State of California v. Intelligender

A sovereign cannot litigate an already settled issue in a class action however, where the state action is brought on behalf of the people, it implicates the public’s interest as well as private interests, and therefore the remedial provisions sweep much more deeply and do not trigger the relitigation exception.

Intelligender sold and advertised a gender prediction test. The test was marketed to use the urine sample of the mother in the comfort of her own home to accurately predict the gender of the baby she was carrying. Purchasers of the product filed a nationwide class action lawsuit. The case ended in a settlement and California’s government officials were notified of the settlement and their right to appeal the settlement within a specified time period. California’s government officials chose not to participate in the settlement approval process. The state of California subsequently filed an enforcement action under the state’s Unfair Competition and False Advertising Laws based largely on the same claims asserted in the settled class action. Intelligender argued that the suit undermined the finality of the class action settlement. The panel notes that the relitigation exception allows a court to issue an injunction where necessary “to protect or effectuate the federal court’s judgments.” They also state that res judicata applies when the earlier suit: (1) reached a final judgment on the merits; (2) involved the same cause of action or claim; and (3) involved identical parties or privies.” The panel goes on to say that requirements (1) and (2) are met, but engage in a discussion of requirement (3). “Privity is a legal conclusion designating a person so identified in interest with a party to former litigation that he represents precisely the same right in respect to the subject matter involved.” The panel uses this definition to conclude that insofar as it seeks restitution for the individual members of the previous class action settlement sufficient privity exists and the state may not go forward with those claims. AFFIRMED in part; REVERSED in part.