Plaintiffs routinely bring class actions under statutes that allow only consumers to bring claims, as opposed to businesses, or which limit claims to those stemming from transactions solely for personal or household purposes. See, e.g., Fair Debt Collections Practices Act, 15 U.S.C. § 1692(c); Electronic Funds Transfer Act, 15 U.S.C. § 1693a(2). In some cases, if it is difficult to determine whether proposed class members are “consumers” without individualized inquiries, a proposed class action may be defeated for failure to satisfy the predominance requirement for class certification.  See Kennedy v. Natural Balance Pet Foods, 361 Fed. Appx. 785, 787 (9th Cir. 2010) (denying class certification because inter alia statute applied only to “consumers” but the proposed class consisted of all “individuals” who purchased the challenged products, regardless of the purpose for which the products were purchased); Johnson v. Harley-Davidson Motor Co. Group, LLC, 285 F.R.D. 573, 583 (E.D. Cal. 2012) (finding that whether class members purchased a vehicle for personal or business use was not a common question and would require individual examination).

In Leebove v. Wal-Mart Stores, Inc., Case No. 2:13-cv-01024 (C.D. Cal. 2013),  Wal-Mart was recently accused of improperly requiring customers paying by credit card to provide their phone numbers and addresses in violation of California’s Song-Beverly Credit Card Act.  The Song-Beverly Credit Card Act, however, created a private right of action only for a “natural person to whom a credit card is issued for consumer credit purposes.”  Cal. Civ. Code § 1747.02(d).  Accordingly, persons who used corporate credit cards were not eligible members of the class.  The court found this to be of particular importance in defeating class certification. “[B]efore liability could be established with respect to each class member, individualized proof regarding whether each class member’s credit card was issued as a consumer or as a business card would have to be produced.”  The need for mini-trials as to whether each class member qualified as a “consumer” under the statute was key to the court’s holding that plaintiffs failed to establish the predominance requirement.

In opposing a motion for class certification or in moving to strike class allegations at the very outset of a consumer class action, defendants should take advantage of the opportunity to make the “consumer” argument detailed above.

For more information on this topic contact Katherine Olson at 312-334-3444 or