Author Archives: David Stein

About David Stein

David Stein represents plaintiffs in class action litigation against the country’s largest corporations. He has served as court-appointed lead counsel in various consumer protection class action and multi-district proceedings, and his advocacy at both the trial and appellate levels has resulted in product recalls, permanent injunctive relief, and substantial remuneration for class members.

Ninth Circuit Agrees to Hear Appeal of HP Certification Ruling

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In an earlier post, we wrote about Judge Hamilton’s decision certifying a class in Karim v. Hewlett-Packard.  The decision spoke to the level of exposure class members need to have to representations that allegedly formed the basis of the bargain for an express warranty.

Update: the Ninth Circuit has granted a Rule 23(f) petition and will consider the decision on appeal.  Judges Canby and Leavy granted the petition.  The caption at the Ninth Circuit is Karim v. Hewlett-Packard Co., No. 16-80000.… Read more

Cal. Court of Appeal Declines to Enforce Online Arbitration Clause

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A few weeks ago, we wrote about the Seventh Circuit’s decision in Sgouros v. TransUnion Corp., declining to compel arbitration because the defendant’s website failed to clearly inform users that they were agreeing to arbitrate their claims.

Around the same time, the California Court of Appeal issued a published opinion reaching a similar conclusion in Long v. Provide Commerce, Inc.  The defendant’s website allows consumers to purchase flower arrangements.  At the bottom of the webpage is a “Terms of Use,” which is viewable via a hyperlink.  Within the Terms of Use was a binding arbitration clause.

The Court of Appeal distinguished “browsewrap” agreements from “clickwrap” agreements, in that “browsewrap agreements do not require users to affirmatively click a button to confirm their assent to the agreement’s terms; instead, a user’s assent is inferred from his or her use of the website.”

Based on the layout of the defendant’s website, the trial court concluded that the Terms of Use hyperlinks were too inconspicuous to impose constructive knowledge on the plaintiff.  The Court of Appeal affirmed, concluding that “the hyperlinks and the overall design of the ProFlowers.com website would not have put a reasonably prudent Internet user on notice of Provide’s Terms of Use, and Plaintiff therefore did not unambiguously assent to the subject arbitration provision simply by placing an order on ProFlowers.com.”
 ***… Read more

Seventh Circuit Approves Class Settlement Over Objections

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Last month, the Seventh Circuit affirmed the final approval of a class settlement that provided both consumer and personal injury remedies.  The objector raised a host of issues and the full opinion is worth reading.  But two points in particular are likely to be informative for future consumer class settlements.

First, the court rejected the argument that variations among state law meant that certification was improper under Rule 23(b)(3).  The court began by reviewing Bridgestone/Firestone and Pella, and explained that it deemed this case to be more like Pella, where the court had found nationwide certification to be appropriate despite such variations.  The court continued:

but there is a stronger reason for supporting the district court’s decision here: the settlement agreement contained a choice‐of‐law clause, which specified the law of Illinois. Martin seems to have overlooked this point, when she asks in her brief, “will variations in claimants’ respective state laws be considered in determining the award?” The short answer is that those variations will not make a difference, because of the choice of a single law.

Second, the court also dealt with the fact that the settlement provided more money, and imposed greater claims burdens, for class members who alleged they had been injured:

As for the general claim that the procedures are too burdensome, we have no reason to disagree with the district court’s assessment to the contrary.

… Read more

Class Certification Granted in Automotive Defect Suit

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Judge Dean D. Pregerson certified the class under Rule 23(b)(3) in a suit alleging an undisclosed defect in certain Nissan vehicles.  The court certified California consumer protection and implied warranty claims, a Washington consumer protection claim, and a claim for common law fraud.  The case is Falco v. Nissan N. Am. Inc., 2016 WL 1327474 (C.D. Cal. Apr. 5, 2016).

Several times, the court relied on the ample Ninth Circuit precedent for certifying automotive defect cases:

The Court finds this case raises similar common questions of fact and law to the common questions alleged in another consumer automobile defect class certification case, Chamberlan v. Ford Motor Co., 402 F.3d 952, 962 (9th Cir. 2005). … In these consumer defect cases, commonality can be found in the very legal and factual question of the defect. See, e.g., id.; see also Wolin v. Jaguar Land Rover N. Am. LLC, 617 F.3d 1168, 1172 (9th Cir. 2010); Doyle v. Chrysler Grp. LLC, No. SACV 13-00620, 2014 WL 7690155, at *6-7 (C.D. Cal. Oct. 9, 2014); Parkinson v. Hyundai Motor Am., 258 F.R.D. 580, 595-96 (C.D. Cal. 2008).

