Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_13-cv-01803/USCOURTS-cand-3_13-cv-01803-33/pdf.json

Nature of Suit Code: 385
Nature of Suit: Property Damage - Product Liability
Cause of Action: 28:1332 Diversity-Personal Property

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United States District Court

For the Northern District of California

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1

 In June 2015, Fundamental Holdings Corp. (d/b/a Peak Internet) voluntarily dismissed its

claims. See Docket Nos. 186, 193 (stipulations of voluntary dismissal). Therefore, the remaining

plaintiffs in this case are (1) Tasion Communications, Inc. (d/b/a Planet Telecom) (“Tasion”); (2)

International Power Systems, LLC (d/b/a Freeway Networks) (“Freeway”); and (3) Nationwide

Computer Systems, Inc. (d/b/a Camplink) (“Camplink”). 

2

 Ubiquiti is the only remaining defendant in this case because, in June 2015, those plaintiffs

with claims against Defendant Streakwave Wireless, Inc. filed voluntary dismissals with respect to

those claims. See Docket Nos. 193-94 (stipulations of voluntary dismissal).

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TASION COMMUNICATIONS, INC., et al.,

Plaintiffs,

v.

UBIQUITI NETWORKS, INC., et al.,

Defendants.

___________________________________/

No. C-13-1803 EMC

ORDER DENYING PLAINTIFFS’

MOTION FOR CLASS

CERTIFICATION

(Docket No. 142)

Currently pending before the Court is Plaintiffs’ motion for class certification.1 Plaintiffs ask

the Court to certify classes and subclasses against Defendant Ubiquiti Networks, Inc.2 for their

claims for breach of express warranty and fraudulent inducement. Having considered the papers

submitted, as well as the oral argument of counsel, the Court hereby DENIES the motion for

certification in its entirety.

I. FACTUAL & PROCEDURAL BACKGROUND

As alleged in the operative fifth amended complaint (“5AC”), Ubiquiti is a communications

technology company that designs, manufactures, and sells broadband wireless products. See 5AC ¶

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1. At issue in this litigation is a Ubiquiti product known as TOUGHCable (“TC”). TC is a cable

product. During the relevant period, Ubiquiti manufactured two kinds of TC, Level 1 and Level 2. 

However, according to Plaintiffs, there are no material differences between the two for purposes of

this lawsuit. 

Plaintiffs allege that, in Ubiquiti’s advertising as well as on the TC box itself, Ubiquiti

claimed that TC was a Category 5e outdoor carrier-class shielded cable that was built to withstand

harsh outdoor environments. See 5AC ¶ 4. Plaintiffs purchased TC based on that representation. 

According to Plaintiffs, that representation was false and Ubiquiti knew the representation to be

false at the time Plaintiffs purchased the TC product. Plaintiffs maintain that Ubiquiti knew that TC

was not suitable for outdoor use based on, e.g., UV testing that was conducted on the product. See,

e.g., 5AC ¶¶ 255-61.

Based on, inter alia, the above allegations, Plaintiffs have sued Ubiquiti for, inter alia,

breach of express warranty and fraudulent inducement.

II. DISCUSSION

A. Legal Standard

In their opening brief, Plaintiffs asked the Court to certify a nationwide Rule 23(b)(3) class

(applying California law) for both its claim for breach of express warranty and its claim for

fraudulent inducement. In the alternative, Plaintiffs asked the Court to certify, pursuant to Rule

23(b)(3), twelve state-based classes for its fraudulent inducement claim and its claims for violations

of state consumer protection laws. Finally, Plaintiffs asked that, if the Court were to find that “any

particular class claim fails to satisfy the requirements of Rule 23(b),” it certify “relevant issues

classes under Rule 23(c)(4).” Mot. at 24.

In its reply brief, Plaintiffs now concede that a nationwide Rule 23(b)(3) class for its

fraudulent inducement claim is improper; Plaintiffs now ask only for certification of issues classes

and subclasses for the fraudulent inducement claim. For the express warranty claim, Plaintiffs still

ask for certification of a nationwide Rule 23(b)(3) class; in the alternative, Plaintiffs ask that issues

classes and subclasses be certified. Apparently, Plaintiffs have completely dropped their request for

Rule 23(b)(3) certification with respect to its consumer protection claims. 

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1. Rule 23(b)(3)

For a Rule 23(b)(3) class, Plaintiffs must show the following:

(1) that all Rule 23(a) requirements are satisfied, i.e., numerosity, commonality, typicality, and

adequacy, see Fed. R. Civ. P. 23(b); and 

(2) that “questions of law or fact common to class members predominate over any questions

affecting only individual members, and that a class action is superior to other available methods for

fairly and efficiency adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).

2. Rule 23(c)(4)

As for an issues class, Rule 23(c)(4) provides that, “[w]hen appropriate, an action may be

brought or maintained as a class action with respect to particular issues.” Fed. R. Civ. P. 23(c)(4). 

The Ninth Circuit has explained that, “[e]ven if the common questions do not predominate over the

individual questions so that class certification of the entire action is warranted, Rule 23[(c)(4)]

authorizes the district court in appropriate cases to isolate the common issues . . . and proceed with

class treatment of these particular issues.” Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234

(9th Cir. 1996) (emphasis added). The theory underlying the rule is that “the advantages and

economies of adjudicating issues that are common to the entire class on a representative basis may

be secured even though other issues in the case may need to be litigated separately by each class

member.” Wright et al., Fed. Prac. & Proc. § 1790. Thus, for example, Rule 23(c)(4) may be used

“to separate the issue of liability from damages.” In re Nassau County Strip Search Cases, 461 F.3d

219, 226 (2d Cir. 2006); see also Fed. R. Civ. P. 23(c)(4), 1966 advisory committee notes (noting, as

an example, “in a fraud or similar case the action may retain its ‘class’ character only through the

adjudication of liability to the class; the members of the class may thereafter be required to come in

individually and prove the amounts of their respective claims”).

