Alert June 27, 2012

Recent Statutory Action

Certification Denied on Predominance Grounds for Claim Alleging Overcharges by Carrier

In a recent decision, the U. S.  District Court for the Eastern District of New York applied Wal-Mart to a proposed Rule 23(b)(3) class and held that common issues did not predominate because the “key issue” was not common. Frey v. Bekins Van Lines, Inc., 2012 U.S. Dist. LEXIS 46412 (E.D.N.Y. Apr. 2, 2012).

In Frey, the plaintiffs sought to represent a putative class of people who claimed to have been overcharged by the defendant Bekins, claiming that the overcharges stemmed from a company policy. The plaintiffs claimed that the defendant – which charged by weight – would initially provide a low estimate, but when generating the final bill would either inflate the true weight or fabricate it, thereby increasing the price. Despite the allegation of a uniform policy, the court looked to the reasoning in Wal-Mart and held that common issues did not predominate. Citing Wal-Mart’s focus on the factual dispute most central to liability (in Wal-Mart, “the reason for a particular employment decision”), the court in Frey refused to certify a class because “[t]he key issue” did not have a common answer. That issue – whether final prices that exceeded estimates were overcharges attributable to the alleged policy – was not common because there could have been other reasons for the disparities. Echoing the language of Wal-Mart, the court summarized its holding as follows:  “Put simply, the reason why any individual shipper’s ultimate cost exceeded the estimated cost is not an issue that is amenable to class treatment.”