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.

N.D. Cal. Certification of UCC Warranty Claim Against Hewlett-Packard

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On December 18, 2015, Judge Phyllis Hamilton of the Northern District of California issued a ruling certifying a California-only class in a case brought by HP customers who alleged their computers were not equipped with the promised wireless cards. See generally Karim v. Hewlett-Packard Co., No. 12-CV-5240, 2015 WL 9258100 (N.D. Cal. Dec. 18, 2015).

The ruling, along with Judge Hamilton’s previous certification-related opinion in the same case, provide useful guidance on the question of what the of exposure class members need to show in connection for an affirmation that is alleged to form part of the basis of the bargain for an express warranty.

HP had cited a number of cases for the proposition that plaintiff would not be able to show through common proof that the challenged statement formed a basis for each class member’s bargain.  HP had previously cast a similar argument on reliance grounds, but Judge Hamilton ruled that a long line of cases requiring reliance (based on Williams v. Beechnut Nutrition, 185 Cal.App.3d 135 (1986)), had been abrogated by the enactment of section 2313.  This time, HP recast its argument as one of “exposure.”

Judge Hamilton, relying on the analysis in Weinstat v. Dentsply Int’l, Inc., 180 Cal.App.4th 1213 (2010), held that while exposure is relevant, it does not require that the buyers must prove that they actually read the statement; instead … “it is sufficient for plaintiff to show that the statement was made available to them.”  Because the plaintiff had limited the class to those who purchased computers (i) while the relevant language was on the website, (ii) using a customization feature available on the website, plaintiff “met its burden” of limiting the class to “purchasers to whom the representation was made available.”… Read more

Seventh Circuit Follows Several Consumer-Related Precedents to Reverse Cert Denial in an FDCPA Case

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The Seventh Circuit’s recent analysis in a fair debt collection opinion draws heavily from recent opinions in the consumer context and will likely have implications in future consumer cases too. See generally McMahon v. LVNV Funding LLC,– F.3d –, 2015 WL 8119786 (Dec. 8, 2015).

The case arises from allegations that defendants violated the FDCPA by sending out letters that sought to collect on debts for which the statute of limitations had already run. Plaintiff’s suit sought, among other relief, actual damages for those class members “who paid a part of the debt after receiving a … letter.” Id. at *2. The district court denied cert based on a finding that a number of individualized causation and damages issues would be presented: “even if ‘the amount of damages due each class member is “capable of ministerial determination,” causation, i.e., determining whether class members paid the debt because of the letter, out of moral compulsion, or for some other reason, is not.'” Id.

The Seventh Circuit disagreed. Following several of its recent consumer decisions, the court held that the certification denial was an abuse of discretion. The court noted that “[i]t is well established that, if a case requires determinations of individual issues of causation and damages, a court may ‘bifurcate the case into a liability phase and a damages phase.'” Id.… Read more

Comcast, Restitution, and Trump University

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As California courts continue to grapple with the Supreme Court’s 2013 Comcast v. Behrend decision and appropriate restitution calculations under California’s consumer protection statutes, a recent decision from Judge Gonzalo P. Curiel of the Central District of California provides helpful analysis. Makaeff v. Trump University, LLC, 309 F.R.D. 631 (C.D. Cal. 2015).

The Trump case arose from real estate seminar students’ claims that, in short, they didn’t get what they were promised.  Plaintiffs brought suit under California’s CLRA and UCL, as well as under Florida’ FDUTPA and New York’s General Business Law sec. 349(h).

The primary issue was whether plaintiffs’ proposed classwide restitution and damages model complies with Comcast and applicable state law: Plaintiffs argued that they received no value (or at best de minimis value) in exchange for their money, and argued they were thus entitled to full refunds. Defendants, for their part, argued that state law doesn’t condone a “full refund” theory, and instead requires an amount-paid minus value-received calculation.

The court sided with plaintiffs. First, under California law, plaintiffs were entitled to offer evidence to substantiate their theory that “only a full-refund will return them to the position that they were in before being ensnared by Defendants’ scam.”  Makaeff, 309 F.R.D.… Read more

Certification in Keurig coffee case in the Southern District of Illinois

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Judge Nancy Rosentstengel’s lengthy opinion certifying a class under Rule 23(b)(3) in Suchanek v. Strum Foods, is worth a read in its entirety and is available at 2015 WL 6689359 (S.D. Ill. Nov. 3, 2015), clarified and reconsideration denied at ECF No. 250 (Nov. 19, 2015).

The case is based on allegations that defendants marketed and sold “premium, ground coffee,” which in truth was more than 95% instant coffee. Here are some highlights:

Commonality:
This case had previously been to the 7th Circuit, which concluded that plaintiffs had satisfied commonality. Suchanek v. Sturm Foods, 764 F.3d 750, 756 (7th Cir. 2014). The district court declined to reconsider that conclusion and reaffirmed that the following question was common classwide: whether the coffee’s packaging was likely to mislead a reasonable consumer.

