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holding that injunctive relief must be the "primary relief sought"
Summary of this case from McKinnon v. Dollar Thrifty Automotive Group, Inc.Opinion
No. C-03-2397 SC
April 13, 2004
ORDER RE: PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
I. INTRODUCTION
Presently before the Court is Plaintiffs' motion for class certification pursuant to Rule 23 of the Federal Rules of Civil Procedure. Plaintiffs seek to certify a class of customers who employed Defendant North American Van Lines ("Defendant" or "North American") to move their household goods and who were injured by North American's allegedly deceptive and unlawful business practices. Having read Plaintiffs' complaint and the papers submitted in connection with this motion and for the reasons articulated below, the Court hereby denies Plaintiffs' motion for class certification. II. BACKGROUND
A more complete discussion of the circumstances leading up to the filing of this action can be found in this Court's January 22, 2004 Order. For now however, a shorter recitation will suffice. The two named Plaintiffs, Karen Robertson and Terra Saks-Young, are former customers of North American. Each of them contracted with North American to move their household belongings across the country, and each received a final bill that was considerably higher than the original estimate that North American had provided. Plaintiffs allege that these instances are part of North American's widespread and deceptive practice of baiting consumers with reasonable, written estimates, then increasing the charges to artificially-inflated amounts and holding consumers' household belongings hostage until the artificially-inflated amount is paid. Pls.' First Amended Compl. ("FAC") at ¶ 1. Plaintiffs contend this practice is in direct violation of federal regulations that require motor carriers to provide "reasonably accurate estimates" and, under certain circumstances, not to charge more than 110% of the estimated price. See 49 C.F.R. § 375.3(b), 375.3(d) (2002). Plaintiffs also contend that Defendant routinely violates several other federal regulations that govern motor carriers, namely, the requirements that a motor carrier provide notice to consumers when their goods are going to be weighed, that a carrier only use certified scales in conducting such weighings, and the requirement regarding the amount of fuel that can be in the tank of the moving truck at the time of each weighing. See 49 C.F.R. § 375.7(a)7; 49 C.F.R. § 375.7(a); 49 C.F.R. § 375.7(a)(3), respectively.
This lawsuit was originally initiated by Lloydine Ann Reese. At the time the original complaint was filed, Mrs. Reese was a 74-year old widow residing in California. Mrs. Reese has since passed away and her daughter, Karen Roberts, has agreed to serve as a class representative in this case. Pls.' FAC at ¶ 11.
The 2004 federal regulations governing motor carriers, which Plaintiffs cite frequently in their briefs, are not directly applicable to this action because carriers were not required to comply with them until April 5, 2004. On June 11, 2003, the Federal Motor Carrier Safety Association ("FMCSA") published an interim final rule amending the applicable household goods regulations at 49 C.F.R. part 375. FMCSA, Transp. of Household Goods; Consumer Protection Regs., 68 Fed. Reg. 35,064, 35,064 (June 11, 2003) (" 2003 Rulemaking"). After receiving, in August 2003, two petitions for reconsideration that sought technical and substantive amendments, the FMCSA, on September 30, 2003, delayed indefinitely the mandatory compliance date of the 2003 Rulemaking, but not its effective date, which had just passed. FMCSA, Transp. of Household Goods; Consumer Protection Regulations; Delay of Compliance Date, 68 Fed. Reg. 56,208, 56,208 (Sept. 30, 2003). On March 5, 2004, the FMCSA published a revised interim rule making technical amendments to the 2003 Rulemaking and setting April 5, 2004 as the mandatory compliance date for the 2003 Rulemaking, as amended. FMCSA, Transp. of Household Goods; Consumer Protection Regulations, 69 Fed. Reg. 10,570, 10,570 (March 5, 2004) (" 2004 Rulemaking").
The FMCSA's goal in updating household goods regulations was to make them easier for consumers to understand. FMCSA, Transp. of Household Goods; Consumer Protection Regs., 68 Fed. Reg. 35,064, 35,064 (June 11, 2003) (" 2003 Rulemaking"). Therefore, the 2003 and 2004 Rulemaking is instructive to this Court. However, because Defendant was not required to comply with these regulations during the relevant time period, the Court will apply the 2002 regulations located at 49 C.F.R. part 375.
On May 21, 2003, Plaintiffs filed the instant action before this Court. Plaintiffs filed an amended complaint on November 5, 2003, which listed four causes of action: 1) breach of contract; 2) violation of the Consumers Legal Remedies Act, California Civil Code § 1750, et seq.; 3) violation of California Business and Professions Code § 17200; and 4) violation of federal statute 49 U.S.C. § 14704(a)(2). Plaintiffs' claim under 49 U.S.C. § 14704(a)(2) is based on Defendants' alleged violations of the federal regulations listed above regarding reasonable estimates, notice of weighing, etc.
