Fitzpatrick v. General Mills: Applying the Presumption of Reliance in Consumer Class Actions to Affirmative Misrepresentations

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In Fitzpatrick v. General Mills, No. 10-11064, 2011 U.S. App. LEXIS 6047 (11th Cir. 2011) (available here), the Eleventh Circuit applied the presumption of reliance among absent class members in a consumer class action case alleging affirmative misrepresentations , similar to the standard used in consumer class actions alleging material omissions. The presumption of reliance where material omissions are alleged is increasingly uncontroversial. See e.g., Cole v. Asurion Corp., 267 F.R.D. 322 (C.D. Cal. 2010) granting certification on omission-based liability theory); Wolin v. Jaguar Land Rover North America, LLC, 617 F.3d 1168 (9th Cir. 2010) (reversing denial of certification where district court abused discretion; common questions predominated as to defendant’s duty to disclose under consumer protection statutes). And while Fitzpatrick formally represents an application of Florida’s consumer protection statute, its broader significance could be in confirming that the presumption of reliance has the same utility in affirmative misrepresentation consumer class actions as in those alleging omissions.

In Fitzpatrick, the district court certified a class alleging that General Mills had materially misrepresented the digestive benefits of its YoPlus yogurt, sold under the popular Yoplait brand. Fitzpatrick, 10-11064 at *2-*3. Not only did the Court of Appeals reject the defendant’s contention on appeal that the district court had abused its discretion in certifying the class because individual issues predominate, the unanimous three-judge panel praised the certification ruling as “a scholarly work reflecting careful attention to the requirements of Federal Rule of Civil Procedure 23, existing precedent and the factual background of this matter.” Id. at *7.

The Eleventh Circuit’s lone quibble with the district court’s certification ruling was that it embodied a class definition that “seems to conflict with its earlier sound analysis.” Id. at *9-*10. Specifically, in limiting the class to those who purchased YoPlus to obtain its claimed digestive health benefit, the federal appellate court noted that the definition “takes into account individual reliance on the digestive health claims,” thereby contradicting the controlling presumed reliance standard. Id. at *10. Thus, although the opinion formally vacated the district court’s certification order, the case was remanded with instructions that the district court issue a certification order that properly reflects its own standard of presumed reliance. Id.

Securities class actions saw the first application of presumption of reliance as the fraud on the market theory to a narrow subset of cases. Now the fraud on the market version of presumed reliance applies virtually without exception in securities class actions. A similar common law evolution is evident in consumer class actions, as Fitzpatrick suggests that the same pragmatic logic by which the presumptions of reliance attach in consumer class actions alleging material omissions is equally applicable where affirmative misrepresentations are alleged.