc) (no class certification in retirees' claim of ERISA violation concerning non- payment of health benefits where individual inquiries required to determine which contract each retiree signed and what representations employer made to each retiree); Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999, 1006 (11th Cir. 1997) (class certification denied because individualized inquiry required into each putative class member's circumstances concerning claim of racially discriminatory rental practices); v. Cotter Corp., 6 5 F.3d 8 2 3 , 8 2 7 - 2 8 (loth Cir. 1995) (no class certification where individual inquiry required i n t o medical impact on each putative c l a s s member's person and property from uranium mill emissions) ; In

Boughton

Baycol Products L i t i g a t i o n , 2 1 8 F . R . D .

15

class action is merely an efficient procedural mechanism

for the collective litigation of substantially similar

individual claims. The class action is 'an exception to

the usual rule that litigation is conducted by and on

behalf of the individual named parties only." Califano v.

Yamasak i , 442 U.S. 682, 700-1 (1979). Accordingly, a

class action does not affect in any way the plaintiff

class representatives' burden of proving liability and

damages with respect to each class member. "It is not

meant to alter the parties' burdens of proof, right to a

jury trial, or the substantive prerequisites to recovery

under a given [claim] . ' I S w . R e f i n i n g Co., Inc. v,

Bernal, 22 S.W.3d 425, 437 (Tex. 2000). In fact, many

courts faced with "light cigarette" cases nearly

identical to Aspinall have denied class certification

under Rule 23 or the equivalent because t h e plaintiffs

have failed to show t h a t each putative class member was

injured. 11

197, 213 (D. Minn. 2003) (no class certification where individual inquiry required into harmful effects of prescription drug on each putative class member).

l1 Courts in those cigarette cases have consistently concluded that individual inquiries into each smoker's behavior would be required to determine who did not receive the promised benefits of lower tar and nicotine. As one court explained:

The fundamental question in the case is whether Defendants' representation that a pack of Marlboso Lights would deliver lower tar and nicotine than Marlboro Regulars is false. The answer to that question requires each class member to prove that the person who smoked the cigarettes actually received something other than "lowered tar and nicotine." Due to the individualized nature of tar and nicotine delivery, causation and loss cannot be established on a class-wide basis.

Mulford v . Altria Group, Inc. 2 4 2 F . R . D . 615, 6 2 7 - 2 9 (D.N.M. 2 0 0 7 ) class on predominance grounds, and rejecting Aspinall's findings of presumptive class-wide injury and of only a de minimis number of uninjured class members). McLaughlin v. American Tobacco Co., 2008 WL 878627 , at * 4 (2d Cir. A p r . 3 , 2 0 0 8 ) smokers alleging RICO violation on predominance grounds because "reliance on the misrepresentation [I cannot be the subject of general proof is needed to overcome the possibility that a member of the purported class purchased Lights for some reason other than the belief that Lights were a healthier alternative") ; Benedict v. A l t r i a Group, Inc. , 2 4 1 F.P.D. 6 6 8 , 6 8 0 (D.Kan. 2007) (denying class certification because issue of deception required inquiry into each "light" smoker's behavior, including whether each smoker "compensated" by smoking more cigarettes or by inhaling more deeply); Davies v. Philip Morris U . S . A . , Inc . , 2 0 0 6 WL 1600067 , a t *3-4 (Wash.Super. May 26 , 2 0 0 6 ) (denying class certification because inherently individual questions concerning each smoker's reasons f o r buying "light" cigarettes "overwhelmingly predominate [dl over the common questions of deceptive acts or practices"); Pearson v. Philip Morris, Inc., 2006 WL 663004 , at *L (Or.Cir., Feb. 23, 2 0 0 6 ) (denying class certification because "individual issues vastly predominate over the common issues of fact and law" concerning each smoker's habits and actual exposure to tar and nicotine levels); Philip Morris USA Inc, v. Hines, 883-So.2d 292, 294 (F1a.Dist.Ct.A~~. 2 0 0 4 ) smokers because key issue whether each smoker "reaped the benefits of a lower tar and nicotine cigarette depended upon how the cigarettes were smoked").

