Source: http://thecomplexlitigator.com/?offset=1323283621000&category=Class+Actions%3A+UCL
Timestamp: 2019-04-24 12:08:14+00:00

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I've been swamped at work, so posts around here have been few and far between. But there haven't been many class-related decisions to write about either, so maybe you didn't miss much. Today, however, when the legal profession is repenting, I at least have some time to write. In Degelmann v. Advanced Medical Optics (9th Cir. Sept. 28, 2011), the Ninth Circuit examined UCL standing and medical device preemption. In Degelmann, the plaintiffs sought to represent a putative class of purchasers of contact lens solution. Their suit alleged that defendant violated California’s Unfair Competition Law (“UCL”) and False Advertising Law (“FAL”) by marketing Complete MoisturePlus (“MoisturePlus”) as a product that cleans and disinfects lenses. The district court granted defendant's motion for summary judgment, ruling that plaintiffs lacked standing.
Here, as in Kwikset, the plaintiffs allege that they paid more for a product due to reliance on false advertising. The district court in this case was likely correct that Degelmann and Lin would have bought other contact lens solution had they not purchased MoisturePlus. However, as elucidated by the Kwikset court’s discussion, it does not necessarily follow that they did not suffer economic harm. Degelmann and Lin presented evidence that they were deceived into purchasing a product that did not disinfect as well as it represented. Had the product been labeled accurately, they would not have been willing to pay as much for it as they did, or would have refused to purchase the product altogether. The district court’s reasoning—that class members would have bought other contact lens solution, and therefore suffered no economic harm— conceived of injury in fact too narrowly.
The inquiry into injury in fact in this case, where the class makes claims under both the UCL’s fraud prong and the FAL, is not controlled by Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009). In that case, purchasers of iPod headphones pursued a claim under the UCL’s “unfair” and “unlawful” prongs, asserting that listening to loud music on the headphones could result in hearing loss. They did not allege economic harm from having purchased headphones in reliance on false advertising, but rather claimed that the inherent risk of the headphones reduced the value of their purchase and deprived plaintiffs of the benefit of their bargain. Id. at 961. The court in that case found that the claim of economic harm was not sufficient to plead injury in fact in part because, in distinct contrast to the MoisturePlus labeling at issue in this case, Apple had not represented that the headphones were safe at high volume. Rather, “Apple provided a warning against listening to music at loud volumes.” Id. Because there is allegedly false labeling and advertising at issue in this case, Birdsong does not aid our disposition here.
In order for the class to recover in this lawsuit, a court would have to hold that California’s UCL and FAL required something different than what the FDA required in order for AMO to label MoisturePlus a disinfectant. Those California laws would have to require that AMO test for Acanthamoeba, and show that MoisturePlus kills it in sufficient quantities. That is, California law would have a requirement that is additional to the federal requirements.
Slip op., at 18569. And that, as they say, was that. You have standing, but you lose. At least it's good to have some guidance from the Ninth Circuit on the application of Kwikset to federal standing arguments.
Oral argument scheduled in Sullivan et al. v. Oracle Corporation et al.
As a side note, the argument calendar also shows that Brinker is not on the April agenda. Do I hear May anyone? And by "May," you all know I mean May 2012, right?
Stephen v. Enterprise Rent-a-Car, 235 Cal. App. 3d 806 (1991) held that a party has no right to bring a second motion to certify a class after the court has denied the first motion and the time for appeal has passed. Stephen arose when a plaintiff failed to timely appeal an order denying certification. But Stephen did not consider all of the unusual permutations that could occur. In Safaie v. Jacuzzi Whirlpool Bath, Inc. (February 22, 2011), the Court of Appeal (Fourth Appellate District, Division One) examined whether, after an unsuccessful appeal of an order decertifying a class, the plaintiff could move for recertification on the basis of new law (Tobacco II). The Court concluded that, because the plaintiff did not petition for review while Tobacco II was pending, the order affirming decertication was final and no further attempts at certification were permissible absent equitable considerations necessary to prevent unfairness.
We agree with Stephen's holding and find its rationale persuasive. To ensure fairness to the class action plaintiff, trial courts are required to liberally grant continuances and ensure a plaintiff has the opportunity to make a complete record before the court rules on class certification. (See Stephen, supra, 235 Cal.App.3d at pp. 814- 815.) Once the record is complete, if the trial court issues a final order denying a class certification motion in its entirety, the plaintiff has the right to seek immediate appellate review and to obtain a written ruling from a Court of Appeal on the disputed issues, and then, if dissatisfied, to petition for review in the California Supreme Court. Thus, unlike the situation with most interlocutory orders, the plaintiff is provided the right to an immediate appeal even though the case is still pending. However, this special status has a necessary ramification: once the appellate period has passed or once the appellate court has affirmed the order and a remittitur has issued, the order is final and plaintiff is bound by the final decertification decision.
In reaching this conclusion, we recognize trial courts have broad discretion to determine the propriety of class actions, including to be procedurally innovative in certifying an appropriate class and in formulating procedures to ensure fairness and avoid manifest injustice in class action litigation. (See Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 339.) Moreover, a court has the discretion to move sua sponte to certify a class. (See City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 453-454.) However, to the extent there may be equitable exceptions to the rule precluding successive class certification motions after a final order denying certification, the circumstances here do not come within this exception.
From all of this I take away two possible lessons. First, you must file a petition for review with the California Supreme Court if there is any chance that a change in law could help your certification arguments. Second, the farther away you get from the wellspring of all consumer and employee protection, the more likely it is that your class action will receive the firing squad, not a certification order. This theory would explain why Los Angeles is dicey, Orange County is perilous, and San Diego is the kiss of death. But it's just a theory.
Accordingly, plaintiffs who can truthfully allege they were deceived by a product‟s label into spending money to purchase the product, and would not have purchased it otherwise, have “lost money or property” within the meaning of Proposition 64 and have standing to sue. Because plaintiffs here have so alleged, we reverse.
Slip op., at 2. Stay tuned.
A link to the opnion has been added to this post.
United States Magistrate Judge Jan M. Adler (Southern District of California) denied a motion for class certification in a suit alleging improper practices and representations about a home warranty insurance product. Campion v. Old Republic Home Protection Co., Inc., 2011 WL 42759 (S.D.Cal. Jan. 06, 2011). The Court found that individual issues would predominate because each denial of warranty coverage would reuqire an inquiry into the basis for the denial. The Court also relied heavily on the construction of Tobacco II that was advanced in Cohen v. DirectTV, 178 Cal. App. 4th 966 (2009) when it refused to presume reliance on the part of absent class members.

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