Recently, many courts have been forced to address what issue-preclusive effect should be given to issues determined in putative class actions when class certification ultimately has been denied. This question can arise in a number of ways. For example, a defendant faced with a follow-on class action in state or federal court can go to the first court that had denied certification and ask for an injunction against the follow-on action. Or the defendant might move in the court that has the follow-on action to strike the class allegations on the basis of issue preclusion.
In In re Baycol Products Liability Litigation, 593 F.3d 716 (8th Cir. 2010), a federal multidistrict litigation (MDL) transferee court refused to certify a nationwide class in litigation seeking a refund on a cholesterol-lowering medicine. The court concluded that, because each class member ” ‘would have to demonstrate that they were either injured by Baycol, or that Baycol did not provide them any health benefits,’ common issues did not predominate.” Id. at 720 (citation omitted). The defendants then moved to deny certification of the proposed statewide class of West Virginia residents. The MDL court did so, holding that nothing in West Virginia law altered its analysis that individual issues of fact predominated plaintiffs’ economic loss claims. Id. at 720-21.
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