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It won’t surprise anyone to learn that we’re not big fans of Judge Tunheim’s recent class certification decision in In re St. Jude Medical, Inc. Silzone Heart Valves Products Liability Litigation. Judge Tunheim adopted the distinct minority view, holding that the District of Minnesota could apply Minnesota consumer protection statutes to a nationwide class of recipients of certain prosthetic heart valves who had neither undergone explant surgery nor manifest an injury that would permit the filing of a personal injury lawsuit in the patient’s state of residence. (Another “no injury” class! But we’ll save that rant for another day.)
Most courts have of course held that choice-of-law issues preclude certifying nationwide classes; the Seventh Circuit squarely so held in Firestone Tires. Judge Tunheim begs to differ, finding that St. Jude Medical has its headquarters in Minnesota, and its relevant corporate conduct occurred in that state, so Minnesota law applies to, say, an operation in which a New York physician implanted a heart valve into a New York patient in a New York hospital.
We won’t trot through all the issues here, but we’ll note one possible way of arguing against certification of a nationwide class in these situations. (The argument borrows in part from a concept raised by Judge Easterbrook in his decision in Firestone Tires.)
Suppose a New York resident wins the lottery. He spends his winnings foolishly, buying three cars at his local car dealership in a single day. At car dealerships on a single street in New York, he buys a Ford, a Toyota, and a Hyundai.
As always happens in these hypotheticals, the New Yorker realizes that he was induced to buy all three cars by consumer fraud. He sues the three car manufacturers in New York state court.
Is there really anyone — anyone — who thinks that this hypothetical lawsuit would be governed by the laws of three different jurisdictions — the jurisdictions in which the corporate defendants have their headquarters and in which their relevant corporate conduct occurred? If so, then the presiding judge must apply Michigan consumer protection law to the purchase of the Ford, Japanese consumer protection law to the purchase of the Toyota, and South Korean consumer protection law to the purchase of the Hyundai. Surely the consumer would be startled by this result, and the presiding judge probably wouldn’t be too pleased with the task confronting him, either. But that’s where most of Judge Tunheim’s analysis leads.
Judge Tunheim did suggest one other factor permitting him to apply Minnesota law to the St. Jude case — the named plaintiff chose to sue in a Minnesota court. That is surely true, but it poses its own problems. First, does “choice-of-law” really mean “the law the plaintiff chooses”? Doesn’t it mean “the law applicable to the facts of the case, whatever the plaintiff’s or defendant’s preference”? (Those questions may not be precisely as rhetorical as the way we just phrased them, but you get our drift.)
Second, what will Judge Tunheim’s class notice tell absent class members in this situation? “The named plaintiff chose to sue in Minnesota, so Minnesota law will apply to your claims. This will help those absent class members who live in states with consumer protection laws weaker than Minnesota’s, but will hurt class members who live in states with consumer protection laws stronger than Minnesota’s. If you live in any of the following states, you’d be better off opting out of the class and pursuing a statewide class action in your home state.” We doubt we’ll see that class notice, but isn’t it what the rules (and due process) would require?
Finally, are the laws of the United States really meant to permit nationwide class actions against domestic companies, such as Ford (or St. Jude) but to forbid nationwide class actions against foreign companies, such as Toyota and Hyundai? That’s an unusual form of discrimination.
Until someone answers our questions, we’re counting on the Eighth Circuit, once again, in the St. Jude MDL.