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CAFA Class Action Defense Cases-Falcon v. Philips Electronics: New York District Court Holds Plaintiff’s Lawyer Not Entitled To Go “Fishing” For New Class Representative And Dismisses Class Action For Lack Of Jurisdiction

After Denying Motion to Certify Class Action on Grounds that Named Plaintiff would be an Inadequate Class Representative, New York District Court Denies Plaintiff’s Lawyer Leave to Conduct Discovery to Identify New Class Representative and Dismisses Class Action Because Subject Matter Jurisdiction Under Class Action Fairness Act of 2005 (CAFA) no Longer Existed

Plaintiff filed a putative class action against Philips Electronics alleging design defects in certain television models that caused them to require repair after the expiration of the express warranty period; federal court jurisdiction existed solely because of the Class Action Fairness Act (CAFA). Falcon v. Philips Electronics North Am. Corp., 489 F.Supp.2d 367,368 (S.D.N.Y. 2007). Plaintiff moved the district court for an order certifying the litigation as a class action; the district court denied the motion, agreeing with defense attorneys that plaintiff was not an adequate representative of the class. Id. Plaintiff’s lawyers then sought further discovery in an effort to find an adequate representative of the class, id. The district court denied the motion and dismissed the class action for lack of jurisdiction.

The district court order refusing to certify a class action turned on the fact that the sole named plaintiff “could not be an adequate class representative, because, among other problems, she did not actually purchase the television in question and because after receiving it, she subsequently discarded it.” Falcon, at 368. Plaintiff’s lawyer sought discovery of the names of customers who complained about the television models identified in the class action complaint “in the hope that that will lead to identification of an adequate class representative.” Id. The district court refused to reopen discovery so plaintiff’s lawyer could go “fishing” for a new class representative, explaining at page 369:

…[P]laintiff’s counsel concededly is not able to come forward at this time with an adequate class representative, but rather seeks to go fishing, through further discovery, in the hopes of finding one. While there might be cases where this would make sense, this is not such a case. Plaintiff filed this action over nine months ago. The deadlines for both class certification discovery and merits discovery have come and gone. Plaintiff cannot plausibly argue that she never considered that, as someone who neither purchased nor retained a defective Philips television set, she might not adequately represent a class of persons consisting of those who did purchase such sets and who seek to get them repaired. Plaintiff has had ample opportunity to conduct discovery to locate a another representative who could more adequately represent the class, and she has failed to do so. Having carefully considered all of the underlying facts and circumstances, the Court determines that further discovery at this time would be grossly unfair to defendant and hence must be denied.

Because plaintiff was not an adequate class representative and because a class action “cannot be certified either now or in the foreseeable future of this case,” the district court held that the lacked continuing subject matter jurisdiction under CAFA and dismissed the class action complaint. Falcon, at 369.

NOTE: Defense attorneys argued that once the district court denied the class certification motion it lost jurisdiction under CAFA to consider plaintiff’s motion for additional discovery. Falcon, at 367. The court rejected this claim, holding that CAFA jurisdiction continues to exist for so long as it is possible that a class action could be certified, and that possibility existed in this case because it was possible for plaintiff’s lawyer to locate an adequate class representative. Id., at 367-68

Download PDF file of Falcon v. Philips Electronics