Opinion ID: 2345453
Heading Depth: 1
Heading Rank: 7

Heading: Class CertificationCommonality Requirement

Text: Finally, we must determine whether common issues of fact and law predominate among members of the class certified by the trial court such that the certification was proper. The standard for review of a trial court decision to certify a class is well established. Class certification is a mixed question of law and fact. Kelly v. County of Allegheny, 519 Pa. 213, 546 A.2d 608, 610 (1988); Bell v. Beneficial Consumer Disc. Co., 465 Pa. 225, 348 A.2d 734, 739 (1975). A trial court's order granting class certification will not be disturbed on appeal unless the court erred as a matter of law by neglecting the requirements listed in Rules 1702 and 1708 of the Pennsylvania Rules of Civil Procedure or abused its discretion in applying them. Kelly, 546 A.2d at 610. According to these Rules, a viable class action must meet several prerequisites including, inter alia, that its claims present questions of law or fact common to the class and that the class action method of adjudication is fair and efficient. Pa. R.C.P. 1702(2), (5) (emphasis added). The class action method of adjudication is fair and efficient if the common questions of law or fact predominate over any question affecting only individual members. Pa. R.C.P. 1708(a)(1) (emphasis added). Here, the trial court was correct to hold that Appellee met its burden to show that there were questions of law and fact common to the class. Pa.R.C.P. 1702(2). See Baldassari v. Suburban Cable TV Co., 808 A.2d 184, 191 (Pa.Super.2002), appeal denied, 573 Pa. 694, 825 A.2d 1259 (2003) (requirement of class certification that there exist a common question of fact means precisely that the facts must be substantially the same so that proof as to one claimant would be proof as to all). According to the complaint, the following conduct harmed all the members of the class. Appellants entered into a series of tacit service contracts with the members of the class that relied on the MRA to supply the price term depending on the type of medical records copied. [11] As a matter of company policy, Appellants billed copies from electronic records at rate M. The only question according to Appellee was whether billing rate M for electronic records violated the MRA. If the conduct violated the MRA then Appellants are liable for breaching the contracts. Under Pennsylvania law, these allegations are sufficient to show that the trial court did not err or abuse its discretion in determining that the class met the commonality requirement. Pa.R.C.P. 1702(2); see Janicik v. Prudential Ins. Co., 305 Pa.Super. 120, 451 A.2d 451, 457 (1982) (holding that common questions generally exist if the class members' legal grievances arise out of the same practice or course of conduct on the part of the class opponent); see also Eisen v. Independence Blue Cross, 839 A.2d 369, 372 (Pa.Super.2003) (holding that no common questions of law and fact exist where each question of disputed fact has a different origin, a different manner of proof and to which there are different defenses). Appellants challenge the conclusion that the elements to prove liability on Appellee's breach of contract claim are common to all members of the class and argue that issues of fact and law regarding contract formation, terms, and defenses are individual to each member of the class. In addition, they claim that these individual issues predominate so that proceeding as a class action is not fair and efficient. Appellants assert that it is an individual inquiry whether each member of the class entered into a contract with the price term fixed at the MRA limits rather than a negotiated rate. Appellants posit that some or all members of the class negotiated rate M or, in the alternative, that they were not deceived by the descriptions in the invoices so that they knowingly accepted rate M for copies from electronic records. Appellants also argue that it is an individual inquiry whether the members of the class knew or should have known that they were legally entitled to a lower rate but voluntarily paid rate M. Appellants' Brief at 32-56. Appellee responds that common issues of law and fact predominate because liability arises in every case out of Appellants' uniform overbilling. According to Appellee, the sole inquiry before us is whether copies from electronic records should have been billed at rate D or rate M. Record requesters who expressly negotiated their rates are not included in the class so issues relevant only to them should not be considered. Appellee's Brief at 14-26. We agree with Appellee. First, we reject Appellants' contention that individual issues predominate because some of the class members negotiated their own rates. On its face, the class certified by the trial court does not include record requesters who negotiated their own rates because they were not, by definition, overcharged. The class only includes persons who agreed to MRA pricing and were charged rate M for copies from electronic records. [12] Second, Appellants seek reversal on the ground that persons other than attorneys are included in the class. Without support in the record, they list four categories of persons that they believe would be included in the class unintentionally. In spite of Appellants' spirited argument, we fail to see how different types of class members defeat class certification as long as their claims arise from the same conduct. Pa.R.C.P. 1702(2); Janicik, 451 A.2d at 457. Third, Appellants