No Damages? No Tort, Says the Supreme Court of Canada

Consider this: What if plaintiffs could assert a cause of action for negligence without proving, or even pleading, any actual damages? And what if the remedy for this damage-free tort claim were disgorgement of profits allegedly acquired by a breach?

This may seem foreign to American tort lawyers, but for Canadian litigants this cause of action has a name, albeit a confusing one: waiver of tort. It is often pled as an independent, gain-based cause of action, and it is a source of frustration and controversy for our friends in the True North. Indeed, class certification grounded in waiver of tort forces defendants to face the prospect of disgorgement without proof that any class member actually suffered damage, even though these commonly advanced claims have never fully been tried in Canada. Canadian scholars have suggested that this uncertainty has the potential to drive settlement negotiations unfairly in the class context.

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Strange Bedfellows – How a Recent Security Fraud Opinion May Impact Consumer Fraud Class Actions

The U.S. Supreme Court’s recent decision in Liu v. SEC, No. 18-1501 (June 22, 2020), limiting the SEC’s ability to obtain monetary equitable relief in securities fraud litigation, may seem an odd topic for this blog.  But Liu is worth some attention because it may foreshadow an impact on calculation and distribution of monetary awards in consumer fraud class actions.  The decision may influence the calculation of disgorgement or restitutionary remedies, and it may signal another hurdle for the controversial judge-made distribution mechanism, cy pres.
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Certain Express Misrepresentation Consumer Fraud Act Claims and Product Liability Claims May Coexist According to NJ Supreme Court

In the case on certification from the Third Circuit, the New Jersey Supreme Court ruled that claims for express or affirmative misrepresentations under New Jersey’s Consumer Fraud Act (NJCFA) may be brought simultaneously with claims under the New Jersey Product Liability Act (NJPLA).

In Sun Chemical Corp. v. Fike Corp., plaintiff Sun Chemical Corporation purchased an explosion suppression system from defendant Fike Corporation. The system was to prevent and contain potential explosions in a new dust collection system. On the system’s first day of operation, a fire occurred, and the system’s alarm was activated but inaudible, resulting in an explosion that injured Sun Chemical employees and damaged its facility.

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“Vanilla” Ice Cream Deceptive Labeling Case Melts on Motion to Dismiss

A federal court in New York recently granted a motion to dismiss claims that ice cream labeled “vanilla” misleads consumers into believing the product’s flavor comes exclusively from vanilla beans or extract, when in fact other natural flavors contribute to the vanilla taste. The decision may be a harbinger of what is to come in similar cases challenging the label description of vanilla and other flavors in products ranging from ice cream to soy milk to energy drinks. The decision also shows that alleged regulatory violations and product testing do not necessarily support a plausible claim of consumer deception.

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The Ship Has Sailed on Plaintiffs’ Efforts to Recover for Mere Fear of Contracting COVID-19

On February 21, 2020, the cruise ship Grand Princess embarked from San Francisco, headed to Hawaii.  Among the ship’s 3,533 passengers and crew were 62 people who had been exposed to COVID-19 on the ship’s immediate prior trip to Mexico.  The Hawaii voyage was curtailed and the ship docked off the cost of California for two weeks, during which passengers were confined to their rooms and two dozen people tested positive.  A number of personal injury lawsuits followed, the majority of which have been coordinated before Hon. R. Gary Klausner in the U.S. District Court for the Central District of California.

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California [Again] Confronts the High Cost of Litigation Uncertainty

The first appellate shoe has dropped in the litigation involving the herbicide Roundup, Johnson v. Monsanto Co., decided July 20, 2020, by California’s 1st District Court of Appeal, Division One. We discussed the verdict and the trial court’s post-trial rulings here, and we now follow through with an update.

Initially, the price tag for allowing questionable science into the courtroom, as measured by this verdict, has been reduced. The court of appeal lowered the compensatory damages award from $39 million to about $10.25 million, concluding the jury had improperly awarded noneconomic damages that plaintiff would likely never suffer. Because plaintiff’s counsel had argued to the jury that plaintiff’s Non-Hodgkins Lymphoma had reduced his future life expectancy to two years, the jury could not award pain and suffering damages beyond that two-year span. And, agreeing with the trial court that constitutional limits required a 1:1 ratio between compensatory and punitive damages, the court slashed the $78 million punitive award to about $10.5 million.

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