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In Stern, as in Torres and the instant case, the defendant argued that issues of consent would require individualized inquiries that defeated commonality.
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Case No. SACV 12-2005 AG (JPRx)
01-29-2014
REI STERN v. DOCIRCLE, INC. dba TRUMPIA.COM
CIVIL MINUTES - GENERAL
Present: The Honorable ANDREW J. GUILFORD Lisa Bredahl
Deputy Clerk Not Present
Court Reporter / Recorder __________
Tape No. Attorneys Present for Plaintiffs: Attorneys Present for Defendants:
Proceedings: [IN CHAMBERS] ORDER GRANTING MOTION FOR CLASS CERTIFICATION
Plaintiff Rei Stern seeks to represent a class of people who received unsolicited text messages from Defendant DoCircle, Inc., in violation of the Telephone Consumer Protection Act ("TCPA"). Plaintiff has filed a Motion for Class Certification ("Motion") (Dkt. No. 38). Defendant opposes the Motion. (Opp'n, Dkt. No. 42.) After considering the arguments and papers submitted, the Court GRANTS the Motion. BACKGROUND Plaintiff is suing Defendant for sending him text messages without his consent, in violation of the TCPA. Plaintiff's allegations were discussed in detail in a previous order. (Order Denying Motion to Dismiss, Dkt. No. 19.) A brief summary, along with some additional facts, help frame the issues discussed in this Order. Defendant DoCircle is a business that offers an online service allowing its customers to send text messages. (Rhie Depo., Dkt. No. 42-2 Ex. 2, at 10-11.) Marc Sporn, a third party who conducts business under the name Business Transact Systems" ("BTS"), is one of Defendant's customers. (Sporn Decl., Dkt. No. 42-3, at ¶¶ 1, 8.) Under his contract with Defendant, Sporn agreed that he would use Defendant's service to send text messages only to subscribers who had consented to receive messages. (Id. ¶ 8 and Ex. 4.) Sporn used Defendant's service to send hundreds of thousands of text messages to cell phones, including Plaintiff's phone. (See id. ¶ 9; First Amended Class Action Complaint ("FAC"), Dkt. No. 40, at ¶ 11.) Plaintiff alleges that neither he nor the other putative class members gave prior express consent to receive these messages. (FAC ¶ 1.) According to Plaintiff, Defendant has "non-existent monitoring procedures" and permitted Sporn to import cell phone numbers into its system without any proof that the users of the cell phones consented to receiving messages. (Id. ¶¶ 11-12.) But according to Sporn, it was the policy of BTS to contact only consumers who consented to receive text messages. (Sporn Decl. ¶ 10.) Sporn states that the messages BTS sent through Defendant's messaging service complied with this policy. (Id. ¶ 11.) BTS operates over eighty-five website where, Sporn contends, consumers can voluntarily provide their consent to receive marketing information. (Id. ¶ 5.) Plaintiff sued DoCirle, but did not list Sporn as a Defendant. Defendant has filed a Third-Party Complaint against Sporn seeking indemnification for each of Plaintiff's claims against Defendant. (First Amended Third-Party Complaint, Dkt. No. 26.) Plaintiffs now ask the Court to certify a class of "All persons within the United States who, between February 24, 2012 and March 23, 2012, received one or more of the following unauthorized text message calls made by DoCircle, Inc." (Motion at 1-2.) The class definition then lists ten text message, most of which advertise health insurance. (Id.) Plaintiff also asks that the court certify him as the class representative and his counsel as class counsel. (Id. at 3.) LEGAL STANDARD Under Federal Rule of Civil Procedure 23(a), a case can proceed as a class action only if four requirements are met:
(1) the class is so numerous that joinder of all members is impracticable;Fed. R. Civ. P. 23(a). Besides the four Rule 23(a) requirements, a class must also satisfy one of the three subsections of Rule 23(b). In this case, Plaintiffs seek to certify a class under Rule 23(b)(3). That subsection requires that "the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3). Factors pertinent to findings of predominance and superiority include:
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.
