Court Opinion

ID: 4635915
Source: CourtListenerOpinion
Date Created: 2020-11-24 21:00:33.7854+00
Date Added: 2024-06-11T07:58:27.266488
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       NOV 24 2020
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

SELENA MOORER; et al.,                          No.    19-56500

                Plaintiffs-Appellees,           D.C. No.
                                                3:16-cv-02816-AJB-AHG
 v.

STEMGENEX MEDICAL GROUP, INC., a                MEMORANDUM*
California Corporation; et al.,

                Defendants-Appellants.

                  Appeal from the United States District Court
                     for the Southern District of California
                  Anthony J. Battaglia, District Judge, Presiding

                    Argued and Submitted November 10, 2020
                              Pasadena, California

Before: PARKER,** CHRISTEN, and WATFORD, Circuit Judges.

      The district court certified two subclasses, consisting of StemGenex

customers who “visit[ed] www.stemgenex.com when the website contained Patient

Satisfaction Ratings and/or . . . receiv[ed] an email from StemGenex with Patient

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable Barrington D. Parker, Jr., United States Circuit Judge
for the U.S. Court of Appeals for the Second Circuit, sitting by designation.
                                                                             Page 2 of 5

Satisfaction Ratings,” before and after the addition of a disclaimer. We hold that

the subclass definitions must be modified to limit the class to those who actually

saw the Patient Satisfaction Ratings (PSRs), but that the district court’s

certification order was otherwise proper.

      1. The district court correctly held that Rule 23(a)’s commonality

requirement was satisfied. Fed. R. Civ. P. 23(a)(2). There are at least two

common questions: (1) whether StemGenex misrepresented the PSRs, and (2)

whether the misrepresentation was likely to deceive a reasonable consumer. The

answers to those questions would “resolve an issue that is central to . . . the claims

in one stroke.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). The

district court correctly concluded that the claims arise from a uniform

misrepresentation: Throughout the class period, the PSRs consistently represented

that 100 percent of StemGenex’s patients reported that the overall experience met

or exceeded their expectations.

      2. The district court also properly held that Rule 23(a)’s typicality

requirement was met. Fed. R. Civ. P. 23(a)(3). The named plaintiffs’ claims arise

from the same injury, based on the same legal theory, as the claims of the rest of

the class. Neither Jennifer Brewer’s nor Alexandra Gardner’s circumstances

render them vulnerable to “unique defenses which threaten to become the focus of

the litigation.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992)
                                                                              Page 3 of 5

(quoting Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith,

Inc., 903 F.2d 176, 180 (2d Cir. 1990)).

      3. As to the requirements of Rule 23(b)(3), the district court correctly held

that predominance was satisfied. Fed. R. Civ. P. 23(b)(3). Common questions as

to whether the PSRs were a material misrepresentation predominate over any

individualized issues. Significantly, the California consumer protection statutes

rely on an objective test that asks whether members of the public are likely to be

deceived, obviating the need for inquiry into each class member’s circumstances.

In re Tobacco II Cases, 207 P.3d 20, 29 (Cal. 2009). Moreover, these statutes

allow plaintiffs to establish reliance and causation by showing that the class was

exposed to a material misrepresentation. Id. at 39. The district court properly

admitted Dr. Kamins’s expert testimony for purposes of establishing the

materiality of the PSRs. Thus, the individualized factors that went into class

members’ decisions to undergo stem cell therapy are largely irrelevant.

      The defendants’ argument that predominance fails because damages cannot

be measured on a classwide basis is without merit. With the revisions required by

the district court, Dr. Stewart’s model is sufficiently tied to the alleged

misrepresentation and theory of injury to satisfy the standard set out in Comcast

Corp. v. Behrend, 569 U.S. 27, 34–35 (2013).

      4. The district court did not err in certifying a nationwide class. The
                                                                           Page 4 of 5

plaintiffs met their initial burden of showing that California has a “significant

contact or significant aggregation of contacts” to the claims of each class member.

Mazza v. Am. Honda Motor Co., 666 F.3d 581, 589 (9th Cir. 2012) (quoting Wash.

Mut. Bank v. Superior Ct., 15 P.3d 1071, 1080 (Cal. 2001)). StemGenex is

headquartered in California, it produced all of the alleged misrepresentations in

California, and all but 78 of 1,415 patients were treated in California. Defendants

have made no argument as to why another state’s law, rather than California law,

should apply.

      5. The classes as currently defined, however, are overbroad. The district

court stated that it intended to certify subclasses of StemGenex customers who saw

the PSRs. But the subclass definitions include anyone who visited the website

when it contained the PSRs or who received an email with the PSRs. It is possible

that someone who visited the website failed to scroll down the homepage to view

the PSRs; the same is true of the emails. A class that includes those who never

saw the alleged misrepresentation is overbroad because those persons were, by

definition, not injured and cannot recover. Sevidal v. Target Corp., 189 Cal. App.

4th 905, 925–26 (2010). Thus, on remand, the district court should conform the

subclass definitions to the descriptions it provided earlier in the order: Subclass A

as those who saw the PSRs without the disclaimer and Subclass B as those persons

who saw the PSRs with the disclaimer.
                                          Page 5 of 5

VACATED and REMANDED.

The parties shall bear their own costs.