Sanity Reigns in Tire Kingdom, But Will the Florida Supreme Court or the Eleventh Circuit Follow?

When is it appropriate to certify a class of consumers who allege false or misleading advertising under Florida law, and why should you care?

Well, as to the first question, in the past decade, courts in the Sunshine State have reached very different conclusions.  These courts agree that some type of causation is required before a consumer can recover damages under the principal Florida consumer protection statute, but the agreement largely ends there. 

Broadly speaking, two different approaches to causation have emerged.  The first holds that the causation element is satisfied if an objectively reasonable person would have been deceived by the practice.  I call this the “weak view” because it does not require the plaintiff to prove that he or she – or anyone else in the class – was actually fooled.  The other approach, which I call the “strong view”, requires the plaintiff to articulate some way in which he or she was personally harmed by the challenged practice.

A court’s preferred approach typically drives its conclusion about whether the class members’ claims have enough in common to warrant class treatment.  If the court chooses the weak view, then it will usually conclude that every class member’s claim revolves around the identical question of whether a reasonable person would have been deceived, and class treatment is appropriate.  If the court adopts the strong view, then it is much less likely to find a common causal link between every class member’s purchasing decision and the practice at issue.

The embrace of the weak view has never been uniform among Florida’s state courts but has led to the perception of the Sunshine State as an advantageous forum for plaintiffs in large consumer class actions.  Ironically, even as Florida’s intermediate appellate courts appear to have begun retreating from the weak view, its federal judges have embraced it.  Given Florida’s large population, plethora of plaintiff’s lawyers and history of sizeable class action verdicts, the ebb and flow of the causation standard in consumer class action claims predicated on false or misleading advertising should be of burning interest to companies that advertise consumer products or services, no matter where they are located.

The Florida Cases Pre-July

The first Florida case to embrace the weak view was Latman v. Costa Cruise Lines, N.V., 758 So.2d 699 ( Fla. Dist. Ct. App. 2000).  The plaintiff in that case claimed that the defendant cruise line hid a mark-up to the fare by calling it a “port charge.”  The cruise line countered that the passengers all knew the total price they would pay before booking the cruise, so they were not harmed.  Affirming class certification, the Third District Court of Appeal explained that the passengers did not need to show that they were actually misled by the characterization because they all “parted with money for what should have been a ‘pass through’ port charge, but the cruise line kept the money.”  Id. at 703.

A few months later, the First District Court of Appeal endorsed a similar view.  In Davis v. Powertel, 776 So.2d 971 (Fla. Dist. Ct. App. 2000), the plaintiff alleged that the defendant cellular phone company sold phones that had been modified so that they would only work on the defendant’s network.  The trial court denied certification, concluding that a class member could not recover unless he could show that he was misled.  The First District reversed, relying on Latman and holding that the causation element of the Florida statute – the Florida Deceptive and Unfair Trade Practices  Act (or FDUTPA) – would be satisfied if a reasonable consumer would have been deceived by the defendant’s practices.

In the ensuing decade, Latman and Davis received substantial criticism from other state and federal courts in Florida.  These courts rightly questioned whether the weak view endorsed by Latman and Davis “gives fair consideration to the principle of causation within [FDUTPA].”  Philip Morris USA, Inc. v. Hines, 883 So.2d 292, 294 ( Fla. Dist. Ct. App. 2003). 

Even the First District retreated substantially from the weak view of causation in Eguwatu v. South Lubes, Inc., 976 So.2d 50 ( Fla. Dist. Ct. App. 2008).  Echoing Latman, the plaintiff in Egwuatu claimed that Jiffy Lube deceptively invoiced customers for an “environmental fee” that appeared to be a tax but was actually direct revenue to the company.  The First District held that class certification was not appropriate because each class member’s claim would turn on whether he or she had actual knowledge that the fee was not a tax. 

Nevertheless, several federal courts have recently endorsed the weak view.  This trend culminated in Fitzpatrick v. General Mills, a decision by the Eleventh Circuit Court of Appeals in April that adopted the weak view with no analysis and without even bothering to discuss the split in authority in the Florida appellate courts.

A Shift?

But earlier this month, the Third District Court of Appeal – the same court that launched the weak view with its 2000 Latman opinion – issued a ruling reversing class certification based on its conclusion that individualized proof was needed to satisfy FDUTPA’s causation element.  In Tire Kingdom, Inc. v. Dishkin, No. 3D08-2088, ___ So.3d ___ (Fla. Dist. Ct. App. July 6, 2011), the Third District reversed the certification of a class of customers who alleged that they were misled by advertised prices that did not include “shop fees” and other below-the-line charges.  It reasoned that the viability of each class member’s claim depended on the particular language of the advertisement he or she saw and the details of his or her discussions with staff members.  In reaching this conclusion, the Third District described Latman as “the rare exception to the general rule that collective proof of individualized transactions cannot be used to prove the indispensable element of causation in a FDUTPA class action.”  Id.

If appealed, Tire Kingdom would allow the Florida Supreme Court to provide some much needed clarity on FDUTPA’s causation element.  Meanwhile, now that both the First District and the Third District have retreated from the decisions that form the basis for the weak view of causation, the Eleventh Circuit’s unquestioning acceptance of the weak view seems, well, questionable.  It remains to be seen, however, whether the Third District’s reasoning in Tire Kingdom will be enough to convince federal courts to disregard Fitzpatrick and make an Erie guess that the Florida Supreme Court will adopt the strong view some day.    

Stay tuned.