Colorado Court Decision Underlines Burden for Class Action Plaintiffs

A recent court decision out of Colorado underlines the substantial burden for class action plaintiffs who want to maintain a nationwide class action when state law claims are involved, lawyers from Duane Morris write in a post on the firm’s website.

The United States District Court for the District of Colorado denied a motion to reconsider its original decision in In Re HomeAdvisor, Inc. In that case, it rejected a class certification of a putative nationwide and states-specific classes.

In the case, the plaintiffs sued HomeAdvisor, an online marketplace that connects home service professionals with homeowners who need services, for misrepresenting the quality of the leads it sells.

The Court certified a nationwide misappropriation class and three state misappropriation classes, but refused to certify a nationwide deceptive practices class and nine state deceptive practices classes.

The Court initially found that the plaintiffs failed to present any claim-specific analysis to support certification of the state law claims, contrary to Tenth Circuit case law. The motion for reconsideration argued that the Court did not adequately consider a choice-of-law provision within HomeAdvisors’ terms and conditions, and that they would have prevailed under the laws of all the state-specific claims.

The Court reconsidered and rejected both claims. The choice-of-law argument lost because the plaintiffs didn’t make the estoppel argument in their original class certification motion, and only provided a two-sentence argument without any supporting legal authority. The plaintiffs also failed to raise the terms and conditions choice-of-law provision in their original motion, and contradicted its enforceability in their pleadings, leading to the second rejection.

The authors suggest that corporate counsel should take note of the ruling and if the facts support it, raise similar arguments at the certification stage of proceedings.

“If they cannot proceed on a nationwide theory, plaintiffs must identify the elements of each and every [state’s] law, if they want to prevail at the certification stage,” the Duane Morris lawyers write. “Where these elements are not identified, employers have an opportunity to raise these deficiencies with the Court, and that can ultimately change the landscape of which (if any) class claims will survive through the certification stage.”

Read more of Today’s General Counsel‘s coverage of class action lawsuits here, here and here.