For a smart man, New Jersey lawyer Harold Hoffman makes a lot of bad purchases.
Since 2011, Hoffman has been duped repeatedly by supposedly deceptive labels or other misleading features of products he has bought. Or, at least, that is what Hoffman has alleged in dozens of consumer fraud class actions filed between 2011 and 2014 in New Jersey Superior Court, naming an array of defendants from Target, Whole Foods and Time Warner to small-timers like Joint Juice and Paradise Herbs. In no fewer than 100 cases, according to a list compiled by one of Hoffman’s targets, Hoffman has appeared as both lead plaintiff and lead counsel. His barrage of class actions has become so notorious that a New York litigation boutique ran a blog post in September 2015 entitled, “Have you been sued by Harold Hoffman?”
The 3rd U.S. Circuit Court of Appeals has had occasion twice in the past few years to look at Hoffman class actions, both of which were removed to federal court by defendants wielding the Class Action Fairness Act. Both times, the appellate court affirmed dismissal of Hoffman’s claims, rejecting his arguments that federal judges wrongly asserted their jurisdiction over the cases. The first time around, in a fraud class action against the supplement maker Nutraceutical, Hoffman posited that because he was acting as counsel and lead plaintiff in the case, his class action could not be certified in federal court and therefore could not have met the $5 million damages threshold for removal under CAFA. The 3rd Circuit, noting Hoffman’s “habit” of filing pro se consumer fraud class actions, ruled that the class action law calls for district court judges to decide their jurisdiction before considering class certification. In that sequence, the appellate panel held, Hoffman couldn’t show to a legal certainty that damages in his purportedly nationwide class action would not exceed $5 million.
Hoffman’s second trip to the 3rd Circuit ended last week, when the appellate court denied his petition to rehear a Sept. 14 decision that the trial judge was permitted to bypass an inquiry into her jurisdiction before tossing Hoffman’s suit as already decided on the merits. Hoffman had initially sued Nordic Naturals, the maker of a fish oil supplement, in state court in Bergen County. Nordic’s lawyers at Gibbons removed the case to federal court, where U.S. District Judge Susan Wigenton of Newark dismissed it for failure to state a claim. She gave Hoffman 30 days to file an amended complaint. Instead, he filed a new suit in state court, putting a restriction on the size of the potential class and adding new claims about the falsity of the product’s “pharmaceutical grade” labeling. Nordic again removed the case to federal court and Judge Wigenton again dismissed it.
On appeal, Hoffman contested subject matter jurisdiction. The 3rd Circuit panel – Judges Julio Fuentes, Cheryl Krause and Jane Roth – cited the U.S. Supreme Court’s 2007 ruling in Sinochem v. Malaysia International Shipping to hold that because Judge Wigenton decided Hoffman’s claims were precluded by her dismissal of the previous class action against Nordic, she did not need first to determine her jurisdiction.
The panel’s ruling was not obvious as a matter of civil procedure. In fact, Philadelphia lawyer Matthew Stiegler, who writes about the 3rd Circuit at CA3blog, was concerned enough about the appellate court’s analysis that he agreed to represent Hoffman in a petition for rehearing. Stiegler, in turn, approached civil procedures scholar Steven Baicker-McKee of Duquesne law school. Baicker-McKee agreed the jurisdictional issue was sufficiently important – and incorrectly decided – to organize an amicus brief backing Hoffman’s petition for rehearing by “law professors who hold the view that federal courts should not bypass contested questions of subject-matter jurisdiction to dispose of claims under the doctrine of res judicata.”
That all sounds substantive enough to drive a non-lawyer to tears, but the 3rd Circuit seems to have no patience for Harold Hoffman. In the first sentence of the panel’s decision, the appeals court called him “a serial pro se class action litigant.” The second sentence referred back to the 3rd Circuit’s previous notation of Hoffman’s “habit of filing class actions in which he serves as both the sole class representative and sole class counsel.” Nordic’s lawyers at Gibbons have repeatedly described Hoffman as a flagrant abuser of the litigation system whose sole motive is to extract settlements from defendants willing to pay to make him go away.
The 3rd Circuit did not address that characterization of Hoffman in its decision, but it did grant Nordic’s motion for sanctions, awarding Nordic fees and costs for defending a supposedly meritless appeal. Nordic has asked for nearly $25,000; the 3rd Circuit has not yet issued a final judgment on the amount of the sanction. The appeals court also referred the Hoffman matter to the New Jersey Supreme Court’s Office of Attorney Ethics “for any action it may deem appropriate.” Nordic previously asked Judge Wigenton to sanction Hoffman for filing a frivolous suit when he brought his second case against the supplement maker. She denied the motion, though she said Hoffman was “playing a thinly veiled game of forum shopping” and that “such tactics reek of gamesmanship.”
So is Harold Hoffman a too-clever-by-half litigator exploiting New Jersey fraud law for his own selfish purposes, as Nordic and its lawyers portray him to be? Or is he a champion of consumer rights, working through the system to hold defendants accountable?
In an interview Tuesday, Hoffman defended his record. “I’m not just throwing something and running away when the window breaks,” he said. “I’m bringing credible claims which are supported by law.”
Hoffman pointed out that the New Jersey Supreme Court ruled in 1983’s In the Matter of Cadillac that in some instances, courts may permit class action lawyers to serve as lead plaintiffs (though the court also said the dual role can create an appearance of impropriety and is best avoided). Hoffman said he does not purchase products to establish standing to sue but sues only when he discovers a product is misrepresented. “I don’t like to get ripped off,” he said. “If I perceive I have a good faith basis for a claim, a good faith basis for bringing it as a class action, I do so – only when the claim is valid in my judgment and only when the class action vehicle is appropriate.”
Hoffman said his fraud class actions have garnered “hundreds of thousands of dollars for hundreds of thousands of consumers.” In particular, he mentioned a cy pres settlement that directed funds to a legal clinic, although he couldn’t remember which defendant made the deal.
Hoffman told me he doesn’t make a living from his class action suits but from his commercial litigation practice, in which he said he represents both plaintiffs and defendants. He vigorously denied Nordic’s accusation of suing to extract settlements – “I have no power to extract anything,” he said – but did concede that some defendants have settled his class actions. “If I bring in good faith a credible claim, the defendant needs to make a business judgment about how to defend that claim,” Hoffman said.
I asked him why the 3rd Circuit felt compelled to call him out as a habitual class action filer/plaintiff in two different opinions. He said it would not be appropriate for him to speculate, but emphasized that in his nearly 40 years in practice, he had never been sanctioned or disciplined before the 3rd Circuit awarded Nordic its fees and costs.
Hoffman said he’s still deciding whether to push on with a petition for Supreme Court review of the 3rd Circuit’s holding.
I left a phone message for Nordic counsel Jennifer Thibodaux of Gibbons but didn’t hear back.