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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Ventures Edge Legal PLLC,

Plaintiff, 

v. 

GoDaddy.com LLC, 

Defendant.

No. CV-15-02291-PHX-GMS

ORDER 

 Pending before the Court is the Motion to Certify Class of Plaintiff Ventures Edge 

Legal PLLC (Doc. 86).1

 For the following reasons, the motion is denied. 

BACKGROUND 

Microsoft sells an office-services product known as Office 365. This product is a 

software system that provides its buyers with various computer programs and 

functionalities. Consumers may purchase Office 365 directly from Microsoft, but 

Microsoft also authorizes other retailers to sell the product. In 2014, Microsoft and 

GoDaddy entered into a partnership that allowed GoDaddy to sell Office 365. GoDaddy’s 

version of Office 365 aimed to serve the small business market. In its version of Office 

365, GoDaddy “consolidated setup, billing and support processes” to result in a 

 

1

 Plaintiff seeks to seal Exhibit 15 to their Reply in Support of Plaintiff’s Motion for Class Certification (Doc. 116). The Court entered a Stipulated Protective Order (Doc. 56) as discovery was likely to produce information and documents that are normally kept confidential for competitive reasons. Defendant has stipulated to seal Exhibit 15. Because both parties are in agreement and the Court finds that the contents of Exhibit 15 fall 

within the ambit of the Stipulated Protective Order, the motion is granted. 
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simplified user interface specifically intended for small business customers. This 

simplified user interface offers a different configuration of Office 365 than that offered 

by Microsoft. Despite bearing the same name, Plaintiff alleges that Microsoft and 

GoDaddy’s Office 365 Business Premium plans contain different functionalities. Some of 

the Microsoft functionalities are absent in GoDaddy’s plan, and some functionalities are 

added to GoDaddy’s plan that do not exist in the Microsoft version. For example, a 

GoDaddy purchaser of Business Premium received Microsoft Access––a Microsoft 

product not available for Microsoft Business Premium purchasers. On the other hand, a 

GoDaddy purchaser of Business Premium lacks access to Microsoft Sharepoint, Single 

Sign-In, among other capabilities—Microsoft functionalities that are available to 

Microsoft Business Premium purchasers. 

 GoDaddy markets and sells its version of Office 365 Business Premium to 

prospective customers in different ways. GoDaddy’s marketing strategy focused on the 

accessibility of the Office 365 products and their use for small business owners. 

GoDaddy consumers can buy Office 365 products from the Office 365 landing page of 

GoDaddy’s website, from the consumer’s personal account, or by contacting GoDaddy 

customer support. GoDaddy supports an online chat function where customers can ask 

questions about products to company representatives. Customers can also make 

purchases of products through the assistance of the company representatives in the chat. 

GoDaddy’s chat employees are trained on the functionalities of the product, and 

GoDaddy asserts that the functionalities of GoDaddy’s Office 365 Business Premium 

including the differences in functionalities might be disclosed to customers during the 

chat. There is evidence that GoDaddy representatives do in fact disclose the different 

functionalities when asked. In Plaintiff’s own conversations with GoDaddy 

representatives through the chat feature, GoDaddy representatives told Plaintiff that there 

were differences between the Microsoft and GoDaddy product and discussed which 

functionalities were not supported by GoDaddy. (Doc. 103). In Plaintiff’s case, however, 

these conversations did not occur until after Plaintiff had already purchased GoDaddy’s 
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product. Customers, however, may use the chat function prior to purchasing the product 

through the website or otherwise. 

 Plaintiff argues that GoDaddy’s alleged failure to disclose these different 

functionalities on its website is an omission of a material fact, and therefore a violation of 

the Arizona Consumer Fraud Act (ACFA). Plaintiff seeks to certify a class of “[a]ll 

individuals and entities who purchased the Office 365 Business Premium plan through 

GoDaddy’s website since November 13, 2014.” (Doc. 86, pg. 2). 

