Opinion ID: 2598149
Heading Depth: 2
Heading Rank: 2

Heading: Class Certification Merits

Text: We consider as well Fireside Bank's objections to the merits of the trial court's class certification. The decision to certify a class rests squarely within the discretion of the trial court, and we afford that decision great deference on appeal, reversing only for a manifest abuse of discretion: Because trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, they are afforded great discretion in granting or denying certification. ( Linder v. Thrifty Oil Co., supra, 23 Cal.4th at p. 435, 97 Cal.Rptr.2d 179, 2 P.3d 27.) A certification order generally will not be disturbed unless (1) it is unsupported by substantial evidence, (2) it rests on improper criteria, or (3) it rests on erroneous legal assumptions. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326-327, 17 Cal.Rptr.3d 906, 96 P.3d 194; Linder, at pp. 435-436, 97 Cal.Rptr.2d 179, 2 P.3d 27.) Class certification requires proof (1) of a sufficiently numerous, ascertainable class, (2) of a well-defined community of interest, and (3) that certification will provide substantial benefits to litigants and the courts, i.e., that proceeding as a class is superior to other methods. (See Code Civ. Proc, § 382; Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326, 17 Cal.Rptr.3d 906, 96 P.3d 194; Linder v. Thrifty Oil Co., supra, 23 Cal.4th at p. 435, 97 Cal.Rptr.2d 179, 2 P.3d 27; City of San Jose v. Superior Court, supra, 12 Cal.3d at p. 459, 115 Cal.Rptr. 797, 525 P.2d 701.) In turn, 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, 174 Cal. Rptr. 515, 629 P.2d 23.) Fireside Bank contests only Gonzalez's proof of typicality and superiority. The Court of Appeal identified no abuse of discretion on either basis, and neither do we.
Fireside Bank does not contend that the trial court applied improper criteria or rested its order on erroneous assumptions, only that the order itself is unsupported by substantial evidence. In particular, it contends that Gonzalez cannot represent the class because (1) she has failed to present evidence establishing she has standing and has suffered injury typical of the class, and (2) she is subject to unique defenses not typical of the class. Gonzalez has standing. She, like other members of the putative class, was subjected to the same alleged wrong: deprivation of a fair opportunity to redeem the financed vehicle, followed by an unlawful demand for payment. The record demonstrates Fireside Bank repossessed Gonzalez's vehicle and pursued a deficiency judgment against her. She thus has standing to seek a declaration that Fireside Bank is unlawfully asserting a debt against her, as well as an injunction against all further collection efforts. The record further shows Gonzalez (or someone on her behalf) made a postrepossession payment against the alleged deficiency; upon proof she made that payment, Gonzalez also has standing to seek restitution. [8] We similarly find no abuse of discretion in the trial court's certification of a class over Fireside Bank's insistence that unique defenses apply to Gonzalez. Certification requires a showing that the class representative has claims or defenses typical of the class. ( Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326,17 Cal.Rptr.3d 906, 96 P.3d 194.) The corollary of this, as the federal courts have recognized, is that evidence that a representative is subject to unique defenses is one factor to be considered in deciding the propriety of certification. (E.g., Beck v. Maximus, Inc. (3d Cir.2006) 457 F.3d 291, 296-297; Hanon v. Dataproducts Corp. (9th Cir.1992) 976 F.2d 497, 508; Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (2d Cir.1990) 903 F.2d 176,180 (Gary Plastic Packaging Corp.).) The specific danger a unique defense presents is that the class representative might devote time and effort to the defense at the expense of issues that are common and controlling for the class. (Beck, at p. 297; see also Gary Plastic Packaging Corp., at p. 180[[T]here is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it]; Hanon, at p. 509 [certification properly denied where it is predictable that a major focus of the litigation will be on a defense unique to the putative representative].) Contrary to Fireside Bank's assertion, however, a defendant's raising of unique defenses against a proposed class representative does not automatically render the proposed representative atypical. An appellate court reviewing a grant of certification in the face of such defenses must still review the trial court's decision deferentially. (Feder