(denying certification of "light cigarette"

See a l so

(decertifying class of "light"

[and] [ i l ndividualized proof

(decertifying class o f "light"

17

In short, extending Aspinall's de m i n i m i s exception

outside the unique context of c. 93A to class actions

under Rule 2 3 would contravene Rule 2 3 ' s rigorous

requirements for class certification, especially the

predominance requirement of Rule 23 (b) (3) . The de

m i n i m i s exception, t o the extent it can survive the

Court's decision in Hershenow (see below), should

accordingly be restricted to claims arising under c. 93A

and should not be extended to Rule 23 cases such as this

one.

C. It is questionable whether the de m i n i m i s exception survives the actual injury requirement under Hershenow.

Since the de m i n i m i s exception is a creature of

c. 93A case law, it is appropriate to consider whether it

remains valid on its native soil of c. 93A jurisprudence.

If the exception were no longer doctrinally supportable

under the current law of c . 93A, then clearly the

question of i t s application in this or any other putative

class action would not arise.

It is indeed questionable whether the de m i n i m i s

exception remains doctrinally valid a f t e r the Court's

decision in Hershenow. In Hershenow, the Court clarified

that c. 93A requires a plaintiff to prove actual injury

18

in order to establish liability.12 This holding, however,

seems to conflict with the d e m i n i m i s exception, which

eliminates the actual injury requirement f o r those few

class members who concededly have suffered no harm. Such

uninjured class members could not recover individually

under Hershenow, and yet the exception allows them to

remain as members of a certified class and to recover

f r o m a favorable judgment or settlement.

A s amici have already argued, it is fundamental that

the procedural mechanism of a class action is not meant

to, anddoes not, alter in any way the substantive proof

requirements of c. 93A (or any other claim brought as a

c lass action) and therefore should not allow uninjured

plaintiffs to recover in a class action. “ [ C l l a s s action

status does not alter the parties’ underlying substantive

rights. If a specific form of relief is foreclosed to

12 In Hershenow, the Court explained:

If any person invades a consumer’s legally protected interests, and if t h a t invasion causes the consumer a loss-whether that loss be economic or noneconomic-the consumer is entitled to redress under our consumer protection statute. A consumer is not, however, e n t i t l e d t o redress under G . L . c. 93A, where no loss h a s occurred. otherwise is irreconcilable with the express language of G . L . c. 9 3 A , § 9, and our earlier case law.

To permit

I d . , 445 Mass. at 8 0 2 (emphasis added) .

19

claimants as individuals, it remains unavailable to them

even if they congregate into a class."

Credit S u i s s e First Boston, LLC, 134 Cal.App.4th 997,

1018 (2005) (internal citations omi t t ed ) . See also Boyd

v. Becker, 627 So.2d 481, 484 (Fla.1993) ("The class

action device is procedural in na tu re only and cannot be

used to change t h e substantive law.").

Feitelberg v.

In short, this case provides t he Court with the

opportunity to consider the continued validity of the de

m i n i m i s exception a f t e r Hershenow. A ca re fu l examination

of A s p i n a l l through the lens of Hershenow indicates that

the d e m i n i m i s exception conflicts with Hershenow's

actual injury requirement and therefore should be

rejected by the Cour t .

2 0

CONCLUSION

For the foregoing reasons, this Court should affirm

the Superior Court’s decision decertifying the

plaintiffs’ class.

NEW ENGLAND LEGAL FOUNDATION and ASSOCIATED INDUSTRIES OF MASSACHUSETTS

By their attorneys,

BBO No. 559918 Martin J. Newhouse, President BBO No. 544755 Jo Ann’ Shotwell Kaplan, General Counsel BBO No. 459800 New England Legal Foundation 150 Lincoln Street Boston, MA 02111-2504 (617) 6 9 5 - 3 6 6 0

CERTIFICATE OF COMPLIANCE

Pursuant to Mass. R. App. P. 16(k), I hereby certify that this brief complies with the rules of cour t pertaining to the filing of an amicus brief, including, but not limited to, Mass. R . App. P . 1 7 .

Ben Robbins

Dated: April 25, 2008

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