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Expelliarmus! Eleventh Circuit Disarms False-Advertising Class Action Against Makers of Fantasy Video Game

Posted in Ascertainability, Class Certification, Predominance

Plaintiffs who wish to bring product-liability and consumer-fraud class actions against businesses often overreach when defining the proposed class in order to raise the stakes—and hence the settlement pressure—on the defendant.  A recent unpublished decision by the Eleventh Circuit, Walewski v. Zenimax Media, Inc. (pdf), No. 12-11843, is yet another example of the growing consensus rejecting these overly broad putative classes.

In Walewski, a Florida purchaser of a fantasy video game (Elder Scrolls IV: Oblivion) alleged that after he had played the game for 450 hours, a software defect prevented him from “cast[ing] spells,” “open[ing] doors and gates,” or taking other in-game actions.  In response, the disappointed wizard conjured a class-action lawsuit in federal court, in which he purported to sue on behalf of all purchasers nationwide.  In an attempt to cloak the individualized nature of the claims and defenses implicated by his allegations, he argued that the company’s failure to disclose the alleged glitch gives every purchaser a fraud claim for having overpaid for the game, even if the glitch never manifested in that customer’s game.  And by suing only under the law of Maryland—the state in which the game manufacturer is located—he sought to sidestep the numerous individualized issues that would be raised by the varying consumer-protection laws of the other 49 states.

Members of the plaintiffs’ bar often try these tactics when bringing consumer class actions against manufacturers.  But an increasing number of courts are rejecting them—with last year’s landmark Ninth Circuit decision in Mazza v. American Honda Motor Co.(pdf), which was briefed and argued by my colleague Don Falk, being a prime example.  (Here is our report on Mazza.)  The Eleventh Circuit is now part of that chorus.

In Walewski, the Eleventh Circuit affirmed the district court’s denial of class certification, pointing out several defects in the class action.  For example, the attempt to apply Maryland law nationwide failed as to the named plaintiff himself:  Because the plaintiff was a Florida resident who purchased and played the game in Florida (and thus would have been exposed to the alleged misrepresentations and injury there), the court held that Florida law governs his claims.  Similarly, the court determined, the varying laws of all 50 states would govern the laws of the putative class members from those states, which precludes the plaintiff from showing (as he must under Rule 23(b)(3)) that common issues predominate over individualized ones.  In addition, the class definition was overbroad because it included purchasers who (for a number of different reasons) had not experienced the claimed defect or been exposed to the alleged misrepresentations.

Together with Mazza, Walewski is a powerful antidote to the curse of nationwide class actions seeking application of the law of the state of the defendant’s place of business.  And it likewise should help in defending against the dark art of recharacterizing inherently individualized product-liability and warranty claims as false-advertising claims for loss in the economic value of the product.