Typicality:
Defendants contested typicality on the grounds that plaintiffs and other class members bought the coffee for different reasons and based on their own beliefs. The court rejected that argument:

What Defendants are essentially saying is that typicality is not satisfied unless the class members all had the same perceptions and knowledge … and the same preferences and reasons for purchasing [the coffee]. This argument goes too far. The standard for typicality does not require the facts underlying every claim to be identical.

… Read more

Further Ninth Circuit Clarification on Comcast and Restitution Under California Law

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Since Comcast v. Behrend, 133 S. Ct. 1426 (2013), was handed down, district courts in the Ninth Circuit have grappled with whether certification under Rule 23(b)(3) requires that damages be susceptible to classwide calculation, with some saying yes and others no. The Ninth Circuit handed down rulings in 2013 and 2014 saying that even post-Comcast it remains permissible under Rule 23(b)(3) for damages calculations to be individualized. See Leyva v. Medline Indus., 716 F.3d 510, 513-14 (9th Cir. 2013); Jimenez v. Allstate Ins., 765 F.3d 1161, 1167 (9th Cir. 2014). Both of these decisions rely on the pre-Comcast Ninth Circuit ruling in in Yokoyama v. Midland Nat’l Life Ins. Co., 594 F.3d 1087 (9th Cir.2010).

Despite this series of clarifying rulings, courts in the Ninth Circuit have continued to hold that Comcast requires a classwide damages model. E.g., In re ConAgra Foods, Inc., 90 F. Supp. 3d 919, 1021 (C.D. Cal. 2015) (“Rule 23(b)(3) is satisfied only if plaintiffs can show that damages are capable of measurement on a classwide basis.”); McVicar v. Goodman Glob., No. 13-cv-1223, 2015 WL 4945730, at *14 (C.D. Cal. Aug. 20, 2015) (“At the class certification stage, Plaintiffs must present a theory that can measure, on a class-wide basis, damages attributable to Plaintiffs’ theory of liability.”).… Read more

Court Declines to Compel Arbitration in Wireless Litigation—At Least For Now

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Judge William Alsup of the Northern District of California issued in order last week declining to compel arbitration since a trial would be “necessary to determine whether plaintiffs agreed to the terms and conditions of defendants’ service, which included [the applicable] arbitration clauses.” Barraza v. Cricket Wireless LLC, No. C 15-02471, 2015 WL 6689396 (Nov. 3, 2015).

The court began by noting a split in opinions regarding whether documents enclosed in a wireless phone package give rise to inquiry notice of the arbitration clause.  Compare Dang v. Samsung Electronics Co., Ltd., No. 14-00430, 2015 WL 4735520 (N.D. Cal. Aug. 10, 2015) (granting motion to compel arbitration where the arbitration clause was on the fifth page of an “Important Information” booklet enclosed in the phone packaging); with Norcia v. Samsung Telecoms. Am., LLC, No. 14-00582, 2014 WL 4652332 (N.D. Cal. Sept. 18, 2014) (denying the motion to compel arbitration because the arbitration provision was inconspicuously located in a 101-page booklet called “Product Safety & Warranty Information”).

Rather than weighing in on one side or the other of the split, the court distinguished the earlier cases on their facts, noting that in this case, the arbitration clause appeared in a “Quick Start Guide” that “lacked any indication of its contractual nature.”  Barraza, 2015 WL 6689396, at *5. … Read more

Defects Manifesting Outside Warranty Can Still Be Material

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In class actions alleging a failure to disclose a product defect, defendants often argue that consumers’ reasonable expectations should be defined by the product’s warranty. In other words, if a defect causes out-of-warranty failures only, the defect can’t possibly matter to consumers and defendants have no legal duty to disclose the defect in advance.

This argument drew considerable traction in California in recent years, often requiring plaintiffs to plead the defect posed a safety hazard in order to state a claim. See, e.g., Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1142-43 (9th Cir. 2012). That pendulum now appears to be swinging back in California, however, with courts recognizing a broader duty to disclose under California law. Rutledge v. Hewlett Packard, 238 Cal.App.4th 1164 (July 2015); see also Norcia v. Samsung Telecommunications Am., 2015 WL 4967247 (N.D. Cal. Aug. 20, 2015).

In Chiarelli v. Nissan N. Am., 2015 WL 5686507 (E.D.N.Y. Sept. 25, 2015), Judge Nicholas Garaufis recently had occasion to consider the argument in the context of New York, Florida, and Maryland law, and he rejected the argument nearly in full:

Nissan next argues that the terms of the express warranty set the consumer’s expectations as a matter of law, and therefore there can be no claim that Nissan’s omissions could be viewed as a practice likely to mislead a reasonable consumer acting reasonably under the circumstances. … Read more