Contrary to what Plaintiffs argued at the hearing, a Rule 23(c)(4) issues class must still meet

the requirements of Rule 23(a) and (b) (except for the predominance requirement of Rule 23(b)(3)). 

See, e.g., Avilez v. Pinkerton Gov’t Servs., 596 Fed. Appx. 579, 579 (9th Cir. 2015) (noting that

subclasses would meet the requirements of Rule 23(a); adding that “[w]e need not decide whether

these subclasses . . . would satisfy the predominance requirement of Rule 23(b)(3)” because the

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 The Court acknowledges that Plaintiffs have objected to the declarations of Mary Kay Kane

and David Stewart. The objections are moot as the Court not relied on either declaration in ruling on

the motion to certify.

4

district court was being asked to certify a liability issues class under Rule 23(c)(4)); Central

Wesleyan College v. W.R. Grace & Co., 6 F.3d 177, 189 (4th Cir. 1993) (stating that, “district courts

may separate and certify certain issues for class treatment, [but] the ‘subclass’ on each issue still

‘must independently meet all the requirements of [subsection 23(a)] and at least one of the

categories specified in [subsection 23(b)]’[;] [t]hus, a limited class pursuing the eight issues still

must possess both (a)(3) typicality and demonstrate (b)(3)(D) manageability”); Romero v. Allstate

Ins. Co., 52 F. Supp. 3d 715, 724 (E.D. Pa. 2014) (stating that “[c]ertification of particular issues

under Rule 23(c)(4) is only proper if the other requirements of Rule 23(a) and (b) are first met”);

House v. Pritzker, 28 F. Supp. 3d 222, 253-54 (S.D.N.Y. 2014) (stating that “Rule 23(c)(4)

continues to provide a viable solution if damages cannot be determined on a classwide basis, so long

as the proposed class satisfies the requirements of 23(a) and (b) with respect to liability”); see also

Wright et al., Fed. Prac. & Proc. § 1790 (stating that, potentially, just “one common issue can be

identified as appropriate for class treatment, that is enough to justify application of the provision as

long as the other Rule 23 requirements are met”). Moreover, even if certain issues may otherwise

meet the requirements of Rule 23(a) and (b), issue certification must materially advance the

litigation. See McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 234 (2d Cir. 2008). 

B. Rule 23(b)(3) Class – Claim for Breach of Express Warranty3

As noted above, Plaintiffs initially asked the Court to certify a nationwide Rule 23(b)(3)

class (applying California law) for two different claims: (1) fraudulent inducement and (2) breach of

express warranty. In their reply brief, Plaintiffs changed their tune and admitted that a nationwide

class for the fraudulent inducement claim would not work because of a predominance or

manageability problem – more specifically, because California law could not uniformly apply. See

Reply at 12 (conceding that “[a] Rule 23(b)(3) class based on fraudulent inducement . . . requires

application of the laws of individual states due to variations in those 50 state’s laws[;] [s]uch a class

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 Although Plaintiffs claim that the class is a nationwide class, it would really appear to be –

as Ubiquiti argues – a worldwide class because some of the purchasers of the TC product reside

outside the United States. See Opp’n at 11. But for purposes of this order, the Court will continue

to refer to a nationwide class. 

5

would not be manageable”). Thus, Plaintiffs now ask for certification of a nationwide class for their

express warranty claim only.4

1. Mazza

Plaintiffs’ proposed nationwide class is defined as follows: All persons or entities who

purchased Ubiquiti TOUGHCable Level 1 or 2 (where the purchase was completed in the United

States). See Mot. at 6. Plaintiffs’ nationwide class is predicated on California law governing all

members of the class. Plaintiffs do not contend that nationwide class certification would be

appropriate in this case if the laws of each of the 50 states were to apply variously to class members

residing in each state. Not surprisingly, the main ground of Ubiquiti’s challenge to the nationwide

class is that Rule 23(b)(3)’s predominance requirement is not met. More specifically, Ubiquiti

contends that California law applies only to California purchasers; for other purchasers, the

applicable law is the law of the state where the purchaser resided when it made the purchase. 

According to Ubiquiti, this means that the laws of all the states in the country, as well as the laws of

the District of Columbia and a number of international countries, are at issue. See Opp’n at 11

(looking at the purchases made from Streakwave, one of Ubiquiti’s main distributors). Because the

laws of multiple jurisdictions have been implicated, Ubiquiti contends that common issues cannot

predominate. As Plaintiffs do not appear to dispute such a conclusion were Ubiquiti correct on the

choice of law, the Court focuses on the choice-of-law question. 

Both parties agree that Mazza v. American Honda Motor Co., Inc., 666 F.3d 581 (9th Cir.

2012) is the critical Ninth Circuit authority on point. Therefore, the Court briefly discusses the

opinion below. In Mazza, the plaintiffs brought a class action, asserting that the defendant-car

company had misrepresented characteristics of a braking system used in a certain kind of vehicle. 

The plaintiffs asserted various claims for relief, all predicated on California law – namely, California

Business & Professions Code §§ 17200 and 17500, the California Consumer Legal Remedies Act,

and unjust enrichment. See id. at 587. The district court certified a nationwide class. On appeal, the

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defendant argued that the district court erred because “common issues of law do not predominate[:]

California’s consumer protection statutes may not be applied to a nationwide class with members in

44 jurisdictions.” Id. at 589. The Ninth Circuit agreed with the defendant that the district court

erred by “conclud[ing] that California law could be applied to the entire nationwide class.” Id. at

585.

The Ninth Circuit reached this conclusion by doing a choice-of-law analysis. Because the

district court, sitting in diversity, was located in California, the Ninth Circuit looked to California’s

choice-of-law rules. See id. at 589. 