(A) the class members' interests in individually controlling the prosecution or defense of separate actions;
(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;Id. "Rule 23 does not set forth a mere pleading standard." Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). "A party seeking class certification must affirmatively demonstrate his compliance with the Rule." Id. "The party seeking class certification bears the burden of demonstrating that the requirements of Rules 23(a) and (b) are met." Marlo v. U.P.S., 639 F.3d 942, 947 (9th Cir. 2011). A district court should certify a class only if the court "is satisfied, after a rigorous analysis," that the Rule 23 prerequisites have been met. Id (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982)). If the court is not satisfied, then certification should be refused. Falcon, 457 U.S. at 161. "Frequently that 'rigorous analysis' will entail some overlap with the merits of the plaintiff's underlying claim. That cannot be helped." Wal-Mart, 131 S.Ct. at 2551. But "Rule 23 does not authorize a preliminary inquiry into the merits of the suit for purposes other than determining whether certification [is] proper." Ellis v. Costco Wholesale Corp., 657 F.3d 970, 983 n.8 (9th Cir. 2011) (citing Wal-Mart, 131 S. Ct. at 2552 n.6). ANALYSIS
(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
1. ASCERTAINABLE CLASS
A threshold question is whether the class is ascertainable. See Knutson v. Schwan's Home Serv., Inc., 2013 WL 3746118 (S.D. Cal. July 15, 2013) ("Although nothing in Rule 23 expressly requires a class to be ascertainable, federal courts have required that a class be ascertainable before it is certified."). "A class is sufficiently defined and ascertainable if it is administratively feasible for the court to determine whether a particular individual is a member." Pryor v. Aerotek Scientific, LLC, 278 F.R.D. 516, 523 (C.D. Cal. 2011) (internal citation marks omitted). Defendant argues that the class is not ascertainable. Defendant contends that "the Court would need to determine numerous individualized issues regarding the merits of the case" to determine whether an individual is a member of the class. (Opp'n at 15.) The class is defined as individuals who received "unauthorized" text messages, and Defendant argues that the Court will have to determine whether BTS obtained consent from each recipient of a text message. This argument is very similar to Defendant's Rule 23(b)(3) argument that individualized issues predominate, and it strikes the Court as better fitting under Rule 23(b)(3). But some courts have held that individualized consent issues rendered proposed TCPA classes unascertainable. See, e.g., Gannon v. Network Tel. Servs., Inc., 2013 WL 2450199 (C.D. Cal. June 5, 2013) ("Based on these facts, the Court would have to hold mini-trials to determine who received unauthorized text messages and thus, who is a class member." (internal citation marks omitted)). Based on the facts before it now, it does not appear that the Court will have to make individualized determinations of consent. While such determinations would be necessary if the parties presented individualized evidence of consent, they haven't done so. Aside from evidence concerning whether Plaintiff himself consented, Plaintiff hasn't presented any individualized evidence as to the consent of other class members. Neither has Defendant. Defendant's primary evidence is a declaration by Marc Sporn stating that BTS has policy of obtaining consent and that BTS followed that policy. (See Sporn Decl. ¶¶ 10-11.) But this evidence doesn't differ between putative class members, and the Court's evaluation of it will apply to all class members equally. Defendant has also provided some individualized evidence of text messages that putative class members sent in reply, most of them either asking for more information or asking to unsubscribe. (Rigali Decl., Dkt. No. 42-2, ¶ 5.) The Court, while reserving the right to be persuaded otherwise as the case progresses, is not convinced that these reply texts are probative of consent. The parties dispute who bears the burden of proof on consent. But whether the lack of individualized evidence will ultimately favor Plaintiff or Defendant isn't important at this stage. What matters now is that individualized issues don't appear to be an obstacle to managing the case as a class action. If the parties present a multitude of individualized evidence on consent later in the case, that evidence might make a class action unwieldy, and the Court can revisit whether class certification is proper. But as of now, the Court hasn't seen much individualized evidence from either party. Defendant also argues that the class is not ascertainable because "undisputed facts show that BTS obtained the requisite consent" to send text messages to all putative class members. (Opp'n at 10.) But this is an argument that Plaintiff will lose on the merits, not an argument as to whether the class definition is administratively feasible. Cf. Hinman v. M and M Rental Center, Inc., 545 F. Supp. 2d 802, 807 (N.D. Ill. 2008) ("[B]y certifying a class . . . I am merely setting the boundaries of the class, not resolving the substantive issues." (internal quotation marks omitted)). Defendant's argument is one for summary judgment, not one that is necessary or appropriate for the Court to resolve now. See Ellis, 657 F.3d at 983 n.8. The Court finds that the class is ascertainable.
