Florida Law on Class Certification: Has the Florida Supreme Court Changed the Law?
Has there been a “sea change” in Florida class action law making it more favorable to plaintiffs? That is what a dissenting opinion asserts in a recent Florida Supreme Court per curiam decision. If that dissent is accurate, insurers and other large corporations should be prepared to face a potential increase in class action filings in the state courts of the Sunshine State. But that can succeed only to the extent that plaintiffs can avoid federal jurisdiction under the Class Action Fairness Act, which will depend in part on the U.S. Supreme Court’s forthcoming decision in Standard Fire Ins. Co. v. Knowles (see my January 8, 2013 blog post for more on that case).
In Soper v. Tire Kingdom, Inc., No. SC11-1462, 2013 Fla. LEXIS 89 (Fla. Jan. 24, 2013) (per curiam), a 5-2 majority of the Florida Supreme Court summarily quashed the Third District Court of Appeal’s (DCA) opinion in Tire Kingdom, Inc. v. Dishkin, 81 So. 3d 437 (Fla. 3d Dist. Ct. App. 2011), and remanded the case to the trial court. The Florida Supreme Court’s majority opinion says nothing more than that the Third DCA’s decision “is in express and direct conflict with this Court’s decision in Sosa v. Safeway Premium Finance Co., 73 So. 3d 91 (Fla. 2011).” To explore why the Third DCA might have been reversed, an examination of both Tire Kingdom and Sosa is required. (I did a prior blog post on Sosa on July 12, 2011.)
Tire Kingdom is a putative class action alleging that the defendant tire shop’s advertising regarding discounts on auto repair services was deceptive. The plaintiff claims that the advertising improperly failed to disclose “shop fees” that would be added to the discounted price, and also that the defendant improperly based the “shop fees” on a percentage of the retail price rather than discounted price. The Third DCA reversed the trial court’s certification of the class, finding that commonality and typicality were not satisfied. On commonality, the court of appeal concluded that the trial court had improperly reached preliminary conclusions on the merits of the case, that the commonality test set forth in the U.S. Supreme Court majority opinion in Wal-Mart v. Dukes was not satisfied (although there was not much discussion on this point), and that individual proof would be required to establish a claim under Florida’s deceptive trade practices act. Tire Kingdom, 81 So. 3d at 446-48. On the last point, the court of appeal concluded that an individual inquiry into each customer’s transaction (i.e., what advertising he or she viewed, conversations with the defendant’s employees, etc.) would be necessary to determine whether the defendant was liable to a putative class member. With respect to typicality, the court of appeal concluded that the plaintiff’s identification of common issues of law was insufficient, and that the evidence did not support the allegation of a “common scheme.” On this point, the court of appeal cited its own decision in Sosa, which was later reversed by the Florida Supreme Court. Id. at 450. Notably, the Third DCA did not reach the issue of predominance of common issues of law or fact because it found that both commonality and typicality were lacking.
Sosa was a 4-3 decision by the Florida Supreme Court finding that class certification was appropriate in a case involving allegations that the defendant violated a Florida statute in imposing certain service charges on premium finance agreements. The Florida Supreme Court held, among other rulings, that: (1) the Third DCA had failed to apply an abuse of discretion standard of review to the trial court’s class certification order (Sosa, 73 So. 3d at 103); (2) a trial court may consider evidence on the merits where such evidence overlaps with class certification requirements, although without making a determination on the merits (id. at 105-06); and (3) the threshold for commonality is “not high,” and depends on “whether the representative’s claim arises from the same practice or course of conduct that gave rise to the remaining claims and whether the claims are based on the same legal theory” (id. at 107). The commonality test as articulated in Sosa was similar to a common formulation of the test applied in the federal courts pre-Wal-Mart. The Florida Supreme Court’s opinion was issued very shortly after the U.S. Supreme Court’s decision in Wal-Mart, and my reading of Sosa has been that the Florida Supreme Court might not have actually considered whether or not to follow the U.S. Supreme Court majority in Wal-Mart. There is no citation to Wal-Mart in Sosa, and if a state supreme court is going to expressly reject federal law on class certification it often will say so directly. With respect to predominance, the Florida Supreme Court in Sosa explained that predominance can be satisfied if the named plaintiff “by proving his or her own individual case, necessarily proves the cases of the other class members.” Id. at 112. This again did not seem to be a departure from the federal standard. On the facts of Sosa, the court concluded that the appropriateness of the alleged overcharges based on a routine billing practice could be determined in a classwide manner, and that issue would predominate. Id. at 113.
Reading Sosa together with the Third DCA’s opinion in Tire Kingdom, it appears that there are several possible grounds on which the Florida Supreme Court majority might have found a conflict with its decision in Sosa. (The Florida Supreme Court majority and dissent in both cases was the same except for Justice Quince, who dissented in Sosa but not in Soper v. Tire Kingdom.) The majority could have concluded, for example, that the appellate standard of review had not been properly applied in Tire Kingdom, or that the trial court in Tire Kingdom had appropriately considered the merits, or that the Tire Kingdom court’s adoption of Wal-Mart on commonality was inconsistent with Sosa’s discussion of pre-Wal-mart law on commonality. None of these would be particularly remarkable. Not every state supreme court has followed the U.S. Supreme Court majority in Wal-Mart on commonality, although I would expect a state supreme court deciding to expressly reject Wal-Mart on this point would say so explicitly, and analyze the issue.
The dissenting opinion of Justice Canady in Soper v. Tire Kingdom suggests that the majority might be going further than a reading of the Third DCA's opinion in Tire Kingdom together with Sosa might suggest. Justice Canady’s dissent, joined by Chief Justice Polston, states that “Sosa marked a sea change in Florida’s law governing class actions,” and that the two dissenters would recede from it. Soper, at *2 (Canady, J., dissenting) (emphasis added). The dissent makes clear that it would follow Wal-Mart on commonality. Id. at *6. The dissent further concludes that, in light of the individualized issues regarding each class member’s transaction with Tire Kingdom, “we have no basis for concluding that this case is appropriate for consideration as a class action.” Id. at *8. It is not clear to me that the Florida Supreme Court has gone so far as to have found class certification appropriate, although it did remand the case to the trial court instead of to the Third DCA.
Sometimes a dissent can have an impact unintended and undesired by its author, and this might become the case here. Was this an overly dramatic dissent that overstates the impact of the majority’s per curiam ruling, and of Sosa? Or is it a sign that Florida law on class certification really has shifted significantly? Only time will tell. But this might spark an increase in class action filings in Florida state courts, with plaintiffs’ lawyers trying to use the dissenting opinion in Tire Kingdom to cast the Sosa opinion as a significant change in Florida class action law.