v. Electronic Data Sys. Corp. (5th Cir.2005) 429 F.3d 125, 136-137.) The risk posed by such defenses is the possibility they may distract the class representative from common issues; hence, the relevant inquiry is whether, and to what extent, the proffered defenses are likely to become a major focus of the litigation. ( Beck v. Maximus, Inc., supra, 457 F.3d at p. 301; accord, Hanon v. Dataproducts Corp., supra, 976 F.2d at pp. 508-509; Gary Plastic Packaging Corp., supra, 903 F.2d at p. 180; Koos v. First Nat'l Bank (7th Cir.1974) 496 F.2d 1162, 1164.) Fireside Bank asserts (1) Gonzalez's father threatened the repossessor, depriving Gonzalez of any remedy under Civil Code section 2983.3, subdivision (b)(4), and (2) Gonzalez is subject to an unclean hands defense because she allegedly purchased the van on her father's behalf. Even assuming as true Fireside Bank's factual allegations (cf. Linder v. Thrifty Oil Co., supra, 23 Cal.4th at pp. 443, 97 Cal. Rptr.2d 179, 2 P.3d 27), we discern no factually intensive or legally complex unique defenses that pose any significant risk of diverting Gonzalez's attention from class issues. Civil Code section 2983.3, subdivision (b)(4) alters a buyer's rights only when [t]he buyer or any other person liable on the contract has committed or threatened acts of violence in connection with actual or attempted repossession. Whether Gonzalez's father made threats is a simple factual question; likewise, whether he qualifies as a person liable on the contract may be determined by easy reference to the parties' agreement. The unclean hands defense also presents no threat to usurp a significant portion of Gonzalez's time. The facts underlying it are readily ascertainable, the doctrine is well understood, and the applicability or inapplicability of the doctrine may be resolved without significant distraction from the common class issues at the heart of this case. Fireside Bank objects to inquiry into the substance of these defenses by noting our conclusion in hinder that a court, in determining class certification, should not consider the merits, ( Linder v. Thrifty Oil Co., supra, 23 Cal.4th at pp. 439-443, 97 Cal.Rptr.2d 179, 2 P.3d 27.) But there, we said only that a plaintiff need not establish a likelihood of success on the merits in order to obtain class certification. It does not follow that, in determining whether the criteria of Code of Civil Procedure section 382 are met, a trial or appellate court is precluded from considering how various claims and defenses relate and may affect the course of the litigation, considerations that may overlap the case's merits. (See Hanon v. Dataproducts Corp., supra, 976 F.2d at p. 509 [court may consider evidence which goes to the requirements of [Fed. Rules Civ.Proc.,] Rule 23 even though the evidence may also relate to the underlying merits of the case].) Indeed, in Linder we expressly recognized that whether the claims or defenses of the representative plaintiffs are typical of class claims or defenses was an issue that might necessarily be intertwined with the merits of the case, but which a court considering certification necessarily could and should consider, Linder, at p. 443, 97 Cal.Rptr.2d 179, 2 P.3d 27; see Hardy v. City Optical Inc. (7th Cir.1994) 39 F.3d 765, 770 [rejecting challenge to typicality based on arguable unique defense on basis that defense was not arguable in light of defendants' factual concessions].) In sum, Fireside Bank's proffered defenses are neither factually intensive nor legally complex and do not threaten to consume an inordinate amount of time and become a major focus of the litigation. The trial court did not abuse its discretion in concluding Gonzalez's claims are typical of the class she seeks to represent.
Fireside Bank contends a class action is not superior to other means of proceeding because this action could proceed more efficiently as a non-class representative action under the UCL. Fireside Bank concedes this argument rests on the premise that Proposition 64, approved by the voters at the November 2, 2004 General Election, [9] does not apply retroactively to this case and thus that the streamlined pre-Proposition 64 UCL procedures are still available and would provide a simpler alternative. As we have recently held, Proposition 64 does apply retroactively to cases such as tins one that were filed before its passage but are still pending postenactment. (Californians for Disability Rights v. Mervyn's, LLC, supra, 39 Cal.4th at p. 227, 46 Cal.Rptr.3d 57, 138 P.3d 207.) Thus, pre-Proposition-64 UCL procedures are unavailable, and Fireside Bank's argument fails.