DISCUSSION 

I. Rule 23 Requirements 

 A class may not be certified unless it meets each of the four requirements of Rule 

23(a), typically referred to as numerosity, commonality, typicality, and adequacy of 

representation. Fed. R. Civ. P. 23(a). In addition, a class action must satisfy at least one 

of the three requirements of Rule 23(b), one of which is “that the 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 

efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The party seeking 

certification bears the burden of demonstrating that it has met all of these requirements, 

and “the trial court must conduct a ‘rigorous analysis’” to determine whether it had met 

that burden. Zinser v. Accufix Research Inst., 253 F.3d 1180, 1186 (9th Cir. 2001) 

(quoting Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1233) (9th Cir. 1996)). 

II. Analysis 

 A. Motion to Strike 

In Plaintiff’s Reply in Support of Plaintiff’s Motion for Class Certification (Doc. 

116), Plaintiff attaches three exhibits consisting of expert reports. Exhibit 3 of Dwight 

Duncan calculates damages. Exhibit 8 of Ilan Srendi sets forth the different 

functionalities of Microsoft and GoDaddy’s Office 365 Business Premium products. 

Exhibit 13 of Thomas Maronick discusses the monetary value consumers place on the 

Microsoft functionalities that are not present in the GoDaddy product. Plaintiff’s Motion 
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for Class Certification (Doc. 86) contained declarations of all three experts, each 

asserting their qualifications and the work they sought to produce in their expert reports. 

Defendants move to strike the expert reports attached to Doc. 116 as consisting of new 

arguments and evidence, or for leave to file a surreply. In light of the Court’s denial of 

the Motion to Certify Class, the Motion to Strike is moot. 

 B. Individual Questions Predominate, Preventing Certification Under 

Rule 23(b)(3)

Plaintiffs have not shown predominance––that questions common to the class 

predominate over individual questions. Therefore, the Court declines to certify the Class. 

 1. The Arizona Consumer Fraud Act 

 The predominance inquiry necessarily requires an evaluation of the underlying 

cause of action. ACFA states that the “act, use or employment by any person of any 

deception, deceptive or unfair act or practice, fraud, false pretense, false promise, 

misrepresentation, or concealment, suppression or omission of any material fact with the 

intent that others rely on such concealment, suppression of omission, in connection with 

the sale or advertisement of any merchandise whether or not any person has in fact been 

misled, deceived or damaged thereby, is declared to be an unlawful practice.” Ariz. Rev. 

Stat. § 44-1522(A). 

 ACFA itself only provides for enforcement by the Arizona Attorney General, but 

the Arizona Supreme Court held that the statute also creates an implied private right of 

action. Sellinger v. Freeway Mobile Home Sales, Inc., 521 P.2d 1119, 1122 (Ariz. 1974).

(“Without effective private remedies the widespread economic losses that result from 

deceptive trade practices remain uncompensable and a private remedy is highly desirable 

in order to control fraud in the marketplace.”). A plaintiff must show that “(1) the 

defendant made a misrepresentation in violation of the Act, and (2) defendant’s conduct 

proximately caused plaintiff to suffer damages.” Cheatham v. ADT Corp., 161 F.Supp.3d 

815, 825 (D. Ariz. 2016) (citing Parks v. Macro-Dynamics, Inc., 591 P.2d 1005, 1008 

(Ariz. Ct. App. 1979)). 
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 2. Reliance is an Element of an ACFA Claim 

 Whether a party seeking class certification must prove individual reliance is a 

question of state law. Yokoyama v. Midland Nat. Life Ins. Co., 594 F.3d 1087, 1092 (9th 

Cir. 2010) (noting that the proper inquiry is “whether the law of [the state] requires a 

finding of individual reliance in the application of its consumer protection statutes”). 

ACFA states that an “omission of any material fact . . . whether or not any person has in 

fact been misled, deceived or damaged thereby, is declared to be an unlawful practice.” 

