Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-00454/USCOURTS-casd-3_11-cv-00454-4/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1441 Petition for Removal

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ROBERT A. WALLER, JR., on behalf of

himself and all others similarly situated,

Plaintiff,

CASE NO. 11cv0454-LAB (RBB)

ORDER STAYING CASE

vs.

HEWLETT-PACKARD COMPANY, etc.,

et al.,

Defendants.

Now pending before the Court is Waller’s motion for class certification. After

considering the parties’ briefs and familiarizing itself with the relevant caselaw, the Court is

inclined to stay this case pending the appeal of the denial of class certification in O’Shea v. 

Epson America, Inc., Case No. 9-CV-8063 (C.D. Cal.), Doc. No. 596.

Front and center here is the question whether unnamed class members in a putative

UCL class action must satisfy Article III standing requirements when that class action is in

federal court. There is no unambiguous, controlling Ninth Circuit authority on that question,

but in the wake of Stearns v. Ticketmaster Corp., 655 F.3d 1013 (9th Cir. 2011), district

courts in California have drifted in different directions. In O’Shea, for example, one judge

in the Central District of California held that “absent class members must satisfy the

requirements of Article III.” 2011 WL 4352458 at *10. But in Bruno v. Quten Research

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Institute, LLC, 280 F.R.D. 524 (C.D. Cal. 2011), another judge in the Central District held

that “the Ninth Circuit in Stearns did not subtly announce a new rule requiring courts to

analyze unnamed class members’ standing.” Id. at 533. 

After both of those decisions, the Ninth Circuit did hold in a putative UCL class action

that “[n]o class may be certified that contains members lacking Article III standing,” Mazza

v. American Honda Motor Co., Inc., 666 F.3d 581, 594 (9th Cir. 2012), but there is an

ambiguity in the opinion, at least as the Court reads it. It explains that standing requires an

actual injury that’s traceable to the challenged conduct, but then seems to find class standing

based on injury alone, namely the fact that consumers allegedly paid more for a good than

it was really worth to them. Id. at 595. The opinion continues, though, to the question

whether a presumption of reliance is justified, and it’s not clear whether this is simply the

traceability prong of the standing requirement, or some free-standing requirement that the

Court assesses in the Rule 23(b)(3) predominance analysis. See id. at 595–96. If the latter,

where exactly does that reliance requirement come from, given that a California UCL claim

doesn’t require it except for the named plaintiff in a class action? (The answer may be that

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Mazza also involved a claim under the Consumer Legal Remedies Act, which does require

an additional showing of reliance. Id. at 595. )

3

 See Brakke v. Economic Concepts, Inc., 213 Cal.App.4th 761, 772 (Cal. Ct. App. 1

2013) (“Unlike common law fraud, a Business and Professions Code section 17200 violation

can be shown even without allegations of actual deception, reasonable reliance, and

damage. Historically, the term ‘fraudulent,’ as used in the UCL, has required only a showing

that members of the public are likely to be deceived.”). 

See Tobacco II Cases, 46 Cal.4th 298, 306 (2009) (“We conclude that standing 2

requirements are applicable only to the class representatives, and not all absent class

members.”); In re Steroid Hormone Product Cases, 181 Cal.App.4th 145, 154 (Cal. Ct. App.

2010) (“[W]hile a named plaintiff in a UCL class action . . . must show that he or she suffered

injury in fact and lost money or property as a result of the unfair competition, once the

named plaintiff meets that burden, no further individualized proof of injury or causation is

required to impose restitution liability against the defendant in favor of absent class

members.”). 

Indeed, the case Mazza cites to, Davis-Miller v. Automobile Club of Southern 3

California, 201 Cal.App.4th 106, 125 (Cal. Ct. App. 2011), is somewhat clear that the

reliance inquiry is necessitated by the CLRA rather than the UCL. The Court limited Waller’s

CLRA claim to injunctive relief in its order on HP’s motion to dismiss (Doc. No. 45), and

Waller subsequently dismissed the claim entirely (Doc. No. 80).

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On November 15, 2011, the Ninth Circuit granted a petition in O’Shea to appeal the

court’s order denying class certification. On this appeal, the Ninth Circuit will address headon the question on which O’Shea and Bruno are split, and which, even after Mazza, is the

source of much confusion here and in other putative UCL class actions that land in federal

court. If unnamed plaintiffs have to satisfy Article III standing requirements simply because

a case is in federal court—requirements, to be clear, that aren’t present in state

court—Waller’s motion for class certification is in serious trouble. Article III standing requires

an injury that’s caused by the alleged misconduct, Lujan v. Defenders of Wildlife, 504 U.S.

