PHYLLIS J. HAMILTON, District Judge.
On August 5, 2015, plaintiff's motion for certification of a California class came on for hearing before this court. Plaintiff Nad Karim ("plaintiff") appeared through his counsel, Jenelle Welling. Defendant Hewlett-Packard Company ("defendant" or "HP") appeared through its counsel, Samuel Liversidge and Blaine Evanson. Having read the papers filed in conjunction with the motion and carefully considered the arguments and the relevant legal authority, and good cause appearing, the court hereby rules as follows.
This suit arises out of plaintiff's purchase of a laptop computer from HP's website. Plaintiff alleges that HP made misrepresentations regarding the computer's wireless card (used to connect to the Internet), and brings this suit on behalf of himself and all others similarly situated. The operative first amended complaint ("FAC") asserts two causes of action, one for breach of express warranty, and one under California's Consumers Legal Remedies Act ("CLRA"), but plaintiff seeks certification only as to the warranty claim.
Plaintiff alleges that, on November 22, 2010, he visited HP's website, which allows customers to customize and purchase computers directly from HP. FAC, ¶ 10. When choosing the customizable components, customers may click on a "help me decide" (or "HMD") button that provides more detailed information about the choices available to the customer.
Plaintiff alleges that "[w]hen he got to the section to select a wireless card, he read HP's description of the wireless card." FAC, ¶ 11. HP represented that the wireless card option for his base model would operate on both the 2.4 GHz and the 5.0 GHz frequencies.
Plaintiff previously moved for certification of a nationwide class, but the court denied the motion for failure to meet the "predominance" requirement of Rule 23(b)(3).
Excluded from the class are purchasers who returned their computers, purchasers whose computers were equipped with a dual-band wireless card, and purchasers of the dv5t computers who selected a wireless card requiring an additional payment.
"Before certifying a class, the trial court must conduct a `rigorous analysis' to determine whether the party seeking certification has met the prerequisites of Rule 23."
The party seeking class certification bears the burden of affirmatively demonstrating that the class meets the requirements of Federal Rule of Civil Procedure 23.
Rule 23(a) requires that plaintiffs demonstrate numerosity, commonality, typicality and adequacy of representation in order to maintain a class. First, the class must be so numerous that joinder of all members individually is "impracticable."
If all four prerequisites of Rule 23(a) are satisfied, the court then determines whether to certify the class under one of the three subsections of Rule 23(b), pursuant to which the named plaintiffs must establish that either (1) that there is a risk of substantial prejudice from separate actions; or (2) that declaratory or injunctive relief benefitting the class as a whole would be appropriate; or (3) that common questions of law or fact common to the class predominate and that a class action is superior to other methods available for adjudicating the controversy at issue.
The court does not make a preliminary inquiry into the merits of plaintiffs' claims in determining whether to certify a class.
As mentioned above, plaintiff has moved for class certification once before — the previous motion sought certification of a nationwide class, whereas the current motion seeks certification of a California-only class. In denying the previous motion, the court found that all four of the Rule 23(a) factors were met, and that the "superiority" requirement of Rule 23(b)(3) was met, but that Rule 23(b)(3)'s "predominance" requirement was not met. Specifically, the court found that California law could not be applied to a nationwide class, because a conflict existed between California's express warranty law and that of other states, and that the interests of those other states outweighed California's interest in applying its laws on a nationwide basis. Thus, because California law could not be used on a classwide basis, individual questions of law would predominate over common ones.
By narrowing the putative class to include only California residents, plaintiff has attempted to remedy the problem that resulted in the previous motion's denial. However, defendant's opposition raises a number of new issues, most of which are directed at the "predominance" prong. The court will begin its analysis there.
Defendant's central argument regarding "predominance" is that "plaintiff cannot show through common proof that the challenged statement formed a basis for each putative class member's bargain." This argument is similar, though not exactly the same, to an argument that defendant presented in opposition to the previous class certification motion. At that time, defendant argued that California's express warranty law required plaintiff to show reliance on the challenged statement, and that reliance could not be shown on a classwide basis. Defendant no longer argues that plaintiff must show reliance, and instead, now argues that plaintiff must establish exposure to the challenged statement. However, because the "reliance"-related precedent is relevant to the "exposure"-related argument, the court finds it useful to revisit its prior discussion regarding reliance:
Dkt. 78 at 7-9.
Again, to be clear, defendant is no longer contending that "reliance" is an element of plaintiff's express warranty claim. However, its "exposure" argument is based on the same provision of California Civil Code § 2313 discussed at length above, which provides that "[a]ny affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise." Defendant argues that, in order for a statement to become "part of the basis of the bargain," a plaintiff must show that he was exposed to the challenged statement.