Under California’s choice of law rules, the class action

proponent bears the initial burden to show that California has

“significant contact or significant aggregation of contacts” to the

claims of each class members. Such a showing is necessary to ensure

that application of California law is constitutional. Once the class

action proponent makes this showing the burden shifts to the other

side to demonstrate “that foreign law, rather than California law,

should apply to class claims.”

California law may only be used on a classwide basis if “the

interests of other states are not found to outweigh California’s interest

in having its law applied.” To determine whether the interests of other

states outweigh California’s interest, the court looks to a three-step

governmental interest test:

First, the court determines whether the relevant

law of each of the potentially affected jurisdictions with

regard to the particular issue in question is the same or

different.

Second, if there is a difference, the court

examines each jurisdiction’s interest in the application

of its own law under the circumstances of the particular

case to determine whether a true conflict exists.

Third, if the court finds that there is a true

conflict, it carefully evaluates and compares the nature

and strength of the interest of each jurisdiction in the

application of its own law to determine which state’s

interest would be more impaired if its policy were

subordinated to the policy of the other state, and then

ultimately applies the law of the state whose interest

would be more impaired if its law were not applied.

Id. at 589-90.

The Ninth Circuit held that, in the case before it, California law could be applied as a

constitutional matter: “California has a constitutionally sufficient aggregation of contacts to the

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claims of each putative class member in this case because [defendant’s] corporate headquarters, the

advertising agency that produced the allegedly fraudulent misrepresentations, and one fifth of the

proposed class members are located in California.” Id. at 590. However, the court then went on to

conclude that the governmental interest test indicated that California law should not apply across the

board. 

First, California law materially “differ[ed] from the laws of the 43 other jurisdictions in

which the class members reside.” Id. at 591. For example, “the California laws at issue here have

no scienter requirement, whereas many other states’ consumer protection statutes do require

scienter. California also requires named class plaintiffs to demonstrate reliance, while some other

states’ consumer protection statutes do not.” Id. Furthermore, “there are also material differences in

the remedies given by state laws,” and “[t]he elements necessary to establish a claim for unjust

enrichment also vary materially from state to state.” Id.

Second, states other than California had an interest in having their laws apply: 

“[E]very state has an interest in having its law applied to its resident

claimants.” California law also acknowledges that “a jurisdiction

ordinarily has ‘the predominant interest’ in regulating conduct that

occurs within its borders. The automobile sales at issue in this case

took place within 44 different jurisdictions . . . .

Id. at 591-92. The court emphasized that “each state has an interest in setting the appropriate level

of liability for companies conducting business within its territory.” Id. at 592-93 (stating that “the

district court erred by discounting” this interest and focusing instead on the protection of consumers

alone).

Third, California did not have a strong interest in applying its law:

California recognizes that “with respect to regulating or

affecting conduct within its borders, the place of the wrong has the

predominant interest.” California considers “the place of the wrong”

to be the state where the last event necessary to make the actor liable

occurred. See McCann, 48 Cal. 4th at 94 n.12 (pointing out that the

geographic location of an omission is the place of the transaction

where it should have been disclosed); Zinn v. Ex-Cell-O Corp., 148

Cal. App. 2d 56, 80 n.6, 306 P.2d 1017 (1957) (concluding in fraud

case that the place of the wrong was the state where the

misrepresentations were communicated to the plaintiffs, not the state

where the intention to misrepresent was formed or where the

misrepresented acts took place). Here, the last events necessary for

liability as to the foreign class members – communication of the

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advertisements to the claimants and their reliance thereon in

purchasing the vehicles – took place in the various foreign states, not

in California.

Id. at 593-94. California also had a limited interest “in applying its law to residents of foreign

states.” Id. at 594.

Accordingly, the Ninth Circuit held that “each class member’s consumer protection claim

should be governed by the consumer protection laws of the jurisdiction in which the transaction took

place.” Id. at 594. 

2. Governmental Interest Test

Having reviewed Mazza, the Court now turns to the application of the governmental interest

test to the case at hand.

a. Step 1: Material Difference in Law

According to Ubiquiti, there are material differences in the laws of the various jurisdictions

with respect to a claim for breach of express warranty. The identified differences are as follows:

1. Privity requirement.

2. Pre-litigation notice requirement.

3. Reliance requirement.

See Opp’n at 12; Courteau Decl. ¶ 6 & Ex. 2 (charts regarding express warranty laws). 

In their reply brief, Plaintiffs concede that Ubiquiti has “correctly identifie[d] those conflicts

as potentially material.” Reply at 2. The Court therefore need not dwell on step one any further. 

However, in the interest of ensuring accuracy, it briefly addresses each of these subjects below. As

discussed below, Ubiquiti has valid arguments. See also Dei Rossi v. Whirlpool Corp., No. 2:12-cv00125-TLN-CKD, 2015 U.S. Dist. LEXIS 55574, at *28-32 (E.D. Cal. Apr. 28, 2015) (indicating

that there are material differences with respect to express warranty law in 33 different jurisdictions –

e.g., regarding privity); Rikos v. Procter & Gamble Co., No. CV 11-226, 2012 U.S. Dist. LEXIS

25104, at *16-19 (S.D. Ohio Feb. 28, 2012) (finding material differences in express warranty laws –

e.g., regarding privity and reliance).

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(i) Privity Requirement

As Ubiquiti argues, some states do, as a general matter, require privity between the plaintiff

and the defendant for an express warranty claim, while others do not have a privity requirement. 

Compare, e.g., Johnson v. Anderson Ford, 686 So. 2d 224, 228 (Ala. 1996) (taking note of the

general rule that “a plaintiff must prove privity of contract in an action on an express warranty where

only economic harm is involved,” unless, e.g., there is evidence that the seller intended to extend the

express warranty directly to the ultimate purchaser); Fowler v. Gen. Elec. Co., 40 N.C. App. 301,

305 (1979) (stating that an “exception to the rule that privity of contract is required in actions for

breach of warranty is applicable when the manufacturer addresses a warranty directly to the ultimate

consumer or user of the product, thereby making an express warranty”), with Cardinal Health 301,

Inc. v. Tyco Elecs. Corp., 169 Cal. App. 4th 116, 143-44 (2008) (stating that “[p]rivity is generally

not required for liability on an express warranty because it is deemed fair to impose responsibility on

one who makes affirmative claims as to the merits of the product, upon which the remote consumer

presumably relies”) (emphasis added).

