The First Circuit’s split decision last week affirming class certification in the Nexium antitrust case is sure to receive much attention in product defect class actions. Over the last several years, a chief battleground in such actions has been the import of the fact that many of the people that bought the particular product – indeed, often an overwhelming majority of those people – had no problem at all with it after many years of use. Defendants in those cases have pointed out that the need to adjudicate the resulting individual issues of injury and causation will typically overwhelm any supposed common issue of whether an abstract “defect” existed untethered to any particular person’s product. Properly read, the Nexium decision provides defendants with substantial support for that position.
The district court in Nexium had assumed that more than a de minimis number of uninjured persons existed and concluded that such did not bar certification because resolution of who was injured and who was not could wait until another day, even if there was no apparent mechanism to make those determinations in an efficient way consistent with the Seventh Amendment. The First Circuit rejected that approach. Repeatedly saying that its holding was limited to the situation where there were only a de minimis number of uninjured persons, the Court conducted a “detailed inquiry into the parties’ and the experts’ economic analyses” that spanned some 15 pages to conclude that only a de minimis number of uninjured persons existed. Whether or not one agrees with the conclusion (or with the dissent’s notation that an appellate court is not well equipped to conduct such an analysis in the first instance), the crucial point for defendants in product defect cases is that such an analysis is necessary – if such a “detailed inquiry” into the relevant evidence does not establish that only a de minimis number of persons are uninjured, certification should be improper. After all, if there are more than a de minimis number of uninjured persons in the class, the numerous individual trials that would be necessary to adjudicate injury will eviscerate the supposed efficiency gained by trying the abstract “common” issue.