Posts belonging to Category Certification Rulings

District Court Judge William Q. Hayes, of California’s Southern District, has certified a class of consumers alleging that the popular retailer, IKEA, violated California’s Song-Beverly Credit Card Act by asking customers to provide their ZIP codes during credit card transactions.  See Yeoman v. IKEA U.S. West, Inc., No. 11-701 (S.D. Cal. May 4, 2012) (order on motion to certify) (available here).  The Song-Beverly Act specifically prohibits asking consumers for “personal information” (which includes ZIP codes) as a condition of consummating a credit card transaction.

In opposing certification, IKEA presented evidence that many customers voluntarily provided their ZIP codes to IKEA outside of credit card transactions, thus removing those individuals from the ambit of a violation of the Song-Beverly Act.  IKEA argued that, since the class would likely include some of these customers, Plaintiffs’ proposed class definition was overbroad.  Judge Hayes rejected this argument, holding the class definition to be “not overbroad.”  Order at 5-6.

As to the often-pivotal class action prerequisite that common questions of law or fact predominate over individual issues, the court concluded that “Plaintiff has shown that common questions of law and fact predominate over other issues in this case on the grounds that IKEA’s uniform policy and practice of requesting personal identification information from customers during credit card transactions can be evaluated to determine if the Song-Beverly Credit Card Act was violated.”  Order at 13.

Finally, though it did not affect the class certification ruling, the court sought supplemental briefing as to the utility of multiple firms functioning as class counsel on behalf of the named plaintiffs and absent class members.  See Order at 15.

Citing the California Supreme Court’s recent Brinker decision, Judge John A. Kronstadt has certified a class of approximately 1300 insurance adjusters who alleged misclassification and related wage violations by their employer, the insurance company Allstate, including off-the-clock work, unpaid overtime, and untimely final wages. See Jimenez v. Allstate Ins. Co., No. 10-08486 (C.D. Cal. Apr. 18, 2012) (order on motion to certify class action) (available here). Judge Kronstadt employed the Brinker court’s reasoning, which resulted in the denial of certification of the off-the-clock class in that case, to certify the Jimenez off-the-clock class. Order at 10-11. Unlike the situation in Brinker, although Allstate had facially compliant policies, Judge Kronstadt found that there was an informal systematic company policy to pressure or require employees to work off-the-clock. Id.

Jimenez is notable both in its application of substantive state law as articulated in Brinker and its adherence to the (still relatively new) class certification procedural criteria set forth in Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011). In considering the plaintiffs’ allegation that Allstate, notwithstanding its written policies compliant with California overtime laws, “turn[ed] a ‘blind eye’ to unpaid overtime actually worked” (Order at 8-9), the Jimenez court found that whether Allstate had an “unofficial policy” of discouraging the reporting of (and compensation for) overtime work constituted a common question capable of class-wide adjudication (Order at 9). As in Brinker, the existence of facially compliant policies did not suffice to establish compliance with the law: “Although Defendant has presented testimony that its official policies are lawful, this showing does not end the inquiry. Plaintiff’s theory is that Defendant has a common practice of not following its official policy regarding overtime.” Order at 10.

Jimenez thus follows the Brinker holding that employers may not insulate themselves from liability by issuing a compliant written policy but failing to follow either that policy or the applicable law the policy purports to reflect.

District Court Judge Christina A. Snyder of the Central District of California has granted certification of two consumer subclasses in an action alleging that L’Oreal failed to warn consumers of the flammability of its Garnier Fructis Sleek & Shine Anti-Frizz Serum.  See Guido v. L’Oreal, USA, No. 2:11-cv-01067 (C.D. Cal. May 7, 2012) (available here).

The ruling is notable in part because the defendants had predicated their opposition to class certification on Dukes v. Wal-Mart, 131 S. Ct. 2541 (2011).  Despite adhering to the “rigorous analysis” mandated by Dukes, Judge Snyder nevertheless found that the plaintiffs had established each of the Rule 23 class certification requirements.  Guido, No. 2:11-cv-01067 at *4, n.4 (citing Ellis v. Costco Wholesale Corp., 657 F.3d 970, 980 (9th Cir. 2011) (citing Dukes, 131 S. Ct. at 2551)).

Although L’Oreal has vowed to challenge the still “tentative” certification ruling, Judge Snyder’s comprehensive order reflects that the parties have already argued the pivotal legal issues.  For instance, Judge Snyder rejected the defendants’ contention that the plaintiffs lacked Article III standing, on grounds that the plaintiffs “would have paid less than [Sleek & Shine’s] retail price or would not have purchased it at all,” had they been forewarned of the product’s flammability.  Guido, No. 2:11-cv-01067 at *8.  As such, the plaintiffs had adequately alleged a cognizable “economic injury.”  Slip op. at 7.

Additionally, the certification ruling adds to the long line of state and federal cases holding that, under California’s Unfair Competition Law, “‘a presumption or at least an inference[] of reliance arises whenever there is a showing that a misrepresentation was material’”  Slip op. at 8-9 (quoting In re Tobacco II Cases, 46 Cal. 4th 298, 326–27 (2009).  Thus, “so long as plaintiffs establish that defendants’ omissions and misrepresentations are ‘material,’ they may bring a UCL claim on behalf of a class without individualized proof of reliance.”  Slip op at 9 (quoting In re Tobacco II, 46 Cal. 4th 326-27).  See also Wolph v. Acer, 272 F.R.D. 477 (N.D. Cal. Mar. 25, 2011) (class-wide reliance presumed from showing that misrepresentation would be material to a reasonable consumer).

In a major victory for consumers, the Sixth Circuit Court of Appeals has upheld the multi-district certification of a class of consumers alleging that their Whirlpool washers accumulate mold and mildew, leaving laundry malodorous and ruined. See Glazer v. Whirlpool Corp., No. 10-4188 (6th Cir. May 3, 2012) (order affirming certification) (available here).

After the district court granted certification, the defendant appealed, arguing that the class representatives could not demonstrate the predominance of common questions of law or fact, chiefly because the lawsuit was comprised of at least 21 different models of washers. However, the Sixth Circuit panel sided with the district court on the commonality issue.

Likewise, the Sixth Circuit rejected the defendant’s contention that the class definition was overly broad because not every class member experienced the same harm (and some class members experienced no harm, and were happy with their washers). The panel found that, so long as the challenged practice is generally applicable to the entire class, class treatment is appropriate.