Covington & Burling LLP
One Front Street
San Francisco, CA 94111
(415) 591-6000
clannin@cov.comJACK B. WEINSTEIN, Senior United States District Judge:
Table of Contents
I. Introduction ............................................................................................................................... 5
II. Facts .......................................................................................................................................... 7
III. Pending Litigation and Administrative Proceedings .............................................................. 12
A. Litigation ........................................................................................................................... 12
1. In This Court ................................................................................................................ 12
2. Other Jurisdictions ........................................................................................................ 14
3. Municipal Plaintiffs ...................................................................................................... 17
B. Federal Trade Commission Action Against Competitor of Defendant ............................ 17
C. Informal Inquiry by FTC of Defendant ............................................................................ 21
D. Proposed Legislation in New York City ........................................................................... 22
E. Warnings by Municipalities to Residents ......................................................................... 22
F. Public Discourse Regarding "Flushable" Wipes .............................................................. 23
IV. What is "Flushable"? .............................................................................................................. 24 A. According to Plaintiff ....................................................................................................... 24
B. According to Plaintiff's Expert ......................................................................................... 24
C. According to Defendant .................................................................................................... 25
D. According to Defendant's Experts .................................................................................... 26
E. According to Other Experts .............................................................................................. 27
F. According to The Association of the Nonvwoven Fabrics Industry & European Counterpart ....................................................................................................................... 28
G. According to Federal Trade Commission ......................................................................... 29
H. According to Dictionaries ................................................................................................. 29
I. Lack of Consumer Surveys ............................................................................................... 30
V. Procedural History and Instant Motions ................................................................................. 30
VI. Expert Reports ........................................................................................................................ 32 A. Plaintiff's Expert: Colin B. Weir ...................................................................................... 32
B. Defendant's Expert: Carol A. Scott, Ph.D. ........................................................................ 34
VII. New York General Business Law § 349 ........................................................................... 35
VIII. N.Y. C.P.L.R. § 901(b)'s Limits on Predetermined Damages and Shady Grove ............. 36 A. Erie .................................................................................................................................... 36
C. Shady Grove ...................................................................................................................... 41
D. Shady Grove Is Binding .................................................................................................... 47
IX. Class Action ............................................................................................................................ 48 A. Rule 23(a)(1): Numerosity ................................................................................................ 51
B. Rule 23(a)(2): Commonality ............................................................................................. 52
C. Rule 23(a)(3): Typicality .................................................................................................. 56
D. Rule 23(a)(4): Adequacy of Representation ..................................................................... 59
E. Implied Requirement of Ascertainability .......................................................................... 61
F. Federal Rule of Civil Procedure 23(b) Factors ................................................................. 64
1. Rule 23(b)(2) Injunctive Relief .................................................................................... 64
a. Article III Standing ....................................................................................................... 64
b. Likely 23(b)(2) Class Certification .............................................................................. 66
2. Rule 23(b)(3) Damages ................................................................................................ 67
a. 23(b)(3): Predominance ................................................................................................ 68
b. 23(b)(3): Superiority .................................................................................................... 73
c. Likely Denial of 23(b)(3) Class Certification .............................................................. 78
X. Primary Jurisdiction Doctrine ................................................................................................. 79 A. Law ................................................................................................................................... 79
B. Federal Trade Commission ............................................................................................... 84
C. Application of Law to Facts .............................................................................................. 88
1. Control by Judges or the Federal Trade Commission? ................................................ 89
2. Federal Trade Commission's Discretion ...................................................................... 89
3. Inconsistent Rulings? ................................................................................................... 90
4. Existing Consideration by Federal Trade Commission ................................................ 90
5. Advantages Versus Costs ............................................................................................. 90
XI. Court's Inherent Authority to Stay Decision on Class Certification ...................................... 91
XII. Conclusion ........................................................................................................................ 92
This consumer class action is stayed because the Federal Trade Commission ("FTC") probably can protect consumers more effectively than this court.
Six related putative class actions are pending in this court. Consumers allege they paid a premium for "flushable" wipes—moist towelettes intended for use in place of, or in addition to, toilet paper—that are not actually "flushable." Similar class actions are pending in other courts. A number of municipalities have brought a class action against manufacturers of similar products, claiming clogging of their sewage disposal facilities.
The FTC is engaged in an ongoing inquiry into defendant's use of the term "flushable." One of defendant's competitors recently negotiated a consent agreement with the FTC, which would limit that manufacturer's description of its products as "flushable."
The "flushable" industry has sales in the multi-billion dollar range. It includes many manufacturers, different designs, and a variety of brands. One flushable wipe begins to disintegrate upon entering the toilet bowl. Defendant's, designed to break down through chemical processes and physical manipulation, shows no signs of coming apart while in a home's plumbing, or possibly even after it reaches a municipal sewage plant.
Plaintiff Anthony Belfiore ("plaintiff") moves to certify a class of consumers in New York who purchased wipes marked "flushable" manufactured by defendant. He claims that the "flushable" wipes, for which he paid a premium over nonflushable moistened wipes, are not "flushable." Originally, plaintiff sought money damages, either based on the premium...