2. RULE 23(a) REQUIREMENTS
As noted, the Rule 23(a) requirements are numerosity, commonality, typicality, and adequacy. Fed. R. Civ. P. 23(a)(1)-(4).
2.1 Numerosity Rule 23(a)(1) requires that a class be "so numerous that joinder of all members is impracticable." Fed. R. Civ. P. 23(a)(1). "[I]mpracticability does not mean impossibility," but simply that joinder of all class members must be difficult or inconvenient. Harris v. Palm Springs Alpine Estates, Inc., 329 F.2d 909, 913 (9th Cir. 1964). Defendant does not contest that the class is sufficiently numerous. Although Plaintiffs do not have a precise estimate of the number of class members, the text messages at issue number in the hundreds of thousands, which suggests that the number of class members will be far too large for joinder to be practiable. See In Re Alcoholic Bevereages Litig., 95 F.R.D. 321, 324 (E.D.N.Y. 1982) ("The fact that the size of the proposed class has not been exactly determined is not a fatal defect in the motion; a class action may proceed upon estimates as to the size of the proposed class.). The Court finds that numerosity is satisfied.
2.2 Commonality "A class has sufficient commonality 'if there are questions of fact and law which are common to the class.'" Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998) (quoting Fed. R. Civ. P. 23(a)(2)). "All questions of fact and law need not be common to satisfy this rule. The existence of shared legal issues with divergent factual predicates is sufficient, as is a common core of salient facts coupled with disparate legal remedies within the class." Id. But there must be a "common contention" that is "of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Wal-Mart, 131 S. Ct. at 2551. Defendant argues that Plaintiffs have failed to satisfy Rule 23(a)(2)'s commonality requirement. (Opp'n at 12-18.) Defendant argues that some issues, particularly issues of consent, require individualized inquiries that are not common to all class members. But even though numerous individual inquiries may run afoul of the Rule 23(b)(3) predominance requirement, not all issues have to be common to satisfy Rule 23(a)(2)'s commonality requirement. Rather, for purposes of Rule 23(a)(2), "even a single common question will do." Wal-Mart, 131 S. Ct. at 2556. The Court finds that common questions of law and fact exist. For example, which party bears the burden of proof on consent—an issue the parties dispute—is a legal issue common to all class members. What steps Defendant took to comply with TCPA, and whether it can be held to have negligently or willfully violated the TCPA when it took those steps, are factual and legal issues common to all class members. The Court finds that commonality is satisfied.
2.3 Typicality "The typicality prerequisite of Rule 23(a) is fulfilled if 'the claims or defenses of the representative parties are typical of the claims or defenses of the class.'" Hanlon, 150 F.3d at 1020 (quoting Fed. R. Civ. P. 23(a)(3)). "Representative claims are 'typical' if they are reasonably co-extensive with those of absent class members; they need not be substantially identical." Id. In the Ninth Circuit, typicality is satisfied if "the unnamed class members have injuries similar to those of the named plaintiffs and the injuries result from the same, injurious course of conduct." Armstrong v. Davis, 275 F.3d 849, 869 (9th Cir. 2001), abrogated on other grounds by Johnson v. California, 543 U.S. 499 (2005). Here, both Plaintiff and the unnamed class members bring claims under the TCPA. The unnamed class members received text messages identical or similar to those received by Plaintiff. And these text messages were caused by the same course of conduct. That is sufficient for typicality, and Defendant does not contest typicality in its papers. The Court finds that the claims of Plaintiffs are typical of those of the class.
2.4 Adequacy "The final hurdle interposed by Rule 23(a) is that the representative parties will fairly and adequately protect the interests of the class." Hanlon, 150 F.3d at 1020 (quoting Fed. R. Civ. P. 23(a)(4)). "Resolution of two questions determines legal adequacy: (1) do the named plaintiffs and their counsel have any conflicts of interest with other class members and (2) will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?" Id. Defendant contests adequacy on several grounds, which the Court addresses in turn.