(ii) Pre-Litigation Notice Requirement

Ubiquiti correctly contends that some states require notice for a claim of breach of express

warranty while others do not. Compare, e.g., Tasion Communs., Inc. v. Ubiquiti Networks, Inc., No.

C-13-1803 EMC, 2014 U.S. Dist. LEXIS 35455, at *14-15 (N.D. Cal. Mar. 14, 2014) (noting that,

under California law, notice of a breach is required within a reasonable time), with Kolarik v. Cory

Int’l Corp., 721 N.W.2d 159, 163 (Iowa 2006) (stating that, for express warranty claim, remote

buyers are not required to give notice to seller). Furthermore, for those jurisdictions that do require

notice, some require pre-litigation notice while others do not. Compare, e.g., Tasion, 2014 U.S.

Dist. LEXIS 35455, at *14-15 (noting that, under California law, “notice must be provided before

the lawsuit – notice that is after, or contemporaneous with, the filing of the lawsuit is insufficient”),

with Pace v. Sagebrush Sales Co., 114 Ariz. 271, 274 (1977) (“agree[ing] with the defendant that the

requirement of notice may indeed be fulfilled by the pleadings themselves”).

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5 But see In re Conagra Foods, Inc., No. CV 11-05379 MMM (AGRx), 2015 U.S. Dist.

LEXIS 24971, at *128-32 & n.198 (C.D. Cal. Feb. 23, 2015) (stating that, for an express warranty

claim, “[p]roof of reliance on specific promises or representations is not required”; acknowledging

some case law to the contrary but finding such case law unpersuasive, especially because the

Uniform Commercial Code commentary provides that reliance is not required).

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(iii) Reliance Requirement

Finally, as Ubiquiti asserts, some jurisdictions require reliance (or something similar) for a

claim of breach of express warranty while others do not. Compare, e.g., Tasion, 2014 U.S. Dist.

LEXIS 88055, at *33 (based on “basis of the bargain” language in the California Commercial Code,

stating that a plaintiff in an express warranty case must at least allege that he or she read or was

otherwise exposed to the representation at issue, especially absent privity)5; Compaq Comp. Corp. v.

Lapray, 135 S.W.3d 657, 676 (Tex. 2004) (concluding that the Uniform Commercial Code’s use of

the “basis of the bargain” language reflects a reliance requirement of some kind), with Norcold, Inc.

v. Gateway Supply Co., 154 Ohio App. 3d 594, 601 (2003) (evaluating “basis of the bargain”

language in the Uniform Commercial Code; indicating agreement with the “majority of courts that . .

. have reached the . . . conclusion that reliance is not an element in a claim for breach of an express

written warranty”); Samuel Bassett v. Kia Motors Am., Inc., 613 Pa. 371, 411-12 (2011) (stating that

the class not was required to prove reliance in order to recover on express warranty claim; “[a]

written express warranty that is part of the sales contract is the seller’s promise which relates to

goods, and it is part of the basis of the bargain[;] [t]his statement of law is not qualified by whether

the buyer has read the warranty clause and relied on its in seeking its application”).

b. Step 2: Interests of Each Jurisdiction

As with step one, Plaintiffs do not contest step two of the governmental interest test. See

Reply at 2 (stating that “Plaintiffs differ with Ubiquiti’s characterizations in this second step of the

analysis, but nevertheless do not challenge it”). However, as above, the Court briefly addresses step

two in the interest of ensuring accuracy.

As discussed above, in Mazza, the Ninth Circuit took into account that (1) a jurisdiction has

an interest in having its own law apply to its residents and that (2) a jurisdiction also has an interest

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in regulating conduct that takes place within its own borders. In the instant case, these

considerations are equally applicable. 

First, for the case at hand, states other than California have an interest in having their own

laws apply to the extent their own residents purchased the TC product (i.e., not everyone who

purchased the TC product resides in California).

Second, states other than California also have an interest in having their own laws apply to

the extent critical conduct took place within their borders. For example, representations about TC’s

suitability for outdoor use were received within their borders by residents who purchased the TC

product. Also, the contracts to purchase the TC product were formed within their borders. See

Ledbetter Erection Corp. v. Workers’ Comp. Appeals Bd., 156 Cal. App. 3d 1097, 1103 (1984)

(taking note of “the well-established principle of contract law that a contract is formed at the time

and place the offeree accepts and communicates his or her acceptance to the offer”); Rest. 2d

Contracts § 64, cmt. c (stating that “the contract is created at the place where the acceptor speaks or

otherwise completes his manifestation of assent”). Although Plaintiffs fairly point out that they have

sued for breach of express warranty, and not for breach of contract, that does not make the place of

contracting irrelevant. The warranty was extended only when a person or entity entered into a

contract to purchase the TC product.

c. Step 3: Weighing Interests

Step three is where Plaintiffs make their challenge. Plaintiffs do not dispute that a

jurisdiction has an interest in having its own law apply to its residents, see also Mazza, 666 F.3d at

594 (indicating that California had a limited interest “in applying its law to residents of foreign

states”), but argues that, as reflected in Mazza, “California recognizes that ‘with respect to

regulating or affecting conduct within its borders, the place of the wrong has the predominant

interest.’ California considers ‘the place of the wrong’ to be the state where the last event necessary

to make the actor liable occurred.” Id. at 593. According to Plaintiffs, in the case at hand, the place

of wrong was California because “[b]reach of express warranty has three elements to establish

liability” (at least under California law) and “the ‘place’ of each of these elements was in

California”:

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(1) Ubiquiti’s representations and promises with respect to

TOUGHCable were effectuated in California [where Ubiquiti’s

principal place of business is located]; (2) the statements became part

of the basis of the bargain in California; and (3) the “breach” was the

TOUGHCable itself (the defective TOUGHCable was the injury).