Ariz. Rev. Stat. § 44-1522(A). Plaintiff asserts that this statutory language demonstrates 

that individualized reliance inquiries are not required to bring a private right of action 

under ACFA. But, such an argument has been long and consistently rejected by Arizona 

courts. See, e.g., Peery v. Hansen, 585 P.2d 574, 577 (Ariz. Ct. App. 1978) (“It is clear 

that before a private party may exert a claim under the statute, he must have been 

damaged by the prohibited practice. A prerequisite to such damages is reliance on the 

unlawful acts.”); Parks, 591 P.2d at 1008 (“For false advertisement to cause the injury, 

the hearer must actually rely on the advertisement; unlike common law fraud, this 

reliance need not be reasonable.”); Kuehn v. Stanley, 91 P.3d 346, 351 (Ariz. Ct. App. 

2004) (noting that “reliance is a required element under Arizona’s consumer fraud 

statute” but it need not be reasonable). The Arizona Supreme Court has never taken up 

this precise question, but it has left the Court of Appeals’ requirement for individual 

reliance under a private right of action undisturbed for forty years. It was not improper 

for the Arizona courts in finding a private right of action in the statute to require as a 

condition of such an action that a Plaintiff rely on the misleading advertisement to her or 

his detriment before obtaining an individual recovery. 

 3. A Presumption of Reliance is Inappropriate 

 To the extent that reliance is an element, it cannot be presumed on a class-wide 

basis––at least based on the facts of this case. Even assuming that there might be an 

omissions case in which it was appropriate to adopt a presumption of reliance, this is not 

such a case. This case does not involve a single product with set functionalities in which 
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GoDaddy has marketed the product absent some of those functionalities without 

disclosing as much. It involves separate versions of a product with the same name that 

has been customized for different users and contains somewhat different functionalities. 

Plaintiff presumably purchased GoDaddy’s Office 365 Business Premium because of his 

prior experience with Microsoft’s Office 365 Business Premium.2

 In essence, Plaintiff 

thought that when he purchased GoDaddy’s product he was purchasing the same 

Microsoft product he had used in the past. However, other purchasers may not have made 

the choice to buy GoDaddy’s product with the same knowledge. Some purchasers may 

have bought the GoDaddy Business Premium precisely because it offers a simplified user 

interface and/or Microsoft Access. Other purchasers may have had no knowledge of the 

differences between GoDaddy and Microsoft; rather, they saw GoDaddy’s 

advertisements and product and were motivated to purchase it on that information for the 

price set by GoDaddy. 

 Presumably, in an attempt to alleviate this difficulty, Plaintiff proposes two 

methods of calculating damages. In the “consideration paid” model, Plaintiff proposes 

that that class members would recover all money paid to GoDaddy. In the “discount” 

model, Plaintiff proposes that class members would recover the consideration paid minus 

the actual value of the allegedly inferior product. Plaintiff retained an expert to calculate 

the value of the allegedly inferior GoDaddy Office 365 Business Premium. Both of 

Plaintiff’s models, however, are not sufficient to avoid individualized inquiries. 

 A class member presumably could not qualify to be included in the “consideration 

paid” model, unless he or she could establish that in purchasing GoDaddy’s version of 

Office 365, she or he relied on the assumption that it included the missing functionalities 

 

2

 Plaintiff states that he believed he was purchasing “Microsoft Office’s Business Premium product—Office 365 Business Premium.” (Doc. 104-1, pg. 105). At the time of 

purchasing, Plaintiff “knew what Microsoft Office Business did, and [ ] knew that 

Microsoft Office Business Premium was a superset of Microsoft Business.” (Id. at pg. 109). Plaintiff had done trial runs with Microsoft Business Premium before purchasing the GoDaddy version of Business Premium. (Id. at pg. 111). Plaintiff did not research the 

GoDaddy product because he “thought they [GoDaddy and Microsoft] were the same product.” (Id. at pg. 114). 
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of Microsoft’s version of Office 365. This would involve an individualized inquiry that 

would predominate. 