For support, defendant cites to
The facts of
Dentsply contended that the challenged statement could not have been "part of the basis of the bargain" because it was found only in the Directions for Use, which were sealed in the product's package. The court rejected that argument as follows: "Dentsply reasons that because the Directions were not available until delivery and the `purchase decision had already been made,' appellants cannot prove that they saw and read the statements prior to the purchase and thus their breach of express warranties claims are doomed. Not so."
The
The
That said,
The survey is described in the declaration of Dr. Tom Meyvis.
However, there are a number of problems with the survey data. The first is the fact that the survey was conducted between April and May 2015, whereas the purchases at issue occurred between January 2010 and April 2011 — approximately five years earlier. Thus, the reliability of the respondents' memory must be taken into account when considering the survey evidence. Although Dr. Meyvis attempts to address this concern by explaining that the survey "helped respondents reconstruct their purchase decision by walking them through the purchase process," which served to "plac[e] respondents back in their purchase mindset" and "reactivat[e] their goals" (Dkt. 131-11, ¶ 41), the fact remains that five-year-old memories relating to wireless card specifications are not likely to be reliable, despite Dr. Meyvis' best attempts.
The second problem relates to the "adjustment for false positives" mentioned above. The details of the adjustment are not discussed in defendant's opposition brief, but they can be found buried within the Meyvis declaration. Dr. Meyvis explains that 30.7% of the respondents actually reported remembering the challenged "help me decide" language, but that 22.3% also reported recognizing "entirely fictional and nonsensical language" for another laptop component. Dkt. 131-11, ¶ 16. Dr. Meyvis thus characterized the 22.3% as a false positive response rate, subtracted it from the 30.7%, and ended up with the 8% figure quoted in defendant's brief.
In the court's view, the fact that such a significant percentage (22.3%) of respondents reported remembering language that, in addition to never being on HP's website, is "nonsensical" (described by Dr. Meyvis as presenting concepts that "were not meaningful in any context") undermines the reliability of the survey evidence, especially when coupled with the fact that the survey was conducted five years after the purchases at issue. Indeed, if nearly one-quarter of respondents recalled seeing language that was not only fictional — but nonsensical — what is the basis for believing that the remaining respondents had memories that were any more reliable? The court finds it transparently self-serving for defendant to assume that the 69.3% of respondents who did not recall seeing the challenged language have reliable memories, while discarding the majority of the remaining 30.7% of respondents as unreliable. Put another way, even when faced with the finding that 73% of all positive responses were false positives
Defendant attempts to bolster the probative value of the new survey by combining it with website tracking data collected during "an interval that includes the putative class period." Dkt. 131-11, ¶ 80. According to defendant, when the survey evidence is combined with the website tracking evidence, one is able to conclude that "at least 85% of the putative class could not have possibly been exposed to the language at issue."
Again, in discussing this website tracking data, defendant leaves out important details. The website data cited by defendant was already submitted to the court in connection with the first motion for class certification, and was addressed in the court's previous order:
Dkt. 78 at 6.
In other words, the fact that defendant's website tracking data included all website visitors — not just purchasers — meant that it fell short of clearly, affirmatively proving that the actual class members did not see the challenged representation. While that problem remains, defendant's evidence also faces a new problem on this motion — the fact that the website tracking data is not limited to website visitors within California. Thus, the website tracking data is now overbroad in two respects: (1) it includes all website visitors, not just purchasers, and (2) it includes visitors from the entire country, not just California.
Defendant attempts to remedy these deficiencies by combining the website tracking data with the survey data (which was limited to actual purchasers within California), but the court has already explained the reasons for questioning the reliability of the survey data. Simply put, if defendant were able to present evidence showing that many of the actual class members did not actually click on the relevant "help me decide" screen when making their purchase, they would have a strong argument against certification. Instead, it proffers unreliable or tangentially-relevant evidence, which falls short of the "clear affirmative proof" needed to show that the class members were not actually exposed to the relevant representation. Thus, while defendant undoubtedly retains the right to present evidence on its affirmative defense of non-exposure, its attempt to rebut a finding of predominance by showing that individual issues will predominate over common ones fails.
Defendant also raises a challenge to predominance that is separate from the "exposure" argument; namely, that "consumers in fact expected to receive single-band cards." Defendant emphasizes that "it is undisputed that HP never used the words `dual-band' in connection with the single-band wireless card." True enough, but it is also undisputed that HP claimed that the wireless cards would function on the 5 GHz band or the 802.11a wireless protocol, and undisputed that the wireless cards did not actually have that functionality. The term "dual-band" is merely a way to collectively refer to those two challenged statements. Defendant also repeats an argument that it made during the previous class certification motion — that the word "most" in one of the challenged representations saved the statement from being false. The court addressed the issue as follows:
Dkt. 78 at 7.