Reply at 2-3 (emphasis in original).

For purposes of this opinion, the Court assumes that Plaintiffs are correct in looking to

California law on breach of express warranty in assessing place of wrong. The problem for

Plaintiffs is that, even with this assumption, the place of wrong is not always California but rather is

the jurisdiction where the purchaser resided (which could be in California or outside of California). 

In Mazza, the Ninth Circuit noted that, in a fraud case, California law provides that “the

place of the wrong was the state where the misrepresentations were communicated to the plaintiffs,

not the state where the intention to misrepresent was formed or where the misrepresented acts took

place.” Mazza, 666 F.3d at 593-94 (emphasis added). Although the Court is dealing here with a

warranty claim, and not a fraud claim, California law – as the Court previously held in this case –

has a reliance-type requirement. See Tasion, 2014 U.S. Dist. LEXIS 88055, at *33 (stating that,

based on “basis of the bargain” language in the California Commercial Code, a plaintiff in an

express warranty case must at least allege that he or she read or was otherwise exposed to the

representation at issue, especially absent privity). That being the case, then the warranty claim is

analogous to a fraud claim, and the critical wrong is where the misrepresentation was received by

the purchaser. 

Plaintiffs focus on TC being defective at the outset. See, e.g., Reply at 3-4 (arguing that

“there was no action or circumstance needed on the part of the purchaser that would alter the fact

that the TOUGHCable was already defective and in breach of the warranty before the product was

even shipped”) (emphasis in original). But contrary to what Plaintiffs argue, TC being “defective”

at the outset is not the real problem. There was only problematic conduct on the part of Ubiquiti

when it communicated (or had others communicate on its behalf) to purchasers that the TC product

was something that it was not. As noted above, this communication was received by purchasers in

the jurisdictions where they resided.

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Finally, the Court notes that, even if an express warranty claim were evaluated more along

the lines of a contract claim, cf., e.g., Cal. U. Com. Code § 2725 (including a breach of warranty as a

breach of contract for sale); Williamson v. Apple, Inc., No. 5:11-cv-00377 EJD, 2012 U.S. Dist.

LEXIS 125368, at *21-22 (N.D. Cal. Sept. 4, 2012) (noting that, “[s]ince liability for breach of

express warranty sounds in contract, ‘[a] manufacturer’s liability for breach of an express warranty

derives from, and is measured by, the terms of that warranty’”), Plaintiffs would fare no better. As

indicated above, the place of contracting is where the TC purchasers ultimately bought the product

(which came with the express warranty); this is where the offeree accepted the offer – presumably

where the offeree/purchaser resided. 

d. Summary

For the foregoing reasons, the Court concludes that there is a true conflict as there are

material differences amongst the jurisdictions with respect to a claim for breach of express warranty,

and that the jurisdiction with the strongest interest (i.e., whose interest would be most impaired if its

law were not applied) is variable, depending on where the purchaser of the TC product resided. 

Under these circumstances, California law does not uniformly apply to the entire class; rather the

governing law for the express warranty claim will be based on where the purchaser of the TC

product resided. And because the laws of multiple jurisdictions is thereby implicated, Ubiquiti

correctly contends that there is a predominance/manageability problem that precludes certification of

a Rule 23(b)(3) class.

C. Rule 23(c)(4) Classes and Subclasses – Fraudulent Inducement and Breach of Express

Warranty

Plaintiffs argue that, even if the Court does not certify a nationwide Rule 23(b)(3) class for

the express warranty claim, it should still certify seven issues classes pursuant to Rule 23(c)(4) to

assist in resolution of the claim. Plaintiffs also contend that the same issues classes would be used

for the fraudulent inducement claim. Subclasses would then be created to address differences in

state law with respect to both the express warranty and fraudulent inducement claims. According to

Plaintiffs, the issues classes and subclasses would cover 49 states.

Plaintiffs identify the following seven issues as issues appropriate for class treatment.

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(1) The falsity of the representation regarding TC’s suitability for outdoor use. 

(2) The materiality of the representation regarding TC’s suitability for outdoor use

(3) Whether the representation regarding TC’s suitability for outdoor use was part of the basis of

the bargain for the purchase of TC. 

(4) Ubiquiti’s state of mind regarding the representation regarding TC’s suitability for outdoor

use.

(5) TC purchasers’ reliance on the representation regarding the product’s suitability for outdoor

use. 

(6) Whether TC purchasers are entitled to consequential damages – more specifically, labor

costs to replace the TC product. 

(7) Whether TC purchasers are entitled to punitive damages

See Reply at 14.

Plaintiffs’ proposal is problematic for multiple reasons. First, even assuming Rule 23(c)(4)

may, in essence, obviate a predominance problem under Rule 23(b)(3) with respect to particular

issues identified for issue certification, see Valentino, 97 F.3d at 1234 (stating that, “[e]ven if the

common questions do not predominate over the individual questions so that class certification of the

entire action is warranted, Rule 23[(c)(4)] authorizes the district court in appropriate cases to isolate

the common issues . . . and proceed with class treatment of these particular issues”) (emphasis

added), Plaintiffs appear to be stretching the rule beyond its intended application. That is, Plaintiffs

are basically asking the Court to have every element of a claim for fraudulent inducement and/or

breach of express warranty subject to class treatment – i.e., in effect, the entire action. Compare,

e.g., Cordes & Co. Fin. Servs. v. A.G. Edwards & Sons, Inc., 502 F.3d 91, 109 (2d Cir. 2007)

(stating that, “[o]n remand, if the district court concludes that the action ought not to be certified in

its entirety because it does not meet the predominance requirement of Rule 23(b)(3), Cordes and

Creditors Trust may seek certification of a class to litigate the first element of their antitrust claim –

the existence of a Sherman Act violation – pursuant to Rule 23(c)(4)(A) and Nassau County”)

(emphasis added). Plaintiffs cite no precedent in which a court has allowed a comprehensive

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6

 Plaintiffs point out that reliance can be presumed under California law. See, e.g., Engalla v.