555, 560 (1992), and it will likely be impossible to show causation on a class-wide basis, at

least here. That is, even if Waller can show that the alleged injury is the same—the value

differential between the SimpleSave consumers bought and a SimpleSave that truly backs

up everything, automatically—he’ll have a very hard time showing that this injury, for all

purchasers, was caused by alleged misrepresentations on the packaging. See Mazza, 666

F.3d at 596 (suggesting that reliance may be presumed only where all class members were

actually exposed to the alleged misrepresentations and guided by them). Did they all read

the alleged misrepresentations? Did they all buy the SimpleSave because of them?

Individual considerations will necessarily predominate in answering those questions.4

The Court’s intuition, for what it is worth, is that O’Shea is probably right and the Court

must take Mazza at its word, and this putative class cannot satisfy Rule 23(b)(3). But the

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proper course might then be to either dismiss the class claims without prejudice or actually

//

Mazza originated in the Central District, and it is also curious that the opinion makes 4

no mention of the O’Shea-Bruno split, nor does it recognize the Article III standing issue to

be a divisive one in the first instance.

Waller also seeks certification under Rule 23(b)(2), but this is a nonstarter. Rule 5

23(b)(2) is reserved for cases in which a putative class seeks primarily injunctive relief, and

Waller’s complaint couldn’t be more clear that it seeks primarily damages. See Wal-Mart

Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2557 (2011) (holding that claims can’t be certified

under Rule 23(b)(2) “where . . . the monetary relief is not incidental to the injunctive or

declaratory relief”); Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1195 (9th Cir.

2001) (“Class certification under Rule 23(b)(2) is appropriate only where the primary relief

sought is declaratory or injunctive.”).

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remand this case, if the Court has made a determination that it cannot proceed as a class

action here on standing grounds. 

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Removal of this case was no doubt proper, as the Court has held (see Doc Nos. 29,

68), and the Court acknowledges that the Ninth Circuit has held that the denial of class

certification doesn’t divest a district court of jurisdiction under CAFA. See United Steel, 7

Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union, AFL-CIO,

CLC v. Shell Oil Co., 602 F.3d 1087, 1092 (9th Cir. 2010) (“If a defendant properly removed

a putative class action at the get-go, a district court’s subsequent denial of Rule 23 class

certification does not divest the court of jurisdiction, and it should not remand the case to

state court.”). 

But Shell Oil also recognized an exception when courts lacked jurisdiction to begin

with—and standing is jurisdictional. Id. at 1092 n. 2; Doe No. 1 v. Reed, 697 F.3d 1235,

1238 (9th Cir. 2012). Running with these principles, at least one district court has held that

when class certification is denied on Article III standing grounds, rather than for failure to

satisfy Rule 23, the court lacks subject matter jurisdiction over the class claims and can

dismiss them without prejudice. Robinson v. Hornell Brewing Co., 2012 WL 6213777 at *8

(D.N.J. Dec. 13, 2012). Another district court has actually remanded a case that was

removed under CAFA when it determined that the plaintiff lacked Article III standing. Range

v. Cincinnati Life Ins. Co., 2012 WL 1035728 (N.D. Ohio 2012). Whatever the result, it

doesn’t seem to be within the spirit and purpose of CAFA that a defendant can remove a

case to federal court and then seize on federal law to insist that plaintiffs lack standing to go

forward. 

 CAFA jurisdiction isn’t exclusive, after all. Guenther v. Crosscheck Inc., 2009 WL

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1248107 at *5 (N.D. Cal. Apr. 30, 2009) (“CAFA gave federal courts ‘original’ jurisdiction over

class actions that satisfy certain criteria, but it did not give federal courts exclusive

jurisdiction over this action.”); Vallier v. American Fidelity Assurance Corp., 2008 WL

4330028 at *3 (D. Kans. Sept. 16, 2008) (“CAFA does not mandate that class actions of any

variety—‘multi-state’ or otherwise—be filed in federal court.”). 

In a very brief scheduling order earlier in this case, the Court mistakenly suggested 7

that the denial of class certification would result in remand. (See Doc. No. 88 at 1.) That is

obviously not the law. 

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This is a vexing issue, and it’s one the Court wants to get right. The Ninth Circuit will

speak to it definitively when it considers the class certification denial in O’Shea, which, like

this case, involves UCL and FAL claims only and was originally filed in state court and then

removed. If the parties care to brief this issue, they may file one supplemental brief each,

no more than 5 pages in length, within two weeks of the date this Order is entered. This

case is otherwise stayed until the Court can proceed under the guidance of the Ninth

Circuit’s opinion in O’Shea. 

IT IS SO ORDERED.

DATED: May 24, 2013

HONORABLE LARRY ALAN BURNS

United States District Judge

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