In the January 22, 2004 Order, this Court dismissed Plaintiffs' first three causes of action on the grounds that they were preempted by federal law. The Court found that the federal regulatory scheme governing the interstate transportation of household goods is so pervasive as to make reasonable the inference that Congress left no room for state law to operate in this area. Plaintiffs, with their remaining claim for relief, now seek to certify a class on behalf of:
All persons and entities through the United States and its territories who contracted with North American Van Lines, Inc. ("Defendant") to move household goods based on "Named Shipper Option" written estimates during the period January 1, 1999 to the present (the "Class Period") and whose final charges prior to delivery were in excess of 110% of the estimated cost as a result of a variance between the last written estimated weight rendered by Defendant prior to complete loading and the purported actual weight determined by Defendant after loading.
Pls.' FAC at ¶ 16. Plaintiffs contend that this class has been injured by Defendant's systematic and uniform violation of several federal regulations governing the conduct of motor carriers. Plaintiffs seek restitution, compensatory damages, declaratory and injunctive relief, and attorneys' fees and costs. Pls.' FAC, ¶ 73. Plaintiffs further request that Karen Robertson be appointed as class representative and that Plaintiffs' counsel be certified as class counsel. Plaintiffs assert they have met the requirements under Fed.R.Civ.P. 23(a) and that this action can be certified by the Court under both 23(b)(2) and 23(b)(3). After reviewing Plaintiffs' complaint and the papers submitted in connection with this motion, the Court finds that Plaintiffs cannot satisfy the requirements under Fed.R.Civ.P. 23(b) and therefore deny Plaintiffs' motion for class certification.
III. LEGAL STANDARD A. Motion for Class Certification
Class actions are governed by Rule 23 of the Federal Rules of Civil Procedure. The party seeking class certification bears the burden of demonstrating that all four requirements under Rule 23(a) have been met and at least one of the requirements of Rule 23(b). However, whether to certify a class is within the "trial court's considered discretion." Doninger v. Pacific Northwest Bell, Inc., 564 F.2d 1304, 1309 (9th Cir. 1977) (quoting Price v. Lucky Stores, Inc., 501 F.2d 1177, 1179 (9th Cir. 1974)). Before certifying a class, the court "must conduct a `rigorous analysis' into whether the prerequisites of Rule 23 are met."Valentin v. Carter-Wallace, Inc., 97 F.3d 1227 (9th Cir. 1996) (citing In re American Medical Sys., 75 F.3d 1069 (6th Cir. 1996).
1. Rule 23(a)
Rule 23(a) lists four prerequisites to a class action: 1) the class must be so numerous that joinder is impracticable; 2) there are common questions of law or fact; 3) the claims and defenses of the class representative are typical of those of the class; and 4) the class representative will fairly and adequately represent the interests of the class.
In addition to meeting the requirements of Rule 23(a), the parties seeking class certification must also show that the action is maintainable under Fed.R.Civ.P. 23(b)(1), (2), or (3). Hanlon v. Chrysler Corp., 150 F.3d 1011, 1022 (9th Cir. 1998) (citing Amchem Products, Inc. v. Windsor, 117 S.Ct. 2231, 2245 (1997)). In this case Plaintiffs propose certification under both 23(b)(2) and 23(b)(3).
2. Rule 23(b)(2)
In order to certify a class under Rule 23(b)(2), Plaintiffs must show that Defendant "has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole. . . . " Fed.R.Civ.P.23(b)(2). In addition, "[c]lass actions certified under Rule 23(b)(2) are limited to those cases where the primary relief sought is injunctive or declaratory relief." Barabin v. Aramark Corp., 2003 WL 355417, *1 (3rd Cir.); see also James v. City of Dallas, 254 F.3d 551, 571 (5th Cir. 2001) (stating that "To maintain an action under Rule 23(b)(2), [injunctive] relief rather than monetary damages must be the predominant form of relief the plaintiffs pursue."). If a plaintiff seeking certification under Rule 23(b)(2) has requested money damages as part of his relief, "[T]he claim for monetary damages must be secondary to the primary claim for injunctive or declaratory relief." Molski v. Gleich, 318 F.3d 937, 947 (9th Cir. 2003).
3. Rule 23(b)(3)
In order to certify a class under Rule 23(b)(3), Plaintiffs must show that " [T]he questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Fed.R.Civ.P. 23(b)(3). "The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation."Hanlon, 150 F.3d at 1022, (quoting Amchem Products, 117 S.Ct. at 2249). Even if Rule 23(a)'s commonality requirement may be satisfied, the predominance inquiry under Rule 23(b)(3) is far more demanding. Amchem Products, 117 S.Ct. at 2231. Rule 23(b)(3) presumes the existence of common issues of fact or law and focuses on the relationship between the common and individual issues. "Thus, the court must determine whether common issues constitute such a significant aspect of the action that `there is a clear justification for handling the dispute on a representative rather than on an individual basis.'" O'Connor v. Boeing North American, Inc., 180 F.R.D. 359, 379 (C.D.Cal. 1997) (quoting Charles Alan Wright, Arthur R. Miller Mary Kay Kane, Federal Practice and Procedure: Civil 2d § 1778 at 528 (1986).
IV. DISCUSSION
A party seeking class certification must establish the requirements under both Rule 23(a) and 23(b). Because in this case Plaintiffs cannot establish the requirements for class certification under Rule 23(b), there is no need for the Court to analyze Plaintiffs' showing under Rule 23(a).