Permanente Med. Grp., Inc., 15 Cal. 4th 951, 977 (1997) (addressing claim for fraud in the

inducement of an arbitration agreement; stating that “[a] presumption, or at least an inference, of

reliance arises wherever there is a showing that a misrepresentation was material”). But they have

made no demonstration in their papers that all or even most jurisdictions have such a presumption. 

See, e.g., Mot. at 15. 

15

division of multiple issues for certification under Rule 23(c)(4) where the aggregation of those

issues would otherwise not be certifiable under Rule 23(b)(3). 

Second, several of the issues Plaintiffs posit for certification pose commonality problems. 

Plaintiffs have not explained, for instance, how reliance or benefit of the bargain will not require

individualized inquiries as to each TC purchaser where reliance is not presumed.6

 See generally In

re Zurn Pex Plumbing Prods. Liab. Litig., 644 F.3d 604, 619 (8th Cir. 2011) (noting that “[c]laims

requiring individual proof of reliance are generally not amenable to class certification because

common evidence could not ‘suffice to make out a prima facie case for the class’”); see also Wright

et al., Fed. Prac. & Proc. § 1790 (stating that “[c]ourts have applied subdivision (c)(4)(A) to allow a

partial class action to go forward, leaving questions of reliance, damages, and other issues to be

adjudicated on an individual basis”); cf. Fed. R. Civ. P. 23(b)(3), 1966 advisory committee notes

(noting that, “although having some common core, a fraud case may be unsuited for treatment as a

class action if there was material variation . . . in the kinds or degrees of reliance by the persons to

whom they were addressed”). In their reply brief, Plaintiffs suggest that, for the express warranty

claim at least, subclasses could be established: “Subclass 2A for states with a reliance requirement

and Subclass 2B for those states that do not have a reliance requirement.” Reply at 20 (emphasis

added). But this proposal still seems problematic because at least for Subclass 2A individualized

inquiries would still need to be made.

Individualized inquiries would also appear to be needed for the damages-related issues

Plaintiffs seek to certify. Plaintiffs contend that there not be individualized inquiries because (1)

they are limiting their damages to the labor cost to replace the TC product and (2) the labor cost can

be determined based on the “average amount of time to install ‘X’ number of feet of cable.” Mot. at

23; see also Reply at 11 (asking “what is a reasonable minimum amount of time to install 1,000 feet

(one box) of cable”). Putting aside, for the moment, Plaintiffs’ abandonment of damages other than

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labor cost (which is problematic for the reasons discussed infra), it is highly questionable that, as

Plaintiffs maintain, “the amount of time [to install] per foot will remain relatively consistent.” Mot.

at 23. As Ubiquiti argues, Plaintiffs’ position that “it takes the same amount of time to install thirty

feet of cable on a tower in a jungle as it does to install on a suburban home” strains credulity. Opp’n

at 14; cf. Doster Lighting, Inc. v. E-Conolight LLC, No. 12-C-0023, 2015 U.S. Dist. LEXIS 78499,

at *52-53 (E.D. Wisc. June 17, 2015) (in case involving allegedly defective LED bulb arrays and

fixtures, noting that “[l]abor costs for each class member could differ based on labor rates in the

particular geographic area and where the light fixtures are located (indoors or outdoors, on a garage

or in a tree, etc.”; therefore, “[i]ndividualized inquiries will be required to determine whether the

labor costs are reasonable for each plaintiff”).

To be sure, Issue Number 1 (falsity) may be amenable to common analysis with a resolution

that applies to all class members. It is one issue that may commonly be adjudicated assuming the

laws of the various states all apply the same legal test of falsity. However, resolution of Issue

Number 1 would leave many other issues to be adjudicated, as evidenced by the six other issues

Plaintiffs have identified. This is problematic because Rule 23(b)(3) requires consideration of

superiority and manageability. Unlike the typical Rule 23(c)(4) case where there is certification of

liability, leaving only damages to be litigated on an individual bases (see, e.g., Nassau, 461 F.3d at

226 (noting that Rule 23(c)(4) may be used “to separate the issue of liability from damages”),

certification here of an issue would resolve only one of many issues necessary to establish only

liability. Cf. McLaughlin, 522 F.3d at 234 (denying request for issue certification because, “in this

case, given the number of questions that would remain for individual adjudication, issue certification

would not ‘reduce the range of issues in dispute and promote judicial economy’[;] [c]ertifying, for

example, the issue of defendants’ scheme to defraud, would not materially advance the litigation

because it would not dispose of larger issues such as reliance, injury, and damages”). Thus,

resolving the question of falsity would only slightly, not substantially or materially, advance the

litigation. Weighed against the limited utility of such an adjudication is the fact that there is no

showing that class members do not have an incentive to prosecute their own claims or lack the

wherewithal to protect their individual interests, and that a class mechanism is essential to

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7

 The Court notes that there also appears to be an adequacy problem specific to Tasion. 

Tasion does not reside in any of the forty-nine states at issue, but rather in Canada, and Plaintiffs

have made no showing that Canadian law is comparable to any state law on breach of express

warranty or fraudulent inducement. 

