The Ninth Circuit's decision last year in Mazza v. American Honda Motor Co. [666 F.3d 581] (a case I argued) made it more difficult to sustain a nationwide class action under California consumer protection laws. Applying California "governmental interest" choice-of-law principles, the Mazza court held that the jurisdiction having the greatest interest in supplying the rule of decision was the one in which a consumer received misleading communications, made her purchase, and sustained any injury—not the location of the company headquarters from which the communications "emanated."

In Maniscalco v. Brother International (USA) Corp., the Third Circuit reached a similar conclusion applying New Jersey's (and the Restatement's) "most significant relationship" choice-of-law test. The court of appeals granted summary judgment against a South Carolina resident seeking to sue (and represent a nationwide class) under the New Jersey Consumer Fraud Act. In doing so, the court rejected In re Mercedes-Benz Tele Aid Contract Litigation, 257 F.R.D. 46 (D.N.J. 2009), a much-cited district court decision that had permitted a nationwide class action to proceed under New Jersey law. 

In Maniscalco, the plaintiffs had claimed that Brother had misled consumers by concealing two purported defects in its printers. The plaintiffs asserted a claim under New Jersey law on the theory that the various alleged acts of concealment had emanated from Brother's New Jersey headquarters. The district court dismissed the case, and the Third Circuit affirmed on the ground that South Carolina law governed the plaintiff's claim.

The Third Circuit found that three of the six factors in Section 148(2) of the Restatement weighed strongly in favor of applying the law of South Carolina. Specifically, (1) the plaintiffs had received and (2) relied on the alleged representations, and where (3) the tangible object of the parties' transaction was located. Weighing less heavily was the Restatement's preference for the domicile of the plaintiff over that of the defendant. Finding a fifth factor irrelevant because the parties were not litigating over a contract, the court examined the final factor—the place of the "alleged omissions." Assuming that the plaintiff was correct that the omissions took place in New Jersey rather than South Carolina, the court of appeals held that single factor insufficient to overcome the others, especially because nothing else having to do with the parties' relationship took place in New Jersey.

The Third Circuit also held (in terms echoing Mazza) that general choice-of-law policies and "the interests of interstate comity" favored application of South Carolina law because "[a]pplying New Jersey law to every potential out-of-state claimant would frustrate the policies of each claimant's state," and the "interest of South Carolina in having its law apply to its own consumers outweighs the interests of New Jersey in protecting out-of-state consumers from consumer fraud."

In declining to "open[] the floodgates to nation-wide consumer fraud class actions brought by out-of-state plaintiffs involving transactions with no connection to New Jersey other than the location of the defendant's headquarters," the Third Circuit put up another impediment to plaintiffs' lawyers seeking to certify nationwide classes under one state's consumer protection laws. Between them, Maniscalco and Mazza suggest that nationwide class certification under state law will be an uphill battle in forums applying either of two prominent modern choice-of-law analyses.

Keywords: choice of law, Class Certification, D.N.J., false advertising, In re Mercedes-Benz Tele Aid Contract Litig., Maniscalco v. Brother Int'l (USA) Corp., Mazza v. Am. Honda Motor Co., Ninth Circuit, product liability, Third Circuit

Edited by Archis A. Parasharami and Kevin S. Ranlett

Visit us at

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2013. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.