The court also approved Plaintiffs’ two closely-related damages methodologies.  First, class members who already spent money on repairs and diagnoses can be provided restitution based on “the average cost of repair.”  Second, class members who had not already paid for repairs could still receive restitution based on the same figure because

the class would be getting the benefit of their bargain because they would be put in the same position they would have been had the car not been sold with the defective timing chain system — it is the cost necessary to make the vehicles conform to the value Plaintiffs thought they were getting in the price tendered.

… Read more

Third Circuit Becomes First Circuit Court to Analyze Campbell-Ewald

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The Third Circuit’s analysis is brief, but may shed light on whether the post-Cambell-Ewald tactic of “furnishing” full relief – rather than merely offering it – is a distinction with a difference.

The Supreme Court held in Campbell-Ewald that an an unaccepted settlement offer, made to a putative class representative, “has no force” and therefore does not moot the class action.  Since then, at least one court has distinguished Campbell-Ewald on the ground that when a settlement payment is furnished, rather than merely offered, the case may be mooted.  Leyse v. Lifetime Entertainment Servs., No. 13-cv-5794 (S.D.N.Y. Mar. 17, 2016).

The Third Circuit’s ruling Monday in Weitzner v. Sanofi Pasteur, does not directly address the issue, but its language can be read to suggest that the relevant question is not whether a settlement has been furnished, but whether the furnished payment has been accepted:

These holdings [in Campbell-Ewald] resolve the question presented to us on interlocutory review. Because an unaccepted settlement offer “has no force,” it moots neither Plaintiffs’ individual claims nor the case as a whole.

(emphasis added); see also Jacobson v. Credit Control Servs., Inc., 2016 WL 929427, at *1 (10th Cir.… Read more

Seventh Circuit Declines to Enforce Arbitration Provision

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In Sgouros v. TransUnion Corp., the Seventh Circuit recently declined to compel arbitration because the defendant’s website failed to clearly inform users that they were agreeing to arbitrate their claims.  Judge Wood, writing for the majority and interpreting Illinois contract law, framed the analysis:

we might ask whether the web pages presented to the consumer adequately communicate all the terms and conditions of the agreement, and whether the circumstances support the assumption that the purchaser receives reasonable notice of those terms.  This is a fact-intensive inquiry: we cannot presume that a person who clicks on a box that appears on a computer screen has notice of all contents not only of that page but of other content that requires further action (scrolling, following a link, etc.) Indeed, a person using the Internet may not realize that she is agreeing to a contract at all, whereas a reasonable person signing a physical contract will rarely be unaware of that fact. We need, therefore, to look more closely at both the law and the facts to see if a reasonable person … would have realized that he was assenting to the [agreement]….”

Ultimately, the court held that TransUnion had failed to ensure consumers “would see the critical language before signifying [their] agreement.”  The court noted in particular that while a block of bold text told users that clicking on the box constituted their authorization, it said nothing about contractual terms.  … Read more

Judgment Entered: Distinguishing Campbell-Ewald

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The Supreme Court ruled in Campbell-Ewald v. Gomez earlier this year that a defendant may not “pick off” the class representative by offering full individual relief under Rule 68. The holding was believed by many to be the end of the pick off defense.  Maybe not.

In Leyse v. Lifetime Entertainment Servs., No. 13-cv-5794 (S.D.N.Y. Mar. 17, 2016), a court yesterday entered judgment as a result of a defendant’s offer of full judgment.  From the opinion:

Only Leyse’s individual claim remains, for which he can recover $500 in statutory damages, or a maximum award of $1500 if the violation was willful or knowing. … Defendant Lifetime has offered to pay the plaintiff $1,503 .00 plus costs, and moved for entry of judgment in favor of plaintiff and to dismiss the complaint. Leyse has not accepted this offer. … Defendant’s motion to enter judgment on behalf of plaintiff Leyse will be granted upon payment to the Clerk of Court for credit to plaintiff, of the full offered amount and an additional amount of $400 to cover the costs estimated by the Clerk.