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vindicating class members’ rights; as discussed below, there is a substantial amount of money

potentially at stake for each class member (many thousands of dollars) who is likely a business and

not a consumer or employee. Cf. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997) (noting

that “‘[t]he policy at the very core of the class action mechanism is to overcome the problem that

small recoveries do not provide the incentive for any individual to bring a solo action prosecuting

his or her rights[;] [a] class action solves this problem by aggregating the relatively paltry potential

recoveries into something worth someone’s (usually an attorney’s) labor”); Byrd v. Aaron’s Inc.,

784 F.3d 154, 176 n.10 (3d Cir. 2015) (indicating that, “‘where the injury to any individual

consumer is small, but the cumulative injury to consumers as a group is substantial, that the class

action mechanism provides one of its most important social benefits’”); Ebin v. Kangadis Food Inc.,

297 F.R.D. 561, 567 (S.D.N.Y. 2014) (stating that “the class action device, at its very core, is

designed for cases like this where a large number of consumers have [allegedly] been defrauded but

no one consumer has suffered an injury sufficiently large as to justify bringing an individual

lawsuit”). Nor is this a case where vindication of important public policy interests (as embodied, for

instance, in a statute) may be jeopardized in the absence of class certification. Thus, in this case, the

Court is doubtful that Plaintiffs have failed to establish the superiority and manageability

requirements of Rule 23(b) to justify Rule 23(c)(4) certification.

Even assuming an issue such as falsity could be certified under Rule 23(c)(4), there is an

adequacy problem.7

 As noted above, Plaintiffs have asked for just one kind of damage – i.e., direct

labor costs to replace TC. Plaintiffs have chosen to forgo all other possible elements of damages. 

Plaintiffs have failed to give any real explanation as to why they are willing to abandon other kinds

of compensable damages, such as replacement cable and cable connectors, damaged radios, travelrelated costs, downtime, lost connectivity, compensation to customers, lost profits, and lost

customers, where such damages are likely to exceed by many times the direct replacement labor cost

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8

 Even if a customer did not seek the cost of replacement cable and simply wanted a refund

of the money it paid for TC, that would not be an insignificant amount either. See, e.g., 5AC ¶¶ 75-

76 (indicating that Tasion paid approximately $100 per box for approximately 25 boxes).

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Plaintiffs now seek. In fact, these kinds of damages were all highlighted extensively in the operative

complaint. For example:

 Plaintiffs repeatedly allege in the complaint that the problem with the TC product “often

destroy[s]” the “expensive” radio equipment to which TC is connected. 5AC ¶¶ 7, 12, 50, 52,

57 (emphasis added). If the radio equipment is so expensive, then that begs the question of

why Plaintiffs are willing to give up their pursuit of that damages component.

 Plaintiffs repeatedly allege that it is necessary to “completely replace[]” TC with new

product because “its installation poses an unreasonable and completely foreseeable risk of

harm to the expensive radio transceiver equipment it is connected to.”8 5AC ¶ 12; see also

5AC ¶ 57 (“Wherever it has been installed, it must be completely replaced. Not replacing

the TOUGHCable subjects delicate and expensive radio and transmission equipment to

certain and inevitable failure. Broadcasters risk complete cessation of broadcast capacity. 

Each customer’s location must be completely rewired – all of the defective TOUGHCable

completely removed and replaced – to protect the equipment at each location where the

TOUGHCable was used.”). Again, if it is necessary to completely replace TC with brand

new cable, then that begs the question of why that damages component is not being pursued. 

 Plaintiffs indicate that Ubiquiti’s wireless products are particularly useful in rural and remote

areas but then, where a Ubiquiti customer must investigate and resolve a problem in such an

area, significant travel time is incurred. See, e.g., 5AC ¶¶ 28, 83, 89. If significant travel

time is incurred, then implicitly there are significant costs, and Plaintiffs should explain why

it is not necessary to include that damages component.

Even beyond Plaintiffs’ complaint, there is evidence in the record that the abandoned

damages could be significant. See, e.g., Himmelfarb Reply Decl., Ex. 48 (e-mail from Ubiquiti

customer from approximately 2012) (stating that “our company is experiencing a significantly

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9

 Although Exhibit 48 is sealed, the Court finds that, because the customer’s identity is not

being disclosed, it is not necessary to seal the excerpt quoted above.

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increased expense in operations costs due to this cable defect that merely providing a replacement of

the cable does not cure”).9 

Plaintiffs’ conduct in this litigation is thus comparable to that of the plaintiff in Drimmer v.

WD-40 Co., No. 06-CV-900 W (AJB), 2007 U.S. Dist. LEXIS 62582 (S.D. Cal. Aug. 24, 2007),

where the district court found an adequacy problem based on the plaintiff’s abandonment of

damages:

In an apparent attempt to limit unique questions of fact, [plaintiff]

seeks only the purchase price and an injunction prohibiting the

language on the Flush packaging. But [plaintiff] cannot plausibly

claim that every class member would forfeit damages from replacing

the tank parts, paying higher water bills, or even hiring a plumber to

find the lead (as [plaintiff] did). “A class representative is not an

adequate representative when the class representative abandons

particular remedies to the detriment of the class.” [Plaintiff] cannot

maintain a class action without seeking all available remedies for the

class members, yet he refuses to seek all available remedies even for

himself. Accordingly, [plaintiff’s] own conduct militates against

finding that he adequately represents the class. Assuming for the sake

of argument that res judicata would not bar the class members from

obtaining further relief, the court cannot ignore the inference that

[plaintiff] holds different priorities and litigation incentives than a

typical class member. 

Id. at *7-8. 

