Cole v. Gene by Gene, Ltd.
322 F.R.D. 500 (2017)
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Rule of Law:
Class certification under Federal Rule of Civil Procedure 23(b)(3) is improper when individual questions regarding consent, disclosure, and damages predominate over common questions, and a class action is not superior to individual litigation, particularly when statutory damages provide a sufficient incentive for plaintiffs to pursue their claims individually.
Facts:
- Gene by Gene, Ltd. sells at-home DNA testing kits that include cheek swabs, vials, and a release form.
- The release form, if signed by the customer, grants Gene by Gene permission to provide the customer’s name and email address to their 'genetic matches.'
- After receiving their results, customers can join optional online 'projects' run by volunteer administrators to connect with individuals having similar genetic characteristics or histories.
- Michael Cole, an Alaska resident, purchased a test from Gene by Gene and joined a project.
- Cole alleged that upon joining a project, his name, email address, kit number, and DNA test results were automatically shared with group administrators and potentially displayed on public project websites without his specific consent.
- The language of the release forms provided to customers varied over time, meaning different customers may have consented to different levels of disclosure.
- Gene by Gene's platform allowed customers to adjust their privacy settings, which would affect what information was shared with project administrators, though this feature was not available during the entire proposed class period.
Procedural Posture:
- Michael Cole filed a complaint against Gene by Gene, Ltd. in the United States District Court for the District of Alaska, alleging violations of the Alaska Genetic Privacy Act.
- Cole filed a motion to certify a 'Project Membership Class' and a 'Worldfamilies Subclass' of Gene by Gene customers residing in Alaska.
- Gene by Gene filed an opposition to the motion for class certification.
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Issue:
Does a proposed class of DNA testing kit customers satisfy the predominance and superiority requirements for certification under Federal Rule of Civil Procedure 23(b)(3) when individual inquiries are required to determine whether each member gave informed consent, whether their information was actually disclosed, and the extent of any actual damages?
Opinions:
Majority - Gleason, J.
No. A proposed class action does not satisfy the predominance and superiority requirements for certification under Federal Rule of Civil Procedure 23(b)(3) where key elements of the claim require individualized proof for each class member. The court found that Mr. Cole failed to meet the predominance and superiority requirements. First, individual questions predominated over common ones because determining liability under the Alaska Genetic Privacy Act would require individualized inquiries for each of the nearly 900 potential class members. Specifically, the court would need to examine: (1) which specific release form each customer signed to determine the scope of their consent; (2) what privacy settings each customer selected, which controlled the extent of any disclosure to project administrators; and (3) whether any class member suffered actual damages, which would necessitate a 'trial within a trial' for each claimant as there was no formulaic way to measure such harm on a class-wide basis. Second, a class action was not the superior method of adjudication. The potential statutory damages for a for-profit violation under the Alaska statute were a minimum of $100,000 per person, which is a substantial amount that provides a strong incentive for individuals to bring their own lawsuits. Additionally, an Alaska procedural rule allows prevailing parties to recover attorney's fees, further making individual litigation economically viable and undermining the core policy of class actions, which is to aggregate claims that are too small to pursue alone.
Analysis:
This case illustrates the significant hurdles plaintiffs face in certifying data privacy class actions, particularly when user agreements and privacy settings are not uniform across the proposed class. The court's focus on variations in consent forms and user-controlled settings demonstrates that individualized issues can easily predominate over the common issue of the defendant's general conduct. Furthermore, the decision highlights how high statutory damages, intended to be punitive, can paradoxically work against class certification by making individual lawsuits economically feasible, thus failing the 'superiority' requirement of Rule 23(b)(3). This ruling serves as a roadmap for defendants opposing class certification in consumer privacy cases by emphasizing the need to focus discovery on variations in user consent and individual harm.