(citations omitted.)

How did the district court distinguish Campbell-Ewald?

I do not read Campbell-Ewald to disrupt the Second Circuit’s precedent allowing for the entry of judgment for the plaintiff over plaintiffs objections.

… Read more

More Comcast Confusion

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Yesterday, we wrote about the ruling in Moore v. Ulta Salon, Cosmetics & Fragrance, in which Central District of California Judge Fernando M. Olguin  concluded (correctly) that “the [Comcast] Court did not hold that damages must be shown through classwide evidence for common liability issues to predominate.”  (emphasis added). Judge Olguin’s conclusion jives with several post-Comcast rulings by the Ninth Circuit.

Today, we note that another court in the same district reached the opposite conclusion, stating that “to certify a class under Federal Rule of Civil Procedure 23(b)(3)” plaintiffs must show that “damages are capable of measurement on a classwide basis.” In re NJOY, Inc. Consumer Class Action Litig., 2016 WL 787415 (C.D. Cal. Feb. 2, 2016). The continuing divergent results on this issue will likely require the Ninth Circuit to take up the issue yet again.

In the Seventh Circuit, on the other hand, there appears to be less uncertainty about interpreting Comcast. Judge Barabara B. Crabb of the Western District of Wisconsin issued a ruling quite similar in tone to Judge Olguin’s.  See Eggen v. Westconsin Credit Union, 2016 WL 797614 (W.D. Wisc. Feb. 26, 2016).  Like Judge Olguin, Judge Crabb was compelled to note that the defendant had ignored circuit court precedent on Comcast, instead arguing that certification was inappropriate due to individualized damages issues.  … Read more

Once Again, Comcast Does Not Require Classwide Proof of Damages

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In previous posts, we’ve noted that some district courts have continued to grapple with Comcast v. Behrend, even though the Ninth Circuit has repeatedly clarified that Rule 23(b)(3) does not require classwide proof of damage.  Given the inconsistent district court holdings, it is not surprising that defendants sometimes avoid mentioning the Ninth Circuit’s holdings.  But in a recent opinion, Judge Fernando M. Olguin dealt with the failure harshly, writing that defense counsel had “misstate[d] the standard set forth in Comcast.” See Moore v. Ulta Salon, Cosmetics & Fragrance, 311 F.R.D. 590 (C.D. Cal. 2015).

In Moore, defendant argued that regardless of whether common questions predominate in the liability context, plaintiff cannot satisfy the predominance requirement unless she also “show[s] that damages can be proven on a class-wide basis.”  Judge Olguin began by noting that the argument hinged on a “failure to address applicable Ninth Circuit precedent.”  Id. at 607.  He continued:

defendant misstates the standard set forth in Comcast. …  The [Comcast] Court did not hold that damages must be shown through classwide evidence for common liability issues to predominate.… Here, if the class prevails on its liability claims … only then will the court determine how many hours of pay each plaintiff is entitled to, how many meal and/or rest breaks each plaintiff was denied, and the resulting penalties that defendant must pay.

… Read more

C.D. Cal.’s “90-Day Rule” — On Its Way Out?

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Yesterday, in Balser v. Hain Celestial Group, Inc., No. 14-55074, the Ninth Circuit issued a memorandum opinion that may spell the beginning of the end for the Central District of California Local Rule 23-3.  Rule 23-3 states:

Within 90 days after service of a pleading purporting to commence a class action other than an action subject to the Private Securities Litigation Reform Act of 1995, P.L. 104-67, 15 U.S.C. § 77z-1 et seq., the proponent of the class shall file a motion for certification that the action is maintainable as a class action, unless otherwise ordered by the Court.

(emphasis added).  The Local Rule dates back to a time when Fed. R. Civ. P. 23(c)(1)(A) required class certification to be decided “as soon as practicable,” rather than the current “at an early practicable time.”

In the Balser decision, the Ninth Circuit casts serious doubt as to whether the 90-day rule remains viable:

the schedule contemplated by Central District of California Local Rule 23-3, when considered alongside federal rules regarding status conferences and the timing of discovery, is quite unrealistic in light of recent case law regarding the need to establish a sufficient factual record at the class certification stage. See Wal-Mart Stores, Inc.

… Read more