 Nor does Plaintiff’s proposed “discount model” work to create a class-wide 

question. Plaintiffs’ discount model aligns with the presumptions of reliance utilized by 

courts in many securities law cases. In Affiliated Ute Citizens v. United States, the 

Supreme Court created a presumption of reliance when there were omissions connected 

the sale of securities. 406 U.S. 128, 153–54 (1972). Later, the Court allowed for the 

fraud-on-the-market presumption of reliance,3

 available in both omissions and affirmative 

misrepresentations related to the sale of securities. Basic Inc. v. Levinson, 485 U.S. 224, 

241–49 (1988). See also Binder v. Gillespie, 184 F.3d 1059, 1064 (9th Cir. 1999) (“Thus, 

the presumption of reliance is available only when a plaintiff alleges that a defendant 

made material representations omissions concerning a security that is actively traded in 

an ‘efficient market.’”) (emphasis added). Of course, however, in such cases the Courts 

are dealing with the same security about which omissions were made. Here, however, as 

is detailed above, we do not have the same product; we have two different versions of a 

product bearing the same name.4

 The set of functionalities belonging to one identically 

named product may or may not have been more valuable than the other, but unlike the 

 

3

 This presumption “is based on the hypothesis that, in an open and developed securities market, the price of a company’s stock is determined by the available material information regarding the company and its business . . . Misleading statements will therefore defraud purchasers of stock even if the purchasers do not directly rely on the misstatement.” Basic Inc. v. Levinson, 485 U.S. 224, 241–42 (1988) (citations omitted). 

4

 Additionally, the securities context is a unique one in which legislation has been passed with a “fundamental purpose . . . to substitute a philosophy of full disclosure for 

the philosophy of caveat emptor.” Affiliated Ute, 406 U.S. at 151 (quoting S.E.C. v. 

Capital Gains Research Bureau, 375 U.S. 480, 186 (1963)). See also Stratton v. 

American Medical Security, Inc., 266 F.R.D. 340, 349 (“Courts rarely presume reliance outside of the securities fraud context.”). Plaintiffs cite to no Arizona cases suggesting that such an approach has been extended to cases involving the purchase of consumer goods. An Arizona court did recognize a fraud-on-the-market presumption under ACFA in Persky v. Turley, Nos. CV 88-1830-PHX-SMM, CV 88-2089-PHX-SMM (D. Ariz., 

filed Dec. 19, 1991). But Persky is distinguishable: it was related to stock purchases, where the fraud-on-the-market presumption of reliance is common. 
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market-value presumption available in stock purchases, one cannot assume that the 

failure to disclose the difference in functionalities would affect the price at which one of 

the two differing products with the same name was sold. Different information about the 

two different products was already in the market. The presumptions of reliance available 

in the securities context are not suited to such facts as are present in this case. 

 Further, as structured, Plaintiff’s discount model only attempts to measure the loss 

in value to GoDaddy’s product absent the functionality contained in the Microsoft 

product even if the consumer purchased the product for that separate functionality or was 

not aware of the difference. But, even assuming that the functionalities missing from 

GoDaddy’s product cause a decrease in the product’s value, the model makes no attempt 

to calculate the additions in value that may result to class members by GoDaddy’s 

simplified design functions or separate functionalities. Such a value could equal the lost 

value from the missing functionalities, resulting in no damage to consumers. Or, their 

value could lessen the delta between GoDaddy’s price and the alleged true value of the 

product. Plaintiff’s proposed models, therefore, fail to account for all the variations 

between the GoDaddy and Microsoft products. This is a particular problem given that 

there are some consumers who may have sought out GoDaddy’s product because of its 

simplicity and its inclusion of Microsoft Access. Determining who these consumers are 

and how their damages vary from other consumers would require individualized 

assessments. 