argue the class was not properly certified because each individual claim is based on different invoices, all presumptively with an implied price term contrary to the stated price term. The basis of the argument is the assumption that the invoices are the contracts between the parties, each with a stated price term. Appellants claim that each member of the class agreed to the price term stated in the invoice so that they may not argue they were overcharged. Appellants' Brief at 40. As our previous analysis shows, Appellants start from the wrong assumption. Here, as to each member of the class, the existence of a contract is implied from the parties' conduct. See supra at 8; Elias, 237 A.2d at 217; Eagle, 604 A.2d at 254. The parties' conduct also indicates that they intended the MRA to supply the price; the price varied depending on the nature of the records copied. The invoices are additional proof that such contracts existed and that the price term was meant to be governed by the MRA, as the billing rates tracked the MRA (though misrepresenting the type of record copied). Thus, whether the parties formed a contract and to what price they agreed is not, as Appellants suggest, an individual inquiry into the content of the invoices. Rather, it is a uniform inquiry into the conduct of Appellants which is common to all the members of the class. Further, no individual inquiry is required into whether each member of the class relied on Appellants' misrepresentations. Appellants claim that whether each member of the class can obtain relief depends on whether each can prove that they relied on Appellants' description of electronic records as fiche. We recognize that the class stated several causes of action arising from Appellants' misrepresentations, including for breach of contract, fraud, and a violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL). The trial court, however, dismissed the fraud and UTPCPL claims of the class on preliminary objections and allowed only the breach of contract claim to proceed. In the cases cited by Appellants, the claims addressed by the courts were for common law fraud or under the UTPCPL. See Toy v. Metropolitan Life Ins. Co., 593 Pa. 20, 928 A.2d 186 (2007) (holding that to establish a claim under the UTPCPL, plaintiff had to prove the same elements as for a common law fraud claim, including justifiable reliance); Weinberg v. Sun Co., 565 Pa. 612, 777 A.2d 442 (2001) (same); Klemow v. Time Inc., 466 Pa. 189, 352 A.2d 12, 16 n. 17 (1976) (stating that [t]he successful maintenance of a cause of action for fraud includes, inter alia, a showing that the plaintiff acted in reliance on the defendant's misrepresentations). The analysis of courts in those cases is not applicable because reliance, or justifiable reliance more specifically, is not an element that the class must prove to recover for a breach of contract. Ferrer, 825 A.2d at 610 (holding that to recover for a breach of contract, a plaintiff must prove that a contract exists, that the contract was breached, and that the breach caused the plaintiff damages). Thus, Appellants' arguments to the contrary notwithstanding, issues of reliance do not prevent class certification. Fourth, Appellants claim that whether each member of the class can overcome the voluntary payment defense is an individual issue of law and fact. According to Appellants, each member of the class must prove it did not know that the quoted term violated the MRA so as to obtain relief for breach of contract. Appellants' Reply Brief at 16. As we noted above, the doctrine of voluntary payment does not bar Appellee's claims because, when it paid, Appellee did not know that it was paying for copies from electronic and not microfilm records. [13] All other members of the class were in the same position as Appellee, having received misleading bills. Hence, they also could not have consented to pay a rate higher than the MRA permits, as they would have had no way of knowing that the Appellants were actually producing copies from electronic rather than microfilm records. See Liss & Marion, P.C., 937 A.2d at 510 (noting that the class does not include record requesters who gave prior approval for higher rates). No individual inquiry is necessary as to each member of the class regarding Appellants' proposed defense. Finally, Appellants argue that the class should not have been certified because some of the members passed on the costs of reproducing medical records to their clients and did not have any damages. [14] Appellants' Brief at 45. Class members may assert a single common complaint even if they have not all suffered actual injury; demonstrating that all class members are subject to the same harm will suffice. Baldassari, 808 A.2d at 191 n. 6. Here, all class members suffered damages when they were overbilled and paid those bills. It is a separate matter whether any class members who passed along improperly augmented copying costs to their clients will ultimately be required to indemnify those clients upon recovery in the present litigation. Indeed, it is notable that Appellee conceded during proceedings in the court of common pleas that such class members would, in fact, have such a duty of indemnification. N.T., 05/03/2004, 72. Accordingly, Appellants' passing-on defense does not undermine class certification. See Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 489, 490 n. 8, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968) (rejecting a so-called passing-on defense in the context of antitrust litigation).