Court Opinion

ID: 9415022
Source: CourtListenerOpinion
Date Created: 2023-08-02 18:01:01.600185+00
Date Added: 2024-06-11T17:20:21.009852
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        AUG 2 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

AUDREY HEREDIA, as successor-in-                  No. 22-55332
interest to the Estate of Carlos Heredia; et al.,
                                                  D.C. No.
                 Plaintiffs-Appellees,            8:18-cv-01974-JLS-JDE

 v.
                                                MEMORANDUM*
SUNRISE SENIOR LIVING, LLC;
SUNRISE SENIOR LIVING
MANAGEMENT, INC.,

                Defendants-Appellants.

                   Appeal from the United States District Court
                       for the Central District of California
                   Josephine L. Staton, District Judge, Presiding

                       Argued and Submitted July 11, 2023
                              Pasadena, California

Before: SANCHEZ and MENDOZA, Circuit Judges, and DONATO,** District
Judge.

      Defendant-appellants Sunrise Senior Living LLC and Sunrise Senior Living

Management, Inc. (Sunrise) appeal from the district court’s order denying

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable James Donato, United States District Judge for the
Northern District of California, sitting by designation.
Sunrise’s motions to strike expert testimony and certifying a class of Sunrise

residents to pursue claims under California’s (i) Consumers Legal Remedies Act

(CLRA), (ii) Unfair Competition Law (UCL), and (iii) elder financial abuse

statute. We have jurisdiction under 28 U.S.C. § 1292(e) and Federal Rule of Civil

Procedure 23(f), and review the district court’s rulings for an abuse of discretion.

See Elosu v. Middlefork Ranch Inc., 26 F.4th 1017, 1023 (9th Cir. 2022); Senne v.

Kansas City Royals Baseball Corp., 934 F.3d 918, 926 (9th Cir. 2019). We affirm.

      We find no abuse of discretion in the denials of the motions to strike the

declarations of plaintiffs’ experts. Plaintiffs adduced evidence that care manager

target hours generally correspond to the actual care delivered to residents, and the

district court correctly concluded that Sunrise’s contrary interpretations of the

evidence were not grounds to exclude the expert declarations. See Elosu, 26 F.4th

at 1026.

      The record supports the district court’s finding that Dr. Cristina Flores,

plaintiffs’ staffing expert, relied on peer-reviewed literature, her own task time

studies, and her experience in the field of assisted living care to estimate the time

required to provide services to residents. The district court was well within its

discretion to find that Dr. Flores’s opinions were supported by a reliable

foundation, and it correctly concluded that Sunrise’s criticisms spoke to weight

rather than admissibility. See City of Pomona v. SQM N. Am. Corp., 750 F.3d

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1036, 1044 (9th Cir. 2014) (a district court is not required to “exclude opinions

merely because they are impeachable”) (internal quotation marks omitted).

      The district court did not abuse its discretion in rejecting Sunrise’s

contention that the methodology proposed by plaintiffs’ damages expert, Dr.

Patrick Kennedy, was unreliable because it might award damages to uninjured

class members. A possible need for individualized damages calculations does not

render a damages methodology unreliable and does not defeat class action

treatment. See Leyva v. Medline Indus., 716 F.3d 510, 514 (9th Cir. 2013).

      The district court did not abuse its discretion in finding that the opinions of

plaintiffs’ systems engineering expert, Dale Schroyer, were reliable and relevant.

Sunrise contends that Schroyer’s declarations should have been struck as not

timely disclosed. But Sunrise demonstrates no prejudice from the timing of

disclosure, and “formalistic evidentiary objections” are not a basis to exclude

evidence offered in support of class certification. Sali v. Corona Reg’l Med. Ctr.,

909 F.3d 996, 1006 (9th Cir. 2018).

      The district court appropriately considered the “persuasiveness of the

evidence” to determine that the expert declarations were sufficient to serve as

common proof of understaffing and classwide damages. See Ellis v. Costco

Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011).

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      With respect to Rule 23(b)(3)’s predominance requirement, the district court

did not impermissibly rely on a “risk of harm” theory of classwide injury to gloss

over Article III standing. See TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2210–

11 (2021); Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 31

F.4th 651, 668-69 & n.12 (9th Cir. 2022) (en banc). The district court reasonably

determined that plaintiffs alleged a cognizable economic injury in the form of an

overpayment. See, e.g., Mazza v. Am. Honda Motor Co., 666 F.3d 581, 595 (9th

Cir. 2012); In re Evenflo Co., Inc., Mktg., Sales Pracs. & Prods. Liab. Litig., 54

F.4th 28, 35 (1st Cir. 2022). Plaintiffs adduced sound evidence to show that they

can prove injury on a classwide basis, and that common questions will predominate

with respect to the standing issues in this case.

      Sunrise contends that the predominance requirement was not satisfied

because there is a need for individualized inquiries into what class members were

told about Sunrise staffing and whether class members relied on any of Sunrise’s

alleged misrepresentations. The district court reasonably determined that all class

members were exposed to substantially similar, material representations about

Sunrise staffing through their residency agreements, and thus, plaintiffs could

invoke a rebuttable inference of classwide reliance under California law. See

Stearns v. Ticketmaster Corp., 655 F.3d 1013, 1020, 1022 (9th Cir. 2011),

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abrogated on other grounds by Comcast Corp. v. Behrend, 569 U.S. 27 (2013);

Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979, 985–86 (9th Cir. 2015).

      Predominance was also demonstrated for the elder financial abuse claim.

Sunrise contends that the district court erred in disregarding evidence that, in some

situations, family members may have paid for the care provided to residents. But

the class certified by the district court consists of Sunrise residents who

“contracted with and paid money to [Sunrise] pursuant to a Residency

Agreement.” If future circumstances indicate that the ownership of the funds used

by residents must be evaluated on an individual basis, the district court can revisit

certification with respect to the elder financial abuse claim. See Patel v. Facebook,

Inc., 932 F.3d 1264, 1276 (9th Cir. 2019).

      With respect to Sunrise’s argument that damages cannot be measured on a

classwide basis, the fees paid by each resident are ascertainable from Sunrise’s

business records. Dr. Kennedy opined that facility-wide staffing shortfall

percentages can be used to estimate the value of the services that class members

received and the discounted service level fees they would have paid had they

known of the actual staffing policies. The district court did not abuse its discretion

in finding that this model provided a reasonable “approximation” of the value of

the services received by Sunrise residents, Pulaski, 802 F.3d at 989, and that

plaintiffs had shown that “damages can be determined without excessive difficulty

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and attributed to their theory of liability,” Just Film, Inc. v. Buono, 847 F.3d 1108,

1121 (9th Cir. 2017).

      Dr. Kennedy’s model is sufficiently tied to the theory of injury to satisfy the

standard set out in Comcast, 569 U.S. at 34-35. Plaintiffs demonstrated a “nexus”

between their legal theory and facility-wide staffing shortfall percentages because

they have shown that the service level fees that residents agreed to pay correlate

with the level of staffing they expected to receive. See Nguyen v. Nissan N. Am.,

Inc., 932 F.3d 811, 821 (9th Cir. 2019). The district court did not abuse its

discretion in finding that staffing shortfall percentages are a reasonable “proxy” for

the discount to the price consumers would have been willing to pay at the outset

had they known of the allegedly defective staffing policy. Id.

      AFFIRMED.

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