Source: https://www.calbizlit.com/cal_biz_lit/consumer_and_class_litigation/
Timestamp: 2019-04-25 10:46:56+00:00

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It’s nice once in awhile when a court understands how the real world works. It’s also nice when a court holds a statute means what it says. The Court of Appeal recently did both those things in Benson v. Southern California Auto Sales, Inc. (August 27, 2015) ___ Cal.App.4th ___ (Fourth Appellate Dist. G050484). This was a case involving California’s Consumer Legal Remedies Act, Civil Code Section 1750 and following, (often known as the “CLRA”).
First, some background: Section 1790 of the CLRA declares some 23 practices in the sale of goods or services to be “unfair methods of competition” and “unfair or deceptive acts or practices.” The itemized proscribed practices are quite broad, including “Passing off goods or services as those of another,” “Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another,” or “Inserting an unconscionable provision in the contract.” The 23 practices are sufficiently broad that consumer plaintiff attorneys can often find one that matches just about anything their clients are unhappy about.
Well, it only took 3 ½ years since the Petition for Hearing was filed, and just a year and a half since the case was fully briefed (see CBL’s posts whining about the long delay here and here) but we finally have a decision in Sanchez v. Valencia Holdings (August 3, 2015) ___Cal.4th___, S1999119, the eagerly awaited consumer arbitration agreement case.
Short version: the binding arbitration agreement in the Form 553 CA ARB retail installment sale contract predominantly used by California automobile dealers in 2010 was valid and enforceable. But this is not just important for automobile dealers. The overall decision is important for all consumer goods businesses that want to use class action waiver and binding arbitration provisions. Because it confirms that they can.
must be of such a nature that it is capable of classwide resolution – which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.
. . . when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.
The community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.
Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470.
While Calfornia courts have often looked to the Rule 23 jurisprudence for guidance (see City of San Jose v. Superior Court (1974) 12 Cal.3d 447; Frazier v. City of Richmond (1986) 184 Cal.App.3d 1491) there is nothing that requires them to do so, and it may be that they decline to follow Dukes altogether. But what will be the impact if they do? CBL sees two areas worth looking at.
First, while Duke provides some pretty solid defense argument on the subject of commonality, there is no real California game changer here. The US Supremes pretty much held that the decision on the common factual or legal issues must be outcome-determinative. And that has been the law in California for a long time. While our courts allow some room for individualized litigation by class members, they have generally held that common issues predominate only when class members, after the class proceedings are over, won’t have to litigate “numerous” or substantial” matters in order to establish liability in their favor. City of San Jose v. Superior Court, supra, 12 Cal.3d 447; Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906. So even if courts follow Dukes, CBL is guessing there's no big change here.
So in CBL’s view, the biggest impact of Dukes on California courts is the stake it casts through the heart (note the multitude of mixed metaphors) of the “no merits consideration” argument. We're guessing that one is pretty much dead here and everywhere else.

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