2.4.1 Knowledge of the Litigation Defendant argues that the Plaintiff is inadequate because he is not sufficiently knowledgeable of the litigation. In particular, Defendant argues that Plaintiff was unfamiliar with the TCPA at his deposition, alleged the wrong month that he received the text message in the original Complaint, and no longer possesses the cell phone that received the text messages from Defendant. The Court does not agree these deficiencies make Plaintiff unsuitable to represent the class. Litigants are not required to know the names of statutes that give them a remedy for their injuries. That is why they hire lawyers. Cf. Surowitz v. Hilton Hotels Corp., 383 U.S. 363, 373 (1966) (permitting plaintiff to bring a securities class action who was "uneducated generally and illiterate in economic matters," and who knew nothing about the content of the suit other than that she was not receiving her stock dividends). Though Plaintiff originally recalled the wrong month in which he received the texts, Plaintiff learned of his error after some discovery and remedied it in the FAC. And Defendant has not explained why Plaintiff needed to keep his cell phone. It was Plaintiff's understanding that the text messages existed as electronic records on third party servers, and Plaintiff was correct. The Court agrees that a representative may not be adequate in extreme cases where a plaintiff has little involvement in the case other than furnishing his name as a plaintiff, but this is not one of those cases. See Pryor v. Aerotek Scientific, LLC, 278 F.R.D. 516, 529-30 (C.D. Cal. 2011) (finding plaintiff adequate, despite "indications that [plaintiff's] counsel is the real party directing this litigation," because plaintiff had met with counsel and participated in a lengthy deposition). Plaintiffs sat for a deposition and selected counsel that successfully defeated a motion to dismiss. The Court is satisfied that "named plaintiffs and their counsel [will] prosecute the action vigorously on behalf of the class." Hanlon, 150 F.3d at 1020.
2.4.2 Article III Standing Defendant also argues that Plaintiff cannot represent the class because he lacks Article III standing. To satisfy Article III's standing requirement, a plaintiff must show: (1) that the plaintiff has suffered an "injury in fact" that is "concrete and particularized" and "actual or imminent," (2) that there is a "casual connection between the injury and the conduct complained of," and (3) that it is "'likely,' as opposed to merely 'speculative,' that the injury will be redressed by a favorable decision." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (internal quotation marks omitted). First, Defendant contends that Plaintiff lacks an injury in fact because his cell phone is on the phone plan of his father's business, and Plaintiff did not pay the bill for that account. But the TCPA creates a right to be free from unwanted calls and messages, and provides for statutory damages whether or not the recipient had to pay a higher phone bill as a result of the text messages. See Manno v. Healthcare Revenue Recovery Grp., LLC, 289 F.R.D. 674, 682 (S.D. Fla. 2013). Numerous courts have held that a regular user of a phone, even if registered in someone else's name, has standing under the TCPA. See id. (citing cases). Defendant cites no authority to the contrary. The Court believes Plaintiff has sufficiently pled an injury under the TCPA. Second, Defendant argues that Plaintiff lacks standing because the alleged injury cannot be fairly traced to Defendant. Defendant argues that it did "not actually cause any of the alleged marketing messages to be sent" because it did not determine the content or select the recipients. (Opp'n at 22.) Defendant is basically arguing that it isn't liable. But whether Defendant helped cause the injury, and whether Defendant will prove liable for the injury, are separate questions. See Bernhardt v. Cnty. of Los Angeles, 279 F.3d 862, 869 (9th Cir. 2002) ("The point is not whether these arguments will prevail but whether they have enough substance to require addressing."). Whether or not Defendant will be liable, Plaintiff has sufficiently alleged that his injuries can be traced to Defendant's text messaging service. The Court concludes that Plaintiff has Article III standing to sue Defendant.
2.4.3 Relationship with Counsel Finally, Defendant argues that Plaintiff and his counsel will not aggressively pursue the claims of the class because of their personal and business relationship. Plaintiff described his attorney as a "personal friend," and Plaintiff's business remodeled the attorney's home over a year ago. (Rigali Decl., Ex. 1 at 108, 110-111.) Courts in some cases have found adequacy lacking because of the relationship between the named plaintiff and class counsel. See, e.g. In re IMAX Sec. Litig., 272 F.R.D. 138, 157 (S.D.N.Y. 2010) (finding plaintiff an inadequate representative because of his extensive personal and financial ties to his counsel). But the Court does not believe that, without more, some preexisting relationship between a named plaintiff and counsel makes the plaintiff an inadequate class representative. See Lewis v. Goldsmith, 95 F.R.D. 15, 20 (D.N.J. 1982) (finding adequacy when there was "no concrete evidence to indicate that plaintiff's familial relationship might hinder his representation of the class," noting that "it would seem a bit anomalous that an individual whose uncle has developed a reputation as a competent securities lawyer should be prohibited from turning to his uncle for assistance"). Plaintiff and his counsel have vigorously represented the putative class so far, and the Court sees no concrete evidence that they will not continue to do so. The Court finds that Plaintiffs and their counsel are adequate to represent the class.
