## Facts

- Purchasers of Milli Vanilli recordings sued Arista Records, alleging the recordings were marketed as featuring vocals by Fabrice Morvan and Rob Pilatus and as a meritorious Grammy-winning act.
- The album *Girl You Know It’s True* sold about seven million copies, and Milli Vanilli received the Grammy for Best New Artist in 1989.
- In November 1990, it became public that Morvan and Pilatus had not performed the vocals on the released album.
- Plaintiffs alleged Arista’s marketing misrepresented the identity of the performers and induced purchases at a “premium” price for a product different from what was represented.
- Plaintiffs asserted claims under RICO, common-law fraud, negligent misrepresentation, breach of warranty, and state consumer-protection statutes, seeking treble damages and other monetary relief, plus declaratory and injunctive relief.
- Plaintiffs moved to certify a nationwide class of all persons who purchased Milli Vanilli recordings before November 15, 1990.

## Issues

1. Whether the proposed purchaser class satisfied Rule 23(a)’s numerosity, commonality, typicality, and adequacy requirements.
2. Whether Rule 23(b)(3) certification was proper given the need for individualized proof of exposure, reliance, causation, and damages on fraud-based and RICO theories.
3. Whether Rule 23(b)(2) certification was proper where the complaint sought substantial monetary relief, including treble damages, along with declaratory or injunctive relief.

## Decision

- The court denied class certification.
- The court concluded certification was not appropriate under Rule 23(b)(3) because individualized questions of reliance, causation, and damages predominated.
- The court concluded certification was not appropriate under Rule 23(b)(2) because the primary relief sought was monetary rather than injunctive or declaratory.
- The action could proceed, if at all, only on behalf of the named plaintiffs rather than a certified nationwide class.

## Legal Principles

- Fraud-based claims commonly require individualized proof that each plaintiff was exposed to the challenged representation and relied on it, which can defeat Rule 23(b)(3) predominance.
- Rule 23(b)(3) predominance is not satisfied where liability and damages depend on individualized inquiries into each consumer’s reasons for purchase and alleged economic loss.
- Rule 23(b)(2) is not appropriate when monetary relief is the primary remedy sought and any injunctive or declaratory relief is secondary.
- Styling claims under RICO or consumer-protection statutes does not eliminate individualized reliance and causation problems when the claims rest on an alleged fraudulent scheme.
- Variation among states’ consumer-protection laws and related choice-of-law questions can further weigh against finding predominance in a proposed nationwide class.

## Conclusion

The court refused to certify a nationwide consumer class against a record label for alleged misrepresentations about performers and awards because proving liability and damages required individualized showings of exposure, reliance, causation, and loss, and because the case principally sought monetary recovery rather than classwide injunctive relief.


Freedman v. Arista Recs., Inc., 137 F.R.D. 225 (E.D. Pa. 1991)