 To the extent that Plaintiffs have attempted to account for this by certifying a class 

of only those persons who have purchased from GoDaddy’s website (which appears to be 

an attempt to eliminate most purchasers who may have been given individual disclosures 

of the different functionalities), that limitation does nothing to identify whether the 

putative class member relied on the presence of the “Microsoft” functionality in question, 

nor does it evaluate the value to the purchaser of the separate GoDaddy functionalities. 

 State courts have already extended the scope of the ACFA in recognizing a private 

right of action thereunder. In doing so, they have uniformly required a demonstration of 
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actual reliance. This Court will not eliminate that state law requirement so as to facilitate 

class treatment of an omissions claim in this context. The facts of this case do not allow 

for effective class treatment due to the predominance of individualized inquiries. 

 C. Plaintiff’s Grievances Are Not Common or Typical to the Class

 Rule 23(a)’s typicality requirement tests “whether other [class] members have the 

same or similar injury, whether the action is based on conduct which is not unique to the 

named plaintiffs, and whether other class members have been injured by the same course 

of conduct.” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 984 (9th Cir. 2011) (quoting 

Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992)). As discussed above, 

Plaintiff appears to have purchased GoDaddy’s Office 365 Business Premium because of 

his prior experience with Microsoft’s Office 365 Business Premium. Other purchasers 

may not have made the choice to buy GoDaddy’s product with the same knowledge. 

Plaintiff’s grievance with GoDaddy’s package is not necessarily typical of the grievances 

of absent class members. Other class members may not have suffered the same injury as 

Plaintiff, and determining which class member did suffer a similar injury would require 

individualized determinations. 

 Further, plaintiffs seeking to certify a class must show that “there are questions of 

law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). However, because “any 

competently crafted class complaint literally raises common questions,” it is not 

sufficient for a plaintiff to simply identify any question that pertains to the whole class. 

Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011) (citations omitted). Instead, 

“[c]ommonality requires the plaintiff to demonstrate that the class members have suffered 

the same injury.” Id. at 349–50 (citations omitted). Claims must “depend on a common 

contention . . . that is capable of classwide resolution.” Id. at 350. More than presenting a 

common question, it is necessary to show that a “classwide proceeding [can] generate 

common answers apt to drive the resolution of the litigation.” Id. (citations omitted). In 

this case, Plaintiff asserts two common questions: (1) whether GoDaddy’s Office 365 

Business Premium fails to provide certain functionalities present in the Microsoft 
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product; and (2) whether GoDaddy fails to disclose the lack of functionality. Answering 

these questions, however, does not drive resolution of the litigation. As discussed above, 

ACFA requires consumers to show reliance and injury. Plaintiff has identified questions 

common to the class. But given the underlying statute and cause of action, these 

questions are insufficient to resolve the question of whether GoDaddy violated ACFA. 

CONCLUSION 

 Individual questions predominate in this putative class action. In Arizona, reliance 

is an element of an ACFA claim. A private litigant bringing an ACFA claim is not 

entitled to a presumption of reliance based on these facts. Therefore, questions of whether 

a particular class member relied on the omission are individualized questions that would 

predominate. Plaintiff’s motion to certify a class is denied. 

IT IS THEREFORE ORDERED that the Motion to Certify Class of Plaintiff 

Ventures Edge Legal, PLLC (Doc. 86) is denied. 

 IT IS FURTHER ORDERED that the Motion to Seal of Plaintiff Ventures Edge 

Legal, PLLC (Doc. 117) is granted. The Clerk of Court is directed to file the lodged 

Exhibit (Doc. 118) under seal. 

 IT IS FURTHER ORDERED finding the Motion to Strike of Defendant 

GoDaddy.com, LLC (Doc. 123) moot.

 Dated this 30th day of January, 2018. 

Honorable G. Murray Snow

United States District Judge