The Alabama legislature recently adopted legislation to prevent class actions in federal court under the Alabama Deceptive Trade Practice Act (“ADTPA”). As reported here last summer, the Eleventh Circuit held in Lisk v. Lumber One Wood Preserving LLC, 792 F.3d 1331 (11th Cir. 2015) that the ADTPA’s prohibition on class actions does not apply in federal court. Thus, a private plaintiff could bring a class action under the ADTPA by suing in federal court. Not surprisingly, several plaintiff counsel began bringing these previously unavailable class actions following the Lisk decision.
Like the consumer fraud statutes in many states, the ADTPA gives private plaintiffs a powerful claim. The ADTPA covers a broad swath of conduct—with some exceptions, it literally applies to any deceptive, misleading, or unconscionable trade practice. The statute also eliminates many of the traditional elements of causation and provides for enhanced damages and attorneys’ fees. A court has discretion to treble any damages award under the ADTPA upon finding a willful violation. In states were private party class actions are allowed, these statutes have been a hotbed of class action litigation. Regardless of whether these class actions have actually deterred consumer fraud, they have certainly been a boon for plaintiffs’ counsel.
Up until Lisk, Alabama had not seen any private-party class actions under the ADTPA because Ala.Code § 8-10-10(f) expressly prohibits them: “A consumer . . . bringing an action under [the ADTPA] may not bring an action on behalf of a class.” The Eleventh Circuit in Lisk determined that this prohibition was a procedural...