Plaintiffs seek certification under Rule 23(b)(2) and 23(b)(3). With respect to the former, it is not disputed that Plaintiffs seek to recover significant monetary damages here. Plaintiffs request restitution, compensatory damages (including "treble damages for the Senior Citizen Sub-Class"), prejudgment interest, and attorneys' fees and costs. Pls.' FAC at ¶ 73. Plaintiffs contend that their claim for monetary damages does not prevent certification under Rule 23(b)(2) because "injunctive and declaratory relief are important aspects of this litigation. . . . " Pls.' Reply Mot. at 12. While this may be true, it does not come close to satisfying Plaintiffs' burden for class certification under Rule 23(b)(2).
The Ninth Circuit has been clear that in order to permit certification under this rule, "the claim for monetary damages must be secondary to the primary claim for injunctive relief." Molski, 318 F.3d at 947. In reviewing the complaint in the case at bar, we cannot find that the primary relief sought is injunctive and/or declaratory in nature. Plaintiffs' claim for monetary damages is equally if not more important as their request for injunctive or declaratory relief with respect to Plaintiffs' intent in bringing this action and what they hope to recover from it. Indeed, the gist of Plaintiffs' grievance is that they were forced to pay more money for their move than was required under the law. The primary way to remedy such injuries is through restitution and compensatory damages. In this case each putative Plaintiff will have a different measure of monetary damages that will have to be proven at trial, and it is clear to the Court that these damages are a significant component of the relief Plaintiffs. Under such circumstances, we find that Plaintiffs do not meet the criteria for class action certification under Rule 23(b)(2). See Barabin v. Aramark Corp., 2003 WL 355417, *2 (3rd Cir.); Coleman v. General Motors Acceptance Corp., 296 F.3d 443, 447 (6th Cir. 2002).
Likewise, we find that Plaintiffs do not satisfy the requirements for class certification under Rule 23(b)(3). Given the disparate circumstances of the putative class members and the individualized relief they are seeking, the Court cannot find that common questions will predominate or that a class action is the best vehicle for resolution of this dispute. In this case Plaintiffs are suing under 49 U.S.C. § 14704(a)(2), which makes a carrier liable for "damages sustained by a person as a result of an act or omission of that carrier or broker in violation of this part." Section 14704(a)(2) provides a right to recover only to persons who have sustained damages as a result of a carrier violation. A carrier's violation of federal regulations does not, in and of itself, entitle a plaintiff to a recovery, as the plaintiff must still prove damages. Thus, even if North American violated various federal regulations with respect to the proposed class as a whole, each member of the class still has to prove, based on their individualized circumstances, what damages they suffered because of these violations. Each member of the class will have a different measure of damages based on a multitude of factors surrounding their particular move. These individual questions will dominate trial of this action, both in terms of time and significance, which demonstrates that this proposed class is not sufficiently cohesive to warrant adjudication by representation. See Owner-Operator Independent Drivers Ass'n. Inc. v. New Prime, Inc., 339 F.3d 1001, 1012 (8th Cir. 2003) (holding that because " 49 U.S.C. § 14704(a)(2) provides a right to recover only to persons who have sustained damages as a result of a carrier violation", "[r]ecovery for any plaintiff would be based on individual, not common, questions of fact" and therefore class certification is inappropriate.);Skipper v. Giant Food Inc., 68 Fed.Appx. 393, 397-398 (4th Cir. 2003) (stating that " [T]he individualized measure of plaintiffs' claims for damages reinforces the district court's conclusion that questions affecting only individual members would predominate over common questions of law or fact.")
In addition, many of the federal regulations Defendant is accused of violating are fact intensive and will require inquiry into each customers' course of dealing with Defendant. For example, the "110% rule", around which Plaintiffs' complaint centers, cannot be adjudicated with respect to an entire class of customers. This rule states that:
At the time of delivery of a collect on delivery shipment, except when such shipment is delivered to a warehouse for storage at the request of the shipper, on which a non-binding estimate of the approximate costs has been furnished by the carrier under the provisions of paragraph (b), the shipper may request delivery of the shipment upon payment, in a form acceptable to the carrier, of an amount not exceeding 110 percent of the estimated charges. The carrier shall, upon request of the shipper, relinquish possession of the shipment upon payment of not more than 110 percent of the estimated charges and shall defer demand for the payment of the balance of any remaining charges for a period of 30 days following the date of delivery.
49 C.F.R. § 375.3(d). Thus, to establish that Defendant violated this rule, each member of the class will have to show, inter alia, that they requested to pay 110 percent of their estimate in a form acceptable to the carrier and were denied possession of their goods. Such a determination will center around communications between customers and Defendant's representatives and will depend on the facts of each case. This underscores the Court's determination that a class action simply is not the best vehicle to resolve this dispute. There are too many individual questions that must be answered to award Plaintiffs the relief they have requested. In these circumstances, the Court finds that this suit is best brought on an individual basis.
V. CONCLUSION
Because Plaintiffs cannot satisfy the requirements under Rule 23(b), their Motion for Class Certification is HEREBY DENIED.
IT IS SO ORDERED.