Plaintiffs’ argument in reply is not convincing. Plaintiffs rely on Murray v. GMAC

Mortgage Corp., 434 F.3d 948 (7th Cir. 2006), to argue that it is appropriate for a class

representative to forego damages in order to achieve class certification. But Murray, a case where

the plaintiff alleged a violation of the Fair Credit Reporting Act, must be taken in context. The

relevant text from Murray is as follows:

The district court’s second reason – that Murray should have

sought compensatory damages for herself and all class members rather

than relying on the statutory-damages remedy – would make consumer

class actions impossible. What each person’s injury may be is a

question that must be resolved one consumer at a time. Although

compensatory damages may be awarded to redress negligence, while

statutory damages require wilful conduct, introducing the “easier”

negligence theory would preclude class treatment. Common questions

no longer would predominate, and an effort to determine a million

consumers’ individual losses would make the suit unmanageable. Yet

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individual losses, if any, are likely to be small – a modest concern

about privacy, a slight chance that information would leak out and

lead to identity theft. That actual loss is small and hard to quantify is

why statutes such as the Fair Credit Reporting Act provide for modest

damages without proof of injury. 

Rule 23(b)(3) was designed for situations such as this, in which

the potential recovery is too slight to support individual suits, but

injury is substantial in the aggregate. Reliance on federal law avoids

the complications that can plague multi-state classes under state law,

and society may gain from the deterrent effect of financial awards. 

The practical alternative to class litigation is punitive damages, not a

fusillade of small-stakes claims.

Refusing to certify a class because the plaintiff decides not to

make the sort of person-specific arguments that render class treatment

infeasible would throw away the benefits of consolidated treatment. 

Unless a district court finds that personal injuries are large in relation

to statutory damages, a representative plaintiff must be allowed to

forego claims for compensatory damages in order to achieve class

certification. When a few class members’ injuries prove to be

substantial, they may opt out and litigate independently. Only when

all or almost all of the claims are likely to be large enough to justify

individual litigation is it wise to reject class treatment altogether.

Id. at 953 (emphasis added). Plaintiffs have failed to make any showing that this case is similar to

Murray where the abandoned damages would be small or insignificant such that it would be fair for

Plaintiffs to forego them in order to prosecute a class action. To the contrary, as noted above,

Plaintiffs’ own allegations in the operative complaint establish that the abandoned damages here are

likely to be significant. This case is thus entirely distinguishable from Murray and other consumer

class action suits. The need to forego damage claims in an effort ultimately to protect the class

through certification is diminished by the fact that it appears that the typical class members here, as

represented by the named Plaintiffs, are businesses, not individual consumers, who made substantial

purchases from Ubiquiti – Plaintiffs conceded at the hearing that each box of TC cost $5,000 to

$10,000. 

To the extent Plaintiffs argue that a putative class member can simply opt out to protect its

interests, that may be true, but it is then possible that a large number of putative class members

would opt out, which could result in a numerosity problem. And regardless of how many class

members would or would not opt out, the opt-out option does not obviate the question as to whether

Plaintiffs and their counsel are willing to drive this case towards certification to the potential and

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10 Plaintiffs do not seek to certify a class confined to any particular state such as where a

named Plaintiff resides. Instead, they seek only a nationwide class, and do so predicated on the

uniform approach of California law. The Court does not suggest that classes and subclasses may

never be certified where multiple state laws are involved. Cf. In re Carrier IQ, Inc., Consumer

Privacy Litig., No. C-12-md-2330 EMC, 2015 U.S. Dist. LEXIS 7123 (N.D. Cal. Jan. 21, 2015)

(claims brought under various state laws); see also Mazza, 666 F.3d at 594 (“express[ing] no view

whether on remand it would be correct to certify a smaller class containing only those who

purchased or leased Acura RLs in California, or to certify a class with members more broadly but

with subclasses for class members in different states, with different jury instruction for materially

different bodies of state law.”); Ellsworth v. U.S. Bank, N.A., No. 12-02506 LB, 2014 U.S. Dist.

LEXIS 81646, at *69 (N.D. Cal. June 13, 2014) (granting class certification where the relevant

“laws of the various states [were] capable of being organized into groups with similar legal

regimes”); In re Toyota Motor Corp. Unintended Accel. Mktg., Sales Pracs., & Prods. Liab. Litig., No. 8:10ML 02151 JVS (FMOx), 2013 U.S. Dist. LEXIS 123298, at *257 (C.D. Cal. July 24, 2013)

(noting that, in the absence of a settlement class, defendant would likely oppose any motion for class

certification and, “as noted by the Court in a previous Order, the laws of different states would likely

apply, necessitating multiple classes or subclasses of Plaintiffs”); Forcellati v. Hyland’s, Inc., 876 F.

Supp. 2d 1155, 1159 (C.D. Cal. 2012) (stating that, “should choice-of-law analysis appear to pose

problems at the class certification stage, Plaintiff could seek to certify subclasses of putative class

members from individual states or subclasses of class members from groups of states with consumer

protection laws that are not materially different”).

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substantial detriment of the putative class. This adequacy problem obtains even if some of the Rule

23(c)(4) issues posited by Plaintiffs are not directly affected by the waiver of damages; Plaintiffs

have demonstrated they are generally inadequate to represent the class because the choices they have

already made in this case vis-a-vis the class. Plaintiffs’ failure to address the problem of

abandonment of damages claims compels the Court to conclude that they are not adequate

representatives in this case. 

III. CONCLUSION

For the foregoing reasons, the Court denies Plaintiffs’ motion for class certification in its

entirety. The proposed Rule 23(b)(3) class for the express warranty claim cannot be certified

because of the predominance/manageability problem conceded by Plaintiffs were the Court to rule,

as it does, that various laws of multiple states, rather than the laws of California above, apply.10 The

proposed Rule 23(c)(4) issue classes and subclasses shall not be certified because there are

substantial problems of commonality, typicality, superiority, manageability, and adequacy of

representation.

///

///

///

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Accordingly, the case shall proceed as an individual, and not a class, action. Plaintiffs’

motion for class certification is DENIED. 

A case management conference is set for August 20, 2015 at 10:30 a.m. A joint case

management conference statement shall be filed by August 13, 2015. 

This order disposes of Docket No. 142.

IT IS SO ORDERED.

Dated: August 10, 2015

_________________________

EDWARD M. CHEN

United States District Judge

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