Defendant further argues that different customers may have had different interpretations of the challenged language, and that the presentation of such evidence would be impossible in a class action. Defendant again points back to the survey evidence, noting that only 13% of respondents reported receiving wireless cards without expected functionality. These arguments miss the point made in
Defendant's final challenge to predominance is based on the "notice" element of an express warranty claim. Defendant argues that, "because reasonable notice is an issue of fact that must be determined from the particular circumstances in each individual case," the issue of whether the notice was sufficient "is a predominantly individual inquiry." Dkt. 131 at 25 (internal quotations omitted). The court addressed this argument as part of its previous class certification order, finding that "even if the notice is not sufficient, the sufficiency issue would be common to the entire class." Dkt. 78 at 10.
Having addressed the arguments raised by defendant, the court finds that plaintiff has indeed established that common issues would predominate over individual ones. Each putative class member customized and purchased a laptop computer, in California, during the time period when the challenged "help me decide" language was available on the website, and received a computer equipped with a wireless card that did not have the promised functionality.
The court will now address the Rule 23(a) factors. First, as to numerosity, the court previously found this factor met with respect to a proposed nationwide class, and finds that it is also met with respect to the narrowed California class, which still includes purchasers of 42,000 computers.
Second, as to commonality, defendant argues that its "new survey confirms that the proposed class is filled with thousands of consumers who never saw the HMD language, did not interpret that language to promise a `dual-band' card, do not know what a dual-band card is, and never intended to purchase a dual-band card." Dkt. 131 at 23. The court has already addressed the unreliability of the survey evidence above, and further notes that these arguments relate more to predominance than to commonality.
To establish commonality, plaintiff need not show that "every question in the case, or even a preponderance of questions, is capable of class wide resolution. So long as there is `even a single common question,' a would-be class can satisfy the commonality requirement of Rule 23(a)(2)."
Given this standard, the court finds that the commonality requirement is met. Each putative class member purchased a laptop computer, in California, from defendant's website, during a time when a challenged representation (either describing the laptop's wireless card as capable of operating on the 5 GHz band or on the 802.11a wireless protocol) was available to the buyers on the website. Each putative class member also suffered a common injury when they received a wireless card that was incapable of the promised functionality. That is more than sufficient to establish commonality.
As to typicality, the court previously found that plaintiff's claims were typical of those of the class, and defendant presents no argument as to why the court should re-visit that finding. Thus, the court finds that the typicality requirement is met.
Finally, as to adequacy, defendant argues that both the plaintiff and his counsel are inadequate. Defendant first points to the fact that, while the complaint pleaded a claim under the CLRA, plaintiff's counsel "unilaterally decided not to pursue certification of the CLRA claim," even though a CLRA claim "offers a broader range of damages than express warranty claims (including potential punitive damages and attorneys' fees)." Presumably, defendant does not contend that punitive damages are appropriate in this case, nor does the court have any basis to find as much. Thus, the court cannot find that the choice to forego punitive damages was contrary to the interests of the class. Similarly, defendant has not provided any basis to find that the decision not to pursue attorneys' fees under a CLRA class claim was contrary to the interests of the class.
Defendant also argues that plaintiff "disregards the interests of putative plaintiffs with respect to damages," specifically, incidental and consequential damages. Defendant points out that plaintiff claims to have incurred incidental and consequential damages, but "presumably recognizing that such damages are not susceptible of measurement across the entire class for purposes of Rule 23(b)(3) by common proof," plaintiff "simply dropped them on behalf of the class." The facts alleged by defendant suggest that plaintiff may have given up his own right to incidental and consequential damages, but defendant provides no basis on which to find that plaintiff's decision was contrary to the interests of the class, as there is no indication that any of the absent class members actually incurred incidental or consequential damages. Thus, the court finds that the adequacy requirement is met.
Turning to Rule 23(b)(3), and having already addressed the "predominance" requirement, the remaining question is whether plaintiff has shown that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. Defendant's argument against class treatment is based on its survey evidence, the unreliability of which is addressed above. The court previously found that the superiority requirement was met, and finds no basis on which to re-visit that finding.
Finally, defendant argues that the proposed class is overbroad and unascertainable. This argument is largely preemised on defendant's overly-stringent view of the "exposure" requirement under
Having found the requirements of Rule 23(a) and Rule 23(b)((3) met, the court GRANTS plaintiff's motion for certification of a California class.