3. RULE 23(b)(3) REQUIREMENTS
Having met the Rule 23(a) prerequisites for class certification, Plaintiffs are entitled to proceed on a class basis only if they meet the requirements of one of the Rule 23(b) subsections. Here, Plaintiff seeks to proceed under Rule 23(b)(3). To qualify for certification under this subsection, a class must satisfy two conditions beyond the Rule 23(a) prerequisites: "'common questions must 'predominate over any questions affecting only individual members,' and class resolution must be 'superior to other available methods for the fair and efficient adjudication of the controversy.'" Hanlon, 150 F.3d at 1022 (9th Cir. 1998) (quoting Fed. R. Civ. P. 23(b)(3)).
3.1 Predominance "The predominance inquiry of Rule 23(b)(3) asks 'whether proposed classes are sufficiently cohesive to warrant adjudication by representation.'" In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 957 (9th Cir. 2009) (quoting Local Joint Executive Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1162 (9th Cir. 2001)). "When common questions present a significant aspect of the case and they can be resolved for all members of the class in a single adjudication, there is clear justification for handling the dispute on a representative rather than an individual basis." Hanlon, 150 F.3d at 1022 (internal quotation marks omitted). Defendant argues that common issues do not predominate because of individualized questions of consent. Defendant's predominance argument is similar to its argument as to whether the class is ascertainable. The Court rejects it for similar reasons. In different TCPA cases, courts have come out different ways as to whether individualized consent issues predominated over common issues. Compare Gannon v. Network Tel. Servs., Inc., 2013 WL 2450199 (C.D. Cal. June 5, 2013) (finding that the plaintiff failed to satisfy the predominance requirement), with Silbaugh v. Viking Magazine Servs., 278 F.R.D. 389, 393 (N.D. Ohio 2012) (finding individual issues regarding consent did not predominate when defendant produced no evidence that any individual consented). TCPA cases are neither uniformly suitable or unsuitable for class action treatment. Whether the predominance requirement is satisfied depends on the unique issues and evidence presented in the case. Here, as the Court already discussed in its discussion of whether the class is ascertainable, there is little individualized evidence of consent. The evidence Defendant has presented applies to the class at large. Plaintiff has presented little evidence of consent whatsoever. At this stage in the litigation, it appears that consent will be proved or disproved on evidence and theories applicable to the entire class. If that changes, and individualized inquiries threaten to swamp common questions, the Court can revisit the propriety of class certification. The Court finds that Plaintiff has met the Rule 23(b)(3) predominance requirement.
3.2 Superiority Class actions certified under Rule 23(b)(3) must be "superior to other available methods for the fair and efficient adjudication of the controversy." Amchem, 521 U.S. at 615 (quoting Fed. R. Civ. P. 23(b)(3)). "The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights." Id. at 617. Plaintiff argues that a class action is superior because the alternative is numerous individual claims for small amounts of damages. Defendant does not argue otherwise. The Court finds that a class action is well suited to adjudicating this controversy.
4. CONCLUSION
The Court finds that the proposed class is ascertainable, and that Plaintiffs satisfy the Rule 23(a) requirements of numerosity, commonality, typicality, and adequacy. Plaintiffs further satisfy the Rule 23(b)(3) predominance and superiority requirements. The Court makes these findings after considering the arguments and authorities on each requirement presented by the parties. Defendant's arguments not expressly rejected in this Order were considered and found unpersuasive. The Court therefore finds the class proposed by Plaintiffs suitable for certification. (See Motion at 1-3.) The Court appoints Rei Stern as class representative and his counsel as class counsel. As the Court noted earlier in the Order, the Court's determination that individualized consent issues will not make a class action unmanageable was based on the evidence presented by the parties so far. The Court retains "broad discretion to determine whether a class should be certified, and to revisit that certification throughout the legal proceedings before the court." Armstrong, 275 F.3d at 871 n.28. Accordingly, the Court will consider future motions to decertify the class if, for example, individual issues come to predominate over common issues as the case progresses. DISPOSITION Plaintiff's Motion for Class Certification is GRANTED, but without prejudice to Defendant bringing a motion to decertify the class should the progression of the case warrant it.
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Initials of Preparer lmb