On July 1, 2013, the US District Court for the Central District of California issued an order granting in part and denying in part the plaintiffs' motion for class certification in Guido v. L'Oreal, USA, Inc. The court found that the class, made up of consumers in California and New York, satisfied all of FRCP 23(a)'s requirements for class certification but failed FRCP 23(b)'s predominance requirement for the class members in California. It held that the damages calculation for the California class members required expert testimony to establish a basis for relief common to the class.

Two separate federal lawsuits were filed against L'Oreal USA Products, Inc. and consolidated in the US District Court for the Central District of California as a class action. The class consisted of New York and California residents who purchased a hair care product, and the action alleged breaches of implied warranties and violations of various consumer and advertising laws.

On motion by the plaintiffs to certify the class, the court first considered the four requirements for class certification under FRCP 23(a):

The court found support for class certification on all four grounds.

The court next considered the requirements of predominance and superiority under FRCP 23(b) to maintain a class action. It found that the superiority and the predominance requirements were satisfied, except for the predominance requirement for the California resident class members.

FRCP 23(b)'s predominance rule requires that the questions of law or fact common to class members predominate over any questions affecting individual members. The court analyzed liability and damages for predominance separately. It found that liability issues common to the class members predominated over liability issues affecting only individual members.

However, the court found that there was insufficient evidence on damages to make a determination of predominance for the California class members. The California plaintiffs proposed that damages should be calculated by using expert testimony to determine the actual market value of the product purchased by the class, and then using the difference between the product's historical market price and its true market price to award a per-bottle award to each class member. The plaintiffs' argument assumed that the true market price of the product would be $0 or substantially less than the historical market price.

The court noted that the Supreme Court in Comcast Corp. v. Behrend held that an FRCP 23(b)(3) class could be certified only if there was evidence showing the existence of a class-wide method of awarding relief that is consistent with the plaintiffs' theory of liability. The court found that in this case, because the plaintiffs had not submitted expert testimony actually showing a difference between the product's true market price and its historical market price, they had not met their burden of demonstrating that common questions predominate over individual issues regarding damages.

Nonetheless, the court ruled that the plaintiffs' burden was not met only for the California class members. For the New York class members, the plaintiffs had elected to receive statutory damages under New York state law instead of actual damages. Therefore, no expert testimony was necessary to determine damages for the New York class members.

Counsel should consider that courts will apply the Comcast standard to their analysis of the predominance standard for damages. This means that if expert testimony is required to devise a class-wide plan for damages, the court may demand that expert testimony be presented for it to certify a class.

For more information on litigating product liability class actions under FRCP 23, see Practice Note, Product Liability Class Actions.